Ziraat Bank's Subsidiaries in 2013
Ziraat Bank aims at offering the means whereby Ziraat Customers can fulfill any financial need effortlessly via domestic and overseas subsidiaries.
20th
Ziraat Bank's subsidiaries in Russia, Kazakhstan, Turkmenistan, and Uzbekistan celebrated their 20th anniversaries in 2013.
TL 321 million
Subsidiary portfolio dividends received in 2013
TL 1,661 million
Ziraat Bank subsidiary investments as of end-2013
Ziraat Bank’s policy regarding its subsidiaries is to deliver contemporary and modern financial services to its customers both in and outside Turkey in the best and most profitable manner, to derive cost advantages and to secure competitive superiority by attaining product diversification.
In the scope of this policy, Ziraat Bank is set its main objectives as follows:
The main developments regarding the subsidiary Banks operating in Russia, Kazakhstan, Turkmenistan, Uzbekistan - which are enjoying their 20th anniversary - during 2013 are summarized below;
Foreign Subsidiaries
ZIRAAT BANK INTERNATIONAL AG
Ziraat Bank International AG is the biggest subsidiary of Ziraat Bank at overseas.
Ziraat Bank International AG is one of the largest banks backed by Turkish capital operating in the European Union. As Ziraat Bank’s largest international subsidiary, the Bank is active in corporate, commercial, and retail banking. Ziraat Bank International AG’s corporate and commercial banking services are mainly concentrated in cash and non-cash credit transactions related to financing foreign trade between Turkey, Germany and other EU countries as well as firms operating in Germany and multinational firms. In addition to corporate, commercial and retail banking services, Ziraat Bank International AG has been mediating the money transfers of Turkish citizens living in Germany to Turkey for 50 years with a modern and rapid technical infrastructure.
Continually improving its retail banking activities, Ziraat Bank International AG’s “Ingenious Account”, one of the Bank’s retail banking products, has repeatedly and consecutively been rated “Constantly Good” by “Stiftung Warentest/ Finanztest”, Germany’s most respectable independent consumer foundation. With the aim of continuously developing its services, the Bank has initiated a wide range of technological investments in 2013 and aims to provide better services to its customers in the coming years.
Ziraat Bank International AG, which is included in the savings deposit insurance fund of Bundesverband Deutscher Banken e.V. (Banking Association of Germany) is also a member of Entschädigungseinrichtung deutscher Banken GmbH (the deposit protection fund of Germany) and of the Association of Foreign Banks in Germany (Verband der Auslandsbanken in Deutschland). Ziraat Bank International AG services a broad base of customers through its ten branches operating in Frankfurt, Hamburg, Cologne, Hannover, Berlin, Duisburg, Stuttgart, Munich, Nurnberg and Essen.
As of 31 December 2013, Ziraat Bank International AG’s paid-in capital stood at EUR 130 million, with shareholders’ equity EUR 161 million, total assets EUR 916 million, loans EUR 787 million and deposits of EUR 747 million, while employing a total of 141 people. The Bank registered a 24% expansion in its total loans.
ZIRAAT BANK BH d.d.
Ziraat Bank BH d.d. is the first bank to be fully backed by foreign capital in Bosnia&Herzegovina.
Starting operations in 1997 under the name of Turkish Ziraat Bank Bosnia d.d., the Bank provides an entire suite of banking products and services to its corporate, commercial, and retail banking customers through 26 service units, 32 ATMs, 20,000 credit cards, 15,000 debit cards, and 769 POS devices throughout the Federation. The Bank had 229 employees at the end of 2013. The name of the Bank was changed from Turkish Ziraat Bank Bosnia d.d. to Ziraat Bank BH d.d. on 27 February 2013.
As of 31 December 2013, Ziraat Bank Bosnia d.d.’s total assets amounted to USD 282 million, with loans of USD 192 million, deposits of USD 163.9 million and shareholders’ equity of USD 51 million.
ZIRAAT BANK (MOSCOW) CJSC
Ziraat Bank (Moscow) CJSC entered operation in Moscow in 1993.
Aiming to satisfy all of the banking needs of its Turkish and Russian customers, the Bank adopts a customer-focused approach to service in the conduct of its activities. Ziraat Bank (Moscow) CJSC offers rapid, high quality and modern banking services to Russian companies, as well as to Turkish companies operating in Russia, in areas of corporate and commercial banking and non-cash loans.
At the end of 2013, the Bank’s total assets amounted to USD 86 million, with loans of USD 36.3 million and shareholders’ equity of USD 30.1 million. Its total assets expanded by 28% YoY in 2013.
KAZAKHSTAN ZIRAAT INTERNATIONAL BANK (KZI BANK)
The Kazakhstan-Ziraat International Bank was established in 1993.
The Bank was incorporated as the first foreign capital-owned bank in Kazakhstan. Based in Almaty, the Bank continues to offer service through 3 branches located in Almaty, Astana and Shymkent. The Bank plans to open another branch in Almaty in 2014 and other branches in Karaganda and Ataru cities, increasing its number of branches to six.
As of 31 December 2013, the Bank’s total assets amounted to USD 168 million, with shareholders’ equity of USD 115 million and a profit of USD 6 million for the period. Its return on equity increased from 3% in 2012 to 5% in 2013. The Bank’s loan book was worth USD 107 million in 2013, representing a 74% YoY surge. The value of the Bank’s deposits was realized at USD 51.1 million.
In 2014, KZI Bank aims to widen its operation network in the framework of the customer focus business model, and to enable more effective trading between Turkey and Kazakhstan.
AZER-TÜRK BANK ASC
Azer-Türk Bank ASC was established as a joint venture between Ziraat Bank and Agrarkredit QSC (Republic of Azerbaijan).
Incorporated in 1995, the Bank provides services through five different units, with Center, Baku, Ganca and Nakchivan branches and the Customer Services Department under the Head Office organization.
As of 31 December, 2013, Azer-Türk Bank’s total assets amounted to USD 120.7 million with shareholders’ equity of USD 19.5 million. The Bank wrote a net profit of USD 2.0 million in 2013. With a concept of service focused on customer satisfaction and transparency in its activities, the Bank maintains its position as a trustworthy and prestigious enterprise within the Azeri banking system.
The Bank will further cement its position in the sector with the planned increase in shareholders’ equity in 2014, in line with the requirements set out by the Central Bank of the Republic of Azerbaijan.
TURKMEN TURKISH JSC BANK
The Turkmen Turkish Joint Stock Commercial Bank has been operating in Turkmenistan since 1993.
Benefiting from a capability to provide a full-scale banking service, the Bank has taken on a significant role in advancing economic, commercial and social relations between Turkmenistan and Turkey and has also become one of the institutions linking Turkmenistan with the rest of the world.
The Bank is the Ashgabat’s most active bank in terms of conversion and foreign currency transactions. The Bank is highly active in consumer and entrepreneur loans and recorded a 49% surge in its credit portfolio in 2013. In addition, 8 Western Union points operated by the Bank handle a large volume of WU transactions.
At the end of 2013, the Bank’s total assets amounted to USD 78.8 million, with shareholders’ equity of USD 17.5 million and a net profit of USD 6.2 million.
UZBEKISTAN-TURKISH BANK (UTBANK)
The Uzbekistan Turkish Bank (UTBANK) was founded in 1993 in Tashkent by Ziraat Bank and Agrobank (Uzbekistan), with each controlling an equal stake.
Moving operations were completed during 2013 and the Bank physically separated into branches and headquarters divisions. The Bank now provides a higher quality service in a comfortable and modern branch environment.
In 2013, for the first time in history, UTBANK and the other Ziraat Bank subsidiary, ZB International AG, signed a credit lined agreement worth USD 5 million. USD 1.05 million of the limit was allocated as a loan.
The Bank’s active loan volume increased by 169% in 2013 to reach USD 5.5 million.
Serving its customers in all business lines of banking, UTBANK’s total assets were worth USD 62.4 million at the end of 2013. The Bank’s deposits amounted to USD 18.6 million and its shareholders’ equity to USD 26.5 million, while it recorded a net profit of USD 2.1 million in the year.
The national credit rating agency again assigned an “A” credit rating in September 2013 with a “positive” outlook for the rating.
Domestic Subsidiaries
ZİRAAT SİGORTA A.Ş.
Ziraat Sigorta was founded on 11 May 2009, and initiated insurance operations in 2010. It recorded TL 567.6 million in premiums during the 2013 full year, representing a YoY increase of 50%, comparing with the 22% average increase in premiums attained by the overall non-life insurance industry in the same period. Succeeding in attaining sustainable growth and profitability, Ziraat Sigorta has become an exemplary company in the sector. The“yenibiris.com” portal, an important recruitment site, rewarded the Company’s success with the title of “Most Rapidly Growing Company”.
Agricultural insurance comprised the key production branch for Ziraat Sigorta in 2013, and with a 40.3% market share the Company sustained its leadership in terms of premium production in the sector. Its modernized product, “Ailem Ziraat Güvencesinde” (My Family is under Ziraat’s Assurance), showed noticeable growth increasing to TL 53.6 million premium volume. The number of insurance policy contracts increased to 467,832 in 2013 from 33,744 last year. Besides, growth of Ziraat Bank in commercial businesses, led to remarkable increase of the share of commercially derived production in the portfolio.
By featuring all the branches “Bank Integration Project” was completed in 2013. With this project it is aimed to ease workforce on branches by enabling the need of insurance arising from the loans given by Bank to match with insurance policies automatically. At the same time, with the help of campaign screens, offer and sale of the most suitable products to customers enabled, developing customer focused marketing approach.
Ziraat Sigorta offers service in all sectors but life insurance. The companies’ priority is to meet the insurance demand deriving from banking transactions. Innovative product development and creating extra capacities, targeting individual arena, will be also helpful for the growth of insurance sector. In the sector wise, importance is given to technical profitability by right pricing and optimal risk preference on the loss creating branches.
Having become a role model that is closely watched in the sector owing to its successful bancassurance activities, Ziraat Sigorta remained the highest premium generator in this field in 2013. It is aimed to carry the Company up the rankings on the back of incentive implementations that will be launched so as to gain greater access to the Bank’s insurance potential and increased contribution of other delivery channels to premium production.
ZİRAAT HAYAT VE EMEKLİLİK A.Ş.
Ziraat Emeklilik was authorized for incorporation on 11 May 2009 and entered operation in the life insurance and personal accident insurance branches at the beginning of 2010. Involved in the Private Pension System since July 2011, the Company maintained its rapid ascent during 2013.
With a weighted portfolio of loans-linked life insurance, the Company has been in a leading position in insurance premium production since its establishment. Based on the year-end premium production data published by the Association of the Insurance and Reinsurance Companies of Turkey (TSRŞB), the Company’s premium production increased by 38% and reached TL 796 million, corresponding to a market share of 23% in 2013. In the same period, company paid TL 351 million in indemnities.
With the new law and regulations (where the government compliments all payments with an additional 25% contribution), which entered effect on 1 January 2013, the Private Pension sector notched up a remarkable pace of growth. By the end of December 2013, the sector’s fund size had expanded by 22% YoY, rising from TL 20.3 billion to TL 25 billion. In the same period, the number of participants grew by 32%, rising from 3,128 to 4,126.
Turkey’s Private Pension System was inaugurated in 2003. Ziraat Pension began offering personal pension products of its own in July 2011. Despite its rather late entry into this business line, the Company grew quite rapidly as people were attracted by the solid reputation of the Ziraat name and brand. By end-2012, the volume of pension fund assets under Ziraat Pension’s management increased by 133% from its initial TL 169.7 million to TL 400 million while the number of account-holders rose by 193% from 39,819 to 116,666.
When compared to the sector, the Company ranked 4th in terms of its technical profitability, with a TL 42.4 million technical profit as of the end of September 2013, according to figures published by the Association of Insurance Turkey, and was ranked 1st in terms of its net investment return, which stood at TL 75 million. In the same period, company wrote a net profit of TL 92.2 million, maintaining second position in the sector. The Company recorded a 5.98% return on assets - exceeding the sector’s average profitability of 3% - with the Company ranked in 4th position. In terms of its shareholders equity, the Company maintained its first position, with a Return on Equity of 49%.
Ziraat Emeklilik sets its main business model as bancassurance, and aims to lowering costs and increase the ratio of Ziraat Bank customers’ insurance and private pension contracts. One of the most effective ways of using the bancassurance model is to deliver insurance and private pension products through the branches. The project of offering the BES license to Bank employees has been applied. Ongoing training efforts in 2013 paved the way for 2,450 bank employees to gain the Private Pension license. Ziraat Emeklilik achieved a 92% success ratio in the licensing examination, organized by Pension Monitoring Center. The success of Ziraat Emeklilik employees in the examinations effectively raised the average success ratio of the sector from 46% to 56%.
Ziraat Emeklilik offers services to its customers through private pension plans and corporate solutions products. Addressing a broad customer segment, the Company’s primary private pension plans include “Güldüren Yarınlar Bireysel Emeklilik Planı” (planning for a future that will make you smile), “Bereket Bireysel Emeklilik Planı” (Plan for Plenty) designed for interest rate sensitive customers, “Şemsiye Bireysel Emeklilik Planı” (Umbrella Plan) and “Pırlanta Bireysel Emeklilik Planı” (Diamond Plan) that provides special advantages to newcomers who enter the system. In addition, there are private pension designed especially for occupational groups which provide unique advantages. There are also alternative investment opportunities, dependent on groups, where employers also contribute for their employees.
On the life insurance front, besides death and disability by accident guaranties, major products include “Hayata Dair Yıllık Hayat Sigortası” (Annual Life Insurance for Life) that pays an indemnity, not only in the event of death or disability, but also in the event of contracting one of the 12 dangerous illnesses and “Hayat Arkadaşım Yıllık Hayat Sigortası” (Annual Life Insurance for my Spouse) which offers various optional assurances in addition to death coverage. The Company also provides special corporate product solutions for the groups.
As far as life insurance is concerned, the Company aims to develop a product portfolio in 2014 in order to diversify its products. Efforts are underway to produce life insurance products which pay death indemnities; this products are widely used internationally, and have recently seen an increase in popularity in Turkey too, with the products aiming to protect standards of living. As such, the Company carries out studies with potential business partners and reassurance firms. Furthermore, the Company continues its efforts to implement modern life insurance products and customize them according to the legislatory framework in different countries, while increasing its market share abroad.
In 2013 the Company undertook investments aimed at improving its technological infrastructure. In the framework of the Bancaasurance project, infrastructure integration with the main distribution channel, Ziraat Bank, was realized. Starting from January 2014, the project to provide private pension products to customers through Bank’s computer systems by licensed employees was implemented. This will enable products to be accessed by more people and raise the participation ratio of Ziraat Bank customers. The Company will therefore gain more a higher market share in the sector and attain a greater fund size.
ZİRAAT FİNANSAL KİRALAMA A.Ş.
Since its foundation in 1991, Ziraat Leasing has been working to a principle of producing the right financial solutions for the right projects. The Company continued to pursue its consistent growth in 2013.
Ziraat Leasing’s primary target has been to provide financing to a wide array of sectors, including construction, healthcare, textiles, food, iron &steel, metal processing and the printing and manufacturing industries, and to support technological advancement in mechanization. Having played a pioneering role in promoting the use of financial leasing for agricultural machinery, Ziraat Leasing maintained its position as the leader in its sector in 2013 with the leasing transactions directed at the agricultural sector.
Ziraat Leasing’s mission is “to finance investments by producing effective and accurate solutions in order to contribute to the national economy and to deepen the financial markets”, and its vision is spelled out as “being the top choice leasing company for investors and employees”. With Ziraat Bank’s support and experienced staff, the Company moves forward to be one of the pioneering and leading companies in the sector.
ZİRAAT YATIRIM MENKUL DEĞERLER A.Ş.
An active participant in the capital markets with its professional team of 106 staff and its mission of providing an efficient service to its customers, Ziraat Yatırım Menkul Değerler entered operation in 1997.
The Company holds authorization certificates for Trade Brokerage, Public Offering Brokerage, Portfolio Management, Investment Consultancy, Trade on Credit, Short Sale and Borrowing-Lending, Options and Derivatives Transactions. The Company also applied to the Capital Markets Authority for a (Forex) Leveraged Trade Brokerage license. The Company is also involved in the Borsa İstanbul Emerging Companies Market (ECM) as a market consultant.
Providing services through 4 branches, 16 investment centers and one liaison office, Ziraat Yatırım Menkul Değerler uses all domestic branches of Ziraat Bank across the country as its agencies.
Ziraat Yatırım Menkul Değerler actively uses alternative delivery channels. The Company’s comprehensive delivery channels include the Company’s internet branch (e-Ziraat) at www. ziraatyatirim.com.tr; “Ziraat Trader”, which allows orders to be placed from mobile phones, tablet PCs and data screens; and the Customer Care Center on 444 4 979.
Ziraat Yatırım Menkul Değerler’s trade volume in the Borsa Istanbul equity market reached TL 19.3 billion in 2013. During the same period, the Company recorded a total of TL 35 billion in repo-reverse repo transactions volume in and outside Borsa Istanbul, while its outright purchase and sale transactions volume in the bonds and bills market stood at TL 3.9 billion. As a leading participant of the derivatives market, Ziraat Yatırım’s total transaction volume on the derivatives exchange totaled TL 6.1 billion in 2013.
ZİRAAT PORTFÖY YÖNETİMİ A.Ş.
Ziraat Portföy Yönetimi entered operation in 2002. The Company manages its clients’ investment portfolios of capital market instruments in the capacity of a commissioner.
Ziraat Portföy Yönetimi manages 12 mutual funds owned by Ziraat Bank, 4 mutual funds owned by Ziraat Yatırım and 10 private pension funds; and one incorporated portfolio owned by Ziraat Hayat ve Emeklilik.
With TL 8.5 million of capital, the total volume of assets managed by the Company had reached TL 1.8 billion by the end of 2013. The Company was ranked 8th among the 41 asset management companies active in the sector, with a market share of 2.81%.
FİNTEK FİNANSAL TEKNOLOJİ HİZMETLERİ A.Ş. (ZİRAAT TEKNOLOJİ)
Founded in 2001, Fintek has been providing IT services to Ziraat Bank and its foreign branches and subsidiaries in the fields of infrastructure, integration, system management, support-operations, application development and technical consultancy. Holding the TS ISO/IEC 27001 Information Security Management System certificate, Fintek was ranked among the top 100 IT companies in “Turkey’s Top 500 IT Companies Survey” conducted by İnterpromedya.
With its competent and dynamic staff of 500 people, and benefiting from state-of-the-art technology and expertise, Ziraat Teknoloji constantly strives to achieve more. The Company continued to provide strong technological support to Ziraat Bank in 2013 with its innovative and up-to-date technological investments and products that comply with TSE EN ISO 9001 and ISO 27001 standards. Ziraat Bank targets dynamic customer interaction through its new service model of being “More than a Bank”. Ziraat Teknoloji carried out the necessary work in line with the “technological transformation” in the “internet banking” channel. Customer display and system infrastructure was designed. User friendly screens and new functionalities were developed. The New Generation website was deemed the best website in its class in the financial services category in the Interactive Media Awards. Assessments were based on the design, content, functions, ease of use, convenience and cross-browser adequacy.
The other important channel - call center systems - was also transformed to a multiple functioning, multi-location structure. The system was given functions including sale functions with customer focused CRM displays, is able to receive calls from every channel (social media, web-chat, e-mail), and which is adequate for a mass working environment.
Credit risk monitoring and measuring systems that include access to all lending decisions and operational processes to be realized in accordance with the risk level of the corporation have been redesigned and brought into use. Besides, credit monitors have been redesigned to be more user friendly and easy to use. Efforts in the “Target and performance management system”, which allows employees’ performance and efficiency to be measured have been completed. Solutions systems which are able to implement customer-focused dynamic pricing and employ analytic models have been developed.
The International Branches/Subsidiaries Basic Banking Software Implementation Projects were developed in order to improve the level of service at the international branches and subsidiaries, as well as at Ziraat Bank. In this context, in Central Asia, the necessary work was initiated at the Bank’s Turkmenistan subsidiary, while approval for the second phase of the Kazakhstan subsidiary was provided, and agreements regarding the Azerbaijan subsidiary were signed and analytical processes were initiated. In Europe, the analytical processes regarding the German subsidiary were completed and the systems at the Bank’s Bosnian subsidiary were brought to installation level.
The Infrastructure standardization project continued during the year, which included international branches and subsidiaries. In order to change the application used by Ziraat Financial Leasing, consultancy services were provided. At Ziraat Sigorta, the Bancassurance project was completed. Market research was carried out for the third party applications that will be used at Ziraat Faktoring and Ziraat GYO subsidiaries.
All communication and data transformation lines were redesigned and all exchanges and traditional communication infrastructure was replaced, and an IP telephone network was set up with the “working together” vision and the transformation within this framework, the “integrated communication” system was established. As a result of this massive infrastructure transformation, pass-code entry to all communication system was enabled. New generation data base solutions have been applied on the data base of the fundamental banking platform, and the central banking system was therefore made available to successfully deal with new demands. This project enabled the Bank to complete 3,000 transactions each second and produce 600 thousand slips in an hour. The 15 terabyte central banking system was moved to a new platform in the space of just 30 minutes, paving the way for an increase of more than 60% in performance. This success was recognized by the Dünya Newspaper CIO Magazine, which handed the “CIO of the year” award to Ziraat Bank’s CIO.
Ziraat Teknoloji will continue to provide Ziraat Bank with rapid and superior technological infrastructure and hardware support in 2014 by increasing operational efficiency at the Bank and its subsidiaries while strictly maintaining quality, in line with the Bank’s purpose of gaining a competitive edge in the sector.