TÜRKİYE İŞ BANKASI ANONİM ŞİRKETİ THE CONSOLIDATED FINANCIAL REPORT AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2014

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4 TÜRKİYE İŞ BANKASI ANONİM ŞİRKETİ THE CONSOLIDATED FINANCIAL REPORT AS OF AND FOR THE YEAR ENDED 31 DECEMBER 2014 Headquarters Address: İş Kuleleri, 34330, Levent/İstanbul Telephone: Fax: Web Site: The consolidated financial report as of and for the year ended 31 December 2014 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, comprises the following sections: GENERAL INFORMATION ABOUT THE PARENT BANK CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK EXPLANATIONS ON THE ACCOUNTING POLICIES APPLIED IN THE CURRENT PERIOD INFORMATION ON THE FINANCIAL POSITION OF THE GROUP DISCLOSURES AND FOOTNOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS OTHER EXPLANATIONS INDEPENDENT AUDITORS REPORT Associates, subsidiaries and special Purpose Entities whose financial statements have been consolidated in the consolidated financial report are as follows: Subsidiaries ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ ANADOLU HAYAT EMEKLİLİK A.Ş. CLOSED JOINT STOCK COMPANY İŞBANK (CJSC İŞBANK) EFES VARLIK YÖNETİM A.Ş. IS INVESTMENTS GULF LTD. İŞ FAKTORING A.Ş. İŞ FİNANSAL KİRALAMA A.Ş. İŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. İŞ GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş. İŞ PORTFÖY YÖNETİMİ A.Ş. İŞ YATIRIM MENKUL DEĞERLER A.Ş. İŞ YATIRIM ORTAKLIĞI A.Ş (PREVIOUS TITLE: İŞ B TİPİ YATIRIM ORTAKLIĞI A.Ş.) R İŞBANK AG MAXIS INVESTMENTS LTD. MİLLİ REASÜRANS T.A.Ş. TSKB GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. TÜRKİYE SINAİ KALKINMA BANKASI A.Ş. YATIRIM FİNANSMAN MENKUL DEĞERLER A.Ş. Special Purpose Entities TIB CARD RECEIVABLES FUNDING COMPANY LIMITED TIB DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY Associates ARAP-TÜRK BANKASI A.Ş. The consolidated financial statements and, related disclosures and footnotes in this report are prepared, unless otherwise indicated, in thousands of the Turkish Lira (TL), in accordance with the Regulation on the Procedures and Principles for Accounting Practices and Retention of Documents by Banks, Banking Regulation and Supervision Agency (BRSA) regulations, Turkish Accounting Standards, Turkish Financial Reporting Standards and the related appendices and interpretations and the Bank s financial records, and they have been subject to limited review and presented as the attached. Prof. Dr. Turkay Berksoy Füsun Tümsavaş H. Ersin Özince Member of the Board and Deputy Chairman of the Board of Directors Chairman of the Board of Directors the Audit Committee and Chairman of the Audit Committee Ali Tolga Ünal Mahmut Magemizoğlu Adnan Bali Head of Financial Management Division Deputy Chief Executive Chief Executive Officer In Charge of Financial Reporting The authorized contact person for questions on this consolidated financial report: Name Surname / Title: Süleyman H. Özcan / Head of Investor Relations Division Phone No : Fax No : Suleyman.Ozcan@isbank.com.tr investorrelations@isbank.com.tr

5 SECTION I General Information about the Parent Bank I. Explanations on the Establishment Date and Initial Status of the Parent Bank, and History Including the Changes in the Former Status 1 II. Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and Control of the Parent Bank, any Changes in the Period, and Information on the Parent Bank s Risk Group 1 III. Explanations on the Chairman s, Directors, Auditors, Chief Executive Officer s and Deputy Chief Executives Shares, if any, and the Areas of their Responsibility at the 1 Bank IV. Information on the Parent Bank s Qualified Shareholders 2 V. Summary Information on the Parent Bank s Functions and Business Lines 2 VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and Explanation about the Institutions Subject to Line-By-Line Method or Proportional Consolidation and Institutions which are Deducted from Equity or not Included in These Three Methods 2 VII. Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders Equity Between the Parent Bank and its Subsidiaries or the Reimbursement of Liabilities 4 VIII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of the Related Disclosures 4 SECTION II Consolidated Financial Statements I. Consolidated Balance Sheet (Statement of Financial Position) Assets 6 II. Consolidated Balance Sheet (Statement of Financial Position) Liabilities and Equity 7 III. Consolidated Off-Balance Sheet Items 8 IV. Consolidated Income Statement 9 V. Consolidated Statement of Income and Expense Items Accounted under Shareholders Equity 10 VI. Consolidated Statement of Changes in the Shareholders Equity 11 VII. Consolidated Statement of Cash Flows 12 VIII. Consolidated Statement of Profit Distribution Table 13 SECTION III Explanations on Accounting Policies I. Basis of Presentation 13 II. Strategy for Use of Financial Instruments and on Foreign Currency Transactions 13 III. Information on the Consolidated Companies 14 IV. Forward, Option Contracts and Derivative Transactions 16 V. Interest Income and Expenses 16 VI. Fees and Commission Income and Expenses 16 VII. Financial Assets 16 VIII. Impairment of Financial Assets 17 IX. Offsetting Financial Instruments 18 X. Sale and Repurchase Agreements and Securities Lending Transactions 18 XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities 18 XII. Goodwill and Other Intangible Assets 19 XIII. Tangible Assets 19 XIV. Investment Property 20 XV. Leasing Transactions 20 XVI. Insurance Technical Income and Expense 20 XVII. Insurance Technical Reserves 20 XVIII. Provisions and Contingent Liabilities 21 XIX. Contingent Assets 21 XX. Liabilities Regarding Employee Benefits 21 XXI. Taxation 23 XXII. Borrowings 25 XXIII. Equity Shares and Issuance of Equity Shares 25 XXIV. Bank Acceptances and Bills of Guarantee 25 XXV. Government Incentives 25 XXVI. Segment Reporting 25 XXVII. Other Disclosures 25 SECTION IV Information on the Financial Position and Risk Management of the Group I. Explanations on Consolidated Capital Adequacy Ratio 26 II. Explanations on Consolidated Credit Risk 32 III. Explanations on Consolidated Market Risk 41 IV. Explanations on Consolidated Operational Risk 42 V. Explanations on Consolidated Currency Risk 43 VI. Explanations on Consolidated Interest Rate Risk 45 VII. Explanations on Equity Shares Risk Arising from Banking Book 49 VIII. Explanations on Consolidated Liquidity Risk 50 IX. Explanations on Securitization Positions 54 X. Explanations on Credit Risk Mitigation Techniques 54 XI. Explanations on Risk Management Objectives and Policies 54 XII. Explanations on Other Price Risks 56 XIII. Explanations on the Presentation of Assets and Liabilities at Fair Value 56 XIV. Explanations on Transactions Carried out on Behalf of Third Parties and Fiduciary Transactions 58 XV. Explanations on Consolidated Business Segmentation 58 SECTION V Disclosures and Footnotes on the Consolidated Financial Statements I. Disclosures and Footnotes on Consolidated Assets 61 II. Disclosures and Footnotes on Consolidated Liabilities 79 III. Disclosures and Footnotes on Consolidated Off-Balance Sheet Items 88 IV. Disclosures and Footnotes on Consolidated Income Statement 91 V. Disclosures and Footnotes on Consolidated Statement of Changes in the Shareholders Equity 95 VI. Disclosures and Footnotes on Consolidated Statement of Cash Flows 95 VII. Disclosures and Footnotes on the Group s Risk Group 97 VIII. Disclosures on the Group s Domestic, Foreign, Off-Shore Branches or Participations and Representative Offices 99 Page:

6 IX. Subsequent Events 101 SECTION VI Other Explanations I. Explanation on the Group s Credit Ratings 102 II. Explanation on Special Purpose Audit and Public Audit 104 SECTION VII Explanations on the Independent Auditors Report I. Explanations on the Independent Auditors Report 104 II. Explanations and Footnotes of the Independent Auditors 104

7 SECTION ONE: GENERAL INFORMATION ABOUT THE PARENT BANK I. Explanations on the Establishment Date and Initial Status of the Parent Bank, and History Including the Changes in the Former Status TÜRKİYE İŞ BANKASI A.Ş. ( the Bank or the Parent Bank ) was established on 26 August 1924 to operate in all kinds of banking activities and to initiate and/or participate in all kinds of financial and industrial sector undertakings when necessary. The Bank status has not been changed since its establishment. II. Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and Control of the Parent Bank, any Changes in the Period, and Information on the Parent Bank s Risk Group As of 31 December 2014, 40.15% of the Bank s shares are owned by Türkiye İş Bankası A.Ş. Members Supplementary Pension Fund (Fund), 28.09% are owned by the Republican People s Party-CHP (Atatürk s shares) and 31.76% are on free float. (31 December 2013: Fund 40.16%, CHP 28.09%, free float 31.75%). III. Explanations on the Chairman s, Directors, Auditors, Chief Executive Officer s and Deputy Chief Executives Shares, if any, and the Areas of their Responsibility at the Bank Board of Directors: Name and Surname Areas of Responsibility H. Ersin Özince Chairman of the Board and the Remuneration Committee Füsun Tümsavaş Deputy Chairman, Audit Committee, TRNC Internal Systems Committee and the Risk Committee, Chairman of the Corporate Governance Committee, Member of the Credit Committee Adnan Bali Chief Executive Officer and Director, Chairman of the Credit Committee, Member of the Risk Committee, Chairman of the Executive Committee, Chairman of the Human Resources Committee Hasan Koçhan Director, Member of the Credit Committee Mustafa Kıcalıoğlu Aysel Tacer Hüseyin Yalçın Murat Vulkan Prof.Dr.Turkay Berksoy Kemal Meral Ulaş Moğultay Director Director, Member of the Corporate Social Responsibility Committee, Alternate Member of the Credit Committee Director Director Director, Audit Committee, TRNC Internal Systems Committee, The Remuneration Committee, and Corporate Governance Committee, Alternate Member of the Credit Committee Director Director, Member of the Corporate Social Responsibility Committee Chief Executive Officer and Deputy Chief Executives: Name and Surname Adnan Bali Mahmut Magemizoğlu Suat İnce Hakan Aran Levent Korba Ertuğrul Bozgedik Yalçın Sezen Rıza İhsan Kutlusoy Senar Akkuş İlhami Koç Yılmaz Ertürk Ergün Yorulmaz Areas of Responsibility Chief Executive Officer and Director, Chairman of the Credit Committee, Member of the Risk Committee, Chairman of the Executive Committee, Chairman of the Human Resources Committee Financial Management, Investor Relations, Managerial Reporting and Internal Accounting, Risk Committee Corporate and Commercial Banking Marketing, Sales and Product Management, SME and Business Banking Sales, Free Zone Branches Alternative Distribution Channels Operations, Information Technology Management Banking Operations, Retail Loan and Card Operations, Support Services and Purchasing, Foreign Trade and Commercial Loan Operations, Internal Operations Management, Construction and Real Estate Management, Branch Network Development Corporate Loans, SME Loans, Commercial Loans and Consumer Loans Underwriting, Loans Portfolio Management, Member of the Risk Committee Consumer Loans, Card Payment Systems, Retail Banking Marketing, Sales and Product Management, Private Banking Marketing and Sale Management, Member of the Corporate Social Responsibility Committee Human Resources, Enterprise Architecture, Strategy and Corporate Performance Management and Talent Management, Coordination of Consumer Relations Officer Treasury Management, Corporate Communication Management, Corporate Social Responsibility Committee Member of the Risk Committee Associates, Cross-Border Banking and Foreign Subsidiaries, Branches and Representative Offices, Capital Markets Management and Risk Committee (1) Economic Research, International Financial Institutions Legal Counsellor, Financial Analysis, Commercial and Corporate Loans and Retail Loans Monitoring and Recovery Management (1) İlhami Koç, participate in the meetings of the Risk Committee on a consolidated basis. 1

8 The Parent Bank s shares attributable to the Directors and members of the Audit Committee, to the CEO and the Deputy Chief Executives are of minor importance. IV. Information on the Parent Bank s Qualified Shareholders Name Surname/Company Shares Ownership Paid-in Capital T. İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı (İşbank Members Supplementary Pension Fund) Cumhuriyet Halk Partisi Republican People s Party (Atatürk s Shares) 1,806, % 1,806,553 1,264, % 1,264,142 Unpaid Capital V. Summary Information on the Parent Bank s Functions and Business Lines In line with the relevant legislation and principles stated in the Articles of Incorporation of the Bank, the Parent Bank s activities include operating in retail, commercial, corporate and private banking, foreign currency and money market operations, marketable securities operations, international banking services and other banking operations, as well as initiating or participating in all kinds of financial and industrial sector corporations as may be required. VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and Explanation about the Institutions Subject to Line-By-Line Method or Proportional Consolidation and Institutions which are Deducted from Equity or not Included in These Three Methods Banks are obligated to prepare consolidated financial statements for credit institutions and financial subsidiaries for creating legal restrictions on a consolidated basis based on the Communiqué on Preparation of Consolidated Financial Statements of Banks by applying Turkish Accounting Standards. There is not any difference between the related Communiqué and the consolidation operations that is based on Turkish Accounting Standards and Turkish Financial Reporting Standards. The consolidated financial statement includes the subsidiaries of the Bank which are credit institutions or financial institutions accordance with the BRSA regulations. As of current there is no credit institution or financial institution subsidiaries which are excluded in the scope of the consolidation. The information about the organizations in the scope of the consolidation: The Parent Bank and its subsidiaries; - ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ - ANADOLU HAYAT EMEKLİLİK A.Ş. - CJSC İŞBANK - EFES VARLIK YÖNETİM A.Ş. - IS INVESTMENTS GULF LTD. - İŞ FAKTORİNG A.Ş. - İŞ FİNANSAL KİRALAMA A.Ş. - İŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. - İŞ GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş. - İŞ PORTFÖY YÖNETİMİ A.Ş. - İŞ YATIRIM MENKUL DEĞERLER A.Ş. - IŞ YATIRIM ORTAKLIĞI A.Ş. (Previous title: İŞ B TİPİ YATIRIM ORTAKLIĞI A.Ş) - İŞBANK AG - MAXIS INVESTMENTS LTD. - MİLLİ REASÜRANS T.A.Ş. - TSKB GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. - TÜRKİYE SINAI KALKINMA BANKASI A.Ş. - YATIRIM FİNANSMAN MENKUL DEĞERLER A.Ş. and Special Purpose Entities, - TIB Diversified Payment Rights Finance Company - TIB Card Receivables Funding Company Limited are fully consolidated, 2

9 Its associate; - ARAP-TÜRK BANKASI A.Ş. is accounted under equity accounting method. Consolidated companies are active in the areas of banking, insurance and reinsurance, private pensions, finance leasing, factoring, real estate investment, venture capital investment, brokerage, investment consulting, portfolio and asset management. Those companies are explained below. Anadolu Anonim Türk Sigorta Şirketi The Company was established in 1925 and operates in almost all non-life insurance service. The headquarter of the Company is in Istanbul. The Company s shares are traded in the Borsa İstanbul A.Ş. Anadolu Hayat Emeklilik A.Ş. The Company was founded in 1990 and its headquarter is in Istanbul. The company s main activities are private individual or group pension and life/death insurance and due to this branch are engaged in all kinds of insurance. There are 24 private pension funds founded by the company. The company s shares are traded in the Borsa Istanbul A.Ş. CJSC İşbank The Bank, which was founded in 1998 and headquartered in Moscow, operating banking services by focusing on deposit, loan and brokerage operations with its 13 branches in several regions of Russian Federation. Efes Varlık Yönetim A.Ş. The field of activity of the company, which was founded in February 2011 is to purchase and sell the receivables with other assets of deposit banks, participation banks and other financial institutions. The Company s headquarter is located İstanbul. Is Investments Gulf Ltd. The purpose of the Company, which was founded in Dubai in the year 2011, is to operate brokerage activities mainly capital markets in the gulf region. İş Faktoring A.Ş. The field of operation of the Company, which operates in the factoring sector since 1993, is domestic and foreign factoring operations. The Company s headquarter is in Istanbul. İş Finansal Kiralama A.Ş. The Company, whose field of activity is financial leasing within the country and abroad started its business in The headquarters of the Company is in Istanbul. The Company s shares are traded in the Borsa İstanbul A.Ş. İş Gayrimenkul Yatırım Ortaklığı A.Ş. The Company whose main field of activity is investing in real estate, capital market instruments backed by real estate, real estate projects and capital market instruments is conducting its business in the sector as a real estate investment trust since The Company s shares are traded in the Borsa İstanbul A.Ş. since its establishment. İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. Having started its venture capital business in the year 2000, the aim of the company is performing long-term investments to venture companies which have potential development and need resources where was founded and established in Turkey. The company s shares are traded in the Borsa İstanbul A.Ş. since the year İş Portföy Yönetimi A.Ş. The purpose of the Company, which was founded in 2000, is to engage in capital market operations stated in its articles of association. Among the capital market operations, the company offers portfolio management and investment consulting services only to corporate investors. İş Yatırım Menkul Değerler A.Ş. The Company s main field of activity is composed of intermediary, corporate finance, investment consulting and private portfolio management services. The Company s shares are traded in the Borsa İstanbul A.Ş. since May As of 30 June 2014, company took over through merger its consolidated associate Camiş Menkul Değerler A.Ş. 3

10 İş Yatırım Ortaklığı A.Ş. (Previous title: İŞ B Tipi Yatırım Ortaklığı A.Ş.) The aim of the Company, which was founded in İstanbul in the year 1995, is operating capital market activities which is located in the principal agreement, is portfolio management. The Company s shares are traded in the Borsa İstanbul A.Ş. since April The company name was changed from İŞ B Tipi Yatırım Ortaklığı A.Ş. to İş Yatırım Ortaklığı A.Ş as of the date of April İşbank AG İşbank AG was founded to carry out the banking transactions in Europe. İşbank AG has 21 branches in total, 17 branches in Germany, 1 branch in Netherlands, France, Switzerland and Bulgaria. Maxis Investments Ltd. The purpose of the Company, which was founded in England in the year 2005, is to operate in activities in foreign capital markets. Milli Reasürans T.A.Ş. The Company, which was founded in 1929 to provide reinsurance services is located in Istanbul. TSKB Gayrimenkul Yatırım Ortaklığı A.Ş. The major field of activity of the Company, which was founded in 2006, is to create and develop an investment property portfolio and to invest in capital market instruments that are based on investment properties. The Company s shares are traded in the Borsa İstanbul A.Ş. since April Türkiye Sınai Kalkınma Bankası A.Ş. Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) which is an industrial development and an investment bank is founded especially to support private sector investments in industry and to provide domestic and foreign capital to Turkish companies. The Bank s shares are traded in the Borsa İstanbul A.Ş. Yatırım Finansman Menkul Değerler A.Ş. The Company was founded in İstanbul in The purpose of the Company is to engage in capital market operations stated in its articles of association. The company's headquarters is in Istanbul. VII. Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders Equity Between the Parent Bank and its Subsidiaries or the Reimbursement of Liabilities None. VIII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of the Related Disclosures The Parent Bank has written policies on assessment of ensuring compliance on market discipline, disclosure obligations, frequency and accuracy of related disclosures. The mentioned policies which are agreed by Board can be obtained from the Parent Bank s website. 4

11 TÜRKİYE İŞ BANKASI A.Ş. CONSOLIDATED FINANCIAL STATEMENTS (STATEMENT OF FINANCIAL POSITION) THOUSAND TL CURRENT PERIOD PRIOR PERIOD ASSETS Footnotes (31/12/2014) (31/12/2013) TL FC Total TL FC Total I. CASH AND BALANCES WITH THE CENTRAL BANK V-I-a 4,762,412 20,381,135 25,143,547 5,265,768 18,143,973 23,409,741 II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (Net) V-I-b 1,367, ,309 2,260,170 1,642,222 1,293,803 2,936, Financial Assets Held for Trading 1,367, ,309 2,260,170 1,642,222 1,293,803 2,936, Government Debt Securities 480,074 10, ,328 1,132,898 5,901 1,138, Equity Securities 69,843-69,843 55,273-55, Derivative Financial Assets Held for Trading 231, ,572 1,081,071 40,316 1,248,518 1,288, Other Marketable Securities 586,445 32, , ,735 39, , Financial Assets at Fair Value Through Profit and Loss Government Debt Securities Equity Securities Loans Other Marketable Securities III. BANKS V-I-c 3,409,819 2,596,638 6,006, ,503 4,707,508 5,186,011 IV. MONEY MARKET PLACEMENTS 256,548 7, , , , Interbank Money Market Placements Istanbul Stock Exchange Money Market Placements 210, , , , Receivables from Reverse Repurchase Agreements 46,439 7,011 53,450 11,928-11,928 V. FINANCIAL ASSETS AVAILABLE-FOR-SALE (Net) V-I-d 37,461,468 8,215,661 45,677,129 27,034,185 7,241,218 34,275, Equity Securities 94,073 6, ,565 93,573 3,209 96, Government Debt Securities 36,694,393 7,184,137 43,878,530 26,162,475 5,817,614 31,980, Other Marketable Securities 673,002 1,025,032 1,698, ,137 1,420,395 2,198,532 VI. LOANS AND RECEIVABLES V-I-e 103,048,356 65,279, ,328,088 89,370,339 56,365, ,736, Loans and Receivables 102,362,890 65,270, ,633,292 88,862,000 56,327, ,189, Loans to the Bank's Risk Group 117, , , , , , Government Debt Securities Other 102,245,180 64,942, ,188,066 88,725,062 55,896, ,621, Non-Performing Loans 2,579, ,424 2,699,501 2,325, ,153 2,476, Specific Provisions (-) 1,893, ,094 2,004,705 1,816, ,140 1,929,981 VII. FACTORING RECEIVABLES 1,203, ,042 1,433, , , ,111 VIII. HELD TO MATURITY INVESTMENTS (Net) V-I-f 1,340,853 51,007 1,391,860 7,712,750 15,697 7,728, Government Debt Securities 1,307,192-1,307,192 7,704,816-7,704, Other Marketable Securities 33,661 51,007 84,668 7,934 15,697 23,631 IX. INVESTMENTS IN ASSOCIATES (Net) V-I-g 800, , , , Associates Accounted for Using the Equity Method 111, ,422 96,644-96, Unconsolidated Associates 689, , , , Financial Investments Non-Financial Investments 689, , , ,466 X. INVESTMENTS IN SUBSIDIARIES (Net) V-I-h 4,810,446-4,810,446 3,406,441-3,406, Unconsolidated Financial Subsidiaries Unconsolidated Non-Financial Subsidiaries 4,810,446-4,810,446 3,406,441-3,406,441 XI. JOINTLY CONTROLLED ENTITIES (JOINT VENTURES) (Net) V-I-i Jointly Controlled Entities Accounted for Using the Equity Method Unconsolidated Jointly Controlled Entities Jointly Controlled Financial Entities Jointly Controlled Non-Financial Entities XII. LEASE RECEIVABLES V-I-j 933,928 1,812,271 2,746, ,502 1,563,620 2,034, Finance Lease Receivables 1,137,663 2,081,338 3,219, ,498 1,775,923 2,327, Operating Lease Receivables 2,352-2, Other Unearned Income (-) 206, , ,154 81, , ,056 XIII. DERIVATIVE FINANCIAL ASSETS HELD FOR HEDGING V-I-k Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges XIV. TANGIBLE ASSETS (Net) V-I-l 2,303,693 83,156 2,386,849 2,137,896 96,432 2,234,328 XV. INTANGIBLE ASSETS (Net) V-I-m 374,598 6, , ,050 4, , Goodwill 35,974-35,974 35,974-35, Other 338,624 6, , ,076 4, ,043 XVI. INVESTMENT PROPERTY (Net) V-I-n 1,387,651-1,387,651 1,342,182-1,342,182 XVII. TAX ASSETS V-I-o 656,624 15, , ,790 15, , Current Tax Assets 29,060 4,676 33,736 18,785 7,436 26, Deferred Tax Assets 627,564 10, , ,005 8, ,543 XVIII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) V-I-p 65, ,993 65,777 2,872 68, Held for Sale 65, ,993 65,777 2,872 68, Discontinued Operations XIX. OTHER ASSETS V-I-r 10,834,402 1,186,995 12,021,397 8,484,903 1,936,240 10,421,143 TOTAL ASSETS 175,018, ,757, ,776, ,078,610 91,540, ,619,140 5

12 TÜRKİYE İŞ BANKASI A.Ş. CONSOLIDATED FINANCIAL STATEMENTS (STATEMENT OF FINANCIAL POSITION) THOUSAND TL CURRENT PERIOD PRIOR PERIOD LIABILITIES Footnotes (31/12/2014) (31/12/2013) TL FC Total TL FC Total I. DEPOSITS V-II-a 72,045,192 62,456, ,501,226 65,359,750 56,478, ,837, Deposits from the Bank's Risk Group 560,159 2,639,078 3,199, ,591 1,476,460 2,369, Other 71,485,033 59,816, ,301,989 64,467,159 55,001, ,468,747 II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING V-II-b 260, , , , ,344 1,197,345 III. FUNDS BORROWED V-II-c 5,094,210 28,965,797 34,060,007 3,111,333 24,112,363 27,223,696 IV. MONEY MARKET FUNDS 19,104,474 3,200,295 22,304,769 20,823,398 4,176,477 24,999, Interbank Money Market Funds Istanbul Stock Exchange Money Market Funds 2,291,363-2,291,363 2,403,976-2,403, Funds Provided Under Repurchase Agreements 16,813,111 3,200,295 20,013,406 18,419,422 4,176,477 22,595,899 V. MARKETABLE SECURITIES ISSUED (Net) V-II-d 6,146,268 12,450,824 18,597,092 5,134,330 4,942,514 10,076, Bills 4,561,693 2,339,748 6,901,441 3,896, ,658 4,054, Asset-backed Securities Bonds 1,584,575 10,111,076 11,695,651 1,238,258 4,783,856 6,022,114 VI. FUNDS ,458 39, ,008 5, Borrower funds ,458 39, ,008 5, Other VII. MISCELLANEOUS PAYABLES 13,547, ,934 14,395,500 10,448, ,857 11,150,140 VIII. OTHER LIABILITIES V-II-e 1,483,272 1,714,707 3,197,979 1,508,917 3,308,205 4,817,122 IX. FACTORING PAYABLES X. LEASE PAYABLES (Net) V-II-f Finance Lease Payables Operating Lease Payables Other Deferred Financial Lease Expenses (-) XI. DERIVATIVE FINANCIAL LIABILITIES HELD FOR RISK MANAGEMENT V-II-g Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges XII. PROVISIONS V-II-h 11,272, ,935 12,083,515 10,094, ,681 10,918, General Loan Loss Provisions 2,447,646 32,124 2,479,770 2,073,263 27,339 2,100, Provision for Restructuring Reserves for Employee Benefits 522,159 1, , ,438 2, , Insurance Technical Reserves (Net) 4,533, ,987 5,287,399 4,029, ,746 4,801, Other Provisions 3,769,363 23,007 3,792,370 3,580,092 23,538 3,603,630 XIII. TAX LIABILITIES V-II-i 747,557 2, , ,334 3, , Current Tax Liabilities 745,675 2, , ,735 3, , Deferred Tax Liabilities 1,882-1,882 2,599-2,599 XIV. LIABILITIES RELATED TO ASSETS HELD FOR SALE AND V-II-j DISCONTINUED OPERATIONS Held for Sale Discontinued Operations XV. SUBORDINATED DEBT V-II-k - 3,384,849 3,384,849-3,090,902 3,090,902 XVI. SHAREHOLDERS' EQUITY V-II-l 31,326, ,914 31,712,461 25,809,518 85,108 25,894, Paid-in Capital 4,500,000-4,500,000 4,500,000-4,500, Capital Reserves 4,746, ,840 5,078,348 2,393,782 (31,790) 2,361, Share premium 33,941-33,941 33,940-33, Share Cancellation Profits Marketable Securities Value Increase Fund 3,107, ,840 3,439, ,187 (31,790) 680, Tangible Assets Revaluation Reserve Intangible Assets Revaluation Reserve Investment Property Revaluation Reserve Bonus Shares Obtained from Associates, Subsidiaries and Jointly Controlled (1,179) - (1,179) (1,179) - (1,179) Entities (Joint Ventures) Hedging Reserves (Effective Portion) Accumulated Revaluation Reserves on Assets Held for Sale and Discontinued Operations Other Capital Reserves 1,606,464-1,606,464 1,648,834-1,648, Profit Reserves 15,811, ,192 15,925,056 13,120, ,434 13,278, Legal Reserves 2,510,521 1,106 2,511,627 2,286,486-2,286, Statutory Reserves 64,234-64,234 59,539-59, Extraordinary Reserves 13,278,217 22,129 13,300,346 10,792,384 20,360 10,812, Other Profit Reserves (41,108) 89,957 48,849 (17,821) 137, , Profit or Loss 2,790,336 (87,426) 2,702,910 2,672,230 (51,068) 2,621, Prior Years' Profit/Loss (594,975) (53,943) (648,918) (621,726) 6,967 (614,759) Current Period Profit/Loss 3,385,311 (33,483) 3,351,828 3,293,956 (58,035) 3,235, Non-controlling Interest V-II-m 3,477,839 28,308 3,506,147 3,122,918 10,532 3,133,450 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 161,029, ,747, ,776, ,389,097 98,230, ,619,140 6

13 TÜRKİYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS THOUSAND TL OFF-BALANCE SHEET ITEMS CURRENT PERIOD PRIOR PERIDOD Footnotes (31/12/2014) (31/12/2013) TL FC Total TL FC Total A. OFF-BALANCE SHEET CONTINGENCIES AND COMMITMENTS (I+II+III) 85,747, ,096, ,843,430 81,418, ,787, ,206,209 I. GUARANTEES AND SURETYSHIPS V-III 18,327,481 26,335,832 44,663,313 16,110,063 23,659,989 39,770, Letters of Guarantee 18,080,951 16,568,615 34,649,566 15,952,429 14,662,821 30,615, Guarantees Subject to State Tender Law 741,815 2,975,340 3,717, ,823 3,865,351 4,633, Guarantees Given for Foreign Trade Operations 3,205,517 5,001,864 8,207,381 2,010,806 5,064,059 7,074, Other Letters of Guarantee 14,133,619 8,591,411 22,725,030 13,173,800 5,733,411 18,907, Bank Acceptances 9,813 1,219,918 1,229,731 4,262 1,490,684 1,494, Import Letters of Acceptance - 413, , , , Other Bank Acceptances 9, , ,034 4,262 1,298,906 1,303, Letters of Credit - 7,763,406 7,763,406-6,903,157 6,903, Documentary Letters of Credit - 5,580,303 5,580,303-4,687,003 4,687, Other Letters of Credit - 2,183,103 2,183,103-2,216,154 2,216, Prefinancing Given as Guarantee Endorsements Endorsements to the Central Bank of Turkey Other Endorsements Purchase Guarantees for Securities Issued Factoring Guarantees 88,602 11, ,543 59,639 12,808 72, Other Guarantees 148, , ,067 93, , , Other Suretyships II. COMMITMENTS 41,486,251 10,949,790 52,436,041 37,582,606 15,533,980 53,116, Irrevocable Commitments 40,998,494 2,863,091 43,861,585 37,093,928 8,593,817 45,687, Forward Asset Purchase Commitments 67, ,497 1,045, ,660 3,636,836 3,990, Forward Deposit Purchase and Sale Commitments Capital Commitment for Associates and Subsidiaries - 121, , Loan Granting Commitments 9,429, ,744 9,956,796 7,819,183 1,367,072 9,186, Securities Underwriting Commitments Commitments for Reserve Deposit Requirements Commitments for Cheque Payments 5,875,007-5,875,007 6,024,383-6,024, Tax and Fund Liabilities from Export Commitments 17,932-17,932 16,821-16, Commitments for Credit Card Expenditure Limits 20,489,527-20,489,527 17,679,967-17,679, Commitments for Credit Cards and Banking Services Promotions 93,072-93,072 90,239-90, Receivables from Short Sale Commitments Payables for Short Sale Commitments 9,784-9,784 1,695-1, Other Irrevocable Commitments 5,016,431 1,236,554 6,252,985 5,107,980 3,589,909 8,697, Revocable Commitments 487,757 8,086,699 8,574, ,678 6,940,163 7,428, Revocable Loan Granting Commitments 487,757 8,086,699 8,574, ,678 6,940,163 7,428, Other Revocable Commitments III. DERIVATIVE FINANCIAL INSTRUMENTS 25,933,585 71,810,491 97,744,076 27,725,929 69,593,642 97,319, Derivative Financial Instruments held for risk management Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges Derivative Financial Instruments Held for Trading 25,933,585 71,810,491 97,744,076 27,725,929 69,593,642 97,319, Forward Foreign Currency Buy/Sell Transactions 2,714,269 5,622,700 8,336,969 3,909,499 8,134,835 12,044, Forward Foreign Currency Buy Transactions 1,822,359 2,346,843 4,169,202 2,700,765 3,303,958 6,004, Forward Foreign Currency Sell Transactions 891,910 3,275,857 4,167,767 1,208,734 4,830,877 6,039, Currency and Interest Rate Swaps 20,108,674 54,556,119 74,664,793 20,325,006 50,359,859 70,684, Currency Swap Buy Transactions 5,688,362 18,851,307 24,539,669 8,276,302 15,023,163 23,299, Currency Swap Sell Transactions 10,533,432 12,171,340 22,704,772 8,213,744 14,888,196 23,101, Interest Rate Swap Buy Transactions 1,943,440 11,766,736 13,710,176 1,917,480 10,224,250 12,141, Interest Rate Swap Sell Transactions 1,943,440 11,766,736 13,710,176 1,917,480 10,224,250 12,141, Currency, Interest Rate and Security Options 3,089,757 9,344,729 12,434,486 3,478,120 10,635,424 14,113, Currency Call Options 1,671,738 3,817,040 5,488,778 1,708,133 4,108,815 5,816, Currency Put Options 1,391,746 4,062,605 5,454,351 1,647,633 4,151,335 5,798, Interest Rate Call Options - 718, ,420 60,000 1,187,637 1,247, Interest Rate Put Options - 718, ,420 60,000 1,187,637 1,247, Securities Call Options 21,813-21,813 1,177-1, Securities Put Options 4,460 28,244 32,704 1,177-1, Currency Futures ,496 24,582 32, Currency Buy Futures ,150 11,652 15, Currency Sell Futures ,346 12,930 16, Interest Rate Futures Interest Rate Buy Futures Interest Rate Sell Futures Other 20,885 2,286,943 2,307,828 5, , ,750 B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) 310,820, ,759, ,580, ,918, ,404, ,323,114 IV. ITEMS HELD IN CUSTODY 127,338,013 10,976, ,314, ,798,561 10,623, ,422, Customers Securities Held Investment Securities Held in Custody 109,012, , ,829, ,224, , ,054, Cheques Received for Collection 12,836,400 3,297,909 16,134,309 13,468,159 3,579,302 17,047, Commercial Notes Received for Collection 2,464,130 5,685,294 8,149,424 2,449,009 4,578,604 7,027, Other Assets Received for Collection 9,682 4,143 13,825 12,832 37,853 50, Assets Received for Public Offering 2,541-2,541 2,541-2, Other Items under Custody 1,259,262 1,172,270 2,431,532 1,213,106 1,598,445 2,811, Custodians 1,753,513-1,753,513 1,428,227-1,428,227 V. PLEDGED ITEMS 183,482, ,783, ,266, ,119, ,781, ,900, Marketable Securities 9,424,785 12,662,712 22,087,497 5,342,002 10,667,762 16,009, Guarantee Notes 6,034,317 11,016,838 17,051,155 5,048,500 9,659,691 14,708, Commodity 39,383,197 10,293,413 49,676,610 42,996,498 10,205,230 53,201, Warranty Real Estates 118,504,932 77,658, ,163,615 95,746,451 71,599, ,346, Other Pledged Items 10,135,678 41,151,538 51,287,216 7,986,266 25,648,845 33,635, Pledged Items-Depository VI. ACCEPTED BILL GUARANTEES AND SURETIES TOTAL OFF-BALANCE SHEET ITEMS (A+B) 396,568, ,855, ,423, ,336, ,192, ,529,323 7

14 TURKIYE IS BANKASI A.S. CONSOLIDATED INCOME STATEMENT INCOME STATEMENT THOUSAND TL Footnotes CURRENT PERIOD PRIOR PERIOD (01/01-31/12/2014) (01/01-31/12/2013) I. INTEREST INCOME V-IV-a 17,752,690 14,853, Interest Income on Loans 13,311,666 10,879, Interest Income on Reserve Deposits Interest Income on Banks 200, , Interest Income on Money Market Placements 15,067 14, Interest Income on Marketable Securities Portfolio 3,931,245 3,570, Financial Assets Held for Trading 127,104 55, Financial Assets at Fair Value Through Profit and Loss Financial Assets Available for Sale 3,118,955 2,277, Held to Maturity Investments 685,186 1,237, Finance Lease Income 186, , Other Interest Income 107, ,578 II. INTEREST EXPENSE V-IV-b 9,282,281 7,172, Interest on Deposits 5,603,036 4,797, Interest on Funds Borrowed 780, , Interest on Money Market Funds 1,762,400 1,165, Interest on Securities Issued 1,071, , Other Interest Expense 65,119 84,638 III. NET INTEREST INCOME / EXPENSE (I - II) 8,470,409 7,681,894 IV. NET FEES AND COMMISSIONS INCOME / EXPENSE 1,505,183 1,468, Fees and Commissions Received 2,434,577 2,400, Non-cash Loans 301, , Other 2,132,775 2,163, Fees and Commissions Paid 929, , Non-cash Loans 8,117 8, Other 921, ,605 V. DIVIDEND INCOME V-IV-c 292, ,057 VI. TRADING INCOME / LOSS (NET) V-IV-d 664, , Gains/Losses on Securities Trading 570, , Derivative Financial Transactions Gains/Losses (614,744) (500,764) 6.3 Foreign Exchange Gains/Losses 708, ,606 VII. OTHER OPERATING INCOME V-IV-e 4,836,167 4,615,411 VIII. TOTAL OPERATING INCOME / EXPENSE (III+IV+V+VI+VII) 15,767,934 14,382,899 IX. PROVISION FOR LOSSES ON LOANS AND OTHER RECEIVABLES (-) V-IV-f 1,530,113 1,654,701 X. OTHER OPERATING EXPENSES (-) V-IV-g 9,515,404 8,308,239 XI. NET OPERATING INCOME (VIII-IX-X) 4,722,417 4,419,959 XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - XIII. PROFIT/LOSS FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD 14,778 9,922 XIV. NET MONETARY POSITION GAIN/LOSS - - XV. PROFIT/LOSS ON CONTINUING OPERATIONS BEFORE TAX (XI+ +XIV) V-IV-h 4,737,195 4,429,881 XVI. TAX PROVISION FOR CONTINUING OPERATIONS (±) V-IV-i 1,005, , Current Tax Provision 1,293, , Deferred Tax Provision (287,857) 350,115 XVII. NET PERIOD PROFIT/LOSS FROM CONTUNUING OPERATIONS (XV±XVI) V-IV-j 3,732,036 3,606,859 XVIII. INCOME ON DISCONTINUED OPERATIONS Income on Assets Held for Sale Gain on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) Other Income on Discontinued Operations - - XIX. EXPENSE ON DISCONTINUED OPERATIONS(-) Expense on Assets Held for Sale Loss on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) Other Expense on Discontinued Operations - - XX. PROFIT/LOSS ON DISCONTINUED OPERATIONS BEFORE TAX (XVIII-XIX) V-IV-h - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) V-IV-i Current Tax Provision Deferred Tax Provision - - XXII. NET PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) V-IV-j - - XXIII. NET PERIOD PROFIT/LOSS (XVII+XXII) V-IV-k 3,732,036 3,606, Group s Profit / Loss 3,351,828 3,235, Non-controlling Interest (-) 380, ,938 Earnings per Share (in full TL)

15 TÜRKİYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF INCOME AND EXPENSE ITEMS ACCOUNTED UNDER SHAREHOLDERS EQUITY THOUSAND TL INCOME AND EXPENSE ITEMS ACCOUNTED UNDER SHAREHOLDERS EQUITY CURRENT PERIOD PRIOR PERIOD (01/01-31/12/2014) (01/01-31/12/2013) I. ADDITIONS TO MARKETABLE SECURITIES VALUE INCREASE FUND FROM FINANCIAL ASSETS AVAILABLE FOR SALE 1,892,979 (2,003,089) II. REVALUATION SURPLUS ON TANGIBLE ASSETS - - III. REVALUATION SURPLUS ON INTANGIBLE ASSETS - - IV. TRANSLATION ADJUSTMENT FOR FOREIGN CURRENCY TRANSACTIONS (70,404) 115,431 V. PROFIT/LOSS ON DERIVATIVE FINANCIAL ASSETS HELD FOR CASH FLOW HEDGES (Effective Portion of the Changes in Fair Value) - - VI. PROFIT/LOSS ON DERIVATIVE FINANCIAL ASSETS HELD FOR NET FOREIGN INVESTMENT HEDGES (Effective Portion of the Changes in Fair Value) - - VII. THE EFFECT OF CORRECTIONS OF THE ERRORS AND CHANGES IN THE ACCOUNTING POLICIES - - VIII. OTHER INCOME AND EXPENSES RECOGNISED UNDER SHAREHOLDERS EQUITY ACCORDANCE WITH TAS 1,116,860 (191,984) IX. DEFERRED TAX EFFECT OF REVALUATION AND VALUE INCREASES (293,464) 295,313 X. NET INCOME/EXPENSE DIRECTLY RECOGNISED UNDER SHAREHOLDERS EQUITY (I+II+ +IX) 2,645,971 (1,784,329) XI. PROFIT/LOSS FOR THE PERIOD 3,351,828 3,235, Net Changes in the Fair Values of Marketable Securities (Transfer to Profit/Loss) 170,766 (45,083) 11.2 The Portion of Derivative Financial Assets Held for Cash Flow Hedges Reclassified in and Transferred to Income Statement The Portion of Derivative Financial Assets Held for Net Foreign Investment Hedges Reclassified in and Transferred to Income Statement Other 3,181,062 3,281,004 XII. TOTAL PROFIT/LOSS RECOGNISED FOR THE PERIOD (X±XI) 5,997,799 1,451,592 9

16 TÜRKİYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY THOUSAND TL CHANGES IN SHAREHOLDERS EQUITY Paid-in Paid-in Capital Share Legal Statutory Extraordinary Other Net Current Prior Period Marketable Securities Tangible and Intangible Bonus Shares from Hedge Accumulated Rev. Reserve on Asset Total Shareholders'Equity Non-controlling Footnotes Share Cancellation Total Shreholder's Capital Inflation Adjustment Premium Profits Reserves Reserves Reserves Reserves Period Profit/(Loss) Profit / (Loss) Value Increase Fund Assets Revaluation Reserve Equity Participations Reserves Held for Sale and Discontinued Oper. Except Non-controlling Interest Interest Equity V-V PRIOR PERIOD (31/12/2013) I. Beginning Balance 4,500,000 1,615,938 33,940 2,031,309 48,553 8,318,990 3,822 2,802,512 2,613,053 - (1,179) - 21,966,938 2,891,817 24,858,755 II. Corrections Made According to TAS The Effect of Corrections of Errors The Effect of Changes in Accounting Policies III. Adjusted Beginning Balance (I+II) 4,500,000 1,615,938 33,940-2,031,309 48,553 8,318,990 3,822-2,802,512 2,613,053 - (1,179) - 21,966,938 2,891,817 24,858,755 Changes During the Period IV. Increase/Decrease Due to Mergers V. Marketable Securities Value Increase Fund (1,932,656) (1,932,656) (30,652) (1,963,308) VI. Hedge Reserves (Effective Portion) Cash Flow Hedges Net Foreign Investment Hedges VII. Revaluation Surplus on Tangible Assets VIII. Revaluation Surplus on Intangible Assets IX. Bonus Shares from Associates, Subsidiaries and Jointly Controlled Entities(Joint Ventures) X. Translation Differences , ,431 (1,542) 113,889 XI. The Effect of Disposal of Assets XII. The Effect of Reclassification of Assets XIII. The Effect of Changes in the Equity of Subsidiaries on the Equity of the Bank XIV. Capital Increase Cash Internal Sources XV. Share Issue XVI. Share Cancellation Profits XVII. Paid-in-Capital Inflation Adjustment XVIII. Other , ,229 (71) 33,158 XIX. Net Profit / Loss for the Period ,235, ,235, ,938 3,606,859 XX. Profit Distribution ,104 10,986 2,493, (3,417,313) (657,687) (97,040) (754,727) 20.1 Dividend Paid (796,618) (796,618) (97,609) (894,227) 20.2 Transfer to Reserves ,104 10,986 2,354, (2,620,695) Other , , ,500 Ending Balance (III+IV+V...+XVIII+XIX+XX) 4,500,000 1,615,938 33,940-2,286,486 59,539 10,812, ,149 3,235,921 (614,759) 680,397 - (1,179) ,761,176 3,133,450 25,894,626 CURRENT PERIOD (31/12/2014) I. Beginning Balance 4,500,000 1,615,938 33,940-2,286,486 59,539 10,812, ,149-2,621, ,397 - (1,179) ,761,176 3,133,450 25,894,626 Changes During the Period II. Increase/Decrease Due to Mergers III. Marketable Securities Value Increase Fund ,758, ,758,725 98,983 2,857,708 IV. Hedge Reserves (Effective Portion) Cash Flow Hedges Net Foreign Investment Hedges V. Revaluation Surplus on Tangible Assets VI. Revaluation Surplus on Intangible Assets VII. Bonus Shares from Associates, Subsidiaries and Jointly Controlled Entities(Joint Ventures) VIII. Translation Differences (70,404) (70,404) (679) (71,083) IX. The Effect of Disposal of Assets X. The Effect of Reclassification of Assets XI. The Effect of Changes in the Equity of Subsidiaries on the Equity of the Bank XII. Capital Increase Cash Internal Sources XIII. Share Issue XIV. Share Cancellation Profits XV. Paid-in-Capital Inflation Adjustment XVI. Other (*) ,010 (42,370) - (1,027) (42,032) (4,868) (46,900) XVII. Net Profit / Loss for the Period ,351, ,351, ,208 3,732,036 XVIII. Profit Distribution ,787 4,695 2,486, (3,269,053) (552,979) (100,947) (653,926) 18.1 Dividend Paid (649,410) (649,410) (101,516) (750,926) 18.2 Transfer to Reserves ,787 4,695 2,390, (2,619,643) Other (**) , , ,000 Ending Balance (I+II+III...+XVI+XVII+XVIII) 4,500,000 1,615,938 33,941-2,511,627 64,234 13,300,346 39,375 3,351,828 (648,918) 3,439,122 - (1,179) ,206,314 3,506,147 31,712,461 (*) The amount also includes the changes in Group's shares. (**) According to the Articles of Incorporation of the Bank, since a portion of the net profit for the period is distributed to the employees as a dividend, the provision provided for employee dividend distribution within the scope of TAS 19-Employee Benefits, has been added to distributable profit. 10

17 TÜRKİYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF CASH FLOWS THOUSAND TL CURRENT PERIOD PRIOR PERIOD Footnotes (01/01-31/12/2014) (01/01-31/12/2013) A. CASH FLOWS FROM BANKING OPERATIONS V-VI 1.1 Operating Profit Before Changes in Operating Assets and Liabilities 4,778,036 5,943, Interest Received 16,619,468 15,627, Interest Paid (9,098,592) (7,129,809) Dividend Received 71, , Fees and Commissions Received 2,434,577 2,400, Other Income 4,682,737 3,942, Collections from Previously Written Off Loans and Other Receivables 971, , Cash Payments to Personnel and Service Suppliers (4,657,996) (4,181,504) Taxes Paid (1,234,783) (958,677) Other (5,010,509) (4,853,581) 1.2 Changes in Operating Assets and Liabilities (8,920,141) (4,420,002) Net (Increase) Decrease in Financial Assets Held for Trading 459,266 (111,506) Net(Increase) Decrease in Financial Assets at Fair Value through Profit or Loss Net (Increase) Decrease in Due From Banks (2,155,635) (3,548,227) Net (Increase) Decrease in Loans (21,709,826) (23,354,766) Net (Increase) Decrease in Other Assets (1,625,666) (1,737,804) Net Increase (Decrease) in Bank Deposits 2,405, , Net Increase (Decrease) in Other Deposits 8,878,862 8,484, Net Increase (Decrease) in Funds Borrowed 6,103,793 5,960, Net Increase (Decrease) in Matured Payables Net Increase (Decrease) in Other Liabilities (1,276,577) 9,341,149 I. Net Cash Provided From Banking Operations (4,142,105) 1,523,980 B. CASH FLOWS FROM INVESTING ACTIVITIES II. Net Cash Provided from / Used in Investing Activities (2,664,351) (797,883) 2.1 Cash Paid for Purchase of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) (23,415) (323) 2.2 Cash Obtained from Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) 20, , Tangible Asset Purchases (586,724) (632,185) 2.4 Tangible Asset Sales 393, , Cash Paid for Purchase of Financial Assets Available for Sale (22,440,548) (14,650,450) 2.6 Cash Obtained from Sales of Financial Assets Available for Sale 13,727,434 11,058, Cash Paid for Purchase of Investment Securities Held to Maturity (86,112) (24,953) 2.8 Cash Obtained from Sales of Investment Securities Held to Maturity 6,564,238 2,927, Other (233,353) (226,634) C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net Cash Provided from / Used in Financing Activities 7,159,820 3,254, Cash Obtained from Funds Borrowed and Securities Issued 20,491,505 14,113, Cash Used for Repayment of Funds Borrowed and Securities Issued (12,580,759) (9,963,851) 3.3 Equity Instruments Dividends Paid (750,926) (894,227) 3.5 Payments for Finance Leases Other - - IV. Effect of Change in Foreign Exchange Rate on Cash and Cash Equivalents 166, ,339 V. Net Increase / (Decrease) in Cash and Cash Equivalents 519,707 4,459,370 VI. Cash and Cash Equivalents at Beginning of the Period 13,042,609 8,583,239 VII. Cash and Cash Equivalents at End of the Period 13,562,316 13,042,609 11