Ziraat Bankası 2011 Faaliyet Raporu

Introduction

Management and Corporate Governance Practices

Information on the Activities of the Committees

Attendance by the Members of the Board of Directors and of the Audit Committee in the Meetings Held During the Reporting Period

Related Party Transactions

Activities for Which Support Services are Outsourced in Accordance with the "Regulation Concerning the Outsourcing of Support Services by Banks and the Authorization of Organizations Providing Such Services" and the Persons and Organizations from Which they are Obtained

Financial Information and Risk Management

Statutory Auditors Report

Audit Committee's Assessment of the Operation of the Internal Audit, Internal Control, and Risk Management Systems

Independent Auditor's Report; Unconsolidated Financial Statements and Notes for the Period January 1- December 31, 2011

Ziraat Bank's Financial Standing, Profitability and Solvency

Ratios

Risk Management Policies Adhered to According to Types of Risk

31 December 2007 – 31 December 2011 Summary Balance Sheet and Income Statement

Credit Ratings

Independent Auditor's Report; Consolidated Financial Statements and Notes for the Period January 1 - December 31, 2011

Board of Directors Report

Ziraat Bank in 2011

Two years away from celebrating its 150th anniversary, Ziraat Bank designated 2011 as the year of change, and initiated a change and transformation project in line with the Bank’s values, vision and mission keeping a close eye on the best practices in the industry. During 2011, Ziraat Bank restructured its infrastructure and organization, targeting a human resource management that encouraged and rewarded employees, as well as customer-focus. Owing to the project launched, Ziraat Bank will become a bank that possesses higher added value power in every aspect, that is able to respond to customer expectations with greater speed and quality, and that commands cutting-edge technology.

With its primary management strategy defined as achieving growth on the basis of sustainable profitability and productivity, the Bank’s total assets had risen to TL 161 billion as at year-end 2011. The Bank targeted a well-balanced balance sheet in 2011 and attained 6% growth in total assets resulting from contracted securities portfolio despite the 24% rise in cash loans. The share of loans in total assets went up from 37% at year-end 2010 to 43% at year-end 2011, while that of marketable securities dropped from 49% to 43%.

Ziraat Bank strictly adheres to its activities focused on supporting the real sector. In 2011, the Bank increased its agricultural loans by 39% to TL 18.9 billion and remained the greatest supporter of the agricultural industry. SME loans grew 29% to TL 6.9 billion, while total commercial loans went over TL 16.5 billion. Retail loans were also up by 30% year-on and increased to TL 30.5 billion.

With a total of 1,434 points of service, the Bank maintained its position of offering the widest branch network of any bank in Turkey. The Bank, which has 24,374 employees (12% of the sector) and a share of 14% in terms of branch number, is the sole provider of banking services at 414 points throughout Turkey.

Ziraat Bank is the most extensive Turkish bank in the international arena with its 16 branches, 8 sub-branches, 8 overseas subsidiary banks and 1 representative office at 78 locations in 17 countries: In addition to its 5 branches and 5 sub-branches in the Turkish Republic of Northern Cyprus, Ziraat Bank has New York Branch in the USA, London Branch in the UK, Sofia Branch and Plovdiv, Kardzhali and Varna sub-branches in Bulgaria, Tbilisi Branch in Georgia, Athens, Komotini, Xanthi and Rhodes branches in Greece, Baghdad and Erbil branches in Iraq, Jeddah Branch in Saudi Arabia, Tehran representative office in Iran, and international banking subsidiaries and their branches, sub-branches and offices in Germany, Macedonia, Azerbaijan, Bosnia-Herzegovina, Kazakhstan, Uzbekistan, Russia, and Turkmenistan.

Conclusion

In 2011, Ziraat Bank generated a pretax profit of TL 2,780 million and a net profit of TL 2,101 million. The Bank’s return on assets was 1.3% in the reporting period, while its return on equity was 16.1%.

Serving the Turkish people for 148 years, Ziraat Bank will continue to work in alignment with the principles of profitability and productivity backed –still today as it has always been- by its extensive service branch network, effective delivery channels, and experienced personnel in view of profitability and productivity principles.

TÜRKİYE CUMHURİYETİ ZİRAAT BANKASI A.Ş.


Hüseyin AYDIN General Manager	Muharrem KARSLI Chairman of the Board