Ziraat Bank targets to timely satisfy all financial needs of its customers by delivering correct value propositions and optimum benefits, based on an understanding that puts customers in its focal point at all times.

In line with these targets, the Bank increased its product and service diversity, upgraded its digital channels, and improved its service delivery processes also in 2019. As a result of all these efforts, the Bank paved significant distance towards profitability and growth.

Molding its activities so as to achieve a well-balanced balance sheet composition, Ziraat Bank registered TL 650 billion in total assets, and TL 70 billion in shareholders’ equity as at year-end 2019. Attaching importance to backing its shareholders’ equity with sustainable profitability, the Bank attained 10.1% return on equity (RoE) and 1.1% return on assets (RoA) in 2019.

Having amounted to TL 448 billion as at 2019 year-end, total lending of Ziraat Bank made up 69% of the Bank’s assets.

The Bank’s total deposits rose to TL 447 billion in 2019, accounting for 69% of liabilities. Ziraat Bank remained the sector’s leader in total deposits in 2019.

IN 2019, WITHIN THE FRAMEWORK OF THE VISION OF BEING “THE LEADING BANK”, ZIRAAT BANK OFFERED HIGH QUALITY BANKING SERVICES TO ITS CUSTOMER PORTFOLIO CONSISTING OF LEADING COMPANIES IN THEIR SECTORS CREATING VALUE FOR THE COUNTRY’S ECONOMY.

COMMERCIAL/SME BANKING

Ziraat Bank is the strongest bank in Turkey in terms of product, service and distribution network diversity. Its strong muscle in securing low-cost funding and the liquidity advantages available to it position the Bank as a service provider focused on growing rapidly in the Commercial/SME Banking business line.

The Bank responds with the same degree of efficiency to the product and service needs of small-scale enterprises, as it does to its commercial customers’ demands for big ticket financing facilities. Ziraat plays a role in every sector and in every stage of the economic lifecycle, fulfilling its identity as a national bank.

In 2019, within the framework of the vision of being “the Leading Bank”, Ziraat Bank offered high quality banking services to its customer portfolio consisting of leading companies in their sectors creating value for the country’s economy. The Bank continued to provide various financial solutions in corporate segment including structuring/rescheduling to harmonize operations with their cash flows and increased the number of its corporate customers to 6,400.

In 2019, Ziraat Bank’s cash loans to customers in the commercial segment reached TL 160 billion, while non-cash loans amounted to TL 98 billion. The share the Bank got from Turkey’s foreign trade volume was 14%.

Assuming a pioneering role in project finance with its contribution to high value-added investment projects that add momentum to the national economy, Ziraat Bank continued with its endeavors to supply the funding needed by businesses to help them sustain their operations healthily at low-cost and through all credit channels.

WITH THE PURPOSE OF FACILITATING CUSTOMERS’ COMMERCIAL TRANSACTIONS, AVAILABLE CHEQUE (HAZIR ÇEK) PRODUCT WAS CREATED, WHICH INCORPORATES PAYMENT GUARANTEE BY ZIRAAT BANK.

With its Bankkart brand, the Bank increased its market share with firms in the commercial segment, and also uninterruptedly continued to work on solutions that generate cash flow such as collections, payments and DDS.

With the purpose of facilitating customers’ commercial transactions, strengthening their prestige in the market and adding a new dimension to commercial life by supporting the same, Available Cheque (Hazır Çek) product was created, which incorporates payment guarantee by Ziraat Bank. Available Cheque is a cheque product entailing the properties of regular cheque books with the additional feature that the Bank-guaranteed amount printed on the cheque will be paid in full even in case of insufficient balance in the account. The product differs from the regular cheques in that it allows customers to demand a cheque book entailing the Bank’s guarantee for each individual cheque leaf for the available cheque limit allocated.

GUARANTEE SUPPORT FOR SMES AT AFFORDABLE TERMS
The Bank aims to provide working capital financing support at affordable terms to SMEs, which are active in almost all the sectors -particularly in manufacturing and commerce- and which act as the lifeline of the economy. To this end, SMEs are Worth it Loans and SMEs are Worth it Loans 2 products were introduced by Ziraat Bank together with the program-partner banks.

In addition, “KOSGEB SME Financing Support Program”, a new financing package providing KGF-guaranteed (Credit Guarantee Fund) loan facilities, was introduced for facilitating SMEs’ access to financing, giving them reach to loans at favorable terms.

In the second quarter of 2019, Economy is Worth It Loan (in Turkish: EDK) product was launched with the aim of supporting all enterprises, SMEs and non-SMEs alike, that play a major role in increasing employment and production in our country, and of alleviating the financing burden on enterprises. This product is intended to contribute value to our economy by extending KGF-guaranteed working capital financing support within the frame of the inflation-indexed, Treasury-Backed Guarantee System provided by the T.R. Ministry of Treasury and Finance.

TL 13.6 billion in loans was extended within the scope of the “İVME (Advanced, Productive, Indigenous Industry) Financing Package”, which is a new product designed to fulfill the growing demand for strategic raw materials/intermediate goods, and for machinery, the most basic input for producer goods in the raw material/intermediate goods manufacturing industry and machinery manufacturing industry that serve as the engine of industrialization.

Disbursements and applications for KGF-sourced COSME and KGF support loans are ongoing.

KOSGEB - MACHINERY AND EQUIPMENT CREDIT WITH INTEREST SUPPORT
Under the protocol signed between Ziraat Bank and KOSGEB, “KOSGEB-Machinery and Equipment Credit with Interest Support” product was created for providing financial support at affordable terms to be used in domestic and new machinery and equipment acquisitions by businesses that are registered in the KOSGEB database, are engaged in the manufacturing industry and are not prohibited from KOSGEB supports.
Domestically Produced Vehicle Loan Package was introduced on 1 October 2019 for customers who will buy brand new vehicles from contracted companies undertaking domestic production. The loan disbursements under this package are ongoing.

Ziraat Bank acknowledges the need for providing healthy and sustainable contribution to existing employment, as well as to production infrastructure, in order to ensure consistent growth and development of the national economy. Along this line, the Bank works to expand the set of facilities the banking sector makes available to the real sector. Accordingly, more than TL 3 billion was lent to over 2,000 customers within the scope of the Employment-Oriented Working Capital Loan (in Turkish: İSTOD) that was introduced on 31 October 2019.

IN 2019, ZIRAAT BANK CONTINUED TO OBTAIN LOW-COST FUNDS FROM INTERNATIONAL FINANCIAL INSTITUTIONS FOR ON-LENDING TO SMES OR LARGER-SCALE COMPANIES.

LOANS SECURED FROM INTERNATIONAL FINANCIAL INSTITUTIONS AND ON-LENT TO SMES
In 2019, Ziraat Bank continued to obtain low-cost funds from international financial institutions for on-lending to SMEs or larger-scale companies.

The agreements executed within this framework incorporate special provisions related to environmental and social control criteria, while also mandating overall compliance with the environment-related legislation in Turkey. The agreements also include lists of environmentally-sensitive sectors or sectors that must be excluded.

Pursuant to these credit agreements, a supplementary agreement is required to be signed by the customers in addition to Ziraat Bank’s general credit agreement for these loans on-lent to SMEs. The said document constitutes the customer’s pledge to ensure compliance with the environmental and social requirements stipulated by the related financial institution. During the reporting period, international financial institutions that Ziraat Bank cooperates with also conducted audits at the Bank and its credit customers from time to time.

The nature and target audiences of the credit agreements made with international financial institutions are summarized below:

WORLD BANK LOANS
The Loan Agreement signed with the World Bank in 2013 is intended to finance energy efficiency investments. As a prerequisite of this facility, Ziraat Bank also established cooperation with a consultant firm for providing technical support to its customers in their energy efficiency investments. Disbursements continued in 2019.

EUROPEAN INVESTMENT BANK LOANS
Ziraat Bank kept financing SMEs and larger-scale companies with the funds it has secured from the European Investment Bank (EIB) in 2019, thus contributing to increased production, efficiency and employment by these businesses, and extending support for their growth.

IPARD LOAN
In 2019, Ziraat Bank continued to disburse loans under the IPARD Project that was signed in 2014 with the EIB for an amount of EUR 100 million for financing rural development projects, and completed the project-related targets as of the end of the year. This fund that targeted micro businesses, SMEs and larger-scale companies contributed to eliminating the difficulties that rural areas have in accessing financing.

Ziraat Bank will realize new projects with international financial institutions and continue to obtain funds to be used for financing SMEs or larger-scale companies in 2020.

ZIRAAT BANK PRIORITIZES PROJECTS FOCUSING ON CONTRACTED PRODUCTION MODEL, CONTROLLED UNDERCOVER FARMING, INCREASING THE AGRICULTURAL MECHANIZATION OF BUSINESSES, AND INCREASING PRODUCTIVITY IN AGRICULTURE.

FINANCING OF THE AGRICULTURAL SECTOR
Sustaining its strong financial support to the agricultural sector, Ziraat Bank develops projects for solving the sector’s structural problems and facilitating direct access to finance, and accordingly works with related ministries, institutions, establishments and agricultural organizations. In this context, weight was given to efforts for facilitating access to financing of small business owner farmers that constitute the most critical link of the agricultural value chain and for diversifying credit products directed towards this objective.

Ziraat Bank prioritizes projects focusing on contracted production model, controlled undercover farming, increasing the agricultural mechanization of businesses, and increasing productivity in agriculture.

Taking to the forefront among Ziraat Bank’s target production areas are investment projects which will create added value in agricultural production and respond to our country’s needs along with investments and activities to increase agricultural businesses’ storage, processing, packaging and marketing capacities for their own produce, particularly licensed storage and cold storage depot investments.

TL 64.3 BILLION LENT FROM THE BANK’S OWN FUNDS FOR FINANCING THE AGRICULTURAL SECTOR
In 2019, a total of TL 43.3 billion was extended from Ziraat Bank’s sources to approximately 486 thousand customers to finance the agricultural sector, and 60,420 new customers were added to the portfolio.

The balance of agricultural loans provided from Bank’s sources reached TL 64.3 billion by the end of 2019, and the number of customers with loans reached 682 thousand.
In terms of the breakdown, 34% of the agricultural loan portfolio consists of investment credits while 66% of the loans consist of business loans.

Additionally, the Bank mediated in the payment of TL 80.4 million in loans from the funds provided by various institutions to more than 6,500 people determined by related institutions. In this context, the amount of fund-based credit payments stood at TL 1.9 billion and the number of customers exceeded 70 thousand by the end of the year.

As a result, the total of loans extended by Ziraat Bank from its own sources to finance the agricultural sector and the fund-based credits that it mediated in had reached TL 66.2 billion by the end of 2019, with the number of customers receiving loans reaching nearly 754 thousand.

AFFORDABLE INTEREST RATES ON AGRICULTURAL LOANS
In line with the decree and communiqué on loans with reduced interest rate, Ziraat customers operating in the sector continued to obtain credits at affordable interest rates within subsidized rates which are defined on the basis of production areas.

In 2019, almost 347 thousand producers and companies engaged in the agricultural sector received TL 31.4 billion subsidized loans (at reduced interest rates).

FINANCING CONTRACTED AGRICULTURAL PRODUCTION ACTIVITY
Within the framework of contracts entered into with 11 firms operating in a number of areas including vegetable farming, seed farming, broiler breeding, pepper and tomato cultivation and sugar beet production, the Bank’s balance of contracted production loans extended to more than 18 thousand contract producers stood at TL 92.7 million by the end of 2019.

CROP PRODUCTION CREDITS
In 2019, Ziraat Bank extended a total of TL 16.3 billion in loans to over 225 thousand customers for vegetable production. As a result of these extensions under various topics, the balance of loans dispersed for crop production as of year-end had reached TL 19.8 billion and the number of customers with such credit had reached 270 thousand.

LIVESTOCK LOANS
In 2019, Ziraat Bank extended a total of TL 17 billion in livestock production loans under various names to approximately 190 thousand customers. As of the end of 2019, the balance of loans disbursed for livestock production had reached TL 26.3 billion and the number of customers extended credit had reached 276 thousand.

AQUACULTURE CREDITS
During the same period, Ziraat Bank extended a total of TL 378.2 million in loans to more than 2,000 customers under various titles of aquaculture. As of the end of 2019, the balance of loans dispersed in this area had reached TL 552.7 million and the number of customers with such credits had reached approximately 3,000.

IN 2019, ZIRAAT BANK EXTENDED PRESSURIZED IRRIGATION SYSTEM LOANS WORTH TL 313 MILLION TO NEARLY 3,500 PEOPLE.

SUPPORT FOR MODERN IRRIGATION SYSTEMS
In 2019, Ziraat Bank extended pressurized irrigation system loans worth TL 313 million to nearly 3,500 people. The loans disbursed have been used for irrigating approximately 298,000 decares of land using modern pressurized irrigation systems. Drip and overhead irrigation systems serve to save water by 30%-40%.

AGRICULTURAL MECHANIZATION LOANS
In order to increase the level of mechanization of agricultural enterprises, efficiency of production and profitability, Ziraat Bank offers loans for tractors and agricultural mechanization. In 2019, TL 1.9 billion in loans to finance the purchase of tractors was provided to 25 thousand customers and TL 545.4 million in agricultural mechanization financing loans was extended to nearly 20 thousand customers.

As of the year-end, a total of TL 7.7 billion of tractor loans had been extended to nearly 200 thousand customers and TL 1.3 billion had been extended to approximately 63 thousand customers for mechanization loans.

In order to renew the old tractor park in Turkey, loans were extended to producers owning tractors for at least 5 years seeking to renew tractors manufactured at least 10 years ago (including 10 years). The amount of Renewed Tractor Loans which had maturities of up to 96 months was TL 4.2 million in 2019.

In 2019, 11,956 customers benefited from Small Equipment Credit which is provided for the purchase of small farming tools and equipment needed by agricultural enterprises belonging to real persons or legal entities, to enable them to sustain their operations efficiently and profitably. The total amount of loans, which has a maximum limit of TL 50,000, reached TL 266.3 million.

LOAN PACKAGES
Total lending in 2019 amounted to TL 5.5 billion which breaks down as follows:

• Greenhouse Farming Loan Package was created with the aim of increasing agricultural production in greenhouses, installation of new greenhouses, and modernization of existing ones, under which TL 2.9 billion was disbursed to nearly 15,000 growers,
• Soy Bean, Corn and Sunflower Loan Package was created to promote the domestic production of soy bean, corn and sunflower, and to reduce their importation, which are strategic vegetal production items that are heavily imported; under this facility, TL 1.2 billion was disbursed to 17,000 producers,
• Loan Package for Livestock Establishments Growing their own Forage was introduced for reducing the input costs of small cattle and stock breeding establishments, under which TL 1.4 billion was disbursed to more than 17,000 producers.

AGRICULTURAL INSURANCE
In the Turkish agricultural insurance segment that registered growth in 2019, the number of TARSİM (Agricultural Insurance Pool) policies went up by 18.87% to 2 million, whereas premium production expanded by 19% to TL 2.4 billion. The most significant growth in this segment occurred in vegetative production area with 62% premium production rate.

Ziraat Sigorta A.Ş., an associate of Ziraat Bank that the Bank collaborates with for protecting the agricultural sector against agricultural risks, retained its position as the leading company in agricultural insurance in 2019. Ziraat Sigorta recorded 58.6% of total TARSİM premium production.

YOUNG FARMERS ACADEMY, ZIRAAT BANK’S SOCIAL RESPONSIBILITY PROJECT LAUNCHED IN SEPTEMBER 2018, CONTINUES TO DEVELOP AND EXPAND.

YOUNG FARMERS ACADEMY
Young Farmers Academy, Ziraat Bank’s social responsibility project launched in September 2018, continues to develop and expand. Within the scope of the project that has received more than 10,000 applications to date, cooperation was established with six universities. So far, approximately 300 participants successfully completed the training programs organized on dairy cattle breeding, greenhouse farming and sheep breeding.

During 2019, nine groups completed training in dairy cattle breeding, five groups in greenhouse farming and one group in sheep breeding.

Applications continued to be accepted in dairy cattle breeding, sheep/goat breeding, greenhouse farming and cattle breeding in Adana, Antalya, Bursa and İzmir.

THE BANK EFFECTIVELY USES ITS COUNTRYWIDE BRANCH NETWORK AND OFFERS SERVICE WITH A RICH PRODUCT RANGE TO A LARGE RETAIL AUDIENCE THAT VARIES FROM STUDENTS TO RETIREES, FROM MERCHANTS TO ENTREPRENEURS AND FROM HOUSEWIVES TO FARMERS.

RETAIL BANKING

An extremely competitive segment, Retail Banking is also the business line in which Ziraat Bank has the largest customer group.

The Bank effectively uses its countrywide branch network and offers service with a rich product range to a large retail audience that varies from students to retirees, from merchants to entrepreneurs and from housewives to farmers.

Possessing broad delivery channels covering ATMs, internet and mobile banking applications and the call center, in addition to its branch network that extends to every corner of the country, Ziraat Bank continued to fulfill the financing needs of its retail customers also in 2019.

ACTIVITIES FOR DIVERSIFYING AND ENRICHING THE PRODUCTS OFFERED TO RETAIL CUSTOMERS

• The Bank continued to market the State Subsidized Dowry (Çeyiz) and the State Subsidized Housing Account products set up by the Ministry of Family, Labor and Social Services and the Ministry of Treasury and Finance to promote saving within the society. As of year-end 2019, the Dowry Account had 14,000 customers and a balance of TL 72 million, whereas the Housing Account had 4,700 customers and a balance of TL 69 million. In addition, the Bank began to collect applications of customers who made payments regularly for 3 years for state subsidy and forwarded them to the Ministry. State subsidy was deposited in the accounts of qualifying customers.
• Ziraat Bank carries out comprehensive activities to diversify and enrich its financing products in order to deepen its funding base and to respond to customer attitudes and needs. Accordingly, marketing activities continued for Inflation-Indexed/Interest Protected and Inflation Protected products introduced on 22 April 2019, and the maturities of the accounts started to be renewed. As of end-September 2019, 230,000 customers had TL 25.6 billion in Inflation-Indexed/Interest Protected accounts and 23,000 customers had TL 1.8 billion in Inflation Protected accounts.
• Merging Consumer Loan product was created on 9 January 2019 for customers experiencing hardships in repaying their credit card debts to Ziraat or other banks. This product is intended to make the financial structures of existing and new customers healthier and more manageable, while also expanding the credit card customer base of the Bank, increasing its market share and diversifying profitability on the basis of customers.
• Discounted Loan Settlement Campaign was organized twice, in April 2019 and October 2019, for customers who purchased homes or business places in projects realized by the Housing Development Administration of Turkey (TOKİ) and sold via Ziraat Bank and have outstanding payments but would like to settle their debts by making advance payments.
• The Digital Credit program planned within the frame of the Digital Transformation Program currently ongoing at the Bank was launched in January 2019.
• The Construction Amnesty Credit was introduced for customers wishing to benefit from the construction amnesty.
• The Bank completed developments for approving the contracts and forms for consumer loans disbursed by branches and the products sold in connection with these loans via the Internet Branch/Ziraat Mobile, and put them into implementation in all branches.
• “Inflation-Indexed Housing Loan”, a housing loan product with variable interest rate, was devised for enabling customers to buy homes at costs that are affordable not only according to the current economic conditions but also according to the future developments and forecasts, without postponing their existing needs for a home.
• Domestically Produced Vehicle Loan Package was launched on 1 October 2019 for customers who will buy brand new vehicles from contracted companies undertaking domestic production.

OTHER ACTIVITIES CONDUCTED IN RETAIL BANKING SEGMENT
“Firm Subsidized 2019” application has been launched as of 17 December 2018, which offers housing credits with a firm subsidized pricing model for customers who would like to purchase new houses that are sold as complete or under construction by companies which have and active credit account with Ziraat Bank.

COMPREHENSIVE ACTIVITIES IN INSURANCE
Within the scope of the “Law Amending the Private Pension Savings and Investment System Law” numbered 6740 which was published in the Official Gazette dated 25 August 2016, all public employees under the age of 45 and all private sector employees working in a workplace registered at Social Security Institution (SGK), in line with the calendar announced by the Ministry of Treasury and Finance, are being included in the Individual Pension Auto Enrollment System.

It is envisaged that new employers, and therefore, new employees to be won for the Auto Enrolment System, which is a long-term saving instrument by Ziraat Bank, will make significant contributions to the Ziraat Finance Group in the long-term with respect to profitability, customer loyalty and new customer acquisition.

The number of local administrations, state-owned enterprises and privately-owned businesses with which agreements were concluded within this framework reached 45,000 as of 31 December 2019. In the Auto Enrolment System that reached 975,000 active participants and a size of TL 2 billion since the enactment of the Law, Ziraat remains the leader of the sector with 16% market share.

THE PRODUCT LIST DEVELOPED FOR WINNING INTERESTSENSITIVE CUSTOMERS FOR THE PRIVATE PENSION SYSTEM WAS EXPANDED WITH “PPS FOR YOUTH” (INTEREST-FREE) PLAN WHICH WILL BE OFFERED TO CUSTOMERS IN THE 18-26 AGE INTERVAL.

The product list developed for winning interest-sensitive customers for the Private Pension System was expanded with “PPS for Youth” (Interest-Free) plan which will be offered to customers in the 18-26 age interval.

“Solar Power Plant Operating Period Insurance” product was put on sale for insuring plants of customers who invested for using solar power that has a crucial place within renewable energy resources for electricity generation against potential losses to facilities, the installation of which have been completed and which are in operation.

Until integration with the SBM (Insurance Information and Monitoring Center) is realized for the “State Subsidized Credit Insurance” product, which was created within the scope of the State Subsidized Credit Insurance Pool under Extraordinary Risks Management Center, Ziraat Sigorta A.Ş. can issue proposals/policies to SMEs covered in the Regulation’s scope.

“Professional Liability Cover” was added to the Pharmacist’s Package Insurance product in order to provide assurance for potential losses that may be sustained by third parties as a result of the professional activity carried out, and policies can be issued by selecting alternative coverage sums with additional premium amounts on top of the existing premium. In addition, the highest coverage that can be selected by the insurance customer within the coupon/prescription limit and commodity price was increased from TL 10,000 to TL 50,000.

A significant step was taken towards paper saving with the digital approval of contracts and forms for insurance products as a result of the work carried out for independently sold PPS and Branch Digital Loan.

For diversifying insurance product package options, a new package was added to the Private Health Insurance product, and an optional coverage to Private Home Insurance.

A new motor own-damage product by the name “Extended Motor Own Damage Insurance (K04)” product was developed within the frame of the Domestically Produced Vehicle Loan Package that will be made available to customers who will buy brand new passenger cars or commercial vehicles from contracted companies undertaking domestic production.

Under the directive concerning the Employment-Oriented Working Capital Loan (in Turkish: İSTOD) package, a free-of-charge one-year personal accident insurance will be obtained for employees, to the employment of whom the Bank contributed, for better servicing the customers. Along this line, “Employment-Specific Personal Accident Insurance” product was put on the market on 7 November 2019.

ZIRAAT BANK BEGAN OFFERING BANKKART BAŞAK THAT COMBINES THE CHARACTERISTICS OF A DEBIT AND CREDIT CARD AND THUS ENABLES “ASSETS AND LIABILITIES MANAGEMENT BY A SINGLE CARD” TO ITS CUSTOMERS IN 2019.

BANKKART BAŞAK THAT MAKES A DIFFERENCE WITH ITS SUPERIOR FEATURES
Ziraat Bank began offering Bankkart Başak that combines the characteristics of a debit and credit card and thus enables “Assets and Liabilities Management by a Single Card” to its SME and commercial customers in the first quarter of 2019.

Designed according to market conditions in view of our country’s macroeconomic priorities and set apart from the other products in the market with its positive characteristics, Bankkart Başak promotes commercial shopping and introduces a new perspective to economic life. The number of commercial cards under this brand reached 474 thousand as of end-2019.

Bankkart Başak is equipped with numerous features that support commercial life in addition to debit and credit card capabilities. Details of these features are as follows:

• Guaranteeing the receivables of small-scale parent companies possessing an extensive dealer and sales network with Micro DDS,
• Optimizing supplier-dealer cash flow processes with Dealer Special Limit,
• Managing the sectors in which holders of supplementary cards can shop with Sector-Based Spending,
• Easily reaching spending details of all Bankkart Başak cards allocated to companies with Detailed Reporting.

Within the scope of the project initiated in February 2019, the number of cards reached 474,000 while total risk balance came to TL 3.78 billion upon the relaunch of Ziraat Bank commercial card as Bankkart Başak.

OPERATION CENTER
Ziraat Bank carries out initiatives in line with its targets of simplifying and centralizing its operational processes, and decreasing and digitizing back office operations. Key developments carried out by the Bank in connection with work processes and flow of the system in 2019 are presented below:

• Quick Process Types were introduced for quickly finalizing Tax/SSI/Telephone collections. Collections are realized automatically when accrual slips bearing barcode/2D-code is scanned by the system.
• The Bank’s commercial collections infrastructure was integrated with the collection structure of Ziraat Katılım (Ziraat Participation Bank), enabling the customers of the latter to pay their bills/payables via all channels by using Ziraat Bank’s infrastructure.
• “OPİ-Operational Innovation” initiative was introduced, which allows customers to send transaction instructions to the Operation Center directly from the internet and mobile channels, manage their accounts, perform transactions, and monitor them instantly.
• Utility/tax collections previously performed from 14 screens are now merged in a single screen.
• Users switched to home office mode within the frame of the Operation Center is at Home project.
• Work was completed to automate the attachment notices sent by enforcement directorates via the UETS (National Electronic Service System); accordingly the system now automatically captures the data thanks to xml integration, eliminating manual data entry.
• E-approval system was introduced for approving the contracts and forms associated with account opening and contract updating processes of Ziraat Yatırım.
• All channels were revised to ensure error-free and easy performance of tax payments.
• In addition, more than 191 million transactions were performed via the Operation Center in 2019, and the overall centralization ratio was registered as 99.68%.

ZIRAAT BANK TARGETS TO MAKE SURE THAT ITS BANKING PRODUCTS AND SERVICES ARE COMPETITIVE, EFFECTIVE AND PRODUCTIVE.

CUSTOMER-FOCUSED CASH MANAGEMENT IMPLEMENTATIONS
Ziraat Bank targets to make sure that its banking products and services are competitive, effective and productive. Creating no-cost funds and cross-selling opportunities on the back of its activities carried out towards this target, the Bank charged ahead with its customer-focused cash management implementations also in 2019.

Businesses covered under an agreement within Ziraat Bank’s Direct Debiting System (DDS) reached 642 in number in the reporting period. While the total collection volume increased by 43%, the number of dealers included in the system shot up by 144% year-over-year, with the contribution of the receivable collection model within the scope of the direct income support.

Moreover, Micro DDS (MDDS) product was introduced in order to guarantee the receivables of small-scale parent companies with extensive dealer and sales networks or to include in the system those dealers that have smaller volumes as compared to the others in the relevant sector, customarily take out installment loans and may opt to defer installments. The number of Micro DDS Protocols executed within this framework reached 687.

Discounted DDS product was offered, which serves to make collections for the invoices in the system before their due dates, and contributed to interest income generated by the Bank.

Number of contracted organizations which Ziraat Bank intermediate in invoice and other payments reached 675 and payments are facilitated through ATMs, Internet Banking, Mobile Banking and Automatic Payment channels in addition to branches.

With the Corporate Collection System which includes contracted institutions the Bank realized 218.8 million collections at a total amount of TL 238.8 billion in 2019. The Bank has 10.9 million automatic payment orders as of 2019.

In addition, the Bank continued to offer customized payments, electronic checks/notes, accounting integrations, pool accounts and cash collection services to meet the needs of its customers.

CONDUCTING ACTIVITIES TO INTEGRATE TECHNOLOGY INTO PRODUCT AND SERVICE DELIVERY PROCESSES AT AN INCREASING RATE, ZIRAAT BANK CONTINUED TO INVEST IN MODERN INFRASTRUCTURAL SYSTEMS IN 2019.

DIGITAL BANKING
Ziraat Bank heavily uses technology in its business processes in order to expand the usage of alternative distribution channels.

Conducting activities to integrate technology into product and service delivery processes at an increasing rate, Ziraat Bank continued to invest in modern infrastructural systems in 2019.

As of 2019 year-end, the number of the Bank’s digital customers reached 14 million, while the number of active mobile banking users and active Internet branch users were registered as 9.1 million and 1.9 million, respectively.

Being the bank with the highest number of devices in the sector with approximately 525,000 POS + Payment Recording devices, Ziraat Bank reached 566,000 member merchants and TL 13.7 billion in total acquiring volume by the end of 2019.

DCC (Dynamic Currency Conversion), which allows cards issued in a foreign country to perform transactions in the currency of the card’s country of issue with POS devices and ATMs in our country, was launched in 2019. This channel that will contribute to the FX position of Turkey and of Ziraat Bank will expand the FC funding base of the Bank.

The process for accepting “MIR Card”, the Russian Federation’s National Card, on Ziraat Bank POS devices and ATMs was completed and launched also during the reporting period. Significant progress was secured in deepening the economic relations between Turkey and Russia with this initiative, which is also a breakthrough that will contribute to FC tourism revenues. Within this scope, cards bearing MIR card logo can now be used for shopping at physical member merchants of Ziraat Bank, and they can also be used to withdraw cash TL and inquire account balance at all Ziraat Bank ATMs.

AN APPROACH THAT MAKES LIFE EASIER: ACCESSIBLE BANKING
Ziraat Bank carries out systematic activities to give individuals with disabilities easier access to its products and services.

As part of Accessible Banking initiatives:

• In 931 branches, tactile paving was installed on indoor and outdoor floors for visually-impaired individuals, the call button was put in to be used for asking for assistance by individuals with disabilities when they come to the branch, and information plate printed in Braille alphabet was posted on the gate,
• In 40 branches and Head Office buildings, accessible elevators are available.

In 2019, Ziraat Bank had 210 Accessible ATMs in 81 different cities.

IN THE TREASURY MANAGEMENT AND INTERNATIONAL BANKING BUSINESS LINE, ZIRAAT BANK IMPLEMENTED A STRATEGY THAT IT PROACTIVELY AND QUICKLY REVISED TO ADAPT TO THE CHANGING MARKET CONDITIONS, AND MANAGED ITS BALANCE SHEET SUCCESSFULLY.

TREASURY MANAGEMENT AND INTERNATIONAL BANKING

In the Treasury Management and International Banking business line, Ziraat Bank implemented a strategy that it proactively and quickly revised to adapt to the changing market conditions, and managed its balance sheet successfully.

The pioneer in the banking sector, Ziraat Bank managed its balance sheet based on a proactive strategy, minimizing liquidity, interest rate and exchange rate risks against the developments in global and local financial markets in 2019.

Maintaining its extensive branch network and robust deposit base, the Bank continued to acquire new deposit base in the retail segment and consolidated its funding structure with core deposits. With remarkable acquisitions in gold deposits, as well as TL and FC deposits, the Bank’s gold deposits increased by 50% as compared to 2018. Additionally, approximately 2 tons of scrap gold was collected from customers through the “golden time” campaigns and recovered for the economy.

INTERMEDIATION FOR GOLD BONDS AND GOLD-BASED LEASE CERTIFICATES
Ziraat Bank continued to offer intermediation service for the issuance of “Gold Bonds” and “Gold-Based Lease Certificates” which were issued for the first time in 2017 by the Ministry of Treasury and Finance. On the other hand, Gold Bonds and Gold-Based Lease Certificates issued in October 2017 were redeemed in October, and customers re-invested the redeemed amounts in these two instruments, or collected them in the form of physical gold or demand gold deposit accounts.

SUCCESSFUL POSITION SUSTAINED AS A MARKET MAKER IN THE TURKISH GOVERNMENT DEBT SECURITIES
In 2019, Ziraat Bank successfully maintained its position as a market maker in the government debt securities market and played an active role in secondary markets. The Bank continued to follow its main asset management strategy in its balance sheet and accordingly, achieved to increase the share of loans in the balance sheet and maintain the share of securities. In this context, share of securities in total assets has been 19% at the end of 2019 compared to 17% share in 2018.

BONDS AND BILLS ISSUES TO QUALIFIED INVESTORS
As in previous years, Ziraat Bank continued to issue bonds and bills in 2019 to qualified investors in the domestic market in order to expand its funding source diversity and customer base. The Bank issued TL 6.4 billion of bonds in the domestic market against TL 6 billion of redemptions under the issuance ceiling of TL 17.25 billion.

In the reporting period, the Bank issued floating rate notes, in addition to fixed-return products, so that investors can diversify their portfolios and effectively distribute risk. These 182-day or 364-day notes were backed by Turkish Lira Overnight Reference Rate (TLREF) announced daily by Borsa İstanbul as overnight interest rate, with variable interests paid every 91 days.

Ziraat Bank carried out the sector’s first debt instrument backed by TLREF reference interest rate at the end of August, securing a financing of TL 2.25 billion with maturities of 6 months and 1 year through three different issuances. The Bank also collaborated with the other market players to create the infrastructure for interest swap deals based on TLREF Turkish Lira overnight interest rate and set up in Turkish lira in both legs to allow the sector to manage the interest rate risk, and began transacting as a market maker bank in the TLREF-based Overnight Indexed Swap (OIS) market.

ZIRAAT BANK CARRIES ON WITH ITS ACTIVITIES WITH THE AIM OF DIVERSIFYING ITS FUNDS AND OBTAINING LOWCOST, LONG-TERM RESOURCES.

STRATEGIES FOCUSED ON DEVELOPING THE CAPITAL MARKETS
Ziraat Bank carries on with its activities with the aim of diversifying its funds and obtaining low-cost, long-term resources. To this end, the Bank’s GMTN (Global Medium Term Notes) program in the amount of USD 4 billion, which was set up to borrow from international capital markets, was updated effective 20 March 2019 and increased to USD 7 billion.

Under the GMTN (Global Medium Term Notes) program, the Bank issued abroad a demand loan (entailing the option to recall at the end of the 5th year) in the nominal amount of EUR 1.4 billion, which will be included in Tier 1 calculation, on 24 April 2019. The buyer of this note that has an interest rate of 5.076% and entails annual coupon payment is TVF Market Stability and Equalization Sub-Fund. Moreover, the Bank continued to secure external funding through private placements.

During 2019, Ziraat Bank provided financing of more than USD 75 million to SMEs and larger-scale customers within the scope of agreements with the World Bank and the European Investment Bank. The Bank thus extended support to its customers for increasing their production, productivity and employment, and kept contributing to elimination of regional development differences.

SYNDICATION ENRICHING ZIRAAT BANK’S SOLID FUNDING STRUCTURE
In March 2019, Ziraat Bank secured a 367-day syndication loan in the total amount of USD 1,425 million, which was participated by 40 banks from 22 countries. The loan that has a large base of participants from different geographies served as an indicator of the trust held in Turkey and in Ziraat Bank.

This transaction, which was aimed at diversifying Ziraat Bank’s strong funding structure, has been the seventh borrowing transaction carried out by the Bank through international syndication for the purpose of financing foreign trade.

Ziraat Bank also secured alternative funds such as bilateral loans and post-financing from correspondent banks thanks to its long-going and consistently maintained robust relationships with its correspondent network. These funds amounted to USD 1.6 billion as at year-end 2019.

Standing by its customers in every respect with the products and services it offers, Ziraat Bank keeps actively supporting its customers in foreign trade finance with a wide variety of financial products and services including discounted letter of credit and avalized/discounted bill of exchange/promissory notes.

Working closely with export credit agencies such as Hermes, Serv and Sace to meet the foreign trade financing needs of its customers, the Bank provides medium- and long-term country loans to its customers. Within the scope of agreements with the Export Import Bank of Korea (KEXIM) and The Export-Import Bank of the Republic of China (Taiwan Exim), the Bank provided medium- and long-term and low-cost financing opportunities for working capital and investment financing needs of customers that have business ties with China, Taiwan and South Korea.

As a result of these successful activities, Ziraat Bank increased the number of its customers performing foreign trade transactions by the day, and expanded its foreign trade volume from USD 11.1 billion in 2012 to USD 53.3 billion at 2019 year-end.


In keeping with its objectives of increasing the diversity of its funding sources and creating long-term alternative sources, Ziraat Bank works to set up DPR (Diversified Payment Rights), a securitization program. The program is intended to obtain loans by showing future flow foreign currency receivables of the Bank as collateral or to secure funding through bond issues.

ZIRAAT BANK HAS A STRONG NETWORK OF CORRESPONDENT BANKS COVERING MORE THAN 1,750 BANKS IN OVER 140 COUNTRIES.

CONTINUALLY RISING MARKET SHARE SUPPORTED BY THE STRONG CORRESPONDENT NETWORK
Ziraat Bank has a strong network of correspondent banks covering more than 1,750 banks in over 140 countries. The Bank diversifies and expands this network in line with customer demands, the conjuncture and trends in the world economy, and thus presents its customers with foreign trade opportunities in many parts of the world.

Attaching importance to improving its relationships and increasing the volume of transactions with resident correspondent banks as well as with foreign banks, Ziraat Bank takes place among the leader banks in foreign trade.

Ziraat Bank implements a reliable limit allocation model for correspondent banks. Accordingly, creditworthiness of resident and non-resident correspondent banks is updated based on periodic analyses, and limits are allocated in favor of these institutions based on internal rating model.

Quality service and rich product range offered within the scope of its strong and sustainable cooperation with correspondent banks form the basis of Ziraat Bank’s being the choice of its customers for their foreign trade transactions and the constantly increasing share of the Bank in this area. Taking advantage of its extensive correspondent network in domestic and overseas FC money transfers, the Bank is able to offer fast and lower-cost alternative solutions to its customers, and constantly grows the volume of FC transfers it intermediates.

INTERNATIONAL BRANCH BANKING
Ziraat Bank conducts its International Branch Banking operations in the countries in which it operates with the following main objectives, in line with its international banking strategy and vision:

• To provide fast, modern and high quality services to all customers in all geographies where the Bank pursues operations, as well as to Turkish entrepreneurs and companies,
• To play a strong role and secure a high share in the financing of foreign trade between Turkey and other countries where it operates,
• To ensure sustainable profitability of branches with healthy and efficient balance sheet structure,
• To create effective synergies within the framework of the “Ziraat Finance Group” approach.

ana hedefleriyle yürütmektedir.

ZIRAAT BANK PURSUES THE GOAL OF BEING THE MOST POWERFUL AND EFFECTIVE BANK IN THE REGIONS WHERE IT OPERATES NOT ONLY TODAY BUT ALSO IN THE FUTURE.

“ZIRAAT IS ALWAYS WITH YOU, WHEREVER YOU ARE IN THE WORLD”
In line with the motto “Ziraat is always with you, wherever you are in the world”, Ziraat Bank carefully considers existing and potential business opportunities in geographies where it operates with an integrated perspective.

Aiming always, and so too in the future, to be the strongest and the most efficient bank in Turkey and in regions where it has a presence, the Bank’s performance in overseas banking business in 2019 is summarized below:

In line with the dynamics and requirements of the London financial center, the London Branch revamped its range of products and services to enhance its effectiveness, particularly in the areas of structured financing and financing of foreign trade. Serving as an important touch point for accessing international financial markets, the London Branch preserves its pioneering and advantageous position in terms of money market and treasury transactions.

In Greece, services are provided through three branches in Athens, Komotini (Gümülcine) and Xhanti (İskeçe). Ziraat Bank focuses on services such as corporate banking and foreign trade financing in Greece and plays an active role in developing the trade between two countries.

In Bulgaria, four branches are operating in corporate and retail segments in Sofia, Plovdiv, Kardzhali and Varna under the Bulgarian Country Administration. Financial services and solutions are offered to customers through non-branch channels such as ATMs and Internet banking.

In Kosovo, the Pristina Branch was opened on 8 June 2015. Serving the corporate and retail customer base in the country with its extensive product range, the Bank further expanded its service network with new branches opened in Prizren and Peja in 2018, and in Ferizaj in 2019.

In the TRNC (Turkish Republic of Northern Cyprus), customer and market oriented activities have been carried out with 8 branches by expanding the product range and continuously increasing service quality. The branches in the TRNC provide corporate and retail banking products to our customers which meet our country’s standards. Thus, the Bank continued to contribute significantly to the economic development of the TRNC.

In Iraq, the Bank supports the development of economic and trading activities between two countries with two branches in Baghdad and Erbil. In addition to fulfilling the contracting firms’ needs for letters of guarantee, the branches remain as the financial solution point for international companies, organizations and institutions, and particularly for Turkish and Iraqi commercial customers operating in the country.

The Jeddah Branch in Saudi Arabia opened its doors in 2011. Efforts are continuing to expand the range of products and services offered at the branch with the aim of meeting the banking needs of Turkish and Saudi corporate and retail customers operating in the country, primarily the collateral letter needs of Turkish contractors, and intermediating in and developing Turkish-Saudi foreign trade.

Ziraat Bank’s second address in the Gulf region, the Bahrain Branch plays an active role in accessing international financial markets.

WITH ITS HUMAN-ORIENTED HR POLICY, ZIRAAT BANK AIMS TO MAKE SURE THAT ITS EMPLOYEES HOLD A CONFIDENT OUTLOOK FOR THE FUTURE.

HUMAN RESOURCES PRACTICES

With its human-oriented HR policy, Ziraat Bank aims to make sure that its employees hold a confident outlook for the future.

Ziraat Bank boasts a qualified human resource that is differentiated with their educational background and professional expertise, coupled with their competence and experience in doing business in global markets.

The Bank’s approach to human resources is one that is focused on constant development of its people and making it a permanent superiority factor in the global competitive environment, and as such, makes up one of its key competitive advantages in its sector.

The Bank’s HR processes that are devised in keeping with its Continuous Development Philosophy are managed meticulously in line with the Bank’s targets.

ZIRAAT BANK’S CONTINUOUS DEVELOPMENT PHILOSOPHY

• It is important for the Bank that its employees are able to keep abreast of the necessities of time, are open to development and change, prone to teamwork, success-oriented and have high sense of responsibility.
• Based on continuous development philosophy, Ziraat Bank supports its employees throughout their careers.
• Each Ziraat employee acts with the awareness that he or she is working under a brand name that is associated with productivity, efficiency, high quality, adherence to ethical values and trust.

HUMAN RESOURCES ACTIVITIES IN 2019
Ziraat Bank acknowledges that its distinctive and prestigious position in the sector is enabled by its superior human resource that offers the right value propositions to the customers at the right time through the right channel drawing on unmatched market knowledge and experience.

Accordingly channeling its largest investment into its people, the Bank kept implementing the contemporary HR management it has espoused also in 2019.

EMPLOYEE PROFILE
Ziraat Bank serves its customers with a total of 24,563 employees as of 2019 year end. In 2019, 608 new people were employed and the average age of employees was 36.5. As of the end of the year, 86% of the employees had a graduate, undergraduate or doctorate education. Average employee tenure is 12.18 years.

The total number of employees in the Ziraat Finance Group at the end of 2019 was 28,325, including domestic and foreign subsidiaries.

DISTRIBUTION OF ZIRAAT BANK’S HUMAN RESOURCES BY LOCATION, AGE GROUP AND EDUCATIONAL BACKGROUND:

Distribution by Head Office, Regions, Branches

Unit	Number of People	%
Head Office	5,181	21.1
Regions	283	1.1
Branches	19,002	77.4
Overseas	97	0.4
Grand Total	24,563	100.0

Distribution by Age

Age	Number of People	%
30 -	2,999	12.7
30 - 50	20,784	83.2
51 +	780	4.1
Grand Total	24,563	100.0

Distribution by Educational Background

Educational Background	Number of People	%
Post-Graduate	44	0.2
Graduate	2,248	9.2
Undergraduate	16,074	65.4
Associate	2,639	10.7
High School	3,437	14.0
Secondary School	121	0.5
Grand Total	24,563	100.0

RECRUITMENT
As in previous years, Ziraat Bank opened its doors to young people wishing to pursue a promising career in banking once again in 2019. A recruitment exam was conducted on 12 October 2019 and interviews were held between 16 and 25 November 2019 in order to meet the Bank’s need for assistant inspectors and lawyers. As a result, a total of 66 personnel will be joining the Ziraat Finance Group family as of January 2020, of whom 25 will are assistant inspectors and 41 are lawyers.

In order to fulfill the Assistant Service Clerk needs that arose in 2019, approximately 400 personnel within the scope of Support Assistant were transferred to permanent positions. In addition, 185 outsourced personnel who had served for the Bank for at least 3 years and 321 others who had served for at least 5 years were formally recruited during 2019.

ZIRAAT BANK TOOK PART IN REGIONAL CAREER FAIRS IN FIVE REGIONS, WHICH WERE ORGANIZED UNDER THE AUSPICES OF THE PRESIDENTIAL HUMAN RESOURCES OFFICE.

CAREER MANAGEMENT
In keeping with the transparent career management approach to which it adheres, Ziraat Bank trains its own managers among its staff. Accordingly 2,917 existing employees who were successful in the written promotion exams which were conducted in 2019 were promoted to a higher job category. In addition to that, more than 100 employees who successfully completed the Management Candidate Program were appointed at Manager positions in branches and units.

Within the scope of Ziraat Finance Group career practices, promotion exams of employees working in domestic subsidiaries have been performed and employees who were successful have been promoted to higher levels.

Ziraat Bank took part in Regional Career Fairs in five regions, which were organized under the auspices of the Presidential Human Resources Office. During these fairs, the Bank got together with thousands of students pursuing their studies at more than 50 different universities, and provided information about the Bank’s recruitment processes and career opportunities.

PROMOTIONS AND TRANSFERS
The Transfer Request application conducted twice a year was carried on to increase the personnel’s motivation, minimize operational workloads, and ensure that transfer processes are carried out quickly, effectively, and methodically. 31% of 1,493 valid applications in the December-January period and 36% of 1,587 valid applications in the June-July period were approved.

REMUNERATION
At Ziraat Bank, the Remuneration Committee is responsible for overseeing and supervising the remuneration practices on behalf of the Board of Directors. The Committee assesses the remuneration policy and practices within the framework of risk management to ensure that remuneration policies are aligned with the Bank’s ethical values and strategic goals, and shares its suggestions with the Board of Directors.

The remunerations of the members of the Bank’s Board of Directors and the CEO are determined during the General Assembly of the relevant year.

The 3rd term collective bargaining agreement was signed between Ziraat Bank and Öz Finans-İş Trade Union effective from 1 January 2019 through 31 December 2020. Accordingly, union members received additional monthly payments and were granted certain personnel rights including leaves. The Bank has a unionization rate of around 90%, and adjustments of wages for 2020 have been made in accordance with the Collective Labor Agreement.

The system set up to monitor overtime worked by the personnel continued to be used effectively in 2019. Focus was placed on reducing overtime, in keeping with the sensitivity exercised for maintaining the work-life balance of employees.

Salary matrices for 2020 were prepared and put into implementation for the Bank’s domestic and foreign subsidiaries, foreign branches and representative offices.

PRIVATE PENSION

In addition to a contribution of 3% of gross salary which cannot be less than TL 50 within the scope of the Noncontributory Group Pension Contract, the Bank introduced a new practice in 2014 under which a monthly employer’s contribution of TL 50 was launched without mandating employee contributions. This amount has been increased to TL 150 in 2018.

On the other hand, an entrance fee and an administrative expenses fee are not charged to the Bank’s employees and their relatives within the scope of BİZBİZE Group-Affiliates Group Pension Contract. Moreover, the fund management fee charged under the plan is applied as 1% per annum and thus, an additional benefit is provided.

HEALTH BENEFITS AND PRACTICES

In addition to health services provided by the National Security Association to employees covered under the retirement fund for civil servants (Law no. 5510 - 4-1/c), Ziraat Bank provides treatment benefits covered from:

• Ziraat Bank’s budget as authorized by the Bank’s Board of Directors,
• Additionally, from the Health and Assistance Fund (the Fund) budget as authorized by the Fund’s Board of Directors.

The Bank also executes special agreements with healthcare service providers, under which its employees can get healthcare services, and announces these agreements to all employees.

ANNUAL LEAVES OF ZIRAAT EMPLOYEES ARE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE LABOR LAW, AND ADDITIONAL RIGHTS ARE ALSO GRANTED TO EMPLOYEES UNDER THE COLLECTIVE BARGAINING AGREEMENT.

LEAVES
Annual leaves of Ziraat employees are determined in accordance with the provisions of the Labor Law, and additional rights are also granted to employees under the Collective Bargaining Agreement. The Bank’s human resources guidelines and regulations are revised/modified as necessary depending on the regulatory framework. Necessary steps are taken and practices are developed so that employees can use the annual leaves that they are entitled to within the same calendar year.

PERFORMANCE MANAGEMENT
The Individual Performance Management System measures each employee’s individual achievements and ranking by periods against objective and quantifiable criteria. The system has two basic components: numeric-based and competency-based.

Ziraat Bank’s strategies are captured in the field through the performance system. Indicators associated with customer-focus, profitability, productivity and risk management have a significant impact on the numeric performance score. The numeric performance scores calculated according to measurements of goals, development and magnitude are combined with competency scores, which provide individuals rankings that are used as the basis of performance bonus payments.

Determined and paid on the basis of periodically conducted individual performance reviews, individual performance bonuses are intended to strengthen the Bank’s customer-focused business model, to promote a marketing and effectiveness-focused approach to work, to increase company loyalty by motiving personnel, and to provide tangible benefits to those whose individual achievements are compatible with the Bank’s corporate objectives.

A current bonus budget is determined by taking the Bank’s profitability and operational results into account with the proviso that the budget’s total amount not exceeds 8% of the Bank’s aggregate monthly salary payments. This allocation is paid out to recipients as an individual performance bonus at three-month intervals along with their February, May, August, and November salaries based on objectively defined and numerically expressible specific criteria.

In this system, which has been set up to focus mainly on marketing in line with the Bank’s strategies and targets, bonuses are paid so as to enhance the earnings of those, who contribute more to the realization of those strategies and targets

The different coefficients that are used when calculating bonuses are determined according to branch segment and scale, individual performance ranking, and job position criteria. Marketing group personnel bonuses are calculated in direct proportion to the individual performance points in each section.

Aiming to motivate employees for increasing their corporate engagement and to reward individual achievements aligned with corporate strategies, Ziraat Bank included all other Head Office units within its performance management system as of the second quarter of 2018, together with the units subject to numeric performance measurement in place, based on the competence-based evaluation system.

On the other hand, within the framework of the fundamental Ziraat Finance Group concept, individual performance evaluation, competence evaluation and bonus system practices were launched at domestic subsidiaries. During the reporting period, the Bank kept taking steps to introduce individual performance management systems also at foreign subsidiaries. Ziraat Bank plans to follow up the outcomes of the performance system devised for foreign subsidiaries and to initiate performance bonus payments also at these units in 2020.

Within the scope of Individual Performance and Competence Evaluation System, the process of calculation of performance premiums by including competence scores in the numeric performance scores and designing training plans accordingly has started in June 2018. In the future, the effect of the performance system outcomes is targeted to continue increasingly.

EMPLOYEE SUGGESTIONS
Having established a relationship with its employees erected on mutual communication, Ziraat Bank aimed to involve employees within the decision-making mechanism, to benefit from their knowledge, to encourage them to research, and to further enhance productivity and quality in services. Accordingly, employees conveyed 2,862 suggestions to the system during 2019, and actions were taken as necessary.

2020 OUTLOOK
Ziraat Finance Group will continue to offer career opportunities and modern working conditions in 2020.

Work processes that are digitalized and the new generation’s expectations from business life that are reshaped as a result of advancements in technology compel modifications particularly in recruitment, career management and talent management processes. Along this line, the Bank began working on vesting the processes in a lean structure so as to be able to respond more quickly to changing needs, to increase digitalization, and to make use of data analytics.

ZIRAAT BANK CONSIDERS TRAINING AND DEVELOPMENT ACTIVITIES CRITICAL FOR BUILDING ON EMPLOYEES’ PROFESSIONAL KNOWLEDGE AND SKILLS, AND PERSONAL SKILLS ALIKE.

TRAINING

Ziraat Bank considers training and development activities critical for building on employees’ professional knowledge and skills, and personal skills alike.

Every year, the Bank polishes up the training programs to ensure that all its employees are knowledgeable and visionary individuals possessing the necessary technical background in banking business and having a command of international literature and practices. Ziraat Bank implemented various training projects along this line also in 2019.

TRAINING ACTIVITIES
Providing continuous professional and personal development opportunities to its employees, Ziraat Bank averaged 13.35 hours of classroom training and 21.87 hours of e-learning per person during 2019.

Training activities for employees carried out in 2019 are as follows:

• “Ziraat First Step Trainings” for new recruited employees to help them get to know the Bank, adapt to corporate culture and gain major knowledge and skills required,
• “Management Candidate Program Training” for preparing the employees holding supervisor title for manager/branch manager positions,
• “Career Trainings” designed to equip employees with basic knowledge and skills necessary for them to fulfill their roles and responsibilities, which are given in accordance with their respective positions,
• “Development Trainings” to meet training needs in accordance with the Bank’s goals and strategies or to present information about new products, services and regulations,
• “Training of Legal Obligations” in connection with the legislation.
• “Licensing/Certificate Trainings” for preparing employees for national and international license and certificate qualification exams.

PROFESSIONAL TRAINING IN LINE WITH THE LEGISLATION

Ziraat Bank conducts systematic training activities related to prevention of laundering proceeds of crime and financing of terrorism for its employees.

During 2019, 80% of the employees participated in the training programs.

IN ADDITION TO CLASSROOM TRAININGS, THE BANK’S EMPLOYEES WERE PRESENTED WITH DIGITAL TRAININGS SUCH AS E-LEARNINGS, GAMIFICATION AND VIRTUAL CLASSES IN 2019.

e-LEARNING
In addition to classroom trainings, the Bank’s employees were presented with digital trainings such as e-learnings, gamification and virtual classes in 2019.

E-learnings offer the advantages of allowing education to be provided to more employees in a short period of time, at low cost, without any loss of labor and at the employee’s place of work or their home. Some of the existing e-learnings which also support classroom trainings were updated and some new ones were added in 2019.

In 2019, approximately 41 e-learnings were assigned to each user and total e-learning time per user was 21.87 hours. As at year-end 2019, there were over 200 e-learnings (interactive e-learnings, videos, book summaries/articles, e-books, etc.) available on the system.

The most frequently accessed e-learnings in 2019 were, in order, Laundering of Proceeds of Crime and Financing of Terrorism, Original Banknotes and their Technical Properties, Cheque Law, Code of Obligations and Security Characteristics of Cheques.

With the virtual classroom method, trainings were made available to employees where they can watch the trainers live and ask questions, at their computers without leaving their branches. Thanks to this method, 1,012 employees received trainings on their computer at their branches.

In addition to these methods, “serious game” application was offered to employees to be used on smart phones, which allows for solution of questions, thus making learning permanent. The application asks participants to increase the number of their branches and portfolios by selling products on real-time basis in a virtual environment populated by customers from different segments depending on the difficulty level. The number of app users was 3,450 who spent 7,026 hours in total for an average of 14 minutes per person. 200 questions related to banking, which were available under the academy section of the game, were solved approximately 400,000 times.

E-learnings were offered to children under the headings:

• Money-Bank Island
• Saving Island
• Loan and Credit Card Island
• Budget Island.

These modules are designed to educate children in the relationship between money and banks, operation of banks, Internet and telephone banking, informed use of loans and credit cards, and using all resources from money to electricity and water economically.

Within the scope of e-learning activities, farmers are provided with awareness training in a wide variety of subjects ranging from modern irrigation techniques to agricultural insurance. In addition, an e-learning program titled “How does the Credit Card System Work?” was prepared for all customers.

INTERNSHIP OPPORTUNITIES
During 2019, internship opportunities were provided at various units of Ziraat Bank to approximately 3,000 students attending Vocational High Schools and Higher Education Institutions who are required to do internship as per the Law no. 3308.

THE SOCIAL RESPONSIBILITY INITIATIVES CARRIED OUT BY THE BANK REFLECT THE IMPORTANCE IT ATTACHES TO THE SOCIETY.

SOCIAL RESPONSIBILITY AND PUBLIC RELATIONS

The social responsibility initiatives carried out by the bank reflect the importance it attaches to the society.

Ziraat Bank aims to take the mission it has assumed within the framework of corporate social responsibility further every year, and to ensure permanence in this respect. To achieve this goal, the Bank uninterruptedly carries on with its activities in various areas with a particular focus on culture, art, education and sport that will contribute benefits to the society.

Ziraat Bank continued to support projects designed for the improvement of individuals and the community in 2019.

SUPPORTING CULTURE AND ART ACTIVITIES IS A LONG-EMBRACED TRADITION FOR ZIRAAT BANK.
Ziraat Bank has been contributing to activities in various artistic disciplines in keeping with its motto “In Art for Art” that summarizes the importance it has attached to art and artists ever since its establishment. The Bank added Çukurambar Art Gallery that it opened in 2019 to its Ankara Kuğulu and İstanbul Tünel Art Galleries that debuted in the 1990s. A total of 25 exhibitions put on display during the reporting period in the Kuğulu Art Gallery in Ankara and the Tünel Art Gallery in İstanbul attracted more than 15,000 visitors.
The “State Theaters at Ziraat Stage” which was executed under the cooperation of the General Directorate of State Theaters and Ziraat Bank with the mission of supporting culture and arts, continues to serve theatre lovers.

ZIRAAT BANK BOASTS ONE OF THE MAJOR SCULPTURE AND PAINTING COLLECTIONS IN TURKEY.
Ziraat Bank brings the artworks in its collection to the public with its collection book and comprehensive exhibitions it organizes. With more than 2,500 artworks, Ziraat Bank Painting Collection continues to expand with the works of art purchased from artists that are exhibited at Ziraat Bank galleries.

TURKEY’S FIRST BANKING MUSEUM WAS ESTABLISHED BY ZIRAAT BANK.
Ziraat Bank Museum was opened in 1981 with the purpose of passing on the Bank’s experience and accumulations to the future generations. The Museum is set in the Hall of Honor on ground level of the historic headquarters building in the Ulus district of Ankara, which was built in 1929 by Italian architect Giulio Mongeri as one of the structures of the First National Architectural Period.

Following the restoration initiated at the historic building in 2017, the Ziraat Bank Museum was expanded to include the basement floor and was enriched with digital components in line with contemporary museum standards, and reopened its doors in November 2019 with its new visage.

The “State Theaters at Ziraat Stage” which was executed under the cooperation of the General Directorate of State Theaters and Ziraat Bank with the mission of supporting culture and arts, continues to serve theatre lovers.

ACTING WITH THE SPIRIT OF GIVING BACK TO THE COMMUNITY FOR 156 YEARS, ZIRAAT BANK HAS EXTENDED SUPPORT TO VARIOUS SOCIAL RESPONSIBILITY PROJECTS ALSO IN 2019.

ZIRAAT BANK IS AN IMPORTANT CONTRIBUTOR TO THE DEVELOPMENT OF TURKISH SPORTS.
Having given its name to the Turkish Cup in connection with its sponsorship for the past 10 seasons, Ziraat Bank contributed significantly to the development of the Turkish sport. At the same time, Ziraat Volleyball Team competing in the Turkish Men’s Volleyball leagues since 1981 has been contending successfully in both the Efeler (Premier) League and AXA Sigorta Cup Volley (Turkish Cup) in the 2019/2020 season. Having succeeded in being the runner up in the CEV Cup in 2017-2018 season, Ziraat Volleyball Team represented Turkey at the Balkan Cup organized in Pazardzhik, Bulgaria and claimed the championship. The team also won the Turkey Champion titles in the U-18 and U-20 categories at the latest Infrastructure Turkey Championships.

Acting with the spirit of giving back to the community for 156 years, Ziraat Bank has extended support to various social responsibility projects also in 2019.

• Ziraat Bank sponsored Ara Güler Retrospective in order to bring photographs of Ara Güler, one of the most important Turkish photography artists, to art lovers in various capital cities around the world. Having made its world premiere in London, England on 23 April 2019, the exhibition will tour a total of six countries, namely UK, France, Japan, USA, Italy and Somali over the course of one year.
• Conducted by the Ministry of National Education, Z-Library Project is intended to disseminate the culture of reading, help develop libraries, deliver a service of sustainable quality, and provide materials support. Ziraat Bank’s support for the making of Z-Libraries decided to be set up in 81 cities continued in 2019.
• Additionally, the Bank keeps supporting the Medeniyet University Ziraat Bank Library Project, which is planned to be the largest library in İstanbul, with the aim of consolidating its support to the socio-cultural and economic development of Turkey and of gifting a permanent value to our country.
• In 2019, Ziraat sponsored Teknofest İstanbul, one of the largest aviation, space and technology events in the world in terms of the number of visitors.
• Improvements to schools located in priority development areas continued within the scope of the “Children on Vacation, Schools in Renovation” social responsibility project in 2019.
• One of the goals of the national education policies is to instill an awareness of cultural values, history and literature in the youth attending higher education as they are the ones who will be steering the socio-cultural and economic development and progress of Turkey in the future. In keeping with this goal, Ziraat Bank kept giving support to seminars, conferences and training activities organized by the Higher Education Student Loans and Dormitories Authority for the youth in higher education who live in dormitories owned by the said authority in 2019.

ADVERTISING AND COMMUNICATION ACTIVITIES
In “The Most Valuable 500 Bank Brands-2019” survey conducted by Brand Finance, Ziraat Bank was named Turkey’s most valuable bank brand, and the advertising film was broadcast in integration with the highly popular “Turkish Cinema” (Yeşilçam) commercial.

Subsidized Housing Loan advertising film for homes to be purchased from housing firms that have an agreement with Ziraat Bank, and Greenhouse Farming advertising film were broadcast.

Advertising film was aired for Inflation-Indexed Interest-Protected Term Deposit Account and Inflation-Protected Deposit Account products.

The advertising film produced for the launch of Bankkart Başak, the new card Ziraat Bank offered to its Commercial/SME customers, was released.

The advertising film specifically made for the first year of Bankkart was broadcast, and the advertising film explaining the Bankkart feature that enables post-shopping interest-free instalments was released. In addition, Bankkart advertising films made for the Mother’s Day and the Father’s Day were aired.

Three advertising films on “online channels” were broadcast which publicize the new generation Internet Branch and Mobile Branch that offer speed and convenience in banking transactions.

“ZIRAAT TURKISH CUP 10TH YEAR” ADVERTISING FILM WAS PRESENTED TO THE AUDIENCE WHICH WAS MADE TO CELEBRATE THE 10TH YEAR OF ZIRAAT TURKISH CUP.

“Ziraat Turkish Cup 10th year” advertising film was presented to the audience which was made to celebrate the 10th year of Ziraat Turkish Cup.

OTHER ACTIVITIES
Using the corporate identity in accordance with Ziraat Bank’s standards, all Ziraat Bank branches received visits in 2019 within the scope of Visual Identity Supervision activities which are being carried out with the aim of correctly perceiving the Ziraat brand image by customers, integrating corporate identity standards into all environments and preventing errors.

Ziraat Bank carries out activities to cement its position in the sector, to increase its brand value, and to become a brand that achieves complete customer satisfaction. In this context, the Bank commissioned a Customer Satisfaction Survey in 2019 to measure the customers’ level of satisfaction and loyalty.

Ziraat Bank became the most effective Bank in the sector in social media channels in which it operates in order to respond to its customers’ requests and expectations at each platform and keep customer satisfaction at the highest level. As of 2019, attracting more than 2,160,000 likes and followers at its Facebook page, the Bank increases its effectiveness in social media every day with its posts on Twitter with more than 396,000 followers, Instagram with 169,000 followers, more than 70 million viewings at YouTube and other similar platforms.

SPONSORSHIPS
Under the cooperation established between Ziraat Bank and the Ministry of Justice, support was given to the construction of the Packaging Waste Collection/Sorting and Manufacturing Facility for Products made of Recycled Plastics Project, which is set up Sincan Prison and Correctional Facility in Ankara housing 8,560 arrested and convicted individuals, with the aim of improving the living quarters of arrested and convicted people, providing better service to them and training them in a vocation or craft.

In a bid to contribute through theater to April 23 National Sovereignty and Children’s Day, to promote children’s theaters and to provide intercultural communication by following up the developments, Ziraat Bank, under the auspices of the Directorate General of State Theaters, has been sponsoring the Little Ladies, Little Gentlemen International Children’s Theater Festival organized every year between April 23-April 30 since 2005.

IN 2019, ZIRAAT BANK CLAIMED AWARDS WITH NUMEROUS PROJECTS, PRODUCT, AND BRAND INTRODUCTIONS AND SOCIAL MEDIA AND CORPORATE SOCIAL RESPONSIBILITY INITIATIVES CONDUCTED.

OUR ACHIEVEMENTS CONTINUE TO BE CROWNED WITH AWARDS.
In 2019, Ziraat Bank claimed awards with numerous projects, product, and brand introductions and social media and corporate social responsibility initiatives conducted.

The awards garnered in 2019 for Ziraat Bank’s initiatives recognized and admired by its stakeholders are listed below:

AWARDS
Data Analytics Award - Most Efficient Bank in Social Media
Lovemarks 2019 - Turkey’s Lovemark in Banking (4 years in a row)
Stevie Awards - “Best New Product or Service of the Year - Business Information Solution / Operation Center “Operation Center Everywhere” Project / Gold Stevie
Turkey Youth Awards - Best Bank
Good Life Brands - Best Banking and Financial Institution
Financial Services Forum Product & Service Innovation 2019 - Best International Project
EMEA Finance Awards 2018 - Best Transport / Highway / Renewable Energy Finance Deals
Universum and HBR Turkey –Most Attractive Employers Survey / Most Desirable Bank to Work for
Sardis - 155th Year Advertising Film / Integrated Communication / Banks / Silver Prize
Brand Finance Banking 500 - Turkey’s Most Valuable Banking Brand 2019
Stevie Awards - Ziraat Turkish Cup Advertising Film / 2 Gold +1 Silver Stevie
Stevie Awards - 155th Year Advertising Film / 1 Silver +1 Bronze Stevie
Clio Awards - Ziraat Turkish Cup Advertising Film / Bronze
Felis - Ziraat Turkish Cup 10th Year Communication / 1 Felis 2 Achievement Awards
Crystal Apple Awards - 155th Year Advertising Film / Crystal Award
Financial Innovation Awards 2019 - Business Life Transformation / Employee Interaction Initiative
Global Banking & Finance Awards 2019 - Most Innovative Digital Transformation Project and Employee Initiative
Effie - 155th Year Advertising Film
Cx Awards - Best Digital Customer Experience Award / Internet Banking Log-in with T.R. ID Card

INITIATIVES THAT ZIRAAT BANK BELONGS TO OR SUPPORTS
Banks Association of Turkey (TBB) - www.tbb.org.tr
Foreign Economic Relations Board of Turkey (DEİK) - www.deik.org.tr
International Chamber of Commerce (ICC) Turkey National Committee - icc.tobb.org.tr Kredi Kayıt Bürosu (KKB) - www.kkb.com.tr
TBB Risk Center - www.riskmerkezl.org
Economic Research Foundation - www.iav.org.tr
Internet Fraud Alarm System (IFAS) Interbank Card Center (BKM) - www.bkm.com.tr
Investor Compensation Center - www.ytm.gov.tr
Capital Markets Board of Turkey - www.tspb.org.tr
Call Centers Association - www.cagrimerkezleridernegi.org
Borsa İstanbul - www.borsaistanbul.com