VKF_FRAE_2018_uyg11

70 Section I: Introduction Syndicated Loans In April 2018, VakıfBank signed a syndicated loan agreement with the participation of 35 banks, amounting to USD 1,272 million in total. The deal consisted of three tranches amounting USD 229 million and EUR 778.75 million with a one-year maturity, and USD 100 million with a two-year maturity. As a result, following the biggest Eurobond issuance in its history conducted in January amounting a total of USD 650 million, the Bank also realized its largest ever syndicated loan deal. Designed to finance foreign trade, the all-in cost of the loan is Libor + 1.30% for USD and Euribor + 1.20% for EUR in the one-year tranche, and Libor + 2.10% for the two-year tranche. Although, the interest rate of the loan decreased 0.15% over the previous year, the roll over ratio came in at 120% with the participation of seven new banks. In the second half of 2018, with the participation of 20 banks from 12 countries, VakıfBank signed a syndicated loan deal consisting of three tranches, amounting to USD 122 million and EUR 528.5 million in one-year tranche, and amounting USD 130 million two- year tranche – totaling USD 855 million. The all-in cost of the loan is Libor + 2.75% for USD and Euribor + 2.65% for EUR in the one-year tranches, and Libor + 3.10% for the two-year tranche. As such, the roll over ratio of this transaction which is for the use of foreign trade financing was realized at 100%. With the first transaction of the year in April, the Bank’s total syndicated loan balance climbed to USD 2.1 billion, with a roll over ratio of 110% for fiscal year 2018. Turkey’s First Additional Tier 1 Issuance in the Form of Bonds On September 27, 2018, VakıfBank issued bonds to be included in Additional Tier 1 calculations, amounting TL 4.99 billion. The transaction is the first Tier-I issuance performed in Turkey outside of participation banks, being a perpetual bond with a fixed coupon payment. This bond issuance contributed 200 basis points to the AT-1 and capital adequacy ratios. Supporting the Real Economy via Mutual Agreements Under the Revolving Credit Agreement (RCA) signed with EBRD to support the import and export transactions of customers, the Bank procured loans amounting a total of EUR 22.5 million at different maturities in 2018. To finance import transactions of customers from Taiwan, the Bank provided a USD 6.6 million loan from Taiwan EXIM Bank with a maturity of up to five years. Loans Obtained from International Financial Institutions VakıfBank continues to collaborate with European Investment Bank (EIB), World Bank, European Bank for Reconstruction and Development (EBRD), German Development Bank (KfW) and French Development Agency (AFD) to provide long-term and cost-effective funding to the real economy. Activities with European Investment Bank (EIB) 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 EIB 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 TR Ministry of Treasury and Finance. Pursuant to the agreement signed between the Bank, EIB and the TR Ministry of Treasury and Finance on November 26, 2015, this 12-year facility with a three-year grace period was converted to an SME Financing loan. After In 2018, VakıfBank became one of the banks that provide the most international funding source to Turkey by using international funding actively and effectively. VakıfBank is on your side with long-term, affordable loan support to the real economy... REVIEW OF OPERATIONS IN 2018