VKF_FRAE_2018_uyg11

VakıfBank Annual Report 2018 23 Inflation spiked to 25.24% in October due to the surge in the foreign exchange rate, before falling back to 20.30% in December thanks to tight monetary and fiscal policies and the recently launched Total Anti-Inflation Program. A gradual decline in inflation is expected under the New Economy Program. To halt the rapid rise in the exchange rate and ensure price stability, the Central Bank of the Republic of Turkey took a series of measures during the year, including lowering reserve requirements and modifying the management of TL and foreign currency liquidity. With high market volatility and a deterioration in the inflation outlook in September, a strong contractionary stance was adopted to support price stability. On September 13, 2018, the CBRT hiked the policy rate by 625 basis points to 24%. In addition, the CBRT emphasized that it would maintain a tight monetary policy until a lasting decline in inflation was achieved in the following period. Throughout 2018, the Turkish banking sector maintained its solid structure and expanded its total assets by 19% to TL 3,867 billion. Loan growth slowed slightly during the year due to the economic stabilization process. As of December 2018, the sector reported cash loan growth of 14%. As for deposits, the most important funding source of Turkey’s banking sector, changes were made in August 2018 to the income TDS rates applicable to interest that accrues to deposit accounts opened or renewed. These modifications to existing regulations were made to encourage savings in Turkish liras and extend deposit maturity terms. Banking sector deposits increased 19% in December 2018 compared to the end of 2017, climbing to TL 2,036 billion. In 2018, VakıfBank provided significant support to the real sector, as it has for the past 65 years. Increasing its total assets to TL 331.4 billion during the year, the Bank provided TL 286.8 billion in support to the national economy in the form of cash and non-cash loans. While raising its total deposits by 16% to TL 179.4 billion, our Bank also continued to secure cost-effective and long-term foreign financing, despite the increasingly challenging conditions, especially in emerging markets. We are committed to doing our part to ensure the balanced and sustainable growth of Turkey’s economy in the coming year – with all our might. On behalf of our Bank, I would like to extend my gratitude to our esteemed customers and dedicated employees for playing a key role in our achievements and being on our side during such a challenging period, and to our shareholders and investors for their unwavering trust in us. Yours sincerely, Assoc. Prof. Şahap Kavcıoğlu Deputy Chairman In 2018, VakıfBank provided significant support to the real sector just like the past 65 years. Total Cash Loans (TL Billion) 2018 221.6 2017 182.9