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the suspension of the debt ceiling limit
until February 7, 2014 and giving the
required expenditure authorization to the US
government.
Moderate recovery
The Euro zone emerged from recession and
grew by 0.2% in the second half of 2013.
However, strong indications as to whether
or not this moderate recovery would be
permanent have not yet been received.
Nevertheless, financial distress was another
factor that came to the fore. Despite debt
write-offs in the Euro zone, the ratio of public
debt to gross domestic product remained
well above the Maastricht Criteria in many
European countries. The European Central
Bank (ECB) decreased its policy interest rate
from 0.75% in May to 0.50% and further
reduced it by 25 basis points to reach 0.25%
in November. If Euro zone inflation continues
to remain low, a new policy design with
different policy instruments may come into
the picture.
Significant uncertainties in global growth
As one of the markets significantly
contributing to global economic growth, the
Chinese economy grew 7.7% in 2013, the
lowest growth performance in the last three
years. In my personal opinion, the Chinese
economy is one of the significant uncertainties
affecting global economic growth with its
declining investments, housing market bubble
and shadow banking system.
Dear Shareholders,
To cope with the financial crisis that began in
the United States during 2008 and later spread
to developed and developing countries, the US
Federal Reserve (Fed) took many measures
to cope with negative effects. To stimulate
economic growth and the employment
market, the Fed implemented a monthly
US$ 85 billion asset purchase program in
addition to other policy instruments. In May
2013, in line with the positive data coming
from housing and labor markets, the Fed
gave the first signal that it was able to slow
the pace of the asset purchase program. The
expectations related to this development gave
direction to financial markets in the second
half of the year. Indeed, in December 2013,
the Fed announced that it would reduce the
asset purchase program by US$ 10 billion
beginning in January. The Fed Chairman, Ben
Bernanke, stated that if the recovery of the
US employment rate remained on course,
the asset purchases would likely continue to
be cut at a measured pace in later periods;
this gave the first signal that we had entered
an assets re-pricing period from that point
onward.
During the year, another important
development in terms of the global economy
was the budget dispute between the House
of Representatives and the US Senate. On
October 17, 2013, this conflict, that negatively
affected all markets, was postponed to a
later date by reaching a compromise on
Japan’s largely export-driven economy was
affected by the global economic crisis of 2008
along with the rising public debt as a result of
2011 tsunami which added to the pressure on
the economy. The Abe Government that came
to power 2013 took a number of measures to
improve low levels of growth and inflation.
In addition, the Bank of Japan declared
an aggressive three-stage expansionary
monetary policy to curb deflation.
Turkey has grown above expectations
During this period, the volatility of the global
economy had a limited impact on Turkey’s
economy, thanks to measures taken by
policy-makers. With a 4% rise in the first nine
months of 2013, Turkey’s economy has grown
above expectations. While the 2013 year-end
inflation was 7.40% in line with the changes
in exchange rates and food prices, I believe
that the upward pressures on inflation will be
suppressed in 2014 by the Banking Regulation
and Supervision Agency’s (BRSA) regulations
on credit cards.
This year, too, policy makers have not
compromised fiscal discipline. The debt stock
to gross domestic product ratio, which was
90.6% in the Euro zone, became 36.2% in
Turkey, well below the Maastricht criteria of
60%. It was proved once again that Turkey is
able to meet this criterion.
As with the Fed’s signals to reduce the asset
purchase program, developing countries,
including Turkey, have experienced increases
in foreign currency exchange rates since May
2013.
However, these foreign currency exchange
rate increases have caused exports to rise and
imports to decline; therefore, along with other
measures, a positive effect on the trade deficit
was established. In the period ahead, I expect
to see a positive impact of foreign exchange
rate increases on the trade deficit and further
positive development in the current account
MESSAGE FROM THE CHAIRMAN
Even though the sector has undergone a relatively
difficult second half year, VakıfBank was able to
raise its profit by 9% to TL 1,586 million.
HUMAN
FOCUSED
SERVICES
F
I
As an institution that
always focused on
customers, for the first time
in 1961, VakıfBank offered
a product able to provide
lifetime income, earning the
lifetime trust of its clients.
Acting in accordance with
its foundation mission, in
1965 the Bank started to
give TL 250 monthly as
scholarships to 75 students
that pass their classes for
two years.