Türkiye Sınai Kalkınma Bankası Anonim Şirketi

Transcription

1 Türkiye Sınai Kalkınma Bankası Anonim Şirketi Publicly announced unconsolidated financial statements and related disclosures at March 31, 2018 together with auditor s review report and interim activity report (Convenience translation of publicly announced unconsolidated financial statements and independent auditor s review report originally issued in Turkish, See Note I. of Section Three)

2 Scope of Review A.Ş. the Bank ) at 31 Mareh 2018 and the related unconsolidated income statement, unconsolidated Introduction INTERIM REVWW REPORT (Convenience translation of the independent auditor s review report originafly issued in Turkish, See Note L of Section three) To the Board of Direetors of Türkiye Sınai Kalkınma Bankası A.Ş. We have reviewed the unconsolidated statemeat offinancial position oftürkiye Sınai Kalkınma Bankası Limited Review of Interim Financial Information Perfonned by the Independent Auditor of the Entiw. statement of income and expense items under shareholders equity, unconsolidated statement of changes responsibility is to express a conclusion on these interim financial statements based on our review. Ey Guney Bağımsız Denetim ve Tel tşo SMMM A.Ş. Fax Maslak MahaLlesi Eski Buyukdere ey.com Buliding a better Cad. Orjin Maslak Plaza Na: 27 Ticaret Sicil Na working world Sarıyer IstanbuL - Türkiye in shareholders equity, unconsolidated statement of cash flows anda summary of signiflcant accounting policies and other explanatory notes to the unconsolidated financial statemeats for the three-month period then ended. The Bank Management is responsible for the preparation and fair presentation of interim fınancial statements in accordance with the Regulation on Accounting Applications for Banks and Safeguarding of Documents published in the Offlcial Gazelle no dated 1 November 2006, and other regulations on accounting records of Banks published by Banking Regulation and Supen ision Agency and circulars and interprerntions published by Banking Regulation and Supervision Authodty and Turkish Accounting Standard 34 İnterim Financial Reporting for those matters not regulated by BRSA Legislation (together referred as BRSA Accounting and Financial Reporting Legislation ). Our \Ve conducted our review in aceordance with the Standard on Review Engagements (SRE) 2410, A review of interim financial information consists of making inquiries, primarily ofpersons responsible for financial reporting process, and applying analytical and other review procedures. A review of interim financial information is substantially Iess in scope than an independent audit performed in accordance with the lndependent Auditing Standards and the objective of which is to express an opinion on the ünancial statements. Consequently, a review of the interim financial infomıation does not provide assurance that the audit fırm wiil be aware of ali signiflcant matters which would have been identifıed in an audit. Accordingly, we do not express an opinion. A membe,tm, ol Emxı S Young Giabal Umeod

3 EY Building a befter working world Basis for Qualified Opinion As explained in Note 7 in the Explanations and Diselosures related to the Liabilities, the accompanying unconsolidated fınancial statements as nt 31 March 2018 include a free provision at an amount of TL thousands, of which TL thousands was provided in prior years and TL thousands in the current period by the Bank management, for the possible effects of the negative circumsiances which may arise in the economy or market conditions and include the reversal of deferred tax asset at an amount of TL thousands, which was accounted based on the free provision provided in 31 December Due to the fact that the above mentioned items do not meet the requirements of TAS 37, the Prior years income/losses as of 31 Match 2018 is understated by TL thousand after deducting the tax effect and the pretax income is overstated by TL thousand. Qualifled Opinion Based on our review, except for the e[fects of the matter on the unconsolidated financial statements described in the basis for qualified conclusion paragraph, nothing has come to our attention that causes us to believe tthat the accompanying unconsolidated fınancial information do not present fairiy in ali material respects the fınancial position of Türkiye Sınai Kalkınma Bankası A.S. at 31 March 2018 and the results of its operations and its cash flows for the three-month period then ended in accordance with the BRSA Accounting and Financial Reporting Legislation. Report on other regulatory requirements arising from legislation Based on our review, nothing has come to our attention that causes us ta believe that the financial information provided in the accompanying interim activity report in Section Seven, are not consistent with the unconsolidated fınancial statements and disclosures in ali material respects. Additional paragraph for convenience translation to English As explained in detail in Note 1. of Section Three, the effects of differences between accounting principles and standards set out by regulations in confonnity with BRSA Accounting and Reporting Legislation and the accounting principles generally accepted in countries in which the accompanying unconsolidated fınancial statements are to be distributed and international Financial Reporting Standards ( IFRS ) have not been quantifıed in the accompanying unconsolidated tinancial statements. Accordingly, the accompanying unconsolidated financial statements are not intended to present the financial position, results of operations and changes in fınancial position and cash flows in accordance with the accounting principles generally accepted in such countries and IFRS. bfty enetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi Global Limited Yaşar Pı tl / 2 May 2018 İstanbul, Türkiye (2>

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5 INDEX Page Number SECTION ONE General Information I. The Bank s incorporation date, beginning status, changes in the existing status... 1 II. Explanations regarding the Bank s shareholding structure, shareholders holding directly or indirectly, collectively or individually, the managing and controlling power and changes in current year, if any and explanations on the controlling group of the Bank... 1 III. Explanations regarding the chairman and the members of board of the directors, audit committee, general manager and assistant general managers and their shares and responsibilities in the Bank... 2 IV. Information about the persons and institutions that have qualified shares in the Bank... 3 V. Summary on the Bank s functions and areas of activity... 3 VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and short explanation about the institution subject to line-by-line method or proportional consolidation and institutions which are deducted from equity or not included in these three methods... 3 VII. The existing or potential, actual or legal obstacle on the transfer of shareholder s equity between the Bank and its subsidiaries or the reimbursement of liabilities... 4 VIII. Written policies of the Bank related to compliance to publicly disclosed obligations of the Bank and assessment of accuracy, frequency and compliance of mentioned disclosures... 4 SECTION TWO Unconsolidated Financial Statements I. Unconsolidated balance sheet II. Unconsolidated statement of off-balance sheet items... 9 III. Unconsolidated income statement IV. Unconsolidated statement of comprehensive income V. Unconsolidated statement of changes in equity VI. Unconsolidated statement of cash flows SECTION THREE Accounting Policies I. Basis of presentation II. Explanations on usage strategy of financial assets and foreign currency transactions III. Explanations on forward and option contracts and derivative instruments IV. Explanations on associates and subsidiaries V. Explanations on interest income and expenses VI. Explanations on fees and commission income and expenses VII. Explanations on financial assets VIII. Explanations on expected credit losses IX. Explanations on offsetting of financial assets and liabilities X. Explanations on derecognitionof financial instruments XI. Explanations on sales and repurchase aggrements and lending of securities XII. Explanations on assets held for sale and discontinued operations XIII. Explanations on goodwill and other intangible assets XIV. Explanations on tangible assets XV. Explanations on leasing transactions XVI. Explanations on provisions and contingent liabilities XVII. Explanations on liabilities regarding employee benefits XVIII. Explanations on taxation XIX. Additional explanations on borrowings XX. Explanations on share certificates issued XXI. Explanations on acceptances XXII. Explanations on government incentives XXIII. Explanations on segment reporting XXIV. Explanations on other matters XXV. Explanations on prior period accounting policies not valid for the current period SECTION FOUR Information on Financial Structure and Risk Management I. Explanations related to shareholders equity II. Explanations related to currency risk III. Explanations related to interest rate risk IV. Explanations related to stock position risk V. Explanations related to the liquidity risk management and liquidity coverage ratio VI. Explanations related to leverage ratio VII. Explanations related to risk management SECTION FIVE Explanations and Disclosures on Unconsolidated Financial Statements I. Explanations and disclosures related to the assets II. Explanations and disclosures related to the liabilities III. Explanations and disclosures related to the off-balance sheet items IV. Explanations and disclosures related to the income statement V. Explanations on the risk group of the Bank VI. Explanations related to the events after the reporting date SECTION SIX Auditors Limited Review Report I. Explanations on the auditors limited review report II. Explanations and notes prepared by independent auditors SECTION SEVEN Information On Interim Activity Report I. Interim period activity report included chairman of board of directors and CEO s assesments for the interim activities

6 FOR THE INTERIM PERIOD 1 JANUARY-31 MARCH 2018 SECTION ONE GENERAL INFORMATION I. The Bank s incorporation date, beginning status, changes in the existing status II. Türkiye Sınai Kalkınma Bankası A.Ş. ( The Bank ) was established in accordance with the decision of President of the Republic of Turkey numbered 3/11203 on 12 May This decision was declared by T.R. Office of Prime Ministry Procedures Directorate Decision Management on 12 May According to the classification set out in the Banking Law No: 5411, the status of the Bank is Development and Investment Bank. The Bank does not have the license of Accepting Deposit. Since the establishment date of the Bank, there is no change in its Development and Investment Bank status. Explanations regarding the Bank s shareholding structure, shareholders holding directly or indirectly, collectively or individually, the managing and controlling power and changes in current year, if any and explanations on the controlling group of the Bank Türkiye İş Bankası A.Ş. has the authority of managing and controlling power of the Bank directly or indirectly, alone or together with other shareholders. Shareholders of the Bank are as follows: Share Shareholding Paid in Unpaid Name Surname/Commercial Title Capital Rate (%) Capital Capital T. İş Bankası A.Ş. Group , T. Vakıflar Bankası T.A.O , Under Custody at Merkezi Kayıt Kuruluşu (Other Institutions and Individuals) , Total , Share Shareholding Paid in Unpaid Name Surname/Commercial Title Capital Rate (%) Capital Capital T. İş Bankası A.Ş. Group , T. Vakıflar Bankası T.A.O , Under Custody at Merkezi Kayıt Kuruluşu (Other Institutions and Individuals) , Total , The Bank shares are traded in Istanbul Stock Exchange ( BIST ) since 26 December The Bank s 50,65% of the shares belongs to İş Bank Group and 38,97% of these shares are in free floating and traded in BIST National Market with TSKB ticker. 1

7 FOR THE INTERIM PERIOD 1 JANUARY-31 MARCH 2018 SECTION ONE (Continued) GENERAL INFORMATION (Continued) III. Explanations regarding the chairman and the members of board of directors, audit committee, general manager and assistant general managers and their shares and responsibilities in the Bank The Chairman and The Members of Board of Directors: Name Surname Title (1) H. Ersin Özince Chairman of the Board of Directors Mehmet Şencan Yavuz Canevi Suat İnce Mehmet Emin Özcan Ebru Özşuca Mithat Rende (2) Zeynep Hansu Uçar Ahmet Hakan Ünal (3) Hüseyin Yalçın (3) Can Yücel General Manager and Vice Presidents Suat İnce Çiğdem İçel Name Surname Ece Börü (by proxy) (4) B. Gökhan Çanakpınar Ece Börü Hakan Aygen A. Ferit Eraslan Aslı Zerrin Hancı H. Yetkin Kesler Vice Chairman of the Board of Directors and Member of Audit Committee Member of the Board of Directors Member of the Board of Directors and General Manager Member of the Board of Directors Member of the Board of Directors and Member of Audit Committee Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors General Manager Title / Area of Responsibility Vice President Economic Research, Financial Instutitions, Development Finance Institutions and Engineering and Technical Consultancy Vice President Loans, Loan Monitoring and Loan Operations Vice President Support Services, System and Network Support and Application Development Vice President Budget Planning and Investor Relations, Financial Analysis and Valuation and Financial Control Vice President Corporate Finance, Corporate Banking and Project Finance Vice President Board of Internal Auditors, Internal Control and Risk Management Vice President Treasury, Treasury and Capital Markets Operations Vice President Pension and Assistance Funds, Human Resources and Corporate Communication, Enterprise Architecture and Process Management and Corporate Compliance (1) The shares of above directors in the Bank are symbolic. (2) In the Ordinary General Assembly meeting held on 23 March 2018, Mithat Rende was appointed as member of independent board within the scope of Corporate Governance Communiqué No. II-17.1 of the Capital Markets Board for three years. (3) In the Ordinary General Assembly meeting held on 23 March 2018, Kamil Yılmaz resigned from his duty. Ahmet Hakan Ünal and Hüseyin Yalçın was appointed as a member of the Board of Directors and started their duties by taking an oath as of 6 April (4) As of 31 March 2018, Ufuk Bala Yücel has resigned from her duty as Vice President of Loans, Loan Monitoring and Loan Operations due to retirement and Ece Börü has been appointed by proxy Vice President of Loans, Loan Monitoring and Loan Operations. According to the regulations on auditing in Articles of the Turkish Commercial Code numbered 6102, Güney Bağımsız Denetim ve Serbest Muhasebeci ve Mali Müşavirlik A.Ş. has been elected as the independent auditor for the year 2018 in the General Assembly Meeting held on 23 March

8 FOR THE INTERIM PERIOD 1 JANUARY-31 MARCH 2018 SECTION ONE (Continued) GENERAL INFORMATION (Continued) IV. Information about the persons and institutions that have qualified shares in the Bank Explanation about the people and institutions that have qualified shares control the Bank s capital directly or indirectly are described in General Information Section II. V. Summary on the Bank s functions and areas of activity The Bank is the first private development and investment bank which was established by the Council of Ministers resolution number of 3/11203 established in 1950 with the support of World Bank, Government of Republic of Turkey, Central Bank of Republic of Turkey and commercial banks. As per the articles of association published in the Official Gazette on 2 June 1950, the aim of the Bank is to support all private sector investments but mostly industrial sectors, to help domestic and foreign capital owners to finance the new firms and to help the improvement of Turkish capital markets. The Bank is succeeding its aims by financing, consulting, giving technical support and financial intermediary services. The Bank, which operates as a non-deposit accepting bank, played a major role on manufacturing and finance sectors in every phase of the economic development of Turkey. The Bank started its journey in 1950 financing the private sector investments in Turkey and today it provides loans and project finance with the goal of sustainable development to corporations in different fields. As a leader in meeting the long term financing needs of the private sector, the Bank also continues to offer solutions with respect to the newest needs and client demands. The Bank has executed marketing and valuation operations efficiently with two branches opened in Izmir and Ankara on April VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and short explanation about the institution subject to line-by-line method or proportional consolidation and institutions which are deducted from equity or not included in these three methods Due to differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Account Standards (TAS), the non-financial subsidiaries and associates, TSKB Gayrimenkul Değerleme A.Ş., TSKB Sürdürülebilirlik Danışmanlığı A.Ş., Terme Metal Sanayi ve Ticaret A.Ş. and Ege Tarım Ürünleri Lisanslı Depoculuk A.Ş. are not consolidated since they are not in scope of financial institutions according to related Communiqué. The Bank and its financial institutions, Yatırım Finansman Menkul Değerler A.Ş., TSKB Gayrimenkul Yatırım Ortaklığı A.Ş. are included in the accompanying consolidated financial statements line by line consolidation method; İş Finansal Kiralama A.Ş., İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. and İş Faktoring A.Ş. are included in the accompanying consolidated financial statements by equity method. Financial institutions included in the consolidation are determined in accordance with Communiqué on Preparation of Consolidated Financial Statements of Banks published in the Official Gazette dated 8 November 2006 numbered The Bank has no partnership share on banks and financial institutions, with shareholding of more than 10% and deducted from capital. Yatırım Finansman Menkul Değerler A.Ş. : Yatırım Finansman Menkul Değerler A.Ş. ( YF ) was established in 15 October The Company s purpose is to perform capital market operations specified in the Company s articles of association in accordance with the CMB and the related legislation. The Company was merged with TSKB Menkul Değerler A.Ş. on 29 December The share of Türkiye Sınai Kalkınma Bankası A.Ş. is 95,78%. The company s headquarters is located at Istanbul/Turkey. 3

9 FOR THE INTERIM PERIOD 1 JANUARY-31 MARCH 2018 SECTION ONE (Continued) GENERAL INFORMATION (Continued) VI. VII. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and short explanation about the institution subject to line-by-line method or proportional consolidation and institutions which are deducted from equity or not included in these three methods (continued) TSKB Gayrimenkul Yatırım Ortaklığı A.Ş. : TSKB Gayrimenkul Yatırım Ortaklığı A.Ş. ( TSKB GYO ) was established on 3 February Core business of the Company is real estate trust to construct and develop a portfolio of properties and make investment to capital market instruments linked to properties. The share of Türkiye Sınai Kalkınma Bankası A.Ş. is 70,84%. The company s headquarters is located at Istanbul/Turkey. İş Finansal Kiralama A.Ş. : İş Finansal Kiralama A.Ş. ( İş Finansal Kiralama ) was established on 8 February The Company has been performing its operations in accordance with the Financial Leasing, Factoring and Financing Companies Law No The purpose of the Company is performing domestic and foreign financial leasing activities and all kind of rental (leasing) transactions within the framework of legislation. The share of Türkiye Sınai Kalkınma Bankası A.Ş. is 29,46%. The company s headquarters is located at Istanbul/Turkey. İş Faktoring A.Ş. : İş Faktoring A.Ş. ( İş Faktoring ), was incorporated in Turkey on 4 July 1993 and it has been performing its operations in accordance with the Financial Leasing, Factoring and Financing Companies Law No: The Company s main operation is domestic and export factoring transactions. The share of Türkiye Sınai Kalkınma Bankası A.Ş. is 21,75%. The company s headquarters is located at Istanbul/Turkey. İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. : İş Girişim Sermayesi Yatırım Ortaklığı A.Ş ( İş Girişim ) started its venture capital operations by the decision of Capital Market Board dated 5 October The principal activity of the Company is to perform long-term investments to venture capital companies mainly established or to be established in Turkey, have development potential and require resource. The share of Türkiye Sınai Kalkınma Bankası A.Ş. is 16,67%. The company s headquarters is located at Istanbul/Turkey. The existing or potential, actual or legal obstacle on the transfer of shareholder s equity between the Bank and its subsidiaries or the reimbursement of liabilities There is no existing or potential, actual or legal obstacle to the reimbursement of liabilities between the Bank and its subsidiaries. The Bank charge or pay cost of the services according to the service agreements done between the Bank and its subsidiaries. Dividend distribution from shareholders equity is made according to related legal regulations. VIII. Written policies of the Bank related to compliance to publicly disclosed obligations of the Bank and assessment of accuracy, frequency and compliance of mentioned disclosures The Bank s Disclosure Policy approved by the meeting of the Board of Directors has entered into force on 28 February Compliance to public disclosure obligations, frequency of public disclosures and tools and methods used for public disclosures are explained in the disclosure policy of the Bank accessible from the Bank s corporate website. 4

10 UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) AS OF 31 MARCH 2018 Reviewed 31 March 2018 ASSETS Section 5 Note I TL FC Total I. FINANCIAL ASSETS (NET) Cash and Cash Equivalents Cash and Balances with Central Bank (1) Banks (3) Money Market Placements Financial Assets at Fair Value Through Profit or Loss Government Debt Securities Equity Instruments Other Financial Assets Financial Assets at Fair Value Through Other Comprehensive Income (4) Government Debt Securities Equity Instruments Other Financial Assets Financial Assets Measured at Amortized Cost (6) Government Debt Securities Other Financial Assets Derivative Financial Assets (2) Derivative Financial Assets at Fair Value Through Profit or Loss Derivative Financial Assets at Fair Value Through Other Comprehensive Income Non-Performing Financial Assets Expected Loss Provision (-) II. LOANS (Net) (5) Loans Measured at Amortized Cost Fair Value Through Profit or Loss Fair Value Through Other Comprehensive Income Lease Receivables (10) Financial Lease Receivables Operating Lease Receivables Unearned Income (-) Factoring Receivables Measured at Amortized Cost Fair Value Through Profit or Loss Fair Value Through Other Comprehensive Income Non-Performing Loans Expected Credit Loss (-) Months Expected Credit Losses (Stage I) Significant Increase in Credit Risk (Stage II) Credit-Impaired Losses (Stage III / Special Provision ) III. PROPERTY AND EQUIPMENT HELD FOR SALE PURPOSE AND RELATED TO DISCONTINUED OPERATIONS (NET) (16) Held for Sale Purpose Related to Discontinued Operations IV. EQUITY INVESTMENTS Investments in Associates (Net) (7) Accounted Under on Equity Method Unconsolidated Associates Subsidiaries (Net) (8) Unconsolidated Financial Subsidiaries Unconsolidated Non-Financial Subsidiaries Entities under Common Control (Joint Venture) (Net) Joint Ventures Valued Based on Equity Method Unconsolidated Joint Ventures V. TANGIBLE ASSETS (Net) (12) VI. INTANGIBLE ASSETS (Net) (13) Goodwill Other VII. INVESTMENT PROPERTY (Net) (14) VIII. CURRENT TAX ASSET IX. DEFERRED TAX ASSET (15) X. OTHER ASSETS (17) TOTAL ASSETS Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatement for the year 2017 is related to the Bank's application of TAS 27 and is disclosed in Section Three, Note XXIV.1. The accompanying notes are an integral part of these unconsolidated financial statements. 5

11 UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) AS OF 31 MARCH 2018 ASSETS RESTATED Audited 31 December 2017 Section 5 Note I TL FC Total I. CASH AND BALANCES WITH CENTRAL BANK (1) II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (Net) (2) Trading Financial Assets Government Debt Securities Share Certificates Derivative Financial Assets Held For Trading Other Marketable Securities Financial Assets At Fair Value Through Profit And Loss Government Debt Securities Share Certificates Other Marketable Securities Loans III. BANKS (3) IV. MONEY MARKET PLACEMENTS Interbank Money Market Placements Istanbul Stock Exchange Money Market Placements Receivables From Reverse Repurchase Agreements V. FINANCIAL ASSETS AVAILABLE FOR SALE (Net) (4) Share Certificates Government Debt Securities Other Marketable Securities VI. LOANS AND RECEIVABLES (5) Loans And Receivables Loans to the Risk Group of the Bank Government Debt Securities Other Non-Performing Loans Specific Provisions (-) (48.540) (982) (49.522) VII. FACTORING RECEIVABLES VIII. HELD TO MATURITY INVESTMENTS (Net) (6) Government Debt Securities Other Marketable Securities IX. INVESTMENTS IN ASSOCIATES (Net) (7) Accounted for under Equity Method Unconsolidated Associates Financial Investments Non-Financial Investments X. INVESTMENTS IN SUBSIDIARIES (Net) (8) Unconsolidated Financial Subsidiaries Unconsolidated Non-Financial Subsidiaries XI. ENTITIES UNDER COMMON CONTROL (JOINT VENT.) (Net) (9) Consolidated under Equity Method Unconsolidated Financial Subsidiaries Non-Financial Subsidiaries XII. LEASE RECEIVABLES (10) Finance Lease Receivables Operating Lease Receivables Other Unearned Income (-) - (10.547) (10.547) XIII. DERIVATIVE FINANCIAL ASSETS FOR HEDGING PURPOSES (11) Fair Value Hedge Cash Flow Hedge Hedge of Net Investment in Foreign Operations XIV. TANGIBLE ASSETS (Net) (12) XV. INTANGIBLE ASSETS (Net) (13) Goodwill Other XVI. INVESTMENT PROPERTY (Net) (14) XVII. TAX ASSET (15) Current Tax Asset Deferred Tax Asset XVIII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) (16) Held for Sale Purpose Related to Discontinued Operations XIX. OTHER ASSETS (17) TOTAL ASSETS Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatement for the year 2017 is related to the Bank's application of TAS 27 and is disclosed in Section Three, Note XXIV.1. The accompanying notes are an integral part of these unconsolidated financial statements. 6

12 UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) AS OF 31 MARCH 2018 Reviewed 31 March 2018 LIABILITIES Section 5 Note II TL FC Total I. DEPOSITS (1) II. FUNDS BORROWED (3) III. MONEY MARKET BALANCES IV. MARKETABLE SECURITIES ISSUED (Net) (3) Bills Assets Backed Securities Bonds V. FUNDS Borrower Funds Other VI. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS VII. DERIVATIVE FINANCIAL LIABILTIES Derivative Financial Liabilities at Fair Value Through Profit or Loss Derivative Financial Liabilities at Fair Value Through Other Comprehensive Income VIII. FACTORING LIABILITIES IX. LEASE LIABILITIES (5) Financial Lease Operating Lease Other Deferred Financial Lease Expenses ( - ) X. PROVISIONS (7) Restructuring Provisions Reverse for Employee Benefits Insurance Technical Provisions (Net) Other Provisions XI. CURRENT TAX LIABILITY (8) XII. DEFERRED TAX LIABILITY (8) XIII. LIABILITIES FOR PROPERTY AND EQUIPMENT HELD FOR SALE AND RELATED TO DISCONTINUED OPERATIONS (Net) (9) Held for Sale Purpose Related to Discontinued Operations XIV. SUBORDINATED DEBT INSTRUMENTS (10) Loans Other Debt Instruments XV. OTHER LIABILITIES XVI. SHAREHOLDERS EQUITY (10.643) Paid-in capital (11) Capital Reserves Share Premium Share Cancellation Profits Other Capital Reserves Accumulated Other Comprehensive Income or Loss Not Reclassified Through Profit or Loss Accumulated Other Comprehensive Income or Loss Reclassified Through Profit or Loss (11) (27.452) (10.643) (38.095) 16.5 Profit Reserves Legal Reserves Status Reserves Extraordinary Reserves Other Profit Reserves Profit Or Loss Prior Years' Profit/Loss Current Year Profit/Loss Non-Controlling Interests TOTAL LIABILITIES AND EQUITY Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatement for the year 2017 is related to the Bank's application of TAS 27 and is disclosed in Section Three, Note XXIV.1. The accompanying notes are an integral part of these unconsolidated financial statements. 7

13 UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) AS OF 31 MARCH 2018 LIABILITIES RESTATED Audited 31 December 2017 Section 5 Note II TL FC Total I. DEPOSITS (1) Deposits from Risk Group of the Bank Other II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) III. FUNDS BORROWED (3) IV. MONEY MARKET BALANCES Interbank Money Market Takings Istanbul Stock Exchange Money Market Takings Funds Provided Under Repurchase Agreements V. MARKETABLE SECURITIES ISSUED (Net) (3) Bills Asset Backed Securities Bonds VI. BORROWER FUNDS Borrower Funds Others VII. MISCELLANEOUS PAYABLES VIII. OTHER LIABILITIES (4) IX. FACTORING PAYABLES X. LEASE PAYABLES (5) Finance Lease Payables Operating Lease Payables Other Deferred Finance Lease Expenses (-) XI. DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING PURPOSES (6) Fair Value Hedge Cash Flow Hedge Hedge Of Net Investment In Foreign Operations XII. PROVISIONS (7) General Loan Loss Provisions Restructuring Provisions Reserve For Employee Benefits Insurance Technical Reserves (Net) Other Provisions XIII. TAX LIABILITY (8) Current Tax Liability Deferred Tax Liability XIV. PAYABLES RELATED TO ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (NET) (9) Held For Sale Discontinued Operations XV. SUBORDINATED LOANS (10) XVI. SHAREHOLDERS' EQUITY Paid-In Capital (11) Capital Reserves Share Premium Share Cancellation Profits Marketable Securities Value Increase Fund (11) (18.040) (5.600) Tangible Assets Revaluation Differences (11) Intangible Assets Revaluation Differences Investment Property Revaluation Differences Bonus Shares Obtained From Associates, Subsidiaries And Jointly Controlled Entities (Joint Vent.) Hedging Funds (Effective Portion) Accumulated Valuation Differences From Assets Held For Sale And From Discontinued Operations Other Capital Reserves Profit Reserves Legal Reserves (11) Statutory Reserves Extraordinary Reserves (11) Other Profit Reserves Profit Or Loss Prior Years' Profit/Loss Current Year Profit/Loss TOTAL LIABILITIES AND EQUITY Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatement for the year 2017 is related to the Bank's application of TAS 27 and is disclosed in Section Three, Note XXIV.1. The accompanying notes are an integral part of these unconsolidated financial statements. 8

14 UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET AS OF 31 MARCH 2018 OFF BALANCE SHEET Reviewed 31 March 2018 Audited 31 December 2017 Section 5 Note III TL FC Total TL FC Total A. OFF-BALANCE SHEET COMMITMENTS AND CONTINGENCIES (I+II+III) I. GUARANTEES AND COLLATERALS (1) Letters of Guarantee Guarantees Subject to State Tender Law Guarantees Given for Foreign Trade Operations Other Letters of Guarantee Bank Acceptances Import Letter of Acceptance Other Bank Acceptance Letters of Credit Documantery Letters of Credit Other Letters of Credit Prefinancing Given as Guarantee Endorsements Endorsements to the Central Bank of Turkey Other Endorsements Securities Issue Purchase Guarantees Factoring Guarantees Other Guarantess Other Collaterals II. COMMITMENTS (1) Irrevocable Commitments Forward Asset Purchase and Sale Commitments Forward Deposit Purchase and Sales Commitments Share Capital Commitments to Associates and Subsidiaries Loan Granting Commitments Securities Underwriting Commitments Commitments for Reserve Deposit Requirements Payment Commitment for Checks Tax and Fund Liabilities from Export Commitments Commitments for Credit Card Expenditure Limits Commitments for Promotions Related with Credit Cards and Banking Activities Receivables from Short Sale Commitments Payables for Short Sale Commitments Other Irrevocable Commitments Revocable Commitments Revocable Loan Granting Commitments Other Revocable Commitments III. DERIVATIVE FINANCIAL INSTRUMENTS (2) Derivative Financial Instruments for Hedging Purposes Fair Value Hedge Cash Flow Hedge Hedge of Net Investment in Foreign Operations Held for Trading Transactions Forward Foreign Currency Buy/Sell Transactions Forward Foreign Currency Transactions-Buy Forward Foreign Currency Transactions-Sell Swap Transactions Related to Foreign Currency and Interest Rate Foreign Currency Swap-Buy Foreign Currency Swap-Sell Interest Rate Swap-Buy Interest Rate Swap-Sell Foreign Currency, Interest Rate, and Securities Options Foreign Currency Options-Buy Foreign Currency Options-Sell Interest Rate Options-Buy Interest Rate Options-Sell Securities Options-Buy Securities Options-Sell Foreign Currency Futures Foreign Currency Futures-Buy Foreign Currency Futures-Sell Interest Rate Futures Interest Rate Futures-Buy Interest Rate Futures-Sell Other B. CUSTODY AND PLEDGES SECURITIES (IV+V+VI) IV. ITEMS HELD IN CUSTODY Customers Securities Held Investment Securities Held in Custody Checks Received for Collection Commercial Notes Received for Collection Other Assets Received for Collection Assets Received for Public Offering Other Items Under Custody Custodians V. PLEDGES ITEMS Marketable Securities Guarantee Notes Commodity Warranty Real Estate Other Pledged Items Pledged Items-Depository VI. ACCEPTED BILL OF EXCHANGE AND COLLATERALS TOTAL OFF BALANCE SHEET ITEMS (A+B) The accompanying notes are an integral part of these unconsolidated financial statements. 9

15 UNCONSOLIDATED STATEMENT OF INCOME FOR THE THREE-MONTH PERIOD THEN ENDED 31 MARCH 2018 INCOME AND EXPENSE ITEMS Section 5 Note IV Reviewed 1 January March 2018 I. INTEREST INCOME (1) Interest on Loans Interest Received from Reserve Deposits Interest Received from Banks Interest Received from Money Market Placements Interest Received from Marketable Securities Portfolio Fair Value through Profit or Loss Fair Value Through other Comprehensive Income Measured at Amortized Cost Finance Lease Income Other Interest Income 772 II. INTEREST EXPENSES (-) (2) Interest on Deposits Interest on Funds Borrowed Interest on Money Market Borrowings Interest on Securities Issued Other Interest Expense 220 III. NET INTEREST INCOME (I - II) IV. NET FEES AND COMMISSIONS INCOME / EXPENSES Fees and Commissions Received Non-cash Loans Other Fees and Commissions Paid (-) Non-cash Loans Other V. PERSONNEL EXPENSES (-) VI DIVIDEND INCOME (3) VII. NET TRADING INCOME (4) (18.067) 7.1 Securities Trading Gains / (Losses) Derivative Financial Instruments Gains / Losses Foreign Exchange Gains / Losses (Net) (22.925) VIII. OTHER OPERATING INCOME (5) IX. GROSS OPERATING INCOME (III+IV+V+VI+VII+VIII) X. EXPECTED CREDIT LOSS (-) (6) XI. OTHER OPERATING EXPENSES (-) (7) XII. NET OPERATING INCOME/(LOSS) (IX-X-XI) XIII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - XIV. PROFIT / (LOSS) ON EQUITY METHOD XV. GAIN / (LOSS) ON NET MONETARY POSITION - XVI. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XII+...+XV) XVII. TAX PROVISION FOR CONTINUED OPERATIONS (±) (8) Provision for Current Income Taxes Deferred Tax Income Effect (+) Deferred Tax Expense Effect (-) - XVIII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XVI±XVII) (9) XIX. INCOME ON DISCONTINUED OPERATIONS Income on Assets Held for Sale Income on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Venture) Income on Other Discontinued Operations - XX. LOSS FROM DISCONTINUED OPERATIONS (-) Loss from Assets Held for Sale Loss on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Venture) Loss from Other Discontinued Operations - XXI. PROFIT / (LOSS) ON DISCONTINUED OPERATIONS BEFORE TAXES (XIX-XX) - XXII. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) Provision for Current Income Taxes Deferred Tax Expense Effect (+) Deferred Tax Income Effect (-) - XXIII. NET PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XXI±XXII) - XXIV. NET PROFIT/LOSS (XVIII+XXIII) (10) Earning / (loss) per share 0,066 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatement for the year 2017 is related to the Bank's application of TAS 27 and is disclosed in Section Three, Note XXIV.1. The accompanying notes are an integral part of these unconsolidated financial statements. 10

16 UNCONSOLIDATED STATEMENT OF INCOME FOR THE THREE-MONTH PERIOD THEN ENDED 31 MARCH 2018 INCOME AND EXPENSE ITEMS Section 5 Note IV RESTATED Reviewed 1 January March 2017 I. INTEREST INCOME (1) Interest on Loans Interest on Reserve Requirements Interest on Banks Interest on Money Market Transactions Interest on Marketable Securities Portfolio Trading Financial Assets Financial Assets at Fair Value Through Profit or Loss Available-for-Sale Financial Assets Held-to-Maturity Investments Financial Lease Income Other Interest Income 490 II. INTEREST EXPENSE (-) (2) Interest on Deposits Interest on Funds Borrowed IInterest Expense on Money Market Transactions Interest on Securities Issued Other Interest Expenses 259 III. NET INTEREST INCOME ( I - II ) IV. NET FEES AND COMMISSIONS INCOME Fees and Commissions Received Non-Cash Loans Other Fees and Commissions Paid (-) Non-Cash Loans (-) Other (-) V. DIVIDEND INCOME (3) VI. TRADING INCOME / (LOSS) (Net) (4) (1.048) 6.1 Trading Gains / (Losses) on Securities Gains / (Losses) on Derivative Financial Transactions (6.075) 6.3 Foreign Exchange Gains / (Losses) VII. OTHER OPERATING INCOME (5) VIII. TOTAL OPERATING INCOME (III+IV+V+VI+VII) IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) X. OTHER OPERATING EXPENSES (-) (7) XI. NET OPERATING INCOME / (LOSS) (VIII-IX-X) XII. EXCESS AMOUNT RECORDED AS INCOME AFTER MERGER - XIII. INCOME / (LOSS) FROM INVESTMENTS IN SUBSIDIARIES CONSOLIDATED BASED ON EQUITY METHOD XIV. INCOME / (LOSS) ON NET MONETARY POSITION - XV. PROFIT / (LOSS) BEFORE TAX FROM CONTINUED OPERATIONS (XI+...+XIV) (8) XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (33.794) 16.1 Current Tax Provision (42.399) 16.2 Deferred Tax Provision XVII. CURRENT PERIOD PROFIT / LOSS FROM CONTINUED OPERATIONS (XV±XVI) (10) XVIII. INCOME FROM DISCONTINUED OPERATIONS Income from Non-Current Assets Held for Sale Profit from Sales of Associates, Subsidiaries and Joint Ventures Income from Other Discontinued Operations - XIX. EXPENSES FROM DISCONTINUED OPERATIONS (-) Expenses for Non-Current Assets Held for Sale Loss from Sales of Associates, Subsidiaries and Joint Ventures Expenses for Other Discontinued Operations - XX. PROFIT / LOSS BEFORE TAX FROM DISCONTINUED OPERATIONS (XVIII-XIX) - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) Current Tax Provision Deferred Tax Provision - XXII. CURRENT PERIOD PROFIT / LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - XXIII. NET INCOME / LOSS (XVII+XXII) (10) Earning / (loss) per share (Full Kuruş) 0,071 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatement for the year 2017 is related to the Bank's application of TAS 27 and is disclosed in Section Three, Note XXIV.1. The accompanying notes are an integral part of these unconsolidated financial statements. 11