VKF_FRAE_2017

404 VakıfBank Annual Report 2017 PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT to TL 19,485 million. The local and foreign investors’ demand for the securities issued by the Bank, made a contribution to the diversification of funding sources and the extension of the maturity structure. In 2017, VakıfBank’s shareholder’s equity increased by 20.89% compared to the previous year end and reached TL 23,258 million. Moreover, the share of equity in the assets was 8.60%. »» ASSESSMENT ON PROFITABILITY In 2017, VakıfBank’s net period profit reached TL 3,723 million increasing by 37.75% compared to the previous year end. In the same period, VakıfBank’s interest income reached TL 21,444 million while the interest expense was TL 12,823 million. Furthermore, VakıfBank’s net interest revenue was TL 8,621 million. Compared to the previous period, the interest income increased by 29.51% while the interest expense was increasing by 33.70%. Thus, the ratio of interest income to interest expenses was 167.24%. As of year-end 2017, VakıfBank’s return on average equity 17.52% while its return on average assets was 1.54%. Solvency Ratio Keeping the share of the interest bearing assets in the total assets at 92.64% in 2017, VakıfBank continued its strong liquidity structure, and maintained its solvency ratio. Continuing its growth in loans without compromising on risk control, VakıfBank’s capital adequacy ratio, with 15.52%, which was above the legal limits and target ratio, was another indicator of its financial strength. The capital adequacy ratio’s long term progress is given in the chart. In the following period, VakıfBank will expand its customer base and increase its product diversity while it continues to grow using potential growth opportunities in and outside the country. Return on Average Equity (%) Return on Average Assets (%) DISTRIBUTION OF ASSETS (%) 10 11 12 13 14 15 16 17 18 2017 2016 2015 2014 2013 0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 1.32 1.19 1.13 1.37 1.54 12.92 12.80 12.24 15.01 17.52 CAPITAL ADEQUACY RATIO (%) 12.5 13.0 13.5 14.0 15.0 15.5 14.5 16.0 2017 2016 2015 2014 2013 13.70 13.96 14.52 14.16 15.52 EVALUATION OF THE BANK’S FINANCIAL POSITION, PROFITABILITY AND SOLVENCY