VKF_FRAE_2017

PART I: INTRODUCTION 46 VakıfBank Annual Report 2017 The return on equity of the banking sector was 13.7% and return on assets was 1.51%. THE WORLD AND TURKEY IN 2017 »» IN 2017, THE NET INTEREST MARGIN NARROWED. In the first quarter of 2017, there was a rapid increase in the profits of the banking sector due to the base effect. However, the ensuing reduction of the base effect and the net interest margin, the annual increase in the sector’s profit slowed down after April, but then rose somewhat towards the end of the year. The sector raised deposit interest rates to fund the rapid increase in loans. The rising deposit interest rates, in turn, resulted in a narrowing of the net interest margin, which then slowed down the increase in the sector’s profits. In conclusion, in 2017, the profit of the Turkish banking sector increased 30.8% over the previous year. The return on assets rose from 1.4% in end-2016 to 1.51% in 2017, and the return on equity from 12.50% to 13.7%. Banking sector profit The profit of the Turkish banking sector increased 30.8% over the previous year. 30.8% NET PROFIT AND NET INTEREST INCOME OF THE PERIOD Source: BRSA -20 20 0 40 60 Dec.08 Dec.09 Dec.10 Dec.11 Dec.12 Dec.13 Dec.14 Dec.15 Dec.16 Dec.17 Net Profit of the Period (Annual % Change) Net Interest Income (Annual % Change)