67
Corporate Governance
Esteemed shareholders,
Welcome to our Bank’s 92
nd
Ordinary General Meeting.
As we present the Board of Directors’ Report and the Income Statement showing our 2015-year results for your review and approval, we
respectfully greet all of you here today.
With the global economy losing momentum in 2015, China’s economy slowed down as the commodity prices continued to move downwards
while geopolitical risks increased. Fed’s long awaited decision to increase interest rates was one of the important incidents of the year.
While the US Dollar gained strength during the year, capital flows to the developing countries weakened. The economic activities in the
developing countries lost some momentum, as the recovery in the economies of developed countries continued.
The economic activity in Turkey had a moderate growth trend in 2015 in spite of the increasing risks. In the first 9 months of the year,
economic growth was 3.4% compared to the same period of the previous year while domestic demand made the highest contribution. In
spite of the decreasing exports due to the problems in Russia and Iraq markets that have important shares in our country’s exports, foreign
trade deficit fell by 25.2% and was realized at USD 63.3 billion in 2015, in parallel to the decreasing energy and commodity prices. Thus, the
improvement in the current account balance continued, and the current account deficit decreased to USD 32.2 billion in 2015. In 2015 when
the fiscal discipline was generally maintained, budget results were in line with the targets throughout the year. Owing to the increase in
food prices and depreciation in TL, inflation was higher than the medium term targets, and the annual CPI inflation was 8.81% in 2015.
Maintaining its cautious monetary policy stance, the CBRT tightened the liquidity policy by effectively using the flexibility in the interest
rate corridor in response to the increasing volatility throughout the year.
The banking sector continued to grow in 2015 in terms of assets, new opening branches and recruitment of new employees. As of 2015
year-end, the total assets of the banking sector reached TL 2,237 billion increasing by 18.4% compared to 2014 year-end.
In parallel to the depreciation of Turkish Lira in 2015, the prudent monetary policy maintained by the CBRT had a negative impact on funding
costs, the political uncertainties throughout the year also put pressure on loan growth.
In 2015, deposits continued to be the main funding resource of the banking sector while the additional funding requirement in the sector
was met with foreign resources, funds from repo transactions and alternative instruments.
For İşbank, 2015 was a year where we showed strong performance in terms of business volume and profitability figures.
As of December 31, 2015, compared to the previous year-end,
• Our loans reached TL 177,037 million increasing by 14.0%,
• Our deposits reached TL 153,802 million increasing by 15.2%,
• Our assets reached TL 275,718 million increasing by 16.0%,
• Our shareholders equity reached TL 32,035 million increasing by 9.3%
while our net profit reached TL 3,083 million.
In 2015, policies to diversify the resources and extend the maturity structure were maintained on the funding side. On the placement side,
increase in volume continued with a selective approach, without compromising from our lending principles. In 2015, the ratio of non-
performing loans was 2.0% and continued to stay below the sector average of 2.9%.
As of year-end, the capital adequacy ratio of the Bank (15.6%) was well above the legal margin while our Bank’s return on assets and return
on equity figures were 1.2% and 10.4% respectively.
With the positive contribution of the domestic demand, and the potential recovery in our important export markets, Turkish economy is
expected to maintain its moderate growth pace in 2016. The impacts of Fed’s monetary policy on developing markets are expected to
continue. The main factors affecting the performance of banks will be the approach regarding the macro-prudential measures in the
banking sector, as well as the regulations regarding capital adequacy. The banking sector is likely to support the growth in Turkish economy
in 2016, as well.
Esteemed shareholders,
We hereby submit our Annual Report, Balance Sheet and Income Statement pertaining to our 2015 activities for your review and approval.
We would like to take this opportunity to express our gratitude to the Turkish public for their steadfast trust in our Bank, to the institutions
of the Turkish State for their continuous support, to our employees for their dedicated efforts; and we extend our respects to you, our
valued shareholders, for having honored this General Meeting with your presence.
TÜRKİYE İŞ BANKASI A.Ş. BOARD OF DIRECTORS
Summary Report of the Board of Directors
