2018 Annual Report

Ziraat Bank defines its targets as sustainable growth, profitability, and productivity. In 2018 the Bank continued to sustain the strength of its equity-compatible balance sheet structure through the asset & liability management strategies that it adhered to.

As of year-end 2018 the Bank’s total assets amounted to TL 537 billion and its total equity to TL 57 billion. Importance was again given to supporting equity through sustainable profitability: total equity accounted for about a 10.7% share of the Bank’s balance sheet.

Recognizing the key importance of sustainable profitability in equity management, Ziraat Bank’s return on equity and return on assets ratios were 15.2% and 1.6% respectively while its capital adequacy ratio was 14.82% at 2018 year-end.

In keeping with the Ziraat Bank Customer Service Model, the Bank focuses on providing financial solutions to all real-sector actors, but especially to those in agriculture, with the result that lendings are making up a steadily increasing share in the balance sheet. As a result of this customer-weighted balance sheet management strategy, the total volume of the Bank’s cash loans increased by 25% to TL 372 billion and corresponded to 69% of total assets while the share of marketable securities, which was 16% in 2017, increased to 17% in 2018. Ziraat Bank’s NPL ratio in 2018 was 2%. The Bank’s consistent ability to maintain an NPL ratio that is half of the sectoral average without selling off any of its assets is an indication of the high quality of its asset structure.

In line with Ziraat Bank’s approach of contributing to the country’s overall level of saving and of having recourse to broadly-based, low-cost sources, total deposits reached TL 331 billion, a performance that maintained the Bank’s standing as the sector’s leading deposit-taker in 2018. Deposits and non-deposit sources account for 62% and 22% shares respectively of total liabilities. In keeping with the Bank’s ongoing efforts to diversify and deepen its sources of funding, in 2018 Ziraat Bank continued to seek out and tap alternatives such as repos, syndicated facilities, international agency and financial institution lines of credit, post-financing, Eurobond and bank bond & bill issues.

The bank’s most important income item in 2018 was interest income, which amounted to TL 53 billion. The share of interest received from loans in total interest income was 77% as a result of the credit activities carried out during the year. The Bank continued its efforts to improve the net interest margin and as a result net interest margin rose by 30% in 2018. As a result of the Bank’s efforts to increase non-interest income, net fees and commission income increased by 19% in 2018.