Annual Report 2024 Toward great goals with strong steps
CONTENTS Part One: General Information 10 Performance of A&T Bank in 2024 11 2024 Highlights 12 About A&T Bank 14 Annual Report Compliance Opinion 15 Shareholding Structure and Paid-In Capital 15 Amendments to the Articles of Association 16 Financial Indicators 18 Assessment of Financial Strength, Profitability and Debt Repayment Capacity 20 Summary Financial Highlights for the Past Five Years 20 Ratings of the Bank 21 Research and Development Implementations for New Services and Activities 23 Vision, Mission and Values 24 Milestones 26 Message from the Chairman 30 Message from the General Manager 34 2024 Performance of the Global Economy and Türkiye’s Economy 36 Turkish Banking Sector in 2024 38 A&T Bank in the Turkish Banking Sector 40 Operations in 2024 42 Treasury 45 Financial Institutions 46 Sales, Marketing and Digital Banking 50 Credits 52 Information Technologies Management 54 Operations 56 Human Resources Management and Organization 60 Compliance and Legislation 62 Support Departments and Units 64 Subsidiary: A&T Finansal Kiralama A.Ş. Part Two: Management and Corporate Governance Practices 66 Board of Directors Report Submitted to the General Assembly 68 Board of Directors 72 Senior Management 73 Group Managers 75 Managers in Charge of Internal Systems Departments 76 Report of the Audit Committee on the Internal Systems of the Bank 78 Risk Management Policies 79 Relations with the Bank’s Risk Group 80 Committees 82 Individuals and Institutions Offering Support Services 83 Other Regulatory Explanations Part Three: Unconsolidated Financial Information 86 Independent Audit Report 92 Unconsolidated Financial Report Part Four: Consolidated Financial Information 192 Independent Audit Report 198 Consolidated Financial Report Addresses
As the first Turkish bank to specialize in trade transactions between Türkiye and the Middle East and North Africa, we continue to make progress in challenging regions as we approach our 50th year. We focus on providing cash and non-cash loans to construction firms undertaking projects in the regions in which we operate and to corporate clients engaged in exports to this region, and we broaden our customer base as a unique bank. Not only broadening our customer base but also expanding our sphere of influence, we are establishing bridges of trade to South Africa. We will continue leveraging our expertise to guide our clients engaged in commercial activities in this region since we know the southern part of Africa as closely as we know the northern part. Expanding our sphere of influence in Africa
At critical junctures, we are with our clients On a challenging continent which is full of uncertainties, we leverage our 47 years of experience to guide our clients and secure the transitions for trade ties. As a guiding bank that serves as a point of reference, we expand our customer base, diversify our service offerings, and maintain our rise as our operating region expands. Number of countries in which we operate 32
Cape of Good Hope is the southwestern most tip of Africa as well as a critical location where the Atlantic Ocean meets the Indian Ocean. Throughout history it has always been a challenging point of passage for seamen due to its strong currents and variable weather conditions.
We are an important resource for the region We constitute an important and extensive ecosystem for growing trade thanks to our expanding and increasingly interconnected correspondent bank network. When it comes to credit, which is an indispensable element of commercial activity, we continue to create resources for our customers even under challenging conditions and to facilitate access to this resource. Total credit volume (cash + non-cash) TL 22,2 billion
The basin of the Nile River, the longest river in the world with a length of 6,650 kilometers, covers one-tenth of the African continent. The river is a vital source of water for the continent.
Diversity and progress As the first Turkish bank which specializes in trade transactions between Türkiye and North Africa, we are building trade bridges to this region. Our diversified services present solutions for important needs. Leveraging our experience in the region, we expand our sphere of influence on the continent and strive to extend our trust to the entire Africa. Foreign trade volume in 2024 USD 811 million
The North African countries of Algeria, Tunisia, and Libya are among the leading countries in the region with their economic, cultural, and natural diversity.
Aiming higher We fill a major void in the region in which we operate. We strive to leverage our unique organization to render unparalleled service quality. While strengthening our ties with our customers and forging long-lasting relationships with them, we also continue to reinforce the synergy and diversify our cooperation with our main shareholder and subsidiary banks, and we continue our progression. Increase in customer deposits 57.11%
Sindou Peaks constitute the highest altitudes in Burkina Faso. These peaks, which are a major tourist attraction, resemble human figures with their interesting rock formations.
A&T Bank Annual Report 2024 10 PERFORMANCE OF A&T BANK IN 2024 A&T Bank continued its support to customers with a foreign trade volume equivalent of USD 811 million in 2024. A&T Bank maintained its strong performance in 2024, increasing its total assets to TL 18.6 billion. Total Assets 400% increase in total assets over the past 10 years Türkiye-Libya Total Trade Volume First choice of Turkish entrepreneurs in target markets with strong potential, particularly in North Africa Equity Size Strong equity structure and a business model focused on sustainable profitability Capital Adequacy Capital adequacy at the banking sector average level Non-Cash Loans A bank specialized in non-cash loans with tailored solutions for clients’ financing needs Net Profit Profitability-based growth Foreign Trade Volume Expanding support to customers in foreign trade transactions TL 18.6 billion USD 3.4 billion TL 2.6 billion 20.09% TL16.3 billion TL 182.2 million USD 811 million
Part One: General Information 11 2024 HIGHLIGHTS After upgrading the mobile application’s technical infrastructure in accordance with the Information Systems Regulation, all customers, including those who do not own a smart phone, were enabled to perform transactions through Internet Banking. Ongoing improvements in digital channels A&T Bank continued to improve user experience and provide solution-oriented developments on digital channels in 2024. Within this scope, functionalities were developed such as allowing users to update their transaction limits and entering the passcodes received via SMS with one click into the passcode field on the login screen. Integration with the new operator NetGSM was completed while the Bank’s SMS delivery infrastructure related to the transactions performed on the digital channels was upgraded. This materially increased the rate of successful delivery to customers of SMS messages sent to Libyan operators used by the Bank’s Libyan customers. In addition, the effectiveness of campaign management screens was enhanced. Further, the Bank joined Open Banking services, thereby enabling our customers to view their A&T Bank accounts and submit payment orders on other bank platforms. After upgrading the mobile application’s technical infrastructure in accordance with the Information Systems Regulation, all customers, including those who do not own a smart phone, were enabled to perform transactions through Internet Banking. Yet another innovation rolled out during the year was the inclusion of detailed information on transactions in push notification messages. Enhanced value added for our strategic clients In an effort to meet the financial needs of its corporate customers that are engaged in exports to North Africa in particular, and to Africa in general, more effectively, and to strengthen foreign trade operations, A&T Bank continued to deepen in this strategic customer segment which is also the focus of our value creation model. In line with this strategy, this customer segment was prioritized in customer acquisition efforts and its share in the customer portfolios increased. Efforts will continue at the same pace in 2025 in accordance with the goal of increasing the number of producer-exporter companies. All customers, including those who do not own a smart phone, were enabled to perform transactions on the mobile application through Internet Banking.
A&T Bank Annual Report 2024 12 ABOUT A&T BANK A&T Bank enjoys a special position in the Turkish banking sector thanks to its robust financial structure and the Bank’s expertise in intermediating the trade between Türkiye and North African countries. . A&T Bank enjoys a special position in the Turkish banking sector thanks to its robust financial structure and the Bank’s expertise in intermediating the trade between Türkiye and North African countries. The Bank plays an important role in helping boost Türkiye’s banking sector and trade. A&T Bank makes significant contributions to the country’s industrial sector and commerce, by financing trade to the target regions, securing funds from overseas, performing treasury transactions, and extending corporate loans. In addition, the Bank’s subsidiary A&T Finansal Kiralama A.Ş. supports Türkiye’s real economy. As a result of the steady growth built thanks to the banking relations, experience, and knowledge of its founders and personnel with the region for 47 years, A&T Bank has become an important player in this special region with unique characteristics. With its mission of becoming a bridge of value between Türkiye and the region, the Bank will continue to create value for our country by supporting the real economy with know-how, expertise and effective financing, as it was in the past. A&T Bank supports the real economy with know-how, expertise, and effective financing, and continues to create value for our country. A&T Bank was founded in 1977 in accordance with the agreement between Libya and Türkiye regarding the establishment of a joint bank, which was signed in Tripoli, Libya on August 11, 1975, to foster trade between the two countries. The Bank is 62.37%Libyan-owned, 36.01% Turkish-owned, and 1.62% Kuwaiti-owned. Libyan Foreign Bank, a wholly owned subsidiary of the Central Bank of Libya, represents the entirety of Libyan capital in A&T Bank. Türkiye İş Bankası A.Ş. and T.C. Ziraat Bankası A.Ş. hold 20.58% and 15.43% of the Bank’s paid-in capital, respectively. Kuwait Investment Company holds a share of 1.62%. A&T Bank, which is headquartered in Istanbul, operates with a total of four branches in Istanbul (Main and Kozyatağı), Ankara, and Gaziantep. As of the end-2024, A&T Bank has 242 employees. A&T Bank was founded in 1977 as a joint venture bank. 1977 year of establishment As of the end-2024, A&T Bank has 242 employees. 242 employees
Part One: General Information 13
A&T Bank Annual Report 2024 14 ANNUAL REPORT COMPLIANCE OPINION CONVENIENCE TRANSLATION INTO ENGLISH OF INDEPENDENT AUDITOR’S REPORT ON THE BOARD OF DIRECTORS’ ANNUAL REPORT ORIGINALLY ISSUED IN TURKISH To the General Assembly of Arap Türk Bankası A.Ş. 1. Opinion We have audited the annual report of Arap Türk Bankası A.Ş. (the “Bank”) for the 1 January 2024-31 December 2024 period. In our opinion, the financial information and the analysis made by the Board of Directors by using the information included in the audited financial statements regarding the Bank’s position in the Board of Directors’ Annual Report are consistent and presented fairly, in all material respects, with the audited full set financial statements and with the information obtained in the course of independent audit. 2. Basis for Opinion Our independent audit was conducted in accordance with the Independent Standards on Auditing that are part of the Turkish Standards on Auditing (the “TSA”) issued by the Public Oversight Accounting and Auditing Standards Authority (“POA”) and the scope of “Regulation on Independent Audit” published on the Official Gazette No.29314 dated 2 April 2015. Our responsibilities under those standards are further described in the Auditor’s Responsibilities in the Audit of the Board of Directors’ Annual Report section of our report. We hereby declare that we are independent of the Bank in accordance with the Ethical Rules for Independent Auditors (including International Independence Standards) (the “Ethical Rules”) and the ethical requirements regarding independent audit in regulations issued by POA that are relevant to our audit of the financial statements. We have also fulfilled our other ethical responsibilities in accordance with the Ethical Rules and regulations. We believe that the audit evidence we have obtained during the independent audit provides a sufficient and appropriate basis for our opinion. 3. Our Audit Opinion on the Full Set Financial Statements We expressed an unqualified opinion in the auditor’s report dated 17 February 2025 on the full set financial statements for the 1 January 2024- 31 December 2024 period. 4. Board of Director’s Responsibility for the Annual Report The Bank management’s responsibilities related to the annual report according to Articles 514 and 516 of Turkish Commercial Code (“TCC”) No. 6102, Capital Markets Board’s (“CMB”) Communiqué Serial II, No:14.1, “Principles of Financial Reporting in Capital Markets” (the “Communiqué”) and “Regulation on Principles and Procedures Regarding Preparation and Promulgation of Annual Reports by Banks” published in Official Gazette No.26333 dated 1 November 2006 are as follows: a) to prepare the annual report within the first three months following the balance sheet date and present it to the general assembly; b) to prepare the annual report to reflect the Bank’s operations in that year and the financial position in a true, complete, straightforward, fair and proper manner in all respects. In this report financial position is assessed in accordance with the financial statements. Also in the report, developments and possible risks which the Bank may encounter are clearly indicated. The assessments of the Board of Directors in regards to these matters are also included in the report. c) to include the matters below in the annual report: - events of particular importance that occurred in the Bank after the operating year, - the Bank’s research and development activities, - financial benefits such as salaries, bonuses, premiums and allowances, travel, accommodation and representation expenses, benefits in cash and in kind, insurance and similar guarantees paid to members of the Board of Directors and senior management. When preparing the annual report, the Board of Directors considers secondary legislation arrangements enacted by the Banking Regulation and Supervision Agency, Ministry of Trade and other relevant institutions. 5. Independent Auditor’s Responsibility in the Audit of the Annual Report Our aim is to express an opinion and issue a report comprising our opinion within the framework of TCC, Communique and “Regulation on Independent Audit of Banks” published on the Official Gazette No.29314 dated 2 April 2015 provisions regarding whether or not the financial information and the analysis made by the Board of Directors by using the information included in the audited financial statements in the annual report are consistent and presented fairly with the audited financial statements of the Bank and with the information we obtained in the course of independent audit. Our audit was conducted in accordance with the TSA. These standards require that ethical requirements are complied with and that the independent audit is planned and performed in a way to obtain reasonable assurance of whether or not the financial information and the analysis made by the Board of Directors by using the information included in the audited financial statements in the annual report are consistent and presented fairly with the audited financial statements and with the information obtained in the course of audit. PwC Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. Didem Demer Kaya, SMMM Independent Auditor Istanbul, 17 February 2025
Part One: General Information 15 SHAREHOLDING STRUCTURE AND PAID-IN CAPITAL There were no changes in the shareholding structure and paid-in capital of A&T Bank in 2024. Shareholders* Paid-in Capital (TL Thousand) Libyan Foreign Bank 274,426 Türkiye İş Bankası A.Ş. 90,534 T.C. Ziraat Bankası A.Ş. 67,900 Kuwait Investment Company 7,140 440,000 *Emek İnşaat ve İşletme A.Ş. has a 0.0000014% share of the paid-in capital with a value of TL 6.20. AMENDMENTS TO THE ARTICLES OF ASSOCIATION No amendments were made to the Bank’s Articles of Association during the 2024 operating year. Insider Holdings Neither the Chairman nor Members of the Board of Directors, the General Manager, or Assistant General Managers hold any shares in A&T Bank. T.C. Ziraat Bankası A.Ş. 15.43% Libyan Foreign Bank 62.37% Türkiye İş Bankası A.Ş. 20.58% Kuwait Investment Company 1.62%
A&T Bank Annual Report 2024 16 FINANCIAL INDICATORS A&T Bank raised its equity to TL 2.6 billion with an increase of 21.8%. A&T Bank maintained its robust financial performance in 2024 with successful results. 2024 2,607,592 2023 2,140,240 2022 1,832,553 Total Assets (TL Thousand) 30.1% growth 16.297.557 13.312.661 7.828.900 Total Guarantees and Suretyships (TL Thousand) 22.4% growth 2024 2023 2022 Shareholders’ Equity (TL Thousand) 21.8% growth 2024 20.09 2023 18.58 2022 21.45 Capital Adequacy (%) 2024 18,571,894 2023 14,278,244 2022 11,442,014
17 Part One: General Information
A&T Bank Annual Report 2024 18 ASSESSMENT OF FINANCIAL STRENGTH, PROFITABILITY AND DEBT REPAYMENT CAPACITY Assets At the end of 2024, the Bank’s total assets increased by 30.1% on to the previous year and amounted to TL 18,572 million. In the period examined, the major items of the Bank’s placements consist of net financial assets amounting to TL 7,883 million with 42.4% share, and net financial assets as measured by the amortized cost of TL 9,002 million with 48.5% share. In 2024, net financial assets increased by TL 1,502 million, while net financial assets measured at amortized cost increased by TL 2,343 million. Change Assets (TL Thousand) 2023 Share (%) 2024 Share (%) Amount % Financial Assets (Net) 6,380,578 44.7 7,882,708 42.4 1,502,130 23.5 Financial Assets Measured at Amortized Cost (Net) 6,658,308 46.6 9,001,785 48.5 2,343,477 35.2 Equity Investments 153,696 1.1 161,695 0.9 7,999 5.2 Tangible Assets (Net) 946,397 6.6 1,372,893 7.4 426,496 45.1 Intangible Assets (Net) 10,931 0.1 11,312 0.1 381 3.5 Other Assets (Net) 128,334 0.9 141,501 0.8 13,167 10.3 Total Assets 14,278,244 100.0 18,571,894 100.0 4,293,650 30.1 Liabilities At the end of 2024, 14.0% and 86.0% of the Bank’s total liabilities comprise from shareholders’ equity and external resources, respectively. Deposits (TL 10,506 million) and funds borrowed (TL 4,783 million) comprise the majority of external resources. As of year-end 2024, deposits increased by TL 3,591 million on the previous period, while shareholders’ equity increased by TL 467 million and reached TL 2,608 million. Change Liabilities (TL Thousand) 2023 Share (%) 2024 Share (%) Amount % Deposits 6,914,946 48.4 10,505,568 56.6 3,590,622 51.9 Funds Borrowed 4,808,759 33.7 4,782,940 25.8 -25,819 -0.5 Lease Liabilities (Net) 9,942 0.1 4,949 0.0 -4,993 -50.2 Provisions 194,315 1.4 195,773 1.1 1,458 0.8 Current Tax Liability 19,138 0.1 63,568 0.3 44,430 232.2 Deferred Tax Liability 77,840 0.5 90,715 0.5 12,875 16.5 Shareholders’ Equity 2,140,240 15.0 2,607,592 14.0 467,352 21.8 Other Liabilities 113,064 0.8 320,789 1.7 207,725 183.7 Total Liabilities 14,278,244 100.0 18,571,894 100.0 4,293,650 30.1
Part One: General Information 19 Off-Balance Sheet Items As of year-end 2024, the Bank’s total off-balance sheet liabilities increased by 22.4% compared to the end of the previous year and reached TL 16,298 million. Off-balance sheet liabilities consist almost entirely of guarantees and warranties. The balance of letters of guarantee, which is the largest off-balance sheet item, increased by 13.3% to TL 11,426 million in the period examined. Change Off-Balance Sheet Liabilities (TL Thousand) 2023 Share (%) 2024 Share (%) Amount % Guarantees and Warranties 13,312,661 100.0 16,297,557 100.0 2,984,896 22.4 Commitments 594 0.0 908 0.0 314 52.9 Total Off-Balance Sheet Liabilities 13,313,255 100.0 16,298,465 100.0 2,985,210 22.4 Profitability In 2024 the Bank’s net interest income increased by 43.4% to TL 813.9 million, and net fees and commissions income went up by 70.9% to TL 238.2 million. Net operating profit increased by 121.1% to TL 229.8 million while the Bank reported a net term profit of TL 182.2 million in the 2024 operating year. At end-2024, the Bank reported return on assets of 1.11% and return on equity of 8.47%. A&T Bank’s capital adequacy standard ratio of 20.09% is above the minimum rate set out in the relevant legislation by virtue of the Bank’s strong capital structure, ability to tap external sources of funding, and effective risk management implementation. The Bank has the capacity to repay its debts with its liquidity. Change Income Statement (TL Thousand) 2023 2024 Amount % Interest Income 852,339 1,172,334 319,995 37.5 Interest Expense (-) 284,835 358,401 73,566 25.8 Net Interest Income 567,504 813,933 246,429 43.4 Net Fees and Commissions Income 139,362 238,226 98,864 70.9 Dividend Income 13,594 8,204 -5,390 -39.6 Net Trading Gain/Loss (+/-) 7,426 48,798 41,372 557.1 Other Operating Income 22,872 32,316 9,444 41.3 Gross Operating Income 750,758 1,141,477 390,719 52.0 Expected Credit Loss (-) 61,859 17,548 -44,311 -71.6 Other Provision Expenses (-) 28,882 22,493 -6,389 -22.1 Personnel Expenses (-) 364,448 595,014 230,566 63.3 Other Operating Expenses (-) 191,647 276,652 85,005 44.4 Net Operating Income/Loss 103,922 229,770 125,848 121.1 Tax Provision (-) -52,735 47,582 100,317 - Net Profit for the Period 156,657 182,188 25,531 16.3
A&T Bank Annual Report 2024 20 SUMMARY FINANCIAL HIGHLIGHTS FOR THE PAST FIVE YEARS RATINGS OF THE BANK The international credit rating agency Fitch Ratings revised the Bank’s credit ratings as of September 17, 2024, as follows: FC Long Term FC B Short Term FC B TL Long Term TL B Short Term TL B Viability Rating b National Long-Term National Note BBB(tur) Outlook Long Term FC Positive Long Term TL Stable Long-Term National Note Positive TL Thousand 2020 2021 2022 2023 2024 Total Assets 5,576,326 9,706,492 11,442,014 14,278,244 18,571,894 Marketable Securities Portfolio 1,945,144 3,465,268 4,565,176 5,494,275 4,095,619 Loans 1,724,581 2,661,837 3,404,852 3,290,502 5,865,632 Deposits 2,854,698 3,944,658 5,519,004 6,914,946 10,505,568 Funds Borrowed and Interbank Money Market 1,457,806 4,254,364 3,798,200 4,808,759 4,782,940 Shareholders’ Equity 1,152,814 1,334,796 1,832,553 2,140,240 2,607,592 Net Term Profit 96,575 160,336 213,492 156,657 182,188
Part One: General Information 21 RESEARCH AND DEVELOPMENT IMPLEMENTATIONS FOR NEW SERVICES AND ACTIVITIES In 2024 A&T Bank continued to take advantage of the opportunities presented by digital transformation in an attempt to offer the most suitable financial solutions to its customers’ banking needs and to render the greatest customer experience while providing these solutions. Within this scope during the period, customers were enabled to increase their transaction limits in digital channels for one time and 61.1 enter the SMS code sent to them while using the A&T Bank mobile application with one click into the passcode field. Campaign management screens were developed for digital channels. Integration with the new operator NetGSM was successfully completed. Thanks to improvements in the SMS infrastructure and effective collaboration with operators and service providers, foreign customers can now be reached more quickly and efficiently. A&T Bank completed an important digital transformation by integrating into Open Banking services. As a result, customers are now able to view their A&T Bank accounts and initiate payment orders on other bank platforms easily. Further, the A&T Bank mobile application’s technical infrastructure was upgraded in accordance with the Information Systems Regulation. Transactional push notifications in the A&T Bank mobile application were enhanced to include transaction details. Additionally, customers began to be able to perform all banking transactions easily through Internet Banking even without a smart phone. A&T Bank continued to make investments into continuously upgrading and strengthening its technology infrastructure without interruption in 2024. Many projects were completed successfully including the upgrade of the Main Banking System to the latest version, renewal of backup and security systems, improvements to the data centers, and upgrading of business applications. These efforts increase the Bank’s operational efficiency while allowing for the provision of more secure and uninterrupted services for customers. In addition, initiatives to transition to artificial intelligence-based security applications stand out as important steps in A&T Bank’s digital transformation journey. On the Treasury transactions front, memberships and integrations were established that will allow the Bank to trade in liquid financial markets.
A&T Bank Annual Report 2024 22
Part One: General Information 23 VISION, MISSION AND VALUES Our Vision Our Mission Our Values To be the bank that is preferred most and does provide the best service in banking transactions between Türkiye and Africa & Middle East countries by ensuring sustainable and profitable growth in the domestic market. To be a bank that • always keeps internal and external customer satisfaction at the highest level thanks to the reliable and high-quality service, • close to customers and easy to work with, • operates by taking ethical values and social responsibility awareness into consideration, • open to innovation and improvements, • takes sustainable growth into basis without compromising effective risk management and, • distinctly and continuously increase the value it adds to its customers, employees, shareholders and the economy. Customer Oriented Our priority in all of our operations and efforts is the satisfaction of our customers. For this purpose, we always offer honest, respectful, solution-oriented and cheerful service. Satisfaction of Employees We value our employees and support their personal and professional development. We place emphasis on delegation and encourage our staff to take initiative. We believe that a fair performance management system is essential to increase efficiency. Openness to Change We always question the way we do business with our customers and business partners and carry on efforts to make our business more efficient and more dynamic. Considering our clients’ expectations and necessities, we invest in technology and strive for increasing our service quality. Reliability We establish confidence and loyalty among our customers, colleagues and business partners thanks to our experience, expertise and knowledge in banking services as well as our commitment to corporate values; whereas we keep our promises timely and completely without compromising prudence. Transparency As being A&T Bank employees, we clearly and in a timely manner share the required information with the related third parties on the basis of transparency principles and we ensure the availability of information. Meanwhile, we encourage all of our staff to share their thoughts in a constructive and open manner in accordance with accepted banking practices. Team Spirit We place emphasis on team spirit and believe that success can be achieved through cooperation, mutual trust and respect.
A&T Bank Annual Report 2024 24 MILESTONES A&T Bank’s effectively conducted initiatives in 2024 resulted in important gains in line with its strategy. 1975 The agreement to establish a joint bank between Libya and Türkiye was signed in Tripoli, Libya. 1977 Arab-Turkish Bank was founded within the framework of the 1975 agreement. 1980’ler A&T Bank became one of the first banks in Türkiye to perform international money-market transactions and foreign-exchange operations. It was also one of the few banks in the country to finance export transactions to North Africa and Middle East countries. 1997 The Bank’s subsidiary A&T Finansal Kiralama A.Ş. was established to carry out leasing operations. 2000-2005 The Turkish economy faced the most destructive twin financial crises of its history at the beginning of the 2000s. The number of banks in Türkiye decreased from 79 to 48 in this period. Thanks to its strong capital structure, effective management and the full support of its main shareholder, A&T Bank was not affected by this severe financial turmoil. In addition, by using its ability to access external sources and injecting them into the financial system, the Bank continued to fulfill its duty of supporting the economy, thereby successfully emerging from this very difficult period, while extending its sustainable growth trajectory. 2008 The Bank unveiled a new strategic plan to reposition itself in the Turkish banking sector. The Bank’s paidin capital increased 485.4%, from TL 41 million to TL 240 million. 2009 The Bank was restructured and reinvigorated, with new branches opening in Kayseri, Konya and Gaziantep in accordance with its strategy of leveraging and promoting closer ties between Turkish companies and their counterparts in the MENA Region. The new corporate name and rebranded identity were communicated to the public via a nationwide launch campaign. 2012 The Bank opened its seventh branch in Güneşli, Istanbul. Substantial progress was achieved in line with the target of sustainable and healthy growth. The Bank capped the year with a return on equity ratio of 16.58%, exceeding the sector average rate of 15.64%. 2014 A&T Bank’s Internet Branch became operational. At a time when the sector’s return on equity dropped to 12.23%, A&T Bank’s return on equity stood at 15.28%. 2019 A&T Bank maintained asset quality while implementing effective liquidity management in 2019. A&T Bank’s shareholders’ equity topped TL 1 billion while net profit reached a record TL 166.4 million during the year. The Bank also achieved a historic success story with a 19.16% return on equity, which is significantly higher than the sector average of 11.65%. 2020 In 2020, the fight against the Covid-19 pandemic was the top agenda item globally. A&T Bank took immediate measures to ensure the health and wellbeing of its customers and personnel as well as the continuity of its business processes and services. Thanks to its quick action, A&T Bank maintained all its operations without any interruption. Work on the Mobile Banking application was completed during the year. Despite the unprecedented market conditions and increased risks, A&T Bank closed the fiscal year 2020 with total assets of TL 5.6 billion and a net profit of TL 96.6 million. A&T Bank developed innovative and sustainable solutions in all of its business lines and increased the value added it creates for its customers.
Part One: General Information 25 2021 The global economy in 2021 was dominated by pandemic-driven economic conditions globally, while fluctuations in financial markets were in the headlines in Türkiye. In this environment, A&T Bank continued to use the opportunities brought about by digitalization in enhancing operational efficiency and service efficacy. Launching the Mobile Banking app in early 2021, the Bank rolled out the Electronic Letter of Guarantee project in the second quarter of the year. In addition, the Banking Regulation and Supervision Agency expanded the Bank’s operating license to allow the provision of “debit card” services in the last quarter of the year. From a financial performance perspective, maintaining its asset quality and successfully continuing its effective risk and liquidity management in 2021, the Bank finished the year with TL 160.3 million in net term profit and 13.94% return on equity. 2022 One of the most important agenda items of A&T Bank’s 2022 business plan was the debit card project, which will enable our retail customers to perform their financial transactions from every corner of the world, and is planned to go live in early 2023. Despite all challenging conditions and increasing risks, the Bank maintained asset quality while implementing effective risk and liquidity management in 2022, and finished the year with an asset size of TL 11.4 billion and a net term profit of TL 213.5 million. 2023 While maintaining the focus of its banking operations in the North Africa market, A&T Bank continued to use its resources efficiently and improve its operational efficiency. The Bank completed the debit card initiative, one of its technology-oriented transformation projects, and entered the world of card payment systems. A&T Bank closed out 2023 with TL 14.3 billion assets and TL 156.7 million net profit for the period in a year where, from a financial performance perspective, asset quality was maintained, and effective risk and liquidity management was executed successfully. 2024 A&T Bank’s effectively conducted initiatives in the foreign trade segment in its target markets in 2024 resulted in important gains in line with its strategy. Continuing to integrate the advantages offered by digitalization into its operations, the Bank developed innovative and sustainable solutions in foreign trade as well as in all of its business lines and increased the value added it creates for its customers. Carrying out effective risk and liquidity management in 2024, A&T Bank ended the year with TL 18.6 billion in assets and TL 182.2 million net profit.
Creating value for our community
Yasin ÖZTÜRK Chairman of the Board of Directors A&T Bank’s equity size is TL 2.6 billion. TL 2.6 billion
A&T Bank Annual Report 2024 28 MESSAGE FROM THE CHAIRMAN It is a great source of pride and satisfaction to us that we raised the number of countries in which we provide our services to 32. Esteemed Stakeholders, We did not experience economic uncertainty The humanitarian crises, particularly in the Middle East but also in many other regions of the world, as well as rising geopolitical risks, had a decisive effect on the global economy in this past year. Geopolitical tensions, inflationary pressures, and monetary policy actions by the central banks were among the primary elements shaping the global growth dynamics. The U.S. Central Bank (Fed) and the European Central Bank (ECB) gradually terminated their respective monetary tightening policies, adopted a more balanced approach toward rate cuts, and contributed to the gradual easing of global inflationary pressures. This development prompted the OECD to slightly raise its global growth projection for 2024 from 3.1% to 3.2% in 2024 and solidified positive expectations for stable economic recovery. The Turkish banking industry maintained its sustainable and profitable growth in 2024 and continued to be the driving engine of the economy. The sector remained resilient in the face of a challenging global backdrop owing to its robust asset quality, effective liquidity management, and its ability to adapt to the changing market conditions. Developments in the regulatory framework and the steps in the financial risk management realm made important contributions to sustaining the resilience of the banking system and to the strengthening of economic stability. The banking sector’s total loans grew 37.5% on an annualized basis and reached TL 16,052 billion in 2024. In the same period, total deposits increased 27.3% to TL 18,903 billion. The sector’s total assets reached TL 32,657 billion with a 38.7% increase. Our banking industry continues to contribute to the maintenance of financial stability with its capital structure at the international level and rapid adaptation to the advances in technology. A&T Bank closed 2024 with successful financial results A&T Bank, a respected participant in the Turkish banking industry, closed 2024 with successful financial results. Thanks to its effective strategic management and customer-focused service approach, our Bank increased its total assets by 30.1% on the previous year to TL 18.6 billion. Our shareholders’ equity grew 21.8% to reach TL 2.6 billion. The Turkish banking industry maintained its sustainable and profitable growth in 2024 and continued to be the driving engine of the economy. On the flipside, global growth dynamics continued to be affected by the ongoing trade and technology tensions between the U.S. and China while the deceleration trend in China’s economy caused fluctuations in capital flows to emerging economies. In addition, volatility in commodity prices and uncertainties associated with global investment flows continue to be a major risk factor for financial markets. Türkiye’s economy continued to grow steadily The tight monetary and fiscal policies implemented in Türkiye’s economy in 2024 represent resolute steps for reinforcing macroeconomic stability. The policies of the CBRT during the process of fighting inflation increased predictability in the financial markets while contributing to the reinstatement of international investor confidence. Türkiye’s economy grew 3.2% in the first nine months of the year and ranked among the five top performing economies in the G20. The headline inflation rate declined to 44.4% at year-end thanks to the tight monetary policy which was pursued as part of the anti-inflationary program while the sharp contraction in the current account deficit demonstrated the successful progression of the macroeconomic balancing process.
Part One: General Information 29 This successful performance was also reflected in our Bank’s profitability, and we reported TL 182 million net profit in 2024. These results affirmed our sound financial structure and commitment to sustainable growth yet again. In light of these developments, our priority goal since the second half of 2024 has been to raise our Bank’s capital through cash capital injection in an attempt to strengthen our capacity to attain our strategic goals. As the number of countries for which we intermediate export transactions increased, so did our business volume. As A&T Bank, which set out with the vision of being the most preferred bank in banking transactions between Türkiye and Africa with the highest service quality, we consider these investments to which we add value within that scope. It is a great source of pride and satisfaction to us that we raised the number of countries in which we provide our services to 32 and 13 of which are Sub-Saharan Africa, where these types of investments have the highest impact on human life. Even though we are in the age of artificial intelligence, digital innovations, and technological innovations, all success is ultimately driven by human intelligence, expertise, and most importantly, effort. The best way for increasing success and ensuring progress continues to be to enhance human value. To this end, as A&T Bank, in 2025 we will maintain our focus on creating value for our colleagues, customers, and communities in addition to our focus on financial success. We aim to increase online training opportunities and provide contemporary and flexible learning solutions to support our colleagues’ professional development and to upgrade their skills for the future. We will continue to develop innovative solutions in the internet and mobile banking segments as part of our digitalization strategies. We will diversify our social responsibility projects in 2025 to reflect our priority for societal benefit. We believe that every investment that spurs economic development also enhances social progress and prosperity. We think that these investments, which conform more and more to the sustainability criteria with each passing day, ensure that future generations will live under better conditions in a better world. In 2025 and beyond, we will continue to strive to sustain our agile and innovative organization, contribute to sustainable development, and create value for all stakeholders. We are grateful to all stakeholders who enable our achievements for their support and confidence in us. A&T Bank will continue to march confidently into the future on the back of the strength of its stakeholders. Respectfully, Yasin ÖZTÜRK Chairman of the Board of Directors The banking sector’s total assets reached TL 32,657 billion with a 38.7% increase. TL 32,657 billion The banking sector’s total loans grew 37.5% on an annualized basis and reached TL 16,052 billion in 2024. TL 16,052 billion
Strengthening our technological infrastructure
Wail J. A. BELGASEM General Manager A&T Bank’s net profit reached TL 182.2 million. TL 182.2 million
A&T Bank Annual Report 2024 32 MESSAGE FROM THE GENERAL MANAGER We rolled out the “digital slip” application which allows A&T Bank debit card holders to view the details of their POS transactions on our digital channels. 2024: Global Transformation The geopolitical crises and trade wars continued to weigh on economic expectations while persistent growth in the developed economies and the initiation of a rate-cutting cycle by the central banks served as a balancing factor for the markets. The European Central Bank (ECB) and the U.S. Central Bank (Fed) began to lower interest rates after a long period of monetary tightening. This is an indication that uncertainty is waning in financial markets. The gradual normalization in global financial conditions has been a supportive factor for capital inflows to developing countries. The need for structural reforms and the slowing economic activity in China’s economy led to volatility in global commodity prices while technological advances centered on digitalization and sustainability continued to play a decisive role in the transformation of the global economy. From the financial performance perspective, banks increased their capabilities to secure long-term resources from international markets and strengthened their presence in capital markets during this period of rising interest rates and fighting against inflation. The Turkish banking industry solidified its strength in 2024 thanks to its adaptation to the current economic uncertainties and the regulations aimed at attracting international capital inflows. A&T Bank: Accomplishments and Goals in 2024 At A&T Bank, we are proud to have successfully attained our 2024 goals in line with our digitalization and customer satisfaction focused transformation strategies. We took important steps toward shaping the future, improving, changing, and transforming by way of shared wisdom and cooperation in the past year. We consolidated our card payment systems and digital channels operations under the Product and Digital Banking Department and maintained our progress in these areas throughout the year. We integrated with related services as part of the Open Banking Project, thereby enabling our customers to view their A&T Bank accounts and make payments on other bank platforms. We rolled out the “digital slip” application which allows A&T Bank debit card holders to view the details of their POS transactions on our digital channels. We accelerated and strengthened our communication with our clients, particularly in Libya, as a result of the improvements in the SMS infrastructure. At A&T Bank, we are proud to have successfully attained our 2024 goals in line with our digitalization and customer satisfaction focused transformation strategies. Türkiye’s Economy: Rebalancing and Sustainable Growth Türkiye’s economy delivered balanced growth in 2024 despite global uncertainties. The IMF projects that Türkiye will grow 3% as inflation declined substantially from its peak levels due in part to monetary tightening policies. The rebalancing process in domestic demand continued as the contribution of exports and foreign demand to growth increased. The current account deficit shrank substantially while risks stemming from balance of payments declined significantly owing mostly to falling energy imports and rising tourism income. Within this scope, rising foreign fund inflows, reserve accumulation, exit from the grey list, and upgrades of Türkiye’s credit ratings by international rating agencies were among the important developments which supported Türkiye’s long-term economic stability. Banking Industry: Transformation and Resilience The Turkish banking industry maintained its robust balance sheet structure and continued to be the linchpin of financial stability in 2024. The banking sector’s assets rose to more than TL 32.7 trillion at year-end 2024 with a significant increase compared to 2023. Deposits reached TL 18.9 trillion with a 27.3% increase as confidence in the Turkish lira increased. Further, the stabilization in the loans/deposits ratios and the low non-performing loans ratio (1.8%) supported the sector’s healthy structure.
Part One: General Information 33 Technology Infrastructure Reinforcements and Investments A&T Bank deployed investments to strengthen its technology infrastructure throughout 2024. We increased our operational efficiency and further enhanced the continuity of our services through such projects as upgrading the Main Banking System to the most recent version, rolling out artificial intelligence-based security applications, and modernization of data centers. Efforts to Improve Customer Experience We took many important steps to improve customer experience in 2024. We conducted joint campaigns with Mastercard to increase the number of debit card users. Reorganizing our physical branch network, we moved the operations of the Kayseri and Konya branches to Ankara, and the operations of the Güneşli, Istanbul branch to our Central Branch. In line with our regional banking approach, our branch network in three provinces continued to address the needs of an expansive and economically active region. We had a successful year and made substantial progress in accordance with our corporate goals in 2024. Our total assets continued to grow. Our bank’s total assets increased 30.1% compared to the previous year and reached TL 18.6 billion in 2024. Our capital adequacy ratio remained above the banking industry average and reached 20.09%. Our dedicated efforts during the year were reflected in improvements in all results. We reported TL 182.2 million net profit and TL 2.6 billion shareholders’ equity. The increase in the number of countries for which we intermediate export transactions resulted in a growing business volume, as our foreign trade volume reached USD 811 million. In addition to these developments and in light of our strategic goals, we focused on raising our Bank’s capital through cash capital injection in the second half of 2024 in an attempt to strengthen and solidify our capacity to attain our goals. 2025: Continuous Improvement and Customer Satisfaction As has always been the case, our goals for 2025 will be continuous improvement and customer satisfaction. We will strive to meet the financial needs of our corporate customers, particularly those that conduct business with our target markets, more effectively and quickly, and continue to strengthen our foreign trade operations. To this end, we will focus on improving our technological infrastructure and investing in mobile banking and debit card applications. As the A&T Bank Family, we take every step with an awareness of social, environmental, and economic responsibility on the back of experience and know-how approaching half a century. I would like to take this opportunity to thank our customers, employees, and all stakeholders for their support and confidence. Respectfully, Wail J. A. BELGASEM General Manager A&T Bank’s capital adequacy ratio stands at 20.09% 20.09% A&T Bank’s foreign trade volume reached USD 811 million. USD 811 million
A&T Bank Annual Report 2024 34 2024 PERFORMANCE OF THE GLOBAL ECONOMY AND TÜRKİYE’S ECONOMY Moody’s, S&P, and Fitch each upgraded Türkiye’s credit rating by two notches in 2024. In Europe, the European Central Bank (ECB) lowered its deposit interest rate by 25 basis points each in June, in September, in October and in December to 3% due to the contraction in the region’s leading economy in Germany and lackluster economic activity in general. The Euro Zone’s growth rate declined to 0.9% in the third quarter while the inflation rate was 2.4% in 2024. The recession in China deepened despite extensive monetary and fiscal measures, which is increasing uncertainties both in emerging economies and in commodity markets. China’s economy grew 4.6% in the third quarter despite China’s central bank’s 5% growth target. The Brent crude oil price held the USD 74.6 level as a result of rising geopolitical risks in the Middle East, the Russia-Ukraine conflict, the U.S.-China relations, and the developments supporting the slowdown in China’s economy. Despite the recession fears in the global markets at the beginning of the year, growth continued both in developed countries and in emerging economies amid soft landing scenarios. The top headlines in the world economy in 2024 were how much longer monetary tightening would continue in the face of the success in the fight against inflation beyond expectations, easing in financial conditions, geopolitical risks, and the timing of rate cutting cycles. Despite the recession fears in the global markets at the beginning of the year, growth continued both in developed countries and in emerging economies amid soft landing scenarios. In its “World Economic Outlook Report” published in October, the IMF forecasted 3.2% global growth for 2024 and 2025 due to the easing inflationary pressures. The U.S. economy grew 2.8% in the third quarter despite recession fears. The headline inflation rate declined to 2.9% in 2024. Following the decline in the inflation rate and strong labor market data, the U.S. Central Bank (the Fed) lowered its policy rate in September for the first time in four years by 100 basis points to the 4.25%-4.50% band. On the politics front, the re-election of Donald Trump and the protectionist policies he has promised may have repercussions on the global trade volume. In its “World Economic Outlook Report” published in October, the IMF forecasted 3.2% global growth for 2024 and 2025 due to the easing inflationary pressures.
Part One: General Information 35 Türkiye’s economy grew 2.1% in the third quarter of 2024. Exports amounted to USD 261.9 billion in 2024. 2.1% USD 261.9 billion Türkiye’s Economy Türkiye’s economy began to slow down in the third quarter of 2024 due in part to monetary tightening and grew 2.1% on the same quarter of the previous year with the support of foreign demand. The reflection of the negative effect of monetary tightening on financial conditions was apparent on the investments front while the major slowdown in domestic demand led to a sharp decline in imports. Moody’s, S&P, and Fitch each upgraded Türkiye’s credit rating by two notches during calendar year 2024 owing to 3.2% growth in the first nine months of the year and the decline in inflation to 44% at the end of the year; the acceleration in the improvement of current account balances in the first half of the year; tight monetary policy; rising foreign exchange reserves; decline in the Exchange Rate Hedged Deposit Account (KKM) balances; and rising capital and portfolio inflows. The most significant risk on the inflation front is the effect of rising oil prices due to geopolitical developments on the headline inflation rate. On the other hand, the recent decline in capacity utilization rates in the manufacturing industry due to the slowdown in domestic demand is putting downward pressure on core inflation. The CBRT maintained its tight stance on monetary policy throughout the year and did not change the interest rates in the last eight meetings during 2024. However, in line with expectations, it lowered its policy rate from 50% to 47.5% at the last Monetary Policy Committee meeting of the year. The current account has been showing a surplus since June as a result of the combined effect of macroeconomic measures, monetary tightening, and the controlled devaluation of the Turkish lira as well as the strong tourism revenues reaching USD 61.1 billion since the beginning of the year. Even though the current account registered a deficit in the last two months of the year with the slowdown in tourism income, the current account deficit declined from USD 40.5 billion through yearend 2023 to USD 10 billion through year-end 2024. Türkiye’s foreign demand balances were negatively affected by the global rise in interest rates, a strong TL, and geopolitical risks, as a result of which exports grew merely 2.4% in 2024 to USD 261.9 billion. On the other hand, imports declined 5% in the same period to USD 344 billion due to the efforts to cool down the economy and the weakening of domestic demand. Consequently, the foreign trade deficit declined 22.7%, from USD 106.3 billion in 2023 to USD 82.2 billion in 2024. After falling to USD 14 billion in the first quarter of the year, the Central Bank reserves rose to USD 64 billion as of November owing to accelerating international capital inflows, rising export revenues, and the increase in domestic investor demand for Turkish lira denominated assets.
RkJQdWJsaXNoZXIy MzMzNjEw