Message From Chairman

We build life-long and successful partnerships with all our stakeholders through understanding and best fulfilling their needs.

Dear Shareholders,

The world economy sustains its upwards growth trend in 2018. IMF expects a higher growth rate to be attained in 2018 compared to last year. However, increasing scale of protectiveness brought about by the developed economies combined with probable retaliations to these policies may be detrimental to global growth outlook and investment appetite. On the other hand, the continuously strengthening global demand and rise of oil prices may bring result in inflationist pressure. In this case, we may see central banks of the developed economies adopt tighter than foreseen monetary policies.

IMF's last "Global Expectations and Policies Report" underlines that global growth has accelerated yet positive conditions cannot prevail forever. According to the report, this year and the next year are expected to represent a global growth rate of 3.9%.

The growth expectation forecast for the Turkish economy has been revised within the same report from 4.3% to 4.4%. After last year's 7.4 annual growth realization, we may say that there is a slowdown in the growth acceleration in 2018. Nevertheless, we expect the decrease in the acceleration to remain small due to the affirmative impact of fiscal policies that are still supported. In addition, this trend may assist the reversal of the deterioration seen in inflation and current account balance.

Growth trend in economy directly affects our sector. In banking credit growth has returned to its normal pattern while CGF (Credit Guarantee Fund) contribution is subsiding. compared to last year.

As QNB Finansbank, we have sustained our growth in 2018. As of 31st March 2018, the total assets of the bank have reached TRY 135 Billion 574 Million with an increase rate of 8% compared to the year end. Compared to year-end 2017, performing loans have reached TRY 86 Billion 469 Million with 6% increase.

QNB Finansbank's net profit for the same period has been realized as TRY 529 Million and its Capital Adequacy Ratio has increased to the impressive level of 14.62%.

At the end of 2017, we obtained a securitization credit from Credit Suisse and Deutsche Bank amounting to USD 575 Million. This securitization credit, which was granted based on a credit score even higher than our bank's credit score, indicates the trust of international markets to the Turkish economy and our bank has constituted the longest-term credit with the highest amount obtained from the mentioned banking groups by our bank. We will go on to use this credit in financing the real sector, SMEs and the Turkish economy in general.

At the very beginning of 2018, we also focused on our social activities as well as intense banking activities. We are happy to stand side by side with our youth in their preparation to the future within the context of the "Young Talents" project realized in cooperation with CEV (Modern Education Foundation). On the other hand, we have not slowed down in our other projects, either: Our "Small Hands Big Dreams" platform aiming to reach out to hundreds of thousands of children in order to prepare them for the future in a myriad of diverse areas such as maths, coding, culture, etc. has also been sustained with the indispensable assistance of our volunteering financiers and business partners. "Tiny Fingers Coding Future" has been extended further to reach out to more children. Within this project, in 32 provinces ranging from Siirt to Istanbul, more than 16,000 children have been given coding training sessions of 8 hours by volunteering financiers. Our target is now to reach 20,000 children. We will also initiate new projects already prepared for the near future, as well.

We celebrated the tenth anniversary of the foundation of our Operation and Call Center situated in Erzurum. The center currently has created more than 700 jobs and it continues to be a hub of experience and learning for the regional university population.

I seize this as an opportunity to thank again to all of my fellow colleagues and shareholders for their incomparable contribution to QNB Finansbank's strength accelerated by them.

Respectfully,

Ömer A. Aras
Chairman