Sustainability at Ziraat Bank-We shape the future

Work on the infrastructural transformation and corporate development projects that were initiated in 2012 under the “Together, to a Better Future” slogan continued in 2014 as well.

Recognizing that change is a never-ending journey and aware of the need to constantly renew itself and adapt to today’s tough competitive environment, Ziraat Bank continued to advance together with its stakeholders in 2014.

The comprehensive transformation journey that the Bank embarked upon in 2012 was summed up in its “Together, Further Ahead” slogan in 2014 and projects to that end were initiated.

Under the heading of “Together, Further Ahead”, the Bank is engaged in an ongoing effort to carry out the infrastructural transformation and corporate development projects conforming to the Ziraat Customer Business Model, which was formulated in order to provide customers with the right value at the right time and in the right way. The Bank’s goal in this is to put what it has learned from these projects to good use in the future and to complete its global transformation projects.

The intended aim of the Ziraat Bank Change & Transformation Project is to support the Ziraat Finance Group’s future movement into three main business lines:

Corporate Banking
Branch Banking
International banking

With this in mind, much valuable work continued on the 2014 Strategic Roadmap that was laid out to achieve the Bank’s strategic goals. Progress on the development of this roadmap is being monitored by the Ziraat Bank Strategic Guide Committee.

Ziraat Bank Change & Transformation Project priorities

Ziraat Bank also regards the following issues that it has identified under its Change & Transformation Project as being high-priority agenda items from the standpoint of its sustainability performance:

Customer relationship management
Institutionalized business processes
Operational excellence
Objective and transparent HR management
Effective IT
Strong balance sheet

Ziraat Bank’s 2014 Strategic Roadmap is rooted in six fundamental principles that are discussed below.

1) Customer Relationship Management
Recognizing that its customers are its most valuable asset, the establishment of sustainable and added-value-creating relationships between them and the bank was once again one of Ziraat Bank’s most important objectives in 2014.

The principle of changing from a “Product/Customer-Based Approach” to a “Bank Customer-Based Approach” that was identified in 2012 was taken to the next level in 2013 by replacing the concept of “bank customer” with that of “Ziraat customer”. In 2014, infrastructure work was undertaken so as to make it possible to satisfy all of a customer’s financial product and service needs within the Ziraat Finance Group. The same attention and priority will be given to efforts undertaken in line with that principle in 2015 as well.

Guided by its principle of serving its customers effectively through every channel, Ziraat Bank not only increased the number of its service locations but also speeded up its efforts to provide its disabled customers with more convenient and accessible service at those locations in line with its recognized service-accessibility standards.

The branch and non-branch channel design work undertaken as part of the “Banking Without Barriers” project in order to make it easier for physically-challenged customers to access financial services has been completed. Modification work will begin in 2015 with the aim of encompassing all branches by the end of 2016.

Seeking to be a strong player in global markets in line with its Change & Transformation Project, Ziraat Bank is committed to being a bold leader and to authoring best practices in the area of customer relationship management.

Rooted in six fundamental principles, Ziraat Bank’s 2014 Strategic Roadmap plays a crucial role from the standpoint of its sustainability performance.

2) Institutionalized Business Processes
Ziraat Bank’s review of its business processes in order both to digitize those that are still being conducted manually and to simplify existing digitized processes continued in 2014 within the scope of a process-management methodology.

In order to power its ongoing development, Ziraat Bank is engaged in efforts to systematically quantify process performance and to improve processes in line with its strategic priorities and budget targets. A “Ziraat Finance Group Quality Policy” is to be formulated with the aim of ensuring that the same levels of service quality are achieved both within the Bank and among all of its subsidiaries.

Ziraat Bank constantly develops its lending processes as a tool for extending its institutionalized appetite for risk into every place in which it is active.

The essential prerequisites for the effective management of credit risk consist of:

Correctly conveying dynamic lending policies to those who must implement them in the field
Fostering a commonly-understood and accepted lending culture
Effectively monitoring and managing credit risk.

Support systems that were introduced in 2012 continued to be developed with the addition of new features in both 2013 and 2014. Newly-introduced practices made it possible for lendings to be monitored and collected more effectively. As part of efforts to integrate sustainability principles into all business processes, it is planned to incorporate environmental- and social-risk management criteria into lending processes in 2015 as well.

3) Operational Excellence
During 2014 Ziraat Bank continued to improve the quality of the customer experience in customers’ interactions with branch personnel. Efforts were made to reduce branches’ operational workloads through process improvement and headquarters centralization so that branch personnel could devote more time to properly identifying customers’ financial product and service needs and recommending the best options to them. In 2014 the number of employees directly involved in operational functions was reduced by 1,204. In the three years to end-2014, the number of bank employees reassigned to added-value-generating positions reached 3,220.

4) Objective and Transparent HR Management
Ziraat Bank’s human resources policy is structured so as to make people central to it. An important tenet of this policy is to promote employee job satisfaction by ensuring that people are employed in positions that are compatible with their competencies and in which they can enjoy doing their jobs.

In 2012 Ziraat Bank initiated a changeover from a title-based, largely vertical organizational structure to a more horizontal structure based on job descriptions. This process continued in 2014 with the introduction of practices enabling employees to advance in their job positions according to their abilities and competencies and also to be promoted based on their testing performance.

A Management Trainee Program for existing personnel has been started in order to create an in-house pool of candidates capable of undertaking management positions. The training provided under this program focuses on creating the managers of the future.

The Ziraat Individual Performance Evaluation System was introduced in 2013 to make it possible for employees to be evaluated objectively on the basis of their performance. That system was augmented in 2014 with the introduction of the Ziraat Competency Management System, whose aim is to allow employees to be assessed on the basis of their competencies and then to identify the kinds of training that are needed so that those competencies may be further improved.

As required by Ziraat Bank’s principle of transparency, employees are involved in and made aware of all innovations in matters affected by the Change & Transformation Project. As part of this project, a variety of in-house communication channels were opened in 2012 to keep personnel informed about changes that are being made. These channels continued to be used in 2014 in order to keep employees informed about the project’s progress.

As a financial services provider, Ziraat Bank’s sustainability approach is shaped in light of its responsibilities, its obligations to the environment and the community, and its duties.

5) Effective IT
It is Ziraat Bank’s principle to maximize the use of information technology in all of its business processes. The IT infrastructure and IT hardware replacement projects that were initiated in order to ensure that all operations can be conducted without interruption and also to optimize costs continued in 2014 as well. Work was also begun last year on projects to renovate the Bank’s data center.

6) Strong Balance Sheet
The principle of equity-compatible balance sheet management continued to be an important source of guidance for the strategic decisions that were made in 2014. Profits, which are the most important element of a company’s equity, are retained by Ziraat Bank as a way of further strengthening the Bank’s equity resources.

In keeping with the principle that rational bigness is better than just bigness, Ziraat Bank seeks to achieve sustainable profitability and growth and in 2014, it continued its efforts to do so. Steadily increasing the weight of customers’ accounts in its balance sheet in order to create increasingly more value for the national economy, the Bank continued to provide financing support to the real sector in 2014.

In order to increase the diversity of its funding, the Bank once again sought to make greater use of non-deposit resources, renewed its syndicated loans, and issued bank bonds and bills. Last year Ziraat Bank issued its first eurobonds and tapped international finance markets on a long-term basis.

Approved and announced on 30 September 2014 by Ziraat Bank Board of Directors, the Sustainability Policy summarizes Ziraat Bank’s sustainability vision, goals and approach and defines the Bank’s stance on the pillars of the environment, community, and products and services.

Sustainability Policy of Ziraat Bank

Our sustainability vision
To use the unrivalled experience and knowledge that we have built up over a century and a half for the benefit of the economy, the environment, and the community; to produce enduring value for our stakeholders; to be a globally-competitive bank through the principles of sustainable profitability and efficiency.

Our sustainability goal
To further develop both the Bank’s strong position in the domestic market and its global competitive strength by increasing the medium- and long-term leverage effect of the Change and Transformation Project through corporate sustainability practices to be implemented under this Sustainability Policy.

2014
Announced 2014 by Ziraat Bank Board of Directors, the Sustainability Policy summarizes the Bank’s goals and approach.

Considering its customers as the essential justification for its existence, Ziraat Bank attaches great importance to perpetuate and amplify customer satisfaction and loyalty.

Our sustainability approach
Our sustainability approach is shaped in light of our responsibilities as a financial services provider, of our obligations to the environment and the community, and of our duties as an employer.

Ziraat Bank is a strong, leading, and trusted bank. We desire to perpetuate our existing success in economic sustainability into the future by supporting it with long-term environmental and social sustainability perspectives.
In our decision-making processes, we take a careful and thoughtful approach when dealing with environmental and social issues and the potential risks associated with them in the management of our resources and our service infrastructure.
We regard environmental sustainability -including climate change and the transition to a low-carbon economy- as an important item on our agenda.
As an employer, we believe in the importance of humane working conditions. In our business model we give importance to equality of opportunity among all of our employees: we regard diversity in our workforce as a component of Ziraat Bank’s richness and therefore we support it.
As a service provider, we regard customer focus and customer satisfaction as being fundamental to everything. Our goal is to offer banking products and services to all of our customers in formats that are practical, intelligible, and accessible and also to enrich the banking industry through innovative and exemplary practices.
As a business partner, our relationships with suppliers are grounded in the principles of mutual respect, responsibility, and fairness and we are committed to developing them accordingly. We support our suppliers’ success through cooperative projects that we carry out together.
We are committed to continuously developing and implementing projects whose aim is to integrate universally-accepted sustainability principles into our business model.
We attach importance to having a presence and playing an active role in multilateral sustainability initiatives and collaboration platforms at both the national and international levels.

Taking the foregoing fundamental tenets as our point of departure, we are focused on promoting, developing, and maintaining sustainability throughout our value chain.

Our sustainability structure
Our sustainability plan is structured under the aegis of the Ziraat Bank Board of Directors. Its implementation is informed by a straightforward and effective organizational structure.

Sustainability practices at Ziraat Bank are conducted under the guidance of the Bank’s CEO.
The Ziraat Bank Strategic Steering Committee is responsible for the coordination of sustainability efforts.
Sustainability activities are monitored by the Organization Department.

Our dialogue with stakeholders
Ziraat Bank’s long-term success depends on its stakeholders’ trust and continued goodwill. The sustainability projects we undertake play a role in further strengthening stakeholder confidence and loyalty.

Employees make up one of our most crucial stakeholder groups. We support our employees in their efforts to proactively identify with Ziraat Bank’s sustainability approaches and commitments.
We regard the training and development of our employees as an important element of the progress that we seek to make in the area of sustainability. Constantly changing and transforming ourselves as we move forward, we continue to invest in training that will contribute to the steady advancement of our human resources.
Our customers are the essential justification for our existence. Our goal is to perpetuate and amplify customer satisfaction and loyalty by supplying high-value products and services under globally competitive conditions through all of Ziraat Bank’s distribution channels.
We engage with our customers on a variety of collaboration and awareness platforms. We regard efforts to increase financial literacy and awareness of sustainability as an essential part of our social responsibility.
Developing mutually beneficial relationships with our suppliers is another of our priorities. We regard it as important that our suppliers recognize and abide by universally-accepted sustainability principles and we accordingly encourage them to do so.
We believe in mutually frank and respectful communication with our stakeholders. In stakeholder communication, we focus on the transparent disclosure of our progress on environmental and social matters as well as of our economic performance.
We believe that the success of corporate sustainability practices will enhance the Bank’s sustainability index performance.

As the bank with the most extensive physical network and one of the biggest employers in the Turkish banking industry, Ziraat Bank’s goal is to curb its direct and indirect environmental impact.

Ziraat Bank and the environment
As the bank with the most extensive physical service network and one of the biggest employers in the Turkish banking industry, our goals are to curb our direct and indirect environmental impact, to effectively manage that impact by means of appropriate strategies and technologies, and to constantly improve our performance in this direction.

To this end:

We engage in ongoing efforts to quantify the greenhouse gas emissions generated by our service processes and to reduce them.
We strive to structure the physical components of our service network in line with the principle of making efficient use of energy and all other natural resources.
Aspiring ourselves to achieve full compliance with all mandatory environmental standards in Turkey, we also encourage the proliferation of globally-recognized best practices and benchmarks pertaining to such matters by engaging in an ongoing, multidimensional dialogue with our stakeholders.
We regard it as important that our customers and suppliers have a greater awareness of environmental issues and we encourage them to make a greater effort for the sake of environmental sustainability.

Constantly improving its sustainability performance in keeping with the principles of transparency, accountability, compliance with the law, ethical behavior, and risk management, Ziraat Bank is focused on being a financial institution that is more than a bank in the area of sustainability as well.

Ziraat Bank and the community
As a company which employs about 25 thousand people, which helps millions of individuals to make their dreams come true, and which supplies financial products and services at locations all over the country, in more than 400 of which it is the only such service provider, Ziraat Bank contributes to the community in many different ways.

We continue to create value for society and to take multidimensional approaches in support of social development through efforts capable of maximizing their socially beneficial impact.

Our products and services
In the processes of satisfying evolving customer needs and expectations, of supplying the right product and service to the right customer at the right time, and of productively exploiting new business opportunities presented by markets, Ziraat Bank always takes environmental and social issues into account as well.

To this end:

We continue to support the agricultural sector, which was the core of our original mission in 1863, through sophisticated financing methods. We are involved in and will continue to support agribusiness because we believe it to be vitally important to the success of our country’s agricultural sector.
In the conduct of our business as a bank, we provide products and services with the potential to be environmentally and socially benign such as renewable energy project finance, loans to improve energy efficiency, and financing packages for small- and medium-sized businesses and entrepreneurs.
We regard expanding this line-up of environmentally and socially benign products and services through collaboration with international financial institutions as an essential element of our sustainability vision.

Summing up
Having been proving that it is more than just a bank in its history exceeding a century and a half, Ziraat Bank’s innate compatibility with sustainability principles springs from its passion to create value for the country and for the world.

Given the general framework encompassing its sustainability policy, Ziraat Bank is committed to pursuing and maintaining sustainably profitable and efficient growth as a competitive, strong, high-market-value, and globally-integrated bank.

Constantly improving our Bank’s sustainability performance in keeping with the principles of transparency, accountability, compliance with the law, ethical behavior, and risk management, we remain on course as a financial institution that is more than a bank in the area of sustainability as well.

G4-35, G4-36, G4-37, G4-44, G4-45, G4-46, G4-47, G4-48

Ziraat Bank’s sustainability structure

Sustainability issues at Ziraat Bank are coordinated by the Strategic Guidance Committee.

Sustainability-related activities at Ziraat Bank are conducted with the knowledge and oversight of the Board of Directors.

Sustainability projects that may be undertaken at the Bank are considered and dealt with by the Strategic Guidance Committee.

The officer with the most senior decision-making authority with respect to the day-to-day conduct of sustainability practices is the Ziraat Bank CEO. The Ziraat Bank Organization Department is responsible for the conduct of sustainability practices in the context of the day-to-day business model.

Ziraat Bank’s objectives in the period ahead will be to accelerate its sustainability performance by identifying those who are responsible for sustainability issues throughout the entire organization, by improving sustainability-related processes, and by preparing job descriptions for those personnel charged with responsibility for sustainability-related matters.