Message from the General Manager
VAKIFBANK REMAINED COMMITTED TO TÜRKİYE’S BALANCE SHEET.
With over TL 4 trillion in assets, we are Türkiye’s largest publicly traded bank.
Dear Stakeholders,
The year 2024 was marked by a global struggle against inflation and uncertainty regarding the end of tightening financial conditions. Additionally, the ongoing war between Russia and Ukraine, Israel’s occupation of Gaza in the Middle East, and rising tensions with neighboring countries suppressed risk appetite. Tight monetary policies in many developed economies, particularly in the US and in Europe, raised concerns about a potential global recession. Following a peak in inflation in the Eurozone, these policies contributed to stagnation in the manufacturing sector. In response, the European Central Bank (ECB) began cutting interest rates in June 2024, driven by apprehensions that this sluggishness would affect the labor market and dampen inflation expectations. The ECB initiated rate cuts three months ahead of the US Federal Reserve (Fed), ultimately reducing rates by 100 basis points by the end of 2024. In contrast, the Fed also cut rates by 100 basis points from September 2024 until year-end, responding to rising unemployment and lower-than-expected non-farm payrolls. By the end of the year, the Fed lowered its policy rate to a range of 4.25%-4.50%, aligning with market expectations.
In 2024, the measures taken to combat inflation helped bring the general price level closer to targeted outcomes without significantly hindering economic activity, as had been feared. The US economy grew by 2.8%, while the Eurozone saw growth of 0.7%. Although challenges in the real estate sector persisted, China’s economy expanded by 5.4%, fueled by a robust increase in consumption expenditures and strong performance in industrial production and retail sales.
With the implementation of economic policies, the Turkish economy has rebalanced domestic demand and improved its current account balance. Additionally, increased portfolio investments and financing from abroad have boosted the CBRT’s foreign exchange reserves. As a result of these developments, the Turkish economy continued to grow this year, finishing 2024 with a growth rate of 3.2%.
In 2024, VakıfBank focused on strengthening Türkiye’s balance sheet. We maintained our status as the largest publicly traded bank in Türkiye, with assets surpassing TL 4.0 trillion. During this time, we supported the real sector and households, increasing our performing loans by 34.02% to TL 2.0 trillion. Our selective credit policy, which prioritizes manufacturing, exports, and employment, led to a 32.00% rise in commercial loans, reaching TL 1.6 trillion. Additionally, we grew our retail loans by 42.78% to TL 403 billion.
Total deposits remained our primary funding source, rising by 29.36% year-on-year to over TL 2.5 trillion. During this period, we continued our strategy of securing broad-based, cost-effective funding, resulting in a 57.79% increase in savings deposits to TL 1.2 trillion and a 55.64% increase in demand deposits to TL 668.7 billion.
Despite tight global financial conditions in 2024, we preserved our leading position in international markets and sustainability-themed financing, leveraging resources obtained from abroad. Through various transactions, we brought a total of USD 11.5 billion in foreign resources to Türkiye.
We upheld our leading position in foreign trade and financing by leveraging our knowledge and experience, technological infrastructure, customer-specific services, and correspondent bank network.
We completed a Diversified Payment Rights (DPR) securitization transaction exceeding USD 700 million in direct funding. This transaction, which has a final maturity of 10 years, marks a historic milestone as the longest-term and largest DPR securitization we have conducted for institutional investors. With this achievement, we reaffirmed our position as the bank with the highest DPR securitization balance in Türkiye.
In April 2024, we successfully issued USD 550 million in Basel III-compliant Additional Tier 1 capital, marking the first market transaction of its kind among public banks in Türkiye. In June 2024, we further strengthened our capital structure in line with our effective capital management strategy by issuing USD 700 million in subordinated bonds, which will be included in the calculation of Basel III-compliant Tier 1 capital. As a result, we became the leader among banks issuing eurobonds with capital provisions in 2024.
In 2024, we maintained our leadership in international markets and sustainable financing by leveraging external resources.
We remained committed to supporting the real sector and households.
In 2024, we continued to add value to the economy through our broad customer base, strong capital structure, and an innovative approach that leads the sector. With our robust technological infrastructure, we offer flexible and innovative solutions tailored to our customers’ needs in the digital landscape. By year-end 2024, the number of SKY customers—one of the products launched with this vision—exceeded four million. During this period, we introduced the SKY SME product to digitalize our commercial customers’ use of deposit, foreign trade, and cash management products and services from start to finish. For SMEs, we facilitated access to financing with reduced costs and minimal operational burdens, and we enabled farmers to access financing digitally through our SKY Agriculture product. Furthermore, we developed solutions for various sectors with Vinov, our payment and collection ecosystem product branded as a VakıfBank innovation. We also made a significant impact with our Vinov Campus and Vinov Pharmacy products, specifically designed for the education and healthcare sectors.
During this period, we continued to contribute to our country’s foreign trade. We maintained our leading position in the sector by leveraging our expertise in foreign trade and financing, along with our advanced technological infrastructure, high-quality tailored services, and a robust network of correspondent banks. In 2024, we launched the V-PART product, providing a strong and flexible financial infrastructure for businesses engaged in global trade. This initiative enabled us to enhance our collaborations by offering adaptable solutions to customers.
Additionally, we reached our customers through a variety of channels during this time. Our digital platforms, which cater to rapidly evolving demands, position us among those banks with the most extensive transaction offerings in the sector. As a result of our commitment to customer satisfaction and seamless transactions, the number of our digital banking customers surpassed 14.4 million in 2024.
As VakıfBank, we steadfastly support the principles of the United Nations Global Compact, the largest corporate sustainability initiative in the world. In 2024, we prioritized sustainability in our corporate strategies by restructuring our Bank and establishing the Sustainable Banking Department. This initiative placed responsible and sustainable banking at the heart of our operations. We maintained our ‘A’ rating in the Climate Change Program and raised our rating in the Water Security Program to ‘A’ in the CDP assessments, which included data from more than 24,800 organizations worldwide. Consequently, we were honored to be included in the CDP’s 2024 Global A List for both Climate Change and Water Security programs. This achievement recognizes and reaffirms our commitment to sustainability, highlighting our efforts to minimize environmental impact and protect water resources.
In addition to the values we contribute to the banking sector, we also enhance our country’s intellectual capital. In 2024, we celebrated the sixth anniversary of VakıfBank Culture Publications, which we introduced to enrich cultural life with the motto “Ve benzersiz kitaplar/And unique books.” Since its inception, VakıfBank Culture Publications has presented approximately 350 works to readers across various categories, including literature, history, philosophy, human studies, society, and art. Throughout this six-year journey, we have embraced cultural publishing as a vital aspect of our sustainable social responsibility. Our VakıfBank Culture Publications brand has enriched the cultural landscape, allowing us to bequeath the assets and values we are entrusted with to future generations.
This year, we held the fifth “Hack to the Future” hackathon, aimed at developing innovative solutions focused on sustainability. A total of 225 teams competed fiercely in this event, where we combined our digital transformation vision with the energy of young innovators, leading to 14 teams reaching the finals. We recognize the promising solutions presented by these teams—young minds who have the potential to shape the future of the finance world—renewing our hope that their creative ideas will bolster our innovative approach and contribute to the digital transformation of banking.
Last year, we celebrated our 70th anniversary as Türkiye’s largest publicly traded bank. For seventy years, we have worked tirelessly for the economic and social development of the country where we thrive. In this journey, we have earned a special place in the hearts of the Turkish nation by creating values not only in banking but also in financial and non-financial areas. We said “We are seventy years old but it’s not enough.” Since 1954, we have dedicated ourselves to the bright future of our country, growing to become one of the two largest banks in Türkiye, serving over 20 million customers through nearly a thousand branches and employing more than 23,000 people. As we mark our seventh decade, we are proud that we are providing uninterrupted support to our country, with an asset size exceeding TL 4.0 trillion. We have consistently stood by our nation, offering innovative products and services that range from cultural and sports initiatives to social responsibility projects. Moving forward, we will continue to stand by our nation, working with great commitment to uphold the values entrusted to us and to support economic development. I would like to take this opportunity to express my sincerest gratitude to our customers and shareholders for their trust in us throughout 2024, to our employees whose contributions have been invaluable to our success, to our Board of Directors for their unwavering support, and to all our other stakeholders for their contributions.
Sincerely,
Abdi Serdar ÜSTÜNSALİH
General Manager
In April 2024, we successfully issued USD 550 million in Basel III-compliant Additional Tier 1 capital.
We were on the Global A List in Climate Change and Water Security programs.