Message From General Manager

QNB Finansbank signed its name under significant achievements in the name of its customers and shareholders.

Dear Shareholders and Board Members,

As QNB Finansbank, we have concluded the first 6 months with a considerable growth following a momentum above the sector once again, driven by the growth in Turkish economy.

As of 30 June 2018, our total assets grew by 19 percent compared to year-end results, reaching 149 billion 266 million TL, while our net period profit was 1 billion 133 million TL as of June 2018.

Compared to the end of 2017, our bank's performing loans increased by 14 percent to TRY 93 billion 217 million and our customer deposits by 13 percent to TRY 73 billion 818 million. In the first six months of 2018, our net interest income increased by 22 percent compared to the same period of previous year and reached TRY 3 billion 372 million, and our net fee and commission income increased by 19 percent and reached TRY 1 billion 970 million. Total equities of QNB Finansbank reached TRY 13 billion 235 million with a 9-percent increase as per 2017 year-end figures.

We are expecting a normalization in the loan growth for this year, in the aftermath of the high loan growth figures achieved in the banking sector in 2017. We anticipate that the banking sector will keep growing mainly in the field of corporate credits. Indeed, precautions taken as part of macro policies to incentivize exports support our anticipation. Our appetite to grow in corporate credits will continue as we focus on our risk-related costs in parallel with the overall growth in the sector. With the uncertainty dissipating after the elections and the government's positive statements on monetary discipline, we also prospect a relief in the markets and banking sector.

The number of customers for, Turkey's first branchless digital bank launched by QNB Finansbank, reached 1 million. Having introduced a credit card product without maintenance fee to costless banking services, keeps growing rapidly.

In Q2 of 2018, we also continued to sign new finance agreements that underscore the trust for Turkish economy and QNB Finansbank in international markets. In May, we extended the term for a 3-year-term finance agreement worth 200 million dollars, which we obtained from one of the world's leading banks in last year's April, by 14 months, and obtained one additional financing in the amount of 105 million 500 thousand with a term of 3 years under the same conditions.

Driven by all these achievements we reached, we were granted six awards by global economy and finance magazine EMEA Finance in 2017 Project Finance Awards and Achievement Awards, thanks to our financing efforts provided to Northern Marmara Highway Asia and Europe Side, Piazza Shopping Mall and Bilkent Laboratory PPP projects.

In 2018, we have kept working guided by our aim to transform such achievement we reached thanks to our financiers in the banking sectors into social contribution. As we prepare for the future, we will stand by our children and touch thousands of kids in many areas through our Small Hands Big Dreams platform.

Children will continue to be our focal point in our corporate social responsibility projects. Together with our volunteering financiers, we will execute new projects that support children's and youth's creativity and analytical thinking in the upcoming period as well. Our "Little Fingers Programming the Future" project, which is run in collaboration with Microsoft Turkey and Habitat Foundation, is ongoing at full speed, where we provide children with coding courses. Our aim is to reach 20 thousand children. We are preparing to introduce our kids with new projects that boost analytical thinking.

I would like to thank our financiers, clients, all strategic business partners and correspondent banks who reinforce our strength as we achieve our goals.

Kind regards,

Temel Güzeloğlu
General Manager