bank as ya 2010 ann U a L REPORT

Transcription

1 2010 ANNUAL REPORT

2 Part I: Presentation 4 Mission, Vision, Strategic Objectives 5 Bank Asya in Brief 6 Key Highlights 8 Bank Asya s Market Position in the Sector 10 Bank Asya s Growth Strategy 14 Milestones 16 History 18 Changes in Capital and Shareholder Structure During the Reporting Period 24 Chairman s Message 28 CEO s Message 30 Message from Mr. Cemil Özdemir 34 Macroeconomic Overview and the Banking Sector 42 Review of Bank Asya s Activities in Corporate Communications and Social Responsibility 60 Subsidiaries and Affiliates 61 Independent Auditors Compliance Opinion on the Annual Report Part II: Information on Management and Corporate Governance Practices 64 Board of Directors 66 Statutory Auditors 68 Senior Management 70 Organization Chart 72 Committees 74 Summary Report of the Board of Directors 75 Human Resources 76 Training 77 Transaction Volume of the Risk Group of the Bank, Outstanding Loan and Deposit Balances, and Current Income and Expenses for the Reporting Period 78 Report on Compliance with Corporate Governance Principles 83 Support Services Procured by Bank Asya 84 The Bank s Profit Distribution Policy 85 The Bank s Profit Distribution Proposal for 2010 Profits 86 Matters Regarding The Ordinary General Assembly Meeting 87 Detailed Information On Agenda Items Part III: Assessment on Financial Information and Risk Management 88 Summary Report of the Statutory Auditors 89 Five-Year Summary Financial Statistics Including the Reporting Period 90 Assessment of Financial Position, Profitability and Debt Servicing Capacity 91 Assessment of the Audit Committee on the Operation of Internal Systems 93 Information on Risk Management Policies Implemented for each Risk Category 95 Credit Ratings and Reports Part IV: Unconsolidated Financial Statements and Accompanying Notes 99 Independent Auditors Report 102 Explanations and Notes for the Financial Statements Bölüm V: consolidated Financial Statements and Accompanying Notes 173 Independent Auditors Report 178 Explanations and Notes for the Financial Statements 250 Branches

3 High caliber human capital, excellent performance With its mission to extend participation banking to the widest population possible with the latest products and services, Bank Asya continues to create sustainable value through investments in advanced technology, a customer-centric approach, and strong, broad capital base. Bank Asya is committed to remain at the top with its high quality service and advanced technology, and to continue on its steady and healthy growth path.

4 Bank Asya, a pioneer with its innovations, strong with its growth momentum Mount AĞRI: Turkey s tallest mountain with an elevation of 5,137 meters.

5 INNOVATION AND STRONG GROWTH

6 4 Bank Asya 2010 ANNUAL REPORT 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 interest-free banking principles and satisfying customer needs and expectations with a different solutions for different expectations approach. 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 its market share. To be a pioneer in the banking industry with its innovations. To be the primary bank of its customers. To sustain and increase support of social responsibility projects including social activities and sports.

7 PresentatIon 5 BANK ASYA IN BRIEF Bank Asya ascertains its strategic targets by the principle of more sustainable value for all of its social and economic stakeholders. Bank Asya, Turkey s most dynamic participation bank, commenced operations under the Asya Finans name in 1996 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 market position. Turkey s first participation bank to go public Bank Asya is firmly committed to a strategy of 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, 52.5% of the Bank s capital was publicly held. The Bank s paid-in capital was TL 900 million as of the end of New high-quality products and services in participation banking Bank Asya works continuously and proactively to expand its product and service lineup in order to meet the changing needs and expectations of its customers across all its business lines. As the first participation bank in Turkey to be awarded ISO 9001 Quality Management System certification, Bank Asya seeks to strengthen its market position by developing new interest-free banking products, including derivative products, with its innovative approach. 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 well understands that when it invests in people and technology, it invests in the future. The Bank deploys advanced technology in order to strengthen its growth momentum and supports its young, dynamic and development-focused workforce to embrace the Company s values. Advanced technology in banking Having expanded the reach of its delivery network through investments in technological infrastructure and alternative distribution channels, in addition to its 175 branches, Bank Asya has been particularly successful in gaining more frequent recognition in recent years for 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 once again demonstrated that it is a pioneer with the introduction in late 2010 of DIT Mobil, which facilitates contactless transactions using mobile phones. Creating more sustainable value Conducting its operations as a good corporate citizen, Bank Asya sets its strategic objectives in line with the principle of creating more sustainable value for all of its social and economic stakeholders. Increasing brand value alongside unmatched growth dynamics Bank Asya is transforming a business model which is based on supporting the real sector and manufacturing and which is informed by the fundamental principles of interest-free banking into an effective example 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 in its national market and in the international arena. In 2010, Bank Asya sustained its profitability and growth in line with its performance targets thanks to its solid capital base and healthy balance sheet. The Bank continued to lead the participation bank market in 2010 in terms of total assets, lending, non-cash loans, deposits and net profit. Bank Asya also outperformed the industry overall in growth of total assets and deposits.

8 6 Bank Asya 2010 ANNUAL REPORT KEY HIGHLIGHTS Key Financial Highlights (Try Million) Change(%) Total Assets 11,609 14, Cash Loans (*) 8,355 11, Deposits 9,137 11, Shareholders Equity 1,708 1, Paid-In Capital Non-Cash Loans 8,886 9, Net Profit for the Period (13.6) Number of Branches Number of Personnel 4,074 4, Key Financial Ratios (%) Cash Loans/Total Assets (**) Loan-to-Deposit Ratio Cash Loans/Deposits (**) Capital Adequacy Ratio Shareholders Equity/Total Assets (*) Cash Loans include leasing receivables and non-performing loans. (**) Loan-To-Deposit Ratio is calculated by dividing Cash Loans by Deposits. (***) Non-performing loans were added to Cash Loans and Total Assets in gross terms. 06 4, ,260 8,109 11,609 14,513 TOTAL ASSETS (TRY MILLION) 25% 06 3, , , , ,060 LOANS (TRY MILLION) 32%

9 PresentatIon 7 Bank Asya sustained its upward momentum in 2010 and achieved growth of 25% in Total Assets, 32.4% in Cash Loans and 22.2% in 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 Funds Borrowed 2 4 Shareholders Equity Other , , , , ,167 DEPOSITS (TRY MILLION) 22% 14% SHAREHOLDERS EQUITY (TRY MILLION) , , ,942

10 7.7 8 Bank Asya 2010 ANNUAL REPORT BANK ASYA S MARKET POSITION IN THE SECTOR High performance, strong and leading position Banking Industry Deposit Banks Participation Banks bank asya TOTAL ASSETS (%) LOANS (%) DEPOSITS (FUNDS COLLECTED) (%) SHAREHOLDERS EQUITY (%) NET PROFIT FOR THE PERIOD (%) NON-PERFORMING LOANS (%) NON-CASH LOANS (%) TOTAL LOANS (%)

11 7.4 PresentatIon 9 Bank Asya maintained its strong market position in 2010 and outperformed the overall sector with its increase in total assets and improvement in asset quality Comparison of Bank Asya with Other Participation Banks NUMBER OF PERSONNEL (%) NUMBER OF BRANCHES (%) LOANS (%) TOTAL ASSETS (%) DEPOSITS (FUNDS COLLECTED) (%) SHAREHOLDERS EQUITY(%) NET PROFIT/LOSS FOR THE PERIOD(%) NUMBER OF BRANCHES (%) NUMBER OF PERSONNEL (%) OTHER PARTICIPATION BANKS bank asya

12 10 Bank Asya 2010 ANNUAL REPORT BANK ASYA S GROWTH STRATEGY Profitability-oriented sustainable growth Bank Asya s strong 2010 results reflected the successful implementation of its growth strategy and its effective business processes and practices. Effective Resource Management Solid capital base Rapid increase in deposits Longer average terms on deposits and high liquidity Sustainably high profitability 13.33% (tier 1) capital adequacy ratio 22% increase in deposits vs. 19.9% for the sector 18% liquidity ratio 14.4% return on equity (ROE) Effective Credit and Risk Management Deeper customer relationships More diversified loan portfolio High rate of NPL recovery Lower NPL ratio Increased loan loss reserves 32.4% growth in cash loans Ranked 12th in cash loans 3.9% NPL/cash loans ratio 2.2% NPL/total loans ratio 67.9% NPL coverage Effective Product and Brand Management Growth in innovative products Greater brand awareness (Sponsorships, effective promotion and advertising) AsyaCard DIT: Market leader in contactless cards 25% increase in credit card turnover Ranked 10th in the sector with 1.8 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 and 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, customer-oriented service philosophy a reality in all aspects. Bank Asya is a transparent institution that continuously improves its business processes and systems in line with the requirements of the day and that embodies the very best of corporate governance principles and practices.

13 PresentatIon 11 TRUST PRODUCTIVITY BUSINESS CONTINUITY OUR STRATEGIC PRIORITIES STEADY GROWTH EFFECTIVE RISK MANAGEMENT FINANCIAL OPERATIONAL EXCELLENCE STAKEHOLDERS PERSONNEL & PROGRESSION Sustainable growth and profitability Strengthening the financial structure Targets for subsidiaries and affiliates Increasing the use of technology Improving the efficiency of business processes Increasing the effectiveness of risk management practices Maximizing customer satisfaction Offering diversified solutions capable of addressing different customer expectations Ensuring sustainable dividend payment to shareholders Increasing the knowledge levels of employees Establishing effective communications and enhancing skills Disseminating corporate strategy and performanceoriented management philosophy Bank Asya s Competitive Advantages Leader among participation banks in total assets, deposits, loans, and profitability Dynamic, growing organization Well-qualified, young staff Customers trust Bank Asya Experienced in crisis management Employee engagement and loyalty to the Bank Strong team spirit throughout the Bank Focus on rapid technology deployment and innovation Bank Asya s Strategic Orientation in Trustworthiness, stable growth, effective 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 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.

14 Bank Asya, shining example with its high performance MOUNT EVEREST: The world s tallest mountain with an elevation of 8,848 meters.

15 HIGH PERFORMANCE, STRONG AND LEADING MARKET POSITION

16 14 Bank Asya 2010 ANNUAL REPORT MILESTONES 13,000 12,000 11,000 10,000 9,000 (TL million) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Bank Asya commences operations on 24 October The number of branches reaches 15. The number of branches reaches 16. Asya Finans launches the Asya Finans credit card. Asya Finans is subjected to the Banking Law. The Company s paid-in capital is increased to TL 10 million. The number of branches reaches 25. The Asya Finans online branch goes into service. The Association of Private Finance Houses is established. The Company s paid-in capital is increased to TL 20 million. The number of branches reaches 28. The Company s paid-in capital is increased to TL 40 million. The ASYA24 ATM network goes live for customer use. The Asya Fin The C

17 PresentatIon 15 DEPOSITS (FUNDS COLLECTED) (TRY MILLION) TOTAL LOANS (TRY MILLION) 11,167 11,060 number of branches reaches 43. ans becomes a member of the VISA system. The number of branches reaches 62. Alo Asya telephone banking services are launched. ompany s paid-in capital is increased to TL 60 million The Company s paid-in capital is increased to TL 120 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. Asya Finans is reorganized as a participation bank and its name is changed to Bank Asya. The number of branches reaches 72. The Company s paid-in capital is increased to TL 240 million. The number of branches reaches 92. The Company s paid-in capital is increased to TL 300 million. 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 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. 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. 2010

18 16 Bank Asya 2010 ANNUAL REPORT HISTORY A success story in participation banking 1996 Originally founded with TL 2 million in capital, Asya Finans Kurumu A.Ş. (Asya Private Finance House Inc.) commences operations on 24 October 1996 at its main branch located in the Altunizade district of Istanbul The number of branches reaches Asya Finans launches the Asya Finans credit card for its customers. The number of branches reaches Asya Finans is subjected to the Banking Law. The Company s paid-in capital is increased to TL 10 million The Asya Finans online branch goes into service. The number of branches reaches The Association of Private Finance Houses is established and a Guarantee Fund is formed. The Company s paid-in capital is increased to TL 20 million The Company launches an installment-based credit card and the ASYA24 ATM network for its customers. Regulations on the Private Finance House Private Current and Participation Account Guarantee Fund go into effect on 18 September. The Company s paid-in capital is increased to TL 40 million. The number of branches reaches Asya Finans is licensed by the Ministry of Finance to accept tax payments. Asya Finans customers begin to make credit card payments and money transfers through online PTT offices located all over the country. Asya Finans becomes a member of the VISA system on 24 October. The Company s paid-in capital is increased to TL 60 million. The number of branches reaches Alo Asya ( ) telephone banking services are launched for retail customers and corporate clients. The Company undergoes a headquarters reorganization in which the number of units is increased to 24. Asya Finans joins the Ortak Nokta ATM sharing platform, enabling its customers to access their accounts from any of more than 2,400 Ortak Nokta ATMs located all over the country. The Company s paid-in capital is increased to TL 120 million. The number of branches reaches As a result of amendments to the Banking Law, private finance houses are given one year to become compliant with participation bank status. Control of the Guarantee Fund is turned over to the Savings Deposit Insurance Fund. Asya Finans Kurumu A.Ş. is reincorporated as Asya Katılım Bankası A.Ş. (Asya Participation Bank Inc.) and it is decided to continue Asya Finans s operations as Bank Asya. The Company s paid-in capital is increased to TL 240 million. The number of branches reaches Bank Asya increases its paid-in capital to TL 300 million as a result of an initial public offering in which 23% of its shares are floated and acquired in record-breaking demand. Bank Asya begins trading on the Istanbul Stock Exchange under the ASYAB ticker symbol on 12 May. Heavy trading in the Company s shares

19 PresentatIon 17 qualifies it for inclusion in the ISE-50 Index of the most actively traded shares by the end of the same year. Bank Asya celebrates its 10th anniversary in the financial services industry. The number of branches reaches Bank Asya stock is added to the ISE- 30 Index as of January. The Company moves to its new headquarters building in the Ümraniye district of Istanbul. The number of branches reaches Bank Asya becomes the name sponsor of the Turkish Football Federation 1st League. The Company undergoes a headquarters reorganization in which the number of units is increased to 40. AsyaCard DIT (Europe s most advanced contactless credit card) and DIT Pratik (Turkey s first prepaid contactless debit card) are made available for the use of the Bank s customers. With the launch of the first transportation system project using AsyaCard DIT in the city of Kahramanmaraş, residents begin to pay municipal bus fares with the card. The Company s paid-in capital is increased to TL 900 million. The number of branches reaches The number of cities in which municipal bus fares can be paid using AsyaCard DIT reaches four with the introduction of the system in Karabük, Balıkesir and Bolu. AsyaCard DIT receives both the Best Cash Displacement Initiative award in the Visa Europe Best Card & Payment Sector Awards and the Best New Credit Card Product Launch award at the Cards & Payments Awards. The AsyaCard website, www. asyacard.com.tr, receives the Best in Class designation at the Interactive Media Awards competition. Bank Asya signs a strategic partnership agreement with the Islamic Corporation for the Development of the Private Sector (ICD), an agency of the Islamic Development Bank (IDB), and becomes a shareholder in Tamweel Africa Holding SA, a Senegal-based company that engages in interestfree banking in Africa. The number of branches reaches 158. Bank Asya is cited in The Banker magazine s list of the world s 1,000 largest banks for its highly impressive performance DIT Pratik is named The Best Mastercard Paypass Prepaid Banking Product in Turkey by Mastercard. Bank Asya branches join the MoneyGram service network to enable international money transfers. AsyaCard receives the Consumer Quality Award at the 23rd International Consumer Summit. Bank Asya signs an agreement with the Turkish Football Federation to extend its name sponsorship of the 1st League until AsyaAsist is launched to provide dedicated assistance services to SMEs. As part of its new generation small business banking concept, Bank Asya consolidates its services for microbusiness and SME segment customers under the Çobanyıldızı brand. Bank Asya introduces DIT Mobil, which facilitates contactless transactions via MicroSD cards using mobile phones. The number of branches reaches 175.

20 18 Bank Asya 2010 ANNUAL REPORT CHANGES IN CAPITAL AND SHAREHOLDER STRUCTURE DURING THE REPORTING PERIOD Bank Asya s shareholder structure as of year-end 2009 and year-end 2010 appears in the table below. Year-end 2009 % Year-end 2010 % Group A (preference shares) 360,000, ,000, Group B (not traded on ISE) 82,014, ,124, Group B (traded on ISE) 457,985, ,875, Total 900,000, ,000, Bank Asya has a broad-based, multi-shareholder, domestically-financed capital structure. As of yearend 2010, the Company had 253 partners who are 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 2010 are presented below. Ownership Title name/surname in the Bank (%) Chairman Behçet Akyar Board Members Salih Sarıgül Tacettin Neğiş - Ahmet Çelik İsmail Erol İşbilen (*) - Hülagü Özcan (*) - CEO Cemil Özdemir (***) Executive Vice Presidents Ayhan Keser (**) Yusuf İzzettin İmre (**) - Buket Gereçci - Ali Tuğlu - Ali Fuat Taşkesenlioğlu - Ömer Faruk Şenel - Erdal Erdem - Hasan Ünal - Fahrettin Soylu - Statutory Auditors Ali Akbulut Atif Bilgin İrfan Hacıosmanoğlu (*) Not shown because the shareholding interest is less than 1/100,000. (**) Executive Vice Presidents Ayhan Keser and Yusuf İzzettin İmre resigned from their posts as of 3 January (***) Board Member and CEO Cemil Özdemir resigned from his duties as of 10 March 2011; he was replaced by Abdullah Çelik.

21 PresentatIon 19 Names and Shareholding Interests of Shareholders Who Own Qualified Shares Shareholders who are registered in Bank Asya s Shareholders Register as of 31 December 2010 and whose ownership of Group A preference shares entitles 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. Group A No Name/Surname share in the Bank (%) 1 Işıl Abay Adem Acar Lutfi Acet Ali Açıl Elif Adıyaman Kazım Afşar Ali Ağaç Recep Ağaç Yalçın Akarsu Ali Akbulut Cemil Akbulut Fikri Akbulut Hakan Cem Akbulut Mustafa Akbulut Şükran Akbulut Mehmet Akçay Ahmet Akgül Zeki Murat Akhan Ali Akın Adnan Aksoylar Erol Aktürk Nuri Alım Fehim Arıcı Hüsamettin Arlı Mehmet Artukarslan Mustafa Atçı Zehra Aydın Aydan Aydın Sağlık Erdal Babadağ Recep Bahtiyar Nusret Barış Group A No Name/Surname share in the Bank (%) 32 Zübeyir Barış Ziya Başcı Ahmet Başoğlu Arif Başoğlu Tuncay Baydak Bahri Bayram Mehmet Emin Bayram Mehmet Salih Bayram A. Selçuk Berksan Ahmet Levent Berksan Ayşe Tülin Berksan Bülent Berksan Fatma Emine Berksan Mehmet Berksan Mehmet Sinan Berksan Ömer Faruk Berksan Atif Bilgin Mustafa Bilgin Ayşe İfakat Bilginoğlu Elif Bilginoğlu Faruk Bilginoğlu Ömer Bilginoğlu Rıfat Bilginoğlu Nur Bilginoğlu Anaç Ali İhsan Bostan Turan Boztepe E. Altan Bursal S. Atilla Bursal Aykut Büyükekşi Yavuz Canikli Mustafa Cemaloğlu

22 20 Bank Asya 2010 ANNUAL REPORT CHANGES IN CAPITAL AND SHAREHOLDER STRUCTURE DURING THE REPORTING PERIOD Group A No Name/Surname share in the Bank (%) 63 Halil İbrahim Ceylan Kadir Ceylan Hakkı Coşkun Mehmet Coşkun Abdurrahman Çakar Hadi Çakar Mustafa Çakar Sadi Çakar Şerafettin Çakar İbrahim Çakır Ahmet Hamdi Çakmaz Ahmet Çelik Ahmet (355) Çelik Hüseyin Çelik Mustafa Çelik Ömer Lütfi Çelik Saffet Çerçi Doğan Çetin Cengiz Çırak İsmail Cem Çitak Cahit Değerli Mustafa Demir Yüksel Demirci Duygu Demirel Zeki Demirtaş Kamil Dere Niyazi Dere Ethem Dizdar Mehmet Semih Doğan Hüseyin Duğral Mustafa Duğral Nuri Duman Yusuf Durmuş Soner Eken Velid Yusuf Elcarullah Elhasen Elcarullah Group A No Name/Surname share in the Bank (%) 98 Mehmet Eldem Kemal Elibal Yalçın Ercan Nurettin Eroğlu Yavuz Eroğlu Mehmet Şevki Erol Avni Ertansel Mehmet Fayik Esen Sabri Esen Celal Evci M. Abdulcebbar Ezgin Memet Fırat Adnan Osman Güldaş Yılmaz Güldaş Ali Gülen İlhami Gülen Mehmet Gülen Sadık Gülen Yusuf Gülen Faik Gün Emine Gündüz Rıdvan Güngör Cemil Gürleroğlu Fevzi Gürses Hüseyin Güzel İrfan Hacıosmanoğlu Mehmet Emin Hasırcılar Derviş İnce Ünal Kabaca Eyyup Kadıoğlu Makbule Kadıoğlu Mehmet Murat Kadıoğlu Mehmet Kafarcı Mevlüt Kaklık Cemal Kalafat

23 PresentatIon 21 Group A No Name/Surname share in the Bank (%) 133 Ayhan Kalaycı Erhan Kalaycı Muammer İhsan Kalkavan Kamil Kandemir Mehmet Emin Kara Müyesser Karadayı Gülsüm Betül Karagöz Sami Karahan Maksut Karakaya Murat Karakaya Sadık Mutlu Karakaya Salih İhsan Karakaya Fahri Karatay Hasan Karatay Celal Karayol Emre Katırcı Mehmet Katırcı Abidin Kavurmacı Ahmet Kavurmacı Ahmet Sait Kavurmacı Mustafa Kavurmacı Mustafa Şevki Kavurmacı Nuri Kavurmacı Ömer Faruk Kavurmacı Salih Servet Kavurmacı A, İskender Kaya Adem Kaya Ali İhsan Kaya Alpaslan Kaya Aynihal Kaya Celal Kaya Cengiz Kaya Coşkun Kaya Etem Kaya Gülten Kaya Group A No Name/Surname share in the Bank (%) 169 Hakan Kaya Halit Kaya Hayati Kaya Hayri Kaya İlgül Kaya İslam Kaya İsmail Hakkı Kaya Şenay Kaya Şükrü Kaya T. Bayram Kaya Kadir Kayalı Hüseyin Kayıkçıoğlu Hasan Keklik Kenan Kelekçi Ayhan Keser Vildane Kılıç Hasan Kırgöz İsmail Kırgöz Nail Kıygın Mesut Kızılhisar Mustafa Koç Mehmet Nevzat Koçak Mehmet Salih Konakçı Abdulkadir Konukoğlu Abdurrahman Kopuz Musa Korkmaz Mustafa Aydın Koyuncu Metin Kulaberoğlu Burhan Kurt Hasan Kurt Turan Kurt Yalçın Atilla Kurtuluş Avni Kuşol Hasan Kuşol Hüseyin Kuşol

24 22 Bank Asya 2010 ANNUAL REPORT CHANGES IN CAPITAL AND SHAREHOLDER STRUCTURE DURING THE REPORTING PERIOD Group A No Name/Surname share in the Bank (%) 204 Mesut Kuşol Selahaddin Kuşol Hasan Kutlutaş Kamil Yavuz Malkatan Cengiz Manav Ahmet Nuri Metin Ahmet Mutafoğlu İlhami Negiş Nermin Negiş Selman Negiş Tacettin Negiş Kemal Övün Fazlı Özalp Abdullah Özata Adnan Özata Ahmet Özata Erol Özata Hürriyet Özata Mustafa Özata Yakup Özata Ramis Özaydın Mustafa Özaydınlık Şükrü Murat Özcan Cemil Özdemir İdris Özdemir Mustafa Kemal Özdemir Recep Özdemir İsmail Özen Enver Özeren Rafet Özeren Osman Gürbüz Özkara Fatih Özkaragöz Kemal Özkaragöz Ali Özturan Ali Öztürk Zekai Öztürk Osman Can Pehlivan Rahmi Peker Group A No Name/Surname share in the Bank (%) 242 Sinan Saraç İrfan Sarı Salih Sarıgül Ahmet Sarıkaya Kadri Sarıkurt Asım Sayın Hasan Sayın İbrahim Sayın Burak Serdaroğlu Semih Serhatlıoğlu Salih Seyhan Osman Sezer Arzu Silahtar Murat Sungurlu Hüseyin Fikret Şahinbaşoğlu Mesut Talha Şahsuvaroğlu Orhan Şeker Yaşar Şeker Harun Şimşek Namık Kemal Şimşek Sebahat Şimşek Abdülvahit Tabakçı Cemil Tan Halis Tan Seyyithan Tan Ali Rıza Tanrıseven Mehmet Tari Aşır Taşkıran Mehmet Sıddık Tekin Ali Cem Tekoğlu Ömer Tekoğlu Tahsin Tekoğlu Ergin Tonyalı Kamil Topçu Murat Toplaoğlu Ümit Topuz Mehmet Torun Sadık Tuğcu

25 PresentatIon 23 Group A No Name/Surname share in the Bank (%) 280 İbrahim Tulum Ahmet Tuna Haluk Tunçak Ahmet Turalioğlu Mehmet Hanifi Turalioğlu Ömer Turalioğlu Vural Tutak Kazım Türkkaynağı Ahmet Tüysüz Mahmut Nedim Uğur Mustafa Nazım Ulusoy Erdoğan Ustaömer Ali Rıza Uysal Mehmed Uzun Numan Uzun Savaş Ünal Ahmet Ruhi Ünlü Mustafa Ünlü Nesrin Vural Mustafa Vuran Ali Yarkın Ahmet Yaşar Niyazi Yıldırım Ayten Yıldız Canan Deniz Yıldız Murat Atıf Yıldız Nagihan Yıldız Hasan Yılmaz İbrahim Yöndem Muammer Yurtsever Mehmet Fevzi Yüce Diğer Pending BRSA Approval Total Group A Pending Approval from BRSA as of 31 December 2010 Group A No Name/Surname share in the Bank (%) 1 Forum İnşaat Dekorasyon Turizm San. ve Tic. A.Ş Ortadoğu Tekstil Tic. San. A.Ş Sürat Basım Yayın Reklamcılık ve Eğitim Araçları San. Tic. A,Ş Ali Ulvi Orhan Asım Sayın Hasan Sayın Mehmet Necip Işık Zeki Erdemir Information on Titles and Shares of Shareholders Holding Preferred Shares Group A No Name/Surname share in the Bank (%) 1 Asya Katılım Bankası A.Ş Aydınlı Hazır Giyim Sanayi ve Tic. A.Ş Birim Birleşik İnşaatçılık Mümessillik San. ve Tic. A.Ş Bj Tekstil Ticaret ve Sanayi A.Ş Forum İnşaat Dekorasyon Turizm San. ve Tic. A.Ş Galaksi İnşaat Tek. San. A.Ş Karakaya Yedek Parça ve Otomotiv San. Tic. Ltd. Şti Koçkaya Motorlu Araçlar San. ve Tic. A.Ş Linateks Tekstil İthalat İhracat San. ve Tic. Ltd. Şti Meltem Turizm İnş. Tic. A.Ş Negiş Giyim İmalat ve İhracat A.Ş Ortadoğu Tekstil Tic. San. A.Ş Serra Turizm Ltd. Şti Teksen Tekstil End. A.Ş Changes Made in the Articles of Association in 2010 No changes were made in the Bank s Articles of Association during 2010.

26 24 Bank Asya 2010 ANNUAL REPORT CHAIRMAN S MESSAGE Technology powerhouse of banking 24% The Istanbul Stock Exchange finished 2010 with a gain of 24%, which made the Turkish equity market among the best performers in the world. The reduced interest burden on the public debt as a result of the low interest rate environment boosts our conviction about the sustainability of the improvement in public finances. Esteemed Shareholders, We have left behind a year when policy measures were implemented to prevent the economic crisis that devastated the entire world from deepening any further while constructive signs were also observed that gave reason to be hopeful for the period ahead. For Bank Asya, 2010 has been a year when the Bank adapted to the evolving environment in the world and in Turkey, achieved its growth targets, and sustained and reinforced its solid market position along with growing business and customer volumes. Global capital flowed and shifted direction according to the measures and policies implemented by individual countries in While economic recovery in response to the policy measures was lackluster in general, a relative improvement in financial markets started to become more apparent. The worsening sovereign debt crisis, particularly in Europe, was attempted to be resolved with the support of and measures taken primarily by the European Union and the IMF. The debt crisis that started in Greece in the first quarter of the year and threatened to spread to Ireland, Portugal and even Spain led to a significant increase in the cost of borrowing for these countries. Many European Union countries, in an attempt to mitigate the impact of the financial crisis, pursued extremely loose monetary and fiscal policies in order to boost consumption and improve credit costs and availability. As the repair process of economic imbalances across the entire world, and especially in more developed countries, continued, emerging markets like Turkey led global economic growth last year. Ranking in the top tier of developing countries with its impressive rate of growth in 2010, Turkey continued to gain ground in the economic arena. The rising share of investments in this growth performance makes us optimistic about the coming years as well. In line with these developments, Turkey s CDSs (credit default swaps), which indicate the risk premium of Turkish sovereign bonds and are monitored closely by international investors, hovered below the premiums of many developed countries throughout While numerous developed country stock markets finished 2010 without major gains, Turkish equities as measured by the ISE-100 index surged by 24%. Turkey s credit ratings were raised while many countries were downgraded. Turkey s prospects to attain an investmentgrade rating also look very favorable. The fact that Turkey managed to rapidly reduce the interest cost of its debt burden indicates the sustainability of the pronounced improvement achieved in public finances over the last few years.

27 PresentatIon 25 The Turkish banking industry in general maintained its solid capital structure, asset quality and profitability in The increase in profits registered in the banking sector for the first two quarters of the year reversed course and began to decline starting in the third quarter. During this period, Bank Asya became one of the very few banks to increase its profit in every quarter on a quarter-over-quarter basis. The year 2010 has been a successful one for participation banking. While other banks responded quickly to the decision taken by the Central Bank of Turkey in the last quarter of the year to raise capital reserve requirements and saw rapid results due to their structure, it took time for the measures taken by participation banks to be reflected in their results. Nevertheless, targets were generally hit in both deposits and lending in In 2010, Bank Asya adapted to the evolving global and domestic economic environment, achieved its growth targets, and sustained and strengthened its solid market position while growing its business and customer volumes. Banks continued to implement measures to improve balance sheet asset quality throughout The share of non-performing loans in total assets began to decline in the overall banking industry and lending rates dropped due to rising excess liquidity in the system, and as a result banks increased their lending. Growth in consumer and small business loans was particularly robust.

28 26 Bank Asya 2010 ANNUAL REPORT CHAIRMAN S MESSAGE Bank Asya, whose profitability depends significantly on lending to the real sector due to its business model, will continue to use its deposits, which the Bank sees as Turkey s capital, as well as its own equity capital, to extend support to Turkish businesses, entrepreneurs and consumers. One significant factor is that the targets set in the government s Medium Term Program (MTP) are consistent with the targets stipulated by the Fiscal Rule, implementation of which has been delayed for now. One major factor in this development is that the targets set in the government s Medium Term Program (MTP) are consistent with the targets stipulated by the Fiscal Rule, implementation of which has been delayed for now. The expected credit rating upgrades by rating agencies beginning in the third quarter of 2011 and the prospect of Turkey attaining an investment-grade sovereign rating inspire the hope in all markets that all lingering issues could be resolved easily. Bank Asya, whose profitability depends significantly on its lending to the real sector due to its business model, will continue to use its deposits, which it sees as Turkey s capital, as well as its own equity capital to extend support to Turkish businesses, entrepreneurs and consumers. The Bank s specialized and expert staff will continue to share its knowledge, know-how and experience gained over many years with clients who do business with Bank Asya. The significant increase in the Bank s cash loans in 2010 signals a similar growth momentum for the upcoming years as well. Bank Asya, the relative newcomer to the banking industry, continues to be the leader in participation banking. The Bank strides forward with confidence towards its target position of overall banking industry leader. Managed by a professional team, the Bank remains committed to its core principles and corporate governance practices on its journey towards its target while continuing to be one of the most transparent banks with one of the highest free float ratios in the sector. Bank Asya aims to closely monitor domestic and international developments in 2011 and sustain its organic growth by making timely and appropriate strategic decisions. Appealing to an increasingly larger domestic customer base with its ever-growing branch network, Bank Asya plans to expand its footprint even further. In addition, with the joint banking investment undertaken with the Islamic Development Bank in Africa, Bank Asya strives to give Turkey the opportunity to take advantage of a vast and largely untapped market. We believe that the shifting global economic balance will prove to all of us how on-the-mark this investment is in the medium and long term.

29 PresentatIon 27 Ever the pioneer and visionary, Bank Asya gives Turkey the opportunity to take advantage of a vast and largely untapped market with its joint banking investment undertaken with the Islamic Development Bank in Africa. Our accomplishments and strategic targets for the future are a direct consequence of our appropriate decisions and planning efforts. Our fundamental objective is to lend a hand as a reliable friend to provide our people with the quality and level of support that they justly deserve. In the process, as the newest bank in the sector, we will share all of our energy, as well as the knowledge and experience we have gained through hard work, and to help others grow as we grow the Bank. Bank Asya will closely monitor domestic and international developments in 2011 and sustain its organic growth by making timely and appropriate strategic decisions. The Bank aims to further expand its customer base in 2011 alongside its ever-growing branch network. I would like to take this opportunity to express my gratitude to everyone who contributed to our strong results in 2010 as well as to all of our stakeholders. Behçet Akyar Chairman of the Board of Directors

30 28 Bank Asya 2010 ANNUAL REPORT CEO S MESSAGE A constantly appreciating, strong brand Bank Asya, Turkey s largest participation bank, has become a leader in all its business lines by focusing on sustainable sources of income and profitability. Bank Asya will continue to conduct its operations with the objective objective of becoming a bank that reaches large masses.in the coming period, the Bank will further expand its branch network in order to achieve the optimum level of growth in its loan portfolio and deposit base. Esteemed Friends of Bank Asya, The world s economy, which contracted as a result of the global financial crisis that broke out in 2008, started to grow again in 2010 as the repercussions of the downturn began to fade. As the extraordinary measures and policy decisions taken to counter the economic crisis started to take effect, the world economy began to recover in Meanwhile, the Turkish economy recorded an impressive performance and displayed one of the liveliest levels of economic activity in the world. The Turkish economy left behind another year of robust growth built on solid foundations. In line with this favorable macroeconomic environment, the banking sector accelerated its growth and continued to increase its profitability. The sector, total assets of which topped TL 1 trillion as of yearend 2010, continued to expand its branch network and contribute to the Turkish economy at an increasing rate, with higher levels of employment and support for the real economy. Shrinking profit margins in 2010 played a decisive role on banking activities. The low inflation and interest rate environment, fierce competition in the Turkish banking industry, and the expanding lending volumes as a result of rising liquidity in the system led to lower lending rates and contracting profit margins. Consequently, banks began to focus on real banking activities and the quality, diversification and speed of services increased. Bank Asya, Turkey s largest participation bank, has become a leader in all of its business lines by focusing on sustainable sources of income and profitability. As you know, I joined the Bank a very short while ago. With the strong initiative and support of our Board of Directors, Bank Asya is pursuing more ambitious goals. I firmly believe that we will successfully accomplish these goals together. Continued steady and profitable growth As Bank Asya s management, our primary function is to guide the Bank along a steady and profitable growth path. We will continue to provide support to the real sector in order to fulfill this responsibility. We plan to further increase the high rate of growth that the Bank achieved in retail and SME loans. Çobanyıldızı (Shining Star) of SMEs Bank Asya demonstrated the importance of the SME segment by launching Çobanyıldızı, its Small Business Banking solution, in Under Çobanyıldızı, the Bank will extend its consulting services offering to small-medium sized enterprises businesses so that the microbusiness and SME segment clients will see Bank Asya as their primary address for all of their financial as well as non-financial needs. Bank Asya plans to be known as the go-to advisor for microbusiness and SME customers in short order. Getting closer to customers Bank Asya will continue to conduct its operations with the objective objective of becoming a bank that reaches large masses.in the coming period, the Bank will further expand its branch network in order to achieve the optimum level of growth in its loan portfolio and deposit base.

31 PresentatIon 29 The focus will be on increasing nondividend income and generating revenues directly from customers. Bank Asya aims to expand cross selling and upselling opportunities by prioritizing products and packages that will increase customer loyalty. As it continues to create a more extensive and efficient branch network, the Bank will concentrate on improving the effectiveness and usage rate of its alternative distribution channels. Focusing on long-term funding sources Bank Asya will also work to secure longer-term sources of funding in order to further improve the management of the liability side of its balance sheet. In an effort to increase the average maturity of its funding facilities, which is already longer than the sector average as of 2010, the Bank will diversify the financial instruments it makes use of and strengthen its balance sheet. This will enable Bank Asya to contribute more resources to the financing of long-term, large-scale projects. Solidifying leadership in contactless credit card market The Bank s pioneering role in modern banking technology is one of its cornerstones. To this end, Bank Asya will concentrate more keenly on its initiatives to introduce new products for the clients that make use of the state-of-the-art technology. The Bank aims to add to its innovative investments particularly in payment systems, gain market share in the contactless card market, and make the lives of its customers easier with the new products and services it will launch during the year. Thanks to its professional management team, highly qualified personnel, innovative approach, and sound policies, Bank Asya will continue to play a pioneering role in the Turkish banking industry in As of 2011, it is safe to say that the rules of the game have changed in the Turkish banking industry. As profit margins get squeezed, there will be even greater focus on increasing non-dividend income and effectively managing non-dividend expenditures. Bank Asya will continue to grow in the period ahead in accordance with its objectives with a laser-sharp focus on profitability. Increasing brand value with each passing day Thanks to its professional management team, highly qualified personnel and sound policies, Bank Asya will continue to be a strong, upward trending brand in the Turkish banking industry in Our goals are ambitious and the road ahead is long Nevertheless, Bank Asya, which we consider to be a large family, is prepared to achieve its goals. I have no doubt that we will accomplish countless new achievements in the period ahead with the momentum of our employees who have made the Bank what it is today with their dedicated efforts, the unparalleled support of our Board of Directors, and the unwavering trust of our customers. Respectfully yours, Abdullah Çelik Board Member and CEO

32 30 Bank Asya 2010 ANNUAL REPORT MESSAGE FROM MR. CEMİL ÖZDEMİR Full support for the real economy Always a supporter of the real sector, including in times of crisis, Bank Asya provided funding support to its clients at a higher pace in The Bank s loan-to-deposit (LTD) ratio topped 100% in 2010, up from 95% in the prior year. Esteemed Shareholders, Bank Asya continued to create value in 2010 with its strong and broad capital base, healthy balance sheet composition, transparent corporate governance approach, and innovative and unrivaled growth dynamic. The priority given to technology and human resources, industry experience and know-how, product development initiatives, and customer-oriented activities stand out as the primary factors that allowed the Bank to sustain its growth and profitability in Sustained level of profitability in loans While cash loan placements declined by nearly 50% compared to 2009, net dividend income in 2010 reached the prior year s level. In addition, despite the extreme competition in the noncash loan market, the Bank maintained its profitability level in this business line while increasing other commission revenues. As of year-end 2010, the Bank s return on equity (ROE) stood at 14.4% and its return on assets (ROA) was 2%. 22% growth in deposits The Bank s deposits were up by 22% as of year-end 2010 compared to the previous year while the deposit base broadened significantly thanks to effective marketing and an expanding branch network; we also managed to secure funding sources with an average maturity longer than the sector average. This practice helps the Bank s liquidity management and facilitates the financing of longer-term projects and ventures. 25% increase in assets by supporting the real economy Bank Asya gained market share by increasing its total assets by 25% on the previous year to TL 14.5 billion by year-end The financial support provided by the Bank to the real economy via cash and non-cash loans reached TL 20.3 billion while cash loans grew to TL 11 billion in 2010, up 32% compared to the prior year. Always a supporter of the real sector, including during the economic crisis, Bank Asya continued to provide funding for its clients at a higher pace in The Bank s loan-to-deposit (LTD) ratio topped 100% in 2010, up from 95% in the previous year. Çobanyıldızı shines a light on SMEs Bank Asya launched the Çobanyıldızı Project in 2010 in order to offer product and solution packages that will empower the Turkish SMEs as they enter global markets. The Bank aims to create value and make a real difference for its customers by meeting their current financial demands while also anticipating their future financial needs with Çobanyıldızı, which embodies Bank Asya s proactive approach to banking. The largest murabaha syndication facility As an indication of the confidence that international markets have in Bank Asya, the Bank entered into an agreement for the largest murabaha syndication loan ever for a participation bank and generated USD 255 million; this facility was used to provide financing to the real sector, with an emphasis on export finance.

33 PresentatIon 31 Bank Asya s high-quality asset composition The Bank continued to improve its asset quality thanks to its cautious growth policy, effective risk management and strong NPL recovery performance; as of year-end 2010, nonperforming loans declined to a 3.9% share of cash loans and 2.2% of total loans. The Bank s capital adequacy ratio at year-end 2010 stood at 13.3%, an optimum level above the regulatory requirement. Extensive branch network, effective distribution channels In an effort to build a broader customer base, Bank Asya increased its branch network by 17 new branches in 2010, to a total of 175, and raised its employee count to 4,266. As of year-end 2010, the Bank continues to provide fast, high quality service to its customers in accordance with their needs through 444 ATMs and 86,434 POS devices as well as via its online, telephone and mobile banking channels. Leader in contactless card transactions Moving up in the overall sector rankings and gaining market share in the credit card segment in 2010 as a result of its customer-oriented activities and effective retail banking operations, Bank Asya became the market leader in contactless credit card transactions, in terms of both market share and turnover. The Bank also increased the number of its retail customers by 18% during the year. In addition, Bank Asya s total number of credit cards reached 1.8 million in 2010 while credit card turnover rose 25% year-on-year. Bank Asya continued to create value in 2010 with its strong, broad capital base, healthy balance sheet composition, transparent corporate governance approach, and innovative and unrivaled growth dynamic. A first in the world DIT Mobil, a product that was launched by Bank Asya in 2010, is a first in the world in terms of equipping SIM memory cards in mobile phones with credit card functionality. DIT Mobil, which offers a much simpler and more flexible lifestyle to consumers, will be one of the major payment methods in the future. Supporting Turkish sports Actively involved in a variety of social responsibility projects since its inception, Bank Asya has been the name sponsor of the Turkish Football Federation 1st League since In July 2010, the Bank signed an agreement to extend its name sponsorship of the Bank Asya League, which has come to be closely identified with the Bank s name, until As a result, the Bank continued to add to the value of both the Bank Asya 1st League and the clubs in that league. I would like to express my gratitude and pay my due respect to our employees who move the Bank forward with each passing year, our partners who always lend us their support, and our customers who have been with us on this journey for many years. Respectfully yours, Cemil Özdemir Board Member and CEO Mr. Cemil Özdemir resigned from his duties as member of the Board of Directors and the CEO of Bank Asya as of 10 March 2011.

34 Bank Asya, respected for its stakeholders thanks to its value Mount Fuji: Japan s tallest mountain with an elevation of 3,766 meters.

35 PROFIT-DRIVEN SUSTAINABLE GROWTH

36 34 Bank Asya 2010 ANNUAL REPORT MACROECONOMIC OVERVIEW AND THE BANKING SECTOR Developing country economies are growing INTERNATIONAL DEVELOPMENTS 1.20% The EUR/USD exchange rate, which stood at 1.44 at the beginning of 2010, slid below 1.20 in June due in part to the Eurozone debt crisis. After contracting as a result of the global crisis in 2009, the global economy started to shake off the effects of the downturn and began to grow again in Expansionary monetary and fiscal policies implemented, especially by developed countries, as well as tax incentives, were influential in the resumption of economic growth in Growth began to slow slightly in the second quarter of 2010; no major improvement in the labor market was registered despite all the measures taken, particularly in the US. As a result, the central bank of the United States, the FED, launched a second quantitative easing program, of USD 600 billion, towards the end of the year. The European Central Bank and the Bank of England also continued to provide liquidity support to the markets. One of the most significant developments of 2010 that impacted the world s economies was the debt crisis experienced in the Eurozone. Starting in Greece in the first quarter of 2010 and also threatening Ireland, Portugal and Spain later on, the European debt crisis led the financial markets to lose confidence in these countries. The CDS (Credit Default Swap) spreads, which are an indicator of the riskiness of sovereign bonds, of countries that were impacted by the debt crisis rose sharply and led to a significant increase in their borrowing costs. The loss of confidence created by the crisis caused a sharp depreciation in the Euro. The EUR/USD exchange rate, which stood at 1.44 at the beginning of 2010, slid below 1.20 in June due in part to the Eurozone debt crisis. GDP GROWTH (T) 2011 (T) 2012 (T) Developed Economies Developing Economies World

37 PresentatIon 35 Expansionary monetary policies forced all developing countries to take measures against hot money flows in 2010; accordingly, the Central Bank of Turkey revised its primary objective to financial stability and announced that it has had shifted its focus from inflation targeting to exchange rate stabilization. Emerging markets continued to diverge positively from the developed economies in Developing countries outperformed developed countries in terms of both economic growth rates and stock market gains. Increased excess global liquidity caused by the expansionary monetary policies of the developed countries in particular led to higher capital inflows into emerging markets. As these short-term capital inflows resulted in the appreciation of emerging market currencies, these countries began to tighten monetary policy and implement tax measures. During this period, Brazil increased taxes and hiked reserve requirements in the banking industry sharply while the Central Bank of Turkey took a similar step and increased the reserve requirements on the country s banks. Commodity prices also took a volatile course in Agricultural and industrial raw materials prices hit record highs with purchases by funds that started to chase returns in response to expectations for higher inflation, abundance of global liquidity and the low interest rate environment. Within the agricultural complex, cotton and wheat prices recorded significant gains while precious metals prices also rose sharply. Perceived as a safe haven in the aftermath of the European debt crisis, gold prices surged to an all-time high of USD 1,435 per troy ounce. After establishing a rising trend in 2009, oil prices continued to rise in 2010 and finished the year at USD 90 per barrel. COUNTRY CDS SPREADS IRELAND TURKEY GREECE SPAIN PORTUGAL GOLD AND OIL 1,500 1,400 1,300 1,200 1,100 1, , Oil (right axis) Gold

38 36 Bank Asya 2010 ANNUAL REPORT MACROECONOMIC OVERVIEW AND THE BANKING SECTOR The share of participation bank assets in total assets of the banking industry rose to 4.3% in 2010, up from 4.0% in the previous year. DOMESTIC DEVELOPMENTS 8.9% Turkey s Gross Domestic Product at constant prices registered a growth rate of 8.9% in the first nine months of 2010 compared to the same period of the previous year. As the extraordinary measures and policy decisions implemented in the aftermath of the global financial crisis started to take effect, the world s economy began to recover in Meanwhile, the Turkish economy registered an impressive performance and displayed one of the liveliest levels of economic activity in the world. While the concerns over the European debt crisis weighed heavily on the markets throughout 2010, Turkey managed to remain in the top tier of emerging markets in terms of its economic growth thanks to the sustained strength in domestic demand that was supported fundamentally by fiscal discipline and the low interest rate environment. After contracting by 4.7% in 2009, the Turkish economy registered growth rates of 11.8%, 10.2% and 5.5% in the first three quarters of the year, respectively. Gross Domestic Product at constant prices registered a growth rate of 8.9% in the first nine months of 2010 compared to the same period of the previous year. The strength in domestic demand and the sharp increase in construction investments were the major drivers of the impressive GDP performance. INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION (%) FOREIGN TRADE AND CURRENT DEFICIT (USD MIllIon) 25,000 20,000 15,000 10,000 5, Capacity Utilization (Right Axis) Industrial Production Seasonally and Calendar Adjusted Industrial Production exports imports current deficit (right axis) Industrial production rose sharply in 2010 after declining by 9.9% in the prior year. Growing especially rapidly in the first quarter of 2010 but losing some of that momentum in the second half of the year, industrial production remained on a steady growth path throughout 2010 and finished the year with a 13.1% increase. After declining all the way down to 58.7% as a result of the crisis in 2009, the manufacturing industry capacity utilization rate stood at 75.6% at year-end In response to slumping domestic demand in 2009, imports declined at a faster rate than exports; as a consequence, the trade deficit contracted. However, imports were up significantly in 2010 due to higher domestic demand as a result of the expansion of credit, the appreciation of the Turkish Lira from surging capital inflows, and the rise in energy prices in global markets. In addition, growth in exports was slower than imports growth due to the persistent weakness in foreign demand in Imports grew by 31.6% from the previous year to reach USD billion while exports were up in 2010 by 11.5%, to USD billion. Consequently, the current account deficit rose sharply to USD 48.5 billion, up from USD 13.9 billion in 2009.

39 PresentatIon GDP Growth by Quarter (%) (In Constant PrIces) 2009/4 2010/1 2010/2 2010/3 5.5 X 2009/1 2009/2 2009/ In 2010, the CPI rose by 6.40% while the PPI recorded an 8.87% rise. Consumer price inflation ticked up slightly as a result of rapidly rising food prices in the first nine months of the year, but started to decline again towards the end of the year as food prices started to retreat from their peak in the fourth quarter and the Central Bank of Turkey began tightening its monetary policy. As a result, the headline inflation rate continued to materialize in line with medium-term targets and came in below the Central Bank s year-end forecast of 7.5%. Alcoholic beverages and tobacco prices registered the largest increase with the combined category shooting up 24.66% within the CPI. Restaurants and hotels (9.76%) and food and beverage (7.02%) were categories that also saw the highest price increases. Core inflation, which excludes food, alcoholic beverages, energy, tobacco products and gold, continued to hover at low levels and closed the year with an increase of 2.99%. CENTRAL BANK OF TURKEY INTEREST RATES 18,00 16,00 14,00 12,00 10,00 8,00 6,00 4,00 2,00 0, Borrowing Lending Weekly Repo UNEMPLOYMENT (%) The recovery in the job market that has been ongoing since the start of 2010 progressed in line with economic growth during the first six months of the year. Although declining to 10.5% with the help of seasonal factors in June, the unemployment rate stood at 11% in November. On an annual average basis, the unemployment rate fell to 11.9% in 2010, down from 14% in the prior year INFLATION Unemployment rate Non-farm unemployment rate The Central Bank of Turkey announced in May that the necessary conditions had formed to take the first step of the technical interest rate adjustment process within the scope of the Monetary Policy Exit Strategy that was published on 14 April The CBT decided to start holding repo auctions as variable-quantity tenders at fixed interest rates at that time. The one-week repo interest rate that will serve as the policy interest rate from this point on in this framework CPI PPI Core Inflation (i)

40 38 Bank Asya 2010 ANNUAL REPORT MACROECONOMIC OVERVIEW AND THE BANKING SECTOR 10.9% During the period January to November 2010, imports grew by 31% to reach USD billion while exports totaled USD 102 billion, up by 10.9% compared to the first 11 months of the previous year. was set at 7%, 50 basis points above the overnight borrowing rate. The benchmark interest rate was lowered by 50 basis points, to 6.5%, in December. Lowering overnight borrowing rates by 400 basis points in November in order to encourage longer maturities in Turkish Lira market transactions, the Central Bank tried to limit the potential adverse effects of short-term speculative capital flows. As part of its monetary policy exit strategy and in line with the normalization in global markets, the Central Bank of Turkey reduced the foreign exchange liquidity facilities gradually back down to pre-crisis levels. As the liquidity crunch eased and credit markets improved, capital reserve requirement ratios for Turkish Lira and foreign currency deposits were used effectively as a policy tool to mitigate financial risks. As a result of the rise in global risk appetite and Turkey s strong economic position, the Istanbul Stock Exchange tested all-time highs despite the adverse environment in Europe. The ISE 100 Index registered an all-time closing high of 71,543 in November and ended 2010 at 66,004. With a gain of 25% in 2010 as measured by the ISE 100 Index, Turkish equities were among the best performing stocks in the world. Turkey s high economic growth rate and fiscal discipline as well as upgrades in its sovereign credit ratings led to increased capital inflows. The funds that entered the Turkish markets particularly as short-term portfolio investments kept demand for the Turkish Lira high and depressed the TL exchange rates. Looking at the average exchange rate throughout the year, after hovering above TL 1.5 as of February, the US dollar peaked above TL 1.6 in June and a hit a low of 1.39 in November. The US dollar declined significantly after Moody s revised the outlook on Turkey s credit rating to positive in October and the markets reacted favorably to the CBT s Medium Term Program. However, the exchange rate started to move up again in November after the Central Bank of Turkey cut its benchmark rate and raised capital reserve requirements. ISE ,00 14,00 10,00 8,00 6,00 2,

41 PresentatIon 39 With a gain of 25% in 2010 as measured by the ISE 100 Index, Turkish equities were among the best performing stocks in the world. EXCHANGE RATES 18,00 16,00 14,00 12,00 10,00 8,00 6,00 4,00 2, USD/TL Basket MEDIUM TERM PROGRAM GDP (TL billion, current prices) 1,099 1,215 1,343 1,485 GDP (USD billion, current prices) GDP Growth Unemployment Rate (%) Exports (FOB) (USD billion) Imports (CIF) (USD billion) Exports / Imports (%) Current Account Balance (USD billion) Current Account Balance / GDP (%) % Change in Year-end CPI (forecast) Improvements in Turkey s risk perception and the rise in global risk appetite also had a favorable effect on credit markets. Bond prices rallied while government debt securities yields declined to all-time lows. The general fall in interest rates had a favorable impact on the Treasury s cost of borrowing. In 2010, the debt stock of the central government rose to TL billion, up 7.2% from the previous year. Fiscal discipline was maintained in The budget deficit fell to TL 39.6 billion for the year, from TL 52.4 billion in 2009, a decline of 24.9%. In 2010, Turkey s central government budget expenditures totaled TL billion while central government budget revenues came in at TL 254 billion, with a primary budget surplus of TL 8.7 billion. The postponement of the implementation of the Fiscal Rule contrary to expectations, completion of negotiations with the IMF without an agreement, and the upcoming general elections in 2011 created the concern that fiscal discipline will be sacrificed. The Medium Term Program (MTP) was perceived favorably due to the fact that the targets set in the program are consistent with those stipulated by the Fiscal Rule, the implementation of which has been delayed for now.

42 Bank Asya, unparalleled in its sector with its speed of technology deployment MOUNT NANGA PARBAT: The world s ninth tallest mountain with an elevation of 8,125 meters.

43 TECHNOLOGY POWERHOUSE OF BANKING

44 42 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 Strong and healthy growth in all segments CORPORATE BANKING, COMMERCIAL BANKING AND SMALL BUSINESS BANKING Customers as a 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.in accordance with its customer-oriented banking philosophy, the Bank employs corporate marketing personnel. Bank Asya has six corporate branches (three in Istanbul and one each in Izmir, Bursa, and Ankara) and employs 37 specialist personnel in these branches as well as 12 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 timely. With its specialist staff, extensive distribution network and advanced banking technology, as well as the trust-based relationships it has established thanks to these assets, Bank Asya aims to be the primary bank of its customers under all market conditions. Bank Asya s customer-focused marketing policy principles Bank Asya: 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 its products and services that are efficient, profitable and competitively priced, Structures its organization in line with corporate objectives and generates results.

45 PresentatIon 43 With its expert staff, extensive distribution network and advanced banking technology, as well as the trust-based relationships it has established thanks to these assets, Bank Asya aims to be the primary bank of its customers under all market conditions. A dedicated service for special projects In response to the increasing need to conduct in-house project-based initiatives, Bank Asya established a Special Projects Service in Operating under the Corporate Marketing Department, this service will perform the initial evaluation of projects, assess their profitability and monitor all project-related processes. As the pioneer of many groundbreaking practices in participation banking, Bank Asya operates with the principle of self-improvement 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 Continued growth in lending volume Leveraging its experience in financing the real sector in 2010, Bank Asya supported both its major corporate clients and a wide range of commercial enterprises and SMEs of varying sizes and from many different sectors. 12.5% The Bank s Corporate Marketing Department increased its cash loans by 25.23%, non-cash loans by 4.30% and total loans by 12.45% in ,473 8,404 2,911 3,645 4,563 4,759 CASH RISK EXPOSURE NON-CASH RISK EXPOSURE TOTAL RISK EXPOSURE COMPARISON OF CORPORATE BANKING RISK EXPOSURE IN 2009 AND 2010 (TL million)

46 44 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN % Bank Asya increased the number of its active small business banking customers with a dedicated credit line to 45,000 in 2010, up 41% from the prior year. 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. Dynamic commercial banking through longstanding, sustainable relationships Bank Asya s primary objective in Commercial Banking, in the constantly changing and intensely competitive environment of financial markets, is to serve all banking needs of its customers with more effective and efficient financing facilities. It will achieve this goal by providing multidimensional projectbased solutions and establishing longstanding, sustainable relationships with its customers. In assessing loan applications, the Bank uses customer and sector segmentation analyses in line with the principles of security, liquidity and profitability; as a result, the Bank diversifies its risk and increases its profitability. Bank Asya s commercial banking activities focus on small and mediumsized enterprises, thus diversifying risk across a broad base. As a result, market risk is managed effectively via product diversification. Swift completion of banking transactions is of utmost importance in today s world for businesses to be able to function efficiently. Main principles of commercial banking Bank Asya: Develops new products and services in line with customer expectations, Is aware of customer needs and restructures its business processes to align with these needs, Increases its presence in the sector by adding new customers to its portfolio while deepening relationships with existing customers, Offers efficient and profitable products and services at competitive prices, Serves clients as a solution partner in special projects and provides customers with all banking services that they need for their lines of business.

47 PresentatIon 45 Bank Asya launched the Çobanyıldızı Project to help its customers compete in the global market, to establish deeper and longer term relationships with them, and to become their advisor bank. Çobanyıldızı is the new generation small business banking concept that shines a light on SMEs. In 2010, Çobanyıldızı served the Microbusiness and SME segments and supported these clients with loan and cash management products under the Small Business Banking business line. The Small Business Banking Department supports the investments, business growth projects, production expansion initiatives and all foreign trade transactions of its microbusiness and SME clients through lending. The Department also offers its customers cash management services including Commercial Card, AsyaAsist Card, Checkbook, POS devices, Tax and Social Security Payment, Bill Payment, Salary Disbursement, Insurance Services and Online Banking. Offering superior quality service in the Small Business Banking segment, Bank Asya increased the number of its active customers with a dedicated credit line to 45,000 in 2010, up 45% compared to the year prior. In accordance with its strategic objective to grow in the Small Business Banking segment, Bank Asya unveiled its Çobanyıldızı Project, in the last quarter of the year. The Çobanyıldızı Project, which represents a new approach to small business banking, is a platform that will empower the Bank s customers to compete globally. In addition, Çobanyıldızı allows Bank Asya to establish long term relationships with its small business clients, and to become their advisor bank. The Bank consolidated all its innovative, microbusiness and SME services under the Çobanyıldızı brand in Continuing to develop sector-specific solutions for its commercial segment clients in 2010, Bank Asya rolled out eight more financing packages for SMEs: Tourism Support Financing Package Agriculture Support Financing Package Merchant Partner Support Financing Package Franchising Financing Fuel Distributor Support Financing Package Pharmacist Support Financing Package Taxi Cab License Financing Office and Land Purchase Support Financing Package 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, Bank Asya organizes Çobanyıldızı Meetings in various Anatolian provinces in order to better understand the issues facing SMEs and to further increase their contribution to employment and to the overall Turkish economy. The first Çobanyıldızı Meeting was held in Malatya, followed by events in Adana and Şanlıurfa. Bank Asya plans to continue to hold Çobanyıldızı Meetings in The AsyaAsist Card family, another Bank Asya service offered to firms, was expanded with the addition of the AsyaAsist Platinum and AsyaAsist Incentive Monitoring Card. The Incentive Monitoring Card allows businesses to stay on top of all the province, region and sector-based

48 46 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 incentive and support programs. Users can also track the latest news and developments in these areas, and conduct their incentive transactionsrelated activities with a cost advantage. The cash loan portfolio of the small business banking business line surged to TL 521 million in 2010, an increase of 84.9% over the prior year s TL 281 million. Non-cash loans registered 16.6% growth in 2010, to TL 407 million, up from TL 349 million in the previous year. As a result, Small Business Banking s total risk exposure rose by 47.1% in 2010, to TL 928 million. In 2010, 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. Bank Asya also joined a loan support program offered by the Undersecretariat of Treasury and an initiative that added maritime industry enterprises to the guarantee system. Furthermore, Bank Asya again participated in an SME Development and Support Administration (KOSGEB)- supported loans project for SMEs, artisans and craftsmen. Cash management products 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. The Virtual Commercial Card was met with acclaim by customers. In addition, as part of the brand development efforts for Çobanyıldızı, a new cash management product called Commercial Card was developed; it was rolled out for the use of enterprises with large dealer networks in the last quarter of Introduced in late 2008 to provide support to businesses in unexpected/ emergency situations when users require medical, legal and financial consultancy services, the AsyaAsist Card reached 37,000 active users in 2010, a 246% increase on the previous year. Bank Asya s Merchant Partner Support Team, located within Small Business Banking, conducted its direct sale and merchant partner commercial signage activities at a faster pace in 2010, increasing its total number of merchant partner visits by 10%, to 99,000. During this reporting period, 7,100 credit card sales were made and 310 new merchant partner acquisitions were registered CASH RISK EXPOSURE NON-CASH RISK EXPOSURE TOTAL RISK EXPOSURE COMPARISON OF SMALL BUSINESS BANKING RISK EXPOSURE IN 2009 AND 2010 (TL million)

49 PresentatIon 47 The year 2010 was a turning point in retail banking for Bank Asya. The launch of the Customer-Oriented Transformation Project laid the foundation for the transition from a product-focused organizational structure to one more customer-focused. RETAIL BANKING 18% As a result of the Customer- Oriented Transformation Project, the number of Bank Asya s retail customers jumped to million in 2010, a rise of 18% from the previous year. Growth continues at full speed The year 2010 was a turning point in retail banking for Bank Asya. The launch of the Customer-Oriented Transformation Project laid the foundation for the transition from a product-focused organizational structure to one more customerfocused. The Bank continued to provide the highest quality service to its customers via 581 retail marketing staff in 175 branches. With this important project, Bank Asya aims to provide a banking service that knows its customers more closely, carefully analyzes their needs, offers the right product and service to the right customer through the right channel, and always stands by its customer. As a result of this project, the number of Bank Asya s retail customers jumped to million in 2010, up 18% compared to the previous year. Growing deposit base In line with the 18% growth in the number of customers, deposits collected from retail customers through various campaigns held during the year increased by 31%, to TL 8.1 billion. Retail customer deposits make up 73% of the Bank s total deposits. The first NFC (Near Field Communication) technology application in the world: DIT Mobil AsyaCard DIT, which was a first in the world in its field with its launch in 2008, added a whole new dimension with DIT Mobil that was unveiled at the Cartes Show in Paris in December DIT Mobil allows all credit card transactions, contactless or not, conducted using AsyaCard DIT to be performed via cell phones with NFC technology. Payments for all highway and bridge tolls, public transportation fares and on-campus expenditures as well as all contactless payments under TL 35 can be made using the NFC technology thanks to this new product; its launch is planned for early Bank Asya aims to maintain its market leadership in contactless payment transactions with this innovative new technology. 345, , , ,000 1,290,000 2,000,000 2,420,000 2,860, NUMBER OF RETAIL CUSTOMERS

50 48 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 The sector leader in technology with contactless cards The Bank undertook a total of six mass transit/transportation projects with the municipalities of Kahramanmaraş, Balıkesir, Adıyaman, Karabük, Safranbolu and Bolu in In addition, Bank Asya entered into AsyaCard DIT and Pratik Card solution partnerships with the sea transit company TURYOL and independently owned commercial taxi cabs in Istanbul. Bank Asya initiated Campus Card Projects in 2010 at 10 universities (Adıyaman, Osmaniye Korkut Ata, Batman, Fırat, Düzce, Fatih, Mevlana, Turgut Özal, Melikşah and Istanbul Commerce Universities); efforts to finalize the initiatives continue at a rapid pace. AsyaCard DIT grew very rapidly thanks to its prepaid toll card feature at highway and bridge booths as well as its availability for purchase within 15 minutes at all Bank branches; the number of AsyaCard DIT users jumped by 56% in 2010 to reach 770,000 customers. Originally launched for customer use in the province of Kahramanmaraş in 2008, the prepaid DIT Pratik card has reached 130,000 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. Card and merchant partner activities Thanks to its proactive marketing campaigns and innovative products, Bank Asya increased the number of its credit cards by 20% on the previous year, to 1.8 million in Credit card turnover also went up by 25% compared to the previous year and reached TL 4.93 billion. Due in part to a variety of card marketing campaigns throughout the year, installment purchases made at Bank Asya merchant partners using AsyaCard surged by 45%. As a result of the brand-oriented regional and national campaign support provided through branded vendor agreements, the Bank s merchant partner network grew by 15% to reach 71,460 merchants. In addition, total merchant partner turnover increased to TL 5.8 billion, up by 25% from Thanks to these successes, Bank Asya ranked 10th in number of credit cards issued, 9th in credit card turnover, 8th in number of POS devices and 9th in merchant partner turnover sectorwide. 360, ,000 1,300,000 1,500,000 1,800,000 1,119 1,707 3,237 4,022 4,938 1,780 2,827 3,927 4,737 5, PROGRESS OF NUMBER OF CREDIT CARDS PROGRESS OF CREDIT CARD TURNOVER (TL million) PROGRESS OF POS TURNOVER (TL million)

51 PresentatIon 49 Bank Asya ranks first in the sector in the number of contactless card (credit cards and prepaid cards combined) transactions and in turnover. Increasing share of housing loans in retail loans... In 2010, Bank Asya raised the share of home finance loans in its retail loan book by entering into many residential project agreements, in particular with construction industry firms, and launching new mortgage products. As a result of the 138% increase in mortgage lending, home finance loans reached a significant share of the Bank s overall retail loans. In terms of the number of loans made in 2010, home finance loans made up 59% of retail lending while vehicle purchase and consumer finance loans constituted 33% and 8%, respectively. Bank Asya s overall retail loan risk exposure increased 95% and reached TL 930 million at year-end 2010; its share in total cash loans rose to 8%. As a result of these developments, Bank Asya s retail lending volume growth of 95% in 2010 far outpaced the 34.8% increase in the overall banking industry. 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 25% to 460,000 in The Bank processed a total of TL 310 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 230,000 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 TL 366 million in payments for 81,000 students attending 625 schools. Bank Asya also handled TL 1.25 billion in social security premiums and TL 1.4 billion in tax collections for its retail and corporate customers in Investment products... A total of 10,500 clients opened brokerage accounts to trade stocks via Bank Asya s online branch. The Bank recorded a total equity trading volume of TL 1.9 billion in With the launch of the Participation Index, sponsored in part by Bank Asya, the Bank aims to boost its equity trading volume, increase its market share among participation banks, and maintain its standing as the pioneer institution in participation banking by introducing new investment products. Two new insurance products As a result of the projects and initiatives undertaken jointly with Işık Sigorta, a Bank Asya subsidiary, two new insurance products, Bank Asya Cüzdanım (My Wallet) and Bank Asya Ailem (My Family), were introduced for customer use joining the card protection plan offering % 12% 1% 33% % 87% BREAKDOWN OF NUMBER OF RETAIL LOANS EXTENDED (%) HOUSING VEHICLE CONSUMER BREAKDOWN OF RETAIL LOANS EXTENDED BY VALUE (%) RETAIL LOAN RISK EXPOSURE (TL million)

52 50 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 As a result of all these initiatives, Bank Asya sold more than 100,000 insurance policies and generated approximately TL 25 million in premiums in The number of insurance policies sold during the year increased 60% compared to CUSTOMER SATISFACTION- ORIENTED ACTIVITIES Channel management activities The Bank Asya call center made more than 9 million customer contacts in 2010 via its SMS information service, incoming / outgoing calls and text to speech (TTS) calls. As a result of these contacts, 195,000 primary cards, 80,000 additional cards, 8,000 Card Protection Plans and nearly 7,000 bill payment instructions were sold to customers. The Bank Asya Cüzdanım (My Wallet) Insurance, the sale of which by the call center began in September, reached 30,000 policy sales in just four months. Some 173,000 credit card customers were convinced to switch to receiving their credit card statements via in 2010, which helped control costs. A total of 558,000 product sales were made via the call center in 2010, resulting in TL 4 million of premium income from these products. Pioneer in call center technology... Bank Asya made many technical improvements to its call center in 2010 in order to respond to customer demands with faster and higher quality service. After renewing the call center infrastructure in February, the Bank achieved nine man-days of labor savings per day. A new project was also initiated to overhaul the credit card screens used by the call center. A pioneer in the sector in all types of technology applications, Bank Asya broke new ground in the financial services industry in 2010 by introducing the Virtual-Operator Mobile Phone Top-up service. In addition, with the new sales screens rolled out at the call center, sales tranactions made by customer representatives can now be monitored in real time. The Bank received a total of 150,000 credit card applications through the SMS and internet channels in More than 35 million applications were responded to via the Bank s SMS Information Service. The number of online branch users rose from 450,000 in 2009 to 550,000 in 2010, an increase of 25%. In 2010, the number of Bank Asya ATMs increased by 23% compared to the previous year and reached 444; 215 of these are located outside of the branches January February March AprIl May June July August September October November December January February March AprIl May June July August September October November December MONTH BASED Number of Incoming Calls Responded by the Call Center MONTH BASED Number of Incoming Calls Responded by the Call Center and Premium Generation NUMBER OF SALES PREMIUM AMOUNT

53 PresentatIon 51 A pioneer in the sector in all types of technology applications, Bank Asya broke new ground in the financial services industry in 2010 by introducing the Virtual- Operator Mobile Phone Top-Up service. Enriching their functionality in 2010, Bank Asya began providing the full range of transactions through its branchless banking channels. As a result of targeted initiatives and upgrades during the year to steer customers toward alternative distribution channels, seven out of every 10 transactions were conducted through non-branch channels. Demands, requests and complaints received from customers were resolved by the Customer Satisfaction Department within one day, on average, in This level of service quality placed the Bank among the top three most consumer-friendly companies in Turkey based on the rankings of the şikayetvar.com website. In addition, starting in the last quarter of 2010, the Customer Satisfaction Department began to monitor Bank Asya-related news that hit social media outlets. Mobile Branch In order to diversify Bank Asya s alternative distribution channels, the Mobile Branch was launched for customers to conduct their banking transactions easily from any location at any time. Bank Asya customers can access the Mobile Branch easily through the mobil.bankasya.com.tr website and perform many transactions free of charge, including viewing account activity, transfering money, using the financing calculator and paying credit card balances. This application allows customers to perform their transactions quickly and easily from any location and save precious time. With the development of new mobile application technologies, Bank Asya began to provide new location-based services to its clients, including identifying the closest Bank Asya Branch/ATM, in As part of the segmentation initiative developed recently by the Bank, customers were initially segmented based on value and behavior. Product and business processes were also reviewed and sales force staff and branch organizations were overhauled. The reflections of the change that this project will bring about will be visible in all retail banking activities in PROGRESS OF NUMBER OF ATMS (units)

54 52 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 INTERNATIONAL BANKING 50% With competitive pricing in customer transactions as a result of Bank Asya s increased presence in foreign exchange markets, the Bank saw its total foreign exchange transaction volume rise by 50% to USD 21 billion in Increasing effectiveness and market share 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 initiated a transformation process in international transactions in early 2010 and transitioned from a branch-based to a transactionbased portfolio structure. Since the completion of this process there have been significant improvements in the speed, reliability, and standardcompliance of the Bank s foreign exchange transactions. International award for excellence The effectiveness of Bank Asya s technological infrastructure and service competencies is confirmed by the Straight Through Processing (STP) Excellence Awards that it has received from some of the world s leading banks. Bank Asya received the STP AWARD 2009 from Commerzbank. The Bank was also deemed worthy of the award for excellence in USD payments by The Bank of New York Mellon for the fifth time. Bank Asya s increasing share in foreign trade... Bank Asya, which holds a strong position in the foreign trade finance segment, solidified its standing in 2010 by generating fast, innovative and customer-oriented solutions for export and import transactions. Despite significant contractions in Turkey s imports and exports in 2009 due to the global economic crisis, Bank Asya increased its share of Turkey s foreign trade transactions in ,424 3,729 2,492 2,796 2,43 2,01 2,43 2,45 Import Transactions (USD Million) Export Transactions (USD Million) Share in Total Imports of Turkey (%) Share in Total Exports of Turkey (%) çağrı merkezi aylık müşteri karşılama ADETLERİ ve üretilen primler

55 PresentatIon 53 While contributing to the national economy through its support to the real sector, 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. The Bank s foreign trade transaction volume in 2010 totaled USD billion, which includes, USD 3,729 million in imports, USD 2,796 million in exports, USD 13,686 million in other transfers and USD 611 million in guarantees. The Bank s share in Turkey s total import volume declined slightly to 2.01% in 2010, from 2.43% in the prior year; whereas its share in total export volume ticked up to 2.45% in 2010, from 2.43% in the previous year. FINANCIAL INSTITUTIONS An enduring and trusted presence in international markets In addition to its wide range of domestic banking activities, Bank Asya also provided international services to its customers through an extensive correspondent network of more than 1,400 banks in 110 countries and managed to increase its trade finance market share. In April 2010, Bank Asya signed an agreement for a one-year murabaha syndication facility of two tranches, of EUR 99 million and USD million, to be used in export financing. Structured with the participation of 26 banks from 17 countries, this facility is the largest murabaha syndicated loan realized by a Turkish institution. Bank Asya also provided 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 TREASURY As a result of the economic crisis and the subsequent recovery, the Treasury Department established a balanced foreign exchange position particularly against fluctuations in the money and foreign exchange markets in This served to protect the Bank from the adverse effects of extreme volatility and risks in the markets. The Department continued Bank Asya s presence in the liquidity management segment by offering existing products and developing new products. With new investments made in the incomeindexed securities that were issued in 2010, the Bank s liquid assets quality and diversification increased. The measures taken by the Central Bank of Turkey to mitigate the inflationary effects of speculative capital inflows and credit expansion put a pressure on the profitability of the banking sector. The Treasury Department continued to make positive contributions to the Bank s profit in 2010 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. Improving the effectiveness of the treasury service offerings thanks to investments in technology and innovative approaches in service provision, the Treasury Department increased the satisfaction level of employees and customers. Achieving competitive pricing in customer transactions as a result of Bank Asya s growing presence in foreign exchange markets, the Bank increased its total foreign exchange transaction volume by 50% to USD 21 billion in In addition, significant growth was registered in deposits, total trading volume and the number of retail and corporate clients in the exclusive client segment that the Bank targets directly for treasury products and services. Thanks to demand from investors who started searching for returns in the low interest rate environment where risk aversion became the norm with the markets fluctuations in 2010, gold has become a widely-preferred 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.

56 54 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 Under the leadership of senior management and with the voluntary participation of all employees, Bank Asya aims to make continuous improvements to its human resources capital, business processes and technology infrastructure in accordance with today s requirements and to extend its customer-oriented service approach to all segments of the banking industry. QUALITY MANAGEMENT SYSTEM A never-ending journey that ensures continuous development... Bank Asya s understanding of quality management targets excellence at the zero error level. When coupled with the unattainability of this goal in practice, quality management takes on the meaning of a never-ending journey that ensures continuous development. Early on, Bank Asya made the strategic decision to adopt the Quality Management System and has expended great efforts to implement this strategy since the Company s inception in With its organizational structure and management approach aligned with this philosophy, Bank Asya has done its utmost to provide different solutions for different expectations of its customers while making the Bank a place where its employees are proud to work. As recognition of its commitment to a quality management approach, Bank Asya received ISO 9001:2008 Quality Management System certification from TÜV NORD. The focal point of Bank Asya s quality management is the meticulous documentation and management of all product and service development processes. Activities of all units within the Bank are reviewed and documented, and subsequently they are updated in order to improve the system and increase the efficiency and effectiveness of the Bank s products and services. As part of its Quality Management System, Bank Asya established the Asya Suggestion System ; this inhouse system collects all comments and suggestions submitted by Bank personnel. All submissions to the Asya Suggestion System are evaluated and those deemed worthy of implementation are rewarded. In 2010, the Bank implemented the Lean Six Sigma Method, which is a model in measuring and improving process quality. One of the key components of quality management, the methododogy prompted the formation of a new service that is responsible for improving the Bank s products and services. Both the processes and the identified areas for improvement are subjected to definition, measurement, analysis, improvement and control steps and ultimately they are improved at an optimal level. In accordance with the Lean Six Sigma method that was applied with a customer-focused perspective, the Bank thoroughly analyzed operational processes necessary for more efficient and effective provision of products and services and launched many process improvement initiatives. Bank Asya completed work on its business continuity and contingency plan to ensure that the Bank continues its operations in the event of an emergency in accordance with legal and regulatory requirements. Bank Asya raised awareness among its employees about business continuity issues and assisgned duties and responsibilities in case of a disruption of normal banking operations. As part of the system security initiatives, the Bank established rule-based access and authorization for all banking screens and completed legal compliance requirements.

57 PresentatIon 55 Bank Asya further enhanced its strong reputation in banking information technology and executed all of its operations reliably and quickly to maximize customer satisfaction. INFORMATION TECHNOLOGIES One step closer to the future of banking... Bank Asya Information Technologies Group ensures quick and error-free management of company operations with more than 250 specialist employees while contributing to the Bank s vision and profitability with its innovative initiatives. Major activities carried out in the Information Technologies field by Bank Asya in 2010 include: The Mobile Banking Channel was launched in order to allow customers to conduct banking transactions using their mobile phones. The Bank continues to upgrade this channel with new functionality on a regular basis. New functions and improved security features were rolled out for the online branch. As a result of market research efforts undertaken to better meet the needs of SMEs and commercial segment customers, Bank Asya began work to create a separate vertical web portal and added new specialized functionality to the online branch. A new telemarketing infrastructure was integrated with the banking system and made available to the sales staff. In addition, initiatives to optimize and redesign the call center interfaces and to completely overhaul the interactive voice response system began. The Integrated Financial Analysis Information System (EMTIS) was rolled out to be used in all small business banking processes, from loan applications to credit limit allocation. In line with Basel II compliance, improvements were made to the market risk and credit risk management processes and a collateral rating system was implemented. The Bank is also working on a multidimensional early warning system that will operate in accordance with a diverse set of criteria. As part of an initiative conducted jointly with an international consultancy to centralize the Bank s operational processes, many loan and accounting-related transactions performed at the branch level were moved to the headquarters level; as a result, labor cost savings were realized. In conjunction with a CRM project, customer segmentation was completed and campaign management and sales force automation initiatives were started. The Bank initiated the first phase in creating an electronic legal proceedings monitoring system to track the status of legal actions. This will serve to increase the Bank s nonperforming loan recovery capability significantly. The Hyperion application was put in service for budget management purposes. The Training Management System, which encompasses all processes from collecting requests to implementation, was designed and developed in-house. To further develop and modernize Human Resources applications in-house, the first phase of the employee information and performance management systems was completed; the remaining modules will be completed in 2011.

58 56 Bank Asya 2010 ANNUAL REPORT REVIEW OF BANK ASYA S ACTIVITIES IN 2010 The Commercial Card, a product that can be used for managing cash flow between dealers and distributors in commercial transactions and replacing checks and bills, was developed. A technology infrastructure initiative that enables gold trading transactions both at the branches and through the online banking channel was completed. In conjunction with an agreement with Moneygram, the infrastructure to provide international SWIFT money transfer services was developed and put into operation. IT INFRASTRUCTURE INVESTMENTS At Bank Asya, one of the core principles is to use technology as effectively as possible. Accordingly, the Bank focuses its IT investments on infrastructure initiatives, process improvements, alternative distribution channels enhancements, and launches of innovative products in card-based payment systems. Bank Asya s IT investments in 2010 include the following: IT Factory, which is an innovative business model developed by the Bank Asya Information Technologies Group, commenced operations. The Information Security Management System that was developed in-house to perform risk, asset and event management was put into service. The Bank began monitoring project management processes, using the PMI methodology, through the PPM application; efforts are under way to monitor demand management using the same application. CMMI compliance efforts were initiated for the optimization of Software Development processes. To further improve the testing management processes, the Bank put in service the testing data formation application in The capacity of the data links connecting the branches to headquarters was increased and the connection speed at the branches was enhanced. Bank Asya switched to the IP HSM technology in its debit card management system infrastructure; as a result, PIN approval times were shortened, the number of parallel transactions was increased and the performance of the ATM service network was enhanced. New technologies were deployed and began to be used for administrative applications that can be performed remotely, including software patches, version upgrades and new software installations for servers located at the branches and desktop computers placed in a variety of locations. This reduced the time demand on technical personnel while providing faster service to users. The POS communications infrastructure was switched to the STN system that operates on an uninterrupted and active-active basis. The entire communications infrastructure of the new annex building at headquarters was installed and integrated into the existing system. Websense internet security software went live with complete functionality.

59 PresentatIon 57 At Bank Asya, one of the core principles is to use technology as effectively as possible. Accordingly, the Bank focuses its IT investments on infrastructure initiatives, process improvements, alternative distribution channels enhancements, and innovative product launches in card-based payment systems. Switching the mobile calls of the branches to the centralized IP FCT structure, the Bank achieved an effective and continuous communications infrastructure and cost savings. The Bank began using the Microsoft System Center for Operations Management technology for better and more effective monitoring of the servers and application systems in its IT infrastructure. Research and development efforts were undertaken to smoothly and seamlessly upgrade the Core Banking database. As a result, the banking application was upgraded with minimal service interruption while the credit card and POS system did not experience any interruption. Research and Development In order to enable customers to perform all contactless, and other type, transactions, with AsyaCard DIT using their mobile phones, the Bank has plans to further develop the DIT Mobil product with two distinct mobile payment applications, one microsd-based and one SIM-based. Bank Asya developed and launched Ultralight mifare ticket applications for use as single-trip tickets on public transportation, supplementing its AsyaCard DIT and DIT Pratik city card offerings. To expand the scope of DIT card use, the Bank conducted R&D studies on a variety of applications including car park, stadium and cafeteria entrances / exits. To take its banking services directly to the customer s door, Bank Asya completed infrastructure work for bill payment using POS devices. To increase customer satisfaction, the Bank initiated efforts to print debit cards and deliver them to customers at the branches. 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 location-based mobile applications and mobile banking experiences. Awards Bank Asya won the Middle East, Africa and the Mediterranean Region Business Optimization Award given by Hewlett-Packard (HP) for the innovative business model it launched in In an event organized by CIO Turkey magazine, Bank Asya was deemed worthy of one of the CIO 2010 awards that are given to companies which increase profitability, enhance competitive strength, optimize business work flows and deepen customer relationships by making the most innovative use of information technologies.

60 58 Bank Asya 2010 ANNUAL REPORT CORPORATE COMMUNICATION AND SOCIAL RESPONSIBILITY Investing in the future with a sense of responsibility Bank Asya has considered the Turkish Football Federation 1st League as 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. Throughout the year, Bank Asya remained in effective and constant communication with its customers and employees as well as with media organizations and the public at large. All of the Bank s corporate communication and marketing activities are intended to reach out to all of its stakeholders. CAMPAIGNS Turkey s highest-transaction-volume bank in contactless card payments... As a result of successful marketing communications campaigns conducted for AsyaCard DIT and DIT Pratik, two innovative and contactless technologybased products, Bank Asya became Turkey s top-ranked bank in terms of the number of contactless card payment transactions performed. Following the re-launch campaign in August of the AsyaAsist product targeted at microbusinesses and SMEs, the launch campaign for Çobanyıldızı Small Business Banking took place in October. The decision to extend the name sponsorship of the Bank Asya 1st League for an additional five years was successfully communicated to the public and football fans with the 5 More Years with Bank Asya 1st League campaign in The Bank continued its Every Fourth Bus Ride Free with DIT public transport campaigns in the provinces where AsyaCard DIT and DIT Pratik can be used to pay fares on intra-city mass transit systems. Using the local radio, TV and periodical publications as well as the bus wrap and outdoor channels actively in these campaigns, the local population s awareness of the DIT brand was enhanced. Other major marketing communications campaigns administered during the year include the Ramadan Campaign, +5 Installment Campaign and the New Year Campaign. In addition, various brand collaboration and sectorspecific campaigns were organized in conjunction with select famous brands and merchant partners. PUBLIC RELATIONS ACTIVITIES AND EVENTS Being in the right channel at the right time... Bank Asya conducted a series of public relations initiatives throughout 2010 in order to place its corporate messages in the right media channel at the right time. Bank Asya s growth performance indicators were regularly shared with customers as well as the public at large through media outlets; six press conferences and two signing ceremonies were held to announce new products and developments. In addition to the separate events organized for the seven new branches that opened during the year, meetings for SMEs were held in three provinces under the Çobanyıldızı Meetings banner. 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 İNEPO 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 finance-related 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

61 PresentatIon 59 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 2008, for an additional five years pursuant to an agreement signed during the year. sponsor of the Fatih University Crystal Clapperboard Short Film Competition for four years. This competition aims to raise Turkish cinema to new heights and encourage younger-generation filmmakers. Media sponsorships During 2010, Bank Asya sponsored a variety of programs, columns and pages in five newspapers, on six radio stations and on 15 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 has undertaken the personal sponsorship of Aşkın Karaca, a 20-year-old track athlete. Mr. Karaca has racked up numerous achievements in national and international competitions in the triple jump category. The Bank Asya Çırağan Kolej Spor Basketball Team, a third-league team of which Bank Asya is a name sponsor, once again successfully carried the Bank Asya name to new heights through its superior performance during the year. Bank Asya also assumed the prime sponsorship of Ümraniye Doğuşspor, which is competing in the Istanbul super amateur football league. Bank Asya 1st League, an investment in Turkey s future... 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 2008, for an additional five years pursuant to an agreement signed during the year. Announcing this news to football fans and the wider public with the 5 More Years Campaign, Bank Asya kept the interest in and awareness of Bank Asya 1st League at heightened levels with its regular communications efforts throughout the year. The campaign in turn made a significant contribution to general recognition and awareness of the Bank Asya brand name. 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 12 out of 18 1st League teams in the season through uniform sponsorship agreements. 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, the Bank has presented Bank Asya 1st League Awards for two seasons now. The second edition of the Awards ceremony was held in June, and the winners in nine award categories were announced. Periodical publications Bank Asya publishes Biz Asya, a quarterly in-house magazine which aims to strengthen communications within the company and also to appeal to the interests of customers. The Bank continued to publish the Bank Asya 1st League magazine throughout Launched at the beginning of 2008, this monthly is still Turkey s first and only First League magazine. The publication is delivered to subscribers and can also be obtained free of charge at Bank Asya branches. In its short life, the magazine has already attracted a wide readership. 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, 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 corporate social responsibility and without public notices or announcements. The Bank donated an amount equivalent to 4/10,000 of its shareholders equity in contributions and assistance to a variety of organizations and entities in 2010.

62 60 Bank Asya 2010 ANNUAL REPORT SUBSIDIARIES AND AFFILIATES Bank s Address Ownership Share Company Name (City/Country) (%) Yeni Mağazacılık A.Ş. (*) Istanbul / Turkey Landmark Holding A.Ş. (*) Istanbul / Turkey Tamweel Holding S.A. (**) Dakar / Senegal Kredi Garanti Fonu Ankara / Turkey 1.67 Asyafin Sigorta Ara. Ltd. Şti. Istanbul / Turkey Nil Yönetim Hizm. Tur. San ve Tic. A.Ş. Istanbul / Turkey Işık Sigorta A.Ş. Istanbul / Turkey Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Istanbul / Turkey Asya Kart Teknoloji Hizmetleri A.Ş. Istanbul / Turkey (*) 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 (**) The Bank made a payment of TL 21,548,000 on 4 February 2010 and became a 40% shareholder in Tamweel Afrika Holding S.A. that was owned by The Islamic Corporation for the Development of the Private Sector (ICD), which is a subsidiary of The Islamic Development Bank (IDB) Group. The Bank participated in the capital increase that was realized on 8 June 2010 with TL 9,077,000; the capital registration transactions have not been concluded as of 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 TL 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 encompasses before, during and after sales. Işık Sigorta places great importance on its organizational structure and continues development efforts in this direction. Investing in technology in order to ensure both the continuity and the uninterrupted provision of its services, Işık Sigorta was the first insurance company to set up an online system to connect directly with its agents. This sytem 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. Işık Sigorta conducts its operations through its regional departments located in Marmara, Ankara, Izmir, Adana, and Antalya, regional representative offices in Bursa and Trabzon, more than 400 authorized agents across the country, and the branches of Bank Asya, Albaraka Türk and Türkiye Finans. 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 İnşaat Emlak Sanayi ve Ticaret A.Ş., the Company was reincorporated as Tuna Gayrimenkul Yatırım Ortaklığı 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 and also to engage in other activities allowed by the CMB s Communiqué on Principles Pertaining to Real Estate Investment Trusts. Bank Asya s directly controls a 22.94% stake in Tuna GYO. Nil Yönetim Hizmetleri Emlak Turizm Sanayi ve Ticaret 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 Kızılcahamam, 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 congress center. Asya Termal Holiday Village quickly established a solid reputation as a prestigious venue for holidays and as a health and congress tourism destination. Since its founding, the Village has played host to many wellknown Turkish and international guests and to many large-scale meetings and events. The resort plays a major role in promoting Kızılcahamam as a nationally and internationally renowned spa.

63 PresentatIon 61 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 2010 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. DRT BAĞIMSIZ DENETİM VE SERBEST MUHASEBECİ MALİ MÜŞAVİRLİK A.Ş. Member of DELOITTE TOUCHE TOHMATSU LIMITED Özlem Gören Güçdemir Partner Istanbul, 11 March 2011

64 Bank Asya, valuable for the Turkish economy with its financial support... K2: The world s second tallest mountain with an elevation of 8,611 meters.

65 32% MORE SUPPORT FOR THE ECONOMY

66 64 Bank Asya 2010 ANNUAL REPORT BOARD OF DIRECTORS Behçet Akyar Chairman Industrialist & businessman. Born in Istanbul in 1955, Behçet Akyar graduated from the Istanbul Academy of Economic and Commercial Sciences (Department of Economics and Public Finance) in He began his career in 1979 as a managing partner of Aker Kumaş Kollektif Şti. and he subsequently served in a number of companies of which he was the owner. He has been a partner and a member of the Board of Directors of Feza Gazetecilik A.Ş. since During the same years, Mr. Akyar also served as a managing partner of Aker Mağazacılık Tekstil Tic. ve San. Ltd. Şti., a position he has also held at Akerler Tekstil Tic. ve San. Ltd. Şti. since He has been chairman of the Bank Asya Board of Directors since February Salih Sarıgül Vice Chairman Businessman. Born in Van in 1955, Salih Sarıgül is a graduate of Ege University (Faculty of Economics). He was appointed to a seat on Bank Asya s Board of Directors in December 2006 after having previously served as a statutory auditor from July 2004 to December Mr. Sarıgül currently also holds the positions of vice chairman of the Board of Directors at Nil Yönetim Hizmetleri Turizm San. ve Tic. A.Ş., member of the Board of Directors at Işık Sigorta A.Ş., member of the Board of Directors at Asya Kart Teknolojileri Hizmetleri A.Ş., and statutory auditor at Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. Abdullah Çelik Board Member - CEO Born in Salihli-Manisa in 1969, Abdullah Çelik graduated from Middle East Technical University (Faculty of Economics and Administrative Sciences, Department of Economics) in He received his MBA degree from Old Dominion University in the United States. Mr. Çelik served as an assistant auditor at the Turkish Prime Ministry s Board of Sworn Bank Auditors from 1992 to 1995, chief auditor at the Turkish Banking Regulation and Supervision Agency (BRSA) s Board of Sworn Bank Auditors in 2004, and head of department at BRSA from 2004 to He was a member of the Board of Directors of the Association of Development Financing Institutions in Asia and the Pacific from 2005 to 2010 and the chairman and CEO of the Development Bank of Turkey from 2005 to Mr. Çelik has been a member of the Board of Directors at the Association of National Development Finance Institutions in Member Countries of the Islamic Development Bank since 2005 and vice chairman at the Association of Development Financing Institutions in Asia and the Pacific since He joined Bank Asya as a member of the Board of Directors and the CEO in March Tacettin Negiş Board Member Businessman. Born in Bayburt in 1948, Tacettin Negiş began his career within the textile industry. He then established his own company in 1971, and went on to found Negiş Kolektif Şirketi in Mr. Negiş established Negiş Giyim İmalat ve İhracat A.Ş. in 1988, a firm primarily involved in imports and exports. Throughout his business career spanning more than 35 years, Mr. Negiş has been awarded numerous certificates of honor and high appreciation. He has been a member of Bank Asya s Board of Directors since July Mr. Negiş also serves as a member of the Board of Directors of Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. and chairman of Negiş Giyim İmalat ve İhracat A.Ş.

67 InformatIon on Management and Corporate Governance PractIces 65 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. İsmail Erol İşbilen Board Member Born in Çankaya in 1959, İsmail Erol İşbilen graduated from Ankara University (Faculty of Political Sciences, Department of Economics and Public Finance) in He began his banking career in 1983 as an assistant auditor at T. Garanti Bankası A.Ş. After serving in a number of positions at T. Garanti Bankası and eventually becoming its assistant regional manager for Izmir, he joined Bank Asya in December 1997, where he served as a branch manager for three years and head of the loans unit for four years before resigning his from his post in April From June 2005 to February 2010, Mr. İşbilen served as head of the financial analysis and business intelligence department of T.C. Ziraat Bankası A.Ş. and he rejoined Bank Asya in February He currently serves as member of the Board of Directors and member of the Audit Committee at the Bank. Hülagü Özcan Board Member Born in Çermik in 1957, Hülagü Özcan graduated from Middle East Technical University (Faculty of Administrative Sciences) in He began his banking career as an auditor at T. İş Bankası in Mr. Özcan worked as a loan specialist auditor from December 1988 to August 1991 at T. İş Bankası. He then served as financial control manager at Koçbank A.Ş. from September 1991 to May In June 1993, Mr. Özcan joined T. Garanti Bankası A.Ş. as deputy regional director and served as branch manager for two years, loans manager for two years and the general manager for Garanti Bank Moscow-Russia from May 1997 to December 1998, respectively. Mr. Özcan then served as executive vice president at Körfezbank A.Ş. from January 1999 to April 2001, as a member of the Board of Directors at Garanti Leasing A.Ş. from February 1999 to July 2001, as auditor at Ziraat Yatırım A.Ş. from November 2001 to April 2002, as executive director at Ziraat Bankası A.Ş. from June 2001 to April 2002, and as head of risk management at Oyak Bank A.Ş. from April 2002 to February He has been a member of Bank Asya s Board of Directors since April Ahmet Çelik Board Member Businessman. Born in Erzurum in 1955, Ahmet Çelik graduated from Istanbul University (Faculty of Economics) in Beginning his professional career in 1983, Mr. Çelik is a founding partner of Yapı Yatırım ve Gayrimenkul A.Ş. (housing and industrial construction); Leal Yapı Gayrimenkul Ltd. Şti.; Hamle Oto A.Ş. (corporate and fleet vehicle rentals); Çelikeller A.Ş. (white goods delership); Çelikeller Ltd. Şti. (foods); and Birim Gayrimenkul Ltd. Şti. (real estate). In addition Mr. Çelik is also a managing partner of Tuna Gayrimenkul A.Ş., Forum İnşaat A.Ş., Zambak Mimarlık A.Ş., Hisar Hizmet A.Ş., Burç Güvenlik A.Ş. He joined Bank Asya as a member of the Audit Committee in 2005 and has served as a member of the Board of Directors since Behçet Akyar Chairman-2010 Salih Sarıgül Vice Chairman-2006 İsmail Erol İşbilen Board Member-2010 Abdullah Çelik Board Member and CEO (March 2011) Tacettin Negiş Board Member Ahmet Çelik Board Member Hülagü Özcan Board Member Board of Directors Meetings Under Article 38 of the Bank s Articles of Association, 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 and/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, members of the Board of Directors are paid a monthly gross salary of TL 5,000.

68 66 Bank Asya 2010 ANNUAL REPORT STATUTORY AUDITORS Atif Bilgin Statutory Auditor Businessman. Born in Elbistan in 1952, Atif Bilgin graduated from Gazi University (Faculty of Education) in He joined the Ministry of Finance in 1976 and worked there until 1986, after which he served as a senior executive at various foreign trade companies. Mr. Bilgin joined Global Bağımsız Denetim Şirketi as a member of its Board of Directors in 1999, a position he continues to hold. Atif Bilgin has been a Statutory Auditor of Bank Asya since He is also a member of the Board of Directors of Asya Kart Teknolojileri Hizmetleri A.Ş. and Galaksi A.Ş., and a statutory auditor for Nil Yönetim Hizmetleri Turizm San. ve Tic. A.Ş. In addition, Atif Bilgin is a partner and member of the Board of Directors of various companies. İrfan Hacıosmanoğlu Statutory Auditor Businessman. Born in Of in 1962, İrfan Hacıosmanoğlu is the owner of the firm of İrfan Tekstil San. Tic. Ltd. Şti. He was appointed a Statutory Auditor of Bank Asya in March Mr. Hacıosmanoğlu currently serves as vice chairman of the Board of Directors at Forum İnşaat Dekorasyon Turizm San. ve Tic. A.Ş. and member of the Board of Directors at Işık Sigorta A.Ş., Asya Kart Teknolojileri Hizmetleri A.Ş. and Nil Yönetim Hizmetleri Turizm San. ve Tic. A.Ş. Ali Akbulut Statutory Auditor Textile manufacturer and businessman. Born in Malatya in 1956, Ali Akbulut is a 1982 graduate of İnönü University (Faculty of Economic and Administrative Sciences). He has served as a Statutory Auditor at Bank Asya since Mr. Akbulut is the licensee of Feza Gazetecilik A.Ş. (Zaman Newspaper, Aksiyon Magazine, Today s Zaman, Zaman Kitap, Cihan News Agency, Cihan Medya Dağıtım A.Ş.), one of Turkey s largest industrial companies. In addition, Mr. Akbulut currently serves as a member of the Board of Directors at Nil Yönetim Hizmetleri Turizm San. ve Tic. A.Ş. and Asya Kart Teknolojileri Hizmetleri A.Ş.; he is also the Chairman of Ortadoğu Tekstil Tic. ve San. A.Ş., Akbulut Tekstil A.Ş., BJ Tekstil A.Ş., and Global Denim Tekstil A.Ş. The Statutory Auditors and Their Terms of Office Details pertaining to the constitution of the Bank s Board of Statutory Auditors is stipulated in Article 49 of the Bank s Articles of Association. Statutory auditors serve threeyear terms and are paid a monthly gross salary of TL 5,000. Ali Akbulut Statutory Auditor-2000 Atıf Bilgin Statutory Auditor-2006 İrfan Hacıosmanoğlu Statutory Auditor-2009

69 InformatIon on Management and Corporate Governance PractIces 67 CHANGES IN THE MEMBERSHIP OF THE BOARD OF DIRECTORS AND THE BOARD OF STATUTORY AUDITORS DURING 2010 Changes in the Membership of the Board of Directors during 2010 Behçet Akyar was appointed to fill the seat on the Board of Directors vacated by the resignation of Ünal Kabaca on 28 January İsmail Erol İşbilen was appointed to fill the seat on the Board of Directors vacated by the resignation of Tahsin Tekoğlu on 12 February Behçet Akyar was appointed to fill the vacated Chairman of the Board of Directors post. Cemil Özdemir was appointed Member of the Board of Directors and the CEO on 11 February Murat Sungurlu resigned on 22 March Hülagü Özcan was appointed to fill this vacated seat on the Board of Directors pursuant to the Board of Directors resolution dated 8 April Changes in the Membership of the Board of Statutory Auditors during 2010 No changes took place in the membership of the Board of Statutory Auditors during 2010.

70 68 Bank Asya 2010 ANNUAL REPORT SENIOR MANAGEMENT Abdullah Çelik Board Member - CEO Born in Salihli-Manisa in 1969, Abdullah Çelik graduated from Middle East Technical University (Faculty of Economics and Administrative Sciences, Department of Economics) in He received his MBA degree from Old Dominion University in the United States. Mr. Çelik served as an assistant auditor at the Turkish Prime Ministry s Board of Sworn Bank Auditors from 1992 to 1995, chief auditor at the Turkish Banking Regulation and Supervision Agency (BRSA) s Board of Sworn Bank Auditors in 2004, and head of department at BRSA from 2004 to He was a member of the Board of Directors of the Association of Development Financing Institutions in Asia and the Pacific from 2005 to 2010 and the chairman and CEO of the Development Bank of Turkey from 2005 to Mr. Çelik has been a member of the Board of Directors at the Association of National Development Finance Institutions in Member Countries of the Islamic Development Bank since 2005 and vice chairman at the Association of Development Financing Institutions in Asia and the Pacific since He joined Bank Asya as a member of the Board of Directors and the CEO in March Buket Gereçci Executive Vice President Born in Gaziantep in 1967, Buket Gereçci is a graduate of Ankara University (Faculty of Political Sciences, Department of International Relations). She began her banking career at Garanti Bankası in 1990 and subsequently worked at Toprakbank and then Finansbank. She joined Bank Asya in 2002 as the manager of the Gaziantep branch. Ms. Gereçci has held the position of Executive Vice President of Operations at Bank Asya since February Ali Tuğlu Executive Vice President Born in Istanbul in 1969, Ali Tuğlu is a graduate of Istanbul Technical University (Department of Computer Engineering) and earned a Master s degree in Computer Science from Virginia Tech in He began his career as an instructor at Virginia Tech where he worked from 1993 to Mr. Tuğlu then served as a software project engineer for CGN Consulting in the United States from 1995 to 1996 and as the software group manager at Minerva Software from 1997 to From 1998 to 2008, he served in a variety of positions in the national and regional organizations of Hewlett Packard in Turkey, eventually becoming the consulting segment manager for HP s Middle East, Africa and Mediterranean region. Mr. Tuğlu joined Bank Asya in March 2008 and currently serves as Executive Vice President of Information Technologies Group. Ali Fuat Taşkesenlioğlu Executive Vice President Born in Erzurum in 1964, Ali Fuat Taşkesenlioğlu graduated from Atatürk University (Faculty of Economic and Administrative Sciences, Department of Accounting and Finance) in After serving as financeaccounting specialist at YENDA Yenidoğan Yayın Dağıtım from 1987 to 1988 and as chief project assessment specialist at Faisal Finans in 1988 to 1996, he joined Bank Asya in Mr. Taşkesenlioğlu served as assistant manager at Credits Department from 1996 to 1999, manager of the Merter Branch from 1999 to 2003, manager of the Sultanhamam Branch from 2003 to 2005, manager of the Credit Allocation Department from 2005 to 2008, and manager of the Credit Allocation I Department from 2008 to He has held the position of Executive Vice President of Loans since March 2010.

71 InformatIon on Management and Corporate Governance PractIces 69 Ömer Faruk Şenel Executive Vice President Born in Konya in 1969, Ömer Faruk Şenel graduated from Middle East Technical University (Faculty of Economic and Administrative Sciences, Department of Economics) in 1991; he began his career as assistant apecialist at T.C. Ziraat Bankası in the same year. Mr. Şenel served in the Internal Audit Department and in the Resource Development Department at Esbank from 1992 to 2000, and in the Resource Development and Banking Services Department at Etibank from 2000 to Joining the Bank Asya family as manager of the Gebze Branch in 2002, Mr. Şenel headed the Human Resources Department from 2004 to He received his MBA degree from Fatih University (Faculty of Social Sciences, Department of Business Administration) in Mr. Şenel has served as Executive Vice President of Human Resources and Support Services since March Erdal Erdem Executive Vice President Born in Çankırı in 1971, Erdal Erdem graduated from Afyon Kocatepe University (Faculty of Economic and Administrative Sciences, Department of Public Finance) in After a brief time at Faisal Finans, he joined Bank Asya s Corporate Marketing Department in Mr. Erdem served in various positions in the Loans Department from 2000 to 2003 and in the Financial Analysis and Information Department from 2003 to Mr. Erdem has held the position of Executive Vice President of Risk Monitoring and Assessment since March Hasan Ünal Executive Vice President Born in Karabük in 1968, Hasan Ünal graduated from Istanbul Technical University (Department of Management Engineering) in After working at Garanti Bankası from 1988 to 1997, he served as R&D and operations manager at AKK/Interbank from 1997 to 1998; as executive vice president at Universal Kart Hizmetleri from 1998 to 2000; as manager of Alternative Distribution Channels at İhlas Finans Kurumu from 2000 to 2001; as manager of Retail Banking at Bank Asya from 2001 to 2004; as consultant at Global Bilişim Hizmetleri from 2004 to 2006; as the head of the Card-based Payment Systems and ADC Department at T. Halk Bankası and as a member of the Board of Directors at Bankalararası Kart Merkezi from 2007 to 2010, and as chairman of the Board of Directors in Mr. Ünal has held the position of Executive Vice President of Retail Banking at Bank Asya since March Fahrettin Soylu Executive Vice President Born in 1971, Fahrettin Soylu graduated from Ankara University (Faculty of Political Sciences, Department of Business Administration) in Mr. Soylu began his professional career in 1994 as assistant sworn bank auditor at the Undersecretariat of the Treasury; he worked there as a sworn bank auditor until August After its establishment, Mr. Soylu served the Banking Regulation and Supervision Agency of Turkey in a variety of roles including sworn bank auditor, chief sworn bank auditor, deputy head of Board of Sworn Bank Auditors, head of Supervision Group, head of Supervision Department III, head of Risk Management Department and head of Supervision Department II. In addition, he attended the Standards Implementation Group of the Basel Committee on Banking Supervision as a member on behalf of the Agency. Mr. Soylu received his Master s degree in Business Administration from the University of Illinois in the United States in He is currently working toward his Ph.D. at Marmara University (Institute of Banking and Insurance, Department of Banking). Mr. Soylu has held the position of Executive Vice President at Bank Asya since May 2010.

72 70 Bank Asya 2010 ANNUAL REPORT organization CHART Board of Directors Audit Committee CEO Cemil Özdemir(**) Consultancy to the CEO Executive Vice President Ayhan Keser(*) Executive Vice President Hasan Ünal Executive Vice President Buket Gereçci Executive Vice President Ali Tuğlu Executive Vice President Ali F. Taşkesenlioğlu Board of Directors Secretariat Osman Nuri Ersen Corporate Marketing Atilla M. Topçu Retail Products Management Department Semih Alşar Payment Systems Operations Department Mustafa Ölmez System Development Department Mustafa Saraç Retail Loans Allocation Department Hasan A. Küçük Legislation and Compliance Department Nazan Ergun Commercial Marketing-I Kıvanç Akdemir Retail Sales Management Department Gökhan Çeviker Banking Services Department J. Başak Ünal Software Development Department Bülent Güngör Commercial Loans Allocation I Department Mustafa Varol Investor Relations Department Commercial Marketing-II Yüksel Ekşi (Vicariously) Alternative Distribution Channels Department Yasemin Aydın Cash Management Department İsrafil Aydın System Operations Department Bekir Başkurt Commercial Loans Allocation II Department Özcan Özverim Small Business Banking Department Tolga Sasık Customer Communication and Telemarketing Department Metin Tiryaki Credit Operations Department Adil Z. Şahin Information Technology Project Management Department Mehmet Ergün Aydemir Small Business Loans Allocation Department Eken Berber Financial Institutions Department İbrahim Öğüdücü Card-based Payment Systems Marketing Department Emre Özgür International Transactions Department Olcay Çakır Card Technologies Department Sami Özen Southern Anatolia Regional Headquarters Yaşar Çelik Southern Anatolia Regional Marketing Department Hayrettin Yamaç Aegean Regional Headquarters Kemal Ertin Aegean Regional Marketing Department Hüsnü Uğur Devrim (*) Executive Vice Presidents Ayhan Keser and Yusuf İzzettin İmre resigned from their posts as of 3 January (**) Cemil Özdemir, Member of the Board of Directors and CEO, resigned from his duties on 10 March 2011 and he was replaced by Abdullah Çelik.

73 InformatIon on Management and Corporate Governance PractIces 71 Executive Vice President Ömer Faruk Şenel Executive Vice President Erdal Erdem Executive Vice President Yusuf İzzettin İmre (*) Executive Vice President Fahrettin Soylu Human Resources Department Cumhur Kınay Financial Analysis and Information Department Naci Manga Accounting and Subsidiaries Department Fuat Akgün Budget and Reporting Department Kamil Yılmaz Internal Audit Department Hilali Yıldırım Training Department Erol Anlı Risk Monitoring Department Mete Eryaşar Administrative Affairs Department Ömer Fuat Özçelebi Treasury Department Cenk Yavuz Internal Control Center Mahmut Yalçın Purchasing Department Murat Aydoğan Group Manager Salim Köse Construction & Facilities Department Hüseyin Sevil Risk Management Department Mehmet Kamil Tümer Organization and Quality Department Jale Doğu Legal Consultancy Department Serhat Güler Corporate Communication Department N. Çiğdem Belgutay Non-Performing Loans Department Zafer Ertan

74 72 Bank Asya 2010 ANNUAL REPORT COMMITTEES Credit Committee Position name title Member Salih Sarıgül Vice Chairman of the Board of Directors Member Cemil Özdemir (1) Member of the Board of Directors - CEO Associate Member İsmail Erol İşbilen Member of the Board of Directors 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. Corporate Governance Committee Position Name title Chairman Behçet Akyar Chairman of the Board of Directors Member Salih Sarıgül Vice Chairman of the Board of Directors Member İsmail Erol İşbilen Member of the Board of Directors Member Yusuf İ. İmre (2) Executive Vice President Member Fahrettin Soylu Executive Vice President Member Mehmet Kamil Tümer Head of Risk Management 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. Audit Committee Position Name title Member Hülagü Özcan Member of the Board of Directors 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 an effective internal control, internal audit and risk management system has been established throughout the Bank; the Activity Report is prepared for the the Board of Directors. The Audit Committee convened 10 times during The Committee held four meetings with the independent auditors in order to evaluate the independent audit activities. Information Security Management Committee Position Name title Chairman Ömer Faruk Şenel Executive Vice President Member Ali Tuğlu Executive Vice President Member Buket Gereçci Executive Vice President Member Ender Şahinaslan Information Security Manager The Information Security Management Committee convenes regularly every three months to oversee Information Security initiatives, monitor developments, and make managerial decisions. (1) Cemil Özdemir, Member of the Board of Directors and CEO, resigned from his duties as of 10 March (2) Executive Vice President Yusuf İ. İmre resigned from his post as of 3 January 2011.

75 InformatIon on Management and Corporate Governance PractIces 73 Assets and Liabilities Committee Position Name Title Chairman Cemil Özdemir (1) CEO Vice Chairman Ayhan Keser (2) Executive Vice President Member Yusuf İ. İmre (2) Executive Vice President Member Buket Gereçci Executive Vice President Member Ali Tuğlu Executive Vice President Member Ali F.Taşkesenlioğlu Executive Vice President Member Ömer Faruk Şenel Executive Vice President Member Erdal Erdem Executive Vice President Member Hasan Ünal Executive Vice President Member Fahrettin Soylu 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. Information Technologies Strategy and Steering Committee Position name title Chairman Cemil Özdemir (1) 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 Ergun Aydemir Information Technology Projects Manager Member Sami Özen Card Technologies Manager The Information Technologies Strategy and Steering Committee convened periodically during At its meetings, the Committee developed strategic and tactical plans in line with business targets, drafted IT budgets, monitored and reported onit activities and implementations. Discipline Committee Position name title Chairman Cemil Özdemir (1) CEO Member Ömer Faruk Şenel Executive Vice President Member Salim Köse General Counsel Member Hilali Yıldırım Head of Internal Audit Member Cumhur Kınay Human Resources Manager 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 issues on the agenda. (1) Cemil Özdemir, Member of the Board of Directors and CEO, resigned from his duties as of 10 March (2) Executive Vice Presidents Ayhan Keser and Yusuf İ. İmre resigned from their posts as of 3 January 2011.

76 74 Bank Asya 2010 ANNUAL REPORT SUMMARY REPORT OF THE BOARD OF DIRECTORS Esteemed Shareholders, Bank Asya maintained its pioneering position in the Turkish banking industry in 2010 with its strong customer relationships, broad deposit base, sound balance sheet, customer-focused 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. Bank Asya had a favorable and successful year in 2010 in terms of both growth and profitability. A brief review of the its key financial indicators for 2010 show the extent of Bank Asya s strong performance during the year. The Bank s realized profit of TL 260 million for the year. Bank Asya s total assets at year-end 2010 reached TL 14.5 billion, up 25% from 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 TL 11,060 million, up 32% compared to the previous year. Deposits, which make up the largest share of the Bank s liabilities, grew by 22% to TL 11.2 billion. Bank Asya also reported return on assets (ROA) of 2% and return on equity (ROE) of 14.4% for In light of the developments highlighted above, in the year ending 31 December 2010, Bank Asya s: * Total Assets increased by 25.02%, to TL 14,513 million * Cash Loans increased by 32.37%, to TL 11,060 million * Deposits increased by 22.22%, to TL 11,167 million * Shareholders Equity increased by 13.69%, to TL 1,942 million * Net Profit stood at TL 260 million * Capital Adequacy Ratio stood at 13.33%. We hereby submit Bank Asya s annual report and financial statements showing the results of the Bank s activities for the period 1 January to 31 December 2010 for your information and consideration. Respectfully yours, Asya Katılım Bankası A.Ş. Board of Directors

77 InformatIon on Management and Corporate Governance PractIces 75 HUMAN RESOURCES The core values of Bank Asya s corporate culture include professionalism, innovation, honesty, trust, 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 rank in the forefront of companies where highly qualified professionals desire to work. 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 academy program; and provides overseas language education opportunities for all employees. 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 Bank during the year. The Development Base Project 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 after qualities in the Bank s applicants are university graduate, command of at least one foreign language, and, for male candidates, having 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 successfully completed training required for promotion; and they must never have been the target of disciplinary action. The aim of Assessment Center Testing is to make the intra-bank appointments and promotions based on objective data. The Bank Asya Human Resources Department is organized into functionbased units in order to manage the Bank s HR practices more effectively and to serve its personnel more efficiently. The Recruitment and Career Progression Unit is responsible for all hiring, dismissal, promotion, career planning, and performance management processes of all departments and branches. The Compensation and Health Benefits Unit is responsible for handling matters pertaining to employee salaries and benefits, including health, meal, and others. The Employee Records Unit is responsible for handling all matters regarding employee records and complying with all legal and regulatory reporting requirements. As of year-end 2010, Bank Asya had a total of 4,266 employees (1,569 females and 2,697 males). Benefits Paid to the Bank s Senior Management In the year ended 31 December 2010, monetary benefits totaling TL 8,642,000 were paid to the members of the Bank s senior management. This amount does not include the value of real rights which are provided to senior managers. Breakdown of Personnel by Educational Background Educational Background number Ratio (%) PhD Graduate Change in Number of Employees , ,266 Change 4.71% Undergraduate 2, Associate High School Primary Total 4,

78 76 Bank Asya 2010 ANNUAL REPORT TRAINING Bank Asya s Training Division contributes to the Bank s business processes and financial results by improving the knowledge level and skills of employees to further improve the Bank s service quality and competitive strength. The fundamental goals of Bank Asya s training process are to increase employee productivity, assist in professional and personal development, and prepare multidimensional individuals to advance in their careers at the Bank. The training programs are integrated with the Bank s career planning and development initiatives to support and complement the core human resources policies at the optimum level. Classifying employees by departments, titles and credentials in accordance with these goals, the Bank implements the training roadmap created for each subgroup as a joint effort with employees, the Training Division and professional training companies. Training Methods Used by Bank Asya: Training programs make use of classroom (orientation, course, seminar, conference, panel, meeting, symposium, workshop), on-the-job and distance training (e-learning) methods and procedures. The expected benefits of training include: Improving personnel s professional knowledge base and competency and helping them achieve maximum productivity Paving the way for the Bank to achieve its performance targets Achieving the Bank s goal of high quality service and ensuring its sustainability Contributing to the effectiveness of core human resources functions including career planning and performance evaluation Increasing employee motivation by enabling personnel to improve themselves Increasing employee loyalty to the Bank Strengthening communications among the Bank s personnel as well as between employees and their managers Creating a strong corporate culture Training Activities Total Number of Trainings 515 Total Work (Person /day) 17,996 Average Number of Per Person Training Days 4,20 Ratio of Shifts 2,93% Number of Employees Receiving Foreign Language Education 102 Number of Employees Receiving MBA Support 57

79 InformatIon on Management and Corporate Governance PractIces 77 TRANSACTION VOLUME OF THE RISK GROUP OF THE BANK, OUTSTANDING LOAN AND DEPOSIT BALANCES, AND INCOME AND EXPENSES FOR THE REPORTING PERIOD Risk Group of the Bank Current Period Direct and Indirect Other Entities subsidiaries and Shareholders Included in the Associates of the Group Risk Group Loans and Other Receivables (*) Cash Non-Cash Cash Non-Cash Cash Non-Cash Balance at Beginning of Period 52,357 9, ,914 68,491 Balance at End of Period 77,494 8, ,548 42,782 Profit Share and Commission Income 15, ,870 - (*) Includes TL 153,000 finance lease receivables as of 31 December 2010 (31 December, 2009: TL 237,000). Prior Period Direct and Indirect Other Entities subsidiaries and Shareholders Included in the Associates of the Group Risk Group Loans and Other Receivables (*) Cash Non-Cash Cash Non-Cash Cash Non-Cash Balance at Beginning of Period 63,903 2, ,820 58,989 Balance at End of Period 52,357 9, ,914 68,491 Profit Share and Commission Income 17, ,148 1 (*) Includes TL 237,000 finance lease receivables as of 31 December 2009 (31 December 2008: TL 483,000). Risk Group Deposits Balances of the Bank Prior Period Direct and Indirect Other Entities subsidiaries and Shareholders Included in the Associates of the Group Risk Group Current and Profit Sharing Accounts Current Period Current Period Current Period Balance at Beginning of Period 56,994-77,749 Balance at End of Period 104, ,357 Profit Share Expense 6,133-3,522

80 78 Bank Asya 2010 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 Relations with Shareholders and Investors 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 Budget and Reporting 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. Uğur Güney Investor Relations / Officer 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 Akgün Shareholder Relations / Manager Tel : [email protected] Özlem Coşkun Shareholder Relations / Officer Tel : ozlem.coskun@bankasya. com.tr Alpay Güneralp Shareholder Relations / Chief Tel: [email protected]. tr 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 2010, the Investor Relations Department took part in an average of 10 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 25 foreign investor conferences in Turkey and abroad, and conducted separate meetings with 270 investors during the year. 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

81 InformatIon on Management and Corporate Governance PractIces 79 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 20 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 TL 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.Ş. 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 2010, Bank Asya issued a total of 32 (thirty-two) 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.Ş. is www. bankasya.com.tr. 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 2010, the Bank has a multi-partner shareholding structure, with 255 shareholders. No shareholder controls more than a 10% 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.

82 80 Bank Asya 2010 ANNUAL REPORT REPORT ON COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES 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. For this reason, 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 2010, 1,701 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. During 2010, 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 0.2% 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.

83 InformatIon on Management and Corporate Governance PractIces 81 BOARD OF DIRECTORS Structure and Formation of the Board of Directors; Non-Executive Members Members of the Board of Directors are presented below: Behçet Akyar Salih Sarıgül İsmail Erol İşbilen Chairman Vice Chairman Board Member Cemil Özdemir Board Member and CEO (March 2011) Tacettin Negiş Ahmet Çelik Hülagü Özcan B 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. Vision: To be a respected, trusted and effective bank that provides service at world standards through the products it develops. 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. Board Member Board Member Board Member 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 effective 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 guarantess 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. Cemil Özdemir, member of the Board of Directors and the CEO, resigned as of March 10, 2011.

84 82 Bank Asya 2010 ANNUAL REPORT REPORT ON COMPLIANCE WITH CORPORATE GOVERNANCE PRINCIPLES 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 thereof 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. 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 a 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 matter 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 May 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 Strategy and Steering Committee Discipline Committee Information Security Management Committee 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 amounts and forms of such payments are determined by the General Assembly.

85 InformatIon on Management and Corporate Governance PractIces 83 SUPPORT SERVICES PROCURED BY BANK ASYA 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 procured that fall within the scope of Regulation on Bank s Procurement of Support Services and Authorization of Such Service Providers are as follows. 1 Debit Card and Credit Card Printing: Plastikkart Akıllı Kart İletişim Sistemleri San. ve Tic. A.Ş. 2 Account Statement Printing: Hobim Bilgi İşlem Hizmetleri A.Ş. 3 OTS (Automatic Collection System) Payment Plan Printing: Hobim Bilgi İşlem Hizmetleri A.Ş. 4 POS Device Operation Transactions: Fujitsu Technology Solutions Bilişim Ltd. Şti.; Teknoser Bilgisayar Teknik Hizmetler San. ve Dış. Tic. A.Ş.; Verifone Elektronik Ve Danışmanlık Ltd. Şti.; Ingenıco Ödeme Sistem Çözümleri A.Ş.; Feri Bilgi Teknolojileri Destek Hizmetleri ve Tic. Ltd. Şti. 5 Virtual POS Operation Transactions: İnnova Bilişim Çözümleri A.Ş. 6 Validation Device Operation Transactions: Toroslar Otomotiv Reklam Turizm Güvenlik Medikal San. ve Tic. Ltd. Şti.; Erçoşkun Bilgisayar Yazılım Donanım Ve Danışmanlık Hizmetleri Ltd. Şti.; Teknoser Bilgisayar Teknik Hizmetler San. ve Dış.Tic. A.Ş. 7 Call Center: ITD İletişim Teknoloji Danışmanlık Tic. A.Ş. 8 Checkbook Printing: Güzel Sanatlar Çek Basım Ltd. Şti. 9 ADC Infrastructure Support: Veripark A.Ş. 10 ATM Repair & Maintenance: NCR Bilişim Sistemleri Ltd. Şti.; Wincor Nixdorf Bilgisayar Sistemleri A.Ş. 11 ATM Software: Banksoft Bilişim Bilgisayar Hizmetleri Ltd. Şti. 12 ATM Case Supply & Repair: Securverdi Güvenlik Hizmetleri A.Ş.; Bantaş 13 Overdue Payment Reminder Calls: Cmc Customer Management Center 14 Information and Collection Initiative for Customers Deemed Insolvent: 15 Credit Card Limit Management (Probe Sm Project): 16 Retail Loan & Credit Card Application Scoring: 17 Credit Card Application Information for Retail Loan & Credit Card Applications: Hamzazade Bilişim Yönetim ve Danışmanlık A.Ş. (Relationship Ended) Experian Decision Analytics, Emeaı Experian Decision Analytics, Emeaı Kkb Kredi Kayıt Bürosu A.Ş. 18 Limit Control System: Kkb Kredi Kayıt Bürosu A.Ş. 19 Siron Embargo: Itd İletişim Teknoloji Danışmanlık Tic. A.Ş. 20 Swift Systems and Interface Maintennace Services: İdeal Bilişim Hiz. San. ve Tic. Ltd. Şti. 21 Moneygram System Developments: Moneygram Payment Systems, Inc. 22 Insurance Assistance Services: Inter Partner Assistance (Ipa Türkiye) 23 Customer Assistance Service: İpa (İnter Partner Assistance) 24 A101 Stores Cash Collection: G4s Güvenlik Hiz. 25 EFT Manager and Performance of EFT Sending and Receiving Transactions: 26 Check Data Entry Program (Icscheck) Software Support & Check Scanning Devices Technical Support: Global Bilişim Aton Ltd. Şti.

86 84 Bank Asya 2010 ANNUAL REPORT THE BANK S PROFIT DISTRIBUTION POLICY Principles of the Bank s profit distribution policy are governed by Article 54 of the Articles of Association, accordingly: The Company s 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: A portion of up to 2% shall be set aside for members of the Board of Directors, 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.

87 InformatIon on Management and Corporate Governance PractIces 85 THE BANK S PROFIT DISTRIBUTION PROPOSAL FOR 2010 At a meeting of the Board of Directors on 24 February 2011, it was resolved that 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 2010 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.

88 86 Bank Asya 2010 ANNUAL REPORT MATTERS REGARDING THE ORDINARY GENERAL ASSEMBLY MEETING Agenda of the Asya Katılım Bankası A.Ş. s Ordinary General Assembly Meeting dated 26 March Opening the meeting, show of respect, 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- Deciding the salaries and entitlements of the members of the Board of Directors and statutory auditors 8- Authorizing the Board of Directors to elect the members of the Senior Advisory Committee and to determine their salaries payments 9- Submitting for approval the independent auditors chosen by the Board of Directors for a one-year term for the 2011 fiscal year 10- 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 12- Authorizing the Company s Board members to engage in activities governed Articles 334 and 335 of the Turkish Commercial Code 13- Petitions and suggestions.

89 InformatIon on Management and Corporate Governance PractIces 87 DETAILED INFORMATION ON AGENDA ITEMS 1- Opening the meeting, show of respect, and forming the presiding committee Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Industry and Commerce 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 Industry and Commerce 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 2010 Explanation: The Board of Directors annual report, the statutory auditors report, and the independent auditor s report for the 1 January 2010 to 31 December 2010 reporting period will be read and deliberated. These reports can be obtained from the Company s headquarters and from its website ( 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 2010 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 ( 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 dated 8 April 2010 to appoint HÜLAGÜ ÖZCAN to fill the seat vacated by the resignation of MURAT SUNGURLU from the Bank s Board of Directors will be presented for the General Assembly s approval. 6- Acquitting the Company s Board members and statutory auditors of their fiduciary responsibilities 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 Company s Board members and its statutory auditors of their fiduciary responsibilities for the Company s activities and transactions in 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. Explanation: Pursuant to the applicable provisions of the Turkish Commercial Code and the Ministry of Industry and Commerce regulation, the salaries to be paid to the statutory auditors will be determined and presented to the shareholders for approval. 8- 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. 9- 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 the Capital Markets Board Communiqué Series: X No: 22, the independent auditors selected by the Board of Directors will be presented for the General Assembly s approval. Explanation: Pursuant to its resolution No: 1928 dated 24 February 2011, 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 2010 for a oneyear period, to perform Bank Asya s independent auditing tasks in 2011 and to present this contract for the General Assembly s approval at the next Ordinary General Assembly Meeting. 10- Providing information about the contributions and donations made during 2010 Explanation: Pursuant to Article 7/b of the Capital Markets Board Communiqué 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. 11- Reading and deliberating changes made in the public disclosure policy principles within the framework of the Bank s corporate governance principles Explanation: No changes were made. 12- 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. 13- Petitions and suggestions.

90 88 Bank Asya 2010 ANNUAL REPORT TO THE GENERAL ASSEMBLY OF CONCISE INTERNAL AUDITORS REPORT Company name : Asya Katılım Bankası A.Ş. Headquarters : Istanbul Capital : TL 900,000,000 Principal business activity Names, terms of office, and company shareholder / employee internal auditors Number of Board of Directors meetings attended and number of internal auditors meetings held : All activities authorized for participation banks : Ali Akbulut, Atif Bilgin, İrfan Hacıosmanoğlu. Threeyear terms. Company shareholders. : They attended at least two of the Board meetings held each month. The internal auditors also convened in committee on the same days. Scope, dates and results of inspections : 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 Şirketi for the period 1 January 2010 to 31 December 2010 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. In our opinion, the income statement for the period 1 January 2010 to 31 December 2010 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 2010, 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 Ali Akbulut İrfan Hacıosmanoğlu Atif Bilgin

91 Assessment on FInancIal InformatIon and RIsk Management 89 FIVE-YEAR SUMMARY FINANCIAL INFORMATION INCLUDING THE REPORTING PERIOD Selected Assets Items (TL thousand) Liquid Assets 939,645 1,382,702 1,247,486 2,572,230 2,666,154 Loans 3,060,181 4,609,665 6,381,322 8,355,346 11,060,267 Fixed Assets 72, , , , ,961 Total Assets 4,179,189 6,260,048 8,108,829 11,608,955 14,513,419 (*) 2006 totals include Assets to be Sold. Selected Liabilities Items (TL thousand) Deposits 3,200,655 4,697,750 5,842,821 9,136,578 11,166,582 Borrowings 126, , , , ,237 Shareholders Equity 632, ,856 1,403,692 1,707,894 1,941,667 - Paid-in Capital 300, , , , ,000 - Net Period Profit 146, , , , ,962 Total Liabilities 4,179,189 6,260,048 8,108,829 11,608,955 14,513,419 Income Statement (TL thousand) Profit Share Income 510, ,275 1,068,206 1,305,652 1,206,930 Profit Share Expenses 224, , , , ,392 Income other than Profit Share 208, , , , ,817 Expenses other than Profit Share 298, , , , ,057 Pre-tax Profit 196, , , , ,298 Provision for Taxes (49,899) (51,564) (65,375) (77,111) (64,336) Net Period Profit 146, , , , ,962

92 90 Bank Asya 2010 ANNUAL REPORT ASSESSMENT OF FINANCIAL POSITION, PROFITABILITY AND DEBT SERVICE ABILITY During 2010, Bank Asya continued to be a leader among participation banks in terms of total assets, cash loans, non-cash loans, deposits and net profit. The Bank also posted rates of growth in total assets and deposits above overall banking industry averages. The Bank s net profit of TL 260 million was the highest among participation banks in 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 25% on the previous year and reached TL 14.5 billion in The growth in the Bank s assets stemmed primarily from its lending. Loans were up 32.4% compared to the previous year and now constitute 76% 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 77% in This share is significantly higher than the sector average, which was 61% as of December Deposits were up 22% this year to TL 11.2 billion, from TL 9.1 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, coupled with its profitability, resulted in a 13.7% increase in the Bank s shareholders equity on the previous year to TL 1.9 billion as end of Reporting net profit of TL 260 million in 2010, Bank Asya earned the distinction of being Turkey s most profitable participation bank for the fourth straight year. 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 22% increase in deposits to productive ventures. Ever striving to provide better service, Bank Asya opened 17 branches in 2010; as a result of these investments, the Bank s service network expanded to 175 branches. Focusing on liquidity due to the lingering effects of the global economic crisis on international markets in 2010, the Bank s liquid assets constituted 18% 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.

93 Assessment on FInancIal InformatIon and RIsk Management 91 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 10 times during The Committee held four meetings with the independent auditors in order to evaluate the independent audit activities. Assessment of the Audit Committee s Internal Systems and Their Operation During 2010, 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 92 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 were inspected and the results were reported to the relevant units and senior managers. In addition to the activities described above, the Board of Inspectors also engaged in 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.

94 92 Bank Asya 2010 ANNUAL REPORT ASSESSMENT OF THE AUDIT COMMITTEE S INTERNAL SYSTEMS AND THEIR OPERATION 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. The Internal Control Department conducts its activities through the On-Location Control, Remote Control, Compliance Control, IT Control, and Internal Control System Design and Administration Units. Under the heading of On-Location Control activities, 294 branch control checks were performed in 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). The Internal Control Department also began to perform Financial Reporting System controls in Under the heading of Compliance Control activities, the Department performed compliance checks of 13 new products, services and applications in The Internal Control Department also conducted a compliance control review at Tamweel Africa Holding S.A., the overseas affiliate of the Bank. 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. 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 Internal System Unit Managers: Professional Name Length of Service Area of Responsibility Educational Background Experience Hilali Yıldırım 61 months Board of Inspectors Master s (Banking)/Bachelor s (Business Administration) Mahmut Yalçın 26 months Internal Control Department Master s (Human Resources)/ Bachelor s (Business Administration) 16 years 11 years Mehmet K. Tümer 62 months Risk Management Department Bachelor s (Business Administration) 30 years

95 Assessment on FInancIal InformatIon and RIsk Management 93 INFORMATION ON RISK MANAGEMENT POLICIES IMPLEMENTED FOR EACH RISK CATEGORY 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 Banks 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. 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. 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.

96 94 Bank Asya 2010 ANNUAL REPORT Risk Türleri İtibarıyla Uygulanan Risk Yönetimi Politikalarına İlişkin Bilgiler As part of the Bank s evaluation of ways to further enhance its liquidity, a core deposits study was conducted and early warning and ultimate liquidity risk limits were established based on the results of the gap analyses. 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. 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 watchon 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.

97 Assessment on FInancIal InformatIon and RIsk Management 95 CREDIT RATINGS AND REPORTS MOODY S 2010 Long Term Foreign Currency Deposit Short Term Foreign Currency Deposit Long Term TL Deposit Short Term TL Deposit Financial Strength Ba3 B1 Ba2 Ba1 D Fitch Ratings 2010 Long Term Foreign Currency B+ Long Term Turkish Lira B Short Term Foreign Currency B+ Short Term Turkish Lira Long Term National Individual Rating B A-(tur) D Support Rating 5 JCR Eurasia Rating 2010 Long Term International Foreign Currency Long Term International Local Currency Long Term National Short Term International Foreign Currency Short Term International Local Currency Short Term National BB BB A - (Trk) B B A -1 (Trk) Support Rating 3 Stand Alone Rating BC

98

99 INDEPENDENT AUDITORS REPORT, UNCONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2010 (Convenience Translation of the Financial Statements and Related Disclosures and Footnotes originally issued in Turkish)

100

101 INDEPENDENT AUDITORS REPORT FOR THE YEAR JANUARY 1, 2010 DECEMBER 31, 2010 To the Board of Directors of Asya Katılım Bankası A.Ş. Istanbul We have audited the accompanying balance sheet of Asya Katılım Bankası A.Ş. as at December 31, 2010 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, 2010 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 Özlem Gören Güçdemir Partner Istanbul, February 14, 2011

102 100 Bank Asya 2010 ANNUAL REPORT THE UNCONSOLIDATED FINANCIAL REPORT OF FOR THE YEAR ENDED DECEMBER 31, 2010 Address of the Headquarter of the Bank : Küçüksu Caddesi Akçakoca Sokak No: Ümraniye/İSTANBUL Phone and Fax Numbers of the Bank : / Website of the Bank : Electronic Mail Address to Contact : [email protected] The 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 AUDITOR S 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. February 14, 2011 Behçet AKYAR Cemil ÖZDEMİR Fahrettin SOYLU Kamil YILMAZ Chairman of the Board of Member of the Board of Assistant General Manager Manager in Charge of Directors Directors and General Manager Responsible of Financial Reporting Financial Reporting Hülagü ÖZCAN Member of the Board of Directors and Member of the Audit Committee İsmail Erol İŞBİLEN 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 Numbe : Fax Number :

103 UNconsolIdated FInancIal Statements and AccompanyIng Notes 101 SECTION ONE GENERAL INFORMATION I. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status 102 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 102 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 102 IV. Individuals and Institutions That Have Qualified Shares in the Bank 103 V. Summary Information on the Bank s Services and Activity Areas 103 SECTION TWO THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Balance Sheet II. Statement of Off-Balance Sheet Contingencies and Commitments 106 III. Statement of Income 107 IV. Statement of Income and Expense Accounted under Equity 108 V. Statement of Changes in Shareholders Equity 109 VI. Statement of Cash Flows 110 VII. Statement of Profit Distribution 111 SECTION THREE ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 112 II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions 112 III. Explanations on Forward and Option Contracts and Derivative Instruments 112 IV. Explanations on Profit Share Income and Expenses 113 V. Explanations on Fees and Commission Income and Expenses 113 VI. Explanations on Financial Assets 113 VII. Explanations on Impairment of Financial Assets 115 VIII. Explanations on Offsetting Financial Assets and Liabilities 115 IX. Explanations on Sales and Repurchase Agreements and Lending of Securities 115 X. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets 115 XI. Explanations on Goodwill and Other Intangible Assets 116 XII. Explanations on Tangible Assets 116 XIII. Explanations on Leasing Transactions 117 XIV. Explanations on Provisions and Contingent Liabilities 117 XV. Explanations on Liabilities for Employee Benefits 117 XVI. Explanations on Taxation 117 XVII. Additional Disclosures on Borrowing 118 XVIII. Explanations on Issuance of Share Certificates 118 XIX. Explanations on Avalized Drafts and Acceptances 118 XX. Explanations on Government Incentives 118 XXI. Explanations on Segment Reporting 119 XXII. Explanations on Other Matters 119 SECTION FOUR INFORMATION ON FINANCIAL STRUCTURE I. Explanations on Capital Adequacy Standard Ratio 120 II. Explanations on Credit Risk 122 III. Explanations on Market Risk 126 IV. Explanations on Operational Risk 127 V. Explanations on Currency Risk 127 VI. Explanations on Interest Rate Risk 129 VII. Explanations on Liquidity Risk 129 VIII. Explanations on Presentation of Financial Assets and Liabilities at Fair Value 132 IX. Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 133 SECTION FIVE EXPLANATIONS AND DISCLOSURES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Assets 133 II. Explanations and Disclosures Related to the Liabilities 151 III. Explanations and Disclosures Related to the Off-Balance Sheet Contingencies and Commitments 158 IV. Explanations and Disclosures Related to the Income Statement 162 V. Explanations and Disclosures Related to the Statements of Changes in Shareholders Equity 167 VI. Explanations and Disclosures Related to the Statement of Cash Flows 168 VII. Explanations on the Risk Group of the Bank 169 VIII. Explanations on the Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 170 SECTION SIX OTHER EXPLANATIONS I. Other Explanations on the Operations of the Bank 170 SECTION SEVEN INDEPENDENT AUDITORS REPORT I. Explanations on the Independent Auditor s Report 170 II. Other Footnotes and Explanations Prepared by the Independent Auditors 170

104 102 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Status and Amendments to the Initial Status Incorporation of Asya Katılım Bankası A.Ş. ( the 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 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, 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 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 0,3102 Tacettin NEGİŞ Member of the Board of Directors - Ahmet ÇELİK Member of the Board of Directors 0,4467 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 Cemil ÖZDEMİR Member of the Board and General Manager 0,0026 Assistant General Managers Ayhan KESER (**) Corporate/Commercial Loans, Business Banking, Financial Institutions 0,0017 Accounting & Bank Affiliates, Administrative Affairs and Construction & Development - Yusuf İzzettin İMRE (**) Buket GEREÇCİ Banking Operations - Ali TUĞLU Information Technologies - Ali Fuat TAŞKESENLİOĞLU Corporate/Business/ Consumer Credit Allocation - Ömer Faruk ŞENEL Human Resources, Education, Purchase and Organization and Quality Management, Public Relations - Erdal ERDEM Credit and Risk Monitoring, Law - Hasan ÜNAL Retail Sales Management, Retail Product Management, Branchless Banking, Customer Contact and Tele Sales, Card Payment Systems Marketing Management - Fahrettin SOYLU Budgeting & Reporting, Treasury - Auditors Ali AKBULUT Auditor 0,0002 Atıf BİLGİN Auditor 0,2667 İrfan HACIOSMANOĞLU Auditor 1,8179 (*) Ownership percentage is not presented due to below 0,001%. (**) Bank Asya s Executive Vice Presidents Mr. Ayhan KESER and Mr. Yusuf İzzettin IMRE have resigned as of January 3, 2011

105 UNconsolIdated FInancIal Statements and AccompanyIng Notes 103 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Ownership Percentage 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 , HASAN SAYIN , NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş , İBRAHİM SAYIN , MUAMMER İHSAN KALKAVAN , İRFAN HACIOSMANOĞLU , AYDAN AYDIN SAĞLIK , FEHİM ARICI , YAVUZ EROĞLU , ABDURRAHMAN KOPUZ , 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.

106 104 Bank Asya 2010 ANNUAL REPORT UNCOSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ASSETS Note CURRENT PERIOD Audited (31/12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2009) 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 (-) ( ) (1.087) ( ) ( ) (1.208) ( ) 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 (-) (13.548) (2.695) (16.243) (16.967) (5.052) (22.019) 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

107 UNconsolIdated FInancIal Statements and AccompanyIng Notes 105 UNCOSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) LIABILITIES AND EQUITY Note CURRENT PERIOD Audited (31/12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2009) 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 Share premium Share cancellation profits Marketable securities revaluation reserve 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 Profit or loss Prior year income/(losses) Current year income/(losses) Non-controlling interest TOTAL LIABILITIES AND EQUITY The accompanying notes are an integral part of these combined financial statements

108 106 Bank Asya 2010 ANNUAL REPORT UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS Note CURRENT PERIOD Audited (31/12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (31/12/2009) TRY FC Total TRY FC Total 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 AVALIZED DRAFTS AND SURETYSHIPS TOTAL OFF BALANCE SHEET ACCOUNTS (A+B) The accompanying notes are an integral part of these combined financial statements

109 UNconsolIdated FInancIal Statements and AccompanyIng Notes 107 UNCONSOLIDATED STATEMENT OF INCOME CURRENT PERIOD Audited (01/01/ /12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01/ /12/2009) STATEMENT OF INCOME Note 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 - 7 II. PROFIT SHARE EXPENSE (2) ( ) ( ) 2.1 Expense on profit sharing accounts ( ) ( ) 2.2 Profit share expense on funds borrowed (16.538) (18.259) 2.3 Profit share expense on money market borrowings Expense on securities issued Other profit share expense (177) (1.404) 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 (51.283) (52.630) Non-cash loans (10) (69) Other (12) (51.273) (52.561) V. DIVIDEND INCOME (3) - - VI. NET TRADING INCOME (4) Securities trading gains/(losses) Gains /(losses) on derivative financial instruments Foreign exchange gains/(losses) ( ) 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. PROFIT /(LOSS) FROM INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD - - XIV. NET MONETARY POSITION GAIN/(LOSS) - - XV. PROFIT/(LOSS) FROM CONTINUED OPERATIONS BEFORE TAXES (XI+ +XIV) (8) XVI. TAX PROVISION FOR CONTINUED OPERATIONS (±) (9) (64.336) (77.111) 16.1 Current income tax charge (70.346) (83.845) 16.2 Deferred tax charge/ (benefit) XVII. NET PROFIT/(LOSS) FROM CONTINUED OPERATIONS (XV±XVI) (10) XVIII. INCOME FROM DISCONTINUED OPERATIONS Income from assets held for sale Income from sale of associates, subsidiaries and jointly controlled entities (Joint Vent.) Income from 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 Non-controlling interest - - Earnings per share 0,29 0,33 The accompanying notes are an integral part of these combined financial statements

110 108 Bank Asya 2010 ANNUAL REPORT STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY THOUSAND TURKISH LIRA CURRENT PERIOD Audited (01/01/ /12/2010) PRIOR PERIOD Audited (01/01/ /12/2009) I. Additions to marketable securities revaluation differences from financial assets available for sale II. Tangible assets revaluation differences - - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions - - V. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) - VI. 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) (730) X. Total Net Profit/Loss accounted under equity (I+II+ +IX) 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) The accompanying notes are an integral part of these combined financial statements

111 UNconsolIdated FInancIal Statements and AccompanyIng Notes 109 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 THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01-31/12/2009) 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 XI. The impact due to disposal of assets XII. The impact due to 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 ( ) Dividends distributed Transfers to reserves ( ) Other Closing Balance (I+II+III+-...+XVI+XVII+XVIII) 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 CURRENT PERIOD Audited (01/01-31/12/2010) I. Prior Period Balance Changes in period II. Increase/decrease related to merger III. Marketable securities revaluation differences 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 impact due to disposal of assets X. The impact due to 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 ( ) (30.000) - (30.000) 18.1 Dividends distributed (30.000) (30.000) - (30.000) 18.2 Transfers to reserves ( ) Other Closing Balance (I+II+III+-...+XVI+XVII+XVIII) The accompanying notes are an integral part of these combined financial statements

112 110 Bank Asya 2010 ANNUAL REPORT UNCONSOLIDATED STATEMENT OF CASH FLOWS A. CASH FLOWS FROM BANKING OPERATIONS Note CURRENT PERIOD Audited (01/01-31/12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01-31/12/2009) 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 (89.412) (90.450) Others ( ) ( ) 1.2 Changes in operating assets and liabilities (56.136) 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 (13.652) ( ) Net increase (decrease) in bank deposits (1.157) 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 (46.696) (22.804) 2.2 Cash obtained from sale of entities under common control, associates and subsidiaries Fixed assets purchases (47.537) (42.932) 2.4 Fixed assets sales Cash paid for purchase of financial assets available for sale ( ) (75.000) 2.6 Cash obtained from sale of financial assets available for sale Cash paid for purchase of investment securities (50.000) (75.000) 2.8 Cash obtained from sale of investment securities Other - - C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net cash provided from financing activities (30.000) (6) 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) Payments for finance leases - (6) 3.6 Other - - IV. Effect of change in foreign exchange rate on cash and cash equivalents (2.641) 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

113 UNconsolIdated FInancIal Statements and AccompanyIng Notes 111 PROFIT DISTRIBUTION TABLE I. DISTRIBUTION OF CURRENT PERIOD PROFIT (**) CURRENT PERIOD Audited (01/01-31/12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01-31/12/2009) 1.1 CURRENT PERIOD PROFIT TAXES AND DUES PAYABLE (-) (64.336) (77.111) Corporate Tax (Income Tax) (70.346) (83.845) 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 (-) - (30.000) To Owners of Ordinary Shares - (18.000) To Owners of Preferred Stocks - (12.000) 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 - 0, TO OWNERS OF STOCKS (%) - 33, TO OWNERS OF PREFERRED STOCKS - 0, TO OWNERS OF PREFERRED STOCKS (%) - 33,47 IV. DIVIDEND PER SHARE TO OWNERS OF STOCKS - 0, TO OWNERS OF STOCKS (%) - 3, TO OWNERS OF PREFERRED STOCKS - 0, TO OWNERS OF PREFERRED STOCKS (%) - 3,33 (*) Deferred tax expense is presented in other tax and dues 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

114 112 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) I. Explanations on Basis of Presentation 1. Presentation of Financial Statements SECTION THREE ACCOUNTING PRINCIPLES 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 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 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 International Accounting Standard No: 29 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 23% of its profit sharing accounts to liquid instruments (December 31, 2009: 28%). 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, since all necessary conditions for hedge accounting have not been, yet, 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.

115 UNconsolIdated FInancIal Statements and AccompanyIng Notes 113 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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. 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, 2010, the Bank has TRY Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2009: TRY Thousand).

116 114 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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, 2010, the Bank has TRY Thousand of held to maturity investments (December 31, 2009: TRY Thousand). 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, 2010, the Bank has TRY Thousand of available for sale financial assets (December 31, 2009: 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, within the framework of the regulation and principles referred to above; the Bank records a general loan loss provision for loans and other receivables. The Bank calculated the general loan provision at 0,5% for cash loans and other receivables, and 0,1% for non-cash loans until November 1, Subsequent to the change in the regulation on Determining the Nature of Loan and Other Receivable Provisions Allocated By Banks and Procedures and Principles of Allocating Provisions which was published in the Official Gazette No: on November 1, 2006; the Bank started to book general loan loss provision at 1% for cash loans and other receivables; and 0,2% for non-cash loans on the increase in the cash and non-cash loan portfolio as compared to their October 31, 2006 balances whereas allocating 0,5% general loan loss provision for cash loans and other receivables, and 0,1% for non-cash loans for the balances as of October 31, Together with the change in the same regulation made on February 6, 2008, the Bank started to book general loan loss provision at 2% for closely monitored cash loans and 0,4% for closely monitored non-cash loans.

117 UNconsolIdated FInancIal Statements and AccompanyIng Notes 115 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 or when the Bank has the right to offset the assets and liabilities simultaneously. IX. Explanations on Sales and Repurchase Agreements and Lending of Securities The Bank does not have any repurchase agreements or lending of securities. 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, 2010, assets held for sale amounts to TRY Thousand (December 31, 2009: 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.

118 116 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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. 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

119 UNconsolIdated FInancIal Statements and AccompanyIng Notes 117 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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, 2010, 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. The main actuarial assumptions used in the calculation of severance indemnity pay provision are as follows: December 31,2010 December 31, 2009 Discount Rate %10 %11 Inflation Rate %5,1 %4,8 TRY 2.517,01 (TRY full amount) salary ceiling, which was effective December 31, 2010 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%.

120 118 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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, 2010, 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. XX. Explanations on Government Incentives As of balance sheet date, there are no government incentives used by the Bank.

121 UNconsolIdated FInancIal Statements and AccompanyIng Notes 119 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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)(*) ( ) 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. Current Period Retail Corporate and Commercial Treasury Undistributed Total Total Assets Total Liabilities Net Profit Share Income/(Expense)(*) ( ) Net Fees and Commissions Income/ (Expense) (2.577) (1.598) Other Operating Income/(Expense) (2.951) (8.870) - ( ) ( ) Profit Before Tax ( ) ( ) Tax Provision (77.111) (77.111) 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.

122 120 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) I. Explanations on Capital Adequacy Standard Ratio SECTION FOUR INFORMATION ON FINANCIAL STRUCTURE The unconsolidated capital adequacy ratio of the Bank is 13, 33% (December 31, 2009: 14, 45%). 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 Turkish Republic 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) Ortaklıklar (Net) Tangible Assets Other Assets Off-Balance Sheet Items Guarantees and Commitments Derivative Financial Instruments Non Risk Weighted Accounts Total Risk Weighted Assets Bank

123 UNconsolIdated FInancIal Statements and AccompanyIng Notes 121 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Summary of the Capital Adequacy Standard Ratio of the Bank: Current Period Bank 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 13,33 14,45 (*) 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 - - Status 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 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 Period 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.

124 122 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) SUPPLEMENTARY CAPITAL Current Period Prior Period General Loan Loss Provision % of the Movables Revaluation Reserve % of the Immovables Revaluation Reserve - - 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 - - Marketable Securities Value Increase Fund 45% Associates and Subsidiaries - - Available for Sale Securities 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 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 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. 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, 2010, the risk of the Bank from its top 100 cash loan customers share in total cash loans ratio is 39,32% (December 31, 2009: 46,57%).

125 UNconsolIdated FInancIal Statements and AccompanyIng Notes 123 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) As of December 31, 2010, the risk of the Bank from its top 100 non-cash loan customers share in total non-cash loan ratio is 47,22% (December 31, 2009: 46,62%). As of December 31, 2010, 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 36,66% (December 31, 2009: 39,86%). As of December 31, 2010 the Bank s general provision amount for its credit risk is TRY Thousand (December 31, 2009: 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 (***) Other Loans (****) Current Period Prior Period 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.

126 124 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Information According to Geographical Concentration: Current Period December 31, 2010 Assets Liabilities Non-Cash Loans Equity Investments Net Profit 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, 2009 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.

127 UNconsolIdated FInancIal Statements and AccompanyIng Notes 125 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 , , , ,02 Farming and Raising Livestock , , , ,62 Forestry, Wood and Paper , , Fishery , , , ,40 Manufacturing , , , ,97 Mining and Quarry , , , ,69 Production , , , ,97 Electricity, Gas and Water , , , ,31 Construction , , , ,06 Services , , , ,95 Wholesale and Retail Trade , , , ,05 Hotel, Tourism, Food and Beverage Services , , , Transportation and Communication , , , ,26 Financial Institutions , , Real Estate and Renting Services , , Self-Employment Services , , , ,68 Education Services , , , ,81 Health and Social Services , ,15-0,15 Other , , , Total , , , ,00 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 (*) Loan granting commitments amounting to TRY Thousand which have been recognized in accordance with the change in the Uniform Chart of Accounts, Commitments and become revocable if the special condition added to the loan agreement at initial date or at a subsequent date is not met are excluded from the table above.

128 126 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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, 2010 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: The Share of Total (%) Category Description of Category Current Period Prior Period Above Average The borrower has a very strong financial structure %35 %30 Average The borrower has an intermediate level of financial structure %36 %34 Under Average The financial structure of the borrower has to be closely monitored in the medium term %11 %7 Not Graded The borrower is not assessed by the Bank %18 %29 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 bonds, forward and swap transactions. c) Other price risks: The Bank does not have investments in equity shares; hence it is not subject to share price risk.

129 UNconsolIdated FInancIal Statements and AccompanyIng Notes 127 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) IV. Explanations on Operational Risk The Bank calculates the amount subject to operational risk based on Basic Indicator Method by using 2009, 2008 and 2007 year end gross income balances of the Bank, 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 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. The currency risk of the Bank is monitored on a daily basis. Net foreign currency position/capital ratio is also controlled using the same basis. 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, 2010 and the previous five working days are as follows: December 31, 2010 US Dollar Eur Sterling Japanese Yen FC Evaluation Rate of the Bank 1,5460 2,0498 2,3769 1,8887 Previously; (Day 1) 1,5567 2,0447 2,4009 1, (Day 2) 1,5416 2,0274 2,3706 1, (Day 3) 1,5403 2,0261 2,3694 1, (Day 4) 1,5392 2,0190 2,3757 1, (Day 5) 1,5446 2,0190 2,3801 1,8561 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 1,5119 per US Dollar, TRY 1,9954 per EUR, TRY 2,3545 per GBP and TRY 1,8101 per 100 JPY.

130 128 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Information on the Foreign Currency Risk of the Bank: Foreign Currencies (Thousand TRY) Current Period-December 31, 2010 Assets EUR USD YEN Other Total 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 ( ) (896) (16.122) Net Off-Balance Sheet Position ( ) ( ) Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) Prior Period-December 31, 2009 Total Assets Total Liabilities Net Balance Sheet Position Net Off-Balance Sheet Position ( ) (579) (60) ( ) Financial Derivative Assets Financial Derivative Liabilities Non-Cash Loans (****) (*) TRY Thousand foreign currency indexed loans are included in loans line (December 31, 2009: 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, 2009: TRY Thousand) in assets and income accrual from derivative financial instruments amounting to TRY Thousand (December 31, 2009: TRY Thousand) in liabilities and expense accrual from derivate financial instruments amounting to TRY Thousand (December 31, 2009: TRY 155 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, 2009: 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.

131 UNconsolIdated FInancIal Statements and AccompanyIng Notes 129 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Effect on Equity Current Period Prior Period Current Period Prior Period USD 10 % increase USD 10 % decrease (13) (421) - - EUR 10 % increase EUR 10 % decrease (104) (302) - - 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 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 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 (%) 164,61 127,57 Highest (%) 211,24 151,42 Lowest (%) 131,67 101,97 Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 192,55 141,96 Highest (%) 233,06 165,89 Lowest (%) 161,13 121,42

132 130 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Presentation of Assets and Liabilities according to Their Maturities: Current Period- December 31, 2010 Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Undistributed (*) Total 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 (**) Held-to-Maturity Investments Other Assets Total Assets 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 ( ) ( ) (24.864) ( ) - Prior Period-December 31, 2009 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 Receivables balance. (***) Equity is presented in the Undistributed column under Other Liabilities.

133 UNconsolIdated FInancIal Statements and AccompanyIng Notes 131 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Year Adjustments Total December 31, 2010 Funds Collected Funds Borrowed (39.843) Total (39.843) December 31, 2009 Funds Collected Funds Borrowed (10.636) Total (10.636) Analysis of contractual expiry by maturity of the Bank s derivative financial instruments: December 31, 2010 Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Year Derivative Financial Instruments for Hedging Purposes Fair Value Hedge Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total Total Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Year Total December 31, 2009 Derivative Financial Instruments for Hedging Purposes Fair Value Hedge Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total

134 132 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 (****) Other Current and Profit Sharing Accounts (****) Funds Provided From Other Financial Institutions Sundry Creditors (*) As receivables from banks and other financial institutions are in short-term nature, their fair value approximates to their book value. (**) Amounting to TRY 93 Thousand of share certificates within financial asset available for sale is reflected to financial statements as cost by the reason of not trading an active market. (***) 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. (*****) Net balances of nonperforming loans are not included. 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 (*) Equity shares classified as available for sale assets amounting to TRY 93 Thousand which are not traded in an active market have been accounted at cost and presented as 3rd level in this table. 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

135 UNconsolIdated FInancIal Statements and AccompanyIng Notes 133 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Beginning and ending term reconciliation of financial assets and liabilities appreciated at 3rd level is stated as below: Held for Trading Financial Assets at Fair Value Through Profit or Loss Financial Assets Available for Sale Derivative Financial Instruments Share Certificates Total Opening Balance Total Loss/Gain In Profit or Loss Under Directly Equity Purchases Issues Disposal/settlements Transfers out of 3rd Level Ending Balance 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 others. 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 published in Official Gazette No:25995 and dated , the banks operating in Turkey are required to keep reserve deposits for Turkish lira and foreign currency liabilities in TRY and USD or EUR at the rates of 6 % and 11% respectively. Upon the amendments to the aforementioned communiqué, reserve deposit rates for Turkish Lira liabilities vary from 5% to 12% depending on maturities of liabilities and these rates have been applied by the banks as of the date of the report.

136 134 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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.. 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 Blocked/Given as a Collateral or Subject to Repurchase Agreements: None.

137 UNconsolIdated FInancIal Statements and AccompanyIng Notes 135 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 4.2. Information on Financial Assets Available for Sale: As of December 30, 2010, the Bank has revenue sharing certificate which has TRY Thousand nominal value (December 31, 2009: TRY Thousand) and TRY Thousand fair value at Available for Sale Financial Assets portfolio (December 31, 2009: 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 (-) - - Total (*) Includes debt securities that are not traded in the stock market at the end of the related periods although they are listed. 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

138 136 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 5.2. Information on First and Second Group Loans and Other Receivables Including Restructured or Rescheduled Loans: Cash Loans Loans Loans and Other Receivables Standard 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 balances mentioned in the table above, the Bank has TRY 320 Thousand of closely monitored finance lease receivables. (December 31, 2009 TRY Thousand) Loan Distribution based on the Maturity Structure: Loans and Other Receivables Standard 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

139 UNconsolIdated FInancIal Statements and AccompanyIng Notes 137 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 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 Total

140 138 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 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: Total Current Period Prior Period Public Sector Private Sector Total Domestic and Foreign Loans: Cari Dönem Önceki Dönem Domestic Loans Foring Loans Toplam Loans Granted to Subsidiaries and Associates:: Cari Dönem Önceki Dönem Loans Granted to Subsidiaries and Associates Directly Loans Granted to Subsidiaries and Associates Indirectly - - Total (*) Includes TRY 153 Thousand of Finance Lease Receivables as of December 31, (December 31, 2009: TRY 237 Thousand)

141 UNconsolIdated FInancIal Statements and AccompanyIng Notes 139 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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: Current Period Group III Group IV Group V Loans and Receivables with Limited Collectability Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables (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: Group III Group IV Group V Loans and Receivables with Limited Collectability 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 (-) ( ) ( ) (97.676) Write offs (-) - (622) (68.484) Corporate and Commercial Loans - (169) (43.358) Retail Loans - (3) (29) Credit Cards - (437) (24.994) Other - (13) (103) Ending Balance of the Current Period Specific Provisions (-) (6.737) (37.039) ( ) Net Balance at the Balance Sheet

142 140 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Information on Foreign Currency Non-Performing Loans and Other Receivables: Group III Group IV Group V Loans and Receivables with Limited Collectability Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period Ending Balance Specific Provisions (-) - - (1.087) Net Balance at the Balance Sheet Prior Period Ending Balance Specific Provisions (-) - (130) (1.078) Net Balance at the Balance Sheet Gross and Net Amounts of Non-Performing Loans with Respect to User Groups: Current Period (Net) Group III Group IV Group V Loans and Receivables with Limited Collectability Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables 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) Prior Period (Net) Loans to Individuals and Corporates (Gross) Specific Provisions (-) (21.500) (70.985) ( ) 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.

143 UNconsolIdated FInancIal Statements and AccompanyIng Notes 141 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 evidence of insolvency, -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, 2010 Loans (*) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards 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. Total Current Period December 31, 2009 Loans (*) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards 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. Total

144 142 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 (*) (**) (***) Group I Loans Group II Loans Group III Loans Group IV Loans Group V Loans Residential, Commercial or Industrial Real Estates Financial Assets Other 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 Total Prior Period (*) (**) (***) Group I Loans Group II Loans Group III Loans Group IV Loans Group V Loans Residential, Commercial or Industrial Real Estates Financial Assets Other 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 Aging analysis of past due but not impaired loans per classes of financial statements is stated as below: Total Current Period December 31, 2010 Loans and Advances to Customers Less than 30 Days (*) Days Days More than 91 Days Total Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables 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 39 Thousand).

145 UNconsolIdated FInancIal Statements and AccompanyIng Notes 143 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Current Period December 31, 2009 Loans and Advances to Customers Less than 30 Days (*) Days Days More than 91 Days Total Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables 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 Thousand). 6. Information on Held-to-Maturity Investments (Net) 6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: 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 (-) 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

146 144 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 ) and has paid TRY Thousand for capital increase on June 8, 2010.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) (*) (42.941) (86.383) (89.975) (****) (2) (*) (1.486) (931) (*****) (3) (**) (33) - (4) (***) (*) Financial information is provided from the associate s unaudited financial statements as of December 31, (**) Financial information is provided from the associate s audited financial statements as of June 30, (***) Financial information is provided from the associate s audited financial statements as of September 30, 2010.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, (*****) Landmark, a subsidiary of the Bank Holding Inc. dated February 9, 2010 appraisal value 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-%21,84 (*) It consists of capital commitment amounting to TRY Thousand to Bank s associate, Kredi Garanti Fonu A.Ş..

147 UNconsolIdated FInancIal Statements and AccompanyIng Notes 145 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 7.4 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 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) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. İstanbul/Turkey %95,00 %95,00 (2) Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş. İstanbul/Turkey %99,93 %99,93 (3) Işık Sigorta A.Ş. İstanbul/Turkey %65,42 %65,42 (4) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul/Turkey %22,94 %22,94 (5) Asya Kart Teknoloji Hizmetleri A.Ş. Istanbul/Turkey %99,50 %99, Bağlı Ortaklıklara İlişkin Bilgiler: (*) 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) (3)(**) (1.461) (***) (4) (547) (****) (5) (9) (13) - (*) Financial information is provided from the unaudited financial statements of subsidiaries as December 31, (**) Financial information is provided from the unaudited financial statements as September 30, (***) 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 (*)In the prior period, it consists of capital commitment amounting to TRY Thousand to Bank s subsidiary, Işık Sigorta A.Ş.

148 146 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 (-) (16.243) (22.019) Cancelled Finance Lease Amounts (-) - - Net Receivable from Finance Leases Information on Derivative Financial Assets for Hedging Purposes None.

149 UNconsolIdated FInancIal Statements and AccompanyIng Notes 147 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 12. Information on Tangible Assets Cost Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) 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, Total Accumulated Depreciation (-) Opening Balance-January 1, Depreciation Expense Disposals - (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 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 assets which is accounted in assets held for sale for more than one year. TRY Thousand of real estate s within assets to be disposed off have been qualified as and transferred to assets held for sale. (***) In the current period, the Bank has provided an additional impairment of TRY Thousand and reversed TRY Thousand impairment due to disposals.

150 148 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Cost Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Opening Balance-January 1, Additions Disposals - (1.009) (329) (6.901) (7.338) (15.577) Transfers (**) Impairment (Losses)/Reversal (2.890) - (2.331) Closing Balance-December 31, Total Accumulated Depreciation(-) Opening Balance-January 1, Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale - (872) (137) (372) (6.931) (8.312) Transfers Impairment (Losses)/Reversal (63) - (39) Closing Balance-December 31, Net Book Value-December 31, Net Book Value-December 31, (*) Other tangible 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 assets which is accounted in assets held for sale for more than one year. TRY Thousand of real estates within assets to be disposed off have been qualified as and transferred to assets held for sale. TRY Thousand of assets held for sale includes impairment losses of TRY Thousand. 13. Information on Intangible Assets Opening and Ending Book Values and Accumulated Depreciation Balances: Current Period Prior Period Book Value Accumulated Depreciation (10.309) (7.037) Net Book Value

151 UNconsolIdated FInancIal Statements and AccompanyIng Notes 149 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Intangible Assets Movement Table: Computer Software Cost 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, Computer Software Cost 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, 2009: None).

152 150 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 15. Information on Deferred Tax Asset As of December 31, 2010, 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) Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Deferred Commission Income Tangible Assets Tax Base Differences (23.362) (4.672) Valuation of Financial Assets (5.038) (1.008) Other 17 3 Deferred Tax Asset (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 (17.634) (3.527) Valuation of Financial Assets (7.418) (1.484) Other 6 1 Deferred Tax Asset (net) Movement of the deferred tax asset as of December 31, 2010 and December 31, 2009 is stated as below: Current Period Prior Period Deferred Tax Asset, January (1.250) Deferred Tax Recognized Directly Under Equity (953) (730) Deferred Tax Benefit /(Charge) 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, 2010, assets held for sale amounts to TRY Thousand (December 31, 2009: TRY Thousand). Current Period Prior Period Opening Balance-January Additions Outflows (3.791) (5.017) Transfers (net) (*) (10.336) Impairment (**) (35) (11) Closing Balance-December (*) TRY Thousand of the balance is transferred from assets held for sale to tangible assets which stayed in assets held for sale for more than one year. TRY Thousand of real estates within assets to be disposed off have been qualified as and transferred to assets held for sale. (**) In the current period, the Bank has provided an additional TRY 244 Thousand impairment and reversed TRY 209 Thousand impairment due to disposals. 17. Information on Other Assets Other assets amount to TRY Thousand. Other assets account does not exceed 10% of the total assets (December 31, 2009: TRY Thousand).

153 UNconsolIdated FInancIal Statements and AccompanyIng Notes 151 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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: 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 Current Period Demand Total 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)

154 152 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Up to 1 Month Up to 3 Months Up to 6 Months Up to 9 Months Up to 1 Year Accumulated 1 Year and Profit Sharing Over Accounts Prior Period Demand Total 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)

155 UNconsolIdated FInancIal Statements and AccompanyIng Notes 153 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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: The Bank has no current or profit sharing accounts which are not under the guarantee of the Saving Deposit Insurance Fund except for the current and profit sharing accounts of Board of Directors, general manager, assistant general managers and their close families. 2. Information on Derivative Financial Liabilities Held for Trading As of December 31, 2010, derivative financial liabilities held for trading amounts to TRY Thousand (December 31, 2009: TRY 155 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: Cari Dönem Önceki Dönem TP YP TP YP 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 Prior Period TRY FC TRY FC Short-Term Medium-Term and Long-Term Total

156 154 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 3.3. 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, 2009: 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 Provisions: Current Period Prior Period General Provisions I. Provisions for First Group Loans and Receivables Profit Sharing Accounts Share The Bank s Share Other II. Provisions for Second Group Loans and Receivables Profit Sharing Accounts Share The Bank s Share Other - - Provisions for Non Cash Loans Movement of General Provisions: Current Period Opening Balance-January 1, Charge for Period Reversal of Prior Period Expenses (1.561) Profit Sharing Accounts Share Closing Balance-December 31, Prior Period Opening Balance January 1, Charge for Period Reversal of Prior Period Expenses (8.833) 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, 2010, the Bank s provision for foreign currency indexed loans amounts to TRY Thousand (December 31, 2009: TRY Thousand). Provisions for foreign currency indexed loans are offset under the loan balance in the financial statements.

157 UNconsolIdated FInancIal Statements and AccompanyIng Notes 155 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 7.4. Information on the Specific Provisions Provided for Unindemnified Non-Cash Loans: As of December 31, 2010, the Bank s specific provision provided for unindemnified non-cash loans amounts to TRY Thousand (December 31, 2009: TRY Thousand) Information on Other Provisions: Information on Provisions for Potential Risks: None (December 31, 2009: 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 Payment Commitment for Checks Litigation Provision Other (*) Total (*) The balance includes provisions accounted for future losses which may be incurred on loan portfolio. Movement of the Retirement Pay Provision: Current Period Prior Period Opening Balance-January Current Service Cost Interest Cost Benefits Paid (782) (711) Settlement/Curtailment/Termination Loss/(Gain) Actuarial Loss/(Gain) (738) 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, 2010 the Bank provided a provision of TRY Thousand for the unused vacation pays (December 31, 2009: TRY Thousand). 8. Explanations on Taxes Payable 8.1. Information on Current Tax Liability: As of December 31, 2010, the Bank s corporate tax payable is TRY Thousand after offsetting pre-paid corporate tax (December 31, 2009: TRY Thousand). Current Period Prior Period Provision for Corporate Taxes Prepaid Corporate Tax (54.620) (65.529) Corporate Tax Payable

158 156 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 8.2. Information on Taxes Payable: Cari Dönem Önceki Dönem Corporate Taxes Payable Taxation of Securities Property Tax Banking Insurance Transaction Tax (BITT) Foreign Exchange Transaction Tax - - Value Added Tax Payable Other Total 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, 2009: 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.

159 UNconsolIdated FInancIal Statements and AccompanyIng Notes 157 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 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 Valuation Difference Foreign Exchange Difference - - Total

160 158 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 Time Deposit 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 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 Definite Guarantees, Provisional Guarantees, Suretyships 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: Cari Dönem Önceki Dönem Non-cash loans Against Cash Risks With Original Maturity of 1 Year or Less With Original Maturity of More than 1 Year Other Non-Cash Loans Total

161 UNconsolIdated FInancIal Statements and AccompanyIng Notes 159 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 2. Sectoral Risk Concentration of Non-Cash Loans Current Period Prior Period TRY (%) FC (%) TRY (%) FC (%) Agricultural , , , ,89 Farming and Raising Livestock , , , ,83 Forestry , , ,05 Fishery 957 0, , ,01 Manufacturing , , , ,71 Mining , , , ,41 Production , , , ,02 Electric, Gas and Water , , , ,28 Construction , , , ,65 Services , , , ,42 Wholesale and Retail Trade , , , ,66 Hotel, Food and Beverage Services , , , ,62 Transportation and Telecommunication , , , ,74 Financial Institutions , , , ,76 Real Estate and Renting Services , , , ,03 Self-Employment Services , , , ,19 Education Services , , , ,08 Health and Social Services , , , ,34 Other , , , ,33 Total , , , ,00 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

162 160 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 4. 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) As of December 31, 2010, 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 Total Prior Period Forward Buy Forward Sell TRY USD EUR - - Total As of December 31, 2009, 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 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. 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.

163 UNconsolIdated FInancIal Statements and AccompanyIng Notes 161 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 6. Explanations on Custodian and Intermediary Services None. 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 December 27, Financial Strength Outlook Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook International Long Term Short Term MOODY S 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, 2011.

164 162 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) JCR EURASIA Foreign Currency Long Term BB Short Term B Outlook Stable International Local Currency Long Term BB Short Term B Outlook Stable National Local Rating Long Term A-(Trk) Short Term A-1 (Trk) Outlook Stable Stand-Alone BC Support Points 3 The information is obtained from the JCR Eurasia Rating report as of June 15, IV. Explanations and Disclosures Related to the Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans: Group I Group II 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 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.

165 UNconsolIdated FInancIal Statements and AccompanyIng Notes 163 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 1.3. 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 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.

166 164 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Total 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 Prior Period Account Name TRY Up to 1 Month Up to 3 Months Up to 6 Months Katılma Hesapları Up to 9 Months Up to 1 Year More than 1 Year Total 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 Information on Dividend Income None (December 31, 2009: None).

167 UNconsolIdated FInancIal Statements and AccompanyIng Notes 165 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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) (73.367) 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. (December 31, 2009: 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 - - 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

168 166 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 14,30% as compared to the prior year figures and total profit before tax amounts to TRY Thousand. Profit before tax includes TRY Thousand net profit share income, TRY Thousand net fees and commission income. Total operating expense amount is TRY Thousand. 9. Information on Continuing Operations Tax Provision As of December 31, 2010, current tax expense is TRY Thousand (December 31, 2009: TRY Thousand) and deferred tax income is TRY Thousand (December 31, 2009: TRY Thousand deferred tax expense). 10. Information on Operating Profit/Loss After Taxes The Bank has decreased the net profit by 13, 71% in compare to the prior period 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.

169 UNconsolIdated FInancIal Statements and AccompanyIng Notes 167 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Other Total Other Fees and Commission Paid Cari Dönem Önceki Dönem 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, 2009: 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.

170 168 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 6. Proposals to General Assembly for the Payment Dates of Dividends and if It will not be Distributed 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, 2010, amount transferred to legal reserves is TRY Thousand (December 31, 2009: TRY Thousand). 8. Information on Shares Issued None. 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, 2009: TRY Thousand) Other Income amounting to TRY Thousand consists of gains on derivative financial transactions, foreign exchange gains and other operating income (December 31, 2009: TRY Thousand). Net increase/decrease in other assets amounting to TRY (13.652) Thousand in Changes in operating assets and liabilities consists of changes in sundry debtors, other assets and intangible asset purchases. (December 31, 2009: TRY ( ) 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, 2009: TRY Thousand). The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2010 is approximately TRY Thousand. (December 31, 2009: TRY (2.641) 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

171 UNconsolIdated FInancIal Statements and AccompanyIng Notes 169 NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 1.4. 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 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 Loans and Other Receivables (*) Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash 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) Prior Period: Risk Group of the Bank Loans and Other Receivables (*) Subsidiaries and Associates Direct and Indirect Shareholders Other Entities Included in the Risk Group Cash Non-Cash Cash Non-Cash Cash Non-Cash Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income (*) The risk group balance includes TRY 237 Thousand finance lease receivables (December 31, 2009: TRY 483 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 Cari Dönem Cari Dönem Cari Dönem Balance at Beginning of Period Balance at End of Period Profit Share Expense

172 170 Bank Asya 2010 ANNUAL REPORT NOTES AND DISCLOSURES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 1.4. Information on Forward and Option Agreements and Other Similar Agreements with Related Parties: Banka nın, dahil olduğu risk grubu ile yaptığı vadeli işlemler ile opsiyon sözleşmeleri ile benzeri diğer sözleşmeler bulunmamaktadır Üst Düzey Yöneticilere Sağlanan Faydalara İlişkin Bilgiler Cari dönemde üst düzey yöneticilere sağlanan faydalar Bin TL dir (31 Aralık 2009: Bin TL). Bu faydanın yanı sıra üst düzey yöneticilere ayni haklar da sağlanmaktadır. 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 Rep-Offices Abroad (*) Country Branches Abroad Total Assets Capital Off-shore Branches (*) The Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India. 2. Explanations on Branch and Agency Openings or Closings of the Bank: The Bank has opened 17 new branches in the period of January 1 December 31, 2010 I. Other Disclosures: 1. Subsequent Events: SECTION SIX OTHER EXPLANATIONS As per the resolution of the Board of Directors of Bank Asya dated January 6, 2011 and numbered 1877; it has been decided to establish a pension fund named Asya Emeklilik ve Hayat A.Ş. with TRY Thousand capital to participate as founding partner with TRY Thousand capital and to give authority to the Head Office of the Bank for executing the foundation process. I. Explanations on the Independent Auditor s Report SECTION SEVEN INDEPENDENT AUDITOR S REPORT The financial statements of the Bank for the year January 1 December 31, 2010 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.

173 AND ITS FINANCIAL SUBSIDIARIES INDEPENDENT AUDITORS REPORT, CONSOLIDATED FINANCIAL STATEMENTS AND NOTES FOR THE YEAR ENDED DECEMBER 31, 2010 (Convenience Translation of the Financial Statements and Related Disclosures and Footnotes originally issued in Turkish)

174

175 AND ITS FINANCIAL SUBSIDIARIES INDEPENDENT AUDITORS REPORT FOR THE YEAR JANUARY 1, 2010 DECEMBER 31, 2010 To the Board of Directors of Asya Katılım Bankası A.Ş. Istanbul We have audited the accompanying balance sheet of Asya Katılım Bankası A.Ş. as at December 31, 2010 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, 2010 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 Özlem Gören Güçdemir Partner Istanbul, April 8, 2011

176 174 Bank Asya 2010 ANNUAL REPORT THE CONSOLIDATED FINANCIAL REPORT OF FOR THE YEAR ENDED DECEMBER 31, 2010 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 : Electronic Mail Address to Contact : [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 INDEPENDENT AUDITORS REPORT The subsidiaries and associates consolidated within the framework of the reporting package are as follows: Subsidiaries Işık Sigorta A.Ş. Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. - Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. - Associates Tamweel Africa Holding S.A. 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. April 8, 2011 Behçet AKYAR Cemil ÖZDEMİR Fahrettin SOYLU Kamil YILMAZ Chairman of the Board of Member of the Board of Assistant General Manager Manager in Charge of Directors Directors and General Manager Responsible of Financial Reporting Financial Reporting Hülagü ÖZCAN Member of the Board of Directors and Member of the Audit Committee İsmail Erol İŞBİLEN 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 Numbe : Fax Number :

177 consolidated FInancIal Statements and AccompanyIng Notes 175 SECTION ONE GENERAL INFORMATION I. History of the Bank Including Its Incorporation Date, Initial Status and Amendments to the Initial Status 176 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 176 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 176 IV. Individuals and Institutions That Have Qualified Shares in the Bank 176 V. Summary Information on the Bank s Services and Activity Areas 176 SECTION TWO THE CONSOLIDATED FINANCIAL STATEMENTS I. Consolidated Balance Sheet II. Consolidated Statement of Off-Balance Sheet Contingencies and Commitments 180 III. Consolidated Statement of Income 181 IV. Consolidated Statement of Income and Expense Accounted under Equity 182 V. Consolidated Statement of Changes in Shareholders Equity 183 VI. Consolidated Statement of Cash Flows 184 VII. Consolidated Statement of Profit Distribution 185 SECTION THREE ACCOUNTING PRINCIPLES I. Explanations on Basis of Presentation 186 II. Explanations on Strategy for Use of Financial Instruments and Foreign Currency Transactions 186 III. Information about the Parent Bank and its Consolidated Subsidiaries 186 IV. Explanations on Forward and Option Contracts and Derivative Instruments 186 V. Explanations on Profit Share Income and Expenses 186 VI. Explanations on Fees and Commission Income and Expenses 186 VII. Explanations on Financial Assets 186 VIII. Explanations on Impairment of Financial Assets 189 IX. Explanations on Offsetting Financial Assets and Liabilities 189 X. Explanations on Sales and Repurchase Agreements and Lending of Securities 189 XI. Explanations on Assets Held for Sale, Discontinued Operations and Liabilities Related to Those Assets 189 XII. Explanations on Goodwill and Other Intangible Assets 190 XIII. Explanations on Tangible Assets 190 XIV. Explanations on Leasing Transactions 191 XV. Explanations on Provisions and Contingent Liabilities 191 XVI. Explanations on Liabilities for Employee Benefits 191 XVII. Explanations on Taxation 192 XVIII. Additional Disclosures on Borrowing 192 XIX. Explanations on Issuance of Share Certificates 192 XX. Explanations on Avalized Drafts and Acceptances 193 XXI. Explanations on Government Incentives 193 XXII. Explanations on Segment Reporting 193 XXIII. Explanations on Other Matters 193 SECTION FOUR INFORMATION ON THE CONSOLIDATED FINANCIAL STRUCTURE I. Explanations Related to the Consolidated Capital Adequacy Standard Ratio 194 II. Explanations Related to the Consolidated Credit Risk 197 III. Explanations Related to the Consolidated Market Risk 200 IV. Explanations Related to the Consolidated Operational Risk 201 V. Explanations Related to the Consolidated Currency Risk 201 VI. Explanations Related to the Consolidated Interest Rate Risk 203 VII. Explanations Related to the Consolidated Liquidity Risk 203 VIII. Explanations on Presentation of Financial Assets and Liabilities at Fair Value 206 IX. Explanations on Transactions Carried out on Behalf of Other Parties and Fiduciary Assets 207 SECTION FIVE EXPLANATIONS AND DISCLOSURES ON THE CONSOLIDATED FINANCIAL STATEMENTS I. Explanations and Disclosures Related to the Consolidated Assets 207 II. Explanations and Disclosures Related to the Consolidated Liabilities 208 III. Explanations and Disclosures Related to the Consolidated Off-Balance Sheet Contingencies and Commitments 235 IV. Explanations and Disclosures Related to the Consolidated Income Statement 239 V. Explanations and Disclosures Related to the Statements of Changes in Shareholders Equity 243 VI. Explanations and Disclosures Related to the Statements of Cash Flows 244 VII. Explanations on the Risk Group of the Parent Bank 246 VIII. Explanations on the Bank s Domestic, Foreign, Off-shore Branches or Investments in Associates and Foreign Representative Offices 248 SECTION SIX OTHER EXPLANATIONS I. Other Explanations on the Operations of the Parent Bank 249 SECTION SEVEN INDEPENDENT AUDITORS REPORT I. Explanations on the Independent Auditors Report 249 II. Other Footnotes and Explanations Prepared by the Independent Auditors 249

178 176 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Status and Amendments to the Initial 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, Istanbul. The Company currently has 177 personnel as of December 31, Işık Sigorta A.Ş. currently has 4 regional management office, 2 regional representation office and (including 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 27 March 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, Istanbul. The company currently has 8 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. Information on Consolidated Associate: Tamweel Africa Holding S.A. Tamweel Africa Holding S.A. was established in June 9, % of it belongs to ICD, 40% of it belongs to Asya Katılım Bankası A.Ş. The company is registered in Senegal, and its headquarter is located in 66 rue Carnot, 5ème Etage Résidence Diouma Léna, Dakar. The company currently has 4 personnel as of December 31, Holding within Senegal, Guinea, Niger and Mauritania, The Bank has operations in four places. 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 % Behçet AKYAR Chairman of the Board of Directors 0,0003 Chairman of the Board of Directors Salih SARIGÜL Vice Chairman of the Board of Directors 0,3102 Member of the Board of Directors Tacettin NEGİŞ Member of the Board of Directors - Ahmet ÇELİK Member of the Board of Directors 0,4467 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 Cemil ÖZDEMİR (***) Member of the Board of Directors and General Manager 0,0026 Assistant General Managers Ayhan KESER (**) Corporate/Commercial Loans, Business Banking, Financial Institutions 0,0017 Yusuf İzzettin İMRE (**) Accounting & Bank Affiliates, Administrative Affairs and Construction & Development - Buket GEREÇCİ (****) Banking Operations - Ali TUĞLU Information Technologies - Ali Fuat TAŞKESENLİOĞLU Corporate/Business/Consumer Credit Allocation -

179 consolidated FInancIal Statements and AccompanyIng Notes 177 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Title Name Area of Responsibility Ownership Percentage % Ömer Faruk ŞENEL Human Resources, Education, Purchase and Organization and Quality Management, Public Relations - Erdal ERDEM Credit and Risk Monitoring, Law - Hasan ÜNAL (****) Retail Sales Management, Retail Product Management, Branchless Banking, Customer Contact and Tele Sales, Card Payment Systems Marketing Management - Fahrettin SOYLU Budgeting & Reporting, Treasury - Auditors Ali AKBULUT Auditor 0,0002 Atıf BİLGİN Auditor 0,2667 İrfan HACIOSMANOĞLU Auditor 1,8179 (*) Ownership percentage is not presented due to below 0,001%. (**) Executive Vice Presidents Mr. Ayhan KESER and Mr. Yusuf Izzettin İMRE have announced their resignations as of January 3, (***) Member of the Board of Directors and General Manager Mr. Cemil ÖZDEMİR has announced his resignation as of March 10, 2011 and Mr. Abdullah ÇELİK has been appointed as Member of the Board of Directors and General Manager. (****) Executive Vice Presidents Mrs. Buket GEREÇCİ and Mr. Hasan ÜNAL have announced their resignations as of March 31, (*****) Mr. Ahmet BEYAZ and Mr. Ercüment GÜLER have been appointed as Executive Vice President as of March 31, 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 Ownership Percentage 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 , HASAN SAYIN , NEGİŞ GİYİM İMALAT VE İHRACAT A.Ş , İBRAHİM SAYIN , MUAMMER İHSAN KALKAVAN , İRFAN HACIOSMANOĞLU , AYDAN AYDIN SAĞLIK , FEHİM ARICI , YAVUZ EROĞLU , ABDURRAHMAN KOPUZ , 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.

180 178 Bank Asya 2010 ANNUAL REPORT CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) ASSETS Note CURRENT PERIOD Audited (31/12/2010) THOUSAND TURKISH LIRA CURRENT PERIOD Audited (31/12/2009) 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 (-) ( ) (1.087) ( ) ( ) (1.208) ( ) 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 (-) (13.548) (2.695) (16.243) (16.967) (5.052) (22.019) 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

181 consolidated FInancIal Statements and AccompanyIng Notes 179 CONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) LIABILITIES AND EQUITY Note CURRENT PERIOD Audited (31/12/2010) THOUSAND TURKISH LIRA CURRENT PERIOD Audited (31/12/2009) 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 Share premium Share cancellation profits Marketable securities revaluation reserve 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) Profit or loss Prior year income/(losses) (9.561) - (9.561) (13.978) - (13.978) Current year income/(losses) Minority shares (12) TOTAL LIABILITIES AND EQUITY The accompanying notes are an integral part of these combined financial statements

182 180 Bank Asya 2010 ANNUAL REPORT STATEMENT OF OFF-BALANCE SHEET CONTINGENGIES AND COMMITMENTS Note CURRENT PERIOD Audited (31/12/2010) THOUSAND TURKISH LIRA CURRENT PERIOD Audited (31/12/2009) TRY FC Total TRY FC Total 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

183 consolidated FInancIal Statements and AccompanyIng Notes 181 CONSOLIDATED STATEMENT OF INCOME CURRENT PERIOD Audited (01/01/ /12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01/ /12/2009) STATEMENT OF INCOME Note 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 (16.736) (18.259) 2.3 Profit share expense on money market borrowings Expense on securities issued Other profit share expense (178) (1.456) 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 (69.464) (69.479) Non-cash loans (10) (69) Other (12) (69.454) (69.410) V. DIVIDEND INCOME (3) VI. NET TRADING INCOME (4) Securities trading gains/(losses) Profit on derivative financial instruments gains/(losses) Foreign exchange gains/(losses) ( ) 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) (65.126) (78.351) 16.1 Provision for current income taxes (70.887) (83.845) 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 0,29 0,34 The accompanying notes are an integral part of these combined financial statements

184 182 Bank Asya 2010 ANNUAL REPORT STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY STATEMENT OF PROFIT AND LOSS ITEMS ACCOUNTED UNDER EQUITY THOUSAND TURKISH LIRA CURRENT PERIOD Audited (01/01/ /12/2010) PRIOR PERIOD Audited (01/01/ /12/2009) I. Additions to marketable securities revaluation differences for available for sale financial assets II. Tangible assets revaluation differences - - III. Intangible assets revaluation differences - - IV. Foreign exchange differences for foreign currency transactions (670) - V. Profit/Loss from derivative financial instruments for cash flow hedge purposes (Effective portion of fair value differences) - - VI. 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) (730) X. Total Net Profit/Loss accounted under equity (I+II+ +IX) 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) The accompanying notes are an integral part of these combined financial statements

185 consolidated FInancIal Statements and AccompanyIng Notes 183 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 THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01-31/12/2009) 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 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 (12.561) (12.561) XIX. Period net income/(loss) XX. Profit distribution ( ) Dividends distributed Transfers to reserves ( ) Other 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 Closing Balance (III+-...+XVI+XVII+XVIII) (13.978) CURRENT PERIOD Audited (01/01-31/12/2010) I. Prior Period Balance Changes in period II. Increase/Decrease related to merger III. Marketable securities revaluation differences 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 (670) (670) - (670) 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 ( ) (30.000) - (30.000) 18.1 Dividends distributed (30.000) (30.000) - (30.000) 18.2 Transfers to reserves ( ) Other Closing Balance (I+II+III+-...+XVI+XVII+XVIII) (670) (9.561) The accompanying notes are an integral part of these combined financial statements

186 184 Bank Asya 2010 ANNUAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS A. CASH FLOWS FROM BANKING OPERATIONS Note CURRENT PERIOD Audited (01/01/ /12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01/ /12/2009) 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 (90.912) (94.624) Others ( ) ( ) 1.2 Changes in operating assets and liabilities (65.530) 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 (10.590) ( ) Net increase (decrease) in bank deposits (1.157) 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 (68.555) (22.804) 2.2 Cash obtained from sale of entities under common control, associates and subsidiaries Fixed assets purchases (48.591) (44.359) 2.4 Fixed assets sales Cash paid for purchase of financial assets available for sale ( ) (75.000) 2.6 Cash obtained from sale of financial assets available for sale Cash paid for purchase of investment securities (50.000) (75.000) 2.8 Cash obtained from sale of investment securities Other - - C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net cash provided from financing activities (27.285) Cash obtained from funds borrowed and securities issued Cash used for repayment of funds borrowed and securities issued Capital increase Dividends paid (30.000) Payments for finance leases - (6) 3.6 Other - - IV. Effect of change in foreign exchange rate on cash and cash equivalents (2.654) 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

187 consolidated FInancIal Statements and AccompanyIng Notes 185 CONSOLİDATED PROFIT DISTRIBUTION TABLE I. DISTRIBUTION OF CURRENT PERIOD PROFIT CURRENT PERIOD Audited (01/01-31/12/2010) THOUSAND TURKISH LIRA PRIOR PERIOD Audited (01/01-31/12/2009) 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

188 186 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) I. Explanations on Basis of Presentation 1. Presentation of Financial Statements SECTION THREE ACCOUNTING PRINCIPLES 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, 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. The related accounting policies and basis of accounting are explained below. 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 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 books. The Group has recorded the adjustments and reclassifications of inflation accounting to its legal books beginning from December 31, 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 23% of the funds collected in liquid instruments (December 31, 2009: 28%). 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. and Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti 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.

189 consolidated FInancIal Statements and AccompanyIng Notes 187 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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. 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. 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 27 March 2009 and numbered 7/194. The transformation and registration have been completed as of December 31, 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 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, since all necessary conditions for hedge accounting have not been, 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 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 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:

190 188 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 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, 2010, the Group has TRY Thousand of derivative financial assets held for trading at fair value through profit or loss (December 31, 2009: 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, 2010, the Group has TRY Thousand of held to maturity investments (December 31, 2009: TRY Thousand). Financial Assets Available for Sale: Marketable securities classified as 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, 2010, the Group has TRY Thousand of financial assets available for sale (December 31, 2009: 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

191 consolidated FInancIal Statements and AccompanyIng Notes 189 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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, within the framework of the regulation and principles referred to above; the Parent Bank records a general loan loss provision for loans and other receivables. The Parent Bank calculated the general loan provision at 0,5% for cash loans and other receivables, and 0,1% for non-cash loans until November 1, Subsequent to the change in the regulation on Determining the Nature of Loan and Other Receivable Provisions Allocated By Banks and Procedures and Principles of Allocating Provisions which was published in the Official Gazette No: on November 1, 2006; the Parent Bank started to book general loan loss provision at 1% for cash loans and other receivables; and 0,2% for non-cash loans on the increase in the cash and non-cash loan portfolio as compared to their October 31, 2006 balances whereas allocating 0,5% general loan loss provision for cash loans and other receivables, and 0,1% for non-cash loans for the balances as of October 31, Together with the change in the same regulation made on February 6, 2008, the Parent Bank started to book general loan loss provision at 2% for closely monitored cash loans and 0,4% for closely monitored noncash loans. 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 respect, 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.

192 190 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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, 2010, assets held for sale amounts to TRY Thousand (December 31, 2009: 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. 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, 2010, goodwill amounts to TRY Thousand (December 31, 2009: 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.

193 consolidated FInancIal Statements and AccompanyIng Notes 191 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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. 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, 2010, 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.

194 192 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 31,2010 December 31, 2009 Discount Rate %10 %11 Inflation Rate %5,1 %4,8 TRY 2.517,01 (TRY full amount) salary ceiling, which was effective December 31, 2010 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 Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis. Tax expense is comprised 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. 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 2010, there are no exported share certificates of the Group.

195 consolidated FInancIal Statements and AccompanyIng Notes 193 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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) (*) ( ) Net Fees and Commissions Income/ (Expense) (1.408) (919) Other Operating Income/ (Expense) (7.194) (16.476) - ( ) - ( ) Gain/Loss on 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. 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) (2.577) (1.598) (4.387) Other Operating Income/ (Expense) (2.951) (8.870) - ( ) - ( ) Profit Before Tax ( ) ( ) Tax Provision (78.351) - (78.351) 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.

196 194 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 13,46% (December 31, 2009: 14,81%). 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

197 consolidated FInancIal Statements and AccompanyIng Notes 195 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 13,46 14,81 13,33 14,45 (*) 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: Consolidated Parent Bank CORE CAPITAL 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 Profıt 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 Current Year 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 Minority Interest Losses that cannot be Covered by Reserves (-) Net Current Period Loss 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 Parent Bank pledged shares to units, as a result of forced sales under the second paragraph of Article 329 of Turkish Commercial Code 5475 Thousand purchase price was over. Purchase discount the effect of capital adequacy in the table is considered.

198 196 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Consolidated Parent Bank SUPPLEMENTARY CAPITAL 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 Associates and Subsidiaries Available for Sale Financial Assets 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

199 consolidated FInancIal Statements and AccompanyIng Notes 197 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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, 2010, the risk of the Parent Bank from its top 100 cash loan customers share in total cash loans ratio is 39,32% (December 31, 2009: 46,57%). As of December 31, 2010, the risk of the Parent Bank from its top 100 non-cash loan customers share in total non-cash loan ratio is 47,22% (December 31, 2009: 46,62%). As of December 31, 2010, 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 36,66% (December 31, 2009: 39,86%). As of December 31, 2010 the Parent Bank s general provision amount for its credit risk is TRY Thousand (December 31, 2009: 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 (***) Other Loans (****) Current Prior Current Period Period Period Prior Period Loans According to Borrowers Private Sector Public Sector Banks Retail Share Certificates Total Information According to 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 classified in the Uniform Chart of Accounts except for the first three areas corresponding columns and defined as loans in Article 48 of Law No: 5411.

200 198 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Information According to Geographical Concentration: Current Period December 31, 2010 Assets Liabilities Non-Cash Loans Equity Investments Net Profit 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, 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.

201 consolidated FInancIal Statements and AccompanyIng Notes 199 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 , , , ,02 Farming and Raising Livestock , , , ,62 Forestry, Wood and Paper , , Fishery , , , ,40 Manufacturing , , , ,97 Mining and Quarry , , , ,69 Production , , , ,97 Electricity, Gas and Water , , , ,31 Construction , , , ,06 Services , , , ,95 Wholesale and Retail Trade , , , ,05 Hotel, Tourism, Food and , , , Beverage Services , , , Transportation and , , Communication , , , ,26 Financial Institutions , , Real Estate and Renting Services , , Self-Employment Services , , , ,68 Education Services , , , ,81 Health and Social Services , ,15-0,15 Other Total The table below shows the maximum exposure to credit risk for the components of the financial statements: Current Period Prior Period The Central Bank of Turkish Republic 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 (*) In accordance with the change in the Uniform Chart Of Accounts TRY Thousand of Allocation of Credit Commitments becoming revocable in case a special condition is added to the credit agreement and this condition is accomplished.

202 200 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Parent Bank, by classifying loans from highest grade to lowest grade according to the probability of default. As of December 31, 2010 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 of Total (%) Category Description of Category Current Period Prior Period Above Average The borrower has a very strong financial structure %35 %30 Average The borrower has an intermediate level of financial structure %36 %34 Under Average The financial structure of the borrower has to be closely monitored in the medium term %11 %7 Not Graded The borrower is not assessed by the Parent Bank %18 %29 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 196 (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 Parent Bank calculates by considering market risk of revenue sharing bonds, forward and swap transactions.

203 consolidated FInancIal Statements and AccompanyIng Notes 201 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 are fixed and 10% increase or decrease in valuation method parameters (stock prices) is appeared, TRY 490 Thousand increase or decrease before tax is anticipated (December 31, 2009: TRY Thousand). IV. Explanations on Operational Risk The Group calculates the amount subject to operational risk based on Basic Indicator Method by using 2009, 2008 and 2007 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. Net foreign currency position/capital ratio of the Parent Bank is also controlled using the same methods. 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, 2010 and the previous five working days are as follows: 31 December 2010 US Dollar Euro Sterling 100 Japanese Yen FC Evaluation Rate 1,5460 2,0498 2,3769 1,8887 Previously; (Day 1) 1,5567 2,0447 2,4009 1, (Day 2) 1,5416 2,0274 2,3706 1, (Day 3) 1,5403 2,0261 2,3694 1, (Day 4) 1,5392 2,0190 2,3757 1, (Day 5) 1,5446 2,0190 2,3801 1,8561 The simple arithmetic averages of the major current foreign exchange buying rates of the Parent Bank for the thirty days before December 31, 2010 are as follows; TRY 1,5119 per US Dollar, TRY 1,9954 per EURO, TRY 2,3545 per GBP and TRY 1,8101 per 100 JPY.

204 202 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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, 2010 Assets Cash (Cash in Vault, Effectives, Money in Transit, Cheques Purchased) and Balances with the Central Bank of Turkish Republic Due from Banks Financial Assets at Fair Value through Profit and Loss (**) Money Market Placements Available-for-Sale Financial Assets 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 ( ) (896) (16.141) Net Off-Balance Sheet Position ( ) ( ) Financial Derivative Assets (***) Financial Derivative Liabilities (***) Non-Cash Loans (****) Prior Period-December 31, 2009 Total Assets Total Liabilities Net Balance Sheet Position Net Off-Balance Sheet Position ( ) (579) (60) ( ) Financial Derivative Assets Financial Derivative Liabilities Non-Cash Loans (****) (*) TRY Thousand of foreign currency indexed loan is also shown under loans line (December 31, 2009: 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, 2009: TRY Thousand) in assets and income accrual from derivative financial instruments amounting to TRY Thousand (December 31, 2009: TRY Thousand) in liabilities and expense accrual from derivate financial instruments amounting to TRY Thousand (December 31, 2009: TRY 155 Thousand), 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 is added to derivative financial liabilities (December 31, 2009: TRY Thousand is added to derivative financial assets and TRY is added to derivative financial liabilities). (****) The related balances do not have any effect on off balance sheet position.

205 consolidated FInancIal Statements and AccompanyIng Notes 203 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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. Effect on Profit or Loss Effect on Equity Change in Currency Rate in % Current Period Prior Period Current Period Prior Period USD 10 % increase USD 10 % decrease (440) (1.137) - - EUR 10 % increase EUR 10 % decrease (294) (482) - - 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 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 (%) 164,61 127,57 Highest (%) 211,24 151,42 Lowest (%) 131,67 101,97 Prior Period 1st Term Period (Weekly) 2nd Term Period (Monthly) Average (%) 192,55 141,96 Highest (%) 233,06 165,89 Lowest (%) 161,13 121,42

206 204 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Presentation of Assets and Liabilities According to Their Maturities: Current Period December 31, 2010 Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Undistributed (*) Total Assets Cash (Cash in Vault, Effectives, Money in Transit, Cheques Purchased) and Balances with the Central Bank of Turkish Republic 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 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, 2009 Total Assets Total Liabilities Net Liquidity Gap ( ) ( ) ( ) ( ) - (*) Certain assets in the balance sheet that are necessary for the banking operations but cannot be readily convertible into cash in the near future such as tangible assets, investments in associates and subsidiaries, stationary supplies, prepaid expenses and non-performing loans are included in this column. (**) Loans include Finance Lease Receivables. (***) Equity is presented in the Undistributed column under Other Liabilities.

207 consolidated FInancIal Statements and AccompanyIng Notes 205 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Year Adjustments Total December 31, 2010 Funds Collected Funds Borrowed (40.013) Total (40.013) December 31, 2009 Funds Collected Funds Borrowed (10.636) Total (10.636) Analysis of Contractual Expiry by Maturity of the Group s Derivative Financial Instruments: December 31, 2010 Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Year Derivative Financial Instruments for Hedging Purposes Fair Value Hedge Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total Total Up to 1 Month 1-3 Months 3-12 Months 1-5 Years Over 5 Year Total December 31, 2009 Derivative Financial Instruments for Hedging Purposes Fair Value Hedge Held for Trading Transactions Forward Sales Contracts Swap Sales Contracts Total

208 206 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 (***) Other Current and Profit Sharing Accounts (***) Funds Provided From Other Financial Institutions Sundry Creditors (*) 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, 2010 Financial Assets 1st Level TRY 2nd Level TRY 3rd Level TRY (*) 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 (*) Equity shares classified as available for sale assets amounting to TRY 224 Thousand which are not traded in an active market have been accounted at cost and presented as 3rd level in this table. December 31, 2009 Financial Assets 1st Level TRY 2nd Level TRY 3rd Level TRY (*) 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

209 consolidated FInancIal Statements and AccompanyIng Notes 207 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Beginning and ending term reconciliation of financial assets and liabilities appreciated at 3rd level is stated as below: Held for Trading Financial Assets at Fair Value Through Profit or Loss Financial Assets Available for Sale Derivative Financial Instruments Share Certificates Total Opening Balance Total Loss/Income Profit/Lost Reflected Profit and Loss Accounted Under Equity Purchases Issued Accrued Transfers from 3rd Level to Other Level Ending Balance 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. 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/Foreign Currency The Central Bank of Turkish Republic 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 (*) Represents the reserve deposit held in the Central Bank of Turkish Republic in relation to foreign currency liabilities. According to the communique No: 2005/1 on required reserves of the banks operating in Turkey published in Official Gazette No: and dated , for the Turkish currency liabilities by 6 % in TRY and for foreign currency liabilities denominated in foreign currencies including USD and EURO by 11% required reserves are established.after the changes in the specified communique, the required reserve ratios for Turkish currency liabilities have been designated as 5-12 % by being differentiated according to their maturities and these rates are applied by the banks as of the date of the report.

210 208 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 ositive 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 (*) Value date is composed of foreign exchange commitments. 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 currency (December 31, 2009: TRY Thousand) which is deposited by Işık Sigorta A.Ş. included in its accounts as elementary branches insurance warranty in favour 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: None.

211 consolidated FInancIal Statements and AccompanyIng Notes 209 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 4.2. Information on Financial Assets Available-for-Sale: As of December 31, 2010, the Parent Bank has revenue sharing certificate which has TRY Thousand nominal value (December 31, 2009: TRY Thousand) and TRY Thousand fair value at Available for Sale Financial Assets portfolio (December 31, 2009: TRY Thousand), as of 4,35% and TRY 131 Thousand of Tarsim Tarım Sigortaları Havuz İşletmesi A.Ş. s shares and TRY 93 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 (-) - - Total (*) Includes debt securities that are not traded in the stock market at the end of the relevant period in spite of being quoted to the stock market. 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

212 210 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 5.2. Information on First and Second Group Loans and Other Receivables Including Restructured or Rescheduled Loans: Cash Loans Loans and Other Receivables Standard Loans and Other Receivables Restructured or Rescheduled Loans and Other Receivables Under Close Monitoring (*) 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 balances mentioned in the table above, the Parent Bank has TRY 320 Thousand of leasing receivables followed under the watch list (December 31, 2009: TRY Thousand) Loan Distribution Based by Maturity Structure: Loans and Other Receivables Standard Loans and Other Receivables Restructured or Rescheduled Loans and Other Receivables Under Close Monitoring (*) 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

213 consolidated FInancIal Statements and AccompanyIng Notes 211 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 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(Real Person) Overdraft Account-FC (Real Person) Total Total

214 212 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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(Legal Entity) Overdraft Account-FC (Legal Entity) Total 5.6. Loan Distribution according to Borrowers: Current Period Prior Period Public Private 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 (*) Includes TRY 153 Thousand of Finance Lease Receivables as of December 31, 2010 (December 31, 2009: TRY 237 Thousand).

215 consolidated FInancIal Statements and AccompanyIng Notes 213 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Restructured or Rescheduled: Current Period Group III Group IV Group V Loans and Receivables with Limited Collectibility Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables (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: Group III Group IV Group V Loans and Receivables with Limited Collectibility Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Ending Balance of Prior Period Additions in the Current Period (+) Inflows from Other Overdue Loans Account (+) Outflows to Other Overdue Loans Account (-) ( ) ( ) - Collections in the Current Period (-) ( ) ( ) (97.676) Write offs (-) - (622) (68.484) Corporate and Commercial Loans - (169) (43.358) Retail Loans - (3) (29) Credit Cards - (437) (24.994) Other - (13) (103) Ending Balance of the Current Period Specific Provisions (-) (6.737) (37.039) ( ) Net Balance at the Balance Sheet

216 214 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Information on Foreign Currency Non-Performing Loans and Other Receivables: Group III Group IV Group V Loans and Receivables with Limited Collectibility Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Current Period Ending Balance Specific Provisions (-) - - (1.087) Net Balance at the Balance Sheet Prior Period Ending Balance Specific Provisions (-) - (130) (1.078) Net Balance at the Balance Sheet Gross and Net Amounts of Non-Performing Loans with Respect to User Groups: Current Period (Net) Group III Group IV Group V Loans and Receivables with Limited Collectibility Loans and Receivables with Doubtful Collectability Uncollectible Loans and Receivables Loans to Real Persons and Legal Entities (Gross) Specific Provisions (-) (6.737) (37.039) ( ) 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 Real Persons and Legal Entities (Gross) Specific Provisions (-) (21.500) (70.985) ( ) 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) 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.

217 consolidated FInancIal Statements and AccompanyIng Notes 215 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 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 are classified as unrecoverable; - If receivables are classified as unrecoverable, specific documents should be obtained from the Collections Agency; or - The Law Department remarks that there are still uncollectible receivables although the execution proceedings are in progress Other Explanations and Disclosures: The information related to loan quality is stated as below: Current Period December 31, 2010 Loans (*) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total (*) The Parent 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. Total Current Period December 31, 2009 Loans (*) Neither past due nor Impaired Past due but not Impaired Past due and Impaired Corporate and Commercial Lending Small Business Lending Consumer Lending Credit Cards Total (*) The Parent 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. Total

218 216 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 (*) (**) (***) Group I Loans Group II Loans Group III Loans Group IV Loans Group V Loans Residential, Commercial or Industrial Real Estates Financial Assets Other 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 Total Prior Period (*) (**) (***) Group I Loans Group II Loans Group III Loans Group IV Loans Group V Loans Residential, Commercial or Industrial Real Estates Financial Assets Other 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 Aging analysis of past due but not impaired loans per classes of financial statements is stated as below: Total Current Period December 31, 2010 Loans and Advances to Customers Less than 30 Days (*) Days Days More than 91 Days Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables 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 TRY Thousand). Total

219 consolidated FInancIal Statements and AccompanyIng Notes 217 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Current Period December 31, 2009 Loans and Advances to Customers Less than 30 Days (*) Days Days More than 91 Days Corporate Lending SME Lending Consumer Lending Credit Cards Finance Lease Receivables 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, 2009 (Finance Lease TRY Thousand). 6. Information on Held-to-Maturity Investments (Net) 6.1. Information on Financial Assets Blocked/Given as Collateral or Subject to Repurchase Agreements: None Information on Government Bonds Classified as Held to Maturity Investments: The Group has TRY Thousand of revenue sharing certificate as of December 31, Total 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 relevant period in spite of being quoted to the stock market 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

220 218 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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) (*) (42.941) (86.383) (89.975) (***) (2) (*) (1.486) (931) (****) (3) (**) (*) Financial information is provided from the associate s unaudited financial statements as of December 31, (**) Financial information is provided from the associate s unaudited financial statements as of September 30, (**) It is expertise value of the Parent Bank s associate, Yeni Mağazacılık A.Ş., as of February 4, (***) It is expertise value of the Parent 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 Parent 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 ) and has paid TRY Thousand of capital increase on June 8, 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) (33) - (*) Financial information is provided from the associate s reviews financial statements as of December 31, 2010.

221 consolidated FInancIal Statements and AccompanyIng Notes 219 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 7.3. 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 - (*)With a book value amounting TRY Thousand TL of Tamweel Africa Holding S.A. is accounted by using equity pickup method and recorded amounting TRY Thousand at the accompanying consolidate financial statements 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 Quoted on the Stock Exchange: None. 8. Information on Subsidiaries (Net) 8.1. Information on Consolidated Subsidiaries: Company Name Address (City/Country) The Parent Bank s Share Percentage, if Different-Voting 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 % 22,94 %22,94 (*) 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) (13) - (3) (8.741) (3.819) (4.972) (*) Financial information is provided from the unaudited financial statements of subsidiaries as of December 31, 2010.

222 220 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 8.2. Information on Subsidiaries: Company Name Address (City/Country) The Parent Bank s Share Percentage, if Different-Voting Percentage (%) The Parent Bank s Risk Group Share Percentage (%) (1) Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. İstanbul/Türkiye %95,00 %95,00 (2) Işık Sigorta A.Ş. İstanbul/Türkiye %65,42 %65,42 (3) Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. İstanbul/Türkiye %22,94 %22,94 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) (**) (***) (3) (**) (549) (****) (*) Financial information is provided from the unaudited financial statements of subsidiaries as December 31, (*) 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, 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) - - Balance at the End of the Period Capital Commitments (*) Share Percentage at the End of the Period (%) %22,94-%95,00 %22,94-%65,42 (*) Prior period balance consists of capital commitment amounts of TRY Thousand to the Parent Bank s subsidiary, Işık Sigorta A.Ş..

223 consolidated FInancIal Statements and AccompanyIng Notes 221 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 8.4. 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) Presentation of Remaining Maturities of Net Finance Leases Method: 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 (-) (16.243) (22.019) Cancelled Amounts (-) - - Net Receivable from Finance Leases Derivative Financial Assets for Hedging Purposes None.

224 222 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 12. Information on Tangible Assets Cost Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Opening Balance-January 1, Additions Disposals - (2.811) (1.141) (69.279) (4.375) (77.606) Transfers (**) (1.234) - (1.234) Impairment (Losses)/Reversal (***) Ending Balance-December 31, Total Accumulated Depreciation (-) Opening Balance-January 1, Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale - (2.335) (704) (1.875) (3.981) (8.895) Transfers (95) - (95) Impairment (Losses)/Reversal Ending 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, TRY Thousand of real estate to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. (***) In the current period, the Parent Bank has provided an additional impairment of TRY Thousand and reversed TRY Thousand impairment due to disposals.

225 consolidated FInancIal Statements and AccompanyIng Notes 223 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Cost Buildings Leased Tangible Assets Vehicles Assets to be Disposed off Other Tangible Assets (*) Opening Balance-January 1, Additions Disposals - (1.009) (396) (6.901) (7.338) (15.644) Transfers (**) Impairment (Losses)/Reversal (2.890) - (2.331) Ending Balance-December 31, Total Accumulated Depreciation (-) Opening Balance-January 1, Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale - (872) (155) (372) (6.931) (8.330) Transfers Impairment (Losses)/Reversal (63) - (39) Ending 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, TRY Thousand of real estate to be disposed have acquired the classification as fixed assets is transferred to assets held for sale. TRY Thousand of assets held for sale includes impairment losses of TRY Thousand. 13. Information on Intangible Assets Opening and Ending Book Values and Accumulated Depreciation Balances: Current Period Prior Period Book Value Accumulated Depreciation (10.451) (7.237) Net Book Value

226 224 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Intangible Assets Movement Table: Cost Rights Other Intangible Assets Opening Balance-January 1, Additions Disposals - (77) (77) Ending Balance-December 31, Accumulated Amortization (-) Opening Balance-January 1, Amortization Expense Disposals - (67) (67) Ending Balance-December 31, Total Net Book Value-December 31, Net Book Value-December 31, Cost Rights Other Intangible Assets Opening Balance-January 1, Effect of Change at Consolidation Scope (*) Additions Disposals - (117) (117) Ending Balance-December 31, Accumulated Amortization (-) Opening Balance-January 1, Effect of Change at Consolidation Scope (*) Amortization Expense Disposals - (117) (117) Ending Balance-December 31, Total Net Book Value-December 31, Net Book Value-December 31, (*) Express the impact of change in consolidation scope as a result of inclusion of Tuna Gayrimenkul Yatırım Ortaklığı A.Ş..

227 consolidated FInancIal Statements and AccompanyIng Notes 225 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Information on Goodwill: Current Period Prior Period Consolidation Goodwill From Tangible Fixed Assets - - From Intangible Fixed Assets - - From Non-Monetary Assets Goodwill From Mergers and Turnovers - - From Tangible Fixed Assets - - From Intangible Fixed Assets - - From Non-Monetary Assets Explanations on Investment Properties Cost Buildings Lands Leased Tangible Assets Vehicles Other Tangible Assets Opening Balance-January 1, Additions Disposals (3.212) (3.212) Impairment Losses/(Reversal) (60) (60) Ending Balance-December 31, Total Accumulated Depreciation (-) Opening Balance-January 1, Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale (2.586) (2.586) Ending Balance-December 31, Net Book Value-December 31, Net Book Value-December 31,

228 226 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Cost Buildings Lands Leased Tangible Assets Other Assets Opening Balance-January 1, Effect of Change at Consolidation Scope (*) Additions Disposals (55) - (116) (498) (669) Ending Balance-December 31, Total Accumulated Depreciation (-) Opening Balance-January 1, Effect of Change at Consolidation Scope (*) Depreciation Expense Accumulated Depreciation of Tangible Assets Held for Resale (1) - (58) (390) (449) Ending Balance-December 31, Net Book Value-December 31, Net Book Value-December 31, (*) Express the impact of change in consolidation scope as a result of inclusion of Tuna Gayrimenkul Yatırım Ortaklığı A.Ş.. A subsidiary of the Parent Bank Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. has rented the facility in Kızılcahaman with all its tangible assets to Nil Yönetim Hizmetleri Tur. San. ve Tic. A.Ş Explanations on Deferred Tax Asset As of December 31, 2010, deferred tax asset is calculated according to the temporary differences, except for general loan loss provision and provision for possible risks, is TRY Thousand and is accounted in the deferred tax asset account (December 31, 2009: TRY Thousand). Deferred Tax Base Current Period 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 (net)

229 consolidated FInancIal Statements and AccompanyIng Notes 227 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Deferred Tax Base Current Period Deferred Tax Asset/(Liability) Retirement Pay Provision and Short-Term Employee Benefits Other Provisions Deferred Commission Income Tangible Assets Tax Base Differences (17.233) (3.447) Valuation of Financial Assets (6.336) (1.267) Other Deferred Tax Asset (net) Movement of the deferred tax asset as of December 31, 2010 and December 31, 2009 is stated as below: Current Period Prior Period Deferred Tax Asset, January Deferred Tax Recognized Directly Under Equity (953) (730) Deferred Tax Benefit/(Charge) Deferred Tax Asset Explanations 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 the balance sheet date, assets held for sale of the Group amount to TRY Thousand (December 31, 2009: TRY Thousand). Current Period Prior Period Opening Balance-January Additions Disposals (3.791) (5.017) Transfers (Net) (*) (10.336) Impairment (**) (35) (11) Ending Balance, 30 December (*) TRY Thousand of the balance is transferred from assets held for sale to tangible assets which stayed in assets held for sale for more than one year. TRY Thousand of real estates within assets to be disposed off have been qualified as and transferred to assets held for sale. (**) In the current period, the Parent Bank has provided an additional TRY 244 Thousand impairment and reversed TRY 209 Thousand impairment due to disposals. 17. Information on Other Assets As of December 31, 2010, other assets amount to TRY Thousand. Other assets account does not exceed 10% of the total assets (December 31, 2009: TRY Thousand).

230 228 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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: Up to 1 Up to 3 Up to 6 Up to 9 Up to 1 Accumulated 1 Year and Profit Sharing Current Period Demand Month Months Months Months Year Over Accounts Total 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)

231 consolidated FInancIal Statements and AccompanyIng Notes 229 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Up to 1 Month Up to 3 Months Up to 6 Months Up to 9 Months Up to 1 Year Accumulated 1 Year and Profit Sharing Over Accounts Prior Period Demand Total 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)

232 230 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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: The Parent Bank has no current or profit sharing accounts which are not under the guarantee of the Saving Deposit Insurance Fund except for the current and profit sharing accounts of Board of Directors, general manager, assistant general managers, and their close families. 2. Information on Derivative Financial Liabilities Held-for-Trading As of December 31, 2010, derivative financial liabilities held for trading amounts to TRY Thousand (December 31, 2009: TRY 155 Thousand). Current Period Prior Period TRY FC TRY FC Forward Transactions (*) Swap Transactions Futures Transactions Options Other Total (*) Value date is composed of foreign exchange commitments. 3. Information on Borrowings 3.1. Information on Banks and Other Financial Institutions: Current Period Prior Period TRY FC TRY FC Loans from the Central Bank of Turkish Republic From Domestic Banks and Institutions From Foreign Banks, Institutions and Funds Total

233 consolidated FInancIal Statements and AccompanyIng Notes 231 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Parent Bank s Major Liabilities: None. 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, 2009: TRY Thousand). 5. Information on Finance Lease Obligationsr None. 6. Information on Derivative Financial Liabilities for Hedging Purposes None. 7. Explanations on Provisions 7.1. Information on General Provisions: 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

234 232 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 7.2. Movement of General Provisions: Current Period Opening Balance-January 1, Charge for Period Reversal of Prior Period Expenses (1.561) Profit Sharing Accounts Share Closing Balance-December 31, Prior Period Opening Balance January 1, Charge for Period Reversal of Prior Period Expenses (8.833) 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, 2010, the Group s provision for foreign currency indexed loans amounts to TRY Thousand (December 31, 2009: 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, 2010, the Group s specific provision for unindemnified non-cash loans amounts to TRY Thousand (December 31, 2009: TRY Thousand) Explanations on Other Provisions: Information on Provisions for Potential Risks:giler: None (December 31, 2009: None) Information on Other Provisions: Other Provisions Current Period Prior Period Provision for Credit Cards and Promotion of Banking Services Provision for Unindemnified Non-cash Loans Payment Commitment for Checks Litigation Provision Other (*) Total (*) Other provisions, provisions for loan portfolio allocated to cover future potential losses include.

235 consolidated FInancIal Statements and AccompanyIng Notes 233 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Movement of the Retirement Pay Provision: Current Period Prior Period Opening Balance-January Change in Scope of Consolidation Effect Current Service Cost Discount Cost Severance Pay (954) (952) Payment/Reduction in Benefits/Loss/Gain due to Dismissal Actuarial Loss/(Gain) (738) 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, 2010, the Group provided a provision of TRY Thousand for the unused vacation pays (December 31, 2009: TRY Thousand). 8. Explanations on Taxes Payable 8.1. Information on Current Tax Liability: As of December 31, 2010, the Group s corporate tax payable is TRY Thousand offsetting the prepaid corporate tax (December 31, 2009: TRY Thousand). Current Period Prior Period Provision for Corporate Taxes Prepaid Corporate Tax (55.161) (65.529) 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 Premium Payables: 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 6 5 Total

236 234 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 8.4. Explanations on Deferred Tax Liabilities: None (December 31, 2009: 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 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 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.

237 consolidated FInancIal Statements and AccompanyIng Notes 235 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 Valuation Difference Foreign Exchange Difference - - Total Explanations on Minority Shares Current Period Prior Period Paid in Capital Share Premium Legal Reserve Prior Year Profit or Loss (9.047) (10.967) 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 Time Deposit 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 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 Letter of Credits Other Guarantees Total

238 236 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Long Standing Guarantees, Temporary Guarantees, Sureties and Similar Transactions: Current Period Prior Period Provisional Letters of Guarantees Definite Letters of Guarantee Sureties and Similar Transactions Total Total Amount of Non-Cash Loans: Current Period Prior Period Guarantees Given Against Achieving Cash Loans With Maturity of 1 Year or Less 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 , , , ,89 Farming and Raising Livestock , , , ,83 Forestry , , ,05 Fishery 957 0, , ,01 Manufacturing , , , ,71 Mining , , , ,41 Production , , , ,02 Electric, Gas and Water , , , ,28 Construction , , , ,65 Services , , , ,42 Wholesale and Retail Trade , , , ,66 Hotel, Food and Beverage Services , , , ,62 Transportation and Telecommunication , , , ,74 Financial Institutions , , , ,76 Real Estate and Renting Services , , , ,03 Self-Employment Services , , , ,19 Education Services , , , ,08 Health and Social Services , , , ,34 Other , , , ,33 Total , , , ,00 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 Bank Acceptances Letters of Credit Endorsements Underwriting Commitments Factoring Commitments Other Commitments and Contingencies

239 consolidated FInancIal Statements and AccompanyIng Notes 237 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 4. Information on Derivative Financial Instruments Type of Trading Transactions Derivative Transactions According to Purposes Trading Hedging Current Period Prior Period Current Period Prior Period 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) As of December 31, 2010 and December 31, 2009, 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 Total Prior Period Forward Buy Forward Sell TRY USD EUR - - Total As of December 31, 2010, the Group does not have any derivative transactions for the purpose of cash flow hedge.

240 238 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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, USD and EUR 946 based on the information provided from the legal department of the Group for one of the ongoing court cases mentioned above, provision amounting to TRY Thousand has been allocated. 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 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 Durağan Turkish Lira Long Term B+ Short Term B Outlook Durağan National Long Term A-(tur) Outlook Durağan Individual Rating D Support Points 5 The information is taken from the Fitch Ratings Report as of December 27, Financial Strength Outlook Foreign Currency Long Term Short Term Outlook Turkish Lira Long Term Short Term Outlook National Long Term Short Term MOODY S D Durağan Ba3 B1 Durağan Ba2 Ba1 Durağan A3 TR-1 The information is taken from the Moody s Investor Service report as of Febuary 10, 2011.

241 consolidated FInancIal Statements and AccompanyIng Notes 239 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) JCR EURASIA Foreign Currency Long Term BB Short Term B Outlook Durağan International Foreign Currency Long Term BB Short Term B Outlook Durağan National Long Term A-(Trk) Short Term A-1 (Trk) Outlook Durağan Stand Alone BC Support Points 3 The information is taken from the JCR Eurasia Rating report as of June 15, IV. Explanations and Disclosures Related to the Consolidated Income Statement 1. Information on Profit Share Income 1.1. Information on Profit Share on Loans: Group I Group II 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 TRY FC TRY FC The Central Bank of Turkish Republic (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 Held-for-Trading Financial Assets Financial Assets at Fair Value through Profit and Loss Available-for-Sale Financial Assets Investments Held-to-Maturity Total

242 240 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 1.4. 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 The Central Bank of Turkish Republic Domestic Banks Foreign Banks Branches and 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 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 Total 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

243 consolidated FInancIal Statements and AccompanyIng Notes 241 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) Prior 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 Total 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 Explanations on Dividend Income The Group has TRY 171 Thousand of dividend income (December 31, 2009: TRY Thousand). 4. Information on Net Trading Income Current Period Prior Period Income Profit on Capital Market Operations Profit on Derivative Financial Instruments Foreign Exchange Gains Losses (-) ( ) ( ) Losses on Capital Market Operations (1.246) (2.949) Losses on Derivative Financial Instruments (34.834) (73.367) 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 Change in Expense of Previous Years (*) Insurance Technical Reserves Other Total (*) Change in expense of previous years consists of amounting to TRY Thousand special provision, general loan provision and provision reversal related to receivables and fees from the doubtful receivables (December 31, 2009: TRY Thousand).

244 242 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 6. Provision Expenses Related to Loans and Other Receivables of the Banks 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 2 Financial Assets at Fair Value through Profit and Loss 66 2 Investment Securities Available for Sale - - Impairment Provision Expense - - Associates - - Subsidiaries - - Entities under Common Control - - Investments Held to Maturity - - Other Total 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 60 - 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 Resale Other Operating Expenses Rent Expenses Maintenance Expenses Advertisement Expenses Other Expenses Loss on Sales of Assets Other Total Explanation on Continuing Operations and Discontinued Operations Profit or Loss before Tax The Group s profit before tax is decreased by 15 % as compared to the prior year figures and total profit before tax amounts to TRY Thousand. Profit before tax includes TRY Thousand net profit share income, TRY Thousand net fees and commission income. Total operating expense amount is TRY Thousand.

245 consolidated FInancIal Statements and AccompanyIng Notes 243 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 9. Explanation on Continuing Operations and Discontinued Operations Tax Provision As of December 31, 2010, current tax expense is TRY Thousand (December 31, 2009: TRY Thousand) and deferred tax income is TRY Thousand (December 31, 2009: TRY Thousand deferred tax income). 10. Explanation on Continuing Operations and Discontinued Operations Net Operating Profit/Loss After Taxes Net profit of the Group is decreased by 14,52% as of December 31, 2010 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. 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 Commissions Received Member firm-pos Credit Cards Commissions and Fees Other Total Other Fees and Commissions Given Current Period Prior Period 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 Movement 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, 2009: TRY Thousand). 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.

246 244 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 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 appropriation as of the date of the financial statements are authorized for issue. 7. Amounts Transferred to Legal Reserves As of December 31, 2010, amount transferred to legal reserves is TRY Thousand (December 31, 2009: 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 vault and foreign currency cash, money in transit, cheques purchased, unrestricted amount in the Central Bank and demand deposits in banks, and Cash equivalents is defined as time deposits in banks having original maturity less than three months. Reserve deposits provided in the Central Bank and elementary branches insurance warranty in favour of Turkish Treasury blocked accounts 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, 2009: 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, 2009: TRY Thousand). Net increase/decrease in other assets amounting to TRY (10.590) 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, 2009: TRY ( ) 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, 2009: TRY Thousand). The effect of changes in foreign exchange rates on cash and cash equivalents as of December 31, 2010 is approximately TRY Thousand (December 31, 2009: TRY (2.654) Thousand).

247 consolidated FInancIal Statements and AccompanyIng Notes 245 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 1.3. 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

248 246 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Loans and Other Receivables (*) 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 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) Prior Period: Risk Group of the Parent Bank Loans and Other Receivables (*) 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 Balance at Beginning of Period Balance at End of Period Profit Share and Commission Income (*) The risk group balance includes TRY 237 Thousand finance lease receivables (December 31, 2008: TRY 483 Thousand).

249 consolidated FInancIal Statements and AccompanyIng Notes 247 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) 1.3. 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 Cari Dönem Cari Dönem Cari Dönem 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. 1.5 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, 2009: TRY Thousand). Besides remuneration, the key management personnel also receive some further tangible rights.

250 248 Bank Asya 2010 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (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 Parent Bank has received all necessary approvals from BRSA to open a representative office in Mumbai, India and India government approval is waiting. Işık Sigorta A.Ş. from the consolidated subsidiaries operates domestically and currently has 4 regional management office, 2 regional representation office and (including the Bank branches) agencies and 177 personnel as of 30 December Tuna Gayrimenkul Yatırım Ortaklığı A.Ş. operates domestically and currently has 9 personnel as of December 31, Asyafin Sigorta Aracılık Hizmetleri Ltd. Şti. A.Ş. has not personnel. Tamweel Africa Holding S.A., operating abroad, has currently 4 banks and totally 4 personnel. 2. Explanations on Branch and Agency Openings or Closings of the Parent Bank: The Parent Bank has opened 17 new branches in the period of January 1 December 31, 2010.

251 consolidated FInancIal Statements and AccompanyIng Notes 249 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010 (Amounts expressed in thousands of Turkish Lira [ TRY ] unless otherwise stated.) I. Other Explanations on Operations of the Group: 1. Subsequent Events: SECTION SIX OTHER EXPLANATIONS As per the resolution of the Board of Directors of Bank Asya dated January 2011 and numbered 1877; Bank Asya s Board of Directors have decided to participate as a founding partner in the establishment of a pension and life insurance subsidiary and gave an authority to Bank Asya Head Office for proceedings. The newly formed company will be named Asya Emeklilik ve Hayat A.Ş. and will have a start-up capital of TRY of which Bank Asya will have a TRY stake in. Asya Katılım Bankası A.Ş. has obtained USD 171 Million and EUR 94,5 Million secure Murabaha Syndication Loan having 1 year maturity from a consortium of 26 international banks, led by Standard Chartered Bank, ABC Islamic Bank, Noor Islamic Bank and National Bank of Abu Dhabi. The syndication loan agreement was signed on March 31, I. Explanations on the Independent Auditors Report SECTION SEVEN INDEPENDENT AUDITORS REPORT The financial statements of the Parent Bank for the year January 1 December 31, 2010 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.

252 250 Bank Asya 2010 ANNUAL REPORT BANK ASYA BRANCHES Head Office Saray Mah. Dr. Adnan Büyükdeniz Cad. No : 10 Ümraniye Istanbul Phone : (0216) Fax : (0216) Aegean Regional Headquarters Akdeniz Mah. Akdeniz Cad. No: 1 Reyent İşhanı Kat: 6 Konak Izmir Phone : (0232) Fax : (0232) Southern Anatolia Regional Headquarters Mücahitler Mah. Gazimuhtarpaşa Bulvarı No: 65 Şehitkamil-Gaziantep Phone : (0342) Fax : (0342) BANK ASYA CORPORATE BRANCHES Anadolu Corporate Branch Değirmen Sokak Nidakule İş Merkezi No: 18 Kat: 19 Kozyatağı/Kadıköy/ Istanbul Phone : (0216) Fax : (0216) Başkent Corporate Branch Armada İş Merkezi, Eskişehir Yolu, No: 6 Kat: 20/34 Söğütözü Ankara Phone : (0312) Fax : (0312) Boğaziçi Corporate Branch Esentepe Mah. Büyükdere Cad. No: 102 Maya Center B Blok K: 22 Şişli/Istanbul Phone : (0212) Fax : (0212) Ege Corporate Branch Akdeniz Mah. Akdeniz Cad. No: 1 Reyent İşhanı Kat: 6 Konak Izmir Phone : (0232) Fax : (0232) Trakya Corporate Branch Güneşli Evren Mah. Koçman Cad. No: 54 Kat: 1 Güneşli Istanbul Phone : (0212) Fax : (0212) Uludağ Corporate Branch Ahmetpaşa Mah. Fevzi Çakmak Cad. No: 73 Fomara İş Merkezi Kat: 5 Osmangazi/Bursa Phone : (0224) Fax : (0224) BANK ASYA BRANCHES 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 Yüzbaşı Agâh Cad. No: 1 Diler İş Merkezi Afyon Phone : (0272) Fax : (0272) Aksaray Branch Hacı Hasanlı Mah. 716 Sok. No: 16 Aksaray Phone : (0382) Fax : (0382) Amasya Branch Yüzevler Mah. Danişment Cad. No: 14/A Amasya Phone : (0358) Fax : (0358) Ankara Ankara Branch Kızılelma Mah. Anafartalar Cad. No: 63 Ulus 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 Yunus Emre Cad. No: 5 Etlik Keçiören Ankara Phone : (0312) Fax : (0312) Kızılay Branch Meşrutiyet Cad. No: 16/A Kızılay Ankara Phone : (0312) Fax : (0312) Kızılcahamam Branch Cengiz Topel Cad. No: 5/17 Kızılcahamam Ankara Phone : (0312) Fax : (0312) Ostim Branch 100. Yıl Bulvarı No: Yenimahalle/Ostim/Ankara Phone : (0312) Fax : (0312) Polatlı Branch Ankara Cad. No: 36 Polatlı/Ankara Phone : (0312) Fax : (0312) 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 Atatürk Cad. No: 60 Karat Otel Altı Alanya Antalya 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) Manavgat Branch Bahçelievler Mah. Demokrasi Bulvarı No: 50 Manavgat/Antalya Phone : (0242) Fax : (

253 consolidated FInancIal Statements and AccompanyIng Notes 251 BANK ASYA BRANCHES 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 Phone : (0266) Fax : (0266) Batman Branch Cumhuriyet Cad. Hamidiler Pasajı No: 1/ 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) 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. Enver Paşa Cad. Bayram Yeri No: 11 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 Istanbul Cad. No: 3/B Düzce Phone : (0380) Fax : (0380) Edirne Branch Çavuşbey Mahallesi 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 İstasyon Cad. No: Erzurum Phone : (0442) Fax : (0442) Eskişehir Branch İstiklal Cad. Şair Fuzuli Cad. No: 24 Eskişehir Phone : (0222) Fax : (0222) Fethiye Branch Cumhuriyet Mah. Hükümet Caddesi No: 5 Fethiye-Muğla Phone : (0252) Fax : (0252) Gaziantep Gatem Branch Gatem Toptancılar Sitesi Sarı Ada 1.Blok No: 2 Şehitkamil/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) 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)

254 252 Bank Asya 2010 ANNUAL REPORT Isparta Branch Pirimehmet Mah. 118 Caddesi Koca Mustafa Pasajı No: 16 Isparta Phone : (0246) Fax : (0246) Istanbul Acıbadem Branch Acıbadem Cad. Kazaca Apt. A Blok No: 97/B Kadıköy-Istanbul Phone : (0216) Fax : (0216) Altıyol Branch Osmanağa Mah. Söğütlüçeşme Cad. No: 29 Kadıköy-Istanbul Phone : (0216) Fax : (0216) Altıntepe Branch Altıntepe Mah. Bağdat Cad. No: 71/B Maltepe/Istanbul Phone : (0216) Fax : (0216) Altunizade Branch Kısıklı Cad. No: 7 Altunizade/Istanbul Phone : (0216) Fax : (0216) Arnavutköy Branch İslambey Mah. Fatih Cad. No: 24 Arnavutköy/Istanbul Phone : (0212) Fax : (0212) Avcılar Branch E-5 Yolu Üzeri Merkez Mah. Engin Sok. No: 1 Avcılar Istanbul Phone : (0212) Fax : (0212) Bağcılar Branch Merkez Mah. 1. Sok. No: 9 Bağcılar/Istanbul Phone : (0212) Fax : (0212) Bahçelievler Branch İzzettin Çalışlar Cad. No: 23/B Bahçelievler/Istanbul Phone : (0212) Fax : (0212) Bakırköy Branch İncirli Cad. No: 113 Bakırköy Istanbul Phone : (0212) Fax : (0212) Bakırköy Çarşı Branch Cevizlik Mah. Istanbul Cad. No: 35/A Bakırköy/Istanbul Phone : (0212) Fax : (0212) Başakşehir Branch Başakşehir Konutları 1.Etap Girişi Başakşehir-İkitelli/Istanbul Phone : (0212) Fax : (0212) Bayrampaşa Branch Yenidoğan Mah. Abdi İpekçi Cad. Parkhan No: 8/B Bayrampaşa/Istanbul Phone : (0212) Fax : (0212) Beşiktaş Branch Sinanpaşa Mah. Beşiktaş Cad. No: 1/A Beşiktaş/Istanbul Phone : (0212) Fax : (0212) Beşyüzevler Branch Yıldırım Mah. Eski Edirne Asfaltı Cad. No: 213/A Bayrampaşa/Istanbul Phone : (0212) Fax : (0212) Beykoz Branch Fevzi Paşa Cad.No: 78 Beykoz/Istanbul Phone : (0216) Fax : (0216) Beylikdüzü Branch Beylikdüzü Mevkii E-5 Yolu Üzeri (Istanbul Outlet Park AVM Girişi) B. Çekmece/Istanbul Phone : (0212) Fax : (0212) Büyükçekmece Branch Fatih Mahallesi, Cengiz Topel Caddesi No: 4/A Büyükçekmece/Istanbul Phone : (0212) Fax : (0212) Çağlayan Branch Çağlayan Vatan Cad. Avrasya İş Merkezi No: 6/A Çağlayan-Kağıthane Istanbul Phone : (0212) Fax : (0212) Çapa Branch Şehremini Mah. Turgut Özal Cad. No: 145/A Fatih/Istanbul Phone : (0212) Fax : ( Çekmeköy Branch Meclis Mah. Teraziler Cad. Aşkın Sokak No: 19/B Sancaktepe/Istanbul Phone : (0216) Fax : (0216) Dolayoba Branch Çınardere Mah. E-5 Yanyolu Cad. No: 63/1 Pendik/Istanbul Phone : (0216) Fax : (0216) Erenköy Branch Şemsettin Günaltay Cad. Çiğdem Apt. No: 238 Erenköy/Istanbul Phone : (0216) Fax : (0216) Esenler Branch Menderes Mah. Atışalanı Cad. No: 15 Esenler Istanbul Phone : (0212) Fax : (0212) Esenyurt Branch Doğan Araslı Cad. No: 124/B Esenyurt Istanbul Phone : (0212) Fax : (0212) Fatih Branch Akdeniz Cad. No: 10 Fatih Istanbul Phone : (0212) Fax : (0212) Fevzipaşa Branch İskenderpaşa Mah. Macar Kardeşler Cad. No: 59 Fatih/Istanbul Phone : (0212) Fax : (0212) Florya Branch Şenlikköy Mah. Florya Asfaltı No: 76/3 Florya Bakırköy Istanbul Phone : (0212) Fax : (0212) GOP Branch Salihpaşa Cad. Şirinler Sok. No: 1 Gaziosmanpaşa Istanbul Phone : (0212) Fax : (0212) Güneşli Branch Evren Mah. Koçman Cad. No: 40 Güneşli-Bağcılar/Istanbul Phone:(0212) Fax : (0212) Hadımköy Branch Akçaburgaz Mah. Hadımköy Yolu No: 148 Esenyurt/Istanbul Phone : (0212) Fax : (0212) İkitelli Branch İkitelli Organize Sanayi Bölgesi Atatürk Cad. No: 137 İkitelli/Istanbul Phone : (0212) Fax : (0212) İmes Sanayi Branch İmes Sanayi Sitesi C Blok 301 Sok. No: 3/A Yukarı Dudullu Istanbul Phone : (0216) Fax : (0216)

255 consolidated FInancIal Statements and AccompanyIng Notes 253 BANK ASYA BRANCHES İstoç Branch İstoç E-1 Blok Öksüzoğulları Plaza No: 5/3 Bağcılar/Istanbul Phone : (0212) Fax : (0212) Kadıköy Branch Tuğlacıbaşı Mah. Poyraz Sok. Sadıkoğlu 1 İş Merkezi No: 16 Ziverbey Kadıköy Istanbul Phone : (0216) Fax : (0216) Kağıthane Branch Mezbaha Sok. No: 1 Kağıthane/Istanbul Phone : (0212) Fax : (0212) Karaköy Branch Müyeeyyedzade Mah. Kemeraltı Cad. No: 6/A Karaköy/Istanbul Phone : (0212) Fax : (0212) Kartal Branch Ankara Cad. No: 96 Kartal-Istanbul Phone : (0216) Fax : (0216) Kavacık Branch Mihrabad Cad. Martı İş Merkezi No: 238 Beykoz Istanbul Phone : (0216) Fax : (0216) Kozyatağı Branch Şaşmaz Plaza Saniye Ermutlu Sok. No: 4 Kozyatağı Istanbul Phone : (0216) Fax : (0216) Kurtköy Branch Kurtköy Mah. Üstün Cad. No: 2 Kurtköy-Pendik/Istanbul Phone : (0216) Fax : (0216) Kuyumcukent Branch 29 Ekim Cad. Kuyumcukent Sitesi Atölye Bloğu Zemin Kat 1. Sok No: 12 Yenibosna/Istanbul Phone : (0212) Fax : (0212) Küçükbakkalköy Branch Kayışdağı Caddesi No: 105/A Ataşehir/Istanbul Phone : (0216) Fax : (0216) Laleli Branch Mustafa Kemal Paşa Cad. No: 86 Aksaray Fatih/Istanbul Phone : (0212) Fax : (0212) Levent Sanayi Branch Sanayi Mah. Sultan Selim Cad. No: 1/C Kağıthane/Istanbul Phone : (0212) Fax : (0212) Libadiye Branch Libadiye Cad. No: 60 Üsküdar/Istanbul Phone : (0216) Fax : (0216) Maltepe Branch Bağlarbaşı Mah. Bağdat Cad. No: 485/B Maltepe/Istanbul Phone : (0216) Fax : (0216) Maslak Branch Ayazağa Mah. Büyükdere Cad. No: 71 Maslak-Şişli/Istanbul Phone : (0212) Fax : (0212) Mecidiyeköy Branch Mecidiyeköy Mah. Mecidiyeköy Cad. No: 6/A Şişli/Istanbul Phone : (0212) Fax : (0212) Mercan Branch Prof. Cemil Birsel Cad. No: 25 Eminönü/Istanbul Phone : (0212) Fax : (0212) Merkez Branch Saray Mah. Dr. Adnan Büyükdeniz Cad. No: 10 Ümraniye Istanbul Phone : (0216) Fax : (0216) Merter Branch Fatih Cad. No: 24 Merter/Istanbul Phone : (0212) Fax : (0212) Pendik Branch Doğu Mah. 23 Nisan Cad. No: 59 Pendik Istanbul Phone : (0216) Fax : (0216) Sarıgazi Branch Meclis Mah. Eski Ankara Cad. No.34 Sancaktepe Sarıgazi/Istanbul Phone : ( Fax : (0216) Sarıyer Branch Şehit Midhat Cad. No: 27 Sarıyer/Istanbul Phone : (0212) Fax : (0212) Sefaköy Branch Tevfik Bey Mah. Emrullah Efendi Cad. No: 22 Sefaköy Istanbul Phone : (0212) Fax : (0212) Sultanbeyli Branch Fatih Bulvarı No: 193 Sultanbeyli Istanbul Phone : (0216) Fax : (0216) Sultançiftliği Branch Eski Edirne Asfaltı No: 710 Sultançiftliği Istanbul Phone : (0212) Fax : (0212) Sultanhamam Branch Rüstempaşa Mah. Vasıfçınar Cad. No: 49 Fatih/Istanbul Phone : (0212) Fax : (0212) Şirinevler Branch Hürriyet Mah. Mahmutbey Cad. No: 3/B Bahçelievler/Istanbul Phone : (0212) Fax : (0212) Şişli Branch Meşrutiyet Mah. Halaskargazi Cad. No: 98/A Şişli/Istanbul Phone : (0212) Fax : (0212) Taksim Branch İnönü Mah. Cumhuriyet Cad. Şakirpaşa İşhanı No.89 Şişli/Istanbul Phone : (0212) Fax : (0212) Tepeüstü Branch Alemdağ Cad. No: 572/A Ümraniye Istanbul Phone : (0216) Fax : (0216) Topçular Branch Kışla Cad. Kurtoğlu İş Merkezi No: 21/7 Eyüp/Istanbul Phone : (0212) Fax : (0212) Topkapı Branch Merkezefendi Mah. Davutpaşa Cad. No: 119 Zeytinburnu Istanbul Phone : (0212) Fax : (0212) Tuzla Free Zone Branch Tuzla Serbest Bölgesi Hakkı Matraş Cad. No: 11 Tuzla Istanbul Phone : (0216) Fax : (0216)

256 254 Bank Asya 2010 ANNUAL REPORT Tuzla Branch Aydıntepe Mah. Irmak Sok. No: 1 Tuzla Istanbul Phone : (0216) Fax : (0216) Ümraniye Branch Namık Kemal Mah. Sütçü Cad. No: 2 Ümraniye Istanbul Phone : (0216) Fax : (0216) Ümraniye Çarşı Branch İstiklal Mah. Alemdağ Cad. No: 174/A Ümraniye/Istanbul Phone : (0216) Fax : (0216) Üsküdar Branch Atlas Çıkmazı No: 5/40 Üsküdar Istanbul Phone : (0216) Fax : (0216) Zeytinburnu Branch Prof. Muammer Aksoy Cad. No: 41 Zeytinburnu Istanbul Phone : (0212) Fax : (0212) Izmir Aliağa Branch Kazımdırık Mah. İstiklal Cad. No: 49 Aliağa/Izmir Phone : (0232) Fax : (0232) Bornova Branch Fevzi Çakmak Cad. No: 15/A Bornova/Izmir Phone : (0232) Fax : (0232) Izmir Branch Gaziosmanpaşa Bulvarı No: 58/1 Çankaya/Izmir Phone : (0232) Fax : (0232) Karabağlar Branch Yeşillik Cad. No: 417 Karabağlar Izmir Phone : (0232) Fax : (0232) Karşıyaka Branch Girne Bulvarı No: /A Karşıyaka/Izmir Phone : (0232) Fax : (0232) Yenişehir Branch Sok. No: 1/F Ege Ticaret İş Merkezi Gıda Çarşısı Yenişehir/Izmir Phone : (0232) Fax : (0232) Gazi Bulvarı Branch Gaziosmanpaşa Bulvarı No: 15/A Çankaya/Izmir Phone : (0232) Fax : (0232) Kahramanmaraş Branch İsmetpaşa Mah. Yeni Hükümet Cad. No: 8/A Merkez/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 Hacıhalil Mah. Körfez Cad. No: 10 Gebze Kocaeli Phone : (0262) Fax : (0262) Gebze Çarşı Branch Zübeyde Hanım Cad.No: 37 Gebze Kocaeli Phone : (0262) Fax : (0262) İzmit Branch Karabaş Mah. Cengiz Topel Cad. No: 12 İzmit 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) 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 Mahallesi 9.Sokak Şimşek İş Merkezi No: 4/A Karaman Phone : (0338) Fax : (0338) Kırıkkale Branch Hüseyin Kahya Mah. Barbaros Hayrettin Cad. No: 22 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 Manisa Branch 1. Anafartalar Mah. Gaziosmanpaşa Cad. No: Manisa Phone : (0236) Fax : (0236) Akhisar Branch Paşa Mah. Haşim Haşimoğlu Cad. 50.Sokak No: 23 Akhisar/Manisa Phone : (0236) Fax : (0236) Turgutlu Branch Turan Mahallesi Atatürk Bulvarı No: 174 Turgutlu/Manisa Phone : (0236) Fax : (0236) Mardin Branch 13 Mart Mah. Vali Ozan Cad. No: 50 Mardin Phone : (0482) Fax : (0482) Mersin Branch Cami Şerif Mah. Uray Cad. No: Mersin Phone : (0324) Fax : (0324)

257 consolidated FInancIal Statements and AccompanyIng Notes 255 BANK ASYA BRANCHES Nevşehir Branch Aksaray Cad. No: Nevşehir Phone : (0384) Fax : (0384) 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 Sularbaşı Mah. Afyon Sok. No: 1/A Sivas Phone : (0346) Fax : (0346) 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 İsmet Paşa Cad. No: Uşak Phone : (0276) Fax : (0276) Van Branch Cumhuriyet Cad. (Vali Konağı Karşısı) Sempaş Yanı 118/A-B Merkez Van Phone : (0432) Fax : (0432) Yalova Branch Yalı Cad. Gürer İş Merkezi No: 11 Merkez/Yalova Phone : (0226) Fax : (0226) Şanlıurfa Branch Yusufpaşa Mah. Asfaltyol Cad. No: Şanlıurfa Phone : (0414) Fax : (0414) Tekirdağ Çerkezköy Branch Gaziosmanpaşa Mahallesi Atatürk Caddesi No: 39 Çerkezköy/Tekirdağ Phone : (0282) Fax : (0282) Çorlu Branch Cemaliye Mah. Omurtak Cad. No: 236/1 Çorlu Tekirdağ Phone : (0282) Fax : (0282)

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