AKBANK T.A.Ş. PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS AND RELATED DISCLOSURES AT 30 SEPTEMBER 2018 TOGETHER WITH AUDITOR S REVIEW REPORT

Transcription

1 PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS AND RELATED DISCLOSURES AT 30 SEPTEMBER 2018 TOGETHER WITH AUDITOR S REVIEW REPORT (Convenience translation of publicly announced consolidated financial statements, related disclosures and auditor s review report originally issued in Turkish, See Note. I.b of Section three)

2

3 CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS, RELATED DISCLOSURES ORIGINALLY ISSUED IN TURKISH, SEE NOTE I.b OF SECTION THREE THE CONSOLIDATED FINANCIAL REPORT OF AS OF 30 SEPTEMBER 2018 Address : Sabancı Center 34330, 4. Levent / İstanbul Telephone : (0 212) Fax : (0 212) Website : The consolidated financial report for the nine-month-period, prepared in accordance with Communiqué on the Financial Statements and the Related Policies and Disclosures to be Publicly Announced as regulated by the Banking Regulation and Supervision Agency, is consist of the sections listed below. Section One - GENERAL INFORMATION ABOUT THE PARENT BANK Section Two - CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK Section Three - EXPLANATIONS ON ACCOUNTING POLICIES Section Four - INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP Section Five - INFORMATION AND DISCLOSURES RELATED TO CONSOLIDATED FINANCIAL STATEMENTS Section Six - EXPLANATIONS ON AUDITOR S REVIEW REPORT Section Seven - INFORMATION ON INTERIM ACTIVITY REPORT Investments in associates, joint ventures and subsidiaries whose financial statements have been consolidated in this reporting package are as follows: Subsidiaries Investments in Associates Joint Ventures 1. Ak Finansal Kiralama A.Ş Ak Yatırım Menkul Değerler A.Ş Ak Portföy Yönetimi A.Ş Akbank AG AkÖde Elektronik Para ve Ödeme Hizmetleri A.Ş. - - A.R.T.S. Ltd., which is not subsidiary of the Bank but over which the Bank has 100% controlling power, has been included in the consolidation due to the reason that this company is Structured Entity. The accompanying consolidated financial statements and notes to these financial statements for the nine-month-period which are expressed, unless otherwise stated, in thousands of Turkish Lira (TL), have been prepared based on the accounting books of the Bank in accordance with the Regulation on Accounting Applications for Banks and Safeguarding of Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards, related appendices and interpretations on these, and have been independently reviewed. 24 October 2018 Suzan SABANCI DİNÇER Hayri ÇULHACI Ş.Yaman TÖRÜNER S. Hakan BİNBAŞGİL Türker TUNALI Zeynep TERZİOĞLU Chairman of the Head of the Member of the CEO Executive Vice Senior Vice Board of Directors Audit Committee Audit President President Committee Contact information of the personnel in charge of addressing questions regarding this financial report: Name-Surname / Title : Zeynep TERZİOĞLU / Senior Vice President Phone No : (0 212) Fax No : (0 212)

4 SECTION ONE Page General Information about the Bank I. Bank s foundation date, start-up status, history regarding the changes in this status 1 II. Explanation about the Bank s capital structure, shareholders of the Bank who are in charge of the management and/or auditing of the Bank directly or indirectly, changes in these matters (if any) and the Group the Bank belongs to 1 III. Explanation on the board of directors, members of the audit committee, president and executive vice presidents, if available, shares of the Bank they possess and their areas of responsibility 1 IV. Information on the individual and corporate shareholders having control shares of the Bank 2 V. Information on the Bank s service types and fields of operation 2 VI. A Short Explanation on the differences between the Communique on Consolidated Financial Statement Reporting and the consolidation procedures required by Turkish Accounting Standards and about institutions that are subject to full consolidation, proportional consolidation, by way of deduction from capital or those that are subject to none 2 VII. Existing or potential, actual or legal obstacles to immediate transfer of capital between parent bank and its subsidiaries and repayment of debts 2 SECTION TWO Consolidated Financial Statements of the Bank I. Balance sheet 3 II. Off Balance Sheet Commitments 7 III. Income statement 9 IV. Statement of profit or loss and other comprehensive income 11 V. Statement of changes in shareholders equity 13 VI. Statement of cash flows 15 SECTION THREE Explanations on Accounting Policies I. Explanations on basis of presentation 17 II. Explanations on strategy of using financial instruments and explanations on foreign currency transactions 18 III. Explanations on equity investments 18 IV. Explanations on interest income and expense 19 V. Explanations on fee and commission income and expenses 19 VI. Explanations on financial assets 19 VII. Explanations on expected credit losses 21 VIII. Explanations on offsetting financial instruments 22 IX. Explanations on sales and repurchase agreements and securities lending transactions 22 X. Explanations on property and equipment held for sale purpose and related to discontinued operations and liabilities related with these assets 22 XI. Explanations on goodwill and other intangible assets 22 XII. Explanations on property and equipment 22 XIII. Explanations on leasing transactions 23 XIV. Explanations on provisions and contingent liabilities 23 XV. Explanations on contingent assets 24 XVI. Explanations on obligations related to employee rights 24 XVII. Explanations on taxation 25 XVIII. Explanations on borrowings 26 XIX. Explanations on issuance of share certificates 26 XX. Explanations on avalized drafts and acceptances 26 XXI. Explanations on government grants 26 XXII. Explanations on segment reporting 26 XXIII. Profit reserves and profit appropriation 27 XXIV. Earnings per share 27 XXV. Related parties 27 XXVI. Cash and cash equivalent assets 27 XXVII. Reclassifications 28 XXVIII. Disclosures of IFRS 9 Financial Instruments Standard 28 XXIX. Explanations on prior period accounting policies not valid for the current period 31 SECTION FOUR Information Related to Financial Position and Risk Management of the Group I. Explanations on equity 34 II. Explanations on currency risk 43 III. Explanations on interest rate risk 45 IV. Explanations on position risk of equity securities 47 V. Explanations on liquidity risk management and liquidity coverage ratio 47 VI. Explanations on leverage ratio 53 VII. Explanations on risk management target and policies 55 VIII. Explanations on hedge transactions 57 IX. Explanations on business segments 61 SECTION FIVE Information and Disclosures Related to Consolidated Financial Statements I. Explanations and notes related to consolidated assets 62 II. Explanations and notes related to consolidated liabilities 81 III. Explanations and notes related to consolidated off-balance sheet accounts 90 IV. Explanations and notes related to consolidated income statement 92 V. Explanations and notes related to consolidated statement of cash flows 99 VI. Explanations and notes related to Bank s risk group 101 VII. Explanations and notes related to subsequent events 103 SECTION SIX Explanations on Auditor s Review Report I. Explanations on interim review auditor s report 104 II. Explanations on notes prepared by independent auditors 104 SECTION SEVEN Information on Interim Activity Report I. Interim period activity report included chairman of the board of directors and CEO s assessments for the interim activities 108

5 SECTION ONE GENERAL INFORMATION ABOUT THE BANK I. BANK S FOUNDATION DATE, START-UP STATUS, HISTORY REGARDING THE CHANGES IN THIS STATUS: Akbank T.A.Ş. ( the Bank, the Parent Bank or Akbank ) was established on 30 January 1948 as a private commercial bank, in accordance with the decision of the Council of Ministers, No.3/6710 and is authorized to perform all economic, financial and commercial activities, which are allowed by the laws of the Turkish Republic ( T.C. ). The status of the Bank has not changed since its foundation. II. EXPLANATION ABOUT THE BANK S CAPITAL STRUCTURE, SHAREHOLDERS OF THE BANK WHO ARE IN CHARGE OF THE MANAGEMENT AND/OR AUDITING OF THE BANK DIRECTLY OR INDIRECTLY, CHANGES IN THESE MATTERS (IF ANY) AND THE GROUP THE BANK BELONGS TO: The Bank s shares have been quoted on the Borsa Istanbul ( BIST ) since In 1998, 4,03% of the outstanding share capital of the Bank was offered and sold in an international offering outside of Turkey in the form of Ordinary Shares and American Depository Receipts ( ADRs ). As of 30 September 2018, approximately 51% of the shares are publicly traded, including the ADRs (31 December 2017: 51%). The major shareholder of the Parent Bank, directly or indirectly, is Sabancı Group. III. EXPLANATION ON THE BOARD OF DIRECTORS, MEMBERS OF THE AUDIT COMMITTEE, PRESIDENT AND EXECUTIVE VICE PRESIDENTS, IF AVAILABLE, SHARES OF THE BANK THEY POSSESS AND THEIR AREAS OF RESPONSIBILITY: Title Name Responsibility Education Chairman: Suzan SABANCI DİNÇER Chairman and Executive Board Member Graduate Board of Directors: Hayri ÇULHACI Vice Chairman and Executive Board Member Graduate A. Fuat AYLA Executive Board Member Undergraduate Ş. Yaman TÖRÜNER Board Member Undergraduate A. Aykut DEMİRAY Board Member Undergraduate I. Aydın GÜNTER Board Member Undergraduate Emre DERMAN Board Member Graduate Can PAKER Board Member PhD K. Özgür Demirtaş Board Member PhD S. Hakan BİNBAŞGİL Board Member and CEO Graduate President and CEO: S. Hakan BİNBAŞGİL CEO Graduate Head of Internal Audit: Eyüp ENGİN Head of Internal Audit Undergraduate Executive Vice Presidents: Bülent OĞUZ SME Banking Graduate H.Burcu CİVELEK YÜCE Human Resources and Strategy Graduate Ege GÜLTEKİN Credit Monitoring and Follow-up Graduate A.Özer İSFENDİYAROĞLU Consumer Banking Graduate Levent ÇELEBİOĞLU Corporate and Investment Banking Undergraduate Emin Tolga ULUTAŞ Direct Banking Graduate N. İlker ALTINTAŞ Technology and Operation PhD Mehmet Hakan TUGAL Commercial Banking Graduate Türker TUNALI Financial Coordination Undergraduate Ali Batu KARAALİ Treasury Graduate Şahin Alp KELER Private Banking and Wealth Management PhD Yunus Emre ÖZBEN Credit Allocation Graduate Internal Audit Committee: Hayri ÇULHACI Head of the Audit Committee Graduate Ş. Yaman TÖRÜNER Member of the Audit Committee Undergraduate The shares of individuals above are insignificant in the Parent Bank. 1

6 In the Ordinary General Assembly Meeting of the Bank held on 26 March 2018, Kemal Özgür Demirtaş has been assigned as a new member of the Bank s new Board of Directors, instead of Erol Sabancı. Yunus Emre Özben has been assigned on 28 August 2018 as Executive Vice President responsible of Credit Allocation Unit instead of Hasan Recai Arabacı who has resigned from his position on 14 August IV. INFORMATION ON THE INDIVIDUAL AND CORPORATE SHAREHOLDERS HAVING CONTROL SHARES OF THE BANK: Share Amounts Share Paid-in Capital Unpaid Name/Commercial Title (Nominal) Percentages (Nominal) Portion Hacı Ömer Sabancı Holding A.Ş ,75 % V. INFORMATION ON THE BANK S SERVICE TYPES AND FIELDS OF OPERATION: The Bank s core business activities consist of consumer banking, commercial banking, SME banking, corporate-investment banking and private banking and wealth management, foreign exchange, money markets, securities transactions (treasury transactions) and international banking services. In addition to regular banking operations, the Bank also provides insurance intermediary services as an agency of Aksigorta A.Ş. and AvivaSA Emeklilik ve Hayat A.Ş.. As of 30 September 2018, the Bank has 781 branches dispersed throughout the country and 1 branch operating abroad (31 December 2017: 800 branches and 1 branch operating abroad). As of 30 September 2018, the Bank the Bank has employees (31 December 2017: ). The Parent Bank and its subsidiaries, Ak Yatırım Menkul Değerler A.Ş., AK Portföy Yönetimi A.Ş., Akbank AG, Ak Finansal Kiralama A.Ş., Akbank (Dubai) Limited and together with A.R.T.S. Ltd., which is not subsidiary of the Bank, but over which the Bank has 100% controlling power due to the reason that this company is Structured Entity, has been included in the scope of consolidation. The Parent Bank together with its consolidated subsidiaries are referred to as the Group in these consolidated financial statements and notes to consolidated financial statements. As at 30 September 2018, the Group employed people (31 December 2017: ). VI. A SHORT EXPLANATION ON THE DIFFERENCES BETWEEN THE COMMUNIQUE ON CONSOLIDATED FINANCIAL STATEMENT REPORTING AND THE CONSOLIDATION PROCEDURES REQUIRED BY TURKISH ACCOUNTING STANDARDS AND ABOUT INSTITUTIONS THAT ARE SUBJECT TO FULL CONSOLIDATION, PROPORTIONAL CONSOLIDATION, BY WAY OF DEDUCTION FROM CAPITAL OR THOSE THAT ARE SUBJECT TO NONE: The Bank sees no difference between the Communiqué on Consolidated Financial Reporting and the consolidation procedures required by Turkish Accounting Standards. Information in regards to consolidated subsidiaries and consolidation methods are given in Section III. Note III. VII. EXISTING OR POTENTIAL, ACTUAL OR LEGAL OBSTACLES TO IMMEDIATE TRANSFER OF CAPITAL BETWEEN PARENT BANK AND ITS SUBSIDIARIES AND REPAYMENT OF DEBTS: None. 2

7 SECTION TWO CONSOLIDATED FINANCIAL STATEMENTS I. CONSOLIDATED BALANCE SHEET AS OF 30 SEPTEMBER 2018 (STATEMENT OF FINANCIAL POSITION) (Amounts are expressed in thousands of Turkish Lira (TL).) CURRENT PERIOD ASSETS Note (30/09/2018) (Section Five) TL FC Total I. FINANCIAL ASSETS (NET) Cash and Cash Equivalents Cash and Balances with Central Bank (I-a) Banks (I-d) Money Markets Financial Assets at Fair Value Through Profit or Loss (I-b) Government Debt Securities Equity Instruments Other Financial Assets Financial Assets at Fair Value Through Other Comprehensive Income (I-e) Government Debt Securities Equity Instruments Other Financial Assets Financial Assets Measured at Amortised Cost (I-g) Government Debt Securities Other Financial Assets Derivative Financial Assets (I-c, l-l) 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) (I-f) Loans Measured at Amortised Cost Fair Value Through Profit or Loss Fair Value Through Other Comprehensive Income Lease Receivables (I-k) Financial Lease Receivables Operating Lease Receivables Unearned Income (-) Factoring Receivables Measured at Amortised Cost Fair Value Through Profit or Loss Fair Value Through Other Comprehensive Income Non-Performing Loans Expected Credit Loss (-) Month 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 (I-o) AND RELATED TO DISCONTINUED OPERATIONS (Net) Held for Sale Purpose Related to Discontinued Operations IV. EQUITY INVESTMENTS Investments in Associates (Net) (I-h) Associates Valued Based on Equity Method Unconsolidated Associates Subsidiaries (Net) (I-i) Unconsolidated Financial Subsidiaries Unconsolidated Non-Financial Subsidiaries Joint Ventures (Net) (I-j) Joint Ventures Valued Based on Equity Method Unconsolidated Joint Ventures V. PROPERTY AND EQUIPMENT (Net) VI. INTANGIBLE ASSETS (Net) Goodwill Other VII. INVESTMENT PROPERTY (Net) (I-m) VIII. CURRENT TAX ASSET IX. DEFERRED TAX ASSET (I-n) X. OTHER ASSETS (I-p) 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. The accompanying explanations and notes form an integral part of these financial statements. 3

8 I. CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2017 (STATEMENT OF FINANCIAL POSITION) (Amounts are expressed in thousands of Turkish Lira (TL).) PRIOR PERIOD ASSETS Note (31/12/2017) (Section Five) TL FC Total I. CASH AND BALANCES WITH CENTRAL BANK (I-a) II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT or LOSS (Net) (I-b) Trading Financial Assets Government Debt Securities Equity Securities Trading Derivative Financial Assets Other Marketable Securities Financial Assets at Fair Value through Profit or Loss Government Debt Securities Equity Securities Loans Other Marketable Securities III. BANKS (I-d) IV. MONEY MARKETS Interbank Money Market Placements Istanbul Stock Exchange Money Market Placements Receivables from Reverse Repurchase Agreements V. AVAILABLE-FOR-SALE FINANCIAL ASSETS (Net) (I-e) Equity Securities Government Debt Securities Other Marketable Securities VI. LOANS and RECEIVABLES (I-f) Loans and Receivables Loans to Bank's Risk Group (VI) Government Debt Securities Other Loans under Follow-up Specific Provisions (-) VII. FACTORING RECEIVABLES VIII. HELD-TO-MATURITY SECURITIES (Net) (I-g) Government Debt Securities Other Marketable Securities IX. INVESTMENTS IN ASSOCIATES (Net) (I-h) Associates Consolidated Based on Equity Method Unconsolidated Associates Financial Investments in Associates Non-Financial Investments in Associates X. SUBSIDIARIES (Net) (I-i) Financial Subsidiaries Non-Financial Subsidiaries XI. JOINT VENTURES (Net) Joint Ventures Consolidated Based on Equity Method Unconsolidated Joint Ventures Financial Joint Ventures Non-Financial Joint Ventures XII. FINANCIAL LEASE RECEIVABLES (Net) (I-k) Financial Lease Receivables Operating Lease Receivables Other Unearned Income ( - ) XIII. HEDGING DERIVATIVE FINANCIAL ASSETS (I-l) Fair Value Hedge Cash Flow Hedge Foreign Net Investment Hedge XIV. PROPERTY AND EQUIPMENT (Net) XV. INTANGIBLE ASSETS (Net) Goodwill Other XVI. INVESTMENT PROPERTY (Net) (I-m) XVII. TAX ASSET Current Tax Asset Deferred Tax Asset (I-n) XVIII. PROPERTY AND EQUIPMENT HELD FOR SALE PURPOSE AND RELATED TO DISCONTINUED OPERATIONS (Net) (I-o) Held for Sale Purpose Related to Discontinued Operations XIX. OTHER ASSETS (I-p) 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. The accompanying explanations and notes form an integral part of these financial statements. 4

9 I. CONSOLIDATED BALANCE SHEET AS OF 30 SEPTEMBER 2018 (STATEMENT OF FINANCIAL POSITION) (Amounts are expressed in thousands of Turkish Lira (TL).) CURRENT PERIOD LIABILITIES Note (30/09/2018) (Section Five) TL FC Total I. DEPOSITS (II-a) II. FUNDS BORROWED (II-c) III. MONEY MARKETS IV. SECURITIES ISSUED (Net) (II-d) Bills Asset Backed Securities Bonds V. FUNDS Borrower Funds Other VI. FİNANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS VII. DERIVATIVE FINANCIAL LIABILITIES (II-b, II-g) Derivative Financial Liabilities at Fair Value Through Profit or Loss Derivative Financial Liabilities at Fair Value Through Other Comprehensive Income VIII. FACTORING LIABILITES IX. LEASE LIABILITIES (Net) (II-f) Financial Lease Operating Lease Other Deferred Financial Lease Expenses ( - ) X. PROVISIONS (II-h) Restructuring Provisions Reserve for Employee Benefits Insurance Technical Provisions (Net) Other Provisions XI. CURRENT TAX LIABILITY (II-i) XII. DEFERRED TAX LIABILITY (II-i) XIII. LIABILITIES FOR PROPERTY AND EQUIPMENT HELD FOR SALE AND RELATED TO DISCONTINUED OPERATIONS (Net) Held for Sale Purpose Related to Discontinued Operations XIV. SUBORDINATED DEBT INSTRUMENTS (II-j) Loans Other Debt Instruments XV. OTHER LIABILITIES XVI. SHAREHOLDERS' EQUITY (II-k) ( ) Paid-in capital 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 ( ) ( ) 16.5 Profit Reserves Legal Reserves Status Reserves Extraordinary Reserves Other Profit Reserves Income or (Loss) s' Income or (Loss) Income or (Loss) Minority Interest (II-l) TOTAL LIABILITIES AND SHAREHOLDERS' 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. The accompanying explanations and notes form an integral part of these financial statements 5

10 I. CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2017 (STATEMENT OF FINANCIAL POSITION) (Amounts are expressed in thousands of Turkish Lira (TL).) PRIOR PERIOD LIABILITIES Note (31/12/2017) (Section Five) TL FC Total I. DEPOSITS (II-a) Deposits of Bank's Risk Group (VI) Other II. TRADING DERIVATIVE FINANCIAL LIABILITIES (II-b) III. FUNDS BORROWED (II-c) IV. MONEY MARKETS Funds from Interbank Money Market Funds from Istanbul Stock Exchange Money Market Funds Provided Under Repurchase Agreements V. SECURITIES ISSUED (Net) (II-d) Bills Asset Backed Securities Bonds VI. FUNDS Borrower Funds Other VII. MISCELLANEOUS PAYABLES VIII. OTHER LIABILITIES (II-e) IX. FACTORING PAYABLES X. FINANCIAL LEASE PAYABLES (Net) (II-f) Financial Lease Payables Operating Lease Payables Other Deferred Financial Lease Expenses ( - ) XI. HEDGING DERIVATIVE FINANCIAL LIABILITIES (II-g) Fair Value Hedge Cash Flow Hedge Foreign Net Investment Hedge XII. PROVISIONS (II-h) General Loan Loss Provisions Restructuring Provisions Reserve for Employee Benefits Insurance Technical Provisions (Net) Other Provisions XIII. TAX LIABILITY (II-i) Current Tax Liability Deferred Tax Liability XIV. LIABILITIES FOR PROPERTY AND EQUIPMENT HELD FOR SALE AND RELATED TO DISCONTINUED OPERATIONS Held for Sale Purpose Related to Discontinued Operations XV. SUBORDINATED LOANS (II-j) XVI. SHAREHOLDERS' EQUITY (II-k) (75.217) Paid-in capital Capital Reserves (75.217) Share Premium Share Cancellation Profits Marketable Securities Valuation Differences ( ) ( ) ( ) Property and Equipment Revaluation Differences Intangible Assets Revaluation Differences Investment Properties Revaluation Differences Bonus Shares from Investments in Associates, Subsidiaries and Joint Ventures Hedging Funds (Effective portion) ( ) ( ) Value Increase of Assets Held for Sale Other Capital Reserves Profit Reserves Legal Reserves Status Reserves Extraordinary Reserves Other Profit Reserves Income or (Loss) s' Income or (Loss) Income or (Loss) Minority Interest (II-l) TOTAL LIABILITIES AND SHAREHOLDERS' 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. The accompanying explanations and notes form an integral part of these financial statements. 6

11 II. CONSOLIDATED OFF-BALANCE SHEET COMMITMENTS AS OF 30 SEPTEMBER 2018 (Amounts are expressed in thousands of Turkish Lira (TL).) CURRENT PERIOD Note (30/09/2018) (Section Five) TL FC Total A. OFF-BALANCE SHEET COMMITMENTS (I+II+III) I. GUARANTEES AND WARRANTIES (III-2, 3) 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 Acceptances Letters of Credit Documentary Letters of Credit Other Letters of Credit Prefinancing Given as Guarantee Endorsements Endorsements to the Central Bank of Turkey Other Endorsements Purchase Guarantees for Securities Issued Factoring Guarantees Other Guarantees Other Collaterals II. COMMITMENTS (III-1) Irrevocable Commitments Asset Purchase Commitments Deposit Purchase and Sales Commitments Share Capital Commitments to Associates and Subsidiaries Loan Granting Commitments Securities Issue Brokerage Commitments Commitments for Reserve Requirements Commitments for Cheque Payments Tax and Fund Liabilities from Export Commitments Commitments for Credit Card Limits Commitments for Credit Cards and Banking Services Promotions Receivables from Short Sale Commitments of Marketable Securities Payables for Short Sale Commitments of Marketable Securities Other Irrevocable Commitments Revocable Commitments Revocable Loan Granting Commitments Other Revocable Commitments III. DERIVATIVE FINANCIAL INSTRUMENTS Hedging Derivative Financial Instruments Fair Value Hedges Cash Flow Hedges Foreign Net Investment Hedges Trading Derivative Financial Instruments Forward Foreign Currency Buy/Sell Transactions Forward Foreign Currency Transactions-Buy Forward Foreign Currency Transactions-Sell Swap Transactions Related to Foreign Currency and Interest Rates 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 RECEIVED (IV+V+VI) IV. ITEMS HELD IN CUSTODY Customer Fund and Portfolio Balances Investment Securities Held in Custody Cheques 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 RECEIVED Marketable Securities Guarantee Notes Commodity Warranty Immovables Other Pledged Items Pledged Items-Depository VI. ACCEPTED BILL, GUARANTEES AND WARRANTEES TOTAL OFF-BALANCE SHEET COMMITMENTS (A+B) 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. The accompanying explanations and notes form an integral part of these financial statements. 7

12 II. CONSOLIDATED OFF-BALANCE SHEET COMMITMENTS AS OF 31 DECEMBER 2017 (Amounts are expressed in thousands of Turkish Lira (TL).) PRIOR PERIOD Note (31/12/2017) (Section Five) TL FC Total A. OFF-BALANCE SHEET COMMITMENTS (I+II+III) I. GUARANTEES AND WARRANTIES (III-2, 3) 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 Acceptances Letters of Credit Documentary Letters of Credit Other Letters of Credit Prefinancing Given as Guarantee Endorsements Endorsements to the Central Bank of Turkey Other Endorsements Purchase Guarantees for Securities Issued Factoring Guarantees Other Guarantees Other Collaterals II. COMMITMENTS (III-1) Irrevocable Commitments Asset Purchase Commitments Deposit Purchase and Sales Commitments Share Capital Commitments to Associates and Subsidiaries Loan Granting Commitments Securities Issue Brokerage Commitments Commitments for Reserve Requirements Commitments for Cheque Payments Tax and Fund Liabilities from Export Commitments Commitments for Credit Card Limits Commitments for Credit Cards and Banking Services Promotions Receivables from Short Sale Commitments of Marketable Securities Payables for Short Sale Commitments of Marketable Securities Other Irrevocable Commitments Revocable Commitments Revocable Loan Granting Commitments Other Revocable Commitments III. DERIVATIVE FINANCIAL INSTRUMENTS Hedging Derivative Financial Instruments Fair Value Hedges Cash Flow Hedges Foreign Net Investment Hedges Trading Derivative Financial Instruments Forward Foreign Currency Buy/Sell Transactions Forward Foreign Currency Transactions-Buy Forward Foreign Currency Transactions-Sell Swap Transactions Related to Foreign Currency and Interest Rates 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 RECEIVED (IV+V+VI) IV. ITEMS HELD IN CUSTODY Customer Fund and Portfolio Balances Investment Securities Held in Custody Cheques 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 RECEIVED Marketable Securities Guarantee Notes Commodity Warranty Immovables Other Pledged Items Pledged Items-Depository VI. ACCEPTED BILL, GUARANTEES AND WARRANTEES TOTAL OFF-BALANCE SHEET COMMITMENTS (A+B) 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. The accompanying explanations and notes form an integral part of these financial statements. 8

13 III. CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2018 (Amounts are expressed in thousands of Turkish Lira (TL).) INCOME AND EXPENSE ITEMS Note CURRENT PERIOD CURRENT PERIOD (Section Five) (01/01-30/09/2018) (01/07-30/09/2018) I. INTEREST INCOME (IV-a) Interest on Loans (IV-a-1) Interest on Reserve Requirements Interest on Banks (IV-a-2) Interest on Money Market Transactions Interest on Marketable Securities Portfolio (IV-a-3) Fair Value Through Profit or Loss Fair Value Through Other Comprehensive Income Measured at Amortised Cost Financial Lease Income Other Interest Income II. INTEREST EXPENSE (-) (IV-b) Interest on Deposits (IV-b-4) Interest on Funds Borrowed (IV-b-1) Interest Expense on Money Market Transactions Interest on Securities Issued (IV-b-3) Other Interest Expenses 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. PERSONNEL EXPENSE (-) VI DIVIDEND INCOME VII. TRADING INCOME /(LOSS) (Net) (IV-c) Trading Gains / (Losses) on Securities ( ) ( ) 7.2 Gains / (Losses) on Derivative Financial Transactions Foreign Exchange Gains / (Losses) ( ) ( ) VIII. OTHER OPERATING INCOME (IV-d) IX. GROSS OPERATING INCOME (III+IV+V+VI+VII+VIII) X. EXPECTED CREDIT LOSS (-) XI. OTHER OPERATING EXPENSES (-) (IV-f) XII. NET OPERATING INCOME/(LOSS) (VIII-IX-X) XIII. EXCESS AMOUNT RECORDED AS INCOME AFTER MERGER - - XIV. INCOME/(LOSS) FROM INVESTMENTS IN SUBSIDIARIES CONSOLIDATED BASED ON EQUITY METHOD - - XV. INCOME/(LOSS) ON NET MONETARY POSITION - - XVI. PROFIT/LOSS BEFORE TAX FROM CONTINUED OPERATIONS (XII+ +XV) XVII. TAX PROVISION FOR CONTINUED OPERATIONS (±) (IV-h) Current Tax Provision Deferred Tax Income Effect (+) Deferred Tax Expense Effect (-) XVIII. CURRENT PERIOD PROFIT/LOSS FROM CONTINUED OPERATIONS (XVI±XVII) (IV-i) XIX. 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 - - XX. EXPENSES FOR DISCONTINUED OPERATIONS (-) Expenses for Non-current Assets Held for Sale Loss from Sales of Associates, Subsidiaries and Joint Ventures Expenses for Other Discontinued Operations - - XXI. PROFIT/LOSS BEFORE TAX FROM DISCONTINUED OPERATIONS (XIX-XX) - - XXII. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) (IV-h) Current Tax Provision Deferred Tax Expense Effect (+) Deferred Tax Income Effect (-) - - XXIII. CURRENT PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XXI±XXII) - - XXIV. NET INCOME/(LOSS) (XVIII+XXIII) (IV-i) Income/(Loss) from the Group Income/(Loss) from Minority Interest (IV-g) (1) (7) Earning/(Loss) per share (in TL full) 0, ,00352 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. The accompanying explanations and notes form an integral part of these financial statements. 9

14 III. CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2017 (Amounts are expressed in thousands of Turkish Lira (TL).) INCOME AND EXPENSE ITEMS Note PRIOR PERIOD PRIOR PERIOD (Section Five) (01/01-30/09/2017) (01/07-30/09/2017) I. INTEREST INCOME (IV-a) Interest on Loans (IV-a-1) Interest on Reserve Requirements Interest on Banks (IV-a-2) Interest on Money Market Transactions Interest on Marketable Securities Portfolio (IV-a-3) 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 II. INTEREST EXPENSE (IV-b) Interest on Deposits (IV-b-4) Interest on Funds Borrowed (IV-b-1) Interest Expense on Money Market Transactions Interest on Securities Issued (IV-b-3) Other Interest Expenses 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 VI. TRADING INCOME /(LOSS) (Net) (IV-c) ( ) ( ) 6.1 Trading Gains / (Losses) on Securities Gains / (Losses) on Derivative Financial Transactions Foreign Exchange Gains / (Losses) ( ) ( ) VII. OTHER OPERATING INCOME (IV-d) VIII. TOTAL OPERATING INCOME (III+IV+V+VI+VII) IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (IV-e) X. OTHER OPERATING EXPENSES (-) (IV-f) 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) XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (IV-h) Current Tax Provision Deferred Tax Provision XVII. CURRENT PERIOD PROFIT/LOSS FROM CONTINUED OPERATIONS (XV±XVI) 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 FOR 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) (IV-i) Income/(Loss) from the Group Income/(Loss) from Minority Interest (IV-g) 11 7 Earning/(Loss) per share (in TL full) 0, ,00373 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. The accompanying explanations and notes form an integral part of these financial statements. 10

15 IV. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER 2018 (Amounts are expressed in thousands of Turkish Lira (TL).) CURRENT PERIOD (30/09/2018) I. CURRENT PERIOD INCOME/LOSS II. OTHER COMPREHENSIVE INCOME ( ) 2.1 Not Reclassified Through Profit or Loss Property and Equipment Revaluation Increase/Decrease Intangible Assets Revaluation Increase/Decrease Defined Benefit Pension Plan Remeasurement Gain/Loss Other Comprehensive Income Items Not Reclassified Through Profit or Loss Tax Related Other Comprehensive Income Items Not Reclassified Through Profit or Loss (1.620) 2.2 Reclassified Through Profit or Loss ( ) Foreign Currency Translation Differences Valuation and/or Reclassification Income/Expense of the Financial Assets at Fair Value through Other Comprehensive Income ( ) Cash Flow Hedge Income/Loss Foreign Net Investment Hedge Income/Loss ( ) Other Comprehensive Income Items Reclassified Through Profit or Losses Tax Related Other Comprehensive Income Items Reclassified Through Profit or Loss XII. TOTAL COMPREHENSIVE INCOME (I+II) 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. The accompanying explanations and notes form an integral part of these financial statements. 11

16 IV. UNCONSOLIDATED STATEMENT OF INCOME AND EXPENSES ACCOUNTED UNDER SHAREHOLDERS' EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2017 (Amounts are expressed in thousands of Turkish Lira (TL).) INCOME AND EXPENSES ACCOUNTED UNDER SHAREHOLDERS' EQUITY PRIOR PERIOD (30/09/2017) I. ADDITIONS TO MARKETABLE SECURITIES VALUATION DIFFERENCES FROM AVAILABLE- FOR- SALE FINANCIAL ASSETS II. PROPERTY AND EQUIPMENT REVALUATION DIFFERENCES III. INTANGIBLE ASSETS REVALUATION DIFFERENCES - IV. TRANSLATION DIFFERENCES FROM FOREIGN CURRENCY TRANSACTIONS V. PROFIT/LOSS FROM CASH FLOW HEDGE DERIVATIVE FINANCIAL ASSETS (Effective Portion of Fair Value Changes) (9.124) VI. PROFIT/LOSS FROM FOREIGN NET INVESTMENT HEDGE DERIVATIVE FINANCIAL ASSETS (Effective Portion) ( ) VII. EFFECTS OF CHANGES IN ACCOUNTING POLICY AND CORRECTIONS - VIII. OTHER INCOME/EXPENSE ACCOUNTED UNDER SHAREHOLDERS' EQUITY AS PER TAS 19 IX. TAX RELATED TO VALUATION DIFFERENCES ( ) X. NET INCOME/EXPENSE DIRECTLY ACCOUNTED UNDER SHAREHOLDERS' EQUITY (I+II+ +IX) XI. CURRENT PERIOD INCOME / LOSS Net Change in Fair Value of Marketable Securities (Transfer to Profit/Loss) Part of Cash Flow Hedge Derivative Financial Assets Reclassified and Presented on the Income Statement (29.474) 11.3 Part of Foreign Net Investment Hedge Derivative Financial Assets Reclassified and Presented on the Income Statement Other XII. TOTAL INCOME / LOSS ACCOUNTED FOR THE PERIOD (X±XI) 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. (*) Figure represents the effective part of the foreign exchange differences of the financial liabilities hedging the net investment risk of foreign investments as explained in Note II of Section Three. The accompanying explanations and notes form an integral part of these financial statements. 12