We Are Carrying Our Well
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ŞEKERBANK T.A.Ş. Emniyet Evleri Mahallesi Eski Büyükdere Caddesi No: 1/1A 34415 Kağıthane-Istanbul +90 212 - 319 70 00 Istanbul Trade Registry Office Trade Registry Number: 536973 ŞEKERBANK WE ARE CARRYING ANNUAL REPORT 2018 OUR WELL- ESTABLISHED HERITAGE INTO THE FUTURE ANNUAL REPORT 2018 This report has been published using recycled paper and environment-friendly technologies. INTRODUCTION 02 Mission, Vision and Values 04 Şekerbank’s Strategy and Position in the Sector 06 Shareholding Structure 07 Agenda of the Ordinary General Assembly 07 Amendments to the Articles of Association and Justifications 07 Forward-Looking Statements 08 Financial Indicators 10 Şekerbank: From Past to Present 16 2018 in Stride 20 Chairman’s Message 22 General Manager’s Message 26 Agricultural Banking 32 SME Banking 34 Corporate and Commercial Banking 35 Cash Management 38 Retail Banking 41 Financial Institutions 44 Sustainable Development Banking 46 Distribution Channels Management 48 Information Technologies ŞEKERBANK 50 Human Resources 52 Subsidiaries of Şekerbank 54 Independent Audit Company 55 Independent Audit Company’s Compliance Opinion MANAGEMENT AND CORPORATE GOVERNANCE PRACTICES 56 Board of Directors ANNUAL REPORT 2018 58 Senior Management 60 Summary Report of the Board of Directors 61 Board and Committees Evaluation Disclosures 62 Succession Planning and Nomination in the Board of Directors 63 General Policy on Insider Trading 64 Board of Directors Activities 65 Declaration of Compliance with Corporate Governance Principles 66 Ethical Rules and Social Responsibility 69 Şekerbank’s Strategic Objectives 70 Structure and Composition of the Board of Directors 73 Information on the Bank’s Transactions with Its Risk Group 74 Profit Distribution Policy 74 Remuneration of the Members of the Board of Directors and Senior Management 75 Corporate Governance Principles Compliance Rating 75 Managers of the Units within Internal Systems 76 Information on Support Services Providers 77 Şekerbank’s Policy against the Laundering of Criminal Proceeds and Terrorism Financing 78 Declaration of Responsibility for the Annual Report 2018 FINANCIAL INFORMATION 79 Disclosures on the Bank’s Financial Position, Profitability and Debt Servicing Capability 80 Expectations for the Future 81 Şekerbank’s Credit Ratings 82 Five-Year Summary Financial Highlights 83 The Audit Committee’s Assessment of the Internal Systems in 2018 85 Risk Management System Strategy 90 Şekerbank T.A.Ş. Head Office Organizational Chart 93 Independent Auditors’ Report on Unconsolidated Financial Statements and Notes to the Financial Statements for January 1 – December 31, 2018 287 Independent Auditors’ Report on Consolidated Financial Statements and Notes to the Financial Statements for January 1 – December 31, 2018 495 Our Branches Proudly produced by FİNAR. www.finarkurumsal.com We provide financial support to shopkeepers, small manufacturers, agricultural households and female entrepreneurs in small towns and villages. We are aware that this type of support has the power not only to transform our customers, but also to transform society. We renew ourselves continuously by connecting the local with the global, taking our 65-year tradition of responsible banking forward into the future and supporting Turkey’s development journey. INTRODUCTION Mission, Vision and Values OUR MISSION With the “Community Banking” understanding from village to city, we are a modern bank that considers both local features and needs, introduces banking services to those who do not use a bank, grows by creating value together with its satisfied customers, employees and partners, and gains its strength from its deep rooted past. OUR VISION To become the “leading bank in financing small enterprises” among Turkey’s top 10 private banks in terms of asset size. ŞEKERBANK ANNUAL REPORT 2018 2 INTRODUCTION OUR VALUES Open Communication Customer Orientation and We respect different perspectives. Acting Locally We are open to any suggestions We take heed of meeting the from our colleagues and customers. expectations and needs of all our Striving to create added value for our customers and ensuring customer Bank and our colleagues, we share all satisfaction by presenting products kinds of ideas and knowledge across and services fast and graciously, the organization in a timely manner by while also taking local features into keeping all communication channels consideration. open. Result Orientation Continuous Development We focus on achieving desired We aspire and strive to acquire new results/goals, proactively solving thoughts, knowledge, and skills with emerging problems without delay, an interrogative viewpoint; we are closely monitoring our operations, willing to work together and assume and fulfilling our duties in a manner to responsibility for the continuous increase profitability and efficiency. development of ourselves and others. Corporate Loyalty We believe in the value of contributing to the performance of our corporation and being loyal to our corporation by working in a respectful, fair, self-sacrificing, sharing, participative manner and with solidarity within our own team and with our other colleagues. ŞEKERBANK ANNUAL REPORT 2018 3 INTRODUCTION Şekerbank’s Strategy and Position in the Sector The Şekerbank brand is strongly equated with trust in local communities and a tradition of strong relationship banking, which is reflected on its solid deposits structure and broad-based customer profile in farmers and SMEs who have been working with Şekerbank for many generations. Şekerbank was established 65 years strategy, Şekerbank aims to further ago, on October 12, 1953, for the In line with increase the financing provided to purpose of supporting the agricultural the mission shopkeepers, farmers, small and industry and sustainable production. medium sized enterprises, while Today, the Bank remains a pioneer in of supporting expanding access to finance widely financing the development of rural production dating throughout broad-based customer areas and fostering inclusive growth. segments. With this approach, the Şekerbank is pursuing its traditional back to the Bank’s Bank plans to maintain its pioneering “Community Banking” mission with a founding, and with role in financing sustainable and “sustainable development banking” inclusive growth in the future. perspective. the power of the valuable branch For 65 years, Şekerbank has Most Şekerbank branches are located conducted its business operations outside Turkey’s three biggest network of which with a responsible banking philosophy. metropolitan areas. With locations that 70% is located The Bank has steadily improved its have not changed for a half century, activities in a way that contributes Şekerbank branches play a key role in Anatolia, to Turkey’s development, in line in reaching out to local residents, Şekerbank with the United Nations Sustainable shopkeepers, the rural population Development Goals in order to achieve and farmers. The Şekerbank brand targets SMEs a better and more sustainable future is strongly equated with trust in and agriculture for all. The Bank is transforming its local communities and a tradition of local experience into an international strong relationship banking, which as its strategic model with a global perspective. is reflected on its solid deposits priorities. structure and broad-based customer Şekerbank focuses on financing that profile in farmers and SMEs who have is both environmentally sustainable been working with Şekerbank for and socially inclusive. Reaching out to many generations. people who have not yet used banking services is a significant component In line with the mission of supporting of the Bank’s mission. To this end, the production dating back to the Bank’s Bank is implementing Turkey’s first very foundation, and with the power of and only microfinancing model, which its valuable branch network of which addresses farmers, shopkeepers and 70% is located in Anatolia, Şekerbank female producers who have limited targets SMEs and agriculture as its access to financing. strategic priorities. Pursuant to this ŞEKERBANK ANNUAL REPORT 2018 4 INTRODUCTION Şekerbank’s responsible banking approach is affirmed by the many “ŞEKERBANK innovations and firsts achieved by the Bank in its core segments. IS PURSUING ITS Şekerbank is one of the first banks in Turkey to take environmental and TRADITIONAL social impacts into consideration during loan decision processes. EKOkredi, which launched in 2009, is COMMUNITY BANKING a first of its kind loan product that can be used to finance energy efficiency projects. With EKOkredi, more than MISSION WITH 100 thousand people have reduced their energy consumption. EKOkredi A SUSTAINABLE has also prevented 6.3 million tons of carbon emissions with TL 1 billion invested in energy efficiency efforts. DEVELOPMENT BANKING To prevent migration from rural areas to urban centers, the Bank PERSPECTIVE.” launched the Family Farming Banking product in 2014 – another first of its kind both in Turkey and worldwide. This product provided TL 7 billion in financing to farmer families over the last four years. These funds were used for unifying individual parcels of agricultural fields, energy efficiency investments, applying modern agricultural methods, and efficiency in agricultural production. In 2018, Şekerbank initiated a digital transformation program to take the Bank’s competitive advantages stemming from its roots forward into the future. Şekerbank is actively developing international applications