Presentation. Part I: Presentation

Transcription

1

2 Presentation Part I: Presentation 006 Bank Asya in Brief 007 Vision, Mission,Strategic Objectives 008 Key Highlights (Indicators) 010 Bank Asya s Market Position in the Sector 012 Bank Asya s Strategy of Growth 016 Milestones 018 Changes in Capital and Shareholder Structure During the Period 021 Awards 022 Message from the Chairman of the Board of Directors 024 Message from the General Manager (CEO) 030 Macroeconomic Overview and the Banking Sector 038 Bank Asya s Activities in Corporate Social Responsibility 053 Affiliates and Subsidiaries 055 Compliance Opinion for the Annual Report Part II: Management Information and Principles of Corporate Governance Practices 058 Board of Directors 060 Statutory Auditors 062 Senior Management 064 Organization Chart 066 Committees 069 Summary Report of the Board of Directors 070 Human Resources 071 Training (Job Training) 072 Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Collected Fund Transactions, and Current Income and Expenses for the Reporting Period 073 (Principals of) Corporate Governance Compliance Report 078 Support Services Benefited by Bank Asya 080 Profit Distribution Policy of Bank Asya 080 Profit Distribution Proposal of Bank Asya for 2011 Profits 081 Considerations Regarding the General Assembly 082 Information on Agenda Items Part III: Financial Information and Risk Management Assessment 086 Summary Report of the Statutory Auditors 087 Summary of Financial Information for Five Years Including the Reporting Period 088 Financial Condition, Profitability and Solvency Assessment 089 Audit Committee Reviews About the Functioning of the Internal Systems 090 Information on Risk Management Policies Implemented for Each Risk Category 092 International Rating Grades Part IV: Non-Consolidated Financial Statements and Related Footnotes 095 Independent Auditors Report 098 Information on Financial Statements and Footnotes Part V: Consolidated Financial Statements and Related Footnotes 169 Independent Auditors Report 172 Information on Financial Statements and Footnotes Part VI: Contact Information 240 Branches 002

3 Bank Asya 2011 Annual Report Continuing to have healthy growth Bank Asya, offers interest-free financial system and its associated advantages to the widest possible audience. By increasing operational efficiency, Bank Asya continues to support the real sector. As for production it offers innovative products and services in retail banking. With a customer satisfaction centered approach, advanced technology and its long-term investments abroad, Bank Asya provides service at world-class standards; Bank Asya is a reputable, reliable and effective participation bank, which boasts a healthy and steady growth. 003

4 A World: Clean and Viable

5 Without compromising the basic founding principles, Bank Asya represents the values of a powerful and reliable financial environment.

6 Presentation Bank Asya In Brief Bank Asya s strategic goals focus on sustainable profitability, producing more value for all stakeholders. In 1996, Bank Asya, Turkey s most dynamic participation bank, commenced operations under the name Asya Finans as the country s sixth private finance house. As the sector s newest participation bank, Bank Asya grew rapidly in a short period of time and achieved a strong and respected position in the market. Turkey s first participation bank to go public Bank Asya is firmly committed to a strategy tailored towards sound and sustainable growth, which it has carefully integrated into its organizational structure. As the first participation bank in Turkey to go public in order to establish a strong and broad capital base, Bank Asya floated 23% of its shares in As of year-end 2010, 52.88% of the Bank s capital was publicly held. By the end 2011, the free float rate reached 52.88%. The Bank s paid-in capital was TRY 900 million as of the end of New high-quality products and services in participation banking Bank Asya works proactively to expand its product and service line in order to meet the changing needs and expectations of its customers across all its business sectors. As the first participation bank in Turkey to be awarded the ISO 9001 Quality Management System Certification, Bank Asya seeks to strengthen its position within the market by developing new interest-free banking products, with its innovative approach including derivative products. The Bank also undertakes efforts to adapt widely used banking products and services to the interest-free banking system at the highest level of quality Invest in people, invest in the future Bank Asya understands that when it invests in people and technology, it invests in the future. The Bank incorporates advanced technology in order to strengthen its growth momentum and support its dynamic and developmentfocused workforce. This in turn facilitates a workplace that embrace s the Company s values. Advanced technology in banking Bank Asya has expanded the reach of its delivery network through investments in technological infrastructure and alternative distribution channels. Iin addition to its 200 branches, Bank Asya has been particularly successful in gaining recognition during recent years through the innovative payment system products that it has introduced. After the launch of Europe s most advanced contactless credit card, AsyaCard DIT, and Turkey s first prepaid contactless debit card, DIT Pratik, Bank Asya demonstrated once again its leading role in banking technology with DIT Mobile, which allows mobile phones to make contactless transactions, and "Cep-T KGS" products. Creating more sustainable value Conducting its operations as a good corporate citizen, Bank Asya aligns its strategic objectives with the principle of creating more sustainable value for all of the social and economic stakeholders. Increasing brand value alongside unmatched growth dynamics Bank Asya is transforming a business model based on supporting the real sector and manufacturing. The Bank integrates the fundamental principles of interest-free banking into an effective paradigm of participation banking through its management competencies, funding practices, risk and quality policies, innovativeness, and unmatched growth dynamics. To this end, the Bank will continue to enhance the brand value that it has established both domestically and internationally. In 2011, Bank Asya sustained its profitability and growth in line with its performance targets thanks to its solid capital base and healthy balance sheet structure. In 2011, the Bank continued to lead the participation bank market in terms of total assets, loans allocated, non-cash loans, deposits and net profit. 006

7 Bank Asya 2011 Annual Report Vision, Mission, Strategic Objectives Strategic Objectives To be one of the world s leading interest-free banks. To continue to be the participation bank with the highest brand value in Turkey. To rank in the forefront of companies where highly qualified professionals would strive to work. To increase market share. To be a pioneer in the banking industry with new innovations. To be the primary bank of its customers. To sustain and increase support of social responsibility projects including social activities and sports. Vision To be a respected, trusted and effective bank that provides world-class service with the products it develops. Mission To contribute to both shareholder value and the Turkish economy by developing modern banking services within the framework of interestfree banking principles and satisfying customer needs and expectations with a different solutions for different expectations approach. 007

8 Presentation Key Highlights Bank Asya sustained its upward momentum in 2011 and achieved growth of 18% in Total Assets, 22% in Cash Loans and 11% in Deposits. Key Financial Highlights (Million TRY) Change (%) Total Assets ,4 Cash Loans (*) ,6 Deposits ,0 Shareholders Equity ,1 Paid-In Capital Non-Cash Loans ,3 Net Profit for the Period ,9 (*)Financial Lease (Leasing) is included Branch and Personnel Information (Quantity) Change (%) Number of Branches ,3 Number of Personnel , % % Total Assets (Million TRY) Cash Loans (Million TRY) 008

9 Bank Asya 2011 Annual Report Key Financial Ratios (%) Cash Loans/Total Assets (*) 76,69 78,63 Deposits / Total Assets 76,94 72,12 Cash Loans/Deposits (*)(**) 101,77 110,97 Capital Adequacy Ratio 13,33 13,31 (*)Non-performing loans were added to Cash Loans and Total Assets in gross terms. (**)Loan-To-Deposit Ratio is calculated by dividing Cash Loans by Deposits. Bank Asya s Composition of Assets (%) Liquid Assets Cash Loans Fixed Assets 3 3 Other 3 3 Bank Asya s Composition of Liabilites (%) Deposits Loans Received 4 9 Other 6 7 Total Shareholders' Equity Bank Asya Income Distribution (%) Net Profit Income Net Commissions Other Income % % Deposits (Million TRY) Total Shareholders' Equity (Million TRY) 009

10 Presentation Bank Asya s Market Position Bank Asya pioneered as a participation bank in Turkey in 2011 through its competitiveness and innovative strategy. Annual Growth Rates ( ) Banking Sector Participation Banks Deposit Money Banks Bank Asya Total Assets (%) Loans (%) Deposits- Funds (%) Number of Employees (%) Number of Branches (%) Net Profit (%) 6 Non-Cash Loans (%) Shareholders' Equity (%)

11 Bank Asya 2011 Annual Report One step ahead of the sector With high competitive power Comparison of Bank Asya with Other Participation banks 0,31 0,32 0,32 0,69 0,68 0,68 Total Assets (%) Deposits- Funds (%) Loans (%) 0,65 0,35 0,73 0,27 In 2011, Bank Asya continued its leadering among participation banks in the total assets, disbursed loans, non-cash loans and deposits. Shareholders' Equity (%) Net Profit / Loss (%) 0,33 0,29 0,67 0,71 Number of Employees (%) Number of Branches (%) 011

12 Presentation Bank Asya s Growth Strategy Identifying strategic priorities and acting according to the principles of sustainable growth Bank Asya has continued to add value to the economy and society in Effective Resource Management Solid capital base Rapid increase in deposits Longer average terms on deposits and high liquidity High profitability Loans from abroad Capital adequacy ratio 13,31% (tier 1) 11% increase. in deposits 20% liquidity ratio 10,1% return on equity 134% increase in loans from abroad Effective Loan and Risk Management Deeper customer relationships More diversified loan portfolio Increase in retail loans and SME loans 22%. growth in cash loans Ranked 13th. in cash loans 75% increase in retail loans Effective Product and Brand Management Development of innovative products Increase in brand awareness (sponsorship, effective promotion, advertising) AsyaCard DIT: Market leader in contactless cards 20% increase in credit card turnover Ranked 11th. in the sector with 1.9 million credit cards High profile with Bank Asya.1st League (football league) Bank Asya forms its strategies around the overarching goal of being one of the most important brands in the participation banking business line not only in Turkey but also in the entire the world. Conducting its operations in line with the principles of sustainable growth while pursuing this primary objective, the Bank focuses on creating more value not just for the economy but also for the society as a whole. Bank Asya is commited to being a model bank along all the three axes of quality, productivity and profitability. The Bank invests both in technology and in people in order to make its proactive, customeroriented service philosophy a reality in all aspects. Bank Asya is a transparent institution that continuously improves its business processes and systems and that embodies the very best of corporate governance principles and practices. 012

13 Bank Asya 2011 Annual Report Financial Operational Excellence Personnel & Progression Stakeholders Sustainable growth and profitability Strengthening the financial structure Targets about subsidiaries and affiliates Increasing the use of technology Improving the efficiency of business processes Increasing the effectiveness of risk management practice Increasing the knowledge levels of employees Establishing effective communications and enhancing skills Disseminating corporate strategy and performanceoriented management philosophy Maximizing customer satisfaction Offering diversified solutions capable of addressing different customer expectations Ensuring sustainable divident payment to shareholders Bank Asya s Competitive Advantages Leader among participation banks in total assets, deposits, loans, and profitability Dynamic, growing organization Well-qualified, young staff Customers' confidence in the Bank Experienced in crisis management Bank employees' sense of ownership Strong team spirit throughout the Bank Speed at technology implementation and priority in innovation Bank Asya s Strategic Orientation ( ) Trustworthiness, stable growth, risk management, business continuity and productivity are Bank Asya s top strategic priorities. Having clearly and explicitly defined its objectives in line with its corporate vision, Bank Asya groups its strategies under four main headings in order to achieve effectively its objectives: Financial Operational excellence Stakeholders Personnel & progression In the same way, Bank Asya has laid out a five-year roadmap whose course is shaped by these strategies 013

14 Bank Asya finds pleasure of providing its customers gain while the Bank also gains by evaluating deposits into profitable investments to be used in the real economy.

15 Investing in Effort

16 Presentation Bank Asya Milestones Achieving many firsts in the past 15 years, Bank Asya moves towards becoming a world bank that thinks both locally and globally Asya Finans is subjected to the Banking Law. The company s paid-in capital is increased to TRY 10 million Bank Asya commences operations on 24 October. Began its operations with an initial capital of TRY 2 million The number of branches reaches The number of branches reaches 16 Asya Finans launches the Asya Finans credit card The number of branches reaches 25. The Asya Finans online branch goes into service 2001 The company s paid-in capital is increased to TRY 20 million. 016

17 Bank Asya 2011 Annual Report 2002 The number of branches reaches 28. The Company s paid-in capital is increased to TRY 40 million. The ASYA24 ATM network goes live for customer use Asya Finans becomes a member of the VISA system. The number of branches reaches 43. The company s paid-in capital is increased to TRY 60 million. Started a partnership with Isik Sigorta A.S The number of branches reaches 62. Alo Asya telephone banking services are launched. The company s paid-in capital is increased to TRY 120 million 2005 The number of branches reaches 72. The company s paid-in capital is increased to TRY 240 million Asya Finans is reorganized as a participation bank and its name is changed to Bank Asya The number of branches reaches 92. The company s paid-in capital is increased to TRY 300 million. In an initial public offering, 23% of Bank Asya s shares are floated; the company s stock begins trading on the Istanbul Stock Exchange under the ASYAB ticker symbol The number of branches reaches 118. Bank Asya stock is added to the ISE-30 Index as of January Bank Asya becomes the name sponsor of the Turkish Football Federation 1st League. Contactless technology products AsyaCard DIT and DIT Pratik are made available for the use of the Bank s customers The number of branches reaches 158. Bank Asya becomes a shareholder in Senegal-based Tamweel Africa Holding SA. AsyaCard DIT receives the Best Cash Displacement Initiative and the Best New Credit Card Product Launch awards. Bank Asya becomes a partner in Tuna GYO A.Ş The number of branches reaches 175. DIT Pratik is named Best Mastercard Prepaid Product in Turkey. Bank Asya joins the MoneyGram service network. AsyaAsist, Çobanyıldızı and DIT Mobil were launched for customer use Bank Asya received the Business Continuity Management Systems Certificate from the British Standards Instituition Bank Asya has become the first Turkish organization to receive this certificate. Bank Asya has been selected The Best Commercial Bank of 2011 in Turkey Award by World Finance. Paksit and DIT Pratik have been released for customer usage. Bank Asya won "The Best Call Center in Turkey" Award in the category of seat-capacity call centers. Bank Asya has proved its quality receiving Customer Satisfaction Management (ISO 10002) and Call Center Certificate (EN 15838) at the same time. Bank Asya has become the first bank in Europe to have these two certificates at the same time. The number of branches reaches 200. Started a partnership with Bank Asya Emeklilik A.Ş. With the vision of "to become the leading bank in participation banking in Turkey", Bank Asya achieved its target since 2006, the tenth anniversary of its foundation date. Although it is the newest participation bank in Turkey, Bank Asya has the most competitive products in the market, and, with 200 branches and 492 ATMs, takes its place as a medium-sized bank in the banking sector. 017

18 Presentation Changes in Capital and Shareholder Structure During the Reporting Period Bank Asya s shareholder structure as of year-end 2010 and year-end 2011 appears in the table below % % Group A (preference shares) , ,00 Group B (not traded on ISE) , ,12 Group B (traded on ISE) , ,88 Total Bank Asya has a broad-based, multi-shareholder, domestically-financed capital structure. As of yearend 2011, the Company had 236 partners who were direct owners of preference shares, excluding the publicly-held portion of the share capital. Shareholding interests held by the Chairman and members of the board of Directors, CEO and Executive Vice Presidents Statements concerning the shareholding interests held by the Chairman and members of the Board of Directors, CEO and Executive Vice Presidents as shown in the Bank s Shareholders Register as of 31 December 2011 are presented below. Ownership Title Name / Surname Areas of Resposibility In the Bank% Chairman Behçet Akyar Chairman 0,0003 Board Members Salih Sarıgül (1) Deputy chairman of the board 0,2056 Ahmet Çelik (1) Board Member 0,4800 Tacettin Negiş (2) (3) Board Member - İsmail Erol İşbilen (3) Board member and Member of Statutory Auditors - Hülagü Özcan (3) Board member and Member of Statutory Auditors - CEO Abdullah Çelik Board Member And CEO - Executive Vice President Corporate/Commercial Loans, Small Banking, Top Management Office Headquarters, Business and - Product development Coordination (4) Ali Tuğlu Information Technologies - Ali Fuat Taşkesenlioğlu (5) Commercial Credit Allocation II, Corporate Credit Allocation - Erdal Erdem (5) Credit and Risk Monitoring, Construction and Real Estate Fahrettin Soylu Banking Operations - Ercüment Güler Retail Sales Management, Retail Product Management, Card Payment Systems Marketing Management, Administrative Affairs, Alternative - Distribution Channels, Resource Development Ahmet Beyaz Budgeting & Reporting, Accounting & Bank Affiliates, Purchasing, Corporate Communications - Zafer Ertan Law, Credit and Risk Monitoring - Ahmet Akar Corporate/Consumer Credit Allocation I, Project Financing - Feyzullah Eğriboyun Treasury, Financial Institutions, Investor Relations, Human Resources and Education 0,0004 Statutory Auditors Ali Akbulut (6) Auditor 0,0002 Atif Bilgin Auditor 0,2411 İrfan Hacıosmanoğlu Auditor 0,7093 (1) Board Members Salih Sarıgül and Ahmet Çelik resigned from their duties as of 26. Jan. 2012; they have been replaced by Ali Çelik and Faruk İlk (2) Board Members Tacettin Negis resigned from his post as of 02. Feb. 2012, he was replaced by Mustafa Talat Katırcıoğlu (3) Not shown because the shareholding interest is less than 1/100,000. (4) Related departments is operatively connected to the General Manager. (5) Executive Vice Presidents Ali Fuat Taşkesenlioğlu and Erdal Erdem resigned from their duties as of 06. Jan (6) Bank's Auditor Ali Akbulut resigned from his post as of 23. Feb. 2012, his seat was replaced by Mehmet Gozutok. 018

19 Bank Asya 2011 Annual Report Names and Shareholding Interests of Shareholders Who Own Qualified Shares Shareholders who were registered in Bank Asya s Shareholders Register as of 31 December 2011 and whose ownership of Group A preference shares entitled them to designate candidates to fill seats on the Board of Directors and Audit Committee as per Articles 32 and 49 of the Articles of Association are presented below. No Name / Surname Group A share in the Bank (%) 1 Ali Akbulut 12,70 2 Abdulkadiṙ Konukoğlu 5,58 3 Hasan Sayın 4,85 4 Tacettiṅ Negiş 4,31 5 Fi kri Akbulut 4,06 6 Osman Can Pehli van 4,00 7 İbrahiṁ Sayın 3,52 8 Fatma Emiṅe Berksan 2,50 9 Muammer İhsan Kalkavan 2,36 10 A. Selçuk Berksan 1,82 11 Mehmet Siṅan Berksan 1,67 12 Aydan Aydın Sağlık 1,65 13 Fehiṁ Arıcı 1,55 14 Yavuz Eroğlu 1,45 15 Bülent Berksan 1,43 16 Mehmet Berksan 1,43 17 Ahmet Levent Berksan 1,14 18 Abdurrahman Kopuz 1,10 19 Hakan Cem Akbulut 1,00 Other (286 people) 37,42 Pending BRSA Approval 4,46 Total 100,00 019

20 Presentation Changes in Capital and Shareholder Structure During the Reporting Period Information on Titles and Shares of Shareholders Holding Preferred Shares No Name / Surname Group A share in the Bank (%) 1 Ortadoğu Tekstil Tic. San. A.Ş. 10, Forum İnşaat Dekorasyon Turizm San. ve Tic. A.Ş. 9, BJ Tekstil Tic. ve San. A.Ş. 5, Birim Birleşik İnşaatçılık Mümessillik San. ve Tic. A.Ş. 4, Serra Turizm Ltd. Şti. 4, Negiş Giyim İmalat ve İhracat A.Ş. 3, Sürat Basım Yayın Reklamcılık ve Eğitim Araçları San. Tic. A.Ş. 1, Galaksi Avrasya Sanayi Ürünleri Dış Tic. A.Ş. 0, Asya Katılım Bankası A.Ş. 0, Teksen Tekstil End. A.Ş. 0, Linateks Tekstil İthalat İhracat San. ve Tic. Ltd. Şti. 0, Aydınlı Hazır Giyim San. ve Tic. A.Ş. 0, Koçkaya Motorlu Araçlar San. ve Tic. A.Ş. 0, Karakaya Yedek Parça ve Otomotiv San. Tic. Ltd. Şti. 0, Meltem Turizm İnş. Tic. A.Ş. 0,0210 Changes Made in the Articles of Association No changes were made in the Bank s Articles of Association during

21 Bank Asya 2011 Annual Report In year 2011, Bank Asya had outstanding success, exemplified by the awards and certificates received during the year. Awards The Best Commercial Bank of 2011 in Turkey World Finance Bank Asya has been selected as the Best Commercial Bank of 2011 in Turkey by World Finance, one of the most respected monthly business magazines that awards successful companies in finance and business every year. STP Excellence Award- Citibank The technological equipment and effectiveness of service of Bank Asya is confirmed by one of the world's leading banks. In 2011, Bank Asya awarded by CITIBANK with the STP Excellence Award. BSI Business Continuity Management Certificate Bank Asya became the first Turkish organization to receive the Business Continuity Certificate from the British Standards Instituition. Best Call Center in Turkey In October,2011, Bank Asya received The Best Call Center of Turkey Award among the call centers with a capacity of seats in Istanbul Call Center Awards held by the IMI Conferences. Call Center Certificate (EN 15838) In the fields of Customer Satisfaction, incoming and outgoing calls, performance management, recruitment, careers and the process of education, Bank Asya received EN Customer Contact Center Quality Management Certificate, an international standard for call centers with special conditions. Customer Satisfaction Management Certificate (ISO 10002) Timely and adequately responding to customer needs and expectations, Bank Asya received the Customer Satisfaction Management ISO Annual Report of National Banks Silver Award - ARC Awards With the Annual Report prepared in 2010, Bank Asya won the second (silver) prize in International ARC (Annual Report Competition) in the category of the National Bank Annual Report issued in local languages. 021

22 Presentation Message from the Chairman The leading participation bank in Turkey Dear Valued Shareholders Decrease of the effects of the global crisis resulted in an optimistic beginning to the year 2011 in the markets but the developed countries have failed to meet the expected performance during the year.. However, developing countries including Turkey have continued to create value through their well established economies. 022

23 Bank Asya 2011 Annual Report "In line with new strategies and plans of growth, Bank Asya aims to increase the number of branches to 300, and the number of credit cards to 3 million as well." With a 9% growth in 2010, Turkish economy recovered the majority of the effects of the global crisis and sustained its rapid growth trend during the year Despite the recession in world economies due to the recession in developed countries and debt crisis in European countrieis, Turkey has grown by over 8% during year 2011and continued to be distinguished with this positive developments. Although the precauitons taken by the Central Bank of Turkey in order to maintain financial stability and to reduce the current account deficit resulted in a decrease in the growthrate, the growth is expected to continue. The European Debt Crisis and recession expectations have affected the profitability of the companies listed in ISE negatively and resulted in loss of market values of these companies. Therefore, the ISE 100 index value decreased by 21% during year The precauitons taken by regulatory agenciesreduced the profit margins in Turkish banking sectors. However, the sector has continued to increase its asset size, thanks to powerful structure of the sector. Comparing the performance of the participation banks to thetotal of the banking sector, participation banks increased their share in total assets and funds collected. As is the case in the rest of the world, participation banking in Turkey continues to develop and the number of new products, conforming with the interest-free financing standards, increases day by day. In year 2011 during which the bank profits declined, Bank Asya sustained the profitabilty thorugh orienting its strategy to use itscapital more effectively, focusing on collecting participation funds and lengding activitiesas its mainbusiness model. With the mindset of developing new strategies, Bank Asya has underwent a year of high performance. Despite its short history of 15 years, Bank Asya has been well known by its high competitive power and innovative aspects, recognized with its new prodcuts and servies in interest free banking area and therefore, it has strengthened its position as the leading participation bank in Turkey. Bank Asya aims toincrease the number of the branches to 300, and credit cards to 3 million as well until 2015 in accordance with its new strategies andgrowth plans aiming to provide faster and higher quality services ineverywhere in Turkey with its expanding network. Bank Asya will continue its organic growth during year 2012 in accordance with this goal, will increase its investments in foreign countries and will continue to operate with its vision to be a global model bank. I would like to thank to the diligent Bank Asya staff who have contributed highto the Bank s progress through their dedicated efforts with the team spirit and a we sense. Also, I would like to thank to the former members of the Board of Directors and Audit Committee, who resigned at the beginning of 2012 after serving for many years in various positions in Management and Supervisory Boards of the Bank. Finally, I would like express my gratitude to our solution partners who had great contribution to Bank Asya, to our valued shareholders who have supported our management and to our customers who always sustain their loyalty to the Bank. I firmly believe that, we will provide Bank Asya toachieve many successful periods all together. Behçet Akyar Chairman of the Board of Directors 023

24 Presentation Message from the CEO Time for expansion abroad Dear Shareholders, We have passed a year experiencing a differentphase of the global economic crisis. The global economic crisis which emerged mainly in the housing loans and banking sector in 2008 turned into apublic finance crisis through increasing public debt. And in year 2011, we have faced political authorities who failed to demonstrate a common will to overcome the crisis. 024

25 Bank Asya 2011 Annual Report Bank Asya continued to grow in 2011, increasing total assets by 18% to TRY 17,2 billion. Therefore, Bank Asya has maintained its position as the biggest participation bank of the past 6 years. Although structural changes are not expected. Until the elections in USA in November 2012, FED announced that interest rates will not beincreased until the year 2014 and monetary expansion will continue if required. On the other hand, the economic outlook has become more unpredictable in Europe. As political authority had diffculty in demostrating stability in managing public finance, public debt become higher. Today even if the governments demonstrate agreater stability, there is a significant doubt on the settlement of the public debt due to the difficulties in sustaining a sufficient growth. Turkey, started to year 2011 with a strong credit demand, thank to the rapid growth based on private sector investments. Lower Government borrowing requirement resulted in a lower investment in public sector bonds and the banking sector funded private sector more. Hence, the loans as 59% of national income in 2010, increased to 67%of national income in in These circumstances have led a decrease in capital adequacy ratio from 19% to 16.5%. Additionally, the implementation of the monetary and banking policies to control the foreign risk sand current account deficit have lowered the sector's profitability through increasing the costs reduced return on equity ratio to 15,5% from 20%. The combination of inflation, high interest rates and devaluation of TRY increased the cost offinancing. Also, due to the impact of the global uncertainty, the banking sector experienced an increase in cost of foreign borrowing. Despite the negative outlook summarised above, Bank Asya continued to grow in 2011, increasing total assets by 18% to TRY 17,2 billion. During the past 6 years, the Bank has maintained its position as the biggest participation bank. During this period, Bank Asya has given financial support of TRY 22,8 billion to the real economy through lending activities. With its profitable and consistent growth strategy, Bank Asya's net profit after tax was TRY 216 million by the end of Since March 2011 as the date of our assignment, in order to use the Bank's capital more efficiently new strategies and policies have been implemented rapidly. In this respect, spread of the credit riskto the base has been targeted and the proportion of the Individual and SME loans in the total loan porftolio has been increased. Individual loans have reached TRY million with an increase by 75% andasignificant increase has been achieved in SME loans. As a result, a diversified loan portfolio has been created providing the opportunity to serve much more customers. The average maturity of deposits, which is a major problem ofthe Turkish Banking Sector, was 64 days as of September 2011 in the sector. On the other hand, Bank Asya has extended the maturities of the funding succesfully as one of its main strategiesand increasedthe average maturity of the fundscollected to 132 days. As a resultof the innovative efforts to in order to diversify the financingstructure which is one of the main problems of the participation banks, fundings from abroad increased by approximately134% and reached to TRY million through the use of new methods of financing. In addition, the Bank completed the required steps for the first time issueance of Sukuk. As per existence of favorable conditions, Sukuk issuance amounting to USD 300 million is projected within the year

26 Presentation Message from the CEO A year, structure of fast and quality service to the customers 75% Retail loans increased by 75% and reached to TRY million. Bank Asya won awards for many innovative products developed, especially for DIT card and continued to lead the sector with the use of contactless technology, trough the transportation and campus projects invarious cities. With in this context, Karamanas transportation project and and Gediz, Zirve, Suleiman Shah and and Duzce University as campus projects are added to the projects of Bank Asya with in the current year. With a total number of credit cards, Bank Asya has became one of the majörplayers players in the sector. Continuing contactless technology investments in 2011, Bank Asya has launched DIT Mobil which converts the cellular phone into a contactless payment instrument regardless of GSM operator and launched Cep-T KGS in cooperation with Turkcell. One of our major investments in the field of technology are implementation of the CRM applications. These applications will strengthen our understanding of customeroriented service, will offer better services to our customers, and contribute to the Bank's profitability and efficiency. Despite the recent economic conjuncture, Bank Asya continued its organic growth with 25 new branches, raising the total number of branches to 200. With more than 500 ATMs in total and with the efforts for serving to a larger customer base, Bank Asya increased the number of individual customers by 16% and reached a total of 3.3 million customers. New gold-based products have been served in order to meet the customer demands especially for gold emerged parallel to the increase in commodity prices and to invest our customers savings. New products for the trade of scrap gold and gold in grams have been designed and implemented. Studies on gold based participation accounts have reached to the final stage. As a result of those efforts, gold accounts increased by 470% reaching 10 tonnes of gold reserves. 026

27 Bank Asya 2011 Annual Report Our Bank s financial support to the real economy through lending activities has been TRY 22.8 Billion through within the current year. Efficient use of capital and a credit portfolio spread to the base On the other hand, in accodance with our new strategies and in order to be closer to our customers and to provide faster and higher quality services, we have increased the number of our regional offices from 2 to 9 and we have increased our support to our customers in terms of organizational structure. In 2011, our Bank strengthened its outstanding success with many awards and certificates. One of the most respectful economic Magazines World Finance selected Bank Asya as "The Best Commercial Bank of 2011" and Citibank awarded Bank Asya with the STP Excellence Award, which measures efficiency of business flows. Bank Asya became the first Turkish organization to receive the Business Continuity Certificate from the British Standards Instituition. Bank Asya received The Best Call Center of Turkey Award and "Customer Satisfaction Management ISO 10002". Bank Asya has become the first bank in Europe to be awarded these two certificates at the same time. Bank Asya orientsabroad in order to operateinterest-free banking activities not only within the country but also in international arena. In 2009, Bank Asya initiated the process of overseas expansion in Africa with Tamweel Holding. and will continue in the next periods. Bank Asya will expand its activities in Africa, and will start its interest-free banking operations in Northern Iraq through opening a branch in Erbil in the near future. As being the first bank obtaining the approval fort he application for a representative office in India, Bank Asya will start its operations in India in the near future. With all these features, Bank Asya has become one of the most attractive banks for foreign investorsand one of the banks with the highest rate of public quotation in Turkey. Bank Asya not only present services in banking area in the country, but also feels responsiblity for the improvement of the social community'srelations with the environment, art and sport. For this purpose, Bank Asya contributes various sponsorship and social responsibility projects. Bank Asya supports worldwide organizations such as International Turkish Olympics and TUSKON's international meetings, and also sustains its support to The First League of football since year I would like to thank to my colleagues who contributed to the successful work of Bank Asya and provided a sense of belonging. I also want to thank to our shareholders who always supportour managementand to our customers who accept Bank Asya as their own bank and toall stakeholders who played an important role in the success of Bank Asya. Abdullah Çelik Board Member and CEO 027

28 Embracing the responsibility of being the first participation bank opened to the public, Bank Asya acts with transparency, one of the foundational values of the Bank

29 Clear and Transparent

30 Presentation Macroeconomic Overview and Banking Sector Altough there was a positive start to the year of 2011, the global economy could not achieve expected stabilization due in part to U.S s fluctuated employment and growth rate and debt crisis experienced particularly in the Eurozone 1,29 The EUR/USD exchange rate, which stood at 1,44 at the first two quarter of 2011, slid below 1,29 as of year-end 2011 due in part to the debt crisis International Developments As a result of diminishing effects of global crisis in 2008, and encouraging forecasts about recovery in housing market and in growth rates in the U.S, performing positive start to the year 2011, the global economy could not achieve the expected stabilization due in part to U.S s slightly fluctuated employment and growth rates and debt crisis experienced particularly in the Eurozone Besides, disagreements during the budget planning in U.S, led to postponement in rise of the debt ceiling, and resulted in a decline in long term-debt note of the U.S from AAA+ to AA+ as decided by S&P The debt crisis in the Eurozone, began in Greece during the first quarter of 2010, and continued to spread in 2011 with the addition of Italy and Spain. During this period, the CDS (Credit Default Swap) spreads, which are an indicator of riskiness soverign bonds of countries that were impacted by the debt crisis rose continuously and led to a signnificant increase in the borrowing cost of Eurozone Greece s nearing bankruptcy, Germany s insistence to compensate the entire recovery cost of Greece through tax incomes from the public, and through the banks which played role in borrowing actively, and the lack of a considerable plan by European leaders during this crisis, manipulated financial markets to lose confidence in Europe, inevitably leading to an increase of uncertainity in the economy. Increasing rate of doubts about sustainability of the European Union, also affected borrowing rate of the countries adversely, Italy and Spain werereported to have the highest levels of debt in the financial markets. The EUR/USD exchange rate, which was at 1,44 during the first two quarters of 2011, slid below 1,29 as of year-end 2011 due in part to the debt crisis. Compared to the year 2010, after implementing austerity policy, especially in the Eurozone, the global economy set forth to monitorize lower growth rate as of year-end 2011 GDP Growth Rate ,3 5 6,6 4,3 6,4 4, ,7 3 2,2 2, ,6-0, (T) 2012 (T) -3,4-4 Developed Countrie Developing Contries World 030

31 Bank Asya 2011 Annual Report Developing Countries are on Path Espcially in the latter half of the year, the U.S economy measured higher records and data over forecasted scenario, which was one of the most important development in the year Country CDS Spreads While S&P 500 Index confined the year with a 0,6% increase, economy registered a decline of -15% in Germany Dax, -17% in Brazil Bovespa, -21% in China Shanghai Comp. and -24% in ISE 100 index. The debt crisis in the Eurozone, inflation rates and a slump in the growth rates in Asia shifted the global capital flow direction to the U.S. On the other side, sustainable policies implemented by the FED, and the trustworthy and appreciated structure of U.S institutions provoked the U.S economy to decouple from other countries. Debates about this favorable decoupling, and the continual uncertainity throughout the year 2011, provided a rise in the price of gold stocks considered the safest haven, alongside U.S stocks and consent stocks. Despite an impressive beginnig, the commodity market ended with a fall as of year-end After record highs in purchases by funds that chase high returns, the commodity prices began to drop caused by decline in the long term portfolios of speculators and the slowing rate of recovery in the U.S and forecasts for global demand deficit due to the debt crisis in the Eurozone. The price of copper measured with a fall in response to the reduction in Chinese import volumes, whereas cotton and wheat prices started to decrase on account of increase in supply in the agricultural market, though were increasing levels during the beginning of the year. Perceived as a safe haven, gold prices reached USD 1,900 per troy ounce in August 2011, but began to decline during the last quarter of the year. There was a rise in the positioning margins of forward gold sales in addition to the appreciation of the US dolar. Country CDS Spreads Turkey Greece Spain Portugal Italy Gold and Oil Gold Oil (right axis) Gold finished the year of 2011 at USD 1,550 with a 13% increase. Oil prices started the year at the level of USD 90,00 per gallon and registered at USD 108,00 as of year end 2011 after challenging period which contracted by the Arabian Spring, developments in Europe and crucial conflicts between Iran and the West

32 Presentation Macroeconomic Overview and Banking Sector Domestic Developments With a growth rate of 9% in 2010, the Turkish economy left behind the negative effects of its past crisis, and also continued its rapid growth path through the year Besides measured recession, particularly in developed countries, and in contrast with slowing global economy resulting from debt crisis experienced in European countries, Turkey s economy maintained to decouple favourably by its respective growth rate at 12%, 8,8%, 8,2% in the first three quarters of the In order to protect stability in financial markets and to decrease budget deficit, the Central Bank of Turkey implemented monetary and fiscal policies especially in the last period of the year. These policies caused growth rates to decelerate, and increased expectations of lose its momentum for upcoming quarter. Looking at the structure of the growth rate, increases in household consumption, which contributed substantially to the growth rate were at highs throughout the year. Growing by 12,2% in the first quarter of 2011, settled households increased their consumption by 8,8% and 7% increase in the second quarter and third quarters respectively. After a rise of 13,1% in 2010, industrial production maintained its rapid growth at begininnig of the year but lost some of that momentum after the second quarter of the year. As a consequence, average growth rate of industrial production stood at 9,4% during the first ten months of Obtaining sustainable fluctuations throughout the year, the manufacturing industry capacity utilization rate, was revised from a recorded level of 77% on October 2011 to 75,5% as of year-end On the other hand, foreign trade indicators figured out export volume as USD 122,5 billion. A 20% increase during the January-November period, while import volume reached to USD 220,2 billion a 33,5% increase. Industrial Production and Capacity Utilization (%) Capacity utilization Rate Imports volume registered at high levels in response to higher domestic demand and a rise in commodity prices while exports fluctuated within a limited range due to drop in foreign demand. As a result of the increasing trade deficit, the current balance of transactions registered USD 65,1 billion at the end of first ten months of After declining sharply in 2010, thanks to the impressive growth rate of the economy, the unemployment rate continued to fall and reached to the lowest level of recent years Foreign Trade and Cuurent Deficit (USD Million) Export Import Current Deficit (right axis) Seasonally and Calendar Adjusted Industrial Production (Annual Base)

33 Bank Asya 2011 Annual Report Sustaining a rapid growth rate in 2011, in contrast to the slowing global economy, the Turkish economy maintained to favourable growth. GDP Growth Rate (%) (in constant prices) Central Bank of Turkey Interest Rate 14 Borrowing Lending Weekly Repo ,8 8, , /1 2011/2 2011/ The unumployment rate fell to 8,8% in October, down from 11,9% in January 2011, while the non-farm unemployment rate fell from 14,7% to 11,3% in the same period. The number of employed individuals rose to 24,7 million up from 22,5 million while the number of unemployed fell from 3 million to 2,4 million. Compared to CPI at 6,40% and PPI at 8,87% in 2010, CPI rose up to 10,45% and PPI stood at 13,33% as or year-end As a consequence of the overpowering effects of the finalization tax regulations which began to be implemented in 2010, the inflation rate tended to decline at the first quarter of In contrast to decrease in the first quarter of the year due to fall in food prices, the inflation rate started to move up again as a result of a rise in food prices in the second quarter of the year. Consequently, inflation rate maintained to incraese in the second half of the year in response to depreciation of Turkish liras caused by a drop in global risk appetite. Developments in the exchange rate were influential on basic commodity prices, while service prices kept its steady position during the year. Despite a measured decrease in international commodity prices, producer prices tended upwards especially due to significant effects of the exchange rate. Despite losing some of its momentum towards the end of year, higher domestic demand throughout the year played an important role on the inflation rate which higher than anticipated. Unemployment (%) 15 Unemployment Non-farmed Unemployment Inflation CPI PPI Core Inflation (I)

34 Presentation Macroeconomic Overview and Banking Sector As a part of its monetary policy and to prevent the economy from getting overheated relative to the deepened debt crisis in European countries in 2010 and worsening perceptions for global risk apetite as of August 2011, the Central Bank of Turkey (CBT) expanded the interest gap downwards to decrease short term capital flow while managing obligatory provisions actively. With financial stability as its primary objective, the CBT withdrew capital from markets by increasing the required reserve ratio, to limit decoupling between foreign demand and domestic demand while managing weekly repo to overcome squeezing liqudity in the markets. In this period, as result of regulating foreign exchange purchasing tenders, the CBT strengthened its foreign exchange reserves and provided services to satisfy the needs for the Turkish lira caused by hot money flows. As developing countries registered capital outflows in response to deteriorated global economies and shrinking global risk apetite, the Central Bank of Turkey focused to limit domestic demand from sloping downward by a decline in indicator interest rate. Meanwhile, to overcome the negative effects of squeezing liquidity, the CBT declared a decrease in the required reserve ratio. On October, by increasing the borrowing. Interest rate, CBT expanded the interest gap upwards again to limit the inflation rate s rising trend which was especially caused by depreciation of Turkish liras. ISE ,000 70,000 65,000 60,000 55,000 50,000 45, Exchange Rate 1,40 DOLLAR/TRY 1,40 1,40 1,

35 Bank Asya 2011 Annual Report Performing impressively throughout the year, participation banks increased their market share in total assets and deposits Within 2011, ISE 100 index recorded at the highest 70,335 and at the lowest 48,600 after starting the year at the level of 66,004. With a 21% decrease during whole year, Index completed 2011 at 51,267. Especially in the second half of 2011, as one of examples ISE 100 Index, markets impacted negatively as a result of capital outflows in developing countries which caused by doubts about global growth and worsening risk perception. The debt crisis in Europe and predictions for recession took its toll on ISE companies profitability and brought about a depreciation of their stocks value. Begining the year 2011 at level of 1,50 foreign exchange rate, followed moving upwards throughout year, reached an all time high at 1,92 with significiant increase in its momentum after August Furthermore, negative expectations for global affairs and realizations of the deepening debt crisis in some of European contries, resulted in a depreciation of the Euro and domestic currencies in developing countries against USD. In Turkey, perceived as a safe haven, increasing demand in USD by foreign funds mostly constructed with investment portfolios, caused Turkish Liras to perfom weakly against USD After purchasing regulated foreign exchange tenders from the beginning to the midldle of the year, the CBT ceased purchasing in July 2011 and began in August to regulate foreign exchange sales tenders to provide and expand liquidity in the economy. In addition, the CBT focused to limit increases in the foreign exchange rate by direct interventions at the last term of According to middle term program between 2012 and 2014, GNP growth rate is expected to be set at 4% in 2012 and at 5% in both 2013 and Due to forecasts for the employment rate to rise gradually and exports to grow higher than imports, current deficit is anticipated to decrease. As a consequence, the inflation rate is expected to return to single-digit numbers and to be balanced at the level of 5%. Middle Term Program GDP (TRY billion, current prices) GDP (USD billion, current prices) GDP Growth 7,5 4,0 5,0 5,0 Unemployment Rate (%) 10,5 10,4 10,2 9,9 Exports (FOB) (USD billion) 134,8 148,5 165,7 185,1 Imports (CIF) (USD billion) 236,9 248,7 272,5 295,9 Exports/Imports (%) 56,9 59,7 60,8 62,6 Current Account Balance (USD billion) -71,7-65,4-67,0-67,1 Current Account Balance / GDP (%) -9,4-8,0-7,5-7,0 % Change in Year-end CPI (forecast) 7,8 5,2 5,0 5,0 035

36 Presentation Macroeconomic Overview and Banking Sector 1,2 trillion Total assets in the banking sector reached TRY 1,2 trillion while deposits were set at TRY 696 billion as of year end 2011 Developments in thebanking Sector According to analysis completed in December 2011, total assets in the banking sector reached a level of TRY 1,2 trillion while deposits were set at TRY 696 billion. In addition, loans registered TRY 701 billion in the banking industry Looking at improvements of participation banks through 2011, participation bank assets increased to TRY 56,2 billion and deposits reached TRY 39,2 billion as volume of loans was recorded at TRY 41,5 billion. Comparing performance of participation banks to the rest of the banking industry, participation banks increased their share in deposits and total assets in the banking industry. The share of participation bank assets in the banking sector total assets moved upward from 4,31% in 2010 to 4,61% as of year-end The share of participation bank deposits in the banking industry rose to 5,64% in December 2011, up from 5,36% in 2010 while loans share in the banking industry stepped backward from 6,03% in the previous year to 5,93% in

37 Bank Asya 2011 Annual Report The share of participation banks total assets increased by 4,6% in 2011, up from 4,3% in Assets Improvement (TRY million) Year Participation Banks Change (%) Deposits Banks Sector Participation Banks /Sector (%) , , , , , , , , , ,61 Deposits Improvement (TRY Million) Year Participation Banks Change (%) Deposits Banks Sector Participation Banks /Sector (%) , , , , , , , , , ,64 Loan Improvement (TRY Million) Year Participation Banks Change (%) Deposits Banks Sector Participation Banks /Sector (%) , , , , , , , , , ,93 037

38 Presentation Bank Asya s Activities in 2011 Increasing its current assets by 50% during the year, Bank Asya ranks first with its rate of current assets in the sector. Accomplished the year with 11% growth in assets... Annual collected funds trend (Milion TRY) Bank Asya, finished the year 2011 dominated by importance of deposits growing incrementally as a consequence of global economic shrinkage, at the point of TRY 12,4 billion in assets with 11% growth compared to the previous year Bank Asya ranks first with the rate of increase in current acoounts within the sector Annual total current account trend (Million TRY) Growth of the funds collected on the basis of customer groups Succeeded in 50% growth to TRY 3,121 million throughout 2011, Bankasya prolonged its leadership in sector with the rate of current assets in total assets while entire banking industry accrued with 23% growth in total current assets As of 2011, Bank Asya, particularly thanks to an upward trend in retail and SME s customers volume, continued to increase the funds collected on the basis of its customer group, The Bank also focused on taking measures against small slices of sources in line with its target to generate long-term, multi-partnered structure of fund Gold Account Besides economic contraction experienced in Eurozone, and increased demand for gold, Bank Asya s gold account reserves vaulted 9,948 kg with an impressive increase of 470% up from 1,745 kg at the begining of the year. This took place in response to individual investors headed towards gold. Continued its first place in annual total participation accounts Enhancing total participation accounts at TRY 9,276 million in 2011, Bank Asya, continued its first place in interest-free banking industry Annual Total Participation account trend (Million TRY)

39 Bank Asya 2011 Annual Report Strong and healthy growth in line with strategic targets Corporate Banking Customers as long-term business partners... In the constantly changing and fiercely competitive environment of financial markets, Bank Asya strives to meet the needs of its customers that it sees as long-term business partners. The Bank serves each client with multidimensional projectbased solutions in a timely manner. The bank conducts corporate marketing activities in line with its customer-oriented banking principles. Bank Asya has six corporate branches (three in Istanbul and one each in Izmir, Antalya, and Ankara) and employs 86 specialist personnel in these branches as well as 11 expert employees in the Headquarters Corporate Marketing Department. The Bank provides more effective and more efficient financing facilities to its clients and supports entrepreneurs with its network of dedicated staff. The marketing network includes the corporate marketing personnel employed in the branches and is also strategically supported by the Headquarters Corporate Marketing Department. This organizational structure allows the Bank to be closer to clients and to review and resolve customer requests in a timely fashion. As the pioneer of many groundbreaking practices in participation banking, Bank Asya operates on the principle of selfimprovement with respect to new customer needs that may arise as a result of an evolving and changing economic environment. The Bank analyzes customer needs appropriately, conducts effective marketing activities, and assesses loan applications in accordance with the principles of security, liquidity and profitability. Main categories of products offered to corporate clients Current Accounts Participation Accounts Cash Management Cash Loans Non-Cash Loans Foreign Trade Finance Insurance Services AsyaCard Business Bank Asya s customer-focused marketing policy principles: Conducts frequent customer visits in order to keep abreast of their current concerns and to respond to their needs with appropriate solutions, while maintaining regular communications, Takes action in a timely and effective manner when dealing with customer requests, Responds to customer requests clearly in order to achieve customer satisfaction and reassures clients to ensure the continuity of business relationships, Develops new products and services in line with customer expectations and serve clients with an extensive product lineup, Is open to customer suggestions and restructures business processes accordingly in case of need, Increases its presence within the sector by adding new customers to its portfolio while enhancing relationships with existing customers, Offers products and services that are efficient, profitable and competitively priced, Structures its organization in line with corporate objectives and generates results. Bank Asya provides a comprehensive range of services to meet the needs of its corporate banking clients, from lending and cash management to foreign trade and investment products, with its extensive lineup of products, professional asset management teams, advanced technology systems and diverse distribution channels. The Bank plans to develop fast-paced and comprehensive offerings while remaining committed to its corporate values and risk-management policies in accordance with its objective of supporting the producers. 039

40 Presentation Bank Asya s Activities in 2011 Commercial Banking A master in project finance Institutionalizing sophisticated experiments gained from projects, specializing in project finance, associating with each project closely, Bank Asya, having financed significiant projects since its foundation, aims to enhance its efficiency in its profitability and risk management policies. For this purpose, the Project Finance Department, employing a dedicated expert team in project finance was established within the Headquarters Profit/Loss sharing projects As one fundamental instrument of interest-free banking, profit-loss sharing projects are analysed and prosecuted by the Project Finance Department. Bank Asya has different types of profit-loss sharing projects, of which analysis and meetings still continue. Yet already, one profit-loss sharing project, of which the sale and contsruction processes are expected to be completed within two years, was designed and loaned by the Project Finance Department. Additionally, sectoral reports complied with results of Project Finance Department s analysis of developments in the sector, were periodically composed and submitted to Bank Asya s personel. In different periods within 2011, detailed reports about the Housing Sector, the Health Sector and the Tourism Sector were issued and distributed to personnel Remarkable growth in financial leasing... While providing financial support to its commercial banking customers requsition to increase their investments, production capacity, profitability and employment during 2011, Bank Asya, thanks to its international reputation, also furnishes non-cash services to companies in need of letters of guarantees, counter guarantees, letters of credits, avalization etc. arising from project conditioned with commitment, or foreign trade transactions. Improvements in financial leasing, as one of primary objectives on marketing agenda throughout the year 2011, boosted incomparably to the previous years volume and as a consequence Bank introduced with remarkable leasing portfolio. Servicing an extensive product line including cheque books, POS, tax, SSI and invoice payments, wage payments, insurance services and internet banking, Bank Asya, with advanced technology and practical solutions, also aims to improve its service network in a pioneering manner to achieve customer satisfaction within pure competitive market. Besides aiming to operate banking services and products in accordance with sound policies and marketing strategies in order to increase profitability and ensure continuity of business relations, Bank Asya contributes to generate and improve commercial portfolios and marketing orginazation. Regional Offices, timely and more efficient banking During the year 2011, seven new Regional Marketing/Allocation Offices in additon to the South East Anatolia and Aegean Regional Offices, were established to operate banking activities. In conjuction with establishment of the Istanbul Europe I, Istanbul Europe II, Istanbul Anatolia, Ankara, Marmara, Konya and Black Sea offices, Regional Offices commenced to conduct all loan and banking transaction processes of SME customers within allocated credit limits. By constructing Regional Coordination and Product Portfolios, the SME Banking Dept was underwent for a change in its organizational structure. As a result of the increase in the number of regional offices and self-authority for allocation, the Commercial Banking Department was merged out of two different departments in the previous periods. 040

41 Bank Asya 2011 Annual Report Bank Asya increased the number of its active SME customers with a dedicated credit line to 63,000 in 2011, up 40 percent compared to SME (Small-Medium sized Enterprises) Banking Bank Asya s Çobanyıldızı continues to shine Serving the Microbusiness and SME segments and supporting these clients with loan and cash management products and sercives, Bank Asya continued to surge the share of SME segmented customers in its total customer portfolio during Bank Asya supports the investments, business growth projects, production expansion initiatives and all foreign trade transactions of its microbusiness and SME clients through lending. Bank Asya also offers its customers cash management services including Direct Debiting System, Commercial Card, AsyaAsist Card, Checkbook, POS devices, Tax and Social Security Payment, Bill Payment, Salary Disbursement, Insurance Services and Online Banking. As a result of sound marketing policies based on innotiative marketing strategies, Bank Asya increased the number of its active SME customers with a dedicated credit line to 63,000 in 2011, up 40 percent compared to In parallel with its strategic objective to grow in the Small Business Banking segment, Bank Asya unveiled its Çobanyıldızı Project, in the last quarter of The Çobanyıldızı Project, which represents a new generation small business banking concept, proceeded to shine a light on SMEs during Rolling out eight more financing packages for SMEs, the number of loans provided to SMEs reached TRY 75 million. The primary objectives of Small Business Banking at Bank Asya are to renew existing financing packages, develop new financing packages, and become the solution partner of more SMEs under the Çobanyıldızı brand. "To this end, taking a close interest in SME customers Bank Asya organized Çobanyıldızı Meetings participated by regional SME customers in various Anatolian provinces such as Malatya, Adana, Şanlıurfa, Kayseri and Konya in order to better understand the concept of "Çobanyıldızı" and our bank and to promote products. Bank Asya also plans to continue to hold Çobanyıldızı Meetings in different provinces through 2012." "Providing support to businesses in unexpected / emergency situations when users require medical, legal and financial consultancy services, the AsyaAsist Card reached 43,000 active users in 2011, a 16 % increase on the previous year." In 2011, Bank Asya continued to take part in government-supported projects for its Small Business Banking clients. Within the framework of its partnership with the Credit Guarantee Fund (KGF), the Bank continued to extend KGF-underwritten loans to firms that have difficulty posting collateral on their own. Developed by Bank Asya continued to give customers a cost advantage by helping them to lower their operational costs while enhancing their ability to make collections. The Direct Debiting System (DDS) makes it possible for firms to automatically receive payment for goods and services they sell to their dealers and regular customers. An alternative to DDS is a cash management product known as the Virtual Commercial Card, which allows payments and collections between a wholesaler/ franchiser and a retailer/dealer exclusively. As of 2011, Bank Asyasupports its SMEs clients with loan and cash management products under brand of The Çobanyıldızı Project, which represents a new approach to small business banking, Bank Asya aims to be the primary bank in Microbusiness and SME segments and to establish long term relationships with its small business clients, and to become their advisor bank. To this end, by developing new products and projects to add to its existing line up of products and services, Bank Asya, has realized its targets and sound strategies. 041

42 Presentation Bank Asya s Activities in 2011 Retail Banking Expected and desired growth in retail banking has been realized... Bank Asya has continued to provide the highest quality service to its customers via 600 retail marketing staff working in 200 branches. The number of Bank Asya s retail customers jumped to 3.3 million in 2011, a rise of 16 percent from the previous year retail finance support was at center stage Improving its competitiveness in housing finance and other supportive products, Bank Asya has focused on new product development in accordance with customer needs and expecations. While housing finances have been related to the construction sector, vehicle financing was increased through a focus on the vehicle dealer network. As a result of all these activities the Bank provided achieved a 75 percent growth over the previous year in financial support activities in This growth had an impact on the increase of the Bank s market share in the banking sector. More efficient financial support Thanks to the various campaigns with special rates for civil servants and teachers conducted during the year, the Bank received extremely positive feedback from customers. Growth in payment and collection services... Bank Asya now plays a major role in the cash cycle of companies that receive bill payments from their customers, thanks to the easy bill payment options it provides, through its alternative distribution channels as well as in the form of automatic payment instructions from customer accounts or credit cards. An increase in the number of firms for which bill payments are accepted contributed to the growth in bill payment instructions, which rose by 21 percent to 554,000. The Bank processed a total of TRY 361 million in bill payments made from all channels during the year. After a very successful year in its payment and collections services, Bank Asya provided salary payment services for some 243,000 employees of about 3,600 firms in In addition, as part of the school and testing center tuition payment services, the Bank processed a total of TRY 399 million in payments for 92,500 students attending 696 schools. In Ongoing International Money transfer services in cooperation with MoneyGram, a pct 90 rise from the last year in outgoing Money transfer transctions and a pct 48 rise in incoming paymenst were realized as well. Bank Asya succeeded to rise commissioning revenues at a rate pct 73. Retail customer gowth trend (quantity) Retail financial support growth (TRY Million)

43 Bank Asya 2011 Annual Report With an increase of 16 percent in the number of retail customers and 75 percent in retail financial support, Bank Asya covered a lot of ground in retail banking sector in Inverstment Products In 2011, the Bank focused its efforts on marketing invetsmets accounts; thus, a total of 15,000 clients (up 50 percent from 2010) opened brokerage accounts to trade stocks.the Bank recorded a rise of 31 percent from 2010 in commission income owing to the increase in efficiency and in the number of clients and invetsments accounts. Record growth via new insurance products 2011 was a year that Bank Asya introduced new incurance products in line with customers needs and expectations. The main products created for retail customers were Bank Asya Evim Güvende Insurance (Home assurance), Bank Asya Continuous Education Plan Insurance,Bank Asya Çocuğum Güvende ınsurance (child safety assurance), and Bank Asya emergency Health Insurance. With the contribution of those new insurance products which were developed with subsidiary Işık Sigorta, Bank Asya produced a 55 percent record growth in commission income in Card and merchant partner activities Bank Asya increased the number of its credit cards by 6.6 percent on the previous year, to above 1.9 million in Credit card turnover consistent with the increasing number of cards also went up by 18.1 percent and reached TRY 5.85 billion. Due in part to a variety of regional and national card marketing campaigns, newly attained vendors and brands as well as efficient cutomer communications throughout the year, installment purchases using AsyaCard at Bank Asya merchant partners surged by 46 percent. As of year end 2011, approximately 200 merchants, became strategic partners. Credit Card Growth (quantity) Bank Asya Retail Loans Distribution Credit Card Balance Growth (TRY Million) % 4% Distribution on quantity base 67% Consumer 1% 10% Distribution on amount base 89% Vehicle Housing 043

44 Presentation Bank Asya s Activities in 2011 Credit Card (Forwarded) Balance Growth Due in part to newly attained brands during the year, the number of merchant partners reached 71,245 while the total merchant partners balance stood at TRY 6.8 billion up 17 percent from POS Balance Growth (TRY Million) In regard to all these effective activities, Bank Asya ranked at 11th in credit cards, 10th in credit card balance, 9th in POS and 10th in POS balance in the Turkish market. Innovations in technology continue Bank Asya, by continuing innovative investments on products and services in 2011, re-demonstrated its market leadership with DIT Mobil and Mobile-T KGS (a card-baded pass system). DIT Mobil using MicroSD based NFC (Near Field Communication) technology and working independent from operators enables customers to pay using their cell phones. Furthermore; Cep-T KGS, a product about which studies were completed in 2011 and which was developed with cooperation between Turkcell and Bank Asya, enables customers at Bank Asya to download the bank s KGS applications through their cellular phones with Turkcell service and pass from bridges and highways without need of a physical toll card by swiping their cell phones at KGS toll booths. Cep-T KGS will be intruduced to customers in the first months of Bank Asya, with its innovative products utilising the latest technology, aims to sustain its market leadership at contactless payment operations in the periods ahead Smart solutions to customer needs via new products and services One of the most substantial products that Bank Asya launched to its customers in 2011 was PAKSİT. Thanks to PAKSİT (Receive at sight, pay forward), Bank Asya customers were given the opportunity to pay in up to 36 installments of their purchases over TRY 50, using their Asyacard domestically or abroad. A solution was created for an important requirement of PAKSİT cumtomers which is valid only for transactions complying with murabaha principles, and which generated a huge transaction volume in a very short time. Contactless cards, transportation and campus projects activities Continuing to innovate on current transportation and campus projects, Bank Asya maintained its leading position in this field in Contacless cards offered by Bank Asya, namely AsyaCard DIT and DIT Pratik are being used with seven public, transport projects in the municipalities of Kahramanmaras, Balıkesir, Adıyaman, Karabuk, Safranbolu, Bolu and Karaman, and in TURYOL Marine Transportation in İstanbul. Campus Card application continues at 9 universities (Adıyaman, Osmaniye Korkut Ata, Fırat, Duzce, Fatih, Mevlana, Meliksah, Suleymansah and Zirve Universities) under the scope of Bank Asya Campus Projects as of the end of AsyaCard DIT grew very rapidly thanks to its prepaid toll card feature at highway and bridge booths as well as its availability for purchase in under 15 minutes at all Bank branches; the number of AsyaCard DIT users jumped by 14 percent in 2011 to reach 876,250 customers. Originally launched in 2008, the prepaid DIT Pratik card has reached 235,684 users to date. Bank Asya ranks first in the sector in terms of the number of contactless card (credit cards and prepaid cards combined) transactions and in turnover. 044

45 Bank Asya 2011 Annual Report The Bank Asya Call Center, is certified in Customer Communication Centers Quality Management (ECCCO EN 15838:2009) and Customer Satisfaction Quality Management (ISO 10002:2004) in all of Europe The best Call Center award goes to Bank Asya In October 2011 the Bank Asya Call Center was deemed worthy of The Best Call Center Award by the industry s most prestigous institution. The call center was also certified in Customer Communication Centers Quality Management (ECCCO EN 15838:2009) and Customer Satisfaction Quality Management (ISO 10002:2004) in June Bank Asya was the first bank to succeed in receiving these two certficates at the same time in whole Europe. Everything is for a more timely and qualified service to customers Bank Asya continued to make technical improvements to its call center in 2011 in order to respond to customer demands with faster and higher quality service. Telemarketing team calls were converted to Automatic Calling System, eleminating some manual work. Online receipt of payment in insurance products was accomplished and Cüzdanım (my pocket), Ailem (my family), İşsizlik (unemployment), Evim Güvencede (home assurance) sales started to be realized via related avenues. The Maraton application enabled daily monitoring of the performances of customer representatives at the Call Center. Customer Complaints Management process improvements were designed and relevant works were initiated. After the completion of this work, it is planned to improve the process of monitoring and managing complaints, measuring them with reporting and using those results as performance inputs. Effective Management of Alternative Distribution Channels Thanks to IVR, Inbound, Delighted Customer Line and Outbound calls, SMS info service and TTS (text to speech) calls, customers were contacted in 2011 from our call center. As a result of these contacts, products were sold to customers and insurance policies generated TRY in premiums throughout the year. Call Center Monthly Customer Contact Mobile Branch Initiatives on Asya Mobile Branch were undertaken with the intent of offering solid banking services easily to citizens in the regions in which our branches do not exist and/or at any location where banking services were interrupted due to natural disasters. These initiatives were completed and the first mobile branch commenced to render banking services to earthquake victims in Van on 5 December ADC Monthly Product Sale (Quantity)

46 Presentation Bank Asya s Activities in 2011 Unconditional customer satisfaction with Delighted Customers Line During 2011, 36,398 calls were responded to under the Delighted Customers Line. The average response duration was 8 seconds and 94,7 percent of calls were serviced. The timeframe to analyse customer demands, desires and complaints was on average one day at the Customer Satisfaction unit. The bank at which internet branch and mobile branch were used at optimum level The Number of Internet branch users reached 647,000 clients, up 19 percent from 2010 during which the number, which was 542,000 Whille there were 925 Internet branch membership cancellations in 2010, there were 427 in 2011 a decline of 46 percent Altough Internet branch active usage ratio was pct 41 in sectorwide in the third quarter of 2011, this ratio was pct 50 at Bank Asya. The number of customers using AsyaCep Internet Branch increased by approximately four times over While the monthly-entry to internet branch as of November 2010 was 1,11 million, this was realized as 1,25 million in 2011 with pct 13 rise. On the other hand; however, the internet branch financial transactions volume as of November 2010 was an average of TRY 1,39 billion, it rose up TRY 1,83 billion in up pct 32 over the previous year. ADK Monthly Insurance Policy Sale (quantity) Internet Branch User AsyaCep Branch User ADK Monthly Promotion Capacitiy (Quantity) Internet Branch Monthly Entry 1,11 Million 1,25 Million

47 Bank Asya 2011 Annual Report Determined to increase foreign trade transactions, Bank Asya succeeded in increasing its foreign sources by 95% International Banking Solid basis in international banking While contributing to the national economy through its support for production, Bank Asya has also increased both its effectiveness and its market share in foreign trade finance as a result of its respected position and strong correspondent relationships in international markets. In conducting foreign trade transactions, Bank Asya delivers service that fully complies with international banking practices and standards and makes use of modern banking instruments in order to provide its customers with superior solutions. Bank Asya completed a transformation process in international transactions in early 2011 and transitioned from a branch-based to a transaction based portfolio structure. Since the completion of this process there have been significant improvements in the speed, reliability, and standard compliance of the Bank s foreign exchange transactions. The foreign trade team at Bank Asya consists of employees with-proven expertise in foreign trade, seven of whom posess Certified Documentary Credit Specialist a certificate on Letter of Credits and International Guarantees (CDCS) International award for excellence The effectiveness of Bank Asya s technological infrastructure and service competencies is demonstrated by the Straight Through Processing (STP) Excellence Awards that it has received from some of the world s leading banks in Bank Asya received the STP AWARD 2011 from Citibank. Bank Asya s increasing share in foreign trade... The Bank s foreign trade transaction volume in 2011 totaled USD billion, which includes, USD 4.1 billion in imports, USD 2.9 billion in exports, USD 13.5 billion in other transfers and USD 570 million in guarantees. Bank Asya sustained increase of its share of Turkey s foreign trade transactions in 2011, achieved a 10 percent increase in import volume and a six percent growth in export volume compared to the previous year. An enduring and trusted presence in international markets Bank Asya continued to provide international services to its customers through an extensive correspondent network of more than 1,400 banks in 110 countries. In April 2011, Bank Asya signed an agreement structured with the participation of 26 banks from 17 countries for a one-year murabaha syndication facility of two tranches, of EUR 99 million and USD million (totally equaling USD 300 million), to be used in export financing. As of 2011, funds collected to be used in export financing from abroad reached USD 760 million, a rise of 95 percent. Bank Asya continued to provide its customers with medium- and long-term credit opportunities and funding sources made available under a variety of Export Credit Agency insurance programs; in addition, the Bank offered qualified customers US Department of Agriculture GSM102 loans, which can be used to finance imports of agricultural products from the United States. Bank Asya aims to continue leveraging its extensive know-how and experience in foreign trade finance and its strong international relations network in order to maintain and increase its presence in this business line in Import Transactions (USD Million Dollar) % Export Transactions (USD Million Dollar) %

48 Presentation Bank Asya s Activities in 2011 Treasury The Treasury Department, trying to minimize the effects of fluctuations in the domestic financial market as a result of the economic crisis in EU and CBT policies, again continued to establish a balanced foreign exchange position during this year. The Department maintained Bank Asya s presence in the liquidity management segment by offering existing products and developing new products. In the second half of the year the opportunity to access to Open Market Operations based on GES was allowed to participation banks and the Bank was able to provide short term fund sources on easy terms contributing considerably to the Bank s profitability. "The conractionary pressures on the Banking Industry margins due to tightening precautions taken by CBT in order to minimize the current deficit, continued in 2011 and caused a reduction in the profitability." The Treasury Department continued to make positive contributions to the Bank s profit in 2011 by earning foreign exchange income in such a period where banking services revenues have an added importance in overall profitability. In an attempt to make the maximum contribution to the Bank s profitability by way of its liquidity management function, the Treasury Department increased the number of its transaction channels and achieved a more competitive pricing structure, producing about USD 25 billion in trading volume. With regards to demand from investors who started searching for returns in the low interest rate environment in which risk aversion became the norm with the markets fluctuations in 2011, and due to ongoing uncertainty in the global ecomomy, gold has become a widelypreferred investment vehicle. Rapidly increasing its gold deposits and gold transactions in response to surging customer demand, Bank Asya recorded significant income growth from these transactions. Thanks to increasing customer interest during this period, the funds deposited in gold accounts achieved a growth higher than the industry and exceeded 9.9 tons, an increase of 470 percent. 048

49 Bank Asya 2011 Annual Report In response to increasing demand for gold, Bank Asya gold accounts surged to 9.9 tons, with 470% increase over the sector Quality Management System The implementation of the Quality Management System and persistent improvement in its effectiveness demonstrates Bank Asya s commitment to development. To this end, the Bank engages in constant review, development and orientation in order to meet customers needs and expectations within the bounds of the law and as per the prescription of the quality management system. Bank Asya s customer-focused management approach is accepted as a necessary condition of companies striving to subsist in today s competitive environment. To live up to customers needs and expectations, the Bank s activities are monitored constantly. In accordance with feedback received from the aforementioned monitoring,studies are done to secure product quality from the design to the end of the representation process. Adopting the subsequent process is our client principle, Bank Asya has attempted to maximize the contribution of every unit and every employee within the instittution to the final customer s satisfaction. Maximum attention is paid to strict compliance with current codes, effectiveness, efficiency, and optimum cost elements in meeting the customers needs and expectations. In order to meet Bank Asya s 2011 quality management system requirements, an organizational change took place with the intent of improving human resouces,system infrastucture, working environment, and enhancing coordination between departments. A single department called Human Resources and Training Department was formed, incorporating the Human Resources and Organization and Quality and Training. After evaluation of the Bank processes in terms of quality,speed, and cost, Business and Product Development Coordination was established to plan,organize, and conduct studies of improvement and development of those processes with a Lean Banking perspective. ISO 9001:2008 Quality Certificate Bank Asya, recognising ISO9001:2008 Quality Management System as a strategic decision, exerted intensive efforts to implement it in all functions of the Bank. Accordingly, the Bank continuously spent great efforts to be a bank in which its employees are proud to be member. As a proof of said effort, ISO 9000:1994 Quality Certificate was granted in 1998 and since then took its place at the banks quality collection counters as ISO 9001:2008 accomplishing the requirements of all revisions. Business Continuity Management (BS 25999) Bank Asya received the Business Continuity Certification which was put into practise in 2011 from a reliable organization called British Standards Institute(BSI) ; thereby, becoming the first Turkish organization to receive the BS BCSM Business Continuity Management System Certicifate held only by 10 banks and 240 institutions throughout the World. The main purpose of business continuity management policy is to minimize the critical operations identified through business effect analyses and make them functional at the shortest duration customers are willing to accept. Call Center Certificate (EN 15838) Bank Asya qualified for EN Customer Communication Centers Quality Management Certificate on the basis of customer satisfation, incoming-outgoing calls, performance management system,hiring,and the whole process of career planning and training. EN is a an international standard consisting of special reqirements for call centers. The system conditions prescribed with this standard is of quality supplementary to technical qualifications. The general purpose in preparing this standard is to identify the mutual quality and technical specifications for communcation centers. The standard, valid for interior and exterior customer communication centers, was designated both for communication centers and for customers utilizing these centers. Customer Satisfaction Management (ISO 10002) Rendering quality service means replying to customer expectations in a consistent manner. Accordingly, Bank Asya informs, develops and steers its employees constantly in order to reply in the manner stipulated in the ISO Standard which guides the systematic identification of customer complaints, needs, and expectations. 049

50 Presentation Bank Asya s Activities in 2011 Information Technologies Bank Asya srenghtened its pioneering and innovative identity in banking information technologies sector through its research and development efforts and projects, and brought its service perminence and operational poductivity through investments on latest technologies and infrastructure. With the aim of achieveing customer satisfaction and competitivie advantage utilising technology in the most efficient manner and producing quick and error- free service supply, Bank Asya focuses its IT investments on infrastructure initiatives, process improvements, alternative distribution channels enhancements, and innovative product launches in card-based payment systems. Major activities and investments carried out in the Information Technologies field by Bank Asya in 2011 include: The Bank began monitoring demand management processin 2011through PMI methodology after acvieveing management of processes via PPM application which was formed using the same methology at previous years. New functions were proceeded to be rolled out for the online branch and a comprehensive work out better to meet teh needs of Small Business Entities (SME) and commercial segment self-banking was brought to end-stage. AsyaCard Branch Renewed Asyacad Branch web site- through which Asyacard owners monitoring their credit card statements and receive information about recent campaigns was completely updated. New functions such as bill payment, credit card provisions tracking were added to Asya Mobile Branch channel which was opened for customers use for allowing them to conduct their banking transactions through mobile phones. Safe Access to Internet Branch via Mobile Signature Mobile Signature application capable of producing entry key to Internet Branch, Mobile Branch and Alo Asya Telephone Banking channels was put our customers disposal. Interactive Voice Response system was throughtly upgraded, and interface structures used by customer agents was optimized to reach the quick service and minimum call duration level. Thus, a new call center interface integrated with the banking system was set up. Bank Asya Mobile Branch ready to service at anytime In order to render customers a quicker and on-site service after natural disasters such as earhquakes or so and at premises in which our branches not available Mobile (travelling) Branch Project was put into practise and made ready to service at anytime via satellite connection and backup links. Technological infrastructure works required were concluded in order to provide sale and purchase transcations to be done both via physical branch and through Internet Branch. At the counters of branches, renewing customer queuing systems a new kiosk-based implementation was commenced recognizing the customers from their debit or credit card number. After consultancy of an international firm within the scope of CRM Project, central CRM application was purchased and faceplates were started to be improved via internal source resulting the start of the pilot implementation of modules such as customer compaign management, sales management, opportunity management. An integrated insurance sub-structure established wih Işık Sigorta and began online to generate various produts as Evim Güvence (House Assurance), Eğitim Güvence (Education Assurance), Kart Koruma Planı (Card Saving Plan). Together with the bill payment of new institutions, hajj registration system and tutition fee collection systems were put into use. It was made possible to allocate limit simultaneously and cedit card prints to parents of students via online access to universities systems. A more effective appraisement management Appraisement Management application was purchased and adopted to the Bank so as to make appraisals of real estates which would constitute collteral surety, generate reports and integrate with the banking systems. With the purpose of enhancing the collectibility, Electronic Litigation System was put into effect in order to track cases transferred to lawyer. Collection Application Minimizing Delay Implementation of Collection, producing miscelloneous actions working as per multidimensional criterion, was put into use at the end of a Project conducted with counselling of an international company with the intent of collection of overdue receipts and cretion of early warning signals. 050

51 Bank Asya 2011 Annual Report With its research-development dynamics, investments on advanced technology and infrastructure, Bank Asya reached to high levels in service sustainability and operational efficiency Suggestion System for Automated Limit Increase A new application was rolled out suggesting amount of limit considering various criterion such as spending habits, of the customers holding credit cards, their solvencies and asstes. System automatically calls customers spotted by this way and increases the limit. Plot scheme was commenced after completion of Management with Targets System integrated with banking application as part of development and renovation of Human Resources implemnetations within the Bank. Account (Pusula) Management System For the sake of enhancement of the business pocesses, in order to measure and track the level of services Account SLA Project was launched out. In this context, all processes witihn the Pusula application being a management system developed within the scope of the Bank were reviewed and went on to identify the time periods during which every step must be completed. DIT Mobile brings contactless technology with mobile phone together In order to enable customers to perform all contactless, and other type, transactions, with AsyaCard DIT and Card Pass System (KGS) using their mobile phones, the Bank gave start to realize its plans to further develop the DIT Mobil product with two distinct mobile payment applications, one microsd-based and one SIM-based. R&D initiatives are ongoing to strengthen the Bank s alternative distribution channels and actively steer customers toward these channels. Bank Asya is currently conducting R&D work to develop new technologies and products for information services on smartphones which became rapidly widespread, mobile banking experiences and loyalty applications. Research and Development R&D initiatives are ongoing to strengthen the Bank s alternative distribution channels and actively steer customers toward these channels. Bank Asya is currently conducting R&D work to develop new technologies and products for information services on smartphones which became rapidly widespread,mobile banking experiences and loyalty applications. Payment by installments with PAKSİT for cash spendings Establishment of an installment infrastructure called PAKSIT was activated availing cash shoppings payable by installments enabling customers adjusting cash flow without being dependent on the merchant. As a new function to POS application, Pre-Provision System was rolled out to make the interim payment with credit card for cost of goods not received yet and perform final payment after the delivery. IT Infrastructure Investments A private cloud environment covering IT infrastructure systems was formed. By doing so, lunching of infrastructure as service was enabled. Automation systems were utilized aiming the decrease of costs of IT infrastructure operaritonal processes and productivity. It is possible to provide self-service virtual infrastructure supplies for IT departments. The outstanding agreement between IBM Global Services İzmir Extraordinary Situation Center and Bank Asya since 2006 was extended to the end of year Hyper-V was also added to virtualiation platform used in the Bank s structure after Vmware. Equipments with which vrtual servers work were renewed and the rate of virual servers in Information Center reached pct 48 of physical servers. Backup of virtual servers and replication to ODM operations were lalso automized. Beginning to use the automation and integration product well-known in its field, implementation of amendments made in masse and simultaneously within the scope of IT operational business processes. Work to be done independently of each other between systems were standardized integrating in a simple but efficient way. As a result of this work, labor-saving was targeted together with the increase of productivity and quality of IT operational processes. System was established enabling video-conference, training and meeting between headquarter and branches. Application Performance management (BSM) l aunched in the last quarter of 2011 monitoring of application peer to peer, evaluation of our customers feelings while they were using our applications and realizing and responding to timely all performance isuues related with applications, and planned to have completef within the first quarter of

52 Presentation Corporate Social Responsibility Not content with its services to the country in the banking sector, Bank Asya conducts its studies on corporate social responsibility with a strong social consciousness. Sponsorships During the year, Bank Asya sponsored a variety of activities in order to highlight its identity not only as an expert banking institution, but also as a company that cares about society as a whole, the environment, arts and sports. Event sponsorships The Bank continued to sponsor major events such as the INEPO International Environmental Project Olympiad and the Turkish Olympiads, which have come to be equated with the Bank Asya brand name over the years. Bank Asya also sponsored events that focus on trade and financerelated issues including the Turkish Confederation of Businessmen and Industrialists (TUSKON) and the Active Academy Financial Summit. Culture and art sponsorships Continuing to support culture and art, Bank Asya has been a prime sponsor of the Fatih University Crystal Clapperboard Short Film Competition for five years. This competition aims to raise Turkish cinema to new heights and encourage youngergeneration filmmakers. Media sponsorships During 2011, Bank Asya sponsored a variety of programs, columns and pages in newspapers, on radio stations and on TV channels that support the Bank s corporate image. The Bank also sponsored a range of TV, newspaper and radio content that appeared during Ramadan. Sport sponsorships Believing that talented young people need to be supported individually for the sake of the future of sports in Turkey, Bank Asya keeps undertaking the personal sponsorship of Aşkın Karaca, a young track athlete who has racked up numerous achievements in national and international competitions in the triple jump category since Bank Asya 1st League Aware that investing in Turkish football is in fact investing in the country s future, Bank Asya extended its name sponsorship of the Turkish Football Federation (TFF) 1st League, which it has undertaken since the beginning of Seeking to improve both the brand value as well as the quality of play in the 1st League, Bank Asya has also acted as uniform sponsor of some league teams since it became the name sponsor. Bank Asya supported 8 out of 18 1st League teams in the season through uniform sponsorship agreements. The Bank Asya 1st League continued to appreciate in value as a rising and easily recognized brand; interest by the media in the 1st League increased and television shows dedicated to 1st League coverage began to be aired. Aiming to contribute to sportsmanship and sports culture by recognizing athletic achievements in addition to its support for Turkish football and clubs, the Bank has presented Bank Asya 1st League Awards for three seasons now. The third edition of the Awards ceremony was held in May, and the winners in eleven award categories were announced. Corporate social responsibility projects Bank Asya has considered the Turkish Football Federation 1st League a corporate social responsibility project from the beginning of its name sponsorship of this organization. The Bank sees its support to this league as an investment in Turkish football. Not content simply with its name sponsorship, the Bank has fully embraced the 1st League since its relationship with the organization began in Projects undertaken by the Bank in support of the 1st League include the Bank Asya 1st League magazine, the bankasyabirincilig.com.tr website, play-off events and the Bank Asya 1st League Awards. Bank Asya offers uniform sponsorship to all 1st League teams at the beginning of each season to further improve the quality of the football play in the league. The Bank provided additional financial support through uniform sponsorship deals with 12 teams in the season, 14 teams in the season, and 12 teams in the season, 8 teams in the out of the 18 total teams in the 1st League. As a result of all of these activities, the Bank played a major role in the increasing brand value of Bank Asya 1st League. Bank Asya continued to make donations to various educational institutions, associations and foundations during the year out of its commitment to corporate social responsibility and without public notices or announcements. The Bank donated an amount equivalent to TRY 645 thousand of its shareholders equity in contributions and assistance to a variety of organizations and entities in

53 Bank Asya 2011 Annual Report Subsidiaries and Affiliates Company Name Address (City / Country) Bank s Ownership Share (%) Yeni Mağazacılık A.Ş. (*) İstanbul / Turkey 21,84 Landmark Holding A.Ş. (*) İstanbul / Turkey 21,84 Tamweel Holding S.A. (**) Dakar / Senegal 40,00 Kredi Garanti Fonu Ankara / Turkey 1,67 Asyafin Sigorta Ara. Ltd. Şti. İstanbul / Turkey 95,00 Nil Yönetim Hiz. Tur. San ve Tic. A.Ş. Ankara / Turkey 99,93 Işık Sigorta A.Ş. İstanbul / Turkey 65,42 Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul / Turkey 22,94 Asya Kart Teknoloji Hizmetleri A.Ş. İstanbul / Turkey 99,50 Asya Emeklilik ve Hayat A.Ş. İstanbul / Turkey 97,99 (*) The Bank recorded Yeni Mağazacılık A.Ş. and Landmark Holding A.Ş. as its affiliates in accordance with the joint investments method that is one of the Financing Methods for Participation Banks as stipulated in Article 19 of the Regulation on Banks Credit Transactions that was published in the Official Gazette No dated 1 November 2006 and that became effective on the same date, and the Uniform Chart of Accounts published in the Official Gazette No (Second Issue) and dated 26 January (**)As of February 4, 2010, the Bank has paid for TRY and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector ( ICD ) which is a group establishment of the Islamic Development Bank ( IDB ). TRY and TRY has paid for capital increase respectively on June 8, 2010 and October 3, As of the reporting date capital registry process has not been finalized yet. Işık Sigorta Işık Sigorta was established in Istanbul in 1996 with the special mission of raising social awareness about insurance as well as attracting those who are unfamiliar with or had negative attitudes toward insurance services. Işık Sigorta has total paid-in capital of TRY 60 million and Bank Asya holds a 65.42% stake. Işık Sigorta has adopted a customerfocused organizational structure that makes use of an advanced data processing network and an experienced workforce in order to provide better insurance consultancy services to its customers. The Company develops products in line with customer expectations and needs and delivers them with a superior service approach that applies before, during and after sales. This system allows the Company to underwrite transactions, which is a significant competitive advantage in terms of business conduct and service quality. In November 2007, the Company moved its headquarters into a modern, fully automated smart building along with Bank Asya, where it has served its agents and customers ever since. Nil Yönetim Hizmetleri Emlak Turizm San. ve Tic. A.Ş. Nil YÖnetim Hizmetleri Emlak Turizm Sanayi ve Ticaret A.Ş. is a real estate management services company that operates the Asya Termal Holiday Village owned by Tuna GYO. Bank Asya controls a 99.93% stake in the Company. Asya Termal Holiday Village is located in KIzIlcahamam, a thermal spring spa known and used for centuries by many different cultures and civilizations. Occupying an area of approximately 100,000 square-meters, Asya Termal Holiday Village consists of a 5-star hotel with 94 rooms and a 200 bed capacity, 494 deluxe timeshare houses (held under 11,856 two-week contracts), recreation facilities, indoor and outdoor swimming pools, health units, a shopping center, a cultural center, and a conference center. Asya Termal Holiday Village quickly established a solid reputation as a prestigious venue for holidays and as a health and conference tourism destination. Since its founding, the Village has played host to many wellknown Turkish and international guests and to many largescale meetings and events. The resort plays a major role in promoting Kızılcahamam as a nationally and internationally renowned spa. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. is a real estate investment trust. Formerly a construction company known as Asyafin Turizm Proje Insaat Emlak Sanayi ve Ticaret A.S., the Company was reincorporated as Tuna Gayrimenkul Yatırım Ortakligi after obtaining a license from the Capital Markets Board. Tuna GYO commenced operations on 30 September 2009 to invest in real estate properties, real estate-backed securities, real estate development projects, real estatebased warrants, and capital markets instruments. The Company also engages in other activities allowed by the CMB s Communique on Principles Pertaining to Real Estate Investment Trusts. Bank Asya directly controls a 22.94% stake in Tuna GYO. 053

54 Presentation Subsidiaries and Affiliates Asya Emeklilik ve Hayat A.Ş. Asya Emeklilik ve Hayat A.Ş.was established on 1 July 2011 with the permissons from Banking Regulation and Supervision Agency dated 16 May 2011 and Undersecretary of Treasury-General Directorate of Inurance dated 8 June 2011 and registerd to trade registry office. Folllowing establisment work, the company applied to the operating licence for pension branch on 16 September 2011 and to life group assuranceslicence on 30 December Asya Emeklilik targets those who are interest sensitive and desire a pension system operating in conformity with participation bank basis. The portfolio is set with this intent and was planned to comprise only of interest-free instruments issued by the Undersecretariat of Treasury in Turkey, as well as interest-free Sukuk and similar instruments issued in international markets, equity shares in compliance wth participation banking applications,participation accounts, and gold funds. Asya Emeklilik determines all of its processes in accordance with the aforementioned targets. Considering Turkey s pension market and dynamics with its exprerience in the participation banking, assurance and retirement needs of target groups were analysed in detail. As a result, products will be launched meeting the needs and expectaions of these target groups. Asya Emeklilik is determined to enchance its market share by differentiating in services rendered to customers while prioritizing its service quality. There will be a service concept which is accessed easily by customers, informing them accurately and quickly in a way that matches their expectaions. A profitable portfolio shall be created with a fast and productive distribution channel realizing sale of the products in accordance with the needs of target groups and operatonal infrastructure. Bank Asya has a share of percent in the company partnership. Tamweel Africa Holding S.A. Tamweel Africa Holding S.A. was founded on 9 June Sixty percent of holding shares belong to the Islamic Corporation for the Development of The Private Sector ICD while 40 percent belong to Bank Asya. Registered in Senegal, the headquarters is located at the address of 66 Rue Carnot, 5 ERNE Etage Residence Diourna Lena Dakar. As of 31 December 2011, 10 person were employed within the holding and there were four branches running in Senegal, Guinea, Niger and Mouritania. Yeni Mağazacılık A.Ş. A101 Yeni Mağazacılık A.Ş. was established on 28 March Opening the first supermarket with the nameof A101 on 28 April 2008 the company has subsequently succeeded its target by 121 stores. A101 provides low cost quality good and comsumables to customers at low prices in the chain markets operated in Hard Discount concept. The Company s goal is to establish 2000 stores by year Operations in A101 are being conducted from Antalya,Trakya,Sakarya,İzmir, Tuzla, Ankara,Kıraç,Samsun, Bursa, Kayseri and Adana regions in addition to the warehouse-office and Istanbul Central Office. 054

55 Bank Asya 2011 Annual Report Independent Auditors Compliance Opinion on the Annual Report To the General Assembly of Shareholders of Asya Katılım Bankası A.Ş.; We have audited the accuracy and compliance of the financial information in the accompanying annual report of Asya Katılım Bankası A.Ş. with the audit report issued as of 31 December The Board of Directors of the Bank is responsible for the annual report. As independent auditors, our responsibility is to express an opinion on the audited annual report based on the compliance of financial information provided in the annual report with the audited financial statements and explanatory notes. Our audit was performed in accordance with the accounting standards and principles and procedures of preparing and issuing annual reports as set out by the Banking Act No: Those standards require that we plan and perform our audit to obtain reasonable assurance whether the annual report is free from material misstatement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. In our opinion, the financial information provided in the accompanying annual report presents fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as of 31 December 2011 in accordance with the prevailing accounting principles and standards set out as per the Article 40 of the Banking Act No: The financial information provided in the annual report is in compliance with the audited financial statements and explanatory notes, and also includes the summary Management report and our audit opinion on these financial statements. DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Hüseyin Gürer Responsible Partner Chief Auditor, SMMM (Independent Accountant and Financial Advisor) İstanbul, 9 March

56 Funding the real sector which is of vital importance for the healthy functioning of the economy, Bank Asya takes the side of its customers in every economical circumstances.

57 Tree of Life

58 Governance Informations and Implementations of Corporate Governance Principles Board of Directors Behçet Akyar Chairman Abdullah Çelik Board Member and CEO Ali Çelik Board Member Faruk İlk Board Member Behçet Akyar graduated from the Department of Financeof İstanbul Economics and Administrative Sciences Academy andbegan his professional career as a managing partner of Akerler Kumaş in He worked as the manager of the various companies ownedby himself. Behçet Akyar is the member of the board of directors and one of the shaeholdersoffeza Gazetecilik since He is also the chairman of Işık Sigorta, a managing partner of Akerler Tekstil and amember ofboard of directors of Aker Magazacılık ina addition to being chairman of Bank Asya since Abdullah Çelik graduated from the MiddleEast Technical University Department of Economicsand completed a marketing and finance based MBA program in Old Dominion University and began his professional career in After serving as a Certified Bank Auditor, Vice President at the Board of Certified Bank Auditors, and Department Head of the Turkish Banking Regulation and Supervision Agency (BRSA) respectively, he was appointed as the CEO and the chairman of Development Bank of Turkey at the beginning of After his assignment at Development Bank of Turkey, Abdullah Çelik joined Bank Asya as the CEO and a board member in the March After beginning his career as a construction contractor in 1980, AliÇelik established Çelikeller Company in 1983, Birim İnşaat Company in 1987 and Yapı Yatırım Company in He currently serves as the chairman of Çelikeller A.Ş., Samanyolu Yayın Holding, Yapı Yatırım ve Gayrimenkul A.Ş. and Hamle Oto Kiralama A.Ş. and as vice chairman of Sema Sağlık Hizmetleri A.Ş.. Mr Çelik has been assigned as a member of the Board of Directorsof Bank Asya since After graduating from Egean University Faculty of Business Administration, Faruk İlk began his professional career in He served as labour inspector in the Ministry of Labour and Social Security since He worked as executive vice president of Samanyolu TV between and as a managing partner and CEO of Dünya Grup between 2000 and Mr İlk serve as a member of oard of directors at Bank Asya since Members of Board of Directors, on Salih Sarıgül and Ahmet Çelik and on Tacettin Negiş resigned from their positions and Ali Çelik, Faruk İlk and Mustafa Talat Katırcıoğlu were appointed instead respectively. 058

59 Bank Asya 2011 Annual Report Board Members and Their Terms of Office Details pertaining to the constitution of the Bank s Board of Directors and to the terms of Office of its members are stipulated in Article 32 of the Bank s Articles of Association. Board members serve for three-year terms. A Board Member whose term of office has expired may be reelected. Mustafa Talat Katırcıoğlu Board Member Graduating from İstanbul Technical University Faculty of Machine, Mustafa Talat Katırcıoğlu began his professional career in 1993.He serves as a partner and board member in firms operating mainly in real estate and construction sector. Mr Katırcıoğlu holds serves as a member of board of directors at Bank Asya since Hülagü Özcan Board Member Graduating from the Middle East Technical University Facuty of Administrative Sciences, Hülagü Özcan began his professional career in He worked as manager, auditor, executive vice president and board member in miscelleneous banks and finance corporations both in the country and abroad. Mr Özcan serves as amember of board of directors and a member in the audit committee of Bank Asya since İsmail Erol İşbilen Board Member Graduating from Ankara University Faculty of Political Sciences Department of Economics and Public Finance, İsmail Erol İşbilen began his professional career in He served as bank examiner and manager at various banks. In 1997 he joined Bank Asya as a branch manager and he worked as the department head of Loans Unit between 2000 and After serving as the department head of a another bank, Mr İşbilen serves as a member of Board of Directors and theaudit Committee since Behçet Akyar Chairman Abdullah Çelik Board Member and CEO Ali Çelik Board Member Faruk İlk Board Member Mustafa Talat Katırcıoğlu Board Member Hülagü Özcan Board Member İsmail Erol İşbilen Board Member Board of Directors Meetings Under Article 38 of the Bank s Articles of Assocation, the Board of Directors must convene at least four times during a fiscal year. In addition, the Board of Directors also meets whenever the Company s business requires a meeting or upon the invitation of its Chairman. The Bank s board of Directors generally meets four times a month. Meetings are usually attended by all members except in situations where members have a valid excuse for their absence. In accordance with Article 44 of the Bank s Articles of Association. The members of the Board of Directors are paid a monthly gross salary of TRY 5,

60 Governance Informations and Implementations of Corporate Governance Principles Statutory Auditors The Statutory Auditors and Their Terms of Office Details pertaining to the constitution of the Bank s Board of Statutory is stipulated in Article 49 of the Bank s Articles of Association. Sattutory auditors serve three-year terms anda are paid as monthly gross salary of TRY 5,000. Atif Bilgin Statutory Auditor İrfan Hacıosmanoğlu Statutory Auditor Mehmet Gözütok Statutory Auditor Atif Bilgin Statutory Auditor Graduating from Gazi University Faculty of Education, Atif Bilgin serves as the statutory auditor since 1996 at Bank Asya. Mr Bilgin, a partner of Tuna Gayrimenkul and Galaksi İnşaat Companies, also serves as statutory auditor of Nil Yönetim Hizmetleri. Beginning his professional career in 1986, İrfan Haciosmanoğlu owns various companies operating in textile industry. He holds the position of statutory auditor of Bank Asya since Mr Haciosmanoğlu, one of the partners of Vira Denizcilik Companies, also serves as vice chairman at Forum İnşaat and board member at Işık Sigorta. Graduating from İstanbul Atatürk Institute of Education- Department of Sciences, Mehmet Gözütok began his career in Mr Gözütok was a member at Municipality of Maltepe and İstanbul Metropolitan Municipality during 1994 and He currently serves as the chairman of the Board of Directors at Orman Ürünleri- Yapı İnşaat ve Dış Ticaret, and Gözütoklar Group, deputy chairman at Samanyolu Yayın Holding and as a board member at Sema Sağlık Hizmetleri A.Ş.. Mr Gözütok holds the position of statutory auditor at Bank Asya since İrfan Hacıosmanoğlu Statutory Auditor Mehmet Gözütok Statutory Auditor The Member of Board of Statutory Auditors, Ali Akbulut resigned from his position on and Mehmet Gözütok was appointed to fill the seat vacated. 060

61 Bank Asya 2011 Annual Report Changes in the Membership of the Board of Directors And the Board of Statutory Auditors during 2011 Changes in the Membership of The Board of Directors During 2011 Abdullah Çelik was appointed asamember of the Board of Directors and the CEO after the resignation of Cemil Özdemir on Changes in the Membership of The Board of Statutory Auditors During 2011 No changes took place in the membership of the Board of Statutory Auditors during Changes in the Membership of the Board of Directors and the Board of Statutory Auditors during 2011 Changes in the Membership of The Board of Directors During 2011 On , Members of Board of Directors, Salih Sarıgül and Ahmet Çelik resigned from their position On , Tacettin Negiş resigned from his position. Ali Çelik, Faruk İlk and Mustafa Talat Katırcıoğlu were appointed for the vacant positions Changes in the Membership of The Board of Statutory Auditors During 2011 The Member of Board of Statutory Auditors, Ali Akbulut resigned from his position on and Mehmet Gözütok was appointed to fill the vacant seat. 061

62 Governance Informations and Implementations of Corporate Governance Principles Senior Management Abdullah Çelik Board Member and CEO Dr. Ercüment Güler Executive Vice President Ahmet Beyaz Executive Vice President Dr. Feyzullah Eğriboyun Executive Vice President Abdullah Çelik graduated from the MiddleEast Technical University Department of Economicsand completed a marketing and finance based MBA program in Old Dominion University and began his professional career in After serving as a Certified Bank Auditor, Vice President at the Board of Certified Bank Auditors, and Department Head of the Turkish Banking Regulation and Supervision Agency (BRSA) respectively, he was appointed as the CEO and the chairman of Development Bank of Turkey at the beginning of After his assignment at Development Bank of Turkey, Abdullah Çelik joined Bank Asya as the CEO and a board member in the March Graduating from Ankara University (Faculty of Political Sciences - Department of Public Finance) and doing his master s degree at İstanbul University (Money and Banking) and studying for doctorate at Marmara University (Banking and Insurance programme), Ercüment Güler began his professional career in After serving as bank examiner, branch manager and department head, Mr Güler joined Bank Asya in 2011 as the Executive Vice President responsible for Retail Banking. Graduating from Ankara University (Faculty of Political Sciences - Department of Public Finance), receiving his master s degree from both Yeditepe University (Financial Law) and from University of Illinois (MBA), Ahmet Beyaz began his professional career in After serving as Certified Bank Auditor, and Certified Bank Chief Auditor, Mr Beyaz joined to Bank Asya in 2011 as the Executive Vice President responsible for Budget and Reporting and Accounting and Subsidiaries. Graduating from Bosphorus University (Department of Electric - Electronic Engineering and Mathematics) and receiving his master degree in Applied Mathematics and doctorate programme at Mathematical Finance from Carnegie Mellon University, Feyzullah Eğriboyun began his professional career in He served as financial engineer, strategist and trader at various international investment banks in New York City and London between 1997 and He taught finance at Sabancı University in Mr Eğriboyun joined Bank Asya in 2011, and currently serves as the Executive Vice President responsible for Treasury, Investor Relations, Financial Institutions, Human Resources and Training Departments. 062

63 Bank Asya 2011 Annual Report Fahrettin Soylu Executive Vice President Ahmet Akar Executive Vice President Zafer Ertan Executive Vice President Ali Tuğlu Executive Vice President Graduating from Ankara University (Faculty of Political Sciences, Business Administration) and completing MBA program inuniversity of Illinois,Fahrettin Soylu began his professional career in After serving as Certified Bank Auditor, Certified Bank Chief Auditor, deputy head of Board of Certified Bank Auditors, headof Supervision Group and head of department at the Banking Regulation and Supervision Agency of Turkey (BRSA), member of the Standard Practice Group of Basel Banking Auditing Committee, Mr Soylu joined Bank Asya as Executive Vice President in He currently holds the position of Executive Vice President. Graduating from Ankara University (Faculty of Political Sciences, Public Administration), Ahmet Akar began his professional career in After serving as bank examiner, manager and branch manager in the banking industry, he joined Bank Asya as Executive Vice President responsible for Loans Allocation in Graduating from Dokuz Eylül University (Public Administration) and completing MBA program in Fatih University, Zafer Ertan began his professional career in 1997 at Bank Asya. He held various positions in Loans Allocation and Loans Monitoring Departments. He was appointed to the Non-Performing Loans Department as the manager in 2008 and he currently serves as the Executive Vice President of Risk Monitoring, Non-Performing Loans,Law and Real Estate Departments. Graduating from İstanbul Technical University (Faculty of Computer Engineering) and Virgnia Technical University (Computer Sciences - Master s Degree), Ali Tuğlu began his career as a lecturer at Virginia Tech University in1993. After working as a consultant and manager at various international corporations within the country and abroad, Mr Tuğlu joined Bank Asya as the Executive Vice President of Information Technologies in

64 Governance Informations and Implementations of Corporate Governance Principles Senior Management Board of Directors Auditing Coordination Ceo Abdullah Çelik Consultancy to CEO Executive Vice President Executive Vice President Ercüment Güler Executive Vice President Fahrettin Soylu Executive Vice President Ali Tuğlu Executive Vice President Ahmet Beyaz Risk Management Center Head Mehmet Kamil Tümer Corporate Marketing Department Atilla M. Topçu Retail Products and Sales Management Department Gökhan Çeviker Banking Services Department J. Başak Ünal System Development Department Mustafa Saraç Budget and Reporting Department Kamil Yılmaz Board of Inspectors Head Hilali Yıldırım Commercial Marketing Department Ahmet Deniz Card-based Payment Systems Marketing Department Emre Özgür Allocation Department Olcay Çakır International Transactions Department Bülent Güngör Accounting and Subsidiaries Department Fuat Akgün Internal Control Head Mahmut Yalçın SME Marketing Department Murat Demir Alternative Distribution Channels Department Ali Sait Özkan Credit Operations Departmen Adil Z. Şahin System Operations Department Bekir Başkurt Purchasing Department Murat Aydoğan Regional Marketing Offices Resource Development Telat Altun Cash Management Department İsrafil Aydın Information Technologies and Project Management Dept. Mehmet Ergün Aydemir Corporate Communication Department Ömer F. Gülap Administrative Affairs Ömer Fuat Özçelebi Payment Sytems Operations Department Mustafa Ölmez Card Technologies Department Sami Özen Retail Loans Allocation Department Hasan A. Küçük 064

65 Bank Asya 2011 Annual Report Executive Vice President Zafer Ertan Executive Vice President Ahmet Akar Executive Vice President Feyzullah Eğriboyun Job and Product Development Coordination Abdurrahman Köse Board of Directors Secretaria Serhat Keleş Non-Performing Loans Department Şeref Bacak Commercial Loans Allocation Department Zihni Zeytun Treasury Department Cenk Yavuz Risk Monitoring Department Kamil Cengiz SME Loans Allocation Department Eken Berber Financial Institutions Department İbrahim Öğüdücü Legislation and Compliance Department Nazan Ergün Construction and Facilities Department Hüseyin Sevil Fiscal Analysis and Information Department Cevdet Korkmaz Invertor Relations Department Group Management Department Mehmet Uruç Corporate Loans Allocation Department Özcan Özverim Human Resources and Training Department Erdoğan Kılıç Legal Consultancy Murat Kızgın Project Finance Department Ersagun Şimşek Foreign Business Legal Consultancy Talha Salih Yayla Regional Allocation Offices 065

66 Governance Informations and Implementations of Corporate Governance Principles Committees Audit Committee Position Name Title Member Hülagü Özcan Member of the Board of Directors-Audit Coordinator Member İsmail Erol İşbilen Member of the Board of Directors-Audit Coordinator The Audit Committee periodically prepares an Audit Committee Activity Report of its findings on the Bank s auditing and risk management activities to ensure that there is effective internal control, internal audit and risk management system throughout the Bank; the Activity Report is prepared for the the Board of Directors. The Audit Committee convened 30 times during The Committee held four meetings with the independent auditors in order to evaluate internal audit activities. Credit Committee Position Name Title Member Abdullah Çelik Member of the Board of Directors CEO Member Salih Sarıgül (1) Vice Chairman of the Board of Directors Associated Member Ahmet Çelik (1) Member of the Board of Directors (1) Salih Sarıgül and Ahmet Çelik resigned from the membership of theboard of Directors on 26th of January 2012 and Behçet Akyar and Faruk İlk were appointed in their place The Credit Committee convenes regularly every week to evaluate commercial, corporate, and small business loan proposals. The Committee may also meet upon the invitation of the Chairman when necessary. The Credit Committee has the power to extend or deny credit within the limits of its own authority subject to the requirements of banking laws and regulations. Proposals that exceed those limits are submitted to the Board of Directors for approval. Assets and Liabilities Committee Position Name Title Head Abdullah Çelik CEO Vice Head Ahmet Beyaz Executive Vice President Member Ahmet Akar Executive Vice President Member Ali Tuğlu Executive Vice President Member Dr. Ercüment Güler Executive Vice President Member Fahrettin Soylu Executive Vice President Member Dr. Feyzullah Eğriboyun Executive Vice President Member Zafer Ertan Executive Vice President Member Mehmet Kamil Tümer Head of Risk Management The Assets and Liabilities Committee convenes every week. Meetings are chaired by the CEO and attended by Executive Vice Presidents and the managers of departments whose activities might have an impact on the Bank s balance sheet. The meeting agenda consists of determining the strategies for the coming week by assessing the Bank s balance sheet, business line activities, general economic data, and current political and economic developments Corporate Governance Committee Position Name Title Member Behçet Akyar Chairman of the Board of Directors Member Salih Sarıgül (1) Vice Chaiman of the Bard of Directors Member Fahrettin Soylu Executive Vice President Member Ahmet Beyaz Executive Vice President Member Mehmet Kamil Tümer Head of Risk Management (1) Salih Sarıgül resigned from his membership from the Board of Directors on 26th of January 2012 and Faruk İlk was appointed to the vacated seat. The Corporate Governance Committee convenes at least three times a year in order to oversee the Bank s compliance with the corporate governance principles, to undertake initiatives to make improvements in this area, and to make recommendations to the Board of Directors. 066

67 Bank Asya 2011 Annual Report Discipline Committee Position Name Title Head Abdullah Çelik CEO Member Dr. Feyzullah Eğriboyun Executive Vice President Member Mehmet Uruç Chief Legal Counselor Member Hilali Yıldırım Head of Supervisory Board Member Erdoğan Kılıç HR and Training Manager Associated Member (1) Zafer Ertan Executive Vice President Associated Member (2) Murat Kızgın Legal Counselor (1) In case the EVP of HR s absence, (2) In case of the absence of Chief Legal Counselor. The Discipline Committee s function is to determine the presence, perpetrators, degrees of culpability, and potential damage of transactions and acts that necessitate disciplinary action pursuant to the Bank s internal regulations and disciplinary bylaws. The Disciplinary Committee convenes as circumstances warrant in meetings chaired by the CEO and attended by those managers involved in the issueson the agenda. Information Technologies (IT) Strategy and Steering Committee Position Name Title Head Abdullah Çelik CEO Member Ali Tuğlu Executive Vice President Member Mustafa Saraç System Development Manager Member Bülent Güngör Software Development Manager Member Bekir Başkurt System Operations Manager Member Mehmet Ergün Aydemir IT Project Manager Member Sami Özen Card Technologies Manager IT plans its activities and investments prepares its annual budget and presents it to the Board of Directors for their approval. It monitors, controls and steers the general projects requiring IT invesments. The committee audits the aims and annual activity plans of all IT units. IT committee also advises on IT functions, processes, systems and the development of systems, risks, sourcing, organizing, relations with service units and meets the needs of service units and the like to the related IT departments. Information Security Management Committe Position Name Title Member Dr. Ercüment Güler Executive VicePresident Member Ali Tuğlu Executive VicePresident Member Ahmet Beyaz Executive VicePresident Member Dr. Ender Şahinaslan Risk Management, Compliance and Information Security Manager The Information Security Management Committee, working under the Chief Executive Officer, convenes regularly to oversee Information Security initiatives, monitor developments, and make managerial decisions. Information Technologies (IT) Risk Management Committee Position Name Title Head Ali Tuğlu Executive Vice President Member Mehmet Kamil Tümer Head of Risk Management Member Mehmet Ergün Aydemir Director of IT Project Management Member Bekir Başkurt System Operations Manager Member Mustafa Saraç System Development Manager Member Sami Özen Card Technologies Manager Member Bülent Güngör System Software Manager Member Dr. Ender Şahinaslan Risk Management, Compliance and Information Security Manager IT Risk Management Comitte reviews risks related to Information Technologies evaluated as the part of operational risk and makes managerial decisions regarding risks requring manegement approval-opinion. 067

68 Governance Informations and Implementations of Corporate Governance Principles Committees Project Finance Credit Committee Position Name Title Head Abdullah Çelik CEO Vice Head Ahmet Akar Executive Vice President Member Ersagun Şimşek Project Finance Manager Member Ahmet Deniz Commercial Marketing Manager Member Atilla M. Topçu Corporate Marketing Manager Member Zihni Zeytun Commercial Loans Allocation Manager Member Özcan Özverim Corporate Loans Allocation Manager (*) Concerned Marketing Managers also participate in the committee as a member according to project title. Project Finance Credit Committee serves depending on the Board of Directors makes the evaluation of Project loans. The authority and function of the General Manager Credit Committee(GMCC) operates in lieu of GMCC during the credit allocation process. Pricing Committee Position Name Title Member Behçet Akyar Chairman of the Board of Directors Member Tacettin Negiş (1) Member of the Board of Directors (1) Mustafa Talat Katırcıoğlu was appointed to the vacated seat after the resignation of board member Tacettin Negiş on 2nd February Acting depending on the Board of Directors, the Pricing Committee was established according to The Regulations Concerning the Principles of Banks Corparate Governance issued by The Banking Regulation and Supervision Agency of Turkey (BRSA) and fulfills the monitoring and supervision tasks of the Bank s pricing implementations on behalf of the Board of Directors. Cost Management Committee Position Name Title Head Ahmet Beyaz Executive Vice President Member Abdurrahman Köse Business and Product Development Coordinator Member Kamil Yılmaz Budget and Reporting Manager Member Fuat Akgün Accounting and Subsidiaries Manager Member Murat Aydoğan Purchasing Manager Member Ümit Eski Cost Management Department Senior Manager Coordinating the effective management activities of the Bank s expenditures the Cost Management Committee, fulfills the tasks of taking decisons related to activities, approving purchase of goods and services prior to purchase within the limits of authority, inviting the managers to the committee to achieve the cost-benefit analysis prior to purchase when necessary. 068

69 Bank Asya 2011 Annual Report Summary Report of Board Director Esteemed Shareholders, Bank Asya maintained its pioneering position in the Turkish banking industry in 2011 with its strong customer relationships, broad deposit base, sound balance sheet, customerfocused and innovative management approach, conservative risk management strategy and transparent corporate governance practices. The low inflation environment, intense competition in the Turkish banking industry, and the rapidly expanding credit as a result of increased liquidity in the system led to lower levels of lending and contracting profit margins. The decline in lending rates also led to an improvement in the key indicators of the banking sector by boosting consumption and growth while fueling credit expansion and reducing both the stock of non-performing loans and the NPL ratio on new loans. The Bank's strategic goals to constitute a lower risk perception and a safer credit portfolio gave its results in The year of 2011 has been a favorable and successful year for Bank Asya in terms of growth and profitability. A brief review of the its key financial indicators for 2011 show the extent of Bank Asya s strong performance during the year. The Bank has attained a profit of TRY 216 million for the year. Bank Asya s total assets at year-end 2011 reached TRY 17.2 billion, up 18% from he previous year. The deposit base expanded and the funds raised were extended to corporate, commercial, small business and retail banking clients as loans. Cash loans, which played a major role in the robust growth of the Bank s balance sheet, totaled TRY 13,45 billion, up 22% compared to the previous year. Deposits, which make up the largest share of the Bank s liabilities, grew by 11% to TRY 12.4 billion. Bank Asya also reported a return on assets (ROA) of 1.3% and return on equity (ROE) of 10.1% for In light of the developments highlighted above, in the year end 31 December 2011, Bank Asya s: Total Assets increased by 18%, to TRY million Cash Loans increased by 22%, to TRY million Deposits increased by 11%, to TRY million Shareholders Equity increased by 10%, to TRY million Net Profit stood at TRY 216 million Capital Adequacy Ratio stood at 13.31%. We hereby submit Bank Asya s annual report and financial statements showing the results of the Bank s activities for the period 1 January 2011 to 31 December 2011 for your information and consideration. Respectfully yours, Asya Katılım Bankası A.Ş. Board of Directors 069

70 Governance Informations and Implementations of Corporate Governance Principles Human Resources The core values of Bank Asya s corporate culture include professionalism, innovation, honesty, confidentiality, compassion, respect, fairness, effectiveness, productivity, quality, teamwork and social responsibility. Bank Asya aims to be one of the world s leading participation banks and to ranking among the forefront of companies where highly qualified professionals desire towork. To this end, the Bank continually develops and implements new initiatives in order to recruit the most highly qualified personnel and ensure their commitment and loyalty to Bank Asya. Through its evaluation center testing, the Bank identifies the areas needed for further professional development and administers training programs accordingly; helps candidates acquire necessary skills via the management trainee academyprogram; and provides overseas language education opportunities forall employees. Bank Asya keeps constant touch with the students via its Development Base To better acquaint university students with Bank Asya, the Bank is undertaking the Development Base Project. The Project organizes a training camp for students and provides them with internship opportunities at the Bankduring the year. The Development BaseProject ensures that students who are prospective employees will learn more about, and remain in contact with, Bank Asya as they advance toward graduation and enter the business life. The primary goal of Bank Asya s Human Resources Department is to cultivate a sense of team spirit within the Bank and increase overall productivity by leveraging the staff s sense of engagement and belonging. The main objective of the Bank s hiring processes is to recruit highly responsible team players who have strong interpersonal communication skills and a strong understanding of participation banking; in addition, Bank Asya candidates should identify with the Bank s mission and vision, be open to learning and professional development, and follow new industry trends closely. The most sought afterqualities in the Bank s applicants are university graduates, who speak at least one foreign language, and, for male candidates, have completed military service. The Bank recruits inexperienced candidates for certain positions including assistant marketing representative, assistant internal auditor, assistant internal controller, assistant financial analysis and information representative, teller representative, and call center customer representative. Inexperienced applicants are evaluated based on the requirements of the position they are applying for. After a recruitment process which identifies candidates who fit with the Bank s business and corporate culture, prospects are assessed on the merits of their education, training and skills; Bank Asya aims to create a professional environment that provides equal career opportunities and a high level of job satisfaction to its employees. When there is an open position in the Bank, an announcement is made to personnel using internal communications before the job opening is posted externally. The Bank s current employees are given priority in filling open positions. However, Bank Asya also considers other candidates who are believed to be able to contribute to the Bank based on their experience, skills and abilities. When the Bank is opening a new branch, priority is given to those successful employees who could not otherwise be promoted due to the lack of open positions in the title or career band. All career paths leading to even the highest positions at Bank Asya are open to all employees. The Bank s primary criteria in promotion decisions are employee performance and contribution to the Bank s overall performance. For Bank Asya employees to receive a promotion the following must occur: there must be a vacant position to which they may advance; they must be successful in their current position;they must have fulfilled the minimum term of service in their current position;they must have performed at a satisfactory level during their testing period; they must have successfullycompleted training required forpromotion; and they must never have been the target of disciplinary action. As of year-end 2011, Bank Asya had a total of 4,542 employees (1,608 females and 2,934 males). Breakdown of Employees by Educational Background Educational B. Number Ratio (%) Graduate ,0 Associate ,0 High School ,3 Post Graduate 284 6,3 Primary 16 0,3 PHD 6 0,1 Total ,0 Number of Employees by Educational Background Change (%) %6,5 070

71 Bank Asya 2011 Annual Report Bank Asya targets to be one of world s foremost pioneering participation banks by continuously increasing its service quality through its qualified human resources and personal improvement programs Training Bank Asya, taking into consideration its goals and strategies as well as supporting all employees personal and professional career developments, carries out activities to contribute to the increase of service quality and productivity. The main objectives of the training program are to educate employees capable of both technical information and self motivation which enable Bank Asya to grow not only within the country but also abroad. The goal is to speed up the compliance and improvement process of employees supporting HR functions such as promoting, managing with targets, and career planning. In accordance with the stipulated targets and findings of education need analysis, the number of trainings which are to given to employees working both at branches and the head office are updated reviewing at the beginning of every fiscal year. Trainings are held in-cooperation with the professional companies specialized in the field of education and experienced in-house trainers. Besides in-class trainings depending on the learning objectives, on-the-job trainings, orientation programs, e-learning trainings are also used widely. 35 pieces of e-learning on different topics were completed by 4,900 employees during hours e-learning per employee. During 2011, 85 trainings on various topics were given including conferences and seminars held outside the Bank. Many studies were carried out to measure the outcomes of those trainings. Bank Asya, with the aim of increasing the number of employees knowing foreign languages, provided 90 of its employees with English course support and also started English language training within the bank in accordance with its misson to be not only one of Turkey s best but also one of world s leading participation banks Number of Employees in Terms of Training Total Number of Training Topics 85 Total Number of Training Groups 629 Total Number of Attendance (Person x Days trained) In-Class Training day per employee 6,34 E-learning hours per employee 7,5 Number of employees suppoted for MBA

72 Governance Informations and Implementations of Corporate Governance Principles Transaction Volumes of the Risk Group Bank Asya included, Outstanding Loans and Funds Collected at the End of Period, Costs and Revenues Regarding the Period Current Period: Risk Group Of The Bank Loans And Other Receivables (*) Participations, Subsidiaries And Joint Ventures Direct and Indirect Shareholders of the Bank Other Entities Included In Risk Group Cash Non-cash Cash Non-cash Cash Non-cash Beginning Balance Endıng Balance Profıt Share And Commıssıon Income (*) Includes TRY thousands Finance Lease Receivables as of 31 December 2011(31 December 2010: TRY 153 thousands) Previous Period Risk Group Of The Bank Participations, Subsidiaries And Joint Ventures Direct and Indirect Shareholders of the Bank Other Entities Included In Risk Group Cash Non-cash Cash Non-cash Cash Non-cash Loans And Other Receivables (*) Beginning Balance Endıng Balance Profıt Share And Commıssıon Income (*) Includes TRY 153 thousands Finance Lease Receivables as of 31 December 2010(31 December 2009 : TRY 237 thousands) Risk Group Deposits Balance of the Bank Risk Group of the Bank Participations,Subsidiaries and Joint Ventures Direct And Indirect Shareholders Of The Ban Other Entities Included In Risk Group Current and particpation accounts Current Period Current Period Current Period Begınnıng Of Perıod End Of Perıod Profıt Share Expense

73 Bank Asya 2011 Annual Report Report on Compliance with Corporate Governance Principles Statement of Compliance with Governance Principles Asya Katılım Bankası s corporate governance structures, processes and principles are formulated so as to be in compliance with the requirements of the Banking Law as well as with all other applicable laws, regulations, and administrative provisions. Bank Asya publicly discloses all rules and practices that determine the Bank s relationships with its Board of Directors, shareholders and other stakeholders in line with its sense of social responsibility, subject always to the requirements of the Banking Law. Shareholders and Investor Relatıons Unit The Bank conducts its investor relations activities within the framework of its public disclosure and corporate governance principles through the Investor Relations Department and the Shareholder Relations Unit of the Accounting and Subsidiaries Department; both departments report directly to the Board of Directors. Investor Relations Department The Investor Relations Department s primary objective is to contribute to the Bank s value in all respects by serving as a bridge between the Board of Directors and investors in accordance with the Bank s public disclosure policy so as to ensure that the Bank s growth model and future goals are explicitly and clearly understood and to increase the Bank s visibility and transparency in the financial services industry and banking sector. To this end, Bank Asya s Investor Relations Department holds meetings with the Bank s existing and prospective investors by taking part in investor conferences organized in Turkey and abroad and by conducting road shows; holds meetings and communicates with representatives from brokerage houses and bank analysts; prepares investor presentations concerning the Bank s activities at the end of each quarter and makes these available to investors on the Bank s website; holds teleconferences; and responds to all verbal and written requests for information about the Company with the exceptions of the Bank s confidential information, trade secrets and information that is not publicly disclosed. Contact information for Investor Relations Department personnel is presented below. Cengiz Önder Investor Relations / Supervisor Tel : [email protected] Nevzat Mutlu Investor Relations / Assistant Chief Tel: [email protected] Shareholder Relations Unit The principal duties of the Shareholder Relations Unit include: Ensuring that shareholder records are maintained in a sound, secure, and upto-date manner. Responding to shareholders written requests for information about the Bank with the exceptions of the Bank s confidential information, trade secrets and information that is not publicly disclosed. Ensuring that General Assembly meetings are conducted in compliance with current laws and regulations, the Bank s Articles of Association and other bylaws. Preparing documents for the use of shareholders at General Assembly meetings. Recording the results of voting at General Assembly meetings and reporting the results to the shareholders. Overseeing and monitoring all issues related to public disclosures as required by law and the Bank s public disclosure policy. Maintaining a section on the Bank s website to inform shareholders about issues that may be of close concern to them including, developments that may have a significant impact on the Bank s financial well-being, the shareholder structure, members of the Board of Directors, annual reports, capital structure, quarterly profit/loss statements, information about branches and key personnel, and General Assembly meeting resolutions. The Shareholder Relations Unit sends reports about its activities to authorities through designated channels during the year. Contact information of Shareholder Relations Unit personnel is presented below. Fuat Akgun Shareholder Relations / Manager Tel : [email protected] Ozlem Coskun Shareholder Relations / Supervisor Tel : ozlem.coskun@bankasya. com.tr Alpay Guneralp Shareholder Relations / Chief Tel: [email protected] Exercise of Shareholders Right to Obtain Information Bank Asya s website located at www. bankasya.com.tr contains an Investor Relations section both in Turkish and in English where information about the Bank that may be of interest to shareholders and to the public at large is published immediately. This website provides information about the Company in general, Bank Asya shares, regularly issued financial statements and annual/interim reports, presentations, and corporate governance structure. Information stipulated by the provisions of the Banking Law, Turkish Commercial Code, the Capital Markets Law and their related regulations is publicly disclosed in the form of special circumstance announcements All questions posed by shareholders that do not fall within the category of the Bank s trade secrets are responded to by the relevant units in keeping with the principles of fairness and equality. In 2011, the Investor Relations Department took part in an average of 6 one-on-one or group meetings per month to increase the visibility of the Bank with existing or prospective investors and bank analysts who visited the Bank; the Department also participated in 17 foreign investor conferences in Turkey and abroad, and conducted separate meetings with 273 investors during the year. 073

74 Governance Informations and Implementations of Corporate Governance Principles Report on Compliance with Corporate Governance Principles Information about General Assembly Meetings Announcements concerning General Assembly meetings are published within the legally prescribed time periods in the Trade Registry Gazette and in the press. Such announcements include a copy of the meeting agenda and a proxy form. Invitations are also sent out to shareholders by mail. During the reporting period, Bank Asya held its Ordinary General Assembly Meeting on 26 March Shareholders exercised their right to ask questions at this meeting and all questions that were raised were answered. No shareholder advanced any motion on any issue that had not been included in the agenda. The Bank s Articles of Association permits votes to be cast by proxy at General Assembly meetings. Voting Rights and Minority Rights Shareholders are entitled to one vote for each TRY 1 (one Turkish lira) share of stock that they own. Shareholders may cast their votes in person or by proxy. Voting at General Assembly meetings is conducted by an open show of hands. However, voting by secret ballot is conducted upon the demand of shareholders representing at least onetwentieth of the capital that is present at the meeting. Issues pertaining to proxy voting are determined within the framework of related laws and regulations. This matter is set forth in Article 24 of the Bank s Articles of Association. Profit Distribution Policy and Timing Principles pertaining to profit distribution of Asya Katılım Bankası A.S. are stipulated in detail in the Bank s Articles of Association, which is available on the Bank s website. Matters concerning the implementation of the dividend payment policy are conducted in accordance with the Articles of Association. Dividends are paid out within the statutorily prescribed time periods. The Board of Directors dividend payment proposal is one of items placed on agenda of the General Assembly meeting. It is presented for the consideration of shareholders and voted on by the General Assembly. This matter is set forth in Article 54 of the Bank s Articles of Association. Transfer of shares The issue of share transfers is governed by Article 11 of the Bank s Articles of Association, and is as follows: Transfers of Group A shares, all of which are registered in the name of their owners, are subject to the approval of the Board of Directors. The Board may, entirely at its own discretion and without advancing any reason for doing so, refuse to allow such transfers; similarly, it may approve and allow such transfers under such terms and conditions as it may deem appropriate. Transfer of these shares are legally binding upon the Company only if they have been duly recorded in the Shareholders Register. Transfers of B group shares, all of which are registered in the name of their owners, may take place without any need for Board of Directors approval subject to Turkish Commercial Code, Capital Markets Law and the Central Registry Agency regulations. Share transfers for which the Banking Law requires Banking Regulation and Supervision Agency approval may be made only if that Agency s permission has been obtained. Transfers that do not have this required approval may not be recorded in the Shareholders Register. Shareholders who acquire shares for which Banking Regulation and Supervision Agency approval is required but for which permission is not obtained may not exercise any shareholder rights other than receiving dividend payments. Public Disclosures and Transparency Company Disclosure Policy A company disclosure policy was developed by the Board of Directors in line with corporate governance principles with the aim of ensuring that all stakeholders, including shareholders and the public at large, are kept informed in a timely, accurate, complete, comprehensible, and simultaneous manner. This policy was approved at the Bank s Ordinary General Assembly Meeting held on 31 March In order to ensure that accurate and timely information is provided in this regard, a presentation for each quarterly financial statement is prepared and shared with investors on the Bank s website. Information about Bank Asya is provided by the Investor Relations Department through its participation in investor meetings. In addition, the Department responds to questions about these issues from investors and shareholders via telephone and . Public Disclosures During 2011, Bank Asya issued a total of 45 (forty-five) special circumstance announcements within the framework of Capital Markets Board regulations. Company Website and Its Content The address for the corporate website of Asya Katılım Bankası A.S. is The Bank s website contains detailed information about the Bank and the products and services offered by the Bank. Banking transactions may be performed through Bank Asya s online branch. The Investor Relations section, presented in both Turkish and English on the Bank s website, contains information about the Bank s management structure; the latest version of the Articles of Association; General Assembly meeting invitations, agendas, and minutes; annual reports; periodical financial statements, reports and presentations; and public disclosures. The Bank pays particular attention to ensure that the information on its website is kept up-to-date. Disclosure of Real Person(s) as Ultimate Controlling Shareholder(s) As of 31 December 2011, the Bank has a multi-partner shareholding structure, with 305 shareholders. No shareholder controls more than a 10 percent stake in the Bank. Information about this matter is publicly disclosed on the Bank s website. Public Disclosure of Individuals Who Have Access to Insider Information A list of individuals who have access to insider information about the Bank has been published on the Bank s website since 30 April The names of members of the Board of Directors and of senior management who may be in such a position are published in annual reports and on the website. 074

75 Bank Asya 2011 Annual Report Stakeholders Keeping stakeholders Informed Stakeholders are regularly kept informed about matters that are deemed necessary and important. The Bank has made necessary organizational arrangements to meet the information requests of shareholders, employees and customers. Through these arrangements, shareholders, customers, employees and regulatory agencies are kept effectively informed. Stakeholder Participation in Management Bank Asya has always encouraged employees to participate in management. In this regard, employees are able to freely express all of their opinions and suggestions about the Bank s activities through the Asya Suggestion System the use of which requires no prior approval. These opinions and suggestions are processed by personnel who are charged with this duty; they are then forwarded to relevant members of management for action to be taken as appropriate. All suggestions received from employees are given a response. Every year, the Bank performs an assessment of employee suggestions that are implemented and presents awards based on their success. During 2011, suggestions were received from the Bank s employees. Human Resources Policy The basic principles of Bank Asya s Human Resources policy are to: Conduct personnel planning in terms of both quality and quantity, employing personnel who fit the Bank s business and the country s culture, Maintain employee productivity and effectiveness at the highest levels, Provide all personnel with opportunities for professional, personal, and social development through effective training plans and programs, Maintain the highest degree of morale and motivation among employees at every level, Safeguard and improve the employees material and moral rights, Create a workplace environment that will foster the willingness of all employees to work with their managers while also striving to improve relationship skills, Provide an open and two-way communications environment, Involve employees in career planning and provide everyone with equal career opportunities. The Bank has adopted a performance management system. Under this system, employees are evaluated at regular intervals in terms of their performance and the results of the evalution are shared with the employees. Every year, an Internal Customer Satisfaction Survey is conducted at the Bank to assess employee and job satisfaction levels. Employee job, social, and psychological satisfaction are also supported through an in-house club for personnel called Yediveren.In this regard during 2011, the club conducted a variety of meetings, events, and activities. Work has been completed on a job description and an associated salary scale system in our growing Bank. The new compensation system has been in effect since Relations with Customers and suppliers Bank Asya employees: Provide accurate, complete and timely information on all matters during every stage of every relationship involving all the products and services that are offered to the Bank s customers. Are obliged to uphold and carefully maintain the confidentiality of all information and documents about customers that they may have access to and not to reveal anything to anyone other than those individuals and entities that have the explicit legal authority to demand such information and documents. Regard quality as an essential prerequisite for supplying any service that is intended to satisfy customer needs and expectations; make every possible effort to deploy the technological infrastructure and qualified human resources that are the two fundamental elements of this concept in such a way as to achieve continuous improvement in service quality. Do not discriminate on the basis of nationality, religion, financial or social status, or sex when serving customers. The existence of an organizational structure and product range that identifies and differentiates among target groups, and approaching customers in different risk groups differently, is not to be interpreted as justification for discriminating among customers or categorizing them. Bank Asya investigates the reasons for any customer complaints that it receives via the systems that it had created, which include, Customer Request Web Module, Alo Asya Call Center, and Happy Customer Hotline. The Bank takes necessary measures to avoid the recurrence of any issues that led to justifiable complaints. Such action includes correcting the practices that provoked the complaint and informing employees in order to prevent any recurrences. Social Responsibility Within the framework of its sense of social responsibility and of the requirements of the laws and regulations which it is subject to, Bank Asya donates to and assists foundations and associations that work for the public good, supports cultural publications and broadcasts, and sponsors congresses and conferences on banking and the economy in general. Bank Asya is respectful of people, individual rights and liberties, and the environment. The Bank takes the requirements thereof into account in all of its business processes, and strives materially and morally to fulfill those requirements at every opportunity. The Bank is not a respondent to any legal action on account of any environmental damage. Penalties Imposed by Public Authorities During the reporting period, the Bank was assessed a total amount equal to 0,08% of its profit in fines by a variety of public authorities on account of conduct in violation of provisions of laws and regulations; Bank Asya paid all of the fines. 075

76 Governance Informations and Implementations of Corporate Governance Principles Report on Compliance with Corporate Governance Principles BOARD OF DIRECTORS Structure and Formation of the board of Directors; Non- Executive Members Board of Directors are constituted of chairman and six members. Members of the Bank s Board of Directors are elected in accordance with Article 32 of the Bank s Articles of Association and the requirements of the Banking Law. Qualifications of the Members of the board of Directors The qualifications of the members of the Boards of Directors of banks are stipulated in the Banking Law. Bank Asya complies with these requirements in the election of its Board members. Mission, Vision, and Strategic Objectives of the Company The Board of Directors has formulated the Bank s vision and mission in a clear and comprehensible way; these are published in the annual reports and on the Bank s website. Bank Asya s mission and vision are presented below. Mission: To contribute to shareholder value and the Turkish economy by developing modern banking services within the framework of interest-free banking principles and satisfying customer needs and expectations with a different solutions for different expectations approach. Vision: To be a respected, trusted and effective bank that provides service at world standards through the products it develops. During the reporting period, the Board of Directors regularly reviewed and monitored the Bank s performance towards achieving its strategic goals and provided guidance on such issues. Risk Management and Internal Control Mechanism Bank Asya has created an effectve internal control and risk management system within the framework of the requirements of the Banking Law and other applicable laws and regulations. This system consists of three separate units: the Internal Control Center, the Risk Management Department and the Internal Audit Department. All three units report directly to the Board of Directors. Duties and Authorities of the Bank s Board of Directors The duties and authorities of Bank Asya s Board of Directors are governed by Article 35 of the Bank s Articles of Association, according to which the Board may decide on any matter that does not require a decision by the General Assembly of shareholders. Specifically, the Board of Directors: Prepares and approves internal regulations governing which matters pertain to the Company s internal affairs and may be dealt with by CEO and which matters only may be dealt with by means of Credit Committee or the Board of Directors decisions; Reviews all matters deemed necessary and continuously oversees day-to-day administrative activities (for which the Board of Directors may assign responsibility to individual members); Prepares the Bank s annual balance sheet and profit & loss statement; submits reports that review the Bank s activities during the year and profit distribution proposals to the General Assembly of shareholders; specifies and makes arrangements for cash positions and guarantees taking the requirements of applicable laws into account; makes the statutory auditors reports available for examination 15 days prior to the General Assembly Meeting of Shareholders; Determines the forms of any and all procedures pertaining to the objectives the Company is founded on; Determines, stipulates and decides upon matters pertaining to the assignment, promotion, dismissal, annual salaries and expense allowances of those who have signing authority, of the CEO and especially of those who report directly to the CEO, and of other key personnel; Resolves to open branches, offices, liaison offices and regional offices and decides the authorities to be granted to them within the framework of applicable laws and regulations; Decides upon the principles pertaining to real estate properties and equity stakes that are to be bought or sold on behalf of the Company; Performs all the duties stipulated in the Turkish Commercial Code and in other applicable laws, regulations and administrative provisions; deals with all matters other than those assigned to the General Assembly of Shareholders or to the Statutory Auditors by laws or under these Articles of Association. The Board of Directors may, when it deems necessary as stipulated in Article 319 of the Turkish Commercial Code, decide to delegate its powers to represent and administer the Company to one or more of its members, managers or to committees consisting there of for a period of time and under such terms and conditions as it deems appropriate. The authority to extend credit rests with the Board of Directors. The Board of Directors is responsible for formulating policies pertaining to extending and approving credit and to other administrative principles; ensuring that these policies are applied and followed; and taking all necessary measures. The Board of Directors may delegate its authority to extend credit to a credit committee or to a CEO in accordance with the requirements of applicable laws and within the framework of principles and procedures to be determined by the Board. 076

77 Bank Asya 2011 Annual Report Operating Principles of the board of Directors The Board of Directors convenes when necessary and/or upon an invitation of the Chairman. Any member may submit a written request to the Chairman asking for a meeting to be convened. According to the Bank s Articles of Association, the Board of Directors must convene at least four times during a fiscal year. However, the tradition at Bank Asya is for Board meetings to be held regularly at weekly or biweekly intervals except under exceptional circumstances. This tradition was upheld during Board of Directors meetings are held at the Company s headquarters. However, a Board of Directors meeting may be held at some other location, city and/or country with the approval of a majority of the members. Board of Directors meetings are conducted according to agendas that are provided to members prior to the meetings. Board members and statutory auditors may request that the Chairman add to the agenda any issues that they wish to have discussed. The Board of Directors convenes in the presence of a simple majority of its membership. Resolutions are passed by a simple majority of the members who are present. Decisions about a proposal advanced by any member may be made by obtaining the written consent of other members so long as none of them request that that the matter be discussed in a meeting. However, decisions made in this way without a meeting require an unanimous vote. Every member of the Board of Directors is entitled to one vote. Neither the Chairman nor any other Board member may cast votes on behalf of any member who is absent from a meeting. If the voting on an issue under consideration results in a tie at any meeting, the matter is left to be discussed in the next meeting. If the tie cannot be broken at the next meeting, the proposal is deemed to have been rejected. Decisions made by the Board of Directors are recorded the same day, in a manner indicating the date and sequential order of each resolution, in a register which has been certified in accordance with the requirements of the Turkish Commercial Code and the Banking Law pertaining to books of account and whose pages have been sequentially numbered. Every resolution must be undersigned by the members of the Board of Directors who voted for it. Prohibition on Doing business or Competing with the Company The Chairman and the Members of the Board of Directors are prohibited from engaging in business with the Company and competing with the Company pursuant to Articles 334 and 335 of the Turkish Commercial Code. However, the General Assembly of Shareholders may authorize the Chairman and all or any number of Board members to engage in such business or competition. This matter is governed by Article 42 of the Bank s Articles of Association. Code of Ethics At the Ordinary General Assembly meeting held on 31 March 2006, it was decided that the Principles of Ethics of Banking published by the Participation Banks Association of Turkey, of which Bank Asya is a member, shall be adopted in the conduct of the Bank s activities as well. Number, structure, and Independence of Committees Established by the board of Directors Pursuant to the Board of Directors resolution dated 2 February 2006, the Bank has created an Audit Committee and a Corporate Governance Committee in accordance with Article 24 of the Banking Law concerning the formation of audit committees and other applicable laws, regulations and administrative provisions. The committees, which have been set up, are active in compliance with the requirements of law, and on which the Bank s Board members serve, include the following: Corporate Governance Committee Credit Committee Audit Committee Assets and Liabilities Committee Information Technologies (IT) Strategy and Steering Committee Discipline Committee Project Finance Credit Committe Pricing Committe Financial benefits Provided to the board of Directors The Chairman and members of the Board of Directors are paid a fee for each Board meeting that they attend. The amount and type of such payments are determined by the General Assembly. 077

78 Governance Informations and Implementations of Corporate Governance Principles The Bank s Distribution Policy Bank Asya is adopting the strategy of procuring higher levels of external support services in order to reduce costs, increase revenues, focus its Human Resources on its core activities, increase the speed and efficiency of operations, and benefit from the technology and expertise that it does not possess in-house. The support services Bank Asya has that fall within the scope of Regulation on Bank s Procurement of Support Services and Authorization of Such Service Providers are as follows. No Outsourcing Service Name of the outsourcing Company 1 Moneygram System Developments Moneygram Payment Systems, Inc 2 Investment Services Bizim Menkul Değerler 3 Debit Card and Credit Card Printing Plastikkart Akıllı Kart İletişim Sistemleri San ve Tic A.Ş. Provena Bilişim ve Ödeme Çözümleri Tic. Ltd. Şti. 4 Raw Card Supply Services Mapikart Tanıtım Hizmetleri ve Dış Tic. Ltd. Şti. Kuryenet Motorlu Kuryecilikve Dağıtım Hizmetleri A.Ş. 5 Card Distribution Services Aktif İleti ve Kurye Hizmetleri A.Ş. Hobim Bilgi İşlem Hizmetleri A.Ş. 6 Account Statement Printing and Distribution Services Cihan Medya Dağıtım A.Ş. Fujitsu Technology Solutions Bilişim Ltd. Şti. Teknoser Bilgisayar Teknik Hizmetler San. ve Dış. Tic. A.Ş. Verifone Elektronik ve Danışmanlık Ltd. Şti. Ingenico Ödeme Sistem Çözümleri A.Ş. 7 POS Device and Virtual POS Operation Transactions Seri Bilgi Teknolojileri Destek Hizmetleri ve Tic. Ltd. Şti. İnnova Bilişim Çözümleri A.Ş. G2 Web Services, Llc Mobilgi Teknolojileri Ltd. Şti. 8 Card Exchange and Calculation Services BKM Bankalararası Kart Merkezi A.Ş. Visa Mastercard 9 Check Book Printing Services Güzel Sanatlar Çek Basım Ltd. Şti. 10 Oracle, Sybase IQ Database and Business Objects Reporting Systems Services Oracle Bilgisayar Sistemleri Ltd. Şti. Sap Türkiye Yazılım Üretim ve Tic. A.Ş. Sybase Türkiye Yazılım 11 ATM Case Supply & Repair Securverdi Güvenlik Hizmetleri A.Ş. Bantaş Nakit Kıymetli Mal Taşıma ve Güvenlik Hiz. A.Ş. Brink s Güvenlik Hizmetleri A.Ş. 12 ATM Repair & Maintenance Ncr Bilişim Sistemleri Ltd. Şti. Wincor Nixdorf Bilgisayar Sistemleri A.Ş. Banksoft Bilişim Bilgisayar Hizmetleri Ltd. Şti. Termtech Bilişim Bilgisayar Teknolojileri Tic. Ltd. Şti. 13 A101 Stores Cash Collection Services G4S Güvenlik Hiz. 14 EFT Systems Transcations Global Bilişim A.Ş. 078

79 Bank Asya 2011 Annual Report No Outsourcing Service Name of the outsourcing Company 15 Check Data Entry Transactions Aton Ltd. Şti. Bonded Kayıt Sistemleri Dağıtım Hizmetleri ve Ticaret A.Ş. 16 Archieve Services Arşiv Kütüphane Belge-Bilgi Yönetimi ve Bilişim Sistemleri Ltd. Şti. Experian Decision Analytics, Emeai 17 Retail Loan & Credit Card Applications and Scoring KKB Kredi Kayıt Bürosu A.Ş. 18 Asya Exertise Transactions Key İnternet Hizmetleri Ltd. Şti. 19 Validator, EMV Scripting, Card Perso Software and Smartsoft Information Technologies Development Services Adam Elektronik Ltd. Şti. 20 Overdue Payment Reminder Calls CMC İletişim Bilg. Reklam ve Dan. Hizm. San. Tic. A.Ş. 21 Information and Collection Initiative for Customers Deemed Insolvent Hamzazade Bilişim Yönetim ve Danışmanlık A.Ş. 22 SMS, URLand Mobile Signature Services Turkcell İletişim Hizmetleri A.Ş. Avea İletişim Hizmetleri A.Ş. Vodafone Telekomünikasyon A.Ş. 23 Password Transactions Smartsoft Information Technologies Kobil Systems Ltd. 24 Call Center Services ITD İletişim Teknoloji Danışmanlık Tic. A.Ş. 25 Mobile Branch Infotech Bilişim ve İletişim Teknolojileri A.Ş. Pozitron Yazılım A.Ş. 26 SWIFT İdeal Bilişim Hiz. San. ve Tic. Ltd. Şti. Orange Business Services S.A. S.W.I.F.T. SCRL 079

80 Governance Informations and Implementations of Corporate Governance Principles The Bank s Distribution Policy Principles of the Banks profit distribution policy are governed by Article 54 of the Articles of Association, accordingly: The Companys net profit consists of the amount remaining after all of the Company s expenses, depreciation and amortization allowances, and various provisions which have been paid or are accrued have been deducted from its income as determined at the end of the fiscal year. Net profit shall, after the deduction of prior-year losses, if any, be apportioned in the order indicated below. 1. 5% of the net profit shall be set aside as a legal reserve as per Turkish Commercial Code Article 466/1. 2. From the amount remaining, a first dividend shall be set aside at a percentage and in an amount determined by the Capital Markets Board. 3. Of the remaining profit: º A portion of up to 2% shall be set aside for members of the Board of Directors, º A portion of up to 5% shall be set aside for the Bank s managers and employees. The General Assembly is authorized to carry forward to the next year or set aside as extraordinary reserve some or all of the net profit remaining after the deduction and allocation of the amounts in paragraphs (1), (2), and (3) above. The Board of Directors may recommend such course of action to the --General Assembly if it deems necessary. (The provisions of Article 466/3 of the Turkish Commercial Code are reserved.) Subject to the provisions of the Capital Markets Law, the General Assembly is authorized to distribute all or some of the remaining profit as dividends to shareholders in the manner indicated below or else to set aside some or all of it as extraordinary reserve. a) Distribute all of it in cash, b) Distribute all of it as shares of stock, c) Distribute a specified percentage as cash and a specified percentage as shares of stock and retain the remainder in the Company, d) Distribute neither cash nor shares of stock and retain the entire amount in the Company. The Board of Directors may make recommendations to the General Assembly on this subject if it deems necessary. Pursuant to the provisions of this article, the Board of Directors shall determine the date(s) on which dividends are to be paid. The Bank s Profit Distribution Proposal for 2011 At a meeting of the Board of Directors on 23 February 2012, it was resolved that TRY ,26 - representing 75 percent of the total sales gain of TRY ,01 - of a real estate located in Altunizade/İstanbul shall be deposited in the special found pool as per article 5-1/e of Corporate Tax Law No.5520, and the sum remaining after the amounts that must be set aside as required by law and the Articles of Association have been set aside from the net profit shown in the balance sheet dated 31 December 2011 shall not be distributed but instead shall be retained as extraordinary reserve in order to strengthen the Bank s equity resources and that this course of action shall be presented for approval at the Ordinary General Assembly meeting. 080

81 Bank Asya 2011 Annual Report Matters Regarding The Ordinary General Assembly Meeting Agenda of the Asya Katılım Bankası A.S. Ordinary General Assembly Meeting dated 31 March Opening the meeting and forming the presiding committee 2- Authorizing the presiding committee to sign the minutes of the meeting 3- Reading and deliberating the Board of Directors annual report, the statutory auditors report, and the independent auditor s report for Examining, deliberating and ratifying the balance sheet and profit & loss statement; reading and deliberating the Board of Directors profit distribution proposal; deciding how to distribute profits 5- Submitting for approval the appointment made during the year to fill the vacant seat on the Board of Directors 6- Acquitting the Company s Board members and statutory auditors of their fiduciary responsibilities 7- Discussion and resolution of the amendment under the title Formation of Board Of Directors of item 32 of the bank s Articles of Association. 8- Selection of members of the board of directors and the board of statutory auditors, and determination of their terms of office, 9- Deciding the salaries and entitlements of the members of the Board of Directors and statutory auditors 10- Authorizing the Board of Directors to elect the members of the Senior Advisory Committee and to determine their salaries payments 11- Submitting for approval the independent auditors chosen by the Board of Directors for a one-year term for the 2012 fiscal year 12- Providing information about the contributions and donations made during Reading and deliberating changes made in the public disclosure policy principles within the framework of the Bank s corporate governance principles 14- Authorizing the Company s Board members to engage in activities governed Articles 334 and 335 of the Turkish Commercial Code 15- Petitions and suggestions. 081

82 Governance Informations and Implementations of Corporate Governance Principles Detailed Information on Agenda Items 1- Opening the meeting and forming the presiding committee Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Customs and Industry regulations, a president and his/her committee (presiding committee) will be elected to conduct the General Assembly meeting. 2- Authorizing the presiding committee to sign the minutes of the meeting Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Customs and Industry regulations, the General Assembly will authorize the presiding committee to record and sign the decisions made at the meeting. 3- Reading and deliberating the Board of Directors annual report, the statutory auditors report, and the independent auditor s report for 2011 Explanation: The Board of Directors annual report, the statutory auditors report, and the independent auditor s report for the 1 January 2011 to 31 December 2011 reporting period will be read and deliberated. These reports can be obtained from the Company s headquarters and from its website ( iliskileri/faaliyet_raporları.jsp, www. bankasya.com.tr/yatirimci_iliskileri/ denetim_raporları.jsp). 4- Examining, deliberating and ratifying the balance sheet and profit & loss statement; reading and deliberating the Board of Directors profit distribution proposal; deciding how to distribute profits Explanation: The Board of Directors balance sheet and profit & loss statement for 2011 will be read, deliberated and voted on at the General Assembly meeting. The financial statements may be obtained from the Company s headquarters and from its website (www. bankasya.com.tr/yatirimci_iliskileri/ faaliyet_raporları.jsp). In accordance with the resolution at the meeting of the Board of Directors on 23 February 2012, it shall be poposed that TRY ,26-representing 75 percent of the total sales gain of ,01-of a real estate located in Altunizade/İstanbul shall be deposited in the special found pool as per article 5-1/e of Corporate Tax Law No.5520, and the sum remaining after the amounts that must be set aside as required by law and the Articles of Association have been set aside from the net profit shown in the balance sheet dated 31 December 2011 shall not be distributed but instead shall be retained as extraordinary reserve in order to strengthen the Bank s equity resources 5- Submitting for approval the appointment made during the year to fill the vacant seat on the Board of Directors Explanation: The Board of Directors resolution to appoint Ali Celik to fill the seat vacated by the resignation of Salih Sarıgül from the Bank s Board of Directors will be presented for the General Assembly s approval. 6- Acquitting the Company s Board members Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Industry and Commerce regulations, the General Assembly will vote on acquitting the Compan s Board members and its statutory auditors of their fiduciary responsibilities for the Company s activities and transactions in Discussion and resolution of the amendment under the title Formation of Board Of Directors of item 32 of the bank s Articles of Association. Explanation: It will be submitted for the approval of the General Assembly that the number of members of the board of directors is increased from 7 to 9, and the term vice-chairman mentioned in article 32 to be altered as deputy chairman. The old text B- FORMATION OF THE BOARD OF DIRECTORS ARTICLE 32: The Board of Directors shall consist of seven members to be elected by the General Meeting among the candidates, who are necessarily shareholders, nominated by the minimum 51% of the total votes of the Group (A) shareholders present at that meeting. General Manager, and in his absence Assistant General Manager are natural members of the Board of Directors. Members of the Board of Directors shall have the conditions and qualifications required by the Banking Law. The Board of Directors elects a chairman and a deputy chairman among its members. The members of the Board of Directors shall have a term of office of three years. Any Director whose term of office ends can be re-elected. In case of any vacancy in the Board of Directors due to any reason, the remaining Directors appoint a member of the Board of Directors among the shareholders for the vacancy. This appointment is submitted to the approval of the following first general meeting of shareholders. General Meeting of Shareholders may dismiss any member of the Board of Directors, without a right of compensation to the dismissed Director. The terms of office of Managers are not dependent on the term of office of the members of the Board of Directors. Managers can be appointed with a longer period than the term of office of the Directors or on contracts with indefinite periods. The powers of the authorized signatories shall remain in force until their powers as authorized signatory are cancelled by the Board of Directors. 082

83 Bank Asya 2011 Annual Report The new text: B- FORMATION OF THE BOARD OF DIRECTORS ARTICLE 32: The Board of Directors shall consist of nine members to be elected by the General Meeting among the candidates, who are necessarily shareholders, nominated by the minimum 51% of the total votes of the Group (A) shareholders present at that meeting. General Manager, and in his absence Assistant General Manager are natural members of the Board of Directors. Members of the Board of Directors shall have the conditions and qualifications required by the Banking Law. The Board of Directors elects a chairman and a vice chairman among its members. The members of the Board of Directors shall have a term of office of three years. Any Director whose term of office ends can be re-elected. In case of any vacancy in the Board of Directors due to any reason, the remaining Directors appoint a member of the Board of Directors among the shareholders for the vacancy. This appointment is submitted to the approval of the following first general meeting of shareholders. General Meeting of Shareholders may dismiss any member of the Board of Directors, without a right of compensation to the dismissed Director. The terms of office of Managers are not dependent on the term of office of the members of the Board of Directors. Managers can be appointed with a longer period than the term of office of the Directors or on contracts with indefinite periods. The powers of the authorized signatories shall remain in force until their powers as authorized signatory are cancelled by the Board of Directors. 8- Selection of members of the board of directors and the board of statutory auditors, and determination of their terms of office, Explanation: Three-year term of office of the present members of the board of directors expired. Therefore,selection of members of the board of directors and the board of statutory auditırs and deternination of their terms of office shall be submitted for the approvalof General Assembly. Pursuant to Article 32 of Association, the Board of Directors are elected by of the sharehoders having at least pct 51 of the total votes of group A stockholders present at the General Assembly 9- Deciding the salaries and entitlements of the members of the Board of Directors and statutory auditors Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Industry and Commerce regulation, the salaries and meeting attendance fees to be paid to the members of the Board of Directors will be determined and presented to the shareholders for approval. 10- Authorizing the Board of Directors to elect the members of the Senior Advisory Committee and to determine their salaries payments Explanation: A proposal authorizing the Board of Directors to choose the members of the Senior Advisory Committee and to determine their salaries payments as per Article 45 of the Bank s Articles of Association will be presented for the approval of the General Assembly. 11- Submitting for approval the independent auditors chosen by the Board of Directors for a one-year term for the 2011 fiscal year Explanation: Pursuant to its resolution No: 2254 dated 08 March 2012, the Board of Directors resolved to enter into a one-year contract with DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Deloitte), which had previously conducted the Bank s independent auditing activities in previous periods, to perform Bank Asya s independent auditing tasks in 2012 and to present this contract for the General Assembly s approval at the next Ordinary General Assembly Meeting. 12- Providing information about the contributions and donations made during 2011 Explanation: Pursuant to Article 7/b of the Capital Markets Board Communique s Series: IV No: 27, the General Assembly must be informed about any donations made during the reporting year. This item is not presented to the General Assembly for approval; it is included in the agenda for the sole purpose of informing the General Assembly. 13- Reading and deliberating changes made in the public disclosure policy principles within the framework of the Bank s corporate governance principles Explanation: Amendments made in the public disclosurepolicy principles shall be read and discussed. 14- Authorizing the Company s Board members to engage in activities governed Articles 334 and 335 of the Turkish Commercial Code Explanation: The issue of authorizing and allowing members of the Board of Directors to conduct business with and compete against the Company as stipulated in Articles 334 and 335 of the Turkish Commercial Code will be presented for approval. Under Articles 334 and 335 of the Turkish Commercial Code, members of the Board of Directors may compete against and conduct business with the Company only with the permission of the General Assembly. The issue of permitting the Members of the Board of Directors to conduct such transactions will be presented for the General Assembly s approval. 15- Petitions and suggestions. 083

84 Bank Asya, maintaining its pioneering position in the field of service quality and hightechnology, is determined to maintain its steady and healthy growth.

85 Added Value

86 Financial Informations and Risk Management To the General Assembly of Asya Katılım Bankası A.S. Concise Internal Auditors Report - Company Name - Headquarters - Capital - Principal business activity Asya Katılım Bankası A.Ş. İstanbul TRY All activities authorized for participation banks Names, terms of office, and company: Number of Board of Directors meetings: Scope, dates and results of inspections: Atıf Bilgin, Irfan Hacıosmanoglu. Threeshareholder / employee internal auditors year terms. Company shareholders. They attended at least two of the Board meetings held attended and number of internal auditors each month. The internal auditors also convened in meetings held committee on the same days. The books of account were checked and inspected performed on the Company s accounts, on 18 June 2010 and 12 November Books and documents It was ascertained that cash items were in accordance with book of account entries. Number and results of inspections conducted: As a result of the inspections conducted as of the in the Company s Treasury pursuant to end of each month, we observed that all subsection 1/4 of Article 353 of the Turkish deposits and securities were present and in keeping Commercial Code with the records. Charges or complaints of improprieties: No charges or complaints of improprieties were received and the action taken referred to us in We have examined the accounts and transactions of Asya Katılım Bankası Anonim Sirketi for the period 01/01/ /12/2011 for compliance with the reqirements of the Turkish Commercial Code, the Company s Articles of Association, other applicable laws and regulations, and generally accepted accounting principles and standards.we determined that the income statement for the period 1 January 2011 to 31 December 2011 accurately and realistically reflects the results of business activities during this period and the proposed distribution of profit is in compliance with the requirements of the laws and the Company s Articles of Association. In our opinion the enclosed balance sheet drawn up as of 31 December 2011, the contents of which we endorse, accurately reflects the true financial standing of the Company on that date; and we hereby recommend that the balance sheet and income statement be approved and that the members of the Board of Directors be acquitted of their fiduciary responsibilities. THE INTERNAL AUDITORS Atif Bilgin İrfan Hacıosmanoğlu 086

87 Bank Asya 2011 Annual Report Five-year Summary Financial Information Including The Reporting Period Selected Assets Items (TRY thousand) Liquid Assets Loans Fixed Assets Total Assets Selected Liabilities Items (TRY thousand) Deposits Borrowings Shareholders Equity Paid-in Capital Net Period Profit Total Liabilities Income statement (TRY thousand) Profit Share Income Profit Share Expenses Income Other than Profit Share Expenses Other than Profit Share Pre-tax Profit Provision for Taxes Net Period Profit

88 Financial Informations and Risk Management Assessment of Financıal Position, Profitability and Debt Service Ability During 2011, Bank Asya continued to be a leader among participation banks in terms of total assets, cash loans, non-cash loans and deposits. Bank Asya had a successful year thanks to its sound and robust balance sheet that it structured in a timely and appropriate manner, and its solid equity capital. Bank Asya s total assets increased by 18% on the last year and reached TRY 17.2 billion in The growth in the Bank s assets stemmed primarily from its lending. Loans were up 22% compared to the previous year and now constitute 79% of the Bank s total assets. Deposits continued to be Bank Asya s major source of funding in The share of deposits in the Bank s total liabilities stood at 72% in This share is significantly higher than the sector average, which was 57% as of December Deposits were up 11% this year to TRY 12.4 billion, from TRY 11,2 billion in Bank Asya s broad deposit base is indicative of a favorable position from the standpoint of the Bank s financing of its assets.bank Asya s strong capital structure, with a net profit of TRY 216 million, resulted in a 10% increase in the Banks shareholders equity on the previous year to TRY 2.1 billion as end of The major sources of the Bank s profitability were profit share income from loans and commission income from non-cash loans, which resulted from channeling funds obtained from the 11% increase in deposits to productive ventures. Ever striving to provide better service, Bank Asya opened 25 branches in 2011; as a result of these investments, the Bank s service network expanded to 200 branches. Focusing on liquidity due to the lingering effects of the global economic crisis on international markets in 2011, the Bank s liquid assets constituted 20% of its total assets, which favorably impacted the Bank s debt service ability. Deposits, which are the Bank s most important funding source, also have a positive effect on Bank Asya s short-term debt servicing ability thanks to their broad base, sound composition and longer maturity compared to the sector average. The maturity of deposits were 140 days as of the end of 2011, and this rate is considerably above the industry average. 088

89 Bank Asya 2011 Annual Report Assessment of the Audit Committee s Internal systems and Their Operation The Audit Committee reports the results of its audit and risk management activities in order to ensure that an effective internal control, internal audit and risk management system has been established throughout the Bank. To this end, the Committee prepares an Audit Committee Activity Report at regular intervals and submits it to the Board of Directors. The Audit Committee convened 40 times during The Committee held four meetings with the independent auditors in order to evaluate the independent audit activities. During 2011, the Audit Committee regularly met with personnel of the Board of Inspectors, Internal Control Department and Risk Management Department. The Audit Committee closely monitored the activities of these units, all of which report directly to the Committee. The Audit Committee reports the results of its audit and risk management activities in order to ensure that an effective internal control, internal audit and risk management system has been established throughout the Bank. To this end, the Committee prepares an Audit Committee Activity Report at regular intervals and submits it to the Board of Directors. The internal audit and risk management findings, which are received from the internal systems units and reported to the Board of Directors by the Committee, were evaluated with the relevant senior executives. Guidance is provided as needed to mitigate risks and improve processes and practices. The Committee also performs the statutorily mandated duties of selecting independent audit, support service, evaluation and rating firms and overseeing their respective relationships with the Bank. Within this scope, the Committee met with officers of the independent audit firm. During these meetings, the independence of the independent audit firm in its relationship with the Bank as well as the adequacy of the resources allocated for the Bank s independent audit and the auditor s report were all evaluated. Board of Inspectors The Board of Inspectors conducts risk-focused audits at the Bank s headquarters units, branches, and consolidated subsidiaries in accordance with international standards. The Board of Inspectors also provides the Board of Directors with the assurances and recommendations as needed on the issues of conducting the Bank s activities in compliance with the the requirements of applicable laws and regulations as well as with the Bank s strategy, policies, principles and objectives. Internal audit activities are carried out at all headquarters units, branches, and consolidated subsidiaries in accordance with an annual audit plan that is approved by the Board of Directors. The Board of Inspectors reports the results of its activities on a quarterly basis to the Board of Directors through the Audit Committee. Under the heading of branch audit activities, inspections were conducted at 68 branches from the perspective of credit risk, operational risk and organizational effectiveness; the results of these inspections along with risk-mitigating recommendations were reported to the relevant departments and senior managers. Under the heading of process audits conducted at headquarters units, eight business processes and under the audits conducted at consolidated subsisidaries three subsidiaries were inspected and the results were reported to the relevant units and senior managers. Moreover, in order to underpin for the Management Declaration which will be drawn up by the board of directors fort he year 2011, test studies on banking processes and information systems processes were completed. In addition to the activities described above, the Board of Inspectors also engaged in three examinations and investigations as needed at the Bank and among its consolidated subsidiaries. Based on the results of its audit activities, the Board performs risk analyses, makes recommendations and provides advice on administrative, technilogical, fiscal, financial, legal and organizational issues in order to help mitigate the risks within the scope of its inspections. Internal Control Department The Internal Control Department executes the functions of designing the Bank s internal control systems and activities as well as how these tasks will be performed; ensuring that these control activities are performed; and, based on the results of the controls, taking the necessary measures to improve the control system and to ensure the smooth operation of internal control activities. The internal control system, which encompasses every employee of the Bank at every level, seeks to ensure that the protection of the Bank s assets, the effectiveness and productivity of its activities, the reliability of its accounting and financial reporting system, and the conduct of all the Bank s activities are in compliance with internal and external regulatory requirements and with the Bank s policies. The Internal Control Department reports directly to the Board of Directors and is responsible for the design and management of the Bank s internal control system and internal control activities in accordance with the requirements of the Banking Law and of the associated Internal Systems Regulations. In order for the Department to fulfill its responsibility more effectively, the outcomes of the Control Self-Assessment Workshops that are organized quarterly with the participation of the Bank s senior managers are given a key role in the design of the internal control systems. At these Workshops, the effectiveness, adequacy and coherence of existing controls performed on business processes are evaluated jointly with the relevant departments; the measures that need to be taken to improve the control system and to ensure the smooth operation of internal control activities are identified. The Internal Control Department oversees the implementation of the measures taken in conjunction with the business unit via action monitoring forms. Under the heading of On-Location Control activities, 296 branch control checks were performed in 2011.Furthermore, under the heading of Remote Control activities, the Department performed credit collateral checks over the system for locations outside of the departments and branches; inspections were also carried out in accordance with scenarios formulated to identify erroneous/non-routine transactions and fraud using computer programs (ACL). As part of the information system controls, a Control Self-Assessment Workshop was conducted for five IT processes and the existing controls were evaluated in light of COBIT requirements. Under the heading of Compliance Control activities, the Department performed compliance checks of 14 new products, services and applications in Apart from these,59 compliance control actvities on various opics were conducted as well. 089

90 Financial Informations and Risk Management Risk Management Strategies on the base of Risk Types Risk Management Department The Risk Management Department is responsible for the deployment of the risk management system that the Bank has set up to detect all risks arising from the Bank s activities and for ensuring that these risks are managed in compliance with the requirements of applicable laws and regulations. The policies and implementation procedures that facilitate the effective execution of this system throughout the Bank have been defined; risks are measured, controlled and reported on an ongoing basis. Bank Asya s internal control system units are supported with qualified personnel in order to meet the increased need for auditing arising from the rapid change in and growth of its banking activities and to achieve a function-based risk management and internal auditing system. Information about Risk Management Policies Applied According totype of Risks Bank Asya conducts its risk management activities within the framework of credit risk, market risk, liquidity risk, operational risk, reputational risk, and strategy risk management policies that it has established in accordance with the requirements of applicable laws, rules and regulations. These policies facilitate management of the identifying, defining, measuring, monitoring, controlling and reporting phases for the risks that the Bank is exposed to or is likely to be exposed to, as well as the mitigation of risks by a variety of measures and techniques and the re-allocation of resources from low-risk to high-risk areas. Credit Risk Management of credit risk at Bank Asya is fundamentally rooted in assessing all of the credit risk arising from the Bank s lending activities. The Bank complies with prescribed policies pertaining to Lending and Credit Risk Management, in determining customer and counterparty limits. In addition, early warning mechanisms that are focused on spotting in advance any credit risks to which the Bank may be exposed make it possible to continuously review the financial circumstances, credit ratings and credit needs of borrowers with heightened credit risk and to reconsider their credit worthiness and limits as appropriate. Bank Asya classifies its loans in two categories, On-balance sheet and Off-balance sheet, and it determines portfolio particulars, sectoral/ regional/group concentrations, and performance accordingly. On the basis of risk-return balances, collateral worthiness, and bank asset quality, a determination is made as to whether the provisions set aside for loans are adequate or not. Scenario analyses are developed in order to more proactively manage credit risk exposure. Volatilities in credit risk and their impact on the Bank s financial indicators are regularly reported to relevant senior managers at the Bank. The Bank makes use of an internal rating system for corporate and commercial loans in its lending decision mechanisms. This system is structured so as to facilitate integration with statistical models that allow credit risk to be quantified and managed. The rating system has been made particularly sensitive to existing and potential impairments in a loan s structure and this is what permits it to fulfill its early warning and risk management functions. Financial situation analyses of borrowers whose loans have become subject to legal action or are placed under close watch are carried out in coordination with all relevant units. The Bank monitors early warning signals and ultimate credit risk limits for its corporate and commercial loan clients daily and actively uses this information in lending decisions. The Bank uses scorecard models developed by an international firm in order to manage the risks arising from the Bank s retail lending and credit card portfolio. With the beginning of a period of increasing importance of country risk management, the bank adopting the growth in regions and countries in which financial and political stability provided as a goal performs analyses which also includes the consideration of credit and political risk factors periodically and submits for the information of the senior management. Market Risk Market risk is measured and assessed using procedures that comply with applicable laws and with Bank Asya s Market Risk Management Policy. The Bank uses the internationally accepted Value at Risk (VaR) method, which conforms well to Bank Asya s own market activities. VaR is an expression of the likelihood, at a specified confidence interval, of a loss that the Bank s portfolio in risk factors within a specified period of time. Bank Asya s VaR model has been developed in-house and is employed simultaneously and in conjunction with the Standardized Approach, whose use is prescribed by public authorities. The amount of market risk that the Bank is exposed to based on these calculations is reported daily to the senior management as are the results of back tests that are performed also on a daily basis to assess the model s reliability. By means of scenario analyses and stress tests that are performed using reverse changes in the Bank s own portfolio and in the market prices that are taken into account, the value of the Bank s portfolio is reconsidered under existing and potential market conditions. The effects that the results of the scenario analyses and stress tests may have on Bank Asya s capital adequacy ratio are also separately analyzed and reported. The Bank has used the VaR methodology to evaluate its market risk since Market risk information is reported to the Board of Directors in a timely and detailed fashion. In addition, in accordance with the Historical Precedent Method, the Bank established early warning and ultimate market risk limits based on VaR calculations assuming a 10-day holding period and a 99% confidence interval; these limits were approved by a resolution of the Board of Directors. Compliance with these commensurate risk limits is monitored daily and any violation of these limits is immediately reported to the Assets and Liabilities Committee, the Audit Committee and the Board of Directors. Information about Internal system Unit Managers: Name Length of Service Area of Responsibility Educational Background Prof. Experience Hilali Yıldırım 6 years Board of Inspectors Master s (Banking)/Bachelor s (Business Administration) 17 years Mahmut Yalçın 3 years Internal Control Department Master s Human Resources) / Bachelor s (Business Administration) 12 years Mehmet K. Tümer 6 years Risk Management Department Bachelor s (Business Administration) 31 years 090

91 Bank Asya 2011 Annual Report Liquidity Risk Reports which have been prepared in line with the applicable provisions of the Regulations on the Measurement and Assessment of the Banks Liquidity Adequacy published by the Banking Regulation and Supervision Agency are examined by the Risk Management Department, the Treasury Department, and senior management. Measures are taken as needed by the Assets and Liabilities Committee to ensure that the ratios which are reported in this way remain within legally prescribed limits. Maturity mismatches of the Bank s assets and liabilities items and the percentages based on maturity segments are monitored by means of day-to-day liquidity GAP analyses. As part of the Bank s evaluation of ways to further enhance its liquidity, the development trend of both participation funds, and loans and syndications from abroad are being monitored on a regular basis especially in terms of maturity and in terms of borrowing. A core deposits study was conducted and early warning and ultimate liquidity risk limits were established based on the results of the gap analyses in order to qualify the loyal participation account holders. Monitoring compliance with those limits that management decisions are taken into account on a daily basis. The Bank has formulated a Liquidity Emergency Action Plan whose aim is to resolve liquidity shortages that it may suffer in the face of such potential developments as impairment of asset quality, an increase in non-perfoming loans, or unexpected withdrawals of deposits. Operational Risk Bank Asya began reporting its operational risk exposure using the Basic Indicator Approach as of 1 June The Bank takes into consideration the impact of operational risk exposure on the Capital Adequacy Standard Ratio by means of scenario analyses that forecast the changes in exposure to operational risk for subsequent years. The amounts exposed to operational risk are also calculated using the Standard and Alternative Standard Approaches stipulated by the Banking Regulation and Supervision Agency; this data is duly reported to senior management. It is expected that these methods will also be used in the Bank s statutorily mandated reports once changes in the regulatory framework have been made. Bank Asya accumulates its potential operational risk losses in a format that complies with a risk catalogue that is based on event classifications. Data about actual losses is used as the basis for creating advanced statistical models that are being planned. Action plans are also being formulated to prevent the recurrence of instances of operational risk whose financial impact is extraordinarily severe. Business Continuity Management is an integrated management process that identifies critical situations that the Bank may encounter and their potential impact on business activities should they actually occur. Bank Asya s Business Continuity and Disaster Plan was put into effect in 2007 as a result of a project undertaken jointly with a consulting that specializes in such matters. The existing plan was revised in 2010 in response to new regulations and evolving needs. The studies on the Management Statement demonstrating assurance of the board of directors on the efficiency and productivity of the Bank s Internal Inspection and Information Systems have been completed. Other Risks In-house reports are regularly prepared on macroeconomic and financial sector developments and presented to the senior management, which contributes to the management of strategic risk. In addition to managing its financial risks, Bank Asya also keeps a close watch on the possible effects of political, legislative and global developments which may cause economic and/or financial sector volatilities even though they are not inherently financial themselves. For this purpose, the Bank makes use of external risks reports prepared by the Risk Management Department. Risk Management in Consolidated subsidiaries Bank Asya s standard calculations of its risk exposures and legal obligations are also made on a consolidated basis. The internal systems-related functions are also performed for the Bank s subsidiaries. Basel Regulations Compliance Initiatives Taking into consideration the possibility of the implementation of The Basel II International Convergence of Capital Measurement and Capital Standards project in the not-too-distant future, the Bank s efforts to comply with both Basel II and Basel II regulations have reached advanced stages. Bank Asya regards these regulations as the foundation for a comprehensive risk management culture that goes far beyond capital adequacy calculation issues. 091

92 Financial Informations and Risk Management CREDIT RATINGS AND REPORTS MOODY S Foreign Currency Deposit TRY Deposit Long Term National Individual Rating Ba3 Ba2 A3 D (*) From Moody s Investors Service report dated 22 February 2012 FITCH RATINGS Long Term Foreign Currency B+ Long Term Turkish Lira B+ Short Term Foreign Currency B Short Term Turkish Lira B Long Term National A-(tour) Individual Rating D (*) From Fitch Ratings report dated 22 November

93 Bank Asya 2011 Annual Report INDEPENDENT AUDITORS REPORT, UNCONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2011 (Translated into English from the Original Turkish Report) 093

94 094 Unconsolidated Financial Statements and Accompanying Notes

95 Bank Asya 2011 Annual Report INDEPENDENT AUDITORS REPORT FOR THE YEAR JANUARY 1, DECEMBER 31, 2011 To the Board of Directors of Asya Katılım Bankası A.Ş. İstanbul We have audited the accompanying balance sheet of Asya Katılım Bankası A.Ş. (the Bank ) as at December 31, 2011 and the related statements of income, cash flows and changes in shareholders equity for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements The Board of Directors of the Bank is responsible for the preparation and fair presentation of the financial statements in accordance with the regulation on Procedures and Principles Regarding Banks Accounting Practices And Maintaining Documents published in the Official Gazette dated November 1, 2006 and numbered and Turkish Accounting Standards ( TAS ), Turkish Financial Reporting Standards ( TFRS ) and other regulations, circulars, communiqués and pronouncements in respect of accounting and financial reporting made by Banking Regulation and Supervision Agency ( BRSA ). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the regulation on Licensing and Operations of Audit Firms in Banking published in the Official Gazette No: on November 1, 2006 and the International Standards on Auditing. We planned and performed our audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the consideration of the effectiveness of internal control and appropriateness of accounting policies applied relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independent Auditors Opinion In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as at December 31, 2011 and the results of its operations and its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as per Article 37 of the Banking Act No: 5411 and other regulations, circulars and communiqués in respect of accounting and financial reporting and pronouncements made by Banking Regulation and Supervision Agency ( BRSA ). Additional paragraph for the English translation The effect of the differences between the accounting principles summarized in Section 3 and the accounting principles generally accepted in countries in which the accompanying financial statements are to be distributed and International Financial Reporting Standards (IFRS) have not been quantified and reflected in the accompanying financial statements. The accounting principles used in the preparation of the accompanying financial statements differ materially from IFRS. Accordingly, the accompanying financial statements are not intended to present the Bank s financial position and results of its operations in accordance with accounting principles generally accepted in such countries of users of the financial statements and IFRS. DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Hüseyin GÜRER Partner İstanbul, February 23,

96 Unconsolidated Financial Statements and Accompanying Notes THE UNCONSOLIDATED FINANCIAL REPORT OF FOR THE YEAR ENDED DECEMBER 31, 2011 Address : Saray Mahallesi Dr. Adnan Büyükdeniz Caddesi No: Ümraniye/İSTANBUL Phone and Fax : / Website : [email protected] The year end unconsolidated financial report designed by the Banking Regulation and Supervision Agency in line with Communiqué on Financial Statements to be Publicly Announced and the Related Policies and Disclosures consists of the sections listed below: GENERAL INFORMATION ABOUT THE BANK UNCONSOLIDATED FINANCIAL STATEMENTS OF THE BANK EXPLANATIONS ON THE CORRESPONDING ACCOUNTING POLICIES APPLIED IN THE RELATED PERIOD INFORMATION ON FINANCIAL STRUCTURE OF THE BANK EXPLANATORY DISCLOSURES AND FOOTNOTES ON UNCONSOLIDATED FINANCIAL STATEMENTS OTHER EXPLANATIONS INDEPENDENT AUDITORS REPORT The unconsolidated financial statements and the explanatory footnotes and disclosures, unless otherwise indicated, are prepared in Thousands of Turkish Lira, in accordance with the Communiqué on Banks Accounting Practice and Maintaining Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards, related communiqués and the Banks records, have been independently audited and presented as attached. Behçet AKYAR Abdullah ÇELİK Ahmet BEYAZ Kamil YILMAZ Chairman of the Board of Directors Member of the Board of Directors and General Manager Assistant General Manager Responsible of Financial Reporting Manager in Charge of Financial Reporting Hülagü ÖZCAN İsmail Erol İŞBİLEN Member of the Board of Directors and Member of the Audit Committee Member of the Board of Directors and Member of the Audit Committee Responsible personnel for the questions that can be raised on the financial statements: Name-Surname/Title: Merve Yasemin GÜNEŞ / Assistant Manager in Charge of Budgeting and Financial Controlling Telephone Number : Fax Number :

97 Bank Asya 2011 Annual Report SECTION ONE: GENERAL INFORMATION I. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status 098 II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank s Risk Group 098 III. Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents 098 IV. Individuals and Institutions That Have Qualified Shares in the Bank 099 V. Summary Information on the Bank s Services and Activity Areas 099 SECTION TWO: THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Balance Sheet II. Statement of Off-Balance Sheet Contingencies and Commitments 102 III. Statement of Income 103 IV. Statement of Profit and Loss Accounted for under Equity 104 V. Statement of Changes in Shareholders Equity 105 VI. Statement of Cash Flows 106 VII. Statement of Profit Distribution 107 SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 108 II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions 108 III. Explanations on Forward and Option Contracts and Derivative Instruments 108 IV. Explanations on Profit Share Income and Expenses 108 V. Explanations on Fees and Commission Income and Expenses 109 VI. Explanations on Financial Assets 109 VII. Explanations on Impairment of Financial Assets 110 VIII. Explanations on Offsetting Financial Assets and Liabilities 110 IX. Explanations on Sales and Repurchase Agreements and Lending of Securities 111 X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets 111 XI. Explanations on Goodwill and Other Intangible Assets 111 XII. Explanations on Tangible Assets 112 XIII. Explanations on Leasing Transactions 112 XIV. Explanations on Provisions and Contingent Liabilities 112 XV. Explanations on Liabilities for Employee Benefits 112 XVI. Explanations on Taxation 113 XVII. Additional Disclosures on Borrowing 113 XVIII. Explanations on Issuance of Share Certificates 113 XIX. Explanations on Avalized Drafts and Acceptances 113 XX. Explanations on Government Incentives 114 XXI. Explanations on Segment Reporting 114 XXII. Explanations on Other Matters 114 SECTION FOUR: INFORMATION ON FINANCIAL STRUCTURE I. Explanations on Capital Adequacy Standard Ratio 115 II. Explanations on Credit Risk 117 III. Explanations on Market Risk 121 IV. Explanations on Operational Risk 122 V. Explanations on Currency Risk 122 VI. Explanations on Interest Rate Risk 124 VII. Explanations on Liquidity Risk 124 VIII. Explanations on Presentation of Financial Assets and Liabilities at Fair Value 127 IX. Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 128 SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Assets 129 II. Explanations and Disclosures Related to the Liabilities 145 III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 152 IV. Explanations and Disclosures Related to the Income Statement 157 V. Explanations and Disclosures Related to the Statements of Changes in Shareholders Equity 162 VI. Explanations and Disclosures Related to the Statement of Cash Flows 163 VII. Explanations on the Risk Group of the Bank 164 VIII. Explanations on the Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 165 SECTION SIX: OTHER EXPLANATIONS I. Other Explanations on the Operations of the Bank 165 SECTION SEVEN: INDEPENDENT AUDITORS REPORT I. Explanations on the Independent Auditor s Report 165 II. Other Footnotes and Explanations Prepared by the Independent Auditors

98 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION ONE: GENERAL INFORMATION I. History of the Bank Including Its Incorporation Date, Initial Legal Status and Amendments to the Legal Status Incorporation of Asya Finans Kurumu A.Ş. is permitted with the decision of the Council of Ministers No: 96/8041 on April 11, 1996 as published in the Official Gazette dated April 25, The Bank was registered on September 20, 1996 and the Articles of Association was published in the Trade Registry Gazette on September 25, The Decision regarding the change in the title of the Bank was settled in the Extraordinary General Board of Directors meeting dated December 22, 2005 and the title was changed from Asya Finans Kurumu A.Ş. into Asya Katılım Bankası A.Ş. ( the Bank ) and it was published in the Trade Registry Gazette on December 26, II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank s Risk Group The Bank has no shareholders having more than 10% shareholding direct or indirect, joint or individual control over the management of the Bank. The Bank is not included in any group. III. Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents Ownership Title Name Area of Responsibility Percentage % Chairman of the Board of Directors Behçet AKYAR Chairman of the Board of Directors 0,0003 Member of the Board of Directors Salih SARIGÜL (*) Vice Chairman of the Board of Directors 0,2056 Ahmet ÇELİK (*) Member of the Board of Directors 0,4800 Tacettin NEGİŞ (**) (***) Member of the Board of Directors - İsmail Erol İŞBİLEN (***) Member of the Board of Directors and the Audit Committees - Hülagü ÖZCAN (***) Member of the Board of Directors and the Audit Committees - General Manager Abdullah ÇELİK Member of the Board and General Manager - Corporate/Commercial Loans, Small Banking, Top Assistant General Management Office Headquarters, Business and Managers Product development Coordination (****) - Ali TUĞLU Information Technologies - Ali Fuat TAŞKESENLİOĞLU (*****) Corporate Credit Allocation II, - Erdal ERDEM (*****) Credit and Risk Monitoring, Construction and Real Estate Fahrettin SOYLU Banking Operations - Ercüment GÜLER Retail Sales Management, Retail Product Management, Card Payment Systems Marketing Management, Administrative Affairs, Alternative - Distribution Channels, Resource Development Ahmet BEYAZ Budgeting & Reporting, Accounting & Bank Affiliates, Purchasing, Corporate Communications - Zafer ERTAN Law, Credit and Risk Monitoring - Ahmet AKAR Corporate/Consumer Credit Allocation I, Project Financing - Feyzullah EĞRİBOYUN Treasury, Financial Institutions, Investor Relations, Human Resources and Education 0,0004 Auditors Ali AKBULUT Auditor 0,0002 Atıf BİLGİN Auditor 0,2411 İrfan HACIOSMANOĞLU Auditor 0,7093 (*) Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations, effective on January 26, 2012 Mr. Ali CELIK and Mr. Faruk ILK were appointed as the board members to fill their vacancies. (**) Bank Asya's Board member Mr. Tacettin NEGİŞ has announced his resignation, effective on February 2, Mr. Mustafa Talat KATIRCIOĞLU was appointed as the board members to fill his vacancy. (***) Pay rate is not presented due to being below 0,001%. (****) Related departments operate under control of the Headquarter. (*****) Bank Asya's Executive Vice Presidents Mr. Ali Fuat TAŞKESENLİOĞLU and Mr. Erdal ERDEM have resigned as of January 6,

99 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) IV. Individuals and Institutions That Have Qualified Shares in the Bank The Bank s capital, amounting to TRY , consists of qualified shares, amounting to TRY and the holders of the A Group type shares are considered as qualified. The qualified shareholders are listed below: Name / Commercial Name: Share Amount Share Amount Paid Shares Unpaid Shares ORTADOĞU TEKSTİL TİC. SAN. A.Ş , FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş , ABDULKADİR KONUKOĞLU , BJ TEKSTİL TİCARET VE SANAYİ A.Ş , BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş , SERRA TURİZM LTD. ŞTİ , OSMAN CAN PEHLİVAN , NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş , HASAN SAYIN , İBRAHİM SAYIN , OTHER , Total , V. Summary Information on the Bank s Services and Activity Areas The Bank operates in accordance with the principles of interest-free banking as a participation bank by collecting funds through current accounts and profit sharing accounts, and lending such funds through production support, finance lease and profit/loss sharing partnership and shared investments. The Bank has two ways of collecting funds; current accounts and profit sharing accounts. The Bank classifies current accounts and profit sharing accounts in accordance with their maturities in its accounting system. Profit sharing accounts are classified into five different maturity groups; up to one month, up to three months (three months included), up to six months (six months included), up to one year (one year included) and one year and more than one year (one month, three months, six months and one year profit share payment). The Bank could determine the participation rates on profit/loss sharing accounts with respect to the maturity group of TRY and foreign currency accounts, separately under the limitation that the participation rate on loss shall not be less than 50%, for different currency type, amount and maturity groups specifically. The Bank constitutes specific fund pools allocated to the individually predetermined projects for financing purposes. Profit sharing accounts, which are part of the funds collected for project financing purpose, are distinguished from others with respect to the terms, accounted separately from the others and no transfers can be made from these accounts to any other maturity groups. Specific fund pools are liquidated at the end of the financing period. The Bank has no specific fund pools as of December 31, In addition to ordinary banking activities, the Bank operates as an agency on behalf of Işık Sigorta A.Ş. and intervenes stock purchase-sell transactions on behalf of Bizim Menkul Değerler A.Ş. through its branches. 099

100 Unconsolidated Financial Statements and Accompanying Notes UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ASSETS Note CURRENT PERIOD Audited (31/12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total I. CASH AND BALANCES WITH THE CENTRAL BANK (1) II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Net) (2) Financial assets held for trading Public sector debt securities Share certificates Derivative financial assets held for trading Other marketable securities Financial assets at fair value through profit or loss Public sector debt securities Share certificates Loans Other marketable securities III. BANKS (3) IV. MONEY MARKET PLACEMENTS V. FINANCIAL ASSETS AVAILABLE FOR SALE (Net) (4) Share certificates Public sector debt securities Other marketable securities VI. LOANS AND RECEIVABLES (5) Loans and receivables Loans to Risk Group of the Bank Public sector debt securities Other Non-performing loans Specific provisions (-) ( ) (1.257) ( ) ( ) (1.087) ( ) VII. HELD TO MATURITY INVESTMENTS (Net) (6) VIII. INVESTMENTS IN ASSOCIATES (Net) (7) Accounted for under equity method Unconsolidated associates Financial investments Non-financial investments IX. INVESTMENTS IN SUBSIDIARIES (Net) (8) Unconsolidated financial subsidiaries Unconsolidated non-financial subsidiaries X. ENTITIES UNDER COMMON CONTROL (JOINT VENT.) (Net) (9) Consolidated under equity method Unconsolidated Financial subsidiaries Non-financial subsidiaries XI. FINANCE LEASE RECEIVABLES (10) Finance lease receivables Operating lease receivables Other Unearned income ( - ) (92.999) (1.679) (94.678) (13.548) (2.695) (16.243) XII. DERIVATIVE FINANCIAL ASSETS FOR HEDGING PURPOSES (11) Fair value hedge Cash flow hedge Hedge of net investment risks in foreign operations XIII. TANGIBLE ASSETS (Net) (12) XIV. INTANGIBLE ASSETS (Net) (13) Goodwill Other XV. INVESTMENT PROPERTIES (Net) (14) XVI. TAX ASSET (15) Current tax asset Deferred tax asset XVII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) (16) Held for sale Discontinued Operations XVIII. OTHER ASSETS (17) TOTAL ASSETS The accompanying notes are an integral part of these combined financial statements 100

101 Bank Asya 2011 Annual Report UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) LIABILITIES AND EQUITY Note CURRENT PERIOD Audited (31/12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total I. FUND COLLECTED (1) Fund from Risk Group of the Bank Other II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) III. FUNDS BORROWED (3) IV. MONEY MARKET BALANCES V. MARKETABLE SECURITIES ISSUED (Net) VI. SUNDRY CREDITORS VII. OTHER LIABILITIES (4) VIII. FINANCE LEASE PAYABLES (5) Finance lease payables Operating lease payables Other Deferred finance lease expenses (-) IX. DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING PURPOSES (6) Fair value hedge Cash flow hedge Hedge of net investment in foreign operations X. PROVISIONS (7) General loan loss provisions Restructuring provisions Reserve for employee benefits Insurance technical reserves (Net) Other provisions XI. TAX LIABILITY (8) Current tax liability Deferred tax liability XII. PAYABLES RELATED TO ASSETS HELD FOR SALE ND DISCONTINUED OPERATIONS (Net) (9) Held for sale Discontinued operations XIII. SUBORDINATED LOANS (10) XIV. SHAREHOLDERS' EQUITY (11) Paid-in capital Supplementary Capital (6.017) - (6.017) Share premium Share cancellation profits Marketable securities valuation differences (13.599) - (13.599) Tangible assets revaluation differences Intangible assets revaluation differences Investment property revaluation reserve Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint Vent.) Hedging funds (Effective portion) Accumulated valuation differences from assets held for sale and from discontinued operations Other capital reserves Profit reserves Legal reserves Status reserves Extraordinary reserves Other profit reserves Profit or loss Prior year income / (losses) Current year income / (losses) Minority shares TOTAL LIABILITIES AND EQUITY The accompanying notes are an integral part of these combined financial statements 101

102 Unconsolidated Financial Statements and Accompanying Notes UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS Note CURRENT PERIOD Audited (31/12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total A. OFF BALANCE SHEET CONTINGENCIES AND COMMITMENTS (I+II+III) I. GUARANTEES (1), (2) Letters of guarantees Guarantees subject to State Tender Law Guarantees given for foreign trade operations Other letters of guarantee Bank loans Import letter of acceptance Other bank acceptances Letters of credit Documentary letters of credit Other letters of credit Prefinancing given as guarantee Endorsements Endorsements to the Central Bank of Turkey Other endorsements Other guarantees Other collaterals II. COMMITMENTS (1) Irrevocable commitments Forward asset purchase commitments Share capital commitment to associates and subsidiaries Loan granting commitments Securities underwriting commitments Commitments for reserve deposit requirements Payment commitment for checks Tax and fund liabilities from export commitments Commitments for credit card expenditure limits Commitments for promotions related with credit cards and banking activities Receivables from short sale commitments Payables for short sale commitments Other irrevocable commitments Revocable commitments Revocable loan granting commitments Other revocable commitments III. DERIVATIVE FINANCIAL INSTRUMENTS (4) Derivative financial instruments for hedging purposes Fair value hedge Cash flow hedge Hedge of net investment in foreign operations Held for trading transactions Forward foreign currency buy/sell transactions Forward foreign currency transactions-buy Forward foreign currency transactions-sell Other Forward buy/sell transactions Other B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) IV. ITEMS HELD IN CUSTODY Assets under management Investment securities held in custody Checks received for collection Commercial notes received for collection Other assets received for collection Assets received for public offering Other items under custody Custodians V. PLEDGED ITEMS Marketable securities Guarantee notes Commodity Warranty Properties Other pledged items Pledged items-depository VI. ACCEPTED AVALIZED DRAFTS AND SURETYSHIPS TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) The accompanying notes are an integral part of these combined financial statements 102

103 Bank Asya 2011 Annual Report UNCONSOLIDATED STATEMENT OF INCOME STATEMENT OF INCOME Note THOUSAND TURKISH LIRA CURRENT PERIOD Audited (01/01/ /12/2011) PRIOR PERIOD Audited (01/01/ /12/2010) I. PROFIT SHARE INCOME (1) Profit share on loans Profit share from reserve deposits Profit share from banks Profit share from money market placements Profit share from marketable securities portfolio Held-for-trading financial assets Financial assets at fair value through profit and loss Available-for-sale financial assets Investment-held for maturity Finance lease income Other profit share income - - II. PROFIT SHARE EXPENSE (2) ( ) ( ) 2.1 Expense on profit sharing accounts ( ) ( ) 2.2 Profit share expense on funds borrowed (38.562) (16.538) 2.3 Profit share expense on money market borrowings (14.340) Expense on securities issued Other profit share expense (199) (177) III. NET PROFIT SHARE INCOME (I - II) IV. NET FEES AND COMMISSIONS INCOME/EXPENSE Fees and commisions received Non-cash loans Other (12) Fees and commisions paid (60.073) (51.283) Non-cash loans (12) (10) Other (12) (60.061) (51.273) V. DIVIDEND INCOME (3) - - VI. NET TRADING INCOME (4) Securities trading gains / (losses) Gains /(losses) from derivative financial instruments Foreign exchange gains / (losses) (25.090) VII. OTHER OPERATING INCOME (5) VIII. NET OPERATING INCOME (III+IV+V+VI+VII) IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) ( ) ( ) X. OTHER OPERATING EXPENSES (-) (7) ( ) ( ) XI. NET OPERATING PROFIT/(LOSS) (VIII-IX-X) XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - XIII. GAIN/(LOSS) ON EQUITY METHOD - - XIV. GAIN/(LOSS) ON NET MONETARY POSITION - - XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+ +XIV) (8) XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (53.042) (64.336) 16.1 Current income tax (charge)/benefit (57.546) (70.346) 16.2 Deferred tax (charge)/benefit XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) XVIII. INCOME ON DISCONTINUED OPERATIONS Income on assets held for sale Income on sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) Income on other discontinued operations - - XIX. LOSS FROM DISCONTINUED OPERATIONS (-) Loss from assets held for sale Loss on sale of associates, subsidiaries and jointly controlled entities (Joint vent.) Loss from other discontinued operations - - XX. PROFIT / (LOSS) ON DISCONTINUED OPERATIONS BEFORE TAXES (XVIII-XIX) - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) Current income tax charge Deferred tax charge/ (benefit) - - XXII. NET PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - - XXIII. NET PROFIT/LOSS (XVII+XXII) (11) Group s profit/loss Minority shares - - Earnings per share 0,24 0,29 The accompanying notes are an integral part of these combined financial statements 103

104 Unconsolidated Financial Statements and Accompanying Notes STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY THOUSAND TURKISH LIRA STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY CURRENT PERIOD Audited (01/01/ /12/2011) PRIOR PERIOD Audited (01/01/ /12/2010) I. Additions to marketable securities revaluation differences from financial assets available for sale (25.414) II. Tangible assets revaluation differences - - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions - - V. VI. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) Profit/Loss from derivative financial instruments for hedge of net investment in foreign operations (Effective portion of fair value differences) VII. The effect of corrections of errors and changes in accounting policies - - VIII. Other profit loss items accounted for under equity due to TAS - - IX. Deferred tax of valuation differences (953) X. Total Net Profit/Loss accounted for under equity (I+II+ +IX) (20.331) XI. Profit/Loss Change in fair value of marketable securities (Transfer to Profit/Loss) Reclassification and transfer of derivatives accounted for cash flow hedge purposes to Income Statement Transfer of hedge of net investments in foreign operations to Income Statement Other - - XII. Total Profit/Loss accounted for the period (X±XI) (20.331) The accompanying notes are an integral part of these combined financial statements 104

105 Bank Asya 2011 Annual Report UNCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER S EQUITY STATEMENT OF CHANGES OF SHAREHOLDER'S EQUITY Note Paid-in Capital Inflation Adjustment to Paid-in Capital Share Premium Share Certificate Cancellation Profits Legal Reserves Statutory Reserves Extraordinary Reserve Other Reserve Current Period Net Income / (Expense) Prior Period Net Income / (Expense) Marketable Securities Revaluation Reserve Tangible and Intangible Assets Revaulation Differences Bonus Shares Obtained from Subsidiaries Hedging Funds Valuation Diff. from Assets Held for Sale and from Disc. Op. Total Equity Excluding Non-controlling Interest Noncontrolling Interest Total Equity PRIOR PERIOD Audited (01/01-31/12/2010) I. Prior Period Balance II. Corrections according to TAS The effect of corrections of errrors The effects of changes in accounting policy III. New Balance (I+II) Changes in period IV. Increase/decrease related to merger V. Marketable securities valuation differences VI. Hedging funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations VII. Tangible assets revaluation differences VIII. Intangible assets revaluation differences IX. Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) X. Foreign exchange differences XI. The disposal of assets XII. The reclassification of assets XIII. The effect of change in associate s equity XIV. Capital increase Cash Internal sources XV. Share premium XVI. Share cancellation profits XVII. Inflation adjustment to paid-in capital XVIII. Other XIX. Period net income/(loss) XX. Profit distribution ( ) (30.000) - (30.000) 20.1 Dividends distributed (30.000) (30.000) - (30.000) 20.2 Transfers to reserves ( ) Other Closing Balance (I+II+III+-...+XVI+XVII+XVIII) CURRENT PERIOD Audited (01/01-31/12/2011) I. Prior Period Balance Changes in period II. Increase/decrease related to merger III. Marketable securities valuation differences (20.331) (20.331) - (20.331) IV. Hedging funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations V. Tangible assets revaluation differences VI. Intangible assets revaluation differences VII. Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) VIII. Foreign exchange differences IX. The disposal of assets X. The reclassification of assets XI. The effect of change in associate s equity XII. Capital increase Cash Internal sources XIII. Share premium XIV. Share cancellation profits XV. Inflation adjustment to paid-in capital XVI. Other XVII. Period net income/(loss) XVIII. Profit distribution ( ) Dividends distributed Transfers to reserves ( ) Other Closing Balance (I+II+III+-...+XVI+XVII+XVIII) 900,000-3,307-65, , (13,599) 4, ,137,426-2,137,426 The accompanying notes are an integral part of these combined financial statements 105

106 Unconsolidated Financial Statements and Accompanying Notes UNCONSOLIDATED STATEMENT OF CASH FLOWS A. CASH FLOWS FROM BANKING OPERATIONS Note CURRENT PERIOD Audited (01/01-31/12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01-31/12/2010) 1.1 Operating profit before changes in operating assets and liabilities Profit share income received Profit share expense paid ( ) ( ) Dividend received Fees and commissions received Other income Collections from previously written off loans Payments to personnel and service suppliers ( ) ( ) Taxes paid (81.339) (89.412) Others ( ) ( ) 1.2 Changes in operating assets and liabilities Net (increase) decrease in financial assets Net (increase) decrease in financial assets at fair value through profit or loss Net (increase) decrease in due from banks and other financial institutions Net (increase) decrease in loans ( ) ( ) Net (increase) decrease in other assets (10.185) Net increase (decrease) in bank deposits Net increase (decrease) in other deposits Net increase (decrease) in funds borrowed Net increase (decrease) in due payables Net increase (decrease) in other liabilities I. Net cash provided from banking operations B. CASH FLOWS FROM INVESTING ACTIVITIES II. Net cash provided from investing activities ( ) ( ) 2.1 Cash paid for purchase of entities under common control, associates and subsidiaries (Joint Vent.) (I.7-I.8) (20.065) (46.696) 2.2 Cash obtained from sale of entities under common control, associates and subsidiaries (Joint Vent.) (I.7-I.8) Fixed assets purchases (I.12) (31.920) (47.537) 2.4 Fixed assets sales (I.12) Cash paid for purchase of financial assets available for sale ( ) ( ) 2.6 Cash obtained from sale of financial assets available for sale Cash paid for purchase of investment securities - (50.000) 2.8 Cash obtained from sale of investment securities Other (I.13) (4.244) (3.467) C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net cash provided from financing activities - (30.000) 3.1 Cash obtained from funds borrowed and securities issued Cash used for repayment of funds borrowed and securities issued Capital increase Dividends paid - (30.000) 3.5 Payments for finance leases Other - - IV. Effect of change in foreign exchange rate on cash and cash equivalents V. Net increase in cash and cash equivalents VI. Cash and cash equivalents at the beginning of the year (1) VII. Cash and cash equivalents at the end of the year (1) The accompanying notes are an integral part of these combined financial statements 106

107 Bank Asya 2011 Annual Report PROFIT DISTRIBUTION TABLE I. DISTRIBUTION OF CURRENT YEAR PROFIT (**) CURRENT PERIOD Audited (01/01/ /12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01/ /12/2010) 1.1 CURRENT YEAR PROFIT TAXES AND DUTIES PAYABLE (-) (53.042) (64.336) Corporate Tax (Income Tax) (57.546) (70.346) Income Withholding Tax Other taxes and duties (*) A. NET INCOME FOR THE YEAR ( ) PRIOR YEAR'S LOSSES (-) FIRST LEGAL RESERVES (-) OTHER STATUTORY RESERVES (-) - - B. NET INCOME AVAILABLE FOR DISTRIBUTION [(A-( )] FIRST DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Shares To Owners of Preferred Shares (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit and loss Sharing Certificates DIVIDEND TO PERSONNEL (-) DIVIDEND TO BOARD OF DIRECTORS (-) SECOND DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Shares To Owners of Preferred Shares (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates SECOND LEGAL RESERVE (-) STATUTORY RESERVES (-) EXTRAORDINARY RESERVES OTHER RESERVES SPECIAL FUNDS - - II. DISTRIBUTION OF RESERVES 2.1 DISTRIBUTED RESERVES SECOND LEGAL RESERVES (-) DIVIDENDS TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Shares To Owners of Preferred Shares (Preemptive Rights) To Profit Sharing Bonds To Holders of the profit /loss Sharing Certificates DIVIDENDS TO PERSONNEL (-) DIVIDENDS TO BOARD OF DIRECTORS (-) - - III. EARNINGS PER SHARE 3.1 TO OWNERS OF ORDINARY SHARES 0,24 0, TO OWNERS OF ORDINARY SHARES ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) - - IV. DIVIDEND PER SHARE 4.1 TO OWNERS OF ORDINARY SHARES TO OWNERS OF ORDINARY SHARES ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) - - (*) Deferred tax benefit is presented in "other tax and duties" line. (**) Profit distribution is agreed on the General Assembly Meeting and as of the reporting date, the General Assembly meeting has not been held, yet. The accompanying notes are an integral part of these combined financial statements 107

108 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 1. Presentation of Financial Statements The Bank prepares its financial statements and notes in accordance with the Communiqué on Banks Accounting Practice and Maintaining Documents, Turkish Accounting Standards ( TAS ), Turkish Financial Reporting Standards ( TFRS ), other communiqués, pronouncements and explanations about accounting and financial reporting issued by the Banking Regulation and Supervision Agency ( BRSA ), Turkish Commercial Code and the Tax Legislation. The prior period financial statements are presented in line with the principles of TAS No: 1 Fundamentals of Preparing and Presenting Financial Statements published in the Official Gazette on January 16, 2005 with No: 25702, and in accordance with TAS and TFRS and other principles, methods and explanations about accounting and financial reporting issued by the BRSA. Certain reclassifications have been made to the prior year financial statements to comply with the current year presentation. The accompanying financial statements are prepared in accordance with historical cost basis except for financial assets at fair value through profit or loss and financial assets available for sale that are presented on fair value basis. 2. Basis of Accounting The accompanying financial statements are based on the Bank s legal records. The Bank has recorded the adjustments of inflation accounting to its legal records beginning from June 30, 2004 to December 31, 2004 in accordance with Act No: 5024 of the Tax Procedural Code. As of December 31, 2003, the financial statements are prepared in accordance with the legal books and historical cost principle except for the revaluation of fixed assets and includes adjustments and reclassifications, including restatement for the changes in the general purchasing power of the Turkish Lira in accordance with Turkish Accounting Standard for Financial Reporting in Hyperinflationary Economies ( TAS 29 ) prior to December 31, 2004 for the purpose of fair presentation. II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions The Bank manages its financial instrument strategies depending on the financing sources. The sources mainly constitute of the current and profit sharing accounts. As of the balance sheet date, the Bank s assets and equity structure are sufficient to cover its liabilities. The Bank allocates 20% of its profit sharing accounts to liquid instruments (December 31, 2010: 23%). The Bank does not carry a significant foreign currency position risk due to the existing floating exchange rate regime. The investment decisions are made by taking into consideration the maturity structure of the balance sheet items. The allocations of asset items are designated, and yield analysis are made based on this designation. In the statutory records of the Bank, the transactions recorded in foreign currencies (all other currencies except Turkish Lira) are translated into the Turkish Lira at the exchange rates prevailing at the transaction dates. Monetary asset and liabilities denominated in foreign currencies are translated into the Turkish Lira at the balance sheet date of the Bank. Foreign exchange gains or losses arising from the translation of monetary items and foreign currency denominated collections or disbursements are recognized in the income statement. III. Explanations on Forward and Option Contracts and Derivative Instruments In determination of fair value of forward and swap transactions, forward rates discounted to the balance sheet date by prevailing are compared with the expected discounted rates at maturity calculated based on the prevailing profit shares as of the balance sheet date and arising foreign exchange differences are recognized in the income statement. Although some of the derivative transactions provide economic hedging in accordance with TAS 39 Financial Instruments: Recognition and Measurement since all necessary conditions for hedge accounting have not been met, the bank classifies these transactions as held for trading therefore changes in the fair value of derivative financial instruments are recognized in profit or loss as they arise. IV. Explanations on Profit Share Income and Expenses Profit share income and expenses are recognized in the income statement on an accrual basis. Realized and unrealized profit share accruals of the non-performing loans are reversed and profit share income in connection with these loans is recorded as profit share income only when they are collected. 108

109 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) V. Explanations on Fees and Commission Income and Expenses Banking service revenues are recognized as income only when they are collected while only the current portion of the prepaid commission income obtained from loans is recorded as income based on the periodicity principle. Fees and commissions for funds borrowed paid to other financial institutions, as part of the transaction costs, are recorded as prepaid expenses and are recognized as expense on the relevant periods. VI. Explanations on Financial Assets Financial instruments comprise of financial assets, financial liabilities and derivative instruments. Financial assets and financial liabilities are recognized on the Bank s balance sheet when the Bank becomes a party to the contractual provisions of the instrument. Basically, financial assets form majority of the commercial activities and operations of the Bank. Financial instruments expose, change or reduce the liquidity and credit risks of the Bank s financial statements. Fair value is the amount for which an asset could be exchanged or a liability settled, between knowledgeable willing parties in an arm length transaction. Fair value is best evidenced by a market price, being the amount obtainable from the sale or payable on the acquisition, of a financial instrument in an active market, if one exists. Estimated fair values of financial assets are determined by the Bank by using the market data and relevant valuation methods. However, interpretation of market data is necessary to determine fair value. Therefore, estimated fair values presented in this report may not be necessarily equivalent of the disposal values of such assets derived from current market conditions. Some carrying values of the financial instruments which are same with their cost values are assumed to be equal to their fair values because of their short term nature. The methods and assumptions used in determining the reasonable estimated values of all financial instruments are mentioned below: Cash, Banks, and Other Financial Institutions: Cash and cash equivalents comprise of cash on hand, demand deposits, and highly liquid short-term investments not bearing risk of significant value change, and that are readily convertible to a known amount of cash. The book value of these financial assets approximate to their fair value. Financial Assets at Fair Value through Profit or Loss: Marketable securities at fair value through profit or loss are classified in two categories; i) marketable securities classified as trading securities: acquired or incurred principally for the purpose of selling or repurchasing it in the near term in order to benefit from short-term profit opportunities; ii) marketable securities classified as marketable securities at fair value through profit or loss at initial recognition. The Bank uses the above-mentioned classification when permitted, or for the purposes of providing a more appropriate presentation. In this group, trading securities are initially recognized at cost and measured at fair value on the financial statements. Fair value of debt securities traded in an active market is determined based on the quoted prices or current market prices. The difference between initial cost and fair value of financial assets at fair value through profit or loss is reflected to profit share income or diminution in value of marketable securities accounts. Profit share income from financial assets at fair value through profit or loss is reflected in profit share income. As of December 31, 2011, the Bank has TRY Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2010: TRY Thousand). Held to Maturity Investments: Held to maturity investments include securities with fixed or determinable payments and fixed maturity when there is an intention of holding till maturity and the relevant conditions for fulfillment of such intention, including the funding ability. This portfolio excludes loans and receivables. Subsequent to initial recognition, held to maturity investments are measured at amortized cost by using the effective interest rate less impairment losses, if any. The Bank has no financial assets acquired and classified as held to maturity investments that cannot be subject to such classification for two years because of the non-performance of tainting rules. The profit share income received from held to maturity investments is recorded as profit share income in the income statement. As of December 31, 2011, the Bank has TRY Thousand of held to maturity investments (December 31, 2010: TRY Thousand). 109

110 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Financial Assets Available for Sale: Financial assets available for sale are initially recognized at cost including the transaction costs. After initial recognition, bonds classified available for sale are measured at fair value and unrealized gains/losses originating from the difference between the amortized cost and the fair value are recorded in Marketable Securities Value Increase Fund under equity. At the disposal of available for sale financial assets, value increase/decrease recorded in Marketable Securities Value Increase Fund under equity is transferred to the income statement. Equity instruments that are classified as available for sale assets are recorded with their value after deduction of any impairment from original cost. As of December 31, 2011, the Bank has TRY Thousand of available for sale financial assets (December 31, 2010: TRY Thousand). Loans and Receivables: Loans and receivables are recognized at amortized cost. Fees, transaction costs and other similar costs in connection with the guarantees of loans and receivables are not considered as part of the transaction cost and recognized as expense in the income statement. Loans are transferred to the relevant accounts in with their cash amounts and income accruals are calculated by using the internal rate of return method and the related income is recorded in the profit share income item. Foreign currency and foreign currency indexed loans are evaluated and evaluation differences are accounted under Foreign Exchange Gains and/or Foreign Exchange Losses in the income statement. The classification and provisioning of doubtful loans/receivables are appropriately accounted for in accordance with the prevailing regulations, and specific provisions allocated are recognized in the income statement for the period. Collections made from such loans are recognized under the Non-performing loans (including receivables from the doubtful receivables) account and Profit share income received from uncollectible loans and other receivables account. Released loan loss provisions are accounted as a reversal from provision expense if realized in the current year, and the remaining amounts are recognized as income in the account of collections from the prior year expenses. In addition to specific loan loss provisions, general loan loss provision are recognized within the framework of the regulation on Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves published in the Official Gazette No dated 1 November Except for specific provisions, the Bank allocates general reserve in accordance with Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions VII. Explanations on Impairment of Financial Assets At each balance sheet date, the Bank evaluates the carrying amounts of its financial asset or a group of financial assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If such an indication exists, the Bank determines the related impairment. A financial asset or a financial asset group incurs impairment loss only if there is an objective indicator related to the occurrence (loss/ damage event) of one or more than one event (or occurrence) subsequent to initial recognition of that asset; and such loss event causes an impairment loss as a result of the effect on the reliable estimate of the expected future cash flows of the related financial asset and asset group. Any amounts attributable to expected losses arising from any future events is not recognized under no circumstances. Companies that are required to prepare separate financial statements under the statutory requirements in accordance with TAS 27 Consolidated and Separate Financial Statements can represent their subsidiaries or associates either at cost or based on requirements set out in TAS 39, Financial Instruments: Recognition and Measurement. In this respect, the Bank chooses to use the first method and presents the subsidiaries, jointly controlled entities and associates at cost less impairment loss, if any. VIII. Explanations on Offsetting Financial Assets and Liabilities Financial assets and liabilities are offset when the Bank has a legally enforceable right to set off, and when the Bank has the intention of collecting or paying the net amount of related assets and liabilities. In other circumstances, the Bank does not offset financial asset and liabilities. 110

111 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) IX. Explanations on Sales and Repurchase Agreements and Lending of Securities The Bank enters into revenue sharing certificates repurchase agreements with the Central Bank of the Republic of Turkey for the money market transactions. X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets The principles on accounting, assessment and disposal of assets held for sale are determined based on the Communiqué of Principles and Procedures on Bank s Disposal of Precious Metals and Assets Held for Sale published on November 1, 2006 in the official Gazette numbered Although the Bank has assets held for sale in the balance sheet, due to the fact that the Bank does not have a formal plan to dispose of these assets in one year subsequent to their classification date, such assets are continued to be depreciated. For this reason, these assets are classified as tangible assets instead of assets held for sale in the accompanying financial statements. Assets held for sale are measured at the lower of the carrying amount of assets and fair value less any cost incurred for disposal. Assets held for sale are not amortized and presented in the financial statements separately. In order to classify an asset as held for sale, only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale. Highly saleable condition requires a plan by the management regarding the sale of the asset to be disposed of (or else the group of assets), together with an active program for the determination of buyers as well as for the completion of the plan. Also the asset (or else the group of assets) shall be actively marketed in conformity with its fair value. On the other hand, the sale is expected to be recognized as a completed sale within one year after the classification date; and the necessary transactions and procedures to complete the plan should demonstrate the fact that there is remote possibility of making any significant changes or cancellation of the plan. Various events and conditions may extend the completion period of the disposal more than a year. If such delay arises from any events and conditions beyond the control of the entity and there is sufficient evidence that the entity has an ongoing disposal plan for these assets, such assets (or else group of assets) are continued to be classified as assets held for sale (or else group of assets). As of December 31, 2011, assets held for sale amounts to TRY Thousand (December 31, 2010: TRY Thousand). A discontinued operation is a division of a bank that is either disposed of or held for sale. Results of discontinued operations are included in the income statement separately. The Bank s has not a discontinued operation. XI. Explanations on Goodwill and Other Intangible Assets Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. No goodwill amount is recognized in the unconsolidated financial statements of the Bank as of the balance sheet date. Intangible assets acquired prior to January 1, 2005 are accounted for at restated cost less accumulated depreciation and any impairment loss, and the intangible assets acquired in subsequent periods are accounted for at acquisition cost less accumulated depreciation and any impairment loss if any, for those acquired prior to January 1, Intangible assets are amortized by using the straight line method considering their useful lives. Amortization method is reviewed at the end of each year periodically. Intangible assets mainly constitute of rights and amortized using the straight line method in 5 years. 111

112 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) XII. Explanations on Tangible Assets Prior to January 1, 2005, tangible assets are accounted for at acquisition cost plus any other direct costs incurred to bring the asset for ready to use. Tangible assets are measured at their acquisition cost less accumulated depreciation and impairment loss, if any. Depreciation of assets held less than one year as of the balance sheet date is accounted for proportionately. If the fair value of tangible assets is under their carrying value, impairment loss is allocated for exceeding amounts and these amounts are recognized as impairment in the financial statements. Gains or losses resulting from disposals of tangible assets are recognized in the income statement. Maintenance costs of the tangible assets are recognized in the income statement as an expense. There are no pledges, mortgages, or other restrictions on tangible assets. Tangible Asset Safety Boxes Office Equipment Furniture and Fixtures Vehicles Leasehold Improvements Buildings Useful Life 5 years 5 years 5 years 5 years 5 years 50 years XIII. Explanations on Leasing Transactions Bank as a Lessor: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the amount of the Bank s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Bank s net investment outstanding in respect of the leases. Bank as a Lessee: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognized as assets of the Bank at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Bank s general policy on borrowing costs. As of December 31, 2011, the Bank as a lessee has operating leases for vehicles, general management and branches in addition to its assets through financial lease. XIV. Explanations on Provisions and Contingent Liabilities Provisions are recognized when there is a present obligation, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are continuously reviewed in order to determine whether there is any possibility of cash flow with regards to the sources having economic benefit for the Bank. XV. Explanations on Liabilities for Employee Benefits Under the existing Turkish law and union agreements, severance indemnity payment is required for employees retired or fired except resignations. The severance indemnity pay provision recognized represents the present value of the defined benefit obligation as adjusted for unrecognized gains and losses in accordance with TAS 19 Employee Benefits. The defined obligation is determined by independent actuaries. 112

113 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) The main actuarial assumptions used in the calculation of severance indemnity pay provision are as follows: December 31, 2011 (*) December 31, 2010 Discount Rate 9,2% - 11,55% 10% Inflation Rate 4,5% - 8,75% 5,1% (*) According to employees retirement dates, different rates have been used in the range of rates given in the table above. TRY (TRY full amount) salary ceiling, which was effective as of December 31, 2011 was taken into account in the current year calculations. It is assumed that the amount of the salary ceiling will increase each year in line with the inflation rate. The age of retirement is considered as the earliest age possible that an individual can retire and CSO 1980 female/male mortality table is used for the mortality rate. XVI. Explanations on Taxation Tax expense comprises of current tax and deferred tax expenses. Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. According to the Article 32 of the Corporate Tax Law No: 5520 announced in the Official Gazette dated June 21, 2006, the corporate tax rate is 20%. Deferred tax asset or liability is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized and recognized in the income statement. If deferred tax is in connection with the assets directly associated with the equity, it shall be directly associated with shareholder s equity items. Taxes payables and prepaid taxes are offset since they are levied by the same taxation authority. Deferred tax assets and liabilities are also offset. The Bank has adjusted its statutory financial statements based on inflation accounting as of January 1, 2004 in accordance with Law No: XVII. Additional Disclosures on Borrowings Borrowings are recognized in accordance with TAS 39 Financial Instruments: Recognition and Measurement. No specific hedging technique is applied for borrowings, their accounting and valuation methods excluding some general methods applied for avoiding any liquidity and currency risks. There are no debt securities or convertible bonds issued by the Bank. XVIII. Explanations on Issuance of Share Certificates As of December 31, 2011, there are no exported share certificates of the Bank. XIX. Explanations on Avalized Drafts and Acceptances Avalized drafts and acceptances are realized simultaneously with the payment dates of the customers and they are presented in the off-balance sheet commitment accounts. 113

114 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) XX. Explanations on Government Incentives As of balance sheet date, there are no government incentives used by the Bank. XXI. Explanations on Segment Reporting The Bank operates in corporate, commercial and retail banking areas in line with its mission by means of profit/loss sharing methodology. Current Period Retail Corporate and Commercial Treasury Undistributed Total Total Assets Total Liabilities Net Profit Share Income / (Expense) (*) ( ) (236) Net Fees and Commissions Income / (Expense) (3.324) Other Operating Income / (Expense) (7.628) (17.078) - ( ) ( ) Profit Before Tax ( ) ( ) Tax Provision (53.042) (53.042) Net Profit for the Period ( ) ( ) (*) The allocation of retail, corporate and commercial banking segments above, is the result of differentiation in fund collection and allocation procedures of the participation banks. Prior Period Retail Corporate and Commercial Treasury Undistributed Total Total Assets Total Liabilities Net Profit Share Income / (Expense) (*) ( ) Net Fees and Commissions Income / (Expense) (1.408) Other Operating Income / (Expense) (7.194) (16.476) - ( ) ( ) Profit Before Tax ( ) ( ) Tax Provision (64.336) (64.336) Net Profit for the Period ( ) ( ) (*) The allocation of retail, corporate and commercial banking segments above, is the result of differentiation in fund collection and allocation procedures of the participation banks. XXII. Explanations on Other Matters There are no explanations on other matters. 114

115 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION FOUR: INFORMATION ON FINANCIAL STRUCTURE I. Explanations on Capital Adequacy Standard Ratio The unconsolidated capital adequacy ratio of the Bank is 13,31% (December 31, 2010: 13,33%). Capital Adequacy Standard Ratio is calculated in accordance with the Communiqué on Measurement and Assessment of Capital Adequacy of Banks, which was published on November 1, 2006 in the Official Gazette No: The calculation of Capital Adequacy Ratio includes the methods used in determining the Capital Adequacy Ratio, determination of risk weighted assets and non-cash credits in line with the relevant banking regulation and measuring the market risk and operational risk ratio in line with the same regulation. Risk Weights Amount Subject to Credit Risk 0% 10% 20% 50% 100% 150% 200% Balance Sheet Items (Net) Cash and Cash Equivalents Matured Marketable Securities Due from Central Bank of Turkey Republic Due from Domestic Banks, Foreign Banks, Branches and Head Office Abroad Bank Interbank Money Market Placements Receivables from Reverse Repo Transactions Reserve Deposits Loans Non-Performing Loans (Net) Financial Lease Receivables Financial Assets Available for Sale Held to Maturity Investments Receivables from Installment Sales of Assets Sundry Debtors Accrued Profit Share and Income Accruals Subsidiaries, Associates and Entities Under Common Control (Joint Vent.) (Net) Tangible Assets Other Assets Off-Balance Sheet Items Guarantees and Commitments Derivative Financial Instruments Non Risk Weighted Accounts Total Risk Weighted Assets

116 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Summary of the Capital Adequacy Standard Ratio of the Bank: Bank Current Period Prior Period Total Risk Weighted Assets (TRWA) Amount Subject to Market Risk (ASMR) Amount Subject to Operational Risk (ASOR) (*) Shareholders Equity Shareholders Equity / (TRWA + ASMR + ASOR) *100 13,31 13,33 (*) The amount subject to operational risk is in accordance with the Regulation Regarding Measurement and Evaluation of the Bank s Capital Adequacy Ratio published in the Official Gazette No: dated 1 November 2006 which is effective from 1 June Operational risk is calculated by using the Basic Indicator Approach. Components of Shareholders Equity: CORE CAPITAL Current Period Prior Period Paid-in Capital (*) Nominal Capital Capital Commitments (-) - - Paid-in Capital Indexation Difference - - Share Premium Share Cancellations Profits - - Legal Reserves First Legal Reserve (Turkish Commercial Code 466/1) Second Legal Reserve (Turkish Commercial Code 466/2) Other Legal Reserve per Special Legislation - - Statutory Reserves - - Extraordinary Reserves Reserves Allocated by the General Assembly Retained Earnings - - Accumulated Losses - - Foreign Currency Share Capital Exchange Difference - - Inflationary Adjustment to Legal Reserve, Status Reserves and Extraordinary Reserves - - Profit Current Year Net Profit Prior Years Profits - - Provision for Possible Losses up to 25% of the Core Capital - - Gains on Sale of Associates and Subsidiaries and Properties to be added to Capital Primary Subordinated Loans up to 15% of the Core Capital - - Losses that cannot be Covered by Reserves (-) - - Net Current Year Loss - - Prior Years Losses - - Leasehold Improvements (-) Prepaid Expenses (-) (**) Intangible Assets (-) Deferred Tax Asset Exceeding 10% of the Core Capital (-) - - Excess Amount in the Article 56, Clause 3 of the Banking Law (-) - - Total Core Capital (*) The Bank has purchased units of its own pledged shares at TRY Thousands as a result of sale in accordance with Turkish Commercial Code article 329/2.The effect of purchase has been considered as deduction from the paid-in capital item in the capital adequacy table. (**) Prepaid expenses are not deducted from the core capital according to the Article 1 of the Regulation for amending the Regulation on Equities of Banks published in the Official Gazette No: dated March 10,

117 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SUPPLEMENTARY CAPITAL Current Period Prior Period General Loan Loss Provision % of the Revaluation Reserve for Movable Fixed Assets % of the Revaluation Reserve for Properties - - Bonus Shares Obtained from Associates, Subsidiaries and Entities Under Common Control - - Primary Subordinated Loans Excluded in The Calculation of the Core Capital - - Secondary Subordinated Loans % of Marketable Securities Valuation Differences (13.599) Associates and Subsidiaries - - Available for Sale Securities (13.599) Indexation Differences for Capital Reserves, Profit Reserves and Retained Earnings (Except Indexation Differences for Legal Reserves, Statutory Reserves and Extraordinary Reserves) - - Total Supplementary Capital TIER III CAPITAL - - CAPITAL DEDUCTIONS FROM THE CAPITAL Shareholdings of Banks and Financial Institutions (Domestic, Foreign) from which the Bank Keeps Ten Percent or More of Capitals - 34 Shareholdings of Banks and Financial Institutions (Domestic, Foreign) from which the Bank Keeps Less than Ten Percent of Capitals which Exceed Ten Percent of Bank s Core And - - Supplementary Capital Secondary Subordinated Loans Granted to Banks and Financial Institutions (Domestic, Foreign) or Qualified Shareholders and Placements That Possess the Nature of Their Primary - - or Secondary Subordinated Debt Loans Granted Being Non-Compliant with the Articles 50 and 51 of the Banking Law - - The Net Book Value of Properties Exceeding Fifty Percent of Equity and Properties Held for Sale and Properties and Commodity to be Disposed, Acquired in Exchange of Loans and Receivables according to the Article 57 of the Banking Law and have not been Disposed yet After 5 Years after Foreclosure Other (*) TOTAL SHAREHOLDERS EQUITY (*) In accordance with the principles of the regulations described in Measurement and Practices of Bank s Shareholder s Equity published in the Official Gazette No: 26333, Article 10/1, clause (e), dated November 1, 2006, BRSA has published the board decision related to consumer loans for the purpose of acquiring housing in the Official Gazette No: dated December 18, II. Explanations on Credit Risk Credit worthiness of loan customers are monitored and semiannually and regularly reviewed by the Risk Monitoring Department of the Bank in accordance with the Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions. The account statements are obtained based on the prevailing regulations. Credit limits are determined by the Board of Directors, the Credit Committee of the Bank and the Credit Administration. The Bank obtains sufficient guarantees for its risks, comprising of personal surety, real-estate mortgage, cash blockage, and customer cheques. For the derivative transactions and other similar positions of the Bank, operational limits are set by the Board of Directors and the transactions are performed within these limits. There are no options or any other similar transactions. Indemnified non-cash loans are subject to the same risk weight with the overdue loans. 117

118 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) The Bank monitors restructured and rescheduled loans in accordance with the Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions. Financial position and business operation of those customers are analyzed systematically and, principal and profit payments based on the restructured payment plan are monitored by the corresponding departments. As of December 31, 2011, the risk of the Bank from its top 100 cash loan customers share in total cash loans ratio is 38,60% (December 31, 2010: 39,32%). As of December 31, 2011, the risk of the Bank from its top 100 non-cash loan customers share in total non-cash loan ratio is 47,01% (December 31, 2010: 47,22%). As of December 31, 2011, the cash and non-cash receivables of the Bank from its top 100 loan customers share in total balance sheet assets and non-cash loan ratio is 35,86% (December 31, 2010: 36,66%). As of December 31, 2011 the Bank s general loan loss provision amount for its credit risk is TRY Thousand (December 31, 2010: TRY Thousand). Distribution of Credit Risk by Types of Borrowers and Geographical Concentration: Borrowers Concentration Loans to Individuals and Corporate (**) Current Period Prior Period Loans to Banks and Other Financial Institution Current Period Prior Period Marketable Securities (***) Current Period Prior Period Other Loans (****) Current Period Prior Period Private Sector Public Sector Banks Retail Share Certificates Total Geographical Concentration Domestic European Union Countries OECD Countries (*) Off-Shore Banking Regions USA, Canada Other Countries Total (*) OECD countries other than European Union countries, USA and Canada. (**) Non-performing loans are not included. (***) Includes financial assets at fair value through profit or loss, Available for Sale and Held to Maturity (****) Includes transactions defined as loan in Article 48 of Law No: 5411 and not covered in the first three columns of the Uniform Chart of Accounts above. 118

119 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information According to Geographical Concentration: Current Period - December 31, 2011 Assets Liabilities Non-Cash Loans Equity Investments Net Income Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control (Joint Vent.) Unallocated Assets/Liabilities (**) Unallocated Assets/Liabilities Total Prior Period - December 31, 2010 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control Unallocated Assets/Liabilities (**) Total (*) OECD countries other than European Union countries, USA and Canada. (**) Assets and liabilities that cannot be allocated on an coherent basis. 119

120 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Sector Concentration for Cash Loans: Current Period Prior Period TRY (%) FC (%) TRY (%) FC (%) Agriculture , , , ,65 Farming and Raising Livestock , , , ,53 Forestry, Wood and Paper , , , Fishery , , , ,12 Manufacturing , , , ,49 Mining and Quarry , , , ,60 Production , , , ,41 Electricity, Gas and Water , , , ,48 Construction , , , ,91 Services , , , ,57 Wholesale and Retail Trade , , , ,67 Hotel, Tourism, Food and , , , ,10 Beverage Services , , , ,10 Transportation and , , , Communication , , Financial Institutions , , , ,23 Real Estate and Renting Services , , , ,47 Self-Employment Services , , Education Services , , , ,38 Health and Social Services , , , ,00 Other Total The table below shows the maximum exposure to credit risk for the components of the financial statements: Current Period Prior Period Central Bank of the Republic of Turkey Due from Banks Derivative Financial Assets Held for Trading Financial Assets Available for Sale Held to Maturity Investments Loans Finance Lease Receivables Total Contingent Liabilities Commitments Total Total Credit Risk Exposure

121 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Credit Rating System: The credit risk is assessed through the internal rating system of the Bank, by classifying loans from highest grade to lowest grade according to the probability of default. As of December 31, 2011 consumer loans are excluded from the internal rating system of the Bank. Additional scoring methodologies are applied for these loans. The risks that are subject to rating models can be allocated as follows: Share in Total (%) Category Description of Category Current Period Prior Period Above Average The borrower has a very strong financial structure 35% 35% Average The borrower has an intermediate level of financial structure 35% 36% Under Average The financial structure of the borrower has to be closely monitored in the medium term 13% 11% Not Graded The borrower is not assessed by the Bank 17% 18% Total 100% 100% III. Explanations on Market Risk The amount subject to market risk is calculated and reported with the Standard Method described in Section 4 of the Communiqué on Measurement and Assessment of Banks Capital Adequacy published in the Official Gazette No: dated November 1, Market risk is measured on a monthly basis. a) Explanations related to market risk: Amount (I) Capital Requirement to be Employed For General Market Risk - Standard Method (II) Capital Requirement to be Employed For Specific Risk - Standard Method - (III) Capital Requirement to be Employed For Currency Risk - Standard Method (IV) Capital Requirement to be Employed For Commodity Risk - Standard Method - (V) Capital Requirement to be Employed For Settlement Risk - Standard Method - (VI) Total Capital Requirement to be Employed For Market Risk Resulting From Options - Standard Method - (VII) Total Capital Requirement to be Employed For Market Risk in Banks Using Risk Measurement Model - (VIII) Total Capital Requirement to be Employed For Market Risk (I+II+III+IV+V+VI) (IX) Amount Subject to Market Risk (12,5 x VIII) or (12,5 x VII) b) Average market risk table calculated at the end of each month in the current period: Current Period Prior Period Average Maximum Minimum Average Maximum Minimum Interest Rate Risk (*) Common Stock Risk Currency Risk Commodity Risk Settlement Risk Option Risk Total Value Subject to Risk (*) The Bank calculates by considering market risk of revenue sharing certificates, forward and swap transactions. 121

122 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) c) Other price risks: The Bank does not have investments in equity shares; hence it is not subject to share price risk. V. Explanations on Currency Risk Foreign currency risk indicates the probability of loss that banks are subject to due to the exchange rate changes in the market. While calculating the share capital requirement, all foreign currency assets, liabilities and forward transactions of the Bank are taken into consideration and value at risk is calculated by using the standard method. Currency risk is managed by considering internal currency limits that are designated as Bank s risk policies. Within the frame of legal limits defined by FC Net General Position / Equity Ratio and internal currency risk limits determined by Board of Directors, decisions are taken by Asset and Liability Committee meet periodically, take decisions for currency and parity risk hedge and those decisions are implemented strictly. The Bank does not use any derivative instruments for hedging. The Standard Method stated in the statutory reporting is used to measure the currency risk of the Bank. The risk measurements with the context of the Standard Method are performed on a monthly basis. The announced current foreign exchange buying rates of the Bank as of December 31, 2011 and the previous five working days are as follows: December 31, 2011 US Dollar Euro Sterling 100 Japanese Yen FC Evaluation Rate of the Bank 1,9065 2,4626 2,9347 2,4475 Previously; (Day 1) 1,8897 2,4462 2,9228 2, (Day 2) 1,8847 2,4626 2,9501 2, (Day 3) 1,8833 2,4609 2,9444 2, (Day 4) 1,8809 2,4510 2,9382 2, (Day 5) 1,8779 2,4497 2,9432 2,4475 The simple arithmetic averages of the major current foreign exchange buying rates of the Bank for the thirty days before the balance sheet date are as follows; TRY 1,8577 per US Dollar, TRY 2,4463 per EUR, TRY 2,8972 per GBP and TRY 2,3823 per 100 JPY. 122

123 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information on the Foreign Currency Risk of the Bank: Foreign Currencies (Thousand TRY) EUR USD YEN Other Total Current Period - December 31, 2011 Assets Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey Due from Banks Financial Assets at Fair Value Through Profit or Loss (**) Money Market Placements Financial Assets Available for Sale Loans (*) Subsidiaries, Associates and Entities Under Common Control Held to Maturity Investments Derivative Financial Assets for Hedging Purposes Tangible Assets Intangible Assets Other Assets Total Assets Liabilities Current and Profit Sharing Accounts of Banks Current and Profit Sharing Accounts Money Market Borrowings Funds Provided from Other Financial Institutions Marketable Securities Issued Sundry Creditors Derivative Financial Liabilities for Hedging Purposes Other Liabilities (**) Total Liabilities Net Balance Sheet Position (76.492) (27) ( ) ( ) Net Off-Balance Sheet Position ( ) Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) Prior Period - December 31, 2010 Total Assets Total Liabilities Net Balance Sheet Position ( ) (896) (16.122) Net Off-Balance Sheet Position ( ) ( ) Financial Derivative Assets Financial Derivative Liabilities Non-Cash Loans (****) (*) TRY Thousand foreign currency indexed loans are included in loans line (December 31, 2010: TRY Thousand). (**) In accordance with the principles of the Regulations on the Measurement and Practices of Bank s Net Overall FX position Shareholders Equity Ratio on a Consolidated and Unconsolidated Basis, general reserves recorded to expense accounts amounting to TRY Thousand (December 31, 2010: TRY Thousand) in assets and income accrual from derivative financial instruments amounting to TRY Thousand (December 31, 2010 : TRY Thousand) in liabilities and expense accrual from derivate financial instruments amounting to TRY Thousand (December 31, 2010: TRY Thousand), are not taken into consideration in the currency risk calculation. (***) TRY Thousand forward asset purchase commitments are added to derivative financial assets and TRY Thousand forward asset sale commitments are added to derivative financial liabilities (December 31, 2010: TRY Thousand forward asset purchase commitments, and TRY Thousand forward asset sale commitments ). (****) The related balances do not have any effect on off balance sheet position. 123

124 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Foreign Currency Sensitivity: The Bank is mainly exposed to USD and EUR currency risks. The following table details the Bank s sensitivity to a 10% increase and decrease in the TRY against USD and EUR. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management s assessment of the possible change in foreign exchange rates. A positive number indicates an increase in profit or loss and other equity in the case of short position and a decrease in the case of long position where the TRY strengthens against USD and EUR. Change in Currency Rate in % Effect on Profit or Loss Current Period Prior Period USD 10% increase (1.503) 13 USD 10% decrease (13) EUR 10% increase EUR 10% decrease (61) (104) VI. Explanations on Interest Rate Risk Since the Bank has interest-free banking operations, it does not have any interest sensitive asset or liability and consequently, it does not have any interest rate risk. VII. Explanations on Liquidity Risk In order to avoid the liquidity risk, the Bank diversifies its funding resources as customer deposits and foreign borrowings, considers the maturity match between assets and liabilities, focuses on strategies especially for the provision of long-term resources and retains its liquid assets in order to provide sufficient liquidity in any market fluctuations. Maturity structure of TRY and FC deposits, cost and change in the total amount are monitored on daily basis by considering the past developments and future expectations. The Bank s policy is to establish an asset structure that primarily meets all kinds of liabilities by using liquid resources. The Board of Directors of the Bank determines a standard for the liquidity ratios, and applies the standard on a regular basis in order to ensure. The table below gives a summary of the liquidity ratio of the Bank: Current Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 135,72 110,28 Highest (%) 167,26 121,20 Lowest (%) 112,65 100,63 Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 164,61 127,57 Highest (%) 211,24 151,42 Lowest (%) 131,67 101,97 124

125 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Presentation of Assets and Liabilities according to Their Maturities: Current Period- December 31, 2011 Assets Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Undistributed (*) Due from Banks Financial Assets at Fair Value Through Profit or Loss Money Market Placements Financial Assets Available for Sale Loans (**) Held to Maturity Investments Other Assets Total Assets Total Liabilities Current and Profit Sharing Accounts of Banks Current and Profit Sharing Accounts Funds Provided from Other Financial Instruments Money Market Borrowings Marketable Securities Issued Sundry Creditors Other Liabilities (***) Total Liabilities Net Liquidity Gap ( ) ( ) ( ) - Prior Period - December 31, 2010 Total Assets Total Liabilities Net Liquidity Gap ( ) ( ) (24.864) ( ) - (*)Asset items, such as tangible assets, investment in associates and subsidiaries, stationary supplies, prepaid expenses and non-performing loans which are required for banking operations and which cannot be converted to cash in short-term are included in this column. (**) Loans balance also includes Finance Lease Receivables balance. (***) Equity is presented in the Undistributed column under Other Liabilities. 125

126 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Analysis of financial liabilities based on the remaining contractual maturities : The table below is drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. Profit share expenses to be paid on such liabilities are included in this table. Adjustments column indicates items that may lead to potential cash flows in the following period. These items are included in maturity analysis, but not included in the balance sheet value of such financial liabilities. Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Adjustments December 31, 2011 Funds Collected Funds Borrowed ( ) Money Market Borrowings (112) Total ( ) Total December 31, 2010 Funds Collected Funds Borrowed (39.843) Money Market Borrowings Total (39.843) Analysis of contractual expiry by maturity of the Bank s derivative financial instruments: Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total December 31, 2011 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total December 31, 2010 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total

127 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VIII. Presentation of Financial Assets and Liabilities at Fair Value As the loan portfolio has fixed profit sharing rates, estimated fair value is calculated by using the discounted cash flows. The table below summarizes the book value and fair value of the financial assets and liabilities. Book value is the sum of the acquisition value and accumulated profit share accruals. Book Value Fair Value Current Period Prior Period Current Period Prior Period Financial Assets Banks and Other Financial Institutions (*) Financial Assets Available For Sale Held to Maturity Investments Loans (**) Financial Liabilities Funds Collected From Banks (***) Other Current and Profit Sharing Accounts (***) Funds Provided From Other Financial Institutions Sundry Creditors Money Market Borrowings (*) As receivables from banks and other financial institutions are in short-term nature, their fair value approximates to their book value. (**) In order to calculate the fair value of loans, current profit sharing rates are used as of the balance sheet date. Loan balance also includes finance lease receivables. Fair values of loans are calculated under the assumption that all installments are distributed equally. (***) Book value of the funds collected approximates to their fair value as it is revalued with the year end unit values. The following table shows an analysis of financial instruments recorded at fair value, between those whose fair value is recorded on quoted market prices, those involving valuation techniques where all model inputs are observable in the market and, those where the valuation techniques involves the use of non observable inputs: December 31, st Level TRY 2nd Level TRY 3rd Level TRY Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available for Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total

128 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) December 31, st Level TRY 2nd Level TRY 3rd Level TRY Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available For Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total IX. Explanations Related to Transactions Carried out on Behalf of Other Parties and Fiduciary Assets The Bank does not deal with fiduciary operations or transactions made on behalf of other. 128

129 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Assets 1. Information on Cash and Balances with Central Bank of the Republic of Turkey 1.1. Information on Cash: Current Period Prior Period TRY FC TRY FC Cash in TRY/ Foreign Currency Central Bank of the Republic of Turkey Other Total Information on Central Bank of the Republic of Turkey Accounts: Current Period Prior Period TRY FC TRY FC Unrestricted Demand Deposit Unrestricted Time Deposit Restricted Time Deposit Other (*) Total (*) Stands for the reserve deposit kept in Central Bank of the Republic of Turkey in relation to foreign currency liabilities. According to the communiqué No: 2005/1 on Reserve Deposits, the banks operating in Turkey are required to keep reserve deposit at the rates varying from 5% to 11% (December 31, 2010: 6 % for all TRY liabilities) for TRY liabilities and at the rates varying from 6% to 11% (December 31, 2010: 11% for all FC liabilities) for foreign currency liabilities mainly denominated in U.S. Dollar and Euro depending on the maturity of the liabilities. Profit share has not paid for reserve deposits. 2. Information on Financial Assets at Fair Value through Profit or Loss 2.1. Information on Financial Assets at Fair Value through Profit or Loss Blocked/Given as Collateral or Subject to Repurchase Agreements: None Positive Differences related to Derivative Financial Assets Held-for-Trading: Current Period Prior Period TRY FC TRY FC Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total (*) Includes forward asset purchase/sale commitments. 129

130 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 3. Information on Banks 3.1. Information on Banks and Other Financial Institutions: Current Period Prior Period TRY FC TRY FC Banks Domestic Foreign Branches and Head Office Abroad Total Information on Foreign Bank Accounts: Unrestricted Amount Restricted Amount Current Period Prior Period Current Period Prior Period European Union Countries USA, Canada OECD Countries (*) Off-Shore Banking Regions Other Total (*) OECD countries other than European Union countries, USA and Canada. 4. Information on Financial Assets Available for Sale 4.1. Information on Financial Assets Available for Sale Given as Collateral/Blocked or Subject to Repurchase Agreements: Information on financial assets Available for Sale given as collateral or blocked: None Financial assets Available for Sale subject to repurchase agreements: As of December 31, 2011, the Bank has revenue sharing certificates in Available for Sale Financial Assets portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY Thousand nominal value (December 31, 2010: None) and TRY Thousand fair value (December 31, 2010: None) Information on Financial Assets Available for Sale: As of December 31, 2011, the Bank has revenue sharing certificates which have TRY Thousand nominal value (December 31, 2010: TRY Thousand) and TRY Thousand fair value at Available for Sale Financial Assets portfolio (December 31, 2010: TRY Thousand). Current Period Prior Period Debt Securities Quoted on a Stock Exchange Not Quoted (*) Share Certificates Quoted on a Stock Exchange - - Not Quoted Impairment (-) (3.750) - Total (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 130

131 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5. Information on Loans 5.1. Information on All Types of Loans and Advances Given to Shareholders and Employees of the Bank: Current Period Prior Period Cash Non-Cash Cash Non-Cash Direct Loans Granted to Shareholders Corporate Shareholders Real Person Shareholders Indirect Loans Granted to Shareholders Loans Granted to Employees Total Information on First and Second Group Loans and Other Receivables Including Restructured or Rescheduled Loans: Cash Loans Loans Standard Loans and Other Receivables Loans and Other Receivables Restructured or Rescheduled Closely Monitored Loans and Other Receivables (*) Loans and Other Receivables Restructured or Rescheduled Discount Notes Export Loans Import Loans Business Loans Consumer Loans Credit Cards Investments on Profit/Loss Partnership Precious Metals Loans Loans Given to Financial Sector International Loans Other Other Receivables Total (*) In addition to the closely monitored loans, the Bank also has TRY Thousand of closely monitored finance lease receivables. (December 31, 2010: TRY 320 Thousand) Loan Distribution based on the Maturity Structure: Standard Loans and Other Receivables Loans and Other Receivables Restructured or Rescheduled Closely Monitored Loans and Other Receivables Loans and Other Receivables Restructured or Rescheduled Short-Term Loans and Other Receivables Loans Other Receivables Medium-Term and Long-Term Loans Loans Other Receivables

132 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5.4. Information on Consumer Loans, Retail Credit Cards, Loans Given to Personnel and Personnel Credit Cards: Short Term Medium-term and Long-term Total Consumer Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Retail Credit Cards-TRY With Installments Without Installment Retail Credit Cards-FC With Installments Without Installment Personnel Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Personnel Credit Cards-TRY With Installments Without Installment Personnel Credit Cards-FC With Installments Without Installment Overdraft Account-TRY(Individuals) Overdraft Account-FC (Individuals) Total

133 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5.5. Information on Installment Basis Commercial Loans and Corporate Credit Cards: Short Term Medium-term and Long-term Total Installment Basis Commercial Loans-TRY Business Loans Vehicle Loans General Purpose Loans Other Installment Basis Commercial Loans-FC Indexed Business Loans Vehicle Loans General Purpose Loans Other Installment Basis Commercial Loans-FC Business Loans Vehicle Loans General Purpose Loans Other Corporate Credit Cards-TRY With Installments Without Installment Corporate Credit Cards-FC With Installments Without Installments Overdraft Account-TRY(Corporate) Overdraft Account- FC (Corporate) Total Allocation of Loans according to Borrowers: Current Period Prior Period Public Sector Private Sector Total Domestic and Foreign Loans: Current Period Prior Period Domestic Loans Foreign Loans Total Loans Granted to Subsidiaries and Associates: Current Period Prior Period Loans Granted to Subsidiaries and Associates Directly Loans Granted to Subsidiaries and Associates Indirectly - - Total

134 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5.9. Specific Provisions Provided against Loans: Current Period Prior Period Loans and Receivables with Limited Collectability Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Total Information on Non-Performing Loans (Net): Information on Loans and Other Receivables included in the Non-Performing Loans which are Restructured or Rescheduled: Loans and Receivables with Limited Collectability III Group IV Group V Group Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables Prior Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables Information on Movement of Non-Performing Loans: Loans and Receivables with Limited Collectability III Group IV Group V Group Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Ending Balance of Prior Period Additions in the Current Period (+) (*) Transfer from Other NPL Accounts (+) Transfer to Other NPL Accounts (-) ( ) ( ) - Collections in the Current Period (-) (*) ( ) (52.762) (68.945) Write offs (-) - - ( ) Corporate and Commercial Loans - - ( ) Retail Loans - - (1.647) Credit Cards - - (51.179) Other - - (1.991) Ending Balance of the Current Period Specific Provisions (-) (40.541) (62.435) ( ) Net Balance at the Balance Sheet (*) Movements between loan groups presented double within additions and collections in the interim financial reporting periods are offset by the year end. 134

135 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information on Foreign Currency Non-Performing Loans and Other Receivables: Loans and Receivables with Limited Collectability Group III Group IV Group V Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period Ending Balance Specific Provisions (-) - - (1.257) Net Balance at the Balance Sheet Prior Period Ending Balance Specific Provisions (-) - - (1.087) Net Balance at the Balance Sheet Gross and Net Amounts of Non-Performing Loans with Respect to User Groups: Loans and Receivables with Limited Collectability Group III Group IV Group V Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) (40.541) (62.435) ( ) Loans to Individuals and Corporates (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) Prior Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) (6.737) (37.039) ( ) Loans to Individuals and Corporates (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) Non-Performing Loans and Main Guidelines of Liquidation Process for Loans and Receivables: If the Bank has collateral components stated in Article 9 of the Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions, such components are immediately liquidated by applying managerial or legal procedures. In the absence of collateral component, even if there is an indication of insolvency, the Bank reviews the financial intelligence of the debtor systematically to determine subsequently acquired property holdings and applies the legal procedures. Prior and subsequent to the legal procedures, as a result of reviews performed regarding the financial information provided, the Bank intends to liquidate its loans and other receivables from the companies that have potential development in the production and consequent contribution to the economy by means of the rescheduled agreements. 135

136 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Explanation on Write off Policy: Provision allocations arising from during or after the transfer of any loan receivables to Non-performing loans are performed by the Bank s Loan Monitoring Department within the framework of the Banking Regulations and Supervisory Agency. Additionally, loans are written-off of against the assets, at least once a year, by the Credit Monitoring Agency to the extent that at least one of the following below is met and provision is fully made for all non-performing loans in accordance with the decision made by the Board of Directors: - Receivables with the document obtained from Collections Agency stating that the receivable cannot be followed up or; - Receivables assessed as uncollectible within existing conditions by the Law Department although the collection follow up process is going on Other Explanations and Disclosures: The information related to loan quality is stated as below: Current Period December 31, 2011 Neither past due nor Impaired Past due but not Impaired Past due and Impaired Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Total (*) The Bank classifies small medium entities ( SME ) considering the criteria set out in the Council of Ministers decision dated November 18, 2005 and numbered published in the Official Gazette and the Communiqué on Descriptions, Nature and Classification of Small Medium Entities. Prior Period December 31, 2010 Neither past due nor Impaired Past due but not Impaired Past due and Impaired Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Total (*) The Bank classifies small medium entities ( SME ) considering the criteria set out in the Council of Ministers decision dated November 18, 2005 and numbered published in the Official Gazette and the Communiqué on Descriptions, Nature and Classification of Small Medium Entities. The details of loan guarantees and leasing portfolio are stated as below: Current Period (*)(**)(***) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Residential, Commercial or Industrial Real Estates Financial Assets Other Total Total (*) Individual loan agreements, general loan agreements, foreign currency cheques, suretyships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or incumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the Measurement and Assessment of Capital Adequacy of Banks published on November 1, 2006 in the Official Gazette numbered

137 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Prior Period (*)(**)(***) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Residential, Commercial or Industrial Real Estates Financial Assets Other Total Total (*) Individual loan agreements, general loan agreements, foreign currency cheques, surety ships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or in cumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the Measurement and Assessment of Capital Adequacy of Banks published on November 1, 2006 in the Official Gazette numbered Aging analysis of past due but not impaired loans per classes of financial statements is stated as below: Current Period December 31, 2011 Less than 30 Days (*) Days Days More than 90 Days Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Total (*) The Bank follows up the entire loan balance overdue less than 30 days within the closely monitored loans based on conservatism principal and TRY Thousand of such amount is not overdue as of December 31, 2010 (Finance Lease Receivable TRY Thousand). Prior Period December 31, 2010 Less than 30 Days (*) Days Days More than 90 Days Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Total (*) The Bank follows up the entire loan balance overdue less than 30 days within the closely monitored loans based on conservatism principal and TRY Thousand of such amount is not overdue as of December 31, 2009 (Finance Lease Receivable TRY 39 Thousand) Other Explanations and Disclosures: Explanations on the loans and other receivables of the Bank for which the payment schedules are revised as per the agreement: Based on the Article 4 of the Communiqué Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves, the number of loans, total amount and extension periods for which the payment schedules are revised after May 28, 2011 are as follows: Extension Period Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total Loans Quantity Amount

138 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 6. Information on Held to Maturity Investments (Net) 6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: Information on Held to Maturity Investments Given as Collateral or Blocked: None Held to Maturity Investments Subject to Repurchase Agreements: As of December 31, 2011, the Bank has revenue sharing certificates in Held to Maturity Investments portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY Thousand nominal value (December 31, 2010: None) and TRY Thousand fair value (December 31, 2010: None) Information on Government Bonds Classified as Held- to-maturity Investments: The Bank has TRY Thousand of revenue sharing certificate as of December 31, Current Period Prior Period TRY FC TRY FC Government Bonds Treasury Bills Other Public Debt Securities Total Information on Held to Maturity Investments: Current Period Prior Period TRY FC TRY FC Debt Securities Quoted on a Stock Exchange Not Quoted (*) Impairment Provision (-) Total (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed Movement of Held to Maturity Investments: Current Period Prior Period Beginning Balance Foreign Currency Differences on Monetary Assets - - Purchases During Year Disposals through Sales and Redemptions - (50.000) Impairment Provision (-) - - Valuation Effects Closing Balance

139 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7. Information on Associates 7.1. Information on Associates: Company Name Address (City/Country) Bank s Share Percentage, If Different-Voting Percentage (%) Bank s Risk Group Share Percentage (%) (1) Yeni Mağazacılık A.Ş. (*) İstanbul/Turkey 21,84% 21,84% (2) Landmark Holding A.Ş. (*) İstanbul/ Turkey 21,84% 21,84% (3) Tamweel Holding S.A. (**) Dakar/Senegal 40,00% 40,00% (4) Kredi Garanti Fonu A.Ş. Ankara/ Turkey 1,67% 1,67% (*) The Bank participated in Yeni Mağazacılık A.Ş. and Landmark Holding A.Ş. with the Financing Method for Participation Banks explained in the regulation No: 19 regarding Banks Lending Transactions published and became effective in the Official Gazette numbered 26333, dated November 1, 2006 by means of joint investment method. These are recorded as associates in accordance with the Uniform Chart of Accounts published in the Official Gazette numbered and dated January 26, (**) As of February 4, 2010, the Bank has paid for TRY Thousand and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector ( ICD ) which is a group establishment of the Islamic Development Bank ( IDB ). TRY Thousand and TRY Thousand has paid for capital increase respectively on June 8, 2010 and October 3, As of the reporting date capital registry process has not been finalized yet Information on Associates: Total Assets Equity Total Fixed Assets Profit Share Income Income from Marketable Securities Portfolio Current Period Profit/Loss Prior Period Profit/Loss Fair Value (1) (*) ( ) (93.799) (86.383) (***) (2) (*) (192) (1.486) (****) (3) (**) (4) (*) (*) Financial information is provided from the associate s unaudited financial statements as of December 31, (**) Financial information is provided from the associate s not reviewed financial statements as of September 30, (***) It is expertise value of the Bank s associate, Yeni Mağazacılık A.Ş., as of February 4, (****) It is the expertise value of the Bank s associate, Landmark Holding A.Ş., as of February 9, Movement of Associates: Current Period Prior Period Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained - - Dividends from Current Year Income - - Sales - - Revaluation Increase - - Provision for Diminution in Value - - Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) 1,67%-40,00% 1,67%-40,00% (*) It consists of capital commitment amounting to TRY Thousand to Bank s associate, Kredi Garanti Fonu A.Ş. (December 31, 2010: TRY Thousand) Sectoral Information on the Investments in Associates and the Related Carrying Amounts: Current Period Prior Period Banks - - Insurance Companies - - Factoring Companies - - Leasing Companies - - Finance Companies - - Other Subsidiaries

140 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 8. Information on Subsidiaries (Net) 8.1. Information on Subsidiaries: Company Name Address (City/ Country Bank s Share Percentage, If Different- Voting Percentage (%) Bank s Risk Group Share Percentage (%) (1) Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. Ankara/Türkiye 99,93% 99,93% (2) Asya Kart Teknoloji Hizmetleri A.Ş. İstanbul/Türkiye 99,50% 99,50% (3) Asya Emeklilik ve Hayat A.Ş. (*) İstanbul/Türkiye 97,99% 97,99% (4) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. İstanbul/Türkiye 95,00% 95,00% (5) Işık Sigorta A.Ş. İstanbul/Türkiye 65,42% 65,42% (6) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul/Türkiye 22,94% 22,94% (*) The Bank has participated to Asya Emeklilik ve Hayat A.Ş. dated on July 1, Information on Subsidiaries: (*) Total Assets Equity Total Fixed Assets Profit Share Income Income from Marketable Securities Portfolio Current Period Profit/Loss Prior Period Profit/Loss Fair Value (1) (2) (9) - (3) (5) (1.221) - - (4) (5) (**) (6) (1.903) 842 (***) (*) Financial information is provided from the unaudited financial statements of subsidiaries as December 31, (**) It is expertise value of the Bank s subsidiary, Işık Sigorta A.Ş., as of February 4, (***)VAT included fair value is TRY Thousand, including land, per expertise appraisal dated January 26, Movement of Subsidiaries: Current Period Prior Period Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained - - Dividends from Current Year Income - - Sales - - Revaluation Increase - - Provision for Diminution in Value - - Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) 22,94%-99,93% 22,94%-99,93% (*) It consists of capital commitment amounting to TRY Thousand to the Bank s subsidary, Asya Emeklilik ve Hayat A.Ş. 140

141 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 8.4. Sectoral Information on the Financial Subsidiaries and the Related Carrying Amounts: Subsidiaries Current Period Prior Period Banks - - Insurance Companies Factoring Companies - - Leasing Companies - - Finance Companies - - Other Subsidiaries Subsidiaries Quoted on the Stock Exchange: None. 9. Information on Entities under Common Control None. 10. Information on Finance Lease Receivables (Net) Presentation of Finance Lease Receivables According to Their Remaining Maturities: Current Period Prior Period Gross Net Gross Net Less than 1 Year to 4 Years More than 4 Years Total Information on Net Investments in Finance Leases: Current Period Prior Period Gross Finance Lease Receivables Unearned Finance Lease Income (-) (94.678) (16.243) Net Receivable from Finance Leases Information on Derivative Financial Assets for Hedging Purposes None. 141

142 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 12. Information on Tangible Assets Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Cost Opening Balance - January 1, Additions Disposals (8.123) (3.523) (714) (51.161) (6.902) (70.423) Transfers (**) - - (283) (2.274) - (2.557) Impairment Losses /(Reversal) (***) (111) Closing Balance - December 31, Accumulated Depreciation (-) Opening Balance - January 1, Depreciation Expense Disposals (1.970) (3.387) (134) (1.649) (5.788) (12.928) Transfers (**) (76) - (76) Impairment (Losses) /Reversal (***) Closing Balance - December 31, Net Book Value - December 31, Net Book Value - December 31, (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipment, furniture, and other fixed assets. (**) TRY Thousand of the balance is transferred from assets held for sale to tangible fixed assets, TRY Thousand of assets to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. (***) In the current period, the Bank has provided an additional impairment provision for assets disposed off amounting TRY Thousand and reversed TRY Thousand impairment due to disposals. In the current period, the Bank has provided an additional provision for buildings amounting TRY 111 Thousand. Total Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Cost Opening Balance - January 1, Additions Disposals - (2.811) (1.037) (69.279) (4.375) (77.502) Transfers (**) (1.234) - (1.234) Impairment (Losses) / Reversal (***) Closing Balance - December 31, Accumulated Depreciation(-) Opening Balance - January 1, Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale - (2.335) (644) (1.875) (3.981) (8.835) Transfers (**) (95) - (95) Impairment (Losses) / Reversal (***) Closing Balance - December 31, Net Book Value - December 31, Net Book Value - December 31, (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipment, furniture and other fixed assets. (**) TRY Thousand of the balance is transferred from assets held for sale to tangible fixed assets, TRY Thousand of real estate to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. (***) During the period, the Bank has provided an additional impairment of TRY Thousand and reversed TRY Thousand impairment due to disposals. Total 142

143 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 13. Information on Intangible Assets Opening and Ending Book Values and Accumulated Depreciation Balances: Current Period Prior Period Book Value Accumulated Depreciation (13.960) (10.309) Net Book Value Intangible Assets Movement Table: Cost Computer Software Opening Balance- January 1, Additions Disposals - Closing Balance- December 31, Accumulated Amortization (-) Opening Balance- January 1, Amortization Expense Disposals - Closing Balance- December 31, Net Book Value- December 31, Net Book Value- December 31, Cost Computer Software Opening Balance- January 1, Additions Disposals - Closing Balance- December 31, Accumulated Amortization (-) Opening Balance- January 1, Amortization Expense Disposals - Closing Balance- December 31, Net Book Value- December 31, Net Book Value- December 31, Information on Investment Properties None (December 31, 2010: None). 143

144 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 15. Information on Deferred Tax Asset As of December 31, 2011, deferred tax asset computed on the temporary differences, except for general loan provision and provision for possible risks, is TRY Thousand, and is recorded in the deferred tax asset account. Current Period Deferred Tax Base Deferred Tax Asset/(Liability) Deferred Commission Income Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Valuation of Financial Assets Tangible Assets Tax Base Differences (14.604) (2.921) Deferred Tax Asset (net) Prior Period Deferred Tax Base Deferred Tax Asset/(Liability) Deferred Commission Income Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Tangible Assets Tax Base Differences (23.362) (4.672) Valuation of Financial Assets (5.038) (1.008) Other 17 3 Deferred Tax Asset (net) Movement of the deferred tax asset as of December 31, 2011 and December 31, 2010 is stated as below: Current Period Prior Period Deferred Tax Asset, January Deferred Tax Recognized Directly Under Equity (953) Deferred Tax Benefit /(Charge), December Deferred Tax Asset Information on Assets Held for Sale Assets held for sale consist of tangible assets which are obtained from non-performing loans and they are recognized as required in accordance with the prevailing the Communiqué of Principles and Procedures on Bank s Disposal of Precious Metals and Assets Held for Sale published on November 1, 2006 in the Official Gazette numbered in the unconsolidated financial statements. As of December 31, 2011, assets held for sale amounts to TRY Thousand (December 31, 2010: TRY Thousand). Current Period Prior Period Opening Balance- January Additions Outflows (3.468) (3.791) Transfers (net) (*) Impairment (37) (35) Closing Balance-December (*) TRY Thousand of the balance is transferred from assets held for sale to tangible fixed assets, TRY Thousand of assets to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. 17. Information on Other Assets Other assets amount to TRY Thousand. Other assets account does not exceed 10% of the total assets (December 31, 2010: TRY Thousand). 144

145 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) II. Explanations and Disclosures Related to the Liabilities 1.1. Information on Maturity Structure of Deposits: Current Period Demand Up to 1 Month Up to 3 Month Up to 6 Month Up to 9 Month Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts I. Real Persons Current Deposits-TRY II. Real Persons Profit Sharing Accounts-TRY III. Other Current Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V. Real Persons Current Deposits-FC VI. Real Persons Profit Sharing Accounts-FC VII. Other Current Accounts-FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII.Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools-TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total(I+II+..+IX+X+XI) Total 145

146 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Demand Up to 1 Month Up to 3 Month Up to 6 Month Up to 9 Month Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts Prior Period I. Real Persons Current Deposits-TRY II. Real Persons Profit Sharing Accounts-TRY III. Other Current Accounts- TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts- TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V. Real Persons Current Deposits-FC VI. Real Persons Profit Sharing Accounts-FC VII. Other Current Accounts- FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII. Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total(I+II+..+IX+X+XI) Total 146

147 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 1.2. Current and Participation Accounts Attributable to Real Entities/Persons under the Guarantee of Saving Deposit Insurance Fund Exceeding the Limit of the Deposit Insurance Fund: Under the Guarantee of Saving Deposit Insurance Exceeding the Limit of Saving Deposit Insurance Current Period Prior Period Current Period Prior Period Real Persons Current and Profit Sharing Accounts that are not Subject to Commercial Activities TRY Accounts FC Accounts Foreign Branches Deposits under Foreign Authorities Insurance Off-shore Banking Regions Deposits under Foreign Authorities Insurance Current and Profit Sharing Accounts which are not under the Guarantee of Deposit Insurance Fund: Current Period Deposits and Other Accounts held at Foreign Branches - Deposits and Other Accounts held by Shareholders and their Relatives Deposits and Other Accounts of the Chairman and Members of Board of Directors, Chief Executive Officer, Senior Executive Officers and their Relatives Deposits and Other Accounts held as Assets subject to the Crime defined in the Article 282 of the Turkish Criminal Code no dated 26 September Deposits at Depository Banks established for Off-Shore Banking Activities in Turkey - Total Information on Derivative Financial Liabilities Held for Trading As of December 31, 2011, derivative financial liabilities held for trading amounts to TRY Thousand (December 31, 2010: TRY Thousand). Current Period Prior Period TRY FC TRY FC Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total (*) Includes forward asset purchase/sale commitments. 3. Information on Borrowings 3.1. Information on Banks and Other Financial Institutions: Current Period Prior Period TRY FC TRY FC Loans from Central Bank of the Republic of Turkey From Domestic Banks and Institutions From Foreign Banks, Institutions and Funds Total

148 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 3.2. Maturity Analysis of Borrowings: Current Period Prior Period TRY FC TRY FC Short-Term Medium-Term and Long-Term Total Additional Explanation Related to the Concentrations of the Bank s Major Liabilities: None. 4. Other Liabilities with Exceeding 10% of the Balance Sheet Total (Excluding Off-Balance Sheet Commitments) and the Breakdown of Such Liabilities Constituting at Least 20% of the Grand Total Other liability items amount to TRY Thousand and do not exceed 10% of the total balance sheet total (December 31, 2010: TRY Thousand). 5. Information on Financial Lease Obligations None. 6. Information on Derivative Financial Liabilities for Hedging Purposes None. 7. Explanations on Provisions 7.1. Information on General Loan Loss Provision: Current Period Prior Period General Loan Loss Provision Provision for First Group Loans and Receivables Profit Sharing Accounts Share The Bank s Share Other - - Provision for Second Group Loans and Receivables Profit Sharing Accounts Share The Bank s Share Other - - Provision for Non Cash Loans

149 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7.2. Movement of General Loan Loss Provisions: Current Period Opening Balance - January 1, Charge for Period Reversal of Prior Period Expenses (3.925) Profit Sharing Accounts Share Closing Balance- December 31, Prior Period Opening Balance January 1, Charge for Period Reversal of Prior Period Expenses (1.561) Profit Sharing Accounts Share Closing Balance- December 31, Information on Provision for Foreign Exchange Losses on the Foreign Currency Indexed Loans and Finance Lease Receivables: As of December 31, 2011, the Bank s provision for foreign currency indexed loans amounts to TRY Thousand (December 31, 2010: TRY Thousand). Provisions for foreign currency indexed loans are offset under the loan balance in the financial statements Information on the Specific Provisions Provided for Unindemnified Non-Cash Loans: As of December 31, 2011, the Bank s specific provision provided for unindemnified non-cash loans amounts to TRY Thousand (December 31, 2010: TRY Thousand) Information on Other Provisions: Information on Provisions for Potential Risks: None (December 31, 2010: None) Information on Other Provisions: Other Provisions Current Period Prior Period Provision for Credit Cards Promotion of Banking Services Provision for Unindemnified Non-Cash Loans Provision Amount Allocated for Profit-Share Accounts Payment Commitment for Checks Litigation Provision Other (*) Total (*) The balance includes provisions accounted for future losses which may be incurred on loan portfolio. 149

150 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Movement of the Retirement Pay Provision: Current Period Prior Period Opening Balance - January Current Service Cost Interest Cost Benefits Paid (1.188) (782) Settlement/Curtailment/Termination Loss/(Gain) Actuarial Loss/(Gain) Closing Balance December The Bank has reflected the employee benefit provision to the financial statements by using actuarial valuation method stated in TAS 19. As of December 31, 2011 the Bank provided a provision of TRY Thousand for the unused vacation pays (December 31, 2010: TRY Thousand). 8. Explanations on Taxes Payable 8.1. Information on Current Tax Liability: As of December 31, 2011, the Bank s corporate tax payable is TRY Thousand after offsetting pre-paid corporate tax (December 31, 2010: TRY Thousand). Current Period Prior Period Provision for Corporate Taxes Prepaid Corporate Tax (48.535) (54.620) Corporate Tax Payable Information on Taxes Payable: Current Period Prior Period Corporate Taxes Payable Taxation of Securities Property Tax Banking Insurance Transaction Tax (BITT) Foreign Exchange Transaction Tax - - Value Added Tax Payable Other Total

151 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 8.3. Premiums: Current Period Prior Period Social Security Premiums-Employee Social Security Premiums-Employer Bank Social Aid Pension Fund Premium-Employee - - Bank Social Aid Pension Fund Premium-Employer - - Pension Fund Membership Fees and Provisions-Employee - - Pension Fund Membership Fees and Provisions-Employer - - Unemployment Insurance-Employee Unemployment Insurance-Employer Other - - Total Explanations on Deferred Tax Liabilities: None (December 31, 2010: None). 9. Information on Liabilities Regarding Assets Held for Sale and Discontinued Operations: None. 10. Information on Subordinated Loans None. 11. Information on Shareholders Equity Presentation of Paid-in Capital: Current Period Prior Period Common Stock Preferred Stock (*) (*) Preferred stockholders have the right to nominate candidates for the Board of Directors and the Audit Committee Paid-in Capital Amount, Explanation as to whether the Registered Share Capital System is Applicable at Bank if so Amount of the Registered Share Capital Ceiling: Registered capital system is not applied in the Bank Share Capital Increases and Their Sources; Other Information on Increased Capital Shares in the Current Period: None Information on Share Capital Increases from Capital Reserves: None Information on Share Capital Increases from Revaluation Funds: None Capital Commitments in the Last Fiscal Year and at the End of the Following Interim Period, General Purpose of These Commitments and Projected Resources Required to Meet These Commitments: None. 151

152 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Indicators of the Bank s Income, Profitability and Liquidity for Prior Periods and Possible Effects of These Future Assumptions on the Bank s Equity due to the Uncertainty of These Indicators: The Bank carries its activities in profitable level and retains the major portion of its net profit within equity by means of transfers to reserve accounts and capital increases. The Bank, also allocates its equity to highly liquid and profit generating assets Summary of Privileges Granted to Preferred Stocks: The holders of the preferred stocks have the right to nominate candidates for the Board of Directors and the Audit Committee Explanations on Marketable Securities Value Increase Fund: Current Period Prior Period From Associates, Subsidiaries, and Entities under Common Control (Joint Vent.) - - Valuation Difference - - Foreign Exchange Difference - - From Financial Assets Available for Sale (13.599) Valuation Difference (13.599) Foreign Exchange Difference - - Total (13.599) III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 1. Explanation on Contingent Liabilities 1.1. Nature and Amounts of Irrevocable Loan Commitments: Current Period Prior Period Asset Purchase-Sale Commitments Capital Commitments for Associates And Subsidiaries (*) Loan Granting Commitments Commitments for Credit Card Expenditure Limits Commitments for Credit Card And Retail Banking Promotions Payment Commitments for Checks Tax and Fund Liabilities from Export Commitments Other Irrevocable Commitments Total (*) It consists of capital commitment amounting to TRY Thousand to the Bank s subsidary, Asya Emeklilik ve Hayat A.Ş. and TRY Thousand to the Bank s associates, Kredi Garanti Fonu A.Ş. (December 31, 2010: It consists of capital commitment amounting to TRY Thousand to the Bank s associate, Kredi Garanti Fonu A.Ş.) Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: Current Period Prior Period Guarantees Bank Acceptances and Avalized Drafts Letters of Credit Other Guarantees Total

153 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Definite Guarantees, Provisional Guarantees, Surety ships, and Similar Transactions: Current Period Prior Period Definite Letters of Guarantee Provisional Letters of Guarantees Suretyships and Similar Transactions Total Total Amount of Non-Cash Loans: Current Period Prior Period Non-cash loans given against achieving cash loans With maturity of 1 year or less than 1 year With maturity of more than 1 year Other non-cash loans Total Sectoral Risk Concentration of Non-Cash Loans Current Period Prior Period TRY (%) FC (%) TRY (%) FC (%) Agricultural , , , ,42 Farming and Raising Livestock , , , ,42 Forestry , , , Fishery , , , Manufacturing , , , ,83 Mining , , , ,59 Production , , , ,20 Electric, Gas and Water , , , ,04 Construction , , , ,51 Services , , , ,42 Wholesale and Retail Trade , , , ,33 Hotel, Food and Beverage Services , , , ,16 Transportation and Telecommunication , , , ,30 Financial Institutions , , , ,48 Real Estate and Renting Services , , , ,37 Self-Employment Services , , , ,19 Education Services , , , ,08 Health and Social Services , , , ,51 Other , , , ,82 Total , , , ,00 153

154 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 3. Information on Ist and IInd Group Non-Cash Loans I st Group II nd Group TRY FC TRY FC Non-Cash Loans Letters of Guarantee Endorsements and Acceptances Letters of Credit Endorsements Underwriting Commitments Factoring Commitments Other Commitments and Contingencies Derivative Financial Instruments Derivative Transactions according to Purposes Trading Hedging Current Period Prior Period Current Period Prior Period Type of Trading Transactions Foreign Currency Related Derivative Transactions (I): Forward Transactions Swap Transactions Futures Transactions Option Transactions Interest Related Derivative Transactions (II) : Forward Interest Rate Transaction Interest Rate Swap Transactions Interest Option Transactions Futures Interest Transactions Marketable Securities Call-Put Options (III) Other Trading Derivative Transactions (IV) A. Total Trading Derivative Transactions (I+II+III+IV) Types of Hedging Transactions Fair Value Hedges Cash Flow Hedges Net Investment Hedges B. Total Hedging Related Derivatives Total Derivative Transactions (A+B)

155 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) As of December 31, 2011, the breakdown of the Bank s foreign currency forward transactions based on currencies are disclosed below in their TRY equivalents. Current Period Forward Buy Forward Sell TRY USD EUR GOLD Total Prior Period Forward Buy Forward Sell TRY USD EUR Total As of December 31, 2011, the Bank does not have any derivative transactions for the purpose of cash flow hedge. 5. Explanations on Contingent Liabilities and Assets As of the balance sheet date, there are 204 ongoing court cases against the Bank amounting to TRY Thousand and EUR 946 based on the information provided from the legal department of the Bank. (December 31, 2010: There were 172 ongoing court cases against the Bank amounting to TRY Thousand and EUR 946 based on the information provided from the legal department of the Bank). For one of the ongoing court cases mentioned above, provision amounting to TRY Thousand has been allocated (December 31, 2010: TRY Thousand). Total amount of letters of guarantees, guarantees and commitments submitted by the Bank pursuant to its own internal affairs and guarantees given by other institutions submitted by the Bank pursuant to the third parties benefit of the Bank stands at TRY Thousand and is recognized under Other irrevocable commitments item of off-balance sheet contingencies and commitments (December 31, 2010: TRY Thousand). 6. Explanations on Custodian and Intermediary Services None. 155

156 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7. Summary Information on the Bank s Rating by the International Rating Institutions FITCH RATINGS Foreign Currency Long Term B+ Short Term B Outlook Stable Turkish Lira Long Term B+ Short Term B Outlook Stable International Long Term A-(tour) Outlook Stable Individual Rating D Support Points 5 The information is obtained from the Fitch Ratings Report as of November 22, MOODY S Financial Strength Outlook Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Short Term D Stable Ba3 B1 Stable Ba2 Ba1 Stable A3 TR-1 The information is obtained from the Moody s Investor Service report as of February 10, SAHA Kurumsal Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. has completed its Corporate Governance rating report for Bank Asya in accordance with the Turkish Capital Markets Board s communiqué of Capital Market Rating Operations and Corporate Governance Principles. Bank Asya s Corporate Governance rating score previously has been identified as 81,69 on July 1, 2010 and revised to 82,56 as of July 1,

157 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) IV. Explanations and Disclosures Related to the Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans: 1.2. Profit Share from Banks: I Group II Group TRY FC TRY FC Profit Share on Loans Short Term Loans Medium and Long Term Loans Profit Share on Non-Performing Loans Premiums Received from Resource Utilization Support Fund Current Period Prior Period TRY FC TRY FC Central Bank of the Republic of Turkey (Reserve Deposit) Domestic Banks Foreign Banks (*) Branches and Head Office Abroad Total (*) Foreign banks include profit shares from murabaha loans Information on Interest Received from Marketable Securities: Current Period Prior Period TRY FC TRY FC Financial Assets Held-for-Trading Financial Assets at Fair Value through Profit or Loss Financial Assets Available for Sale Held to Maturity Investments Total Information on Profit Share Income Received from Associates and Subsidiaries: Current Period Prior Period Profit Share Income Received from Associates and Subsidiaries

158 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 2. Information on Profit Share Expenses 2.1. Information on Interest on Funds Borrowed: Current Period Prior Period TRY FC TRY FC Banks Central Bank of the Republic of Turkey Domestic Banks Foreign Banks Foreign Head Office and Branches Other Institutions Total Information on Profit Share Expense Given to Associates and Subsidiaries: Current Period Prior Period Profit Share Expenses Given to Associates and Subsidiaries Information on Profit Share Expense to Marketable Securities Issued: None. 158

159 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 2.4. Distribution of Profit Share Expense on Deposits Based on Maturity of Deposits: Current Period Account Name TRY Up to 1 Month Up to 3 Month Profit Sharing Accounts Up to 6 Month Up to 9 Month Up to 1 Year More than 1 Year Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Total FC Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Precious Metal Deposits Total Grand Total Total Prior Period Account Name TRY Up to 1 Month Up to 3 Month Profit Sharing Accounts Up to 6 Month Up to 9 Month Up to 1 Year More than 1 Year Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Total FC Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Precious Metal Deposits Total Grand Total Total 159

160 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 3. Information on Dividend Income None (December 31, 2010: None). 4. Information on Net Trading Income (Net) Current Period Prior Period Profit Securities Trading Gains - - Gains on Derivative Financial Instruments Foreign Exchange Gains Loss (-) ( ) ( ) Securities Trading Losses - - Losses on Derivative Financial Instruments ( ) (34.834) Foreign Exchange Losses ( ) ( ) 5. Information on Other Operating Income The detail of other operating income is stated as below: Current Period Prior Period Communication Expense Reversal Gain on Sale of Assets Reversals from Previous Years Expenses (*) Other Total (*) Includes TRY Thousand reversals from specific provisions for loans, general loan provision, and doubtful fees and other receivables provision and TRY Thousand reversals from provisions for cheques. (December 31, 2010: TRY Thousand). 6. Provision Expenses of the Bank for Loans and Other Receivables Current Period Prior Period Specific Provisions for Loans and Other Receivables III. Group Loans and Receivables IV. Group Loans and Receivables V. Group Loans and Receivables Doubtful Commission, Fee and Other Receivables General Loan Loss Provision Expenses Provision Expenses for Possible Losses - - Marketable Securities Impairment Losses - - Financial Assets at Fair Value through Profit or Loss - - Financial Assets Available for Sale - - Impairment Losses on Investment in Associates, Subsidiaries, Entities under Common Control and Held to Maturity Investments - - Investments in Associates - - Subsidiaries - - Entities under Common Control - - Held to Maturity Investments - - Other Total

161 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7. Information on Other Operating Expenses Current Period Prior Period Personnel Expenses Provision for Employee Termination Benefits Bank Social Aid Provision Fund Deficit Provision - - Impairment Losses on Tangible Assets Depreciation Expenses of Tangible Assets Impairment Losses on Intangible Assets - - Impairment Losses on Goodwill - - Amortization Expenses of Intangible Assets Impairment Losses on Investments Accounted for under Equity Method - - Impairment Losses on Assets to be Disposed off Depreciation Expenses of Assets to be Disposed off Impairment Losses on Assets Held for Sale Other Operating Expenses Operating Lease Expenses Repair and Maintenance Expenses Advertisement Expenses Other Expenses Loss on Sales of Assets Other Total Information on Continuing Operations Profit or Loss Before Tax The Bank s profit before tax is decreased by 17,01% (December 31, 2010: 14,30%) as compared to the prior year figures and total profit before tax amounts to TRY Thousand (December 31, 2010: TRY Thousand). Profit before tax includes TRY Thousand (December 31, 2010: TRY Thousand) net profit share income, TRY Thousand (December 31, 2010: TRY Thousand) net fees and commission income. Total operating expense amount is TRY Thousand (December 31, 2010: TRY Thousand). 9. Information on Continuing Operations Tax Provision As of December 31, 2011, current tax expense is TRY Thousand (December 31, 2010: TRY Thousand) and deferred tax income is TRY Thousand (December 31, 2010: TRY Thousand). 10. Information on Operating Profit/Loss After Taxes The Bank s net profit for the year ended December 31, 2011 has declined by 16,88% in compare to the prior year s net profit. 11. Explanations on Net Income / Loss for the Period: The nature and amount of certain income and expense items from ordinary operations is disclosed if the disclosure for nature, amount, and repetition rate of such items is required for the complete understanding of the Bank s performance for the period: None. Effect of changes in accounting estimates on income statement for the current and, if any, for subsequent periods: None. 161

162 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 12. The Description and Amounts of Items which Constitute at Least 20% of Other Items in the Income Statement, If These Liabilities Exceed 10% of the Total Income Statement Other fees and commissions income/expense are stated as below: Current Period Prior Period Other Fees and Commission Received Member Firm-POS Fees and Commission Credit Card Fees and Commission Commissions on Collection and Disbursement Expertise Fees Money Transfer Commissions Insurance Underwriting Commissions Other Total Current Period Prior Period Other Fees and Commission Paid Credit Card Fees and Commission Other Total Nature and Amount of Changes in Accounting Estimates which Have Material Effects on the Current Period or Expected to Have Material Effects on the Subsequent Periods None. V. Explanations and Disclosures Related to the Statements of Changes in Shareholders Equity 1. Increases from Valuation of Financial Assets Available for Sale Increase resulting from revaluation of financial assets available for sale is TRY Thousand (December 31, 2010: TRY Thousand). 2. Increases Due to Cash Flow Hedges None. 3. Reconciliation of Foreign Exchange Differences at Beginning and End of Current Period None. 4. Dividends Declared Subsequent to the Balance Sheet Date, but Before the Announcement of the Financial Statements None. 5. Dividends per Share Proposed Subsequent to the Balance Sheet Date None. 6. Proposals to General Assembly for the Payment Dates of Dividends and if It will not be Distribute the Reasons for This The Board of Directors has not decided for profit distribution as of the reporting date. 7. Amounts Transferred to Legal Reserves As of December 31, 2011, amount transferred to legal reserves is TRY Thousand (December 31, 2010: TRY Thousand). 8. Information on Shares Issued None. 162

163 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VI. Explanations and Disclosures Related to Statement of Cash Flows 1. Cash and Cash Equivalents 1.1. Components of Cash and Cash Equivalents and Accounting Policies Used to Determine Such Components: Cash is defined as cash in TRY and foreign currency, money in transit, cheques purchased and demand deposits in Banks, and Cash equivalents is defined as time deposits in Banks having original maturity less than three months and short term murabaha (sale at a markup) loans. Deposits held in Central Bank of the Republic of Turkey are not presented as cash equivalents The effects of the other items stated in the cash flow statement and the changes in foreign currency exchange rates on cash and cash equivalents: Other item amounting to TRY ( ) Thousand in Operating profit before changes in operating assets and liabilities consists of fees and commission paid, operating lease expenses, repairment and maintenance expenses, advertisement expenses and other operating expenses.(december 31, 2010: TRY ( ) Thousand Other Income amounting to TRY Thousand consists of gains on derivative financial transactions, foreign exchange gains and other operating income (December 31, 2010: TRY Thousand). Net increase/decrease in other assets amounting to TRY Thousand in Changes in operating assets and liabilities consists of changes in sundry debtors, other assets and intangible asset purchases. (December 31, 2010: TRY (10.185) Thousand) Net increase/ decrease in other liabilities with a total amount of TRY Thousand consists of changes in sundry creditors and other liabilities. (December 31, 2010: TRY Thousand). Other items amounting to TRY Thousand (31 December 2010: TRY Thousand) in Net cash provided from investing activities consists of cash paid for purchases of intangible assets. The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2011 is approximately TRY Thousand (December 31, 2010: TRY Thousand) Cash and Cash Equivalents at the Beginning of the Period: Current Period Prior Period Cash Cash in TRY/Foreign Currency Banks-Demand Deposit Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans Total Cash and Cash Equivalents Cash and Cash Equivalents at the End of the Period: Current Period Prior Period Cash Cash in TRY/Foreign Currency Banks-Demand Deposit Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans - - Total Cash and Cash Equivalents

164 Unconsolidated Financial Statements and Accompanying Notes NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VII. Explanations on the Risk Group of the Bank 1. Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Deposit Balances and Current Income and Expense Amounts 1.1. Current Period: Risk Group of the Bank Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income (*) The risk group balance includes TRY Thousand finance lease receivables (December 31, 2010: TRY 153 Thousand) Prior Period: Risk Group of the Bank Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income (*) The risk group balance includes TRY 153 Thousand finance lease receivables (December 31, 2009: TRY 237 Thousand) Risk Group Deposits Balances of the Bank: Risk Group of the Bank Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in the Risk Group Current and Profit Sharing Accounts Current Period Current Period Current Period Balance at Beginning of Period Balance at End of Period Profit Share Expense Information on Forward and Option Agreements and Other Similar Agreements with Related Parties: None Information on Compensation of Key Management Personnel: During the current period, the total amount of remuneration and benefits provided to the key management personnel of the Bank is TRY Thousand (December 31, 2010: TRY Thousand). Besides remuneration, the key management personnel also receive some further in kind rights. 164

165 Bank Asya 2011 Annual Report NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VIII. Explanations on the Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 1. Explanations on the Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices Number Employees Domestic Branches Country Rep-Offices Abroad (*) Total Assets Capital Branches Abroad Off-shore Branches (*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India and a branch in Arbil, Iraq. As of the reporting date, opening representative office and branch is still in progress. 2. Explanations on Branch and Agency Openings or Closings of the Bank: The Bank has opened 25 new branches in the period of January 1 - December 31, SECTION SIX: OTHER EXPLANATIONS I. Other Disclosures: 1. Subsequent Events: Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations, effective on January 26th, 2012 and Mr. Tacettin NEGIS has announced his resignation, effective on February 2nd, 2012 then, retrospectively Mr. Ali ÇELİK, Mr. Faruk İLK and Mr. Mustafa Talat KATIRCIOĞLU were appointed as the board members to fill their vacancies. SECTION SEVEN: INDEPENDENT AUDITOR S REPORT I. Explanations on the Independent Auditor s Report The financial statements of the Bank for the year January 1 December 31, 2011 have been audited by DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Member of Deloitte Touche Tohmatsu Limited). The independent auditor s report is presented at the beginning of the financial statements and related notes. II. Other Footnotes and Explanations Prepared by the Independent Auditors There is no significant matter or disclosure which may be in connection with the Bank s operations but not explained in the above sections. 165

166

167 Bank Asya 2011 Annual Report ASYA KATILIM BANKASI A.Ş. AND ITS FINANCIAL SUBSIDIARIES INDEPENDENT AUDITORS REPORT, CONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2011 (Translated into English from the Original Turkish Report) 167

168 168 Consolidated Financial Statements and Accompanying Notes

169 Bank Asya 2011 Annual Report AND ITS FINANCIAL SUBSIDIARIES INDEPENDENT AUDITORS REPORT FOR THE YEAR JANUARY 1, DECEMBER 31, 2011 To the Board of Directors of Asya Katılım Bankası A.Ş. İstanbul We have audited the accompanying balance sheet of Asya Katılım Bankası A.Ş. (the Bank ) and its financial subsidiaries ( the Group ) as at December 31, 2011 and the related consolidated statements of income, cash flows and changes in shareholders equity for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management s Responsibility for the Financial Statements: The Board of Directors of the Bank is responsible for the preparation and fair presentation of the financial statements in accordance with the regulation on Procedures and Principles Regarding Banks Accounting Practices And Maintaining Documents published in the Official Gazette dated November 1, 2006 and numbered and Turkish Accounting Standards ( TAS ), Turkish Financial Reporting Standards ( TFRS ) and other regulations, circulars, communiqués and pronouncements in respect of accounting and financial reporting made by Banking Regulation and Supervision Agency ( BRSA ). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the regulation on Licensing and Operations of Audit Firms in Banking International Standards published in the Official Gazette No: on November 1, 2006 and the International Standards on Auditing. We planned and performed our audit to obtain reasonable assurance whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the consideration of the effectiveness of internal control and appropriateness of accounting policies applied relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independent Auditors Opinion In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Asya Katılım Bankası A.Ş. as at December 31, 2011 and the results of its operations and its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as per Article 37 of the Banking Act No: 5411 and other regulations, circulars and communiqués in respect of accounting and financial reporting and pronouncements made by Banking Regulation and Supervision Agency ( BRSA ). Additional paragraph for the English translation: The effect of the differences between the accounting principles summarized in Section 3 and the accounting principles generally accepted in countries in which the accompanying financial statements are to be distributed and International Financial Reporting Standards ( IFRS ) have not been quantified and reflected in the accompanying financial statements. The accounting principles used in the preparation of the accompanying financial statements differ materially from IFRS. Accordingly, the accompanying financial statements are not intended to present the Bank s financial position and results of its operations in accordance with accounting principles generally accepted in such countries of users of the financial statements and IFRS DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Hüseyin GÜRER Partner İstanbul, April 5,

170 Consolidated Financial Statements and Accompanying Notes THE CONSOLIDATED FINANCIAL REPORT OF ASYA KATILIM BANKASI A.Ş. FOR THE YEAR ENDED DECEMBER 31, 2011 Address of the Headquarter of the Bank : Saray Mahallesi, Dr. Adnan Büyükdeniz Caddesi No: Ümraniye/İSTANBUL Phone and Fax Numbers of the Bank : / Website of the Bank : [email protected] The consolidated financial report designed by the Banking Regulation and Supervision Agency in line with Communiqué on Financial Statements to be Publicly Announced and the Related Policies and Disclosures consists of the sections listed below: GENERAL INFORMATION ABOUT THE PARENT BANK CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK EXPLANATIONS ON THE CORRESPONDING ACCOUNTING POLICIES APPLIED IN THE RELATED PERIOD INFORMATION ON CONSOLIDATED FINANCIAL STRUCTURE OF THE GROUP EXPLANATORY DISCLOSURES AND FOOTNOTES ON CONSOLIDATED FINANCIAL STATEMENTS OTHER EXPLANATIONS AND DISCLOSURES INDEPENDENT AUDITORS REPORT The subsidiaries and associates consolidated within the framework of the reporting package are as follows: Subsidiaries Associates (1) Işık Sigorta A.Ş. Tamweel Africa Holding S.A. (2) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. - (3) Asya Emeklilik ve Hayat A.Ş. - (4) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. - The consolidated financial statements and the explanatory footnotes and disclosures, unless otherwise indicated, are prepared in Thousands of the Turkish Lira, in accordance with the Communiqué on Banks Accounting Practice and Maintaining Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards, related communiqués and the Banks records, have been independently audited and presented as attached. Behçet AKYAR Abdullah ÇELİK Ahmet BEYAZ Kamil YILMAZ Chairman of the Board of Directors Member of the Board of Directors and General Manager Assistant General Manager Responsible of Financial Reporting Manager in Charge of Financial Reporting Dr. Ercüment GÜLER Mehmet URUÇ Member of the Board of Directors and Member of the Audit Committee Member of the Board of Directors and Member of the Audit Committee Responsible personnel for the questions that can be raised on the financial statements: Name-Surname/Title: Merve Yasemin GÜNEŞ / Assistant Manager in Charge of Budgeting and Financial Controlling Telephone Number : Fax Number :

171 Bank Asya 2011 Annual Report SECTION ONE: GENERAL INFORMATION I. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status 172 II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank s Risk Group 173 III. Explanations Regarding the Shares of the Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents 173 IV. Individuals and Institutions That Have Qualified Shares in the Bank 174 V. Summary Information on the Bank s Services and Activity Areas 174 SECTION TWO: THE CONSOLIDATED FINANCIAL STATEMENTS I. Consolidated Balance Sheet II. Consolidated Statement of Off-Balance Sheet Contingencies and Commitments 178 III. Consolidated Statement of Income 179 IV. Consolidated Statement of Income and Expense Accounted under Equity 180 V. Consolidated Statement of Changes in Shareholders Equity 181 VI. Consolidated Statement of Cash Flows 182 VII. Consolidated Statement of Profit Distribution 183 SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 184 II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions 184 III. Information about the Parent Bank and its Consolidated Subsidiaries 184 IV. Explanations on Forward and Option Contracts and Derivative Instruments 185 V. Explanations on Profit Share Income and Expenses 185 VI. Explanations on Fees and Commission Income and Expenses 185 VII. Explanations on Financial Assets 185 VIII. Explanations on Impairment of Financial Assets 187 IX. Explanations on Offsetting Financial Assets and Liabilities 187 X. Explanations on Sales and Repurchase Agreements and Lending of Securities 187 XI. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets 187 XII. Explanations on Goodwill and Other Intangible Assets 188 XIII. Explanations on Tangible Assets 188 XIV. Explanations on Leasing Transactions 188 XV. Explanations on Provisions and Contingent Liabilities 189 XVI. Explanations on Liabilities for Employee Benefits 189 XVII. Explanations on Taxation 189 XVIII. Additional Disclosures on Borrowing 190 XIX. Explanations on Issuance of Share Certificates 190 XX. Explanations on Avalized Drafts and Acceptances 190 XXI. Explanations on Government Incentives 190 XXII. Explanations on Segment Reporting 190 XXIII. Explanations on Other Matters 191 SECTION FOUR: INFORMATION ON THE CONSOLIDATED FINANCIAL STRUCTURE I. Explanations Related to the Consolidated Capital Adequacy Standard Ratio 192 II. Explanations Related to the Consolidated Credit Risk 195 III. Explanations Related to the Consolidated Market Risk 197 IV. Explanations Related to the Consolidated Operational Risk 198 V. Explanations Related to the Consolidated Currency Risk 198 VI. Explanations Related to the Consolidated Interest Rate Risk 200 VII. Explanations Related to the Consolidated Liquidity Risk 200 VIII. Explanations on Presentation of Financial Assets and Liabilities at Fair Value 203 IX. Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 203 SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE CONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Consolidated Assets 204 II. Explanations and Disclosures Related to the Consolidated Liabilities 221 III. Explanations and Disclosures Related to the Consolidated Off-Balance Sheet Contingencies and Commitments 227 IV. Explanations and Disclosures Related to the Consolidated Income Statement 231 V. Explanations and Disclosures Related to the Statements of Changes in Shareholders Equity 236 VI. Explanations and Disclosures Related to the Statements of Cash Flows 237 VII. Explanations on the Risk Group of the Parent Bank 238 VIII. Explanations on the Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 239 SECTION SIX: OTHER EXPLANATIONS I. Other Explanations on the Operations of the Parent Bank 239 SECTION SEVEN: INDEPENDENT AUDITORS REPORT I. Explanations on the Independent Auditors Report 239 II. Other Footnotes and Explanations Prepared by the Independent Auditors

172 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION ONE: GENERAL INFORMATION I. History of the Parent Bank Including Its Incorporation Date, Initial Legal Status and Amendments to the Initial Legal Status Incorporation of the Parent Bank is permitted with the decision of the Council of Ministers No: 96/8041 on April 11, 1996 as published in the Official Gazette dated April 25, The Parent Bank was registered on September 20, 1996 and the Articles of Association was published in the Trade Registry Gazette on September 25, The decision regarding the change in the title of the Bank was settled in the Extraordinary General Board of Directors meeting dated December 22, 2005 and the title was changed from Asya Finans Kurumu A.Ş. into Asya Katılım Bankası A.Ş. and it was published in the Trade Registry Gazette on December 26, Information on Consolidated Subsidiaries: Işık Sigorta A.Ş. Işık Sigorta A.Ş. ( the Company ) was established in 1995 in İstanbul and operates in various insurance and reinsurance sectors excluding life insurance. The Company is registered in Turkey, and it s headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: Ümraniye, İstanbul. The Company currently has 169 personnel as of December 31, Işık Sigorta A.Ş. currently has 4 regional management offices, 2 regional representation offices and (including the Bank branches) agencies. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Based on the announcement of the Capital Market Board dated August 13, 2009, it has been permitted transformation of the subsidiary of the Parent Bank Asyafin Turizm İnşaat San. A.Ş. into Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. with the decision dated March 27, 2009 and numbered 7/194. The transformation and registration have been completed as of September 30, 2009 and the Articles of Association has been published in the Trade Registry Gazette on October 8, The company s main operations are development of residential and saleable real estate and generation of rental revenue from its own real estate portfolio. The company is registered in Turkey, and its headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: Ümraniye, İstanbul. The company currently has 18 personnel as of December 31, Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. was established in 1997 in İstanbul and shows a variety of insurance and reinsurance activities. As of reporting date, the Company has no operation. The Company is registered in Turkey, and it s headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: Ümraniye, İstanbul. Asya Emeklilik ve Hayat A.Ş. Asya Emeklilik ve Hayat A.Ş. was established in 2011 and plans to operate private pension, life and casualty insurance areas. As of reporting date, the Company has not started its operations yet. The Company is registered in Turkey, and its headquarter is located in Saray Mah. Dr. Adnan Büyükdeniz Cad. No: Ümraniye, İstanbul. The company currently has 24 personnel as of December 31, Information on Consolidated Associate: Tamweel Africa Holding S.A. Tamweel Africa Holding S.A. (the Holding ) was established in June 9, % of it belongs to ICD, 40% of it belongs to Asya Katılım Bankası A.Ş. The Holding is registered in Senegal, and its headquarter is located in 66 rue Carnot, 5ème Etage Résidence Diouma Léna, Dakar. The Holding currently has 10 personnel as of December 31, 2011 and 4 banks operating in Senegal, Guinea, Niger and Mauritania. 172

173 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) II. Shareholder Structure, Shareholders Having Direct or Indirect, Joint or Individual Control Over the Management and Internal Audit of the Parent Bank, Changes in Shareholder Structure During the Current Period, if any and Information on the Bank s Risk Group The Parent Bank has no shareholders having more than 10% shareholding or direct or indirect, joint or individual control over the management of the Parent Bank. The Parent Bank is not included in any group. III. Explanations Regarding the Shares of the Parent Bank Owned by and Areas of Responsibility of the Chairman and the Members of Board of Directors, Audit Committee Members, Chief Executive Officer, Executive Vice Presidents Title Name Area of Responsibility Ownership Percentage Chairman of the Board of Directors Behçet AKYAR Chairman of the Board of Directors 0,0003 Member of the Board of Directors Salih SARIGÜL (*) Vice Chairman of the Board of Directors 0,2056 Ahmet ÇELİK (*) Member of the Board of Directors 0,4800 Tacettin NEGİŞ (**) (***) Member of the Board of Directors - İsmail Erol İŞBİLEN (***)(*******) Member of the Board of Directors and the Audit Committees - Hülagü ÖZCAN (***) (*******) Member of the Board of Directors and the Audit Committees - General Manager Abdullah ÇELİK Member of the Board and General Manager - Assistant General Managers Corporate/Commercial Loans, Small Banking, Top Management Office Headquarters, Business and - Product Development Coordination (****) Ali TUĞLU Information Technologies - Ali Fuat TAŞKESENLİOĞLU (*****) Corporate Credit Allocation II, - Erdal ERDEM (*****) Credit and Risk Monitoring, Construction and Real Estate Fahrettin SOYLU Banking Operations - Dr. Ercüment GÜLER (*******) Retail Sales Management, Retail Product Management, Card Payment Systems Marketing Management, Administrative Affairs, Alternative - Distribution Channels, Resource Development Ahmet BEYAZ Budgeting & Reporting, Accounting & Bank Affiliates, Purchasing, Corporate Communications - Zafer ERTAN Law, Credit and Risk Monitoring - Ahmet AKAR Corporate/Consumer Credit Allocation I, Project Financing - Feyzullah EĞRİBOYUN Treasury, Financial Institutions, Investor Relations, Human Resources and Education 0,0004 Auditors Ali AKBULUT (******) Auditor 0,0002 Atıf BİLGİN Auditor 0,2411 İrfan HACIOSMANOĞLU Auditor 0,7093 (*) Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations as of January 26, 2012 and Mr. Ali ÇELİK and Mr. Faruk İLK were appointed as the board members to fill their vacancies. (**) Bank Asya's Board member Mr. Tacettin NEGİŞ has announced his resignation as of February 2, 2012 and Mr. Mustafa Talat KATIRCIOĞLU was appointed as the board members to fill his vacancy. (***) Pay rate is not presented due to being below 0,001%. (****) Related departments operate under control of the Headquarter. (*****) Bank Asya's Executive Vice Presidents Mr. Ali Fuat TAŞKESENLİOĞLU and Mr. Erdal ERDEM have resigned as of January 6, (******)Bank Asya's Auditor Mr. Ali AKBULUT has announced his resignation. Mr. Mehmet GÖZÜTOK was appointed as the auditor. (*******) Bank Asya's Board members Mr. Ismail Erol ISBILEN and Mr. Hülagü ÖZCAN have announced their resignations, effective on March 12th Mr. Dr. Ercument GULER (Executive Vice President) and Mr. Mehmet URUÇ (Chief Legal Counsel) were appointed as the board members to fill their vacancies. 173

174 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) IV. Individuals and Institutions That Have Qualified Shares in the Parent Bank The Parent Bank s capital, amounting to TRY , consists of qualified shares, amounting to TRY and the holders of the A Group type shares are considered as qualified. The qualified shareholders are listed below. Name & Surname / Commercial Title Share Amount Share Amount Paid Shares Unpaid Shares ORTADOĞU TEKSTİL TİC. SAN. A.Ş , FORUM İNŞAAT DEKORASYON TURİZM SAN. VE TİC. A.Ş , ABDULKADİR KONUKOĞLU , BJ TEKSTİL TİCARET VE SANAYİ A.Ş , BİRİM BİRLEŞİK İNŞAATÇILIK MÜMESSİLLİK SAN. VE TİC. A.Ş , SERRA TURİZM LTD. ŞTİ , OSMAN CAN PEHLİVAN , NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş , HASAN SAYIN , İBRAHİM SAYIN , OTHER , Total , V. Summary Information on the Bank s Services and Activity Areas The Parent Bank operates in accordance with the principles of interest-free banking as a participation bank, by collecting funds through current accounts and profit sharing accounts, and lending such funds through production support, finance lease and profit/loss sharing partnership. The Parent Bank has two ways of collecting funds; current accounts and profit sharing accounts. The Parent Bank classifies current accounts and profit sharing accounts in accordance with their maturities in its accounting system. Profit sharing accounts are categorized into five different maturity groups; up to one month, up to three months (three months included), up to six months (six months included), up to one year and one year (one year included) and more than one year (one month, three months, six months and one year profit share payment). The Parent Bank could determine the participation rates on profit/loss sharing accounts with respect to the maturity group of TRY and foreign currency accounts, seperately under the limitation that the participation rate on loss shall not be less than 50%, for different currency type, amount and maturity groups specifically. The Parent Bank constitutes specific fund pools, allocated to the individually predetermined projects for financing purposes. Profit sharing accounts, which are part of the funds collected for project financing purpose, are distinguished from others with respect to the terms, accounted seperately from the others and it is not allowed to make any transfers from these accounts to any other maturity groups. Specific fund pools are clarified at the end of the financing period. The Parent Bank has no specific fund pools as of December 31, In addition to the regular banking activities, the Parent Bank operates as an agency on behalf of Işık Sigorta A.Ş. and intervenes stock purchase-sell transactions on behalf of Bizim Menkul Değerler A.Ş. through its branches. 174

175 Bank Asya 2011 Annual Report SECTION TWO THE CONSOLIDATED FINANCIAL STATEMENTS 175

176 Consolidated Financial Statements and Accompanying Notes CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ASSETS Note CURRENT PERIOD Audited (31/12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total I. CASH AND BALANCES WITH THE CENTRAL BANK (1) II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (Net) (2) Trading financial assets Public sector debt securities Share certificates Derivative financial assets held for trading Other marketable securities Financial assets at fair value through profit and loss Public sector debt securities Share certificates Loans Other marketable securities III. BANKS (3) IV. MONEY MARKET PLACEMENTS V. FINANCIAL ASSETS AVAILABLE FOR SALE (Net) (4) Share certificates Public sector debt securities Other marketable securities VI. LOANS AND RECEIVABLES (5) Loans and receivables Loans to risk group of the Bank Public sector debt securities Other Non-performing loans Specific provisions (-) ( ) (1.257) ( ) ( ) (1.087) ( ) VII. HELD TO MATURITY INVESTMENTS (Net) (6) VIII. INVESTMENTS IN ASSOCIATES (Net) (7) Accounted for under equity method Unconsolidated Financial associates Non-financial associates IX. INVESTMENTS IN SUBSIDIARIES (Net) (8) Unconsolidated financial subsidiaries Unconsolidated non-financial subsidiaries X. ENTITIES UNDER COMMON CONTROL (Net) (9) Consolidated under equity method Unconsolidated Financial subsidiaries Non-financial subsidiaries XI. FINANCE LEASE RECEIVABLES (10) Finance lease receivables Operating lease receivables Other Unearned income ( - ) (92.999) (1.679) (94.678) (13.548) (2.695) (16.243) XII. DERIVATIVE FINANCIAL ASSETS FOR HEDGING PURPOSES (11) Fair value hedge Cash flow hedge Hedge of net investment risks in foreign operations XIII. TANGIBLE ASSETS (Net) (12) XIV. INTANGIBLE ASSETS (Net) (13) Goodwill Other XV. INVESTMENT PROPERTY (Net) (14) XVI. TAX ASSET (15) Current tax asset Deferred tax asset XVII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) (16) Held for Sale Discontinued Operations XVIII. OTHER ASSETS (17) TOTAL ASSETS The accompanying notes are an integral part of these combined financial statements 176

177 Bank Asya 2011 Annual Report CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) LIABILITIES AND EQUITY Note CURRENT PERIOD Audited (31/12/2011) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2010) TRY FC Total TRY FC Total I. FUND COLLECTED (1) Fund from risk group of the Bank Other II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING (2) III. FUNDS BORROWED (3) IV. MONEY MARKET BALANCES V. MARKETABLE SECURITIES ISSUED (NET) VI. SUNDRY CREDITORS VII. OTHER LIABILITIES (4) VIII. FINANCE LEASE PAYABLES (5) Finance lease payables Operating lease payables Other Deferred finance lease expenses (-) IX. DERIVATIVE FINANCIAL LIABILITIES FOR HEDGING PURPOSES (6) Fair value hedge Cash flow hedge Hedge of net investment in foreign operations X. PROVISIONS (7) General loan loss provisions Restructuring provisions Reserve for employee benefits Insurance technical reserves (Net) Other provisions XI. TAX LIABILITY (8) Current tax liability Deferred tax liability XII. PAYABLES RELATED TO ASSETS HELD FOR SALE (Net) (9) Held for sale Discontinued operations XIII. SUBORDINATED LOANS (10) XIV. SHAREHOLDERS' EQUITY (11) Paid-in capital Capital reserves (6.017) - (6.017) Share premium Share cancellation profits Marketable securities revaluation reserve (13.599) - (13.599) Tangible assets revaluation reserve Intangible assets revaluation reserve Investment property revaluation reserve Bonus shares obtained from associates, subsidiaries and jointly controlled entities Hedging funds (Effective portion) Value increase on assets held for resale Other capital reserves Profit reserves Legal reserves Status reserves Extraordinary reserves Other profit reserves (670) - (670) 14.4 Profit or loss Prior year income / (losses) (7.483) - (7.483) (9.561) - (9.561) Current year income / (losses) Minority shares (12) TOTAL LIABILITIES AND EQUITY The accompanying notes are an integral part of these combined financial statements 177

178 Consolidated Financial Statements and Accompanying Notes STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS THOUSAND TURKISH LIRA Note CURRENT PERIOD Audited (31/12/2011) PRIOR PERIOD Audited (31/12/2010) TP YP Toplam TP YP Toplam A. OFF BALANCE SHEET COMMITMENTS AND CONTINGENCIES (I+II+III) I. GUARANTEES (1), (2) Letters of guarantees Guarantees subject to State Tender Law Guarantees given for foreign trade operations Other letters of guarantee Bank loans Import letter of acceptances Other bank acceptances Letter of credits Documentary letter of credits Other letter of credits Prefinancing given as guarantee Endorsements Endorsements to the Central Bank of Turkey Other endorsements Other guarantees Other collaterals II. COMMITMENTS (1) Irrevocable commitments Forward asset purchase commitments Share capital commitment to associates and subsidiaries Loan granting commitments Securities underwriting commitments Commitments for reserve deposit requirements Payment commitment for checks Tax and fund liabilities from export commitments Commitments for credit card expenditure limits Commitments for promotions related with credit cards and banking activities Receivables from short sale commitments Payables for short sale commitments Other irrevocable commitments Revocable commitments Revocable loan granting commitments Other revocable commitments III. DERIVATIVE FINANCIAL INSTRUMENTS (4) Derivative financial instruments for hedging purposes Fair value hedge Cash flow hedge Hedge of net investment in foreign operations Held for trading transactions Forward foreign currency buy/sell transactions Forward foreign currency transactions-buy Forward foreign currency transactions-sell Other Forward buy/sell transactions Other B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) IV. ITEMS HELD IN CUSTODY Assets under management Investment securities held in custody Checks received for collection Commercial notes received for collection Other assets received for collection Assets received for public offering Other items under custody Custodians V. PLEDGED ITEMS Marketable securities Guarantee notes Commodity Warranty Properties Other pledged items Pledged items-depository VI. ACCEPTED INDEPENDENT GUARANTEES AND WARRANTIES TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) The accompanying notes are an integral part of these combined financial statements 178

179 Bank Asya 2011 Annual Report CONSOLIDATED STATEMENT OF INCOME STATEMENT OF INCOME Note THOUSAND TURKISH LIRA CURRENT PERIOD Audited (01/01/ /12/2011) PRIOR PERIOD Audited (01/01/ /12/2010) I. PROFIT SHARE INCOME (1) Profit share on loans Profit share on reserve deposits Profit share on banks Profit share on money market placements Profit share on marketable securities portfolio Held-for-trading financial assets Financial assets at fair value through profit and loss Available-for-sale financial assets Investment-held for maturity Finance lease income Other profit share income II. PROFIT SHARE EXPENSE (2) ( ) ( ) 2.1 Expense on profit sharing accounts ( ) ( ) 2.2 Profit share expense on funds borrowed (43.161) (16.736) 2.3 Profit share expense on money market borrowings (14.340) Expense on securities issued Other profit share expense (199) (178) III. NET PROFIT SHARE INCOME (I - II) IV. NET FEES AND COMMISSIONS INCOME Fees and commisions received Non-cash loans Other (12) Fees and commisions paid (79.623) (69.464) Non-cash loans (12) (10) Other (12) (79.611) (69.454) V. DIVIDEND INCOME (3) VI. NET TRADING INCOME (4) Securities trading gains / (losses) (1.334) Profit on derivative financial instruments gains / (losses) Foreign exchange gains / (losses) (23.419) VII. OTHER OPERATING INCOME (5) VIII. NET OPERATING INCOME (III+IV+V+VI+VII) IX. PROVISION FOR LOAN LOSSES AND OTHER RECEIVABLES (-) (6) ( ) ( ) X. OTHER OPERATING EXPENSES (-) (7) ( ) ( ) XI. NET OPERATING INCOME/(LOSS) (VIII-IX-X) XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - XIII. GAIN / (LOSS) ON EQUITY METHOD XIV. GAIN / (LOSS) ON NET MONETARY POSITION - - XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+ +XIV) (8) XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (54.515) (65.126) 16.1 Provision for current income taxes (60.625) (70.887) 16.2 Provision for deferred taxes XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) XVIII. INCOME ON DISCONTINUED OPERATIONS Income on assets held for sale Income on sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) Income on other discontinued operations - - XIX. LOSS FROM DISCONTINUED OPERATIONS (-) Loss from assets held for sale Loss on sale of associates, subsidiaries and jointly controlled entities (Joint vent.) Loss from other discontinued operations - - XX. PROFIT / (LOSS) ON DISCONTINUED OPERATIONS BEFORE TAXES (XVIII-XIX) - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) Provision for current income taxes Provision for deferred taxes - - XXII. NET PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - - XXIII. NET PROFIT/LOSS (XVII+XXII) (11) Group s profit/loss Minority shares Earnings per share 0,25 0,29 The accompanying notes are an integral part of these combined financial statements 179

180 Consolidated Financial Statements and Accompanying Notes STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY THOUSAND TURKISH LIRA STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY CURRENT PERIOD Audited (01/01/ /12/2011)) PRIOR PERIOD Audited (01/01/ /12/2010) I. Additions to marketable securities revaluation differences for available for sale financial assets (25.414) II. Tangible assets revaluation differences - - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions (670) V. VI. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) Profit/Loss from derivative financial instruments for hedge of net investment in foreign operations (Effective portion of fair value differences) VII. The effect of corrections of errors and changes in accounting policies - - VIII. Other profit loss items accounted under equity due to TAS - - IX. Deferred tax of valuation differences (953) X. Total Net Profit/Loss accounted under equity (I+II+ +IX) (14.129) XI. Profit/Loss Change in fair value of marketable securities (Transfer to Profit/Loss) Reclassification and transfer of derivatives accounted for cash flow hedge purposes to Income Statement Transfer of hedge of net investments in foreign operations to Income Statement Other - - XII. Total Profit/Loss accounted for the period (X±XI) (14.129) The accompanying notes are an integral part of these combined financial statements 180

181 Bank Asya 2011 Annual Report CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER S EQUITY STATEMENT OF CHANGES OF SHAREHOLDER'S EQUITY Note Paid-in Capital Inflation Adjustment to Paid-in Capital Share Premium Share Certificate Cancellation Profits Legal Reserves Statutory Reserves Extraordinary Reserve Other Reserve Current Period Net Income / (Expense) Prior Period Net Income / (Expense) Marketable Securities Revaluation Reserve Tangible and Intangible Assets Revaulation Differences Bonus Shares Obtained from Subsidiaries Hedging Funds Valuation Diff. from Assets Held for Sale and from Disc. Op. Total Equity Excluding Noncontrolling Interest Noncontrolling Interest Total Equity PRIOR PERIOD Audited (01/01-31/12/2010) I. Prior Period Balance II. Corrections according to TAS The effect of corrections of errrors The effects of changes in accounting policy III. New Balance (I+II) Changes in period IV. Increase/Decrease related to merger V. Marketable securities revaluation differences VI. Hedging Funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations VII. Tangible assets revaluation differences VIII. Intangible assets revaluation differences IX. Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) X. Foreign exchange differences (670) (670) - (670) XI. The disposal of assets XII. The reclassification of assets XIII. The effect of change in associate s equity XIV. Capital increase Cash Internal sources XV. Share premium XVI. Share cancellation profits XVII. Inflation adjustment to paid-in capital XVIII. Other XIX. Period net income/(loss) XX. Profit distribution ( ) (30.000) - (30.000) 20.1 Dividends distributed (30.000) (30.000) - (30.000) 20.2 Transfers to reserves ( ) Other Closing Balance (III+-...+XVI+XVII+XVIII) (670) (9.561) CURRENT PERIOD Audited (01/01-31/12/2011) I. Prior Period Balance (670) Changes in period II. Increase/Decrease related to merger III. Marketable securities revaluation differences (20.331) (20.331) - (20.331) IV. Hedging Funds (Effective Portion) Cash-flow hedge Hedge of net investment in foreign operations V. Tangible assets revaluation differences VI. Intangible assets revaluation differences VII. Bonus shares obtained from associates, subsidiaries and jointly controlled entities (Joint vent.) VIII. Foreign exchange differences IX. The disposal of assets X. The reclassification of assets XI. The effect of change in associate s equity XII. Capital increase Cash Internal sources XIII. Share premium XIV. Share cancellation profits XV. Inflation adjustment to paid-in capital XVI. Other XVII. Period net income/(loss) XVIII. Profit distribution ( ) Dividends distributed Transfers to reserves ( ) Other Closing Balance (I+II+III+-...+XVI+XVII+XVIII) (7.483) (13.599)

182 Consolidated Financial Statements and Accompanying Notes CONSOLIDATED STATEMENT OF CASH FLOWS THOUSAND TURKISH LIRA A. CASH FLOWS FROM BANKING OPERATIONS Note CURRENT PERIOD Audited (01/01-31/12/2011) PRIOR PERIOD Audited (01/01-31/12/2010) 1.1 Operating profit before changes in operating assets and liabilities Profit share income received Profit share expense paid ( ) ( ) Dividend received Fees and commissions received Other income Collections from previously written off loans Payments to personnel and service suppliers ( ) ( ) Taxes paid (84.318) (90.912) Others ( ) ( ) 1.2 Changes in operating assets and liabilities Net (increase) decrease in financial assets (3.588) Net (increase) decrease in financial assets at fair value through profit or loss Net (increase) decrease in due from banks and other financial institutions Net (increase) decrease in loans ( ) ( ) Net (increase) decrease in other assets (7.124) Net increase (decrease) in bank deposits Net increase (decrease) in other deposits Net increase (decrease) in funds borrowed Net increase (decrease) in due payables Net increase (decrease) in other liabilities I. Net cash provided from banking operations B. CASH FLOWS FROM INVESTING ACTIVITIES II. Net cash provided from investing activities ( ) ( ) 2.1 Cash paid for purchase of entities under common control, associates and subsidiaries (I.7-I.8) (10.317) (68.555) 2.2 Cash obtained from sale of entities under common control, associates and subsidiaries (I.7-I.8) Fixed assets purchases (I.12) (32.924) (48.591) 2.4 Fixed assets sales (I.12) Cash paid for purchase of financial assets available for sale ( ) ( ) 2.6 Cash obtained from sale of financial assets available for sale Cash paid for purchase of investment securities - (50.000) 2.8 Cash obtained from sale of investment securities Other (I.13) (5.397) (3.476) C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net cash provided from financing activities - (27.285) 3.1 Cash obtained from funds borrowed and securities issued Cash used for repayment of funds borrowed and securities issued Capital increase Dividends paid - (30.000) 3.5 Payments for finance leases Other - - IV. Effect of change in foreign exchange rate on cash and cash equivalents V. Net increase in cash and cash equivalents VI. Cash and cash equivalents at the beginning of the year (1) VII. Cash and cash equivalents at the end of the year (1) The accompanying notes are an integral part of these combined financial statements 182

183 Bank Asya 2011 Annual Report CONSOLİDATED PROFIT DISTRIBUTION TABLE I. DISTRIBUTION OF CURRENT PERIOD PROFIT THOUSAND TURKISH LIRA CURRENT PERIOD Audited (01/01/ /12/2011) PRIOR PERIOD Audited (01/01/ /12/2010) 1.1 CURRENT PERIOD PROFIT TAXES AND DUES PAYABLE (-) Corporate Tax (Income Tax) Withholding Tax Other taxes and dues - - A. NET PERIOD PROFIT ( ) PRIOR YEAR'S LOSSES (-) FIRST LEGAL RESERVES (-) OTHER STATUTORY RESERVES (-) - - B. DISTRIBUTABLE NET PERIOD PROFIT [(A-( )] FIRST DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Stocks To Owners of Preferred Stocks (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates DIVIDEND TO PERSONNEL (-) DIVIDEND TO BOARD OF DIRECTORS (-) SECOND DIVIDEND TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Stocks To Owners of Preferred Stocks (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates SECOND LEGAL RESERVE (-) STATUS RESERVES (-) EXTRAORDINARY RESERVES OTHER RESERVES SPECIAL FUNDS - - II. DISTRIBUTION FROM RESERVES 2.1 DISTRIBUTED RESERVES SECOND LEGAL RESERVES (-) SHARE TO SHAREHOLDERS (-) To Owners of Ordinary Shares To Owners of Preferred Stocks To Owners of Preferred Stocks (Preemptive Rights) To Profit Sharing Bonds To Owners of the profit /loss Sharing Certificates SHARE TO PERSONNEL (-) SHARE TO BOARD OF DIRECTORS (-) - - III. EARNINGS PER SHARE 3.1 TO OWNERS OF STOCKS TO OWNERS OF STOCKS ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) - - IV. DIVIDEND PER SHARE TO OWNERS OF STOCKS TO OWNERS OF STOCKS ( % ) TO OWNERS OF PREFERRED STOCKS TO OWNERS OF PREFERRED STOCKS ( % ) - - (*) Based on the prevailing regulations in Turkey, profit distribution is not made on the consolidated income. The accompanying notes are an integral part of these combined financial statements 183

184 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION THREE: ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 1. Presentation of Financial Statements The Parent Bank prepares its financial statements and notes in accordance with the Communiqué on Banks Accounting Practice and Maintaining Documents published in the Official Gazette No: dated November 1, 2006, Turkish Accounting Standards ( TAS ), Turkish Financial Reporting Standards ( TFRS ), other communiqués, pronouncements and explanations about accounting and financial reporting issued by the Banking Regulation and Supervision Agency ( BRSA ), Turkish Commercial Code and the Tax Legislation. The Parent Bank prepares financial statements by applying accounting policies and basis of accounting in accordance with the Turkish Accounting Standards ( TAS ) and related communiqués, pronouncements and explanations issued by the Banking Regulation and Supervision Agency ( BRSA ). The related accounting policies and basis of accounting are explained below. The prior year financial statements are presented in line with the principles of TAS No:1 Fundamentals of Preparing and Presenting Financial Statements published in the Official Gazette on January 16, 2005 with No:25702, and in accordance with Turkish Accounting Standards and Turkish Financial Reporting Standards; and other principles, methods and explanations about accounting and financial reporting issued by the BRSA. Certain reclassifications have been made to the prior year financial statements to comply with the current year presentation. The accompanying financial statements are prepared in accordance with historical cost basis except for financial assets at fair value through profit or loss and financial assets available for sale that are presented on fair value basis. 2. Basis of Accounting The accompanying consolidated financial statements are based on the Group s legal records. The Group has recorded the adjustments and reclassifications of inflation accounting to its legal books beginning from June 30, 2004 to December 31, 2004 in accordance with Act No: 5024 of the Tax Procedural Code. As of December 31, 2003 the consolidated financial statements are prepared in accordance with the legal books and historical cost principle except for the revaluation of fixed assets and includes adjustments and reclassifications, including restatement for the changes in the general purchasing power of the Turkish Lira in accordance with International Accounting Standard No: 29 Financial Reporting in Hyperinflationary Economies ( TAS 29 ) before December 31, 2004 for the purpose of fair presentation. II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions The Group manages its financial instrument strategies depending on the financing sources. The sources mainly constitute of the current and profit sharing accounts. As of the balance sheet date, the Group s assets and equity structure are sufficient to cover its liabilities. The Group uses 21% of the funds collected in liquid instruments (December 31, 2010: 23%). The Group does not carry a significant foreign currency position risk due to the existing floating exchange rate regime. The investment decisions are made by taking into consideration of the maturity structure of the balance sheet items. The allocation of asset items are designated, and yield analysis are made based on this designation. In the statutory books of the Group, the transactions recorded in foreign currencies (all other currencies except Turkish Lira) are translated into the Turkish Lira at the exchange rates prevailing at the transaction dates. Monetary asset and liabilities denominated in foreign currencies are translated into the Turkish Lira at the year end exchange rates. Foreign exchange gains or losses arising from the translation of monetary items and foreign currency denominated collections or disbursements are recognized in the income statement. III. Information on Consolidated Subsidiaries and Associates Asya Katılım Bankası A.Ş. and its subsidiaries Işık Sigorta A.Ş., Tuna Gayrimenkul Yatırım Ortaklığı A.Ş., Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti and Asya Emeklilik ve Hayat A.Ş. are consolidated by line consolidation method in the accompanying consolidated financial statements and its associate Tamweel Africa Holding S.A. is consolidated by using equity method. Entities that are consolidated are assessed based on the communiqué on Regulations Regarding Banks Consolidated Financial Statements published on Official Gazette numbered dated November 8, The Parent Bank and the consolidated subsidiaries and associate are referred to as Group. When there are differences between the accounting policies of the subsidiaries and associate with the Parent Bank, the financial statements are adjusted in accordance with the principle of materiality. 184

185 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. has consolidated for the first time based on the change of the communiqué on Regulations Regarding Banks Consolidated Financial Statements published on Official Gazette numbered dated January 23, Associate, Tamweel Africa Holding S.A. prepares in accordance with the International Financial Accounting Standards. The Group has used to equity method for the first time in 2010 due to purchase of 40% of Tamweel Africa Holding S.A. s share. Asya Emeklilik ve Hayat A.Ş. was established in July 01, 2011 and has been consolidated for the first time in September 30, Based on the announcement of the Capital Market Board dated August 13, 2009, it has been permitted transformation of the subsidiary of the Parent Bank Asyafin Turizm İnşaat San. A.Ş. into Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. with the decision dated March 27, 2009 and numbered 7/194. The transformation and registration have been completed as of September 30, 2009 and the Articles of Association has been published in the Trade Registry Gazette on October 8, IV. Explanations on Forward and Option Contracts and Derivative Instruments In determination of fair value of forward and swap transactions, forward rates discounted to the balance sheet date by prevailing rates are compared with the expected discounted forward rates at maturity calculated based on the prevailing profit shares as of the balance sheet date and arising foreign exchange differences are recognized in the income statement. Although some of the derivative transactions provide economic hedging in accordance with TAS 39 Financial Instruments: Recognition and Measurement since all necessary conditions for hedge accounting have not been met yet, the Parent Bank classifies these transactions as held for trading therefore changes in the fair value of derivative financial instruments are recognized in profit or loss as they arise. V. Explanations on Profit Share Income and Expenses Profit share income and expenses are recognized in the income statement on an accrual basis. Realized and unrealized profit share accruals of the non-performing loans are reversed and profit share income in connection with these loans is recorded as profit share income only when they are collected. VI. Explanations on Fees and Commission Income and Expenses Banking service revenues are recognized as income only when they are collected while only the current portion of the prepaid commission income obtained from loans is recorded as income based on the periodicity principle. Fees and commissions for funds borrowed paid to other financial institutions, as part of the transaction costs, are recorded as prepaid expenses and are recognized as expense on the relevant periods. VII. Explanations on Financial Assets Financial instruments comprise of financial assets, financial liabilities and derivative instruments. Financial assets and financial liabilities are recognized on the Group s consolidated balance sheet when the Group becomes a party to the contractual provisions of the instrument. Basically, financial assets form majority of the commercial activities and operations of the Group. Financial instruments expose, change or reduce the liquidity and credit risks of the Group s financial statements. Fair value is the amount for which an asset could be exchanged or a liability settled, between knowledgeable willing parties in an arm s length transaction. Fair value is best evidenced by a market price, being the amount obtainable from the sale or payable on the acquisition, of a financial instrument in an active market, if one exists. Estimated fair values of financial assets are determined by the Group by using the information about the market and relevant valuation methods. However, interpretation of market information is necessary to determine fair value. Therefore, estimated fair values presented in this report may not be necessarily equivalent of the disposal values of such assets derived from current market conditions. Some carrying values of the financial instruments (which are same with their cost values) are assumed to be equal to their fair values because of their short term nature. The methods and assumptions used in determining the reasonable estimated values of all financial instruments are mentioned below: Cash, Banks, and Other Financial Institutions: Cash and cash equivalents comprise of cash on hand, demand deposits, and highly liquid short-term investments not bearing risk of significant value change, and that are readily convertible to a known amount of cash. The book value of these financial assets approximate to their fair value. 185

186 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Financial Assets at Fair Value through Profit and Loss: Marketable securities at fair value through profit or loss are classified in two categories; i) marketable securities classified as trading securities: acquired or incurred principally for the purpose of selling or repurchasing it in the near term in order to benefit from short-term profit opportunities; ii) marketable securities classified as marketable securities at fair value through profit or loss at initial recognition. The Parent Bank uses the above-mentioned classification when permitted, or for the purposes of providing a more appropriate presentation. In this group, trading securities are initially recognized at cost and measured at fair value on the financial statements. Fair value of debt securities traded in an active market is determined based on the quoted prices or current market prices. The difference between initial cost and fair value of financial assets at fair value through profit and loss is reflected to profit share income or diminution in value of marketable securities accounts. Profit share income from financial assets at fair value through profit and loss is reflected in profit share income. As of December 31, 2011, the Group has TRY Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2010: TRY Thousand). Held to Maturity Investments: Investments held to maturity include securities with fixed or determinable payments and fixed maturity when there is an intention of holding till maturity and the relevant conditions for fulfillment of such intention, including the funding ability. This portfolio excludes loans and receivables. Subsequent to initial recognition, held to maturity investments are measured at amortized cost by using the effective interest rate less impairment losses, if any. The Group has no financial assets acquired and classified as held to maturity investments that cannot be subject to such classification for two years because of the nonperformance of tainting rules. The profit share income received from held to maturity investments is recorded as profit share income in the income statement. As of December 31, 2011, the Group has TRY Thousand of held to maturity investments (December 31, 2010: TRY Thousand). Financial Assets Available for Sale: Financial assets available for sale are initially recognized at cost including the transaction costs. After initial recognition, available for sale securities are measured at fair value and unrealized gains/losses originating from the difference between the amortized cost and the fair value are recorded in Marketable Securities Value Increase Fund under equity. At the disposal of available for sale financial assets, value increase/decrease recorded in Marketable Securities Value Increase Fund under equity is transferred to the income statement. Equity instruments classified as available for sale are accounted at cost less impairment, if any. As of December 31, 2011, the Group has TRY Thousand of financial assets available for sale (December 31, 2010: TRY Thousand). Loans and Receivables: Loans and receivables are recognized at amortized cost. Fees, transaction costs and other similar costs in connection with the guarantees of loans and receivables are not considered as part of the transaction cost and recognized in the income statement. Loans are transferred to the relevant accounts in cash amounts and income accruals are calculated by using the internal rate of return method and the related income is recorded in the profit share income item. Foreign currency and foreign currency indexed loans are evaluated and evaluation differences are accounted under Foreign Exchange Gains and/or Foreign Exchange Losses in the income statement. The classification and provisioning of doubtful loans/receivables are appropriately accounted for in accordance with the prevailing regulations, and specific provisions allocated are recognized in the income statement for the period. Collections made from such loans are recognized under the Non-performing loans (including receivables from the doubtful receivables) account and Profit share income received from Uncollectible Loans and Other Receivables account. Released provisions are accounted as a cancellation of such provisions if realized in the current year, and the remaining amounts are recognized in the account of collections from the prior year expenses. In addition to specific loan loss provisions, general loan loss provision are recognized within the framework of the regulation on Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves published in the Official Gazette No dated 1 November Except for specific provisions, the Bank allocates general reserve in accordance with Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions 186

187 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VIII. Explanations on Impairment of Financial Assets At each balance sheet date, the Group evaluates the carrying amounts of its financial asset or a group of financial assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If such an indication exists, the Group determines the related impairment. A financial asset or a financial asset group incurs impairment loss only if there is an objective indicator related to the occurrence (loss/ damage event) of one or more than one event (or occurrence) subsequent to initial recognition of that asset; and such loss event causes an impairment loss as a result of the effect on the reliable estimate of the expected future cash flows of the related financial asset and asset group. Any amounts attributable to expected losses arising from any future events is not recognized under no circumstances. Companies that are required to prepare separate financial statements under the statutory requirements in accordance with TAS 27 Consolidated and Separate Financial Statements can represent their subsidiaries or associates either at cost or the requirements set out in IAS 39, Financial Instruments: Recognition and Measurement. In this case, the Parent Bank chooses to use the first method and presents the subsidiaries, jointly controlled entities and associates at cost less impairment loss, if any. IX. Explanations on Offsetting Financial Assets and Liabilities Financial assets and liabilities are offset when the Group has a legally enforceable right to set off, and when the Group has the intention of collecting or paying the net amount of related assets and liabilities or when the Group has the right to offset the assets and liabilities simultaneously. X. Explanations on Sales and Repurchase Agreements and Lending of Securities The Group does not have any repurchase agreements or lending of securities. XI. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets The principles on accounting, assessment and disposal of assets held for sale are determined based on the Communiqué of Principles and Procedures on Bank s Disposal of Precious Metals and Assets Held for Sale published on November 1, 2006 in the Official Gazette numbered Although the Parent Bank has assets held for sale in the balance sheet, due to the fact that the Parent Bank does not have a formal plan to dispose of these assets in one year subsequent to their classification date, such assets are continued to be depreciated. For this reason, these assets are classified as tangible assets instead of assets held for sale in the accompanying financial statements. Assets held for sale are measured at the lower of the carrying amount of assets and fair value less any cost incurred for disposal. Assets held for sale are not amortized and presented in the financial statements separately. An asset is classified as held for sale, only when the sale is highly probable and the asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale. Highly saleable condition requires a plan by the management regarding the sale of the asset to be disposed of (or else the group of assets), together with an active program for the determination of buyers as well as for the completion of the plan. Also the asset (or else the group of assets) shall be actively marketed in conformity with its fair value. On the other hand, the sale is expected to be recognized as a completed sale within one year after the classification date; and the necessary transactions and procedures to complete the plan should demonstrate the fact that there is remote possibility of making any significant changes or cancellation of the plan. Various events and conditions may extend the completion period of the disposal more than a year. If such delay arises from any events and conditions beyond the control of the entity and there is sufficient evidence that the entity has an ongoing disposal plan for these assets, such assets (or else group of assets) are continued to be classified as assets held for sale (or else group of assets). As of December 31, 2011, assets held for sale amounts to TRY Thousand (December 31, 2010: TRY Thousand). A discontinued operation is a division of a bank that is either disposed of or held for sale. Results of discontinued operations are included in the income statement separately. The Group does not have any discontinued operations. 187

188 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) XII. Explanations on Goodwill and Other Intangible Assets Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognized at the date of acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to each of the Group s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Intangible assets acquired prior to January 1, 2005 are accounted for at restated cost less accumulated depreciation and any impairment loss, and the intangible assets acquired in subsequent periods are accounted for at acquisition cost less accumulated depreciation and any impairment loss if any, for those acquired prior to January 1, Intangible assets are amortized by using the straight line method considering their useful lives. Amortization method is reviewed at the end of each year periodically. Intangible assets mainly constitute of rights and amortized using the straight line method in 5 years. As of December 31, 2011, goodwill amounts to TRY Thousand (December 31, 2010: TRY Thousand). XIII. Explanations on Tangible Assets Prior to January 1, 2005, tangible assets are accounted for at acquisition cost plus any other direct costs incurred to bring the asset for ready to use. Tangible assets are measured at their acquisition cost less accumulated depreciation and impairment loss, if any. Depreciation of assets held less than one year as of the balance sheet date is accounted for proportionately. If the fair value of tangible assets under their carrying value, impairment loss is allocated for exceeding amounts and these amounts are recognized as impairment in the financial statements. Gains or losses resulting from disposals of tangible assets are recognized in the income statement. Maintenance costs of the tangible assets are recognized in the income statement as an expense. There are no pledges, mortgages or other restrictions on tangible assets. Tangible Asset Safety Boxes Office Equipment Furniture and Fixtures Vehicles Leasehold Improvements Buildings Useful Life 5 years 5 years 5 years 5 years 5 years 50 years XIV. Explanations on Leasing Transactions Group as a Lessor: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the amount of the Group s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group s net investment outstanding in respect of the leases. 188

189 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Group as a Lessee: Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets held under finance leases are recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group s general policy on borrowing costs. As of December 31, 2011, the Group, as a lessee, has operating leases for vehicles, general management and branches in addition to its assets through financial lease. XV. Explanations on Provisions and Contingent Liabilities Provisions are recognized when there is a present obligation, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; a reliable estimate can be made of the amount of the obligation. Contingent liabilities are continuously reviewed in order to determine whether there is any possibility of cash flow with regards to the sources having economic benefit for the Group. XVI. Explanations on Liabilities for Employee Benefits Under the existing Turkish law and union agreements, severance indemnity payment is required for employees retired or fired except resignations. The severance indemnity pay provision recognized represents the present value of the defined benefit obligation as adjusted for unrecognized gains and losses in accordance with TAS 19 Employee Benefits. The defined obligation is determined by independent actuaries. The main actuarial assumptions used in the calculation of severance indemnity pay provision are as follows: December 31, 2011 (*) December 31, 2010 Discount Rate 9,2% - 11,55% 10% Inflation Rate 4,5% - 8,75% 5,1% (*) According to employees retirement dates, different rates have been used in the range of rates given in the table above. TRY (TRY full amount) salary ceiling, which was effective December 31(December 31, 2010: TRY full amount), 2011 was taken into account in the current year calculations. It is assumed that the amount of the salary ceiling will increase each year in line with the inflation rate. The age of retirement is considered as the earliest age possible that an individual can retire and CSO 1980 female/male mortality table is used for the mortality rate. XVII. Explanations on Taxation Tax expense is comprises of current tax and deferred tax expenses. Current tax payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. According to the Article 32 of the Corporate Tax Law No: 5520, announced in the Official Gazette dated June 21, 2006, the corporate tax rate is 20%. Deferred tax asset or liability is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized and recognized in the income statement. If deferred tax is in connection with the assets directly associated with the equity, it shall be directly associated with shareholders equity items. 189

190 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Taxes payables and prepaid taxes are offset since they are levied by the same taxation authority. Deferred tax assets and liabilities are also offset. The Group has adjusted its statutory financial statements based on inflation accounting as of January 1, 2004 in accordance with Law No: The revenue earned from real estate investment activities of the Group s subsidiary (Tuna Gayrimenkul Yatırım Ortaklığı A.Ş.) which has acquired the status of the real estate investment trust, is exempt from Corporate Tax according to Article 5/(1) (d) (4) of the Corporate Tax Law No: XVIII. Additional Explanations on Borrowings Borrowings are recognized in accordance with TAS 39 Financial Instruments: Recognition and Measurement. No specific hedging technique is applied for borrowings, their accounting and valuation methods excluding some general methods applied for avoiding any liquidity and currency risks. There are no debt securities or convertible bonds issued by the Group. XIX. Explanations on Issuance of Share Certificates As of December 31, 2011 there are no exported share certificates of the Group. XX. Explanations on Acceptances Acceptances are realized simultaneously with the payment dates of the customers and they are presented as probable commitments in the off-balance sheet accounts. XXI. Explanations on Government Incentives As of the balance sheet date, there are no government incentives used by the Group. XXII. Explanations on Segment Reporting The Parent Bank operates in corporate, commercial and retail banking areas in line with its mission by means of profit/loss sharing methodology Current Period Retail Corporate and Commercial Treasury Undistributed Elimination Total Total Assets ( ) Total Liabilities ( ) Net Profit Share Income / (Expense) (*) ( ) (109) Net Fees and Commissions Income/ (Expense) (5.648) Other Operating Income / (Expense) (9.101) (17.078) ( ) - ( ) Gain from Investments in Associates Accounted for under Equity Method Profit Before Tax ( ) ( ) Tax Provision (54.515) - (54.515) Net Profit for the Period ( ) ( ) Minority Share 326 Group Share (*) The allocation of retail, corporate and commercial banking segments of the Parent Bank above is the result of differentiation in fund collection and allocation procedures of the participation banks. 190

191 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Prior Period Retail Corporate and Commercial Treasury Undistributed Elimination Total Total Assets ( ) Total Liabilities ( ) Net Profit Share Income / (Expense) (*) ( ) Net Fees and Commissions Income/ (Expense) (1.408) (919) Other Operating Income / (Expense) (7.194) (16.476) ( ) - ( ) Gain from Investments in Associates Accounted for under Equity Method Profit Before Tax ( ) ( ) Tax Provision (65.126) - (65.126) Net Profit for the Period ( ) ( ) Minority Share Group Share (*) The allocation of retail, corporate and commercial banking segments of the Parent Bank above is the result of differentiation in fund collection and allocation procedures of the participation banks. XXIII. Explanations on Other Matters There are no explanations on other matters. 191

192 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION FOUR: INFORMATION ON THE CONSOLIDATED FINANCIAL STRUCTURE I. Explanations Related to the Consolidated Capital Adequacy Standard Ratio The capital adequacy ratio of the Group based on the consolidated financial statements is 13,48% (December 31, 2010: 13,46%). Capital Adequacy Standard Ratio is calculated in accordance with the Communiqué on Measurement and Assessment of Capital Adequacy of Banks, which was published on November 1, 2006 in the Official Gazette numbered The calculation of Capital Adequacy Ratio includes the methods used in determining the Capital Adequacy Ratio, determination of risk weighted assets and non-cash loans in line with the relevant banking regulation and measuring the market risk and operational risk ratio in line with the same regulation. Risk Weights Risk Weights Consolidated Parent Bank Amount Subject to Credit Risk 0% 10% 20% 50% 100% 150% 200% 0% 10% 20% 50% 100% 150% 200% Balance Sheet Items (Net) Cash and Cash Equivalents Matured Marketable Securities Due From Central Bank of Turkey Due From Domestic Banks, Foreign Banks, Branches and Head Office Abroad Interbank Money Market Placements Receivables From Reverse Repo Transactions Reserve Deposits Loans Non-Performing Loans (Net) Financial Lease Receivables Available-for-Sale Financial Assets Held to Maturity Investments Receivables From Installment Sales of Assets Sundry Debtors Accrued Profit Share and Income Accruals Subsidiaries, Associates and Entities Under Common Control (Net) Tangible Assets Other Assets Off-Balance Sheet Items Guarantees and Commitments Derivative Financial Instruments Non Risk Weighted Accounts Total Risk Weighted Assets

193 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Summary Information Related to Capital Adequacy Standard Ratio: Consolidated Parent Bank Current Period Prior Period Current Period Prior Period Total Risk Weighted Assets (TRWA) Amount Subject to Market Risk (ASMR) Amount Subject to Operational Risk (ASOR) (*) Shareholders Equity Shareholders Equity / (TRWA + ASMR + ASOR) *100 13,48 13,46 13,31 13,33 (*) The amount subject to operational risk is in accordance with the Regulation Regarding Measurement and Evaluation of the Bank s Capital Adequacy Ratio published in the Official Gazette No: dated November 1, 2006 which is effective from June 1, Operational risk is calculated by using the Basic Indicator Approach. Information Related to Consolidated Components of Shareholders Equity: CORE CAPITAL Consolidated Parent Bank Current Period Prior Period Current Period Prior Period Paid-in Capital (*) Nominal Capital Capital Commitments (-) Paid-in Capital Indexation Difference Share Premium Share Cancellations Profits Legal Reserves First Legal Reserve (Turkish Commercial Code 466/1) Second Legal Reserve (Turkish Commercial Code 466/2) Other Legal Reserve Per Special Legislation Status Reserves Other Profit Reserves (670) - - Extraordinary Reserves Reserves Allocated by the General Assembly Retained Earnings Accumulated Losses Foreign Currency Share Capital Exchange Difference Inflationary Adjustment to Legal Reserve, Status Reserves and Extraordinary Reserves Profit Net Profit for the Period Prior Years Profits Provision for Possible Losses up to 25% of the Core Capital Gains on Sale of Associates and Subsidiaries and Properties to be Added to Capital Primary Subordinated Loans up to 15% of the Core Capital Minority Interest Losses that cannot be Covered by Reserves (-) Net Loss for the Period Prior Years Losses Leasehold Improvements (-) Prepaid Expenses (-) (**) Intangible Assets (-) Deferred Tax Asset Exceeding 10% of the Core Capital (-) Excess Amount in Clause 3, Article 56 of the Banking Law (-) Consolidated Goodwill (Net) (-) TOTAL CORE CAPITAL (*) The Bank has purchased units of its own pledged shares at TRY Thousand as a result of sale in accordance with Turkish Commercial Code article 329/2.The effect of purchase has been considered as deduction from the paid-in capital item in the capital adequacy table. (**) Prepaid expenses are not deducted from the core capital according to the Article 1 of the Regulation for amending the Regulation on Equities of Banks published in the Official Gazette No: dated March 10,

194 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SUPPLEMENTARY CAPITAL Consolidated Parent Bank Current Period Prior Period Current Period Prior Period General Loan Loss Reserves % of The Revaluation Reserve for Movable Fixed Assets % of The of Revaluation Reserve for Properties Bonus Shares Obtained From Associates, Subsidiaries and Entities Under Common Control Primary Subordinated Loans Excluded in the Calculation of the Core Capital Secondary Subordinated Loans % of The Marketable Securities Value Increase Fund (13.599) (13.599) Associates and Subsidiaries Available for Sale Financial Assets (13.599) (13.599) Indexation Differences for Capital Reserves, Profit Reserves and Retained Earnings (Except Indexation Differences for Legal Reserves, Statutory Reserves and Extraordinary Reserves) Minority Interest TOTAL SUPPLEMENTARY CAPITAL TIER III CAPITAL CAPITAL DEDUCTIONS FROM THE CAPITAL Consolidated Investments in Banks and Financial Institutions Secondary Subordinated Loans and Primary or Secondary Subordinated Debt Placements Granted to Banks and Financial Institutions (Domestic, Foreign) or Qualified Shareholders Shareholdings in the Banks and Financial Institutions which are Accounted for Under the Equity Pick up Method but the Assets and Liabilities are not Consolidated Loans Granted not in Compliance with Articles 50 and 51 of the Banking Law The Net Book Value of the Bank s Real Estates in Excess of 50% of the Equity and in accordance with Article 57 of the Act, Net Book Value of Real Estates and Commodities Acquired in Exchange of Loans and Receivables that should be Disposed of However; have not been Disposed of Although It has been 5 Years since the Beginning of the Acquisition Date Other (*) TOTAL SHAREHOLDERS EQUITY (*) In accordance with the principles of the regulations described in Measurement and Practices of Bank s Shareholder s Equity published in the Official Gazette No: 26333, Article 10/1, clause (e), dated November 1, 2006, BRSA has published the board decision related to consumer loans for the purpose of acquiring housing in the Official Gazette No: dated December 18,

195 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) II. Explanations on Credit Risk Credit worthiness of loan customers are monitored and semiannually and regularly reviewed by the Risk Monitoring Department of the Parent Bank in accordance with the Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions. The account statements are obtained based on the prevailing regulations. Credit limits are determined by the Board of Directors, the Credit Committee of the Parent Bank and the Credit Administration. The Parent Bank obtains sufficient guarantees for its risks, comprising of personal surety, real-estate mortgage, cash blockage and customer cheques. For the derivative transactions and other similar positions of the Parent Bank, operational limits are set by the Board of Directors and the transactions are performed within these limits. There are no options or any other similar transactions. Indemnified non-cash loans are subject to the same risk weight with the overdue loans. The Parent Bank monitors restructured and rescheduled loans in accordance with the Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated By Banks and Procedures and Principles of Allocating Provisions. Financial position and business operation of those customers are analyzed systematically and, principal and profit payments based on the restructured payment plan are monitored by the corresponding departments. As of December 31, 2011, the risk of the Parent Bank from its top 100 cash loan customers share in total cash loans ratio is 38,60% (December 31, 2010: 39,32%). As of December 31, 2011, the risk of the Parent Bank from its top 100 non-cash loan customers share in total non-cash loan ratio is 47,01% (December 31, 2010: 47,22%). As of December 31, 2011, the cash and non-cash receivables of the Parent Bank from its top 100 loan customers share in total balance sheet assets and non-cash loan ratio is 35,86% (December 31, 2010: 36,66%). As of December 31, 2011 the Parent Bank s general provision amount for its credit risk is TRY Thousand (December 31, 2010: TRY Thousand). Distribution of Credit Risk by Types of Borrowers and Geographical Concentration: Loans to Individuals and Corporate (**) Current Period Prior Period Loans to Banks and Other Financial Institution Current Period Prior Period Marketable Securities (***) Current Period Prior Period Other Loans (****) Current Period Prior Period Borrowers Concentration Private Sector Public Sector Banks Retail Share Certificates Total Geographical Concentration Domestic European Union Countries OECD Countries (*) Off-Shore Banking Regions USA, Canada Other Countries Total (*) OECD countries other than European Union countries, USA and Canada. (**) Non-performing loans are not included. (***) Includes financial assets at fair value through profit or loss, available-for-sale and held-to-maturity. (****) Includes transactions defined as loan in Article 48 of Law No: 5411 and not covered in the first three columns of the Uniform Chart of Accounts above. 195

196 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information According to Geographical Concentration: Assets Liabilities Non-Cash Loans Equity Investments Net Income Current Period December 31, 2011 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control Unallocated Assets/Liabilities (**) Total Prior Period December 31, 2010 Domestic European Union Countries OECD Countries (*) Off-shore Banking Regions USA, Canada Other Countries Associates, Subsidiaries and Entities Under Common Control Unallocated Assets/Liabilities (**) Total (*) OECD countries other than European Union countries, USA and Canada. (**) Assets and liabilities that cannot be allocated on a coherent basis. Sector Concentration for Cash Loans: Current Period Prior Period TRY (%) FC (%) TRY (%) FC (%) Agriculture , , , ,65 Farming and Raising Livestock , , , ,53 Forestry, Wood and Paper , , , Fishery , , , ,12 Manufacturing , , , ,49 Mining and Quarry , , , ,60 Production , , , ,41 Electricity, Gas and Water , , , ,48 Construction , , , ,91 Services , , , ,57 Wholesale and Retail Trade , , , ,67 Hotel, Tourism, Food and Beverage Services , , , ,10 Transportation and Communication , , , ,10 Financial Institutions , , , Real Estate and Renting Services , , Self-Employment Services , , , ,23 Education Services , , , ,47 Health and Social Services , , Other , , , ,38 Total , , , ,00 196

197 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) The table below shows the maximum exposure to credit risk for the components of the financial statements: Current Period Prior Period Central Bank of the Republic of Turkey Due from Banks Derivative Financial Assets Held for Trading Available-for-Sale Financial Assets Held to Maturity Investments Loans Finance Lease Receivables Total Contingent Liabilities Commitments Total Total Credit Risk Exposure Credit Rating System: The credit risk is assessed through the internal rating system of the Parent Bank, by classifying loans from highest grade to lowest grade according to the probability of default. As of December 31, 2011 consumer loans are excluded from the internal rating system of the Parent Bank. Additional scoring methodologies are applied for these loans. The risks that are subject to rating models can be allocated as follows: The Share in Total (%) Category Description of Category Current Period Prior Period Above Average The borrower has a very strong financial structure 35% 35% Average The borrower has an intermediate level of financial structure 35% 36% Under Average The financial structure of the borrower has to be closely monitored in the medium term 13% 11% Not Graded The borrower is not assessed by the Parent Bank 17% 18% Total 100% 100% III. Explanations Related to the Consolidated Market Risk The amount subject to market risk is calculated and reported with the Standard Method described in Section 4 of the Communiqué on Measurement and Assessment of Banks Capital Adequacy published in the Official Gazette No: dated November 1, Market risk is measured on a monthly basis. a) Explanations related to market risk: Amount (I) Capital Requirement to be Employed for General Market Risk - Standard Method (II) Capital Requirement to be Employed for Specific Risk - Standard Method 304 (III) Capital Requirement to be Employed for Currency Risk - Standard Method (IV) Capital Requirement to be Employed for Commodity Risk - Standard Method - (V) Capital Requirement to be Employed for Settlement Risk - Standard Method - (VI) Total Capital Requirement to be Employed for Market Risk Resulting From Options Standard Method (VII) Total Capital Requirement to be Employed for Market Risk in Banks Using Risk Measurement Model - (VIII) Total Capital Requirement to be Employed for Market Risk (I+II+III+IV+V+VI) (IX) Amount Subject to Market Risk (12,5 x VIII) or (12,5 x VII)

198 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) b) Average market risk table calculated at the end of each month in the current period: Current Period Prior Period Average Maximum Minimum Average Maximum Minimum Interest Rate Risk (*) Common Stock Risk Currency Risk Commodity Risk Settlement Risk Option Risk Total Value Subject to Risk (*) The Parent Bank calculates by considering market risk of revenue sharing bonds, forward and swap transactions. c) Other price risks: The Group is exposed to stock price risk as a consequence of investing in publicly traded companies in İstanbul Stock Exchange. As of reporting date, assuming that all other variables have fixed and 10% higher/lower change in revaluation method parameters (stock prices and funds prices) is appeared, income before tax in statement of income will be anticipated TRY 628 Thousand and TRY 94 Thousand increase/decrease, respectively (December 31, 2010: TRY 490 Thousand and None). IV. Explanations on Operational Risk The Group calculates the amount subject to operational risk based on Basic Indicator Method by using 2010, 2009 and 2008 year end gross income balances of the Group, in accordance with the Section 4 of the Regulation Regarding Measurement and Evaluation of Banks Capital Adequacy Ratio published in the Official Gazette No: dated November 1, 2006, namely The Calculation of the Amount Subject to Operational Risk. V. Explanations Related to Consolidated Currency Risk Foreign currency risk indicates the probability of loss that banks are subject to due to the exchange rate changes in the market. While calculating the share capital requirement, all foreign currency assets, liabilities and forward transactions of the Parent Bank are taken into consideration and value at risk is calculated by using the standard method. Currency risk is managed by considering internal currency limits that are designated as Bank s risk policies. Within the frame of legal limits defined by FC Net General Position / Equity Ratio and internal currency risk limits determined by Board of Directors, decisions are taken by Asset and Liability Committee meet periodically, take decisions for currency and parity risk hedge and those decisions are implemented strictly. The Parent Bank does not use any derivative instruments for hedging. The Standard Method stated in the statutory reporting is used to measure the currency risk of the Parent Bank. The risk measurements are performed on a monthly basis. The announced current foreign exchange buying rates of the Parent Bank as of December 31, 2011 and the previous five working days are as follows: December 31, 2011 US Dollar Euro Sterling 100 Japanese Yen FC Evaluation Rate 1,9065 2,4626 2,9347 2,4475 Previously; (Day 1) 1,8897 2,4462 2,9228 2, (Day 2) 1,8847 2,4626 2,9501 2, (Day 3) 1,8833 2,4609 2,9444 2, (Day 4) 1,8809 2,4510 2,9382 2, (Day 5) 1,8779 2,4497 2,9432 2,4475 The simple arithmetic averages of the major current foreign exchange buying rates of the Parent Bank for the thirty days before December 31, 2011 are as follows; TRY 1,8577 per US Dollar, TRY 2,4463 per EURO, TRY 2,8972 per GBP and TRY 2,3823 per 100 JPY. 198

199 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information on the Foreign Currency Risk of the Group: Foreign Currencies (Thousand TRY) EUR USD YEN Other Total Current Period - December 31, 2011 Assets Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey Due from Banks Financial Assets at Fair Value through Profit and Loss (**) Money Market Placements Financial Assets Available-for-Sale Loans (*) Subsidiaries, Associates and Entities under Common Control Held-to-Maturity Investments Derivative Financial Assets for Hedging Purposes Tangible Assets Intangible Assets Other Assets Total Assets Liabilities Current and Profit Sharing Accounts of Banks Current and Profit Sharing Accounts Money Market Borrowings Funds Provided from Other Financial Institutions Marketable Securities Issued Sundry Creditors Derivative Financial Liabilities for Hedging Purposes Other Liabilities (**) Total Liabilities Net Balance Sheet Position (75.125) (27) ( ) ( ) Net Off-Balance Sheet Position ( ) Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) Prior Period - December 31, 2010 Total Assets Total Liabilities Net Balance Sheet Position ( ) (896) (16.141) Net Off-Balance Sheet Position ( ) ( ) Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) (*) TRY Thousand of foreign currency indexed loan is also shown under loans line (December 31, 2010: TRY Thousand). (**) In accordance with the principles of the Regulations on the Measurement and Practices of Bank s Net Overall FX position Shareholders Equity Ratio on a Consolidated and Unconsolidated Basis, income accrual from derivative financial instruments amounting to TRY Thousand (December 31, 2010 : TRY Thousand) in assets and general reserves recorded to expense accounts amounting to TRY Thousand (December 31, 2010: TRY Thousand) and expense accrual from derivate financial instruments amounting to TRY Thousand (December 31, 2010: TRY Thousand) in liabilities, are not taken into consideration in the currency risk calculation. (***) Forward asset purchase-sale commitments of TRY Thousand are added to derivative financial assets and TRY Thousand is added to derivative financial liabilities (December 31, 2010: TRY Thousand is added to derivative financial assets and TRY Thousand is added to derivative financial liabilities). (****) The related balances do not have any effect on off balance sheet position. 199

200 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Foreign Currency Sensitivity: The Group is mainly exposed to USD and EUR currency risks. The following table details the Bank s sensitivity to a 10% increase and decrease in the TRY against USD and EUR. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management s assessment of the possible change in foreign exchange rates. A positive number indicates an increase in profit or loss and other equity in the case of short position and a decrease in the case of long position where the TRY strengthens against USD and EUR. Change in Currency Rate in % Effect on Profit or Loss Current Period Prior Period USD 10 % increase (767) 440 USD 10 % decrease 767 (440) EUR 10 % increase EUR 10 % decrease (198) (294) VI. Explanations on Interest Rate Risk Since the Group has interest-free banking operations, it does not have any interest sensitive asset or liability and consequently, it does not have any interest rate risk. VII. Explanations on Liquidity Risk In order to avoid the liquidity risk, the Parent Bank diversifies its funding resources as customer deposits and foreign borrowings, considers the maturity match between assets and liabilities, focuses on strategies especially for the provision of long-term resources and retains its liquid assets in order to provide sufficient liquidity in any market fluctuations. Maturity structure of the TRY and FC deposits, cost and change in the total amount are monitored on daily basis by considering the past developments and future expectations. The Parent Bank s policy is to establish an asset structure that primarily meets all kinds of liabilities by using liquid resources. The Board of Directors of the Parent Bank determines a standard for the liquidity ratios, and applies the standard on a regular basis in order to ensure. The table below gives a summary of the liquidity ratio of the Parent Bank: Current Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 135,72 110,28 Highest (%) 167,26 121,20 Lowest (%) 112,65 100,63 Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 164,61 127,57 Highest (%) 211,24 151,42 Lowest (%) 131,67 101,97 200

201 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Presentation of Assets and Liabilities According to Their Maturities: Current Period December 31, 2011 Assets Cash (Cash in TRY,Cash in Foreign Currency, Money in Transit, Cheques Purchased) and Balances with Central Bank of the Republic of Turkey Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Undistributed (*) Due from Banks Financial Assets at Fair Value through Profit and Loss Money Market Placements Available-for-Sale Financial Assets Loans (**) Held-To-Maturity Investments Other Assets Total Assets Total Liabilities Current and Profit Sharing Accounts of Banks Other Current and Profit Sharing Accounts Funds Provided from Other Financial Instruments Money Market Borrowings Marketable Securities Issued Sundry Creditors Other Liabilities (***) Total Liabilities Net Liquidity Gap ( ) ( ) ( ) - Prior Period December 31, 2010 Total Assets Total Liabilities Net Liquidity Gap ( ) ( ) ( ) - (*)Asset items, such as tangible assets, investment in associates and subsidiaries, stationary supplies, prepaid expenses and non-performing loans which are required for banking operations and which cannot be converted to cash in short-term are included in this column.. (**) Loans balance also includes Finance Lease Receivable balance. (***) Equity is presented in the Undistributed column under Other Liabilities. 201

202 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Analysis of Financial Liabilities Based on the Remaining Contractual Maturities: The table below is drawn up based on the undiscounted contractual maturities of the financial assets and liabilities. Profit share expenses to be paid on such liabilities are included in this table. Adjustments column indicates items that may lead to potential cash flows in the following period. These items are included in maturity analysis, but not included in the balance sheet value of such financial liabilities. Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Adjustments December 31, 2011 Funds Collected Funds Borrowed ( ) Money Market Borrowings (112) Total ( ) Total December 31, 2010 Funds Collected Funds Borrowed (40.013) Money Market Borrowings Total (40.013) Analysis of Contractual Expiry by Maturity of the Group s Derivative Financial Instruments: Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total December 31, 2011 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total December 31, 2010 Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total

203 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VIII. Presentation of Financial Assets and Liabilities at Fair Value As the loan portfolio has fixed profit sharing rates, estimated fair value is calculated by using the discounted cash flows. The table below summarizes the book value and fair value of the financial assets and liabilities. Book value is the sum of the acquisition value and accumulated profit share accruals. Book Value Fair Value Current Period Prior Period Current Period Prior Period Financial Assets Banks and Other Financial Institutions (*) Financial Assets Available For Sale Held to Maturity Investments Loans (**) Financial Liabilities Funds Collected From Banks (***) Other Current and Profit Sharing Accounts (***) Funds Provided From Other Financial Institutions Sundry Creditors Money Market Borrowings (*) As receivables from banks and other financial institutions are in short-term nature, their fair value approximates to their book value. (**)In order to calculate the fair value of loans, current profit sharing rates are used as of the balance sheet date. Loan balance also includes finance lease receivables. Fair values of loans are calculated under the assumption that all installments are distributed equally. (***) Book value of the funds collected approximates to their fair value as it is revalued with the year end unit value. The following table shows an analysis of financial instruments recorded at fair value, between those whose fair value is recorded on quoted market prices, those involving valuation techniques where all model inputs are observable in the market and, those where the valuation techniques involves the use of non observable inputs: December 31, st Level TRY 2nd Level TRY 3rd Level TRY Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available for Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total December 31, st Level TRY 2nd Level TRY 3rd Level TRY Financial Assets Financial Assets at Fair Value Through Profit or Loss Financial Assets Available For Sale Total Financial Liabilities Financial Liabilities at Fair Value Through Profit or Loss Other Financial Liabilities Total IX. Explanations Related to Transactions Carried out on Behalf of Other Parties and Fiduciary Assets The Group does not deal with fiduciary operations or transactions made on behalf of others. 203

204 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) SECTION FIVE: EXPLANATIONS AND DISCLOSURES ON THE CONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Consolidated Assets 1. Information on Cash and Balances with the Central Bank of Turkish Republic 1.1. Information on Cash: Current Period Prior Period TRY FC TRY FC Cash in TRY/ Foreign Currency Central Bank of the Republic of Turkey Other Total Information on the Central Bank of Turkish Republic Accounts: Current Period Prior Period TRY FC TRY FC Unrestricted Demand Deposit Unrestricted Time Deposit Restricted Time Deposit Other (*) Total (*) Stands for the reserve deposit kept in Central Bank of the Republic of Turkey in relation to foreign currency liabilities. According to the communiqué No: 2005/1 on Reserve Deposits, the banks operating in Turkey are required to keep reserve deposit at the rates varying from 5% to 11% (December 31, 2010: 6 % for all TRY liabilities) for TRY liabilities and at the rates varying from 6% to 11% (December 31, 2010: 11% for all FC liabilities) for foreign currency liabilities mainly denominated in U.S. Dollar and Euro depending on the maturity of the liabilities. Profit share has not paid for reserve deposits. 2. Information on Financial Assets at Fair Value through Profit and Loss 2.1. Information on Financial Assets at Fair Value through Profit and Loss Blocked/Given as Collateral or Subject to Repurchase Agreements: None Positive Differences Related to Derivative Financial Assets Held for Trading: Current Period Prior Period TP YP TP YP Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total (*) Includes forward asset purchase/sale commitments. 204

205 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 3. Information on Banks 3.1. Information on Banks and Other Financial Institution: Current Period Prior Period TRY FC TRY FC Banks Domestic (*) Foreign Branches and Head Office Abroad Total (*) It also contains TRY Thousand blocked accounts (December 31, 2010: TRY Thousand) which is deposited by Işık Sigorta A.Ş. as elementary branches insurance warranty in favor of Turkish Treasury Information on Foreign Bank Accounts: Unrestricted Amount Restricted Amount Current Period Prior Period Current Period Prior Period European Union Countries USA, Canada OECD Countries (*) Off-Shore Banking Regions Other Total (*) OECD countries other than European Union countries, USA and Canada. 4. Information on Financial Assets Available for Sale 4.1. Information on Available for Sale Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: Information on Financial Assets Available For Sale Given as Collateral or Blocked: None Information on Financial Assets Available for Sale Subject to Repurchase Agreements: As of December 31, 2011, the Group has revenue sharing certificates in Available for Sale Financial Assets portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY Thousand nominal value (December 31, 2010: None.) and TRY Thousand fair value (December 31, 2010: None) Information on Financial Assets Available for Sale As of December 31, 2011, the Parent Bank has revenue sharing certificate which has TRY Thousand nominal value (December 31, 2010: TRY Thousand) and TRY Thousand fair value at Available for Sale Financial Assets portfolio (December 31, 2010: TRY Thousand), as of 4,35% and TRY 125 Thousand of Tarsim Tarım Sigortaları Havuz İşletmesi A.Ş. s shares and TRY 94 Thousand other share certificates as of December 31, Current Period Prior Period Debt Securities Quoted on a Stock Exchange Not Quoted (*) Share Certificates Quoted on a Stock Exchange - - Not Quoted Impairment Provision (-) (3.750) - Total (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 205

206 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5. Information on Loans 5.1. Information on All Types of Loans or Advances Given to Shareholders and Employees of the Parent Bank: Current Period Prior Period Cash Non-Cash Cash Non-Cash Direct Loans Granted to Shareholders Corporate Shareholders Real Person Shareholders Indirect Loans Granted to Shareholders Loans Granted to Employees Total Information on First and Second Group Loans and Other Receivables Including Restructured or Rescheduled Loans: Cash Loans Standard Loans and Other Receivables Loans and Other Receivables Restructured or Rescheduled Closely Monitored Loans and Other Receivables (*) Loans and Other Receivables Restructured or Rescheduled Discount Notes Export Loans Import Loans Business Loans Consumer Loans Credit Cards Investments on Profit/Loss Partnership Precious Metal Loans Loans Given to Financial Sector International Loans Other Other Receivables Total (*) In addition to the closely monitored loans, the Bank also has TRY Thousand of closely monitored finance lease receivables. (December 31, 2010: TRY 320 Thousand) Loan Distribution Based by Maturity Structure: Standard Loans and Other Receivables Loans and Other Receivables Restructured or Rescheduled Closely Monitored Loans and Other Receivables Loans and Other Receivables Restructured or Rescheduled Short-Term Loans and Other Receivables Loans Other Receivables Medium-Term and Long-Term Loans Loans Other Receivables

207 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5.4. Information on Consumer Loans, Retail Credit Cards, Loans Given to Personnel and Personnel Credit Cards: Short Term Medium-term and Long-Term Total Consumer Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Consumer Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Retail Credit Cards-TRY With Installments Without Installment Retail Credit Cards-FC With Installments Without Installment Personnel Loans-TRY Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Indexed Housing Loans Vehicle Loans Consumer Loans Other Personnel Loans-FC Housing Loans Vehicle Loans Consumer Loans Other Personnel Credit Cards-TRY With Installments Without Installment Personnel Credit Cards-FC With Installments Without Installment Overdraft Account-TRY(Individuals) Overdraft Account-FC (Individuals) Total

208 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5.5. Information on Installment Basis Commercial Loans and Corporate Credit Cards: Short Term Medium and Long Term Total Installment Commercial Loans-TRY Business Loans Vehicle Loans Consumer Loans Other Installment Commercial Loans-FC Indexed Business Loans Vehicle Loans Consumer Loans Other Installment Commercial Loans-FC Business Loans Vehicle Loans Consumer Loans Other Corporate Credit Cards-TRY With Installments Without Installments Corporate Credit Cards-FC With Installments Without Installments Overdraft Account-TRY(Corporate) Overdraft Account- FC (Corporate) Total Allocation of Loans according to Borrowers: Current Period Prior Period Public Sector Private Sector Total Domestic and Foreign Loans: Current Period Prior Period Domestic Loans Foreign Loans Total Loans Granted to Subsidiaries and Associates: Current Period Prior Period Loans Granted to Subsidiaries and Associates Directly Loans Granted to Subsidiaries and Associates Indirectly - - Total

209 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 5.9. Specific Provisions Provided Against Loans: Current Period Prior Period Loans and Receivables with Limited Collectibility Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Total Information on Non-Performing Loans (Net): Information on Loans and Other Receivables Included in the Non-Performing Loans which are Restructured or Rescheduled: Loans and Receivables with Limited Collectibility III Group IV Group V Group Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables Prior Period (Gross Amount Before Specific Provision) Restructured Loans and Other Receivables Rescheduled Loans and Other Receivables Information on Movement of Non-Performing Loans: Loans and Receivables with Limited Collectibility III Group IV Group V Group Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Ending Balance of Prior Period Additions in the Current Period (+) (*) Transfer from Other NPL Accounts (+) Transfer to Other NPL Accounts (-) ( ) ( ) - Collections in the Current Period (-) (*) ( ) (52.762) (68.945) Write offs (-) - - ( ) Corporate and Commercial Loans - - ( ) Retail Loans - - (1.647) Credit Cards - - (51.179) Other - - (1.991) Ending Balance of the Current Period Specific Provisions (-) (40.541) (62.435) ( ) Net Balance at the Balance Sheet (*) Movements between loan groups presented double within additions and collections in the interim financial reporting periods are offset by the year end. 209

210 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information on Foreign Currency Non-Performing Loans and Other Receivables: Loans and Receivables with Limited Collectibility III Group IV Group V Group Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period Ending Balance Specific Provisions (-) - - (1.257) Net Balance at the Balance Sheet Prior Period Ending Balance Specific Provisions (-) - - (1.087) Net Balance at the Balance Sheet Gross and Net Amounts of Non-Performing Loans with Respect to User Groups: Loans and Receivables with Limited Collectability III Group IV Group V Group Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) (40.541) (62.435) ( ) Loans to Real Persons and Legal Entities (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net) Prior Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) (6.737) (37.039) ( ) Loans to Individuals and Corporates (Net) Banks (Gross) Specific Provisions (-) Banks (Net) Other Loans and Receivables (Gross) Specific Provisions (-) Other Loans and Receivables (Net)

211 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Non-Performing Loans and Main Guidelines of Liquidation Process for Loans and Receivables: If the Parent Bank has collateral components stated in Article 9 of the Communiqué on Determining the Nature of Loan and Other Receivable Provisions Allocated by Banks and Procedures and Principles of Allocating Provisions, such components are immediately liquidated by applying managerial or legal procedures. In the absence of collateral component, even if there is an indication of insolvency, the Parent Bank reviews the financial intelligence of the debtor systematically to determine subsequently acquired property holdings and applies the legal procedures. Prior and subsequent to the legal procedures, as a result of reviews performed regarding the financial information provided, the Parent Bank intends to liquidate its loans and other receivables from the companies that have potential development in the production and consequent contribution to the economy by means of the rescheduled agreements Explanation on Write off Policy: Provision allocations arising from during or after the transfer of any loan receivables to Non-performing loans are performed by the Parent Bank s Loan Monitoring Department within the framework of the Banking Regulations and Supervisory Agency. Additionally, loans are written-off against the assets, at least once a year, by the Credit Monitoring Agency to the extent that at least one of the following below is met and provision is fully made for all non-performing loans in accordance with the decision made by the Board of Directors: - Receivables with the document obtained from Collections Agency stating that the receivable cannot be followed up or; - Receivables assessed as uncollectible within existing conditions by the Law Department although the collection follow up process is going on Other Explanations and Disclosures: The information related to loan quality is stated as below: Current Period December 31, 2011 Neither past due nor Impaired Past due but not Impaired Past due and Impaired Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Total (*) The Group classifies small medium entities ( SME ) considering the criteria set out in the Council of Ministers decision dated November 18, 2005 and numbered published in the Official Gazette and the Communiqué on Descriptions, Nature and Classification of Small Medium Entities. Prior Period December 31, 2010 Neither past due nor Impaired Past due but not Impaired Past due and Impaired Loans (*) Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total Total (*) The Group classifies small medium entities ( SME ) considering the criteria set out in the Council of Ministers decision dated November 18, 2005 and numbered published in the Official Gazette and the Communiqué on Descriptions, Nature and Classification of Small Medium Entities. 211

212 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) The details of loan guarantees and leasing portfolio are stated as below: Current Period (*)(**)(***) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Residential, Commercial or Industrial Real Estates Financial Assets Other Total Total (*) Individual loan agreements, general loan agreements, foreign currency cheques, suretyships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or incumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the Measurement and Assessment of Capital Adequacy of Banks published on November 1, 2006 in the Official Gazette numbered Prior Period (*)(**)(***) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Residential, Commercial or Industrial Real Estates Financial Assets Other Total Total (*) Individual loan agreements, general loan agreements, foreign currency cheques, surety ships, customer cheques and notes and other guarantees are not included in the table above. (**) The table above is prepared by taking into consideration the lowest value presented as a result of the comparison made between the outstanding loan balance as of the balance sheet date and the lower of the net amount reached at the fair value of collaterals stated in the corresponding expertise reports or the net collateral amount less any pledges or in cumbrances on such amounts, if any. (***) Guarantee details of the credit portfolio are determined based on the Measurement and Assessment of Capital Adequacy of Banks published on November 1, 2006 in the Official Gazette numbered Aging analysis of past due but not impaired loans per classes of financial statements is stated as below: Current Period December 31, 2011 Less than 30 Days (*) Days Days More than 91 Days Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Total (*) The Parent Bank follows up the entire loan balance having less than 30 days overdue in the watch list based on conservatism principal and TRY Thousand of such amount does not have payment overdue as of December 31, 2011 (Finance Lease Receivables: TRY Thousand) Prior Period December 31, 2010 Less than 30 Days (*) Days Days More than 91 Days Loans and Advances to Customers Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables Total Total (*) The Parent Bank follows up the entire loan balance having less than 30 days overdue in the watch list based on conservatism principal and TRY Thousand of such amount does not have payment overdue as of December 31, 2010 (Finance Lease Receivables: TRY 39 Thousand). 212

213 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Other Explanations and Disclosures: Explanations on the loans and other receivables of the Parent Bank for which the payment schedules are revised as per the agreement: Based on the Article 4 of the Communiqué Methods and Principles for the Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves, the number of loans, total amount and extension periods for which the payment schedules are revised after May 28, 2011 are as follows: Extension Period Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total Loans Quantity Amount Information on Held-to-Maturity Investments (Net) 6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: Information on Held to Maturity Investments Given as Collateral or Blocked: None Held to Maturity Investments Subject to Repurchase Agreements: As of December 31, 2011, the Bank has revenue sharing certificates in Held to Maturity Investments portfolio which are subject to repurchase agreements with the Central Bank of the Republic of Turkey amounting to TRY Thousand nominal value (December 31, 2010: None) and TRY Thousand fair value (December 31, 2010: None) Information on Government Bonds Classified as Held to Maturity Investments: The Group has TRY Thousand of revenue sharing certificate as of December 31, 2011 (December 31, 2010: TRY Thousand). Current Period Prior Period TRY FC TRY FC Government Bonds Treasury Bill Other Total Information on Investments Held-to-Maturity: Current Period Prior Period TRY FC TRY FC Debt Securities Quoted on a Stock Exchange Not Quoted (*) Impairment Provision (-) Total (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed Movement of Held-to-Maturity Investments: Current Period Prior Period Beginning Balance Foreign Currency Differences on Monetary Assets - - Purchases During Year Disposals through Sales and Redemptions - (50.000) Impairment Provision (-) - - Valuation Effects Closing Balance

214 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7. Information on Associates 7.1. Information on the Consolidated Associates: Company Name Address (City/ Country) The Parent Bank s Share Percentage, if Different-Voting Percentage (%) The Parent Bank s Risk Group Share Percentage (%) (1) Yeni Mağazacılık A.Ş. (*) İstanbul/Turkey 21,84% 21,84% (2) Landmark Holding A.Ş. (*) İstanbul/Turkey 21,84% 21,84% (3) Kredi Garanti Fonu A.Ş. Ankara/Turkey 1,67% 1,67% (*) The Parent Bank participated in Yeni Mağazacılık A.Ş. and in Landmark Holding A.Ş. with the Financing Method for Participation Banks explained in the regulation No: 19 regarding Banks Lending Transactions published and became effective in the Official Gazette numbered 26333, dated November 1, 2006 by means of joint investment method. These are recorded as associates in accordance with the Uniform Chart of Accounts published in the Official Gazette numbered and dated January 26, Total Assets Equity Total Fixed Assets Profit Share Income Income from Marketable Securities Portfolio Current Period Profit/Loss Prior Period Profit/Loss Fair Value (1) (*) ( ) (93.799) (86.383) (**) (2) (*) (192) (1.486) (***) (3) (*) (*) Financial information is provided from the associate s unaudited financial statements as of December 31, (***) It is expertise value of the Bank s associate, Yeni Mağazacılık A.Ş., as of February 4, (****) It is the expertise value of the Bank s associate, Landmark Holding A.Ş., as of February 9, Information on Associates: Company Name Address (City/ Country) The Parent Bank s Share Percentage, if Different-Voting Percentage (%) The Parent Bank s Risk Group Share Percentage (%) (1) Tamweel Africa Holding S.A. (*) Dakar/Senegal 40,00% 40,00% (*) As of February 4, 2010, the Bank has paid for TRY Thousand and as a consequence, became owner of 40% of Tamweel Africa Holding S.A. that is owned by the Islamic Corporation for the Development of the Private Sector ( ICD ) which is a group establishment of the Islamic Development Bank ( IDB ). TRY Thousand and TRY Thousand has paid for capital increase respectively on June 8, 2010 and October 3, As of the reporting date capital registry process has not been finalized yet. (*) Total Assets Equity Total Fixed Assets Profit Share Income Income from Marketable Securities Portfolio Current Period Profit/Loss Prior Period Profit/Loss Fair Value (1) (*) Financial information is provided from the associate s audited financial statements as of December 31, Movement of the Consolidated Associates: Current Period Prior Period Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained - - Dividends from Current Year Income - - Sales - - Revaluation Increase - - Provision for Diminution in Value - - Balance at the End of the Period Capital Commitments - - Share Percentage at the End of the Period (%) 40,00% 40,00% (*)Tamweel Africa Holding S.A., of which acquisition cost is TRY Thousand, has been accounted for under equity method and recognized at TRY Thousand in the accompanying consolidated financial statements (December 31, 2010: TRY Thousand). 214

215 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7.4. Sectoral Information on the Financial Associates and the Related Carrying Amounts: Current Period Prior Period Banks - - Insurance Companies - - Factoring Companies - - Leasing Companies - - Finance Companies - - Other Subsidiaries Quoted on the Stock Exchange: None. 8. Information on Subsidiaries (Net) 8.1. Information on Unconsolidated Subsidiaries: Company Name Address (City/ Country) The Parent Bank s share percentage, if differentvoting percentage (%) The Parent Bank s risk group share percentage (%) (1) Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. Ankara/Turkey 99,93% 99,93% (2) Asya Kart Teknoloji Hizmetleri A.Ş. İstanbul/Turkey 99,50% 99,50% (3) GH Sultanbeyli Gayrimenkul ve Proje Geliştirme A.Ş. İstanbul/Türkiye - 99,92% (*) Total Assets Equity Total Fixed Assets Profit Share Income Income from Marketable Securities Portfolio Current Period Profit/Loss Prior Period Profit/Loss Fair Value (1) (2) (9) - (3) (492) (3.819) (*) Financial information is provided from the unaudited financial statements of subsidiaries as of December 31, Information on Consolidated Subsidiaries: Company Name Address (City/ Country) Bank s share percentage, if different-voting percentage (%) The Parent Bank s risk group share percentage (%) (1) Asya Emeklilk ve Hayat A.Ş. (*) İstanbul\Turkey 97,99% 97,99% (2) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. İstanbul\Turkey 95,00% 95,00% (3) Işık Sigorta A.Ş. İstanbul\Turkey 65,42% 65,42% (4) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul\Turkey 22,94% 69,39% (*) The Parent Bank has become the shareholder of Asya Emeklilik ve Hayat A.Ş. established on July 1, (*) Total Assets Equity Total Fixed Assets Profit Share Income Income from Marketable Securities Portfolio Current Period Profit/Loss Prior Period Profit/Loss Fair Value (1) (5) (1.221) - - (2) (3) (**) (4) (2.054) 842 (***) (*) Financial information is provided from the audited financial statements of subsidiaries as December 31, (**) It is expertise value of the Bank s subsidiary, Işık Sigorta A.Ş., as of February 4, (***)VAT included fair value is TRY Thousand, including land, per expertise appraisal dated January 26,

216 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 8.3. Movement of the Consolidated Subsidiaries: Current Period Prior Period Balance at the Beginning of the Period Movements in Period Purchases Free Shares Obtained - - Dividends from Current Year Income - - Sales - - Revaluation Increase - - Provision for Impairment Addition / (Reversal) - - Effect of Change at Consolidation Scope - 34 Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) 22,94%-97,99% 22,94%-95,00% (*) It consists of TRY Thousand capital commitment to the Bank s subsidary, Asya Emeklilik ve Hayat A.Ş Sectoral Information on the Consolidated Financial Subsidiaries and the Related Carrying Amounts: Subsidiaries Current Period Prior Period Banks - - Insurance Companies Factoring Companies - - Leasing Companies - - Finance Companies - - Other Subsidiaries Subsidiaries Quoted on the Stock Exchange: None. 9. Information on Entities under Common Control None. 10. Information on Finance Lease Receivables (Net) 10.1 Presentation of Finance Lease Receivables According to Their Remaining Maturities: Current Period Prior Period Gross Net Gross Net Less than 1 Year to 4 Years More than 4 Years Total Information on Net Investments in Finance Leases: Current Period Prior Period Gross Receivable from Finance Leases Unearned Finance Lease Income (-) (94.678) (16.243) Net Receivable from Finance Leases Derivative Financial Assets for Hedging Purposes None. 216

217 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 12. Information on Tangible Assets Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Cost Opening Balance - January 1, Additions Disposals (8.123) (3.523) (734) (51.161) (6.907) (70.448) Transfers (**) - - (232) (2.274) (408) (2.914) Impairment (Losses) / Reversal (***) (111) Closing Balance - December 31, Accumulated Depreciation (-) Opening Balance - January 1, Depreciation Expense Accumulated Depreciation of Disposals (1.970) (3.387) (144) (1.649) (5.792) (12.942) Transfers (**) (76) (256) (328) Impairment (Losses) / Reversal (***) Closing Balance - December 31, Net Book Value - December 31, Net Book Value - December 31, (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipment, furniture and other fixed assets. (**) TRY Thousand of the balance is transferred from assets held for sale to tangible fixed assets due to not being disposed off within one year; TRY Thousand of real estates to be disposed off have met the definition of non-current assets held for sale and have been transferred to assets held for sale. In the current period, tangible assets amounting to TRY 172 Thousand have been transferred to intangible assets and investment properties amounting to TRY 67 Thousand have been transferred to tangible assets. (***) In the current period, TRY Thousand additional impairment has been provided for assets to be disposed off and TRY Thousand impairment has been reversed due to disposals. In the current period, TRY 111 Thousand additional impairment has been recognized for buildings. Buildings Leased Tangible Assets Vehicles Assets Held for Resale Other Tangible Assets (*) Cost Opening Balance - January 1, Additions Disposals - (2.811) (1.141) (69.279) (4.375) (77.606) Transfers (**) (1.234) - (1.234) Impairment (Losses) / Reversal Closing Balance - December 31, Accumulated Depreciation (-) Opening Balance - January 1, Depreciation Expense Accumulated Depreciation of Disposals - (2.335) (704) (1.875) (3.981) (8.895) Transfers (95) - (95) Impairment (Losses) / Reversal Closing Balance - December 31, Net Book Value - December 31, Net Book Value - December 31, (*) Other tangible fixed assets comprise leasehold improvements, safety box, office equipments, furniture and other fixed assets. (**) TRY Thousand of the balance is transferred from assets held for sale to tangible fixed assets due to not being disposed off within one year, TRY Thousand of real estates to be disposed off have met the definition of non-current assets held for sale and have been transferred to assets held for sale. (***)During the period, TRY Thousand additional impairment has been provided for assets to be disposed off and TRY Thousand impairment has been reversed due to disposals. Total Total 217

218 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 13. Information on Intangible Assets Opening and Ending Book Values and Accumulated Depreciation Balances: Current Period Prior Period Book Value Accumulated Depreciation (14.589) (10.451) Net Book Value Intangible Assets Movement Table: Cost Rights Other Intangible Assets Total Opening Balance- January 1, Additions Transfers (*) Disposals Closing Balance- December 31, Accumulated Amortization (-) Opening Balance- January 1, Amortization Expense Transfers (*) Disposals Closing Balance- December 31, Net Book Value- December 31, Net Book Value- December 31, (*) In the current period, TRY 172 Thousand of the balance from tangible assets is transferred to intangible assets. Cost Rights Other Intangible Assets Total Opening Balance- January 1, Additions Disposals - (77) (77) Closing Balance- December 31, Accumulated Amortization (-) Opening Balance- January 1, Amortization Expense Disposals - (67) (67) Closing Balance- December 31, Net Book Value- December 31, Net Book Value- December 31, Information on Goodwill: As of December 31, 2011, goodwill amounts to TRY Thousand (December 31, 2010: TRY Thousand). 218

219 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 14. Explanations on Investment Properties Buildings Lands Leased Tangible Assets Vehicles Other Tangible Assets Cost Opening Balance - January 1, Additions Disposals (281) (281) Transfers (*) (51) (22) (73) Impairment Expense (75) (75) Closing Balance - December 31, Accumulated Depreciation (-) Opening Balance - January 1, Depreciation Expense Disposals (10) (10) Transfers (*) (4) (2) (6) Closing Balance - December 31, Net Book Value - December 31, Net Book Value - December 31, (*) In the current period, TRY 67 Thousand of the balance from investment properties is transferred to tangible assets. Total As of December 31, 2011, fair value of investment properties amounts to TRY Thousand (December 31, 2010: TRY Thousand). Buildings Lands Leased Tangible Assets Vehicles Other Tangible Assets Cost Opening Balance - January 1, Additions Disposals (3.212) (3.212) Impairment Expense (60) (60) Closing Balance - December 31, Accumulated Depreciation (-) Opening Balance - January 1, Depreciation Expense Disposals (2.586) (2.586) Closing Balance - December 31, Net Book Value - December 31, Net Book Value - December 31, Total 219

220 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 15. Explanations on Deferred Tax Asset As of December 31, 2011, deferred tax asset calculated as the net amount according to the temporary differences, except for general loan loss provision and provision for possible risks is TRY Thousand. As noted in disclosure 8.4 of section V.II, for purpose of consolidated financial statements deferred taxes arising from different consolidated subsidiaries are presented separately in assets and liabilities. Therefore, TRY Thousand deferred tax assets and TRY 8 Thousand deferred tax liabilities are presented separately in the accompanying consolidated financial statements (December 31, 2010: TRY Thousand deferred tax assets). Current Period Deferred Tax Base Deferred Tax Asset/(Liability) Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Deferred Commission Income Tangible Assets Tax Base Differences (14.064) (2.813) Valuation of Financial Assets Other Deferred Tax Asset/(Liability), net Prior Period Deferred Tax Base Deferred Tax Asset/(Liability) Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Deferred Commission Income Tangible Assets Tax Base Differences (22.911) (4.582) Valuation of Financial Assets (5.038) (1.008) Other (94) (19) Deferred Tax Asset/(Liability), net Movement of the net deferred tax asset/ (liability) as of December 31, 2011 and December 31, 2010 is stated as below: Current Period Prior Period Deferred Tax Asset, January Deferred Tax Recognized Directly Under Equity (953) Deferred Tax Benefit /(Charge) Deferred Tax Asset/(Liability), net Information on Assets Held for Sale Assets held for sale consist of tangible assets which are obtained from non-performing loans and they are recognized as required in accordance with the prevailing Communiqué of Principles and Procedures on Bank s Disposal of Precious Metals and Assets Held for Sale published on November 1, 2006 in the Official Gazette numbered in the consolidated financial statements. As of December 31, 2011, assets held for sale amounts to TRY Thousand (December 31, 2010: TRY Thousand). Current Period Prior Period Opening Balance- January Additions Disposals (3.468) (3.791) Transfers (Net) (*) Impairment (**) (37) (35) Closing Balance, 31 December (*)TRY Thousand of the balance is transferred from assets held for sale to tangible fixed assets due to not being disposed off within one year; TRY Thousand of real estates to be disposed off have met the definition of non-current assets held for sale and have been transferred to assets held for sale. (**)TRY 244 Thousand additional impairment has been recognized and TRY 209 Thousand impairment has been reversed due to disposals in the prior. 17. Information on Other Assets As of December 31, 2011, other assets amount to TRY Thousand. Other assets account does not exceed 10% of the total assets (December 31, 2010: TRY Thousand). 220

221 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) II. Explanations and Disclosures Related to the Consolidated Liabilities 1.1. Information on Maturity Structure of Deposits: Current Period Demand Up to 1 Month Up to 3 Months Up to 6 Months Up to 9 Months Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts I. Real Person Current Deposits-TRY II. Real Person Profit Sharing Accounts-TRY III. Other Current Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V.Real Person Current Deposits-FC VI. Real Person Profit Sharing Accounts-FC VII. Other Current Accounts-FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII.Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total (I+II+..+IX+X+XI) Total 221

222 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Prior Period Demand Up to 1 Month Up to 3 Months Up to 6 Months Up to 9 Months Up to 1 Year 1 Year and Over Accumulated Profit Sharing Accounts I. Real Person Current Deposits-TRY II. Real Person Profit Sharing Accounts-TRY III. Other Current Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses Central Bank Domestic Banks Foreign Banks Banks Other IV. Profit Sharing Accounts-TRY Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks V.Real Person Current Deposits-FC VI. Real Person Profit Sharing Accounts-FC VII. Other Current Accounts-FC Commercial Residents in Turkey Commercial Residents in Abroad Banks Central Bank Domestic Banks Foreign Banks Banks Other VIII.Profit Sharing Accounts- FC Public Sector Commercial Sector Other Institutions Commercial and Other Institutions Banks and Finance Houses IX. Precious Metal Deposits X. Profit Sharing Accounts Special Fund Pools TRY Residents in Turkey Residents Abroad XI. Profit Sharing Accounts Special Fund Pools-FC Residents in Turkey Residents Abroad Total (I+II+..+IX+X+XI) Total 222

223 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 1.2. Current and Participation Accounts Attributable to Real Entities/Persons Under the Guarantee of Saving Deposit Insurance Fund Exceeding the Limit of the Deposit Insurance Fund: Under the Guarantee of Saving Deposit Insurance Exceeding the Limit of Saving Deposit Insurance Current Period Prior Period Current Period Prior Period Real Persons Current and Profit Sharing Accounts that are not Subject to Commercial Activities TRY Accounts FC Accounts Foreign Branches Deposits Under Foreign Authorities Insurance Off-shore Banking Regions Deposits Under Foreign Authorities Insurance Current and Profit Sharing Accounts which are not under the Guarantee of Deposit Insurance Fund: Current Period Deposits and Other Accounts held at Foreign Branches - Deposits and Other Accounts held by Shareholders and their Relatives Deposits and Other Accounts of the Chairman and Members of Board of Directors, Chief Executive Officer, Senior Executive Officers and their Relatives Deposits and Other Accounts held as Assets subject to the Crime defined in the Article 282 of the Turkish Criminal Code no dated 26 September Deposits at Depository Banks established for Off-Shore Banking Activities in Turkey - Total Information on Derivative Financial Liabilities Held for Trading As of December 31, 2011, derivative financial liabilities held for trading amounts to TRY Thousand (December 31, 2010: TRY Thousand). Current Period Önceki Dönem TRY FC TRY FC Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total (*) Includes forward asset purchase/sale commitments. 3. Information on Borrowings 3.1. Information on Banks and Other Financial Institutions: Current Period Prior Period TRY FC TRY FC Loans from Central Bank of the Republic of Turkey From Domestic Banks and Institutions From Foreign Banks, Institutions and Funds Total Maturity Analysis of Borrowings: Current Period Önceki Dönem TRY FC TRY FC Short-Term Medium-Term and Long-Term Total Additional Explanation related to the Concentrations of the Parent Bank s Major Liabilities: None. 223

224 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 4. Other Liabilities Exceeding 10% of the Balance Sheet Total Excluding Off-Balance Sheet Commitments and the Breakdown of Such Liabilities Constituting at Least 20% of the Grand Total Other liability items amount to TRY Thousand and do not exceed 10% of the balance sheet total (December 31, 2010: TRY Thousand). 5. Information on Finance Lease Obligations None. 6. Information on Derivative Financial Liabilities for Hedging Purposes None. 7. Explanations on Provisions 7.1. Information on General Loan Loss Provision: Current Period Prior Period General Provisions Provisions for First Group Loans and Receivables Profit Sharing Accounts Share The Bank s Share Other - - Provisions for Second Group Loans and Receivables Profit Sharing Accounts Share The Bank s Share Other - - Provisions for Non Cash Loans Movement of General Loan Loss Provisions Current Period Opening Balance - January 1, Charge for Period Reversal of Prior Period Expenses (3.925) Profit Sharing Accounts Share Closing Balance- December 31, Prior Period Opening Balance January 1, Charge for Period Reversal of Prior Period Expenses (1.561) Profit Sharing Accounts Share Closing Balance- December 31, Information on Provision for Foreign Exchange Losses on the Foreign Currency Indexed Loans and Finance Lease Receivables: As of December 31, 2011, the Group s provision for foreign currency indexed loans amounts to TRY Thousand (December 31, 2010: TRY Thousand). Provisions for foreign currency indexed loans are offset under the loan balance in the financial statements Information on the Specific Provisions Provided for Unindemnified Non-Cash Loans: As of December 31, 2011, the Group s specific provision for unindemnified non-cash loans amounts to TRY Thousand (December 31, 2010: TRY Thousand) Explanations on Other Provisions: Information on Provisions for Potential Risks: one (December 31, 2010: None). 224

225 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Information on Other Provisions: Other Provisions Current Period Prior Period Provision for Unindemnified Non-Cash Loans Provision for Credit Cards and Promotion of Banking Services Provision Amount Allocated for Profit-Share Accounts Payment Commitment for Checks Litigation Provision Other (*) Total (*) Other provisions, provisions for loan portfolio allocated to cover future potential losses include Movement of the Retirement Pay Provision: Current Period Prior Period Opening Balance- January Current Service Cost Discount Cost Benefits Paid (1.547) (954) Settlement/Curtailment/Termination Loss/(Gain) Actuarial Loss/(Gain) Closing Balance The Parent Bank has reflected the employee benefit provision to the financial statements by using actuarial valuation method stated in TAS 19. As of December 31, 2011, the Group provided a provision of TRY Thousand for the unused vacation pay (December 31, 2010: TRY Thousand). 8. Explanations on Taxes Payable 8.1. Information on Current Tax Liability: As of December 31, 2011, the Group s corporate tax payable is TRY Thousand offsetting the prepaid corporate tax (December 31, 2010: TRY Thousand). Current Period Prior Period Provision for Corporate Taxes Prepaid Corporate Tax (50.557) (55.161) Corporate Tax Payable (*) In current period income statement, tax expense for prior period amounts to TRY 215 Thousand is presented in the provision for income tax and other dues account (December 31, 2010: None) Information on Taxes Payable: Current Period Prior Period Corporate Taxes Payable Taxation of Securities Property Tax Banking Insurance Transaction Tax (BITT) Foreign Exchange Transaction Tax - - Value Added Tax Payable Other Total

226 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 8.3. Premiums: Current Period Prior Period Social Security Premiums-Employee Social Security Premiums-Employer Bank Social Aid Pension Fund Premium-Employee - - Bank Social Aid Pension Fund Premium-Employer - - Pension Fund Membership Fees and Provisions-Employee - - Pension Fund Membership Fees and Provisions-Employer - - Unemployment Insurance-Employee Unemployment Insurance-Employer Other 17 6 Total Explanations on Deferred Tax Liabilities: As of December 31, 2011, deferred tax liability amounts to TRY 8 Thousand (December 31, 2010: None). Movement of deferred tax liability and temporary differences are disclosed in Note 15 of section V.I. 9. Information on Liabilities Regarding Assets Held for Sale and Discontinued Operations None. 10. Information on Subordinated Loans None. 11. Information on Shareholders Equity Presentation of Paid-in Capital: Current Period Prior Period Common Stock Preferred Stock (*) (*) Preferred stockholders have the right to nominate candidates for the Board of Directors and the Audit Committee Paid-in Capital Amount, Explanation as on whether the Registered Share Capital System is Applicable at the Parent Bank, if so, Amount of the Registered Share Capital Ceiling: Registered capital system is not applied in the Parent Bank Share Capital Increases and Their Sources; Other Information on Increased Capital Shares in the Current Period: None Information on Share Capital Increases from Capital Reserves: None Information on Share Capital Increases from Revaluation Funds: None Capital Commitments in the Last Fiscal Year and at the End of the Following Interim Period, General Purpose of These Commitments and Projected Resources Required to Meet These Commitments: None. 226

227 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) Indicators of the Parent Bank s Income, Profitability and Liquidity for Prior Periods and Possible Effects of These Future Assumptions on the Equity due to the Uncertainty of These Indicators: The Parent Bank carries its activities in a high profitable level and retains the major portion of its net profit within equity by means of transfers to reserve accounts and capital increases. Also, the Parent Bank allocates its equity to highly liquid and profit generating assets Summary Information of Privileges Granted To Preferred Stocks: The holders of the preferred stocks have the right to nominate candidates for the Board of Directors and the Audit Committee Explanations on Marketable Securities Value Increase Fund: Current Period Prior Period From Associates, Subsidiaries, and Entities under Common Control (Joint Vent.) - - Valuation Difference - - Foreign Exchange Difference - - Financial Assets Available for Sale (13.599) Valuation Difference (13.599) Foreign Exchange Difference - - Total (13.599) Explanations on Minority Shares Current Period Prior Period Paid in Capital Share Premium Legal Reserve Prior Year Profit or Loss (8.056) (9.057) Net Profit/(Loss) for the Period Total III. Explanations and Disclosures Related to the Consolidated Off-Balance Sheet Contingencies and Commitments 1. Explanation on Contingent Liabilities 1.1. Nature and Amounts of Irrevocable Loan Commitments: Current Period Prior Period Asset Purchase-Sale Commitments Capital Commitments for Associates and Subsidiaries (*) Loan Granting Commitments Commitments for Credit Card Expenditure Limits Commitments for Credit Card and Retail Banking Promotions Payment Commitments for Checks Tax and Fund Liabilities from Export Commitments Other Irrevocable Commitments Total (*) It consists of capital commitment amounting to TRY Thousand to the Bank s subsidary, Asya Emeklilik ve Hayat A.Ş. and TRY Thousand to the Bank s associates, Kredi Garanti Fonu A.Ş. (December 31, 2010: It consists of capital commitment amounting to TRY Thousand to the Bank s associate, Kredi Garanti Fonu A.Ş.). 227

228 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 1.2. Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: Non-cash Loans Including Guarantees, Bank Acceptances and Avalized Drafts, Collaterals That Qualify as Financial Guarantees and Other Letters of Credit: Current Period Prior Period Guarantees Bank Acceptances and Avalized Drafts Letter of Credits Other Guarantees Total Long Standing Guarantees, Temporary Guarantees, Sureties and Similar Transactions: Current Period Prior Period Definite Letters of Guarantee Provisional Letters of Guarantees Suretyships and Similar Transactions Total Total Amount of Non-Cash Loans: Current Period Prior Period Non-cash loans given against achieving cash loans With maturity of 1 year or less than 1 year With maturity of more than 1 year Other non-cash loans Total Sectoral Risk Concentration of Non-Cash Loans Current Period Prior Period TRY (%) FC (%) TRY (%) FC (%) Agricultural , , , ,42 Farming and Raising Livestock , , , ,42 Forestry , , , ,00 Fishery , , , ,00 Manufacturing , , , ,83 Mining , , , ,59 Production , , , ,20 Electric, Gas and Water , , , ,04 Construction , , , ,51 Services , , , ,42 Wholesale and Retail Trade , , , ,33 Hotel, Food and Beverage Services , , , ,16 Transportation and Telecommunication , , , ,30 Financial Institutions , , , ,48 Real Estate and Renting Services , , , ,37 Self-Employment Services , , , ,19 Education Services , , , ,08 Health and Social Services , , , ,51 Other , , , ,82 Total , , , ,00 228

229 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 3. Information on Ist and IInd Group Non-Cash Loans I st Group II nd Group TRY FC TRY FC Non-Cash Loans Letters of Guarantee Endorsements and Acceptances Letters of Credit Endorsements Underwriting Commitments Factoring Commitments Other Commitments and Contingencies Information on Derivative Financial Instruments Derivative Transactions According to Purposes Trading Hedging Current Period Prior Period Current Period Prior Period Type of Trading Transactions Foreign Currency Related Derivative Transactions (I) Forward Transactions Swap Transactions Futures Transactions Option Transactions Interest Related Derivative Transactions (II) Forward Rate Transactions Interest Rate Swap Transactions Interest Option Transactions Futures Interest Transactions Marketable Securities Call-Put Options (III) Other Trading Derivative Transactions (IV) A. Total Trading Derivative Transactions (I+II+III+IV) Types of Hedging Transactions Fair Value Hedges Cash Flow Hedges Net Investment Hedges B. Total Hedging Related Derivatives Total Derivative Transactions (A+B)

230 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) As of December 31, 2011 and December 31, 2010, the breakdown of the Group s foreign currency forward transactions based on currencies are disclosed below in their TRY equivalents. Current Period Forward Buy Forward Sell TRY USD EUR GOLD Total Prior Period Forward Buy Forward Sell TRY USD EUR Total As of December 31, 2011, the Group does not have any derivative transactions for the purpose of cash flow hedge. 5. Explanations on Contingent Liabilities and Assets As of the balance sheet date, there are ongoing court cases against the Group amounting to TRY Thousand and EUR 946 based on the information provided from the legal department of the Group for one of the ongoing court cases mentioned above (December 31, 2010: There were ongoing court cases against the Group amounting to TRY Thousand, USD and EUR 946), provision amounting to TRY Thousand has been allocated (December 31, 2010: TRY Thousand). In addition to the aforementioned lawsuits, the amount of the loss claim lawsuits from insurance operation is TRY Thousand (December 31, 2010: TRY Thousand), and provision for the whole amount has been recognized in the Insurance technical reserves item of balance sheet. Total amount of letters of guarantees, guarantees and commitments submitted by the Group pursuant to its own internal affairs and guarantees given by other institutions submitted by the Group pursuant to the third parties benefit of the Group stands at TRY Thousand (December 31, 2010: TRY Thousand) and is recognized under Other irrevocable commitments item of off-balance sheet contingencies and commitments. 6. Explanations related to Custodian and Intermediary Services None. 7. Summary Information on the Parent Bank s Rating by the International Rating Institutions FITCH RATINGS Foreign Currency Long Term B+ Short Term B Outlook Stable Turkish Lira Long Term B+ Short Term B Outlook Stable International Long Term A-(tour) Outlook Stable Individual Rating D Support Points 5 The information is obtained from the Fitch Ratings Report as of November 22,

231 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) MOODY S Financial Strength Outlook Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Short Term D Stable Ba3 B1 Stable Ba2 Ba1 Stable A3 TR-1 The information is obtained from the Moody s Investor Service report as of February 22, SAHA Kurumsal Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. has completed its Corporate Governance rating report for Bank Asya in accordance with the Turkish Capital Markets Board s communiqué of Capital Market Rating Operations and Corporate Governance Principles. Bank Asya s Corporate Governance rating score previously has been identified as 81,69 on July 1, 2010 and revised to 82,56 as of July 1, IV. Explanations and Disclosures Related to the Consolidated Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans: I st Group II nd Group TRY FC TRY FC Profit Share on Loans Short Term Loans Medium and Long Term Loans Profit Share on Non-Performing Loans Premiums Received from Resource Utilization Support Fund Profit Share from Banks: Current Period Prior Period TP YP TP YP Central Bank of the Republic of Turkey (Reserve Deposit) Domestic Banks Foreign Banks (*) Foreign Head Office and Branches Total (*) Foreign banks include profit shares from murabaha loans. 231

232 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 1.3. Information on Interest Received from Marketable Securities: Current Period Prior Period TP YP TP YP Held-for-Trading Financial Assets Financial Assets at Fair Value through Profit and Loss Available for Sale Financial Assets Held to Maturity Investments Total Information on Profit Share Income Received from Associates and Subsidiaries: Current Period Prior Period Profit Share Income Received from Associates and Subsidiaries Information on Profit Share Expenses 2.1. Information on Interest on Funds Borrowed: Current Period Prior Period TRY FC TRY FC Banks Central Bank of the Republic of Turkey Domestic Banks Foreign Banks Branches and Foreign Head Office Abroad Other Institutions Total Information on Profit Share Expense Given to Associates and Subsidiaries: Current Period Prior Period Profit Share Expenses Given to Associates and Subsidiaries Information on Profit Share Expense to Marketable Securities Issued: None. 232

233 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 2.4. Distribution of Profit Share Expense on Deposits Based on Maturity of Deposits: Current Period Account Name TRY Up to 1 Month Up to 3 Months Profit Sharing Accounts Up to 6 Months Up to 9 Months Up to 1 Year More than 1 Year Banks and Finance Houses Real Person s Profit Sharing Acc. Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Total FC Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc. Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Precious Metal Deposits Total Grand Total Toplam Genel Toplam Total Prior Period Account Name Up to 1 Month Up to 3 Months Profit Sharing Accounts Up to 6 Months Up to 9 Months Up to 1 Year More than 1 Year TRY Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Total FC Banks and Finance Houses Real Person s Profit Sharing Acc Public Sector Profit Sharing Acc Commercial Sector Profit Sharing Acc Other Institutions Profit Sharing Acc Precious Metal Deposits Total Grand Total Total 3. Explanations on Dividend Income The Group has TRY 131 Thousand of dividend income (December 31, 2010: TRY 171 Thousand). 233

234 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 4. Information on Net Trading Income Current Period Prior Period Income Securities Trading Gains Gains on Derivative Financial Instruments Foreign Exchange Gains Losses (-) ( ) ( ) Securities Trading Losses (2.570) (1.246) Losses on Derivative Financial Instruments ( ) (34.834) Foreign Exchange Losses ( ) ( ) 5. Explanations on Other Operating Income The detail of other operating income is stated as below: Current Period Prior Period Communication Expense Reversal Gain on Sale of Assets Adjustments to Previous Years Expenses (*) Insurance Technical Reserves Gain on Timeshare Sales Other Total (*) Adjustments to previous years expenses consists of amounting to TRY Thousand special provision, general loan provision and provision reversal related to receivables and fees from the doubtful receivables and TRY Thousand provision reversal related to cheques (December 31, 2010: TRY Thousand). 6. Provision Expenses of the Bank for Loans and Other Receivables Current Period Prior Period Specific Provisions for Loans and Other Receivables III. Group Loans and Receivables IV. Group Loans and Receivables V. Group Loans and Receivables Doubtful Commission, Fee and Other Receivables General Provision Expenses Provision Expenses for Possible Losses - - Marketable Securities Impairment Losses - 66 Financial Assets at Fair Value through Profit and Loss - 66 Investment Securities Available for Sale - - Impairment Provision Expense - - Associates - - Subsidiaries - - Entities under Common Control - - Investments Held to Maturity - - Other Total

235 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7. Information on Other Operating Expenses Current Period Prior Period Personnel Expenses Provision for Employee Termination Benefits Bank Social Aid Provision Fund Deficit Provision - - Impairment Expenses of Fixed Assets Depreciation Expenses of Fixed Assets Impairment Expenses of Intangible Assets - - Impairment Expense of Goodwill - - Amortization Expenses of Intangible Assets Impairment Provision for Investments Accounted for under Equity Method - - Impairment Expenses of Assets to be Disposed off Depreciation Expenses of Assets to be Disposed off Impairment Expenses of Assets Held for Sale Other Operating Expenses Rent Expenses Maintenance Expenses Advertisement Expenses Other Expenses Loss on Sales of Assets Other (*) Total (*) Other expenses consist of TRY Thousand insurance technical expenses (December 31, 2010: TRY Thousand). 8. Explanation on Continuing Operations and Discontinued Operations Profit or Loss before Tax The Group s profit before tax is decreased by 15,72% (December 31, 2010: 15%) as compared to the prior year figures and total profit before tax amounts to TRY Thousand (December 31, 2010: TRY Thousand ). Profit before tax includes TRY Thousand (December 31, 2010: TRY Thousand) net profit share income, TRY Thousand (December 31, 2010: TRY Thousand) net fees and commission income. Total operating expense amount is TRY Thousand (December 31, 2010: TRY Thousand). 9. Explanation on Continuing Operations and Discontinued Operations Tax Provision As of December 31, 2011, current tax expense is TRY Thousand (December 31, 2010: TRY Thousand) and deferred tax income is TRY Thousand (December 31, 2010: TRY Thousand deferred tax income). 10. Information on Operating Profit/Loss After Taxes Net profit of the Group is decreased by 15,58% as of December 31, 2011 as compared to the prior year s net profit. 11. Explanations on Net Income / Loss for the Period The nature and amount of certain income and expense items from ordinary operations is disclosed if the disclosure for nature, amount and repetition rate of such items is required for the complete understanding of the Group s performance for the period: None. Effect of changes in accounting estimates on income statement for the current and, if any, for subsequent periods: None. 235

236 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 12. The Description and Amounts of Items which Constitute at Least 20% of Other Items in the Income Statement, if These Liabilities Exceed 10% of the Total Income Statement Other fees and commissions received/given are stated as below: Current Period Prior Period Other Fees and Commission Received Member Firm-POS Fees and Commission Credit Card Fees and Commission Commissions on Collection and Disbursement Expertise Fees Money Transfer Commissions Insurance Underwriting Commissions Other Total Current Period Prior Period Other Fees and Commissions Given Credit Cards Commissions and Fees Other Total Nature and Amount of Changes in Accounting Estimates which have Material Effects on The Current Period or Expected to have Material Effects on the Subsequent Periods None. V. Explanations and Disclosures Related to the Statements of Shareholders Equity 1. Increases from Valuation of Financial Assets Available for Sale Decrease resulting from revaluation of financial assets available for sale is TRY Thousand (December 31, 2010: TRY Thousand increase). 2. Increases Due to Cash Flow Hedges None. 3. Reconciliation of Foreign Exchange Differences at Beginning and End of Current Period In the current period, the change in other reserves item is a result of the conversion losses of financial institutions. 4. Dividends Declared Subsequent to the Balance Sheet Date, but before the Announcement of the Financial Statements None. 5. Dividends per Share Proposed Subsequent to the Balance Sheet Date None. 6. Proposals to General Assembly for the Payment Dates of Dividends and if It will not be Appropriated the Reasons for This The Board of Directors has not decided for profit distribution as of the reporting date. 236

237 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) 7. Amounts Transferred to Legal Reserves As of December 31, 2011, amount transferred to legal reserves is TRY Thousand (December 31, 2010: TRY Thousand). 8. Information on Shares Issued None. 9. Other Information Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. has consolidated for the first time based on the change of the communiqué on Regulations Regarding Banks Consolidated Financial Statements published on Official Gazette numbered dated January 23, 2011 and the effects of the scope of consolidation are shown on other line at consolidated statements of shareholders equity movement. VI. Explanations and Disclosures Related to Statement of Cash Flows 1. Cash and Cash Equivalents 1.1. Components of Cash and Cash Equivalents and Accounting Policies Used to Determine Such Components: Cash is defined as cash in TRY and foreign currency, money in transit, cheques purchased and demand deposits in Banks, and Cash equivalents is defined as time deposits in Banks having original maturity less than three months and short term murabaha (sale at a markup) loans. Deposits held in Central Bank of the Republic of Turkey are not presented as cash equivalents Cash and Cash Equivalents at the Beginning of the Period: Other item amounting to TRY ( ) Thousand in Operating profit before changes in operating assets and liabilities consists of fees and commission paid, operating lease expenses, repairment and maintenance expenses, advertisement expenses and other operating expenses (December 31, 2010: TRY ( ) Thousand). Other Income amounting to TRY Thousand consists of gains on derivative financial transactions, insurance operation income foreign exchange gains and other operating income (December 31, 2010: TRY Thousand). Net increase/decrease in other assets amounting to TRY Thousand in Changes in operating assets and liabilities consists of changes in sundry debtors, insurance operation receivables, other assets and intangible asset purchases (December 31, 2010: TRY (7.124) Thousand). Net increase/decrease in other liabilities with a total amount of TRY Thousand consists of changes in sundry creditors and other liabilities (December 31, 2010: TRY Thousand). Other items amounting to TRY Thousand (31 December 2010: TRY Thousand) in Net cash provided from investing activities consists of cash paid for purchases of intangible assets. The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2011 is approximately TRY Thousand (December 31, 2010: TRY Thousand) Cash and Cash Equivalents at the Beginning of the Period: Current Period Prior Period Cash Cash in TRY/Foreign Currency Banks-Demand Deposit Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans Total Cash and Cash Equivalents Cash and Cash Equivalents at the End of the Period: Current Period Prior Period Cash Cash in TRY/Foreign Currency Banks-Demand Deposit Cash Equivalents Banks-Time Deposit Murabaha Transactions Classified as Loans - - Total Cash and Cash Equivalents

238 Consolidated Financial Statements and Accompanying Notes NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VII. Explanations on the Risk Group of the Parent Bank 1. Transaction Volume of the Risk Group of the Parent Bank, Outstanding Loan and Deposit Balances and Current Income and Expense Amounts 1.1. Current Period: Risk Group of the Parent Bank 1.2. Prior Period: Subsidiaries and Associates Direct and Indirect Shareholders of the Group Other Entities Included in the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income (*) The risk group balance includes TRY Thousand finance lease receivables (December 31, 2010: TRY 153 Thousand). Risk Group of the Parent Bank Subsidiaries and Associates Direct and Indirect Shareholders of the Group Other Entities Included in the Risk Group Nakdi G.Nakdi Nakdi G.Nakdi Nakdi G.Nakdi Loans and Other Receivables (*) Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income (*) The risk group balance includes TRY 153 Thousand finance lease receivables (December 31, 2009: TRY 237 Thousand) Risk Group Deposits Balances of the Parent Bank: Risk Group of the Parent Bank Subsidiaries and Associates Direct and Indirect Shareholders of the Group Other Entities Included in the Risk Group Current and Profit Sharing Accounts Current Period Current Period Current Period Balance at the Beginning of Period Balance at the End of Period Profit Share Expense Information on Forward and Option Agreements and Other Similar Agreements with Related Parties: None Information on Compensation of Key Management Personnel: During the current period, the total amount of remuneration and benefits provided to the key management personnel of the Group is TRY Thousand (December 31, 2010: TRY Thousand). Besides remuneration, the key management personnel also receive some further tangible rights. 238

239 Bank Asya 2011 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2011 (Amounts expressed in thousands of Turkish Lira ( TRY ) unless otherwise stated.) VIII. Explanations on the Parent Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 1. Explanations on the Parent Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices Number Employees Domestic Branches Country Rep-Offices Abroad (*) Total Assets Capital Branches Abroad Off-shore Branches (*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India and a branch in Arbil, Iraq. As of the reporting date, opening representative office and branch is still in progress. Işık Sigorta A.Ş. from the consolidated subsidiaries operates domestically and currently has 4 regional management offices, 2 regional representation offices and (including the Bank branches) agencies and 169 personnel as of 31 December Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. operates domestically and currently has 18 personnel as of December 31, Tamweel Africa Holding S.A., which operates abroad, has currently 4 banks and 10 personnel. Asya Emeklilik ve Hayat A.Ş. operates domestically and currently has 24 personnel. 2. Explanations on Branch and Agency Openings or Closings of the Parent Bank: The Parent Bank has opened 25 new branches in the period of January 1 December 31, SECTION SIX: OTHER EXPLANATIONS I. Other Explanations on Operations of the Group 1. Subsequent Events Bank Asya's Board members Mr. Salih SARIGÜL and Mr. Ahmet ÇELİK have announced their resignations, effective on January 26th, 2012, Mr. Tacettin NEGİŞ has announced his resignation, effective on February 2nd, 2012, Mr. İsmail Erol İŞBİLEN and Hülagü ÖZCAN have announced their resignations, effective on March 12th, 2012 then, retrospectively Mr. Ali ÇELİK, Mr. Faruk İLK and Mr. Mustafa Talat KATIRCIOĞLU, Dr. Ercüment GÜLER, Mehmet URUÇ were appointed as the board members to fill their vacancies. In general meeting on March 31, 2012, the number of Parent Bank s board members determined as 9 and Mehmet GÖZÜTOK and Recep KOÇAK were appointed as the board members, Erhan BİRGİLİ was appointed as the auditor. On March 8, 2012, it has been decided to increase the capital of Tamweel Africa Holding S.A. by EUR which has been accounted for under the equity method by the Parent Bank. The Parent Bank has paid EUR for the capital increase on March 8, Capital registry process has not been finalized yet. SECTION SEVEN: INDEPENDENT AUDITORS REPORT I. Explanations on the Independent Auditors Report The financial statements of the Parent Bank for the year January 1 December 31, 2011 have been audited by DRT Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. (Member of Deloitte Touche Tohmatsu Limited). The independent auditor s report is presented at the beginning of the financial statements and related notes. II. Other Footnotes and Explanations Prepared by the Independent Auditors There is no significant matter or disclosure which may be in connection with the Group s operations but not explained in the above sections. 239

240 Contact Information Bank Asya Branches Head Office Saray Mah. Dr. Adnan Büyükdeniz Cad. No:10 Ümraniye İstanbul Phone: (0216) Fax: (0216) BANK ASYA Regional Offices Ankara Regional Office Ehlibeyt Mah. Ceyhun Atuf Kansu Cad Sk. Sümer İş Merkezi Kat:3 No:15/11 Balgat / Ankara Phone: (0312) Fax: (0312) Ege Regional Office Akdeniz Cad. No:1 Reyent İş Hanı Kat:6 Pasaport Konak İzmir Phone: (0232) Fax: (0232) İstanbul Anatolia Regional Office Yenişehir Mah. Mevlana Sok. No:31 Ataşehir / İstanbul Phone: (0216) Fax: (0216) İstanbul European Regional Office I Esentepe Mah. Büyükdere Cad. No:102 Maya Center B Blok K:22 Şişli / İstanbul Phone: (0212) Fax: (0212) İstanbul European Regional Office II Evren Mah. Koçman Cad. No:40 Güneşli Bağcılar / İstanbul Phone: (0212) Fax: (0212) Karadeniz Regional Office Çömlekci Mah. Sanayi Cad. Yaren Sok. No:2 Değirmendere / Trabzon Phone: (0462) Fax: (0462) Konya Regional Office Musalla Bağları Mah. Belh Cad. No:10 Selçuklu / Konya Phone: (0332) Fax: (0332) Marmara Regional Office Ahmet Paşa Mah. Fomara İş Mrk. No:73 Kat:5 Osmangazi / Bursa Phone: (0224) Fax: (0224) Southeastern Anatolia Regional Office Mücahitler Mah. Gazimuhtarpaşa Bulvarı No:65 Şehitkamil / Gaziantep Phone: (0342) Fax: (0342) BANK ASYA Corporate Branches Anadolu Corporate Branch Değirmen Sok. Nidakule İş Mrk. No:18 Kat:19 Kozyatağı Kadıköy / İstanbul Phone: (0216) Fax: (0216) Akdeniz Corporate Branch Tarım Mah. Aspendos Bulvarı Olimpos Erüst İş Mrk. B Blok No:4 Antalya Phone: (0242) Fax: (0242) Başkent Corporate Branch Armada İş Mrk. Eskişehir Yolu No:6 Kat:20/ Söğütözü / Ankara Phone: (0312) Fax: (0312) Boğaziçi Corporate Branch Esentepe Mah. Büyükdere Cad. No:102 Maya Center B Blok K:22 Şişli / İstanbul Phone: (0212) Fax: (0212) Ege Corporate Branch Şehit Fethi Bey Cad. No:55 Heris Tower İş Mrk. K:16 D:23-24 Pasaport Alsancak / İzmir Phone: (0232) Fax: (0232) Trakya Corporate Branch Çobançeşme Mah. Sanayi Cad. No:44/A Nish İstanbul Yenibosna Bahçelievler / İstanbul Phone: (0212) Fax: (0212) BANK ASYA's Branchs Adana Adana Branch Çınarlı Mah. Atatürk Cad. Kemal Özülkü İş Merkezi No:23 Zeminkat Seyhan Adana Phone: (0322) Fax: (0322) Çukurova Branch Turgut Özal Bulvarı Dosteller Apt. No:176 Seyhan / Adana Phone: (0322) Fax: (0322) Adapazarı Branch Atatürk Bulvarı No:75 Adapazarı Phone: (0264) Fax: (0264) Adıyaman Branch Atatürk Cad. Ulu Cami Yanı 444 Sok. No:10 Adıyaman Phone: (0416) Fax: (0416) Afyon Branch Dumlupınar Mah. Yüzbaşı Agâh Cad. No: Afyon Phone: (0272) Fax: (0272) Aksaray Branch Minarecik Mah. Ankara Cad. No:14/A Aksaray Phone: (0382) Fax: (0382) Amasya Branch Yüzevler Mah. Danişment Cad. No:14/A Amasya Phone: (0358) Fax: (0358) Ankara Ankara Branch Anafartalar Cad. No:63 Anafartalar Altındağ Ankara Phone: (0312) Fax: (0312) Balgat Branch Ehlibeyt Mah. Ceyhun Atuf Kansu Cad. No:100/T (B Blok No: 20) Balgat / Ankara Phone: (0312) Fax: (0312) Çankaya Branch Güzeltepe Mah. Hoşdere Cad. No:222 Çankaya Ankara Phone: (0312) Fax: (0312) Etlik Branch İncirli Mah. Yunus Emre Cad. No:5 Etlik Keçiören Ankara Phone: (0312) Fax: (0312) İvedik Organize Sanayi Branch Ostim Mah. 23. Cad. Tuğcular İş Mrk. No:18/10 Yenimahalle / Ankara Phone: (0312) Fax: (0312) Keçiören Branch Güçlükaya Mah. Cumhuriyet Cad. No:11/B Keçiören / Ankara Phone: (0312) Fax: (0312) Kızılay Branch Meşrutiyet Cad. No:16/A Kızılay Ankara Phone: (0312) Fax: (0312) Kızılcahamam Branch Yenice Mah. Cengiz Topel Cad. No:5/17 Kızılcahamam Ankara Phone: (0312) Fax: (0312) Ostim Branch Yenimahalle Yüzüncü Yıl Bulvarı No: Ostim / Ankara Phone: (0312) Fax: (0312) Polatlı Branch Ankara Cad. No:36 Polatlı / Ankara Phone: (0312) Fax: (0312) Pursaklar Branch Merkez Mah. Belediye Cad. No:17/A-B Pursaklar / Ankara Phone: (0312) Fax: (0312)

241 Bank Asya 2011 Annual Report Sincan Branch Atatürk Mah. Onur Sok. No:16/A Sincan / Ankara Phone: (0312) Fax: (0312) Siteler Branch Demirhendek Cad. No:68 Siteler Ankara Phone: (0312) Fax: (0312) Yenimahalle Branch Ragıp Tüzün Cad. No:167 Yenimahalle / Ankara Phone: (0312) Fax: (0312) Antalya Alanya Branch Şekerhane Mah. Şevket Tokuş Cad. Kerim Çağırıcı Sok. No:35/A Alanya Phone: (0242) Fax: (0242) Antalya Branch Adnan Menderes Bulvarı Has İş Merkezi No: Antalya Phone: (0242) Fax: (0242) Aspendos Bulvarı Branch Tarım Mah. Aspendos Bulvarı Olimpos Erüst İş Merkezi B Blok No:4 Antalya Phone: (0242) Fax: (0242) Kepez Branch Yükseliş Mah. Mithat Paşa Cad. Görkem Apt. No:22/ Antalya Phone: (0242) Fax: (0242) Konyaaltı Branch Arapsuyu Mah. Atatürk Bulvarı Altınay Plaza No:127/B-2 Konyaaltı / Antalya Phone: (0242) Fax: (0242) Manavgat Branch Bahçelievler Mah. Demokrasi Bulvarı No:50 Manavgat / Antalya Phone: (0242) Fax: ( Muratpaşa Branch Balbey Mah. İsmetpaşa Cad. İkizhan İş Hanı 12/A Antalya Phone: (0242) Fax: (0242) Aydın Aydın Branch Hükümet Bulvarı Hasan Efendi Mah. No:19/A Aydın Phone: (0256) Fax: (0256) Nazilli Branch Altıntaş Mah. İstasyon Bulvarı No:23 Nazilli / Aydın Phone: (0256) Fax: (0256) Balıkesir Balıkesir Branch Altıeylül Mah. Kızılay Cad. No: Balıkesir Phone: (0266) Fax: (0266) Bandırma Branch İsmet İnönü Cad. No:68/A Bandırma / Balıkesir Phone: (0266) Fax: (0266) Batman Branch Bahçelievler Mah. Turgut Özal Bulvarı No:237 Batman Phone: (0488) Fax: (0488) Bolu Branch İzzet Baysal Cad. Güney Kaya Pasajı No:77 Bolu Phone: (0374) Fax: (0374) Bursa Bursa Branch Haşim İşçan Cad. No:2 Osmangazi Bursa Phone: (0224) Fax: (0224) Demirtaş Branch Panayır Mah. Yeni Yalova Cad. No:455/H Özyıldırım Plaza Osmangazi / Bursa Phone: (0224) Fax: (0224) İnegöl Branch Nuri Doğrul Cad. No:29 İnegöl / Bursa Phone: (0224) Fax: (0224) Nilüfer Branch İhsani Mah. İzmir Yolu Bankalar Cad. Çilek Sok. Atalay 9 Sitesi A Blok No:22 Nilüfer / Bursa Phone: (0224) Fax: (0224) Ulucami Branch Atatürk Caddesi No:94 Osmangazi / Bursa Phone: (0224) Fax: (0224) Uludağ Branch Ulu Mah. Kıbrıs Şehitleri Cad. No:48/A-B Osmangazi / Bursa Phone: (0224) Fax: (0224) Yıldırım Branch Duaçınarı Mah. Ankara Yolu Cad. No:237 Yıldırım / Bursa Phone: (0224) Fax: (0224) Çanakkale Branch Çarşı Cad. No:131 Çanakkale Phone: (0286) Fax: (0286) Çorum Branch İnönü Cad. No: Çorum Phone: (0364) Fax: (0364) Denizli Branch Saraylar Mah. Saltak Cad. No:6/C Merkez / Denizli Phone: (0258) Fax: (0258) Diyarbakır Dağkapı Branch Gazi Cad. No:18 Diyarbakır Phone: (0412) Fax: (0412) Diyarbakır Branch Şanlıurfa Yolu Bulvarı Serin Apt. No:57/C Diyarbakır Phone: (0412) Fax: (0412) Düzce Branch Burhaniye Mah. İstanbul Cad. No:3/B Düzce Phone: (0380) Fax: (0380) Edirne Branch Çavuşbey Mah. Hükümet Cad. No:3 Edirne Phone: (0284) Fax :(0284) Elazığ Branch Rızaiye Mah. Gazi Cad. No:2 Zemin Kat: 4 Elazığ Phone: (0424) Fax: (0424) Ereğli Branch Müftü Mah. Erdemir Caddesi No:60/B Kdz. Ereğli / Zonguldak Phone: (0372) Fax: (0372) Erzincan Branch Karaağaç Mah. Fevzi Paşa Cad. No:26/B Erzincan Phone: (0446) Fax: (0446) Erzurum Branch Gez Mah. Orhan Şerifsoy Cad. No:15 Erzurum Phone: (0442) Fax: (0442) Eskişehir Branch İstiklal Mah. Şair Fuzuli Cad. No:24 Odunpazarı / Eskişehir Phone: (0222) Fax: (0222) Fethiye Branch Cumhuriyet Mah. Hükümet Cad. No:5 Fethiye / Muğla Phone: (0252) Fax: (0252)

242 Contact Information Bank Asya Branches Gaziantep Gatem Branch Muammer Aksoy Bulvarı Prestij İş Merkezi No:8-9 Şehit Kamil Gaziantep Phone: (0342) Fax: (0342) Gaziantep Branch İncilipınar Mah. Muammer Aksoy Bulvarı Prestij İş Merkezi No:9-10 Şehit Kamil Gaziantep Phone: (0342) Fax: (0342) Suburcu Branch Karagöz Mah. Karagöz Cad. No: 2/A Şahinbey / Gaziantep Phone: (0342) Fax: (0342) Giresun Branch Hacımiktat Mah. Fatih Cad. No:18 Merkez / Giresun Phone: (0454) Fax: (0454) Hatay Antakya Branch Yavuz Selim Cad. Zühtiye Ökten İşhanı No:6 Antakya / Hatay Phone: (0326) Fax: (0326) İskenderun Branch Savaş Mah. Mareşal Fevzi Çakmak Cad. No:10 Modern İş Hanı İskenderun / Hatay Phone: (0326) Fax: (0326) Isparta Branch Pirimehmet Mah. 118 Cad. Koca Mustafa Pasajı No:16 Isparta Phone: (0246) Fax: (0246) İstanbul Acıbadem Branch Acıbadem Cad. Kazaca Apt. A Blok No:97/B Kadıköy / İstanbul Phone: (0216) Fax: (0216) Aksaray Branch Mustafa Kemal Paşa Cad. No:86 Aksaray Fatih / İstanbul Phone: (0212) Fax: (0212) Altıntepe Branch Altıntepe Mah. Bağdat Cad. No:71/B Maltepe / İstanbul Phone: (0216) Fax: (0216) Altıyol Branch Osmanağa Mah. Söğütlüçeşme Cad. No:29 Kadıköy / İstanbul Phone: (0216) Fax: (0216) Altunizade Branch Kısıklı Cad. No:7 Altunizade / İstanbul Phone: (0216) Fax: (0216) Arnavutköy Branch İslambey Mah. Fatih Cad. No:24 Arnavutköy / İstanbul Phone: (0212) Fax: (0212) Ataşehir Branch Yenişehir Mah. Mevlana Sok. No:31 Ataşehir / İstanbul Phone: (0216) Fax: (0216) Avcılar Branch E-5 Yolu Üzeri Merkez Mah. Engin Sok. No:1 Avcılar İstanbul Phone: (0212) Fax: (0212) Bağcılar Branch Merkez Mah. 1. Sok. No:9 Bağcılar / İstanbul Phone: (0212) Fax: (0212) Bahçelievler Branch İzzettin Çalışlar Cad. No: 23/B Bahçelievler / İstanbul Phone: (0212) Fax: (0212) Bakırköy Branch İncirli Cad. No: 113 Bakırköy İstanbul Phone: (0212) Fax: (0212) Bakırköy Çarşı Branch Cevizlik Mah. İstanbul Cad. No:35/A Bakırköy / İstanbul Phone: (0212) Fax: (0212) Başakşehir Branch Ziya Gökalp Mah. İkitelli OSB S.S Tümsan 1.Kısım Sanayi Sitesi 3.Blok No:5 Başakşehir / İstanbul Phone: (0212) Fax: (0212) Bayrampaşa Branch Yenidoğan Mah. Abdi İpekçi Cad. Parkhan No:8/B Bayrampaşa / İstanbul Phone: (0212) Fax: (0212) Beşiktaş Branch Sinanpaşa Mah. Beşiktaş Cad. No:1/A Beşiktaş / İstanbul Phone: (0212) Fax: (0212) Beşyüzevler Branch Yıldırım Mah. Eski Edirne Asfaltı Cad. No: 213/A Bayrampaşa / İstanbul Phone: (0212) Fax: (0212) Beykoz Branch Fevzi Paşa Mah. No:78 Beykoz / İstanbul Phone: (0216) Fax: (0216) Beylikdüzü Branch Gürpınar Kavşağı E5 Yolu Üzeri Deko İş Merkezi Beylikdüzü - Büyükçekmece / İstanbul Phone: (0212) Fax: (0212) Büyükçekmece Branch Fatih Mah. Cengiz Topel Cad. No:4/A Büyükçekmece / İstanbul Phone: (0212) Fax: (0212) Cennet Mahallesi Branch Cennet Mah. Barboros Cad. No:69/B Küçükçekmece / İstanbul Phone: (0212) Fax: (0212) Çağlayan Branch Çağlayan Vatan Cad. Avrasya İş Merkezi No: 6/A Çağlayan - Kağıthane İstanbul Phone: (0212) Fax: (0212) Çapa Branch Şehremini Mah. Turgut Özal Cad. No:145/A Fatih / İstanbul Phone: (0212) Fax: ( Çekmeköy Branch Meclis Mah. Teraziler Cad. Aşkın Sok. No:19/B Sancaktepe/İstanbul Phone: (0216) Fax: (0216) Çeliktepe Branch Emniyet Evleri Mah. İsmet İnönü Cad. No:12/A Çeliktepe / İstanbul Phone: (0212) Fax: (0212) Dikilitaş Branch Dikilitaş Mah. Emirhan Cad. No:85/A Beşiktaş / İstanbul Phone: (0212) Fax: (0212) Dolayoba Branch Çınardere Mah. E-5 Yanyolu Cad. No: 63/1 Pendik / İstanbul Phone: (0216) Fax: (0216) Dudullu Branch Yukarı Dudullu Mah. Alemdağ Cad. No: /D Ümraniye / İstanbul Phone: (0216) Fax: (0216) Erenköy Branch Şemsettin Günaltay Cad. Çiğdem Apt. No: 238 Erenköy / İstanbul Phone: (0216) Fax: (0216)

243 Bank Asya 2011 Annual Report Esenler Branch Atışalanı Cad. No:21 Esenler İstanbul Phone: (0212) Fax: (0212) Esenyurt Branch İnönü Mah. Doğan Araslı Bulvarı No:124/B Esenyurt İstanbul Phone: (0212) Fax: (0212) Fatih Branch Akşemsettin Mah. Akdeniz Cad. No:10 Fatih İstanbul Phone: (0212) Fax: (0212) Eyüp Branch Merkez Mah. Fahri Korutürk Cad. No:46-A Eyüp / İstanbul Phone: (0212) Fax: (0212) Fevzipaşa Branch İskenderpaşa Mah. Macar Kardeşler Cad. No:59 Fatih / İstanbul Phone: (0212) Fax: (0212) Fındıkzade Branch Şehremini Mah. Kızıl Elma Cad. No:12/A Fatih / İstanbul Phone: (0212) Fax: (0212) Florya Branch Şenlikköy Mah. Florya Asfaltı No:76/3 Florya Bakırköy İstanbul Phone: (0212) Fax: (0212) Gaziosmanpaşa Branch Salihpaşa Cad. Şirinler Sok. No:1 Gaziosmanpaşa İstanbul Phone: (0212) Fax: (0212) Güneşli Branch Evren Mah. Koçman Cad. No: 40 Güneşli - Bağcılar / İstanbul Phone: (0212) Fax: (0212) Güngören Branch Güven Mah. İnönü Cad. No:42/B Güngören / İstanbul Phone: (0212) Fax: (0212) Hadımköy Branch Akçaburgaz Mah. Hadımköy Yolu No:148 Esenyurt/İstanbul Phone: (0212) Fax: (0212) İkitelli Branch Turgut Özal Cad. İkitelli Organize Sanayi Bölgesi İkitelli - Küçükçekmece / İstanbul Phone: (0212) Fax: (0212) İmes Sanayi Branch İmes Sanayi Sitesi C Blok 301 Sok. No:3/A Yukarı Dudullu İstanbul Phone: (0216) Fax: (0216) İmsan Branch Atatürk Mah. İmsan Sanayi Sitesi 1. Sok. No:42 Küçükçekmece / İstanbul Phone: (0212) Fax: (0212) İstoç Branch İstoç E-1 Blok Öksüzoğulları Plaza No:5/3 Bağcılar / İstanbul Phone: (0212) Fax: (0212) Kadıköy Branch Tuğlacıbaşı Mah. Poyraz Sok. Sadıkoğlu 1 İş Merkezi No:16 Ziverbey Kadıköy İstanbul Phone: (0216) Fax: (0216) Kağıthane Branch Mezbaha Sok. No: 1 Kağıthane / İstanbul Phone: (0212) Fax: (0212) Karaköy Branch Müeyyedzade Mah. Kemeraltı Cad. No:6/A Karaköy / İstanbul Phone: (0212) Fax: (0212) Kartal Branch Ankara Cad. No:96 Kartal / İstanbul Phone: (0216) Fax: (0216) Kavacık Branch Orhan Veli Kanık Cad. Martı İş Merkezi No:72 Kavacık İstanbul Phone: (0216) Fax: (0216) Kozyatağı Branch Şaşmaz Plaza Saniye Ermutlu Sok. No:4 Kozyatağı İstanbul Phone: (0216) Fax: (0216) Kurtköy Branch Kurtköy Mah. Üstün Cad. No:2 Kurtköy - Pendik / İstanbul Phone: (0216) Fax: (0216) Küçükbakkalköy Branch Kayışdağı Cad. No:105/A Ataşehir / İstanbul Phone: (0216) Fax: (0216) Küçükköy Branch Yeni Mah. İstanbul Cad. No:1-3A Gaziosmanpaşa / İstanbul Phone: (0212) Fax: (0212) Levent Sanayi Branch Sanayi Mah. Sultan Selim Cad. No:1/C Kağıthane / İstanbul Phone: (0212) Fax: (0212) Libadiye Branch Bulgurlu Mah. Libadiye Cad. No:60 Üsküdar / İstanbul Phone: (0216) Fax: (0216) Maltepe Branch Bağlarbaşı Mah. Bağdat Cad. No:485/B Maltepe / İstanbul Phone: (0216) Fax: (0216) Maslak Branch Ayazağa Mah. Büyükdere Cad. No:71 Maslak - Şişli / İstanbul Phone: (0212) Fax: (0212) Mecidiyeköy Branch Mecidiyeköy Yolu Cad. No:6/A Mecidiyeköy Şişli / İstanbul Phone: (0212) Fax: (0212) Mercan Branch Prof. Cemil Birsel Cad. No:25 Eminönü / İstanbul Phone: (0212) Fax: (0212) Merkez Şube Saray Mah. Dr. Adnan Büyükdeniz Cad. No:10 Ümraniye İstanbul Phone: (0216) Fax: (0216) Merter Branch Mehmet Nezihi Özmen Mah. Fatih Cad. No:24 Merter / İstanbul Phone: (0212) Fax: (0212) Natoyolu Branch Güzeltepe Mah. Bosna Bulvarı (Nato Yolu) No:143/B Üsküdar / İstanbul Phone: (0216) Fax: (0216) Pendik Branch Doğu Mah. 23 Nisan Cad. No:59 Pendik İstanbul Phone: (0216) Fax: (0216) Sancaktepe Branch Meclis Mah. Eski Ankara Cad. No.34 Sancaktepe Sarıgazi / İstanbul Phone: ( Fax: (0216) Sarıyer Branch Şehit Midhat Cad. No:27 Sarıyer/İstanbul Phone: (0212) Fax: (0212)

244 Contact Information Bank Asya Branches Sefaköy Branch Fevzi Çakmak Mah. Ahmet Kocabıyık Sok. No:12/C Sefaköy / İstanbul Phone: (0212) Fax: (0212) Silivri Branch Alibey Mah. Aziz Sok. A.Kadir Yılmaz İş Mrk. No:3/2 Silivri / İstanbul Phone: (0212) Fax: (0212) Soğanlık Branch Soğanlık Yenimahalle Atatürk Caddesi No:60/B Kartal / İstanbul Phone: (0216) Fax: (0216) Sultanbeyli Branch Fatih Bulvarı No:193 Sultanbeyli İstanbul Phone: (0216) Fax: (0216) Sultançiftliği Branch Cebeci Mah. Eski Edirne Asfaltı No:702A Sultançiftliği-Sultangazi İstanbul Phone: (0212) Fax: (0212) Sultanhamam Branch Rüstempaşa Mah. Vasıfçınar Cad. No:49 Fatih / İstanbul Phone: (0212) Fax: (0212) Şirinevler Branch Hürriyet Mah. Mahmutbey Cad. No:3/B Bahçelievler / İstanbul Phone: (0212) Fax: (0212) Şişli Branch Meşrutiyet Mah. Halaskargazi Cad. No:98/A Şişli / İstanbul Phone: (0212) Fax: (0212) Taksim Branch İnönü Mah. Cumhuriyet Cad. Şakirpaşa İşhanı No.89 Şişli / İstanbul Phone: (0212) Fax: (0212) Telsiz Mahallesi Branch Telsiz Mah. Seyit Nizam Cad. No:176/A Zeytinburnu / İstanbul Phone: (0212) Fax: (0212) Tepeüstü Branch Alemdağ Cad. No:572/A Ümraniye İstanbul Phone: (0216) Fax: (0216) Topçular Branch Kışla Cad. Kurtoğlu İş Merkezi No:21/7 Eyüp / İstanbul Phone: (0212) Fax: (0212) Topkapı Branch Merkezefendi Mah. Davutpaşa Cad. No:119 Zeytinburnu İstanbul Phone: (0212) Fax: (0212) Tuzla Branch Aydıntepe Mah. Irmak Sok. No:1 Tuzla İstanbul Phone: (0216) Fax: (0216) Tuzla Serbest Bölge Branch İstanbul Deri Serbest Bölgesi Hakkı Matraş Cad. No:11 Tuzla İstanbul Phone: (0216) Fax: (0216) Ümraniye Branch Namık Kemal Mah. Sütçü Cad. No:2 Ümraniye İstanbul Phone: (0216) Fax: (0216) Ümraniye Çarşı Branch İstiklal Mah. Alemdağ Cad. No:174/A Ümraniye / İstanbul Phone: (0216) Fax: (0216) Üsküdar Branch Atlas Çıkmazı No:5/40 Üsküdar İstanbul Phone: (0216) Fax: (0216) Yenibosna Radar Branch Merkez Mah. Atatürk Cad. No:1/A Yenibosna Bahçelievler / İstanbul Phone: (0212) Fax: (0212) Zeytinburnu Branch Prof. Muammer Aksoy Cad. No:41 Zeytinburnu İstanbul Phone: (0212) Fax: (0212) İzmir Aliağa Branch Kazımdırık Mah. İstiklal Cad. No:49 Aliağa / İzmir Phone: (0232) Fax: (0232) Bornova Branch Fevzi Çakmak Cad. No:15/A Bornova / İzmir Phone: (0232) Fax: (0232) Gazi Bulvarı Branch İsmet Kaptan Mah. Gaziosmanpaşa Bulvarı No:15/A Çankaya / İzmir Phone: (0232) Fax: (0232) İzmir Branch Gaziosmanpaşa Bulvarı No:58/1 Çankaya / İzmir Phone: (0232) Fax: (0232) Karabağlar Branch Yeşillik Cad. No:417 Karabağlar İzmir Phone: (0232) Fax: (0232) Karşıyaka Branch Girne Bulvarı No: /A Karşıyaka / İzmir Phone: (0232) Fax: (0232) Kemalpaşa Branch Mehmet Akif Ersoy Mah. Atatürk Bulvarı No:51/1 Kemalpaşa / İzmir Phone: (0232) Fax: (0232) Şirinyer Branch Güven Mah. Menderes Cad. No:318/A Buca / İzmir Phone: (0232) Fax: (0232) Yenişehir Branch Ege Ticaret İş Merkezi Gıda Çarşısı Sok. No:25/E İzmir Phone: (0232) Fax: (0232) Kahramanmaraş Branch İsmetpaşa Mah. Hükümet Bulvarı Beyzade İşhanı No:8/A Kahramanmaraş Phone: (0344) Fax: (0344) Kastamonu Branch Hepkebirler Mah. Cumhuriyet Cad. No:46/A Kastamonu Phone: (0366) Fax: (0366) Karabük Branch Bayır Mah. Hürriyet Cad. No: Karabük Phone: (0370) Fax: (0370) Kayseri Kayseri Branch Cumhuriyet Mah. Nazmi Toker Cad. No: Kayseri Phone: (0352) Fax: (0352) Sanayi Branch Sanayi Mah.Osman Kavuncu Bulvarı No:120 Kocasinan / Kayseri Phone: (0352) Fax: (0352) Kocaeli Gebze Branch Hacı Halil Mah. Zübeyde Hanım Cad. Tekhan No:37 Gebze Kocaeli Phone: (0262) Fax: (0262) Gebze Çarşı Branch Zübeyde Hanım Cad. No:37 Gebze Kocaeli Phone: (0262) Fax: (0262)

245 Bank Asya 2011 Annual Report İzmit Branch Karabaş Mah. Cengiz Topel Cad. No:12 İzmit / Kocaeli Phone: (0262) Fax: (0262) Körfez Branch Kuzey Mah. Cahit Zarifoğlu Cad. No:53/D Körfez / Kocaeli Phone: (0262) Fax: (0262) Konya Büsan Branch Fevzi Çakmak Mah. Kosgeb Cad. Büsan San. Sitesi No:19 Karatay Konya Phone: (0332) Fax: (0332) Konya Branch Musalla Bağları Mah. Belh Cad. No:10 Selçuklu Konya Phone: (0332) Fax: (0332) Karatay Sanayi Branch Fatih Mah. Köprü Sok. No:29/1 Selçuklu / Konya Phone: (0332) Fax: (0332) Konya Ereğli Branch Pirömer Mah. İnönü Cad. Çimenlik Sok. No:2/A Ereğli / Konya Phone: (0332) Fax: (0332) Mevlana Branch Pürçüklü Mah. Aziziye Cad. No:24 Karatay / Konya Phone: (0332) Fax: (0332) Karaman Branch Fenari Mah. 9. Sok. Şimşek İş Merkezi No:4/A Karaman Phone: (0338) Fax: (0338) Kırıkkale Branch Yenidoğan Mah. Barbaros Hayrettin Cad. No:24/A Kırıkkale Phone: (0318) Fax: (0318) Kütahya Branch Cumhuriyet Cad. Karakol Sok. Acar Apt. No: 1/ Kütahya Phone: (0274) Fax: (0274) Malatya Branch Hüseyin Bey Mah. Atatürk Cad. No: Malatya Phone: (0422) Fax: (0422) Manisa Akhisar Branch Paşa Mah. Haşim Haşimoğlu Cad. 50. Sok. No:23 Akhisar / Manisa Phone: (0236) Fax: (0236) Manisa Branch 1. Anafartalar Mah. Gaziosmanpaşa Cad. No: Manisa Phone: (0236) Fax: (0236) Turgutlu Branch Turan Mah. Atatürk Bulvarı No:174 Turgutlu / Manisa Phone: (0236) Fax: (0236) Mardin Branch Çankaya Mah. İstiklal Cad. No:59/A Mersin Phone: (0324) Fax: (0324) Mersin Branch Cami Şerif Mah. Uray Cad. No: Mersin Phone: (0324) Fax: (0324) Nevşehir Branch Aksaray Cad. No: Nevşehir Phone: (0384) Fax: (0384) Niğde Branch Esenbey Mah. Ayhan Şahenk Bulvarı No:18/C Merkez / Niğde Phone: ( Fax: (0388) Ordu Branch Şarkiye Mah. Kazım Karabekir Cad. No:7 Ordu Phone: (0452) Fax: (0452) Osmaniye Branch İstiklal Mah. Atatürk Cad. No:150 Osmaniye Phone: (0328) Fax: (0328) Rize Branch Tevfik İleri Cad. No:1 Rize Phone: (0464) Fax: (0464) Samsun Branch Kale Mah. Cumhuriyet Cad. No: Samsun Phone: (0362) Fax: (0362) Siirt Branch Bahçelievler Mah. Hazreti Fakirullah Cad. No:115/A Siirt Phone: (0484) Fax: (0484) Sivas Branch Eskikale Mah. Bankalar Cad Sok. No:4 Sivas Phone: (0346) Fax: (0346) Şanlıurfa Branch Yusufpaşa Mah. Asfaltyol Cad. No: Şanlıurfa Phone: (0414) Fax: (0414) Tatvan Branch Aydınlar Mah. Abdullah Kocakaplan Cad. No:31 A Blok Tatvan / Bitlis Phone: (0434) Fax: (0434) Tekirdağ Çerkezköy Branch Gaziosmanpaşa Mah. Atatürk Cad. No:39 Çerkezköy / Tekirdağ Phone: (0282) Fax: (0282) Çorlu Branch Cemaliye Mah. Omurtak Cad. No:236/1 Çorlu Tekirdağ Phone: (0282) Fax: (0282) Tekirdağ Branch Hükümet Cad. No:142 Tekirdağ Phone: (0282) Fax: (0282) Tokat Branch Gaziosmanpaşa Bulvarı Yar Ahmet Mah. No:185/A Tokat Phone: (0356) Fax: (0356) Trabzon Branch Kemerkaya Mah. Kahramanmaraş Cad. No:37/A Trabzon Phone: (0462) Fax: (0462) Uşak Branch Kurtuluş Mah. İsmetpaşa Cad. Mavi Plaza İş Merkezi No:45/B Uşak Phone: (0276) Fax: (0276) Van Branch Çarşı Mah. Cumhuriyet Cad. Vali Konağı Karşısı No:118/A-B Van Phone: (0432) Fax: (0432) Yalova Branch Yalı Cad. Gürer İş Merkezi No:11 Merkez/Yalova Phone: (0226) Fax: (0226)

246