VKF_FRAE_2017

PART I: INTRODUCTION 72 VakıfBank Annual Report 2017 As a result of its success in sustainability in projects for targeting SMEs and medium-sized businesses, the European Investment Bank allocated EUR 300 million funds to the Bank under the name of VakıfBank Loan III for SMEs and Midcaps. REVIEW OF OPERATIONS IN 2017 12-year facility with a 3-year grace period, the Bank allocated EUR 53.1 million in loans as of end-2016. The remaining EUR 21.9 million tranche, which was not allocated, was turned into a SME Financing loan with an agreement signed between VakıfBank, EIB and Undersecretariat of Treasury in March 2017. Allocations within the scope of the aforementioned scheme were competed as of October 2017. As a co-financing facility to USD 80 million TurSEFF II project obtained through an agreement signed with the European Bank for Reconstruction and Development (EBRD) in 2013, VakıfBank, European Investment Bank and the Undersecretariat of Treasury converted a EUR 50 million Energy Efficiency Cofinancing Loan Agreement. Loan allocations under this 8-year loan with a 3-year grace period were completed by June 2017. The European Investment Bank (EIB) allocated a EUR 200 million facility to VakıfBank in 2013 to be extended to Turkish municipalities and their subsidiary companies. VakıfBank and the European Investment Bank signed the Municipal Infrastructure Projects Financing Loan Agreement for a EUR 100 million tranche of this facility on December 19, 2013 under the guarantee of the Undersecretariat of Treasury of Turkey. Pursuant to the agreement signed between the Bank, the European Investment Bank and the Undersecretariat of Treasury of Turkey on November 26, 2015, this 12-year facility with a three-year grace period for principal repayments was converted to an SME Financing loan. After the conversion, EUR 100 million portion was allocated. VakıfBank signed an additional SME-B Loan Agreement on May 6, 2016 for the remaining EUR 100 million spare of the EUR 200 million facility which was obtained in 2013. The EUR 50 million first tranche of the loan was transferred to the Bank’s accounts on October 14, 2016 and the funding source was fully disbursed by November 2016. The last tranche of the loan in the amount of EUR 50 million arrived in the Bank’s accounts on December 22, 2016. Loan disbursements from this funding source are currently ongoing. This is a 12-year facility with a four-year grace period. The loan agreements for the EUR 200 million facility allocated for VakıfBank by the European Investment Bank in 2014 under the guarantee of the Undersecretariat of Treasury of Turkey as part of VakıfBank Loan II for SMEs and Midcaps II project were signed in the form of two EUR 100 million tranches in 2014 and in 2015. These loans have a maturity of eight years with a three-year grace period. Disbursements from the VakıfBank Loan II for SMEs and Midcaps II project were completed as of October 2016. As a result of its sustained success in projects targeting SMEs and medium-sized businesses, the European Investment Bank allocated a new EUR 300 million fund to the Bank under the name of VakıfBank Loan III for SMEs and Midcaps. To be obtained under the guarantee of the Undersecretariat of Treasury of Turkey, the first agreement for the loan amounting EUR 100 million was signed on December 16, 2016. This 8-year facility with a 3-year grace period was transferred to VakıfBank accounts on March 9, 2017. The loan allocations under the mentioned facility continues. Agreements concerning the remaining EUR 200 million facility allocated to VakıfBank are planned to be signed in 2018. VakıfBank provided funding sources amounting to USD 110 million from the European Bank for Reconstruction and Development (EBRD) in the framework of TurSEFF II and TurSEFF III programs. VakıfBank became the first bank to allocate the EBRD’s TurSEFF III funds.