VKF_FRAE_2017

PART I: INTRODUCTION 30 VakıfBank Annual Report 2017 We defined our Bank’s vision for the future on the basis of digitalization. In 2017, VakıfBank implemented radical projects of change and transformation. MESSAGE FROM THE GENERAL MANAGER We defined our Bank’s vision for the future on the basis of digitalization. As such, in our new organization chart, we dedicated one Assistant General Manager position to digital banking and payment systems. This structure will help us keep a closer watch on developments in the digital world and become one of the banks leading the digital transformation in the sector. Furthermore, we achieved a first in Turkey with our new organizational structure, by establishing the Local Governments Banking Marketing department in order to respond to the demands and needs of local governments in a faster and more efficient manner. With this new structure, we aim to meet local governments’ demands and needs concerning financing and other financial solutions in a faster and more efficient manner. We decided to establish commercial branches in order to create a branch structure in line with the revamped Head Office organization. With our new branch structure, we aim to customize the services we offer our customers in the commercial segment on the basis of locations and channels, so as to boost our service quality even further. VakıfBank is a large family with its subsidiaries serving in many different areas. We have recently launched efforts to establish a closer relation with our subsidiaries, the other members of our family, and strengthen ourselves mutually. One of our key objectives in the coming period will be to increase group synergy. In this respect, we have taken the necessary steps to actively market our subsidiaries’ products in the Bank’s branches. Soon enough, we started to collect the fruits of these measures, especially in the form of an increase in fee and commission income. We are also working on developing the information processing capacities of our subsidiaries, and ensuring a fast and efficient communication among our subsidiaries and the Bank’s IT infrastructures. In the upcoming period, VakıfBank Finance Group, together with its subsidiaries, aims to offer a one- stop solution to the full range of customer needs. Thus, we will offer a better quality and faster service to our customers, and our subsidiaries will make larger contributions to the consolidated balance sheet of the Bank. We also made radical changes to the career planning and compensation policies concerning our employees. The employees, whom we consider to be the most valuable asset of the Bank, were previously able to move only vertically in their careers. Following the recent changes, it has become possible for them to make horizontal moves as well. We also implemented a scheme making it possible for employees to be paid according to their performance. All these measures started to bear fruit in a short space of time. In the coming periods, change and transformation will always remain on our agenda. In order to become a modern and highly competitive bank, we shall take all the necessary steps without losing time. In addition to these, our Board of Directors started to visit our Regional Directorates in order to observe the activities of our branches in place, visit our customers to hear their demands, and to meet with the companies we have not been able to work with so far. In this scope, Board Members met with branches, province managers, NGOs and clients in Erzurum, Diyarbakır and Adana. We plan to continue these regional visits which turned out to be highly productive. In 2017, we received numerous prestigious prizes on the national and international arenas in recognition of innovative and pioneering practices. With our 5-year, EUR 500 million Covered Bond issuance in 2016, our first Euro-denominated issuance of its kind, we were deemed worthy of “Best International Bond Issuance of the Year” and “Best Financial Institution Deal of the Year” awards at the “Bonds and Loans 2017”, one of the most prestigious award organizations of the Turkish capital markets and finance sector. Furthermore, the Global Capital magazine granted use the top prize for Financial Institution Deal of the Year in the category CEEMEA Financial Institution Deal of the Year, in January 2017. In this period, we were proud to receive numerous prestigious business