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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,

We started 2023 with the Kahramanmaraş-centered earthquake disaster, which was felt in many provinces and affected millions of our citizens. We became an important part of the social solidarity steps taken to overcome the difficulties experienced in the region after the earthquake. Then, the general elections in the second quarter of the year brought about important changes in economic policies. These changes in economic policies focused on the maintenance of financial stability, especially the persistent decrease in inflation. 

In parallel, with the situation in Türkiye, the fight against inflation was one of the main agenda items in global markets. After having reached its highest levels in recent years in developed countries, inflation displayed a downward trend as a result of monetary tightening policies, particularly interest rate hikes. It is expected that gradual monetary easing will begin in many countries, especially developed countries, in 2024. On the other hand, surging geopolitical risks and conflicts around the world in recent years increase the possibility of a slowdown in economic growth in the coming periods.

As for the Turkish economy, the decisions taken by the new economic administration in the post-election period were decisive. While consumer inflation continued to increase in the second half of the year, expectations improved with the gradual increase in policy rate. The economic outlook has become more positive with the tightening steps taken in line with market expectations and the macroprudential measures implemented. For the banking sector, a more predictable environment has been created as the regulations implemented in previous years have been simplified. 

The high demand for retail loans resulted in a demand-driven inflation in 2023. In the upcoming period, a decrease in domestic demand will be an important requirement to ensure a sustainable decrease in inflation along with the disinflationary process. In addition, the introduction of actions and policies increased rapidly the share of Turkish Lira deposits in customer deposits. We foresee TL-weighted loan growth in the industry in 2024, in line with inflation expectations. In addition, we believe there may be a limited increase in non-performing loans, with the possibility of a slight deterioration in asset quality. Although 2023 was a very positive year in terms of profitability, there may be profitability pressure in the industry in 2024 due to the contracting net interest margins in line with market conditions. 

Despite the changing conditions in the markets, QNB Finansbank closed the year 2023 with robust financial results. As of 31 December 2023, the Bank's total assets increased by 64%, compared to the year-end of 2022, reaching TL 987 billion 817 million. In the same period, net loans grew by 66% to TL 571 billion 44 million, and customer deposits rose by 58% to TL 606 billion 466 million. As a result of our strategies and thriving financial performance in 2023, our net profit in 2023 was TL 33 billion 172 million. During this period, while maintaining our profitable growth, we also strongly expanded our customer base with our investments. In addition to successfully achieving all the targets set by the Central Bank, we undertook important projects in digitalization and sustainability in line with our mission of creating sustainable shareholder value.

In 2023, we issued subordinated bonds with a nominal amount of USD 300 million. We concluded a sustainability-linked syndicated loan deal of USD 829 million in two periods to restore international markets' trust in our national economy. 

Our bank has taken our sustainability efforts one step further with the "Becoming 1 with the World" vision. In our transformation journey where we are "Becoming 1 with the World", we set the goal of protecting nature, defending equal rights and freedoms, and acting as the spokesperson of children's future in a world where we encounter and tackle environmental and social challenges. A major tool of the "Becoming 1 with the World" vision is the sustainability-linked syndicated loan, which will help us support the national economy and foreign trade of our country. Our bank's sustainability commitments focused on "Gender Equality" include important items such as reducing the gender wage gap and providing financial resources to regions damaged by the earthquake disaster, in line with the bank's goals of creating a fairer working environment, a better world and a more equal future. Our bank also concluded a loan agreement of 110 million dollars with the European Bank for Reconstruction and Development (EBRD) to be provided to individuals and organizations affected by the earthquake. 

After meeting the priority vital needs after the earthquake, we turned to education, which is also the basis of our Bank's corporate social responsibility projects. To enable our children living in the earthquake zone to resume their education, we allocated a fund of TL 36 million and launched the 'Small Hands Big Dreams Education Scholarship' in cooperation with TEV and TED. In addition, in order to improve the physical education conditions of our children, we launched the "renovation project of 100 schools in the earthquake-affected regions" in cooperation with UNICEF. On the occasion of the 100th Anniversary of our Republic, we designated this project as our Bank's "100th Anniversary Project to support and contribute to the education of children who will carry the torch of the Republic to the future".

Working with the Turkish Education Volunteers Foundation (TEGV), one of the most active NGOs in the field following the earthquake, we launched a psycho-social support project for children. For this, we transformed the "Climate Protectors are Growing Up" project, launched in 2022 in cooperation with TEGV, into the "Social and Emotionally Based Post-Disaster Activities Project". This ongoing project has reached 1,750 children. In addition, we provided 16-month educational scholarships to 45 students affected by the earthquake for the continuation of their education, in collaboration with the Turkish Female Physicians’ Education Support Foundation (KAHEV). We opened an education center in Iskenderun for our children with special needs, together with the Turkish Down Syndrome Association. 

During this period when we intensified our efforts for a more sustainable world, we carried out many successful projects. We sponsored the Nature Pioneers Youth Programme carried out by the World Wildlife Fund - Türkiye (WWF-Türkiye) in collaboration with the Ministry of National Education of the Republic of Türkiye. As part of our activities on sustainability and combating climate change, we included the QNB Finansbank Clean Energy Index in the capital market instruments we offer to investors. 

In 2023, we published the "Gender Equality Guide" under the motto of "We aim for an equal world... QNB Finansbank breaks the glass ceiling!". We included Gender-Sensitive Banking Principles and an Action Plan in this guide. Published for the banking industry, 51 percent of which constitutes women, this guide publicly announces our commitment to eliminate gender discrimination in working life and provide more equal working conditions. We took our place in the 2023 edition of the Bloomberg Gender Equality Index (GEI), which reports data on gender equality in the workplace.

Our bank and subsidiaries  won 17 awards in national and international award programs in 2023 thanks to the products, services, and solutions we offer to our customers.

I would like to thank all our employees, customers, and business partners who contributed to the sustainable and profitable growth of our bank as stakeholders of our achievements during this difficult period.

Kind regards,

Ömür Tan
General Manager