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

Human Resources Practices

Having preserved its strong position in the banking sector in 2011, Ziraat Bank recognizes that the human resource is the key element that makes a difference in competition, and sustains the modern human resources management system it has adopted in line with the principles of transparency, participation, productivity and compliance with banking ethics.

Demographics

Aiming to fulfill the requirements of banking and international competition and to provide modern and reliable banking service, Ziraat Bank had 24,374 employees on its payroll at the end of 2011. Total headcount increased by 7.33% as compared with year-end 2010. While 12% of our employees work at the head office units, 88% are assigned at regional offices and branches. 81% of the employee body holds undergraduate and graduate degrees; average age of employees is 37 and average tenure is 14 years.

Recruitment

Adopting a transparent approach to career management and offering young people the chance to advance in their banking careers, Ziraat Bank continued to open its doors to numerous new graduates in 2011 following suit of previous years. 66,755 people took part in the online recruitment tests, which is a system developed and implemented for the first time in Turkey by Ziraat Bank in 2009.

As a result of the tests given, a total of 3,164 new employees joined the Ziraat Bank family and were placed in various positions under various titles.

Career

Regarding its qualified human resource as its most important equity, Ziraat Bank espouses a transparent approach to career management where career paths and requirements are defined clearly, and gives young people the chance to advance in their banking careers. The bank aims to fill managerial positions through promotion from within.

Performance System

Ziraat Bank implements Branch Performance System; according to the results of this system, Performance Bonuses are paid as a separate element apart from the salaries and compensations paid on the basis of salary determination principles. In this framework, employees are paid performance bonuses at quarterly intervals along with their salaries in February, May, August and November.

Performance Bonuses do not exceed 7% of an employee’s total salary for one month and are determined based on two different criteria, general and specific. 60% of the bonus amounts is distributed to employees as General Performance Bonus and the remaining 40% as Specific Performance Bonus.

“General Performance Bonus” payments are determined according to branch rankings based on scales announced quarterly by the Budget, Performance and Profitability Management Department.

Ranked among their peers in each scale, branches are divided into six Performance Groups according to percentage tranches. While each Performance Group receives payments calculated using different coefficients, the branches that fall under the final 6th group do not usually benefit from the General Performance Bonus payment.

“Specific Performance Bonus”, on the other hand, is calculated based on the target actualization rates announced once in every three months by the Budget, Performance and Profitability Management Department.

Employees of branches with a target actualization rate of 90% and above receive a specific performance bonus calculated on the basis of predetermined coefficients. Branches with target realization rates of below 90% are not entitled to Specific Performance Bonus.

On the other hand, employees of regional offices receive performance bonus payments based on the average General and Specific Performance Bonus coefficients of affiliated branches, whereas head office employees are paid performance bonuses on the basis of the average General and Specific Performance Bonus coefficients of regional offices.

Given the retrospective nature of these payments, employees who have left the Bank or are on unpaid leave are paid the performance bonus amount that they have become entitled to in relation to the timeframe they have actively worked. However, employees who have been given disciplinary punishment may not benefit from the performance bonus payments for the period of time set forth in the bylaws depending on the punishment given.