Ziraat Bank is constantly on the lookout for alternative ways in which to pursue organic and inorganic growth in every country and sector which it deems to be in line with its strategies and objectives and which it sees being potentially profitable and productive.

 

A strategy based on sustainable profitability and growth
Ziraat Bank’s subsidiary and affiliate strategy is rooted in the principle of achieving sustainable profitability and growth for the entire Ziraat Finance Group by:

• Maximizing synergies among domestic business concerns active in a wide range of sectors on the one hand and geographically-dispersed foreign ones on the other;
• Ensuring that every subsidiary/affiliate is a viable business concern that is both the most preferred by customers and the most profitable one in its respective business line.

In keeping with this strategy, Ziraat Bank’s primary goal therefore is to develop and maintain a portfolio of subsidiaries and affiliates which command leading and competitively strong positions in whatever business line and/or locality they may be active by virtue of their:

• broad product range,
• delivery channel diversity,
• competent human resources,
• lean business processes,
• advanced technological infrastructure.

An equally important consideration is that they should be able to respond to Ziraat Finance Group customers’ financial product and service needs with the best possible solutions no matter what those needs may be.

Ziraat Bank is constantly on the lookout for alternative ways in which to pursue organic and inorganic growth in every country and sector which it deems to be in line with its strategies and objectives and which it sees being potentially profitable and productive.

A fundamental issue for Ziraat Bank is that its subsidiaries and affiliates should be contributing about 10% of the Ziraat Finance Group’s total assets and about 15% of its total profits in the medium term.

In 2015 Ziraat Bank made three new additions to its service network.
Three new members of the Ziraat Finance Group commenced operations in 2015:

• Ziraat Katılım Bankası A.Ş., a Turkish-based participation bank founded on 29 May 2015 with the equivalent of USD 300 million in capital;
• Ziraat Bank Azerbaijan ASC (AZN 50 million) and Ziraat Bank Montenegro AD (EUR 10 million), both incorporated on 27 July 2015.

Other subsidiary and affiliate developments in 2015:

• Ziraat Bank International AG’s 32% stake in Bosnia-Herzegovina headquartered ZiraatBank BH d.d. was taken over by Ziraat Bank, thereby turning it into a direct and wholly-owned Ziraat Bank subsidiary. At the same time, ZiraatBank BH d.d.’s paid-in capital was increased to KM 100,000,000 by a cash injection of KM 30,000,000 and a non-cash addition of KM 10,000,000.
• Turkmenistan-based Turkmen Turkish JSC Bank’s capital was increased to TMT 61,100,000 as a result of the capitalization of TMT 19,085,300 worth of various balance sheet items.
• Ziraat Bank’s Uzbekistan-based subsidiary Uzbekistan Turkish Bank JSC was renamed UTBANK JSC and its capital was increased from UZS 30,894,600,000 to UZS 36,146,682,000.
• Moscow-based Ziraat Bank JSC’s paid-in capital was increased by a USD 15,000,000 cash injection.

International Subsidiaries

Ziraat Bank International AG
Active in Germany for fifty-one years, Ziraat Bank International AG supplies an extensive array of retail and corporate banking products and services through nine branches located in the cities of Berlin, Duisburg, Frankfurt, Hamburg, Hannover, Cologne, Munich, Nuremburg, and Stuttgart. The bank also has an İstanbul-based representative’s office that it opened in April 2014.

Employing a staff of 149 people, Ziraat Bank International AG’s paid-in capital at end-2015 amounted to EUR 130 million. As of the same date the bank reported EUR 184.5 million in shareholders’ equity, EUR 1,401 million in total assets, EUR 1,272 in total lendings, and EUR 1,194 million in total deposits. In the year to end-2015, the bank’s credit placements increased by 3.5% while its net profit grew by 35.7% to EUR 13.7 million.

ZiraatBank BH d.d.
When it commenced operations in 1997, ZiraatBank BH d.d. was the first and only entirely foreign-owned bank in Bosnia-Herzegovina.

ZiraatBank BH d.d. supplies a complete range of banking products and services to corporate, small-business, and retail customers through a service network that includes 44 ATM and 781 POS units. As of end-2015 the bank had issued 10 thousand credit cards and 23 thousand bank cards and employed a staff of 265.

As of the same date, ZiraatBank BH d.d. reported total assets of USD 402 million, total lendings of USD 277 million, total deposits of USD 251 million, and USD 65 million in shareholders’ equity. Last year the bank posted a profit of USD 5 million. In February it successfully completed the installation of new basic banking software in order to provide its customers with better-quality service.

Ziraat Bank (Moscow) JSC
Moscow-based Ziraat Bank JSC commenced operations in 1993.

Focusing primarily on the corporate banking segment, Ziraat Bank (Moscow) JSC at end-2015 showed total assets of USD 46.2 million, total lendings of USD 22 million, and a profit of USD 892 thousand. Last year the bank’s capital was increased by USD 15 million.

Kazakhstan Ziraat International Bank (KZI Bank)
Headquartered in Almaty, Kazakhstan Ziraat International Bank (KZI Bank) was the country’s first foreign-owned financial institution when it was founded in 1993. The bank serves retail and corporate customers through branches located in the cities of Almaty, Astana, and Shymkent.

According to its independently-audited financial statements dated 31 December 2015, KZI Bank showed total assets worth USD 169.7 million, USD 617 million in shareholders’ equity, and a net profit of USD 5.4 million. Last year the value of the bank’s loan book amounted to USD 91.3 million, a figure that corresponds to a 34.4% twelve-month rise on a local-currency basis. Bank-held customer deposits were worth USD 81 million.

Turkmen Turkish JSC Bank
Founded in 1993 as a Ziraat Bank and Dayhan Bank joint venture in which each controlled a 50% stake, Turkmen Turkish JSC Bank was the first bank in Turkmenistan in which there was a foreign capital interest.

Headquartered in Ashgabat and employing a staff of 272 in operations in that city and elsewhere, the bank reported total assets and a net profit worth USD 195.3 million and USD 8.8 million respectively in 2015. Turkmen Turkish JSC Bank supplies a complete range of banking products and services to the corporate, small-business, and retail segments.

UTBANK JSC
UTBANK JSC was founded as a joint venture of Ziraat Bank and Agrobank of Uzbekistan in which each controlled a 50% stake. Headquartered in Tashkent, it was the first bank in which there was a foreign capital interest to be licensed in the country.

The bank supplies a complete range of banking products and services conforming to international standards of quality to corporate and retail customers. In 2015 UTBANK registered an 86% year-on rise in its lendings, which reached USD 33 million in value, while its total assets were up by 28% to USD 85.8 million and its total deposits by 91% to USD 37 million. In the twelve months to end-2015, UTBANK’s net profit grew by 48% to USD 3.1 million. In line with its growth vision, in 2016 the bank will be opening new branches in Samarkand and Fergana, which will bring the total number in the country to four.

Ziraat Bank Azerbaijan ASC and Ziraat Bank Montenegro AD, the two newest members of the Ziraat Finance Group’s international organization, both commenced operations in July 2015.

Ziraat Bank Azerbaijan ASC
One of the two most recent additions to the Ziraat Finance Group’s international organization is Ziraat Bank Azerbaijan ASC, which commenced operations in July 2015, having been issued its license on 30 December 2014. This is reputedly the fastest that any bank in the country’s banking industry has opened its doors for business after being issued its license.

Set up mainly to serve the corporate banking segment, Ziraat Bank Azerbaijan ASC conducts its operations through its headquarters office in Baku and İçerişehir branch. The bank’s registered capital is AZN 50 million, of which Ziraat Bank controls a 99.98% stake.

Ziraat Bank Montenegro AD
Having been issued its license by Montenegrin authorities in April 2015, Ziraat Bank Montenegro AD became one of the Ziraat Finance Group’s two newest members when it opened its doors for business in July 2015

Headquartered in Montenegro’s capital Podgorica, the bank has one branch located in the same city. The bank, whose registered capital amounts to EUR 10 million, is a wholly-owned subsidiary of Ziraat Bank.

Domestic Subsidiaries

Ziraat Sigorta A.Ş.
Ziraat Sigorta A.Ş., a general (non-life) insurance company, was incorporated on 11 May 2009 and commenced operations in 2010. The company quickly gained a reputation as a noteworthy and successful example of bancassurance by virtue of its sustainable and profitable sector-leading growth in premium production.

With its growth and development firmly on course in its sixth year of operation, Ziraat Sigorta generated about TL 934 million in premiums in 2015, about 33% more than those of the previous year. Such performance is what clinches the company’s position among Turkey’s top ten non-life insurers as measured by premium production.

As of year-end 2015, Ziraat Sigorta had total assets of TL 594 million and shareholders’ equity amounting to TL 196 million. The company’s net profit, which weighed in at TL 87 million, was up by 34% year-on.

Ziraat Hayat ve Emeklilik A.Ş.
Ziraat Hayat ve Emeklilik is a life insurance and pension provider that was founded in 2009. The company commenced operations in the life and personal accident insurance branches at the beginning of 2010 and began offering pension products in July 2011. The consistent premium production leader of the Turkish life insurance industry since its inception, ZHE’s TL 630 million worth of premiums taken in during 2015 corresponded to a 16% market share.

One of the founders of Turkey’s private pension system, ZHE’s pension funds grew by 75% to TL 1,462 million year-on in 2015 while the number of its pension account customer was up by 56% to 395 thousand. As of end-2015 the company reported total assets of TL 2.6 billion, shareholders’ equity of TL 304 million, and a net profit of TL 163 million.

Ziraat Finansal Kiralama A.Ş.
Founded in 1991 and having consistently grown both its assets and its net leasing receivables faster than sectoral averages ever since, Ziraat Finansal Kiralama is a leasing company and leader of the Turkish leasing industry. In 2015 the company’s total assets, net leasing receivables, and net profit reached TL 2.4 billion, TL 2.3 billion, and TL 36 million respectively.

Ziraat Yatırım Menkul Değerler A.Ş.
Ziraat Yatırım Menkul Değerler is Ziraat Bank’s brokerage house. Founded in 1997, the company conducts its operations through eight branches, twelve liaison offices, an online platform, and a call center.

In 2015 the company wrote business worth TL 23 billion on the BIST equities market, TL 7 billion on the derivatives market, and TL 83 billion on the repo & reverse-repo and the bond & bill markets.

Ziraat Yatırım is also an active player in the corporate finance product and service business line: last year the company underwrote TL 7.2 billion worth of private-sector bond and bill issues that were sold to qualified investors. As of end-2015 t Ziraat Yatırım showed shareholders’ equity in the amount of TL 90 million.

Ziraat Portföy Yönetimi A.Ş.
Ziraat Portföy Yönetimi, an asset & portfolio management company that Ziraat Bank set up in 2002, provides management services for portfolios consisting mainly of capital market vehicles. The company has USD 8.5 million in capital. Licensed last year to establish collective investment schemes (investment funds) of its own, ZPY has since set up 21 of them, which it manages along with 11 pension funds.

With 81 individual and 12 corporate clients, ZPY was cited as Turkey’s “Biggest Private Portfolio Manager” by the Turkish Institutional Investment Managers’ Association in 2015.

In 2015 ZPY made many new additions to its business lineup. The company undertook major investments in the areas of investment advisory services and online trading infrastructure & technology and marketing that give it the ability to manage institutional and private portfolios in real time not just in Turkey but anywhere in the world. Portfolio management software which ZPY purchased and installed has brought the system’s technology security to international standards. The company also continued to investment in human resources in order to sustain its rapid growth.

Every Ziraat Bank branch is authorized to act as a ZPY agent. The company has also moved into alternative delivery channels through active marketing and distribution agreements that it has entered into with its sister company Ziraat Yatırım and with Odeabank to trade in the shares of investment funds that are quoted on the Turkey Electronic Fund Trading Platform.

At end-2015 ZPY had TL 7.5 billion worth of funds under its management, a 90% increase over the previous year’s TL 3.9 billion. Having boosted its share of private portfolio management services from 2.91% to 18.77% and that of institutional portfolio management services from 11.21% and 24.63% during the previous twelve months, it now ranks in first and second place in those markets respectively. When company-managed investment funds and pension funds are also taken into account, ZPY’s market share grew from 5.06% in 2014 to 7.77% in 2015 and boosted the company to fifth place in the sector.

Ziraat Teknoloji A.Ş.
An IT solutions provider founded in 2001, Ziraat Teknoloji employs a knowledgeable and dynamic staff of nearly 550 to provide application development, systems management, project management, and technology consultancy services to Ziraat Bank and to its domestic and international subsidiaries and affiliates.

Based in Yıldız Technical University’s technopark and holding both ISO 9001 Quality Management System and ISO 27001 Information Security Management System certifications, Ziraat Teknoloji plays an important role as an effective technology services provider through the software and apps that it develops for the Ziraat Finance Group’s IT projects.

Ziraat Katılım Bankası A.Ş.
Founded on 10 October 2014 under Banking Regulation and Supervision Agency license number 6046 that was published in issue 29146 of the official gazette on 15 October 2014, Ziraat Katılım Bankası commenced operations as of 29 May 2015.

ZKB’s underlying philosophy is to listen to its customers’ needs at all times and to come up with bespoke solutions that are consistent with the principles of Islamic banking. The bank strives to create value not just for its customers and shareholders but for all of its stakeholders and society as a whole as well. The bank’s registered capital is TL 675 million, of which Ziraat Bank controls a 99.99% stake.