U.S.$1,000,000,000 Programme for the Issuance of Loan Participation Notes to Be Issued By, but with Limited Recourse To, Commerzbank International S.A

U.S.$1,000,000,000 Programme for the Issuance of Loan Participation Notes to be issued by, but with limited recourse to, Commerzbank International S.A. for the purpose of financing advances to BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙ Under the Programme for the Issuance of Loan Participation Notes described in this Base Prospectus (the ‘‘Programme’’), Commerzbank International S.A. (the ‘‘Issuer’’), subject to compliance with all relevant laws, regulations and directives, may from time to time issue limited recourse loan participation notes (the ‘‘Notes’’) on the terms set out herein, as supplemented by a final terms (each a ‘‘Final Terms’’). The aggregate principal amount of Notes outstanding will not at any time exceed U.S.$1,000,000,000 (or the equivalent in other currencies). Notes will be issued in Series (as defined in ‘‘Overview of the Programme’’) and the sole purpose of issuing each Series will be to finance either (i) senior advances (each a ‘‘SeniorAdvance’’) to (Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸irketi) (‘‘Bankpozitif’’ or the ‘‘Bank’’) as borrower, on the terms of a master senior loan agreement each, a ‘‘Master Senior Loan Agreement’’ dated 7 February 2008 as amended and supplemented by a senior loan supplement (in respect of each Senior Advance, and each, a ‘‘Senior Loan Supplement’’ ) on each applicable issue date (each an ‘‘Issue Date’’) and the Master Senior Loan Agreement, as supplemented by a Senior Loan Supplement will constitute a senior loan agreement (each, a ‘‘Senior Loan Agreement’’) between the Issuer and the Bank; or (ii) a subordinated advance (each, a ‘‘Subordinated Advance’’, and, together with each Senior Advance, each an ‘‘Advance’’) to the Bank as borrower, on the terms of a master subordinated loan agreement (the ‘‘Master Subordinated Loan Agreement’’, and, together with the Master Senior Loan Agreement, the ‘‘Master Loan Agreements’’ and each a ‘‘Master Loan Agreement’’) dated 7 February 2008 as amended and supplemented by a subordinated loan supplemented (in respect of each Subordinated Advance, and each, a ‘‘Subordinated Loan Supplement’’ and, together with each Senior Loan Supplement, a ‘‘Loan Supplement’’) on each applicable Issue Date and the Master Subordinated Loan Agreement, as supplemented by a Subordinated Loan Supplement will constitute a subordinated loan agreement (each, a ‘‘Subordinated Loan Agreement’’ and together with each Senior Loan Agreement, each a ‘‘Loan Agreement’’) between the Issuer and the Bank. Subject as provided in the Trust Deed (as defined herein) the Issuer will charge, by way of first fixed charge as security for its payment obligations in respect of each Series of Notes and under the Trust Deed, certain of its rights and interests as lender under the relevant Loan Agreement and the relevant Account (as defined in the relevant loan supplement) to Deutsche Trustee Company Limited as trustee (the ‘‘Trustee’’), for itself and for the benefit of the holders of the Notes (the ‘‘Noteholders’’) and will assign certain rights under such Loan Agreement to the Trustee. In each case where amounts of principal, interest and additional amounts (if any) are stated to be payable in respect of a Series of Notes, the obligation of the Issuer to make any such payment constitutes an obligation only to account to the Noteholders, on each date upon which such amounts of principal, interest and additional amounts (if any) are due in respect of such Series of Notes, for an amount equivalent to all principal, interest and additional amounts (if any) actually received by or for the account of the Issuer pursuant to the corresponding Advance made under the Loan Agreement excluding, however, any amounts paid in respect of Reserved Rights (as defined in the Terms and Conditions of the Notes). The Issuer will have no other financial obligations under the relevant Series of Notes and no other assets of the Issuer (including the Issuer’s rights with respect to any Advance relating to any other Series of Notes) will be available to such Noteholders. Noteholders will be deemed to have accepted and agreed that they will be relying solely on the credit and financial standing of the Bank in respect of the financial servicing of the Notes. INVESTING IN THE NOTES INVOLVES A HIGH DEGREE OF RISK. SEE ‘‘RISK FACTORS’’ BEGINNING ON PAGE 14. The Notes and the Advances (collectively, the ‘‘Securities’’) have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the ‘‘Securities Act’’), or the Securities Laws of any state of the United States or other jurisdiction and the Securities may not be offered or sold within the United States (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. The Notes will be offered and sold only in offshore transactions in reliance on Regulation S under the Securities Act. For a description of these and certain further restrictions, see ‘‘Subscription and Sale’’. This document (the ‘‘Base Prospectus’’) constitutes a base prospectus for the purposes of Article 5.4 of Directive 2003/71/EC (the ‘‘Prospectus Directive’’) as implemented in Luxembourg by a law dated 10 July 2005 on the prospectuses for securities (the ‘‘Prospectus Law’’) and the Final Terms shall constitute Final Terms for the purpose of the Base Prospectus. Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the ‘‘CSSF’’), which is the Luxembourg competent authority for the purposes of the Prospectus Directive to approve this document as a Base Prospectus. Application has also been made to the Luxembourg Stock Exchange for the Notes to be admitted to listing on the Official List and trading on the Regulated Market of the Luxembourg Stock Exchange. Such approval relates only to Notes which are to be admitted to trading on a regulated market of the Luxembourg Stock Exchange or, subject to Chapter IV of the Prospectus Directive as implemented in any Member State, such other regulated markets for the purpose of the Markets in Financial Instruments Directive (2004/39/EC) (‘‘MiFID’’) or which are to be offered to the public in any Member State of the European Economic Area. The Luxembourg Stock Exchange is a regulated market for the purposes of MiFiD. References in this Base Prospectus to Notes being listed (and all related references) shall mean that such Notes have been admitted to the Official List and trading on the Luxembourg Stock Exchange’s regulated market. It is anticipated that the Notes will be admitted to trading on or about the issue date thereof, however, there can be no assurance that listing will be granted. No application will be made to list the Notes on any other stock exchange unless required to be made pursuant to the Trust Deed. The Notes will be issued in fully registered form. The Notes will be represented by a global registered note (the ‘‘Global Note’’) registered in the name of BT Globenet Nominees Limited as nominee for and deposited with a common depositary for Euroclear Bank S.A./N.V. (‘‘Euroclear’’) and Clearstream Banking, socie´te´ anonyme (‘‘Clearstream, Luxembourg’’). Definitive notes (‘‘Definitive Notes’’) evidencing holdings of Notes will be available only in certain limited circumstances described under ‘‘Summary of Provisions Relating to the Notes in Global Form’’.

Arrangers and Dealers for the Programme CITI COMMERZBANK CORPORATES & MARKETS The date of this Base Prospectus is 7 February 2008 None of the Issuer or the Bank intends to provide any post-issuance transaction information regarding any Notes or the performance of any Advance. No person has been authorised in connection with the offering of the Notes to give any information or make any representation regarding the Bank, the Issuer, or the Notes other than as contained in this Base Prospectus. Any such representation or information must not be relied upon as having been authorised by the Issuer, the Bank, any of the Dealers or the Arranger. The delivery of this Base Prospectus at any time does not imply that the information contained herein is correct as at any time subsequent to its date. The distribution of this Base Prospectus and the offer or sale of the Notes in certain jurisdictions is restricted by law. Persons into whose possession this Base Prospectus may come are required by the Issuer, the Bank, any of the Dealers and the Arranger to inform themselves about and to observe any such restrictions. Each Dealer represents, warrants and agrees with the Issuer and each other Dealer that (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the ‘‘FSMA’’)) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not apply to the Issuer and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom. Further information with regard to restrictions on offers and sales of the Notes and the distribution of this Base Prospectus is set out under ‘‘Subscription and Sale’’. RESPONSIBILITY STATEMENT

The Bank accepts responsibility for the information contained in this Base Prospectus, except for the Issuer Information (as defined below). To the best of the knowledge and belief of the Bank (having taken all reasonable care to ensure that such is the case), the information contained in this Base Prospectus (except for the Issuer Information) is in accordance with the facts and does not omit anything likely to affect the import of such information. The Issuer accepts responsibility for the information contained in this Base Prospectus only with respect to itself (the ‘‘Issuer Information’’). To the best of the knowledge and belief of the Issuer (having taken all reasonable care to ensure that such is the case), such Issuer Information is in accordance with the facts and does not omit anything likely to affect the import of such information. The Bank has derived substantially all of the information contained in this Base Prospectus concerning the Turkish banking market and its competitors, which may include estimates or approximations, from publicly available information, including press releases and filings made under various securities laws. The Bank accepts responsibility for correctly copying such information from its sources and confirms that such information has been correctly copied from its sources. However, the Bank has relied on the accuracy of such information without carrying out an independent verification. In addition, some of the information contained in this Base Prospectus has been derived from official data published by the Banking Regulation and Supervision Agency (the ‘‘BRSA’’) and the Turkish Bank Association of Turkey and Central Bank of the Republic of Turkey (the ‘‘Turkish Central Bank’’); the Bank does not accept responsibility for the accuracy of such information. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE BY THE DEALERS, THE ARRANGER, THE TRUSTEE OR ANY PERSON OTHER THAN THE BANK AND THE ISSUER AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS BASE PROSPECTUS, AND NONE OF SUCH PERSONS HAS ATTEMPTED TO VERIFY SUCH INFORMATION. NONE OF THE DEALERS, THE ARRANGER, THE TRUSTEE AND NO PERSON OTHER THAN THE BANK AND THE ISSUER ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY OR COMPLETENESS OF THE INFORMATION SET FORTH IN THIS DOCUMENT. EACH PERSON CONTEMPLATING MAKING AN INVESTMENT IN ANY SERIES OF NOTES MUST MAKE ITS OWN INVESTIGATION AND ANALYSIS OF THE BANK’S CREDITWORTHINESS AND ITS OWN DETERMINATION OF THE SUITABILITY OF ANY SUCH INVESTMENT, WITH PARTICULAR REFERENCE TO ITS OWN INVESTMENT OBJECTIVE AND EXPERIENCE, AND ANY OTHER FACTORS WHICH MAY BE RELEVANT TO IT IN CONNECTION WITH SUCH INVESTMENT. IN CONNECTION WITH THE ISSUE OF ANY SERIES OF NOTES, THE DEALER OR DEALERS (IF ANY) NAMED AS THE STABILISING MANAGER(S) (OR PERSONS ACTING ON BEHALF OF ANY STABILISING MANAGER(S)) IN THE APPLICABLE FINAL TERMS MAY OVER ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILISING MANAGER(S) (OR PERSONS ACTING ON BEHALF OF A STABILISING MANAGER) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE FINAL TERMS OF THE OFFER OF THE RELEVANT SERIES OF NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE RELEVANT SERIES OF NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE RELEVANT SERIES OF NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE RELEVANT STABILISING MANAGER(S) (OR PERSONS ACTING ON BEHALF OF ANY STABILISING MANAGER(S)) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.

i FORWARD-LOOKING STATEMENTS

This Base Prospectus includes ‘‘forward-looking statements’’ relating to the Group’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Group’s businesses). When used in this document, the words ‘‘anticipates’’, ‘‘estimates’’, ‘‘expects’’, ‘‘believes’’, ‘‘intends’’, ‘‘plans’’, ‘‘aims’’, ‘‘seeks’’, ‘‘may’’, ‘‘will’’, ‘‘should’’ and any similar expressions generally identify forward-looking statements. These forward- looking statements are contained in ‘‘Risk Factors’’, ‘‘Description of Bankpozitif’’ and other sections of this document. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Group or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group’s present and future business strategies and the environment in which the Group will operate in the future. These assumptions reflect the best judgment of management but involve uncertainties and are subject to certain risks the occurrence of which could cause actual results to differ materially from those predicted in the Group’s forward- looking statements and from past results, performance or achievements. Although Bankpozitif believes that the estimates and the projections reflected in its forward-looking statements are reasonable, if one or more of the risks or uncertainties materialise or occur, including those which Bankpozitif has identified in this Base Prospectus, or if any of Bankpozitif’s underlying assumptions prove to be incomplete or incorrect, the Group’s actual results of operations may vary from those expected, estimated or projected. These forward-looking statements speak only as of the date of this Base Prospectus. Except to the extent required by law, each of the Issuer and Bankpozitif expressly disclaims any obligation or undertaking to disseminate after the date of the Base Prospectus any updates or revisions to any forward-looking statements made in this Base Prospectus whether as a result of new information, future events or otherwise. All subsequent written or oral forward-looking statements attributable to the Issuer and Bankpozitif or persons acting on their behalf, are expressly qualified in their entirety by the cautionary statements contained throughout this Base Prospectus. As a result of these risks, uncertainties and assumptions, a prospective purchaser of the Notes should not place undue reliance on these forward-looking statements. Moreover, no assurance can be given that any of the historical information, data, trends or practices mentioned and described in this Base Prospectus are indicative of future results or events.

ii ENFORCEMENT OF FOREIGN JUDGMENTS

The Bank is a joint stock company established under the Turkish Banking Law (Law No. 5411) and the Turkish Commercial Code (Law No. 6762). Certain of the directors and officers of the Bank reside in Turkey and all or a significant portion of the assets of such persons, and substantially all of the assets of the Bank, are located in Turkey. As a result, it may not be possible for investors to effect service of process upon such persons or entities outside Turkey or to enforce against them in the courts of jurisdictions other than Turkey any judgments obtained in such courts that are predicated upon the laws of such other jurisdictions. In accordance with Article 54 of Turkey’s Act on International Private Law and Procedural Law (Law No. 5718), the courts of Turkey will not enforce any judgment obtained in a court established in a country other than Turkey unless either: (a) there is in effect a treaty between such country and Turkey providing for reciprocal enforcement of court judgments, (b) there is de facto enforcement in such country of judgments rendered by Turkish courts or (c) there is a provision in the law of such country that provides for the enforcement of judgments of Turkish courts. In addition, the courts of Turkey will not enforce any judgment obtained in a court other than Turkey if either: (a) the court rendering the judgment did not have jurisdiction to render such judgment, (b) the defendant was not duly summoned or represented or the defendant’s fundamental procedural rights were not observed, (c) the judgment in question was rendered with respect to a matter within the exclusive jurisdiction of the courts of Turkey, (d) the judgment is clearly against any public policy rules of Turkey, (e) the foreign judgment is not final and binding and with no further recourse for appeal under the laws of the country where the judgment has been rendered, (f) the judgment is not of a civil nature, (g) the judgment is incompatible with a judgment of a court in Turkey between the same parties and relating to the same issues, or in some circumstances, with an earlier foreign judgment which satisfies the same criteria and is enforceable in Turkey or (h) the judgment has not been rendered by a court that considers itself having jurisdiction although is not related to the case in question or the parties. There are also limitations on the enforcement of arbitral awards in Turkey in certain circumstances. Furthermore, under Law No. 5718, in any suit or action against the Bank in Turkish courts, a foreign plaintiff may be required to deposit security for court costs (cautio judicatum solvi) unless the plaintiff is considered to be a national of one of the contracting states of the Convention Relating to Civil Procedure signed at the Hague on March 1, 1954 (ratified by Turkey by law no. 1574) or a national of a state that has signed a bilateral treaty with Turkey that is duly ratified, containing, inter alia, a waiver of the cautio judicatum solvi requirement on a reciprocal basis. In connection with the issuance of Notes, the Bank will designate Law Debenture Corporate Services Limited, with offices at 5th Floor, 100 Wood Street, London EC2V 7EX, United Kingdom as their agent upon whom process may be served in connection with proceedings in England. In connection with the issuance of Notes, the Issuer will designate Commerzbank Aktiengesellschaft, London Branch, with offices at 60 Gracechurch Street, London EC3V 0HR, United Kingdom as their agent upon whom process may be served in connection with proceedings in England.

iii TABLE OF CONTENTS

OVERVIEW OF THE PROGRAMME 1 RISK FACTORS 6 INFORMATION INCORPORATED BY REFERENCE 19 DESCRIPTION OF EACH TRANSACTION UNDER THE PROGRAMME 20 USE OF PROCEEDS 22 EXCHANGE RATES 23 BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙ 24 MANAGEMENT 48 PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION 52 FINANCIAL REVIEW OF BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙ 54 CAPITALISATION 65 SELECTED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION 66 SELECTED FINANCIAL RATIOS OF BANKPOZI˙TI˙F 67 COMMERZBANK INTERNATIONAL S.A. 68 THE MASTER SENIOR LOAN AGREEMENT 70 THE MASTER SUBORDINATED LOAN AGREEMENT 117 TERMS AND CONDITION OF THE NOTES 161 FORM OF FINAL TERMS 182 SUMMARY OF THE PROVISIONS OF THE NOTES WHEN IN GLOBAL FORM 189 TAXATION 191 SUBSCRIPTION AND SALE 196 LISTING AND GENERAL INFORMATION 199

iv OVERVIEW OF THE PROGRAMME

The following overview of key factors of the Programme is qualified in its entirety by the remainder of this Base Prospectus. Words and expression defined in the ‘‘Terms and Conditions of the Notes’’ below shall have the same meanings in this overview of key features of the Programme. This overview constitutes a general description of the Programme for the purposes of Article 22.5(3) of Commission Regulation (EC) 809/2004 implementing the Prospectus Directive. Issuer Commerzbank International S.A.. Borrower Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸irketi Description Programme for the Issuance of Loan Participation Notes. Size Up to U.S.$1,000,000,000 (or the equivalent in other currencies at the date of issue) aggregate principal amount of Notes outstanding (as defined in the Trust Deed) at any one time. Arrangers Commerzbank Corporates & Markets and Citigroup Global Markets Limited. Dealers Commerzbank Corporates & Markets and Citigroup Global Markets Limited. The Bank may from time to time terminate the appointment of any dealer under the Programme or appoint additional dealers either in respect of one or more Series or in respect of the whole Programme. References in this Base Prospectus to ‘‘Permanent Dealers’’ are to the persons listed above as Dealers and to such additional persons that are appointed as dealers in respect of the whole Programme (and whose appointment has not been terminated) and to ‘‘Dealers’’ are to all Permanent Dealers and all persons appointed as dealers in respect of one or more Series. Trustee Deutsche Trustee Company Limited Registrar Deutsche Bank Luxembourg S.A. Principal Paying Agent Deutsche Bank AG, London Branch, unless it is specified in the applicable Final Terms relating to a Series of Notes that another principal paying agent is appointed in respect of that Series. References in this Base Prospectus to ‘‘Principal Paying Agent’’ are to Deutsche Bank AG, London Branch or such other alternative principal paying agent, as the case may be. Luxembourg Listing Agent Deutsche Bank Luxembourg S.A. Luxembourg Paying Agent Deutsche Bank Luxembourg S.A. Risk Factors For a discussion of certain issues that should be considered by prospective purchasers of the Notes, see ‘‘Risk Factors’’. Method of Issue The Notes will be issued on a syndicated or non-syndicated basis. The Notes may be issued in tranches (each a ‘‘Tranche’’) which will have one or more issue dates and to the extent that such Tranches have identical terms (or identical other than in respect of the first payment of interest) such Tranches will be consolidated to form a single series (a ‘‘Series’’) with such existing Tranches of that Series. The Notes of each Series will be interchangeable with all other Notes of that Series. The specific terms of each Series will be set out in final terms which supplement this Base Prospectus (each, a ‘‘Final Terms’’). Status of the Notes The Notes will constitute secured and limited recourse obligations of the Issuer and shall at all times rank pari passu and without preference amongst themselves. Status of each Subordinated Any claims of the Issuer under the provisions of each Subordinated Advance Loan Agreement, excluding the Reserved Rights, will be subordinated upon a Bankruptcy Event (as defined in the Master

1 Subordinated Loan Agreement) and will rank, after the claims of all Senior Creditors (as deﬁned in the Master Subordinated Loan Agreement), in accordance with the Execution and Bankruptcy Law (Law No: 2004), Law No: 5411, Turkish Commercial Code (Law No: 6762) and the Regulation on the Equity of Banks, will rank at least equally with the claims of other unsecured and subordinated creditors of the Bank and will be senior to the claims of holders of (a) the Bank’s share capital (including preference shares) and (b) all other obligations ranking junior to the claims of the Issuer pursuant to applicable law or otherwise (including claims relating to Tier 1 quasi capital (birincil sermaye benzeri borc¸lar) excluding the Reserved Rights), all as more fully described in the Master Subordinated Loan Agreement..

Issue Price of Notes Notes may be issued at their principal amount or at a discount or premium to their principal amount as speciﬁed in the applicable Final Terms. The price and amount of Notes to be issued under the Programme will be determined by the Issuer and the relevant Dealer(s) at the time of issue in accordance with prevailing market conditions.

Form of Notes Notes may only be issued in registered form. Each Series of Notes will initially be in the form of a Global Note. Each Global Note will be deposited on or about the relevant Issue Date with a common depositary for Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and registered in the name of a nominee for such depositary and will only be exchangeable in accordance with its terms for Deﬁnitive Notes. Notes of each Series will be represented by interests in one or more Global Notes.

Clearing Systems Euroclear, Clearstream, Luxembourg and, in relation to any Series, such other clearing system as may be agreed between the Issuer, the Bank, the Principal Paying Agent, the Trustee and the relevant Dealer.

Initial Delivery of Notes On or before the Issue Date for each Series, the Global Note will be deposited with a common depository for Euroclear and Clearstream, Luxembourg. Global Notes may also be deposited with any other clearing system or may be delivered outside any clearing system provided that the method of such delivery has been agreed in advance by the Issuer, the Bank, the Principal Paying Agent, the Trustee and the relevant Dealer(s). Notes that are to be credited to one or more clearing systems on issue will be deposited with a common depositary for such clearing systems.

Currencies Subject to compliance with all relevant laws, regulations and directives, Notes may be issued in any currency agreed between the Issuer, the Bank and the relevant Dealer(s).

Maturities Subject to compliance with all relevant laws, regulations and directives, Notes may have a maturity of between seven days and thirty years.

Speciﬁed Denomination No Notes may be issued under the Programme which have a denomination of less than c50,000 (or its equivalent in another currency at the issue date). Subject thereto, Notes will be in the denomination speciﬁed in the applicable Final Terms.

Interest Notes may be interest-bearing or non-interest bearing. Interest (if any) may accrue at a ﬁxed rate or a ﬂoating rate or other variable rate and the method of calculating interest may vary between the Issue Date and the maturity date of the relevant Series.

2 Redemption The Final Terms will specify the redemption amounts payable. Unless otherwise permitted by then current laws and regulations, Notes which have a maturity of less than one year must: (i) have a minimum redemption value of £100,000 (or its equivalent in other currencies) and be issued only to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonable to expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purposes of their businesses; or (ii) be issued in other circumstances which do not constitute a contravention of section 19 of the Financial Services and Markets Act 2000 (the ‘‘FSMA’’) by the Issuer.

Negative Pledge and Other The Master Senior Loan Agreement contains a negative pledge in Covenants relation to the creation of Security Interests to secure the Relevant Indebtedness of the Bank, as borrower under the Master Senior Loan Agreement, (each as defined in the Master Senior Loan Agreement), subject to certain exceptions, and as set out in the Master Senior Loan Agreement. The Master Senior Loan Agreement also contains covenants restricting mergers and disposals by the Bank, limiting the incurrence of additional indebtedness, prohibiting any substantial change to the Business of the Bank (as defined in the Master Senior Loan Agreement) and to maintain a capital adequacy ratio and Tangible Net Worth (as defined in the Master Senior Loan Agreement) at certain levels specified in the Master Senior Loan Agreement.

Clause 12 (Covenants) of the Master Subordinated Loan Agreement contains covenants restricting mergers and disposals by the Bank, to maintain certain authorisations and a covenant by the Bank as to capital treatment.

Events of Default/Relevant Events/ In the case of the occurrence and continuance of an Event of Bankruptcy Event Default (as defined in the Master Senior Loan Agreement) or a Relevant Event (as defined in the Terms and Conditions of the Notes), the Trustee may, subject as provided in the Trust Deed, (1) declare or require the Issuer to declare all amounts payable under the Senior Loan Agreement by the Bank to be immediately due and payable (in the case of an Event of Default) or (2) enforce the Security Interests (as defined in the Terms and Conditions of the Notes) in favour of itself (in the case of a Relevant Event).

Upon repayment of a Senior Advance following an Event of Default, the Notes will be redeemed or repaid at the principal amount thereof, together with interest accrued to the date ﬁxed for redemption and any additional amounts due, and thereupon shall cease to be outstanding.

Under the terms of each Subordinated Advance, if a Bankruptcy Event (as deﬁned in the Master Subordinated Loan Agreement) has occurred and is continuing (a) the Trustee may, subject as provided in the Trust Deed, declare, or require the Issuer to declare, all amounts payable under such Subordinated Advance by the Bank to be immediately due and payable. Upon repayment of such Subordinated Advance following a Bankruptcy Event, the Notes will be redeemed or repaid at their principal amount, together with interest accrued to the date ﬁxed for redemption and any additional amounts then due (if any), and thereupon shall cease to be outstanding.

3 Early Redemption The Notes relating to a Senior Advance may be redeemed at the option of the Issuer, at any time, upon giving notice to the Noteholders, at the principal amount thereof together with accrued and unpaid interest to the date of redemption and any additional amounts in respect thereof, upon the Issuer receiving notice that the Bank wishes to prepay the Senior Advance in the circumstances set out in the applicable Loan Supplement or for tax reasons or in the event that it becomes unlawful for the Issuer to fund the advance or allow to remain outstanding the Senior Advance under each Senior Loan Agreement as more fully described in Clause 5 of the Master Senior Loan Agreement. See also Condition 7 (Redemption and Purchase)in‘‘Terms and Conditions of the Notes’’. The Notes relating to a Subordinated Advance may be redeemed at the option of the Issuer at any time, upon giving notice to the Noteholders, at the principal amount thereof together with accrued and unpaid interest to the date of redemption and any additional amounts in respect thereof, upon the Issuer receiving notice that the Bank wishes to prepay the Subordinated Advance in the circumstances set out in the applicable Loan Supplement or for tax reasons or in the event that it becomes unlawful for the Issuer to fund the advance or allow to remain outstanding the Subordinated Advance under each Subordinated Loan Agreement as more fully described in Clause 5 of the Master Subordinated Loan Agreement. See also Condition 7 (Redemption and Purchase)in‘‘Terms and Conditions of the Notes’’. If so speciﬁed in the applicable Final Terms for Notes relating to a Senior Advance only, the Noteholders can require the Issuer to redeem the Notes in accordance with the Conditions and such Final Terms. Any Prepayment of a Subordinated Advance requires the prior consent of and approval by the BRSA. Redemption upon a Change of If so speciﬁed in the applicable Final Terms, on the occurrence of Control Event any merger, acquisition, amalgamation, restructuring or reorganisation which results in Bank Hapoalim B.M. ceasing to own or control, whether directly or indirectly at least 50.01 per cent. of the issued share capital of and voting rights in the Borrower, Noteholders relating to a Senior Advance shall have the option to give notice or procure that notice is given for the prepayment of the applicable amount of the Advance. To the extent such amount is actually received by the Issuer from the Bank, each Note held by the relevant Noteholders shall be redeemed. See also Condition 8 (Redemption upon a Change of Control Event)in‘‘Terms and Conditions of the Notes’’. Withholding Tax All payments of principal and interest to be made by the Issuer in respect of the Notes and by the Bank under the Loan Agreement will be made free and clear of all taxes, duties, assessments or governmental charges of Luxembourg or Turkey save as required by law. If any taxes, duties, assessments or governmental charges are payable in either or both of the above jurisdictions, the sum payable by the Issuer will (subject to certain exceptions) be required to be increased to the extent necessary to ensure that the Noteholders receive the net sum which they would have received had no such deduction or withholding been made or required to be made. The respective sum payable by the Bank under the Loan Agreement will be required to be increased to the extent necessary to ensure that the Lender or the Trustee, as the case may be, receives andretains a net sum equivalent to such increased amounts. The sole obligation of the Issuer in this respect will be to pay to the

4 Noteholders sums equivalent to the sums actually received by or for the account of the Issuer from the Borrower. See Condition 10 (Taxation)in‘‘Terms and Conditions of the Notes’’. Further Issues The Issuer may from time to time issue further Tranches of Notes of any Series on identical terms as existing Tranches of Notes of that Series (or identical other than in respect of the first payment of interest) and such further Notes shall be consolidated and form a single Series with such existing Tranches of Notes of that Series. Governing Law The Notes, the Master Senior Loan Agreement, the Master Subordinated Loan Agreement and the Trust Deed will be governed by English Law. Listing and Admission to Trading Application has been made to the CSSF to approve this document as a Base Prospectus. Application has also been made for the Notes to be admitted to listing on the Official List and trading on the Luxembourg Stock Exchange’s Regulated Market. Notes may also be issued on the basis the Notes will not be admitted to listing, trading and/or quotation by any competent authority, stock exchange and/or quotation system. Selling Restrictions The Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States. The offering of the Notes has not been registered with the Turkish Capital Markets Board (‘‘CMB’’) and accordingly the Notes may not be offered to investors in Turkey. The Notes may be sold in other jurisdictions only in compliance with applicable laws and regulations. The offer and sale of the Notes may also be restricted in other jurisdictions. See ‘‘Subscription and Sale’’. Use of Proceeds The net proceeds from each issue of Notes will be applied by the Issuer for the sole purpose of financing each Advance to the Bank. The net proceeds from each Advance will be used by the Bank for general corporate purposes. Limited Recourse Each Series of Notes will be limited recourse secured obligations of the Issuer. Each Series of Notes will constitute the obligation of the Issuer to apply the proceeds from the issue of the Notes solely for financing the relevant Advance and to account to the Noteholders for amounts equivalent to sums of principal, premium, interest and additional amounts (if any) actually received by or for the account of the Issuer pursuant to the relevant Loan Agreement less any amount in respect of Reserved Rights, all as more fully described in ‘‘Terms and Conditions of the Notes’’. Security Each Series of Notes will be secured by a first fixed charge on: (i) all principal, interest and other amounts payable by the Bank to the Issuer under the relevant Loan Agreement and the right to receive all sums payable by the Bank under any claim, award or judgment relating to the relevant Loan Agreement; and (ii) all of the Issuer’s rights, title and interest in and to all sums of money held from time to time in an account specified in the relevant Loan Agreement, together with the debts represented thereby (excluding interest from time to time earned thereon, if any), pursuant to the Trust Deed, in each case, other than certain Reserved Rights and its right to any amounts in respect of such Reserved Rights.

5 RISK FACTORS

Investment in the Notes involves certain risks. Potential investors should read this entire Base Prospectus and in particular should consider all the risks inherent in making such an investment, including the risk factors set forth below, before making a decision to invest. These risk factors, individually or together, could have a material adverse effect on the Bank’s business, operations and ﬁnancial condition which, in turn, could have a material adverse effect on its ability to service its payment obligations under each Loan Agreement and, as a result, the ability of the Issuer to make payments under the relevant Series of Notes. In addition, the value of the relevant Series of Notes could decline due to any of these risks, and prospective investors may lose some or all of their investment. Prospective investors should note that the risks described below are not the only risks the Bank faces. The Bank has described only those risks relating to its operations that it considers being material. In addition, the Bank has described certain general risks applicable to an investment in Turkey and the Turkish banking industry and associated with an investment in the Notes. There may be additional risks that the Bank currently considers not to be material or of which the Bank is not currently aware, and any of these risks could have the effects set forth above. Words and expressions deﬁned in the ‘‘Terms and Conditions of the Notes’’ below or elsewhere in this Base Prospectus have the same meanings in this section.

Risks Related to the Market and Notes Generally There may not be an active trading market for the Notes There can be no assurance that an active trading market for the Notes will develop, or, if one does develop, that it will be maintained. If an active trading market for the Notes does not develop or is not maintained, the market or trading price and liquidity of the Notes may be adversely affected. If the Notes are traded after their initial issuance, they may trade at a discount to their initial offering price, depending upon prevailing interest rates, the market for similar securities, general economic conditions and the ﬁnancial condition of the Issuer and Bankpozitif. Although application has been made for the Notes to be admitted to listing on the Ofﬁcial List and to trading on the Luxembourg Stock Exchange’s Regulated Market, there is no assurance that such application will be accepted or that an active trading market will develop. Accordingly, there is no assurance as to the development or liquidity of any trading market for the Notes.

Market price of the Notes may be volatile The market price of the Notes could be subject to significant fluctuations in response to actual or anticipated variations in the Group’s operating results, adverse business developments, changes to the regulatory environment in which the Group operates, changes in financial estimates by securities analysts and the actual or expected sale of a large number of Notes, as well as other factors, including the trading market for notes issued by or on behalf of the Republic of Turkey as a sovereign borrower. In addition, in recent years the global financial markets have experienced significant price and volume fluctuations which, if repeated in the future, could adversely affect the market price of the Notes without regard to the Group’s results of operations or financial condition.

Financial turmoil in emerging markets could cause the price of the Notes to suffer The market price of the Notes is inﬂuenced by economic and market conditions in Turkey and, to a varying degree, economic and market conditions in emerging markets generally. Financial turmoil in Turkey and emerging markets in the past have adversely affected market prices in the world’s securities markets for companies that operate in developing economies. Even if the Turkish economy remains relatively stable, ﬁnancial turmoil in these countries could materially adversely affect the market price of the Notes.

Notes may not be suitable investments for all investors Each potential investor in the Notes must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should: * have sufﬁcient knowledge and experience to make a meaningful evaluation of the Notes, the merits and risks of investing in the Notes and the information contained in this Base Prospectus or any applicable supplement;

6 * have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular financial situation, an investment in the Notes and the impact such investment will have on its overall investment portfolio; * have sufficient financial resources and liquidity to bear all of the risks of an investment in the Notes, including where the currency for principal and interest payments is different from the potential investor’s currency; * understand thoroughly the terms of the Notes and be familiar with the behaviour of financial markets in which they participate; and * be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic, interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Exchange rate risks and exchange controls The Issuer will pay principal, premium and interest on the Notes in the specified currency. This presents certain risks relating to currency conversions if an investor’s financial activities are denominated principally in a currency or currency unit (the ‘‘Investor’s Currency’’) other than the specified currency. These include the risk that exchange rates may significantly change (including changes due to a devaluation of the specified currency or a revaluation of the Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency may impose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to the specified currency would decrease (1) the Investor’s Currency-equivalent yield on the Notes, (2) the Investor’s Currency-equivalent value of the principal payable on the Notes and (3) the Investor’s Currency- equivalent market value of the Notes. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal.

Credit ratings may not reflect all risks One or more independent credit rating agencies may assign credit ratings to the Notes. The ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Notes. Credit ratings assigned to the Notes do not necessarily mean that they are a suitable investment. A rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. Similar ratings on different types of notes do not necessarily mean the same thing. The ratings do not address the likelihood that the principal on the Notes will be prepaid, paid on an expected final payment date or paid on any particular date before the legal final maturity date of the Notes. The ratings do not address the marketability of the Notes or any market price. Any change in the credit ratings of the Notes or Bankpozitif could adversely affect the price that a subsequent purchaser will be willing to pay for the Notes. The significance of each rating should be analysed independently from any other rating.

Modification, waivers and substitution The conditions of the Notes contain provisions for calling meetings of Noteholders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Noteholders including Noteholders who did not attend and vote at the relevant meeting and Noteholders who voted in a manner contrary to the majority. The conditions of the Notes also provide that the Trustee may, without the consent of Noteholders, agree to (i) any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of Notes or (ii) determine without the consent of the Noteholders that any event which would or might otherwise give rise to a right of acceleration under the Loan Agreement shall not be treated as such or (iii) the substitution of another company as principal debtor under any Notes in place of the Issuer, in the circumstances described in Condition 12.

Restrictions on transfer The Notes have not been and are not expected to be registered: (a) under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’), or any applicable state’s or other jurisdiction’s (including Turkey’s or Luxembourg’s) securities laws or (b) with the US Securities and Exchange Commission or any other applicable state’s or other jurisdiction’s (including Turkey’s or

7 Luxembourg’s) regulatory authorities. The offering of the Notes (and beneficial interests therein) will be made pursuant to exemptions from the registration provisions of the Securities Act and from other securities laws. Accordingly, reoffers, resales, pledges and other transfers of the Notes (and beneficial interests therein) are subject to certain transfer restrictions. Each investor is advised to consult legal counsel in connection with any such reoffer, resale, pledge or other transfer. Because transfers of interests in the Notes can be effected only through book entries at Clearstream, Luxembourg and Euroclear for the accounts of their respective participants, the liquidity of any secondary market for Global Notes may be reduced to the extent that some investors are unwilling to hold Notes in book-entry form in the name of a participant in Clearstream, Luxembourg or Euroclear, as applicable. The ability to pledge interests in the Notes may be limited due to the lack of a physical note. In the event of the insolvency of Clearstream, Luxembourg, Euroclear or any of their respective participants in whose name interests in the Notes are recorded, the ability of beneficial owners to obtain timely or ultimate payment of principal and interest on a Notes may be impaired.

Notes where denominations involve integral multiples: definitive Notes In relation to any issue of Notes which have denominations consisting of a minimum Specified Denomination (as described in the applicable Final Terms) plus one or more higher integral multiples of another smaller amount, it is possible that such Notes may be traded in amounts that are not integral multiples of such minimum Specified Denomination. In such a case a holder who, as a result of trading such amounts, holds an amount which is less than the minimum Specified Denomination in his account with the relevant clearing system at the relevant time may not receive a definitive Note in respect of such holding (should definitive Notes be printed) and would need to purchase a principal amount of Notes such that its holding amounts to a Specified Denomination. If definitive Notes are issued, holders should be aware that definitive Notes which have a denomination that is not an integral multiple of the minimum Specified Denomination may be illiquid and difficult to trade.

EU Savings Directive Under EC Council Directive 2003/48/EC on the taxation of savings income, Member States are required to provide to the tax authorities of another Member State details of payments of interest (or similar income) paid by a paying agent within its jurisdiction to an individual resident or a ‘‘residual entity’’ established in that other Member State. However, for a transitional period, Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments (the ending of such transitional period being dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries). A number of non-EU countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland). If, following implementation of this directive, a payment were to be made or collected through a member state which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to the Notes as a result of the imposition of such withholding tax. If a withholding tax is imposed on payment made by a Paying Agent following implementation of this directive, the Issuer will be required to maintain a Paying Agent in a member state that will not be obliged to withhold or deduct tax pursuant to the directive.

Risk Related to the Structure of a particular issue of the Notes A range of Notes may be issued under the Programme. A number of these Notes may have features which contain particular risks for potential investors. Set out below is a description of the most common such features:

Fixed/Floating Rate Notes Fixed/Floating Rate Notes may bear interest at a rate that converts from a fixed rate to a floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a conversion, this will affect the secondary market and the market value of the Notes since the Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing. If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Fixed/Floating Rate Notes may be less favourable than then prevailing spreads on comparable

8 Floating Rate Notes tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates on other Notes. If the Issuer converts from a floating rate to a fixed rate in such circumstances, the fixed rate may be lower than then prevailing rates on its Notes.

Notes issued at a substantial discount or premium The market values of securities issued at a substantial discount or premium from their principal amount tend to ﬂuctuate more in relation to general changes in interest rates than do prices for conventional interest-bearing securities. Generally, the longer the remaining term of the securities, the greater the price volatility as compared to conventional interest-bearing securities with comparable maturities.

Notes subject to optional redemption by the Issuer An optional redemption feature of Notes is likely to limit their market value. During any period when the Issuer may elect to redeem Notes, the market value of those Notes generally will not rise substantially above the price at which they can be redeemed. This also may be true prior to any redemption period. The Issuer may be expected to redeem Notes when its cost of borrowing is lower than the interest rate on the Notes. At those times, an investor generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the interest rate on the Notes being redeemed and may only be able to do so at a signiﬁcantly lower rate. Potential investors should consider reinvestment risk in light of other investments available at that time.

The Issuer’s obligations under Subordinated Notes are subordinated The Issuer’s obligations under Subordinated Notes will be subordinated and will rank junior in priority of payment to its obligations under Notes which are not subordinated. Although Subordinated Notes may pay a higher rate of interest than comparable Notes which are not subordinated, there is a real risk that an investor in Subordinated Notes will lose all or some of his investment should the Issuer become insolvent.

The Noteholders have no direct recourse against Bankpozitif Save as otherwise expressly provided in the Conditions and in the Trust Deed, no proprietary or other direct interest in the Issuer’s rights under or in respect of the Loan Agreement or the Loan exists for the beneﬁt of the Noteholders. Subject to the terms of the Trust Deed, no Noteholder will have any entitlement to enforce any of the provisions in the Loan Agreement except through action by the Trustee under the security granted to the Trustee by the Issuer. Neither the Issuer nor the Trustee shall be required to take proceedings to enforce payment under the Loan Agreement unless it has been indemniﬁed and/or secured by the Noteholders to its satisfaction against all liabilities, claims and demands to which it may thereby become liable and all costs, charges and expenses which may be incurred by it in connection therewith.

Unsecured obligations of Bankpozitif The obligations of Bankpozitif under the Master Senior Loan Agreement will be unsecured and unsubordinated obligations of Bankpozitif, and rank and will at all times rank pari passu with all other unsecured and unsubordinated obligations of Bankpozitif to the extent permitted by applicable laws relating to creditors, rights in the event of insolvency. (See also ‘‘Risk Factors – Risks Related to the Structure of the Issue of Notes – The claims of Noteholders may be limited in the event of the Issuer’s or Bankpozitif’s insolvency or liquidation’’).

The claims of Noteholders may be limited in the event of the Issuer’s or Bankpozitif’s insolvency or liquidation The payments to be made by the Issuer under the Notes may be impaired by the occurrence of Luxembourg insolvency or (voluntary or judicial) liquidation proceedings that could affect the Issuer. Although the transactions contemplated hereby entered into by the Issuer are concluded at arm’s length terms, the insolvency or liquidation of the Issuer under Luxembourg law may not be ruled out. The Issuer may be subject to limited insolvency proceedings as detailed in the Luxembourg law of 5 April 1993 on the ﬁnancial sector as amended, being suspension of payments (‘‘sursis de paiement’’) and judicial liquidation proceedings (‘‘liquidation judiciaire’’). The general bankruptcy provisions in the Luxembourg Commercial Code do not apply to Luxembourg credit institutions.

9 The bankruptcy provisions of the Execution and Bankruptcy Law (Law No. 2004) (the ‘‘Turkish Bankruptcy Law’’) are applicable to Bankpozitif, under which, if Bankpozitif were to go into insolvency, its obligations to the Issuer under the Loan Agreement would be effectively subordinated to certain obligations, including: expenditures associated with the conduct of the insolvency proceedings and expenses of the liquidator; obligations secured on Bankpozitif’s assets with a mortgage or pledge; employee severance and notice payments accrued within the last year and other employment-related obligations; and receivables stated to be privileged under their applicable laws. The Turkish Bankruptcy Law treats all obligations other than those which are prioritised by its provisions as being in the same class. Under the Banking Law, in case of bankruptcy of Bankpozitif, the Saving Deposit Insurance Fund of Turkey (‘‘SDIF’’) (in respect of all of its claims) and, in the event that Bankpozitif starts collecting deposits, the depositors of Bankpozitif (in respect of the portion of their deposits uncovered by the deposit insurance scheme) have priority over other unsecured creditors, including Bankpozitif’s obligations to the Issuer under the Loan Agreement. Due to the provisions of the Turkish Banking Law, before a bankruptcy procedure is started regarding a bank, its banking licence will most likely be revoked by the BRSA (as defined in ‘‘Presentation of Financial and Certain Other Information’’) due to the insolvency or the financial difficulties the bank is going through and the control of such bank will be transferred to SDIF. Upon revocation of the banking licence, all existing execution proceedings against the bank shall cease as of the date of the publication of in the Official Gazette of the revocation decision and no new proceedings may be instituted. Also upon the revocation of the banking licence, no person other than the SDIF may initiate bankruptcy proceedings against such bank and those bankruptcy proceedings already initiated cease as of the date of publication in the Official Gazette of the revocation decision.

Bankpozitif may not have the ability to raise the funds necessary to ﬁnance the optional redemption upon the occurrence of a Change of Control Event as required by the Conditions and the Loan Agreement Pursuant to the terms of the Loan Agreement upon the announcement or occurrence of any merger, acquisition, amalgamation, restructuring or reorganisation which would result in Bank Hapoalim B.M. ceasing to own or control, whether directly or indirectly, at least 50.01 per cent of the issued share capital of and voting rights in the Borrower, Noteholders shall have the option to give notice or procure that notice is given for the prepayment of the applicable amount of the Loan, which would fund the redemption of the Notes by the Issuer. However, it is possible that the Borrower will not have sufﬁcient funds at the time of the occurrence of such events to make the required prepayment of the Loan to enable the Issuer to redeem the Notes. See ‘‘Terms and Conditions of the Notes – Redemption and Purchase – Redemption upon a Change of Control Event.’’

Risks relating to Turkey In recent years Turkey has undergone signiﬁcant political and economic transformation which has resulted in increased nationwide stability and economic growth. However, Turkey is still considered by international investors to be an emerging market. In general, investing in the securities of issuers that have operations primarily in emerging markets, such as Turkey, involves a higher degree of risk than investing in the securities of issuers with substantial operations in, for example, the United States and the countries of the European Union (the ‘‘EU’’). Summarised below are a number of risks relating to operating in Turkey.

Political developments in Turkey Turkey has been a parliamentary democracy since 1923, although the military has in the past played a signiﬁcant role in politics, intervening in the political process through coups in 1960, 1971 and 1980. Unstable coalition governments have been common, and in the 82 years since its formation, Turkey has had 60 governments, with political controversies frequently resulting in early elections. The most recent general election, held on 22 July 2007, again resulted in victory for the Justice and Development Party (the ‘‘AKP’’), which has been in power since the previous election held on 3 November 2002. The AKP, led by Recep Tayyip Erdogan, received 46.7% of the votes cast and formed a single-party government in the Grand National Assembly (the ‘‘GNA’’) with 340 seats. In the July 2007 election, the AKP exceeded predictions and managed to obtain an extra 13% of votes, compared with the November 2002 election results. Currently there are four parties in the GNA based on the July 2007 election results. Since the November 2002 elections, the AKP have been implementing the International Monetary Fund (IMF) programme (in its current form) and the economic policies introduced by the former government, with only minor revisions. The AKP-led government has succeeded in creating a market-friendly image with pro-IMF and pro-EU statements,

10 while supporting a democratic, secular state with a strong rule of law. Prime Minister Erdogan’s commitment to further progress on political reforms for EU accession has led the international financial markets to become more confident in the political stability of Turkey. To date, the AKP’s economic policies have complied with the IMF programme and have been successful in bringing relative stability to the Turkish economy. As a result of the progress in implementing an agenda for constitutional and legislative reforms, the Council of Europe, on 22 June 2004, decided to remove Turkey from the list of countries monitored for democratic shortcomings. Turkey had been on the list since 1996. The current president, Mr. Abdullah Gu¨l, the former foreign minister of the previous government and a former deputy prime minister, was elected by the GNA on 28 August 2007 after the parliamentary elections. Although the nomination of Mr. Gu¨l as a president was not supported by the military leaders, civil society and some non-governmental organisations in the lead up to the presidential election, any negative atmosphere and conflict soon dissipated following his election as president. In addition to the parliamentary and the presidential elections, there was a referendum on 21 October 2007 in order to change the current constitutional charter which has been in force since 1982. The new constitutional charter is intended to be prepared with the ‘‘broadest social consensus’’ and would allow Turkish citizens to elect the president directly. The new constitutional charter also reduces the presidential term of office from seven years to five years, allows the president to run for a second term, set general elections for every four years instead of five, and reduces the number of lawmakers needed for a quorum from 367 to 184. The change in the constitutional charter was accepted in the referendum with 69% for and 31% against the change. It is intended that the draft be ready for presentation to parliament in early 2008. Negative changes in the government and political environment, including conflicts between senior politicians in Turkey, the failure of the government to devise or implement appropriate economic programmes, or the failure of the IMF to complete periodic reviews of the reform programme supported by the new 2005-2008 Stand-By Arrangement (see ‘‘Economic developments in Turkey’’ below) introduced by it, may each, and cumulatively, adversely affect the stability of the Turkish economy and, in turn, Bankpozitif’s business, financial condition and results of operations.

Conflict within Turkey or neighbouring countries As a result of the continuing violence and civil unrest in Iraq, neighbouring countries, including Turkey, have experienced and may continue to experience certain negative economic effects, such as decreases in revenues from trade and tourism, increases in oil expenditures, decreases in capital inflow, increases in interest rates and increases in military expenditures. The relations between other countries in the Middle East and outside powers are often subject to tensions that could result in economic and/or diplomatic sanctions being imposed on one or more of Turkey’s neighbours the result of which could lead to military action that could have a negative impact of Turkey’s economy and political stability. Furthermore, Turkey has become a potential target for terrorist attacks as a result of factors above mentioned, and such as its membership of the North Atlantic Treaty Organisation (NATO). The four bombings which targeted British and other interests in Istanbul in November and December 2003 are believed to have had a limited impact on the Turkish economy. However, if similar attacks occur in the future, Turkey’s capital markets, as well as the levels of tourism and foreign investment in Turkey, may suffer. Turkey has experienced problems with particular terrorist and/or separatist groups in recent years, particularly Kurdish terrorist groups. The activity of Kurdish terrorist groups has increased during the second half of 2007 compared to previous years. Following the consecutive attacks by terrorist groups in the south-east region of Turkey in the fourth quarter of 2007, the Turkish Parliament approved a motion on 18 October 2007 which empowers the Government to call for a cross-border military operation into neighbouring Northern Iraq to battle Kurdish terrorist group. This motion is valid for 1 year. It is possible that further acts of terrorism may be conducted within Turkey in the future, having a direct or indirect impact on Bankpozitif or its properties, which may have a material adverse effect on Bankpozitif’s business, financial condition and results of operations.

Economic developments in Turkey Over the past two decades, the Turkish economy has undergone a transformation from a highly protected and regulated system to a free market system. Although the Turkish economy has responded well to this transformation, it has continued to experience severe macro-economic

11 imbalances, including a significant imbalance of payment deficits, and a considerable level of unemployment. After 15 years of a combination of both economic growth under the free market system and adverse shocks, such as the Russian financial crisis of 1998, Turkey entered into a standby agreement with the IMF at the end of 1999 to stabilise its financial condition. However, liquidity crises in the banking sector in November 2000 and February 2001 triggered a steep decline in the Turkish capital markets and led to increased interest rates on government borrowings. These factors contributed to a decline of 7.5% in Turkey’s real GDP in 2001 compared with 2000. Following the almost 50% devaluation of the Turkish Lira on average throughout 2001, average inflation based on the Turkish producer price index rose to 62%, and year-end inflation was 88.6%. The combination of the significant depreciation of the Turkish Lira, high real interest rates and the high cost of bank restructurings caused the ratio of net public debt to GDP to increase from 57% at the end of 2000 to 91% at the end of 2001. In 2001, Turkey implemented a macroeconomic programme, backed by a U.S$ 19.0 billion standby agreement with the IMF. The goal of this programme was to improve the Turkish economy’s resilience and reduce its volatility in the short-term, as well as to achieve sustainable growth through fundamental structural reforms in the medium to long term. GDP grew by 7.8% in 2002, 5.8% in 2003, 8.9% in 2004, 7.4% in 2005, 6.1% in 2006 and 5.3% in the first half of 2007. Despite Turkey’s economic growth, it remains vulnerable to both external and internal shocks, including escalating oil prices and terrorist activity, as well as potential domestic political uncertainty. High government debt levels and a high current account deficit of U.S.$ 31.6 billion in 2006 may also contribute to economic vulnerability. The government signed a further three year standby agreement with the IMF in 2005. The programme sets macroeconomic targets, such as an annual economic growth rate of 5% during its period of existence, decreasing the ratio of net public debt to GDP to 52% by the end of the period (which had already been decreased to 55.8% by the 2005 year-end and 44.8% by the 2006 year-end). There is no assurance that Turkey will continue its current fiscal policy and remain economically stable after the completion of the IMF-monitored programme. Any downturn in Turkey’s economy in the future could have a material adverse effect on Bankpozitif’s business, financial condition and results of operations.

Uncertainties relating to Turkey’s accession to the European Union Turkey commenced negotiations on its accession to the EU on 3 October 2005. However, Turkey’s accession depends on a number of economic and political factors relating to both Turkey and the EU. On 12 December 2006, the EU decided to suspend the negotiations with Turkey on eight out of 32 negotiation topics. Although the shared objective of the negotiations is accession, the suspension is expected to delay Turkey’s accession to the EU. Potential delays in Turkey’s accession to the EU may have a negative effect on the Turkish economy, which may in turn adversely impact on Bankpozitif’s business activities.

Earthquakes On 17 August 1999, an earthquake measuring 7.4 on the Richter scale struck the area surrounding Izmit. On 12 November 1999, another earthquake occurred in the city of Du¨zce, between Ankara and Istanbul, resulting in further financial costs to Turkey. Almost all of Turkey is classified by seismologists as being in a high-risk earthquake zone. Almost 45% of Turkey’s population and most of its economic resources are located in a first-degree earthquake risk zone (the zone with the highest level of risk of damage from earthquakes). Bankpozitif’s properties in Turkey are located in earthquake risk zones. Bankpozitif maintains earthquake insurance, but does not have, in addition, the wider business interruption insurance or insurance for loss of profits, as these are not generally available in Turkey. The occurrence of a severe earthquake could adversely affect one or more of Bankpozitif’s facilities, therefore causing an interruption in, and an adverse effect on, Bankpozitif’s business. In addition, a severe earthquake could harm the Turkish economy in general, which could adversely affect Bankpozitif’s business.

The government’s influence over the Turkish economy Traditionally, the government has exercised, and continues to exercise, significant influence over many aspects of the Turkish economy. The government is also directly involved in the Turkish economy through its ownership and administration of State Economic Enterprises (‘‘SEEs’’) which, despite the divestments undertaken in the government’s privatisation programme, continue to represent a significant portion of the Turkish economy. Although none of the SEEs operate in any business

12 segment in which Bankpozitif operates, any decisions taken by the government with respect to the SEEs may signiﬁcantly impact the Turkish economy and thus may indirectly adversely affect Bankpozitif’s business.

Disclosure obligations The reporting, accounting and ﬁnancial practices applicable to Turkish banks differ in certain respects from those applicable to similar banks in the European Union or in other developed economies. There is less publicly available information in Turkey than is regularly published in the European Union or in other developed markets and any information that is published may only be presented in Turkish. This may make it more difﬁcult to assess Bankpozitif’s continuing and expected future compliance with all required regulatory and legal requirements for those unfamiliar with the Turkish banking system.

The level of inflation in Turkey In the past two decades, the Turkish economy has experienced significant inflationary pressures and inflation was one of the most serious problems faced by the Turkish economy in the last decade. Over the five-year period ended 31 December 2000, the Turkish economy experienced annual inflation averaging approximately 65.1% per year as measured by the Turkish producer price index. In response, the government implemented policies intended to combat these persistently high levels of inflation. However, as a result of the financial crises experienced in Turkey in November 2000 and February 2001, the producer price index increased to 88.6% by the end of 2001. In line with the Stand-By Arrangements with the IMF in 2001 and 2005, the government implemented certain measures to reduce public sector debt and to control inflation. The inflation rate based on the producer price index declined each year from 30.8% (2002 year-end) to 13.9% (2003 year-end), to 13.8% (2004 year-end), to 4.5% (2005 year-end), to 11.6% (2006 year-end) and to 5.0% (September 2007). Although recent Turkish Central Bank policies have had some success in reducing inflation, there can be no assurance that this trend will not reverse. The high current account deficit, which stood at U.S.$ 22.9 billion at the end of 2005 and U.S.$ 31.6 billion at the end of 2006, is being financed by higher levels of foreign direct investment than have been experienced in the past. The level of foreign investment in Turkey, however, is strongly linked to Turkey’s prospects of entering the EU and any setback in Turkey’s EU accession prospects (see above) could lead to certain economic problems typically associated with a high current account deficit. If the level of inflation in Turkey were to fluctuate significantly, it is possible that Bankpozitif’s business, results of operations and financial condition could be adversely affected.

Exchange rate risk Exchange rates for the New Turkish Lira have historically been, and continue to be, highly volatile. Although until February 2001 it had been the standard policy of the Turkish Central Bank to devalue the New Turkish Lira in line with the domestic inflation rate, the Turkish Central Bank has since adopted a floating exchange rate policy resulting in increased volatility in the value of the New Turkish Lira. The annual inflation rates in Turkey as measured by the percentage changes in the Turkish producer price index for 2000, 2001, 2002, 2003, 2004, 2005, 2006 and for the first ten months of 2007 were 32.7%, 88.6%, 30.8%, 13.9%, 13.8%, 4.5%, 11.6% and 6.08%, respectively; while in 2000, 2001, 2002 and 2006 the New Turkish Lira depreciated against the U.S. dollar by 24.38%, 114.30%, 13.54 % and 5.22% respectively, and in 2003, 2004, 2005 and first ten months of 2007, appreciated by 14.6%, 3.8%, 0.02% and 19.2% respectively. Any significant depreciation of the New Turkish Lira against the U.S. dollar or other major currencies may adversely affect the financial condition of Turkey as a whole and may have a negative effect on Bankpozitif’s ability to repay its debt denominated in currencies other than the New Turkish Lira.

The state of the current account deficit in Turkey could lead to exchange rate adjustments with inflationary consequences To date, the New Turkish Lira has appreciated by almost 47% from the 2001 year-end according to the Turkish Central Bank’s consumer price index-based Real Effective Exchange Rate Index. However, given the widening current account deficit and the resulting surge in external financing needs, some economists are concerned about currency stabilisation. The current account deficit increased from U.S.$ 7.9 billion in 2003 (3.3% of GNP) to U.S.$ 15.6 billion (5.2% of GNP) in 2004, U.S.$ 22.9 billion (6.3% of GNP) in 2005 and U.S.$ 31.6 billion (7.9% of GNP) in 2006. In a period of political uncertainty, the persistent widening of the current account deficit may lead to a sudden

13 adjustment in the value of the New Turkish Lira with associated inﬂationary consequences, which in turn may have a material adverse effect on Bankpozitif’s business, ﬁnancial condition or results of operations.

Statistics A range of ministers, along with the State Planning Organisation, the Turkish Central Bank and State Institution of Statistics, produce statistics on Turkey and its economy. Turkey subscribes to the IMF’s Special Data Dissemination Standards. Statistical data appearing in this Base Prospectus has, unless otherwise stated, been obtained from public sources and documents. Similar statistics may be obtainable from other sources, but the underlying assumptions, methodology and consequently the resulting data may vary from source to source. Unless otherwise indicated, the information and figures presented in this Base Prospectus have not been restated to reflect the effects of inflation. The reader should be aware that distortions caused by inflation may be present in such figures and information. As a result, period-to-period comparisons may not be meaningful.

Risk factors relating to Bankpozitif’s business Summarised below are a number of risks speciﬁcally relating to the business of Bankpozitif.

Credit risk Credit risk arises where the possibility exists of a counterparty defaulting on its obligations. Bankpozitif is exposed to the creditworthiness of its customers and counterparties. There is no assurance that Bankpozitif will correctly assess the creditworthiness of its credit applicants. As at 30 September 2007, 70% of Bankpozitif’s assets were loans to clients. Bankpozitif places emphasis mainly on the payment ability and cash-generating ability of the borrower in any given transaction, and also obtains sufficient collateral from borrowers including, wherever possible, cash collateral, mortgages or security over other assets. Bankpozitif seeks to manage its credit risk exposure through diversification of lending activities to avoid undue concentration of risks with individuals or groups of customers in specific locations or businesses. Bankpozitif implemented centralised credit approval processes and all loan proposals are evaluated and monitored by credit and risk monitoring departments established independently from its marketing and sales departments. Bankpozitif also uses an in-house developed rating system for corporate loan customers and uses a rating system developed in conjunction with Experian Decision Analytics for its retail loan customers. Bankpozitif’s future exposure to credit risks could lead to a material adverse effect on Bankpozitif’s business, financial condition or results of operations.

Market risk Market risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements. The Board of Directors determines the risk limits for these primary risks carried by Bankpozitif and periodically revises such limits. The Asset and Liability Committee, comprising members of senior management of Bankpozitif, manages the market risk by weekly meetings based on reports prepared by the risk management and financial planning and control departments. These reports include maturity and interest rate gap analysis, scenario analysis and stress tests. For the purpose of hedging market risk, Bankpozitif primarily aims to balance the foreign currency position, match the interest and duration structure of its assets and liabilities and keep a sufficient level of liquid assets. Bankpozitif holds an investment securities portfolio almost fully consisting of floating rate Turkish government securities and does not take interest rate risk. Bankpozitif intends to hold these securities until their relevant maturities. Bankpozitif’s exposure to market risks could lead to a material adverse effect on Bankpozitif’s business, financial condition or results of operations.

Foreign currency risk Bankpozitif is exposed to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. Bankpozitif prefers not to carry foreign currency risk and holds foreign currency asset and liability items together with derivatives in balance against the foreign currency risk. Bankpozitif manages foreign currency risk by weekly Asset and Liability Committee meetings and through placing limits on the positions which can be taken by Bankpozitif’s treasury. Bankpozitif’s future exposure to foreign currency risks could lead to a material adverse effect on Bankpozitif’s business, financial condition or results of operations.

14 Cash flow and fair value interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of a change in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of a change in market interest rates. Bankpozitif is exposed to the effects of fluctuations in the prevailing levels of market interest rates on both its fair value and cash flows. Bankpozitif prefers to protect itself from the effects created by the interest rate volatility and aims to do this by having a perfect match in interest rate risk. Bankpozitif prefers not to generate income from interest rate mismatches. Bankpozitif manages interest rate risk through the Asset and Liability Committee and risk management departments by utilising interest rate derivative agreements and setting limits on the positions which can be taken by Bankpozitif’s credit and treasury departments. Bankpozitif’s future exposure to cash flow and fair value interest rate risks could have a material adverse effect on Bankpozitif’s business, financial condition or results of operations.

Liquidity risk Liquidity risk is the risk that an entity will be unable to meet its net funding requirements. Liquidity risk can be caused by market disruptions or credit downgrades which may cause certain sources of funding to become unavailable. This is a substantial risk in the Turkish market, which exhibits signiﬁcant volatility. Bankpozitif’s general policy is to maintain an adequate level of liquid assets so as to meet the contractual maturity of existing funding, to fund investment opportunities, to satisfy credit demands and to cover against contingent liquidity risks derived from unexpected withdrawals or other unforeseen events. Bankpozitif is not allowed to take any liquidity risk in any currency, at any time, unless such action has been authorised by the senior management of Bankpozitif. Generally, Bankpozitif prefers not to utilise liquidity from the Interbank money markets, and is in a net lender position in the Interbank money markets. Bankpozitif’s future exposure to liquidity risk could lead to a material adverse effect on Bankpozitif’s business, ﬁnancial condition or results of operations.

The impact of a change in government policy in relation to government securities Some of Bankpozitif’s assets are government securities. A change of government and an associated change in policy in relation to such securities may have a negative impact on Bankpozitif’s asset portfolio. However, Bankpozitif only maintains 12% of its asset portfolio in the form of ﬂoating rate government securities repriced in every 3 to 6 months, and as such, any negative impact on government securities should only have a very limited impact on Bankpozitif’s asset portfolio as a whole.

Competition in the Turkish banking sector As at 30 September 2007, there were a total of 46 banks (excluding the Central Bank and four participation banks) licensed to operate in Turkey. The Turkish banking industry is dominated by a small number of banks. According to the Turkish Banking Association, as at 30 September 2007, the top five banks in Turkey held approximately 56.5% of the banking sector’s total loan portfolio and approximately 61.9% of the total bank assets in Turkey. Foreign banks have shown an increased interest in the banking sector in Turkey. HSBC Bank plc acquired through its 2002 acquisition of Demirbank A.S¸. a broad network of branches in Turkey. UniCredito Italiano acquired 50% of the holding company of Koçbank in 2002 and BNP Paribas acquired 50% of the shares of TEB Mali Yatırımlar A.S¸., which owns 84.3% of the shares of Tu¨rkiye Ekonomi Bankası A.S¸., in February 2005. In September 2005, the Koçbank holding company (50% owned by UniCredito Italiano as described above) acquired 57.4% of the shares of Yapı ve Kredi Bankası A.S¸. In July 2005, Fortis Bank acquired 89.3% of the share capital of Tu¨rk Dıs¸ Ticaret Bankası A.S¸. In April 2006, the National Bank of Greece announced its acquisition of 46% of Finansbank from Finansbank’s founding shareholders. Following this deal in May, Zorlu Holding sold its 75% stake in Denizbank to Dexia. In June 2006, S¸ekerbank’s parents, S¸ekerbank Social Security Fund and S¸ekerbank Personnel Fund, signed a ‘‘Share Purchase Agreement’’ with Kazakh Turan Alem regarding the acquisition of a 34% stake of S¸ekerbank. Arap Bank Plc and Bank Med participated in the acquisition of 91% of MNG Bank in September 2006. In October 2006, Sabancı and Citigroup signed an agreement regarding the acquisition of a 20% stake of Akbank by Citigroup. Also in October 2006, Koçbank and Yapı ve Kredi Bankası A.S¸. completed their merger. The sale of 100% shares of Oyakbank to ING Bank of The Netherlands was approved by BRSA at year-end 2007. Bankpozitif’s management believes that further entries into the sector by foreign competitors, either directly or in collaboration with existing Turkish banks, is likely to increase competition in the

15 market, especially given that some of these foreign competitors (e.g. HSBC Bank and Citibank) have significantly greater resources and cheaper funding sources than Turkish banks. Bankpozitif could be exposed to domestic and foreign competition in certain industry sectors, particularly in the retail banking sector, which could have a material adverse effect on Bankpozitif’s business, financial condition or results of operations. Bankpozitif’s recent entry into a new banking business: retail banking Following Bankpozitif’s acquisition by Bank Hapoalim, Bankpozitif commenced operations in the retail banking sector. In accordance with the business plan developed in 2005, Bankpozitif entered into the retail banking business with lending products such as mortgages, vehicle finance, home equity and personal loans through a pilot implementation in the first quarter of 2006. Bankpozitif started to open new branches at the beginning of 2006 and had a nine branch network as at 30 September 2007. Bankpozitif aims to open six additional branches, thus reaching fifteen branches by the end of 2008. With the continued growth of Bankpozitif’s business in this area (see ‘‘Risks relating to growth strategy’’ below), the proportion of Bankpozitif’s business associated with this sector should continue to grow. Although the setting up of the business plan and the carrying out of the pilot implementation for its retail business occurred during the one and a half years prior to launching, Bankpozitif actively started its retail activities in 2007. With the experience of Bank Hapoalim (a leading retail bank in Israel) in the retail sector, Bankpozitif continues to build up its presence in retail banking. Therefore Bankpozitif is exposed to the market risk of entry into a new banking business, which may have a material adverse effect on Bankpozitif’s business, financial condition and results of operations. Operating within the retail banking sector Lending to retail customers may increase the overall credit risk exposure in the loan portfolio while providing Bankpozitif with a more diversified loan concentration. Retail customers typically have less financial strength than corporate borrowers, and negative developments in the Turkish economy could affect retail customers more significantly than large corporate borrowers, which could, in turn, have a material adverse effect on Bankpozitif’s business, financial condition or results of operations. Risks relating to growth strategy Bankpozitif’s strategy comprises growth in the corporate and retail banking business, growth in international markets and differentiation from the competition in terms of segmentation, use of technology, experienced people and efficient work-flows, with the underlying principles of efficiency, sound risk management and effectiveness. Key elements of Bankpozitif’s own growth strategy according to its business plan, which was approved by Bank Hapoalim, include introducing its own retail banking services (see ‘‘Bankpozitif’s recent entry into a new banking sector’’ above), expanding corporate banking activities and developing a presence in other emerging market countries (see ‘‘Risk of expansion into new markets’’ below). All of these aspects of Bankpozitif’s growth strategy deal with new market areas for Bankpozitif, and no assurance can be given that entry (particularly if unsuccessful) into which will not have a material adverse effect on Bankpozitif’s business, financial condition and results of operations. There can be no assurance that any such growth will be in accordance with Bankpozitif’s strategy or business plan which could have a material adverse effect on Bankpozitif’s business, financial condition and results of operations. In addition, there can be no assurance that Bankpozitif will be able to access sufficient funds for its planned growth or any growth that is not in accordance with its strategy or business plan which could influence Bankpozitif’s ability to grow. The strategy of Bankpozitif has been, and is likely to continue to be, determined in accordance with the overall strategy of Bank Hapoalim, and therefore may be developed in the context of the aims of Bank Hapoalim, which may not be aligned with the aims of the Noteholders. Bankpozitif holds interests in, and enters into transactions with, its affiliates with the approval of the Related Party Transaction Committee. Although the management of Bankpozitif believes these transactions are on commercially reasonable terms, there can be no assurance that the interests of Bankpozitif will be at all times aligned with the interests of the Noteholders. Risk of expansion into new markets One component of Bankpozitif’s growth strategy is the development of a presence in new markets, particularly emerging market countries with close links to Turkey. Based on this policy, Bankpozitif has acquired a new subsidiary by way of purchase of all of the shares in JSC Demir Kazakhstan

16 Bank (‘‘Demir Kazakhstan’’) in Kazakhstan on 21 November 2007. After the acquisition of Demir Kazakhstan and share capital increase (see ‘‘Business Description – Strategy’’ below), the total cost of the investment in Kazakhstan by Bankpozitif is U.S.$ 70.5 million. The total cost of this investment was funded by a share capital increase amounting to U.S.$ 72 million as of 31 December 2007. Expansion into markets in which Bankpozitif has no prior banking experience brings a range of risks and challenges including lack of local knowledge (both economic and cultural), competitive pressures from established market participants and lack of familiarity with the local regulatory regimes. Consequently, no assurance can be given that entry (particularly if unsuccessful) into these markets, or continued operation in these markets, will not have a material adverse effect on Bankpozitif’s business, financial condition and results of operations. Demir Kazakhstan: acquisition and integration into the Bankpozitif Group As described in ‘‘Risk of expansion into new markets’’ above, Bankpozitif acquired Demir Kazakhstan by way of purchase of all of its shares on 21 November 2007. Demir Kazakhstan is a mid-sized banking institution and as at 30 September 2007, Demir Kazakhstan had total assets amounting to U.S.$ 120 million and a total equity size of U.S.$ 24.9 million. The total cost of investment in Kazakhstan by Bankpozitif is U.S.$ 70.5 million following the acquisition and the associated share capital increase (see ‘‘Business Description – Business Activities’’). The total cost of this investment was funded by a share capital increase amounting to U.S.$ 72 million as of 31 December 2007. This is a significant acquisition for Bankpozitif and no assurance can be given that if Demir Kazakhstan’s business was to slow down or fail, this would not have a material adverse effect on Bankpozitif’s business, financial condition and results of operations. The primary integration risk (in addition to the ‘‘Risks relating to information technology’’ below) is the risk that Bankpozitif’s working processes and principles will not be compatible with those currently found in Demir Kazakhstan or that it will be difficult to convert Demir Kazakhstan’s working processes and principles to the Bankpozitif system. The further associated risk that this has for Bankpozitif is that Demir Kazakhstan, functioning under Bankpozitif’s working processes and principles, may not be compatible with the economic and cultural banking environment in Kazakhstan. No assurance can be given of the successful integration of Demir Kazakhstan into the Bankpozitif Group which, if unsuccessful, could have a material adverse effect on Bankpozitif’s business, financial condition and results of operations. Risks relating to information technology Bankpozitif uses a wide range of information technology (‘‘IT’’) systems and is rapidly increasing its IT capabilities, with major investments in hardware, software and network systems. The majority of Bankpozitif’s banking business is dependent on its IT systems. The IT system that Bankpozitif operates for its banking activities has been developed in-house and Bankpozitif does not rely on any third party in this respect. Bankpozitif minimises risks in many ways, such as by having frequently updated off-site data storage, separate IT security and audit departments and external IT audits similar to those performed on Bank Hapoalim’s IT systems. Bankpozitif’s IT system has been used by Demir Kazakhstan since the second half of 2005. Bankpozitif has minimised the risks associated with such transformation by having its technical staff ensure that all necessary upgrades have been made and tests performed in advance of the acquisition. In addition, senior Bankpozitif technical staff will work on-site to ensure a smooth transformation. There can be no assurance that an interruption (even short-term), deterioration, failure, breach or lack of capacity of Bankpozitif’s IT systems or any other systems in its branch network, clearing operations or elsewhere, or delay caused by problems with new technology (particularly when being utilised outside of Turkey in different banks) will not have a material adverse effect on Bankpozitif’s business, financial condition or results of operations. In addition, Bankpozitif’s expansion plans depend to a large extent on its ability to expand its IT capacity and in it continuing to function efficiently. Reliance on key personnel Bankpozitif relies on key personnel in its upper levels of management and in the operation of its IT systems. No assurance can be given that the key members of senior management will remain at Bankpozitif or that such business relationships will endure if such members depart Bankpozitif. Bankpozitif enters into long-term contracts with its key employees to manage this risk. Particularly in relation to IT personnel, Bankpozitif may find it difficult to identify sufficiently experienced operators due to the wide ranging and novel IT applications used in Bankpozitif’s

17 operations. It is also likely there would be a time lag between a new employee’s start date and such employee’s operational date because significant training of new employees is likely to be required due to the novel IT applications Bankpozitif utilises. In addition, Bankpozitif’s expansion plans rely on its ability to attract and retain a sufficient number of appropriately qualified personnel. To ensure that Bankpozitif IT systems and working principles are correctly integrated into the Demir Kazakhstan banking structure in Kazakhstan, Bankpozitif intends to send certain of its staff, including key personnel in upper levels of management, to work on-site in Kazakhstan. The intention is that these staff will only work in the setting up of the systems in Demir Kazakhstan, but there is no guarantee of how long this process will take. Even though Bankpozitif has a clear staffing strategy in relation to the Demir Kazakhstan integration, there still remains the potential for Bankpozitif’s personnel resources in Turkey to be stretched and no assurance can be given that this strategy will not have, in turn, a material adverse effect on Bankpozitif’s business, financial condition or results of operations.

18 INFORMATION INCORPORATED BY REFERENCE The information set out in the table below shall be deemed to be incorporated in, and to form part of, this Base Prospectus provided however that any statement contained in any document incorporated by reference in, and forming part of, this Base Prospectus shall be deemed to be modified or superseded for the purpose of this Base Prospectus to the extent that a statement contained herein modifies or supersedes such statement. Such documents will be made available, free of charge, during usual business hours at the specified offices of the Paying Agent and the Listing Agent in Luxembourg, unless such documents have been modified or superseded. Such documents will also be available to view on the website of the Luxembourg Stock Exchange (www.bourse.lu). For ease of reference, the tables below set out the relevant page references for the consolidated financial statements, the notes to the consolidated financial statements and the Auditors’ reports for the years ended 2005 and 2006 for the Borrower and the unaudited consolidated interim financial statements for the nine months ended 30 September 2007 for the Borrower and the condensed interim consolidated financial statements for the nine months ended 30 September 2007 for Demir Kazakhstan, as set out in the respective annual reports or interim report. Any information not listed in the cross-reference table but included in the documents incorporated by reference is given for information purposes only. Consolidated Financial Statements year ended 31 December 2005 Income statement Page 3 Balance sheet Page 2 Cash flow statement Page 5 Notes to Financial Statements Page 6 to 47 Auditors Report Page 1 Consolidated Financial Statements year ended 31 December 2006 Income statement Page 3 Balance sheet Page 2 Cash flow statement Page 5 Notes to Financial Statements Page 6 to 53 Auditors Report Page 1 Condensed Interim Consolidated Financial Statements for the nine months ended 30 September 2007 Condensed Income statement Page 3 Condensed Balance sheet Page 2 Condensed Cash flow statement Page 2 Selected Notes to Interim Financial Statements Page 6 to 47 Auditors Review Page 1 Condensed Interim Consolidated Financial Statements for the nine months ended 30 September 2007 for JSC Demir Kazakhstan Bank Condensed Income statement Page 4 Condensed Balance sheet Page 5 Condensed Cash flow statement Page 7 Selected Notes to Interim Financial Statements Page 9 to 24 Auditors Review Page 1

19 DESCRIPTION OF EACH TRANSACTION UNDER THE PROGRAMME

The following summary description should be read in conjunction with, and is qualiﬁed in its entirety by, the information set forth under ‘‘Terms and Conditions of the Notes’’, ‘‘The Master Senior Loan Agreement’’ and ‘‘The Master Subordinated Loan Agreement’’ that appear elsewhere in this Base Prospectus. Set out below is a diagrammatic representation of the structure:

Principal and Interest Principal and on the Notes Interest Noteholders The Issuer The Borrower

Proceeds of the Loan Notes

The Issuer will issue each Series of Notes for the sole purpose of funding either a Senior Advance or a Subordinated Advance to the Bank. Each Series of Notes will be constituted by, subject to, and have the benefit of a supplemental trust deed (the ‘‘Supplemental Trust Deed’’) supplemental to a principal trust deed (together, the ‘‘Trust Deed’’) each between the Issuer and the Trustee. The obligations of the Issuer to make payments under a Series of Notes shall constitute an obligation only to pay to the Noteholders an amount equal to and in the same currency as sums of principal, interest and additional amounts (if any) actually received by or for the account of the Issuer from the Bank as borrower pursuant to the Loan Agreement relating to the Advance corresponding to such Series. The Issuer will have no other financial obligations under the relevant Series of Notes and no other assets of the Issuer (including the Issuer’s rights with respect to any Advance relating to any other Series of Notes) will be available to such Noteholders. Accordingly, all payments to be made by the Issuer under each Series of Notes will be made only from and to the extent that such sums are received or recovered by or on behalf of the Issuer or the Trustee from the assets securing such Series. Noteholders shall look solely to such sums for payments to be made by the Issuer under such Notes, the obligation of the Issuer to make payments in respect of such Notes will be limited to such sums and Noteholders will have no further recourse to the Issuer or any of the Issuer’s other assets in respect thereof. In the event that the amount due and payable by the Issuer under such Notes exceeds the sums so received or recovered, the right of any person to claim payment of any amount exceeding such sums shall be extinguished, and Noteholders may take no further action to recover such amounts. As provided in the Trust Deed, the Issuer will charge in relation to each Series of Notes in favour of the Trustee for the benefit of the Trustee and the Noteholders as security for its payment obligations in respect of such Series of Notes (a) its rights to principal, premium, interest and additional amounts (if any) under the relevant Loan Agreement, (b) its right to receive all sums payable by the Bank under any claim, award or judgment relating to the relevant Loan Agreement and (c) its rights in and to all amounts received pursuant to the relevant Loan Agreement in an account relating to such Series with the Principal Paying Agent at its specified office, in the name of the Issuer, together with the debt represented thereby (the ‘‘Account’’), in each case other than certain amounts in respect of certain Reserved Rights (collectively the ‘‘Charged Property’’). In addition, the Issuer will assign in relation to each Series of Notes in favour of the Trustee for the benefit of the Trustee and the Noteholders as security for its payment obligations in respect of such Series of Notes all the rights, interests and benefits, both present and future, which have accrued or may accrue to the Issuer as lender under or pursuant to the relevant Loan Agreement, the Advance made pursuant to such Loan Agreement (including, without limitation, the right to declare the Advance made pursuant to such Loan Agreement immediately due and payable and to take proceedings to enforce the obligations of the Bank, thereunder) other than any rights, interests and benefits charged to the Trustee by way of first fixed charge and any amounts relating to the Reserved Rights (the ‘‘Assigned Rights’’). ‘‘Reserved Rights’’ are the rights excluded from the Charged Property and Assigned Rights, being all and any rights, interests and benefits of the Issuer in respect of the obligations of the Borrower under clause 3.2 (Senior Advance Arrangement Fee) or clause 3.2 (Subordinated Advance Arrangement Fee), clause 3.4 (Ongoing Fees and Expenses), (other than the right to receive any amount payable under such clauses), clause 7.1 (Additional Amounts) (to the extent that the Borrower shall reimburse the

20 Issuer on demand for any amount paid by the Issuer in respect of taxes, penalties or interest), clause 7.2 (Double Tax Treaty Relief), clause 7.3 (Indemnity Amounts) (to the extent that the Issuer has received amounts to which the Noteholders are not entitled), clause 7.4 (Tax Claims), clause 7.5 (Tax Credits and Tax Refunds), clause 7.7 (Delivery of Forms and Other Instruments), clause 9.1 (Increased Costs), clause 9.3 (Mitigation), clause 14 (Indemnity), clause 15 (Survival), clause 16 (Expenses) and clause 17.2 (Stamp Duties) of the Master Senior Loan Agreement and the Master Subordinated Loan Agreement, as the case may be and clause 5.2 (Prepayments for Tax Reasons and Change in Circumstances) and clause 5.3 (Prepayment in the event of Illegality) (other than the right to receive any amount payable under such clauses), of the Master Senior Loan Agreement. The Issuer has covenanted in relation to each Series of Notes not to agree to any amendments to or any modification or waiver of, or authorise any breach or potential breach of, the terms of the relevant Loan Agreement (except in relation to the Reserved Rights) unless the Trustee has given its prior written consent. The Issuer (save as expressly provided in the Trust Deed, the Loan Agreement relating to such Series or with the consent of the Trustee) shall not pledge, charge or otherwise deal with the corresponding Advance or the Charged Property or any right or benefit either present or future arising under or in respect of the relevant Loan Agreement or the relevant Account or any part thereof or any interest therein or purport to do so. Any amendments, modifications, waivers or authorisations made with the Trustee’s consent shall, unless the Trustee agrees otherwise, be notified to the Noteholders of the applicable Series in accordance with Condition 16 (Notices) of the Terms and Conditions of the Notes and will be binding on the Noteholders of such Series. Payments in respect of each Series of Notes will, except in certain limited circumstances, be made without any deduction or withholding for or on account of taxes of Luxembourg, except as required by law. See ‘‘Terms and Conditions of the Notes – 10. Taxation’’. In that event, the Issuer will only be required to pay additional amounts to the extent that it receives corresponding amounts under the relevant Loan Agreement. Each Loan Agreement will provide for the Bank as borrower to pay such corresponding amounts in these circumstances. In addition, payments under each Loan Agreement will, except in certain limited circumstances, be made without any deduction or withholding for or on account of Turkish and Luxembourg taxes, and as described therein, except as required by law, in which event the Bank will be obliged to increase the amounts payable under each Loan Agreement. However, it is unclear whether the gross-up provisions of the Loan Agreement are enforceable under Turkish law. Under the terms of each Loan Agreement, each Advance may be prepaid at its principal amount, together with accrued interest, at the option of the Bank, as borrower, upon the Bank being required to increase the amount payable or to pay additional amounts on account of taxes of Turkey or Luxembourg pursuant to the Loan Agreement or required to pay additional amounts on account of Luxembourg taxes incurred by the Issuer under the Notes save that, in the case of a Subordinated Advance, such right to prepay is subject to the prior approval of the BRSA and to the relevant prepayment clauses being specified in the relevant Subordinated Loan Supplement as being applicable. In addition, the Issuer may (in its own discretion) require an Advance to be prepaid if it becomes unlawful for such Advance or the Notes to remain outstanding, as set out in the relevant Loan Agreement save that, in the case of a Subordinated Advance, such prepayment is subject to the prior approval of the BRSA and to the relevant prepayment clause being specified in the relevant Subordinated Loan Supplement as being applicable. Notes held by the Issuer, shall not be excluded for the purposes of determining the Notes outstanding save as described in the Trust Deed. If the Bank elects or is required to prepay an Advance, the Issuer will make corresponding prepayments on the Notes, together with accrued interest (to the extent that the Issuer has actually received the relevant funds from the Bank). See ‘‘Risk Factors – Risks Related to the Market and Notes generally’’, ‘‘Master Loan Agreement – Repayment and Prepayment – Prepayment For Tax Reasons and Change in Circumstances’’ and ‘‘Terms and Conditions of the Notes – 7. Redemption’’.

21 USE OF PROCEEDS

The Issuer will use the proceeds of each issue of the Notes for the sole purpose of ﬁnancing each Advance to the Bank. The net proceeds from each Advance will be used by the Bank for general corporate purposes.

22 EXCHANGE RATES

Exchange rates for the Turkish Lira have historically been and continue to be highly volatile. Although until February 2001 it was a stated policy of the Turkish Central Bank to devalue the Turkish Lira in line with the domestic inflation rate in the past, the Turkish Central Bank has since adopted a floating exchange rate policy resulting in increased volatility in the value of the Turkish Lira. The annual inflation rates in Turkey as measured by the percentage changes in the PPI for 2001, 2002, 2003, 2004, 2005 and 2006 were 88.6 per cent., 30.8 per cent., 13.9 per cent., 13.8 per cent., 4.5 per cent. and 11.58 per cent., respectively. In 2000, 2001, 2002 and 2006 the New Turkish Lira depreciated against the U.S. dollar by 24.38%, 114.30%, 13.54% and 5.22% respectively, and in 2003, 2004, 2005 and the first ten months of 2007, appreciated by 14.6%, 3.8%, 0.02% and 19.2% respectively. The following table sets forth the high, low, period average and period end exchange rates for U.S. dollars announced by the Turkish Central Bank, expressed as the number of Turkish Lira (or New Turkish Lira in the case of 2005 and 2006, see below) per U.S. dollar, for the periods indicated:

Period Year ended 31 December High Low Average(1) End(2) 2000 692,536 537,722 631,509 671,765 2001 1,647,837 666,940 1,252,815 1,439,567 2002 1,696,336 1,294,176 1,524,335 1,634,501 2003 1,754,813 1,354,525 1,502,509 1,395,835 2004 1,558,189 1,307,617 1,431,452 1,342,100 2005 1.40 1.25 1.34 1.39 2006 1.70 1.30 1.43 1.41

Source: Turkish Central Bank. Notes: (1) Represents the average of the monthly Turkish Central Bank exchange rates for the relevant period. Averages were computed by using the average of the Turkish Central Bank’s U.S. dollar ask rates on the last business day of each month during the relevant period. (2) Represents the Turkish Central Bank’s U.S. dollar ask rate on the last business day for the relevant period.

Pursuant to Law No. 5083 on the Currency Unit of the Republic of Turkey, with effect from 1 January 2005, the currency of Turkey was redenominated, with one million Turkish Lira being converted into a new unit of currency known as the ‘‘New Turkish Lira’’ or ‘‘YTL’’. The smallest unit of currency is the ‘‘New Kurus’’ which represents one-hundredth of a New Turkish Lira. The Turkish Lira ceased to be a unit of currency as of 1 January 2005, and ceased to be in circulation as of 1 January 2006. The YTL/U.S. dollar exchange rate on 30 September 2007 was YTL 1.2100 = U.S. $1.00.

23 BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙

Introduction Bankpozitif is a non-deposit taking Turkish bank which provides both boutique corporate banking services, encompassing activities such as corporate lending, project finance, trade finance, financial leasing, and retail banking services. As at 30 September 2007, Bankpozitif had consolidated total assets of YTL 888,135 thousand (U.S.$ 733,996 thousand) and shareholder equity of YTL 264,775 thousand (U.S.$ 218,822 thousand). Bankpozitif is 57.55% owned by Tarshish-Hapoalim Holdings and Investments Ltd. (‘‘Tarshish’’), a wholly owned subsidiary of Bank Hapoalim B.M. (‘‘Bank Hapoalim’’). Bank Hapoalim is one of Israel’s leading banks in terms of market share, profit, size of network and total assets (according to publicly available financial information) and has an extensive worldwide presence (which includes North and Latin America, Europe, East Asia and Australasia) as well as a strong domestic market position. As at 30 September 2007, Bank Hapoalim had consolidated total assets of U.S.$ 75.2 billion and shareholder equity of U.S.$ 4.8 billion. Bank Hapoalim’s long-term foreign currency rating is BBB+ by Fitch Ratings, A2 by Moody’s and A- by S&P. Bank Hapoalim controls Bankpozitif, as both the majority shareholder and by electing the majority of Bankpozitif’s board of directors (the ‘‘Board of Directors’’), and also provides supervision and technical assistance for Bankpozitif’s corporate and retail banking operations, risk management, compliance, internal control and internal audit. As at 30 September 2007, Bankpozitif had two wholly owned operating subsidiaries, PozitifMenkul Degˇerler A.S¸. (formerly named C Menkul Degˇerler A.S¸.) (‘‘PozitifMenkul’’), an equity brokerage and corporate finance services company, and C Bilis¸im Teknolojileri ve Telekomu¨nikasyon Hizmetleri A.S¸. (‘‘C Bilis¸im’’), which specialises in software development, technical support and other technological activities relating to financial services. Bankpozitif, PozitifMenkul and C Bilis¸im are collectively referred to as the ‘‘Group’’ for the purpose of this Base Prospectus. On 21 November 2007, Bankpozitif acquired 100% of the share capital of Demir Kazakhstan, a bank which carries out its banking activities in Kazakhstan. As at 30 September 2007, Bankpozitif provided services through its head office and its nine branches located in Istanbul, Ankara and Izmir, and employed 262 personnel. As of the date of this prospectus Bankpozitif has a foreign currency long-term issuer default rating of BB with stable outlook, local currency long-term issuer default rating of BBB- with stable outlook and national long-term rating of AAA(tur) with stable outlook by Fitch Ratings. The registered head office address of Bankpozitif is Ru¨zgarlıbahçe Mahallesi Kayın Sok. No:3 34805 Kavacık Beykoz, Istanbul, Turkey and its telephone number is +90 (216) 538 25 25. Bankpozitif is registered with the Istanbul Trade Registry under number 417870.

History Bankpozitif was incorporated in Turkey on 9 April 1999 under the name of Toprak Yatırım Bankası A.S¸. as a subsidiary of Toprakbank A.S¸. On 1 December 2001, Toprakbank A.S¸., the previous majority shareholder, was taken over by the Savings Deposit Insurance Fund (‘‘SDIF’’). As a result, SDIF became the controlling shareholder of Toprak Yatırım Bankası A.S¸. On 1 November 2002, C Faktoring A.S¸. (‘‘C Faktoring’’) acquired 89.92% of the shares of Toprak Yatırım Bankası A.S¸. in an auction. C Faktoring is a part of C Group, which has banking and ﬁnancial investments in Turkey and around the world (including The Netherlands, Romania and Kyrgyzstan). C Faktoring itself is one of the biggest factoring company in Turkey in terms of paid-in capital. The most signiﬁcant investment of C Group is in Demir-Halk Bank Nederlands NV (‘‘DHB’’), in which C Group holds a 70% stake. The asset size of DHB is approximately EUR 1.9 billion with a total equity of EUR 204 million as at 30 September 2007. Following the acquisition by C Faktoring, the name of Toprak Yatırım Bankası A.S¸. was changed to C Kredi ve Kalkınma Bankası A.S¸. on 27 January 2003 and its share capital was increased on 19 June 2003 to YTL 47,500 thousand from YTL 5,930 thousand. As a result of share capital increases in 2003 and by purchasing other third party minority shareholders’ shares in August 2005, C Faktoring and its nominees increased their shareholding to 100%. On 13 December 2005, Bank Hapoalim signed an agreement to acquire a 57.55% stake in Bankpozitif by means of a capital injection to be made through Tarshish, a wholly owned subsidiary of Bank Hapoalim. On 23 December 2005, the name of C Kredi ve Kalkınma Bankası A.S¸ was changed to Bankpozitif Kredi ve Kalkınma Bankası A.S¸. All necessary approvals from both Turkish and Israeli authorities were obtained in 2006, and on 16 November 2006 Tarshish completed the acquisition of

24 57.55% shares of Bankpozitif. As of the date of this Base Prospectus, C Faktoring still holds a 42.45% stake in Bankpozitif. During the acquisition of the majority of Bankpozitif’s shares by Tarshish, Bankpozitif’s share capital was increased by YTL 64,396 thousand from YTL 47,500 thousand to YTL 111,896 thousand, and the total share premium amounts for the new issued shares paid by Tarshish totalled YTL 79,801 thousand, in two extraordinary general assembly meetings held on 31 October 2006 and 25 January 2007. The total equity increase amounted to YTL 144,197 thousand (U.S.$ 119,171 thousand) as a result of these capital increases.

Relationship with Bank Hapoalim Bankpozitif became a subsidiary of Bank Hapoalim in 2006 (see ‘‘History’’ above). As at 30 September 2007, Bank Hapoalim is one of Israel’s leading banks in terms of market share, profit, size of network and total assets (according to publicly available financial information), with international branches, subsidiaries and representative offices worldwide, including presence in major financial centres in Europe, North America and Latin America. Bank Hapoalim focuses on retail banking, credit cards, corporate finance, asset management, private banking and trade, corporate and syndicated financing. Bank Hapoalim provides significant supervision and technical assistance to Bankpozitif, as well as providing six of the nine members of the Board of Directors (see ‘‘Management’’ below). One of the members appointed by Bank Hapoalim resides in Turkey, is involved in the daily operations of Bankpozitif and works full time with Bankpozitif. Bankpozitif benefits from a continuous information flow between itself and Bank Hapoalim, site visits and advice in the areas of corporate and retail banking, risk management, internal control, compliance, internal audit and technology. Bankpozitif’s major policies are reviewed by the relevant departments of Bank Hapoalim before they are approved by Bankpozitif’s management. There are periodic visits from the risk management and internal audit departments of Bank Hapoalim, and monthly reports on the financial position, risk management, corporate and retail business are submitted to Bank Hapoalim. The head of risk management from Bank Hapoalim attends all meetings of the Board of Directors and the head of internal audit of Bank Hapoalim attends all of Bankpozitif’s Audit Committee meetings. In addition, a full time representative of Bank Hapoalim who reports directly to the Board of Directors is employed by Bankpozitif working in the area of internal control and internal systems. Bankpozitif has undergone significant organisational changes in terms of its work processes and procedures following Bank Hapoalim’s involvement. Among other things, Bankpozitif is fully compliant with the applicable regulations of the Bank of Israel (the Israeli Banking Regulator) and has revised its internal risk limits to achieve this. All policies, regulations and workflows are reviewed and approved (initially and on an ongoing basis) by Bank Hapoalim. Bank Hapoalim has extensive available credit lines across most of its correspondent bank network (which amounts to over 2500 correspondent banks worldwide), through which it conducts international activities. Through the international presence of Bank Hapoalim and by the development of Bankpozitif’s own international relations (which has been ongoing since 2002), Bankpozitif can access various different avenues of external funding. Bankpozitif currently receives funding support from Bank Hapoalim, amounting to YTL 97.0 million (U.S.$ 80.2 million) in the form of bilateral agreements as of 30 September 2007. Bankpozitif’s growth strategy is now closely supported by that of Bank Hapoalim. Bank Hapoalim aims to substantially increase its international activity and generate one-third of its revenue from its international presences in the next five years (see ‘‘Strategy’’ below).

Strategy Bankpozitif seeks to achieve and maintain high levels of profitability and high efficiency ratios such as return on equity, return on assets and cost/income ratios by concentrating on its core banking business, with sound risk management policies and one of the most efficient operational processes in the Turkish banking sector. Bankpozitif focuses on corporate and retail banking (its core banking business), excluding the acceptance of deposits. Bankpozitif’s corporate target segment consists of medium to large size corporate clients with average annual turnover of U.S.$ 20 million or more in

4 According to Bankpozitif’s internal categorisation system, upper mass segment retail customers have a net income per household in excess of U.S.$ 2,000 per month. Afﬂuent customers have a net income per household in excess of U.S.$ 3,000 per month.

25 the targeted sectors. Bankpozitif targets afﬂuent and upper-mass segment4 retail customers on the retail banking side. Bankpozitif aims to grow its corporate business and its retail business and aims to grow in international markets by ways of acquisition. In addition, Bankpozitif is currently undertaking the application process required in order to obtain deposit permission (see ‘‘Business Activities’’ below). Currently, Bankpozitif does not view deposit-taking as an integral part of its funding strategy but as a complementary service that would be particularly aimed at its retail customers and which it believes will increase the customer retention and per customer revenues.

Corporate growth With the capital injection from Bank Hapoalim and the benefits Bankpozitif gains from its new shareholder structure, Bankpozitif will seek to both continue and expand its boutique corporate banking activities, as opposed to shifting to become a mass player in the corporate banking business, see ‘‘Corporate Banking Business’’ below. The management of the Bank plans to achieve growth by penetration in the current corporate customer portfolio and by reaching new customers in the targeted sectors by focusing on individual projects of potential customers. Bankpozitif plans to significantly grow its corporate cash portfolio by the end of 2008 compared to the third quarter of 2007. Bankpozitif also aims to increase the growth rate for its corporate business in 2008, building upon the 115% growth rate achieved for the first nine months of 2007. Since its establishment, Bankpozitif has mainly been involved in the non-cash loan (letters of guarantee, letters of credit) business of corporate banking, has acted as an arranger for the cash financing needs of its clients and has teamed up with foreign banks as part of large-size syndicated cash lending transactions (where Bankpozitif participated as arranger). In accordance with the new business plan and with the increasing level of funding capability leveraged by its high level of equity, Bankpozitif plans to grow its cash loans by being more active in its direct lending role, by increasing its presence in its targeted sectors in terms of project financing, trade financing, corporate lending and leasing activities, and by increasing its corporate staff size and experience. Bankpozitif also continues to play an arranger role in large-size syndicated cash lending. As presented in the 30 September 2007 financial statements, Bankpozitif achieved significant growth in terms of its loan book balance. The loan book increased by 93% during the year 2006. During the first nine-month period of 2007 the loan book increased by 125% compared to year-end 2006 to YTL 621,614.

International markets growth Bank Hapoalim has identiﬁed Turkey as a platform for it to grow its international business both in the Turkish market and in the emerging markets surrounding Turkey, relying on Turkey’s historical and cultural links with such markets. On 2 November 2006, Bankpozitif signed a purchase agreement to acquire 100% of the ordinary shares of Demir Kazakhstan. The acquisition was completed on 21 November 2007. The total cost of investment in Kazakhstan by Bankpozitif is U.S.$ 70.5 million following the acquisition of Demir Kazakhstan and the associated share capital increase. The entire cost of such investment was funded by an increase of U.S.$ 72 million in the share capital of Bankpozitif, whereby Bank Hapoalim and C Faktoring made additional contributions to the share capital of Bankpozitif in the proportions of their existing shareholdings. This share capital increase was ﬁnalised as of 31 December 2007. In addition, based on the strong relationship Bankpozitif has with Bank Hapoalim, Bankpozitif is also seeking to become the main banking business partner between Turkey and Israel.

Retail growth The introduction of retail banking services was a new strategy developed by Bankpozitif following its acquisition by Bank Hapoalim. During 2006, Bankpozitif entered into the retail banking business with lending products such as mortgage loans, vehicle loans, home equity loans and consumer loans. Bankpozitif targets affluent and upper-mass segment retail customers and differentiates its services from the competition with effective and efficient technology intensive processes. Cost effective, sales- oriented branches, direct sales force and vendor relations are the main sales channels for Bankpozitif. Bankpozitif started to open new branches in the beginning of 2006 and had a nine branch network as of 30 September 2007. This is expected to increase to fifteen by the end of 2008. All of the credit operations of Bankpozitif are centralised. Bankpozitif aims to achieve a substantially expanded retail loan portfolio in the following years. Bankpozitif enjoys a relatively unique market position compared to medium- and large-sized deposit- taking banks, which are mainly relying on the traditional branch structure for their retail business.

26 Bankpozitif uses alternative sales channels in its retail business which brings a new dimension to its banking business (see ‘‘Retail Banking Business’’ below). In both the corporate and retail banking sectors, Bankpozitif is a niche expert bank in its target areas. Due to its relatively small size, Bankpozitif achieves a niche position in the Turkish market, both in its retail and corporate business, by offering higher quality, faster services to a selected target group of clients through a lower cost base and a limited physical network. Bankpozitif distinguishes itself from other banks and financial institutions in the domestic market by certain key elements of its strategy: * Bankpozitif does not compete in terms of the size of its balance sheet or its network but instead focuses on its status as a niche player serving targeted segments in the corporate and retail market to differentiate itself from other Turkish banks; * as a subsidiary of Bank Hapoalim, Bankpozitif is able to benefit from and build on its parent’s international experience; and * all of Bankpozitif’s activities and business lines are guided by three key principles, Efficiency, Effectiveness and Sound Risk Management. Bankpozitif is able to increase and keep its competitive advantage by applying these three principles and its differentiation strategy in terms of segmentation, use of technology, experienced people and efficient work-flows, even in a declining interest rate environment, by serving its clients in the most effective and time efficient manner. These principles are further detailed below:

Efficiency Bankpozitif prefers to measure its success against target ratios for return on assets, return on equity and cost / income ratio rather than specific asset size or market share goals. Bankpozitif enhances its efficiency by outsourcing certain of its non-core activities. Payroll services, PR activities, construction and engineering services for premises, legal services and follow up for retail collections are outsourced. In order to achieve the most efficient lending process, Bankpozitif’s operations are centralised, and there is a standardised flow of information during the loan application and disbursement processes. Bankpozitif also benefits from low costs of operations in terms of personnel expense, communication expense and maintenance and support expense.

Effectiveness Bankpozitif aims to be one of the most efficient operators in the Turkish market. Bankpozitif does not intend to offer a wide range of products and services to all client segments but instead identifies target client segments and offers a specific set of products and services that are suitable for the targeted segments. While keeping efficiency measures at very high levels, Bankpozitif also aims to keep service quality high by offering convenience, fast decision-making processes and expertise through highly trained and well-equipped people, and by specialising in selected products, differentiated services and targeted customer segments in its corporate and retail businesses, as more particularly set out in ‘‘Corporate Banking Business’’ and ‘‘Retail Banking Business’’ below.

Sound Risk Management Bankpozitif will continue to focus on its core banking activities and therefore only assume risks that are associated with the areas in which Bankpozitif has most familiarity. Since it is a relatively new bank, it aims to have higher than required ratios and standards in risk management. Examples include: (i) the maintenance of a Bank of International Settlements (‘‘BIS’’) ratio of in excess of 40% for each of the past four years and plans to keep the BIS ratio above 15% for the next two years after the acquisition of the majority of Bankpozitif’s shares by Bank Hapoalim; (ii) Bankpozitif is not willing to take any position in maturity, interest rate and/or currency risks; (iii) there are certain limitations in terms of single borrower and single group exposures, sectoral concentrations and related party loans; and (iv) Bankpozitif’s trade and investment in securities is limited (less than 12% of total asset size as at 30 September 2007). As a result, the majority of Bankpozitif’s income derives from its core business. For more detail concerning the risk management of Bankpozitif, see ‘‘Risk Management’’ below.

27 Competition in the Turkish banking sector Bankpozitif enjoys a relatively unique market position, and is regarded in the market as a niche operator. Its business approach in respect of its corporate operations means that it is not in direct competition with other banks. However, it is still in competition with both Turkish and foreign banks in certain industry sectors. In particular, Bankpozitif is in direct competition with other banks in the retail sector for its target retail clients.

Business Activities Bankpozitif currently operates as a non-deposit taking investment bank and is mainly involved in the provision of corporate services such as corporate lending, trade finance, financial leasing, and project finance in industries such as construction, energy, automotive, tourism, food and agricultural products, transportation and shipping and ports (marine industry). Bankpozitif has also recently launched retail banking operations (see ‘‘Retail Banking Business’’ below) which is a key area of growth for Bankpozitif. As an investment bank, Bankpozitif borrows from the financial markets, its counterparties and its credit customers. Currently Bankpozitif is undertaking the application process required in order to obtain a deposit permission, which is the permission required by Turkish banking law for banks to accept deposits. Bankpozitif’s business plan does not rely on deposit collection for its funding, thus Bankpozitif mainly uses international borrowing activities as a funding source (see ‘‘Funding’’ below). However, Bankpozitif believes that in the future, deposit-taking, in additional to other retail products, will increase customer retention and per customer revenues. As at 30 September 2007, Bankpozitif’s subsidiary, PozitifMenkul, is involved in intermediary, brokerage and corporate finance activities, such as IPO, advisory, mergers and acquisitions, and another subsidiary, C Bilisim, specialises in software development and technological issues relating to the financial industry and provides technical support to Bankpozitif, its subsidiaries and C Group companies. Bankpozitif acquired a new subsidiary by purchasing all of the shares in Demir Kazakhstan from C Group on 21 November 2007. This acquisition is the outcome of one aspect of the growth strategy developed following Bankpozitif’s acquisition by Bank Hapoalim. Demir Kazakhstan is a mid-sized banking institution (total assets amounting to U.S.$ 120 million and total equity size of U.S.$ 24.9 million, both as of 30 September 2007), reputed for the quality and liquidity of its assets and characterised in the Kazakh banking sector by prudence and conservative management. Through its branches, Demir Kazakhstan offers a full range of financial products to its corporate and retail clients, including trade finance, consumer finance, deposit products and cash and asset management. Demir Kazakhstan’s network comprises six branches and employs 299 people. The total cost of investment in Kazakhstan by Bankpozitif is U.S.$ 70.5 million following the acquisition of Demir Kazakhstan and the associated share capital increase. The entire cost of such investment was funded by an increase (by U.S.$ 72 million) in the share capital of Bankpozitif, whereby Bank Hapoalim and C Faktoring made additional contributions to the share capital of Bankpozitif in the proportions of their existing shareholdings. This share capital increase was finalised as of 31 December 2007.

Corporate banking business Bankpozitif’s corporate banking business consists of trade finance, corporate lending, project finance and financial leasing. Bankpozitif’s management semi-annually reviews and selects target sectors according to their anticipated growth, importance of the sector for the country, supply and demand analysis and income generation potential. In 2007, Bankpozitif’s main target sectors were construction, shipping and transportation, energy, automotive, tourism, food, agricultural products, and shipping and ports (marine industry). The management of Bankpozitif is currently considering the entry into potential new sectors, such as healthcare/hospitals and water. Bankpozitif operates its corporate banking business through three geographical business divisions: Istanbul, Izmir and Ankara, which accounted for 79.45%, 12.40% and 8.15%, respectively, of Bankpozitif’s corporate banking business as at 30 September 2007. Bankpozitif’s target customers for its corporate business are medium to large size corporates with an average annual turnover of U.S.$ 20 million or more, principally within Bankpozitif’s selected sectors. In addition to multinational companies and blue-chip companies which operate in Bankpozitif’s target sectors, its corporate banking operations target the largest one thousand Turkish companies by focusing on both profitability and loyalty. The targeted average relationship size with a single client is not less than U.S.$ 4 million. Targeted minimum relationship size with a client is U.S.$ 1 million.

28 Bankpozitif also participates and teams up with foreign banks as part of a syndicate on transactions over U.S.$ 50 million. Bankpozitif provides tailor-made products such as project and investment financing, financial structuring and trade financing, which are adapted to the demands of its customers with the support of specialised corporate banking teams. Among these products and services, project finance and structured financial solutions are gaining increasing importance. Bankpozitif employs highly trained sector specialists, who provide advice and analysis to clients, which the management of Bankpozitif believes exceeds the quality and expertise in these sectors in other banks. Bankpozitif generates commission and fee income from non-cash operations (contingent liabilities such as letters of guarantee, letters of credit and bank acceptances), trade finance loan facilities and arranger fees for cash loan facilities. Bankpozitif aims to increase its advisory commission income through its subsidiary PozitifMenkul by being more active in various fields of corporate finance, mainly advisory services, mergers and acquisitions, public offerings, and the arrangement of syndicated deals. The following table shows a breakdown of Bankpozitif’s fee and commission income and expense for the years ended 31 December 2006 and 2005 and the period ended 30 September 2007:

Year ended Year ended Period ended 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousands) thousands) thousands) Fee and commission income Letters of guarantee 4,092 3,520 2,451 Loans 569 2,882 4,252 Letters of credit 1,174 604 753 Other fees 245 251 568 Commission income on brokerage activities 3,143 2,800 2,055

Total 9,223 10,057 10,079

Fees and commission expense Corresponding bank fees 381 659 1,283 Other fees and commission expense — 396 1,854

Total 381 1,055 3,137

Bankpozitif has worked with well-known foreign banks in large corporate deals. A key example was where Bankpozitif arranged and co-financed with Credit Suisse projects in each of the cement and steel industries. These were U.S.$ 80 million and U.S.$ 49 million deals, respectively. Bankpozitif was also involved in the privatisation of Petrol Ofisi A.S. and Istanbul Hilton Hotel and the purchase of operating rights of Istanbul Ataturk Airport by TAV. In addition, Bankpozitif provides advisory services in corporate finance and consultancy services to clients contemplating new investments. While supporting its non-interest income, these activities have also helped Bankpozitif further build its presence and reputation in corporate banking.

Retail banking business Until the acquisition by Bank Hapoalim of a majority stake in Bankpozitif, Bankpozitif did not engage in retail banking operations, except for some pilot retail activities. However, since the acquisition, Bankpozitif has established a retail banking division offering lending products such as mortgages, home equity, vehicle finance and consumer loans to individuals. In 2006 and in the first nine months of 2007, Bankpozitif invested in its retail banking business by opening eight new branches, by hiring staff for the expansion and by investing in infrastructure. Utilising centralised operations, a low cost base, fast and efficient processes and unique sales channels, Bankpozitif built up its position in the Turkish retail banking sector in 2007 and further aims to expand its retail lending business in the following years. In the current business plan for the retail loan portfolio, Bankpozitif targets significant growth in both 2008 and 2009, which should result in a substantial increase in the portfolio balance by the end of 2008.

29 Bankpozitif has a unique sales organisation. There are 5 geographical regions (three in Istanbul, one in each of Izmir and Ankara). Under each region there are three sales channels of ‘‘Branches’’, ‘‘Direct Sales Force’’ and ‘‘Vendor Relations’’, as described more particularly below. Each region has a regional head that reports to the assistant general manager responsible for retail banking business, who is based in the head ofﬁce. A considerable amount of retail loan applications come directly from vendors, and as such Bankpozitif invests time and expense in maintaining and developing these relationships.

The Group (through PozitifMenkul) also manages three open-ended investment funds which were established under the regulations of the Capital Market Board of Turkey. In accordance with the funds’ charters, the Group purchases and sells securities on behalf of funds, markets their participation certiﬁcates and provides other services in return for a management fee and undertakes management responsibility for their operations. The total asset size of these three funds is YTL 1.2 million.

– Branches Bankpozitif has nine branches through which it operated its retail banking business as at 30 September 2007. Six of these branches are located in Istanbul, two of them are in Ankara and one in Izmir. All branches are in prime locations with a high level of visibility and with high densities of retail business target segments (afﬂuent and upper-mass). Each branch has 4 staff including a branch manager, two customer relationship managers and one greeter. Branches do not perform any cash transactions; they only perform sales and collect loan applications which are sent to the centralised retail loans department. All operations are carried out centrally in the head ofﬁce to allow the branch personnel to focus on sales. Branch personnel have a performance based salary scheme and each team member has monthly targets to achieve in terms of number of applications, number of loans granted, amount of loans and approval ratio. Performance appraisals of the personnel are reported to the management weekly.

– Direct Sales Force Bankpozitif currently has five Direct Sales Force teams (three in Istanbul and one in each of Izmir and Ankara) based on geographical area. Each team is composed of four customer relationship managers and one team leader. These teams acquire customers through outbound customer visits, references from existing clients and campaigns to the salaried staff of well-known companies. This sales channel is very flexible and cost efficient. Direct sales force teams have a performance based salary scheme and each team member has monthly targets to achieve in terms of number of applications, number of loans granted, amount of loans and approval ratio. Performance appraisals of personnel are reported to the management weekly.

– Vendor Relations Bankpozitif currently has ﬁve Vendor Relations teams (three in Istanbul and one in each of Izmir and Ankara) based on geographical area. Each team is composed of three vendor relationship managers. Through this sales channel, Bankpozitif can easily meet with the customer. Bankpozitif works with vendors (car dealers, real estate agencies and stores) whose customers may require the retail banking loans provided by Bankpozitif. Each team member is responsible for ﬁnding new vendors, and managing and monitoring the existing relationships. The vendors’ customers can make a direct loan application to Bankpozitif from the vendors’ premises using Bankpozitif’s internet banking technology. Bankpozitif gives training to each vendor on how to use such technology. Vendors are paid commission based on their performance. Vendor Relations teams also have a performance based salary scheme and each team member has monthly targets to achieve in terms of number of applications, number of loans granted, amount of loans and approval ratio. Performance appraisals of personnel are reported to the management weekly.

Bankpozitif is also intending to take advantage of cross-selling opportunities and believes its growing existing retail banking business will provide a potential entry point to new business lines such as credit cards and insurance products linked to the lending products as an agent.

Bankpozitif believes it will also beneﬁt from the background and extensive know-how of Bank Hapoalim in the retail banking sector when building up the business.

30 Subsidiaries Bankpozitif had two wholly owned operating subsidiaries, PozitifMenkul and C Bilisim as at 30 September 2007. PozitifMenkul is an equity brokerage firm that performs intermediary and brokerage activities, corporate finance activities, intermediary activities in IPOs and custodian services. C Bilis¸im specialises in software development, IT support and other technological activities relating to financial services. Both PozitifMenkul and C Bilis¸im are consolidated in the financial statements of Bankpozitif prepared in accordance with IFRS. As of 30 September 2007, the contributions of PozitifMenkul and C Bilis¸im to Bankpozitif’s consolidated total net assets were 1.7% and 0.3% (31 December 2006: 3.2% and 0.5%) and to net income were -3.0% and -0.8% (31 December 2006: 11.7% and -1.4%), respectively. Bankpozitif acquired Demir Kazakhstan, a new wholly-owned subsidiary on 21 November 2007. Through its branches, Demir Kazakhstan offers a full range of financial products to its corporate and retail clients including trade finance, consumer finance, deposit products, and cash and asset management. As of 30 September 2007, the total asset and total equity size of Demir Kazakhstan was U.S.$ 120 million and U.S.$ 24.9 million.

Funding Bankpozitif currently does not accept deposits and relies on the following three sources for its funding purposes: equity, borrowings from banks (syndicated loans, the bond market and bilateral borrowings) and customer accounts including cash collateral. Among these three, equity remains the most significant source of funding, representing 49.1% of total liabilities in 2006 and 29.8% in the third quarter of 2007. Bankpozitif has entered the bond market with its debut appearance in June 2007 (as described below) and is also considering asset securitisations as a future method of raising funds. As a general principle, Bankpozitif prefers to borrow long-term funds from a diversified lender base through the above mentioned markets and aims to develop its balance sheet by matching such funds with the maturities of its assets and interest rate structure. Bankpozitif only uses its money market lines for short-term bridge financing purposes. The following table shows the funding structure of Bankpozitif as at the dates indicated:

Year ended December 31 Period ended September 30 2005 2006 2007 (YTL thousands except (YTL thousands except (YTL thousands except percentages) percentages) percentages) Equity 91,467 41.1% 235,705 49.1% 264,775 29.8% Borrowing under LPN Structure bond issue — — — — 181,500 20.4% Syndicated loans — — 57,123 11.9% 151,250 17.0% Bilateral Borrowings 75,322 33.9% 99,821 20.8% 180,811 20.4% Other Money Markets 5,509 2.5% 23,524 4.9% 23,457 2.7% Other Liabilities (mainly customer accounts) 50,107 22.5% 64,304 13.3% 86,342 9.7%

Total Liabilities 222,405 100% 480,477 100% 888,135 100%

31 Repayments of medium/long term borrowing are as follows as at dates indicated:

As at year ended As at period ended 31 December 2006 30 September 2007 Floating Fixed Floating Fixed rate rate rate rate (YTL thousands) 2007 12,338 5,648 6,115 599 2008 18,927 164 11,595 27,370 2009 17,741 164 90,735 142 2010 865 — 796 — 2011 161 — 137 — Thereafter — — — 183,580

Total 50,032 5,976 109,378 211,691

On 28 April 2006, Bankpozitif completed its first syndicated loan, a U.S.$ 40 million facility with one year maturity, through lead managers Bayern LB, HVB Bank (UniCredit Group), Commerzbank Aktiengesellschaft, GarantiBank International N.V. and Raiffeisen Zentralbank Osterreich AG. The first syndicated loan was repaid before its maturity when Bankpozitif obtained a new syndicated loan facility under its current shareholding structure. On 22 February 2007, Bankpozitif secured a U.S.$ 125 million syndicated loan, with BayernLB, HVB Bank (UniCredit Group), Wachovia Bank NA, Commerzbank AG, RZB and Garanti International as lead managers. The first tranche amounted to U.S.$ 59.25 million, and has a one year term, bearing an interest rate of Libor + 0.45%. The second tranche was U.S.$ 65.75 million with a two year term, bearing an interest rate of Libor + 0.85%. The purpose of the loan is funding the trade financing needs of the clients of Bankpozitif. Additionally, on 26 June 2007 Bankpozitif received a five-year U.S.$ 150 million loan from Deutsche Bank Luxembourg S.A. through a loan participation note issue lead managed by Deutsche Bank AG on a sole basis. The proceeds of this loan were used for general corporate purposes. Bankpozitif’s debut appearance in debt capital markets received significant attention from the investor community (including insurance companies, fund managers and banks) as was evidenced by the transaction being more than one and a half times oversubscribed with the participation of over 35 investors from Switzerland, Benelux, Israel, UK and Austria among others. This debut appearance in the debt capital markets is the first senior unsecured Eurobond issue for a bank in Turkey for almost a decade. The issue was priced at a yield of 7.815%. As at 30 September 2007, Bankpozitif had short term bilateral borrowings with related party group banks, which amounted to YTL 97.8 million (U.S.$ 80.8 million).

Loan Portfolio General Bankpozitif provides loans to corporate and retail customers. In 2006, Bankpozitif’s gross loans almost doubled in nominal terms compared with 2005, although gross loans accounted for only 58% of total assets (compared with 65% in 2005). The decrease in the percentage of gross loans to total assets is due to the increase in the asset size as a result of the capital injection in November 2006. As at 30 September 2007, total loan book constituted 70% of total assets. In 2006 and 2007, Bankpozitif achieved signiﬁcant growth in terms of its loan book balance. The loan book increased by 93% during the year 2006. During the ﬁrst nine-month period of 2007 the loan book increased by 125%. Total retail loan balances account for 6.7%, 17.2% and 27.2% of the total cash loan book as at 31 December 2005 and 2006 and 30 September 2007, respectively. Total non-cash loans (contingent liabilities such as letters of guarantee, letters of credit and bank acceptances) equated to 42% of total assets as at 30 September 2007 (compared to 55% as at 31 December 2006). Bankpozitif aims to increase the letters of guarantee and letters of credit in line with the sectoral concentration limits set out in Bankpozitif’s corporate loan policy, see ‘‘Corporate Loan Policy and Approval Process’’.

32 The table below shows the distribution of Bankpozitif’s total loans by business unit as at the dates indicated: Year ended Year ended Period ended 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousands) thousands) thousands) Corporate Loans 86,126 192,544 415,569 Commercial Instalment Loans 62 6,907 31,054 Consumer Loans 9,555 40,642 137,916

Total Loans 95,743 240,093 584,539 Loan in arrears 2,657 2,141 11,276 Less: Speciﬁc reserve for impairment (2,657) (898) (3,253) Less: Portfolio reserve for impairment (1,300) (2,616) (5,701)

Total Loan, net 94,443 238,720 586,861

Minimum lease payment receivables, net 49,059 38,083 34,753

Total 143,502 276,803 621,614

The table below shows the distribution of retail loans (including commercial instalment loans) by type as at the dates indicated:

Year ended Year ended Period ended 31 December 2005 31 December 2006 30 September 2007 (YTL thousands except percentages) Personal 4,288 45% 5,830 12% 23,697 14% Vehicle 919 10% 20,337 43% 61,115 36% Home Equity 715 7% 16,796 35% 40,346 24% Mortgage 3,695 38% 4,586 10% 43,812 26%

Grand total 9,617 100% 47,549 100% 168,970 100%

As at 30 September 2007, the share of the Group’s receivables from its top 20 credit customers in its total loan portfolio was 38% (31 December 2006 – 56%). The concentration of the corporate loan portfolio in terms of single borrowers and industry type is closely monitored by daily reporting to senior management, including the chief executive ofﬁcer, the general manager and the relevant assistant general managers.

33 The following table shows a breakdown of Bankpozitif’s total cash and non-cash loan portfolio by industry sector as at the dates indicated:

Period ended Year ended 31 December 30 September 2005 2006 2007 (YTL thousands except percentages) Construction 141,388 24.9% 101,554 18.7% 200,566 20.2% Financial sector 60,376 10.6% 55,013 10.1% 108,084 10.9% Tourism and entertainment 118,445 20.9% 92,533 17.1% 106,288 10.7% Automotive 22,547 4.0% 26,542 4.9% 90,501 9.1% Energy 41,847 7.4% 23,405 4.3% 63,497 6.4% Metal 13,243 2.3% 24,002 4.4% 60,386 6.1% Carpet manufacturing and Textiles 22,373 3.9% 42,195 7.8% 53,125 5.4% Machinery 19,199 3.4% 24,124 4.5% 40,385 4.1% Transportation 25,176 4.4% 15,495 2.9% 28,177 2.8% Food 15,343 2.7% 6,810 1.3% 13,240 1.3% Plastic 1,824 0.3% 4,500 0.8% 11,968 1.2% Computer 5,937 1.0% 8,677 1.6% 6,681 0.7% Others 70,434 12.4% 74,987 13.8% 62,741 6.3%

Corporate 558,132 98.2% 499,837 92.2% 845,639 85.2%

Consumer & staff loans 10,944 1.9% 40,150 7.4% 136,788 13.8% Loans in arrears 2,657 0.5% 2,141 0.4% 11,276 1.1% Interest accruals 674 0.1% 3,399 0.6% 7,541 0.8% Provision for possible loan losses (3,957) (0.7%) (3,514) (0.6%) (8,954) (0.9%)

Total 568,450 100.0% 542,013 100.0% 992,290 100.0%

The following table sets out an analysis of the currency exposure of Bankpozitif’s corporate and retail cash loan portfolio (loans and advances plus minimum lease payment receivables) as at the dates indicated:

Period ended Year ended 31 December 30 September 2005 2006 2007 (YTL thousands except percentages) New Turkish Lira 32,156 22% 112,392 41% 261,764 42% U.S. Dollar 69,204 48% 109,066 39% 208,543 33% Euro 42,142 30% 55,345 20% 134,448 22% Others ————16,859 3%

Total 143,502 100% 276,803 100% 621,614 100%

Lending

Corporate Loan Policy and Approval Process Bankpozitif manages its corporate loan approval and monitoring processes in accordance with the internal corporate loan policy documents, internal corporate loan and risk monitoring regulation and related risk exposure limit documents (together, ‘‘Corporate Loan Policies’’), which are approved by the Board of Directors. The Corporate Loan Policies of Bankpozitif comply with the Banking Law in Turkey, and relevant Banking Regulatory and Supervision Agency (Turkey) (‘‘BRSA’’) and Bank of Israel regulations.

Bankpozitif has established independent departments for the marketing, credit approval and monitoring functions. The Corporate Marketing Department is responsible for reaching out to customers, managing customer relations and submitting credit proposals. The Corporate Loans and

34 Risk Monitoring Department is responsible for evaluating and analysing these credit proposals, presenting the proposals to the relevant approval authorities and monitoring the existing portfolio. The Corporate Loans and Risk Monitoring Department does not have any sales targets and is solely responsible for the evaluation and allocation of new corporate loans and monitoring the performance of the corporate loan portfolio. The Corporate Loans and Risk Monitoring Department is not included in any phase of the pricing of corporate loans. According to the Banking Law in Turkey, only the Board of Directors has the authority to grant credits but can delegate certain levels of authority to the Credit Committee (see ‘‘Management’’ below) and to the General Manager. The Board of Directors can delegate an authorisation limit of up to 10% of the total equity to the Credit Committee and up to 1% of the total equity to the General Manager in accordance with the provisions of the Banking Law in Turkey. Bankpozitif’s internal Corporate Loan Policies apply stricter limits than the above mentioned limitations based on internal corporate ratings given to its customers. Bankpozitif has an internal corporate rating system for its corporate loan customers which span a ten notch range, extending from ‘‘Aaa’’ (the lowest risk category) to ‘‘D’’ (the highest risk category). Corporate loan approval authority delegations of the Board of Directors to the Credit Committee and to the General Manager are as follows:

Board of Directors Credit Committee General Manager 100% cash collateralised All loans above Between Up to U.S.$ 12 million U.S.$ 1-12 million U.S.$ 1 million Existing customer with B or higher All loans above Between Up to internal rating U.S.$ 12 million U.S.$ 1-12 million U.S.$ 1 million Existing customer with CAA All loans above Up to — internal rating U.S.$ 3 million U.S.$ 3 million New customer with B or higher All loans above Between Up to internal rating U.S.$ 7 million U.S.$ 1-7 million U.S.$ 1 million Any customer with an internal All loans — — rating lower than CAA

As at 30 September 2007, 91% of Bankpozitif’s corporate loan portfolio was rated in the internal top six categories. The internal rating system has been in place since 2003 and is currently being aligned with Bank Hapoalim’s rating system. Customers are rated according to the ﬁnancial analysis of the past three years’ ﬁnancial performance and an evaluation of business performance. Bankpozitif believes that its existing rating system is adequate in light of the small size of Bankpozitif’s current loan portfolio. However, Bankpozitif aims to further develop the existing model and upgrade it in line with international rating standards. The Credit Risk Working Group (‘‘CRW Group’’), consisting of senior credit managers of Bankpozitif, members from the risk management department and a business analyst from C Bilis¸im, is currently aiming to develop and implement a rating system for Bankpozitif that is consistent with both the rating system used by Bank Hapoalim and Basel II. The CRW Group is currently undertaking an initial study. The target is to achieve consistency in all aspects of the rating system, from the testing to the evaluation stage. The project is planned to be completed in early 2008. Bankpozitif’s ultimate objective is to develop a credit risk modelling system that uses statistical analysis to generate probability of default and is consistent with Basel II. Bankpozitif also has certain concentration limitations for the loan portfolio. These limits are more stringent regulations than those set by both the Bank of Israel and the BRSA. Bankpozitif’s internal regulations also differ from the BRSA regulations in certain ways, such as, in the internal regulations, non-cash loans are included in the calculation by their nominal values, whereas in BRSA regulations there are certain hair-cut ratios for non-cash loans (e.g. 50% or 40% of the nominal value may be applied in the calculation of the risk). The following table shows a comparison between the legal limits and Bankpozitif’s internal limit for each of the major concentrations:

35 Israel Turkish Internal legislation legislation regulation A Borrower’s Indebtedness / Own Funds(*) 15% 25% 15% A Group of Borrower’s Indebtedness / Own Funds 30% 25% 25% A Controlled Group of Borrowers (subsidiaries) / Own Funds 50% 20% 10% Six Largest Borrowers and Group of Borrowers will not exceed the Own Funds over 135% — 135% Total of Big Credits cannot exceed the Own Funds over — 800% 800% The Bank’s Own Risk Group’s Indebtedness / Own Funds 10% 20% 10% Maximum Sectoral Concentration in a Single Sector as a percentage of Own Funds — — 30%(**)

(*) Own funds calculated as the total of core capital + supplementary capital + Tier III Capital – deductions from the capital, as required by the BRSA in the capital adequacy calculation regulation. (**) Effective from 1 January 2008, it reads 25%.

During the approval process of a corporate loan, apart from control procedures performed by the Corporate Loans and Risk Monitoring Department, the Internal Control Unit also reviews corporate loans above U.S.$ 100 thousand for their compliance with certain policies and procedures. In accordance with the Corporate Loan Policies, no exception from the required conditions for a loan disbursement is allowed. While granting a corporate loan, all policies and procedures should be fulﬁlled without any missing documentation. If there is missing documentation, the process of granting the corporate loan is suspended until all the documentation is complete.

Retail Loan Policy and Approval Process In accordance with the retail credit policy, retail loan evaluation procedures and retail loan monitoring procedures (together ‘‘Retail Loan Policies’’), and all evaluating, granting and monitoring activities are performed by a separate centralised department, the Retail Loans and Risk Monitoring Department. The department and its responsibilities are built on the efficiency principle by standardising the flow of transactions, enabling branch personnel to focus on customers, keeping costs at low levels, facilitating a faster decision-making process and allowing close monitoring and follow up of customers after disbursement. The Retail Loans and Risk Monitoring Department does not have any sales targets and is solely responsible for the evaluation and allocation of new retail loans and monitoring the performance of the retail loan portfolio. Retail Loans and Risk Monitoring Department is not included in any phase of the pricing of retail loans. In accordance with the Retail Loan Policies, during the evaluation process for retail loans, generally the following are considered: default history of the client, current financial situation and its sustainability, value of the collateral, liquidity of the collateral, loan to collateral value (‘‘LTV’’) ratio and existence of required documents. The maximum LTV’s for standard retail loans are as follows: 80% for (new) vehicle loans (70% if the vehicle is second-hand) 70% for mortgage loans 50% for home equity loans (if the mortgage is residential property) 40% for home equity loans (if the mortgage is commercial property) Based on the creditworthiness and income level of the borrower, these LTV ratios may vary. The market value and the liquidation value of the real estate assets are determined by independent appraisal companies that are licensed under the relevant regulations and approved by the Board of Directors. The liquidation value is taken into consideration during the evaluation process. The real estate assets located in the central zones of the three biggest cities (Istanbul, Ankara, and Izmir) in Turkey are accepted as collateral in accordance with Bankpozitif’s internal regulations. If the real estate asset which is subject to real estate lending is in the construction phase, then the construction should be at least 70% complete. During the initial evaluation and allocation process of a retail loan, the decision-making process is fully automated (including checking the creditworthiness of the customer through different internal and external data warehouses including the Credit Bureau, the official Turkish Banking Database). The final decision is made either automatically for loans that are below predetermined limits (these

36 limits vary based on the type of the product, but these limits are between YTL 3 to YTL 5 thousand) or by the credit officer for loans that are above these limits. As Bankpozitif is in the process of building its retail loan portfolio, Bankpozitif only grants loans to those clients with good credit history with other banks. This is confirmed using internal and external databases. Bankpozitif has developed its own scorecard system in conjunction with Experian Decision Analytics (formerly Experian-Scorex). This is currently being implemented and is scheduled for completion during the first quarter of 2008. In accordance with the Retail Loan Policies, limits to approve a retail loan are the same as corporate loans. Retail loans above U.S.$ 1 million need the approval of the Credit Committee and, if necessary, the Board of Directors. The General Manager (acting alone) has a limit of U.S.$ 1 million. The General Manager has delegated his limits as follows: Collateral Collateral No by Mortgage by Vehicle collateral (Thousand YTL) Assistant General Manager 0-750 0-250 0-100 Manager 0-300 0-150 0-50 Assistant Manager 0-150 0-75 0-25

The above mentioned limitations are subject to the quarterly approval (monthly approval if an update is required) of the Board of Directors. A further requirement in relation to the approval of a retail loan is that there should be an insurance policy taken out by the borrower or for the vehicle for which the loan is sought. During the approval process of a retail loan, apart from control procedures performed by the Retail Loans and Risk Monitoring Department, the Internal Control Unit also reviews retail loans (vehicles: above YTL 20 thousand, personal: above YTL 10 thousand, mortgage: all loans) for their compliance with policies and procedures. In accordance with the Retail Loan Policies, no exception from the required conditions for a loan disbursement is allowed. While granting a retail loan all policies and procedures should be fulﬁlled without any missing documentation. If there is missing documentation, the process of granting the retail loan is suspended until all the documentation is complete.

Loan Classification and Provisioning Policy * Bankpozitif classifies its total loan portfolio in accordance with current Turkish banking regulations in its Statutory Financial Statements. Pursuant to these regulations, banks are required to classify their loans and receivables in one of the following groups: (a) Standard Loans and Other Receivables – All loans and receivables are fully collectible or expected to be paid in full in a timely manner where the debtor is financially strong. (b) Closely Monitored Loans and Other Receivables – In the event that a deterioration in the financial condition or in the cash flow of the debtor is evidenced, or there is sufficient proof or risk that repayment will not be made in a timely manner and in accordance with the conditions as set forth in the applicable loan agreement, loans and receivables must be allocated to this group. Nevertheless, in order to be classified in this group, there must be an expectation that such loans or receivables will be repaid in full. It is not required to provide any specific reserve for this group of loans. (c) Loans and Other Receivables with Limited Collectibility – In the event the principal and/ or accrued interest on a loan or receivable is not paid within a period of 90 – 180 days following its due date then such loan or receivable must be allocated to this group. (d) Loans and Other Receivables with Remote Collectibility – In the event the principal and/ or accrued interest on a loan or receivable is not paid within a period of 180 days to one year following its due date but there is still an expectation that the debtor may get additional financing by way of a merger, capital increase or cash injection, then such loan or receivable must be allocated to this group. (e) Loans and Other Receivables Considered as Losses – In the event there is no likelihood of collection on a loan or receivable, or the principal and/or accrued interest thereon is not paid or not expected to be paid within one year following its due date, such loan or receivable must be allocated to this group.

37 In the event that it is not expected to be paid within 90 days of the due date or the net equity of the debtor, and the security provided is not sufficient for the repayment of a loan or receivable, it can be directly classified as a non-performing loan without considering any unpaid period. Pursuant to these regulations, all loans and receivables in groups (c), (d) and (e) above and the collection of whose principal and/or accrued interest payments thereon have remained unpaid for 90 days following their due dates are defined as ‘‘non-performing loans’’ (‘‘NPLs’’). For NPLs, Bankpozitif is required by the applicable regulations to provide a specific reserve. These specific reserves must be set aside for non-performing loans and receivables in groups (c), (d) and (e) described above, in the amounts of 20 per cent., 50 per cent. and 100 per cent., respectively, of the relevant uncovered portion (net of collateral of the loan – net exposure) of the loan or receivable. The uncovered portion of a loan is calculated by deducting the cash equivalent value of collateral from the NPL. Collateral is taken into consideration in the calculation with respect to its liquidation level, between 100% and 25% of its notional values. Bankpozitif intends to provide a 100% specific provision for its corporate loans classified as NPLs without considering the classification rules in accordance with the applicable regulations. Bankpozitif maintains a stricter provisioning policy than is required by the applicable regulations which specify that a bank can provide a reserve on NPLs by 20% to 100%, depending on the unpaid period. For retail loans, Bankpozitif’s provisioning policy follows the applicable regulations. For retail loans, after 60 days (two consecutive unpaid instalments) Bankpozitif takes follow up action and after a 90- day unpaid period, a specific provision is provided. Bankpozitif seeks to maintain loan loss reserves of equal or greater amounts than NPLs after consideration of the cash equivalent value of collateral received. As at 30 September 2007, 1.79% of Bankpozitif’s total gross cash loans (corporate, retail and lease receivables) were classified as NPLs, compared to 0.76% as at 31 December 2006. As at 30 September 2007, the increase in the ratio in 2007 is due to the one major customer risk that was transferred to loans in arrears in the second half of 2007. The total amount at risk is U.S.$ 5.2 million and this is fully provisioned (although full provisioning is not required by the BRSA regulations) after considering all collateral. The Turkish regulations also require Turkish banks to provide a general loan loss reserve calculated at 1% of their total cash loan portfolio and comprising any loan that is considered to be a cash loan pursuant to the applicable banking law provisions, and a general reserve calculated at 0.2% of their non-cash loan portfolio (letters of guarantee, acceptance credits, letters of credit, undertakings and endorsements). In its IFRS financial statements, Bankpozitif’s management consider the above mentioned general loan loss reserve as a portfolio reserve. The portfolio reserve for impairment is provided based on past experience, the management’s assessment of current economic conditions, and the quality of, and inherent risk in, the credit portfolio of the Group. In the preparation of IFRS financial statements, all portfolio reserves and specific provisions for impairments are reviewed and any necessary adjustments to the Statutory Financial Statements are made.

38 The following table sets out a breakdown of Bankpozitif’s consolidated gross cash loan (corporate and retail) portfolio by as at the dates indicated:

Year ended Year ended Period ended 31 December 2005 31 December 2006 30 September 2007 (YTL thousands) (YTL thousands) (YTL thousands) Gross Loans 147,459 280,317 630,568

Corporate loans 86,188 199,451 446,623 Consumer loans 9,555 40,642 137,916 Leasing Receivables 49,059 38,083 34,753 NPL 2,657 2,141 11,276

NPL Ratio 1.80% 0.76% 1.79%

The total amount of recoveries from provisions for NPLs and write-offs for the ﬁrst nine months of 2007 and as at the 2006 and 2005 year-ends were YTL 0.2 million, YTL 1.2 million and YTL 0.4 million, respectively. The total amount of recoveries from NPLs and write-offs for the ﬁrst nine months of 2007 and as at the 2006 and 2005 year ends were YTL 1.6 million, YTL 1.4 million and YTL 0.4 million, respectively. The NPL ratio increased to 1.79% as at 30 September 2007. The increase in the ratio in 2007 is due to the one major customer risk that was transferred to loans in arrears in the second half of 2007. Total risk amount is U.S.$ 5.2 million and it is fully provisioned (although full provisioning is not required by the regulations) after considering all collateral.

The following table shows the general and speciﬁc movements in the reserve for possible loan losses as at the dates indicated:

Year ended Year ended Period ended 31 December 2005 31 December 2006 30 September 2007 (YTL thousands) (YTL thousands) (YTL thousands) Reserve at 1 January 3,444 3,957 3,514 Provision for loan impairment 1,103 1,506 5,653 Recoveries (440) (1,159) (213)

Provision net of recoveries 663 347 5,440 Loans written off during the year — (790) — Monetary gain (150) — —

Reserve at end of year/period 3,957 3,514 8,954

Portfolio Supervision and Non-Performing Loans Bankpozitif’s Loans and Risk Monitoring Departments for both corporate and retail loans (separate teams for each area) and its risk committee regularly review the total loan portfolio and provide daily reports to senior management and monthly reports to the Board of Directors detailing all aspects of Bankpozitif’s lending activity, including the loans to be closely monitored, the status of existing NPLs and collections. Bankpozitif’s management pays close attention to the timeliness of debt repayments, classified loans and contingent liabilities. Prompt legal or administrative follow-up action is taken by the Loans and Risk Monitoring Departments for both corporate and retail loans, which are responsible for supervising and monitoring loan repayments in their respective areas if any principal or accrued interest repayment problems arise. Bankpozitif’s determination of whether a repayment problem has arisen is based upon a number of objective and subjective criteria, including changes to the relevant borrower’s revenue in accounts held by Bankpozitif, changes to the relevant borrower’s economic and financial activity which gives rise to the suspicion that a loan is not being used for its original purpose, applications to change credit terms, failure of the relevant borrower to fulfil the terms and conditions of its loan agreement and refusal of the relevant borrower to cooperate in supplying current information. Any overall deterioration in the quality of Bankpozitif’s loan portfolio is brought to the attention of the Board of Directors in the monthly meetings.

39 Collateral Collateralisation is perceived as an independent process that mitigates (or eliminates, if possible) losses of Bankpozitif that would potentially arise on the future insolvency of the borrower. Credit applications are analysed completely independently of collateral. Bankpozitif seeks to substantially (if not entirely) reduce its credit risk by requiring collateral from borrowers. Collateral on loans extended by Bankpozitif includes, but is not limited to, real estate and other mortgages, stocks, customer cheques, bills of exchange, cash collateral, assignment of receivables, corporate guarantees and personal guarantees of the shareholders of borrowers. Loans and Risk Monitoring Departments of the corporate and retail businesses estimate the net liquidation value of the collateral provided by borrowers and monitor the quality of such collateral on a monthly basis. In certain cases, such as deterioration in the value of the collateral, additional collateral may be sought from the borrower. Historically, Bankpozitif has rarely had to enforce its collateral to collect on its defaulting loans. However, where Bankpozitif has had to enforce, Bankpozitif’s management believes that Bankpozitif has a satisfactory record in enforcing its collateral. Where possible, Bankpozitif attempts to resolve security enforcement without resorting to court action or arbitration. In particular, Bankpozitif takes prompt steps to issue notices of default and to carry out the subsequent sale of any pledged collateral either in reliance upon its legal rights or with the cooperation of the borrower as soon as legally possible. If necessary, Bankpozitif seeks to obtain repayment or sequestration of a debtor’s property or funds held in accounts with other banks in the courts of law. The following table sets out the collateralised/uncollaterised split for Bankpozitif’s corporate cash and non-cash loan portfolio as at the dates indicated:

31 December 2005 31 December 2006 30 September 2007 (U.S.$ thousand except percentages) Collateralised 360,485 87.1% 306,081 88.9% 652,639 93.4% Uncollateralised 53,495 12.9% 38,262 11.1% 46,236 6.6%

Total 413,980 100.0% 344,343 100.0% 698,875 100.0%

The following table sets out the collateralised/uncollaterised split for Bankpozitif’s retail cash loan portfolio as at the dates indicated:

31 December 2005 31 December 2006 30 September 2007 (YTL thousand except percentages) Collateralised 5,267 55.8% 34,812 85.7% 121,028 87.8% Uncollateralised 4,288 44.2% 5,830 14.3% 16,888 12.2%

Total 9,555 100.0% 40,642 100.0% 137,916 100.0%

According to Bankpozitif’s internal Credit Policies, ‘‘Net Exposure’’ is defined in order to follow up and monitor current loan customers with respect to their uncovered exposure. In accordance with the Net Exposure concept, net exposure is the risk that Bankpozitif will face in the case of a default of a customer. The difference between credit exposure of the customer and cash equivalents of the collateral taken against this exposure is considered as the net exposure. Each group of collateral (determined by the type of collateral, as defined below) is included in the calculation by way of different hair-cut ratios which depend on the collateral’s cash convertibility. Grouping of collateral is stricter than the grouping described in the ‘‘Loan Classification and Provisioning Policy’’ section. The groupings of collateral in the relevant regulation compared with Bankpozitif’s internal credit policy are: * first group: this group mainly includes cash and cash equivalent collateral, and in this case, 100% of the collateral amount is taken into consideration for calculating net exposure. This is the same as Bankpozitif’s internal credit policy; * second group: this group mainly includes mortgages, equity shares, domestic cheques and pledges on receivables from public companies, and in this case, 75% of the collateral amount is taken into consideration for calculating net exposure. In accordance with Bankpozitif’s policy; mortgages are further divided into different sub-groups such as residential or commercial, high

40 trading zone, factory, or warehouse. For each sub-group, the percentage varies between 20% and 75%. Cheques and pledges on receivables are also further divided into sub-groups between 30% to 70%. Equity shares take 30% of the collateral amount into consideration; * third group: this group mainly includes pledges on commercial enterprises, export documents, vehicles, promissory notes, pledge on goods, and guarantees of an entity or person who has higher creditworthiness, and in this case, 50% of the collateral amount is taken into consideration for calculating net exposure. In accordance with Bankpozitif’s policy, pledges on commercial enterprises are taken into consideration by 0%; pledges on machinery and equipment are taken into consideration by 25%; pledges on goods are further divided into sub-groups between 20% and 40%; and export documents are taken into consideration by 0% to 90%; and * fourth group: this group includes all other types of collateral that does not fall within the ﬁrst, second or third groups, and in this case, 25% of the collateral amount is taken into consideration for calculating the net exposure.

Related party transactions All related party transactions are subject to the approval of the Related Party Committee (composed of three independent board members, two of whom were appointed by Bank Hapoalim) which is a mandatory committee in accordance with Bank of Israel regulations. As at both 30 September 2007 and 31 December 2006 total related party loans amounted to YTL 3,660 thousand and YTL 79 thousand, respectively.

Capital Adequacy Bankpozitif is required to comply with capital adequacy guidelines promulgated by the BRSA, which are based upon the standards established by the Bank of International Settlements. These guidelines require banks to maintain adequate levels of regulatory capital against risk-bearing assets and off- balance sheet exposures (commitment and contingencies). Bankpozitif’s total capital ratio is calculated by dividing its ‘‘Tier I’’ capital, which comprises its share capital, reserves, retained earnings and profit for the current periods, plus its ‘‘Tier II’’ capital, which comprises general provisions and revaluation surplus, by the aggregate of its risk-weighted assets and risk-weighted off-balance sheet exposures. In accordance with these guidelines, Bankpozitif must maintain a total capital ratio in excess of 8% calculated in accordance with BRSA regulations. Bank Hapoalim together with C Faktoring undertook to the Bank of Israel to maintain a minimum capital adequacy ratio of 15% for Bankpozitif for the two years following Bank Hapoalim’s acquisition of Bankpozitif. As at 30 September 2007, Bankpozitif’s regulatory capital adequacy ratio was 37% (31 December 2006 – 71% and 31 December 2005 – 47%) and therefore significantly exceeded the minimum ratio. Under the Basel II proposals, which are going to be implemented in Turkey from 1 January 2009, the capital adequacy ratio is likely to be lowered. Management of Bankpozitif believes that Basel II is likely to have an impact on Bankpozitif in three key areas: (a) the relative rating of Turkish corporates and (b) eligible collateral. The majority of Bankpozitif’s loan portfolio is corporate loans in respect of which the capital calculation will be based on ratings, in accordance with Basel II. Most of Bankpozitif’s corporate customers do not have ratings from external credit rating agencies in Turkey and the ones that are rated have their rating limited by the country ceiling of Turkey. Accordingly, the risk weighting for such loans for capital adequacy purposes under Basel II will be 100%. Mortgages, other than those for residential purposes, are not eligible collateral under Basel II (unlike under Basel I), and under Bankpozitif’s current collateral structure, such mortgages form the most significant part of Bankpozitif’s collateral. The addition of operational risk into the capital adequacy calculation under Basel II has been in effect since June 2007 due to the regulation of BRSA. The calculation specifies that 15% of the last three years’ average gross income amount is added to the denominator in the capital adequacy calculation. As of 30 September 2007, the addition of operational risk into the capital adequacy has lowered the ratio by 3.4%.

Information Technology Bankpozitif understands the importance and beneﬁts of sound information technology (‘‘IT’’) systems and recognises the critical dependence of many business processes on IT, the need to comply with

41 increasing regulatory compliance demands and the beneﬁts of managing risk effectively. Bankpozitif is taking the necessary steps in using the Control Objectives for Information and Related Technology (‘‘COBIT’’) as its primary toolset to bridge the gap between control requirements and technical issues. The priority for Bankpozitif’s IT function is security, compliance, efﬁciency and effectiveness in IT- related processes and, as such, Bankpozitif has established separate IT audit and IT security departments.

The IT audit function started operating at the beginning of 2007 with the introduction of an IT audit manager. The IT audit function’s mission is to support effective and efficient execution of all the required controls in the IT processes that are utilised within Bankpozitif. It aims to achieve its goal by using independent and objective evaluation methods and consultation activities to identify and assess the adequacy and effectiveness of the required controls. Internally, the IT audit charter and the IT auditing and risk assessment standards were established in 2007 and the 2007 IT audit plan was created based on COBIT control objectives, in accordance with the BRSA regulations. The first phase of Bankpozitif’s IT audit plan was initiated in February 2007. According to the regulation issued by BRSA on 17 August 2006, Bankpozitif’s current financial audit firm KPMG has performed an information systems audit of Bankpozitif as at 31 December 2006 and KPMG is performing an information systems audit of Bankpozitif for 31 December 2007. The scope of this audit encompassed both application controls and general information technology controls. In the context of the application controls audit, KPMG assessed the effectiveness and efficiency of both automated and manual controls on Bankpozitif’s Electronic Funds Transfer (‘‘EFT’’), Swift and loan processes. In the context of general information technology controls audit, KPMG assessed the effectiveness and efficiency of controls employed on Bankpozitif’s ‘‘Plan and Organize, Acquire and Implement, Deliver and Support, and Monitor and Evaluate’’ related information systems processes based on COBIT control objectives.

A separate IT security department exists to protect Bankpozitif’s internal information and also to assist in the representation of Bankpozitif’s external information. Bankpozitif is also investing heavily in its IT storage systems, and is in the process of developing a complete back up storage facility at a location away from the centre of operations that will receive updates to stored data every thirty minutes.

In May 2003, Bankpozitif established C Bilis¸im as an information technology company in order to develop and implement in-house software solutions as well as to accumulate its knowledge of technology. The first project of C Bilis¸im was to create the Core Banking System (‘‘CBS’’). CBS is a comprehensive, integrated yet modular core banking solution, which focuses on all operations performed in the banking sector and ensures the fulfilment of Bankpozitif’s financial services requirements. It gives users the unique advantage of implementing a single application seamlessly across Bankpozitif. CBS is endorsed by the Turkish Technology Development Foundation and the Technology Monitoring and Assessment Department as a new technology for banking in Turkey. CBS is a full banking application with modules including, among others, retail loans with credit application, corporate loans with automatic collateral control, foreign trade, guarantees, EFT, treasury, cheques, accounting, pricing and current operations. As an example, in relation to credit checks for vehicle loans, CBS ensures that a fast (the system takes a maximum of three minutes to reach a decision) and effective (the system searches the Central Credit Bureau database and ten other credit and/or identity databases) service is provided.

In order to support its growth under the current business plan, Bankpozitif is making significant investment in its IT systems, both in terms of hardware, software and experienced IT personnel (either by hiring or by training). Bankpozitif is currently increasing its processing capacity by acquiring hardware for core banking databases. Bankpozitif’s network infrastructure is being modified to efficiently deal with expected future demand. Bankpozitif has also started to implement the Customer Relationship Management (‘‘CRM’’) solution. The CRM system is being integrated into both the CBS and the call centre infrastructure. This solution helps Bankpozitif to identify customer needs proactively and create segment specific solutions and products for the market.

Bank Hapoalim also supports Bankpozitif by providing it with banking technology, by sharing experience and guidance in relation to call centre infrastructure, network security and business continuity projects.

42 Risk Management Strategy in using ﬁnancial instruments In the course of its normal operations, Bankpozitif is exposed to a number of risks. The primary risk within Bankpozitif’s activities is credit risk. In addition to credit risk, Bankpozitif is exposed to interest rate, currency, liquidity and operational risk in conducting its core business activities. Bankpozitif’s general risk management strategy is to actively manage and hedge its currency, interest rate and maturity positions that might create liquidity or market risk to Bankpozitif. The main principle of Bankpozitif is to manage credit risk effectively and to eliminate the other types of risk by not carrying positions which could give rise to such risks. Responsibility for the management of these risks rests with the Board of Directors, which delegates the operational responsibility to Bankpozitif’s general management and appropriate sub-committees. One of the risk management policies of Bankpozitif is to protect Bankpozitif from the effects of interest rate volatility. All types of sensitivity analysis performed within this context are calculated by the risk management department and reported to the Asset and Liability Committee (see below ‘‘Management Structure’’). Bankpozitif manages its exposure to market risk through the Asset and Liability Committee and also through limits on the positions which can be taken by Bankpozitif’s treasury department. The Board of Directors of Bankpozitif determines the risk limits for primary risks carried by Bankpozitif and periodically revises these limits. Bankpozitif actively monitors and hedges foreign currency risk and holds foreign currency asset and liability items together with derivatives in balance against the foreign currency risk.

Credit risk In general, credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Bankpozitif places emphasis mainly on the payment ability and cash generating ability of the borrower in any given transaction, and also obtains sufficient collateral from borrowers including, wherever possible, cash collateral, mortgages or security over other assets. Bankpozitif seeks to manage its credit risk exposure through diversification of lending activities to avoid undue concentration of risks with individuals or groups of customers in specific locations or businesses. Furthermore, Bankpozitif’s lending is subject to the principles and limits set by the Board of Directors, which observes the more stringent of either the relevant Turkish or Israeli (the domicile of Bank Hapoalim) banking regulations. Bankpozitif implemented centralised credit approval processes and all loan proposals are evaluated and monitored by Loans and Risk Monitoring Departments established independently from its marketing and sales departments. Bankpozitif also uses an in-house developed rating system for corporate loan customers and recently started a rating system project with Experian Decision Analytics for its retail loan customers (see ‘‘Corporate Loan Policy and Approval Process’’ and ‘‘Collateral’’ above). The day-to-day management of credit risk is devolved to individual business units, such as the Loans and Risk Monitoring Departments of corporate and retail business, which perform regular appraisals of quantitative information relating to counterparty credit.

Liquidity risk In general, liquidity risk is the risk that an entity will be unable to meet its net funding requirements. Liquidity risk can be caused by market disruptions or credit downgrades which may cause certain sources of funding to become unavailable. Liquidity risk is a substantial risk in Turkish markets, which exhibit signiﬁcant volatility. Bankpozitif’s general policy is to maintain an adequate level of liquid assets so as to meet the contractual maturity of existing funding, to fund investment opportunities, to satisfy credit demands and to cover against contingent liquidity risks derived from unexpected withdrawals or other unforeseen events. Bankpozitif measures and manages its cash ﬂow commitments on a daily basis. Bankpozitif uses various methods, including predictions of daily cash positions and scenario analysis, to monitor and manage its liquidity risk to avoid an undue concentration of funding requirements at any point in time or from any particular source. Risk management and treasury departments monitor daily liquidity gaps in all currencies. As decided by the Board of Directors, Bankpozitif is not allowed to take any liquidity risk in any currency, at any time, unless such action has been authorised by the Asset and Liability Committee of Bankpozitif. See ‘‘Management Structure’’ for further details.

43 Generally, Bankpozitif does not utilise liquidity from interbank money markets and is in a net lender position in the interbank money markets. The table below analyses the assets and liabilities of Bankpozitif in relevant maturity groupings based on the remaining period at balance sheet date to contractual maturity date:

On Up to 1 1to3 3to6 6to12 Over 1 Demand month months months months year Unallocated Total YTL thousands As at 30 September 2007 Assets Cash and balances with Central Bank 88 — — — — — — 88 Deposits with other banks and ﬁnancial institutions 5,652 59,897 — — — — — 65,549 Other money market placements — 2,790 — — — — — 2,790 Reserve deposits at Central Bank — 52,746 — — — — — 52,746 Trading assets — 166 277 40 — — 488 971 Receivables from customers due to brokerage activities — 9,109 — — — — — 9,109 Loans and advances — 74,747 66,281 66,685 56,613 320,213 2,322 586,861 Minimum lease payments Receivable — 1,920 2,683 3,990 7,060 19,100 — 34,753 Investment securities — 518 — 2,188 352 80,746 55 83,859 Loaned securities — — — — 19,802 3,487 — 23,289 Property and equipment — — — — — — 12,468 12,468 Intangible assets — — — — — — 5,083 5,083 Deferred tax assets — — — — — — 2,854 2,854 Other assets — 2,521 987 — — — 4,207 7,715

Total assets 5,740 204,414 70,228 72,903 83,827 423,546 27,477 888,135

Liabilities Other money market deposits — 23,457 — — — — — 23,457 Trading liabilities — 1,347 3,810 — 13 2,573 — 7,743 Funds borrowed — 14,964 30,135 85,440 105,652 277,370 — 513,561 Other liabilities 25,102 29,165 11,959 4,580 1,307 955 — 73,068 Provisions — — 1,616 — — — 668 2,284 Income taxes payable — — 3,226 — — — — 3,226 Deferred tax liability — — — — — — 21 21

Total liabilities 25,102 68,933 50,746 90,020 106,972 280,898 689 623,360

Net liquidity gap (19,362) 135,481 19,482 (17,117) (23,145) 142,648 26,788 264,775

As at 31 December 2006 Total assets 1,993 210,917 34,719 23,988 36,166 161,010 11,684 480,477 Total liabilities 2,904 75,674 33,547 68,299 24,960 38,948 440 244,772

Net liquidity gap (911) 135,243 1,172 (44,311) 11,206 122,062 11,244 235,705

Market risk Market risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general and specific market movements. The Board of Directors determines the risk limits for these primary risks carried by Bankpozitif and periodically revises such limits. The Asset and Liability Committee manages the market risk by weekly meetings based on the reports prepared by the risk management and financial planning and control departments. These reports include maturity and interest rate gap analysis, scenario analysis and stress tests. For the purpose of hedging market risk, Bankpozitif primarily aims to balance the foreign currency position, match the interest and duration structure of its assets and liabilities and keep a sufficient level of liquid assets. Bankpozitif holds an investment securities portfolio almost fully consisting of floating rate Turkish government securities and does not take interest rate risk. Bankpozitif intends to hold these securities until their relevant maturities. The interest rate and exchange rate risks of the financial positions taken by Bankpozitif relating to balance sheet and off-balance sheet accounts are measured and in calculating the capital adequacy, the value at risk is calculated in accordance with the BIS standard method. The table below summarises the Group’s exposure to interest rate risk on the basis of the remaining period at the balance sheet date (30 September 2007) to the reprising date:

44 Non Up to 1 1to3 3to6 6to12 1to5 Over 5 interest month months months months years Years bearing Total YTL thousands As at 30 September 2007 Assets Cash and balances with Central Bank — — — — — — 88 88 Deposits with other banks and ﬁnancial institutions 59,897 — — — — — 5,652 65,549 Other money market placements 2,790 — — — — — — 2,790 Reserve deposits at Central Bank 52,746 — — — — — — 52,746 Trading assets 166 277 40 — — — 488 971 Receivables from customers due to brokerage activities 9,109 — — — — — — 9,109 Loans and advances 154,871 166,604 106,449 34,116 110,755 11,744 2,322 586,861 Minimum lease payments Receivable 2,903 2,771 14,597 5,445 9,037 — — 34,753 Investment securities 354 — 77,904 — 5,546 — 55 83,859 Loaned securities 16,298 — 3,489 3,502 — — — 23,289 Property and equipment — — — — — — 12,468 12,468 Intangible assets — — — — — — 5,083 5,083 Deferred tax assets — — — — — — 2,854 2,854 Other assets — — — — — — 7,715 7,715

Total assets 299,134 169,652 202,479 43,063 125,338 11,744 36,725 888,135

Liabilities Other money market deposits 23,457 — — — — — — 23,457 Trading liabilities 1,347 3,810 — 13 2,573 — — 7,743 Funds borrowed 19,256 91,646 178,704 40,094 183,861 — — 513,561 Other liabilities 18,693 11,868 4,580 1,307 955 — 35,665 73,068 Provisions — — — — — — 2,284 2,284 Income taxes payable — — — — — — 3,226 3,226 Deferred tax liability — — — — — — 21 21 Total liabilities 62,753 107,324 183,284 41,414 187,389 — 41,196 623,360

Net liquidity gap 236,381 62,328 19,195 1,649 (62,051) 11,744 (4,471) 264,775

As at 31 December 2006 Total assets 263,771 101,036 40,074 20,583 36,508 1,407 17,098 480,477 Total liabilities 77,311 35,635 76,603 45,039 1,177 — 9,007 244,772

Net liquidity gap 186,460 65,401 (36,529) (24,456) 35,331 1,407 8,091 235,705

Currency risk Bankpozitif is exposed to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. Foreign currency risk indicates the possibility of the potential losses that a bank is subject to due to the exchange rate movements in the market. Bankpozitif effectively hedges its foreign currency risk and holds foreign currency asset and liability items together with derivatives in balance against the foreign currency risk. Bankpozitif manages foreign currency risk by weekly Asset and Liability Committee meetings and through limits on the positions which can be taken by Bankpozitif’s treasury department. The treasury department’s total foreign currency position is currently limited to a total of U.S.$ 5 million across all currencies and all maturities. The limits are reviewed by the Board of Directors and amended from time to time to meet the growing business needs of Bankpozitif.

45 A 10 per cent. weakening of YTL against the foreign currencies at 30 September 2007 and 31 December 2006 would have decreased equity and proﬁt or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2006.

30 September 2007 Equity Proﬁt or loss U.S.$ (535) (535) Euro 39 39 Other currencies (11) (11)

(507) (507)

31 December 2006 Equity Proﬁt or loss U.S.$ (45) (45) Euro (7) (7) Other currencies 1 1

(51) (51)

Cash flow and fair value interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of a change in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate because of a change in market interest rates. Bankpozitif is exposed to the effects of fluctuations in the prevailing levels of market interest rates on both its fair value and cash flows. Bankpozitif prefers to protect itself from the effects created by interest rate volatility and aims to do this by having a perfect match or asset position in interest rate risk. Bankpozitif currently does not generate income from interest rate mismatches. Bankpozitif manages interest rate risk through the Asset and Liability Committee and by utilising interest rate derivative agreements and setting limits on the positions which can be taken by Bankpozitif’s credit and treasury departments.

’’Know Your Customer’’ policy During the acquisition of a new customer, Bankpozitif applies the policies and procedures described in its ‘‘Know Your Customer’’ Policy (the ‘‘KYC Policy’’). The KYC Policy includes the ﬂow of transactions, system-based and manual control activities with respect to its process owner during the sub-processes of the application of a customer, the evolution of a customer, the collection of required documents and the updating of customer information. The KYC Policy also includes the risk areas during the process and the management of these risk areas.

Anti Money Laundering policies Turkey has been a member country of the Financial Action Task Force (‘‘FATF’’) since 1991 and has enacted laws and regulations to combat money laundering, terrorist financing and other financial crimes. In Turkey, all banks and their employees are obliged to implement and fulfil certain requirements regarding the treatment of activities that may be referred to as money laundering. Article 76/3 of the Banking Law and the related regulations regarding implementation of Law No. 5549 set forth such a requirement. The main provisions of Law No. 5549 include regulation of (i) client identification, (ii) suspicious activity reporting, (iii) training, internal audit and control, risk management systems and other measures, (iv) periodical reporting, (v) information and document disclosure, (vi) retention of records and data, (vii) data access systems to public records, (viii) protection of individuals and legal entities and (ix) written declaration of beneficial owners by transacting customers, among other provisions. Bankpozitif is fully compliant with all applicable Anti Money Laundering regulations. Bankpozitif has its own internal policy for managing Anti Money Laundering activities and this policy is in line with the requirements of FATF. This internal policy includes minimum standards and duties according to the Turkish Anti Money Laundering Act which include customer identification, record keeping, suspicious activity reporting, employee training, an audit function and designation of a compliance

46 ofﬁcer. In accordance with Bankpozitif’s internal policy, suspicious transactions must be reported to the Turkish Financial Intelligence Unit, Financial Crimes Investigation Board.

Operational risk Operational risk is an integral part of the business activity and due to its nature it is hardly possible to eliminate it. Therefore Bankpozitif’s operational risk policy is based on the proper identiﬁcation, assessment, monitoring and controlling of the operational risks inherent in products, processes and internal/external systems.

To manage operational risk: * Bankpozitif performs consistent and systematic analysis and review of material work processes, including deﬁning the parties responsible for the processes and the risks inherent therein. * Centralised operational organisation employed in Bankpozitif to build up a minimal risk level with the personnel who are expert in their areas. * All transactions, excluding data entry, at Bankpozitif are executed on the ‘‘four eyes’’ principle. * A simultaneous control system is executed by the Internal Control Department. Controls on corporate loans that are above U.S.$ 100,000 are made instantly when the loan is released. In addition, retail loans which are above YTL 20,000 against seizure on vehicle, retail consumer loans over YTL 10,000 and all retail loans against mortgage – independent of exposure amount – are sent to the Internal Control Department for control. * Bankpozitif incorporates proper cultural values of awareness, transparency and efﬁciency in the way that work is undertaken in each of its business lines. * Importance is given to employing risk aware staff who have proper skills and experience in their own areas. Bankpozitif gathers details of operational loss events, whether they resulted in loss or not, and is planning to form an extensive database which will serve to build up a measurement model and also to make a detailed operational risk analysis of Bankpozitif.

47 MANAGEMENT

In accordance with Bankpozitif’s articles of association and the relevant laws of Turkey, Bankpozitif is ultimately controlled by its shareholders through its General Assembly. Resolutions at the General Assembly are adopted by the affirmative votes of a simple majority of the shares represented at the meeting. Certain decisions, including ‘‘Major Decisions’’, as defined in the articles of association, require the affirmative votes of a majority of 75% of the shares represented at the General Assembly in order to be adopted. Such decisions include, but are not limited to: a merger or takeover where the other party has a value of 15% or more of the shareholders’ equity in Bankpozitif; the sale or disposal of an asset that has a value of 15% or more of the shareholders’ equity in Bankpozitif; and changes to the articles of association.

Board of Directors According to the articles of association of Bankpozitif, the Board of Directors consists of nine members, as elected by the shareholders at the General Assembly. Six of the nine members are elected from candidates proposed by Bank Hapoalim, and the remaining three members from candidates proposed by C Faktoring. The Board of Directors meets on a monthly basis, either in person or by telephone or video conference. At least once a quarter, the Board of Directors meets in person. The quorum for a meeting of the Board of Directors is six, and resolutions are adopted by a simple majority of the members of the Board of Directors who are present at the meeting. Certain ‘‘Major Decisions’’ require the affirmative vote of seven members of the Board of Directors in order to be adopted. The Board of Directors may also pass written resolutions without holding a meeting. The business address of each of the members of the Board of Directors is Ru¨zgarlıbahçe Mahallesi, Kayın Sokak No: 3 34805, Kavacık / Beykoz Istanbul, Turkey. Currently, the Board of Directors comprises the following: I˙smail Hasan Akc˛akayalıog¯lu, aged 43 years, has been at Bankpozitif for five years and has been CEO and chairman of the Board of Directors since 4 December 2002. Mr Akc˛akayalıog¯lu has 14 years of experience in the banking and finance sectors. Mr Akcakayalıoglu is the chairman of the board of directors of PozitifMenkul, C Bilis¸im, C Sigorta, C Faktoring and chairman of the board of directors of Demir Kygryz International Bank and Demir Kazakhstan and a member the board of directors of Demir Halkbank (Nederland) NV. Mr Akc˛akayalıog¯lu has a BSc and an MSc in Computer Engineering from Middle East University, Ankara, Turkey and an MBA from Yeditepe University, Istanbul, Turkey. Alberto Garfunkel, aged 52 years, has been deputy chairman of the Board of Directors since 18 December 2006. He is a member of the Board of Management of Bank Hapoalim, and he is head of International Activities. Mr Garfunkel is also a member of the board of directors of Bank Hapoalim Switzerland and Bank Hapoalim Luxembourg and has 30 years of experience in the banking and financial sectors within the Bank Hapoalim Group. Mr Garfunkel was CEO of Bank Hapoalim (Switzerland) Ltd. between 2001 and 2006. Mr Garfunkel has a BA in Economics and Business Administration from Ben Gurion University, Israel. Kalman Schiff, aged 55 years, has been a member of the Board of Directors since 6 March 2007. Mr. Schiff is also the executive vice president of emerging markets banking – international activities division for Bank Hapoalim and has 25 years of experience in the banking and financial sectors. Mr Schiff has a BA degree in sociology, criminology and economics from Bar-Ilan University, Israel. Ariel Hasson, aged 34 years, has been a member of the Board of Directors since 17 November 2006. Mr. Hasson is also the head of the emerging markets banking – international activities division of Bank Hapoalim and has a total of 16 years of work experience, of which seven years have been in the defence industry sector and nine years in the finance, strategy and banking sectors. Mr Hasson has a BA in Economics and Business Administration from Tel Aviv University, Israel and an MBA from Kellogs School of Management at the Northwestern University, USA. Menashe Carmon, aged 61 years, has been a member of the Board of Directors since 17 November 2006. Mr Carmon is also chairman of the Israel-Turkey Business Council as well as a member of the board of directors of several joint ventures between Israeli and Turkish companies. Mr Carmon has 38 years of experience in the financial, insurance and textiles sectors, nine years of which have been in the banking sector. Mr Carmon has a BA in economics from Hebrew University, Jerusalem Israel,

48 is a graduate of the Engineering of Textiles program from Shenkar University, Israel and has an MA in Economy and Business Administration from Hebrew University, Jerusalem, Israel. Zion Kenan, aged 52 years, has been a member of the Board of Directors since 17 November 2006. Mr. Kenan is also the deputy CEO of Bank Hapoalim, as well as a member of the board of management and head of Corporate Banking at Bank Hapoalim. Mr. Kenan also serves as a member of the Board of Directors of several subsidiaries of Bank Hapoalim, including Isracard and Poalim Asset Management. He has 28 years of experience in the banking and financial sector. Mr Kenan has a BA in Social Sciences and an MA in Labour Studies (specialising in human resource management and organisational development) from Tel Aviv University, Israel. Hakan Okan Balko¨se, aged 37 years, is general manager of Bankpozitif and has been a member of the Board of Directors since 30 April 2004. Prior to becoming the general manager of Bankpozitif, he served as the assistant general manager responsible for corporate banking between March 2003 and April 2004. He has 14 years of experience in the banking and financial sector. Mr Balkose has a BSc and an MSc in Industrial Engineering from Bilkent University, Ankara, Turkey and an MBA in Finance from Yeditepe University, Istanbul, Turkey. Halil Eralp, aged 55 years, has been an independent non-executive member of the Board of Directors since 18 May 2007 and has 19 years of experience in banking and finance sector. Mr Eralp has a BA degree in mechanical engineering from Bogˇazici University, Turkey. Hu¨seyin Fehmi Ç ubukçu, aged 43 years, has been an independent non-executive member of the Board of Directors since 17 November 2006 and has 19 years of experience in the banking and financial sectors. Mr Ç ubukçu has a BSc and an MSc, both in Economics and both from Bourgogne University, France. There are no conflicts of interest between any duties of the members of the Board of Directors to Bankpozitif and their private interests or other duties.

Independent non-executive directors In accordance with the BRSA regulations, the Board of Directors includes two non-executive directors who are responsible for the Audit Committee. In addition to the BRSA requirements, Bankpozitif is also subject to certain requirements of the Bank of Israel due to its status as a controlled subsidiary of Bank Hapoalim. These requirements mainly include corporate governance, loan limitations, approval of related party transactions, risk management and internal audit regulations applicable to Israeli banks. According to Israeli regulations, the Board of Directors has to include two independent members (as deﬁned by the Israeli regulations). Bankpozitif satisﬁes these requirements with the inclusion of two non-executive, independent members of the Board of Directors. These are currently Halil Eralp and Hu¨seyin Fehmi C˛ ubukcu.

Senior Management In addition to the chairman and the general manager (see ‘‘Board of Directors’’ above), Bankpozitif has four assistant general managers, responsible for different areas of Bankpozitif’s business. Together these six members constitute the senior management of Bankpozitif and thus make up the Management Committee (see ‘‘Management Structure’’ below). Erden Kadir Ç evik, aged 35 years, is the assistant general manager responsible for Retail Banking. He has 13 years of experience in the banking and financial sector and has been at Bankpozitif for four years. Mr Kadir has a BSc in Business Administration from Middle East University, Turkey. Atasel Tuncer, aged 36 years, is the assistant general manager responsible for Operations, Human Resources (HR) and Information Technology. He has 16 years of experience in the banking and financial sector and has been at Bankpozitif for five years. Mr Tuncer has a BSc in Industrial Engineering from Yildiz Teknik University, Turkey and has an MA in Business Administration from Yeditepe University, Turkey. Mehmet Yalçın, aged 32 years, is the assistant general manager responsible for Financial Planning and Control. He has 10 years of experience in the banking and financial sector and has been at Bankpozitif for five years. Mr Yalçın has a BSc in Management Engineering from ITU, Turkey. Murat Betoner, aged 35 years, is the assistant general manager responsible for Corporate Marketing. He has 13 years of experience in the banking and financial sector and has been at Bankpozitif for two years. Mr. Betoner has a BSc in Economics from Istanbul University, Turkey.

49 Management structure The day-to-day management of Bankpozitif falls with the Senior Management and eight committees, as described below. In relation to the management of HR, Bankpozitif does not have a specific department to deal with HR issues. Every manager in Bankpozitif is the HR manager for his or her team. The Audit Committee is responsible for the supervision of the efficiency and adequacy of Bankpozitif’s internal systems, namely internal control, risk management, internal audit and compliance. The Audit Committee also oversees the proper functioning of these systems and the accounting and reporting systems within the framework of the Banking Law in Turkey and the relevant legislation, and is responsible for the integrity of the information produced. It also conducts the necessary preliminary evaluations for the selection of independent audit firms by the Board of Directors; regularly monitors the activities of the independent audit firm selected by the Board of Directors; and for Bankpozitif’s subsidiaries, ensures that the internal audit functions of the subsidiaries which are subject to consolidated supervision are performed in a consolidated and coordinated manner, on behalf of the Board of Directors. The committee is chaired by the independent board member appointed by Bank Hapoalim, and composed of one independent and one non-executive board member. The committee meets at least four times a year and reports to the Board of Directors. The Credit Committee is responsible for the assessment and approval of the credit proposals presented by the Loans and Risk Monitoring Departments of corporate and retail businesses within the limits defined by the Board of Directors. The committee meets on a weekly basis and is currently chaired by the chief executive officer, and composed of two board members (one being a board member nominated by Bank Hapoalim). The Asset and Liability Committee is responsible for managing Bankpozitif’s asset and liability positions in all currencies. In managing Bankpozitif’s positions, the committee considers the interest rates, balance sheet composition in all currencies, volume and duration of each asset and liability item on Bankpozitif’s balance sheet, inflation rates, exchange rates, political and economical trends and the environment. The committee meets on a weekly basis. The committee is chaired by the chief executive officer, and composed of a board member nominated by Bank Hapoalim, general manager, assistant general managers, head of treasury, head of risk management, relevant department managers and a member appointed by Bank Hapoalim. The Management Committee is an advisory committee which oversees the ongoing business of Bankpozitif. The committee meets on a weekly basis. The committee is chaired by the chief executive officer, and composed of the general manager and all assistant general managers. The head of risk management, head of internal control and head of internal audit also attend the meetings. The Purchase Committee is responsible for the approval of all purchases of Bankpozitif within certain limits set forth by the Board of Directors. The committee meets on an ‘‘as needed’’ basis. The committee is chaired by the general manager, and composed of two assistant general managers and a member appointed by Bank Hapoalim. The Risk Management Committee is formed in order to provide a platform within Bankpozitif for discussing the risk issues of Bankpozitif. The committee meets four times a year and reports to the Board of Directors. The committee is chaired by the head of risk management, and composed of a non-executive board member appointed by Bank Hapoalim, the head of internal audit, the head of treasury and a member appointed by Bank Hapoalim. The chairman of the Credit Committee and relevant department managers also attend the meetings. The Internal Discipline/Obedience Committee is responsible for internal disciplinary issues. The committee meets as needed and is composed of two members of the Board of Directors, the general manager, the assistant general manager responsible for human resources and head of internal audit. Human Resources Committee is an advisory committee and is responsible for monitoring the human resources systems in Bankpozitif and human resources-related matters. The committee meets on a weekly basis and is composed of the assistant general manager responsible for human resources, four members selected by the Management Committee and a member appointed by Bank Hapoalim.

Internal audit and internal control Bankpozitif has an independent audit group called the Internal Audit Department and consists of ﬁnancial, operational and information technology auditors. According to Bankpozitif’s Internal Audit Charter, the Internal Audit Department performs audits and investigations using a risk-based

50 approach, which is embodied by a comprehensive risk assessment effort. The Internal Audit Department reports directly to the Board of Directors through the Audit Committee. The Internal Audit Department produces quarterly activity reports and an annual report, in addition to regular audit reports. The annual report is sent to the Board of Directors, to the BRSA and to Bank Hapoalim. In addition, the Internal Audit Department may be required to perform additional audits and investigations throughout the year at the request of the Board of Directors. Bankpozitif also has an Internal Control Unit, which exists to ensure the minimisation of potential losses by intervening immediately if any issues arise in Bankpozitif’s operations. The Internal Control Unit operates with a preventative approach and reviews transactions above certain thresholds before they are executed. The Internal Control Unit is responsible for the daily controls and checks of Bankpozitif’s operations, including the compliance with all legal and internal requirements. Any error that is identiﬁed is immediately reported to the relevant department and reported on a monthly basis to the Board of Directors and to the Audit Committee.

Employees and beneﬁts As at 30 September 2007, the number of employees of Bankpozitif and its consolidated afﬁliates are 262 and 61, respectively. Demir Kazakhstan has 299 employees. Bankpozitif expects growth in the number of staff, and although competition for staff is high in the Turkish market, it expects to attract the people it needs, and has budgeted for, in order to grow. No trade unions exist and Bankpozitif has good relations with its employees. Bankpozitif does not have a pension scheme in place. However, it is a member of a health insurance scheme which all of its employees and their families are entitled to join, and it makes the necessary social security payments in relation to its employees, as it is required to do by Turkish law. Bankpozitif operates a performance-related bonus system. In addition, those employees who have manager status or higher are entitled to a company car and a mobile telephone for business use.

51 PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

Bankpozitif and its Turkish subsidiaries maintain their books of accounts and prepare their statutory financial statements (the ‘‘Statutory Financial Statements’’) in New Turkish Lira (YTL) in accordance with the Accounting Practice Regulations as promulgated by the Banking Regulation and Supervision Agency of Turkey (the ‘‘BRSA’’) and also the Turkish Commercial Code and the Turkish Tax Legislation (collectively, ‘‘Turkish GAAP’’). Bankpozitif’s subsidiaries are those companies that are controlled by Bankpozitif (that is, where Bankpozitif has the power to govern the financial and operating policies of a particular company so as to benefit from its activities). These subsidiaries are PozitifMenkul and C Bilis¸im. Collectively, Bankpozitif and its subsidiaries are referred to as the Group. In addition, on 21 November 2007 Bankpozitif acquired Demir Kazakhstan, a new wholly-owned subsidiary. Due to the date of the acquisition, the financial statements of Demir Kazakhstan are not included in the consolidated financial statements of the Group contained in this Base Prospectus, and for the purpose of this Base Prospectus, Demir Kazakhstan is not included in the ‘‘Group’’ defined term. Though Bankpozitif is not required by Turkish law to prepare financial statements in accordance with International Financial Reporting Standards (‘‘IFRS’’), including International Accounting Standards (‘‘IAS’’) as promulgated by the International Accounting Standards Board (‘‘IASB’’) and interpretations issued by the Standards Interpretation Committee of the IASB, as international investors are generally unfamiliar with Turkish GAAP, the consolidated financial statements for the years ended 31 December 2006 and 2005 of Bankpozitif and its affiliates included herein (the ‘‘Annual Financial Statements’’) and the interim condensed consolidated financial statements (the ‘‘Interim Financial Statements’’) for the nine months of 2007 have been prepared and presented in accordance with IFRS. The Annual Financial Statements for the year 2005 have been restated in accordance with IAS 29 (Financial Reporting in Hyperinflationary Economies) (‘‘IAS 29’’) to account for the effects of changes in the Turkish Producer Price Index (‘‘PPI’’). Pursuant to IAS 29, the Annual Financial Statements have been set forth in New Turkish Lira as adjusted for the effects of inflation in New Turkish Lira units current at 31 December 2005. However, under IAS 29, Turkey has been considered a non-hyperinflationary economy since 1 January 2006. Therefore, the hyperinflationary provisions of IAS 29 have not been applied to the consolidated financial statements as at 31 December 2006 and to the interim condensed consolidated financial statements as of and for the nine-month period ended 30 September 2007. Restatement of balance sheet and income statement items through the use of a general price index and relevant conversion factors does not necessarily mean that the Group could realise or settle the same values of assets and liabilities as indicated in the consolidated interim balance sheets. Similarly, it does not necessarily mean that the Group could return or settle the same values of equity to its shareholders. The Annual Financial Statements as of and for the year ended 31 December 2006 have been audited, and the Interim Financial Statements have been reviewed, by Akis Bagımsız Denetim ve Serbest Muhasebeci Mali Mu¨s¸avirlik A.S¸. (‘‘KPMG’’) (see KPMG’s reports dated 21 February 2007 and 9 November 2007, respectively, in Appendix A), who have issued an unqualified opinion for both the Annual Financial Statements as of and for the year ended 31 December 2006 and the Interim Financial Statements as of and for nine months ended 30 September 2007. The Annual Financial Statements as of and for the year ended 31 December 2005 have been audited by Gu¨ney Bagımsız Denetim Serbest Muhasebeci Mali Mu¨s¸avirlik A.S¸. (‘‘Ernst & Young’’) (see Ernst & Young’s report dated 3 February 2006 in Appendix A) who have issued an unqualified opinion for the year ended 31 December 2005. The financial information relating to Bankpozitif set forth herein, has, unless otherwise indicated, been extracted without material adjustment from the Annual Financial Statements and Interim Financial Statements attached hereto. Unless otherwise indicated, references to ‘‘New Turkish Lira’’ or ‘‘YTL’’ with respect to the Annual Financial Statements and Interim Financial Statements are references to the Turkish currency rounded to the nearest thousand. Unless otherwise indicated, references to ‘‘US$,’’ ‘‘$,’’ ‘‘U.S. Dollars’’, ‘‘U.S.$’’ or ‘‘Dollars’’ in this Base Prospectus are to United States Dollars rounded to the nearest thousand.

52 For the convenience of the reader, this Base Prospectus presents translations of certain New Turkish Lira amounts into Dollars at the New Turkish Lira exchange rate for purchases of Dollars announced by the Bank. Unless otherwise stated, any balance sheet or income statement data in Dollars derived from the Annual Financial Statements as at 31 December 2006 and 2005 and from the Interim Financial Statements as at 30 September 2007 have been translated from New Turkish Lira into Dollars at YTL 1.2100 = US$1.00 (being the rate for Dollars determined by the Bank on 30 September 2007) as a constant currency. Certain figures included in this Base Prospectus have been subject to rounding adjustments (e.g. certain U.S. Dollar amounts have been rounded to the nearest million). Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

53 FINANCIAL REVIEW OF BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙

Introduction The following discussion and analysis of the financial condition and results of operations of Bankpozitif covers the years ended 31 December 2006 and 31 December 2005, and the nine-month periods ended 30 September 2007 and 30 September 2006. Unless otherwise specified, the financial information presented in this discussion has been extracted or derived without material adjustment from Bankpozitif’s financial statements. As described in ‘‘Presentation of Financial and Certain Other Information’’, Bankpozitif prepares its financial statements in accordance with both Turkish GAAP and IFRS. Under IFRS, Bankpozitif’s financial statements are consolidated with the financial statements of its subsidiaries. Bankpozitif’s subsidiaries are those companies that are controlled by Bankpozitif (that is, where Bankpozitif has the power to govern the financial and operating policies of a company so as to benefit from such company’s activities). These subsidiaries are PozitifMenkul and C Bilis¸im. Collectively, Bankpozitif and its subsidiaries are referred to as the Group. In addition, on 21 November 2007 Bankpozitif acquired Demir Kazakhstan, a new wholly-owned subsidiary. Due to the date of the acquisition, the financial statements of Demir Kazakhstan are not included in the consolidated financial statements of the Group contained in this Base Prospectus, and for the purpose of this Base Prospectus, Demir Kazakhstan is not included in the ‘‘Group’’ defined term.

Key components of Bankpozitif’s operations Bankpozitif performs its core banking activities in the corporate and retail banking sectors. Bankpozitif mainly focuses on its core banking activities and generates most of its income from lending products offered to corporate and retail customers. Bankpozitif primarily offers corporate banking services, such as corporate lending, trade finance, financial leasing and project finance. Other examples of Bankpozitif’s corporate banking activities include participation in financing for investment projects, advisory services for strategic partnerships, and privatisations. Bankpozitif commenced retail banking activities soon after it was acquired by Bank Hapoalim B.M. (‘‘Bank Hapoalim’’). Within the retail banking sector, Bankpozitif focuses on lending products, such as mortgage loans, vehicle loans, home equity loans and general purpose consumer loans. As a non-deposit taking bank, apart from funding its activities with its own equity, Bankpozitif mainly borrows funds from the international financial markets and from its correspondent banks; Bankpozitif also can accept funds only from its credit customers, although this is not considered as a significant source of funding. During the acquisition of the majority of Bankpozitif’s shares by Bank Hapoalim, Bankpozitif’s total equity was increased by YTL 144,197 thousand (U.S.$ 119,171 thousand) in two extraordinary general assembly meetings held on 31 October 2006 and 25 January 2007. As a result of the equity injections that resulted from these meetings, Bankpozitif’s assets grew significantly, and Bankpozitif was able to further increase its corporate and retail loans (including lease receivables) to a total amount of YTL 621,614 thousand (U.S.$ 513,731 thousand) as at 30 September 2007 from YTL 143,502 thousand (U.S.$ 118,597 thousand) as at 31 December 2005.

54 Key performance indicators The following table sets out certain key performance indicators as at the dates indicated:

Year ended Year ended Period ended 30 31 December 2005 31 December 2006 September 2007 Operating ROAA1 9.6% 3.5% 6.3%(*) Operating ROAE2 22.3% 7.8% 17.9%(*) Net Interest Margin3 9.6% 6.4% 7.0%(*) Capital Adequacy Ratio4 46.8% 70.8% 36.6% Cost to income ratio5 43.5% 67.6% 47.0% Free Capital Ratio6 95.2% 95.1% 90.3% NPL Ratio7 1.8% 0.8% 1.79%

(*) Annualised figures are used. 1 Operating Return on Average Assets: this represents the annualised net operating income for the relevant period divided by average total assets. Average total assets are computed by adding the total assets at the beginning of the reported period to the total assets at the end of such period and dividing the total by two. As at 31 December 2006, the ratio was lower than in the previous year due to the increase in asset size with the capital injection in November 2006, the high level of investments and one-off expenses incurred in 2006, the combined effect of which led to higher operating expenses. 2 Operating Return on Average Equity: this represents the annualised net operating income for the relevant period divided by average shareholders’ equity excluding current year income. Average shareholders’ equity is computed by adding the shareholders’ equity at the beginning of the reported period to the shareholders’ equity at the end of such period and dividing the total by two. As at 31 December 2006, the ratio was lower than in the previous year due to the increased equity in November 2006 (which increased the average), and the high level of investment undertaken and one-off expenses, the combined of which led to higher operating expenses. 3 Net Interest Margin: this represents the annualised net interest income for the relevant period divided by average interest bearing assets. Average interest bearing assets is computed by adding the average interest bearing assets at the beginning of the reported period to the average interest bearing assets at the end of such period and dividing the total by two. 4 Capital Adequacy Ratio: this represents the aggregate of Bankpozitif’s risk-weighted assets, risk-weighted off-balance sheet exposures, market risk and operational risk divided by its Capital Base, which includes Tier I capital (comprising share capital, reserves, retained earnings and profit for the relevant periods) plus its Tier II capital (comprising general provisions and revaluation surplus). Bankpozitif is required to comply with the capital adequacy guidelines promulgated by the BRSA, which are based on standards established by the Bank of International Settlements (‘‘BIS’’). Bank Hapoalim together with C Faktoring A.S¸. (‘‘C Faktoring’’) undertook to the Bank of Israel to maintain a minimum capital adequacy ratio of 15% for Bankpozitif for the two years following the acquisition. Banking regulations in Turkey require a minimum capital adequacy ratio of 8%. 5 Cost Income Ratio: Cost includes operating expenses (but excluding impairment losses and foreign exchange losses), depreciation, amortisation expenses and a reserve for employee severance indemnities. Income includes net interest income, net fee and commission income and other operating income and excludes increases/reductions by gains/losses on monetary position. As at 31 December 2006, the ratio was higher than in the previous year due to the investments undertaken and one-off expenses, the combined effect of which led to higher operating expenses. 6 Free Capital Ratio: this represents total shareholders’ equity minus intangible assets, tangible assets, assets held for resale, investments in equity participations and net non-performing loans (excluding allowances made on a portfolio basis to cover any inherent risk of loss) divided by the total shareholders’ equity. 7 Non-Performing Loan Ratio: this represents the non-performing loan amount to gross cash loan amount. As at 31 December 2005, 88% of total non-performing loans from the pre-acquisition period of Bankpozitif had been transferred to the Savings Deposit Insurance Fund (‘‘SDIF’’). The increase in the ratio in 2007 is due to the one major customer risk that was transferred to loans in arrears in the second half of 2007. Total amount at risk is U.S.$ 5.2 million and this is fully provisioned (although full provisioning is not required by the BRSA regulations) after considering all collateral (see ‘‘Loan Classification and Provisioning Policy’’ above).

Key accounting policies Bankpozitif’s accounting policies are integral to understanding its results of operations. Bankpozitif’s significant accounting policies are described in the notes to the Annual Financial Statements and the Interim Financial Statements, which are prepared in accordance with IFRS. The preparation of these financial statements requires Bankpozitif’s management to make estimates and judgements that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Bankpozitif’s management believes that, of all the accounting policies that affect Bankpozitif’s financial condition and results of operations, the following accounting policies require more critical judgements or estimates to be made, or involve a greater degree of complexity in application:

Provision for loan impairment Bankpozitif reviews its loan portfolio to assess impairment on a quarterly basis as a minimum. In determining whether an impairment loss should be recorded in the consolidated income statement, Bankpozitif makes judgements as to whether there is any observable data indicating that there is a measurable decrease in the estimated future cash ﬂows from a portfolio of loans and from individual loans. All loans with principal and/or interest overdue for more than 90 days are considered to be impaired and are individually assessed. Other evidence of impairment may include observable data

55 indicating that there has been an adverse change in the payment status of certain borrowers, or national or local economic conditions that correlate with defaults on assets of Bankpozitif. Impairment and collectibility are measured and recognised individually for loans and receivables that are individually significant, and on a portfolio basis for a group of similar loans and receivables that are not individually identified as impaired. For further information, please refer to ‘‘Loan Classification and Provisioning Policy’’ above.

Fair value of derivatives and other financial instruments The fair value of financial instruments that are not quoted in active markets is determined by using valuation techniques. Bankpozitif uses valuation techniques commonly used by market participants to price the financial instruments when such techniques provide reliable estimates of prices obtained in actual market transactions. To the extent practicable, financial models use only observable data; however, areas such as credit risk and volatilities require the management of Bankpozitif to make estimates. Changes in assumptions about the factors that require estimations could affect the reported fair value of financial instruments.

Income and expense recognition Interest income and expense are recognised in the consolidated income statement for all interest bearing instruments on an accrual basis using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, Bankpozitif estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment, call and similar options), but does not consider future credit losses. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Fees and commissions are generally recognised on an accrual basis when the service has been provided. Loan commitment fees in relation to loans that are likely to be drawn down are deferred (together with related direct costs) and recognised as an adjustment to the effective interest rate of the loan. Commission and fees arising from negotiating or participating in the negotiation of a transaction for a third party are recognised on completion of the transaction in question. Fees for bank transfers and other banking transaction services are recorded as income when collected. Dividends are recognised when the shareholders’ right to receive the payments is established.

Income taxation Tax expense (income) is the aggregate amount included in the determination of net profit or loss for the period in respect of current and deferred tax. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered or paid to the tax authorities. The tax rates and tax laws used to compute the amount is those that are enacted, or substantively enacted, and are in force, as at the balance sheet date. Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses. To the extent that it is probable that taxable profit will be available against the deductible temporary differences, carry-forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax assets to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it is probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted, and are in force, as at the balance sheet date.

56 Results of operations for the nine months ended 30 September 2007 and 30 September 2006 and for the years ended 31 December 2006 and 31 December 2005 The following summary ﬁnancial and operating data as at and for each of the years ended 31 December 2006 and 2005 and as at and for the nine-month period ended 30 September 2007 and 2006 was prepared in accordance with IFRS and has been extracted without material adjustment from the audited Annual Financial Statements and the reviewed Interim Financial Statements of Bankpozitif.

Year ended Year ended Period ended Period ended 31 December 31 December 30 September 30 September 2005 2006 2006 2007 (YTL (YTL (YTL (YTL thousands) thousands) thousands) thousands) Total interest income 20,995 33,777 20,131 57,257 Gains from investment securities (net) 1,916 3,697 2,307 8,981 Total interest expense (4,048) (12,129) (7,493) (22,805)

Net interest income 18,863 25,345 14,945 43,433 Net fee and commission income 8,842 9,002 6,979 6,942 Net trading income/(expense) 329 (142) 569 193 Foreign exchange gain (net) 2,526 2,436 1,155 9,313 Provision for impairment of loan and lease receivables (663) (347) (860) (5,440) Other operating income 1,482 1,564 1,489 826 Total operating expense (13,941) (25,816) (16,049) (28,533)

Proﬁt from operating activities before income tax and monetary loss 17,438 12,042 8,228 26,734 Income tax – current (1,952) (2,406) (2,002) (7,919) Income tax – deferred 68 (313) 431 2,346 Monetary loss (3,575) — — —

Net proﬁt for the year-end/period-end 11,979 9,323 6,657 21,161

Bankpozitif mainly relies on income from its core banking business, namely corporate and retail banking, rather than speculative activities, such as taking positions on foreign currency, interest rates or securities. Bankpozitif incurred operating (both one-off expenses and expenses for investments) expenses in 2006 in respect of the expansion of its retail banking activities, which included the opening of new branches, the expansion of head office premises and the development of its IT infrastructure. As such, the net income for 2006 showed a decline of YTL 2,656 thousand (U.S.$ 2,195 thousand) from 31 December 2005 (a 22% decrease). However, for 2007 and 2008, the management of Bankpozitif believes that the retail banking business will significantly benefit from the 2006 investments, and the 2007 figures have reflected this with net profit for the nine-month end in 2007 having increased by 218% compared to same period in 2006.

57 Average interest rates The effective simple interest rates applied to the main monetary ﬁnancial instruments of Bankpozitif as lender are as follows:

31 December 2005 31 December 2006 30 September 2007 New Turkish Foreign Foreign New Turkish Foreign Foreign New Turkish Foreign Foreign Lira Currency Currency Lira Currency Currency Lira Currency Currency Indexed Indexed Indexed Loans Corporate Loans 20.74% U.S.$ 9.00% U.S.$ 9.10% 23.02% U.S.$ 9.06% U.S.$ 9.90% 23.08% U.S.$ 8.90% U.S.$ 9.27% EUR 8.87% EUR 8.74% EUR 8.59% EUR 7.06% EUR 8.46% EUR 8.92% CHF 6.74% Consumer Loans 19.00% — U.S.$ 9.29% 22.15% — U.S.$ 9.22% 20.78% — U.S.$ 10.69% EUR 6.52% EUR 7.70% EUR 7.72% CHF 7.29%

31 December 31 December 30 September 2005 2006 2007 Investment Securities AFS at fair value – Turkish Government Bonds (YTL denominated) 17.8% 22.06% 19.49% AFS at fair value – Corporate Bond (U.S.$ denominated) — — 9.25%

(*) Bankpozitif’s investment securities portfolio consists of floating rate Turkish government securities which are evaluated every 3 to 6 months and corporate bonds fixed at maturity. As at 30 September 2007, U.S.$ denominated available-for-sale securities comprise a fixed rate corporate bond with semi-annual coupon payment having maturity of July 2012.

The effective simple interest rates applied to the main monetary ﬁnancial instruments of Bankpozitif as borrower are as follows:

31 December 2005 31 December 2006 30 September 2007 New Turkish Foreign New Turkish Foreign New Turkish Foreign Lira Currency Lira Currency Lira Currency Funds borrowed Short term – ﬁxed interest rate 18.00% EUR 3.96% 19.18% EUR 4.62% 19.85% U.S.$6.45% U.S.$ 6.61% U.S.$ 5.94% EUR 6.03% JPY 1.10% JPY 1.32%

Short term – ﬂoating interest rate — — — U.S.$ 6.19% — U.S.$ 5.81%

Medium/long term – ﬁxed interest rate — — — U.S.$ 6.43% 19.42% U.S.$7.62% EUR 5.00% JPY 1.65%

Medium/long term – ﬂoating interest rate — EUR 3.36% EUR 4.22% — U.S.$ 6.27% U.S.$ 6.20% U.S.$ 7.33% EUR 5.02% Nine-month period ended 30 September 2007 compared to nine-month period ended 30 September 2006

Net interest income Bankpozitif’s net interest income for the nine months ended 30 September 2007 was YTL 34,452 thousand (U.S.$ 28,473 thousand) which represents an increase of 173% compared to YTL 12,638 thousand (U.S.$ 10,445 thousand) for the same period of 2006. This increase was primarily due to the growth of Bankpozitif’s loan portfolio: total loans and lease receivables increased to YTL 621,614 thousand (U.S.$ 513,731 thousand) for the nine months ended 30 September 2007 which constitutes an increase of 185% compared to YTL 218,003 thousand (U.S.$ 180,168 thousand) for the nine months ended 30 September 2006.

Total interest income increased by 184% from the nine months ended 30 September 2006 compared to the nine months ended 30 September 2007, rising from YTL 20,131 thousand (U.S.$ 16,637 thousand) to YTL 57,257 thousand (U.S.$ 47,320 thousand). 87% and 80% of total interest income was generated from loans and lease receivables for the nine months ended 30 September 2007 and 2006, respectively. Remaining interest income comprised interest on deposits with other banks and ﬁnancial institutions, on money market placements, on securities and other interest income (brokerage interest income).

For the nine months ended 30 September 2007, total interest expense increased by 204% to YTL 22,805 thousand (U.S.$ 18,847 thousand), compared with YTL 7,493 thousand (U.S.$ 6,193 thousand) for the nine months ended 30 September 2006, and was as a result of the growth of the liabilities of Bankpozitif. Funds borrowed amounted to YTL 513,561 thousand (U.S.$ 424,431 thousand) for the nine months ended 30 September 2007, and had signiﬁcantly increased by 227% compared to YTL 157,069 thousand (U.S.$ 129,809 thousand) for the nine months ended 30 September 2006. Total interest expense was mainly composed of interest on funds borrowed and amounted to YTL 17,155 thousand (U.S.$ 14,178 thousand) for the nine months ended 30 September 2007, compared with YTL 5,011 thousand (U.S.$ 4,141 thousand) for the nine months ended 30 September 2006. The remainder comprised interest on other money market deposits and other interest expense on customer accounts.

58 Gains from investment securities For the nine months ended 30 September 2007, the gain from investment securities was YTL 8,981 thousand (U.S.$ 7,422 thousand) which is an increase of 289% compared with the gain from investment securities of YTL 2,307 thousand (U.S.$ 1,907 thousand) for the nine months ended 30 September 2006. The increase was due to the 422% increase in the size of the total investment securities portfolio (including loaned securities) between the nine months ended 30 September 2006 and 2007.

Net fee and commission income Net fee and commission income amounted to YTL 6,942 thousand (U.S.$ 5,737 thousand) as at 30 September 2007 (30 September 2006 – YTL 6,979 thousand (U.S.$ 5,768 thousand)). The breakdown of net fees and commission income is as follows:

Period ended Period ended 30 September 30 September 2006 2007 (YTL (YTL thousands) thousands) Fee and commission income on banking activities 6,279 8,024 Commission income on brokerage activities 1,702 2,055 Fee and commission expense (1,002) (3,137)

Net fee and commission income 6,979 6,942

Bankpozitif aims to increase its commission income from its customers by the growth of its corporate and retail cash and non-cash (primarily letters of guarantee and letters of credit) loan portfolio. Fee and commission expense for 30 September 2007 mainly includes accrued commission expense on syndicated loans, loan participation notes and associated bank fees.

Provision for impairment of loan and lease receivables For the nine months ended 30 September 2007, the provision for impairment of loan and lease receivables was YTL 5,440 thousand (U.S.$ 4,496 thousand) which amounted to an increase of 533% compared with the provision for impairment of loan and lease receivables of YTL 860 thousand (U.S.$ 711 thousand) for the nine months ended 30 September 2006. The increase was due to the one major customer risk that was transferred to loans in arrears in the second half of 2007. Total amount at risk is U.S.$ 5.2 million and it is fully provisioned (although full provisioning is not required by the BRSA regulations) after considering all collateral (see ‘‘Loan Classiﬁcation and Provisioning Policy’’ above).

Total operating expense Total operating expenses increased by 78%, from YTL 16,049 thousand (U.S.$ 13,264 thousand) as at the nine months ended 30 September 2006 to YTL 28,533 thousand (U.S.$ 23,581 thousand) as at the nine months ended 30 September 2007. There was a signiﬁcant increase in operating expenses in the third quarter of 2007 compared to the third quarter of 2006 due to the hiring of new personnel and the move to a new head ofﬁce.

59 The following table shows a breakdown of Bankpozitif’s operating expense for the period ended 30 September 2007 and 2006:

Period ended Period ended 30 September 30 September 2006 2007 (YTL (YTL thousands) thousands) Salaries and employee beneﬁts 7,418 13,858 Administrative Expenses 5,176 9,784 Depreciation and amortisation expenses 995 2,750 Other expenses 2,460 2,141

Total 16,049 28,533

Net profit For the nine months ended 30 September 2007, Bankpozitif’s net profit increased by 218% to YTL 21,161 thousand (U.S.$17,488 thousand) from YTL 6,657 thousand (U.S.$ 5,502 thousand) for the nine months ended 30 September 2006. The main reason for this increase was the significant rise in total interest income which was attributable to the increase in the size of the loan portfolio to a total amount of YTL 621,614 thousand (U.S.$ 513,731 thousand) for the nine months ended 30 September 2007 from YTL 218,003 thousand (U.S.$ 180,168 thousand) for the nine months ended 30 September 2006.

Year ended 31 December 2006 compared to year ended 31 December 2005 Net interest income Bankpozitif’s net interest income for the year ended 31 December 2006 was YTL 21,648 thousand (U.S.$ 17,891 thousand), which represents an increase of 28% compared with the previous year (31 December 2005 – YTL 16,947 thousand (U.S.$ 14,006 thousand)). This increase was primarily due to the growth of Bankpozitif’s loan portfolio, which increased by 93% from the previous year. In addition to the growth of the loan portfolio, the average interest rate that applied to the local currency loan portfolio increased from 21% to 23% over the same period. Total interest income increased by 61% from 31 December 2005 to 31 December 2006, rising from YTL 20,995 thousand (U.S.$ 17,351 thousand) to YTL 33,777 thousand (U.S.$ 27,915 thousand). 80% and 74% of total interest income was generated from loans and lease receivables for the years ended 2005 and 2006, respectively. The remaining interest income comprised interest on deposits with other banks and ﬁnancial institutions, on money market placements, on securities and on other interest income (brokerage interest income). As at 31 December 2006, total interest expense increased by 200% to YTL 12,129 thousand (U.S.$ 10,024 thousand), compared with YTL 4,048 thousand (U.S.$ 3,345 thousand) as at 31 December 2005 and was as a result of the growth of the liabilities which increased from YTL 130,938 thousand (U.S.$ 108,213 thousand) to YTL 244,772 thousand (U.S.$ 202,291 thousand) representing a growth of 87% when compared with 2005 year-end. Total interest expense was mainly composed of interest on funds borrowed and amounted to YTL 7,863 thousand (U.S.$ 6,498 thousand) for the year ended 31 December 2006, compared with YTL 2,276 thousand (U.S.$ 1,881 thousand) for the year ended 31 December 2005. The remainder comprised interest on other money market deposits and other interest expense on customer accounts.

Gains from investment securities In 2006, the gain from investment securities increased by 93% to YTL 3,697 thousand (U.S.$ 3,055 thousand) from YTL 1,916 thousand (U.S.$ 1,583 thousand) in 2005. The increase was due to the 77% increase in size of the total investment securities portfolio (including loaned securities) between the 2005 year-end and the 2006 year-end.

Net fee and commission income Net fee and commission income amounted to YTL 9,002 thousand (U.S.$ 7,440 thousand) as at 31 December 2006 (31 December 2005 – YTL 8,842 thousand (U.S.$ 7,307 thousand)). The breakdown of net fees and commission income is as follows:

60 Year ended Year ended Period ended 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousands) thousands) thousands) Fee and commission income on banking activities 6,080 7,257 8,024 Commission income on brokerage activities 3,143 2,800 2,055 Fee and commission expense (381) (1,055) (3,137)

Net fee and commission income 8,842 9,002 6,942

Bankpozitif aims to increase its commission income from its customers by the growth of its corporate and retail cash and non-cash (primarily letters of guarantee and letters of credit) loan portfolio. The reason for the increase in commission expenses in 2006 is the increase in the borrowings of Bankpozitif (for the purpose of funding its growing loan portfolio) that led to a corresponding increase in bank fees.

Total operating expenses Total operating expenses increased by 85% from (YTL 13,941 thousand (U.S.$ 11,521 thousand)) as at 31 December 2005 to (YTL 25,816 thousand (U.S.$ 21,336 thousand)) as at 31 December 2006. This signiﬁcant increase was due to the opening of new branches, the hiring of new personnel and the development of Bankpozitif’s information technology infrastructure to gear up and support its retail banking operations. The following table shows a breakdown of Bankpozitif’s operating expense for the years ended 31 December 2006 and 2005:

Year ended Year ended 31 December 31 December 2005 2006 (YTL (YTL thousands) thousands) Salaries and employee beneﬁts7,467 12,523 Administrative Expenses 4,674 9,095 Depreciation and amortisation expenses806 1,525 Other expenses 994 2,673

Total 13,941 25,816

Monetary loss The monetary loss, which is not a cash outflow, in 31 December 2005 is related to the effect of the application of IAS 29 ‘‘Inflation Accounting’’. With respect to the net monetary liability position, Bankpozitif incurred monetary loss amounting to YTL 3,575 thousand (U.S.$ 2,955 thousand) as at 31 December 2005. Under IAS 29, Turkey is considered a non-hyper-inflationary economy beginning 1 January 2006. Therefore Inflation Accounting was not applied for the financial statements as at 31 December 2006 and interim condensed financial statements as at 30 September 2007.

Net profit Bankpozitif’s net profit decreased by 22% from YTL 11,979 thousand (U.S.$ 9,900 thousand) as at 31 December 2005 to YTL 9,323 thousand (U.S.$ 7,705 thousand) as at 31 December 2006. The main reason for this decrease is the significant increase in total operating expenses incurred in accordance with Bankpozitif’s growth strategy and infrastructure investment costs, particularly in the last quarter of 2006.

61 Financial Condition The following table summarises Bankpozitif’s balance sheet and its growth trends: Year ended Year ended Period ended 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousands) thousands) thousands) Total Assets 222,405 480,477 888,135 Loans and advances 94,443 238,720 586,861 Minimum lease payments receivable 49,059 38,083 34,753 Marketable securities 20,099 35,643 107,148 Cash and cash equivalents 39,510 139,680 121,173 Other Assets 19,294 28,351 38,200

Total Liabilities 130,938 244,772 623,360 Funds borrowed 75,322 156,944 513,561 Other money market deposits 5,509 23,524 23,457 Customer account 37,975 56,128 56,281 Provisions 161 442 2,284 Other liabilities 11,971 7,734 27,777

Total Equity 91,467 235,705 264,775

As at 30 September 2007, total loans and lease receivables contributed 70% of the total assets (2006 year-end – 58% and 2005 year-end – 65%). In the third quarter of 2007, total loans and lease receivables increased to YTL 621,614 thousand (U.S.$ 513,731 thousand) from YTL 276,803 thousand (U.S.$ 228,763 thousand), which represented an increase of 125% compared with the 2006 year-end. In 2006, the total loans and lease receivables figure almost doubled but decreased in terms of a percentage of the total assets compared with the 2005 year-end. This is due to the increase in asset size as a result of a capital injection in November 2006. As at 30 September 2007, Bankpozitif’s total assets amounted to YTL 888,135 thousand (U.S.$ 733,996 thousand) which amounted to an increase of 85% compared with YTL 480,477 (U.S.$ 397,088 thousand) as at 31 December 2006. In 2006, total assets increased from YTL 222,405 thousand (U.S.$ 183,806 thousand) to YTL 480,477 thousand (U.S.$ 397,088 thousand), which represented an increase of 116% compared with the 2005 year-end. Assets: On the assets side, total loans and lease receivables amounted to YTL 621,614 thousand (U.S.$ 513,731 thousand) as at 30 September 2007, which increased by 125% compared with YTL 276,803 thousand (U.S.$ 228,763 thousand) as at 31 December 2006. As described above, total loans and lease receivables figures almost doubled but decreased as a percentage of total assets in 2006. Deposits with banks and other financial institutions increased by 473% from YTL 19,859 thousand (U.S.$ 16,412 thousand) as at 31 December 2005 to YTL 113,711 thousand (U.S.$ 93,976 thousand) as at 31 December 2006. The reason for the high liquidity was the capital injection in November 2006. Investment and loaned securities increased by 201% from YTL 35,643 thousand (U.S.$ 29,457 thousand) as at 31 December 2006 to YTL 107,148 thousand (U.S.$ 88,552 thousand) as at 30 September 2007. As at 30 September 2007, all investment securities comprised Turkish Government floating rate notes (FRN), a corporate bond and inflation indexed notes with semi- annual and quarterly coupon payments having a maturity range from July 2008 to February 2014. Liabilities: On the liabilities side, funds borrowed amounted to YTL 513,561 thousand (U.S.$ 424,431 thousand) as at 30 September 2007, an increase of 227% compared with the 2006 year-end. As at 30 September 2007, Bankpozitif’s foreign currency borrowings included U.S.$ 125 million of syndicated loans obtained on 22 February 2007 and U.S.$ 150 million loan obtained on 26 June 2007 and financed by the issue of loan participation notes. As at 31 December 2006, Bankpozitif’s borrowings amounted to YTL 156,944 thousand (U.S.$ 129,706 thousand), which was an increase of 108% compared with the 2005 year-end. The increase can mainly be attributed to the first syndicated loan facility of Bankpozitif obtained in April 2006 which amounted to U.S.$ 40 million. This facility was paid back in full in February 2007.

62 Shareholder’s equity: Total shareholder equity amounted to YTL 264,775 thousand (U.S.$ 218,822 thousand) as at 30 September 2007 and increased by 12% compared with the 2006 year-end. The main reasons for this increase are the share capital increase which amounted to YTL 9,100 thousand (including the share premiums) and the increase in the net income for the period, which amounted to YTL 21,161 thousand (U.S.$ 17,488 thousand).

Off balance sheet risk Guarantees and other contingent liabilities Bankpozitif retains certain off-balance sheet contingent liabilities in the normal course of business in order to meet the needs of its customers. These contingent liabilities, which include letters of guarantee, acceptance credits, and import letters of credit and other commitments and contingencies, involve varying degrees of credit risk and are not reﬂected in Bankpozitif’s balance sheet. Bankpozitif’s maximum exposure to credit losses for letters of guarantee, acceptance credits and import letters of credit is represented by the contractual amount of these transactions. The following table, prepared in accordance with IFRS, sets out certain details of Bankpozitif’s guarantees and other contingent liabilities as of the dates indicated:

Year ended Year ended Period ended 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousand) thousand) thousand) Letters of guarantee 376,735 214,754 285,251 Letters of credit 45,347 41,233 75,834 Letters of guarantee obtained by consolidated afﬁliates from other banks 2,071 3,672 2,071 Other guarantees 795 5,551 7,520

Total 424,948 265,210 370,676

As at 31 December 2006, due to the completion of some bigger projects and privatisation deals, some letters of guarantee expired and as such the outstanding balance of the letters of guarantee decreased in comparison with the 2005 year-end. The increase in 2007 of the outstanding balance of the letters of guarantee and letters of credit is due to the Bankpozitif strategy to increase the letters of guarantee and credit in line with the sectoral concentration limits set in the corporate loan policy.

Derivative transactions Bankpozitif enters into derivative instruments including forwards, swaps and options in the foreign exchange and capital markets. As at 30 September 2007, all derivative transactions are for asset liability management purposes in order to hedge on balance sheet foreign currency and interest rate positions. Most of these derivative transactions are considered as effective economic hedges under the Group’s risk management policies; however, since they do not qualify for hedge accounting under the speciﬁc provisions of IAS 39, they are treated as derivatives held for trading and are market-to- market. As of 30 September 2007, outstanding forward, swap, futures and option contracts amounted to YTL 510,866 thousand (U.S.$ 422,203 thousand) compared with YTL 151,968 thousand (U.S.$ 125,593 thousand) as at 31 December 2006. Since Bankpozitif prefers not to carry foreign currency positions or maturity and interest rate mismatch, derivative transactions also increase in line with the balance sheet growth.

Key Financial Figures on Demir Kazakhstan Financial figures of Demir Kazakhstan are going to be consolidated under Bankpozitif’s financials after the acquisition date of 21 November 2007. Therefore Demir Kazakhstan financial figures are not included in any financial information provided for the Group.

63 The following summary ﬁnancial date as at the nine-month period ended 30 September 2007 was prepared in accordance with IFRS and has been extracted without material adjustment from the reviewed Interim Financial Statements of Demir Kazakhstan.

Period ended 30 September 2007 U.S.$ thousands Total Assets 120,218 Loans and Advances, net 32,742 Provision for impairment of loan and lease receivables (2,732) Funds Borrowed 3,039 Total Equity 24,942 Net Interest Income 4,118 Total Operating Income 9,195 Net Proﬁt 2,309

64 CAPITALISATION

The following table, prepared in accordance with IFRS, sets forth the consolidated capitalisation of Bankpozitif as of 30 September 2007 and 31 December 2005 and 2006. This table should be read in conjunction with the Annual Financial Statements and the Interim Financial Statements and the notes thereto appearing elsewhere in this Base Prospectus. All New Turkish Lira amounts in this section, unless otherwise indicated, are presented in thousands of New Turkish Lira (and the year 2005 was adjusted for changes in general purchasing power of New Turkish Lira as at 31 December 2005).

As of (and for As of (and for As of (and for the years the years the nine-month ended) ended) period ended) 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousands) thousands) thousands) Long-term debt 16,668 56,008 321,069 Capital stock; legal reserves, retained earnings and other equity accounts 79,488 226,382 243,614 Current period net income 11,979 9,323 21,161

Total shareholders’ equity 91,467 235,705 264,775

Total capitalisation 108,135 291,713 585,844

65 SELECTED CONSOLIDATED FINANCIAL AND OPERATING INFORMATION

The following summary ﬁnancial and operating data as of and for each of the years ended 31 December 2005 and 2006 and as of and for the nine-month periods ended 30 September 2006 and 2007 which were prepared in accordance with IFRS have been extracted without material adjustment from the Annual Financial Statements which, as at 31 December 2005 were audited by Ernst & Young Gu¨ney Bagˇimsiz Denetim ve S.M.M.M. A.S¸. and, as at 31 December 2006, were audited by KPMG Akis Bagˇimsiz Denetim ve S.M.M.M. A.S¸. and the reviewed Interim Financial Statements of Bankpozitif included along with KPMG’s report. This information should be read in conjunction with the Bank’s Annual Financial Statements and Interim Financial Statements and the notes thereto.

Income Statement Data

Year ended Year ended Period ended Period ended 31 December 31 December 30 September 30 September 2005 2006 2006 2007 (YTL (YTL (YTL (YTL thousands) thousands) thousands) thousands) Net interest income 16,947 21,648 12,638 34,452 Net fee and commission income 8,842 9,002 6,979 6,942 Net trading income/(expense) 329 (142) 569 193 Foreign exchange gain (net) 2,526 2,436 1,155 9,313 Gains from investment securities (net) 1,916 3,697 2,307 8,981 Provision for impairment of loan and lease receivables (663) (347) (860) (5,440) Other operating income 1,482 1,564 1,489 826 Total operating expense (13,941) (25,816) (16,049) (28,533)

Proﬁt from operating activities before income tax and monetary loss 17,438 12,042 8,228 26,734 Income tax (1,884) (2,719) (1,571) (5,573) Monetary loss (3,575) —

Net proﬁt for the year-end/period-end 11,979 9,323 6,657 21,161

Balance Sheet Data

Year ended Year ended Period ended 31 December 31 December 30 September 2005 2006 2007 (YTL (YTL (YTL thousands) thousands) thousands) Total assets 222,405 480,477 888,135

Loans and advances 94,443 238,720 586,861 Minimum lease payments receivable 49,059 38,083 34,753

Total Liabilities 130,938 244,772 623,360 Funds borrowed 75,322 156,944 513,561

Total Equity 91,467 235,705 264,775

66 SELECTED FINANCIAL RATIOS OF BANKPOZITIF

Period ended Year ended 31 December 30 September 2005 2006 2007 Proﬁtability Ratios1 Operating ROAA2 9.6% 3.5% 6.3% Operating ROAE3 22.3% 7.8% 17.9% Net interest margin4 9.6% 6.4% 7.0% Cost to income ratio5 43.5% 67.6% 47.0% Balance Sheet Ratios Asset growth 42.2% 116.0% 84.8% Total loans and leasing receivables to total assets 64.5% 57.6% 70.0% Funds borrowed to total liability 61.7% 73.7% 86.1% Total shareholder’s equity to total assets 41.1% 49.1% 29.8% Credit Quality Non-performing loans to total loans 1.8% 0.8% 1.8% Total provisioning to non performing loans6 148.9% 164.1% 79.4%

1 All ratios in this table are based upon constant YTL amounts (and the year 2005 was adjusted to account for the effects of inflation at 31 December 2005). Nine-month figures are annualised. 2 Operating Return on Average Assets: this represents the annualised net operating income for the relevant period divided by average total assets. Average total assets are computed by adding the total assets at the beginning of the reported period to that at the end of such period and dividing the total by two. As at 31 December 2006, the ratio was lower than in the previous year due to the increase in asset size with the capital injection in November 2006, the high level of investments undertaken in 2006 and one-off expenses incurred in 2006, which led to higher operating expenses. 3 Operating Return on Average Equity: this represents the annualised net operating income for the relevant period divided by average shareholders’ equity excluding current year income. Average shareholders’ equity is computed by adding the shareholders’ equity at the beginning of the reported period to that at the end of such period and dividing the total by two. 4 Net interest margin: this represents the annualised net interest income for the relevant period divided by average interest bearing assets. Average interest bearing assets is computed by adding the average interest bearing assets at the beginning of the reported period to that at the end of such period and dividing die total by two. 5 Cost to income ratio: cost includes operating expenses excluding impairment losses and foreign exchange losses. It includes depreciation, amortisation expenses and a reserve for employee severance indemnities. Income includes net interest income, net fee and commission income and other operating income and excludes increases/reductions by gains/losses on monetary position. 6 Portfolio reserve for impairment plus specific reserve for impairment divided by gross non-performing loans. The increase in the ratio in 2007 is due to the one major customer risk that was transferred to loans in arrears in the second half of 2007. Total amount at risk is U.S.$ 5.2 million and it is fully provisioned (although full provisioning is not required by the BRSA regulations) after considering all collateral (see ‘‘Loan Classification and Provisioning Policy’’ above).

67 COMMERZBANK INTERNATIONAL S.A.

Establishment, Duration and Domicile The Issuer was founded in Luxembourg on June 25, 1969 with the legal form of a socie´te´ anonyme (public limited liability company). It is entered in the Luxembourg Register of Commerce and Companies under the registration number B 8495. The object of the Issuer is to perform all kinds of banking transactions in the Grand Duchy of Luxembourg and abroad. The Issuer is a Group company of Commerzbank Aktiengesellschaft, Frankfurt am Main, and is included in the latter’s consolidated financial statements. Insofar as they are not determined by Luxembourg laws, directives and regulations, the Issuer’s business policy and valuation principles are established and supervised by its Board of Directors. Pursuant to Art. 80 of the Luxembourg legislation on the accounting of credit institutions, the Issuer has refrained from preparing its own group financial statements and group management report. The Commerzbank Group’s financial statements are available in Frankfurt am Main.

Objectives The corporate objects of the Issuer as stated in its Articles of Association is the transaction, on its own behalf and on behalf of third parties, of banking and ﬁnance business of all kinds within the Grand Duchy of Luxembourg and abroad, together with all operations directly or indirectly connected therewith. For the purposes of transacting such business, the Issuer may acquire interests in other companies having their seat within the Grand Duchy of Luxembourg or abroad, and may set up branch establishments.

Share Capital The share capital of the Issuer amounts to Euro 579,800,000 and is divided into 2,230,000 registered shares. The share capital is fully paid up. Each share entitles to one vote at the shareholders’ meeting.

Ownership Commerzbank AG owns directly or indirectly 100 % of the share capital of Commerzbank International S.A. Luxembourg.

Financial Year The ﬁnancial year of the Issuer is the calendar year.

Independent auditors The independent external auditors of the Issuer for the financial years 2005 and 2006 were PricewaterhouseCoopers, Socie´teá` responsabilite´ limiteé, Re´viseurs d’Entreprises, 400, route d’Esch, L-1014 Luxembourg (‘‘PricewaterhouseCoopers’’) who have audited the financial statements for the financial years ended December 31, 2005 and 2006 and have issued their unqualified auditor’s report in each case. PricewaterhouseCoopers is a member of the Institut des Re´viseurs d’Entreprises.

Business The business activities of the Issuer comprise all types of banking operations in the Grand Duchy of Luxembourg and abroad. The Issuer is principally active in private-client business, international lending operations, money market, foreign exchange and precious metals trading, and also acts as a custodian bank for funds of the Commerzbank Group. With the aim of expanding its private banking business, the Issuer opened a branch in Brussels in 2006. For its precious metals business the Issuer also has an operation in New York and a sales ofﬁce in Singapore. Indirectly, the Issuer is a wholly-owned subsidiary of Commerzbank AG and its results are included in the consolidated accounts.

68 Management Bodies of the Issuer Members of the Board of Directors: Klaus-Peter MU¨ LLER Chairman, Chairman of the Board of Managing Directors of Commerzbank AG Dr. Jacques LOESCH Deputy Chairman, Avocat a` la Cour a` Luxembourg Dr. Kai FRANZMEYER, as of 11.04.2007 Director of Commerzbank AG Ulrich H. LEISTNER Director of Commerzbank AG Dr. Thorsten REITMEYER, as of 11.04.2007 Director of Commerzbank AG Dr. Eric STRUTZ Member of the Board of Managing Directors of Commerzbank AG Falk FISCHER, as from 08.08.2007 Managing Director Bernd HOLZENTHAL Managing Director Cornelius OBERT Managing Director

Managing Directors Falk FISCHER, as of 08.08.2007 Bernd HOLZENTHAL Cornelius OBERT The business address of Klaus-Peter Mu¨ller, Dr. Kai Franzmeyer, Ulrich Leistner, Dr. Thorsten Reitmeyer and Dr. Erich Strutz is Kaiserplatz, D – 60311 Frankfurt/Main, Germany. The business address of Dr. Jacques Loesch is 35, Avenue John F. Kennedy, L – 1855 Luxembourg, Luxembourg. The business address of Falk Fischer, Bernd Holzenthal and Cornelius Obert is 25, Rue Edward Steichen, L – 2540 Luxembourg, Luxembourg.

Annual General Meeting The ordinary general meeting of the shareholders of the Issuer takes place at the registered ofﬁce at twelve noon on the second Wednesday of the month of April. Where that day is a statutory public holiday, the meeting shall be deferred to the next working day.

69 THE MASTER SENIOR LOAN AGREEMENT

THIS AGREEMENT is made on 7 February 2008 between: (1) BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙ (the ‘‘Borrower’’); and (2) COMMERZBANK INTERNATIONAL S.A., a socie´te´ anonyme incorporated under the laws of Luxembourg, having its registered ofﬁce at 25, rue Edward Steichen L-2510 Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B-8495 (the ‘‘Lender’’).

WHEREAS: (A) The Lender has, at the request of the Borrower, agreed to make available to the Borrower Senior Advances (as deﬁned below) subject to and in accordance with this master senior loan agreement (the ‘‘Master Senior Loan Agreement’’), as amended and supplemented in relation to each Senior Advance by a senior loan supplement dated the Closing Date, substantially in the form of Schedule 1 to this Master Senior Loan Agreement (each, a ‘‘Senior Loan Supplement’’). Now it is hereby agreed as follows:

1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this Master Senior Loan Agreement (including the recitals), the following terms shall have the meanings indicated: ‘‘Account’’ means an account in the name of the Lender with the Principal Paying Agent at its specified office as specified in the applicable Senior Loan Supplement; ‘‘Additional Amounts’’ has the meaning set forth in Clause 7.1 (Additional Amounts); ‘‘Affiliate’’ of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purpose of this definition, ‘‘control’’ when used with respect to any Person means the power to direct the management and policies of such Person or to control the composition of such Person’s board or board of directors directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms ‘‘controlling’’ and ‘‘controlled’’ have meanings correlative to the foregoing; ‘‘Agency’’ means any agency, authority, central bank, department, government, legislature, minister, official or public statutory person (whether autonomous or not) of, or of the government of, any state; ‘‘Agency Agreement’’ means the paying agency agreement relating to the Programme dated 7 February 2008 between the Lender (as issuer of the Notes), the Borrower, the Trustee and the other agents named therein; ‘‘Arrangers’’ means Commerzbank Aktiengesellschaft and Citigroup Global Markets Limited, or any additional or replacement arranger appointed, and excluding any Arranger whose appointment has terminated pursuant to the Dealer Agreement; ‘‘Assets’’ means all tangible and intangible property of a person including real property, chattels, money and debts owing to that person (including, for the avoidance of doubt, all securities portfolios and customer receivables); ‘‘Asset-Backed Bonds’’ means bonds, notes or other securities (however defined) (i) supported by present or future revenues or assets of the Borrower or any Subsidiary in a securitisation of receivables, and (ii) such other similar financing structure originated by the Borrower or any Subsidiary whereby all payment obligations are to be discharged solely from such assets or revenues; ‘‘Assigned Rights’’ has the meaning assigned to such term in the Principal Trust Deed; ‘‘Authorisation’’ means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration; ‘‘Bank Hapoalim’’ means Bank Hapoalim B.M., a banking corporation incorporated in Israel;

70 ‘‘Banking Business’’ means any type of banking business (including, without limitation, any interbank operations with maturities of 18 months or less, factoring, consumer credit and lending, commercial and residential property finance and mortgage lending, issuance of bank guarantees, letters of credit (and related cash cover provision), bills of exchange and promissory notes and making payments under such guarantees, letters of credit, bills and promissory notes, trading of securities, fund management and professional securities market participation) which the Borrower or any Subsidiary of the Borrower conducts or may conduct pursuant to its licence issued by the appropriate authorities, accepted market practice and any applicable law; ‘‘BIS’’ means the Bank for International Settlements; ‘‘Borrower Account’’ means an account in the name of the Borrower as specified in the applicable Senior Loan Supplement; ‘‘Borrower Agreements’’ means this Master Senior Loan Agreement and the Agency Agreement, together with, in relation to each Senior Advance, the applicable Senior Loan Supplement; ‘‘Broken Amount’’ has the meaning specified in the applicable Senior Loan Supplement; ‘‘BRSA’’ means the Banking Regulation and Supervision Agency (Bankacılık Du¨zenleme ve Denetleme Kurumu) of the Republic; ‘‘Business Centre(s)’’ means the city or cities specified as such in the applicable Senior Loan Supplement; ‘‘Business Day’’ means: (a) in the case of a currency other than euro, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the Principal Financial Centre for such currency; and/or (b) in the case of euro, a day on which the TARGET system is operating (a ‘‘TARGET Business Day’’); and/or (c) in the case of a currency and/or one or more Business Centres a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency in the Business Centre(s) or, if no currency is indicated, generally in each of the Business Centres; ‘‘Business Day Convention’’ has the meaning set out in sub-clause 4.3.2 (Business Day Convention); ‘‘Calculation Agent’’ means, in relation to a Senior Advance, Deutsche Bank AG, London Branch or any person named as such in the applicable Senior Loan Supplement or any successor thereto; ‘‘Calculation Amount’’ has the meaning given in the applicable Senior Loan Supplement; ‘‘Central Bank’’ means the Central Bank of Turkey (Tu¨rkiye Cumhuriyet Merkez Bankası); ‘‘Change of Control Amount’’ means, in respect of a Change of Control Event, the aggregate principal amount of the Notes which are to be redeemed as a result of the Change of Control Event (together with any accrued interest thereon) in accordance with Condition 7 of the terms and conditions of the Notes; ‘‘Change of Control Business Day’’ means a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in New York, London, Luxembourg and Istanbul and in the place of presentation of the Change of Control Option Exercise Notice; ‘‘Change of Control Event’’ means any merger, acquisition, amalgamation, restructuring or reorganisation which results in Bank Hapoalim ceasing to own or control, whether directly or indirectly, at least 50.01 per cent. of the issued share capital of and voting rights in the Borrower; ‘‘Change of Control Option Exercise Notice’’ means a duly signed and completed notice of exercise presented pursuant to Condition 8 of the terms and conditions of the Notes; ‘‘Change of Control Event Redemption Notice’’ means, in respect of a Change of Control Event, a notice given by or on behalf of the Lender (after receipt by the Lender of written confirmation from the Borrower of the Change of Control Event) to the Borrower specifying (i) the Change of Control Amount; and (ii) the Change of Control Settlement Date;

71 ‘‘Change of Control Period’’ means the period of 30 days after notice is given by the Lender (in its capacity as issuer of the Notes) to the holders of the Notes, in accordance with Condition 8 (Redemption upon a Change of Control Event) of the Notes, of the occurrence of a Change of Control Event; ‘‘Change of Control Settlement Date’’ means, in respect of a Change of Control Event, the date specified by or on behalf of the Lender in the Change of Control Event Redemption Notice on which the Senior Advance is to be prepaid in accordance with Clause 5.4 (Prepayment upon a Change of Control Event), which date shall be the fifteenth Change of Control Business Day immediately following the last day of the Change of Control Period; ‘‘Change of Law’’ means any of the enactment or introduction of any new law; the variation, amendment or repeal of an existing or new law; any ruling on or interpretation or application by a competent authority of any existing or new law; and the decision or ruling on, the interpretation or application of, or a change in the interpretation or application of, any law by any court of law, tribunal, central bank, monetary authority or agency or any Taxing Authority or fiscal or other competent authority or agency; which, in each case, occurs after the date hereof. For this purpose the term ‘‘law’’ means all or any of the following whether in existence at the date hereof or introduced hereafter and with which it is obligatory or customary for banks, other financial institutions or, as the case may be, companies in the relevant jurisdiction to comply: (a) any statute, treaty, order, decree, instruction, letter, directive, instrument, regulation, ordinance or similar legislative or executive action by any national or international or local government or authority or by any ministry or department thereof and other agencies of state power and administration (including, but not limited to, taxation departments and authorities); and (b) any letter, regulation, decree, instruction, request, notice, guideline, directive, statement of policy or practice statement given by, or required of, any central bank or other monetary authority, or by or of any Taxing Authority or fiscal or other authority or agency (whether or not having the force of law); ‘‘control’’ when used with respect to any Person means the power to direct the management and policies of such Person or to control the composition of such Person’s board or board of directors, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms ‘‘controlling’’ and ‘‘controlled’’ have meanings correlative to the foregoing; ‘‘Closing Date’’ means the date specified as such in the applicable Senior Loan Supplement; ‘‘Compliance Certificate’’ means a certificate substantially in the form set out in Schedule 3; ‘‘Covered Bond’’ means bonds, notes or other securities (however defined) designated by the Borrower or any Subsidiary as covered bonds issued under Turkish Capital Markets Law number 2499 (as amended by the Law Amending Certain Laws Relating to House Financing System number 5582) or under any applicable law; ‘‘Dealer Agreement’’ means the dealer agreement relating to the Programme dated 7 February 2008 between the Lender (in its capacity as issuer of the Notes), the Borrower and the Arrangers and the other dealers appointed pursuant to it; ‘‘Default’’ means any Event of Default or Potential Event of Default; ‘‘Double Tax Treaty’’ means the Convention of 9 June 2003 between Turkey and Luxembourg for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital gains; ‘‘Event of Default’’ has the meaning assigned to such term in Clause 13 (Events of Default); ‘‘Fee Side Letter’’ has the meaning given in Clause 16.2 of this Master Senior Loan Agreement; ‘‘Finance Documents’’ means the Principal Trust Deed, this Master Senior Loan Agreement together with, in relation to each Senior Advance, the applicable Senior Loan Supplement and Supplemental Trust Deed; ‘‘Financial Indebtedness’’ means any indebtedness for or in respect of: (a) monies borrowed or raised;

72 (b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with Turkish GAAP or IFRS, be treated as a finance or capital lease; (e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); (f) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; (g) any amounts raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; and (h) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (g) above; ‘‘First Degree Signatory’’ means an ‘‘A’’ degree signatory under the Borrower’s articles of association, and as provided for in the most recent Signature Circular of the Borrower, and ‘‘First Degree Signatories’’ shall have a corresponding meaning; ‘‘First Interest Payment Date’’ has the meaning specified in the applicable Senior Loan Supplement after the Interest Commencement Date; ‘‘First Interest Period’’ means the period from (and including) the Closing Date to (but excluding) the First Interest Payment Date; ‘‘Fixed Amount’’ has the meaning specified in the applicable Senior Loan Supplement; ‘‘Fixed Rate Advance’’ means a Senior Advance specified as such in the applicable Senior Loan Supplement; ‘‘Floating Rate Advance’’ means a Senior Advance specified as such in the applicable Senior Loan Supplement; ‘‘Group’’ means the Borrower and its Subsidiaries from time to time taken as a whole; ‘‘IFRS’’ means the International Financial Reporting Standards including IAS, promulgated by the International Accounting Standards Board (as amended, supplemented or re-issued from time to time); ‘‘incur’’ means issue, assume, guarantee, incur or otherwise become liable for; provided that, any Financial Indebtedness of a Person existing at the time such Person becomes a Subsidiary of another Person (whether by merger, consolidation, acquisition or otherwise) or is merged into a Subsidiary of another Person will be deemed to be incurred or issued by the other Person or such Subsidiary (as the case may be) at the time such Person becomes a Subsidiary of such other Person or is so merged into such Subsidiary; ‘‘Indemnity Amounts’’ has the meaning set forth in Clause 7.3 (Indemnity Amounts); ‘‘Interest Commencement Date’’ means, in relation to any Senior Advance, the date specified in the applicable Senior Loan Supplement from which such Senior Advance bears interest or, if no such date is specified therein, the Closing Date; ‘‘Interest Payment Date’’ means the dates specified as such in the applicable Senior Loan Supplement; ‘‘Interest Period’’ means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the First Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date; ‘‘ISDA Definitions’’ means the 2006 ISDA Definitions (as are amended and updated as at the date of the first Senior Advance (as specified in the applicable Senior Loan Supplement) as published by the International Swaps and Derivatives Association, Inc.);

73 ‘‘Issue Date’’ means, in relation to a Series of Notes, the date on which the Notes of that Series have been issued or, if not yet issued, the date agreed for their issue between the Issuer, the Borrower and the Relevant Dealer(s) as defined in the Dealer Agreement; ‘‘Lead Manager(s)’’ means the manager(s) specified as such in the relevant Subscription Agreement; ‘‘Lender Agreements’’ means this Master Senior Loan Agreement, the Dealer Agreement, the Agency Agreement, the Principal Trust Deed, together with, in relation to each Senior Advance, the applicable Senior Loan Supplement and Supplemental Trust Deed; ‘‘Material Adverse Effect’’ means any effect, event, circumstance or change which (having regard to the prevailing circumstances) is materially adverse, in the opinion of the Lender, to (a) the business, operations, property, financial condition or prospects of the Borrower or its Material Subsidiaries; (b) the Borrower’s ability to perform or comply with its obligations under this Agreement; (c) the validity or enforceability of the Finance Documents or the rights and remedies of the Lender hereunder; or (d) the condition (financial, political, economic, market or otherwise) or prospects (financial, political, economic, market or otherwise) of the Republic; ‘‘Material Subsidiary’’ means any Subsidiary of the Borrower either: (a) whose profits before tax represent ten per cent. or more of the profits before tax of the Group; or (b) whose net assets or revenues represent ten per cent. or more of the net assets or revenues of the Group, in each case calculated on a consolidated basis in accordance with the then most recent audited consolidated financial statements of the Borrower in accordance with IFRS; ‘‘Maximum Redemption Amount’’ has the meaning given in the applicable Senior Loan Supplement; ‘‘Minimum Redemption Amount’’ has the meaning given in the applicable Senior Loan Supplement; ‘‘Noteholder’’ means, in relation to a Note, a person in whose name a Note is registered in the Register (or in the case of joint holders, the first named thereof) and the words ‘‘holder’’ and ‘‘holders’’ and related expressions shall (where appropriate) be construed accordingly; ‘‘Notes’’ means the limited recourse loan participation notes that may be issued from time to time by the Lender under the Programme in Series, each Series corresponding to a Senior Advance and issued for the purpose of funding each such Senior Advance; ‘‘Officers’ Certificate’’ means a certificate, substantially in the form as set out in Schedule 2, signed on behalf of the Borrower by two First Degree Signatories; ‘‘Official Gazette’’ means the Official Gazette of the Republic; ‘‘Optional Redemption Amount (Call)’’ means, in respect of any relevant Senior Advance (or any relevant part thereof), its principal amount or such other amount as may be specified in, or determined in accordance with, the applicable Senior Loan Supplement; ‘‘Optional Redemption Amount (Put)’’ means, in respect of any relevant Senior Advance (or any relevant part thereof), its principal amount or such other amount as may be specified in, or determined in accordance with, the applicable Senior Loan Supplement; ‘‘Optional Redemption Date (Call)’’ has the meaning given in the applicable Senior Loan Supplement; ‘‘Optional Redemption Date (Put)’’ has the meaning given in the applicable Senior Loan Supplement; ‘‘Original Financial Statements’’ means the audited consolidated financial statements of the Group for the financial year ended 31 December 2006 in accordance with IFRS; ‘‘Paying Agents’’ means, in relation to the Notes of any Series, the several institutions (including, where the context permits, the Principal Paying Agent) at their respective specified offices initially appointed pursuant to the Agency Agreement and/or, if applicable, any Successor paying agents, in relation to such Notes at their respective specified offices, and ‘‘Paying Agent’’ shall mean any one of them;

74 ‘‘Person’’ means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organisation, government, or any Agency or political subdivision thereof or any other entity whether or not having a corporate legal personality; ‘‘Potential Event of Default’’ means any event or circumstance specified in Clause 13 (Events of Default) which may become (with the passage of time, the expiry of a grace period, the giving of notice and/or the making of a determination and/or the fulfilment of any other requirement) under the Finance Documents, an Event of Default; ‘‘Prepayment Date’’ means the date on which a Senior Advance is prepaid pursuant to Clause 5.2 (Prepayment for Tax Reasons), Clause 5.3 (Prepayment in the event of Illegality), Clause 5.4 (Prepayment upon a Change of Control Event), Clause 5.6 (Prepayment at the Option of the Borrower) or Clause 5.7 (Prepayment at the Option of the Lender), as the case may be; ‘‘Principal Financial Centre’’ means, in relation to any currency, the principal financial centre for that currency provided, however, that: (a) in relation to euro, it means the principal financial centre of such Member State of the European Communities as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; and (b) in relation to Australian dollars, it means either Sydney or Melbourne and, in relation to New Zealand dollars, it means either Wellington or Auckland; in each case as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; ‘‘Principal Trust Deed’’ means the principal trust deed dated 7 February 2008 between the Lender and the Trustee; ‘‘Programme’’ means the Programme for the issuance of the limited recourse loan participation notes of the Lender for the purpose of financing each Senior Advance; ‘‘Programme Limit’’ means U.S.$1,000,000,000 (as may be increased in accordance with the Dealer Agreement); ‘‘Put Option Notice’’ means a notice which must be delivered to a Paying Agent by any Noteholder wanting to exercise a right to redeem a Note at the option of the Noteholder; ‘‘Qualifying Jurisdiction’’ means any jurisdiction which by reason of either (a) any provision of Turkish law, or (ii) any double taxation treaty between such jurisdiction and Turkey the payment of which interest by Turkish borrowers to lenders established in such jurisdiction is generally able to be made (upon completion of any necessary formalities required in relation thereto) without deduction or withholding of Taxes under Turkish law; ‘‘Rate of Interest’’ has the meaning assigned to such term in the applicable Senior Loan Supplement; ‘‘Reference Rate’’ has the meaning given in the applicable Senior Loan Supplement; ‘‘Relevant Indebtedness’’ means (a) any present or future indebtedness (whether being principal, premium, interest or other amounts) for or in respect of any notes, bonds, debentures, debenture stock, loan stock or other securities (other than Covered Bonds and Asset-Backed Bonds) which are for the time being quoted, listed or ordinarily dealt in on any stock exchange, over the counter or other securities market and having a maturity in excess of one year, and (b) any guarantee or indemnity in respect of any such indebtedness; ‘‘Relevant Period’’ means each period of twelve months ending on the last day of the Borrower’s financial year and each period of twelve months ending on the last day of the first half of the Borrower’s financial year; ‘‘Relevant Screen Page’’ means the page, section or other part of a particular information service (including, without limitation, Reuters) specified as the Relevant Screen Page in the applicable Senior Loan Supplement or such other page, section or other part as may replace it on that information service or such other information service, in each case, as may be nominated by the Person providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to the Reference Rate;

75 ‘‘Relevant Time’’ means, in relation to a payment in U.S. Dollars, New York City time and, in relation to a payment in euro, Brussels time or in relation to any currency agreed between the Issuer, the Bank and the relevant Dealer(s) (as defined in the Dealer Agreement), the time in the Principal Financial Centre for that currency; ‘‘Repayment Date’’ means the date specified as such in the applicable Senior Loan Supplement; ‘‘Reserved Rights’’ has the meaning assigned to such term in the Principal Trust Deed; ‘‘Same-Day Funds’’ means (i) if the Specified Currency is U.S. Dollars, Dollar funds settled through the New York Clearing House Interbank Payments System or (ii) if the Specified Currency is euro, through the TARGET System or in either case such other funds for payment in the Specified Currency as the Lender may at any time determine to be customary for the settlement of international transactions in Brussels of the type contemplated hereby or (iii) in all other cases, funds for payment, in the Specified Currency, as the Lender may at any time determine to be customary for the settlement of international transactions in the Principal Financial Centre of the country of the Specified Currency; ‘‘Senior Advance’’ means each senior advance to be made pursuant to, and on the terms specified in, the Senior Loan Agreement; ‘‘Senior Loan Agreement’’ means this Master Senior Loan Agreement and (unless the context requires otherwise), in relation to a Senior Advance, means this Master Senior Loan Agreement as amended and supplemented by the applicable Senior Loan Supplement; ‘‘Series’’ means a Tranche of Notes together with any further Tranche or Tranches of Notes expressed to be consolidated and form a single series with the Notes of the original Tranche and the terms of which are identical (save for the Issue Date and/or the Interest Commencement Date, including as to whether or not the Notes are listed); ‘‘Signature Circular’’ means the written circular of the Borrower reflecting at least the names and specimen signatures of all of the First Degree Signatories; ‘‘Specified Currency’’ means the currency specified as such in the applicable Senior Loan Supplement; ‘‘Subscription Agreement’’ means the agreement specified as such in the applicable Senior Loan Supplement; ‘‘Subsidiary’’ of a Person means another Person: (a) which is controlled, directly or indirectly, by that first-named Person, whether by contract, the power to appoint or remove members of the governing body of such Person or otherwise; or (b) more than half the issued share capital of which is beneficially owned, directly or indirectly, by that first-named Person; ‘‘Supplemental Trust Deed’’ means a supplemental trust deed in respect of a Series of Notes which constitutes and secures, inter alia, such Series, dated the relevant Closing Date and made between the Lender and the Trustee (substantially in the form set out in Schedule 6 of the Principal Trust Deed); ‘‘Tangible Net Worth’’ means the aggregate of (a) all amounts paid up or credited as paid up on the Borrower’s issued and fully paid share capital (including share premium); (b) all amounts standing to the credit of the unconsolidated reserve accounts of the Borrower; (c) any retained earnings; and (d) any revaluation surplus, but excluding any amounts attributable to the revaluation of goodwill and other intangible assets accounted under equity; ‘‘TARGET System’’ means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET or TARGET2) System or any successor thereof; ‘‘Taxes’’ means any taxes, levies, duties, imposts or other charges or withholding of a similar nature or no matter where arising (including interest or penalties thereon and additions thereto) which are now or at any time hereafter imposed, assessed, charged, levied, collected, demanded, withheld or claimed by Turkey, Luxembourg or any taxing authority thereof or therein or any organisation of which Turkey or Luxembourg may be a member or with which Turkey or Luxembourg may be associated or any country or state from or through which the Borrower makes payments under the Senior Loan Agreement, provided, however, that for the purposes of this definition the references to Luxembourg shall also, upon the occurrence of the Relevant

76 Event (as this term is deﬁned in the Trust Deed), be deemed to be references to the jurisdiction in which the Trustee is a resident and acting through for tax purposes; and the term ‘‘Taxation’’ shall be construed accordingly; ‘‘Taxing Authority’’ has the meaning set out in Clause 7.1 (Additional Amounts); ‘‘Trust Deed’’ means the Principal Trust Deed and the Schedules to it (as from time to time modiﬁed in accordance with the provisions therein contained) and (unless the context otherwise requires) includes the relevant Supplemental Trust Deed; ‘‘Trustee’’ means Deutsche Trustee Company Limited, as trustee under the Trust Deed and any successor thereto as provided thereunder; ‘‘Turkey’’ and ‘‘Republic’’ means Tu¨rkiye Cumhuriyeti (the Republic of Turkey); ‘‘Turkish GAAP’’ means generally accepted accounting principles in Turkey; ‘‘US Dollars’’ and ‘‘US$’’ means the lawful currency for the time being of the United States of America and ‘‘New Turkish Lira’’ and ‘‘TRY’’ means the lawful currency for the time being of Turkey; and ‘‘VAT’’ means value added tax, including any similar tax which may be imposed in place thereof from time to time.

1.2 Other Definitions Unless the context otherwise requires, terms used in this Master Senior Loan Agreement which are not defined in this Master Senior Loan Agreement or the Senior Loan Supplement but which are defined in the Principal Trust Deed, the Notes, the Agency Agreement or the Dealer Agreement shall have the meanings assigned to such terms therein.

1.3 Interpretation Unless the context or the express provisions of this Master Senior Loan Agreement otherwise require, the following shall govern the interpretation of this Master Senior Loan Agreement: 1.3.1 all references to ‘‘Clause’’ or ‘‘sub-Clause’’ are references to a Clause or sub-Clause of this Master Senior Loan Agreement; 1.3.2 the terms ‘‘hereof’’, ‘‘herein’’ and ‘‘hereunder’’ and other words of similar import shall mean this Master Senior Loan Agreement as a whole and not any particular part hereof; 1.3.3 words importing the singular number include the plural and vice versa; 1.3.4 all references to ‘‘taxes’’ include all present or future taxes, levies, imposts and duties of any nature and the terms ‘‘tax’’ and ‘‘taxation’’ shall be construed accordingly; 1.3.5 the table of contents and the headings are for convenience only and shall not affect the construction hereof; and 1.3.6 all references in this Agreement to this Agreement or any other document are to this Agreement or those documents as amended, supplemented or replaced from time to time in relation to the Programme and include any document that amends, supplements or replaces it.

2. SENIOR FACILITY 2.1 Senior Facility On the terms and subject to the conditions set forth in this Master Senior Loan Agreement and, as the case may be, each Senior Loan Supplement, the Lender hereby makes available to the Borrower Senior Advances up to, together with any Subordinated Advances the Lender agrees to make available to the Borrower under the Subordinated Loan Agreements, a total aggregate amount equal to the Programme Limit.

2.2 Purpose The proceeds of each Senior Advance will be used by the Borrower for general corporate purposes and, without affecting the obligations of the Borrower in any way, the Lender shall not be obliged to concern itself with such application.

77 2.3 Separate Senior Advances Where Senior Advances are made, all the provisions of this Master Senior Loan Agreement and the Senior Loan Supplement in respect of each Senior Advance shall apply mutatis mutandis separately and independently to each such Senior Advance and in respect of each such Senior Advance the expressions ‘‘Account’’, ‘‘Assigned Rights’’, ‘‘Closing Date’’, ‘‘Day Count Fraction’’, ‘‘Finance Documents’’, ‘‘Interest Payment Date’’, ‘‘Senior Loan Agreement’’, ‘‘Notes’’, ‘‘Principal Financial Centre’’, ‘‘Rate of Interest’’, ‘‘Repayment Date’’, ‘‘Same-Day Funds’’, ‘‘Speciﬁed Currency’’, ‘‘Subscription Agreement’’ and ‘‘Trust Deed’’, together with all other terms that relate to Senior Advances, shall be construed as referring to those of the particular Senior Advance in question and not of all Senior Advances, unless expressly so provided, so that each such Senior Advance shall be made pursuant to this Master Senior Loan Agreement and the Senior Loan Supplement in respect of the applicable Senior Advance, together comprising the Senior Loan Agreement, in respect of such Senior Advance and that, unless expressly provided, events affecting one Senior Advance shall not affect any other.

3. SENIOR ADVANCES 3.1 Senior Advances On the terms and subject to the conditions of a Senior Loan Agreement, the Lender shall make the applicable Senior Advance in the amount and on the terms speciﬁed in such Senior Loan Agreement to the Borrower and the Borrower shall make a single drawing in the full amount of such Senior Advance.

3.2 Senior Advance Arrangement Fee In consideration of the Lender’s undertaking to make a Senior Advance available to the Borrower, the Borrower hereby agrees that it shall, one Business Day before each Closing Date, pay to or to the order of the Lender, in Same-Day Funds by 10 a.m. (Relevant Time) an Arrangement Fee (as defined in the applicable Senior Loan Supplement) in connection with the financing of such Senior Advance. The total amount of the Arrangement Fee will be as specified in the applicable Senior Loan Supplement.

3.3 Disbursement Subject to the conditions set forth in the applicable Senior Loan Agreement, on the Closing Date thereof the Lender shall transfer the full amount of each Senior Advance to the Borrower Account in Same-Day Funds. If the Arrangement Fee has not been otherwise received by the Lead Manager(s) or, as the case may be, the Relevant Dealer, then the Lead Manager(s) or, as the case may be, the Relevant Dealer, shall deduct such sum from such Senior Advance.

3.4 Ongoing Fees and Expenses In consideration of the Lender establishing and maintaining the Programme and agreeing to make Senior Advance to the Borrower, the Borrower shall pay on demand to the Lender as and when such payments are due an amount or amounts to reimburse the Lender for its expenses relating to its management and operation in servicing the Senior Advance as set forth to the Borrower in an invoice from the Lender (including, for the avoidance of doubt and without limitation, the fees and expenses of the Lender’s counsel, auditors, corporate services providers and agents and any taxes of the Issuer).

4. INTEREST 4.1 Rate of Interest for Fixed Rate Advances For each Fixed Rate Advance, the Borrower will pay interest in the Speciﬁed Currency to the Lender on the outstanding principal amount of each Senior Advance from time to time at the relevant Rate of Interest.

4.2 Payment for Fixed Rate Advances In relation to each Senior Advance, interest shall accrue at the relevant Rate of Interest from day to day, starting from (and including) the Interest Commencement Date and shall be paid in arrear not later than 10.00 a.m. (Relevant Time) 1 (one) New York (if the Speciﬁed Currency is

78 U.S. Dollars) or Brussels (if the Speciﬁed Currency is euros) Business Day (or such other day as may be speciﬁed in the applicable Senior Loan Supplement) prior to each Interest Payment Date.

4.3.2 Business Day Convention: If any date referred to in the applicable Senior Loan Supplement that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day.

4.3.3 Rate of Interest for Floating Rate Advances:

(a) ISDA Determination: If ISDA Determination is specified in the applicable Senior Loan Supplement as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Senior Advance for each Interest Period will be the sum of the Margin (as specified in the applicable Senior Loan Supplement) and the relevant ISDA Rate where ‘‘ISDA Rate’’ in relation to any Interest Period means a rate equal to the Floating Rate (as defined in the ISDA Definitions) that would be determined by the Calculation Agent under an interest rate swap transaction if the Calculation Agent were acting as Calculation Agent for that interest rate swap transaction under the terms of an agreement incorporating the ISDA Definitions and under which:

(i) the Floating Rate Option (as defined in the ISDA Definitions) is as specified in the applicable Senior Loan Supplement;

(ii) the Designated Maturity (as defined in the ISDA Definitions) is a period specified in the applicable Senior Loan Supplement; and

(iii) the relevant Reset Date (as defined in the ISDA Definitions) is either (A) if the relevant Floating Rate Option is based on the London inter-bank offered rate (LIBOR) for a currency, the first day of that Interest Period or (B) in any other case, as specified in the applicable Senior Loan Supplement.

79 (b) Screen Rate Determination for Floating Rate Advances: If Screen Rate Determination is specified in the applicable Senior Loan Supplement as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Senior Advance for each Interest Period will be determined by the Calculation Agent on the following basis: (i) if the Reference Rate is a composite quotation or customarily supplied by one entity, the Calculation Agent will determine the Reference Rate which appears on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date; (ii) in any other case, the Calculation Agent will determine the arithmetic mean of the Reference Rates which appear on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date; (iii) if, in the case of (i) above, such rate does not appear on that page or, in the case of (ii) above, fewer than two such rates appear on that page or if, in either case, the Relevant Screen Page is unavailable, the Calculation Agent will: (A) request the principal Relevant Financial Centre office of each of the Reference Banks to provide a quotation of the Reference Rate at approximately the Relevant Time on the Interest Determination Date to prime banks in the Relevant Financial Centre interbank market in an amount that is representative for a single transaction in that market at that time; and (B) determine the arithmetic mean of such quotations; and (iv) if fewer than two such quotations are provided as requested, the Calculation Agent will determine the arithmetic mean of the rates (being the nearest to the Reference Rate, as determined by the Calculation Agent) quoted by major banks in the Principal Financial Centre of the Specified Currency (as specified in the applicable Senior Loan Supplement), selected by the Calculation Agent, at approximately 11.00 a.m. (local time in the Principal Financial Centre of the Specified Currency) on the first day of the relevant Interest Period for loans in the Specified Currency to leading European banks for a period equal to the relevant Interest Period and in an amount that is representative for a single transaction in that market at that time, and the Rate of Interest for such Interest Period shall be the sum of the Margin and the rate or (as the case may be) the arithmetic mean so determined; provided, however, that if the Calculation Agent is unable to determine a rate or (as the case may be) an arithmetic mean in accordance with the above provisions in relation to any Interest Period, the Rate of Interest applicable to the Senior Advance during such Interest Period will be the sum of the Margin and the rate or (as the case may be) the arithmetic mean last determined in relation to the Senior Advance in respect of a preceding Interest Period.

4.4 Accrual of Interest Interest shall cease to accrue on each Senior Advance on the due date for repayment thereof unless payment of principal is improperly withheld or refused, in which event interest will continue to accrue (after as well as before judgment) at the same Rate of Interest as before the due date to but excluding the date on which payment in full of the principal thereof is made.

4.5 Maximum/Minimum Rates of Interest, Maximum/Minimum Redemption Amount and Rounding 4.5.1 If any Maximum or Minimum Rate of Interest is specified in the applicable Senior Loan Supplement, then any Rate of Interest shall be subject to such maximum or minimum, as the case may be. 4.5.2 If any Maximum or Minimum Redemption Amount is specified in the applicable Senior Loan Supplement, then the Optional Redemption Amount (Call) shall in no event be greater than the maximum or be less than the minimum so specified. 4.5.3 For the purposes of any calculations required pursuant to a Senior Loan Agreement (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with

80 halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest sub-unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For this purpose a ‘‘sub- unit’’ means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro means one cent.

4.6 Calculations The amount of interest payable in respect of any Senior Advance for any period shall be calculated by multiplying the product of the Rate of Interest and the outstanding principal amount of such Senior Advance by the Day Count Fraction, unless an Interest Amount (or a formula for its calculation) is speciﬁed in the applicable Senior Loan Supplement in respect of such period, in which case the amount of interest payable in respect of such Senior Advance for such period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable in respect of such Interest Period shall be the sum of the amounts of interest payable in respect of each of those Interest Accrual Periods.

4.7 Determination and Publication of Rates of Interest and Interest Amounts As soon as practicable after the Relevant Time on each Interest Determination Date or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, the Calculation Agent shall determine such rate and calculate the Interest Amounts in respect of such Floating Rate Advance for the relevant Interest Accrual Period, obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Period and the relevant Interest Payment Date to be notiﬁed to the Borrower, the Trustee, the Lender, each of the Paying Agents and any other Calculation Agent appointed in respect of such Floating Rate Advance that is to make a further calculation upon receipt of such information. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to sub-clause 4.3.2 (Business Day Convention), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Borrower and the Lender by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If such Floating Rate Advance becomes due and payable under Clause 13 (Events of Default) the accrued interest and the Rate of Interest payable in respect of such Floating Rate Advance shall nevertheless continue to be calculated as previously in accordance with this Clause 4 but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Lender otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be ﬁnal and binding upon all parties.

4.8 Determination or Calculation by Trustee If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Period or any Interest Amount in relation to a Floating Rate Loan, the Lender and the Borrower agree that such determination or calculation may be made by or at the direction of the Trustee, as set out in and in accordance with the terms and conditions of the corresponding Series of Notes.

81 number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365); (ii) if ‘‘Actual/365 (Fixed)’’ is specified in the applicable Senior Loan Supplement, the actual number of days in the Calculation Period divided by 365; (iii) if ‘‘Actual/365 (Sterling)’’ is specified in the applicable Senior Loan Supplement, the actual number of days in the Calculation Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366; (iv) if ‘‘Actual/360’’ is specified in the applicable Senior Loan Supplement, the actual number of days in the Calculation Period divided by 360; (v) if ‘‘30/360’’, ‘‘360/360’’ or ‘‘Bond Basis’’ is specified in the applicable Senior Loan Supplement, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: [360 x(Y –Y)] + [30 x(M –M)] + (D –D) Day Count Fraction = 2 1 2 1 2 1 360 where:

‘‘Y1’’ is the year, expressed as a number, in which the ﬁrst day of the Calculation Period falls;

‘‘Y2’’ is the year, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;

‘‘M1’’ is the calendar month, expressed as a number, in which the ﬁrst day of the Calculation Period falls;

‘‘M2’’ is the calendar month, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;

‘‘D1’’ is the ﬁrst calendar day, expressed as a number, of the Calculation Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and

‘‘D2’’ is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; (vi) if ‘‘30E/360’’ or ‘‘Eurobond Basis’’ is speciﬁed in the applicable Senior Loan Supplement, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows: [360 x(Y –Y)] + [30 x(M –M)] + (D –D) Day Count Fraction = 2 1 2 1 2 1 360 where:

‘‘Y1’’ is the year, expressed as a number, in which the ﬁrst day of the Calculation Period falls;

‘‘Y2’’ is the year, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;

‘‘M1’’ is the calendar month, expressed as a number, in which the ﬁrst day of the Calculation Period falls;

‘‘M2’’ is the calendar month, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;

‘‘D1’’ is the ﬁrst calendar day, expressed as a number, of the Calculation Period, unless such number would be 31, in which case D1 will be 30; and

‘‘D2’’ is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless such number would be 31, in which case D2 will be 30; (vii) if ‘‘30E/360 (ISDA)’’ is speciﬁed in the applicable Loan Supplement, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows:

82 [360 x(Y –Y)] + [30 x(M –M)] + (D –D) Day Count Fraction = 2 1 2 1 2 1 360 where:

‘‘Y1’’ is the year, expressed as a number, in which the ﬁrst day of the Interest Period falls;

‘‘Y2’’ is the year, expressed as a number, in which the day immediately following the last day of the Interest Period falls;

‘‘M1’’ is the calendar month, expressed as a number, in which the ﬁrst day of the Interest Period falls;

‘‘M2’’ is the calendar month, expressed as a number, in which the day immediately following the last day of the Interest Period falls;

‘‘D1’’ is the ﬁrst calendar day, expressed as a number, of the Interest Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and

‘‘D2’’ is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; and (viii) if ‘‘Actual/Actual-ICMA’’ is specified in the applicable Senior Loan Supplement: (a) if the Calculation Period is equal to or shorter than the Determination Period during which it falls, the number of days in the Calculation Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in any year; and (b) if the Calculation Period is longer than one Determination Period, the sum of: (A) the number of days in such Calculation Period falling in the Determination Period in which it begins divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year; and (B) the number of days in such Calculation Period falling in the next Determination Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Periods normally ending in any year, where: ‘‘Determination Period’’ means the period from and including a Determination Date in any year to but excluding the next Determination Date. ‘‘Determination Date’’ means the date specified in the applicable Senior Loan Supplement or, if none is so specified, the Interest Payment Date. ‘‘Interest Accrual Period’’ means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the first Interest Period Date and each successive period beginning on (and including) an Interest Period Date and ending on (but excluding) the next succeeding Interest Period Date. ‘‘Interest Amount’’ means the amount of interest payable, and in the case of Fixed Rate Advances, means the Fixed Amount or Broken Amount, as the case may be. ‘‘Interest Commencement Date’’ means the Closing Date or such other date as may be specified in the applicable Senior Loan Supplement. ‘‘Interest Determination Date’’ means, with respect to a Rate of Interest and Interest Accrual Period, the date specified as such in the applicable Senior Loan Supplement or, if none is so specified, (i) the first day of such Interest Accrual Period if the Specified Currency is Sterling or (ii) the day falling two Business Days in London for the Specified Currency prior to the first day of such Interest Accrual Period if the Specified Currency is neither Sterling nor euro or (iii) the day falling two TARGET Business Days prior to the first day of such Interest Accrual Period if the Specified Currency is euro.

83 ‘‘Interest Period’’ means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the First Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date. ‘‘Interest Period Date’’ means each Interest Payment Date unless otherwise specified in the applicable Senior Loan Supplement. ‘‘Reference Banks’’ has the meaning given in the applicable Senior Loan Supplement or, if none, four major banks selected by the Calculation Agent in the market that is most closely connected with the Reference Rate. ‘‘Relevant Financial Centre’’ has the meaning given in the applicable Senior Loan Supplement. ‘‘Relevant Time’’ means, with respect to any Interest Determination Date, the local time in the Relevant Financial Centre specified in the applicable Senior Loan Supplement or, if no time is specified, the local time in the Relevant Financial Centre at which it is customary to determine bid and offered rates in respect of deposits in the Specified Currency in the interbank market in the Relevant Financial Centre and for the purpose ‘‘local time’’ means, with respect to Europe as a Relevant Financial Centre, 11.00 hours, Brussels time.

4.10 Calculation Agent and Reference Banks The Lender shall procure that there shall at all times be specified no less than four Reference Banks (or such other number as may be required) with offices in the Relevant Financial Centre and appointed one or more Calculation Agents if provision is made for them hereon and for so long as any amount remains outstanding under a Senior Loan Agreement. If any Reference Bank (acting through its relevant office) is unable or unwilling to continue to act as a Reference Bank, then the Lender shall (with the prior approval of the Borrower) appoint another Reference Bank with an office in the Relevant Financial Centre to act as such in its place. Where more than one Calculation Agent is appointed in respect of a Loan, references in the applicable Senior Loan Agreement to the Calculation Agent shall be construed as each Calculation Agent performing its respective duties under the applicable Senior Loan Agreement. If the Calculation Agent is unable or unwilling to act as such or if the Calculation Agent fails duly to establish the Rate of Interest for an Interest Period or Interest Accrual Period or to calculate any Interest Amount, or to comply with any other requirement, the Lender shall (with the prior approval of the Borrower) appoint a leading bank or investment banking firm engaged in the interbank market (or, if appropriate, money, swap or over-the-counter index options market) that is most closely connected with the calculation or determination to be made by the Calculation Agent (acting through its principal London office or any other office actively involved in such market) to act as such in its place. The Calculation Agent may not resign its duties without a successor having been appointed as aforesaid. Both the Borrower and the Lender agree that such successor Calculation Agent will be appointed on the terms of the Agency Agreement in relation to the applicable Senior Loan Agreement.

5. REPAYMENT AND PREPAYMENT 5.1 Repayment Except as otherwise provided in the applicable Senior Loan Agreement, the Borrower shall repay each Senior Advance not later than 10.00 a.m. (Relevant Time) one New York (if the Specified Currency is U.S. Dollars) or Brussels (if the Specified Currency is euros) Business Day (or such other day as may be specified in the applicable Senior Loan Supplement) prior to the Repayment Date therefor.

5.2 Prepayment for Tax Reasons and Change in Circumstances If, 5.2.1 as a result of the application of, or any amendment to, or a change in or ofﬁcial interpretation of (i) the Double Tax Treaty (or in the double taxation treaty between Turkey and any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes) or (ii) the laws or regulations of Luxembourg or Turkey (or any Qualifying Jurisdiction where the Lender is resident for tax purposes) or of any political sub-division thereof or any authority therein having power to tax or any Agency therein,

84 the Borrower would thereby be required to pay any Additional Amounts in respect of Taxes as provided in Clause 7.1 (Additional Amounts) or Indemnity Amounts as provided in Clause 7.3 (Indemnity Amounts); or 5.2.2 the Lender ceases to be resident for tax purposes in a Qualifying Jurisdiction, or has a permanent establishment in Turkey for the purposes of the Double Tax Treaty, and as a result the Borrower would be required to withhold or deduct an amount on account of tax from any payment to be made under the Senior Loan Agreement; or 5.2.3 (for whatever reason) the Borrower would have to or has been required to pay additional amounts pursuant to Clause 9 (Changes in Circumstances); or 5.2.4 after a Relevant Event, the Borrower is or would be required to increase the payment of principal or interest or any other payment due hereunder as provided in Clause 7.1 (Additional Amounts) as a result of such payments being made to any person other than the Lender to whom the benefit of the Double Tax Treaty or laws or regulations described in sub-clause 5.2.1 above are unavailable, and, in any such case, such obligation cannot be avoided by the Borrower taking reasonable measures available to it, then the Borrower may, upon not less than 30 days’ written notice (which notice shall be irrevocable) to the Lender (with a copy to the Trustee) specifying the date of payment and including an Officers’ Certificate to the effect that the Borrower would be required in the case of sub-clauses 5.2.1, 5.2.3 and 5.2.4 above to pay such Additional Amounts, Indemnity Amounts or additional amounts, and in the case of sub-clause 5.2.2 above to withhold or deduct such amounts, supported (where the certification relates to tax matters) by an opinion of an independent tax adviser of recognised standing in the relevant tax jurisdiction, prepay the Senior Advance in whole (but not in part), together with all accrued and unpaid interest, any Additional Amounts then payable under Clause 7.1 (Additional Amounts), Indemnity Amounts payable under Clause 7.3 (Indemnity Amounts) and additional amounts payable pursuant to Clause 9 (Changes in Circumstances). Any such notice of prepayment given by the Borrower shall be irrevocable and shall oblige the Borrower to make such prepayment on such date. No such notice shall be given earlier than 30 calendar days prior to the earliest date on which the Borrower would be obliged to pay such Additional Amounts, Indemnity Amounts or additional amounts, or deduct or withhold such amounts, as the case may be, were payment due at that time.

5.3 Prepayment in the event of Illegality If at any time, the Lender reasonably determines that it is or would be unlawful or contrary to any applicable law or regulation or regulatory requirement or directive of any agency of any state or otherwise for the Lender to allow all or part of the Senior Advance or the corresponding Series of Notes to remain outstanding or for the Lender to maintain or give effect to any of its obligations in connection with the Senior Loan Agreement and/or to charge or receive or to be paid interest at the rate then applicable to such Senior Advance (an ‘‘Event of Illegality’’), then upon notice by the Lender to the Borrower in writing, the Borrower and the Lender shall consult in good faith as to a basis which eliminates the application of such Event of Illegality; provided, however, that the Lender shall be under no obligation to continue such consultation if a basis has not been determined within 30 days of the date on which it so notiﬁed the Borrower. If such a basis has not been determined within the 30 days, then upon written notice by the Lender to the Borrower, the Borrower shall prepay such Senior Advance (without penalty or premium) in whole (but not in part) on the next Interest Payment Date or on such earlier date as the Lender shall certify to be necessary to comply with such requirements.

5.4 Prepayment upon a Change of Control Event If this Clause 5.4 is speciﬁed in the applicable Senior Loan Supplement as being applicable, notwithstanding Clause 5.1 (Repayment), promptly, and in any event within 5 calendar days after a Change of Control Event, the Borrower shall deliver to the Lender and the Principal Paying Agent (with a copy to the Trustee) a written notice on a Change of Control Business Day substantially in the form of Schedule 4 (the ‘‘Change of Control Event Notice’’) hereto signed on behalf of the Borrower by two First Degree Signatories ofﬁcers of the Borrower, which notice shall be irrevocable, stating:

85 5.4.1 that a Change of Control Event has occurred; and 5.4.2 the circumstances and relevant facts giving rise to such Change of Control Event. 5.5 The Borrower shall, on the Change of Control Settlement Date (having been given a Change of Control Event Redemption Notice by the Lender (with a copy to the Trustee)), prepay the Senior Advance in the amount of the Change of Control Amount and additional amounts (if any) to the extent and in an amount that the Lender is required to pay the holders of the Notes as a result of the relevant Change of Control Event. The Change of Control Amount and additional amounts (if any), shall be set out in the Change of Control Event Redemption Notice (with a copy to the Trustee).

5.6 Prepayment at the option of the Borrower If the Call Option is specified in the applicable Senior Loan Supplement as being applicable, the relevant Senior Advance may be prepaid at the option of the Borrower in whole or, if so specified in the applicable Senior Loan Supplement, in part on any Optional Redemption Date (Call) on the Borrower giving not less than 30 nor more than 60 days’ notice to the Lender (with a copy to the Trustee) (which notice shall be irrevocable and shall oblige the Borrower to prepay the relevant Senior Advance or, as the case may be, the relevant part of the relevant Senior Advance specified in such notice on the relevant Optional Redemption Date (Call) plus accrued interest (if any) to such date).

5.7 Prepayment at the option of the Lender If the Put Option is speciﬁed in the applicable Senior Loan Supplement as being applicable, the Lender shall, upon notice from the holder of any Note require the Borrower to prepay the relevant part of the relevant Senior Advance on the Optional Redemption Date (Put) speciﬁed in the relevant Put Option Notice together with interest (if any) accrued to such date.

5.8 Reduction of Senior Advances upon Cancellation of corresponding Notes The Borrower or any of its Subsidiaries may from time to time purchase Notes in the open market or by tender or by private agreement at any price. The Borrower or any of its Subsidiaries may from time to time deliver to the Lender (or directly to the Paying Agent) definitive Notes, having an aggregate principal value of at least U.S.$1 million, or its equivalent in the Specified Currency, together with a request for the Lender to present such definitive Notes to the Principal Paying Agent for cancellation, and may also from time to time procure the delivery to the Principal Paying Agent of a Global Note with instructions to cancel a specified aggregate principal amount of Notes (being at least U.S.$1 million, or its equivalent in the Specified Currency) represented thereby (which instructions shall be accompanied by evidence satisfactory to the Principal Paying Agent that such Person is entitled to give such instructions), whereupon the Lender shall, pursuant to clause 8.2 (Redemption, Reduction and Cancellations)of the Agency Agreement, request the Principal Paying Agent to cancel such Notes (or a specified aggregate principal amount of such Series of Notes represented by the Global Note). Upon any such cancellation by or on behalf of the Principal Paying Agent, the principal amount of such Senior Advance corresponding to the principal amount of such Notes shall be deemed to be repaid for all purposes as of the date of such cancellation.

5.9 Payment of Other Amounts If the Senior Advance is to be prepaid by the Borrower pursuant to any of the provisions of Clause 5.2 (Prepayment for Tax Reasons and Change in Circumstances), Clause 5.3 (Prepayment in the event of Illegality), 5.4 (Prepayment upon a Change of Control Event), Clause 5.6 (Prepayment at the option of the Borrower) or Clause 5.7 (Prepayment at the option of the Lender) of this Clause 5, the Borrower shall, simultaneously with such prepayment, pay to the Lender (i) accrued interest thereon to the date of actual payment, (ii) all other sums payable by the Borrower pursuant to the applicable Senior Loan Agreement and all other amounts ending or payable to the Lender hereunder. For the avoidance of doubt, if the principal amount of such Senior Advance is reduced pursuant to the provisions of Clause 5.8 (Reduction of Senior Advances upon Cancellation of corresponding Notes), then no interest shall accrue or be payable during the Interest Period in which such reduction takes place in respect of the amount by which such Senior Advance is so reduced and the Borrower shall not be entitled to any interest in respect of the cancelled Notes of the corresponding Series.

86 5.10 Provisions Exclusive The Borrower shall not prepay or repay all or any part of the amount of the Senior Advance except at the times and in the manner expressly provided for in the applicable Senior Loan Agreement. The Borrower shall not be permitted to reborrow any amounts prepaid or repaid under such Senior Loan Agreement.

6. PAYMENTS All payments of principal and interest to be made by the Borrower under the Senior Loan Agreement shall be made unconditionally by credit transfer to the Lender not later than 10.00 a.m. (Relevant Time) 1 (one) New York (if the specified currency is U.S. Dollars) or Brussels (if the specified currency is euros) Business Day (or such other day as may be specified in the applicable Senior Loan Supplement) prior to each Interest Payment Date or the Repayment Date (as the case may be) or prepayment date in relation to Clause 5.2 (Prepayment for Tax Reasons and Change in Circumstance), Clause 5.3 (Prepayment in the event of Illegality), Clause 5.4 (Prepayment upon a Change of Control Event), Clause 5.6 (Prepayment at the option of the Borrower) or Clause 5.7 (Prepayment at the option of the Lender) in Same-Day Funds to the relevant Account.

The Borrower shall, before 10.00 a.m. (Relevant Time) on the first New York (if the specified currency is U.S. Dollars) or Brussels (if the specified currency is euros) Business Day (or such other day as may be specified in the applicable Senior Loan Supplement) prior to each Interest Payment Date, Repayment Date or Prepayment Date (as the case may be), procure that the bank effecting the payments referred to in the first paragraph of this Clause 6 on its behalf confirms to the Principal Paying Agent by tested telex or authenticated SWIFT the irrevocable payment instructions relating to such payment.

The Lender agrees with the Borrower that it will not deposit any other monies into such Account and that no withdrawals shall be made from such Account other than as provided for and in accordance with the Trust Deed and the Agency Agreement.

7. TAXES

7.1 Additional Amounts 7.1.1 All payments to be made by the Borrower under a Senior Loan Agreement shall be made in full without set-off or counterclaim, free and clear of and without withholding or deduction for or on account of any present or future Taxes imposed by any taxing authority of or in, or having authority to tax in, Turkey, Luxembourg or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes or any political sub division or authority thereof or therein having the power to tax (each a ‘‘Taxing Authority’’), unless the Borrower is required by applicable law to make such payment subject to the deduction or withholding of such Taxes. In the event that the Borrower is required to make any such payment subject to deduction or withholding of any such Tax the Borrower shall, on the due date for such payment, pay such additional amounts (‘‘Additional Amounts’’) as may be necessary to ensure that the Lender or the Trustee, as the case may be, receives a net amount which, following any such deduction or withholding on account of Taxes, shall be not less than the full amount which it would have received had the payment been made without such deduction or withholding and shall deliver to the Lender (or the Trustee, as the case may be) without undue delay, evidence satisfactory to the Lender (or the Trustee, as the case may be) of such deduction or withholding and of the accounting therefor to the relevant authority. For the avoidance of doubt, this Clause 7.1 shall not apply to any Taxes assessed on the Lender in Luxembourg (or any Qualifying Jurisdiction) by reference to its overall net income.

7.1.2 At least 30 calendar days prior to each date on which any payment under or with respect to the Senior Advance is due and payable, if the Borrower will be obliged to pay Additional Amounts with respect to such payment, the Borrower will deliver to the Lender (and to the Trustee) an Ofﬁcers’ Certiﬁcate stating that such Additional Amounts will be payable and the amounts so payable.

87 7.1.3 Whenever this Agreement mentions, in any context, the payment of amounts based upon the principal or premium, if any, interest or of any other amount payable under or with respect to the Senior Advance, this includes, without duplication, payment of any Additional Amounts and Indemnity Amounts that may be applicable.

The foregoing provisions shall apply, modiﬁed as necessary, to any Taxes imposed or levied by any Taxing Authority in any jurisdiction in which any successor obligor to the Borrower is organised.

7.2.2 Each of the Lender and the Borrower shall make reasonable and timely efforts to cooperate and assist each other in obtaining relief from withholding of Turkish income tax pursuant to the Double Tax Treaty or relevant provision of Turkish law. In particular, the Borrower and the Lender will inform each other, in a reasonable and timely manner, on the status of the procedures and the steps necessary to be taken in this regard. The Lender makes no representation as to the application or interpretation of the Double Tax Treaty.

7.2.3 If the Lender becomes resident for tax purposes in another Qualifying Jurisdiction, references in sub-clauses 7.2.1 and 7.2.2 to the Luxembourg Tax Authority, Luxembourg tax certiﬁcate and Double Tax Treaty shall be read, respectively, as including references to the Tax Authority of the Qualifying Jurisdiction, a tax certiﬁcate of the Qualifying Jurisdiction and the double tax treaty between Turkey and the Qualifying Jurisdiction.

7.3 Indemnity Amounts Without prejudice to or duplication of the provisions of Clause 7.1 (Additional Amounts), if the Lender notiﬁes the Borrower that:

7.3.1 it is obliged to make any deduction or withholding for or on account of any Taxes (other than Taxes assessed on the Lender by reference to its net income) from any payment which the Lender (as issuer of the Notes) is obliged to make under or in respect of the Notes or any Finance Documents and the Lender (as issuer of the Notes) is required under the terms and conditions of the Notes or such Finance Documents to pay additional amounts to the holders of the Notes in connection therewith, the Borrower shall pay to the Lender within 30 days of such notice (and otherwise in accordance with the terms of this Agreement) such additional amounts as are equal to the additional payments which the Lender (as issuer of the Notes) would be required to make under the terms and conditions of the relevant series of Notes or such Finance Documents, in order that the net amount received by each holder of Notes or other party to the relevant Finance Documents is equal to the amount which such holder or party would have received had no such withholding or deduction been required to be made; and/or

7.3.2 it is liable to pay any Taxes imposed by a Taxing Authority (other than Taxes assessed on the Lender by reference to its overall net income) in relation to this Agreement, the Notes or any Finance Documents, the Borrower shall, as soon as reasonably practicable following, and in any event within 30 calendar days of, a written demand made by the Lender, indemnify the Lender in relation to such properly documented payment or liability.

88 Any payments required to be made by the Borrower under this Clause 7.3 are collectively referred to as ‘‘Indemnity Amounts’’. For the avoidance of doubt, the provisions of this Clause 7.3 shall not apply to any withholding or deductions of Taxes with respect to the Senior Advance which are subject to payment of Additional Amounts under Clause 7.1 (Additional Amounts).

7.4 Tax Claims If the Lender intends to make a claim pursuant to Clause 7.3 (Indemnity Amounts), it shall notify the Borrower thereof as soon as reasonably practicable after the Lender becomes aware of any obligation to make the relevant withholding, deduction or payment; provided that nothing herein shall require the Lender to disclose any conﬁdential information relating to the organisation of its affairs.

7.5.2 If as a result of a failure to obtain relief from deduction or withholding of any Tax imposed by any Taxing Authority, in particular in accordance with the Double Tax Treaty, such Tax is deducted or withheld by the Borrower pursuant to Clause 7.1 (Additional Amounts) and an Additional Amount is paid by the Borrower to the Lender in respect of such deduction or withholding, the Borrower may apply, under the supervision and on behalf of the Lender, to the relevant Taxing Authority for a Tax refund. If and to the extent that any Tax refund is credited by such Taxing Authority to a bank account of the Lender, the Lender shall as soon as reasonably possible notify the Borrower of the receipt of such Tax refund and promptly transfer the entire amount of the Tax refund to an account speciﬁed by the Borrower if and to the extent that the Lender determines in its absolute discretion (acting in good faith) that to do so will leave it (after the payment and after deduction of costs and expenses incurred in relation to such Tax refund for which the Borrower is liable) in no worse an after-Tax position than it would have been in had there been no failure to obtain relief from such withholding or deduction.

7.6 Tax Position of the Lender The Lender represents and warrants that:

89 7.6.1 The Lender is subject to taxation in Luxembourg on the basis of its registration as a legal entity, location of its management body or another similar criterion and it is subject to taxation in Luxembourg not merely on income from sources in Luxembourg or connected with property located in Luxembourg. 7.6.2 The Lender is considered a resident of Luxembourg for taxation purposes and will be liable to Luxembourg taxes on its Luxembourg sourced income as well as on its foreign sourced income. The Lender beneﬁts from tax treaties signed by Luxembourg, including the Double Tax Treaty. 7.6.3 At the date hereof, the Lender does not have a permanent establishment in Turkey. 7.6.4 The Lender does not have any current intentions to effect, during the term of this Agreement, any corporate action or reorganisation or change of taxing jurisdiction that would result in the Lender ceasing to be a resident for taxation purposes of Luxembourg. The Lender makes no representation as to the application of the Double Tax Treaty.

7.7 Delivery of Forms and Other Instruments 7.7.1 The Lender will use its reasonable endeavours, as provided in Clause 7.2 (Double Tax Treaty Relief) (to the extent it is able to do so under applicable law), and shall deliver to the Borrower such duly completed certificate issued by the competent Taxing Authority in Luxembourg or other Qualifying Jurisdiction confirming that the Lender is a tax resident in Luxembourg or other Qualifying Jurisdiction to enable the Borrower to apply to obtain relief from deduction or withholding of tax in Turkey, Luxembourg or any other Qualifying Jurisdiction or, as the case may be, to apply to obtain a tax refund if a relief from deduction or withholding of tax in Turkey, Luxembourg or any other Qualifying Jurisdiction has not been obtained. The certificate shall be stamped or otherwise approved by the competent tax authority in Luxembourg or other Qualifying Jurisdiction, and apostilled or otherwise legalised if requested by the Borrower. If a relief from deduction or withholding of tax or a tax refund under this Clause 7.7 has not been obtained and further to an application of the Borrower to the relevant Turkish tax authorities the latter requests the Lender’s New Turkish Lira bank account details, the Lender shall (subject to it being satisfied that that action is not adverse to its interests) at the request of the Borrower (i) use reasonable efforts to procure that such New Turkish Lira bank account of the Lender is duly opened and maintained, and (ii) thereafter furnish the Borrower with the details of such New Turkish Lira bank account. The Borrower shall pay for all costs associated, if any, with opening and maintaining such New Turkish Lira bank account. 7.7.2 The Lender shall also use its reasonable endeavours to execute such acknowledgements of payment and other similar instruments as may be reasonably required by the Borrower.

8. TAX RECEIPTS 8.1 Notiﬁcation of Requirement to Deduct Tax If, at any time, the Borrower is required by law to make any deduction or withholding from any sum payable by it hereunder (or if thereafter there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), the Borrower shall promptly notify the Lender.

8.2 Evidence of Payment of Tax 8.2.1 The Borrower will use its reasonable endeavours to provide the Lender with Tax receipts evidencing the payment of any Taxes deducted or withheld by it from each Tax Authority imposing such Taxes or, if such receipts are not obtainable, other evidence of such payments by the Borrower reasonably acceptable to the Lender. The Borrower will also provide English translations of such receipts. 8.2.2 The Lender will use its reasonable endeavours to provide the Borrower with Tax receipts evidencing the payment of any Taxes deducted or withheld by it from each Tax Authority imposing such Taxes or, if such receipts are not obtainable, other evidence of such payments by the Lender reasonably acceptable to the Borrower.

90 9. CHANGES IN CIRCUMSTANCES

9.1 Increased Costs If, by reason of (i) any Change of Law, other than a Change of Law which relates to the basis of computation of, or rate of, Tax on, the net income of the Lender, and/or (ii) any compliance by the Lender with any request, policy or guideline (whether or not having the force of law but, if not having the force of law, the observance of which is in accordance with the generally accepted accounting or financial practice of financial institutions in the country concerned) from or of any central bank or other fiscal, monetary, regulatory or other authority, Agency or any official of any such authority after the date hereof:

9.1.1 the Lender incurs an additional cost as a result of the Lender entering into or performing its obligations (including its obligation to make the Senior Advance) under this Agreement (excluding Taxes payable by the Lender on its overall net income); or

9.1.2 the Lender becomes liable to make any additional payment on account of Taxes or otherwise (not being Taxes imposed on its net income or the amounts due pursuant to the Fee Side Letter) on or calculated by reference to the amount of the Senior Advance and/or to any sum received or receivable by it hereunder except where compensated under Clause 7.1 (Additional Amounts) or under Clause 7.3 (Indemnity Amounts),

then the Borrower shall, on demand, pay to the Lender amounts sufﬁcient to hold harmless and indemnify it from and against, as the case may be, such properly documented cost or liability, provided that the Lender will not be entitled to indemniﬁcation where such additional cost or liability arises as a result of the gross negligence, fraud or wilful default of the Lender and provided, further, that the amount of such increased cost or liability shall be deemed not to exceed an amount equal to the proportion of any cost or liability which is directly attributable to the Senior Loan Agreement.

9.2 Increased Costs Claims If the Lender intends to make a claim pursuant to Clause 9.1 (Increased Costs), it shall promptly notify the Borrower thereof and provide a description in writing in reasonable detail of the relevant reason (as described in Clause 9.1 (Increased Costs) above) including a description of the relevant affected jurisdiction or country and the date on which the change in circumstances took effect. This written description shall demonstrate the connection between the change in circumstance and the increased costs and shall be accompanied by relevant supporting documents evidencing the matters described therein, provided that nothing herein shall require the Lender to disclose any conﬁdential information relating to the organisation of its or any other Person’s affairs.

9.3 Mitigation If circumstances arise which would result in any payment being required to be made by the Borrower pursuant to Clauses 7.1 (Additional Amounts) or 7.3 (Indemnity Amounts) or this Clause 9.3, then, without in any way limiting, reducing or otherwise qualifying the rights of the Lender or the Borrower’s obligations under any of the above mentioned provisions, the Lender shall as soon as reasonably practicable upon becoming aware of the same notify the Borrower thereof and, in consultation with the Borrower and to the extent it can lawfully do so and without prejudice to its own position, take reasonable steps to avoid or mitigate the effects of such circumstances including (without limitation) by the change of its lending ofﬁce or transfer of its rights or obligations under the Senior Loan Agreement to another bank; provided that the Lender shall be under no obligation to take any such action if, in its sole opinion, to do so might have any adverse effect upon its business, operations or ﬁnancial condition or might be in breach of any provisions of any Finance Document or any arrangements which it may have made in connection with the Finance Documents. The Borrower agrees to reimburse the Lender for all properly incurred costs and expenses (including but not limited to legal fees) incurred by the Lender in connection with this Clause 9.3.

91 10. CONDITIONS PRECEDENT 10.1 Documents to be Delivered 10.1.1 The obligation of the Lender to make each Senior Advance shall be subject to the receipt by the Lender on or prior to the relevant Closing Date of an executed copy of each of the following documents, dated the relevant Closing Date, in form and substance satisfactory to the Lender: (a) this Master Senior Loan Agreement, the Dealer Agreement, the Principal Trust Deed and the Agency Agreement in respect of the Programme; (b) the Senior Loan Supplement, Subscription Agreement, Supplemental Trust Deed and Final Terms in respect of the Senior Advance; (c) written evidence that the persons mentioned in Clause 21.3 (Borrower’s process agent) have agreed to receive process in the manner specified in the applicable Senior Loan Supplement; (d) a true and up-to-date copy of the constitutional documents of the Borrower (together with an English translation); (e) A copy certified by a notary public in Turkey as of a date falling no earlier than one month prior to the Closing Date to be a true and up-to-date copy of a board of directors resolution (together with an English translation) of the Borrower: (i) approving the terms of this Master Senior Loan Agreement and resolving that it execute, deliver and perform its rights and obligations under this Agreement; (ii) authorising specific persons to execute and deliver on its behalf this Master Senior Loan Agreement; and (iii) authorising a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under or in connection with the Finance Documents to which it is a party. (f) a notarised copy of the Signature Circular; and (g) an original Certificate of Activity of the Borrower issued by the Istanbul Trade Register as of a date falling no earlier than 2 days prior to the Issue Date evidencing the valid existence of the Borrower.

10.2 Further Conditions The obligation of the Lender to make each Senior Advance shall be subject to the further conditions precedent that as at the relevant Closing Date the Lender shall have received the full amount of the net subscription moneys for the relevant Series of Notes pursuant to such Subscription Agreement and those subscription moneys shall be and remain available in full to be on-lent to the Borrower.

11. REPRESENTATIONS AND WARRANTIES 11.1 Borrower’s Representations and Warranties The Borrower makes the representations and warranties set out in sub-clause 11.1.1 (Status) below to sub-clause 11.1.21 (Taxation) (inclusive), with the intent that such shall form the basis of each Senior Loan Agreement. 11.1.1 Status (a) It is a joint stock company (anonim s¸irket) duly incorporated and validly existing under the laws of Turkey including the Banking Law (Law No. 5411). (b) Each Material Subsidiary is a duly incorporated and validly existing under the laws of Turkey or any applicable law. 11.1.2 Binding Obligations The obligations expressed to be assumed by it under the Senior Loan Agreement to which it is a party are legal and valid obligations binding on it and enforceable in accordance with the terms thereof, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganisation, moratorium or other similar laws

92 affecting the enforcement of creditors’ rights generally and (b) general principles of law or equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 11.1.3 No Conflict With Other Obligations The entry into and performance by it of, and the transactions contemplated by, the Borrower Agreements do not conflict with any law or regulation applicable to it, and do not and will not conflict with its constitutional documents or any agreement or instrument binding upon it or any of its assets (including existing financing arrangements). 11.1.4 Power and Authority It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Borrower Agreements and each Finance Document to which it is a party and the transactions contemplated by those Borrower Agreements. 11.1.5 Authorisations All necessary Authorisations: (a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Borrower Agreements to which it is a party; and (b) to make the Borrower Agreements to which it is a party admissible in evidence in its jurisdiction of incorporation, have been obtained or effected and are in full force and effect, except for (in the case of paragraph (b) above only) the translation of the Borrower Agreements into the Turkish language certified by a notary public or a General Consulate of Turkey. 11.1.6 Maintenance of Legal Validity and Legal Status The Borrower shall do all such things as are necessary to maintain its existence as a legal person and shall obtain, comply with the terms of and do all that is necessary to maintain in full force and effect all Authorisations required in or by the laws and regulations of Turkey to enable it lawfully to enter into and perform its obligations under the Borrower Agreements to which it is a party and to ensure the legality, validity, enforceability or admissibility in evidence in Turkey of the Borrower Agreements to which it is a party. 11.1.7 Compliance with laws The Borrower shall (and shall ensure that each of its Material Subsidiaries shall) comply in all material respects with all relevant Authorisations, laws, permits and licences including, in particular, all applicable environmental laws and licences, to which it may be subject. 11.1.8 Governing Law and Judgments In any proceedings initiated or taken in Turkey in relation to the Borrower Agreements, the choice of English law as the governing law of each Senior Loan Agreement (except to the extent that to recognise and give effect thereto would be clearly against the public policy rules of the Republic) and any judgment obtained in England with respect to the Borrower Agreements will be recognised and enforced in Turkey subject to the satisfaction of the requirements of Turkish law regarding the enforceability in Turkey of judgments obtained in the English courts. 11.1.9 Validity and Admissibility in Evidence Under Turkish law in effect on the date of this Master Senior Loan Agreement, to ensure the admissibility in evidence of the Borrower Agreements in Turkey, a translation thereof into Turkish certified by a notary public or General Consulate of Turkey is necessary, but it is not necessary that these Borrower Agreements or any other document be filed or recorded or that any stamp, registration or Turkish tax be paid for the enforcement of these Borrower Agreements, other than (a) stamp taxes imposed by Stamp Tax Law of the Republic (Law No. 488) (as amended) in the amount of the TRY equivalent of 0.75% of the principal amount of the Senior Advance, however, as a result of Article IV.23 of Table No. 2 of the Stamp Tax Law of the Republic (Law No. 488)

93 (as amended), each Borrower Agreement is exempt from such stamp tax (b) court charges imposed pursuant to the Law on Charges of the Republic (Law No. 492) in the amount of 5.4% of the TRY equivalent of the amount in dispute (one quarter of which is payable at the commencement of any suit or action and the remainder of which is payable upon the entry of judgment) (c) court charges, payable in connection with the making of an appeal from an adverse judgment, (d) the deposit of security for such costs to be determined by the court on the basis of reciprocity principles taking into consideration the jurisdiction of the plaintiff and (e) lawyer’s fees payable in accordance with the most recent tariff in force at the time of judgment as published in the Ofﬁcial Gazette together with other court expenses.

11.1.10 No Deductions or Withholding Under the laws of Turkey in force at the date of this Master Senior Loan Agreement, payments by the Borrower to the Lender under this Master Senior Loan Agreement and all payments by it under the Fee Side Letter may be made without deduction or withholding of Turkish Tax. However, income or franchise taxes of general application and the Banking and Insurance Transaction Tax at a rate of 5% (five per cent.) applied to interest only may be imposed on any bank or financial institution if it books a loan under an agreement in Turkey, or receives any amount payable thereunder, at any facility office located, incorporated or organised in Turkey or if it has its principal office or a permanent representative in Turkey.

11.1.11 No Material Breach of Law; No Potential Event of Default and No Event of Default (a) Neither the Borrower nor any of its Material Subsidiaries is in breach of any law or in breach of or in default under any agreement to which it is a party or which is binding on it or any of its assets to an extent or in a manner which has or may have a Material Adverse Effect. (b) No event has occurred or circumstance has arisen which would constitute an Event of Default or a Potential Event of Default and no Event of Default or a Potential Event of Default is reasonably likely to result from the execution of, or the performance of any transaction contemplated by, the Borrower Agreements.

11.1.12 No Material Adverse Change Save as disclosed in the Prospectus, since 31 December 2006 there has been no material adverse change, or any development involving a prospective material adverse change of which the Borrower is aware, in the business, condition (ﬁnancial or otherwise) or results of operations of the Borrower or any of its Material Subsidiaries.

11.1.13 Financial Statements The Borrower’s consolidated audited financial statements for the two financial years ended 31 December 2005 and 2006 and its reviewed interim condensed consolidated financial statements as at and for the nine months ended 30 September 2007 were prepared in accordance with IFRS and present in accordance with IFRS the financial condition of the Group as at the dates as of which they were prepared and the result of the operations of the Group during the periods then ended.

11.1.14 Claims Pari Passu Under the laws of Turkey in force at the date hereof, the claims of the Lender against the Borrower under the Borrower Agreements to which it is a party will rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are preferred solely by the laws of Turkey and any bankruptcy, insolvency, liquidation or other similar laws of general application or which arise by operation of law, including (a) liabilities which are preferred by reason of reserve and/or liquidity requirements required by law to be maintained by the Borrower with the Central Bank, (b) claims of the individual depositors holding savings deposits with the Borrower to the extent of any excess which such depositors are not fully able to recover from the Savings and Deposit Insurance Fund of the Republic, (c) claims which the Savings and Deposit Insurance Fund of the Republic may have against the Borrower, and (d) claims which the Central Bank may have against the Borrower with respect to

94 the loans made by it to the Borrower in accordance with Article 40.I(c) of the Central Bank Law (Law No. 1211) (published in the Ofﬁcial Gazette dated 26 January 1970, No. 13409) (as amended from time to time).

11.1.15 No proceedings pending or threatened No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Change have (to the best of its knowledge and belief) been started or threatened against the Borrower or any of its Material Subsidiaries.

11.1.16 No Immunity It is subject to civil and commercial law with respect to its obligations under the Borrower Agreements to which it is a party and the execution of the Borrower Agreements to which it is a party constitutes, and the exercise of its rights and performance of its obligations under the Borrower Agreements to which it is a party will constitute, private and commercial acts done and performed for private and commercial purposes rather than governmental or public acts; none of the Borrower or any of its property has, under Turkish law, any right of immunity from jurisdiction of courts, suit, execution upon a judgment, attachment prior to judgment or in aid of execution upon a judgment or any other legal process with respect to its obligations under the Borrower Agreements to which it is a party.

11.1.17 No Obligation to Create Security Its execution of each Senior Loan Agreement and its exercise of its rights and performance of its obligations hereunder will not result in the existence of nor oblige any Material Subsidiary or the Borrower to create any encumbrance over all or any of its present or future revenues or assets.

11.1.18 No Winding up None of the Material Subsidiaries or the Borrower has taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of its knowledge and belief after due enquiry) threatened against any of the Material Subsidiaries or the Borrower for its winding up, dissolution, administration or re organisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar ofﬁcer of it or of any or all of its assets or revenues.

11.1.19 No Consents Other than expressly permitted herein, no Authorisations of, and registrations, recordings or filings with, any governmental body or agency, instrumentality or official of Turkey or international organisation or agency thereof or therein are required for the due entering into, execution, delivery or performance by the Borrower of the Borrower Agreements to which it is a party and the related documents or for the validity and enforceability thereof. The Borrower will take all necessary actions to obtain all such Authorisations and registrations, recordings or filings as shall or may be necessary in Turkey in order for the foregoing to continue to be true hereafter.

11.1.20 Borrowing Limits The Senior Advance, together with any other Financial Indebtedness, will not, if fully drawn, exceed any borrowing limit binding on the Borrower.

11.1.21 Taxation It and each Material Subsidiary has duly and punctually paid and discharged all Taxes imposed upon it or its assets within the time period allowed without incurring penalties (save to the extent that payment is being contested in good faith and by appropriate proceedings).

11.1.22 Deemed Repetition Each of the representations and warranties contained in this Clause 11.1 shall be deemed to be repeated by the Borrower on the Issue Date.

95 11.2 Lender’s Representations and Warranties The Lender represents and warrants to the Borrower as follows and acknowledges that the Borrower has entered into each Senior Loan Agreement in reliance on these representations and warranties and that contained in Clause 7.6 (Tax position of the Lender):

11.3 Status The Lender is duly incorporated under the laws of Luxembourg and is resident for taxation purposes in Luxembourg and has full corporate power and authority to enter into each of the Lender Agreements and to undertake and perform the obligations expressed to be assumed by it herein and therein.

11.4 Authorisation Each of the Lender Agreements to which it is a party has been duly authorised, executed and delivered by the Lender and is a legal, valid and binding obligation of the Lender, enforceable against the Lender in accordance with its terms, except that the enforcement thereof may be subject to bankruptcy, insolvency, fraudulent conveyance, reorganisation, moratorium and other similar laws relating to or affecting creditors’ rights generally and to general principles of equity.

11.5 Consents and Approvals All authorisations, consents and approvals required by the Lender for or in connection with the execution of the Lender Agreements and each Finance Document to which it is a party and the performance by the Lender of the obligations expressed to be undertaken in such agreements have been obtained and are in full force and effect.

11.6 No Conﬂicts The execution of each Lender Agreement and the undertaking and performance by the Lender of the obligations expressed to be assumed by it herein and therein will not conﬂict with, or result in a breach of or default under, the laws of Luxembourg.

12. COVENANTS The undertakings in this Clause 12 remain in force from the date of this Agreement for so long as any amount is outstanding under the Senior Advance or any of the Finance Documents.

12.1 Financial statements 12.1.1 The Borrower shall supply to the Lender (with a copy to the Trustee): (a) as soon as the same become available, but in any event within 120 days after the end of each of its financial years (i) its audited financial statements for that financial year in accordance with Turkish GAAP; (ii) the audited consolidated financial statements of the Group for that financial year in accordance with IFRS; and (b) as soon as the same become available, but in any event within 90 days after the end of each half of each of its financial years (i) its reviewed financial statements for that financial half year in accordance with Turkish GAAP; and (ii) the reviewed consolidated financial statements of the Group for that financial half year in accordance with IFRS. 12.1.2 The Borrower shall allow the Lender and/or the Trustee, upon being given a reasonable request and upon reasonable notice, to inspect any of the Borrower’s books and records which may relate to any of the Borrower’s obligations under the Finance Documents.

12.2 Information – Miscellaneous The Borrower shall supply to the Lender or the Trustee, if the Lender or the Trustee, as applicable, so requests: 12.2.1 all documents despatched by it to its shareholders (or any class of them) or its creditors generally at the same time as they are despatched;

96 12.2.2 promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending, and which could reasonably be expected to have a Material Adverse Effect on the ﬁnancial condition of the Borrower or on the ability of the Borrower to perform its obligations under the Finance Documents; and 12.2.3 promptly, such further information in the possession or control of the Borrower regarding the ﬁnancial condition and operations of the Borrower and its Subsidiaries as the Lender may reasonably request.

12.3 Compliance Certificates The Borrower shall supply to the Lender (with a copy to the Trustee): 12.3.1 together with the delivery of the financial statements specified in Clause 12.1 (Financial Statements); and 12.3.2 promptly at any other time, if the Lender or the Trustee so requests, a Compliance Certificate setting out (in reasonable detail) the computations as to compliance with Clause 13.2 (Financial Covenants) as at the date as at which those financial statements were drawn up. Each Compliance Certificate shall be signed by two First Degree Signatories of the Borrower.

12.4 Requirements as to financial statements 12.4.1 Each set of financial statements delivered by the Borrower pursuant to Clause 12.1 (Financial statements) shall be certified by two First Degree Signatories of the Borrower as fairly and accurately representing its financial condition as at the date at which those financial statements were drawn up. 12.4.2 The Borrower shall procure that each set of financial statements of the Group delivered pursuant to Clause 12.1 (Financial statements) is prepared using IFRS and complies with Turkish statutory requirements, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements, it notifies the Lender (with a copy to the Trustee) that there has been a change in International Accounting Standards, the accounting practices or reference periods and its auditors (or, if appropriate, the auditors of the Group) deliver to the Lender (with a copy to the Trustee) a description of any changes necessary for those financial statements to reflect the International Accounting Standards, accounting practices and reference periods upon which the Original Financial Statements were prepared and sufficient information in a form and substance as reasonably required by the Lender (or the Trustee, as the case may be). 12.4.3 The Borrower shall procure that each set of financial statements delivered by it under sub-paragraph (a)(i) of Clause 12.1 (Financial Statements) has been audited and reviewed by an internationally recognised independent firm of auditors. Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

12.5 Notification of default 12.5.1 The Borrower shall notify the Lender and the Trustee in writing in the form of an Officer’s Certificate of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence. 12.5.2 Promptly upon a request by the Lender or the Trustee, the Borrower shall supply to the Lender (with a copy to the Trustee) a certificate signed by two of its First Degree Signatories certifying on its behalf that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). 12.6 ’’Know your customer’’ checks If:

97 12.6.1 the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of the Senior Loan Agreement; 12.6.2 any change in the status of the Borrower after the date of the Senior Loan Agreement; or 12.6.3 a proposed assignment or transfer by the Lender of any of its rights and obligations under the Senior Loan Agreement to a third party, obliges the Lender (or, in the case of paragraph (c) above, any prospective new Lender) to comply with ‘‘know your customer’’ or similar identiﬁcation procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Lender (for itself or, in the case of the event described in paragraph (c) above, on behalf of any prospective new Lender) in order for the Lender or, in the case of the event described in paragraph (c) above, any prospective new Lender to carry out and be satisﬁed it has complied with all necessary ‘‘know your customer’’ or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

12.7 Signature Circular The Borrower shall, at least 1 Business Day prior to the Issue Date, provide the Lender and the Trustee with a notarised copy of the Borrower’s Signature Circular. For so long as the Senior Advance remains outstanding, the Borrower shall continue to provide the Lender and the Trustee with an updated copy of the Signature Circular promptly upon each occasion on which a First Degree Signatory is added, removed or replaced.

12.8 Authorisations The Borrower shall promptly: 12.8.1 obtain, comply with and do all that is necessary to maintain in full force and effect; and 12.8.2 supply certiﬁed copies to the Lender of, any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.

12.9 Compliance with laws The Borrower shall (and shall ensure that each of its Material Subsidiaries shall) comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under the Finance Documents.

12.10 Maintenance of legal validity The Borrower shall ensure that it does all that is necessary to preserve or maintain in force its existence as a bank, duly licensed and in good standing under the laws of the Republic.

12.11 Approvals The Borrower shall ensure that all consents, approvals, registrations and authorisations, both governmental and corporate are in place, and in full force and effect to permit the utilisation of the Senior Advance by the Borrower and enable foreign exchange to be made available when required.

12.12 Negative Pledge So long as the Senior Advance remains outstanding the Borrower will ensure that no Relevant Indebtedness of the Borrower or any Subsidiary will be secured by any mortgage, charge, lien, pledge or other security interest securing any obligation of any person or any other agreement

98 or arrangement having a similar effect upon, or with respect to, any of the present or future business, undertaking, assets or revenues (including any uncalled capital) of the Borrower or any Subsidiary.

12.13 Disposals 12.13.1 The Borrower shall not and shall procure that no Subsidiary shall, enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. 12.13.2 Sub-clause 12.13.1 above does not apply to any sale, lease, transfer or other disposal: (a) for full value made in the ordinary course of business of the disposing entity; (b) of assets in exchange for other assets comparable or superior as to type, value and quality; (c) for a value which is in excess of book value where the full proceeds are received by the Borrower or the Subsidiary; or (d) of assets which is required by operation of the laws of Turkey. 12.13.3 For the avoidance of doubt, this Clause 12.13 shall not apply to any revenues or assets (or any part thereof) which are the subject of any securitisation of receivables, asset- backed ﬁnancing or similar ﬁnancing structure originated by the Borrower or any Subsidiary whereby all payment obligations are to be discharged solely from such assets or revenues.

12.14 Merger The Borrower shall not enter into any amalgamation, demerger, merger or corporate reconstruction which will result in: 12.14.1 the Borrower having a capital adequacy ratio below the higher of the capital adequacy ratios stipulated by the BRSA or BIS; or 12.14.2 Bank Hapoalim losing its right to appoint the majority of the members of the board of directors of the Borrower.

12.15 Change of Business The Borrower shall procure that no substantial change is made to the general nature of the Business of the Borrower or any of its Material Subsidiaries from that carried on at the date of the Senior Loan Agreement. For the avoidance of doubt, the granting of permission by the BRSA for the Borrower additionally to carry out any of the ﬁnance activities set forth in the Banking Law No: 5411 shall not be deemed a change of business (including, for the avoidance of doubt, insurance and deposit-taking activities).

12.16 Financial Covenants The Borrower shall procure that at all times: 12.16.1 its minimum capital adequacy ratio is the higher of: (a) the minimum percentage calculated in accordance with current regulations and guidelines set by the BIS (as amended from time to time); (b) the minimum percentage specified by the BRSA in connection with the Banking Business of the Borrower; or 12.16.2 its Tangible Net Worth according to IFRS exceeds an amount equal to TRY200,000,000 (as of 31 December 2006) thereafter adjusted upwards to reflect the rate of inflation in the Republic (as calculated by the Borrower).

12.17 Pari Passu Ranking The Borrower shall procure that its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured and unsubordinated creditors, except for those whose claims are preferred by the effect of law of general application or by any bankruptcy, insolvency or other similar laws of general application, including (a) liabilities which are preferred by reason of reserve or liquidity requirements by law to be maintained by

99 it with the Central Bank, (b) claims of the individual depositors with the Borrower to the extent of any excess which such depositors are not fully able to recover from the Savings and Deposit Insurance Fund of the Republic, (c) claims which the Savings and Deposit Insurance Fund of the Republic may have against the Borrower, and (d) claims which the Central Bank may have against the Borrower with respect to the loans made by it to the Borrower in accordance with Article 40.I(c) of the Central Bank Law of the Republic (Law No. 1211) (published in the Ofﬁcial Gazette dated January 26, 1970, No. 13409) (as amended from time to time).

12.18 Insurance The Borrower shall maintain insurances on and in relation to its business and assets with reputable underwriters or insurance companies against such risks and to such extent as is reasonable and prudent for companies carrying on a business such as that carried on by the Borrower.

13. EVENTS OF DEFAULT Each of the events or circumstances set out in Clauses 13.1 (Non-payment) to 13.17 (Necessity to Carry on Business) is an Event of Default.

13.1 Non-payment The Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable, unless: 13.1.1 its failure to pay is caused by an administrative or technical error; and 13.1.2 payment is made within 5 Business Days of its due date.

13.2 Financial Covenants Any provision of Clause 12.16 (Financial Covenants) is not satisﬁed, provided that no Event of Default will occur in terms of this Clause 13.2 if the failure to comply is capable of remedy and is remedied within 5 Business Days of the Lender giving notice to the Borrower or of the Borrower becoming aware of the failure to comply.

13.3 Other obligations 13.3.1 The Borrower does not comply with any provision of the Finance Documents (other than those referred to in Clause 13.1 (Non-payment) and Clause 13.2 (Financial Covenants)). 13.3.2 No Event of Default under sub-clause 13.3.1 above will occur if the failure to comply is capable of remedy and is remedied within 5 days of the Lender giving notice to the Borrower or the Borrower becoming aware of the failure to comply.

13.4 Misrepresentation Any representation or statement made or deemed to be made by the Borrower in the Finance Documents or any other document delivered by or on behalf of the Borrower under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

13.5 Cross default 13.5.1 Any Financial Indebtedness of the Borrower or any of its Material Subsidiaries is not paid when due nor within any originally applicable grace period. 13.5.2 Any Financial Indebtedness of the Borrower or any of its Material Subsidiaries is declared to be or otherwise becomes due and payable prior to its speciﬁed maturity as a result of an event of default (however described). 13.5.3 Any commitment for, or underwriting of, any Financial Indebtedness of the Borrower or any of its Material Subsidiaries is cancelled or suspended by any creditor of the Borrower or any Material Subsidiary as a result of an event of default (however described).

100 13.5.4 No Event of Default will occur under this Clause 13.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within sub- clauses 13.5.1 to 13.5.3 above is less than US$5,000,000 (or its equivalent in any other currency or currencies).

13.6 Insolvency 13.6.1 A member of the Group is unable or admits inability to pay its debts as they fall due or suspends making payments on any of its debts; 13.6.2 The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities); 13.6.3 A moratorium is declared in respect of any indebtedness of any member of the Group (if a moratorium occurs in respect of the Borrower, the ending of the moratorium will not remedy any Event of Default caused by the moratorium); or 13.6.4 A member of the Group is, or is deemed for the purposes of any applicable law to be, unable to pay its debts as they fall due.

13.7 Insolvency proceedings Any corporate action, legal proceedings or other procedure or step is taken in relation to: 13.7.1 the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group; 13.7.2 a composition, compromise, assignment or arrangement with any creditor of any member of the Group; 13.7.3 the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar ofﬁcer in respect of any member of the Group or any of its assets; or 13.7.4 enforcement of any mortgage, charge, lien, pledge or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect over any assets of any member of the Group, or any analogous procedure or step is taken in any jurisdiction.

13.8 Creditors’ process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a member of the Group and is not discharged within 10 days.

13.9 Analogous proceedings Any event occurs anywhere which, in the opinion of the Lender, appears to correspond with any of those mentioned in Clause 13.6 (Insolvency) and 13.7 (Insolvency proceedings).

13.10 Cessation or change of business The Borrower changes, suspends, ceases, or threatens to cease, to carry on all or a substantial part of its business. For the avoidance of doubt, the granting of permissions by the BRSA for the Borrower additionally to carry out any of the ﬁnance activities set forth in the Banking Law (Law No. 5411) shall not be deemed a change of business (including for the avoidance of doubt, insurance or deposit-taking activities).

13.11 Unlawfulness It is or becomes unlawful for the Borrower to perform any of its obligations under the Finance Documents, or any of the obligations of the Borrower under the Finance Documents are not, or cease to be legal, valid and binding on the Borrower.

13.12 Foreign Currency Any restriction is imposed on the ability of the Borrower to hold and deal with any currency other than New Turkish Lira, which would make it impossible for it to perform its obligations under the Senior Loan Agreement.

101 13.13 Further acts Any act or condition required to be done, fulﬁlled or performed at any time in order: 13.13.1 to enable the Borrower lawfully to enter into, exercise its rights under, and perform the obligations expressed to be assumed by it in the Borrower Agreements as legal, valid and binding; or 13.13.2 to make the Senior Loan Agreement admissible in evidence in the Republic, is not done, fulﬁlled or performed.

13.14 Repudiation The Borrower repudiates a Finance Document, or does or causes to be done any act or thing, evidencing an intention to repudiate a Finance Document.

13.15 Nationalisation and Expropriation All or any material part of the undertaking or assets of any member of the Group shall be expropriated, nationalised, compulsorily acquired or taken into public ownership or any member of the Group shall cease to be able or entitled to exercise the rights of control or ownership of the same.

13.16 Material Adverse Change 13.16.1 Any event or series of events occurs which has or is likely to have a material and adverse effect on the condition, earnings, business affairs, business prospects or operations of any member of the Group or on the ability of the Borrower to comply with its obligations under the Borrower Agreements. 13.16.2 A general moratorium is declared by the Republic or any declaration by the Central Bank or the BRSA which has or, in the opinion of the Lender, might have a material and adverse effect on the ability of the Borrower to perform its payment obligations under the Borrower Agreements.

13.17 Necessity to Carry on Business It is or becomes necessary under the laws of the Republic and/or the constitution of the Borrower: 13.17.1 in order to enable the Lender to enforce its rights under the Lender Agreements; or 13.17.2 by reason only of the execution, delivery and performance of the Lender Agreements, that the Lender should be licensed, qualiﬁed or otherwise entitled to carry on business in the Republic.

13.18 Acceleration On and at any time after the occurrence of an Event of Default, the Lender (upon the instruction of the Trustee) and/or the Trustee, as applicable in accordance with the Trust Deed, may by notice to the Borrower declare that all or part of the Senior Advance, together with interest accrued and all other amounts accrued or outstanding under the Borrower Agreements be immediately due and payable, whereupon they shall become immediately due and payable.

14. INDEMNITY 14.1 Indemnification The Borrower undertakes to the Lender that if the Lender or any of its Affiliates, each director, officer, employee or agent of the Lender and each person controlling the Lender (each an ‘‘indemnified party’’) incurs any properly incurred out-of-pocket loss, liability, cost, claim, charge, expense (including, without limitation, Taxes, legal fees and expenses and any applicable stamp duties, stamp duty reserve tax or other duties payable), demand and damage (a ‘‘Loss’’) as a result of or in connection with any Event of Default or Potential Event of Default, the Borrower shall pay to the Lender on demand an amount equal to such Loss and all properly incurred out-of-pocket costs, charges and expenses (including, without limitations, taxes, legal fees and expenses and any applicable stamp duties, stamp duty reserve tax or other duties payable) which it or any indemnified party may pay or incur in connection with investigating,

102 disputing or defending any such action or claim as such costs, charges and expenses are incurred unless such Loss was either caused by such indemnified party’s negligence or wilful misconduct or arises out of a breach of the representations and warranties of the Lender under the Senior Loan Agreement. The Lender shall not have any duty or obligation whether as fiduciary or trustee for any indemnified party or otherwise, to recover any such payment or to account to any other person for any amounts paid to it under this Clause.

14.2 Independent Obligation Clause 14.1 (Indemniﬁcation) constitutes a separate and independent obligation of the Borrower from its other obligations under or in connection with the Senior Loan Agreement or any other obligations of the Borrower in connection with the issue of the corresponding Series of Notes by the Lender and shall not affect, or be construed to affect, any other provision of such Senior Loan Agreement or any such other obligations.

14.3 Evidence of Loss A certiﬁcate of the Lender setting forth the amount of the Loss, costs, charges and expenses described in Clause 14.1 (Indemniﬁcation) and specifying in full detail the basis therefor and calculations thereof shall be prima facie evidence of the amount of such Loss, cost, charges and expenses.

14.4 Currency Indemnity If any sum due from the Borrower under the Senior Loan Agreement or any order or judgment given or made in relation hereto has to be converted from the currency (the ‘‘first currency’’) in which the same is payable hereunder or under such order or judgment into another currency (the ‘‘second currency’’) for the purpose of (a) making or filing a claim or proof against the Borrower, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation hereto, the Borrower shall indemnify and hold harmless the Lender (and the Trustee) from and against any loss suffered or reasonably incurred as a result of any discrepancy between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or rates of exchange at which the Lender (and the Trustee) may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part, of any such order, judgment, claim or proof.

14.5 Invoices and Acts of Acceptance (a) In connection with all payments to be made under this Clause 14 (Indemnity), before such payment is made by the Borrower, the Lender (or the Trustee, as the case may be) shall submit an invoice to the Borrower providing, in reasonable details, the nature and calculation of the relevant payment or expense with respect to the amounts paid.

(c) In connection with all payments to be made under this Clause 14 (Indemnity), the Borrower and the Lender shall, within 60 days of such payment becoming due, enter into and sign a delivery and acceptance act (which the Borrower shall prepare) with respect to amounts to be paid by the Borrower.

(d) The invoices and the delivery and acceptance acts shall separately specify: (i) net amount due; (ii) any applicable Turkish income tax withholding; (iii) any applicable Turkish VAT; and (iv) the resulting total tax-inclusive amount.

15. SURVIVAL The obligations of the Borrower pursuant to Clauses 7 (Taxes), 14.1 (Indemniﬁcation), 14.4 (Currency Indemnity), this Clause 15, 17.2 (Stamp Duties) and 26 (Limited Recourse and Non- Petition) shall survive the execution and delivery of the Senior Loan Agreement, the making of the applicable Senior Advance and the repayment in full of such Senior Advance, in each case by the Borrower.

103 16. EXPENSES 16.1 Reimbursement of Front-end Expenses for the Extension of the Senior Loan by the Lender The Borrower shall reimburse the Lender in the Speciﬁed Currency for all reasonable costs and expenses incurred by the Lender in connection with the negotiation, preparation and execution of each Senior Loan Agreement and all related documents and other expenses connected with the extension of each Senior Advance, including, without limitation, the reasonable fees and expense of its counsel.

16.2 Payment of Ongoing Expenses In addition, the Borrower hereby agrees to pay to or to the order of the Lender on demand in the Speciﬁed Currency all ongoing commissions, costs, fees and expenses and taxes (including, without limitation, enforcement costs), payable by the Lender under or in respect of the Lender Agreements and the letter entered into between the Borrower, the Lender, the Trustee and the Agents dated 7 February 2008 in respect of the Programme (the ‘‘Fee Side Letter’’). The Borrower shall also pay the Lender for, or pay to the order of the Lender for, any indemniﬁcation or other payment obligations of the Lender under or in respect of the Agency Agreement, Trust Deed and/or the Fee Side Letter (other than the obligation of the Lender to make payments of principal, interest or additional amounts in respect of the corresponding Series of Notes). Payments to the Lender or to the order of the Lender referred to in this Clause 16.2 (Payment of Ongoing Expenses) shall be made by the Borrower at least one Business Day before the relevant payment is to be made or expense incurred.

17. GENERAL 17.1 Evidence of Debt The entries made in the Account referred to in Clause 6 (Payments) shall constitute prima facie evidence of the existence and amounts of the Borrower’s obligations recorded therein.

17.2 Stamp Duties The Borrower shall pay all stamp duties, stamp duty reserve tax, registration taxes, capital duties and other similar duties or taxes (if any) including any interest and penalties thereon or in connection therewith which are payable in Turkey or Luxembourg on the execution of the Senior Loan Agreement. The Borrower shall also indemnify the Lender against any claim, demand, action, liability, damages, cost, loss or expense (including without limitation, legal fees and any applicable value added tax) which it may incur as a result of or arising out of or in relation to any failure to pay or any delay in paying the same.

17.3 Remedies and Waivers No failure by the Lender or the Trustee to exercise, nor any delay by the Lender or the Trustee in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided in the Senior Loan Agreement are cumulative and not exclusive of any rights or remedies provided by law.

17.4 Prescription Subject to the Lender having previously received from the Borrower the relevant principal amount or interest amount, the Lender shall repay to the Borrower, the principal amount or the interest amount in respect of any Notes upon the relevant Note pertaining thereto becoming void pursuant to Condition 13 (Prescription) of such Notes.

18. NOTICES All notices, requests, demands or other communications to or upon the respective parties hereto shall be given in writing delivered by hand or courier or sent by facsimile transmission (in the case of facsimile transmission, conﬁrmed by copy delivered by hand or courier) addressed as follows:

18.1 Addresses for Notices 18.1.1 if to the Borrower:

104 Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸irketi Ru¨zgarlıbahc¸e Mahallesi Kayın Sokak No.: 3 34805 Kavacık/Beykoz Istanbul Turkey Fax: +90 216 538 42 65/+90 216 538 42 41 Attention: The General Manager, The Chief Financial Ofﬁcer and the Financial Planning and Control Manager 18.1.2 if to the Lender: Commerzbank International S.A. 25, rue Edward Steichen L-2510 Luxembourg Fax: +352 477911 2263 Attention: Nicolaas van de Roemer 18.1.3 if to the Trustee: Deutsche Trustee Company Limited 1 Great Winchester House London EC2N 203 United Kingdom Fax: +44 207 547 6149 Attention: The Managing Director or to such other address or fax number as any party may hereafter specify in writing to the other. Every notice or other communication sent in accordance with this Clause 18 (Notices) shall be effective upon receipt by the addressee on a business day in the city of the recipient, provided however, that any such notice or other communication which would otherwise take effect after 4.00 p.m. on any particular day shall not take effect until 10.00 a.m. on the immediately succeeding business day in the place of the addressee. 18.2 The parties to this Agreement agree that any communication or notice to be delivered to any other party under the Borrower Agreements which is sent by facsimile shall, inter alia, constitute legal written evidence between the parties hereto pursuant to the provision of the second sentence of Article 287 of the Civil Procedure Code of Turkey (Law No. 1086) for the purpose of any suit, action or proceeding in Turkey.

19. ASSIGNMENT 19.1 Beneﬁt The Senior Loan Agreement shall inure to the beneﬁt of and be binding upon the parties, their respective successors and any permitted assignee or transferee of some or all of a party’s rights or obligations under such Senior Loan Agreement. Any reference in the Senior Loan Agreement to any party shall be construed accordingly and, in particular, references to the exercise of rights and discretions by the Lender, following the enforcement of the security and/ or assignment referred to in Clause 19.3 (Assignments by the Lender), below, shall be references to the exercise of such rights or discretions by the Trustee (as Trustee) on the terms of the Trust Deed.

19.2 No Assignments and Transfers by the Borrower The Borrower shall not be entitled to assign or transfer all or any of its rights, beneﬁts and obligations under the Senior Loan Agreement.

19.3 Assignments by the Lender Subject to the provisions of clause 17 (Substitution) of the Trust Deed, the Lender may not assign or transfer, in whole or in part, any of its rights and benefits or obligations under the Senior Loan Agreement to any Affiliate or Subsidiary or other party (other than the Reserved Rights) except (i) the transfer of its obligations as principal debtor under the Trust Deed and the Notes to a third party; (ii) the charge by way of first fixed charge granted by the Lender in favour of the Trustee (as Trustee) of certain of the Lender’s rights and benefits under such

105 Senior Loan Agreement and (iii) the absolute assignment by the Lender to the Trustee of certain rights, interests and beneﬁts under such Senior Loan Agreement, in each case, pursuant to clause 6 of the applicable Supplemental Trust Deed.

20. GOVERNING LAW This Master Senior Loan Agreement shall be governed by, and construed in accordance with, English law.

21. JURISDICTION OF ENGLISH COURTS

21.1 English Courts The Borrower agrees for the beneﬁt of the Lender that the courts of England shall have jurisdiction to hear and determine any suit, action or proceedings, and to settle any disputes, which arise out of or in connection with this Agreement (‘‘Proceedings’’) and, for such purposes, irrevocably submits to the jurisdiction of such courts.

21.2 Appropriate Forum The Borrower irrevocably waives any objection which it might now or hereafter have to the courts of England being nominated as the forum to hear and determine any Proceedings, and agrees not to claim that any such court is not a convenient or appropriate forum.

21.3 Borrower’s process agent The Borrower agrees that the process by which any Proceedings in England are begun may be served on it by being delivered to Law Debenture Corporate Services Limited at Fifth Floor, 100 Wood Street, London, EC2V 7EX or, if different, its registered ofﬁce for the time being or at any address of the Borrower in Great Britain at which process may be served on it in accordance with Part XXIII of the Companies Act 1985 (as modiﬁed or re-enacted from time to time). If such person is not or ceases to be effectively appointed to accept service of process on the Borrower’s behalf, the Borrower shall, on the written demand of the Lender, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Lender shall be entitled to appoint such a person by written notice to the Borrower. Nothing in this Clause 21 shall affect the right of the Lender to serve process in any other manner permitted by law.

21.4 Lender’s process agent The Lender agrees that the process by which any Proceedings in England are begun may be served on it by being delivered to Commerzbank Aktiengesellschaft, London Branch at 60 Gracechurch Street, London EC3V 0HR or, if different, its registered ofﬁce for the time being or at any address of the Lender in Great Britain at which process may be served on it in accordance with Part XXIII of the Companies Act 1985 (as modiﬁed or re-enacted from time to time). If such person is not or ceases to be effectively appointed to accept service of process on the Lender’s behalf, the Lender shall, on the written demand of the Borrower, appoint a further person in England to accept service of process on its behalf and, failing such appointment within 15 days, the Borrower shall be entitled to appoint such a person by written notice to the Lender. Nothing in this Clause 21 shall affect the right of the Borrower to serve process in any other manner permitted by law.

21.5 Non-exclusivity The submission by the Borrower to the jurisdiction of the English courts shall not (and shall not be construed so as to) limit the right of the Lender to bring Proceedings in any other court of competent jurisdiction. To the extent allowed by law, the Lender may take concurrent Proceedings in any number of jurisdictions. The Borrower consents generally in respect of any Proceedings to the giving of any relief or the issue of any process in connection with such Proceedings including (without limitation) the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of an order or judgment which is made or given in such Proceedings.

106 21.6 Conclusive evidence Without limitation to the generality of any of the foregoing, the Borrower agrees, without prejudice to the enforcement of a judgment obtained in the courts of England according to the provisions of Article 54 of the Act on International Private Law and Procedural Law of Turkey (Law No. 5718), that if the Borrower is sued in a court in Turkey in connection with any Borrower Agreement, any judgment obtained in connection with such suit in England shall constitute conclusive evidence of the existence and amount of the claim against the Borrower, pursuant to the provisions of the second paragraph of Article 287 of the Civil Procedure Code of Turkey (Law No. 1086) and Articles 58 and 59 of the Act on International Private and Procedural Law of Turkey (Law No. 5718).

22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 A person who is not a party to this Master Senior Loan Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Master Senior Loan Agreement.

23. COUNTERPARTS This Master Senior Loan Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when so executed shall constitute one and the same binding agreement between the parties.

24. AMENDMENTS Any and all amendments to this Master Senior Loan Agreement shall be valid and binding provided that such amendments have been made in writing and signed by the Lender and the Borrower.

25. SCHEDULES The Schedules to this Master Senior Loan Agreement constitute integral parts hereof.

26. LIMITED RECOURSE AND NON-PETITION Neither the Borrower nor any other person acting on its behalf shall be entitled at any time to institute against the Lender, or join in any institution against the Lender of, any bankruptcy, administration, moratorium, reorganisation, controlled management, arrangement, insolvency, examinership, winding-up or liquidation proceedings or similar insolvency proceedings under any applicable bankruptcy or similar law in connection with any obligation of the Lender under this Agreement, save for lodging a claim in the liquidation of the Lender which is initiated by another party or taking proceedings to obtain a declaration or judgment as to the obligations of the Lender. The Borrower hereby agrees that it shall have recourse in respect of any claim against the Lender only to sums in respect of principal, interest or other amounts (if any), as the case may be, received by or for the account of the Lender pursuant to this Senior Loan Agreement (the ‘‘Lender Assets’’), subject always (1) to the Security Interests (as defined in the Trust Deed) and (2) to the fact that any claims of the Dealers (as defined in the Dealer Agreement) pursuant to the Dealer Agreement shall rank in priority to any claims of the Borrower hereunder and that any such claim by any and all such Dealers or the Borrower shall be reduced pro rata so that the total of all such claims does not exceed the aggregate value of the Lender Assets after meeting claims secured on them. Neither the Borrower nor any person acting on its behalf shall be entitled to take any further steps against the Lender to recover any further sums and no debt shall be owed by the Lender to such person in respect of any such further sum. In particular, the Borrower shall not be entitled to institute, or join with any other person in bringing, instituting or joining, insolvency proceedings (whether court based or otherwise) in relation to the Lender. The Borrower shall have no recourse against any director, shareholder or officer of the Lender in respect of any obligations, covenants or agreement entered into or made by the Lender in respect of this Agreement, except to the extent that any such person acts in bad faith or is negligent in the context of its obligations.

107 SCHEDULE 1

FORM OF SENIOR LOAN SUPPLEMENT

This Senior Loan Supplement is made on [*] between: (1) BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙ (the ‘‘Borrower’’); and (2) [*] (the ‘‘Lender’’) Whereas: (A) The Borrower has entered into master senior loan agreement dated [*] (the ‘‘Master Senior Loan Agreement’’) with the Lender in respect of the Borrower’s [*] Programme for the Issuance of Loan Participation Notes (the ‘‘Programme’’). (B) The Borrower proposes to borrow [U.S.$][c][other] [any currency agreed between the Issuer, the Bank and the relevant Dealer(s)] (the ‘‘Senior Advance’’) and the Lender wishes to make such Senior Advance on the terms set out in the Master Senior Loan Agreement and this Senior Loan Supplement. It is agreed as follows:

1. Definitions Capitalised terms used but not defined in this Senior Loan Supplement shall have the meaning given to them in the Master Senior Loan Agreement save to the extent supplemented or modified herein. The Schedule forms part of this Senior Loan Supplement and shall have effect accordingly.

2. Additional Definitions For the purpose of this Senior Loan Supplement, the following expressions used in the Master Senior Loan Agreement shall have the following meanings: ‘‘Account’’ means the account opened in relation to the Senior Advance in the name of the Lender with the Principal Paying Agent (account number [*],[*]); ‘‘Borrower Account’’ means the account in the name of the Borrower (account number [*],[*]); ‘‘Business Day Convention’’ means Floating Rate Business Day Convention, Following Business Day Convention, Modified Following Business Day Convention, Preceding Business Day Convention or other Business Day Convention as specified herein; ‘‘Calculation Agent’’ means [*]; ‘‘Calculation Amount’’ means [*]; ‘‘Closing Date’’ means [*]; ‘‘Interest Payment Date[s]’’ means [*]; ‘‘Notes’’ means [U.S.$][c][other] [any currency agreed between the Lender, the Bank and the relevant Dealer(s)][*] per cent.] [Floating Rate] Loan Participation Notes due [*] issued by the Lender as Series [*] under the Programme; ‘‘Rate of Interest’’ means [*] per cent. per annum; ‘‘Repayment Date’’ means [*]; ‘‘Senior Loan Agreement’’ means the Master Senior Loan Agreement as amended and supplemented by this Senior Loan Supplement; ‘‘Specified Currency’’ means [U.S.$][c][any currency agreed between the Lender, the Bank and the relevant Dealer(s)]; ‘‘Subscription Agreement’’ means an agreement between the Lender, the Borrower and [*] dated [*] relating to the Notes; and ‘‘Trust Deed’’ means the Principal Trust Deed between the Lender and the Trustee, as amended and supplemented by a Supplemental Trust Deed dated [*] constituting the Notes.

108 3. Interest The Senior Advance is a [Fixed Rate] [Floating Rate] Loan. Interest shall be calculated, and the following terms used in the Senior Loan Agreement shall have the meanings, as set out below:

3.1 Fixed Rate Loan Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph) (i) Rate[(s)] of Interest: [*]% per annum [payable [annually/semi- annually] in arrear (ii) Interest Commencement Date [*] (iii) Interest Payment Date(s): [*] in each year [adjusted in accordance with [specify Business Day Convention and any applicable Business Centre(s) for the definition of ‘‘Business Day’’]/not adjusted] (iv) Fixed Amount[(s)]: [*] per [*] in principal amount (v) Broken Amount: [Insert particulars of any initial or final broken interest amounts which do not correspond with the Fixed Amount[(s)] and the Interest Payment Date(s) to which they relate] (vi) Day Count Fraction (Day count fraction should be Actual/Actual-ICMA (Clause 4.9 (Definitions)) for all fixed rate loans other than those denominated in U.S. dollars, unless specified) (vii) Determination Date(s) [*] in each year. [Insert regular interest payment (Clause 4.9 (Definitions)): dates, ignoring closing date or repayment date in the case of a long or short first or last interest period. N.B. Only relevant where Day Count Fraction is Actual/Actual (ICMA)] (viii) Other terms relating to the [Not Applicable/give details] method of calculating interest for Fixed Rate Loans: 3.2 Floating Rate Loan Provisions [Applicable/Not Applicable] (If not applicable, delete the remaining sub-paragraphs of this paragraph) (i) Interest Commencement Date [*] (ii) Interest Period(s): [*] (iii) Specified Interest Payment Dates: [*] (iv) First Interest Payment Date: [*] (v) Business Day Convention: [Specify Business Day Convention and any applicable Business Centre(s) for the definition of ‘‘Business Day’’] (vi) Business Centre(s) [*] (Clause 4.9 (Definitions)): (vii) Manner in which the Rate(s) of [Screen Rate Determination/ISDA Determination/ Interest is/are to be determined: other (give details) (viii) Interest Period Date(s): [Not Applicable/specify dates] (ix) Party responsible for calculating [*] the Rate(s) of Interest and Interest Amount(s) (if not the Calculation Agent):

109 (x) Screen Rate Determination (sub-clause 4.3.3 (Rate of Interest for Floating Rate Loans)): * Reference Rate: [*] * Interest Determination [*] Date(s): * Relevant Screen Page: [*] * Relevant Time: [*] * Relevant Financial Centre: [*] (xi) ISDA Determination (sub-clause 4.3.3 (Rate of Interest for Floating Rate Loans)): * Floating Rate Option: [*] * Designated Maturity: [*] * Reset Date: [*] (xii) Margin(s): [+/-][*]% per annum (xiii) Minimum Rate of Interest: [*]% per annum (xiv) Maximum Rate of Interest [*]% per annum (xv) Day Count Fraction (Clause 4.9 [*] (Deﬁnitions)): (xvi) Fall back provisions, rounding [*] provisions, denominator and any other terms relating to the method of calculating interest on Floating Rate Loans, if different from those set out in the Senior Loan Agreement: 3.3 Call Option [Applicable/Not Applicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph) (i) Optional Redemption Date(s): [*] (ii) Optional Redemption Amount(s) [*] per Calculation Amount of each Note and method, if any, of calculation of such amount(s): (iii) If redeemable in part: (a) Minimum Redemption [*] per Calculation Amount Amount: (b) Maximum Redemption [*] per Calculation Amount Amount: (iv) Notice period: [*] 3.4 Put Option [Applicable/Not Applicable] (If not applicable, delete the remaining sub- paragraphs of this paragraph) (i) Optional Redemption Date(s): [*] (ii) Optional Redemption Amount(s) [*] per Calculation Amount of each Note and method, if any, of calculation of such amount(s): (iii) Notice period: [*]

110 3.5 Repayment and Prepayment [Applicable/Not Applicable] [If not applicable, delete the remaining sub-paragraphs of this paragraph] (i) Repayment: [As set out in Clause 5.1 (Repayment) of the Senior Loan Agreement]/[specify other provisions] (ii) Prepayment upon a Change of [Applicable/Not Applicable] Control Event: (iii) Prepayment at the option of the [Clause 5.6 (Prepayment at the option of the Borrower: Borrower) of the Senior Loan Agreement is applicable]/[specify other provisions] (iv) Prepayment at the option of the [Clause 5.7 (Prepayment at the option of the Lender: Lender) of the Senior Loan Agreement is applicable]/[specify other provisions]

4. Incorporation by Reference Except as otherwise provided, the terms of the Master Senior Loan Agreement shall apply to this Senior Loan Supplement as if they were set out herein and the Master Senior Loan Agreement shall be read and construed, only in relation to the Senior Advance constituted hereby, as one document with this Senior Loan Supplement.

5. Disapplication The following clauses of the Master Senior Loan Agreement shall not apply to this Senior Loan Supplement: [*]

6. The Senior Advance Subject to the terms and conditions of the Senior Loan Agreement, the Lender agrees to make the Senior Advance on the Closing Date to the Borrower and the Borrower shall make a single drawing in the full amount of the Senior Advance.

7. Fees and Expenses 8. Pursuant to Clause 3.2 (Senior Advance Arrangement Fee) of the Master Senior Loan Agreement and in consideration of the Lender making the Senior Advance to the Borrower, the Borrower hereby agrees that it shall, one Business Day before the Closing Date, pay to or to the order of the Lender, in Same-Day Funds, the total amount of [*], being the ‘‘Arrangement Fee’’ in respect of the Senior Advance as set forth in Clause [*] of the Subscription Agreement pursuant to an invoice submitted by, or at the request of, the Lender to the Borrower in the total amount.

9. No Assignments and Transfers by the Borrower The Borrower shall not be entitled to assign or transfer all or any of its rights, beneﬁts and obligations hereunder.

10. Assignments by the Lender The Lender shall not be entitled to assign or transfer all or any part of its rights or obligations hereunder to any Affiliate or Subsidiary or other party, except for (i) the transfer of its obligations as principal debtor under the Trust Deed and the Notes to a third party which is not an Affiliate or Subsidary of the Borrower; (ii) the charge by way of first fixed charge granted by the Lender in favour of the Trustee of the Lender’s rights and benefits under this Agreement; and (iii) the absolute assignment by way of security by the Lender to the Trustee of certain rights, interest and benefits under this Agreement and to the Account, in each case pursuant to the Trust Deed (and provided that the conditions for assignment set out therein have been fulfilled).

11. Contracts (Rights of Third Parties) Act 1999 A person who is not a party to this Senior Loan Supplement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Senior Loan Supplement.

111 12. Governing Law This Senior Loan Supplement shall be governed by and construed in accordance with English law. For the avoidance of doubt, the terms of Clauses 20 (Governing Law), 21 (Jurisdiction of English Courts) and 26 (Limited Recourse and Non-Petition) of the Master Senior Loan Agreement shall be deemed to be incorporated by reference into this Senior Loan Supplement mutatis mutandis.

13. Counterparts This Senior Loan Supplement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when so executed shall constitute one and the same binding agreement between the parties. This Senior Loan Supplement has been entered into on the date stated at the beginning.

112 SCHEDULE 2

FORM OF OFFICERS’ CERTIFICATE

[On the letterhead of the Borrower] [date] To: Commerzbank International S.A. With a copy to: Deutsche Trustee Company Limited

Dear Sirs, Re: Senior Loan Agreement dated [*] (the ‘‘Senior Loan Agreement’’) between Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸ irketi and Commerzbank International S.A. We refer to clause 12.5 (Notification of Default) of the Senior Loan Agreement. Terms used and defined in the Senior Loan Agreement are used herein as so defined. We confirm that [up to and including the date hereof no Event of Default or Potential Event of Default has occurred and is continuing [*]]/[specify any Event of Default or Potential Event of Default which has occurred and is continuing, and if so, what action the Borrower is taking or proposes to take with respect thereto]1.

Yours faithfully,

BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙

By: ______

Name: Title:

By: ______

Name: Title:

1 Delete and/or complete as applicable.

113 SCHEDULE 3

FORM OF COMPLIANCE CERTIFICATE

To: Commerzbank International S.A. With a copy to: Deutsche Trustee Company Limited From: Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸irketi Dated: [*]

Dear Sirs, Re: Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸ irketi – [US$/e/specify other currency][*] Senior Loan Agreement dated [*] (the ‘‘Agreement’’) 1. We refer to clause 12.3 (Compliance Certificates) of the Senior Loan Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate. 2. We confirm that: [Insert details of covenants to be certified and calculation basis] 3. [We confirm that no Default is continuing.]*

Signed:

BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙

By: ...... By: ......

Name:...... Name:......

Title: ...... Title: ......

114 SCHEDULE 4

FORM OF CHANGE OF CONTROL EVENT NOTICE

[On the letterhead of the Borrower] [date] To: Commerzbank International S.A. With a copy to: Deutsche Trustee Company Limited and Deutsche Bank AG, London Branch For the attention of: [Principal Paying Agent Reference]

Dear Sirs: Re: Senior Loan Agreement, dated [*] (the ‘‘Senior Loan Agreement’’) between Bankpozitif Kredi ve Kalkınma Bankası Anonim S¸ irketi and Commerzbank International S.A. 1. We refer to clause 5.4 (Prepayment upon a Change of Control Event) of the Senior Loan Agreement. 2. We conﬁrm a Change of Control Event has occurred. 3. The circumstances and relevant facts giving rise to the Change of Control Event are as follows: [provide details of Change of Control Event]. Capitalised terms used, but not deﬁned herein, having the meanings ascribed to them in the Senior Loan Agreement

Yours faithfully,

By: ______

Name: ______

Title: ______

By: ______

Name: ______

Title: ______

BANKPOZI˙TI˙F KREDI˙ VE KALKINMA BANKASI ANONI˙MS¸I˙RKETI˙

115 THE MASTER SUBORDINATED LOAN AGREEMENT

WHEREAS: The Lender has, at the request of the Borrower, agreed to make available to the Borrower Subordinated Advances (as deﬁned below) subject to and in accordance with this master subordinated loan agreement (the ‘‘Master Subordinated Loan Agreement’’), as amended and supplemented in relation to each Subordinated Advance by a subordinated loan supplement dated the Closing Date substantially in the form of Schedule 1 to this Master Subordinated Loan Agreement (each, a ‘‘Subordinated Loan Supplement’’). Now it is hereby agreed as follows:

1. DEFINITIONS AND INTERPRETATION 1.1 Definitions In this Master Subordinated Loan Agreement (including the recitals), the following terms shall have the meanings indicated: ‘‘Account’’ means an account in the name of the Lender with the Principal Paying Agent at its specified office as specified in the relevant Subordinated Loan Supplement; ‘‘Additional Amounts’’ has the meaning set forth in Clause 7.1 (Additional Amounts); ‘‘Affiliate’’ of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purpose of this definition, ‘‘control’’ when used with respect to any Person means the power to direct the management and policies of such Person or to control the composition of such Person’s board or board of directors, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms ‘‘controlling’’ and ‘‘controlled’’ have meanings correlative to the foregoing; ‘‘Agency’’ means any agency, authority, central bank, department, government, legislature, minister, official or public statutory person (whether autonomous or not) of, or of the government of, any state; ‘‘Agency Agreement’’ means the paying agency agreement relating to the Programme dated 7 February 2008 between the Lender (as issuer of the Notes), the Borrower, the Trustee and the other agents named therein; ‘‘Arrangers’’ means Commerzbank Aktiengesellschaft and Citigroup Global Markets Limited, or any additional or replacement arranger appointed, and excluding any Arranger whose appointment has terminated pursuant to the Dealer Agreement; ‘‘Assets’’ means all tangible and intangible property of a person including real property, chattels, money and debts owing to that person (including, for the avoidance of doubt, all securities portfolios and customer receivables); ‘‘Assigned Rights’’ has the meaning assigned to such term in the Principal Trust Deed; ‘‘Authorisation’’ means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration; ‘‘Bank Hapoalim’’ means Bank Hapoalim B.M., a banking corporation incorporated in Israel; ‘‘Banking Business’’ means any type of banking business (including, without limitation, any inter-bank operations with maturities of 18 months or less, factoring, consumer credit and lending, commercial and residential property finance and mortgage lending, issuance of bank guarantees, letters of credit (and related cash cover provision), bills of exchange and promissory notes and making payments under such guarantees, letters of credit, bills and promissory notes,

116 trading of securities, fund management and professional securities market participation) which the Borrower or any Subsidiary of the Borrower conducts or may conduct pursuant to its licence issued by the appropriate authorities, accepted market practice and any applicable law; ‘‘Bankruptcy Event’’ means the date on which the bankruptcy of the Borrower is final in accordance with Article 165 of the Execution and Bankruptcy Code (Law No. 2004) of the Republic upon the finalisation of a judgment of a competent Turkish court finding the Borrower to be bankrupt; ‘‘Bankruptcy Proceedings’’ means any proceeding in a competent Turkish court relating to a bankruptcy or any other proceedings including, but not limited to, the revocation of a banking licence or appointment of a temporary administration, which could reasonably lead to an occurrence of a Bankruptcy Event; ‘‘BIS’’ means the Bank for International Settlements; ‘‘Borrower Account’’ means an account in the name of the Borrower as specified in the relevant Subordinated Loan Supplement; ‘‘Borrower Agreements’’ means this Master Subordinated Loan Agreement, the Dealer Agreement, the Agency Agreement, and together with, in relation to each Subordinated Advance, the relevant Subscription Agreement and Subordinated Loan Supplement; ‘‘Broken Amount’’ has the meaning specified in the applicable Subordinated Loan Supplement; ‘‘BRSA’’ means the Banking Regulation and Supervision Agency (Bankacılık Du¨zenleme ve Denetleme Kurumu) of the Republic; ‘‘Business Centre(s)’’ means the city or cities specified as such in the applicable Subordinated Loan Supplement; ‘‘Business Day’’ means: (a) in the case of a currency other than euro, a day (other than a Saturday or Sunday) on which commercial banks and foreign exchange markets settle payments in the Principal Financial Centre for such currency; and/or (b) in the case of euro, a day on which the TARGET system is operating (a ‘‘TARGET Business Day’’); and/or (c) in the case of a currency and/or one or more Business Centres a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in such currency in the Business Centre(s) or, if no currency is indicated, generally in each of the Business Centres; ‘‘Business Day Convention’’ has the meaning set out in sub-clause 4.3.2 (Business Day Convention); ‘‘Calculation Agent’’ means, in relation to a Subordinated Advance, Deutsche Bank AG, London Branch or any person named as such in the applicable Subordinated Loan Supplement or any successor thereto; ‘‘Calculation Amount’’ has the meaning given in the applicable Subordinated Loan Supplement; ‘‘Central Bank’’ means the Central Bank of Turkey (Tu¨rkiye Cumhuriyet Merkez Bankası); ‘‘Change of Law’’ means any of the enactment or introduction of any new law; the variation, amendment or repeal of an existing or new law; any ruling on or interpretation or application by a competent authority of any existing or new law; and the decision or ruling on, the interpretation or application of, or a change in the interpretation or application of, any law by any court of law, tribunal, central bank, monetary authority or agency or any Taxing Authority or fiscal or other competent authority or agency; which, in each case, occurs after the date hereof. For this purpose the term ‘‘law’’ means all or any of the following whether in existence at the date hereof or introduced hereafter and with which it is obligatory or customary for banks, other financial institutions or, as the case may be, companies in the relevant jurisdiction to comply:

117 (d) any statute, treaty, order, decree, instruction, letter, directive, instrument, regulation, ordinance or similar legislative or executive action by any national or international or local government or authority or by any ministry or department thereof and other agencies of state power and administration (including, but not limited to, taxation departments and authorities); and (e) any letter, regulation, decree, instruction, request, notice, guideline, directive, statement of policy or practice statement given by, or required of, any central bank or other monetary authority, or by or of any Taxing Authority or fiscal or other authority or agency (whether or not having the force of law); ‘‘control’’ when used with respect to any Person means the power to direct the management and policies of such Person or to control the composition of such Person’s board or board of directors, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise and the terms ‘‘controlling’’ and ‘‘controlled’’ have meanings correlative to the foregoing; ‘‘Closing Date’’ means the date specified as such in the relevant Subordinated Loan Supplement; ‘‘Compliance Certificate’’ means a certificate substantially in the form set out in Schedule 3; ‘‘Dealer Agreement’’ means the dealer agreement relating to the Programme dated 7 February 2008 between the Lender (in its capacity as issuer of the Notes), the Borrower and the Arrangers and the other dealers appointed pursuant to it; ‘‘Double Tax Treaty’’ means the Convention of 9 June 2003 between Turkey and Luxembourg for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and on capital gains; ‘‘Fee Side Letter’’ has the meaning given in Clause 16.2 (Payment of Ongoing expenses) of this Master Subordinated Loan Agreement; ‘‘Finance Documents’’ means the Principal Trust Deed, this Master Subordinated Loan Agreement together with, in relation to each Subordinated Advance, the relevant Subordinated Loan Supplement and Supplemental Trust Deed; ‘‘Financial Indebtedness’’ means any indebtedness for or in respect of: (a) monies borrowed or raised; (b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with Turkish GAAP or IFRS, be treated as a finance or capital lease; (e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); (f) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; (g) any amounts raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; and (h) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (g) above; ‘‘First Degree Signatory’’ means an ‘‘A’’ degree signatory under the Borrower’s articles of association, and as provided for in the most recent Signature Circular of the Borrower, and ‘‘First Degree Signatories’’ shall have a corresponding meaning; ‘‘First Interest Payment Date’’ has the meaning specified in the applicable Subordinated Loan Supplement after the Interest Commencement Date; ‘‘First Interest Period’’ means the period from (and including) the Closing Date to (but excluding) the First Interest Payment Date;

118 ‘‘Fixed Amount’’ has the meaning specified in the applicable Subordinated Loan Supplement; ‘‘Fixed Rate Advance’’ means a Subordinated Advance specified as such in the relevant Subordinated Loan Supplement; ‘‘Floating Rate Advance’’ means a Subordinated Advance specified as such in the relevant Subordinated Loan Supplement; ‘‘Group’’ means the Borrower and its Subsidiaries from time to time taken as a whole; ‘‘IFRS’’ means the International Financial Reporting Standards including IAS, promulgated by the International Accounting Standards Board (as amended, supplemented or re-issued from time to time); ‘‘incur’’ means issue, assume, guarantee, incur or otherwise become liable for; provided that, any Financial Indebtedness of a Person existing at the time such Person becomes a Subsidiary of another Person (whether by merger, consolidation, acquisition or otherwise) or is merged into a Subsidiary of another Person will be deemed to be incurred or issued by the other Person or such Subsidiary (as the case may be) at the time such Person becomes a Subsidiary of such other Person or is so merged into such Subsidiary; ‘‘Indemnity Amounts’’ has the meaning set forth in Clause 7.3 (Indemnity Amounts); ‘‘Interest Commencement Date’’ means, in relation to any Subordinated Advance, the date specified in the applicable Subordinated Loan Supplement from which such Subordinated Advance bears interest or, if no such date is specified therein, the Closing Date; ‘‘Interest Payment Date’’ means the dates specified as such in the applicable Subordinated Loan Supplement; ‘‘Interest Period’’ means the period beginning on (and including) the Interest Commencement Date and ending on (but excluding) the First Interest Payment Date and each successive period beginning on (and including) an Interest Payment Date and ending on (but excluding) the next succeeding Interest Payment Date; ‘‘ISDA Definitions’’ means the 2006 ISDA Definitions (as are amended and updated as at the date of the first Subordinated Loan Advance (as specified in the relevant Subordinated Loan Supplement) as published by the International Swaps and Derivatives Association, Inc.); ‘‘Issue Date’’ means, in relation to a Series of Notes, the date on which the Notes of that Series have been issued or, if not yet issued, the date agreed for their issue between the Issuer, the Borrower and the Relevant Dealer(s) as defined in the Dealer Agreement; ‘‘Lead Manager(s)’’ means the manager(s) specified as such in the relevant Subscription Agreement; ‘‘Lender Agreements’’ means this Master Subordinated Loan Agreement, the Dealer Agreement, the Agency Agreement, the Principal Trust Deed and together with, in relation to each Subordinated Advance, the relevant Subscription Agreement, Subordinated Loan Supplement and Supplemental Trust Deed; ‘‘Material Adverse Effect’’ means any effect, event, circumstance or change which (having regard to the prevailing circumstances) is materially adverse, in the opinion of the Lender, to (a) the business, operations, property, financial condition or prospects of the Borrower or its Material Subsidiaries; (b) the Borrower’s ability to perform or comply with its obligations under this Agreement; (c) the validity or enforceability of the Finance Documents or the rights and remedies of the Lender hereunder; or (d) the condition (financial, political, economic, market or otherwise) or prospects (financial, political, economic, market or otherwise) of the Republic; ‘‘Material Subsidiary’’ means any Subsidiary of the Borrower either: (a) whose profits before tax represent ten per cent. or more of the profits before tax of the Group; or (b) whose net assets or revenues represent ten per cent. or more of the net assets or revenues of the Group, in each case calculated on a consolidated basis in accordance with the then most recent audited consolidated financial statements of the Borrower in accordance with IFRS; ‘‘Maximum Redemption Amount’’ has the meaning given in the applicable Subordinated Loan Supplement;

119 ‘‘Minimum Redemption Amount’’ has the meaning given in the applicable Subordinated Loan Supplement; ‘‘Noteholder’’ means, in relation to a Note, a person in whose name a Note is registered in the Register (or in the case of joint holders, the first named thereof) and the words ‘‘holder’’ and ‘‘holders’’ and related expressions shall (where appropriate) be construed accordingly; ‘‘Notes’’ means the limited recourse loan participation notes that may be issued from time to time by the Lender under the Programme in Series, each Series corresponding to a Subordinated Advance and issued for the purpose of funding each Subordinated Advance; ‘‘Officers’ Certificate’’ means a certificate, substantially in the form as set out in Schedule 4, signed on behalf of the Borrower by two First Degree Signatories; ‘‘Official Gazette’’ means the Official Gazette of the Republic; ‘‘Optional Redemption Amount (Call)’’ means, in respect of any relevant Subordinated Advance (or any relevant part thereof), its principal amount or such other amount as may be specified in, or determined in accordance with, the applicable Subordinated Loan Supplement; ‘‘Optional Redemption Date (Call)’’ has the meaning given in the applicable Subordinated Loan Supplement; ‘‘Original Financial Statements’’ means the audited consolidated financial statements of the Group for the financial year ended 31 December 2006 in accordance with IFRS; ‘‘Paying Agents’’ means, in relation to the Notes of any Series, the several institutions (including, where the context permits, the Principal Paying Agent) at their respective specified offices initially appointed pursuant to the Agency Agreement and/or, if applicable, any Successor paying agents, in relation to such Notes at their respective specified offices, and ‘‘Paying Agent’’ shall mean any one of them; ‘‘Person’’ means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organisation, government, or any Agency or political subdivision thereof or any other entity whether or not having a corporate legal personality; ‘‘Prepayment Date’’ means the date on which a Senior Advance is prepaid pursuant to Clause 5.3 (Prepayment for Tax Reasons and Change in Circumstances), Clause 5.4 (Prepayment in the event of Illegality) or Clause 5.5 (Prepayment at the Option of the Borrower), as the case may be; ‘‘Principal Financial Centre’’ means, in relation to any currency, the principal financial centre for that currency provided, however, that: (a) in relation to euro, it means the principal financial centre of such Member State of the European Communities as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; and (b) in relation to Australian dollars, it means either Sydney or Melbourne and, in relation to New Zealand dollars, it means either Wellington or Auckland; in each case as is selected (in the case of a payment) by the payee or (in the case of a calculation) by the Calculation Agent; ‘‘Principal Trust Deed’’ means the principal trust deed dated 7 February 2008 between the Lender and the Trustee; ‘‘Programme’’ means the Programme for the issuance of limited recourse loan participation notes of the Lender for the purpose of funding each Subordinated Advance; ‘‘Programme Limit’’ means U.S.$1,000,000,000 (as may be increased in accordance with the Dealer Agreement); ‘‘Qualifying Jurisdiction’’ means any jurisdiction which by reason of either (a) any provision of Turkish law, or (ii) any double taxation treaty between such jurisdiction and Turkey the payment of which interest by Turkish borrowers to lenders established in such jurisdiction is generally able to be made (upon completion of any necessary formalities required in relation thereto) without deduction or withholding of Taxes under Turkish law; ‘‘Rate of Interest’’ has the meaning assigned to such term in the relevant Subordinated Loan Supplement;

120 ‘‘Regulation’’ means the Regulation on Equity of the Bank published in the Official Gazette dated 1 November 2006 and number 26333; ‘‘Reference Rate’’ has the meaning given in the applicable Subordinated Loan Supplement; ‘‘Relevant Period’’ means each period of twelve months ending on the last day of the Borrower’s financial year and each period of twelve months ending on the last day of the first half of the Borrower’s financial year; ‘‘Relevant Screen Page’’ means the page, section or other part of a particular information service (including, without limitation, Reuters) specified as the Relevant Screen Page in the applicable Subordinated Loan Supplement or such other page, section or other part as may replace it on that information service or such other information service, in each case, as may be nominated by the Person providing or sponsoring the information appearing there for the purpose of displaying rates or prices comparable to the Reference Rate; ‘‘Relevant Time’’ means, in relation to a payment in U.S. Dollars, New York City time and, in relation to a payment in euro, Brussels time or in relation to any currency agreed between the Issuer, the Bank and the relevant Dealer(s) (as defined in the Dealer Agreement), the time in the Principal Financial Centre for that currency; ‘‘Repayment Date’’ means the date specified as such in the relevant Subordinated Loan Supplement and which cannot be earlier than the fifth anniversary of the Interest Commencement Date; ‘‘Reserved Rights’’ has the meaning assigned to such term in the Principal Trust Deed; ‘‘Same-Day Funds’’ means (i) if the Specified Currency is U.S. Dollars, Dollar funds settled through the New York Clearing House Interbank Payments System or (ii) if the Specified Currency is euro, through the TARGET System or in either case such other funds for payment in the Specified Currency as the Lender may at any time determine to be customary for the settlement of international transactions in Brussels of the type contemplated hereby or (iii) in all other cases, funds for payment, in the Specified Currency, as the Lender may at any time determine to be customary for the settlement of international transactions in the Principal Financial Centre of the country of the Specified Currency; ‘‘Series’’ means a Tranche of Notes together with any further Tranche or Tranches of Notes expressed to be consolidated and form a single series with the Notes of the original Tranche and the terms of which are identical (save for the Issue Date and/or the Interest Commencement Date, including as to whether or not the Notes are listed); ‘‘Signature Circular’’ means the written circular of the Borrower reflecting at least the names and specimen signatures of all of the First Degree Signatories; ‘‘Specified Currency’’ means the currency specified as such in the relevant Subordinated Loan Supplement; ‘‘Subordinated Advance’’ means each advance to be made pursuant to, and on the terms specified in, the Subordinated Loan Agreement; ‘‘Subordinated Loan Agreement’’ means this Master Subordinated Loan Agreement and (unless the context requires otherwise), in relation to a Subordinated Advance, means this Master Subordinated Loan Agreement as amended and supplemented by the relevant Subordinated Loan Supplement; ‘‘Subscription Agreement’’ means the agreement specified as such in the relevant Subordinated Loan Supplement; ‘‘Subsidiary’’ of a Person means another Person: (a) which is controlled, directly or indirectly, by that first-named Person, whether by contract, the power to appoint or remove members of the governing body of such Person or otherwise; or (b) more than half the issued share capital of which is beneficially owned, directly or indirectly, by that first-named Person; ‘‘Supplemental Trust Deed’’ means a supplemental trust deed in respect of a Series of Notes which constitutes and secures, inter alia, such Series, dated the relevant Closing Date and made between the Lender and the Trustee (substantially in the form set out in Schedule 6 of the Principal Trust Deed);

121 ‘‘Tangible Net Worth’’ means the aggregate of (a) all amounts paid up or credited as paid up on the Borrower’s issued and fully paid share capital (including share premium); (b) all amounts standing to the credit of the unconsolidated reserve accounts of the Borrower; (c) any retained earnings; and (d) any revaluation surplus, but excluding any amounts attributable to the revaluation of goodwill and other intangible assets accounted under equity; ‘‘TARGET System’’ means the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET or TARGET2) System or any successor thereof; ‘‘Taxes’’ means any taxes, levies, duties, imposts or other charges or withholding of a similar nature or no matter where arising (including interest or penalties thereon and additions thereto) which are now or at any time hereafter imposed, assessed, charged, levied, collected, demanded, withheld or claimed by Turkey, Luxembourg or any taxing authority thereof or therein or any organisation of which Turkey or Luxembourg may be a member or with which Turkey or Luxembourg may be associated or any country or state from or through which the Borrower makes payments under the Subordinated Loan Agreement, provided, however, that for the purposes of this definition the references to Luxembourg shall also, upon the occurrence of the Relevant Event (as this term is defined in the Trust Deed), be deemed to be references to the jurisdiction in which the Trustee is a resident and acting through for tax purposes; and the term ‘‘Taxation’’ shall be construed accordingly; ‘‘Taxing Authority’’ has the meaning set out in Clause 7.1 (Additional Amounts); ‘‘Trust Deed’’ means the Principal Trust Deed and the Schedules to it (as from time to time modified in accordance with the provisions therein contained) and (unless the context otherwise requires) includes the relevant Supplemental Trust Deed; ‘‘Trustee’’ means Deutsche Trustee Company Limited, as trustee under the Trust Deed and any successor thereto as provided thereunder; ‘‘Turkey’’ and ‘‘Republic’’ means Tu¨rkiye Cumhuriyeti (the Republic of Turkey); ‘‘Turkish GAAP’’ means generally accepted accounting principles in Turkey; ‘‘US Dollars’’ and ‘‘US$’’ means the lawful currency for the time being of the United States of America and ‘‘New Turkish Lira’’ and ‘‘TRY’’ means the lawful currency for the time being of Turkey; and ‘‘VAT’’ means value added tax, including any similar tax which may be imposed in place thereof from time to time.

1.2 Other Definitions Unless the context otherwise requires, terms used in this Master Subordinated Loan Agreement which are not defined in this Master Subordinated Loan Agreement or the Subordinated Loan Supplement but which are defined in the Principal Trust Deed, the Notes, the Agency Agreement or the Dealer Agreement shall have the meanings assigned to such terms therein.

1.3 Interpretation Unless the context or the express provisions of this Master Subordinated Loan Agreement otherwise require, the following shall govern the interpretation of this Master Subordinated Loan Agreement: 1.3.1 all references to ‘‘Clause’’ or ‘‘sub-Clause’’ are references to a Clause or sub-Clause of this Master Subordinated Loan Agreement; 1.3.2 the terms ‘‘hereof’’, ‘‘herein’’ and ‘‘hereunder’’ and other words of similar import shall mean this Master Subordinated Loan Agreement as a whole and not any particular part hereof; 1.3.3 words importing the singular number include the plural and vice versa; 1.3.4 all references to ‘‘taxes’’ include all present or future taxes, levies, imposts and duties of any nature and the terms ‘‘tax’’ and ‘‘taxation’’ shall be construed accordingly; 1.3.5 the table of contents and the headings are for convenience only and shall not affect the construction hereof; and

122 1.3.6 all references in this Agreement to this Agreement or any other document are to this Agreement or those documents as amended, supplemented or replaced from time to time in relation to the Programme and include any document that amends, supplements or replaces it.

2. SUBORDINATED FACILITY 2.1 Subordinated Facility On the terms and subject to the conditions set forth in this Master Subordinated Loan Agreement and, as the case may be, each Subordinated Loan Supplement, the Lender hereby makes available to the Borrower Subordinated Advances up to, together with any Subordinated Advances the Lender agrees to make available to the Borrower under the Subordinated Loan Agreements, a total aggregate amount equal to the Programme Limit.

2.2 Purpose The proceeds of each Subordinated Advance will be used by the Borrower for general corporate purposes and, without affecting the obligations of the Borrower in any way, the Lender shall not be obliged to concern itself with such application.

2.3 Subordination 2.3.1 Subordination: The claims of the Lender under this Master Subordinated Loan Agreement, excluding the Reserved Rights, and under each Subordinated Loan Agreement constitute the direct, unconditional and unsecured subordinated obligations of the Borrower and will rank, after the claims of all Senior Creditors (as defined below), at least equally with all other unsecured and subordinated obligations of the Borrower (whether actual or contingent) having a fixed maturity from time to time outstanding save only for such obligations as may be preferred by mandatory provisions of applicable law and will be senior to the claims of holders of (a) the Borrower’s share capital (including preference shares) and (b) all other obligations ranking junior to the claims of the Lender pursuant to applicable law or otherwise (including claims relating to Tier I quasi-capital (birincil sermaye benzeri borçlar), excluding the Reserved Rights). The Reserved Rights constitute the direct, unconditional, unsecured and unsubordinated obligations of the Borrower and will rank at least equally with other unsecured and unsubordinated obligations of the Borrower save only for such obligations as may be preferred by mandatory provisions of applicable law. 2.3.2 Derivative Transactions: The Borrower and the Lender agree that this Agreement is not related to any derivative transaction or contract including but not limited to any derivative instruments or contract giving to the Lender any security collateralising any Subordinated Advance(s) or otherwise creating security of any kind that may give rise to the Lender’s claims to rank in a manner other than as described in clause 2.3.1 above. 2.3.3 Bankruptcy Event: Upon the occurrence of a Bankruptcy Event and so long as such Bankruptcy Event is continuing, the claims of the Lender under this Agreement, excluding the Reserved Rights, shall be subordinated in right of payment to the claims of all Senior Creditors (as defined below). As used in this Master Subordinated Loan Agreement and under each Subordinated Loan Agreement, ‘‘Senior Creditors’’ means all creditors of the Borrower other than creditors whose claims are in respect of (i) the share capital of the Borrower (including preference shares) or (ii) other obligations ranking junior to the claims of the Lender pursuant to applicable law or otherwise (including claims relating to Tier 1 quasi-capital (birincil sermaye benzeri borçlar), excluding the Reserved Rights). The Lender agrees that so long as any Bankruptcy Event has occurred and is continuing, any amounts that would otherwise be due to the Lender under this Master Subordinated Loan Agreement, other than amounts in respect of the Reserved Rights, will only be paid after the payment in full of all claims of the Senior Creditors (including interest and other amounts in respect of such claims accruing after the date of commencement of such Bankruptcy Event). Thereafter, such amounts that would otherwise be paid to the Lender under this Master Subordinated Loan Agreement will

123 be paid equally and rateably, together with all obligations of the Borrower ranking equally in right of payment with the liabilities of the Borrower under this Master Subordinated Loan Agreement.

2.3.4 No Set-Off: The Lender shall not be entitled to offset any liabilities of the Borrower under this Agreement against any liabilities owing by the Lender to the Borrower.

2.4 Separate Subordinated Advances Where Subordinated Advances are made, all the provisions of this Master Subordinated Loan Agreement and the Subordinated Loan Supplement in respect of each Subordinated Advance shall apply mutatis mutandis separately and independently to each such Subordinated Advance and in respect of each such Subordinated Advance the expressions ‘‘Account’’, ‘‘Assigned Rights’’, ‘‘Closing Date’’, ‘‘Day Count Fraction’’, ‘‘Finance Documents’’, ‘‘Interest Payment Date’’, ‘‘Subordinated Loan Agreement’’, ‘‘Notes’’, ‘‘Principal Financial Centre’’, ‘‘Rate of Interest’’, ‘‘Repayment Date’’, ‘‘Same-Day Funds’’, ‘‘Speciﬁed Currency’’, ‘‘Subscription Agreement’’ and ‘‘Trust Deed’’, together with all other terms that relate to Subordinated Advances shall be construed as referring to those of the particular Subordinated Advance in question and not of all Subordinated Advances unless expressly so provided, so that each such Subordinated Advance shall be made pursuant to this Master Subordinated Loan Agreement and the Subordinated Loan Supplement in respect of the relevant Subordinated Advance, together comprising the Subordinated Loan Agreement in respect of such Subordinated Advance and that, unless expressly provided, events affecting one Subordinated Advance shall not affect any other.

3. SUBORDINATED ADVANCES

3.1 Subordinated Advances On the terms and subject to the conditions of a Subordinated Loan Agreement, the Lender shall make the relevant Subordinated Advance in the amount and on the terms speciﬁed in such Subordinated Loan Agreement to the Borrower and the Borrower shall make a single drawing in the full amount of such Subordinated Advance.

3.2 Subordinated Advance Arrangement Fee In consideration of the Lender’s undertaking to make a Subordinated Advance available to the Borrower, the Borrower hereby agrees that it shall, one Business Day before each Closing Date, pay to or to the order of the Lender, in Same-Day Funds by 10 a.m. (Relevant Time) an Arrangement Fee (as defined in the applicable Subordinated Loan Supplement) in connection with the financing of such Subordinated Advance. The total amount of the Arrangement Fee will be as specified in the applicable Subordinated Loan Supplement.

3.3 Disbursement Subject to the conditions set forth in the relevant Subordinated Loan Agreement, on the Closing Date thereof the Lender shall transfer the full amount of each Subordinated Advance to the Borrower Account in Same-Day Funds. If the Arrangement Fee has not been otherwise received by the Lead Manager(s) or, as the case may be, the Relevant Dealer, then the Lead Manager(s) or, as the case may be, the Relevant Dealer, shall deduct such sum from such Subordinated Advance.

3.4 Ongoing Fees and Expenses In consideration of the Lender establishing and maintaining the Programme and agreeing to make Subordinated Advance to the Borrower, the Borrower shall pay on demand to the Lender as and when such payments are due an amount or amounts to reimburse the Lender for its expenses relating to its management and operation in servicing the Subordinated Advance as set forth to the Borrower in an invoice from the Lender (including, for the avoidance of doubt and without limitation, the fees and expenses of the Lender’s counsel, auditors, corporate services providers and agents and any taxes of the Issuer).

124 4. INTEREST 4.1 Rate of Interest for Fixed Rate Advances For each Fixed Rate Advance, the Borrower will pay interest at the rate speciﬁed in the relevant Subordinated Loan Supplement in the Speciﬁed Currency to the Lender on the outstanding principal amount of each Subordinated Advance from time to time at the relevant Rate of Interest.

4.2 Payment for Fixed Rate Advances In relation to each Subordinated Advance, interest shall accrue at the relevant Rate of Interest from day to day, starting from (and including) the Interest Commencement Date and shall be paid in arrear not later than 10.00 a.m. (Relevant Time) 1 (one) New York (if the Specified Currency is U.S. Dollars) or Brussels (if the Specified Currency is euros) Business Day (or such other day as may be specified in the relevant Subordinated Loan Supplement) prior to each Interest Payment Date.

4.3 Interest for Floating Rate Advances 4.3.1 Interest Payment Dates: Each Floating Rate Advance bears interest on its outstanding principal amount from (and including) the Interest Commencement Date and thereafter from (and including) each Interest Payment Date, to (but excluding) the next Interest Payment Date at the rate per annum (expressed as a percentage) equal to the applicable Rate of Interest, such interest being payable in arrear not later than 10:00 a.m. (Relevant Time) 1 (one) New York (if the Specified Currency is U.S. Dollars) or Brussels (if the Specified Currency is euros) Business Day prior to each Interest Payment Date (or such other day as may be specified in the relevant Subordinated Loan Supplement). Such Interest Payment Date(s) is/are either shown in the relevant Subordinated Loan Supplement as Specified Interest Payment Date(s) or, if no Specified Interest Payment Date(s) is/are shown in the relevant Subordinated Loan Supplement, Interest Payment Date shall mean each date which falls the number of months or other period shown in the relevant Subordinated Loan Supplement as the Interest Period after the preceding Interest Payment Date or, in the case of the First Interest Payment Date (as specified in the applicable Subordinated Loan Supplement), after the Interest Commencement Date. 4.3.2 Business Day Convention: If any date referred to in the relevant Subordinated Loan Supplement that is specified to be subject to adjustment in accordance with a Business Day Convention would otherwise fall on a day that is not a Business Day, then, if the Business Day Convention specified is (A) the Floating Rate Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event (x) such date shall be brought forward to the immediately preceding Business Day and (y) each subsequent such date shall be the last Business Day of the month in which such date would have fallen had it not been subject to adjustment, (B) the Following Business Day Convention, such date shall be postponed to the next day that is a Business Day, (C) the Modified Following Business Day Convention, such date shall be postponed to the next day that is a Business Day unless it would thereby fall into the next calendar month, in which event such date shall be brought forward to the immediately preceding Business Day or (D) the Preceding Business Day Convention, such date shall be brought forward to the immediately preceding Business Day. 4.3.3 Rate of Interest for Floating Rate Advances:

(a) ISDA Determination: If ISDA Determination is specified in the applicable Subordinated Loan Supplement as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Subordinated Advance for each Interest Period will be the sum of the Margin (as specified in the applicable Subordinated Loan Supplement) and the relevant ISDA Rate where ‘‘ISDA Rate’’ in relation to any Interest Period means a rate equal to the Floating Rate (as defined in the ISDA Definitions) that would be determined by the Calculation Agent under an interest rate swap

125 transaction if the Calculation Agent were acting as Calculation Agent for that interest rate swap transaction under the terms of an agreement incorporating the ISDA Deﬁnitions and under which:

(i) the Floating Rate Option (as defined in the ISDA Definitions) is as specified in the applicable Subordinated Loan Supplement;

(ii) the Designated Maturity (as defined in the ISDA Definitions) is a period specified in the applicable Subordinated Loan Supplement; and

(b) Screen Rate Determination for Floating Rate Advances: If Screen Rate Determination is speciﬁed in the applicable Subordinated Loan Supplement as the manner in which the Rate(s) of Interest is/are to be determined, the Rate of Interest applicable to the Subordinated Advance for each Interest Period will be determined by the Calculation Agent on the following basis:

(i) if the Reference Rate is a composite quotation or customarily supplied by one entity, the Calculation Agent will determine the Reference Rate which appears on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date;

(ii) in any other case, the Calculation Agent will determine the arithmetic mean of the Reference Rates which appear on the Relevant Screen Page as of the Relevant Time on the relevant Interest Determination Date;

(iii) if, in the case of (i) above, such rate does not appear on that page or, in the case of (ii) above, fewer than two such rates appear on that page or if, in either case, the Relevant Screen Page is unavailable, the Calculation Agent will:

(A) request the principal Relevant Financial Centre ofﬁce of each of the Reference Banks to provide a quotation of the Reference Rate at approximately the Relevant Time on the Interest Determination Date to prime banks in the Relevant Financial Centre interbank market in an amount that is representative for a single transaction in that market at that time; and

(B) determine the arithmetic mean of such quotations; and

(iv) if fewer than two such quotations are provided as requested, the Calculation Agent will determine the arithmetic mean of the rates (being the nearest to the Reference Rate, as determined by the Calculation Agent) quoted by major banks in the Principal Financial Centre of the Specified Currency (as specified in the applicable Subordinated Loan Supplement), selected by the Calculation Agent, at approximately 11.00 a.m. (local time in the Principal Financial Centre of the Specified Currency) on the first day of the relevant Interest Period for loans in the Specified Currency to leading European banks for a period equal to the relevant Interest Period and in an amount that is representative for a single transaction in that market at that time, and the Rate of Interest for such Interest Period shall be the sum of the Margin and the rate or (as the case may be) the arithmetic mean so determined; provided, however, that if the Calculation Agent is unable to determine a rate or (as the case may be) an arithmetic mean in accordance with the above provisions in relation to any Interest Period, the Rate of Interest applicable to the Subordinated Advance during such Interest Period will be the sum of the Margin and the rate or (as the case may be) the arithmetic mean last determined in relation to the Subordinated Advance in respect of a preceding Interest Period.

126 4.4 Accrual of Interest Interest shall cease to accrue on each Subordinated Advance on the due date for repayment thereof unless payment of principal is withheld or refused, in which event interest will continue to accrue (as well after as before any judgment) at the same Rate of Interest as before the due date to but excluding the date on which payment in full of the principal thereof is made.

4.5 Maximum/Minimum Rates of Interest, Maximum/Minimum Redemption Amount and Rounding 4.5.1 If any Maximum or Minimum Rate of Interest is specified in the applicable Subordinated Loan Supplement, then any Rate of Interest shall be subject to such maximum or minimum, as the case may be. 4.5.2 If any Maximum or Minimum Redemption Amount is specified in the applicable Subordinated Loan Supplement, then the Optional Redemption Amount (Call) shall in no event be greater than the maximum or be less than the minimum so specified. 4.5.3 For the purposes of any calculations required pursuant to a Subordinated Loan Agreement (unless otherwise specified), (x) all percentages resulting from such calculations shall be rounded, if necessary, to the nearest one hundred-thousandth of a percentage point (with halves being rounded up), (y) all figures shall be rounded to seven significant figures (with halves being rounded up) and (z) all currency amounts that fall due and payable shall be rounded to the nearest sub-unit of such currency (with halves being rounded up), save in the case of yen, which shall be rounded down to the nearest yen. For this purpose a ‘‘sub-unit’’ means, in the case of any currency other than euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, in the case of euro means one cent.

4.6 Calculations The amount of interest payable in respect of any Subordinated Advance for any period shall be calculated by multiplying the product of the Rate of Interest and the outstanding principal amount of such Subordinated Advance by the Day Count Fraction, unless an Interest Amount (or a formula for its calculation) is speciﬁed in the relevant Subordinated Loan Supplement in respect of such period, in which case the amount of interest payable in respect of such Subordinated Advance for such period shall equal such Interest Amount (or be calculated in accordance with such formula). Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interest payable in respect of such Interest Period shall be the sum of the amounts of interest payable in respect of each of those Interest Accrual Periods.

4.7 Determination and Publication of Rates of Interest and Interest Amounts As soon as practicable after the Relevant Time on each Interest Determination Date or such other time on such date as the Calculation Agent may be required to calculate any rate or amount, obtain any quotation or make any determination or calculation, the Calculation Agent shall determine such rate and calculate the Interest Amounts in respect of such Floating Rate Advance for the relevant Interest Accrual Period, obtain such quotation or make such determination or calculation, as the case may be, and cause the Rate of Interest and the Interest Amounts for each Interest Period and the relevant Interest Payment Date to be notiﬁed to the Borrower, the Trustee, the Lender, each of the Paying Agents and any other Calculation Agent appointed in respect of such Floating Rate Advance that is to make a further calculation upon receipt of such information. Where any Interest Payment Date or Interest Period Date is subject to adjustment pursuant to sub-clause 4.3.2 (Business Day Convention), the Interest Amounts and the Interest Payment Date so published may subsequently be amended (or appropriate alternative arrangements made with the consent of the Borrower and the Lender by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. If such Floating Rate Advance becomes due and payable under Clause 13 (Limited Acceleration Rights) the accrued interest and the Rate of Interest payable in respect of such Floating Rate Advance shall nevertheless continue to be calculated as previously in accordance with this Clause 4 but no publication of the Rate of Interest or the Interest Amount so calculated need be made unless the Lender otherwise requires. The determination of any rate or amount, the obtaining of each quotation and the making of each determination or calculation by the Calculation Agent(s) shall (in the absence of manifest error) be ﬁnal and binding upon all parties.

127 4.8 Determination or Calculation by Trustee If the Calculation Agent does not at any time for any reason determine or calculate the Rate of Interest for an Interest Period or any Interest Amount in relation to a Floating Rate Loan, the Lender and the Borrower agree that such determination or calculation may be made by or at the direction of the Trustee, as set out in and in accordance with the conditions of the corresponding Series of Notes.

4.9 Definitions In this Clause 4 only, unless the context otherwise requires, the following defined terms shall have the meanings set out below: ‘‘Day Count Fraction’’ means, in respect of the calculation of an amount of interest on any Subordinated Advance for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period, the ‘‘Calculation Period’’): (i) if ‘‘Actual/365’’ or ‘‘Actual/Actual-ISDA’’ is specified in the applicable Subordinated Loan Supplement, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365); (ii) if ‘‘Actual/365 (Fixed)’’ is specified in the applicable Subordinated Loan Supplement, the actual number of days in the Calculation Period divided by 365; (iii) if ‘‘Actual/365 (Sterling)’’ is specified in the applicable Subordinated Loan Supplement, the actual number of days in the Calculation Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366; (iv) if ‘‘Actual/360’’ is specified in the applicable Subordinated Loan Supplement, the actual number of days in the Calculation Period divided by 360; (v) if ‘‘30/360’’, ‘‘360/360’’ or ‘‘Bond Basis’’ is specified in the applicable Subordinated Loan Supplement, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:

[360 x(Y2 –Y1)] + [30 x(M2 –M1)] + (D2 –D1) Day Count Fraction 360 where:

‘‘Y1’’ is the year, expressed as a number, in which the ﬁrst day of the Calculation Period falls;

‘‘Y2’’ is the year, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;

‘‘M1’’ is the calendar month, expressed as a number, in which the ﬁrst day of the Calculation Period falls;

‘‘M2’’ is the calendar month, expressed as a number, in which the day immediately following the last day of the Calculation Period falls;

‘‘D2’’ is the calendar day, expressed as a number, immediately following the last day included in the Calculation Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; (vi) if ‘‘30E/360’’ or ‘‘Eurobond Basis’’ is speciﬁed in the applicable Subordinated Loan Supplement, the number of days in the Calculation Period divided by 360, calculated on a formula basis as follows:

[360 x(Y2 –Y1)] + [30 x(M2 –M1)] + (D2 –D1) Day Count Fraction 360

128 where: