Deutsche Bank A.Ş. Annual Report 2013 · 2014-04-22 · Deutsche Bank Annual Report 2013 Message...

Deutsche Bank A.Ş. Annual Report 2013

Deutsche Bank

Our Values and Beliefs

Integrity

Sustainable Performance

Client Centricity Innovation

Discipline

Partnership

Our Values & Beliefs

Integrity We live by the highest standards of integrity in everything we say and do We will do what is right – not just what is allowed We communicate openly; we invite, provide and respect challenging views

Sustainable Performance We drive value for shareholders by putting long-term success over short term gain We encourage entrepreneurial spirit which responsibly balances risks and returns We pursue lasting performance by developing, nurturing and investing in the best talent, and by managing based on merit

Client Centricity We earn our clients’ trust by placing them at the core of our organisation We deliver true value by understanding and serving our clients’ needs best We strive to pursue mutually beneficial client relationships in which the value created is shared fairly

Innovation We foster innovation by valuing intellectual curiosity in our people We enable our clients’ success by constantly seeking suitable solutions to their problems We continuously improve our processes and platforms by embracing new and better ways of doing things

Discipline We protect the firm’s resources by always thinking and acting like owners We live by the rules and hold ourselves accountable to deliver on our promises – no excuses We achieve operational excellence by striving to ‘get it right the first time’

Partnership We build diverse teams to generate better ideas and reach more balanced decisions We put the common goals of the firm before ‘silo’ loyalty by trusting, respecting and working with each other We act as responsible partners with all our stakeholders and regulators, and in serving the wider interests of society

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Deutsche Bank operates by six core values. Our values show how we bring our brand to life each and every day.

1 Introduction

History of Deutsche Bank A.Ş.Financial Highlights Amendments to the Articles of AssociationExtraordinary General Meetings in 2013Shareholder Structure, Changes during the Year, Qualified Shares and Management SharesAssociates Deutsche Bank A.Ş. within the Banking IndustryResearch and DevelopmentOperations in 2013

3 Financial Assessment and Risk ManagementReport of the Audit CommitteeManagement DeclarationAuditsOther Information Regarding Corporate ActionsFinancial AssessmentMonitoring TargetsRisk Management PoliciesCredit RatingsSummary of Five - Year Financial HighlightsAnnual Report Compliance Opinion

2 Management and Corporate Governance Board of DirectorsSenior ManagementIndependent Auditor CommitteesThe Summary Board of Directors Report Presented to the General AssemblyHuman Resources ApplicationsRelated - Party TransactionsOutsourced ServicesCorporate Social Responsibility

4 Independent Auditors’ Report, Financial Statements and Disclosures

Independent Auditors’ ReportUnconsolidated Financial ReportFinancial Statements and Disclosures

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Contents

Message from the Chairman and the CEO

Deutsche Bank Annual Report 2013

02Message from the Chairman and the CEO


Peter Tils Ersin AkyüzChairman of the Board of Directors CEO

Dear Shareholders,

We look back on 2013 as a year when the economic recovery in the world began to strengthen, albeit with a slow pace. In Europe, economies seem to be on the track of recovery following an 18-month double-dip recession period, although the recovery is still viewed as slow, uneven and fragile. In the US, the rate of GDP growth has steadily improved through the year. In emerging markets, economic expansion continued in 2013, but with a slower pace than in prior years.

Turkish economy bounced back from the soft-landing in 2012. GDP growth for 2013 is expected to materialise at 4.0%. However, the current account deficit as percent of GDP is expected to increase to 7.9% in 2013 from 6.2% a year ago. On the monetary policy front, Central Bank continued to apply monetary easing in the first half of the year, decreasing the policy rate to 4.50% in May 2013 from 5.50% at the end of 2012. There were significant capital inflows in anticipation of an investment grade upgrade by Moody’s, which finally came in the middle of May. Soon after that, however, Central Bank had to increase its average cost of funding as Turkish Lira depreciated significantly on the back of the Fed signalling that tapering would start soon and the exit is insight.


03Message from the Chairman and the CEO

Inflation increased to 7.4% at end-2013 from 6.2% a year ago, due to the strong pass-through of currency weakness. Following rising political risks, rising inflationary risks and the pressure on Turkish Lira as the country is viewed as being among the most vulnerable to anticipated volatility in capital flows, Central Bank delivered a significant tightening late in January, raising the policy rate by 550bps to 10%.

Trading environment was extremely challenging compared to 2012. Given the developments mentioned above, the first half of the year was characterised by a bullish background, whilst there was a severe bear market during the second half. The benchmark T-bill compound rates started the year at 6.18%, rallied to an all-time low of 4.79% in the middle of May 2013 and finished the year at 10.10%. Lending spreads continued to narrow on the back of continued capital flows during the first half of the year and remained relatively narrow for the most of the remainder of the year despite the overall market weakness during the second half of the year.

In this unfavourable environment, our Net Income suffered to TL 2.1mn from TL 104.1mn in 2012. The decline was caused primarily by sharp falls in our Trading income. Our Balance Sheet increased from TL 1,297mn to TL 2,360mn. This was due to an increase in our loan portfolio, in particular our foreign exchange denominated loans which went up in TL terms due to around 24% depreciation in TL against USD and EUR. Following this increase in our Balance Sheet in general and Loans in particular, our Capital Adequacy Ratio at year-end dropped to 24.8%, compared to 49.4% in 2012. Despite the drop, we still have a very high capital adequacy ratio, which we believe gives us ample room for further growth in our balance sheet.


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Our Trading business was not immune to the sudden turn in the market and the gains of the first half were reversed to finish the year with losses from Trading. Our Sales and Coverage platform performed well to meet the financing and trading demands of our financial and corporate clients. Because of the lending spreads remaining tight for the most of the year, we were able to increase our Lending volumes only in the last quarter of the year. As a result, our revenues from Lending increased less than the increase in our volumes. Our Custody business continued to add new clients and became the market leader. Our Investment Banking Coverage and Our Investment Banking Coverage and Advisory group performed well, executing several sell side mandates including a highly coveted mandate in the insurance sector. We are pleased to report that in line with our medium term objectives, we were able to increase our Fees and Commission Income by an impressive 25%.

On the Costs side, we continued to review and challenge our operating platform to achieve operational excellence and further efficiencies. We managed to keep the rise in our costs below the inflation rate in 2013.

We continue to remain committed to our corporate social responsibilities. We started disbursing on our educational support for the victims of the Van Earthquake. The program provides support for 15 primary school students until June 2014. Separately, we continue our support for a primary school in a poor part of Istanbul. Our staff continues to complement these efforts by active involvement with the students in the school. These investments strengthen the fabric of the society and help enhance the environment in which we operate.

Looking ahead into the rest of 2014, the world economy is showing signs of improvement on the back of a recovery in developed economies, although some dangers to global financial stability persist. European economy is also moving forward. On the other hand, the outlook for emerging economies is mixed in the face of headwinds from Fed tapering and domestic structural challenges.



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On the domestic front, sustained pressure on the currency and rising inflationary risks that could led to further tightening seem to be the main challenges for the Turkey’s economy. Political uncertainty is unlikely to be resolved before local elections in March and possibly persist beyond that. Further noise on this front, or renewed negative sentiment towards EM, would add to pressure on the Lira notwithstanding some likely adjustment in the external balance this year. We expect growth to dip this year to 2.2% as tighter monetary conditions and reduced confidence begin to bite, and year-end inflation to materialise at 8.0%. On the fiscal front; a slippage is possible this year as we are heading to an 18-month long election cycle, though we expect this to be modest. We do, however, think the current account deficit will now dip a little below 6% of GDP in 2014. Financing this still relatively large deficit may be challenging given the fragile sentiment towards emerging markets in general and Turkey in particular.

We are very conscious of this highly challenging environment. The trading conditions will be very difficult despite the high levels of benchmark interest rates. The Fed tapering is causing significant volatility across all emerging markets and the domestic political calendar is very uncertain, given the upcoming local and presidential elections. We expect the M&A environment to be also negatively affected by the uncertainty. On the positive side, we expect increased revenues from our lending activity, arising from both increased volumes and higher spreads. We will continue to seek further ways of improving our operational efficiencies. We are very confident that we will deliver outstanding service to our clients and sustainable value to our shareholders.


Peter Tils Chairman of the Board of Directors

Ersin AkyüzCEO

1 Introduction

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History of Deutsche Bank A.Ş.Financial Highlights Amendments to the Articles of AssociationExtraordinary General Meetings in 2013Shareholder Structure, Changes during the Year, Qualified Shares and Management SharesAssociates Deutsche Bank A.Ş. within the Banking IndustryResearch and DevelopmentOperations in 2013


70701 - IntroductionHistory of Deutsche Bank A.Ş.Financial Highlights

History of Deutsche Bank A.Ş.• Established as Türk Merchant Bank A.Ş. in 1987.• Renamed as Bankers Trust A.Ş. in 1997.• Continued operations as Deutsche Bank A.Ş. as of 2000 following

Deutsche Bank’s acquisition of Bankers Trust.• Having provided corporate banking services under an investment banking license

until 2004, Deutsche Bank A.Ş. applied to the Banking Regulation and Supervision Agency (BRSA) for permission to accept deposits in an attempt to expand its product range.

• Obtained permission to accept deposits in October 2004.• Added corporate cash management and custody and settlement services to its

product portfolio in 2005.• Acquired Garanti Bank’s domestic custody services and became the second

largest custodian bank in 2007.• Received authorization to participate in Treasury auctions as a market-maker in

2013 as every year since 2005.• Starting from 2010 continued to act as a market maker for TL-USD, TL-EUR and

EUR-USD futures contracts (with cash settlement) on the Turkish Derivatives Exchange in 2013.

• Received factoring and forfeiting licenses in February 2012, in accordance with the decision taken by the Banking Regulation and Supervision Agency.

• The Bank has no branches. • The Trade Registry Number of the Bank is 244378.• The Central Registration System Number (MERSIS) of the Bank is:

0-8760-0487-2200015 • Bank's web address: www.db.com.tr• Bank's E-mail address: [email protected]• Bank's Head Office address: Esentepe Mahallesi Büyükdere Caddesi Tekfen Tower

No: 209 K: 17-18 Şişli 34394 Istanbul / Turkey

Financial Highlights

December 31, 2013

Summary Financial Highlights (TL 000) 2013

Cash and Balances with the Central Bank 228,523Trading Securities 816,019 Loans and Receivables 904,029Total Assets 2,359,630 Deposits 592,956Shareholders’ Equity 426,707Interest Income 158,897Operating Profit 4,132

Financial Ratios (%) 2013

Capital Adequacy Ratio 24.81Shareholders’ Equity/Assets 18.08

Off-Balance Sheet Items (TL 000) 2013

Guarantees and Warranties 187,418Commitments 3,985,252Derivative Financial Instruments 1,976,829Items Held in Custody 45,377,511


0801 - IntroductionAmendments to the Articles of Association, Extraordinary General Meetings in 2013, Shareholder Structure, Changes during the Year, Qualified Shares and Management Shares, Associates

Amendments to the Articles of AssociationAmendments were made in the Articles of Association of the Bank in order to ensure their compliance with the Turkish Commercial Code and current legislation and to simplify the same. These amendments were accepted during the Ordinary General Meeting held on March 28, 2013, in accordance with the permission of the Republic of Turkey, Ministry of Customs and Trade dated March 27, 2013 with no. 2287 and approval of the Banking Regulation and Supervision Agency, and publicly announced in the Trade Registry Gazette dated April 19, 2013 with issue no. 8304.

Extraordinary General Meetings in 2013 No Extraordinary General Meeting was held in 2013. During the Ordinary General Meeting held on March 28, 2013, Articles of Association of the Bank were amended, resignations of statutory auditors were accepted, independent auditor was selected and Terms of Reference regarding operating principles and procedures of the General Assembly Meetings were approved.

Shareholder Structure, Changes during the Year, Qualified Shares and Management Shares

All shareholders of Deutsche Bank A.Ş. are Deutsche Bank Group companies.

The Bank holds no privileged shares.

There was no change in the shareholder structure in 2013.

The Bank did not acquire its own shares.

The most recent shareholder structure is presented in the table below.

Chairman and Members of the Board of Directors, Members of the Audit Committee, CEO and Assistant General Managers do not own any shares in the Bank.

AssociatesThe Bank does not have any associates, either directly or indirectly.

01.01.2013 - 31.12.2013Shareholder Number of Shares Shares Capital (TL) Share (%)Deutsche Bank AG 1,349,999,730 134,999,973 99,99Süddeutsche Vermögensverwaltung GmbH 68 6,8 <1DB Industrial Holdings GmbH 68 6,8 <1Nordwestdeutscher Wohnungsbauträger GmbH 67 6,7 <1DB Capital Markets (Deutschland) GmbH 67 6,7 <1Total 1,350,000,000 135,000,000 100


0901 - IntroductionDeutsche Bank A.Ş. within the Banking IndustryResearch and Development

Deutsche Bank A.Ş. within theBanking IndustryOperating in Turkey since 1987, leveraging the strong global banking network of its parent company Deutsche Bank AG, Deutsche Bank A.Ş. is primarily focused on corporate banking. Offering its corporate banking services with a workforce of 110 employees, Deutsche Bank A.Ş. is the Istanbul based subsidiary of Deutsche Bank Group, which has approximately 100,000 employees and EUR 1.649 billion in total assets (as of December 2013) throughout the world. Deutsche Bank A.Ş. targets the highest levels of quality in all product and service segments in which it is active, and strives to be the first or second choice for clients.

The assets of Deutsche Bank A.Ş. primarily consist of a treasury bill and government bond portfolio held for trading purposes. Consequently, the Bank has a significantly lower ratio of risk-weighted assets compared to the rest of the sector. Off balance sheet forward foreign currency transactions are also one of the Bank’s main areas of operation. The bulk of the Bank’s profit is generated from interest income from securities.

In 2013, the Bank secured a 3% market share in the outright purchases and sales market for bonds and bills and over-the counter fixed income securities transactions. The Bank maintained its 2% market share in total foreign currency vs. Turkish lira transaction volume. Commercial banking is an area in which Deutsche Bank A.Ş. plans to be more actively involved in the upcoming period. The Direct Securities Services, which operates under the Global Transaction Banking, performed very successfully and became the market leader with new clients in 2013 with a total market share of 47% in assets under custody. Deutsche Bank A.Ş. selects its clients through an especially diligent evaluation process. The Bank’s client portfolio consists of low-risk domestic and foreign companies. The Bank’s high customer cash credit risk concentration is due to its limited number of conscientiously selected clients. Deutsche Bank A.Ş. has a relatively high capital adequacy ratio compared to the sector average.

Deutsche Bank A.Ş. selects its clients through an especially diligent evaluation process.

The Bank’s client portfolio consists of low-risk domestic and foreign companies. The Bank’s high customer cash credit risk concentration is due to its limited number of conscientiously selected clients.

Deutsche Bank A.Ş. has a relatively high capital adequacy ratio compared to the sector average.

Research and DevelopmentAfter many years of providing corporate banking services in Turkey under an investment banking license, Deutsche Bank A.Ş. also began offering commercial banking services in October 2004 after having been awarded a deposit taking license. In 2005, a separate unit was established within the Bank to provide settlement and custody services. Deutsche Bank A.Ş. continuously seeks to enhance the quality and diversity of service. To this end, the Bank implements system development studies required by its expanding services and cash management products. Having started as an extension of its main business line in 2006, these services have continued effectively in 2013.

Combining its local experience with its main shareholder Deutsche Bank AG’s global network, expertise and know-how in the areas of public offerings, block sales and derivative products, Deutsche Bank A.Ş. continues to provide services in the capital markets.


1001 - IntroductionOperations in 2013

Operations in 2013

Deutsche Bank A.Ş. believes that Turkey, which has long stood out among emerging economies, offers tremendous potential for growth and investment in the years ahead. Corresponding to this perspective, the Bank is continuing its expansion into Turkey with a primary focus on corporate banking.

The organization of Deutsche Bank A.Ş. is composed of Markets, Global Transaction Banking, Corporate Finance and Support Functions.

Markets

The Markets business consists of two units; Trading and Research.

Trading: This unit conducts the structuring and sales transactions of debt and money market instruments. It mediates the spot trading and derivatives trading transactions of financial institutions, insurance companies and corporations in foreign exchange and TL. The unit also conducts transactions of debt instruments, treasury bonds, trading of bonds and derivative products. Moreover, it provides clients with rate of exchange and interest risk management services by pursuing risk management policies.

Deutsche Bank A.Ş. is a leader in the Turkish capital markets in terms of fixed income products.

Research: The Research monitors macroeconomic and political developments closely and provides the internal Bank units and its clients with information and investment recommendations through daily, weekly and monthly periodic reports.

The Risk Management, Investment Banking and Capital Markets departments of the Bank as well as the International Origination Department of Deutsche Bank rely on the Research Department’s risk and return analyses for the Turkish economy in their activities. The unit also actively shares its analyses with the sales units and investors. Throughout 2013, the Research Unit focused on Central Bank monetary policy, developments in the balance of payments, and the impact of instability in foreign markets on Turkey. The Unit will continue to prioritise similar issues in 2014.

Global Transaction Banking

The Global Transaction Banking consists of three units providing services to corporations and financial institutions; which are Direct Securities Services, Trade Finance and Cash Management Corporates, and Cash Management & Trade FIs.

Direct Securities Services: With its Direct Securities Services Unit, established by a highly competent and experienced team in 2005, Deutsche Bank A.Ş. has become an extremely reputable bank, preferred by foreign investors for its custody services. The Bank has a 45% market share among all the custodian banks that keep custody of securities portfolios of foreign institutional investors.

Deutsche Bank A.Ş. continued to grow by expanding its current market share and client portfolio in 2013. The Bank maintains its successful intermediary services by increasing its transaction volume in a number of significant acquisitions, company takeovers transfers and, especially, in stock lending transactions.


Deutsche Bank A.Ş. Direct Securities Services maintained their ‘TOP RATED’ status, first granted in 2009, and scored even higher points in the annual customer poll conducted by the Global Custodian magazine in 2013, as in previous years. In this way, it has asserted its first class quality of client services. On the other hand, the Global Finance Magazine also selected Deutsche Bank A.Ş. as the most successful Direct Securities Services provider.

In 2014, Deutsche Bank A.Ş. plans to boost its market share and capture the leading position in the market for clearing and custody activities through new products to be included in its already wide product range and with customized applications developed for foreign investors.

Trade Finance and Cash Management Corporates: This unit mediates cash management circulation in domestic and international trade. Its specialist teams have been providing services and consultancy to clients in Turkey since 2006 in the fields of short and medium term trade financing and risk management. Deutsche Bank A.Ş. reflects the additional value of 100 years plus experience in more than 70 countries of Deutsche Bank, its main shareholder, to its clients. Besides Conventional Foreign Trade products, the bank has become a reliable partner in its clients’ banking transactions. This is achieved by providing customized solutions in terms of Trade Financing products and corporate cash management.

Deutsche BankAnnual Report 2013

Executive CommitteeFrom left to right: S. Mert Haracçı, Hakan Ulutaş, Özge Kutay, Ersin Akyüz, Pınar Çapanoğlu Altuğ, H. Sedat Eratalar, Mustafa Bağrıaçık, Cenk Esener


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In Corporate Banking, enhancing the efficiency of resources, and, for this purpose, setting the necessary targets and attaining them gain more and more importance with each passing day. Although the competition is becoming fiercer, particularly in corporate banking as a result of rising interest from foreign capital organizations in the wake of Turkey’s upgrade to Investment Grade by a leading international rating agency, as Deutsche Bank A.Ş. Trade Finance and Cash Management Corporate Unit we develop suitable products which meet the needs of changing conditions, and we have gradually raised our market share.

Cash Management and Trade Finance, Financial Institutions: As one of the leading global banks in the field of Cash Management, Deutsche Bank continues to provide services as one of the solution partners and main correspondents for Turkish banks. Enjoying this position to provide cash management solutions to banks, the unit performs US Dollar money transfers through Deutsche Bank Trust Company Americas, New York; Euro transfers through Deutsche Bank AG, Frankfurt and Sterling transfers through Deutsche Bank AG, London. Services provided by the unit include Dollar and Euro based commercial and treasury money transfers, liquidity management and sales and support services for related products. While supporting clients with local, regional and global cash management solutions, the unit aims to provide the most efficient and the best services through its extensive global branch network.

Having been providing its clients with foreign trade services in more than 40 countries, Deutsche Bank offers solutions for foreign trade products and trade financing through its experience, knowledge and wide variety of products in order to maximize the level of its clients’ efficiency in foreign trade transactions. By taking an active role in the guarantee transactions and in confirmation, financing and discounting of letters of credit from Turkish financial institutions to those abroad, the division performs the sales and marketing of similar products used in the financing of global trade.

Through difficult times in financial markets and the global economy, the Bank has maintained uninterrupted and consistent support for Financial Institutions. Thus, it aims to always be the most reliable and preferred business partner of Turkish banks by continuing to share its Cash Management and Foreign Trade products with clients, as well as to provide innovative solutions and global experience.

Corporate Finance

Corporate Finance is composed of two units; Investment Banking Coverage & Advisory; and Capital Markets & Treasury Solutions.

Investment Banking Coverage & Advisory: The unit is divided into two groups as Non-Financial Corporates Coverage and Financial Institutions and provides services to corporate and financial institutes.

Investment Banking Coverage & Advisory provides consultancy services to Turkish companies as well as foreign companies seeking to invest in Turkey. These consultancy services include company mergers and acquisitions, public offerings and capital market and financing products.



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In this respect, the Unit provided consultancy services to Yapı Kredi Bank during acquisition of Yapı Kredi Sigorta A.Ş. and Yapı Kredi Emeklilik A.Ş. by Allianz AG in 2013. This was the biggest acquisition in the insurance sector of Turkey so far. We also provided consultancy services to Turkven, one of biggest private equity funds acting in Turkey, during the acquisition of Provus Bilişim Hizmetleri A.Ş., a portfolio company of Turkven and the only independent payment solutions provider in Turkey, by MasterCard.

Investment Banking Coverage & Advisory currently continues to work on some financing, merger and acquisitions and public offerings, and aims to maintain its pioneering position in the market in 2014 as it did in 2013 through developments in ongoing projects.

Capital Markets & Treasury Solutions: The Unit is divided into three groups; Non-Financial Institutions, Financial Institutions and Corporate Banking, providing services to corporations and FI’s.

- Non-Financial InstitutionsThe Non-Financial Corporates group offers Turkish companies, operating both in Turkey and abroad, access to Deutsche Bank’s global platform and accumulation of knowledge in the field of structured finance and risk management. By working in cooperation with the Corporate Coverage, the Bank aims to comprehensively understand every facet of its clients’ needs. The Bank is then able to efficiently and rapidly generate appropriate solutions by working with the right teams within Deutsche Bank.

- Financial InstitutionsThe FI Group is responsible for developing, marketing and selling products in order to meet the requirements of all financial institutions, primarily those of banks, brokerage houses and asset management companies based in Turkey. It offers a platform to financial institutions for all financial product transactions, especially exchange and fixed income securities. In addition the group also offers long-term funding and structured products by tailoring the design of the products for its clients, allowing them to benefit from the worldwide distribution network and product know-how of Deutsche Bank. In 2014, the FI group aims to continue to offer solutions that fully meet the requirements of its clients, to offer them with global access and products and thus to remain a key strategic partner for financial institutions.


14Deutsche Bank Annual Report 2013


- Corporate BankingThe Corporate Banking aims to provide services in line with the priorities andrequirements of its local and multinational customer segment, so as to develop strategic and longstanding relations with its prominent customers. In doing so, the Group takes advantage of Deutsche Bank’s global know-how and maximizes the coordination within different product groups, thus providing the most effective solutions through exclusively designed financing techniques and banking services for its clients. The Group’s target for 2014 will be to reinforce its reputation as a reliable and permanent business partner by establishing longstanding relations with its clients.

Support Functions

Support Functions include Human Resources, Risk Management, Legal, Finance, Compliance and Internal Control, Internal Audit, Technology and Operations and Corporate Real Estate and Services.

Human Resources: Human Resources Unit is responsible for the recruitment, workforce planning, performance management, salary and fringe benefits management, training and development processes in accordance with the Bank’s strategies.

In the recruitment function, the unit ensures that the right people are employed to pursue the Bank’s strategies, that they are qualified to create a corporate culture and that they are appointed to the right positions. The Bank’s basic recruitment policy is to hire professionals and to consider their potential to undertake bigger responsibilities in the future by placing emphasis particularly on expertise in the employment of new human resources.

Ensuring a work environment compliant with globally adopted Deutsche Bank values, the unit operates with the objective of implementing fair and competitive compensation and fringe benefits. In 2013, remuneration was based on global and local practices.

Aiming to develop the personal and business capabilities of the personnel and to keep their motivation high and loyalty strong, the Human Resources Unit also plays an active role in identifying and meeting the training and career development needs of the employees.

Throughout the Bank, the review of processes for each Unit and the undertaking of necessary steps regarding the optimization of resources continued for the sake of bringing about a more effective organizational structure. Training, rotation and transfer opportunities were stepped up to promote the effective utilization of bank personnel to ensure the sharing of information and expertise. In line with its strategy, the structuring of certain units will be accelerated and plans for the establishment of necessary teams will continue.

Risk Management: The Risk Management Unit is responsible for Bank-wide implementation of the standards “regarding the risk-return structure of the Bank’s cash flows and monitoring, controlling and, when necessary, modifying the nature and level of the operations” that were devised and put into effect by the Board of Directors within the framework of the BRSA regulations.

15Deutsche Bank Annual Report 2013


The Risk Management Unit is responsible for understanding risks and conducting sufficient evaluations before entering a transaction, setting risk management policies and practice methods based on risk management strategies, ensuring the application and adaptation of risk management policies and practice methods, maintaining quantified risks within limits and reporting the risk measurements and risk monitoring results to the Board of Directors or Board Member responsible from Internal Systems and senior management, on a regular and timely basis.

Legal: The Legal Unit provides legal consultancy services to the business and support service divisions of Deutsche Bank A.Ş. and performs Corporate Secretariat functions. It examines the compliance of contracts to which the Bank is a party, as well as transactions and texts prepared by other divisions of the Bank with the applicable laws, and expresses its opinions with respect to legal implications to the divisions. The Legal Unit is also responsible for examining the Bank’s new projects and recently developed products from a legal point of view, and where necessary, for offering legally compliance alternatives. The Unit also serves as the secretariat to Board of Directors, General Assembly and Audit Committee meetings. The Legal Unit represents the Bank in lawsuits to which the Bank is a party or appoints 3rd party law firms for this purpose.

Operations Committee From left to right: Ö. Yekta Bahadıroğlu, M. Kemal Şahin, C. Ertunç Ulak, G. Duygu Özcan, Özge Kutay, Ersin Akyüz, Günce Çakır İldun, Nesrin Akyüz, Ayhan Eryiğit, Ali Doğrusöz


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In 2014, the Legal Unit aims to continue providing legal consultancy services related to the finance sector and issues concerning the Bank, to provide legal support for potential projects, and to conduct the necessary studies in order for the Bank to be in compliance with the amended legislation.

Finance: The Finance Unit examines the Bank’s financial position through its daily and monthly reports and informs the Executive Management on the results. In order to adequately assess the performance of profit centers, the unit prepares the financial statements for these units on a daily and monthly basis. The unit is in charge of providing the information flow for the Bank's audit by the independent auditor and regulatory bodies. The Finance Unit generates new projects for Executive Management reporting and internal control systems and supports other related projects, the unit prepares the Bank’s financial statements and related disclosures in the required format and submits them to entities such as the Banking Regulation and Supervision Agency, Central Bank of Turkey, Undersecretariat of Treasury, Capital Markets Board and The Banks Association of Turkey.

Compliance and Internal Control: Compliance and Internal Control conducts Bank's compliance and internal control activities. Responsibilities of the unit in terms of compliance are to ensure compliance of internal by-laws and applications and each and every contract and similar legal text that may be binding on Deutsche Bank with the related applicable laws, regulations, ethical principles and widely-accepted Principles of Corporate Governance. Within this framework, it is responsible from conducting the necessary research and preparing the necessary reports regarding the businesses and transactions of the Bank's clients by taking the relevant laws and regulations, especially the Banking Law no. 5411 and Law no. 5549 on Prevention of Laundering Proceeds of Crime as basis. It acts as a bridge between business units. The unit provides recommendations about maintaining the necessary legal compliance and cooperation in relations with the supervisory and regulatory institutions determined by laws and regulations. The unit also undertakes to give opinions and recommendations about the necessary issues to the Board of Directors, Executive Management and business units, in compliance with the related legislation.

The Compliance and Internal Control Unit is secondarily responsible for the internal control activities after the unit, which is liable from the operation of all control systems established within the body of Deutsche Bank A.Ş. in the first place, primarily the financial and operational systems. The Unit maintains its activities within the framework of “Compliance and Internal Control By-Law” confirmed by the Board of directors.

The principle of separation of powers has been established for the necessary control points within the Bank. The independence of the internal control process from the functional activity units has been sufficiently assured and tasks and responsibilities within the corporate structure have been separated on the basis of function. Thanks to this organizational structure, measures within the internal control system are implemented independently and objectively with the principle of the separation of powers. The internal control system is regulated in compliance with the types and levels of risks emerging in relation with the character and content of the Bank’s activities.


17Deutsche BankAnnual Report 2013


Internal Audit: The Internal Audit Unit monitors the internal audit structure at all Deutsche Bank A.Ş. units regularly and independently on behalf of the Board of Directors. The Unit evaluates the unit’s transactions and practices on the basis of targets, their compliance with internal/external regulations and their performance within the framework of risk analysis, and focuses on assisting the Board of Directors regarding the effectiveness of the corporate management.

The Unit checks that the Bank’s ethical standards have been fully implemented by the business units. In addition to monitoring the compliance with internal and external regulations, Internal Audit also conducts dynamic and effective monitoring of the working environment at all business and support units under a risk focused approach.

Technology and Operations: Improvements to support the diversified product range and increasing transaction volume of the Bank and applications strengthening our control structure were the points of focus for the Technology and Operations Unit during 2013. In this respect, our Organizational structure was configured based on the new needs, applications were developed and new investments were made to boost the performance.

The Technology and Operations Units will focus on risk controlling, service management and capacity expansion in 2014. In line with the Bank’s and its parent company’s strategies, improvement operations in Product development, Risk Management, Hardware and Software Consolidation and Operational Continuity will go on.

Corporate Real Estate and Services: The Unit is responsible for providing a working environment compliant with the necessary health and safety conditions in order to sustain the activities of Deutsche Bank A.Ş. in a productive, safe and efficient way. The unit is also responsible for the management of critical systems such as construction, real estate, decoration, rent management, building management, strategies for working spaces, security systems, office and building maintenance, generators, UPS and mechanical and electrical systems, as well as conducting corporate services such as insurance, providing physical archive space, car rental, couriers and reception. The unit maintains its efforts to create a physical working environment in compliance with Deutsche Bank's global values and standards in order to better meet the internal client needs.

2 Management and Corporate Governance

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Board of DirectorsSenior ManagementIndependent Auditor CommitteesThe Summary Board of Directors Report Presented to the General AssemblyHuman Resources ApplicationsRelated - Party TransactionsOutsourced ServicesCorporate Social Responsibility


1902 - Management and Corporate GovernanceBoard of Directors

Board of Directors

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Board of Directors


Peter Johannes Maria TilsChairman of the Board of Directors,Chief Executive Officer of Central and Eastern Europe RegionBorn in 1952, Peter Tils graduated from the University of Cologne with an MBA. He has more than 36 years of experience in banking. Mr. Tils joined Deutsche Bank AG in 1977 and has been serving as the Chief Executive Officer for the Central and Eastern Europe Region at Deutsche Bank in Frankfurt since 2005. Tils was appointed as the Chairman of the Board of Directors of Deutsche Bank A.Ş. on November 21, 2012.

Ersin AkyüzMember of the Board of Directors, CEOBorn in 1961, Mr. Akyüz has a Bachelor’s and Master’s degree in Economics from the London School of Economics in addition to a Master’s degree in Business Administration from the University of Chicago. Assuming various positions both in Turkey and abroad in his 25 - year banking career, Mr. Akyüz joined Deutsche Bank A.Ş. in February 2008 as the CEO and Board Member.

Ahmet ArınçMember of the Board of Directors, Deutsche Bank AG, London Markets Trading, Managing DirectorBorn in 1970, Mr. Arınç is a graduate of the College of Wooster, Department of Economics. He has 22 years of experience in the banking industry and joined Deutsche Bank in 1998. Serving as a Managing Director in charge of Emerging Markets Trading at Deutsche Bank AG, Mr. Arınç joined the board of Deutsche Bank A.Ş. in August 2000. Mr. Arınç has been serving as the Board Member since September 2002.

Kaya DidmanVice Chairman of the Board of Directors, Chairman of Audit CommitteeBorn in 1962, Mr. Didman is a graduate of Boğaziçi University, Department of Business Administration. Mr. Didman held senior positions in companies such as Türk Ekonomi Bank, Baring Securities (London) and Morgan Stanley & Co. in London. Appointed to the Board of Directors at Deutsche Bank A.Ş. in June 2007, Mr. Didman has served as the Audit Committee Chairman since March 2008.

Hamit Sedat EratalarMember of the Board of Directors Responsible from Internal SystemsBorn in 1952, Mr. Eratalar is a graduate of Ankara University, Department of Economics and Public Finance. He worked as a partner at Arthur Andersen between 1981 and 2001 and served as a founding partner at Eratalar Management Consulting between 2001 and 2008. Serving on the Board of Directors at Deutsche Bank A.Ş. since August 2001.

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21Deutsche BankAnnual Report 2013

Marco KistnerMember of the Board of DirectorsBorn in 1964, Marco Kistner graduated with a degree in Banking Management from the University of Frankfurt. With 30 years of banking experience, Mr. Kistner has been working for Deutsche Bank AG since 1984. Currently serving as the Global Director of Emerging Markets Credit Risk Management, Mr. Kistner was appointed as a member of Board of Directors of Deutsche Bank A.Ş. in September 2012.

Satvinder SinghMember of the Board of DirectorsBorn in 1970, Satvinder Singh graduated with an MBA from the University of Durham. Having worked for HSBC and Citibank before joining Deutsche Bank AG in 2011, Mr. Singh is the Global Director of Direct Securities Services and Cash Management FI. Mr. Singh was appointed as a member of the Board of Directors of Deutsche Bank A.Ş. in July 2012.

Miklos KormosMember of the Board of DirectorsBorn in 1962, Miklos Kormos holds a Master’s degree in Diplomatic Relations from the University of Vienna and a PhD in Economics from the University of Budapest. He joined Deutsche Bank AG in 2007 and currently serves as the Managing Director responsible for Deutsche Bank AG’s Investment Banking operations in Central Europe, Israel and Turkey. With 21 years of experience in banking, Mr. Kormos was appointed as a member of the Board of Directors of Deutsche Bank A.Ş. in November 2012. Mr. Kormos' duties as the Board Member ended due to his demise on December 13, 2013.

Özge KutayMember of the Board of Directors responsible from Financial ReportingChief Operating OfficerBorn in 1970, Ms. Kutay is a graduate of the Faculty of Business Administration at Istanbul University. Starting her career at the Turkey Office of KPMG in 1993, Ms. Kutay has 17 years of experience in banking. Having been employed by Deutsche Bank A.Ş. since 1998, she served as an Assistant General Manager between 2001 and 2012 before being appointed as a member of the Board of Directors in October 2012.

Paul Antony GeradineMember of the Board of Directors, Member of the Audit CommitteeBorn in 1960, Paul Geradine holds a Master’s degree in Modern History from the University of Oxford. Having worked for UBS AG and HSBC before joining Deutsche Bank AG in 2012, Mr. Geradine is currently responsible for Deutsche Bank AG’s Corporate Banking Services Compliance Unit in the Europe, the Middle East and Africa regions. Mr. Geradine was appointed as a member of the Board of Directors and a member of the Audit Committee of Deutsche Bank A.Ş. in December 2012.

None of the members of the Board of Directors is involved in transactions with the Bank either in their own capacity or on behalf of third persons or engaged in operations considered under the prohibition of competition.

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2202 - Management and Corporate Governance Senior Management

Senior Management

Ersin Akyüz, Member of the Board of Directors, CEO:Born in 1961, Mr. Akyüz has a Bachelor’s and Master’s degree in Economics from the London School of Economics in addition to a Master’s degree in Business Administration from the University of Chicago. Assuming various positions both in Turkey and abroad in his 25-year banking career, Mr. Akyüz joined Deutsche Bank A.Ş. in February 2008 as the CEO and Member of the Board of Directors.

Özge Kutay, Member of Board of Directors responsible from Financial Reporting - Chief Operating Officer: Born in 1970, Ms. Kutay is a graduate of the Faculty of Business Administration at Istanbul University. Starting her career at the Turkey Office of KPMG in 1993, Ms. Kutay has 17 years of experience in banking. Having been employed by Deutsche Bank A.Ş. since 1998, she served as an Assistant General Manager between 2001 and 2012 before being appointed as a member of the Board of Directors in October 2012.

Ali Doğrusöz, Assistant General Manager - Technology and Operations:Born in 1963, Mr. Doğrusöz graduated from North Carolina State University, Department of Mechanical Engineering and received a master’s degree in Mechanical Engineering from Middle East Technical University. With 25 years of professional experience, Mr. Doğrusöz has been working at Deutsche Bank A.Ş. as the Assistant General Manager since 2002.

Süleyman Mert Haracçı, Assistant General Manager - Markets:Born in 1971, Mr. Haracçı graduated with both undergraduate and master’s degrees from Marmara University, Department of Finance. Serving in the banking sector since 1996, Mr. Haracçı joined Deutsche Bank A.Ş. in 2000. He was appointed Assistant General Manager in 2009.

Mustafa Bağrıaçık, Assistant General Manager - Corporate Finance, Investment Banking Coverage and Advisory, Corporate Coverage: Born in 1968, Bağrıaçık holds a Bachelors degree from the Mechanical Engineering Faculty of Istanbul Technical University, a Masters in Finance from Boston College, and a Masters in Management from Suffolk University. Throughout his 19 - year banking career, Bağrıaçık has undertaken various posts both in Turkey and abroad. Bağrıaçık was appointed as Assistant General Manager in October 2012.

Hakan Ulutaş, Assistant General Manager - Global Transaction Banking, Direct Securities Services:Born in 1965, Mr. Ulutaş is a graduate of Istanbul University, Department of Business Administration and holds a master’s degree in Business Administration from Marmara University as well as a master’s degree in Management from North Carolina State University. Mr. Ulutaş spent 21 years of his 24-year professional career in the banking sector. Hakan Ulutaş has been with Deutsche Bank A.Ş. since 2004. Ulutaş was appointed as the Assistant General Manager in October 2012.

Cenk Esener, Assistant General Manager - Global Transaction Banking, Trade Finance and Cash Management Corporates:Born in 1970, Mr. Esener graduated from Eastern Mediterranean University, in the Department of Economics. Having served for 17 years in similar positions in various banks, he joined Deutsche Bank A.Ş. in August 2009, and was appointed as Assistant General Manager in October 2012.

Hüseyin Hüsnü Okvuran, Managing Director - Corporate Finance, Investment Banking Coverage and Advisory, FI Coverage: Born in 1972, Mr. Okvuran graduated with a Bachelor’s degree from the Faculty of International Relations and Economics at Yale University. Throughout his 20-year banking career, Okvuran has undertaken various positions in the investment-banking sector abroad. Okvuran took up his position as director responsible for Turkey, the Middle East and South-eastern Europe at the Deutsche Bank Investment Banking Services, Financial Institutions Group in August 2011.

Pınar Çapanoğlu Altuğ, Director - Global Transaction Banking, Cash Management and Trade Finance, FIs:Born in 1977, Mrs. Çapanoğlu graduated from the Middle East Technical University with a degree from the Department of Economics. Serving in the banking sector since 1999, Mrs. Çapanoğlu joined Deutsche Bank A.Ş. in 2008.


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Ali Cem Cansu, Director - Corporate Finance, Capital Markets and Treasury Solutions, Corporate Banking:Born in 1972, Mr. Cansu graduated from the Department of Political Science and Public Administration in Middle East Technical University Administrative Sciences. Mr. Cansu holds an Executive MBA degree from Koç University from 2007 and has a total of 17 years of banking experience mainly in the fields of Corporate Banking and Trade Financing. He has been providing services for Deutsche Bank A.Ş. since March 2010.

Orhan Özalp, Vice President - Corporate Finance, Capital Markets and Treasury Solutions, Financial Institutions:Born in 1982, Mr. Özalp graduated with a Bachelor’s degree from the Economics and Business Administration Departments at Koç University. Having worked at the Trading Unit for Deutsche Bank A.Ş. since 2006, Özalp has been serving as the Manager in charge of Financial Institutions since 2011.

Özcan Yekta Bahadıroğlu, Director - Internal Audit:Born in 1969, Mr. Bahadıroğlu is a graduate of Middle East Technical University, Department of Economics and holds an MBA from RSM Erasmus University. Working in the banking industry since 1996, he joined Deutsche Bank A.Ş. in 2002. Mr. Bahadıroğlu holds CIA (Certified Internal Auditor) and CISA (Certified Information Systems Auditor) certificates.

Mustafa Kemal Şahin, Director - Compliance and Internal Control:Born in 1970, Mr. Şahin is a graduate of Middle East Technical University, Department of Economics and has an MBA from Warwick Business School. Working in the banking sector since 1992, Mr. Şahin joined Deutsche Bank A.Ş. in 2005 and was appointed as the Money Laundering Reporting Officer of the Bank. Mustafa Kemal Şahin is also appointed as Anti-Money Laundering Officer since April 1, 2011.

Cenk Ertunç Ulak, Director - Risk Management:Born in 1976, Ulak holds a Bachelors degree in Management from Boğaziçi University and a Masters in Management from Koç University. Working in the banking sector since 1999, Ulak joined Deutsche Bank A.Ş. in 2011.

Günce Çakır İldun, Director - Legal:Born in 1977, Mrs. İldun is a graduate of Ankara University, Faculty of Law and holds a Master of Laws (LL.M.) degree from State University of New York, Buffalo. Günce Çakır İldun has 14 years of professional experience, 13 of which were in the banking sector. Mrs. İldun has been with Deutsche Bank A.Ş. since December 2006.

Ayhan Eryiğit, Vice President - Human Resources: Born in 1972, Eryiğit holds an undergraduate degree in business administration from Istanbul University and an MBA from Yeditepe University. Eryiğit started his professional career in 1996 and has been working in human resources field of the banking sector since 1998. Eryiğit joined Deutsche Bank A.Ş. in 2013.

Gonca Duygu Özcan, Vice President - Global Logistic Services:Born in 1972, Mrs. Özcan is a graduate of Istanbul Technical University, Department of Architecture and holds an MBA from Istanbul Bilgi University/Manchester Business School. She has 21 years of professional experience, 18 of which are in the banking sector. Mrs. Özcan joined Deutsche Bank A.Ş. in 2006.

Nesrin Akyüz, Vice President - Finance:Born in 1975, Nesrin Akyüz graduated from the Middle East Technical University with a degree from the Department of Business Administration. Having gained auditing experience in various banks since 1997, Akyüz joined Deutsche Bank A.Ş. in 2006.

02 - Management and Corporate Governance Senior Management


2402 - Management and Corporate Governance Independent Auditor Committees

Independent Auditor

During the Ordinary General Assembly meeting of the Bank in 2013, statutory auditors of the Bank resigned and in the same meeting held on March 28, 2013, Akis Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. was selected as the independent auditor of the Bank.

Committees

Audit CommitteeKaya Didman, ChairmanPaul Antony Geradine, Member

The Audit Committee was established on October 31, 2006, pursuant to the Board of Directors Resolution No. 48/6. The Audit Committee convened 17 times during the 2013 fiscal year.

Assets and Liabilities Committee (ALCO)Ersin Akyüz, ChairmanÖzge Kutay, MemberCenk Esener, MemberHakan Ulutaş, MemberJoachim Bartsch, MemberS. Mert Haracçı, MemberCenk Ertunç Ulak, Member

The ALCO is responsible from analyzing the Bank's future capital requirements by overseeing the structure of the Bank's assets and liabilities, and evaluating risk-bearing assets, liquidity and market risk. The ALCO convenes quarterly under the presidency of the Bank’s CEO. During the 2013 fiscal year, all committee meetings were attended by all members either in person or via teleconferencing.

Executive Committee (EXCO) Ersin Akyüz, Chairman Özge Kutay, MemberS. Mert Haracçı, Member Hakan Ulutaş, Member Cenk Esener, Member Pınar Çapanoğlu Altuğ, MemberH. Sedat Eratalar, MemberMustafa Bağrıaçık, Member

The Executive Committee meets once a month for a number of purposes including Deutsche Bank's global strategies to be followed in Turkey, generating ideas for the mutual development of coordination and new business ideas among the executive units established in Turkey, in addition to exploring cross-selling opportunities, coordination with the infrastructure units and assessing any risks regarding the reputation of Deutsche Bank’s franchise.


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Operations CommitteeÖzge Kutay, ChairmanAli Doğrusöz, MemberMustafa Kemal Şahin, MemberÖ. Yekta Bahadıroğlu, MemberG. Duygu Özcan, MemberAyhan Eryiğit, MemberGünce Çakır İldun, MemberCenk Ertunç Ulak, MemberNesrin Akyüz, Member

The Operations Committee meets on a weekly basis. The Committee is a platform where all Operations, Support and Control Units discuss the developments, changes and problems regarding the operations of the Bank, produce solutions and organize the effective utilization and allocation of resources. The Committee meeting minutes are reported to the CEO and the Board Member responsible from the Internal Systems.

Personnel CommitteeErsin Akyüz, ChairmanÖzge Kutay, MemberAyhan Eryiğit, MemberAli Doğrusöz, MemberS. Mert Haracçı, MemberHakan Ulutaş, MemberCenk Esener, MemberMustafa Bağrıaçık, Member

The Personnel Committee is responsible for setting up the necessary platforms for establishing, implementing, discussing and modifying personnel policies; evaluating promotion recommendations up to the Vice President level; organizing training and development tasks that have Bank-wide relevance; and implementing the benefits to be provided to the personnel. The Committee meets once a year or when deemed necessary by the Committee Chairman or the Human Resources Unit. Human Resources represent units that are not self-represented in Committee meetings.

Reputational Risk CommitteeErsin Akyüz, ChairmanAhmet Arınç, MemberH. Sedat Eratalar, MemberÖzge Kutay, MemberM. Kemal Şahin, MemberSancar Tomruk, MemberHakan Ulutaş, MemberCenk Esener, MemberGünce Çakır İldun, Member

Clients, transactions and other matters that are deemed to be of potential risk to the Bank’s reputation are assessed at the Reputational Risk Committee. The Reputational Risk Committee offers recommendations to the related units on whether the Bank should accept the transactions or clients under consideration. The Committee meets under the presidency of the CEO when deemed necessary. The Compliance and Internal Control Director undertakes the duty of Secretary of the Committee.

02 - Management and Corporate Governance Committees


2602 - Management and Corporate Governance Committees

Credit CommitteeErsin Akyüz, ChairmanH. Sedat Eratalar, MemberÖzge Kutay, Member

The Credit Committee was established to allocate credits under the authority delegated to the committee by the Board of Directors’ decision No. 84 dated December 13, 2010. The Committee takes loan decisions within the limits determined for itself, and by determining the allocation conditions. The frequency of Credit Committee meetings is arranged as per necessity, but no less than twice a month.

Risk Management MeetingsWeekly meetings on “Market Risk” are held upon participation of the Board Member responsible from Internal Systems, Head of Markets Unit and Head of Deutsche Bank A.Ş. Risk Management Unit. If it is needed, General Manager is also invited to these meetings.

The objective of these meetings is to review the developments in the economy, (FX rates, Interest Rates etc.) discuss the position of the bank in terms of Government Bond portfolio and bank’s FX position, (if any) and check whether the bank is within the Bank Limits for Market Risk (like PV01, the effect of 1 basis change in interest rates to the Bank’s P/L). Stress test results are also discussed in these meetings before they are submitted to the Board of Directors for approval.

It was also resolved to convene monthly Risk Management meetings where Market Risk, Operational Risk and Credit Risk related matters will be discussed. Board Member responsible from Internal Systems, COO, Head of Markets Unit, Head of Internal Control and Head of Deutsche Bank A.Ş. Risk Management Unit participate in these meetings. If it is needed, General Manager is also invited to these meetings.

The objective of these meetings is to review the developments in the economy, to discuss all kinds of credit, market or operational risk related matter and to check whether the bank is within the Bank Limits. Results of the stress test regarding credit, market and operational risk are also discussed in these meetings before they are submitted to the Board of Directors for approval.

Participation of Board Members and Committee Members in Meetings The Board of Directors meets at least once a month in accordance with the Bank’s Articles of Association and governing legislation to oversee matters related to the Bank and to make decisions (within the scope of its duties and responsibilities). When deemed necessary, the Chairman of the Board of Directors also calls for meetings. During 2013, members participated in Board meetings regularly, conforming to the criteria for a quorum to convene and make decisions.

The Audit Committee meets at least once a month. In principle, Committee members participate in all meetings. However, in the event that they are not present at the Bank, due to business travel arrangements or other reasons, they participate through teleconferencing to present their opinions and suggestions regarding agenda items. In 2013, the Committee and Council Members participated in Committee meetings regularly, conforming to the criteria to form a quorum to convene and arrive at decisions.


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Transactions conducted by Members of the Board of Directors with the Bank

Pursuant to the permission granted by the Bank's General Assembly, none of the members of the Board of Directors is involved in transactions with the Bank either in their own capacity or on behalf of third persons or engaged in operations considered under the prohibition of competition.

Financial Benefits of the Senior Executives In the current period, the total benefits allocated to senior executives such as Chairman of the Board of Directors, members of the Board of Directors, the CEO and the Assistant General Managers amounting to TL 17.172 thousands and expenses such as the transportation and accommodation of senior executives amounting to TL 531 thousands.

The Summary Board of Directors Report Presented to the General Assembly As of December 31, 2013, the Bank’s total assets amounted to TL 2,359,630 thousands, increased by 82% compared to the previous year. The main reason of the increase is the increase in loans.

Total loans increased by 137% from TL 381,905 thousands at the end of 2012 to TL 904,029 thousands by the end of 2013. All loans are short-term.

Total deposits amounted to TL 592,956 thousands at the end of 2013, implying 38% growth over the TL 430,740 thousands at the end of 2012. This growth was largely driven by the increase in banks deposits.

Items held in Custody grew by 10% from TL 41,325,502 thousands at the end of 2012 to TL 45,377,511 thousands at the end of 2013.

Off-balance sheet items increased from TL 3,401,449 thousands at the end of 2012 to TL 6,149,499 thousands at the end of 2013 due to the trading derivative financial instruments and commitments.

By the end of 2013, the Bank’s net profit after taxes was TL 2.087 thousands.

The Bank continues to operate at high levels of profitability and strengthens its equity. The Bank commands a high level of liquidity which is sufficient to meet its debts, and a capital adequacy standard ratio well in excess of the minimum rate set by the related regulations.

Information on Dividend Distribution PolicyThe allocation and the distribution of the net profit are decided at the Deutsche Bank A.Ş. shareholders’ Annual General Assembly. Since the Annual General Assembly concerning the 2013 financial year had not been held as of the date of this Report, no decision has yet been taken on the distribution of dividends.

In the Bank’s Annual General Assembly held on March 28, 2013, out of the TL 104,107 thousands net profit generated in 2012 after deferred tax assets, a total of TL 5,190 thousands was allocated to 1st legal reserves, TL 90.261 thousands was allocated to the shareholders as dividend, TL 8.351 thousands was reserved as 2nd legal reserves out of paid and distributed dividend; whereas TL 305 thousands was allocated to Extraordinary Reserves.

02 - Management and Corporate Governance The Summary Board of Directors Report Presented to the General Assembly


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Human Resources Applications

The training needs of employees are determined essentially based on the performance evaluation process and with the cooperation of department managers and Human Resources. In addition to local training and development programs, the Bank also takes advantage of the global opportunities presented by Deutsche Bank. Considering development of talents necessitated by working internationally important, Deutsche Bank offers its employees the services of domestic and foreign training companies for personal development training as well as technical training in line with their needs.

Performance evaluation and goal setting are carried out online in computer environment at certain times of the year. Within this scope, the process continues with the managers’ feedback after the employee self-evaluations are received. The results of the performance evaluations are used in career planning and to determine training and development needs and compensation strategies.

Our “Diversity at Work” week was held between 11th and 15th November 2013 and included a meeting entitled “Working and Communicating in Different Cultures”.

As of December 31, 2013, Deutsche Bank A.Ş. had 110 employees. Of the Bank’s employees, 67% are university graduates and 3% are high school graduates while 30% hold a Masters and/or a PhD.

Related - Party TransactionsWithin the scope of its activities, the Bank enters into various transactions with Group companies. These transactions are conducted at market prices and for fully commercial purposes. The resulting profit/loss is reflected in the income statement.

The related party transactions of Deutsche Bank A.Ş. are reported in detail in the notes to the financial statements included in this annual report.

The Bank did not take part in any legal transactions with the controlling Company or with any party related to the controlling Company and/or with the direction of the controlling Company for the benefit of the controlling Company or its related parties. Since banking regulations and market conditions are taken into account as far as the relations with the Group companies are concerned, measures are neither taken nor specifically avoided to be taken for the benefit of the controlling Company or its related parties in the past fiscal year.

02 - Management and Corporate Governance Human Resources ApplicationsRelated - Party Transactions


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Outsourcing Business Lines of Explanation ofCompanies Outsourced Services the ServiceSecurverdi Güvenlik Security Security services in the office, Hizmetleri A.Ş. building and their extensions, transportation of cash and securitiesAkbasım Matbaacılık ve Operations The secure and timely printing ofTicaret Ltd. Şti. check books in accordance with legal requirements as to formJCI Correspondence Correspondence ServicesBİS Çözüm Bigisayar ve Information Systems Main Banking SystemEntegrasyon Hiz. ve Tic. A.Ş. Global Bilişim Bilgisayar Yazılım Information Systems Technical support and maintenance-Danışmanlık San. ve Tic. Ltd. Şti. EFT/EMKT web interface development and maintenanceDataassist Bilgi Teknolojileri A.Ş. Human Resources Payroll ServicesManpower İnsan Kaynakları Ltd. Şti. Human Resources Human Resources ServicesDeutsche Bank AG Information Systems Technical support and maintenance- SMARAGD- suspicious activitiesDeutsche Bank AG Information Systems Technical support and maintenance Message Broker-Swift interfaceDeutsche Bank AG Information Systems Technical support and maintenance - Support services regarding send/receive procedures of MNT - Swift MessagesBT Bilişim Hizmetleri A.Ş. Information Systems Location supply and all infrastructure services for Disaster Recovery SiteDeutsche Bank AG Operations Operational support services within the context of Hotscan - Embargo filtering practicesDeutsche Bank AG Information Systems Technical support and maintenance - Hotscan - Embargo filtering practices Deutsche Bank AG Information Systems Technical support and maintenance - SSR - Reconciliation practises - Technical support and maintenance - ID-Management - Management of User AccountsDeutsche Bank AG Information Systems Technical support and maintenance - Active Directory - ID ManagementDeutsche Bank AG Information Systems Technical support and maintenance - Network SupportDeutsche Bank AG South African Branch, Information Systems Technical support and maintenance - Securities (Pty) Ltd, Auto hedgerDeutsche Securities SA (Pty) Ltd. Deutsche Bank AG Information Systems Technical support and maintenance - DAPDeutsche Bank DBOI Operational Proceedings Client Information ServicesGlobal Services Pvt Ltd Platin S.M.M.M. Ltd. Şti. Operational Proceedings Data entry and filing services

Outsourced Services

The business lines and names of the entities that we have procured support services from in 2013 are listed below pursuant to Regulation on Bank's Procurement of Support Services.

02 - Management and Corporate Governance Outsourced Services


3002 - Management and Corporate Governance Corporate Social Responsibility

Corporate Social Responsibility

Deutsche Bank A.Ş. considers corporate social responsibility to be of utmost importance and priority. The Bank takes a highly sensitive approach to the production of social responsibility projects and the support of existing projects. Deutsche Bank A.Ş. is aware of the fact that social responsibility is as important as providing customer satisfaction, employee motivation and a healthy, efficient and high-quality working environment.

Deutsche Bank continues to be a bridge between Germany and Turkey in terms of developing economic, social and cultural relations: Deutsche Bank pays great attention to the development of economic, social and cultural relations between Germany and Turkey. In order to contribute to these long-running relations between the two countries, the Bank works diligently on the development of economic, social and cultural projects.

Bank’s parent company, Deutsche Bank AG has been organising the traditional annual “Incentive Tour for Top GMC Clients” meeting for the last twelve years for the senior managers of its prominent medium scale corporate clients. Due to the importance that the Bank accords to the development of social and cultural relations between Germany and Turkey, this meeting has taken place in Istanbul four times over this period of twelve years. Furthermore, the “Deutsche Bank European Advisory Board Meeting” was held in Turkey for the first time in 2013. Those who attended the meetings organized in Istanbul with their families gained the opportunity to get to know the city’s historical, cultural and natural beauties and enrich their impressions of Turkey.

The "1st Turkish-German Investment and Cooperation Conference" was organised in 2010 in Berlin, with Deutsche Bank as the lead sponsor in cooperation with the Foreign Economic Relations Board (DEIK), the Turkish-German Business Council and participants including Turkish and German government officials, and representatives of the business world and media. The Conference proved a success, and the "2nd Turkish-German Investment and Cooperation Conference" was held in Berlin in coordination with the DEIK Turkish-German Business Council in 2011. These relations continued to strengthen in 2013 as well.

Deutsche Bank will continue its studies on developing economic, social and cultural relations between Germany and Turkey.

Van Earthquake Project:In order to heal the wounds of those earthquake victims left homeless by the Van earthquake which struck in October 2011, Deutsche Bank allocated a budget of 100,000 Euros to construct container homes and provide the necessary furnishings. Visits were organised for families living in prefabricated towns and the necessary help was provided after ascertaining their needs. Moreover, Deutsche Bank provided scholarships to 15 primary school pupils on the recommendation of the Van Governorship Welfare and Solidarity Foundation during the school years of 2012-2014. Various gifts were sent to these school pupils on the 23rd April National Sovereignty and Children’s Day.

Sait Taşcıoğlu Primary School Project: The “Sait Taşçıoğlu Primary School” project has been ongoing since 2010. As part of the project, negotiations were conducted with officials to determine the needs of the school, located in the village of Zerzevatçı in Istanbul’s Beykoz district, and its pupils in 2013. As part of the Project, which was organised by Deutsche Bank employees, various educational games and events were organised for young pupils of the school on the 23rd April National Sovereignty and Children’s Day. Moreover, in order to promote reading, Deutsche Bank employees donated books and provided chess and English learning sets to the school.

Deutsche Bank Memorial Forest Project:With the project launched in order to popularize and develop environmental protection awareness in 2010, like every year, Deutsche Bank employees were given a tree sapling every year on their birthdays via the Turkish Foundation for Combating Soil Erosion, for Reforestation and for Protection of Natural Habitats (TEMA) in 2013.

In order to provide support for the combat of the TEMA Foundation against soil erosion and desertification, it was resolved to donate tree saplings to the Balıkesir Kepsut Memorial Forest to be established in 2014 and to create a Deutsche Bank Memorial Forest.





Culture and Arts:

Deutsche Bank believes in the universality of art, and will continue to closely follow and support young artists around the world:

In order to encourage creativity and innovation, Deutsche Bank has been supporting promising young artists all over the world in the fields of painting and music for 32 years. The starting point of the Deutsche Bank collection, the largest and most important corporate art collection in the world, can be considered as its decisiveness and sensibility in contributing to the development of art. The corporate collection, expanding since 1945, consists of paintings and photographs. Deutsche Bank has organised the exhibitions, Habersiz Buluşma (Blind Date) and Joseph Beuys ve Öğrencileri (Joseph Beuys and His Students) in Istanbul in previous years. As the sponsor of the ‘1st Contemporary Istanbul and Edge of Arabia Istanbul: Transition’ exhibition, Deutsche Bank highlighted the importance it attributes to Istanbul as a bridge between civilizations.

Magdelena Kozena and Venice Baroque Orchestra Concert:Bank’s parent company Deutsche Bank AG once more showed the importance it attaches to arts and Istanbul by becoming a sponsor to the concert of Magdelena Kozena, the famous soprano of the baroque music, accompanied by the Venice Baroque Orchestra in Hagia Irene during the 41st Istanbul Music Festival, organized by Istanbul Foundation for Culture and Arts (IKSV).

Berlin Philharmonic Orchestra:Bank’s parent company, Deutsche Bank AG has supported the Berlin Philharmonic Orchestra since 1989, which was established as an autonomous assemblage in 1882 and has been accepted as the most noteworthy musical constitution of our era. In 2002, Deutsche Bank was the exclusive partner and focused on the education of the talented youngsters. Deutsche Bank also extended an opportunity to open a digital concert hall as an innovative initiation in 2009 which would enable the orchestra to reach more people through the Internet. For the first time in its history, the Berlin Philharmonic Orchestra performed a concert in Istanbul as part of the Istanbul Culture and Art Foundation’s 40th anniversary events in September 2012. Furthermore, the orchestra performed a concert as part of the 26th International Izmir Fest, which was organised by the Izmir Culture, Art and Education Foundation (İKSEV).

We encourage individuals to take responsibility for their own cities:Through the “Urban Age” conference and project competition, Deutsche Bank’s forum for examining the future of metropolitan cities around the world that took place in Istanbul in 2009, organised by the Alfred Herrhausen Society and the London School of Economics (LSE), issues such as the participation in urban life and taking responsibility in multi-cultural societies were discussed with people from different environments, workshops were conducted in an effort to encourage individuals to question the idea of being an urbanite and to take responsibility for their own cities, as well as following up with award winning projects.



Continued support for foundations supporting the environment, women’s labor and education:

International Women’s Day, 8th March:The funds raised by the lottery organized by Deutsche Bank employees to underline the importance of the personal development and economic freedom of women in our society were donated to the Women Entrepreneurs Association of Turkey (KAGİDER) on International Women’s Day, 8th March.

With a charity sale organized, handmade gifts, made by women on low incomes who were members of the Foundation for the Support of Women’s Work, were purchased by Deutsche Bank employees as new-year gifts. Accordingly, our handcraft products gained a higher profile, improving the economic freedom of women in our society.

Turkish Foundation for Children in Need of Protection, Koruncuk: In order to encourage reading, Deutsche Bank employees donated books to the Turkish Foundation for Children in Need of Protection in an effort to support education of homeless children.

Earth Week: Through the “Dünya Haftası / Earth Week”, which is celebrated between 18th and 23rd March in the world and aims to raise awareness of environmental issues, necessary measures were taken to promote the economical and correct use of water and energy resources. There were a number of presentations and speeches during the week, aimed at raising environmental awareness.

Various events were organised in November 2013 across all Deutsche Bank branches simultaneously as part of “Diversity Week”, which is aimed at creating awareness and promoting better understanding between individuals.

Deutsche Bank A.Ş. employees have been implementing their own social responsibility projects by taking individual responsibility:Deutsche Bank A.Ş. pays prioritised attention to ensure that its employees are individuals who are socially and environmentally conscious, sensitive and prepared to take responsibility. Therefore, employees are encouraged to take responsibility individually and to carry out their own projects. Deutsche Bank employees improved their individual projects and worked actively on collecting waste paper, plastic bags and caps of plastic bottles in an effort to create a more sustainable environment in 2013. Employees also worked on water and energy saving projects. Deutsche Bank A.Ş. employees, even when they give a special gift to their loved ones, contribute to people who face financial difficulty, the environment and education by acting with concern for social responsibility.

3 Financial Assessment and Risk Management

Report of the Audit CommitteeManagement DeclarationAuditsOther Information Regarding Corporate ActionsFinancial AssessmentMonitoring TargetsRisk Management PoliciesCredit RatingsSummary of Five - Year Financial HighlightsAnnual Report Compliance Opinion

35373838393939414243


3503 - Financial Assessment and Risk ManagementReport of the Audit Committee

Report of the Audit Committee

The Audit Committee did not observe any adverse occurrences regarding the Bank’s internal control, internal audit and risk management systems during the 2013 fiscal year. The Committee regularly corresponded with the Bank’s internal systems department managers, closely monitored the Bank’s risk and operations and ensured that all measures were taken for timely identification and elimination of any risk. Regarding the compliance of the Bank’s accounting practices with the Banking Law No. 5411 and other applicable legislation, the Committee reviewed the assessments of the independent auditors and did not encounter any discrepancies.

Our observations and opinions on the Bank’s risk management and internal control activities are as follows:

Supervision by the Board of Directors and Executive Management: The Board of Directors consists of experienced members who work actively in the banking sector, are specialized in various fields of the banking profession and possess sufficient knowledge on different types of assumed risks, how these risks occur and how they can be managed.

The Executive Management works in close contact with the Board of Directors, is knowledgeable and experienced on risk and is capable of utilizing the know-how and experience of the parent bank, Deutsche Bank AG, in these areas.

Responsibilities regarding continuous risk reporting associated with developments in the financial markets, risk management practices and the Bank’s operations have been identified. Risk reporting is performed on a daily basis.

The Board of Directors and the Executive Management monitor the reliability and functioning of accounting and reporting systems through specialists who are not users of these systems.

The Board of Directors, Executive Management and the parent company, Deutsche Bank AG, continuously review risk acceptance limits and implement the necessary preventive measures in response to changing market conditions.

The Board of Directors, Executive Management and the parent company, Deutsche Bank AG, act conscientiously to ensure that the Bank’s business units and business lines employ personnel who possess the necessary knowledge, experience and expertise regarding the nature and scope of the tasks being performed.

In addition, employees are offered the opportunity to benefit from the Deutsche Bank AG specialists, their knowledge and experience.

Through "the Code of Business Conduct and Ethics for Deutsche Bank Group" document notified to the Deutsche Bank employees during the recruitment process against signature, the Board of Directors, Executive Management and the main partner, Deutsche Bank AG, have determined the general rules in order to form the human resources team to conduct the Bank's activities in a safe and reliable way. Thus, the necessary measures undertaken to carry out the Bank’s operations in a safe and reliable manner and to ensure that employees are honest and ethical and that they behave consistently with the Bank’s prudent management philosophy and conduct.

Report of the Audit CommitteeManagement DeclarationAuditsOther Information Regarding Corporate ActionsFinancial AssessmentMonitoring TargetsRisk Management PoliciesCredit RatingsSummary of Five - Year Financial HighlightsAnnual Report Compliance Opinion


3603 - Financial Assessment and Risk ManagementReport of the Audit Committee

The Board of Directors, Executive Management and the parent company, Deutsche Bank AG, monitor all operations of the Bank adequately through various internal audit and control systems. Before the Bank embarks on a new line of business or launches a new product, the Board of Directors, Executive Management and the parent company, Deutsche Bank AG, require the implementation of New Product Approval and New Business Approval procedures to assess all potential risk which may arise from such business or products, and provide the necessary infrastructure and internal controls for the management of such risk.

The New Product Approval and New Business Approval procedures intend to overview the adequacy of the Bank’s infrastructure necessary for identifying, monitoring and controlling the potential risk before embarking on a new operation or launching a new product.

Risk Management Policies, Implementation Methods and Limits: The Bank’s risk in trading treasury bills and government bonds has been identified and policies, implementation methods and limits to measure, monitor and control these have been established.

These policies, implementation methods and limits are consistent with the level of experience, goals and objectives and financial strength of Deutsche Bank A.Ş. as well as of the parent bank, Deutsche Bank AG. Following the determination of risk policies by Deutsche Bank AG, the Bank Risk Committee evaluates these policies, adopts those that are appropriate for Deutsche Bank A.Ş. and then submits them for the approval of the Board of Directors.

Hierarchical structure of the authorities and responsibilities in the Bank’s operations are set out in the organization chart.

We did not identify any transaction that might result in any significant risk during 2013. The Bank’s risk management and internal control systems are capable of identifying potential risk in advance.

On behalf of the Audit CommitteeKaya Didman, Chairman


3703 - Financial Assessment and Risk ManagementManagement Declaration

Management Declaration

As a result of the assessment made by the Board of Directors of Deutsche Bank A.Ş. (“Bank”) of the internal controls on information systems and banking processes for the audit period of January 1, 2013 - December 31, 2013 in terms of efficiency, adequacy and compliance pursuant to Regulation on Bank Information Systems and Banking Processes Audit to be Performed by External Audit Institutions, which became effective on December 31, 2009 and publicly announced at the Official Gazette on January 13, 2010 with issue no. 27461, by the Banking Regulation and Supervision Agency and the Circular Letter dated June 30, 2010 with no. B.02.1.BDK.0.77.00.00.010.06.02/3 on “Management Declaration”, which specifies the particulars of the Management Declaration, preparation of which is stipulated in Article 33 of the Regulation above, we hereby declare that,

• Board of Directors of our Bank is responsible from establishment and performance of an efficient, adequate and compliant internal control system pursuant to Articles 29 and 30 of the Banking Law with no. 5411 and to paragraph 1 of Article 4 of the Regulation on the Internal Systems of the Banks, which was publicly announced at the Official Gazette of November 1, 2006 with issue no. 26333,

• Internal Control and Internal Audit Units of our Bank performed an examination on the internal control system for the banking processes included in Article 25 of the Regulation on Bank Information Systems and Banking Processes Audit to be Performed by External Audit Institutions and the Information Systems processes included in Article 24 of the same Regulation and an assessment in order to reveal all significant control deficiencies regarding this system,

• During the assessment made by the related units of our Bank on the internal control system, results of the works conducted by the related units of our Bank, not the results of the works of the external audit institution were used,

• No significant control deficiency was detected on the Internal Control System of our Bank,

• No significant control deficiency, which may hinder the efficiency, adequacy or compliance of our internal control system in accordance with the procedures and principles set forth in the second chapter of the Regulation on the Internal Systems of the Banks entitled “The Internal Control System” and the Communiqué on Principles to be Considered in Information Systems Management in Banks, which was publicly announced at the Official Gazette dated September 14, 2007 with issue no. 26643, was found,

• As a result of the assessment made on our internal control system, all control weaknesses and noteworthy control deficiencies detected on our internal control system are classified and presented to the external auditor, even if they were corrected by the end of the period,

• As a result of the audits performed by the Internal Audit Unit during 2013, 25 Control Weakness (CW) and 5 Noteworthy Lack of Control (NLC) findings were determined in total and currently, 16 CW and 1 NLC findings are still open in accordance with the target dates of the management action plans,


3803 - Financial Assessment and Risk ManagementManagement DeclarationAuditsOther Information Regarding Corporate Actions

• No act of misconduct or corruption, which may result in material misrepresentation in the Financial tables or materially impact the integrity, consistency, reliability and confidentiality, if and when a need for such confidentiality arises, of sensitive data of the Bank, especially the financial data, and continuity of the activities or in which managers, be it of important function or not, or other employees with critical duties in the internal control system of the Bank are involved, was detected,

• Current status of the findings, whether they are closed or not, determined in the previous external information systems and banking processes audits and presented to the bank, closure of which have not yet been approved by the external auditor have been determined and submitted to the external auditor,

• Subsequent to the examinations made on our internal control system, changes in the internal control system or in other issues which may materially impact the internal control system are presented to the external auditor in a way that will include the corrective actions taken by the bank in significant and noteworthy control deficiencies.

Board of Directors of Deutsche Bank A.Ş.

Audits During the fiscal period, the Bank underwent financial audit performed by the Banking Regulation and Supervision Agency (BRSA) and the routine responsibility audit, performed by the Central Bank of Turkey. In addition, independent auditor of the Bank performed quarterly interim audits and an annual audit.

Other Information Regarding Corporate ActionsNo legal action has been lodged against the Bank that would affect the Bank’s fiscal position and actions.

During 2013, the Bank was ordered to pay an administrative fine of TL 167,385 by the BRSA as a result of inconsistencies found in the Bank’s application of regulations. No administrative or legal sanctions have been applied against the Bank’s Board of Directors.


39

Financial Assessment

A Higher Capital Adequacy than the Sector Average Deutsche Bank A.Ş. has a relatively high capital adequacy ratio when compared to the sector average. On and off-balance sheet foreign currency balances are managed concurrently. While the securities portfolio held for trading purposes and loans comprise the majority of the Bank’s assets, the majority of its profit is derived from interest from securities and loans and profits from derivative financial instruments. The Bank’s liquidity and interest risk are managed diligently by taking into account its capital and the funding limit set by Deutsche Bank AG, for the risk exceeding a reasonable amount, by selling forward securities to Deutsche Bank AG, London. The Bank maintains high levels of liquidity at all times and makes investment decisions depending on prevailing market conditions.

The Bank’s parent company, Deutsche Bank AG, undertakes that it will fulfill the contracted responsibilities of Deutsche Bank A.Ş. based on its declaration which was approved at the General Shareholders and published in its annual report.

An analytical assessment of the financial position is included in the Summary Report of the Board of Directors to the General Assembly.

Monitoring TargetsThe annual budget is set by the Bank’s Board of Directors in line with the targets and monitoring activities check whether or not operational results are in line with the budget. Profit/loss, balance sheet and risk weighted assets, established in accordance with the internal assessment process, are approved by the Board of Directors of the Bank. The Bank made less profit than the profit budgeted due to the effects of the market fluctuations in the current period.

Decisions taken by General Assembly are fulfilled by the Board of Directors without exception.

Risk Management Policies

General Policies Deutsche Bank A.Ş. holds a portfolio including TL treasury bills, government bonds and private sector bonds for trading purposes, but the Bank does not trade in the equity market. Deutsche Bank does not extend cash or non-cash corporate loans with maturities of over 5 years. The Bank has various upper limits on cash loans, letters of guarantee and commercial letters of credit. Country and sector concentration limits also apply. The Bank carefully avoids interbank money market transactions whose maturities are beyond six months.

03 - Financial Assessment and Risk ManagementFinancial AssessmentMonitoring TargetsRisk Management Policies


4003 - Financial Assessment and Risk ManagementRisk Management Policies

With the exception of banks and institutions with established limits, foreign currency transactions with banks and institutions are carried out on a “cash-against-delivery” basis. The Bank’s approval procedures are followed for new products and business lines. All insurance transactions against operational risks are coordinated with Deukona. The Disaster Recovery Plan is reviewed and tested periodically.

Compliance with such policies and limits are monitored on a daily basis. Any form of violation is reported to the senior management, the relevant department and the board member responsible for internal systems.

Risk Management PoliciesForeign currency transaction with banks and corporations are conducted on a pay on delivery basis, although Limit installed banks and corporations are exempted from this procedure. The Bank carries out approval procedures on new products and new business branches. Insurance transactions are coordinated with Deukona for types of operational risk. Reputational risks are discussed and determined by the Reputational Risk Committee. The Emergency plan is revised and tested periodically. Policies and limits are monitored on a daily basis; any violation is reported to the senior management, the relevant department and the board member responsible for internal systems.

The Bank aims to expand its loan portfolio in large scale corporates. Having a high capital adequacy ratio, the Bank will continue to pay efforts to enlarge its loan portfolio in 2014.

There were no studies or reports on early risk identification issues.

Risk ManagementThe Risk Management Unit is responsible for the Bank-wide implementation of the standards “regarding the risk-return structure of the Bank’s cash flows and monitoring, and, where necessary, modifying the nature and level of the operations” that were devised and brought into effect by the Board of Directors within the framework of BRSA regulations. In addition, the Risk Management Unit is also responsible for risk monitoring through the management of information systems, monitoring and maintaining market risk, credit risk, and operational risk at a minimum level. The Bank’s risk monitoring exercises and reports include the risks set out above.

Market RiskMarket risk is the risk that the Bank’s positions may lose value as a result of market fluctuations. Market risk arises as a result of uncertainties emanating from the levels of correlation and volatility of market prices and movements in exchange rates.

Credit RiskIn the event that a debtor defaults and the Bank takes on a loss risk, the credit risk covers all transactions that could bring actual, conditional or potential demands to the Bank by another party, debtor or obligator.


4103 - Financial Assessment and Risk ManagementRisk Management PoliciesCredit Ratings

Operational RiskOperational risk represents the probability of a value loss due to insufficient or inefficient in-house processes, employee error or systems-related errors and/or situations outside the bank (together with the legal dimensions). An operational risk also includes legal risks, tax-related risks and IT systems-related risks. The Board of Directors state that the controls of the Bank are appropriate in relation to the risk factors mentioned above, that these risk factors are under control thanks to bank limits approved by the Board of Directors and that these factors are monitored closely.

Compliance and Internal Control The internal control system is regulated in compliance with risk types and levels emerging in relation to the quality and content of the Bank’s activities.

Internal control activities are subject to continuous examination for one whole year after the completion of risk evaluation studies. Reports on the findings of the results are prepared and these findings are rated according to the risks they imply.

Dates are determined for the accomplishment of measures to close the findings.

Any overrun of time is reported to the Audit Committee and the Executive Management.

Internal AuditInternal control and information systems are monitored throughout the whole year, based on risk assessment studies carried out by the Audit Committee. Furthermore, by taking into account the results of the risk assessment, periodical audits are also conducted in different areas. Improvements to processes were carried out in line with the ascertained findings of the audits and suggestions of ways to enhance the controls were submitted. Furthermore, measures approved for implementation by the senior management were effectively followed.

As a result, internal audit plays an important role in the mitigation, identification and management of the bank’s risks through its risk assessed approach and qualified resources.

Credit RatingsDeutsche Bank A.Ş. is not rated by rating agencies.

As of December 31, 2013, international rating agencies had attached the following ratings to the Bank’s parent company, Deutsche Bank AG:

Short - term Long - term Individual Rating Rating Outlook RatingMoody’s Investors Service P - 1 A2 Negative baa2Standard & Poor’s A - 1 A Stable baa+Fitch Ratings F1 + A + Stable A


4203 - Financial Assessment and Risk ManagementSummary of Five - Year Financial Highlights

Assets (TL 000) 2013 2012 2011 2010 2009Cash and Balances with the Central Bank 228.523 162.344 132.773 27.035 27.340 Trading Securities (Net) 797.082 618.241 1.195.014 348.652 1.103.873Derivative Financial Assets Held-for-Trading 18.937 861 11.063 10.745 4.773Banks and Other Financial Institutions 313.018 41.691 112.268 55.077 69.273Receivables from Money Markets - - 170.100 2.344.327 469.085Investment Securities Available-for-Sale (Net) - - - - -Loans and Receivables 904.029 381.905 531.975 168.584 68.955Unconsolidated Subsidiaries (Net) - - - - -Tangible Assets (Net) 2.675 3.442 2.532 3.617 4.769Intangible Assets (Net) 27.028 34.151 39.429 45.646 114.085Tax Assets 1.673 - 4.070 1.254 531Other Assets 66.665 54.331 42.796 46.331 47.585Total Assets 2.359.630 1.296.966 2.242.020 3.051.268 1.910.269

Liabilities (TL 000) 2013 2012 2011 2010 2009Deposits 592.956 430.740 334.835 1.790.087 569.255Derivative Financial Liabilities Held-for-Trading 18.145 1.065 13.832 13.020 2.594Payables to Money Markets 187.512 59.753 816.753 19.783 22.341Funds Borrowed 1.074.023 236.062 608.570 803.971 865.264Securities Issued (Net) - - - - -Funds - - - - -Miscellaneous Payables 2.167 2.252 3.591 7.353 2.958 Other External Resources Payable 3.632 525 5.882 193 14Factoring Payables - - - - -Lease Payables (Net) - - 17 283 984Provisions and Tax Liability 54.488 51.688 41.352 31.463 34.563Subordinated Loans - - - - -Shareholders’ Equity 426.707 514.881 417.188 385.115 412.296Total Liabilities 2.359.630 1.296.966 2.242.020 3.051.268 1.910.269

Income Statement (TL 000) 2013 2012 2011 2010 2009Interest Income 158.897 301.467 214.384 103.482 54.860Interest Expense 26.805 51.318 55.693 30.727 38.590Net Interest Income/(Expense) 132.092 250.149 158.691 72.755 16.270Net Fees and Commissions Income/(Expense) 55.947 45.105 34.572 21.851 40.805Net Trading Income/(Loss) (100.171) (85.818) (83.566) 22.188 150.281Other Operating Income 16.433 7.511 6.464 6.966 6.298Total Operating Profit 104.301 216.947 116.161 123.760 213.654Provision for Losses on Loans or Other Receivables (-) 10.170 1.804 5.531 970 2.354Other Operating Expenses (-) 89.999 84.511 69.201 128.071 76.943Net Operating Profit/(Loss) 4.132 130.632 41.429 (5.281) 134.357Gain/(Loss) on Net Monetary Position - - - - -Profit/(Loss) Before Taxes 4.132 130.632 41.429 (5.281) 134.357Provision for Taxes (-) 2.045 26.525 9.356 760 28.653Net Operating Profit/(Loss) after Taxes 2.087 104.107 32.073 (6.041) 105.704Extraordinary Profit/(Loss) After Taxes - - - - -Net Profit/(Loss) 2.087 104.107 32.073 (6.041) 105.704 Debt / Equity Ratio (%) 440,22 141,86 427,50 684,13 354,94

Summary of Five - Year Financial Highlights


4303 - Financial Assessment and Risk ManagementAnnual Report Compliance Opinion

4 Independent Auditors’ Report, Financial Statements and Disclosures

464750

Independent Auditors’ ReportUnconsolidated Financial ReportFinancial Statements and Disclosures

DEUTSCHE BANK ANONİM ŞİRKETİ

Unconsolidated Financial StatementsAs of and For the Year Ended 31 December 2013With Independent Auditors’ Report Thereon


46

CONVENIENCE TRANSLATION OFTHE INDEPENDENT AUDITOR’S REPORTORIGINALLY PREPARED AND ISSUED IN TURKISH

To the Board of Directors of Deutsche Bank Anonim Şirketi

We have audited the unconsolidated balance sheet of Deutsche Bank Anonim Şirketi (“the Bank”) as of 31 December 2013 and the related unconsolidated statements of income, changes in equity, cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

The Board of Directors’ Responsibility for the Financial Statements

The Board of Directors of the Bank is responsible for the establishment of an internal control system, selection and application of appropriate accounting policies for the preparation and fair presentation of the financial statements in accordance with the “Regulation on the Procedures and Principles for Accounting Practices and Retention of Documents by Banks” published in the Official Gazette dated 1 November 2006 and numbered 26333 and Turkish Accounting Standards, Turkish Financial Reporting Standards and other regulations, explanations and circulars on accounting and financial reporting principles announced by the Banking Regulation and Supervision Agency (BRSA) and declarations by the Banking Regulation and Supervision Board, free from material misstatement, whether due to fraud or error, that could lead to false information within.

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 Authorization and Activities of Institutions to Perform Independent Audit at Banks” published on the Official Gazette dated 1 November 2006 and numbered 26333 and International Standards on Auditing. We planned and conducted our audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement. Our audit includes using the audit techniques for the purpose of obtaining evidence supporting the amounts and disclosures in the financial statements. The selection of the audit techniques made in accordance with our professional judgment by taking the effectiveness of the controls over financial reporting into and assessing the appropriateness of the applied accounting policies. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion expressed below.

Opinion

In our opinion, based on our audit, the accompanying unconsolidated financial statements present fairly, in all material respects, the financial position of Deutsche Bank Anonim Şirketi as of 31 December 2013 and the results of its operations and its cash flows for the year then ended in accordance with the prevailing accounting principles and standards as per the Article 37 of (Turkish) Banking Law No: 5411 and other regulations, explanations and circulars on accounting and financial reporting principles announced by BRSA.

Other Matter

The financial statements of the Bank as at and for the year ended 31 December 2012 were audited by another auditor who expressed an unmodified opinion on those statements on 8 March 2013.

İstanbul, Akis Bağımsız Denetim ve 5 March 2014 Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi Funda Aslanoğlu Partner

Funda Aslanoğlu Sorumlu Ortak, Başdenetçi

Akis Bağımsız Denetim ve SerbestMuhasebeci Mali Müşavirlik A.Ş.Kavacık Rüzgarlı Bahçe Mah. Kavak Sok. No: 29Beykoz 34805 Istanbul

TelephoneFaxInternet

+90 (216) 681 90 00+90 (216) 681 90 90www.kpmg.com.tr


47

The Unconsolidated Financial Report of Deutsche Bank A.Ş. As of 31 December 2013

Bank’s Head Office Address : Esentepe Mahallesi, Eski Büyükdere Cad. Tekfen Tower No: 209 Kat: 17-18 Şişli 34394 - ISTANBUL

Bank’s Telephone and Fax Numbers : (0212) 317 01 00 : (0212) 317 01 05

Bank’s web address : www.db.com.tr

E-mail address : [email protected]

The unconsolidated year-end financial report prepared in accordance with the communiqué of Financial Statements and Related Disclosures and Footnotes to be announced to Public by Banks as regulated by Banking Regulation and Supervision Agency, is comprised of the following sections:

1. GENERAL INFORMATION ABOUT THE BANK2. UNCONSOLIDATED FINANCIAL STATEMENTS3. EXPLANATIONS ON ACCOUNTING POLICIES4. INFORMATION RELATED TO FINANCIAL POSITION OF THE BANK5. EXPLANATIONS AND NOTES RELATED TO UNCONSOLIDATED FINANCIAL STATEMENTS6. OTHER EXPLANATIONS AND NOTES7. 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. Unless stated otherwise, the accompanying unconsolidated financial statements are presented in thousands of Turkish Lira (TL).

Peter Johannes Maria Tils Kaya Didman Paul Antony GeradineChairman og Board of Directors Chairman of Audit Committee Member of Audit Committee

Ersin Akyüz Özge Kutay Nesrin AkyüzGeneral Manager Board Member Responsible Finance Manager from Financial Reporting

Information related with the personnel authorised to answer the questions regarding this financial report

Name-Surname / Title: Nesrin Akyüz / Finance Manager

Tel No: 0 212 317 02 27

Fax No: 0 212 317 01 05


48

SECTION ONE

GENERAL INFORMATION ABOUT THE BANK Page

I. History of the Bank including its incorporation date, initial legal status, amendments to legal status 50II. Bank’s shareholder structure, management and internal audit, direct and indirect shareholders, change shareholder structure during the year and information’s on Bank’s risk group 50III Information’s on the Bank’s board of directors’ chairman and members, audit committee members, general manager, assistant general managers, change in top management and their shareholdings in the Bank 51IV. Information on the Bank’s qualified shareholders 52V. Summary information on the Bank’s activities and services 53

SECTION TWO

UNCONSOLIDATED FINANCIAL STATEMENTS

I. Balance sheet (Statement of Financial Position) 54II. Off-balance sheet items 56III. Income statement 57IV. Statement of Income /Expense items recognized under equity 58V. Statement of changes in equity 59VI. Statement of cash flows 60VII. Statement of profit distribution 61

SECTION THREE

EXPLANATIONS ON ACCOUNTING POLICIES

I. Explanations and notes basis of presentation 62II. Basis of presentatiton of financial statements 62III. Explanations on strategy of using financial instruments and foreign currency transactions 64IV Informations related to investments in associates and subsidiaries 64V. Explanations on forward, options and derivative transactions 64VI Explanations on interest income and expenses 64VII. Explanations on fee and commission income and expense 64VIII. Explanations on financial assets 65IX. Explanations on impairment of financial assets 66X. Explanations on offsetting financial assets 66XI. Explanations on sales and repurchase agreements and securities lending transactions 66XII. Explanations on assets held for resale and discontinued operations 66XIII. Explanations on goodwill and other intangible assets 66-67XIV. Explanations on property and equipment 67XV. Explanations on leasing transactions 67XVI. Explanations on provisions and contingent commitments 68XVII. Explanations on contingent assets 68XVIII. Explanations on obligations related to employee rights 68XIX. Explanations on taxation 68-69XX. Explanations on borrowings 69XXI. Explanations on issuance of share certificates 69XXII. Explanations on avalized drafts and acceptances 69


49

XXIII. Explanations on government grants 69XXIV. Explanations on profit reserves and profit distribution 69XXV. Explanations on earnings per share 70XXVI. Explanations on related parties 70XXVII. Explanations on cash and cash equivalents 70XXVIII. Explanations on segment reporting 70XXIX. Reclassifications 70

SECTION FOUR

INFORMATION RELATED TO FINANCIAL POSITION OF THE BANK

I. Explanations on capital adequacy ratio 71-74II. Explanations on credit risk 74-81III. Explanations on market risk . 81-82IV. Explanations on operational risk 82-83V. Explanations on currency risk 83-84VI. Explanations on interest rate risk 85-87VII. Explanations on liquidity risk 87-92VIII. Explanation regarding the presentation of financial assets and liabilities at their fair values 92-93IX. Explanation regarding the activities carried out on behalf and account of other parties 93X. Explanations on operating segments 94

SECTION FIVE

EXPLANATIONS AND NOTES RELATED TO UNCONSOLIDATED FINANCIAL STATEMENTS

I. Explanations and notes related to assets 95-101II. Explanations and notes related to liabilities 102-106III. Explanations and notes related to off-balance sheet accounts 107-109IV. Explanations and notes related to income statement 109-113V. Explanations and notes related to changes in shareholders’ equity 114VI. Explanations and notes related to statement of cash flows 114-115VII. Explanations and notes related to Bank’s risk group 115-117VIII. Explanations and notes related to domestic, foreign off-shore branches and foreign representatives of the Bank 117IX. Explanations and notes related to subsequent events 117

SECTION SIX

OTHER EXPLANATIONS AND NOTES

I. Other explanations related to Bank’s operations 118

SECTION SEVEN

EXPLANATIONS ON INDEPENDENT AUDITORS’ REPORT

I. Explanations on independent auditors’ report 118II. Explanations and notes prepared by independent auditor 118


50

SECTION ONE

General Information About The Bank

I. History of the Bank including its incorporation date, initial legal status, amendments to legal status

Deutsche Bank Anonim Şirketi (“the Bank”) was established with Council of Ministers Permit No. 87/12432, dated 16 December 1987. This permit was published in the Official Gazette dated 26 December 1987 and it was registered on 4 April 1988. The “Articles of Association” of the Bank were published in the Trade Registry Gazette on 7 April 1988. The commercial title of the Bank upon its establishment was “Türk Merchant Bank A.Ş.” which was changed to “Bankers Trust A.Ş.” on 17 April 1997. After the global merger of Bankers Trust and Deutsche Bank, the Bank’s commercial title has been changed to “Deutsche Bank Anonim Şirketi” at 1 March 2000. The Bank obtained the permission to accept deposits with the article numbered 1381 and dated 8 September 2004 of Banking Regulatory and Supervisory Agency (“BRSA”). This permission became valid after it was published in Official Gazette No. 25614 dated 15 October 2004. The Bank’s head office is located in Istanbul and has no branches.

II. Bank’s shareholder structure, management and internal audit, direct and indirect shareholders, change in shareholder structure during the year and information on Bank’s risk group

As of 31 December 2013, the Bank’s paid-in capital is comprised of 1.350.000.000 shares whose historical nominal unit values are TL 0,1. The Bank is one of the group companies of Deutsche Bank Group and 99.99% of the Bank’s capital is owned by Deutsche Bank AG.

Deutsche Bank Anonim Şirketi Notes to Unconsolidated Financial Statements At 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))


51

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52

Changes occured for the year ended 31 December 2013:

Title Outgoing within the period Appointee within the period Auditors (*) Erdal Hasan Ortaç - Auditors (*) Sacit Akdemir - Member of Board (**) Miklos Kormos -

(*) Statutory auditor position of the Bank‘s auditors has been ended on 28 March 2013.(**) Board Member Miklos Kormos has passed away on 13 December 2013.

IV. Information on the Bank’s qualified shareholders

The Bank’s qualified shareholder, which has direct or indirect control power, due to the definition of qualified portion on Banking Act No. 5411 and regarding to Article 13th of Communiqué on Transactions Subject to Bank’s Permission and Indirect Portion Ownership, is shown below:

Share Share Paid UnpaidName Surname / Commercial Title Amounts Ratios Shares Shares Deutsche Bank AG 134.999 99,99 134.999 -Other 1 0,01 1 - Total 135.000 100 135.000 -

Deutsche Bank Anonim ŞirketiNotes to Unconsolidated Financial Statements At 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))


53


V. Summary information on the Bank’s activities and services

Activities of the Bank as stated in its Articles of Association are as follows:

• All banking operations;• Jointly establishing enterprises with the corporations or individuals, joint ventures, investing to the existing or newly established commercial and industrial institutions, banks and financial institutions and transferring the shares of those enterprises;• Providing commercial and insurance activities on behalf of the Bank or the domestic and foreign institutions, acting as agencies, and providing commitments to public and non-public entities in compliance with the regulations set by the Banking Law and the related legislations;• Purchasing and selling marketable securities on behalf of the Bank or third parties, issuing debt securities by taking the necessary permissions in accordance with the related legislation, establishing and managing investment funds and performing other capital market transactions, which are allowed by the Banking Law and operating in stock exchange;• Performing faktoring and forfaiting;• Performing transactions in foreign currency markets including forward transactions on behalf of the Bank or its’ customers;• Performing equipment leasing and real estate financing by way of leasing the extent permitted by legislation• Acquiring intangible assets related with the Bank’s operations and making savings on them;

The Bank, which has been providing investment banking services since its establishment date, has obtained the permission to accept deposits from BRSA Decision No. 1381 dated 8 September 2004, as a result of the Bank’s growth and investment policies in Turkey. This permission became into force after it was published in Official Gazette No. 25614 dated 15 October 2004.

The main operations of the Bank are, Interbank Money Market transactions, purchasing and selling marketable securities, foreign currency transactions, providing collateralised non-cash loans related with commercial activities and custody services. After obtaining commercial banking licence, in addition to the Bank’s current operations like commercial banking and money market transactions, the Bank became structured to meet all of the needs of its’ customers by providing services such as accepting deposits, opening individual accounts and selling cash management products and services, accordingly.

As of 31 December 2013, the number of employees of the Bank is 110 (31 December 2012: 105).

The notes between page 13 and 86 are an integral part of these financial statements.


54

SECTION TWO

Unconsolidated Financial Statements

I. BALANCE SHEET (STATEMENT OF FINANCIAL POSITION)

Current period Prior period 31 December 2013 31 December 2012ASSETS Note (5 - I) TL FC Total TL FC Total

I. CASH AND BALANCES WITH THE CENTRAL BANK (1) 30.142 198.381 228.523 42.933 119.411 162.344II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT/LOSS (Net) (2) 797.082 18.937 816.019 618.241 861 619.1022.1 Trading securities 797.082 18.937 816.019 618.241 861 619.1022.1.1 Government debt securities 797.082 - 797.082 618.241 - 618.2412.1.2 Share certificates - - - - - -2.1.3 Trading derivative instruments - 18.937 18.937 - 861 8612.1.4 Other securities - - - - - -2.2 Financial assets at fair value through profit/loss - - - - - -2.2.1 Government debt securities - - - - - -2.2.2 Share certificates - - - - - -2.2.3 Loans - - - - - -2.2.4 Other securities - - - - - -III. BANKS (3) 307.745 5.273 313.018 38.574 3.117 41.691IV. MONEY MARKET PLACEMENTS - - - - - -4.1 Interbank money market placements - - - - - -4.2 Istanbul Stock Exchange money market placements - - - - - -4.3 Receivables from reverse repurchase agreements - - - - - -V. AVAILABLE FOR SALE FINANCIAL ASSETS (Net) (4) - - - - - -5.1 Share certificates - - - - - -5.2 Government debt securities - - - - - -5.3 Other securities - - - - - -VI. LOANS AND RECEIVABLES (5) 491.836 412.193 904.029 263.507 118.398 381.9056.1 Loans 491.836 412.193 904.029 263.507 118.398 381.9056.1.1 The Bank's risk group's loans - - - - - -6.1.2 Government debt securities - - - - - -6.1.3 Others 491.836 412.193 904.029 263.507 118.398 381.9056.2 Loans at follow-up - - - - - -6.3 Specific provisions (-) - - - - - -VII. FACTORING RECEIVABLES - - - - - -VIII. HELD TO MATURITY FINANCIAL ASSETS (Net) (6) - - - - - -8.1 Government bonds - - - - - -8.2 Other securities - - - - - -IX. INVESTMENTS IN ASSOCIATES (Net) (7) - - - - - -9.1 Consolidated according to equity method - - - - - -9.2 Non-consolidated - - - - - -9.2.1 Financial associates - - - - - -9.2.2 Non-Financial associates - - - - - -X. INVESTMENTS IN SUBSIDIARIES (Net) (8) - - - - - -10.1 Non-consolidated financial subsidiaries - - - - - -10.2 Non-consolidated non-financial subsidiaries - - - - - -XI. INVESTMENTS IN JOINT VENTURES (Net) (9) - - - - - -11.1 Consolidated according to equity method - - - - - -11.2 Non-consolidated - - - - - -11.2.1 Financial joint ventures - - - - - -11.2.2 Non-financial joint ventures - - - - - -XII. FINANCIAL LEASE RECEIVABLES (Net) (10) - - - - - -12.1 Financial lease receivables (Net) - - - - - -12.2 Operational lease receivables - - - - - -12.3 Other - - - - - -12.4 Unearned Income (-) - - - - - -XIII. DERIVATIVE FINANCIAL INSTRUMENTS HELD FOR RISK MANAGEMENT (11) - - - - - -13.1 Fair value hedges - - - - - -13.2 Cash flow hedges - - - - - -13.3 Net foreign investment hedges - - - - - -XIV. TANGIBLE ASSETS (Net) (12) 2.675 - 2.675 3.442 - 3.442XV. INTANGIBLE ASSETS (Net) (13) 27.028 - 27.028 34.151 - 34.15115.1 Goodwill - - - - - -15.2 Other intangibles 27.028 - 27.028 34.151 - 34.151XVI. INVESTMENT PROPERTY (Net) (14) - - - - - -XVII. TAX ASSET (15) 1.673 - 1.673 - - -17.1 Current tax asset 1.673 - 1.673 - - -17.2 Deferred tax asset - - - - - -XVIII. ASSETS HELD FOR SALE OR FOR DISCONTINUED OPERATIONS (Net) (16) - - - - - -18.1 Held for sale - - - - - -18.2 Related with discontinued operations - - - - - -XIX. OTHER ASSETS (17) 10.785 55.880 66.665 11.064 43.267 54.331 TOTAL ASSETS 1.668.966 690.664 2.359.630 1.011.912 285.054 1.296.966

Deutsche Bank Anonim ŞirketiUnconsolidated Balance Sheet (Statement of Financial Position) As At 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))



55

I. BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) (continued)

Current period Prior period 31 December 2013 31 December 2012LIABILITIES NOTE (5 - II) TL FC Total TL FC Total

I. DEPOSITS (1) 542.551 50.405 592.956 321.647 109.093 430.7401.1 The Bank's risk group's deposits 258.390 - 258.390 128.468 29 128.4971.2 Others 284.161 50.405 334.566 193.179 109.064 302.243II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) - 18.145 18.145 - 1.065 1.065III. FUNDS BORROWED (3) 401.913 672.110 1.074.023 880 235.182 236.062IV. INTERBANK MONEY MARKET 187.512 - 187.512 59.753 - 59.7534.1 Interbank money market funds - - - - - -4.2 Istanbul Stock Exchange money market funds - - - - - -4.3 Obligations under repurchase agreements 187.512 - 187.512 59.753 - 59.753V. SECURITIES ISSUED (Net) - - - - - -5.1 Bills - - - - - -5.2 Asset backed securities - - - - - -5.3 Bonds - - - - - -VI. FUNDS - - - - - -6.1 Borrower funds - - - - - -6.2 Others - - - - - -VII. MISCELLANEOUS PAYABLES 2.102 65 2.167 2.212 40 2.252VIII. OTHER EXTERNAL RESOURCES PAYABLE (4) 1.063 2.569 3.632 284 241 525IX. FACTORING PAYABLES - - - - - -X. LEASE PAYABLES (Net) (5) - - - - - -10.1 Finance lease payables - - - - - -10.2 Operational lease payables - - - - - -10.3 Others - - - - - -10.4 Deferred expenses (-) - - - - - -XI. DERIVATIVE FINANCIAL LIABILITIES HELD FOR RISK MANAGEMENT (6) - - - - - -11.1 Fair value hedges - - - - - -11.2 Cash flow hedges - - - - - -11.3 Net foreign investment hedges - - - - - -XII. PROVISIONS (7) 26.437 19.478 45.915 18.719 20.083 38.80212.1 General provisions 14.833 - 14.833 8.408 - 8.40812.2 Restructuring reserves - - - - - -12.3 Reserve for employee benefits 11.110 7.084 18.194 9.918 5.333 15.25112.4 Insurance technical provisions (Net) - - - - - -12.5 Other provisions 494 12.394 12.888 393 14.750 15.143XIII. TAX LIABILITY (8) 8.573 - 8.573 12.886 - 12.88613.1 Current tax liability 5.544 - 5.544 8.052 - 8.05213.2 Deferred tax liability 3.029 - 3.029 4.834 - 4.834XIV. LIABILITIES FOR ASSETS HELD FOR SALE AND ASSETS OF DISCONTINUED OPERATIONS (Net) (9) - - - - - -14.1 Held for sale - - - - - -14.2 Discontinued operations - - - - - -XV. SUBORDINATED DEBTS (10) - - - - - -XVI. SHAREHOLDERS' EQUITY (11) 426.707 - 426.707 514.881 - 514.88116.1 Paid-in capital 135.000 - 135.000 135.000 - 135.00016.2 Capital reserves 31.866 - 31.866 31.866 - 31.86616.2.1 Share premium - - - - - -16.2.2 Share cancellation profits - - - - - -16.2.3 Securities value increase fund - - - - - -16.2.4 Revaluation surplus on tangible assets - - - - - -16.2.5 Revaluation surplus on intangible assets - - - - - -16.2.6 Revaluation surplus on investment property - - - - - -16.2.7 Bonus shares of associates, subsidiaries and joint-ventures - - - - - -16.2.8 Hedging reserves (effective portion) - - - - - -16.2.9 Revaluation surplus on assets held for sale and assets of discontinued operations - - - - - -16.2.10 Other capital reserves 31.866 - 31.866 31.866 - 31.86616.3 Profit reserves 257.754 - 257.754 243.908 - 243.90816.3.1 Legal reserves 57.679 - 57.679 44.138 - 44.13816.3.2 Status reserves - - - - - -16.3.3 Extraordinary reserves 200.075 - 200.075 199.770 - 199.77016.3.4 Other profit reserves - - - - - -16.4 Profit or loss 2.087 - 2.087 104.107 - 104.10716.4.1 Prior periods profit / loss - - - - - -16.4.2 Current period profit / loss 2.087 - 2.087 104.107 - 104.107 TOTAL LIABILITIES 1.596.858 762.772 2.359.630 931.262 365.704 1.296.966

Deutsche Bank Anonim ŞirketiUnconsolidated Balance Sheet (Statement of Financial Position) As At 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))



56

Deutsche Bank Anonim ŞirketiUnconsolidated Off-Balance Sheet Commitments As At 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))

II. OFF-BALANCE SHEET ITEMS

Current period Prior period 31 December 2013 31 December 2012OFF-BALANCE SHEET Note (5 - III) TL FC Total TL FC Total

A. OFF-BALANCE SHEET COMMITTMENTS (I+II+III) 2.591.374 3.558.125 6.149.499 1.231.739 2.169.710 3.401.449I. GUARANTIES AND WARRANTIES (1) 23.472 163.946 187.418 23.424 288.437 311.8611.1 Letters of guarantee 23.472 155.891 179.363 22.696 214.424 237.1201.1.1 Guarantees subject to State Tender Law - - - - - -1.1.2 Guarantees given for foreign trade operations - - - - - -1.1.3 Other letters of guarantee 23.472 155.891 179.363 22.696 214.424 237.1201.2 Bank acceptances - - - 728 - 7281.2.1 Import letter of acceptance - - - 728 - 7281.2.2 Other bank acceptances - - - - - -1.3 Letters of credit - 6.412 6.412 - 15.184 15.1841.3.1 Documentary letters of credit - 6.412 6.412 - 15.184 15.1841.3.2 Other letters of credit - - - - - -1.4 Guaranteed prefinancings - - - - - -1.5 Endorsements - - - - - -1.5.1 Endorsements to the Central Bank of Turkey - - - - - -1.5.2 Other endorsements - - - - - -1.6 Underwriting commitments - - - - - -1.7 Factoring related guarantees - - - - - -1.8 Other guarantees - - - - - -1.9 Other sureties - 1.643 1.643 - 58.829 58.829II. COMMITMENTS (1) 1.849.935 2.135.317 3.985.252 837.938 1.149.101 1.987.0392.1 Irrevocable commitments 1.617.589 1.355.517 2.973.106 750.667 382.185 1.132.8522.1.1 Asset purchase commitments 767.543 910.272 1.677.815 213.497 262.970 476.4672.1.2 Deposit purchase and sales commitments - - - - - -2.1.3 Share capital commitments to associates and subsidiaries - - - - - -2.1.4 Loan granting commitments 849.997 - 849.997 537.140 - 537.1402.1.5 Securities issuance brokerage commitments - - - - - -2.1.6 Commitments for reserve deposit requirements - - - - - -2.1.7 Commitments for cheque payments 44 - 44 29 - 292.1.8 Tax and fund obligations on export commitments 5 - 5 1 - 12.1.9 Commitments for credit card limits - - - - - -2.1.10 Commitments for credit cards and banking services related promotions - - - - - -2.1.11 Receivables from "short" sale commitments on securities - - - - - -2.1.12 Payables from "short" sale commitments on securities - - - - - -2.1.13 Other irrevocable commitments - 445.245 445.245 - 119.215 119.2152.2 Revocable commitments 232.346 779.800 1.012.146 87.271 766.916 854.1872.2.1 Revocable loan granting commitments 232.346 779.800 1.012.146 87.271 766.916 854.1872.2.2 Other revocable commitments - - - - - -III. DERIVATIVE FINANCIAL INSTRUMENTS (2) 717.967 1.258.862 1.976.829 370.377 732.172 1.102.5493.1 Derivative financial instruments held for risk management - - - - - -3.1.1 Fair value hedges - - - - - -3.1.2 Cash flow hedges - - - - - -3.1.3 Net foreign investment hedges - - - - - -3.2 Trading derivatives 717.967 1.258.862 1.976.829 370.377 732.172 1.102.5493.2.1 Forward foreign currency purchases/sales 362.854 372.537 735.391 126.537 194.995 321.5323.2.1.1 Forward foreign currency purchases 188.691 179.172 367.863 81.385 79.391 160.7763.2.1.2 Forward foreign currency sales 174.163 193.365 367.528 45.152 115.604 160.7563.2.2 Currency and interest rate swaps 355.113 886.325 1.241.438 243.840 537.177 781.0173.2.2.1 Currency swaps-purchases 171.637 449.274 620.911 116.014 274.401 390.4153.2.2.2 Currency swaps-sales 183.476 437.051 620.527 127.826 262.776 390.6023.2.2.3 Interest rate swaps-purchases - - - - - -3.2.2.4 Interest rate swaps-sales - - - - - -3.2.3 Currency, interest rate and security options - - - - - -3.2.3.1 Currency call options - - - - - -3.2.3.2 Currency put options - - - - - -3.2.3.3 Interest rate call options - - - - - -3.2.3.4 Interest rate put options - - - - - -3.2.3.5 Security call options - - - - - -3.2.3.6 Security put options - - - - - -3.2.4 Currency futures - - - - - -3.2.4.1 Currency futures-purchases - - - - - -3.2.4.2 Currency futures-sales - - - - - -3.2.5 Interest rate futures - - - - - -3.2.5.1 Interest rate futures-purchases - - - - - -3.2.5.2 Interest rate futures-sales - - - - - -3.2.6 Others - - - - - -B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) 45.347.241 30.270 45.377.511 41.302.841 22.661 41.325.502IV. ITEMS HELD IN CUSTODY (5) 45.347.241 30.270 45.377.511 41.302.841 22.661 41.325.5024.1 Customers' securities held 37.802.836 - 37.802.836 34.644.667 - 34.644.6674.2 Investment securities held in custody 7.510.698 - 7.510.698 6.642.063 - 6.642.0634.3 Checks received for collection 33.707 8.927 42.634 16.111 4.835 20.9464.4 Commercial notes received for collection - - - - - -4.5 Other assets received for collection - - - - - -4.6 Assets received through public offering - - - - - -4.7 Other items under custody - 21.343 21.343 - 17.826 17.8264.8 Custodians - - - - - -V. PLEDGED ITEMS - - - - - -5.1 Securities - - - - - -5.2 Guarantee notes - - - - - -5.3 Commodities - - - - - -5.4 Warranties - - - - - -5.5 Real estates - - - - - -5.6 Other pledged items - - - - - -5.7 Pledged items-depository - - - - - -VI. CONFIRMED BILLS OF EXCHANGE AND SURETIES - - - - - - TOTAL OFF-BALANCE SHEET ITEMS (A+B) 47.938.615 3.588.395 51.527.010 42.534.580 2.192.371 44.726.951



57

Deutsche Bank Anonim ŞirketiUnconsolidated Income Statement for the Years Ended 31 December 2013 (Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))

III. INCOME STATEMENT

Current period Prior period 1 January- 1 January-INCOME AND EXPENSE ITEMS Note (5 - IV) 31 December 2013 31 December 2012

I. INTEREST INCOME (1) 158.897 301.4671.1 Interest income from loans 37.370 28.5981.2 Interest income from reserve deposits - -1.3 Interest income from banks 7.569 9.8471.4 Interest income from money market transactions 27.891 34.6701.5 Interest income from securities portfolio 85.707 227.9551.5.1 Trading financial assets 85.707 227.9551.5.2 Financial assets valued at fair value through profit or loss - -1.5.3 Financial assets available-for-sale - -1.5.4 Investments held-to-maturity - -1.6 Finance lease income - -1.7 Other interest income 360 397II. INTEREST EXPENSE (2) 26.805 51.3182.1 Interest on deposits 7.122 11.9432.2 Interest on funds borrowed 6.179 2.5132.3 Interest on money market transactions 13.504 36.8252.4 Interest on securities issued - -2.5 Other interest expenses - 37III. NET INTEREST INCOME / EXPENSE (I - II) 132.092 250.149IV. NET FEES AND COMMISSIONS INCOME / EXPENSE 55.947 45.1054.1 Fees and commissions received 68.100 54.2224.1.1 Non-cash loans 1.712 1.6684.1.2 Others (12) 66.388 52.5544.2 Fees and commissions paid 12.153 9.1174.2.1 Non-cash loans - -4.2.2 Others (12) 12.153 9.117V. DIVIDEND INCOME (3) - -VI. NET TRADING INCOME/LOSSES (Net) (4) (100.171) (85.818)6.1 Trading account income/losses (55.323) (36.730)6.2 Income/losses from derivative financial instruments 136.715 (53.951)6.3 Foreign exchange gains/losses (181.563) 4.863VII. OTHER OPERATING INCOME (5) 16.433 7.511VII. TOTAL OPERATING PROFIT (III+IV+V+VI+VII) 104.301 216.947IX. PROVISION FOR LOSSES ON LOANS AND RECEIVABLES (-) (6) 10.170 1.804X. OTHER OPERATING EXPENSES (-) (7) 89.999 84.511XI. NET OPERATING PROFIT/LOSS (VIII-IX-X) 4.132 130.632XII. INCOME RESULTED FROM MERGERS - -XIII. INCOME/LOSS FROM INVESTMENTS UNDER EQUITY ACCOUNTING - -XV GAIN/LOSS ON NET MONETARY POSITION - -XV. PROFIT/LOSS BEFORE TAXES (XI+XII+XIII+XIV) (8) 4.132 130.632XVI. PROVISION FOR TAXES (9) 2.045 26.52516.1 Current tax charge 3.850 26.83016.2 Deferred tax charge/(credit) (1.805) (305)XVII. NET OPERATING PROFIT/LOSS AFTER TAXES (XV-XVI) (10) 2.087 104.107XVIII INCOME FROM DISCONTINUED OPERATIONS - -18.1 Income from assets held for sale - -18.2 Income from sale of associates, subsidiaries and joint-ventures - -18.3 Others - -XIX. EXPENSES FROM DISCONTINUED OPERATIONS (-) - -19.1 Expenses on assets held for sale - -19.2 Expenses on sale of associates, subsidiaries and joint-ventures - -19.3 Others - -XX. PROFIT/LOSS BEFORE TAXES ON DISCONTINUED OPERATIONS (XVIII-XIX) - -XXI. PROVISION FOR TAXES OF DISCONTINUED OPERATIONS - -21.1 Current tax charge - -21.2 Deferred tax charge/(credit) - -XXII. NET PROFIT / LOSS AFTER TAXES ON DISCONTINUED OPERATIONS (XX+XXI) - -XVIII. NET PERIOD PROFIT/LOSS (XVII+XXII) (11) 2.087 104.107 Earnings Per Share (TL Full) (3.XXIV) 0,0016 0,0771



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7


60

VI. STATEMENT OF CASH FLOWS Current period Prior period 1 January - 31 1 January - 31 Note December 2013 December 2012A. CASH FLOWS FROM BANKING OPERATIONS 1.1 Operating profit before changes in operating assets and liabilities (9.571) 131.841 1.1.1 Interests received 147.508 306.8581.1.2 Interests paid (25.551) (52.596)1.1.3 Dividend received - -1.1.4 Fees and commissions received 68.100 54.2221.1.5 Other income 153.148 7.5111.1.6 Collections from previously written-off loans and receivables - -1.1.7 Payments to personnel and service suppliers (22.605) (25.116)1.1.8 Taxes paid (10.353) (19.289)1.1.9 Others (5.VI.1) (319.818) (139.749) 1.2 Changes in operating assets and liabilities 375.671 (264.621) 1.2.1 Net (increase) decrease in financial assets held for trading (167.648) 574.2311.2.2 Net (increase) decrease in financial assets valued at fair value through profit or loss - -1.2.3 Net (increase) decrease in due from banks and other financial institutions (57.450) 59.9371.2.4 Net (increase) decrease in loans (521.977) 147.2211.2.5 Net (increase) decrease in other assets (12.626) (7.111)1.2.6 Net increase (decrease) in bank deposits 270.727 58.9001.2.7 Net increase (decrease) in other deposits (108.495) 37.0021.2.8 Net increase (decrease) in funds borrowed 836.782 (371.850)1.2.9 Net increase (decrease) in matured payables - -1.2.10 Net increase (decrease) in other liabilities 136.358 (762.951) I. Net cash used from banking operations 366.100 (132.780) B. CASH FLOWS FROM INVESTING ACTIVITIES II. Net cash used in investing activities (1.930) (4.980) 2.1 Cash paid for purchase of associates, subsidiaries and joint-ventures - -2.2 Cash obtained from sale of associates, subsidiaries and joint-ventures - -2.3 Purchases of tangible assets (5.I.12) (390) (2.347)2.4 Sales of tangible assets - -2.5 Cash paid for purchase of financial assets available-for-sale - -2.6 Cash obtained from sale of financial assets available-for-sale - -2.7 Cash paid for purchase of investments held-to-maturity - -2.8 Cash obtained from sale of investments held-to-maturity - -2.9 Others (1.540) (2.633) C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net cash used in financing activities (90.261) (6.431) 3.1 Cash obtained from funds borrowed and securities issued - -3.2 Cash used for repayment of funds borrowed and securities issued - -3.3 Equity instruments issued - -3.4 Dividends paid (5.V.5) (90.261) (6.414)3.5 Payments for financial leases - (17)3.6 Others - - IV. Effect of change in foreign exchange rate on cash and cash equivalents 6.098 (6.856) V. Net increase in cash and cash equivalents 280.007 (151.047) VI. Cash and cash equivalents at beginning of period (5.VI.3) 140.478 291.525 VII. Cash and cash equivalents at the end of period (5.VI.3) 420.485 140.478

Deutsche Bank Anonim ŞirketiUnconsolidated Statement of Cash Flows For the Years Ended 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))



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VII. STATEMENTS OF PROFIT DISTRIBUTION Current period(*) Prior period 31 December 2013 31 December 2012 I. DISTRIBUTION OF CURRENT YEAR INCOME 1.1 CURRENT YEAR INCOME 4.132 130.6321.2 TAXES AND DUTIES PAYABLE (2.045) (26.525)1.2.1 Corporate tax (Income tax) (3.850) (26.830)1.2.2 Income witholding tax - -1.2.3 Other taxes and duties (**) 1.805 305 A. NET INCOME FOR THE YEAR (1.1-1.2) 2.087 104.107 1.3 PRIOR YEARS LOSSES (-) - -1.4 FIRST LEGAL RESERVES (-) - 5.1901.5 OTHER STATUTORY RESERVES (-) - - B. NET INCOME AVAILABLE FOR DISTRIBUTION [(A-(1.3+1.4+1.5)] 2.087 98.917 1.6 FIRST DIVIDEND TO SHAREHOLDERS (-) - 6.7501.6.1 To owners of ordinary shares - 6.7501.6.2 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 holders of profit and loss sharing certificates - -1.7 DIVIDENDS TO PERSONNEL (-) - -1.8 DIVIDENDS TO BOARD OF DIRECTORS (-) - -1.9 SECOND DIVIDEND TO SHAREHOLDERS (-) - 83.5111.9.1 To owners of ordinary shares - 83.5111.9.2 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 holders of profit and loss sharing certificates - -1.10 SECOND LEGAL RESERVES (-) - 8.3511.11 STATUTORY RESERVES (-) - -1.12 GENERAL RESERVES - 3051.13 OTHER RESERVES - -1.14 SPECIAL FUNDS - - II. DISTRIBUTION OF RESERVES 2.1 APPROPRIATED 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 profit and 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 0,0016 0,07713.2 TO OWNERS OF ORDINARY SHARES (%) 0,2 7,73.3 TO OWNERS OF PRIVILAGED SHARES - -3.4 TO OWNERS OF PRIVILAGED SHARES (%) - - IV. DIVIDEND PER SHARE 4.1 TO OWNERS OF ORDINARY SHARES - 0,0674.2 TO OWNERS OF ORDINARY SHARES (%) - 6,74.3 TO OWNERS OF PRIVILAGED SHARES - -4.4 TO OWNERS OF PRIVILAGED SHARES (%) - - (*) As of the date of this report the decision of profit distribution in the current year has not been made since the General Assembly meeting has not conducted yet.(**) According to BRSA circular numbered BDDK.DZM.2/13/1-a-3 and dated 8 December 2004 net deferred tax income is not subjected to profit distribution and capital increase.

Deutsche Bank Anonim ŞirketiStatement of Profit Distribution for the Years Ended31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))



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SECTION THREE

EXPLANATIONS ON ACCOUNTING POLICIES

I. Basis of presentation

1.a Disclosures on the preparation of financial statements and its explanatory notes in accordance with the Turkish Accounting Standards and the Regulation on Accounting Applications for Banks and Safeguarding of Documents

As prescribed in the Article 37 of the Banking Act No. 5411, the Bank prepares its financial statements and underlying documents in accordance with the “Regulation on the Procedures and Principles for Accounting Practices and Retention of Documents by Banks” and Turkish Accounting Standards (“TAS”), Turkish Financial Reporting Standards (“TFRS”), their explanations and interpretations (together “Reporting Standards”).

The unconsolidated financial statements have been prepared in TL, under the historical cost convention as modified in accordance with inflation adjustments until 31 December 2004, except for the financial assets and liabilities which are carried at fair value.

The preparation of unconsolidated financial statements in conformity with TAS requires the use of certain critical accounting estimates by the Bank management to exercise its judgment on the assets and liabilities of the balance sheet and contingent issues as of the balance sheet date. These estimates are being reviewed regularly and, when necessary, suitable corrections are made and the effects of these corrections are reflected to the income statement. The explanation on the impairment of intangible assets, one of the most important assumptions and estimations of the Bank, is presented below Note XII.

1.b Accounting policies and measurement

The accounting policies and valuation principles applied in the preparation of these financial statements and valuation principles are defined and applied in accordance with TAS. Those accounting policies and valuation principles are explained in Notes II to XXIX below.

1.c Additional paragraph for convenience translation into English

The differences between accounting principles, as described in the preceding paragraphs and accounting principles generally accepted in countries in which these unconsolidated financial statements are to be distributed and International Financial Reporting Standards (“IFRS”) have not been quantified in these unconsolidated financial statements. Accordingly, these unconsolidated financial statements are not intended to present the financial position, results of operations and changes in financial position and cash flows in accordance with the accounting principles generally accepted in such countries and IFRS.

II. Basis of presentatiton of financial statements

The accounting rules and the valuation principles used in the preparation of the financial statements were implemented as stated in the Reporting Standards.

Comments and changes on standards

New standards and interpretations in 2013

Except for the new standards summarised below, the accounting policies applied for the year ended 31 December 2012 have been applied consistently for the year ended 31 December 2013 in preparing these financial statements.

• TFRS 13 Fair Value Measurement (see note (i))• TAS 19 Employee Benefits (2011) (see note (ii))

The nature and effects of the changes are explained below.



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(i) Fair Value Measurement

TFRS 13 Fair Value Measurement establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other TFRSs.

It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other TFRSs, including TFRS 7 Financial Instruments: Disclosures.

In accordance with the transitional provisions of TFRS 13, the Company has applied the new fair value measurement guidance prospectively and has not provided any comparative information for new disclosures. Notwithstanding the above, the change had no significant impact on the measurements of the Company’s assets and liabilities.

(ii) Employee benefits

As a result of the amendments to TAS 19 (2011), all actuarial gains and losses should be recognised in equity and to be applied retrospectively.

New standards and interpretations not yet adopted as of 31 December 2013

There have been new standards and interpretations not yet adopted to the accompanying unconsolidated financial statements as of 31 December 2013. These standards and interpretations are:

• TFRS 9 Financial Instruments (see note (i))• TAS 32 Financial instruments: Presentation (amendment): Offsetting financial assets and financial liabilities (see note (ii))

i. Financial Instruments

TFRS 9 Financial Instruments was published in April 2010 introducing new requirements as part of the project to replace TAS 39 Financial Instruments: Recognition and Measurement.

TFRS 9 Financial Instruments, published on 27 April 2010 in the Government Gazette numbered 27564, introducing new requirements as part of the project to replace TAS 39 Financial Instruments: Recognition and Measurement had been published by the International Accounting Standards Board in November 2009. TFRS 9 can be summarised as follows.

TFRS 9 aims to reduce complexity in accounting for financial instruments and introduce a principles-based approach to accounting for financial instruments. The principles-based approach to accounting for financial assets, as a result of the first phase of the TFRS 9, aims to provide information that is useful and relevant for users of financial statements in predicting uncertainties, timing and amounts of future cash flows by allowing users to use their own judgment.

TFRS 9 introduces two measurement categories for financial assets: fair value through profit or loss and amortised cost. The distinction between the two models is based on the business model of each entity and nature of the contractual cash flows of the financial assets. Entities will continue to apply the existing impairment and hedge accounting requirements in TAS 39. TFRS 9 is applicable to annual reporting periods beginning on or after 1 January 2015 and early adoption is permitted. The Bank does not plan to adopt this standard early and it is not expected that these amendments will have significant impact on the financial position and financial performance of the Bank.

ii. TAS 32 Financial instruments: Presentation (amendment): Offsetting financial assets and financial liabilities

The amendments clarify that offsetting is required when an entity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. They also clarify when gross settlement is equivalent to net settlement. The amendments are applicable to annual reporting periods beginning on or after 1 January 2014 and applied on a retrospective basis. Early adoption is permitted if entities provide disclosures in accordance with TFRS 7. The Bank does not plan to adopt this standard early and it is not expected that these amendments will have significant impact on the financial position and financial performance of the Bank.


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III. Explanations on strategy of using financial instruments and foreign currency transactions

The main operations of the Bank are, interbank money market transactions, purchasing and selling marketable securities, foreign currency transactions and providing collateralised cash, non-cash loans and custody services.

The Bank’s main funding sources are equity, deposit and borrowings from domestic and foreign financial institutions. Bank’s assets mainly consist of placements in banks, reverse repo transactions, corporate loans and marketable securities portfolio held for trading.

The purchasing and selling of the capital market instruments are the main activity of the Bank that generates earnings over the average earnings of all of the operation segments of the Bank. The off balance sheet items are mostly comprised of forward foreign currency purchases/sales transactions, letter of credits and letter of guarantees extended against cash borrowings from foreign financial institutions.

Foreign currency risk, interest rate risk and liquidity risk are daily measured and monitored and the asset-liability management is performed within the internal risk limits and legal limits

The Bank has no foreign currency available for sale financial instruments.

The Bank has no investments in foreign associates.

IV. Information related to investments in associates and subsidiaries

The Bank has no investments in associates and subsidiaries.

V. Explanations on forward, options and other derivative transactions

In accordance with the Turkish Accounting Standard 39 (TAS 39) “Financial Instruments: Recognition and Measurement”; the forward foreign currency purchases/sales transactions and swap transactions, which are not considered as hedging instruments, are classified as trading derivative instruments. A provision is made for the diminution in value of the impaired financial asset and it is charged against the income for the year.

“Financial assets at fair value through profit or loss” are measured at fair value. If the fair value of derivative financial instruments is positive, it is disclosed under the main account “Financial assets at fair value through profit or loss” in “Trading derivative financial instruments” and if the fair value difference is negative, it is disclosed under “Trading derivative financial liabilities”. Differences in the fair value of trading derivative instruments are accounted under “Trading income/loss” in the income statement.

The fair values of the trading forward foreign currency purchases/sales transactions are measured with the internal pricing models by taking the expectations from the market into account. The change in the fair values is recorded through the period’s profit or loss.

The Bank records the spot legs of its currency swap transactions either on its balance sheet accounts or on it’s off balance sheet accounts together with its forward currency transactions by taking the maturity dates of those transactions.

The Bank has no derivative financial instruments designated as hedging instruments or embedded derivative financial instruments.

VI. Explanations on interest income and expenses

Interest income and expenses are recognised in the income statement on an accrual basis by using the effective interest method.

The Bank ceases accruing interest income on non-performing loans and, any interest income accruals from such loans are reversed and no income is accounted until the collection is made according to the related regulation.

VII. Explanations on fee and commission income and expense

Commissions received for various banking services are recorded when they are collected and other income and expense items are recorded on an accrual basis. Fees and commissions received and paid and other loan fees and commissions paid to financial institutions, income derived from agreements and asset purchases made on behalf of third parties are recognised as income when they are realised.



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VIII. Explanation on financial assets

The Bank classifies and accounts its financial assets as “Fair value through profit or loss”, “Available-for-sale”, “Loans and receivables” or “Held-to-maturity”. The appropriate classification of financial assets of the Bank is determined at the time of purchase by the Bank management, taking into consideration the purpose of holding the investment.

The purchase and sale transactions of those financial instruments are recognised and derecognised according to their “Delivery dates”. The fair value differences between the transaction date and the delivery date of financial assets and liabilities at fair value through profit or loss and financial assets available for sale are recorded.

a. Financial assets at fair value through profit or loss

Financial assets, classified as “Financial assets at fair value through profit or loss”, are trading financial assets and are either acquired for generating profit from short-term fluctuations in the price or dealer’s margin, or are financial assets included in a portfolio in which a pattern of short-term profit making exists independent from the acquisition purpose.

Trading financial assets are initially recognised at fair value and are subsequently re-measured at their fair value. However, if fair values cannot be obtained from the fair market transactions, it is accepted that the fair value cannot be measured reliably and that the financial assets are carried at “amortised cost” using the effective interest method.

All gains and losses arising from these evaluations are recognised in the income statement. Interest earned while holding financial assets is reported as interest income and dividends received are included separately in dividend income.

Derivative financial instruments are treated as trading financial assets unless they are not designated as hedge instruments. The principles regarding the accounting of derivative financial instruments are explained in detail in Note V of the related section.

The difference between the cost values and fair values of the financial assets at fair value through profit or loss, is recorded as accrued interest income or allowance for the impairment loss.

b. Loans and receivables

Loans and receivables are financial assets which are created by providing money, services or goods to a debtor. Loans and receivables originated by the Bank are carried initially at cost and subsequently recognised at the amortised cost value calculated using the effective interest method. The expenses incurred for the assets received as collateral are not considered as transaction costs and are recognised in the expense accounts.

The Bank provides general and specific provisions based on the assessments and estimates of the management, by considering the “Communiqué Related to Principles and Procedures on Determining the Qualifications of Banks’ Loans and Other Receivables and the Provision for These Loans and Other Receivables” published in the Official Gazette No. 26333 dated 1 November 2006. In this context, the revised credit risk, general structure of the current loan portfolio, conditions of the customers, non-financial information and economic conjuncture on the basis of the prudence principle are taken into consideration by the Bank in determining the estimates.

Provision expenses are deducted from the net income of the year. If there is a collection from a receivable that is provisioned previously, the amount is deducted from the “Specific Provisions” account and recorded as income to “Provision for Loan Losses and Other Receivables”. Uncollectible receivables are written-off after all the legal procedures have been finalised.

Cash loans in Turkish Lira are comprised of the foreign currency indexed loans, export guaranteed loans, fund resourced loans and cash loans in foreign currency are comprised of the export loans and operating loans.

Foreign currency indexed loans are followed under the TL accounts by translating its original amount to TL by using the historical foreign exchange rate of its opening date. Repayments are calculated with the foreign exchange rate on the payment date and the incurred foreign exchange gains/losses are recorded through the period’s profit or loss.

c. Held-to-maturity financial assets

The Bank has no held-to-maturity financial assets.

Deutsche Bank Anonim ŞirketiNotes to The Unconsolidated Financial Statements At 31 December 2013(Unless otherwise stated amounts are expressed in thousands of Turkish Lira (“TL”))


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d. Available-for-sale financial assets

The Bank has no available-for-sale financial assets.

IX. IExplanations on impairment of financial assets

Financial asset or group of financial assets are reviewed at each reporting date to determine whether there is objective evidence of impairment. If any such indication exists, the Bank estimates the amount of impairment.

Impairment losses occurs if, and only if, there is an objective evidence that the expected future cash flows of financial asset or group of financial assets are adversely affected by an event(s) (“loss event(s)”) incurred subsequent to recognition. The losses expected to incur due to future events are not recognised even if the probability of loss is high.

X. Explanations on offsetting financial assets

The Bank provides allowance for the impairment losses on the financial assets at fair value through profit or loss, when the fair values are less than their carrying values. This allowance is netted from the carrying value of the related financial assets group on the balance sheet.

The Bank provides specific provisions for loans and other receivables in accordance with the related regulations. This allowance is netted from the carrying value of the loans and receivables on the asset side of the balance sheet.

Except for the matters explained above are offset and the net amount is reported in the balance sheet when the Bank has a legally enforceable right to offset the recognised amounts and there is an intention to collect/pay related financial assets and liabilities on a net basis, or to realise the asset and settle the liability simultaneously.

XI. Explanations on sales and repurchase agreements and securities lending transactions

Securities subject to repurchase agreements (“Repo”) are classified as “Financial assets at fair value through profit or loss”, “Available-for-sale” and “Held-to-maturity” according to the investment purposes of the Bank and measured according to the portfolio to which they belong. Funds obtained from repurchase agreements are accounted under “Funds Provided under Repurchase Agreements” in liabilities and the difference between the sale and repurchase price is accrued over the life of repurchase agreements using the effective interest method.

Funds given against securities purchased under agreements (“Reverse repo”) to resell are accounted under “Receivables from Reverse Repurchase Agreements” on the balance sheet. The difference between the purchase and determined resell price is accrued over the life of repurchase agreements using the “effective interest method”. The Bank has no securities lending transactions.

As of 31 December 2013 and 31 December 2012, the Bank has no reverse repo.

XII. Explanations on assets held for resale and discontinued operations

There are no assets held for resale and discontinued operations as of 31 December 2013 and 31 December 2012.

XIII. Explanations on goodwill and other intangible assets

There are no goodwill and other intangible assets as of 31 December 2013 and 31 December 2012.

Intangible assets are measured at cost on initial recognition and any directly attributable costs of setting the asset to work for its intended use are included in the initial measurement. Subsequently, intangible assets are carried at historical costs after the deduction of accumulated amortisation and the provision for value decreases, if any.

Intangible assets are impaired when the book value exceeds the recoverable amount. Impairment indicates that losses may be realised. When the indicators are present the Bank makes estimation on the recoverable amount. If there are no indicators of impairment there is no need for the recoverable amount estimation. The explanation on the impairment of intangible asset is presented in Note I-13 of Section Five.



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Intangibles are amortised over their estimated useful lives using the straight-line method. The useful life of the asset is determined by assessing the expected useful life of the asset, technical, technological and other kinds of obsolescence and all required maintenance expenses necessary to utilise the economic benefit of the asset.

The Bank’s intangible assets consist of rights and custody services acquired by the Bank on July 2007 (customer relationship). The intangible assets are amortised over their useful lives on a straight line basis. The amortisation method and the useful lives of the intangible assets are reassessed regularly at each year end. Rights and the customer relationship are amortised with straight line method over 5 and 10 years, respectively.

XIV. Explanations on property and equipment

The property and equipment acquired before 31 December 2004 are recorded at restated historical costs in accordance with inflation accounting and subsequent additions to 31 December 2004 are recorded at their historical purchase costs.

The property and equipments are depreciated over their estimated useful lives on a straight-line basis.

If the recoverable amounts of the tangible assets are different than their restated net book values, the Bank records other income in the income statement or other expense or equity to be added to capital.

Expenditures for the repair and renewal of property and equipment are recognised as expense. The capital expenditures made in order to increase the capacity of the tangible asset or to increase its future benefits are capitalised on the cost of the tangible asset. The capital expenditures include the cost components which are used either to increase the useful life or the capacity of the asset, or the quality of the product or to decrease the costs.

There are no restrictions such as pledges, mortgages or any other restrictions on the property and equipment as of 31 December 2013 and 31 December 2012.

There are no changes in the accounting estimates that would have significant effects in the current period or in the following periods.

Depreciation rates and the estimated useful lives of tangible assets are as follows:

Motor Vehicles 5 yearsOffice Machinery 3 - 5 yearsFurnitures 5 - 15 years

XV. Explanations on leasing transactions

Maximum length of the finance lease contracts is 4 years. The leased assets are classified under tangible assets and depreciated over their useful lives with the rate of 20%. The payables related with those finance lease agreements are recorded under “Lease payables” on the liability side of the balance sheet. The incurred interest expenses and foreign exchange differences are recorded through the income statement.

In the event of the annulment of the operational lease contracts before its expiration date, the cash paid penalties are recognised as expense in the related period. There are no operational lease contracts which are annulled by the Bank before its expiration date.

Transactions regarding operational lease agreements are accounted on an accrual basis in accordance with the terms of the related contracts.

The Bank, does not perform any finance lease transactions as “Lessor’’.



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XVI. Explanations on provisions and contingent commitments

Provisions and contingent liabilities except for the specific and general provisions recognised for loans and other receivables are accounted in accordance with the “Turkish Accounting Standard for Provisions, Contingent Liabilities and Contingent Assets” (“TAS 37”).

Provisions are recognised when the Bank has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. The provision for contingent liabilities arising from past events should be recognised in the same period of occurrence in accordance with the “Matching principle”. When the amount of the obligation cannot be estimated and there is no possibility of an outflow of resources from the Bank, it is considered that a “Contingent” liability exists and it is disclosed in the related notes to the financial statements.

XVII. Explanations on contingent assets

The contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the Bank. If an inflow of economic benefits to the Bank has become probable, then the contingent asset is disclosed in the footnotes to the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised in the financial statements of the period in which the change occurs.

XVIII. Explanations on obligations related to employee rights

In accordance with the existing Turkish Labor Law, the Bank is required to make lump-sum termination indemnities to each employee whos has completed one year of service with the Bank and whose employment is terminated due to retirement or for reasons other than resignation or misconduct and this amount is limited by the termination imdentiy upper limit. Employee severance indemnities are not subject to legal funding requirements.

The provision has been calculated by estimating the present value of the future probable obligation of the Bank arising from the retirement of employees. TAS 19 requires actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined benefit plans. Accordingly, assumptions on discount rate, expected rate of salary increase and employee turnover rate is used in the calculation of the total liability. Each assumptions are reviewed on an annual basis.

XIX. Explanations on taxation

Current taxMany clauses of Corporate Tax Law No. 5520 which are valid starting from 1 January 2006, came into effect after being published in Official Gazette No. 26205, dated 21 September 2006. According to the New Tax Law, the corporate tax rate in Turkey is payable at the rate of 20% for 2013 (2012: 20%). The corporate tax rate is calculated on the total income of the Bank after adjusting for certain disallowable expenses, exempt income and other allowances. No further tax is payable unless the profit is distributed.

Dividends paid to non-resident corporations, which have a place of business in Turkey or to resident corporations are not subject to withholding tax. Otherwise, dividends paid are subject to withholding tax at the rate of 15%. An increase in capital via issuing bonus shares is not considered as profit distribution and thus does not incur withholding tax.

Corporations are required to pay advance corporate tax quarterly at a rate of 20% on their corporate income. Advance tax is declared by the 14th and paid by the 17th day of the second month following each calendar quarter end. Advance tax paid by corporations which is for the current period is credited against the annual corporation tax calculated on their annual corporate income in the following year. Despite the offset, if there is temporary prepaid tax remaining, this balance can be refunded or used to offset any other financial liabilities to the government.

A 75% portion of the capital gains derived from the sale of equity investments and immovable properties held for at least two years is tax exempt, if such gains are added to paid-in capital or held in a special account under shareholder’s equity for five years.

Under the Turkish Corporate Tax Law, losses can be carried forward to offset against future taxable income for up to five years. Losses cannot be carried back to offset profits from previous periods.



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In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Tax returns are required to be filled and delivered to the related tax office until the evening of the 25th of the fourth month following the balance sheet date. Tax returns are open for five years from the beginning of the year following the date of filing during which period the tax authorities have the right to audit tax returns, and the related accounting records on which they are based, and may issue re-assessments based on their findings.

Deferred taxAccording to the Turkish Accounting Standard 12 (TAS 12) “Income Taxes”; deferred tax assets and liabilities are recognized on all taxable temporary differences arising between the carrying values of assets and liabilities in the financial statements and their corresponding balances considered in the calculation of the tax base, except for the differences not deductible for tax purposes and initial recognition of assets and liabilities which affect neither accounting nor taxable profit.

If transactions and events are recorded in the income statement, then the related tax effects are also recognised in the income statement. However, if transactions and events are recorded directly in the shareholders’ equity, the related tax effects are also recognised directly in the shareholders’ equity.

The deferred tax assets and liabilities presented on the financial statements by net basis (off-set).

Transfer pricingThe article no. 13 of the Corporate Tax Law describes the issue of transfer pricing under the title of “disguised profit distribution” by way of transfer pricing. “The General Communiqué on Disguised Profit Distribution by Way of Transfer Pricing” published at 18 November 2007, explains the application related issues on this topic.

According to this communiqué, if the taxpayers conduct transactions like purchase and sale of goods or services with the related parties where the prices are not determined according to the arm’s length principle, then it will be concluded that there is a disguised profit distribution by way of transfer pricing. Such disguised profit distributions will not be deducted from the corporate tax base for tax purposes.

XX. Explanations on funds borrowed

Trading and derivative financial liabilities are valued with their fair values and the other financial liabilities are carried at “amortised cost” using the effective interest method.

The Bank utilises various hedging techniques to minimise the currency, interest rate and liquidity risks of its financial liabilities. No convertible bonds have been issued by the Bank.

XXI. Explanations on shares certificates issued

There is no issued share certificates for the period ended at 31 December 2013.

XXII. Explanations on bills of exchange and acceptances

As of 31 December 2013, the Bank has no bills of exchange and acceptances.

XXIII. Explanations on government grants

As of 31 December 2013, the Bank has no government grants.

XXIV. Explanations on profit reserves and profit distributions Retained earnings as per the financial statements other than legal reserves are available for distribution, subject to the legal reserve requirement referred to below.

Under the Turkish Commercial Code (“TCC”) the legal reserves are composed of first and second reserves. The TCC requires first reserves to be 5% of the profit until the total reserve is equal to 20% of issued and fully paid-in share capital. Second reserves are required to be 10% of all cash profit distributions that are in excess of 5% of the issued and fully paid-in share capital. However holding companies are exempt from this application. According to the Turkish Commercial Code, legal reserves can only be used to compensate accumulated losses and cannot be used for other purposes unless they exceed 50% of paid-in capital.

Retained earnings except legal reserves are allowed for distribution on the condition being subjected to legal reserve requirement as mentioned above. Deferred tax income can not be subjected to profit distribution.



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XXV. Explanations on earnings per share

Earnings per share disclosed in the income statement are calculated by dividing net profit/(loss) for the year to the weighted average number of shares outstanding during the period concerned. Current Period Prior Period Net Profit For the Year 2.087 104.107Weighted Average Number of Issued Ordinary Shares 1.350.000.000 1.350.000.000Total (Full TL) 0,0016 0,0771

In Turkey, companies can increase their share capital by making a pro-rata distribution of shares (“bonus shares”) to existing shareholders from retained earnings. For the purpose of earnings per share computations, the weighted average number of shares outstanding during the year has been adjusted in respect to bonus shares issued without a corresponding change in resources by giving them a retroactive effect for the year in which they were issued and for each earlier period.

XXVI. Explanations on related parties

For the purpose of these financial statements, shareholders, key management personnel and board members together with their families and companies controlled by/affiliated with them, and associated companies are considered and referred to as related parties in accordance with “Turkish Accounting Standard for Related Parties” (“TAS 24”). The transactions with related parties are disclosed in detail in Note VII of Section Five.

XXVII. Explanations on cash and cash equivalents

For the purposes of the statement of cash flows, “Cash” includes cash, effectives, cash in transit, purchased cheques and demand deposits including balances with the Central Bank; and “Cash equivalents” include interbank money market placements, trading securities and time deposits at banks with original maturity periods of less than three months.

XXVIII. Explanations on segment reporting

Operational segment is distinguishable section of the Bank that has different characteristics from other operational segments per earning and conducts the presentation of service group, associated bank products or a unique product. Operating segments are disclosed in Note X in Section Four.

XXIX. Reclassifications

In order to be consistent with the presentation of financial statements dated 31 December 2013, there are some reclassifications made on unconsolidated balance sheet and income statement as of and for the year ended 31 December 2012.

Accounting policies of unconsolidated financial statements dated 31 December 2013 applied consistently to all of the periods presented and there has not been any reclassifications made in the comparative financial statements as at the end of the reporting period.



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SECTION FOUR

INFORMATION RELATED TO FINANCIAL POSITION OF THE BANK

I. Explanations on Capital Adequacy Ratio

As of 31 December 2013 the Bank’s capital adequacy ratio is 24,81%. (31 December 2012: 49,36%)

1. 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 Securitisations” published in the Official Gazette no.28337 dated 28 June 2012 and the “Regulation on Equities of Banks” published in the Official Gazette no.26333 dated 1 November 2006. In the calculation of capital adequacy ratio, the data prepared from accounting records in compliance with the current legislation are used. Furthermore, the market and operational risk are also taken into account within the framework of regulations.

In the calculation process of credit risk, asset types determined in 6th article of the Regulation, ratings and credit risk mitigators are taken into account. “Simple financial collateral approach” is taken into account for banking book items.The amount subject to credit risk for non cash loans are considered by using the conversion rates which are defined in the 5th article of “Regulation On Measurement And Evaluation Of Capital Adequacy Of Banks”. Depleted and amortized assets are taken into consideration by net amounts which are calculated by the deduction of depreciation cost and provisions. The items which are deducted from shareholders’ equity and trading book items are not considered in the calculation of risk weighted assets.

As per the article 5 of the Regulation, the “counterparty credit risk” is calculated for repurchase transactions, reverse repurchase transactions and securities. In the calculations regarding counterparty credit risk, for the trading account “ Comprehensive Financial Guarantee Method” is used.



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2. Information related to capital adequacy ratio

As of 31 December 2013: Risk weights 0% 10% 20% 50% 75% 100% 150% 200%Weighted Credit RiskRisk classifications:Conditional and unconditional exposures to central governmentsor central banks 275.772 - - - - 3.843 - -Conditional and unconditionalexposures to regionalgovernments or local authorities - - - - - - - -Conditional and unconditional exposures to administrative bodiesand non-commercial undertakings - - - - - - - -Conditional and unconditional exposures to multilateral development banks - - - - - - - -Conditional and unconditional exposures to international organisations - - - - - - - -Conditional and unconditional exposures to banks and brokerage houses - - 346.569 64.902 - 111.573 - -Conditional and unconditional exposures to corporates - - 14.907 - - 854.585 - -Conditional and unconditional retail exposures - - - - 662 119.281 - -Conditional and unconditional exposures secured by real estate property - - - - - - - -Past due items - - - - - - - -Items in regulatory high-risk categories - - - - - - - -Exposures in the form of bonds secured by mortgages - - - - - - - -Securitisation positions - - - - - - - -Short term exposures to banks, brokerage houses and corporates - - - - - - - -Exposures in the form of collective investment undertakings - - - - - - - -Other receivables 159 - - - - 13.921 - -Total balance subject to credit risk 275.931 - 361.476 64.902 662 1.103.203 - - Value at credit risk - - 72.295 32.451 497 1.103.203 - -

i. Summary information related to unconsolidated capital adequacy ratio Current Period Prior Period Capital to be employed for credit risk (Amount subject to credit risk*0,08) (I) 96.676 49.175Capital to be employed for market risk (II) 14.019 7.284Capital to be employed for operational risk (III) 22.890 22.767Shareholders’ equity 414.277 488.794Shareholders’ equity / ((CRCR+-MRCR+ORCR ) * 12.5*100) 24,81 49,36



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ii. Information about equity items Current Period Prior PeriodCORE CAPITAL Paid-in capital 135.000 135.000Nominal capital 135.000 135.000Capital commitments (-) - -Adjustment to paid-in capital 31.866 31.866Share premium - -Share repeal - -Legal reserves 257.754 243.908Adjustment to legal reserves - -Profit 2.087 104.107Net Current period profit 2.087 104.107Prior period profit - -Provisions for possible losses up to 25% of core capital - -Profit on sale of associates, subsidiaries and buildings - -Primary subordinated loans - -Loss that is not covered with reserves (-) - -Net current period loss - -Prior period loss - -Development cost of operating lease (-) 235 344Intangible assets (-) 27.028 34.151Deferred-assets for tax which exceeds 10% of core capital (-) - -Excess amount expressed in the Law (Article 56, 3rd paragraph) (-) - -Total Core Capital 399.444 480.386SUPPLEMENTARY CAPITAL - -General reserves 14.833 8.40845% of increase in revaluation fund of movables - -45% of increase in revaluation fund of fixed assets - -Free shares from investment and associates, subsidiaries and joint ventures that is not recognized in profit - -Primary subordinated loans which are ignored in the calculation of core capital - -Secondary subordinated loans - -45% of value increase fund of financial assets available for sale and associates and subsidiaries - -Adjustment to paid-in capital, profit reserves and previous years losses(except adjustment to legal reserves) - -Total Suplementary Capital 14.833 8.408CAPITAL DEDUCTIONS FROM THE CAPITAL - -Partnership share on banks and financial institutions (domestic and abroad) that are not consolidated, with a shareholding of 10% and above - -The sum of partnership share on banks and financial institutions (domestic and abroad), with shareholding of less than 10%, but exceeding 10% and more of the sum of core and suplimentary capital of the bank - -Loans extended to banks, financial institutions (domestic and abroad) and qualified shareholders, like secondary subordinated loan and debt instruments purchased from these institutions issued, like primary and secondary subordinated loan - -Loans extended being noncompliant with articles 50 and 51 of the Law - -Net book values of properties owned, exceeding 50% of banks’ equity and properties, and trade goods overtaken in exchange for loans and receivables that should be disposed within five years in accordance with article 57 of the Law, but not yet disposed - -Securitisation positions to be deducted from the shareholders' equity - -Other - -Total Equity 414.277 488.794



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iii. Information on the Bank’s internal capital requirements within the scope of the internal capital adequacy assessment process in order to evaluate the adequacy of the approach in terms of current and future activities

The Bank evaluates the interrelated components that are the part of The Bank’s management and decision making process such risk appetite, strategy, capital and risk management policy and stress testing within the process of internal capital adequacy evaluation for the risks that the Bank was exposed or may be exposed accordingly current risk profile. The Bank formed the internal capital adequacy evaluation process within the framework risk management and strategy, risk management processes, risk methods and risk infrastructure on the purpose of observing the current, future and under stress conditions capital adequacy of the Bank’s and measuring, managing,observing and reducing the subjected risks relating to evaluate the significant risks exposed. Under this framework, the Bank performs base-case and stress test estimations by determining the risks faced including structural position risk, business, credit, group, liquidity, market, operational, regulations and credibility risks considering growth targets of all business lines, strategic plans, sections provides support service. Within the scope of this evaluation, the Bank uses like Pillar 2A of Internal Capital Requirement Evaluation, Pillar 2B of Stress Test and Reverse Stress Test methods.

II. Explanations on credit risk

Loan customers are subject to the concentration risk limits according to their geographical segments, risk groups, or sectors approved by thr Board of Directors. In compliance with the banking legislations the Bank does not work with the untrustworthy individuals and corporate, which are listed in the international watch lists.

Credit limit allocation and credit extension procedures, forward transactions and the transactions related with the other derivative instruments, the limits and the risk exposures of the daily cash transactions of the customers are approved by the different level of people from the Bank’s management team according to their related authorisation limits. The risk limits and concentrations of the daily on and off balance sheet transactions are monitored per each customer by the authorised people of the treasury department of the Bank.

The credit risk of the forward transactions is managed with the potential risks arising from the fluctuations in the market and it is avoided from the transactions that could have significant credit risks.

The credit worthiness’ of customer is followed up on a regular basis in accordance with related regulations and accordingly the credit limits of the customers are revised, if necessary. Statement documents received for loans that are audited in accordance with regulations is consequential.

The Bank, as an active player in the international banking market, does not hold significant credit risk when compared to the financial activities of the other international financial institutions.

The Bank’s cash loan portfolio is composed of 53 customers and non-cash loan portfolio is composed of 112 customers as of 31 December 2013 (31 December 2012: 39 of cash loan portfolio and 101 of non-cash loans portfolio).

The share of Bank’s cash and non-cash loans from first top 100 loan customers in total cash and non-cash loan portfolio is 100% (31 December 2012: 100%).

Total cash and non-cash loans of first 100 customers constitute 39% and 0.36% of total balance sheet and the off-balance sheet items, respectively.( 31 December 2012 : 34% and %0.64 )

The Bank’s calculated general provision for credit risk amounting to TL 14.833 as of 31 December 2013 (31 December 2012: TL 8.408).



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a. Types of loans and specific provisions Factoring31 December 2013 Corporate Consumer Receivables TotalStandard Loans 903.971 58 - 904.029Loans under close monitoring - - - -Non-performing loans - - - -Specific provision (-) - - - -Total 903.971 58 - 904.029

Factoring31 December 2012 Corporate Consumer Receivables Total Standard Loans 381.811 94 - 381.905Loans under close monitoring - - - -Non-performing loans - - - -Specific provision (-) - - - -Total 381.811 94 - 381.905

b. Loans and receivables past due but not impaired

None (31 December 2012: None).

c. Debt securities, treasury bills and other bills

Financial Assets Available for Sale Held to at Fair Value Financial Maturity 31 December 2013 through P/L (Net) Assets (Net) Securities (Net) Total Moody’s Ba2 (*) 797.082 - - 797.082Total 797.082 - - 797.082

Financial Assets Available for Sale Held to at Fair Value Financial Maturity 31 December 2012 through P/L (Net) Assets (Net) Securities (Net) Total Moody’s Ba2 (*) 618.241 - - 618.241Total 618.241 - - 618.241

(*) Consists of Turkish Republic government bonds and treasury bills.

d. Information on rating concentration

The Bank does not have any credit rating policy.

e. Fair value of collaterals (loans and advances to customers)

Guarantees received as at 31 December 2013 are presented in “Credit Risk Mitigation Techniques” disclosure.



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f. Credit risk is the risk reduction effects without taking into consideration the total amount of exposures after offsetting transactions with different risk classes according to the types and amounts of disaggregated risks are listed below the average for the period Current Period Average RiskRisk classifications: Risk Amount(*) Amount(**)

Conditional and unconditional exposures to central governments or central banks 232.208 234.986Conditional and unconditional exposures to regional governments or local authorities - -Conditional and unconditional exposures to administrative bodies and non-commercial undertakings - -Conditional and unconditional exposures to multilateral development banks - -Conditional and unconditional exposures to international organisations - -Conditional and unconditional exposures to banks and brokerage houses 505.549 339.598Conditional and unconditional exposures to corporates 934.395 796.595Conditional and unconditional retail exposures 119.943 103.159Conditional and unconditional exposures secured by real estate property - -Past due items - -Items in regulatory high-risk categories - -Exposures in the form of bonds secured by mortgages - -Securitisation positions - -Short term exposures to banks, brokerage houses and corporates - -Exposures in the form of collective investment undertakings - -Other receivables 14.080 11.129

(*) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.(**) Average risk amounts are the arithmetical average of the risk amounts after conversion in January-December period.

Prior Period Average RiskRisk classifications: Risk Amount(*) Amount(**)

Conditional and unconditional exposures to central governments or central banks 162.059 161.201Conditional and unconditional exposures to regional governments or local authorities - -Conditional and unconditional exposures to administrative bodies and non-commercial undertakings - -Conditional and unconditional exposures to multilateral development banks - -Conditional and unconditional exposures to international organisations - -Conditional and unconditional exposures to banks and brokerage houses 189.576 428.264Conditional and unconditional exposures to corporates 487.347 592.122Conditional and unconditional retail exposures 91.153 28.658Conditional and unconditional exposures secured by real estate property - -Past due items - -Items in regulatory high-risk categories - -Exposures in the form of bonds secured by mortgages - -Securitisation positions - -Short term exposures to banks, brokerage houses and corporates - -Exposures in the form of collective investment undertakings - -Other receivables 7.565 38.211

(*) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.(**) Average risk amounts are the arithmetical average of the risk amounts after conversion in July-December period.



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g. Profile of significant exposures in major regions

Conditional Conditional and and unconditional unconditional Conditional Conditional exposures to exposures to and and central banks and unconditional unconditional governments or brokerage exposures to retail Other31 December 2013 central banks houses corporates exposures receivables Total 1. Domestic 232.208 297.604 867.955 119.943 14.080 1.531.7902. European Union (EU) countries - 139.234 39.838 - - 179.0723. OECD countries (**) - 13.087 1.922 - - 15.0094. Off-shore banking regions - - 155 - - 1555. USA, Canada - 49.276 19.142 - - 68.4186. Other countries - 6.348 5.383 - - 11.7317. Associates, subsidiaries and joint ventures - - - - - -8. Unallocated assets / liabilities (***) - - - - - -Total (*) 232.208 505.549 934.395 119.943 14.080 1.806.175

(*) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.(**) OECD countries other than EU countries, USA and Canada(***) Assets and liabilities that can not be allocated on a consistent basis

Conditional Conditional and and unconditional unconditional Conditional Conditional exposures to exposures to and and central banks and unconditional unconditional governments or brokerage exposures to retail Other31 December 2012 central banks houses corporates exposures receivables Total 1. Domestic 162.059 51.134 382.776 91.153 7.565 694.6872. European Union (EU) countries - 91.266 62.651 - - 153.9173. OECD countries (**) - 9.666 1.860 - - 11.5264. Off-shore banking regions - - 124 - - 1245. USA, Canada - 31.077 38.821 - - 69.8986. Other countries - 6.433 1.115 - - 7.5487. Associates, subsidiaries and joint ventures - - - - - -8. Unallocated assets / liabilities (***) - - - - - -Total (*) 162.059 189.576 487.347 91.153 7.565 937.700



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h. Risk profile according to sectors and counterparties

Conditional Conditional and and unconditional unconditional Conditional Conditional exposures to exposures to and and central banks and unconditional unconditional governments or brokerage exposures to retail Other31 December 2013 central banks houses corporates exposures receivables Total Agriculture - - 6.237 - - 6.237 Farming and raising livestock - - 6.237 - - 6.237 Forestry - - - - - - Fishing - - - - - -Manufacturing - - 478.556 37.662 - 516.218 Mining - - 160 - - 160 Production - - 478.156 37.662 - 515.818 Electric, gas and water - - 240 - - 240Construction - - 10.150 - - 10.150Services 228.365 505.549 433.176 82.228 - 1.249.318 Wholesale and retail trade - - 273.826 81.948 - 355.774 Hotel, food and beverage services - - - - - - Transportation and telecommunication - - 40.701 280 - 40.981 Financial institutions 228.365 505.549 118.649 - - 852.563 Real estate and renting services - - - - - - Self-employement services - - - - - - Education services - - - - - - Health and social services - - - - - Other 3.843 - 6.275 54 14.080 24.252Total (*) 232.208 505.549 934.394 119.944 14.080 1.806.175

(*) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions.

Conditional Conditional and and unconditional unconditional Conditional Conditional exposures to exposures to and and central banks and unconditional unconditional governments or brokerage exposures to retail Other31 December 2012 central banks houses corporates exposures receivables Total Agriculture - - 7.101 - - 7.101 Farming and raising livestock - - 7.101 - - 7.101 Forestry - - - - - - Fishing - - - - - -Manufacturing - - 232.505 27.260 - 259.765 Mining - - - - - - Production - - 229.236 27.260 - 256.496 Electric, gas and water - - 3.269 - - 3.269Construction - - 40.370 - - 40.370Services 162.059 189.576 205.159 63.799 - 620.593 Wholesale and retail trade - - 181.105 63.599 - 244.704 Hotel, food and beverage services - - - - - - Transportation and telecommunication - - 22.654 200 - 22.854 Financial institutions 162.059 189.576 - - - 351.635 Real estate and renting services - - - - - - Self-employement services - - - - - - Education services - - - - - - Health and social services - - 1.400 - - 1.400Other - - 2.212 94 7.565 9.871Total (*) 162.059 189.576 487.347 91.153 7.565 937.700




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i. Distribution of maturity risk factors according to their outstanding maturities

Term to maturity Current Period 1 month 1-3 months 3-6 months 6-12 months Over 1 year Total Conditional and unconditional exposures to central governments or central banks 198.262 - - - - 198.262Conditional and unconditional exposures to banks and brokerage houses 501.758 - - - - 501.758Conditional and unconditional exposures to corporates 383.888 164.515 27.363 213.998 - 789.764Conditional and unconditional retail exposures 96.128 15.971 228 1.282 - 113.609Other receivables - - - - - -Total (*) 1.180.036 180.486 27.591 215.280 - 1.603.393


Term to maturity Prior Period 1 month 1-3 months 3-6 months 6-12 months Over 1 year Total Conditional and unconditional exposures to central governments or central banks 119.216 - - - - 119.216Conditional and unconditional exposures to banks and brokerage houses 186.036 - - - - 186.036Conditional and unconditional exposures to corporates 105.441 120.167 60.853 12 - 286.473Conditional and unconditional retail exposures 49.099 28.879 4.296 5.952 - 88.226Other receivables - - - - - -Total (*) 459.792 149.046 65.149 5.964 - 679.951


j. Information on risk classifications

According to the 7th article of the Communiqué on “Measurement and Assessment of Capital Adequacy of Banks”, in the process of risk weighted assets calculation, risk weights are determined through ratings given by internatiol rating companies.

The international risk ratings are used for the exposures to central governments and central banks, whereas for central governments and central banks that are not rated by Fitch Ratings, the published country ratings as announced by the Organisation for Economic Cooperation and Development (OECD) are used. If exist, the ratings of Standart&Poor’s (S&P), Moody’s and Fitch Ratings are used together for the exposures of the foreign banks and brokerage houses. Where the counterparties are domestic, the related exposures are included in the calculation of capital adequcy as unrated.

TL exposures of Central Government of Turkey and Central Bank of Turkey and all reserve requirement balances have 0% risk weight.

The Fitch Ratings, Moody’s and Standart&Poor’s risk ratings as per the credit quality grades and the risk weights according to exposure categories are presented below:

Credit Quality Ratings to match Grades Fitch Moody’s Standart & Poor’s

Long-term Credit Rating 1 AAA and AA- Aaa and Aa3 AAA and AA- 2 A+ and A- A1 and A3 A+ and A- 3 BBB+ and BBB- Baa1 and Baa3 BBB+ and BBB- 4 BB+ and BB- Ba1 and Ba3 BB+ and BB- 5 B+ and B- B1 and B3 B+ and B- 6 CCC+ and below Caa1 and below CCC+ and belowShort-Term Credit Rating 1 F1+ and F1 P-1 A-1+ and A-1 2 F2 P-2 A-2 3 F3 P-3 A-3 4 F3 and below NP A-3 below 5 - - - 6 - - -



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k. Risk amount based on risk weight Risk Weight(*) Deductions Risk Weight 0% 10% 20% 50% 75% 100% 150% From Equity 1. Exposures Before Credit Risk Mitigation 228.525 - 380.735 - 662 1.196.253 - 27.2632. Exposures After Credit Risk Mitigation 275.931 - 361.476 64.902 662 1.103.203 - 27.263

(*) The Bank does not have risk weighted balances on 200% nor 1.250%

l. Information according to sector and counterparty types Loans 31 December 2013 Impaired Past due Value adjustments Provisions Agricultural - - 62 - Farming and raising livestock - - 62 - Forestry - - - - Fishing - - - -Manufacturing - - 5.922 - Mining - - - - Production - - 5.921 - Electric, gas and water - - 1 -Construction - - 41 -Services - - 8.638 - Wholesale and retail trade - - 4.034 - Hotel, food and beverage services - - - - Transportation and telecommunication - - 805 - Financial institutions - - 3.799 - Real estate and renting services - - - - Self-employement services - - - - Education services - - - - Health and social services - - - -Other - - 170 - Total - - 14.833 -

(*) Represents general provisions. Loans 31 December 2012 Impaired Past due Value adjustments Provisions Agricultural - - 71 - Farming and raising livestock - - 71 - Forestry - - - - Fishing - - - -Manufacturing - - 2.764 - Mining - - - - Production - - 2.751 - Electric, gas and water - - 13 -Construction - - 161 -Services - - 5.388 - Wholesale and retail trade - - 3.252 - Hotel, food and beverage services - - - - Transportation and telecommunication - - 486 - Financial institutions - - 1.636 - Real estate and renting services - - - - Self-employement services - - - - Education services - - - - Health and social services - - 14 -Other - - 24 -Total - - 8.408 -

(*) Represents general provisions.



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m. Information about value adjustments and provisions

Impaired loans; are the credits that either overdue more than 90 days as of the reporting date or are treated as impaired due to their creditworthiness. For such credits, “specific provisons” are allocated as per the Provisioning Regulation. The Bank does not have impaired loans as at the reporting date.

Past due loans; are the credits that overdue upto 90 days but not impaired. For such credits, “general provisions” are allocated as per the Provisioning Regulation. The Bank does not have past due loans as at the reporting date. Opening Provisions for Provision Other Closing 31 December 2013 balance the period reversals adjustments balance 1. Specific provisions - - - - -2. General provisions 8.408 6.425 - - 14.833

Opening Provisions for Provision Other Closing 31 December 2012 balance the period reversals adjustments balance 1. Specific provisions - - - - -2. General provisions 8.940 - (532) - 8.408

III. Explanations on Market Risk

The Bank calculates market risk by using “Standard Method” on a monthly basis.

Being exposed to market risk, the Bank’s Board of Directors has identified risk management strategies and policies and has pursued the implementation of these strategies periodically. Considering the existing major risks, the Bank’s Board of Directors determines and revises the risk limits, when necessary. The Board of Directors ensures that the risk management group and the executive management are taking necessary actions in identifying, measuring, monitoring and managing the various risks that the Bank exposes to.

The Bank performs daily stress testing related with the asset-liability management and Deutsche Bank AG performs the ‘VAR’ analysis.

The market risk exposed positions are transferred to the global markets with the most appropriate market prices for each assets and liabilities. The global markets prepare the daily market yield curves which are used as reference prices for such transfers.

The capital requirement for the general market risk and specific risks is calculated using the standard method in accordance with the “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks” and reported monthly.

a) Information related to market risk 31 December 2013 (I) Capital Requirement against General Market Risk - Standard Method 7.303(II) Capital Requirement against Specific Risks - Standard Method -Capital Requirement against Specific Risks of Securitisation Positions– Standard Method -(III) Capital Requirement against Currency Position Risk - Standard Method 5.923(IV) Capital Requirement against Commodity Risks - Standard Method -(V) Capital Requirement against Clearing Risks - Standard Method -(V) Capital Requirement against Clearing Risks - Standard Method -(VII) Capital Requirement against Counterparty Credit Risks - Standard Method 793(VIII) Capital Requirement against Market Risks of Banks applying Risk Measurement -(IX) Total Capital Requirement against Market Risk (I+II+III+IV+V+VI+VII) 14.019(X) Value-At-Market Risk ((12.5*VIII) or (12.5*IX)) 175.238



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b) Average market risk calculated during the period at month ends

Current Period Prior Period Average Maximum Minimum Average Maximum MinimumInterest rate risk 11.774 20.673 6.085 13.204 20.781 5.326Share risk - - - - - -Currency risk 2.992 6.636 863 1.950 5.681 267Commodity risk - - - - - -Settlement risk - - - - - -Options risk - - - - - -Counterparty Credit Risk (*) 1.240 2.846 439 579 1.008 217Amount subject to total risk 200.380 294.548 143.510 196.662 343.375 72.625

(*) Counterparty credit risk includes January-December period for the current period and July-December period for the prior period.

c) Quantitative information on counterparty risk

As per the 21st article of the “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks”, counterparty risk is calculated over the following trading book transactions:

a) Over-the-counter derivative financial instruments and credit derivatives,

b) Securities or commodity based securities included in the trading books or commodity borrowing or lending transactions and repurchase and reverse repurchase agreements.

The Bank calculates counterparty credit risk by using “Valuation on Fair Value” method and risk amounts from this method are used in calculations. Total Risk Amount Weighted Amount Interest rate contracts (*) 800.011 586Foreign exchange rate contracts (**) 22.948 9.327Commodity contracts - -Equity shares related contracts - -Other - -Gross positive fair values 586 586Netting benefits - -Net current exposure amount - -Collaterals received - -Net derivative position 22.948 9.327

(*) Consist of repurchase transactions. (**) Consist of currency swaps and forward agreements.

IV. Operational risk

The amount subject to operational risk is calculated once a year in accordance with the Regulation on “Measurement and Assessment of the Capital Adequacy of Banks” published in the Official Gazette numbered 28337 on 28 June 2012. In the calculation of the Bank’s operational risk, the “Basic Indicator Method” is used. In the Basic Indicator Method, the amount subject to operational risk is calculated by multiplying 15% of the Bank’s average gross revenue over the previous three years with 12,5. Amount subject to operational risk is TL 286.129 for the current period.



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Total / Number of years for which gross income 31.12.2010 31.12.2011 31.12.2012 is positive Rate (%) Total Gross Income 123.564 117.652 216.591 152.602 15 22.890Amount subject to operational risk (Total*12,5) 286.129

V. Explanations on currency risk

The Bank manages its foreign currency balance sheet by paying maximum attention to comply with the regulations of the related authorities and by choosing the most appropriate methods to the Bank’s liquidity and profitability policies.

The position limit regarding the foreign currency risk is determined as parallel to the net foreign currency position standard rate. As of 31 December 2013, the Bank’s net ‘on balance sheet’ foreign currency long position amounts to TL 42.614, net ‘off-balance sheet’ foreign currency long position amounts to TL 30.336, while this net foreign currency long position amounts to TL 72.950.

“Standard method’’, which is also used for the statutory reporting purposes, is used to measure the Bank’s foreign currency risk .

The Bank’s effective exchange rates on the date of 31 December 2013 and 2012 and for the last five working days of the period announced by the Bank in TL are as follows:

25 Dec. 2013 26 Dec. 2013 27 Dec. 2013 28 Dec. 2013 31 Dec. 2013 USD 2,0812 2,071 2,0957 2,1604 2,1343CHF 2,3194 2,3111 2,3337 2,4307 2,3899GBP 3,3978 3,3735 3,4286 3,5601 3,5114EUR 2,8466 2,8353 2,8693 2,9844 2,9365

26 Dec. 2012 27 Dec. 2012 28 Dec. 2012 29 Dec. 2012 30 Dec. 2012 USD 1,7893 1,7877 1,7848 1,7829 1,7826CHF 1,9549 1,9516 1,9484 1,9544 1,9430GBP 2,8950 2,8796 2,8787 2,8823 2,8708EUR 2,3651 2,3586 2,3566 2,3657 2,3517

The arithmetical average of the Bank’s main foreign currency purchase rates for the last 30 days before the balance sheet date are listed below:

Monthly average purchase rate Current Period Prior PeriodUSD 2,0457 1,7791CHF 2,2713 1,9271GBP 3,3339 2,8700EUR 2,7926 2,3332

a) Exposure to foreign currency risk

A 10 percent depreciation of the TL against the following currencies as at 31 December 2013 and 31 December 2012 would have increased or decreased equity and profit or loss (excluding tax effects) by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

Current Period Prior PeriodMonthly average purchase rate Profit/loss Equity(*) Profit/loss Equity(*)

USD 5.442 5.442 (731) (731)EUR 1.732 1.732 2.005 2.005Other foreign currencies 121 121 61 61Total, net 7.295 7.295 1.335 1.335 (*) Equity includes profit/loss effect.



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b) Information on currency risk of the Bank

Current Period Euro USD Other FC Total Assets Cash (Cash in Vault, Effectives, Cash in Transit, Cheques Purchased) and Balances with Central Bank of Turkey 101 198.280 - 198.381Banks 2.466 1.145 1.662 5.273Financial Assets at Fair Value Through Profit or Loss - - - -Interbank Money Market Placements - - - -Available-for-sale Financial Assets - - - -Loans and Receivables (*) 329.645 198.604 - 528.249Investments in Associates, Subsidiaries and Joint Ventures - - - -Held-to-maturity Financial Assets - - - -Derivative Financial Assets Held for Risk Management - - - -Tangible Assets - - - -Intangible Assets - - - -Other Assets (***) 44.287 8.531 24 52.842Total Assets 376.499 406.560 1.686 784.745 Liabilities Bank Deposits 304 - - 304Foreign Currency Deposits 40.431 9.606 64 50.101Funds From Interbank Money Market - - - -Funds Borrowed From Other Financial Institutions 587.437 84.673 - 672.110Marketable Securities Issued - - - -Miscellaneous Payables 3 62 - 65Derivative Financial Liabilities Held for Risk Management - - - -Other Liabilities (***) 18.470 669 412 19.551Total Liabilities 646.645 95.010 476 742.131 Net On-Balance Sheet Position (270.146) 311.550 1.210 42.614 Net Off-Balance Sheet Position (**) 324.568 (294.232) - 30.336Derivative Assets 551.703 566.349 2.447 1.120.499Derivative Liabilities 227.135 860.581 2.447 1.090.163Non-Cash Loans (****) 109.468 54.397 81 163.946 Prior Period Total Asset 163.694 220.356 1.055 385.105Total Liabilities 289.701 74.251 446 364.398Net On-Balance Sheet Position (126.007) 146.105 609 20.707Net Off-Balance Sheet Position 146.055 (153.413) - (7.358)Derivative Assets 216.856 278.191 - 495.047Derivative Liabilities 70.801 431.604 - 502.405Non-Cash Loans (****) 139.065 149.306 66 288.437

(*) The foreign currency indexed loans amounting to TL 116.056 is included.(**) Indicates the net amount of derivative financial assets and liabilities. Spot foreign exchange buy and sell transactions shown under “Asset purchase commitments” in the financial statements are included in the “Net off-balance position”. Derivative financial assets and liabilities include accrual amounting to TL 18.937 and TL 18.145, respectively.(***) Accruals from spot foreign exchange buy and sell transactions are not included in “Other Assets” and “Other Liabilities”. Income and expense accruals from spot foreign exchange buy and sell transactions are TL 1.950 income and TL 2.496 expense accrual, respectively. Foreign currency prepaid expenses amounting to TL 1.088 is excluded from other assets.(****) There is no impact on net off-balance sheet position.



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VI. Explanations on Interest Rate Risk

The interest rate sensitivity of assets, liabilities and off-balance sheet items are evaluated quarterly at Asset-Liability Committee meetings.

The Bank’s interest rate risk is measured by using the standard method. The Bank provides information to its main shareholder Deutsche Bank AG for their, Value at Risk (VAR), risk measurement methods and performs sensitivity analyses.Standard method measurements are performed monthly by using the maturity distribution.

At the time of the computations on dailiy bases sensitivity analysis, interest rate risk of FC and TL trading securities and available for sale financial assets with placements and forwards is measured.

1. Interest rate sensitivity of assets, liabilities and off balance sheet items

(Based on repricing dates)

Up to 1 1-3 3-12 1-5 5 Years Non-InterestCurrent Period Ended Month Months Months Years and Over Bearing TotalAssets Cash and Balances with the Central Bank of Turkey - - - - - 228.523 228.523Banks 307.252 - - - - 5.766 313.018Financial Assets at Fair Value through Profit/Loss 305.602 21.399 307.737 93.105 69.239 18.937 816.019Money Market Placements - - - - - - -Available-for-Sale Financial Assets - - - - - - -Loans and Receivables 363.714 236.352 303.963 - - - 904.029Held-to-Maturity Financial Assets - - - - - - -Other Assets (*) - - - - - 98.041 98.041Total Assets 976.568 257.751 611.700 93.105 69.239 351.267 2.359.630 Liabilities Bank Deposits - - - - - 414.533 414.533Other Deposits 71.339 - - - 107.084 178.423Money Market Funds 187.512 - - - - - 187.512Miscellaneous Payable - - - - - 2.167 2.167Securities Issued - - - - - - -Funds Borrowed 754.546 319.477 - - - - 1.074.023Other Liabilities (**) - - - - - 502.972 502.972Total Liabilities 1.013.397 319.477 - - - 1.026.756 2.359.630 On Balance Sheet Long Position - - 611.700 93.105 69.239 - 774.044On Balance Sheet Short Position (36.829) (61.726) - - - (675.489) (774.044)Off-Balance Sheet Long Position 1.305.742 269.140 252.542 - - - 1.827.424Off-Balance Sheet Short Position 1.306.601 268.306 252.313 - - - 1.827.220Total Position (37.688) (60.892) 611.929 93.105 69.239 (675.489) 204

(*) Tangible assets amounting to TL 2.675, intangible assets amounting to TL 27.028, current tax asset amounting TL 1.673 and other assets amounting to TL 66.665 are presented in the other assets.(**) Equity amounting to TL 426.707, provisions amounting to TL 45.915, other liabilities amounting to TL 3.632, derivative instruments held for trading amounting to TL 18.145 and tax liabilities amounting to TL 8.573 are presented in the other liabilities.



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Up to 1 1-3 3-12 1-5 5 Years Non-InterestPrior Period Ended Month Months Months Years and Over Bearing TotalAssets Cash and Balances with the Central Bank of Turkey - - - - - 162.344 162.344Banks 38.151 - - - - 3.540 41.691Financial Assets at Fair Value through Profit/Loss 212.291 148.473 65.790 124.651 67.036 861 619.102Money Market Placements - - - - - - -Investment Securities Available-for-Sale - - - - - - -Loans and Receivables 161.746 149.046 71.113 - - - 381.905Investment Securities Held-to-Maturity - - - - - - -Other Assets (*) - - - - - 91.924 91.924Total Assets 412.188 297.519 136.903 124.651 67.036 258.669 1.296.966 Liabilities Bank Deposits 30.304 - - - - 113.502 143.806Other Deposits 65.043 27.150 - - - 194.741 286.934Money Market Funds 59.753 - - - - - 59.753Miscellaneous Payable - - - - - 2.252 2.252Securities Issued - - - - - - -Funds Borrowed 880 235.182 - - - - 236.062Other Liabilities (**) - - - - - 568.159 568.159Total Liabilities 155.980 262.332 - - - 878.654 1.296.966 On Balance Sheet Long Position 256.208 35.187 136.903 124.651 67.036 - 619.985On Balance Sheet Short Position - - - - - (619.985) (619.985)Off-Balance Sheet Long Position 714.314 35.550 39.510 - - - 789.374Off-Balance Sheet Short Position (714.599) (35.549) (39.494) - - - (789.642)Total Position 255.923 35.188 136.919 124.651 67.036 (619.985) (268)

(*) Tangible assets amounting to TL 3.442, intangible assets amounting to TL 34.151 and other assets amounting to TL 54.331 are presented in the other assets.(**) Equity amounting to TL 514.881, provisions amounting to TL 38.802, other liabilities amounting to TL 525, trading derivative instruments amounting to TL 1.065, payable from leasing transactions amounting to TL 12.886 are presented in the other liabilities.

2. Average interest rates on monetary financial instruments

Current Period EUR % USD % JPY % TL %AssetsCash and Balances with the Central Bank of Turkey - - - -Banks and Other Financial Institutions - - - 6,66Financial Assets at Fair Value through Profit/Loss - - - 8,70Money Market Placements - - - -Available-for-Sale Financial Assets (Net) - - - -Loans and Receivables 2,61 2,44 - 9,08Held-to-Maturity Financial Assets (Net) - - - - Liabilities Bank Deposits - - - -Other Deposits 0,10 0,10 - 5,68Money Market Funds - - - 5,06Miscellaneous Payable - - - -Securities Issued - - - -Funds Borrowed 0,18 0,38 - 6,75



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Prior Period EUR % USD % JPY % TL %AssetsCash and Balances with the Central Bank of Turkey - - - -Banks and Other Financial Institutions - - - 6,82Financial Assets at Fair Value through Profit/Loss - - - 9,24Money Market Placements - - - -Available-for-Sale Financial Assets (Net) - - - -Loans and Receivables 2,60 3,70 - 7,81Held-to-Maturity Financial Assets (Net) - - - - Liabilities Bank Deposits - 0,33 - -Other Deposits 0,10 0,28 - 4,63Money Market Funds - - - 5,15Miscellaneous Payable - - - -Securities Issued - - - -Funds Borrowed 0,07 - - -

3. Interest rate risk on banking books

The interest rate risk of the banking books is measured and monitored within the scope of the Regulation about Measurement and Assessment of Interest Rate Risk in the Banking Accounts by Standard Shock Method.

31 December 2013 Shock Applied Gains/ Gains/Equity- Type of Currency (+/- x basis point) (Losses) (Losses)/Equity TL (+) 500bp (1.024) (0,240%)TL (-) 400bp 866 0,203%EUR (+) 200bp 288 (0,067%)EUR (-) 200bp (16) %0,003USD (+) 200bp (710) (0,166%)USD (-) 200bp 722 0,169%Total (of positive shocks) (1.750) (0,473%)Total (of negative shocks) 1.876 0,375%

31 December 2012 Shock Applied Gains/ Gains/Equity- Type of Currency (+/- x basis point) (Losses) (Losses)/Equity TL (+) 500bp (1.706) (0,349%)TL (-) 400bp 1.449 0,296%EUR (+) 200bp 288 (0,059%)EUR (-) 200bp (293) 0,060%USD (+) 200bp (140) (0,029%)USD (-) 200bp 142 0,029%Total (of positive shocks) (1.558) (0,319%) Total (of negative shocks) 1.298 0,266%

4. Position risk of equity securities on banking books

None.

VII. Explanations on liquidity risk

The Bank calculates liquidity adequacy ratio and reports to BRSA on a weekly basis in accordance with the “Measurement and Assessment of Liquidity Adequacy of Banks” issued in the Official Gazette numbered 26333 and dated 1 November 2006. The liquidity adequacy of the Bank is over the limit values specified in the mentioned regulation.



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1. The resources of the current liquidity risk; whether the necessary precautions have been taken, whether the Board of Directors sets limits on the funds available to meet the urgent liquidity requirements and to be able to pay borrowings when they become due

Liquidity risk is managed by considering the main criteria such as (1) the expected cash flows at related time intervals, (2) the possibility and capacity of borrowing from the market, (3) the credit quality of the assets on the balance sheet.

In addition to the compliance with the legal limitations regarding the liquidity, the Bank monitors from the cash flow reports that there are matching borrowing opportunities with the cash out-flows within the same time interval.

2. The matching of the payments, assets and liabilities and the interest rates, and the possible impact of the current mismatch on the profitability of the Bank

The Bank’s assets and liabilities carry positive interest earnings. Whether government debt securities which are classified in trading securities are most liquid securities that are liquidated in changes in market conditions.

3. Internal and external resources that meets the short and long term liquidity needs of the Bank and unutilised significant liquidity resources

The Bank monitors that the maturity matching of the assets and liabilities are kept. The Bank keeps sufficient liquid assets to meet liquidity needs caused by the fluctuations in the market.

As per the BRSA Communiqué published on 1 November 2006 and effective from 1 January 2007, “Measurement and Assessment of the Adequacy of Banks’ Liquidity”, the weekly and monthly liquidity ratios on a bank-only basis for foreign currency assets/liabilities and total assets/liabilities should be minimum 80% and 100%, respectively. The liquidity ratios as of 31 December 2013 and 31 December 2012 are as follows:

First Maturity Bracket (Weekly) Second Maturity Bracket (Mothly)Current Period FC FC + TL FC FC + TL Average (%) 114,24 119,44 108,22 114,81Maximum (%) 150,91 152,41 144,92 154,53Minimum (%) 84,25 101,21 89,03 100,90

First Maturity Bracket (Weekly) Second Maturity Bracket (Mothly)Prior Period FC FC + TL FC FC + TL Average (%) 100,24 115,04 97,72 113,92Maximum (%) 143,43 150,72 125,02 146,71Minimum (%) 80,41 100,27 80,70 100,87

4. The assessment of the amounts and resources of the Bank’s cash flows

As explained above, the Bank has sufficient cash and cash inflows in order to be able to timely meet the cash outflows.

Maturity analysis of residual values of contractual financial liabilities:

Gross Carrying Nominal Up to 1 1-3 3-12 1-5 5 YearsCurrent period Value Outflow Demand Month Months Months Years and OverBank Deposits 414.533 414.533 414.533 - - - - -Other Deposits 178.423 177.621 107.084 70.537 - - - -Funds Borrowed 1.074.023 1.075.856 - 756.257 319.599 - - -Interbank Money Market Funds 187.512 187.512 - 187.512 - - - -Miscellaneous Payables 2.167 2.167 2.167 - - - - -Finance Lease Payables - - - - - - - -Total 1.856.658 1.857.689 523.784 1.014.306 319.599 - - -



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Gross Carrying Nominal Up to 1 1-3 3-12 1-5 5 YearsPrior period Value Outflow Demand Month Months Months Years and Over Bank Deposits 143.806 143.806 113.502 30.304 - - - -Other Deposits 286.934 286.969 194.741 65.064 27.164 - - -Funds Borrowed 236.062 238.678 - 880 237.798 - - -Interbank Money Market Funds 59.753 59.753 - 59.753 - - - -Miscellaneous Payables 2.252 2.252 2.252 - - - - -Finance Lease Payables - - - - - - - -Total 728.807 731.458 310.495 156.001 264.962 - - -

The above table shows the undiscounted estimated cash outflows of the financial liabilities in accordance with their contracts.

Maturity analysis of assets and liabilities according to remaining maturities Up to 1 1-3 3-12 1-5 5 Years Unallo-Current period Demand Month Months Months Years and Over cated TotalAssets Cash and Balances with the Central Bank of Turkey 30.260 198.263 - - - - - 228.523Banks 5.766 307.252 - - - - - 313.018Financial Assets At Fair Value Through Profit or Loss - 714.850 42.855 58.314 - - - 816.019Interbank Money Market Placements - - - - - - - -Available-for-Sale Financial Assets - - - - - - - -Loans and Receivables - 363.714 236.352 303.963 - - - 904.029Held-to-Maturity Financial Assets - - - - - - - -Other Assets (*) - 5.273 959 43.049 - - 48.760 98.041Total Assets 36.026 1.589.352 280.166 405.326 48.760 2.359.630 Liabilities Bank Deposits 414.533 - - - - - - 414.533Other Deposits 107.084 71.339 - - - - 178.423Funds Borrowed - 754.546 319.477 - - - - 1.074.023Interbank Money Market Funds - 187.512 - - - - - 187.512Securities Issued - - - - - - - -Miscellaneous Payables 2.167 - - - - - - 2.167Other Liabilities (**) 37.333 13.926 5.882 19.124 - - 426.707 502.972Total Liabilities 561.117 1.027.323 325.359 19.124 - - 426.707 2.359.630 Liquidity (Gap) / Surplus (525.091) 562.029 (45.193) 386.202 - - (377.947) - Prior Period Total Assets 46.668 321.047 229.919 175.885 365.968 96.472 61.007 1.296.966Total Liabilities 338.094 166.596 262.416 14.979 - - 514.881 1.296.966Liquidity (Gap) / Surplus (291.426) 154.451 (32.497) 160.906 365.968 96.472 (453.874) -

(*) Tangible assets amounting to TL 2.675, intangible assets amounting to TL 27.028, current tax asset amounting TL 1.673 and other assets amounting to TL 66.665 are presented in the other assets(**) Equity amounting to TL 426.707, provisions amounting to TL 45.915, other liabilities amounting to TL 3.632, derivative instruments held for trading amounting to TL 18.145 and tax liabilities amounting to TL 8.573 are presented in the other liabilities.



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Contractual maturity analysis of the Bank’s derivative instruments Up to 1 1-3 3-12 1-5 5 years31 December 2013 Month Months Months Years and Over Total Derivative instruments held for tradingForeign exchange derivatives: 934.528 537.446 504.855 - - 1.976.829- Inflow 467.092 269.140 252.542 - - 988.774- Outflow (-) 467.436 268.306 252.513 - - 988.055Interest rate derivatives: - - - - - -- Inflow - - - - - -- Outflow (-) - - - - - - Derivative instruments held for risk management Foreign exchange derivatives: - - - - - -- Inflow - - - - - -- Outflow (-) - - - - - -Interest rate derivatives: - - - - - -- Inflow - - - - - -- Outflow (-) - - - - - -Total cash inflow 467.092 269.140 252.542 - - 988.774Total cash outflow 467.436 268.306 252.313 - - 988.055

Up to 1 1-3 3-12 1-5 5 Years31 December 2012 Month Months Months Years and Over Total Derivative instruments held for trading 952.445 71.099 79.005 - - 1.102.549Foreign exchange derivatives: 476.131 35.550 39.510 - - 551.191- Inflow 476.314 35.549 39.495 - - 551.358- Outflow (-) - - - - - -Interest rate derivatives: - - - - - -- Inflow - - - - - -- Outflow (-) - - - - - - Derivative instruments held for risk management Foreign exchange derivatives: - - - - - -- Inflow - - - - - -- Outflow (-) - - - - - -Interest rate derivatives: - - - - - -- Inflow - - - - - -- Outflow (-) - - - - - -Total cash inflow 476.131 35.550 39.510 - - 551.191Total cash outflow 476.314 35.549 39.494 - - 551.358

5. Explanations on securitization positions

None.

6. Credit risk mitigation techniques

The Bank applies credit risk mitigation according to the simple financial collateral method 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.



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Guarantees 31 December 2013 Financial Other/Physical and Credit Risk Classifications: Amount (*) Collaterals Collaterals Derivatives

Conditional and unconditional exposures to central governments or central banks 232.208 - - -Conditional and unconditional exposures to regional governments or local authorities - - - -Conditional and unconditional exposures to administrative bodies and non-commercial undertakings - - - -Conditional and unconditional exposures to multilateral development banks - - - -Conditional and unconditional exposures to international organisations - - - -Conditional and unconditional exposures to banks and brokerage houses 505.549 47.407 - -Conditional and unconditional exposures to corporates 934.395 - - 64.902Conditional and unconditional retail exposures 119.943 - - -Conditional and unconditional exposures secured by real estate property - - - -Past due items - - - -Items in regulatory high-risk categories - - - -Exposures in the form of bonds secured by mortgages - - - -Securitisation positions - - - -Short term exposures to banks, brokerage houses and corporates - - - -Exposures in the form of collective investment undertakings - - - -Other receivables 14.080 - - -


Guarantees 31 December 2012 Financial Other/Physical and Credit Risk Classifications: Amount (*) Collaterals Collaterals Derivatives

Conditional and unconditional exposures to central governments or central banks 162.059 - - -Conditional and unconditional exposures to regional governments or local authorities - - - -Conditional and unconditional exposures to administrative bodies and non-commercial undertakings - - - -Conditional and unconditional exposures to multilateral development banks - - - -Conditional and unconditional exposures to international organisations - - - -Conditional and unconditional exposures to banks and brokerage houses 189.576 43.444 - -Conditional and unconditional exposures to corporates 487.347 - - 85.186Conditional and unconditional retail exposures 91.153 - - -Conditional and unconditional exposures secured by real estate property - - - -Past due items - - - -Items in regulatory high-risk categories - - - -Exposures in the form of bonds secured by mortgages - - - -Securitisation positions - - - -Short term exposures to banks, brokerage houses and corporates - - - -Exposures in the form of collective investment undertakings - - - -Other receivables 7.565 - - -

(*) Includes risk amounts before the effect of credit risk mitigation but after the credit conversions



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7. Risk management objective and policies

The aim of the risk management system is to provide the definition, measurement, surveillance and control of the exposed risks; by means of policies, implementation methods and limits; determined in order that the risk-return structure contained in the future cash flows of the Bank, and the quality of the related activities and their levels are followed, controlled, and changed, if needed.

The required policies, methods and limits for the measurement, analysis, reporting and controlling of the defined risks are determined by the Board of Managers.

In the determination of risk management policies and implementation methods; strategies, policies and implementation methods regarding the activities of the Bank; the volume, quality and the complexity of the activities; risk strategy and acceptable level of risk; risk monitoring and managing capacity; past experience and performance; the level of expertise of the managers of the related units in topics related to their area; and the obligations indicated in the law and other related legislation; are taken into account.

The adaptation of the risk management policies and procedures to the changing conditions is essential. The Board of Managers or the related Internal Systems Specialist evaluates the adequacy of these regularly and makes the required alterations.

Risk management policies and procedures include the utilization of risk reduction techniques like hedging, insurance or credit derivatives.

The Bank determines written limits for the quantifiable risk like the credit risk, market risk, interest rate risk and liquidity risk originating from its activities; and these limits are approved by the Board. The risk limits are determined together with top management executives including the related internal systems specialist, the risk management unit executive and the general manager of the Bank. These limits become valid with the approval of the Board.

The risk limits are determined according to the risk level the Bank can take, and the volume and complexity of its products and services. The risk limits are reviewed periodically in a way to reflect the currency of the developments in the implementation and adapted according to the changes in the market conditions and bank strategy. It is essential that the limits are determined risk-based. The risk limits to be determined, cannot go out of the limits determined in the regulations related to these topics.

VIII. Explanations regarding the presentation of financial assets and liabilities at their fair values

It has been assumed that fair value of financial assets and liabilities which have not been presented by fair value approximates their carrying value due to short-term maturity structure.

TFRS 7 - Financial instruments: Disclosures requires the classification of fair value measurements into a fair value hierarchy by reference to the observability and significance of the inputs used in measuring fair value of financial instruments measured at fair value to be closed. This classification basically relies on whether the relevant inputs are observable or not. This distinction brings about a fair value measurement classification generally as follows:

Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets of liabilities;

Level 2: Fair value measurements using inputs other than quoted prices included within Level 1 that are obversable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3: Fair value measurements using inputs for the assets or liability that are not based on observable market data (unobservable inputs).



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This classification of fair value measurements of financial assets and liabilities measured at fair value is as follows:

31 December 2013 Level 1 Level 2 Level 3 Total Financial Assets at Fair Value Through Profit or Loss 797.082 18.937 - 816.019Government Debt Securities 797.082 - - 797.082Share Certificates - - - -Derivative Financial Assets Held for Trading - 18.937 - 18.937Other Securities - - - -Available for Sale Financial Assets - - - -Government Debt Securities - - - -Other Securities - - - -Derivative Financial Assets Held for Risk Management - - - -Total Assets 797.082 18.937 - 816.019 Derivative Financial Liabilities Held for Trading - 18.145 - 18.145Derivative Financial Liabilities Held for Risk Management - - - -Total Liabilities - 18.145 - 18.145

31 December 2012 Level 1 Level 2 Level 3 Total Financial Assets at Fair Value Through Profit or Loss 618.241 861 - 619.102 Government Debt Securities 618.241 - - 618.241 Share Certificates - - - - Derivative Financial Assets Held for Trading - 861 - 861 Other Securities - - - -Available for Sale Financial Assets - - - - Government Debt Securities - - - - Other Securities - - - -Derivative Financial Assets Held for Risk Management - - - -Total Assets 618.241 861 - 619.102 Derivative Financial Liabilities Held for Trading - 1.065 - 1.065Derivative Financial Liabilities Held for Risk Management - - - -Total Assets - 1.065 - 1.065

IX. Explanation regarding the activities carried out on behalf and account of other parties

1. Purchasing, selling, custody, management and advisory services which are carried out by the Bank on behalf of customers

The Bank provides intermediary services for the purchase and sale of financial assets on behalf of the customers and custody services.

2. Whether operations with financial institutions and financial services in the context of transaction agreements held in trust effect the financial situation of the Bank significantly

The Bank is not involved in trust activities.



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X. Explanations on operating segments

Financial information on operational segments as of 31 December 2013 and 31 December 2012 are as follows:

Corporate Global Current period Banking Markets Other Unallocated Total

Operating Profit 53.933 (19.183) 69.551 - 104.301Net Operating Profit / (Loss) 20.744 (25.639) 9.027 - 4.132Profit /(Loss) Before Tax 20.744 (25.639) 9.027 4.132Tax Provision - - - (2.045) (2.045)Net Period Profit /(Loss) 20.744 (25.639) 9.027 (2.045) 2.087 Segment Assets 963.303 1.396.327 - - 2.359.630Segment Liabilities 582.161 1.350.762 - - 1.932.923Equity - - - 426.707 426.707

Corporate Global Prior period Banking Markets Other Unallocated Total

Operating Profit 50.669 137.363 28.915 - 216.947Net Operating Profit / (Loss) 19.550 82.167 28.915 - 130.632Profit /(Loss) Before Tax 19.550 82.167 28.915 - 130.632Tax Provision - - - (26.525) (26.525)Net Period Profit /(Loss) 19.550 82.167 28.915 (26.525) 104.107 Segment Assets 445.419 851.547 - - 1.296.966Segment Liabilities 377.246 404.839 - - 782.085Equity - - - 514.881 514.881



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SECTION FIVE

EXPLANATIONS AND NOTES TO UNCONSOLIDATED FINANCIAL STATEMENTS

I. Explanations and Notes Related to Assets

1. Information related to cash and balances with the Central Bank of Turkey

1.a Information on cash and balances with the Central Bank of Turkey

Current Period Prior Period TL FC TL FC Cash in TL/ Foreign currency 41 118 90 195Central Bank of Turkey 30.101 198.263 42.843 119.216Other - - - -Total 30.142 198.381 42.933 119.411

1.b Information on balances with the Central Bank of Turkey Current Period Prior Period TL FC TL FC Unrestricted Demand Deposits 30.101 - 42.843 -Unrestricted Time Deposits - 77.259 - 55.662Restricted Time Deposits - 121.004 - 63.554Total 30.101 198.263 42.843 119.216

1.c Information on reserve deposits

The Banks, established or operating by means of opening a branch in Turkey, subject to the Communiqué numbered 2005/1 “Reserve Deposits” of the Central Bank of Turkey. The amount result from total domestic liabilities by deduction of the accounts indicated in the Communiqué and the deposit accepted from Turkey on behalf of the branches abroad forms liabilities subjected to required reserves. The banks operating in Turkey keep reserve deposits for Turkish currency liabilities in TL, USD, EUR and/or standard gold at the rates between 5% and 11.5% according to their maturities (31 December 2012: between 5% and 11% according to their maturities), foreign currency liabilities in USD, EUR and/or standard gold at the rates between 6% and 12,5% according to their maturities (31 December 2012: between 6% and 11.5 % according to their maturities), respectively as per the Communiqué no.2005/1 “Reserve Deposits” of the Central Bank of Turkey.

Reserve deposits required by the Central Bank of Turkey are not interest earning.

2. Information on financial assets at fair value through profit or loss

2.a Financial assets at fair value through profit or loss

2.a.1 Financial assets at fair value through profit/loss subject to repurchase agreements and provided as collateral/blocked

Current Period Prior Period TL FC TL FC Share Certificates - - - -Government Securities, Treasury Bills, and Other Securities 141.940 - 212.382 -Others - - - -Total 141.940 - 212.382 -



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2.a.2 Financial assets at fair value through profit/loss subject to repurchase agreements

Current Period Prior Period TL FC TL FC Government Bonds - - 62.229 -Treasury Bills - - - -Other Securities - - - -Bond Issued or Guaranteed By Banks - - - -Asset Backed Securities - - - -Others - - - -Total - - 62.229 -

2.b Positive differences on derivative financial assets held for trading

Current Period Prior Period TL FC TL FC Forward Transactions - 9.364 - 561 Swap Transactions - 9.573 - 300 Futures - - - - Options - - - - Other - - - -Total - 18.937 - 861

3. 3. Information on banks

3.a. Information on banks Current Period Prior Period TL FC TL FC Banks Domestic 278.245 498 23.426 102 Foreign 29.500 4.775 15.148 3.015 Foreign headoffices and branches - - - -Total 307.745 5.273 38.574 3.117

3.b Information on foreign banks account Unrestricted amount Restricted amount Current Period Prior Period Current Period Prior Period

EU Countries 32.814 16.949 - -USA, Canada 1.107 981 - -OECD Countries (*) 354 233 - -Off-shore Banking Regions - - - -Other - - - -Total 34.275 18.163 - -

(*) OECD countries other than EU countries, USA and Canada.

4. Information on financial assets available for sale




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5. Explanations on loans and receivables

5.a Information on all types of loan or advance balances given to shareholders and employees of the Bank

Current Period Prior Period Cash Non-cash Cash Non-cash Direct Lending to Shareholders - 28.413 - 181.953 Corporate Shareholders - 28.413 - 181.953 Individual Shareholders - - - -Indirect Lending to Shareholders 76.968 - 54.934 -Loans to Employees 58 - 94 -Total 77.026 28.413 55.028 181.953

5.b Information on the first and second group loans and receivables including loans that have been restructured or rescheduled and other receivables Standard Loans Loans and Receivables and Receivables Under Close Monitoring Loans and Restructured or Loans and Restructured or Receivables Rescheduled Receivables Rescheduled Extension of Extension of the payment the payment Cash Loans plan Other plan OtherNon-Specialized Loans 658.176 245.853 - - - -Commercial loans 416.818 73.850 - - - -Export Loans 223.694 172.003 - - - -Import Loans - - - - - -Loans Given to Financial Sector 657 - - - - -Consumer Loans 58 - - - - -Credit Cards - - - - - -Other 16.949 - - - - -Specialized Lending - - - - - -Other Receivables - - - - - -Total 658.176 245.853 - - - -

Information on loans whose terms are extended as of 31 December 2013: Current Period Standard Loans Loans and Receivables Number of extensions and Receivables Under Close Monitoring 1 or 2 Times 116.284 -3, 4 or 5 Times 33.346 -Over 5 Times 96.223 -Total 245.853 -

Current Period Standard Loans Loans and ReceivablesExtension Periods and Receivables Under Close Monitoring 0 - 6 Months 133.123 -6 Months - 12 Months 112.730 -1 - 2 Years - -2 - 5 Years - -5 Years and Over - -Total 245.853 -



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5.c Loans according to their maturity structure Standard Loans and Loans and Receivables Under Close Current Period Receivables Monitoring Loans and Restructured or Loans and Restructured orCash Loans Receivables Rescheduled Receivables RescheduledShort-term Loans and Receivables 658.176 245.853 - -Non-specialised Loans 658.176 245.853 - -Specialised Loans - - - -Other Receivables - - - -Medium and Long-Term Loans and Receivables - - - -Non-specialised Loans - - - -Specialised Loans - - - -Other Receivables - - - -Total 658.176 245.853 - -

Standard Loans Loans and ReceivablesPrior Period and Receivables Under Close Monitoring Loans and Restructured or Loans and Restructured orCash Loans Receivables Rescheduled Receivables RescheduledShort-term Loans and Receivables 214.780 167.125 - -Non-specialised Loans 214.780 167.125 - -Specialised Loans - - - -Other Receivables - - - -Medium and Long-Term Loans and Receivables - - - -Non-specialised Loans - - - -Specialised Loans - - - -Other Receivables - - - -Total 214.780 167.125 - -

5.d Information on consumer loans, individual credit cards, personnel loans and personnel credit cards

The Bank has no consumer loans, consumer credit cards and personnel credit cards as of 31 December 2013 (31 December 2012: None). The Bank has short term personnel loan amounting to TL 58 as of 31 December 2013 (31 December 2012: TL 94).

5.e Information on installment based commercial loans and corporate credit cards

The Bank’s overdraft account amount is TL 16.949 as of 31 December 2013. ( 31 December 2012: None )



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5.f Information on allocation of loan customers Current Period Prior Period Public Sector - -Private Sector 904.029 381.905Total 904.029 381.905

5.g Distribution of domestic and foreign loans Current Period Prior Period Domestic Loans 903.372 360.364Foreign Loans 657 21.541Total 904.029 381.905

5.h Loans to associates and subsidiaries


5.i Specific provisions for loans


5.j Information on non-performing loans (Net)

5.j.1 Information on non-performing loans and receivables restructured or rescheduled:

None (31.12.2012: None).

5.j.2 Information on the movement of total non-performing loans:


5.j.3 Information on foreign currency non-performing loans and receivables

None (31 December 2012: None).5.k Main principles of liquidating for uncollectible loans and receivables

The Bank has no uncollectible loans and receivables as of 31 December 2013 (31 December 2012: None).

6. Information on held-to-maturity financial assets


7. Information on investments in associates


8. Information on investments in subsidiaries


9. Information on investments in joint ventures


10. Information on finance lease receivables


11. Information on derivative financial assets held for risk management




100

12. Information on property and equipment Leased Other Tangible Tangible Current Period Real Estates Assets Assets Total

31 December 2012 Cost - 2.919 14.393 17.312Accumulated Depreciation (-) - (2.875) (10.995) (13.870)Net carrying value - 44 3.398 3.442 - 31 December 2013 Net Carrying Value at the Beginning of the Period - 44 3.398 3.442Additions - - 390 390Disposals (-) (net) - - - -Depreciation (-) - (7) (1.150) (1.157)Cost at the End of the Period - 2.919 14.783 17.702Accumulated Depreciation at the End of the Period (-) - (2.882) (12.145) (15.027)Closing Net Carrying Value at the End of the Period - 37 2.638 2.675

Leased Other Tangible Tangible Prior Period Real Estates Assets Assets Total

31 December 2011 Cost - 2.919 12.046 14.965Accumulated Depreciation (-) - (2.874) (9.559) (12.433)Net carrying value - 45 2.487 2.532 31 December 2012 Net Carrying Value at the Beginning of the Period - 45 2.487 2.532Additions - - 2.347 2.347Disposals (-) (net) - - - -Depreciation (-) - (1) (1.436) (1.437)Cost at the End of the Period - 2.919 14.393 17.312Accumulated Depreciation at the End of the Period (-) - (2.875) (10.995) (13.870)Closing Net Book Value at the End of the Period - 44 3.398 3.442

As of 31 December 2013 and 31 December 2012, there is not impairment losses or reversal of impairment losses on tangible assets.

As of 31 December 2013 and 31 December 2012, there is no pledge on tangible assets.

13. Additionally necessary information on each intangible asset type:

The Bank has intangible assets amounting to TL 27.028 as of 31 December 2013 (31 December 2012: TL 34.151). The Bank acquired the custody operations (customer list) of a local Bank in Turkey on 11 May 2007 and the transaction was settled on 2 July 2007. Purchase amount was amounting to TL 150.967, a provision of TL 59.823 has been recorded after revaluation in April 2010 because of changes in expected cash flows. The Bank performs impairment tests annually for this to intangible asset and there is no identified impairment as of 31 December 2013.



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13.a Carrying value and accumulated amortization balances at current and prior period

Current Period Prior Period Accumulated Accumulated Amortisation Impairment Amortisation Amortisation Impairment Amortisation Intangible Assets 162.452 61.950 73.474 160.912 61.950 64.811

13.b Information on movements between the beginning and end of the period Current Period Prior Period Beginning of the Period 34.151 39.429Additions due to Mergers, Transfers and Acquisitions 1.540 2.633Disposals (-) - -Amortisation (-) (8.663) (7.911)End of the Period 27.028 34.151

14. Information on investment property


15. Information on tax assets

The Bank has TL 1.673 current tax asset as of 31 December 2013.( 31 December 2012: None ) Detailed information related to net deferred tax assets/liabilities is given in Section Five Note 8.b.

There is no deductible temporary differences that are not included in calculation of deferred tax asset and not reflected to financial statements in prior periods.

16. Information on assets held for sale and discontinued operations


17. Information on other assets

17.a Information on prepaid expenses, tax and similar transactions Current Period Prior Period Income accruals (*) 47.499 30.561Guarantees given 14.508 20.337Prepaid expenses 1.256 1.017Other 3.402 2.416Total 66.665 54.331

(*) TL 44.262 of income accruals comprise service income accruals (31 December 2012: TL 28.711).

17.b Breakdown of other assets which constitute at least 20% of grand total

Presented in the table above.



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II. Explanations and Notes Related to Liabilities

1. Information on maturity structure of deposits With 6 7 day Up to 1 1-3 3-6 months - 1 year Current Period Demand notification month months months 1 year and over Total

Saving Deposits - - - - - - - -Foreign Currency Deposits 26.114 - 23.987 - - - 50.101 Residents in Turkey 19.619 - 23.987 - - - - 43.606 Residents Abroad 6.495 - - - - - 6.495Public Sector Deposits - - - - - - - -Commercial Deposits 63.201 - 40.642 - - - - 103.843Other Institutions Deposits 17.769 - 6.710 - - - - 24.479Precious Metal Deposits - - - - - - - -Bank Deposits 414.533 - - - - - 414.533 The Central Bank of Turkey - - - - - - - - Domestic Banks - - - - - Foreign Banks 414.533 - - - - - - 414.533 Special Financial Institutions - - - - - - - - Other - - - - - - - -Total 521.617 - 71.339 - - - 592.956

With 6 7 day Up to 1 1-3 3-6 months - 1 year Prior Period Demand notification month months months 1 year and over Total Saving Deposits - - - - - - - -Foreign Currency Deposits 30.622 - 20.893 27.150 - - - 78.665 Residents in Turkey 29.391 - 20.893 - - - - 50.284 Residents Abroad 1.231 - - 27.150 - - - 28.381Public Sector Deposits - - - - - - - -Commercial Deposits 143.611 - 44.067 - - - - 187.678Other Institutions Deposits 20.508 - 83 - - - - 20.591Precious Metal Deposits - - - - - - - -Bank Deposits 113.502 - 30.304 - - - - 143.806 The Central Bank of Turkey - - - - - - - - Domestic Banks 121 - 30.304 - - - - 30.425 Foreign Banks 113.381 - - - - - - 113.381 Special Financial Institutions - - - - - - - - Other - - - - - - - -Total 308.243 - 95.347 27.150 - - - 430.740

Saving deposits covered by deposit insurance and total amount of deposits exceeding insurance coverage limit


Saving deposits at domestic branches of foreign banks in Turkey under the coverage of foreign insurance

None (31 December 2012: None). Saving deposits out of the insurance coverage limits of Saving Deposit Insurance Fund


2. Information on derivative financial liabilities held for trading

Negative differences on derivative financial liabilities held for trading

Current Period Prior Period TL FC TL FCForward Transactions - 9.109 - 208Swap Transactions - 9.036 - 857Futures Transactions - - - -Options - - - -Other - - - -Total - 18.145 - 1.065



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3. Information on funds borrowed

3.a Information on banks and other financial institutions

Current Period Prior Period TL FC TL FC Central Bank of Turkey - - - -Domestic Banks and Institutions 1.013 - 880 -Foreign Banks, Institutions and Funds 400.900 672.110 - 235.182Total 401.913 401.913 880 235.182

3.b Information on maturity structure of funds borrowed Current Period Prior Period TL FC TL FC Short-Term 401.913 646.498 880 235.182Medium and Long-Term - 25.612 - -Total 401.913 672.110 880 235.182

3.c Additional information on the major concentration of the Bank’s liabilities

The Bank funds its assets within the normal course of its banking business with bank deposits, funds borrowed and interbank money markets.

4. At least 20% of account of other liabilities on the balance sheet, exceeding 10% of the total liabilities excluding the off balance sheet items

Account of other liabilities on the balance sheet does not exceeds 10% of total liabilities excluding the off-balance sheet items.

5. Information on financial lease payables (Net)

5.1 General information on the criteria used for the lease instalment arrangements, renewal or buy options and restrictions in the agreements

The maturity of the finance lease agreements are mostly 4 years. In lease agreements the interest rate and the Bank’s cash flow are important criteria. In lease agreements there are no articles that bear significant liabilities to the Bank.

5.2 Changes in the conditions of the agreements and new requirements for the Bank

There are no changes in the conditions of the finance lease agreements of the Bank.

5.3 Information on financial lease payables


5.4 Operational lease agreements

The Bank’s operational leasing activities comprise of vehicles, photocopy machines and office buildings.

5.5 Information on sales and lease-back agreements

In the current period there are no sales and lease-back agreements (31 December 2012: None).

6. Information on derivative financial liabilities held for risk management




104

7. Information on provisions and subordinated loans

7.a Information on general provisions Current Perod Prior PeriodGeneral Provisions Loans and Receivables in Group I 12.592 6.666- Additional Provision for Loans and Receivables with Extended Maturities 2.754 2.197Loans and Receivables in Group II - -- Additional Provision for Loans and Receivables with Extended Maturities - -Non-cash Loans 375 1.118Other 1.866 624Total 14.833 8.408

7.b Information on provisions for foreign exchange differences on foreign currency indexed loans

As of 31 December 2013, provision for the foreign exchange differences on foreign currency indexed loans is TL 69 (31 December 2012: TL 415) and this amount is netted with loans on the asset side of the financial statements.

7.c Provisions for non-cash loans that are not indemnified or converted into cash

The Bank has specific provisions provided for unindemnified non cash loans amounting to TL 138 as of the reporting date (31 December 2012: TL 120). It is recognized under “Other Revenues”.

7.d Reserve for employment benefits

Information on reserve for employment termination benefits Current Perod Prior Period Personnel Bonus Provision 15.703 12.884Provision for Employee Severance Indemnities 874 774Vacation Pay Liability 1.617 1.593Total 18.194 15.251

In accordance with the existing Turkish Labor Law, the Bank is required to make lump-sum termination indemnities to each employee whos has completed one year of service with the Bank and whose employment is terminated due to retirement or for reasons other than resignation or misconduct and this amount is limited by the termination imdentiy upper limit. Employee severance indemnities are not subject to legal funding requirements.

The provision has been calculated by estimating the present value of the future probable obligation of the Bank arising from the retirement of employees. TAS 19 requires actuarial valuation methods to be developed to estimate the enterprise’s obligation under defined benefit plans. Accordingly, assumptions on discount rate, expected rate of salary increase and employee turnover rate is used in the calculation of the total liability. Each assumption is reviewed on an annual basis. The major acturial assumptions used in the calculation of the total liability are as follows:

Current Perod Prior Period Net discount rate 2,74% 2,74%Rate of expected inflation increase 5,30% 5,30%Turnover rate to estimate the probability of retirement 93,80% 95,73%

Movement of provision for severance indemnities during the year is presented below: Current Perod Prior Period Balance at the beginning of the period 774 560Recognised during the period 154 475Paid during the period (-) (13) (72)Cancelled during period (-) (41) (189)Total 874 774



105

7.e Information on other provisions

7.e.1 General reserve for possible losses


7.e.2 Information on other provisions exceeding 10% of total provisions

As of 31 December 2013, other provisions amounting to TL 12.888 (31 December 2012: TL 15.143) includes provisions amounting to TL 12.326 (31 December 2012: TL 14.562) that will be paid in accordance with the service agreement signed with Deutsche Bank Group.

8. Information on tax liability

8.a.1 Information on tax liability

As of 31 December 2013 tax asset amounted to TL 1.673 recognized after deducting prepaid tax amounted TL 5.523 from provision for current tax amounted to TL 3.850. (31 December 2012: TL 3.535 current tax payable).

8.a.2 Information on taxes payable

Current period Prior period Corporate Taxes Payable - 3.535Taxation on Securities Income 234 215Tax on Real Estates Income - -Banking Insurance Transaction tax (BITT) 2.787 1.719Foreign Exchange Transactions tax - -Value Added Tax Payable 1.523 1.510Others (*) 771 872Total 5.315 7.851

(*) Includes withholding income taxes amounting to TL 743 as of 31 December 2012 (31 December 2012: TL 831).

8.a.3 Information on premium payables Current period Prior period Social Security Premiums-Employee 97 89Social Security Premiums-Employer 111 94Bank Pension Fund Premium-Employees - -Bank Pension Fund Premium-Employer - -Pension Fund Membership Fee and Provisions-Employee - -Pension Fund Membership Fee and Provisions-Employer - -Unemployment Insurance-Employee 7 6Unemployment Insurance-Employer 14 12Others - -Total 229 201

8.b Information on deferred tax liability

As of 31 December 2013, net deferred tax liability calculated on the timing differences between applied accounting polices with valuation base and tax regulations, amounting to TL 3.029. ( 31 December 2012: TL 4.834 ). Related balances comprise deferred tax asset/liability are presented below.



106

Current period Prior period Accumulated Deferred Tax Accumulated Deferred Tax Temporary Asset / Temporary Asset / Differences (Liability) Differences (Liability)Impairment on Intangible Assets 59.823 11.965 59.823 11.965Reserve for Employment Benefits 9.671 1.934 2.367 473Provisions 144 29 5.333 1.067Derivative Financial Liabilities - - 301 60Other 1.035 207 283 56Deferred Tax Assets 70.673 14.135 68.107 13.621 Differences Between Carrying Value and Tax Value of Tangible and Intangible Assets (85.574) (17.115) (92.277) (18.455)Derivative Financial Asset Accrual Income (246) (49) - -Deferred Tax Liabilities (85.820) (17.164) (92.277) (18.455) Deferred Tax Assets Liability, net (15.147) (3.029) (24.170) (4.834)

9. Information on liabilities related to assets held for sale and discontinued operations


10. Explanations on the number of subordinated loans the group used, maturity, interest rate, institution that the loan was borrowed from, and conversion option, if any


11. Information on shareholders’ equity

11.1 Presentation of paid-in capital Current period Prior period Common Stock 135.000 135.000Preferred Stock - -Total 135.000 135.000

11.2 Paid-in capital amount, explanation as to whether the registered share capital system ceiling is applicable at bank, if so amount of registered share capital

The Bank is not subject to registered share capital system.

11.3 Information on the share capital increases during the period and their sources


11.4 Information on share capital increases from revaluation funds

None (31 December 2012: None). 11.5 Capital commitments in the last fiscal year and at the end of the following interim period, the general purpose of these commitments and projected resources required to meet these commitments


11.6 Information on privileges given to shares representing the capital


11.7 Information on securities value increase fund




107

III. Explanations and Notes Related to Off-Balance Sheet Items

1. Information on off balance sheet liabilities

1.a The amount and type of irrevocable commitments

Type of irrevocable commitments Current Period Prior Period Loan Granting Commitments 849.997 537.140Two Days Forward Buy/Sell Commitments 1.677.815 476.467Payment Commitments for Checks 44 29Tax and Fund Liabilities from Export Commitments 5 1Other Irrevocable commitments 445.245 119.215Total 2.973.106 1.132.852

1.b Possible losses and commitments resulted from off-balance sheet items including the following

1.b.1 Non-cash loans including guarantees, bank acceptances, letters of guarantee substitute for financial guarantees and other letters of credit

As of 31 December 2013, amount of letters of guarantee, letters of credit, import letter of acceptance and sureties are amounting to TL 179.363 (31 December 2012: TL 237.120), TL 6.412 (31 December 2012: TL 15.184), TL 728 (31 December 2011: TL 1.210) and TL 1.643 (31 December 2011: TL 58.829), respectively.

1.b.2 Certain guarantees, tentative guarantees, sureties and similar transactions

None except the items explained above in note 1.b.1.

1.c.1 Non-cash loans Current Period Prior Period Non-Cash Loans against Cash Risks - - With Original Maturity up to 1 Year - - With Original Maturity of More Than 1 Year - -Other Non-Cash Loans 187.418 311.861Total 187.418 311.861

1.c.2 Sector risk concentration of non-cash loans

Current Period Prior Period TL (%) FC (%) TL (%) FC (%)Agriculture - - - - - - - - Farming and Stockbreeding - - - - - - - - Forestry - - - - - - - - Fishery - - - - - - - -Manufacturing 5.581 24.00 102.840 63 8.698 37 128.566 45 Mining - - 320 - - - - - Production 5.581 24.00 102.040 63 2.160 9 128.566 45 Electricity, Gas, Water - - 480 - 6.538 28 - -Construction - - 20.300 12 - - 80.740 28Services 17.891 76.00 40.730 25 14.726 63 79.131 27 Wholesale and Retail Trade 12.021 51.00 19.657 12 11.286 48 66.684 23 Hotel, Food and Beverage Services - - - - - - - - Transportation and Telecommunication 5.839 25.00 14.555 9 3.409 15 2.480 1 Financial Institutions 31 - 6.518 4 31 - 9.967 3 Real Estate and Renting Services - - - - - - - - “Self-Employment’’ Type Services - - - - - - - - Educational Services - - - - - - - - Health and Social Services - - - - - - - -Other - - 76 - - - - -Total 23.472 100 163.946 100 23.424 100 288.437 100



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1.c.3 Non-cash loans classified under Group I and II Group I Group II TL FC TL FC

Letters of Guarantee 23.472 155.891 - -Bank Acceptances - - - -Letters of Credit - 6.412 - -Endorsements - - - -Underwriting Commitments - - - -Factoring Related Guarantees - - - -Other Commitments and Contingencies - 1.643 - -Total 23.472 163.946 - -

2. Information on financial derivative instruments

Derivative Transactions per Their Purposes Trading Risk Management Current Period Prior Period Current Period Prior Period

Derivatives Held for Trading Foreign Currency Related Derivative Transactions (I) 1.976.829 1.102.549 - -Currency Forwards 735.391 321.532 - -Currency Swaps 1.241.438 781.017 - -Currency Futures - - - -Currency Options - - - -Interest Rate Related Derivative Transactions (II) - - - -Interest Rate Forwards - - - -Interest Rate Swaps - - - -Interest Rate Futures - - - -Interest Rate Options - - - -Other Derivatives Held for Trading (III) - - - -A. Total Derivatives Held for Trading (I+II+III) 1.976.829 1.102.549 - - Derivatives Held for Risk Management Fair Value Hedge (1) - - - -Cash Flow Hedge (2) - - - -Net Foreign Investment Hedge - - - -B. Total Derivatives Held for Risk Management - - - - Total Derivative Transactions(A+B) 1.976.829 1.102.549 - -

3. Information on credit derivatives and risk exposures on credit derivatives


4. Explanations on contingent liabilities and assets

There is ongoing law suits against the Bank and there is no provision requirement due to immateriality (31 December 2012: None).



109

5. Explanations on services provided on behalf of third parties

The Bank provides purchase and sales of the financial instruments and custody services on behalf of the third parties. Financial instruments (notional values) held on behalf of the individuals and corporates by the Bank are as follows:

Current Period Prior Period Government Bonds-TL 35.734.399 32.461.246Private Sector Bonds 1.097.792 1.000.693Warrants 970.645 1.182.728Share Certificates-TL 7.510.698 6.642.063Cheques in Portfolio-TL 33.707 16.111Cheques in Portfolio-FC 8.927 4.835Other Items Under Custody 21.343 17.826Total 45.377.511 41.325.502

IV. Explanations and Notes Related to Income Statement

1. Information on interest income:

1.a Information on interest income on loans (*)

Current Period Priod Period TL FC TL FC Short-Term Loans 29.949 5.342 17.093 11.505Medium/Long-Term Loans - 2.079 - -Loans Under Follow-up - - - -Premiums Received from Resource Utilisation Support Fund - - - -Total 29.949 7.421 17.093 11.505

(*) Includes also the fee and commission income on cash loans.

1.b Information on interest income on banks Current Period Priod Period TL FC TL FC Central Bank of Turkey - - - -Domestic Banks 4.273 - 5.525 -Foreign Banks 3.296 4.321 1Foreign Head Offices and Branches - - - -Total 7.569 9.846 1

1.c Information on interest income on marketable securities Current Period Priod Period TL FC TL FC Financial Assets Held for Trading 85.707 - 227.955 -Financial Assets At Fair Value Through Profit or Loss - - - -Available-for-Sale Financial Assets - - - -Held-to-Maturity Financial Assets - - - -Total 85.707 227.955

1.d Information on interest income received from associates and subsidiaries




110

2. Information on interest expenses

2.a Information on interest expense on funds borrowed (*)

Current Period Priod Period TL FC TL FC Banks 4.010 2.169 19 2.494Central Bank of Turkey - - - -Domestic Banks - - - -Foreign Banks 4.010 2.169 19 2.494Foreign Head Offices and Branches - - - -Other Institutions - - - -Total 4.010 2.169 19 2.494 (*) Includes also the fee and commission expense on funds borrowed.

2.b Information on interest expense paid to associates and subsidiaries


2.c Interest expense on securities issued


2.d Maturity structure of the interest expense on deposits Time Deposits

Demand Up to 1 1-3 3-6 6-12 1 Year Deposits Month Months Months Months and Over TotalTL Bank Deposits 263 1.291 - - - - 1.554Saving Deposits - - - - - - -Public Sector Deposits - - - - - - -Commercial Deposits 45 4.317 - - - 4.362Other Deposits - 302 - - - 302“7 Days Notice” Deposits - - - - - - -Total 308 5.910 - - - 6.218 FC Foreign Currency Deposits - 57 14 24 - - 95“7 Days Notice” Deposits - - - - - - -Precious Metal Deposits - - - - - - -Bank Deposits - 809 - - - - 809Total - 866 14 24 - - 904 Grand Total 308 6.776 14 24 - - 7.122

Time Deposits Demand Up to 1 1-3 3-6 6-12 1 Year

Deposits Month Months Months Months and Over TotalTL Bank Deposits 241 949 - - - - 1.190Saving Deposits - - - - - - -Public Sector Deposits - - - - - - -Commercial Deposits 42 8.131 417 - - - 8.590Other Deposits - 206 84 - - - 290“7 Days Notice” Deposits - - - - - - -Total 283 9.286 501 - - - 10.070 FC Foreign Currency Deposits - 94 16 17 - - 127“7 Days Notice” Deposits - - - - - - -Precious Metal Deposits - - - - - - -Bank Deposits - 1.746 - - - - 1.746Total - 1.840 16 17 - - 1.873 Grand Total 283 11.126 517 17 - - 11.943



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3. Information on dividend income


4. Information on trading loss/income (Net) Current Period Prior Period Income 3.079.351 1.929.843Capital Market Transactions 83.690 29.756Derivative Financial Transactions (*) 1.152.207 1.148.232Foreign Exchange Gains 1.843.454 751.855Losses (-) 3.179.522 2.015.661Capital Market Transactions 139.013 66.486Derivative Financial Transactions (*) 1.015.492 1.202.183Foreign Exchange Losses 2.025.017 746.992Net Income/(Losses) (Net) (100.171) (85.818)

(*) Foreign exchange loss from derivative transactions is amounting to TL 150.257 (31 December 2012: loss amounting to TL 5.338).

5. Information on other operating income

As of 31 December 2012, the Bank’s other operating income is amounting to TL 16.433 (31 December 2012: TL 7.511).

Current Period Prior Period Service Income – FC 12.382 2.578Service Income – TL 3.598 3.521Other 453 1.412Total 16.433 7.511

6. Provisions for losses on loans and receivables Current Period Prior Period Specific Provisions for Loans and Receivable - -Loans and Receivables in Group III - -Loans and Receivables in Group IV - -Loans and Receivables in Group V - -General Provisions 6.425 -Provision for Possible Losses - -Foreign Exchange Losses on Foreign Currency - -Impairment Losses on Securities 3.745 -Financial Assets at Fair Value through Profit or Loss 3.745 1.804Available-for-sale Financial Assets - -Other Impairment Losses - -Associates - -Subsidiaries - -Joint Ventures - -Held to Maturity Financial Securities - -Other - -Total 10.170 1.804



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7. Information on other operational expenses Current Period Prior Period Personnel Expenses 25.648 24.885Reserve for Employee Termination Benefits 100 214Bank Pension Fund Deficit Provisions - -Impairment Losses on Tangible Assets - -Depreciation Expenses of Tangible Assets 1.157 1.437Impairment Losses on Intangible Assets - -Impairment Losses on Goodwill - -Amortization Expenses of Intangible Assets 8.663 7.911Impairment Losses on Investments Accounted Under Equity Method - -Impairment Losses on Assets to be Disposed - -Depreciation Expenses of Assets to be Disposed - -Impairment Losses on Assets Held for Sale - -Other Operating Expenses 32.870 32.077Operational Lease Related Expenses 2.917 2.787Repair and Maintenance Expenses 769 396Advertisement Expenses - -Other Expenses (*) 29.184 28.894Loss on Sale of Assets - -Other - -Other (**) 21.561 17.987Total 89.999 84.511

(*) The “Other operating expenses” includes communication expenses amounting to TL 6.633 (31 December 2012: TL 5.712), benefits and services obtained from third parties amounting to TL 2.397 (31 December 2012: TL 2.283), information and technology expenses amounting to TL 2.557 (31 December 2012: TL 2.154) and Deutsche Bank Group management service expenses amounting to TL 3.445 (31 December 2012: TL 3.975).(**) As of 31 December 2013 “Other” includes short term employee benefits amounting to TL 14.372 (31 December 2012: TL 12.008).

8. Profit/loss before taxes from continuing and discontinued operations

As of 31 December 2013 the Bank has a profit before tax amounting to TL 4.132 (31 December 2012: profit of TL 130.632).

9. Information on provision for taxes from continuing and discontinued operations

9.1 Information on current tax income/ expense and deferred tax income/expense from continuing and discontinued operations

As of 31 December 2013 the Bank has deferred tax income amounting to TL 1.805 (31 December 2012: TL 305 deferred tax expense) and current tax expense amounting to TL 3.850 (31 December 2012: TL 26.830).

9.2 Deferred tax income or expense from temporary differences of continuing and discontinued operations

The deferred tax income amounting to TL 1.805 for the year ended 31 December 2013 (31 December 2012: TL 305 deferred tax expense) is arising from timing differences resulting from the temporary differences between applied accounting policies and tax regulations.

9.3 Deferred tax income/expense from the temporary differences, tax losses or tax exemptions of continuing and discontinued operations

As of 31 December 2013, deferred tax income presented in the income statement includes the net amount remaining after netting of tax deductible timing differences and taxable timing differences. The Bank does not have prior years’ losses.



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10. Information on net operating profit/loss after taxes of continuing operations and discontinued operations

For the year ended 31 December 2013, the Bank has profit after tax amounting to TL 2.087.

11. Information on net profit and loss for the period

11.1 The nature and amount of certain income and expense items from ordinary operation 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

The main operations of the Bank are interbank money market transactions, marketable securities transactions, foreign currency transactions, custody services and providing collateralised non-cash loans. Therefore; net interest income, net trading income, net foreign exchange gain and fees and commission income from custody services are the most important captions of the Bank’s income statement. Current Period Priod Period Interest Income/(Expense), Net 132.092 250.149Income/(Loss) from Capital Market Transactions, Net (55.323) (36.730)Gain/(Loss) from Derivative Financial Transactions, Net 136.715 (53.951)Foreign Exchange Gains/(Losses), Net (181.563) 4.863Commissions from Custody Operations 25.395 18.500Commissions from Non-cash Loans 1.712 1.668Commissions from Intermediary Services 38.777 31.383Other Commission Income 2.216 2.671

11.2 Effects of changes in accounting estimates on the current and following periods’ profit/loss

There is no significant change in accounting estimates which would affect the current or following period.

12. Components of other items in income statement, as each sub-account exceeding 20% of the total separately, exceeding 10% of total income statement

Other fee and commission income Current Period Priod Period TL FC TL FC Commissions from Custody Operations 25.395 - 18.500 -Commissions from Intermediary Services - 38.777 - 31.383Other Fee and Commissions 2.216 - 1.099 1.572Total 27.611 38.777 19.599 32.955

Other fee and commission expense Current Period Priod Period TL FC TL FC Commissions due to Custody Operations 7.781 - 4.528 -Commissions Paid to Intermediary Services - 637 - 3.115Commissions Paid to Correspondent Banks - 895 - 697Commissions due to Intermediary Services - - - -Other Fee and Commissions 2.220 620 313 464Total 10.001 2.152 4.841 4.276



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V. Explanations and Notes Related to Changes in Shareholders’ Equity

1. Information on increase due to revaluation of available for sale financial assets


2. Information on increases due to cash flow hedges


3. Reconciliation of foreign exchange differences at beginning and end of current period


4. Information on decrease due to revaluation of available for sale financial assets


5. Information on distribution of profit

Based on the decision taken at General Assembly meeting of the Bank held on 28 March 2013, dividend amounting to TL 90.261 is distributed to shareholders after allocating first legal reserves amounting to TL 5.190 from the net profit amounting to TL 104.107 and allocated second legal reserves amounting to TL 8.351 and the amounting to TL 305 is transferred to extraordinary reserves. Since the General Assembly meeting has not been held as of 31 December 2013, there has not been made any decision regarding profit distribution yet. VI. Explanations and Notes Related to Statement of Cash Flows

1. Information on other items and effect of exchange rate on cash and cash equivalents in Cash Flow Statement;

The “others” account included in “operating profit before changes in operating assets and liabilities” are comprised of net trading gain/loss, impairment loss provision on loans and receivables and other operating income/loss. The “net increase/ (decrease) in other liabilities” account in “changes in operating assets and liabilities” is comprised of the changes in miscellaneous liabilities, other liabilities, provision expenses, lease payables and tax liabilities. The effect of change in foreign exchange rate on cash and cash equivalents as of 31 December 2013 is approximately increase of amounting to TL 6.098 (31 December 2012: decrease of TL 6.856).

2. Cash and cash equivalents at the beginning of the period

Cash contains, cash and cash in foreign currency, cash equivalents contain unrestricted deposits in Central Bank of Turkey, money market operations and bank deposits and money market placements whose original maturities are up to 3 months as of 31 December 2013 and 31 December 2012. 1 January 2013 1 January 2012 Cash 285 257Cash Equivalents 140.193 291.268Balances with Central Bank of Turkey 98.505 9.025Banks’ Demand Deposits and Time Deposits Whose Original Maturities Up to 3 Months 41.688 112.243Money Market Placements - 170.000Total 140.478 291.525

3. Cash and cash equivalents at the end of the period 31 December 2013 31 December 2012 Cash 159 285Cash Equivalents 420.326 140.193Balances with Central Bank of Turkey 228.364 98.505Banks’ Demand Deposits and Time Deposits Whose Original Maturities Up to 3 Months 191.962 41.688Money Market Placements - -Total 420.485 140.478



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4. Restricted cash and cash equivalents due to legal requirements or other reasons

There are no cash and cash equivalents restricted for the usage of the Bank by legal limitations and other reasons (31 December 2012: None).

There is no additional information that needs to be disclosed in addition to those disclosed in Note 1.

VII. Explanations and Notes Related to Bank’s Risk Group

1. Transactions with the Bank’s risk group; lendings and deposits and other related party transactions outstanding at period end and income and expenses from such transactions incurred during the period

1.1 Current period Associates, Subsidiaries Direct and Indirect Other Components in and Joint Ventures Shareholders of the Bank Risk Group Bank’s Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans and Receivables Balance at the Beginning of the Period - - 54.073 181.953 955 - Balance at the End of the Period - - 76.053 28.413 973 -Funds Borrowed Balance at the Beginning of the Period - - 235.170 - - - Balance at the End of the Period - - 1.071.818 - - -Interest and Commission Income - - 40.326 78 - -Interest and Commission Expense - - 3.345 - 1.615 -

1.2 Prior Period Associates, Subsidiaries Direct and Indirect Other Components in and Joint Ventures Shareholders of the Bank Risk Group Bank’s Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash

Loans and Receivables Balance at the Beginning of the Period - - 45.946 172.542 1.902 - Balance at the End of the Period - - 54.073 181.953 955 Funds Borrowed - Balance at the Beginning of the Period - - 608.570 - - - Balance at the End of the Period - - 235.170 - - -Interest and Commission Income - - 33.804 213 - -Interest and Commission Expense - - 7.534 - 2.018 -

1.3 Information on deposits of the Bank’s risk group

Associates, Subsidiaries Direct and Indirect Other Components in and Joint Ventures Shareholders of the Bank Risk Group Bank’s Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash

Deposits Balance at the Beginning of the Period - - 96.701 23.172 31.796 2.296Balance at the End of the Period - - 224.894 96.701 33.496 31.796Interest Expenses - - 49 51 194 138



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1.4 Information on forward and option agreements and other similar agreements with the Bank’s risk group

Associates, Subsidiaries Direct and Indirect Other Components in and Joint Ventures Shareholders of the Bank Risk Group Bank’s Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash

Transactions at Fair ValueThrough Profit and Loss Beginning of the Period - - 652.755 3.000.528 - - End of the Period - - 2.423.944 652.755 - -Total Profit / Loss - - (242) (30.655) - (114)Transactions for hedgingpurposes Beginning of the Period - - - - - - End of the Period - - - - - -Total Profit / Loss - - - - - -

2. Information on the Bank’s risk group

2.1 The relations with entities that are included in the Bank’s risk group and controlled by the Bank

The Bank performs various transactions with the group companies as a part of the banking transactions in accordance with the ordinary bank-client relationship and market conditions within the limitations determined by the Banking Law.

2.2 The type of transaction, the amount and its ratio to total transaction volume, the amount of significant items and their ratios to total items, pricing policy and other issues Current Period Priod Period According to the According to the Amounts in the Amounts in the Financial Financial Amount Statements% Amount Statements% Banks 4.420 1% 13.620 33%Loans and Receivables 72.606 8% 41.408 9%Non-cash Loans 28.413 15% 181.953 58%Deposits 258.390 44% 128.497 30%Interest Income on Loans 2.129 6% 2.592 9%Interest Expense on Deposits 243 3% 189 2%Interest Expense on Funds Borrowed 6.179 100% 2.401 96%Funds Borrowed 1.071.818 100% 235.170 100%Fees and Commissions Received 38.275 56% 31.425 58%Fees and Commissions Paid 1.355 11% 2.074 23%Interest Expense on Money Market Placements 1.615 12% 2.018 6%Other Operating Income 12.651 77% 6.083 81%Other Operating Expense 7.176 8% 7.931 9%Derivative Financial Instruments 2.423.944 66% 652.755 41%

Terms of transactions made with group companies are set in accordance with the market prices, if market prices do not exist cost plus method is used. Except for the situations requiring separate disclosure, there is not any account balance that is similar in nature and presented as an aggregate line.



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2.3 Equity accounting

None.

2.4 Information on transactions such as purchase-sale of immovable and other assets, purchase-sale of service, agent agreements, financial lease agreements, transfer of the information gained as a result of research and development, licence agreements, financing (including loans and cash or in kind capital), guarantees, collaterals and management contracts

The Bank has no agreement signed for asset purchases/sales, service rendering, agencies, finance lease contracts, research and development and licences with the group companies as of 31 December 2013.

The service agreement signed with Deutsche Bank AG includes the conditions of calculation of service fee and cost based on the annual defined rates and transfer of the calculated amount to the service-rendering bank’s account in cash, for intermediary services performed by Bank’s sales executives in the transactions of other group companies and intermediary services performed by sales executives of other group banks.

In accordance with the agreement signed with Deutsche Bank AG, which is valid since January 2004, the Bank pays a service fee to Deutsche Bank AG in return for global and regional management, leadership and coordination activities provided to the Bank by the top management of Deutsche Bank AG.

In accordance with the agreement signed with Bebek Varlık Yönetimi A.Ş., which is valid since January 2005, Bebek Varlık Yönetimi A.Ş. pays a service fee to the Bank in return for the operational services that is provided by the Bank.

In accordance with the agreement signed with Deutsche Bank AG, which is valid since January 2005, Deutsche Bank AG pays a service fee to the Bank in return for the services related to financial sector cash management products.

Deutsche Securities Menkul Değerler A.Ş. benefits from the Bank’s employees and similar services and hence pays in return for these services to the Bank in the framework of the signed agreement.

2.5 Information on benefits provided to top management

Benefits paid to key management personnel in the current period amounting to TL 17.172 (31 December 2012: TL 15.127).

VIII. Explanations and notes to the domestic, foreign, off-shore branches and foreign representatives of the Bank

Bank has no domestic, foreign or off-shore branches. As of 31 December 2013, number of employees of the Bank is 110 (31 December 2012: 105).

IX. Explanations and notes related to subsequent events

1. Significant events and matters arising subsequent to reporting date and their financial statement effects

None.



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SECTION SIX

OTHER EXPLANATIONS AND NOTES

I. Other explatanations related to the Bank’s operations

None.

SECTION SEVEN

EXPLANATIONS ON INDEPENDENT AUDITORS’ REPORT

I. Explanations on the independent auditors’ report

Unconsolidated financial statements and the notes to the financial statements as at 31 December 2013 have been audited by Akis Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (“the Turkish member firm of KPMG International Cooperative, a Swiss entity”) and an unqualified audit opinion is rendered on 5 March 2014.

II. Explanations and notes prepared by the independent auditor

TAS 19 (“Employee Benefits”) is amended effective from 1 January 2013. In accordance with the amendment all actuarial gains and losses on defined benefit plans should be recognised in other comprehensive income. Due to immaterial actuarial gain and losses balances as of 31 December 2013 and 31 December 2012, they are not recognized under equity and recognized through profit or loss.


We serve shareholders best by putting our clients first and by building a global networkof balanced businesses underpinned bystrong capital and liquidity.

We value our German roots and remain dedicated to our global presence.

We commit to a culture that aligns risks and rewards, attracts and develops talentedindividuals, fosters teamwork and partnership and is sensitive to the society in which we operate.

We aspire to be the leading client-centric global universal bank

Deutsche Bank A.Ş. Trade Registry Number: 244378Central Registration System Number (MERSIS): 0-8760-0487-2200015 Esentepe Mahallesi Büyükdere Caddesi Tekfen Tower No: 209 K: 17-18 Şişli 34394 Istanbul / TurkeyTel : +90 212 317 0100 Fax : +90 212 317 0105

www.db.com.tr [email protected]

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