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EVALUATION OF THE BANK’S FINANCIAL POSITION, PROFITABILITY AND SOLVENCY
ASSESSMENT OF THE ASSETS
Vn 2014, VakıfBank increased its assets to TL 158.2 billion growing by 16.77%, and kept its “ratio of interest bearing assets to
total assets” at 83.62% by maintaining its healthy asset structure. In 2014, 66.49% of the total assets were composed of assets in
Turkish Liras while 33.51% was composed of assets in foreign currency.
Increasing loans, the fundamental brokerage function of the banking sector, by 20.63% to TL 104.3 billion made the most important
contribution to VakıfBank’s asset growth in 2014. Increasing its commercial loans by 27.65% with the big step taken forward in SME
loans which are very important for growth strategies, VakıfBank increased its personal loans by 7.75%, mortgage loans by 7.63%,
and installment consumer loans by 12.35%.
VakıfBank’s portfolio of securities increased by 6.85% and reached TL 23.2 million while its ratio in the assets was 14.65% in 2014
compared to the previous year.
ASSESSMENT OF THE LIABILITIES
In 2014, the portion of the deposits – one of the important sources of fund – in the liabilities decreased from 60.17% to 57.99%.
VakıfBank, while increasing its total amount of deposits by 12.54% to TL 91.8 billion; increased the amount of its demand deposits
by 22.93% and its term deposits by 10.45%. As a consequence, term-demand deposit balance was 83.23% – 16.77% in 2013. This
balance was 81.68% – 18.32% in 2014. At 2014 yearend, while the 71.61% of the total deposits was in TL, 28.39% was in FX.
In 2014, VakıfBank made important progress to generate funds from non-deposit sources. The domestic and foreign investors’
demand for the securities issued by the Bank, made a contribution to the diversification of fund sources and the extension of the
maturity structure. VakıfBank started issuing securities in 2011 and continued to issue securities with different maturities and types
(bonds, treasury bills and similar marketable securities) in 2014 as well.
The equity capital of VakıfBank increased to TL 14.8 billion. The portion of equity capital in total liabilities reached 9.34% in 2014.
ASSESSMENT OF THE PROFITABILITY
In 2014, VakıfBank’s net period profit for the period reached TL 1,753 million increasing by 10.58%. The increase in other operating
income due to our Bank’s high collection of non-performing loans in 2014, and the decrease in the provision for impairment of
receivables and loans had an impact on the increase of the net profit for the period.
In the mentioned period, interest revenue reached TL 11.4 billion increasing by 23.35%. On the other hand, interest expense was TL
6.7 billion increasing by 51.71% in the related period. Net fee and commission revenue reached TL 709 million increasing by 3.32%
compared to the previous year’s same period. There was 89.96% increase in other operating income, and 12.77% increase in other
operating expenses. In 2014 yearend, VakıfBank’s average return on equity was 12.80% and average return on assets was 1.19%.
Despite the fact that VakıfBank did not sell any of its assets or make deletion from assets, decline in the ratio of non-performing
loans in total loans (NPL ratio) continued due to the decrease in transfers to non-performing loans, and increase in collections
respect to previous year. In an environment where the ratio of the provision set aside by banks for non-performing loans has
decreased, VakıfBank achieved its profitability figures by increasing its provision ratio – which is already higher than the sector – in a
conservative manner.
Moreover, authorization was granted to the General Directorate to sell the 1.367.330 Mastercard Inc shares, and 86.714 Visa Inc.
shares that are monitored under the “Securities Available for Sale Account” in the balance sheet of VakıfBank. The process was
completed as the mentioned shares were sold. As a consequence of the sale of Visa Inc. shares and Mastercard Inc. shares, US$
139.499.797 in total – US$ 22.783.751 from the sale of Visa Inc. shares and US$ 116.716.046 from the sale of Mastercard Inc. shares
– was transferred to VakıfBank accounts and this had a positive impact on the profitability.
EVALUATION OF THE BANK’S FINANCIAL
POSITION, PROFITABILITY AND
SOLVENCY
FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT