Ziraat Bank in 2012

2012 has been a period of intensive activity for Ziraat Bank and the change and transformation initiatives launched in December 2011 continued at a fast pace during the reporting period. Within the scope of the efforts seeking to more effectively respond to customers needs, the Bank conducted nearly 100 projects and realized major changes that strengthened the Bank’s infrastructure. Carried out using exclusively the Bank’s own resources, these 100 projects are nearing completion almost one year ahead of the targeted deadline.

Under the change and transformation project conducted, the “Bank Customer Service Model”, which places the customer in its focal point and is intended to fulfill all financial needs of customers, was started to be rolled out at branches from April 2012. Transition to the business model was completed at 857 branches by 31 December 2012. The target is to have all branches offer service to the customers on the basis of the new service model by April 2013. Within the scope of customer relationship management, branch and customer segmentation was carried out aiming to hear out and understand the customers’ financial needs and to offer them the right value propositions accordingly; an agriculture concept integrated with the customer segments was developed; principles of portfolio management were set out and branches began offering services within this framework, and significant way has been paved in the shift from a “product customer” approach to “ Ziraat customer” approach.

Within the frame of the efforts to increase effectiveness of risk policies and processes, and to create enterprise risk appetite, the Bank launched major decision support systems including “Retail Loans Assessment Module”, “SME Assessment Module” and “Company Assessment Module”. Upon introduction of Retail Loans Centralized Allocation, retail loan applications made to branches started to be evaluated by the Head Office. An Operations Center was set up and operational transactions were started to be moved to this center gradually for the purposes of ensuring productivity in operational transactions, and alleviating the operational workload on branches. Significant progress has been achieved also in efficient information technology and productive operational infrastructure, objective and transparent human resources management and effective communication, which take place among the principles of our new business model.

While the Bank changed its business model, initiatives were carried out for transforming and strengthening the financial structure, as well. Ziraat Bank defined its primary financial management strategy as possessing a shareholders’ equity that corresponds to the balance sheet size, increasing the relative share of loans, and attaining an efficient and diversified funding structure. As a result of retention of prior year profit, the percentage of shareholders’ equity to total liabilities went up from 8.2% at year-end 2011 to 10.5% at year-end 2012.

The Bank’s total assets were worth TL 163 billion as at year-end 2012. Aiming to render profitability, which is an important component of shareholders’ equity, sustainable, the Bank posted year-end net profits in the amount of TL 2,650 million, which showed a 26% rise year-to-year. In parallel with the increased profit, the Bank captured marked upward trends in profitability and productivity ratios, which take place among the Bank’s important agenda items. 16.1% at the end of 2011, return on equity (RoE) went up to 17.6% at the end of 2012. Similarly, return on assets (RoA) also went up and rose from 1.3% to 1.7% in the twelve months to end-2012.

In line with the Bank’s target of growing through lending to the real sector, it is aimed to reduce the share of marketable securities within the balance sheet to the sector’s norms, and to create an assets structure, in which marketable securities will be converted into loans. Hence, at the end of 2012, the Bank’s lending was worth TL 71.4 billion, and loans had 44% share of total assets, whereas the share of marketable securities portfolio declined from 44% in 2011 to 40% in 2012.

In line with the objective of attaining an effective and diversified funding resource, and ensuring broad-based and low-cost funds, total deposits were worth TL 119 billion. Share of deposits to liabilities was 73%, whereas the share of non-deposit resources including funds was 12.6%. In an effort to increase the diversity and quality of resources and to extend average maturity on funding, TL-denominated Bank bonds/bills issues started in February 2012, and the public offering on the back of five issues amounted to TL 4 billion during the reporting period. In December 2012, permission has been obtained from the BRSA for a total issue of TL 7 billion. In 2013 and thereafter, funding structure will be diversified through non-deposit financing resources such as eurobond issues and syndication loans.

The primary goal of the Bank is to be a leading bank that carries out banking for everyone that all segments of the society are happy to be working with, that stands by its customers not only in good times, but also in bad times and offers world-class banking services. Stepping into its 150th year in service, Ziraat Bank will uninterruptedly work towards achieving its targets, carry the values and principles it has always espoused into the future within a sustainable structure, and continue to be more than a bank for its customers.

TÜRKİYE CUMHURİYETİ ZİRAAT BANKASI A.Ş.