Our Financial
Capital

In 2023, we, as VakıfBank continued to stand by our customers by continuing our support for our country’s sustainable development. In this period, we increased our assets by 66.36% to TL 2,797 billion. Thus, we remain to be Türkiye’s second-largest bank. This year, we have endeavored tirelessly with all our strength to ensure the effective functioning of the financial system and the proper utilization of resources. In 2023, we increased our commercial loans by 61.20% and our retail loans by 58.14%, demonstrating our commitment to supporting all segments of society. The support we provided to the national economy through cash and non-cash loans exceeded TL 1,989 billion in 2023.

On the funding part, we increased our total deposits by 73.96% to TL 1,962 billion. In terms of wholesale funding, we maintained our leading position in international debt capital markets. We continued to provide varied medium and long-term foreign funds to support the national economy and our customers during this time, contributing a total of USD 6.3 billion fresh funding. We were the bank with the greatest sustainability-themed resources in its funding structure in 2023. We shall focus on new and different alternatives in wholesale funding in the upcoming periods and maintain our pioneering position in this field.

Despite consecutive monetary tightening and interest rate hike measures taken in the global markets in 2023, parallel to the improvement in our country’s CDS levels, we secured a total of USD 6.3 billion in new funding from international markets under various structures, with long-term and low-cost characteristics. With these transactions in foreign markets, we have once again proven the reputation and credibility of Türkiye and VakıfBank in the eyes of international investors with international funding reaching a total of USD 14 billion.

Under the securitization program based on future flow and treasury transactions, we completed the Turkish banking sector’s largest single DPR securitization transaction in the first quarter of 2023 despite the challenging conditions affecting global markets in the first half of the year, thanks to strong program ratios and collateral infrastructure. As a result of the transactions with maturities ranging between 4 and 5 years, we have provided USD 2 billion of new cost-effective funding. In the recent years, especially in the Corporate, Commercial and SME segments, we have increased the capacity of our securitization program based on future flows from abroad as we have facilitated more of our clients’ foreign trade transactions. We have thus achieved a successful operation by utilizing our increased capacity efficiently.

We also renewed our sustainability-themed syndication loan amounting to USD 815 million in May 2023. We were able to include 5 new banks in this loan, which were not included in the syndication transaction we concluded in the same period of the previous year. In November 2023, we renewed a sustainability-themed syndication loan amounting to USD 653 million with the participation of 15 new banks from all over the world, from Europe to the USA, from China to the UK, which were not included in the previous transaction. In addition, the cost of the loan was 75 basis points lower for both currencies compared to May 2023 and November 2022.

We have maintained our position as the Turkish bank with the most sustainability-themed funding owing to the repo and syndication loan transactions performed. In December 2023, we signed a sustainability-themed secured funding agreement worth EUR 200 million with a maturity of 2 years based on sustainability criteria. As an indicator of our commitments in the field of sustainability, we have designated loans provided to women entrepreneurs and new loans in the renewable energy production sector with environmental and social themes as the performance criteria for our secured funding transaction. In addition, for the syndication transactions renewed in the first and second periods of the year, we have designated environmental and social-themed loan disbursements, including sub-categories such as green housing, environmental-friendly transportation, loans to women entrepreneurs, and loans for regions affected by earthquakes, as the sustainability performance criteria for our secured funding transaction.

In September 2023, we conducted a sustainable Eurobond transaction amounting USD 750 million. Thanks to the strong demand, the coupon rate was 9.0% and the yield rate was 9.125%, 62.5 bps below the initial level. This transaction was the most successful Eurobond issuance carried out by Turkish banks in 2023, due to its low interest rate, the highest issue amount and the longest maturity. We also became the first Turkish bank to conduct a sustainable Eurobond transaction for the third time. As a result of this issuance, we increased the total amount of our sustainable Eurobond issuance to USD 2 billion and strengthened our pioneering position among Turkish banks in this field.

Throughout 2023, we also carried out 10 private placements with medium and long-term maturities amounting USD 693 million in various currencies under the Global Medium Term Note Program (GMTN).

Besides, with the advantage of our high credibility and reliable position in the sector, we provided high value-added funding of USD 350 million from alternative sources such as bilateral loans from correspondent banks, post financing and SACE guaranteed loan with a 7-year maturity.

As one of the most active banks in the international capital markets, we continue our uninterrupted support to deepen capital markets in Türkiye, increase product diversity, and create resources for the national economy and the real sector by means of the transactions carried out under various structures.

Below are the details of our funding structure as of the end of 2023.

We make available sustainability-themed products, constituting one of our Sustainable Development approach’s essential components, for our customers to support socio-economic development by considering all segments of society. We support all segments of society, from households to the real sector, with the support we provide. While supporting our customers, we take steps to evaluate and manage the environmental and social impacts of the projects we finance, with the awareness that our most significant impact in the environmental and social domain is through financing.

Support for SMEs

In 2023, we continued to support SMEs, who create high-added value for Türkiye’s economy through their job creation capacity, with our products and services offered under SME banking. We have strengthened our current structure to offer the products and services we provide to SMEs to a wider audience. In this context, we closely followed the requirements of SMEs by performing customer visits both online and in person. We increased our SME loans to TL 378 billion according to the legal SME definition during this period.

In 2023, we continued to offer KGF (Loan Guarantee Fund) Support Loan Packages to SMEs to support companies that create added value. With the Loan Guarantee Fund guarantee, we prepared a total of 15 different loan packages for SMEs and non-SMEs. Within the scope of the packages, we have provided support for employment, working capital requirements and investment financing to all sectors engaged in economic activity.

Due to the earthquake disaster that occurred on February 6, 2023, we have supported businesses operating in Kahramanmaraş, Gaziantep, Şanlıurfa, Diyarbakır, Adana, Adıyaman, Malatya, Elazığ, Osmaniye, Hatay and Kilis provinces to meet their capital requirements with the “KGF 6 February Earthquakes Operating Expenses Support Package.” We have also provided financing for the investment expenditures of enterprises operating in these provinces with the “KGF February 6 Earthquakes Investment Support Package” for the financing of their investments and operating expenditures related to their investments.

In order to support SMEs’ access to finance, we participated in all of the zero-interest emergency support loan programs provided by KOSGEB this year.

In 2023, we supported small businesses through Financial Friendly Hand - FIDE, which we prepared for tradesmen and SMEs who are our Bank’s customers. With FIDE, which contributes to the growth of businesses through its fast and flexible solutions, we provided our customers with convenience in many fields such as free money transfer, free checkbook, advantageous deposit interest, special POS fees and VakıfBank ProCard privileged spending advantages.

During this period, we launched the “Sky SME” digital banking service to enable businesses to carry out their banking operations, including loan utilization, deposit transactions, foreign trade, and cash management, end-to-end in a digital manner through Internet banking and mobile banking channels. Thus, we became the first bank to offer such a wide range of digital product diversity and transaction sets in the field of commercial banking to the customers. We offer the opportunity to carry out banking transactions digitally end-to-end without the need to visit a branch, providing a unique customer experience through Sky SME. In 2023, we included customers with a certain credit score level into the Sky world. In the medium term, we aim to enable all of our commercial customers to conduct their transactions in digital environments.

With our focus on digitalization and innovation, we continued to establish digital collaborations in 2023 aimed at customer acquisition and end-to-end loan utilization through digital channels. Through the provided collaborations, we ensured that customers benefit from our services quickly and in a user-friendly manner via digital platforms. We also conducted various initiatives towards widespread and innovative solutions that shall save time and operational processes.

In 2024, we shall continue to support SMEs with our responsible financing and sustainable cooperation approach, offering new products allowing SMEs to access financing without interruption and protect employment. In addition, unlike our competitors, we shall continue to highlight our strength in the sector by offering customer-oriented, innovative and successful solutions to Retail Banking customers.

Support to Local Governments

As VakıfBank, we are implementing all the solutions that our municipalities need by combining our know-how of many years for “Municipality Banking” with our powerful technological infrastructure in the fields of cash management and public collections.

We support all public organizations, municipalities, special administrations and their subsidiaries in the field of local governments with our direct banking products and services through our organizational structure, which is unique to VakıfBank in the banking sector. In addition to providing banking services in line with the organizations’ own special laws and regulations, we also provide services such as consultancy, financial solutions and product development when needed to prevent issues in the public audit system.

In 2023, as VakıfBank, we continued to support municipalities in the implementation of environmentally friendly transportation investments within the scope of green financing activities. In this period, we have played an active role in clean energy production by providing loans for renewable energy investments of our municipalities.

During the February 6 earthquake disaster, we made it easier for earthquake-affected municipalities to make various banking transactions and loan payments. We provided the necessary financial support to the relevant public organizations for the construction of the buildings that began after the earthquake. We also supported social support projects and fund-raising activities in cooperation with AFAD (Disaster and Emergency Management Presidency), Red Crescent and municipalities.

In the upcoming period, we shall continue to finance local governments and public organizations in order to provide them with the financing they shall need to fulfill their services and to provide the necessary support by creating solutions that shall facilitate their banking operations and transactions. At the same time, we shall make the lives of both local governments and our citizens easier through innovative solutions we developed for the banking business and transactions between citizens and local governments & other public organizations and authorities to be carried out quickly and effectively. We shall continue to enhance our permanent solution partnership in the operations of our organizations and dynamically fulfill our responsibilities in public banking to the highest level.

Support for Foreign Trade

As a result of our extensive network of correspondent banks with which we cooperate worldwide and our effective management activities, we have added more than 100 organizations operating in different regions in 2023, and we continue to carry out our customers’ foreign trade transactions through 1,300 banks and financial organizations in nearly 120 countries with our quality services at global standards.

With the increase in our country’s market share in foreign trade, we enhanced our correspondent bank relationships, and as VakıfBank, we also increased our market share. In order to contribute to the development of our bank’s strong market share in foreign trade and to ensure the hassle-free continuation of our relationships with correspondent banks, we made changes to our organizational structure. With a profound understanding of the significant contribution of foreign trade to the national economy, we have begun managing our correspondent relationships through two directorates. This initiative aims to ensure the widespread coverage of our customer portfolio and to facilitate effective coordination. In this respect, we started to intermediate the transactions of our foreign trade customers, which increased by 20% compared to the previous year and reached 26,000 by the end of 2023, in a faster manner. We increased our Bank’s total foreign trade volume by 13% to USD 120 billion by the end of 2023 thanks to our expert teams and extensive correspondent bank network.

Thanks to our specialized teams, advanced technological infrastructure and digital channels, we enabled our customers to carry out their foreign trade transactions faster in 2023. For the purpose of facilitating the lives of more than 17 thousand exporter customers, we expanded our customer portfolio through systemic improvements tailored to our manufacturing exporter customers by enabling them to issue their Export Price Acceptance Documents through online banking.

Türk Eximbank’s Export Loan Programs, pre-shipment and post-shipment financing resources of the CBRT to support exports, and the protocol signed with İhracat Geliştirme AŞ (İGE) provide alternative solutions to foreign trade financing requirements and continue to contribute to the development of exports by supporting the growth of our country’s economy.

In addition, we have been positioned among the banks that contributed the highest capital to the IGE, which was established to provide guarantee support to exporters. In this regard, we completed the necessary system integration processes to provide IGE equity and treasury-backed guarantees to exporters. In this regard, we extended loans with the IGE guarantee to facilitate exporters’ access to loan throughout the year.

In 2023, within the scope of the protocol signed with the Türkiye Exporters Assembly (TİM), we launched the Vade(SİZ) Export Loan Package to contribute to the access of commercial exporters, who play a significant role in maintaining the balance of foreign trade and are the leading force of the country’s economy, to financing.

Thanks to our correspondent network, that we strengthen each day in line with the requirements of our customers, we facilitate access to medium and long-term financing sources. In line with the demands and requirements of our customers, we are extending our products and services in accordance with the agreements we have made with international financing organizations such as the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC) and the Taiwan Export and Import Bank (TEXIM), as well as our cooperation with export loan agencies such as Hermes, Serv, SACE and Cesce, and we also provide services to our customers with medium and long-term sovereign loan facilities.

Besides our qualified products and services, we further provide transfer services to our customers, for which we intermediate domestic and international foreign currency payments through our wide correspondent network, in 15 different currencies and with our correspondent accounts in nearly 50 banks in many countries around the world, and we also provide competitive prices to our customers making bulk transfers. In 2023, we increased our foreign currency transfer volume by approximately 30% in terms of units compared to the previous year, reaching 900 thousand.

In 2024, we shall focus on broadening our customer portfolio and work towards its sustainability being well aware of the significant contributions of foreign trade to the national economy. Taking customers’ requests and requirements into account, we shall expand our products and services, and provide support to foreign trade customers, first and foremost exporters.

Support to Agriculture

As VakıfBank, we recognize the strategic importance of the agricultural sector in terms of sustainability. In this regard, we work tirelessly with our expert agricultural personnel to strengthen agriculture and farmers and carry the sector to the next level. In 2023, we developed innovative products for the financial requirements of farmers. By presenting these products to our farmers with advantageous offers, we financed their operating costs.

In this period, we finalized one of the major collaborations in the agricultural sector. Within the scope of the agreement between our Bank and Trakya Birlik, one of the most established farmers organizations of our country, we have provided all our agricultural banking products, primarily TarımKart, with advantages to nearly 30 thousand farmers in the field. Through this agreement, we have ensured that our farmers in a total of 13 provinces, primarily in Edirne, Tekirdağ and Kırklareli, can use some or all of their TarımKart limits as cash advances for the purchase of agricultural inputs such as diesel fuel, fertilizer and seeds at over 10 thousand contracted merchants.

In addition, within the scope of the protocol we signed with Kayseri Sugar Factory, we enabled the smooth payment of the product prices of our farmers to whom we extended our Contracted Production Loan product, as in previous years. In 2024, we aim to extend our contracted loan product instantly through off-branch channels without requiring any documents from the farmers. Thus, with this system, to be a first in the sector, we shall enable farmers to benefit from Contracted Production Loans without the need to visit a branch.

In 2023, we provided operational and investment financing support to farmers through our loan products covering all agricultural sectors, from crop production to aquaculture. So far, we have supported 330 thousand farmers and contributed approximately TL 13 billion to the agricultural sector by the end of 2023. In 2023, we increased the number of our agricultural banking customers to 400 thousand and increased our agricultural cash loan disbursement volume by 43% compared to the previous year. Furthermore, we accelerated our field activities in this period and increased the number of VakıfBank-contracted agricultural merchants where farmers can make interest-free purchases and the turnover of TarımKart merchants.

In the upcoming period, we aim to continue to support our farmers by initiating our “Digital Agriculture Application” and “Sky Agriculture” loan disbursements. Through these products, our farmers shall be able to make agricultural card applications and loan disbursements through our digital platform. This way, we shall expand our product range and offer our products and services to our farmers not only in our branches but also through mobile channels.

As VakıfBank, with the support of our digitalization process, we shall continue to improve our products, reveal the agricultural production potential of our country, support agricultural organizations by partnering with farmers, and empower farming by being the strength alongside our farmers.

Support to Households

As one of the sector’s leading banks in retail banking with our experience and customer-focused strategy, we serve approximately 22 million retail customers and continue to provide financial support to households with our products in both loan and savings deposits.

As a bank that has been aiming to develop the national economy as well as itself in all its activities since the day it was founded, we not only support production, exports and employment, but also work to provide new products that shall enable our individual customers to utilize their savings in the most effective way.

In February 2023, following the devastating earthquake catastrophe we experienced, we supported the urgent cash requirements of citizens in the affected provinces. Within this scope, as VakıfBank, we created financing resources to support individual requirements and disbursed 112,033 Earthquake Support Loans totaling over TL 10 billion. As VakıfBank family, like we have always done, we supported the healing process as united with our nation in this period.

Leaving loan limit management to customers’ disposal, and enabling them to manage their budget effortlessly on mobile or Internet banking channels without having to visit a branch, Sky Limit remained an attractive option for users of all segments. In 2023, we continued to define special limits to customers tailored as per their workplace, titles, and positions after we identified certain groups based on sector, occupation, and income.

Additionally, in the second half of 2023, we updated the mobile banking interface for granting loans under the Sky Limit product, which we had begun accepting preliminary applications for through VakıfBank Mobile the previous year. We enabled the possibility of instant loan disbursement within seconds through user-friendly, simple, understandable, and streamlined interface.

We introduced a new campaign model for retail loans. With the product that we launched as “Loan Earning with Bankomat,” we enabled our customers who are in need of cash to earn interest deductions in the following month’s loan installments depending on the bankomat card expenditures they shall make through physical/virtual POS each month.