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Message From Chairman

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

Dear Shareholders,

Subsequent to the material currency depreciation in the third quarter of 2018, we have entered a period where financial conditions are tighter, inflation has increased substantially and interest rates were hiked as a result.  These conditions mark the deceleration of growth trends, while current account deficit is observed to be rapidly narrowed and a new period of balancing takes place in the economy. 

Having started with currency fluctuations, this period has marked decisive steps undertaken both by the government and Central Bank, within a two-month period, in order to accelerate the balancing process. The ‘New Economic Program’ announced furthered the confidence in sustaining economic stability and reform-driven policies under the titles “Balancing, Change and Discipline”. Therefore, we are most assured that the effects of the market volatility encountered in our economy will be eliminated and a rapid recovery will follow.

We can observe that the currency account deficit, which reached almost 7% of the GDP, will ease to 4% with the slowdown in economic activity. Both the decrease in imports caused by growth deceleration and the recovery of export and tourism revenue, driven by currency advantages, will play a major role in decreasing external financing risks. 

We anticipate that inflation will maintain its high levels in the short run with currency depreciation and distortion in pricing behaviors. However, we believe that the inflation landscape will be much more positive in the second half of the upcoming year, if strict fiscal and monetary policies are sustained, which can trigger a decrease in interest rates as well. 

It is observed that extreme currency volatility has had a negative impact on companies with high foreign currency debts, while top exporting companies and sectors with a high foreign currency income (e.g. tourism industry) take advantage of this currency depreciation. 

The global growth trend has slowed down to a certain extent, as a result of concerns regarding tightening financial conditions and trade wars across the global economy. However, the growth of the US economy is expected to sustain a strong curve, and FED is expected to maintain gradual interest increases and balance sheet reduction program. As for the European Union, the bond-buying program is expected to be terminated this year, despite the decelerated growth trend. The pressure on the markets of developing countries is expected to continue as a result of this disruption in global liquidity conditions. Implementation of policies driven by economic stability will be important for our country to overcome this period with the least damage possible. 

At QNB Finansbank, we have sustained our growth in the first 9 months of the year. As of 30 September 2018, the Bank’s total assets grew by 44 percent compared to year-end results, reaching TRY 180 billion 876 million; performing loans by 25 percent reaching TRY 101 billion 955 million; and customer deposits by 33 percent reaching TRY 86 billion 575 million.  Our bank’s net profit for the 9-month period was realized as TRY 1 billion 749 million.

As of 30 September 2018, QNB Finansbank’s total equity increased by 15 percent compared to the end of the previous year and amounted to TRY 14 billion, and, the Bank’s capital adequacy ratio reached 16 percent.

On the deposits side, our funding sources continued to diversify and grow. Accordingly, we increasingly continue to contribute to the industry with the Bank’s robust capital structure and the strength of QNB Finansbank’s main shareholder Qatar National Bank Q.P.S.C. (QNB), as the international shareholder bank with the highest ratings among the Turkish peers. 

Driven by our strong capital structure, we are sustaining our corporate social responsibility projects at full speed. Without slowing down, we continue to launch critical projects with our voluntary financiers under the roof of our “Small Hands Big Dreams” corporate social responsbility platform that we initiated to prepare our children for the future.

I, once again, would like to thank all my financier colleagues and stakeholders that further grow QNB Finansbank.

Kind regards,

Ömer A. Aras

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