Before starting his climbing, a mountain climber first takes all equipment with him and checks for their soundness; makes his plan and determines the path.
Equipment and plan are prerequisites for a safe climbing. The safety, however, is provided by knowing where and how to use the equipment.
A sound mountain climber knows how to tie a knot, where to drive a nail and which stone to step on. Annual Report
http://www.kkb.com.tr/eng 2012 Annual Report
KKB KREDİ KAYIT BÜROSU A.Ş. Barbaros Mahallesi, Ardıç Sokak, Varyap Meridian, F Blok Ataşehir-İstanbul-Türkiye Trade Registry Number: 329148-276730
Tel. : +90 216 579 29 29 Fax : +90 216 455 45 36
A New Era just like a mountain climber, knows which information a bank needs while in Risk granting and monitoring a loan and always keeps Management these information accessible. A six-floor reinforced concrete building coated with aluminum and glass on a construction area of 8.300 m2 The inauguration • Three office floors of each 790 m2 ceremony • Data Center of our new • Two basement floors building • Two seminar halls was held on • Diesel generators automatically activating in case of power failure January 17, • Water tank as a reserve in case of necessity 2013 with the • Heating and cooling with air conditioner units attendance of connected to VRV (Variable Refrigerant Volume) Deputy Prime system Minister Ali • Air cleaning system Babacan. • Fire automation • Security systems
Produced by
www.crosscom.biz 0216 386 32 16 A NEW ERA IN RISK MANAGEMENT
We are living close to risk in every field of our lives. Several risks surround us although they might not be likely for us to notice. Even at the moments that we think we are utmost safe...
Finance sector comes on top of the list where the risk is endured the most. From the conglomerates ruling over millions of dollars to the individuals as the smallest unit of the economy, there are threats surrounding all actors of the economy.
Living side by side with the risks might be a part of our lives and businesses. However, it is possible to manage the risks and keep them under control. We may ensure security by analyzing the conditions and accompanying risks, which are currently available or may occur in the future, and by taking the accurate measures, continue with our lives with a peace of mind and protect our businesses.
We, as KKB, dissipate the clouds with the services we offer in such an economic atmosphere full of unknowns. We ensure that all economical units, including financial institutions, manage their risks successfully and we pave the way in order for them to take controllable risks.
With the radical change and restructuring process we have undergone in 2012, we are paving the way for creating the added value we provided in the financial sector as well as in the real sector by opening our information-based services to the entire real rector, individuals and organizations. We are aware that better management of credit risk by the real sector will reduce the credit risk of the financial sector.
In our Annual Report 2012, we are sharing our activities we have performed in order for the wheels of the economy to rotate securely, as well as our financial portrait with you. CONTENTS
INTRODUCTION 4 KKB at a Glance 8 KKB in Brief and Historical Progress 9 Vision, Mission, Strategies 10 Milestones
MANAGEMENT 14 Message from the Chairman of the Board 16 Message from the General Manager 18 Board of Directors and Audit Committee 24 Associate Members & Members 26 Executive Board
ACTIVITIES IN TRADITIONAL SERVICES 2012 30 The Credit Reference System (CRS) 31 Credit Bureau Score (CBS) 31 MİDES 32 Commercial Bureau System 32 Limit Control System (LCS) 32 Security Systems
NEW SERVICES 34 Check Report 35 Risk Report 35 Consumer Indebtedness Index (CII) CONTENTS
PLANS AND R&D 38 E-Report System ACTIVITIES 38 Check Index FOR 2013 39 Commercial Credit Note 39 GeoMIS - Map Based Reporting Service 40 New Risk Center Services 40 Other Planned Services
BOARD OF 44 Investments DIRECTORS 45 Innovation in Services Organizational Structuring REPORT 2012 48 49 Human Resources 50 Risk Management 52 Audit 53 Competitive Status of Company Executives 53 Financial Rights Granted, Sanctions and Punishments Applied to Board Members and Top Executives 53 Donations, Aids and Social Responsibility Projects 53 Dividend Distribution Proposal 54 Declaration of Conformity for Annual Report 55 Agenda of Ordinary General Assembly 56 Audit Committee Report KKB 2012 ANNUAL REPORT
KKB AT A GLANCE
KKB HAS UNDERGONE A RADICAL CHANGE IN 2012 AND EXPANDED ITS SERVICE PORTFOLIO AND TARGET AUDIENCE
FOLLOWING THIS CHANGE, A WIDE RANGE OF AUDIENCE FROM PUBLIC INSTITUTIONS TO BANKS, FROM PRIVATE SECTOR TO INDIVIDUALS IS ABLE TO BENEFIT FROM THE SERVICES OF KKB
Banks Legal Authorities Participation Banks
Individuals
Consumer Financing Companies
Real Sector
Leasing Companies Credit Insurance Companies Factoring Companies
4 credit bureau first andonly Turkey’s KKB is 16 total 102 9 leasing companies 2011 136 72 financial institutions 1 38 insurancecompany 136 factoringcompanies 2012 banks members
Number of Members 33 KKB MEMBERS THE NUMBEROF INCREASE IN queries inCRS % million 245,5 2012 Total 29 2011 scores forindividuals 76 generated bureau 2012 208,4 INTRODUCTION
million Number of Staff number ofaccounts 167,8 162 million STAFF the numberof INCREASE IN
% 5 KKB 2012 ANNUAL REPORT
NUMBER OF CRS QUERIES +20,5% 2008 2009 2010 2012 245.506.151
104.643.467 115.477.969 161.567.532 2011 203.711.896
NUMBER OF COMMERCIAL BUREAU QUERIES +16,9% 2008 2009 2010 2012 1.708.298
5.246 22.520 236.670 2011 1.461.539
NUMBER OF BUREAU SCORES FOR INDIVIDUALS +22,2% 2008 2009 2010 2012 208.423.568
66.066.818 97.753.788 137.698.115 2011 170.566.036
NUMBER OF CREDIT ACCOUNTS IN CRS +10,8% 2008 2009 2010 2012 167.812.059
102.988.385 116.121.333 133.463.002 2011 151.409.059
NUMBER OF MEMBERS +33,0% 2008 2009 2010 2012 136
38 77 99 2011 102
NUMBER OF staff +162,1% 2008 2009 2010 2012 76
27 27 28 2011 29
6 INTRODUCTION
MONTHLY QUERY RECORDS IN CRS +28,3% 2008 2009 2010 2012 25.571.790
12.977.627 17.133.752 20.624.099 2011 19.935.339
NUMBER OF LCS TRANSACTIONS +76,7% 2008 2009 2010 2012 33.032.732
15.202.559 12.185.474 14.426.485 2011 18.698.874
TOTAL NUMBER OF FILES IN SABAS +7,7% 2008 2009 2010 2012 19.220
9.662 12.704 16.166 2011 17.852
NUMBER OF DISPUTES IN MİDES -25,5%
2008 2009 2010 2012 229.973
119.331 255.402 329.863 2011 308.559
MİDES dısputes RESPONSE TIMES -18,8% 2008 2009 2010 2012 1 hr 20 mn
1 hr 45 mn 1 hr 55 mn 1 hr 30 mn 2011 1 hr 35 mn
7 KKB 2012 ANNUAL REPORT
KKB IN BRIEF AND HISTORICAL PROGRESS Launching innovations in every field in 2012, KKB has achieved a more dynamic structure in order to meet the expectations of the finance sector and the real sector with the change and transformation it has undergone during its 17th year of foundation. Turkey’s first Credit Bureau, Kredi Kayıt Bürosu was founded on April 11, 1995 with the initiatives of The Banks Association of Turkey and partnership of 11 leading banks of the sector.
Today, KKB has 136 members consisted of 38 banks, 9 consumer financing companies, 72 factoring companies, 16 leasing companies and 1 insurance company, which 9 of these are shareholders of KKB.
KKB was founded with the objective to facilitate the exchange of information and documents between the credit institutions (deposit banks and participation banks) and financial institutions (organizations other than credit institutions established to perform insurance, private pension fund or capital market activities or to engage in at least one of the fields of activity set out in the Banking Law as well as development and investment banks and financial conglomorate companies) through the companies to be founded by at least five banks pursuant to the Banking Law No. 5411 (Article 73/4). The member organizations exchange the credit information of their clients through KKB as of April 1999 pursuant to the same article of this Law.
Following the economic crisis in 2001, KKB has undertaken a significant role in credit decision-making processes of the banks and steady growth of the credit market.
KKB has taken its place as an exemplary organization in the world with its premium payment structure ensuring the sharing of both positive and negative credit information and encouraging this information exchange.
KKB data is widely used in allocation, monitoring and collection processes for credit risk management of the banks and other financial institutions. Each customer available in KKB database is queried 10 times a year in average and the banks are able to give more accurate decisions about their clients thanks to these queries.
Developing and growing KKB has offered some specific information, which were only open to banks to date, to the use of real and legal entities through Check Report and Risk Report systems launched in 2012.
KKB will continue to develop its new products and services and to add value to the finance sector and real sector during the upcoming year.
8 INTRODUCTION
MISSION Offering best of the information and tools needed by finance sector and real sector for effectively managing the risks
VISION Being the growing value of Turkey and the exemplary leader credit bureau of the world by exceeding the expectations with the innovative products and services
STRATEGIES
SHORT-TERM
Playing an active role in Risk Center endeavor and ensuring that the infrastructure established covers the needs in the best possible way
Starting product diversification through strategic partnerships with expert companies
Planning corporate identity and image management activities
MEDIUM-TERM
Launching and promoting different products specific to financial sector and increasing their use
Collecting data from different databases from public and private sector and opening this data to access
Launching the products planned to be offered to the finance sector
LONG-TERM
Establishing data sharing infrastructures for the sectors other than the financial sector
Providing technical and business support to credit bureaus at abroad, establishing overseas bureaux
9 KKB 2012 ANNUAL REPORT
MILESTONES
2001 Credit Application Records 1993 as well as Credit Application The credit information was Records were opened for allowed to be exchanged access in June. between the financial institutions with the amendment 2007 Internet Fraud Alert System in the Banking Law No. 3182. (IFAS) was launched in 2002 February. Information Verification System (IVS) was launched. 1995 Kredi Kayıt Bürosu (KKB), 2008 Turkey’s first and the only credit The Commercial Bureau bureau, was founded on April System database was 11. 2005 enriched by adding Mortgaged Commercial Bureau System Properties, Persons Banned was opened for the access of from Taking Part in Public the members in June. Tenders and Bad Check Information. The technical 1999 infrastructure of SABAS was Credit Reference System improved and integrated with (CRS) was established in April. KKB system. With the amendment made in 2006 the Banking Law on December MIDES, Information 17, 1999, banks, insurance Verification and Emergency companies, consumer financing Update Systems turned 2009 companies as well as other into interactive information “Bad Check Query System” companies approved by BRSA exchange platforms with a was established in order to were allowed to become a fully online infrastructure. allow members to search bad member to KKB. In addition to this, Limit check information shared on a Control System (LCS) was daily basis. implemented within the scope of the arrangement set out in 2000 article 9 of Bank Cards and Customer Disputes Processing Credit Cards Law. System (MİDES) was launched in April and SABAS in September. In November, MİDES was moved into an electronic environment allowing to respond a customer dispute within maximum two hours.
10 INTRODUCTION 2012
4th version of Bureau Scores, which are used since 2003, were offered for the use of Turkish Identification Number (MERNİS) the banks. Database was integrated to Credit Risk and Check Reports demand process.
Electronic report request and delivery processes (E-Report) were launched. Risk Center Service Agreement was KKB Internet branch was also launched in concluded with The Banks Association of accordance with this. Turkey (TBB).
In line with the changing vision and Entire operational and data storage- needs, some changes were applied in the exchange activities of Risk Center, organizational structure. Strategic Planning established under TBB, were transferred to and Corporate Relations Department, Legal KKB. Compliance and Internal Audit Department and Human Resources and Financial Affairs Directorate were founded.
KKB moved to its new building constructed according the strategy of the new period. New KKB logo and corporate identity were launched in line with the changed KKB mission and vision..
The Data Center, which was operated by outsourcing since its foundation, was incorporated to KKB.
Consumer Indebtedness Index was launched for bringing the risk management systems of the banks one step further.
11
MANAGEMENT
The passion for reaching high speeds makes Formula 1 the most followed sport of the world. There is a risk of accident at any moment with the speeds reaching to 350 km/h in the races and the competition arising with the ambition to win.
The measures taken for making this risky atmosphere safer are; checkered flag and security car in case the road safety is endangered, pit stops, radio for continuous communication, secure cockpit and drivers’ outfit...
warns its members with checkered flag for the credit applications received from high- risk customers. And with the high credit rating provided for the people paying their credit debts regularly, KKB ensures that these customers get the pole position in the race.
13 KKB 2012 ANNUAL REPORT
MESSAGE FROM THE CHAIRMAN OF THE BOARD
Risk management becomes increasingly important in the economy that is maintaining its stability against the global economic balances and in the finance sector which is strengthening its financial structure.
ESTEEMED STAKEHOLDERS,
GLOBAL ECONOMIC balances The global economy enters the year 2013 in an atmosphere where the country economies become more interdependent. When we look at the economic markets, we see that a significant slowdown in a regional economy turns into a global slowdown by being spread through foreign trade and finance markets. During the same period, we’ve witnessed that the slowdown in Europe has caused crisis in some countries, the stagnation in Far East continues and the US economy, which appear to be more active, becomes more vulnerable against internal and external developments. With the impact of these developments, we’ve notified that the growth speed of the economies such as China and India, which have grown and developed quickly during the previous year, also slowed down.
THE ECONOMIC INDICATORS PROGRESS POSITIVELY DESPITE THE EXTERNAL FACTORS We have significantly felt the impacts of the global economical developments on the economy of our country. The Turkish economy gained acceleration in 2010 and 2011 after the global economical crisis during the last quarter of 2008 and it is estimated that the Turkish economy will close the year 2012 with a growth of approximately 3 percent. Compared to the fluctuations in the other countries’ economies, particularly in Europe, our economy has overcome this period successfully.
This slowdown in our economy was triggered by the external conditions on side and the cautious economical policy on the other side. As a result of effective studies and foresights of our economy management, the macroeconomic stability has been maintained in Turkey, worries on current deficit have decreased, Turkey’s credit rating has increased and inflation has slowed down.
FISCAL DISCIPLINE IN FINANCIAL SECTOR When we evaluate the banking and finance sector in the light of these developments, we see that our economy, which had a fiscal discipline after 2001 and restructured the banking sector successfully, has achieved a healthy structure. Our strong stance against the last global fluctuation and the increase in our credit rating to “investable” are the most important indicators regarding this.
14 MANAGEMENT
THE IMPORTANCE OF EFFECTIVE RISK MANAGEMENT IN BANKING INCREASES An effective risk management is the key for the banking sector to become stronger and to grow. Continuing to be a part of risk management insight of the banks and financial institutions and adding value to the development of the sector, KKB has brought a new risk management understanding to the real sector, in addition to the benefits it provides to the finance sector, with the new products and services launched in 2012.
WE LAUNCHED OUR NEW SERVICES KKB offers services for allowing the banks and finance institutions to determine the limit and risk details of their customers, to determine their bad checks and to carry out credit ratings in the light of such data and New products and services KKB has expanded the scope and target audience of these services. KKB has launched the Check Report in April 2012 and the Risk Report Infrastructure improvement in September 2012 and offered them to the use of the individuals and organizations through all banks. This allows individuals controlling their transactions own risks, as well as accurately controlling the risks of the individuals and organizations they are trading with. New organizational restructuring CHANGE, DEVELOPMENT AND SUSTAINABLE SUCCESS... Having a successful year in 2012 with the new products and services offered to its members, sector and consumers, infrastructure improvement activities and new organizational restructuring, new initiatives and projects launched, KKB has offered important services for both financial sector and real sector actors and brought a new risk management understanding to the sector. I would like to express my gratitude to our staff and Board of Directors who contributed to the success of KKB, adopting a change, development and sustainable success understanding, in 2012. With the services we offer, we pave the way Sincerely yours, for the individuals and organizations to evaluate their risks accurately.
Mustafa Aydın
15 KKB 2012 ANNUAL REPORT
MESSAGE from the general manager
We closely follow the requirements of the economic conjuncture and produce proactive solutions. We launch the new services needed and offer our services to all individuals and real sector for the effective use of risk management by all units.
ESTEEMED SHAREHOLDERS,
RISK MANAGEMENT INCREASINGLY BECOMES MORE IMPORTANT 2012 has been a year where the impacts of the crisis continued in the global economic markets. In our country, it’s seen that the risk management concerns have become more prominent in the real sector, not only in the financial sector, together with the measures on slowing down the credit growth and conscious cooling down in the economy.
In addition to the constriction caused by the slowdown in the growth; building a trust in trading with the checks, which have a vital place in the Turkish business life, has become more significant with the revoking of imprisonment punishment imposed to bad checks as a result of the new arrangement in the Check Law in February. A need for a system ensuring a safe use of “check”, which is among the most important financial resources of the real sector actors, has emerged.
With the Check and Risk Reports developed in 2012, KKB presented valuable source of information for risk management not only fort he transactions made by checks, notes or charge accounts, but also for all other commercial decisions that involve counter party risks. Easily accessed with low costs, these reports have started a new era in the business life. These reports allowed the relevant parties to manage their credibility and the risks they are exposed to by knowing the risks of both themselves and the other parties they are having a business relationship. With online and mobile versions, these reports ensure accessing to information in the pace required by the flow of the business life.
RISK CENTER UNDER TBB 2012 has been a year where concrete steps were taken for the Risk Center founded under TBB to go into action. The year 2012 has seen the publication of the regulations and appointment of the Risk Center Management that are critical for the operation of the new structure with significant results in terms of the real sector and macro economy, in addition to the finance sector. In line with the Regulation published with the approval of BRSA and the resolutions of the Risk Center Management, a service agreement was concluded between TBB and KKB for carrying out all operations related to collecting, combining and sharing the information and an important threshold has been passed.
16 MANAGEMENT
OUR NEW SERVICE BUILDING IS OPENED Taking it as its most important mission to securely increase the level of added value created in the financial sector for managing the exposed credit risks, KKB has completed the construction of its new building and the data center within the building as of the end of 2012 and moved in. By solving the problem on building and data center which constituted an important obstacle in expanding and % deepening the scope of the service provided, KKB has received the physical and 21 technological infrastructure aspired for long years. The trust given to KKB and the INCREASE significance of the added value it creates was demonstrated at the highest level with the attendance of top level executives of the finance world and Deputy Prime IN NUMBER Minister Ali Babacan to the inauguration ceremony of the building. OF TOTAL
WE HAVE CLOSED A YEAR FULL OF ACHIEVEMENTS QUERIES 2012 has been a productive year where we have realized what we planned, successfully implemented our strategic targets and undergone a rapid development and transformation. Carrying out its works with a closed circuit system between the banks and assuming a critical role in this field since its foundation, KKB has taken important steps to create a similar benefit for the real % sector. 33 The number of our corporate members has increased to 136, with 33% increase INCREASE IN compared to the previous year. The total number of queries in CRS increased by 21% and exceeded 245 million. This outcome indicated that KKB query tools NUMBER OF are substantial risk management tools used both in decision-making process and MEMBERS collection process.
OUR ORGANIZATIONAL STRUCTURE HAS BEEN RENEWED In accordance with the changing vision and needs, we have performed important We have implemented changes in our organizational structure. The Strategic Planning and Corporate Communication Department, which meets all communication, planning, significant steps product management and analytic needs of KKB, has been changed into Legal for Risk Center Compliance and Internal Audit Department for ensuring compliance with the founded under TBB laws and regulations. The Financial and Administrative Affairs Department has changed into Human Resources and Financial Affairs Directorate, while the to get into action. existing IT Department has continued with its restructuring throughout the year. We have renewed The number of our staff, which was 29 at the beginning of the year, has increased to 76 as of the end of 2012. our organizational structure in line with the We have completed the transactions related to our new logo, which is created by combining the colors and signs reflecting the innovation as well as dynamism increasing number of of our organization by complying with the mission and vision of KKB, and also services and growing complete the operations related to our corporate identity. target audience. In 2013, KKB will continue to meet the risk management needs of both its members and the real sector with innovative products and services with the same enthusiasm and dynamism.
I would like to express my gratitude to our shareholders and members for their trust and support to our organization, to our Board of Directors for the power and support they provided with the meetings and resolutions and to all my colleagues for their efforts in all processes and activities in 2012, which we call as the year of change and transformation for KKB.
Sincerely yours,
Kasım Akdeniz
17 KKB 2012 ANNUAL REPORT
BOARD OF DIRECTORS
Mehmet Gökmen Mehmet Veysel Abdurrahman Mustafa Uçar Sezgin Sunman Özciğer Aydın
18 MANAGEMENT
Osman İsmail Mehmet Ertuğrul Mehmet Hakkı Cantekin Bozgedik Sindel İmamoğlu
19 KKB 2012 ANNUAL REPORT
BOARD OF DIRECTORS AND Audit Committee
Mustafa Aydın
Chairman of the Board Appointment Date: 21.09.2012
DenizBank A.Ş. Vice General Manager; Retail, SME and Agricultural Credits Allocation Group
Mustafa Aydın was born in 1967 in Ordu. Aydın has graduated from Ankara University Political Sciences Faculty Public Administration Department. Aydın started his professional career in 1987 as an Inspector in Töbank and continued with Demirbank, Bank Ekspres and DenizBank, respectively. Worked as Branch Manager, Marketing Group Manager and Regional Manager for DenizBank, Aydın works as DenizBank Retail, SME and Agricultural Credits Allocation Group Vice General Manager as of May 2007.
Mehmet Sezgin
Vice Chairman of the Board Appointment Date: 03.09.2012
Garanti Ödeme Sistemleri A.Ş. Co-Chairman of the Board
Mehmet Sezgin was born in 1962 in Antalya. After completing his high school education in Barrington High School, Sezgin has graduated from ODTÜ Business Administration Faculty and received his MBA degree from University of Massachusetts. Sezgin started his professional career in 1984 as a Consultant in PwC and worked as an Inspector for Interbank from 1985 to 1988. Sezgin started to work for Pamukbank in 1990 as Bank24 and Credit Cards Manager and then appointed as EuroPay/MasterCard Eurasia Region General Manager in 1993. Sezgin worked as General Manager of Garanti Payment Systems from 1999 to 2012. Sezgin was appointed as Global Payment Systems Chairman of BVBA, the second biggest bank of Spain, in 2012 and continues as Co-Chairman of the Board of Garanti Payment System. Sezgin is also a Board member of the Interbank Card Center (BKM) and MasterCard Europe.
Osman Mehmet Sindel
Board Member Appointment Date: 20.09.2012
Akbank T.A.Ş. Vice General Manager; Payment Systems
Osman Mehmet Sindel was born in 1970 in Istanbul. Sindel has graduated from Boğaziçi University Business Administration Faculty.
Before joining Akbank, Sindel has worked in executive positions of various private sector banks. Sindel has started to work as Payment Systems Vice General Manager of Akbank in November 2010.
20 MANAGEMENT
Abdurrahman Özciğer
Board Member Appointment Date: 12.09.2012
Şekerbank T.A.Ş. Vice General Manager; Retail Banking
Abdurrahman Özciğer was born in 1966 in Antalya. Özciğer has graduated from Ankara University Political Sciences Faculty Public Administration Department. Özciğer started his professional career as an Assistant Inspector for Yapı Kredi Bankası in 1990 and appointed as Credit Card Customer Services Manager for Vakıfbank within the same year. He worked as Retail Banking Operation Director for Alternatifbank in 1998, Card Operation Director for Koçbank in 2002 and Management Consultant for Çalıkbank/ Sanpaolo Bank in 2006. Özciğer works as Retail Banking Vice General Manager for Şekerbank T.A.Ş. as of September 2006.
Veysel Sunman
Board Member Appointment Date: 13.09.2012
T.C. Ziraat Bankası A.Ş. Head of Department; Credit Risk Monitoring
Veysel Sunman was born in 1967 in Sakarya and graduated from Marmara University Press Faculty Journalism and Public Relations Department.
Sunman has worked as a Specialist in Credit Risk Monitoring Department of Pamukbank T.A.Ş. from 1988 to 1994 and then worked as Director - Manager in Credit Monitoring Department of Osmanlı Bankası A.Ş. from 1994 to 2001. Sunman continued his career as Head of Department of Credit Risk Monitoring for T. Halk Bankası A.Ş. from 2002 to 2005 and Head of Department of Internal Control and Monitoring Center for MNG Bank from 2005 to 2007. Sunman works as Head of Department of Credit Risk Monitoring for T.C. Ziraat Bankası A.Ş. as of 2007.
İsmail Hakkı İmamoğlu
Board Member Appointment Date: 10.09.2012
T. Halk Bankası A.Ş. Vice General Manager; Retail Banking
İsmail Hakkı İmamoğlu was born in 1960 in Trabzon. İmamoğlu has graduated from Ankara Economical and Administrative Sciences Academy Management Sciences Faculty. He started his professional career as an Inspector for T. Vakıflar Bankası in 1984. İmamoğlu has worked as Supervisory Board Vice Chairman, General Manager Executive Assistant, Board of Directors Secretary, Branch Manager and Head of Department for the same Bank. Then, he worked as Supervisory Board Chairman for Sümerbank and Tekstilbank and as Coordinator for Bayındırbank. İmamoğlu has worked as Regional Coordinator and Tradesmen-SME Banking-2 Vice General Manager respectively from 2003 to 2011 for Halk Bankası and works as Retail Banking Vice General Manager as of July 2011.
21 KKB 2012 ANNUAL REPORT
Ertuğrul Bozgedik
Board Member Appointment Date: 05.09.2012
T. İşbankası A.Ş. Vice General Manager; Credits
Bozgedik was born in 1964 in Kayseri and has graduated from Ankara University Political Sciences Faculty Economics Department. Starting his career as Intern Assistant Inspector in Supervisory Board for İşbankası in 1986, Bozgedik was promoted as Non-Performing Credits Assistant Manager in 1995 and Regional Manager of Enterprise Credits Directorate in 1999. Bozgedik was appointed as Regional Manager of Non-Performing Credits Directorate in 2002, Enterprise Credits Manager in 2004 and Chairman of Supervisory Board in 2008. Bozgedik was appointed as Vice General Manager on April 13, 2011.
Mehmet Cantekin
Board Member Appointment Date: 04.09.2012
T.Vakıfbank T.A.O. Chief Deputy General Manager; Credit Monitoring-Regional Directorates- Strategy Development-Economic Researches
Born in 1969 in Niğde, Mehmet Cantekin has received his bachelor’s degree from Ankara University Political Sciences Faculty Finance Department and master’s degree from University of Illinois Accounting Department. After working for various banks and public institutions, Cantekin has worked as Head of Department in BRSA. Mehmet Cantekin joined Vakıfbank in 2007 as Deputy General Manager and appointed as Chief Deputy General Manager in 2010.
Mehmet Gökmen Uçar
Board Member Appointment Date: 11.09.2012
Yapı ve Kredi Bankası A.Ş. Assistant General Manager; Retail Credits
Mehmet Gökmen Uçar was born in 1975 in Kayseri. Uçar has graduated from Boğaziçi University Economics and Administrative Sciences Faculty Economics Department. Uçar started his professional career in 1998. He worked as an Independent Auditor for Başaran Nas Bağımsız Denetim ve S.M.M.M. A.Ş. (PwC) from 1998 to 2002 and received “Certified Public Accountant” title. Uçar joined Koçbank in 2002 and worked as Budget Planning and Management IT Systems (MIS) Director in Financial Control and Planning Department until 2005. Uçar assumed various executive missions on strategy, budget and planning in Italy, Germany and Austria under UniCredit Group from 2005 to 2007. Uçar transferred to Yapı ve Kredi Bankası in 2008 and respectively worked as Capital Management, Expense Control and Allocation Director, Head of Financial Reporting Group and Financial Reporting and Accounting Director. Uçar was appointed as Financial Reporting and Accounting Group Director in 2011 and works as Retail Credits Assistant General Manager as of August 2012.
22 MANAGEMENT
İzzet Metcan
Audit Committee Member Appointment Date: 23.03.2012
Şekerbank Operation Department Manager
İzzet Metcan was born in 1969 in Istanbul.
Metcan has received his Bachelor’s and Master’s degrees from Istanbul University Philosophy Department. He still continues with his Doctorate studies in Maltepe University Philosophy Department.
He respectively worked for İktisat Bankası, İnterbank, Egebank and Teknoloji Holding/Universal Card Services.
Metcan still works as Operation Department Manager for Şekerbank.
Faruk Ergin
Audit Committee Member Appointment Date: 10.05.2012
Garanti Bankası Retail and SME Credits Department Manager
Faruk Ergin was born in 1965 in Samsun.
Ergin has received his Bachelor’s degree from Ankara University Political Sciences Faculty Business Administration Department.
He respectively worked for Koç Holding, G. Finansal Kiralama, Bank Ekspres, Narin Tekstil, Finansbank and Garanti Bankası.
Ergin still works as Retail and SME Credits Department Manager for Garanti Bankası.
23 KKB 2012 ANNUAL REPORT
ASSOCIATE MEMBERS
Denizbank T. Garanti Akbank Şekerbank A.Ş. Bankası A.Ş. T.A.Ş. T.A.Ş. www.denizbank.com.tr www.garanti.com.tr www.akbank.com.tr www.sekerbank.com.tr
(TL 675.000) (TL 675.000) (TL 675.00) 9,09% 9,09% (TL 675.000) 9,09% 9,09%
(TL 675.000) (TL 1.350.000) 9,09% 18,18%
(TL 675.000) (TL 675.000) (TL 1.350.000) 9,09% 9,09% 18,18%
T. İş T. Halk Yapı ve Kredi T. Vakıflar T.C. Bankası A.Ş. Bankası A.Ş. Bankası A.Ş. Bankası A.Ş. www.vakifbank.com.tr www.isbankasi.com.tr www.halkbank.com.tr Ziraat Bankası A.Ş. www.yapikredi.com.tr www.ziraatbankasi.com.tr
24 MANAGEMENT
MEMBERS
Acar Faktoring A.Ş. Doğa Faktoring Finans Hizmetleri A.Ş. Optima Faktoring Hizmetleri A.Ş. ACL Finans Faktoring Hizmetleri A.Ş. Doğan Faktoring A.Ş. Orfin Finansman A.Ş. Ak Faktoring Hizmetleri A.Ş. Eko Faktoring A.Ş. Pamuk Factoring A.Ş. AK Finansal Kiralama A.Ş. Ekspo Faktoring A.Ş. Para Finans Faktoring A.Ş. Akdeniz Faktoring A.Ş. Eren Finans Faktoring Hizmetleri A.Ş. Prime Faktoring Hizmetleri A.Ş. Akın Faktoring Hizmetleri A.Ş. Erişim Finans Faktoring Hizmetleri A.Ş. Saray Faktoring A.Ş. Aktif Yatırım Bankası A.Ş. FFK Fon Finansal Kiralama A.Ş. Şeker Faktoring Hizmetleri A.Ş. Albaraka Türk Katılım Bankası A.Ş. Fiba Faktoring A.Ş. Şeker Finansal Kiralama A.Ş. ALJ Finansman A.Ş. Fibabanka A.Ş. Şeker Mortgage Finansman A.Ş. Alternatif Finansal Kiralama A.Ş. Finans Faktoring Hizmetleri A.Ş. Siemens Finansal Kiralama A.Ş. Alternatifbank A.Ş. Finans Finansal Kiralama A.Ş. Şirinoğlu Faktoring A.Ş. Anadolu Faktoring Hizmetleri A.Ş. Finansbank A.Ş. Societe Generale (SA) Anadolubank A.Ş. First Factoring A.Ş. Strateji Faktoring Hizmetleri A.Ş. Analiz Faktoring A.Ş. Garanti Factoring Hizmetleri A.Ş. Sümer Faktoring Hizmetleri A.Ş Ar Faktoring Finansal Hizmetler A.Ş. Garanti Finansal Kiralama A.Ş. T.İhracat Kredi Bankası A.Ş. (Türk Eximbank) Arap Türk Bankası A.Ş. Girişim Faktoring A.Ş. Tam Faktoring A.Ş. Arena Faktoring A.Ş. Global Faktoring Hizmetleri A.Ş. TEB Faktoring A.Ş. Artı Finans Faktoring Hizmetleri A.Ş Habib Bank Limited TEB Tüketici Finansman A.Ş. As Faktoring Hizmetleri A.Ş. Hepkon Finans Factoring Hizmetleri A.Ş. Tek Faktoring Hizmetleri A.Ş. Asya Katılım Bankası A.Ş. HSBC Bank A.Ş. Tekstil Bankası A.Ş. Atılım Faktoring A.Ş. Huzur Faktoring A.Ş. Tekstil Factoring Hizmetleri A.Ş. Bank Mellat ING Bank A.Ş. The Royal Bank of Scotland N.V. Bankpozitif Kredi ve Kalkınma Bankası A.Ş. ING Faktoring A.Ş. Trend Finans Faktoring Hizmetleri A.Ş. Başer Faktoring A.Ş. ING Finansal Kiralama A.Ş. Tuna Faktoring Hizmetleri A.Ş. Bayramoğlu Faktoring A.Ş. İş Faktoring Finansman Hizmetleri A.Ş. Türk Ekonomi Bankası A.Ş. BERG Faktoring Hizmetleri A.Ş. İş Finansal Kiralama Turkish Bank A.Ş. BNP Paribas Finansal Kiralama A.Ş. Kapital Faktoring Hizmetleri A.Ş. Turkish Faktoring Hizmetleri A.Ş. Burgan Bank A.Ş. Katar Faktoring Finans Hizmetleri A.Ş. Türkiye Finans Katılım Bankası A.Ş. Burgan Finansal Kiralama A.Ş. Kent Faktoring A.Ş. Türkiye Kalkınma Bankası A.Ş. C Faktoring A.Ş. Koç Fiat Kredi Tüketici Fin.A.Ş. Türkiye Sınai Kalkınma Bankası A.Ş. Çağdaş Faktoring A.Ş. Koç Tüketici Finansmanı A.Ş. Turkland Bank A.Ş. Citibank A.Ş. Kredi Alta Faktoring A.Ş. Ulusal Faktoring A.Ş. Coface Sigorta A.Ş. Kredi Finans Faktoring Hizmetleri A.Ş. Vakıf Finansal Kiralama A.Ş. Çözüm Finans Faktoring Hizmetleri A.Ş. Kuveyt Türk Katılım Bankası A.Ş. VFS Finansal Kiralama A.Ş. Creditwest Faktoring Hizmetleri A.Ş. Lider Faktoring Hizmetleri A.Ş. Volkswagen Doğuş Tüketici Fin. A.Ş. DD Konut Finansman A.Ş. Makro Faktoring A.Ş. Yapı Kredi Faktoring A.Ş. Değer Faktoring A.Ş. Mercedes-Benz Fin.Türk A.Ş. Yapı Kredi Finansal Kiralama A.O. Demir Faktoring A.Ş. Merkez Faktoring Hizmetleri A.Ş. Yaşar Factoring A.Ş. Deniz Faktoring A.Ş. Mert Finans Faktoring Hizmetleri A.Ş. Yeditepe Faktoring Hizmetleri A.Ş. Deniz Finansal Kiralama A.Ş. MET-AY Faktoring Finans Hizmetleri A.Ş. Ziraat Finansal Kiralama A.Ş. Destek Finans Faktoring Hizmetleri A.Ş. MNG Faktoring Hizmetleri A.Ş. Zorlu Faktoring A.Ş. Deutsche Bank A.Ş. Nurol Yatırım Bankası A.Ş. Devir Faktoring Hizmetleri A.Ş. Odea Bank A.Ş.
25 KKB 2012 ANNUAL REPORT
EXECUTIVE board Kasım Akdeniz has an experience of 25 years in the banking sector and has graduated from Dokuz Eylül University Economics Department. Akdeniz started his career in 1987 in Yapı Kredi Supervisory Board. He has assumed management responsibilities at manager, director and head of group levels including establishing the credit products and processes, establishing and operating credit allocation and monitoring systems, establishing credit policies and fields of compliance from 1996 to 2011.
During this period, Akdeniz has taken place as a member in workgroups related to the preparation of the Banking Law and relevant regulations before TBB, as well as in KKB Commercial Bureau Establishment Workgroup, Brokerage Costs on Credits Workgroup and Credit and Provisions Workgroup and as a chairman in Credit Guarantee Fund (KGF) Workgroup and Risk Center Workgroup. Kasım Akdeniz General Manager As a result of the endeavor carried out by Brokerage Costs on Credits Workgroup with BRSA, KKDF (Resource Utilization Support Fund/RUSF) on commercial credits and the stamp duty liability on the assurance documents were reduced to zero. The results of this endeavor were published in November-December 2003 issue of Active Magazine.
As a result of the activities carried out by KGF Workgroup, it’s been provided that the banks become a member to KGF A.Ş. and “Treasury Supported KGF Guarantee” was implemented.
As a result of the activities carried out by Risk Center Workgroup, the endeavor on law and regulation related to the foundation of Risk Center under TBB and the design of the new structure were completed.
Akdeniz has lectured trainings and conferences related to banking sector before Yapı Kredi, TBB, various universities and organizations. He worked as a “mediator” related to some articles and books submitted to TBB.
Akdeniz has worked as a Board Member of KKB A.Ş. from 2005 to 2011, including Board Chairmanship in 2007, and appointed as General Manager to KKB A.Ş. as of October 2011.
Koray Kaya has an experience of 17 years in the banking sector and has graduated from Yıldız Technical University Engineering Faculty Civil Engineering Department. Kaya started his career in Garanti Bankası in 1995. He has taken a significant role in establishing one of the first retail credit scoring systems. During his term in Garanti Bankası, Kaya designed credit automation systems for consumer credits, credit cards and small enterprise credit application. Kaya started to work as a consultant for Experian in 2004.
Kaya has taken place in the projects related to consultancy and credit decision automation almost in every bank. He introduced the good/ bad definition on customer level, which is used for the scorecard Koray Kaya infrastructure of KKB. Kaya worked as Retail Credits Allocation Strategic Planning and Department Director for TEB from 2005 to 2009. Starting to work Corporate Relations Department as Head of Retail Credits Monitoring and Collection Department Vice General Manager for Akbank in 2009, Kaya was appointed as head of Retail Credits Allocation Department in January 2012. Kaya continues as Strategic Planning and Corporate Relations Vice General Manager of KKB as of May 2012.
26 MANAGEMENT
Abdullah Bilgin has an experience of 27 years in business life and has graduated from Middle East Technical University (ODTÜ) Computer Engineering Department in 1985. Bilgin has received his Master’s degree from Istanbul University International Relationships Department in 2002.
Bilgin started his career in Bilpa A.Ş. in 1986 and assumed various management responsibilities in IT Department of Yapı Kredi Bankası until 2012; finally, he was responsible for Group Directorate in Alternative Distribution Channels. Bilgin works as IT Department Vice General Manager for KKB as of November 2012.
Abdullah Bilgin IT Department Vice General Manager Ali Kemal Cenk has an experience of 13 years in business life and has graduated from Middle East Technical University (ODTÜ) Business Administration Department. Cenk has worked in various positions as Banks Sworn Auditor, Head of Group, 2011 FSAP Talks Coordinator and Deputy Chairman of Audit Department in BRSA from 2000 to 2012. Within this scope, he has assumed a significant role in the project group of Risk Oriented Audit Project where BRSA has restructured its audit system. Cenk has applied a 1-month application for Risk Oriented Audit Project related to FED audits and carried out works within the scope of FDIC. Cenk has completed his MBA and Finance Master’s degree with Boston College MBA-MSF dual degree during the period of 2007 to 2009. In addition to the audits of several different legal issues, internal systems and information management during BRSA audits, he has also carried out audits at Netherlands and Germany.
In addition to several trainings in risk management, Basel II-III, internal audit and banking at the USA, he has also received trainings and certificates on COBIT, TFRS, International Accounting Standards, Ali Kemal Cenk Oliver&Wyman Risk Management, European Central Bank Eurosystem Legal Compliance and Internal Macro-Micro Financial Audit. Cenk works as Legal Compliance and Audit Department Internal Audit Department Vice General Manager for KKB as of April Vice General Manager 2012.
İnci Tümay Kesici has an experience of 18 years in business life and has graduated from Boğaziçi University Business Administration Department in 1995.
Kesici started her career in Ernst & Young Denetim company in 1995. After quitting her office as Manager from Ernst & Young Denetim company in 2000, she worked as CFO for Yapı Kredi Leasing from 2000 to 2012. Kesici works as Human Resources and Financial Affairs Department Manager for KKB as of May 2012. İnci Tümay Kesici Human Resources and Financial Affairs Department Manager
27
ACTIVITIES IN 2012
Trapeze is one of the areas where the word “risk” becomes more expressive. Power, harmony, timing, coordination, flexibility and fitness... If one of them lacks, it is impossible to become successful. Is it possible to perform this show for long years without any single mistake? Maybe you could. But what about the hands you expect to hold you?
allows accessing to accurate information through the risk management tools it has established. KKB holds you when you jump and ensures that the show continues uninterruptedly. KKB protects you like a net underneath when you miss the hand.
29 KKB 2012 ANNUAL REPORT TRADITIONAL SERVICES
CREDIT REFERENCE SYSTEM (CRS)
Credit Reference System (CRS) is an information exchange system developed in accordance with KKB’s foundation purposes. Any kind of detailed information related to retail credit products is exchanged among the Member institutions through this infrastructure. Accordingly, With CRS, the financial the financial institutions are able to take any kind of risk decision related institutions are able to to their customers based on concrete data. Each financial institution take any kind of risk is able to manage their own risks well and offer credit products to right customers with right conditions. It is both ensured in the macro scale decision related to their that the financial sector grows healthy and required financial support is customers based on provided to the real sector.
concrete data. With the queries performed by KKB member Banks and other financial institutions on CRS, they are able to access online to;
• All open account details of the consumer, where the consumer is a “debtor” or “guarantor”, • Closed account details during the last five years, • Application details during the last six months, and • Credit repayment performance details for the last 36 months
only within a few seconds. In this way, the total credit risk and payment habits of the consumer can be determined within a very short period of time and credit decisions can be taken promptly (for instance; granting credit through SMS). Such information allows the members to offer credit products to the consumers within a very short period of time and perform their risk assessments efficiently.
The Members submit the credit payment details of their customers to CRS on a monthly basis as up-to-date and retrospectively with the predetermined information and format. KKB transfers the retail credit product details received from the members to CRS Database without making any change, combination, addition and similar as a standard and opens these for sharing with the other members. Additionally, the information available in the Risk Reports also comes from this data pool. CRS is not a black list but contains positive credit repayment information as well. Thus, the customers have the opportunity to easily introduce themselves to an institution that they will work with for the first time. The credit accounts are updated by the Members on a monthly basis and the application records are instantly created and opened for sharing.
The benefits provided by the system can be summarized as follows:
• Minimizes the risk of retail credit. • Encourages the retail credit customers to repay regularly. • Increases the use of retail credits. • Increases the volume of the credit granted by measuring the credit risk. • Ensures that credit decisions are taken quicker and more effectively. • Keeps problematic customers out of KKB member institutions.
Query within seconds • Ensures taking rational decisions in determining the new credit limits of existing customers.
30 ACTIVITIES IN 2012
CREDIT BUREAU SCORE (CBS)
This is a numerical indicator calculated for foreseeing the repayment performance of a consumer compared to another consumer for the credit received or will be received from a KKB member institution. CBS is a decision supporting product generated by using a statistical model. It may also be defined as the summary of information obtained related to the customer through the Credit Reference System. CBS facilitates It allows the risk decisions to be taken by the credit institutions to become access to credit rational and standard, and it also shortens the decision-making process significantly. This makes it possible for the customers to have access to the products credit products within a shorter period of time. ! The models used in calculating CBS are renewed with certain intervals in order to maintain and increase the estimation capacity. Third generation CBS model has been replaced with a more strengthened fourth generation in 2012.
Types of Characteristics Used in Scoring Model: Efficiency= can be considered “credit utilization intensity”.
The difference of bureau scores from the models specifically developed by each institution for their own portfolio is that it reflects the profile of all credit users within the country. One of the most significant contributions of the bureau scores is to display the risk level of the person when compared to the country in general.
MİDES
The Customer Disputes Processing System (MIDES) is a system allowing a consumer to announce his/her dispute related to his/her information shared Electronic in Credit Reference System with all members and departments. Thanks to dispute MİDES, the disputes of the customers are evaluated and finalized within a short period of time. In case any problem is determined in the information shared as processing a result of the examination, then the related amendment is made within a short innovation period of time without requiring any request.
The average response time for the disputes to date by KKB members is 1 hour 20 minutes. However, taking into consideration the complex nature of the problem, the unit that is directly responsible for the problem is allowed twenty-four hours to perform the necessary investigation and respond to the customer in question. In comparison to similar systems in other countries regarding evaluation and finalization of customer disputes, MIDES can be Average described as the fastest consumer dispute processing system. response The disputes against the Risk Reports can be submitted electronically by using times for hour the reference number of the relevant record through online transactions section 1 disputes through kkb.com.tr. 20 KKB acts as a center for managing and supervising communication between minutes the consumer and the member concerning transactions performed in MIDES. KKB is also responsible for making SABAS-related findings obtained in MIDES applications available for sharing on SABAS, evaluating findings to improve data quality in the CRS and improving and upgrading software and hardware infrastructure components of MIDES in line with advances in technology. KKB closely monitors the relationships of its consumers with KKB and its Members as well as the business transactions carried out, incidents and problems encountered in this context and in line with this approach, endeavors towards transforming MIDES into a much more efficient system by launching new projects. 31 KKB 2012 ANNUAL REPORT
COMMERCIAL BUREAU SYSTEM
Commercial Bureau System is established completely with own Commercial Bureau resources of KKB with very advanced features in order to keep the System is established credit registry information of commercial companies. Launched in 2005, Commercial Bureau System offers a significantly rich information set, completely with own which might be needed for evaluating the risk of a legal entity customer, resources of KKB in case of any need. The system shares company and real entity identity information, capital based relationship information, credit accounts and repayment information, collaterals, import and export information as well as bad check information.
The utilization intensity of the system increases in accordance with the enrichment of the information shared in the system and the increase in the number of the Members providing information to the system. In this way, Commercial Bureau System has become a significant tool for the credit evaluation processes of the Members related to legal entity customers.
The Corporate Workgroup (constituted of representatives from credit departments of KKB Member institutions) established in 2012 carries out active performance for improving the system and increasing its use. Within this scope, there are some significant progresses related to increasing the data quality. Additionally, through the reports created by using the bad check data exchanged in the System on a daily basis, special warning messages are delivered to KKB Member institutions, who are a customer of the companies whose check dishonored on that day.
LIMIT CONTROL SYSTEM (LCS)
Launched by KKB, Limit Control System (LCS) is the first and only credit bureau system in the world operates as online and real-time. The system provides information exchange for credit card accounts pursuant to the Bank Card and Credit Cards Law. The total limit of the cards of a customer, who starts using a credit card for the first time within the scope of the law, owned from all banks shall not exceed two times of his/her income for the first year and four times for the second year. LCS system ensures that the credit card limits collected from all institutions granting credit card in the sector are combined on customer basis and managed by the institutions offering single limit practice.
SECURITY SYSTEMS
FRAUDULENT INFORMATION / DOCUMENT / DECLARATION / APPLICATION DETECTION SYSTEM (SABAS) Serving to the finance sector for 10 years, SABAS is a system for ensuring that all information concerning fraud acts and related risks are shared among the Members and that all necessary measures are taken in accordance with a certain discipline. SABAS has three fundamental objectives;
32 ACTIVITIES IN 2012
• To protect citizens (consumers and customers of KKB members) against risk and financial loss by preventing the unauthorized use of their information, documents and assets by others (personal information thieves, money launderers, fraudsters, counterfeiters, etc.) • To protect KKB Members against risk and to allow them to minimize their losses, by notifying them in advance about actual and potential risk arising out of malicious acts documented in SABAS. • By providing Members with a means of exchanging information in accordance with standards and rules free from personal opinion, belief and prejudice, to protect them against legal grievances that could have much graver consequences than any loss arising out of unauthorized attempts monitored by SABAS. Preventing the use
With SABAS, KKB Members are able to minimize their risks and also of the information protect the real and legal entity customers from getting abused due to determined by IFAS such attempts.
Equipped with KKB’s information sharing platform that distinguishes SABAS from similar systems around the world, KKB Members are able to seamlessly exchange facts, findings and evidence relating to crimes such as counterfeiting, fraud, personal information theft and money laundering.
INTERNET FRAUD ALARM SYSTEM (IFAS) Fraudsters acquire user names, passwords, passkeys and other information of bank customers and transfer money from their accounts to other accounts they usually set up by using fake documents. Banks Feature to create employ advanced security systems to prevent these attacks, but money flow diagrams fraudsters develop ever-new methods to bypass these systems.
IFAS firstly aims to establish a communication between the member institutions related to the fraudulent acts performed online. The requests on blocking the accounts in fraudulent money transfers are submitted through IFAS. Thus, both the communication between the institutions has become more effective and it is made possible to keep any kind of information related to the transactions in IT environment.
Since money movements may take very complicated forms, an automatic graphing option has been added to the system to facilitate case evaluation. This option provides a flow diagram of money movements for each fraud. Perfect Another substantial feature of IFAS is that it can work in harmony with consistency SABAS. In cases of Internet fraud, fraudsters usually open savings accounts with fraudulent information to draw money transferred from with SABAS customer accounts. Information about such accounts is shared within SABAS and all relevant units of member institutions can access this information. Therefore, information manipulated for fraud detected by IFAS can never be used again.
33 KKB 2012 ANNUAL REPORT NEW SERVICES
CHECK REPORT
The regulation issued within the scope of the Law No. 6273 on the Amendment of the Check Law, which was published in the Official Gazette dated February 3, 2012 and numbered 28193 (bis), abolishes the imprisonment sanction applied to the ones drawing a bad check. This regulation starts a new era in the economy about managing the receivable risk. In order to manage the risk correctly, it has become more significantly important to obtain detailed information about the financial background of the individuals whom the goods are sold with credit. For preventing the sufferings caused to the check holders in addition to the agony of the drawers, it is required to establish platforms where the check holders may have access to the information required for giving the correct decision on whether to accept the check or not.
KKB has taken the required steps and implemented “Check Report System” in April 2012 for making check a more reliable as a widespread payment instrument.
Check Report System is a service offered for providing the past check payment information of the check drawers in order to allow the check holders to make a sound decision on whether accepting the check. The system allows access to the past check payment information of the check drawer. The following takes place within the scope of the report;
• Banks where the client’s check account is available, • Number of the checks submitted since 2007, • Number and amounts of the checks paid at sight, • Number and amounts of the checks after 2009 which were bounced and paid on a later date, • Date of the first submitted check and the date of the first endorsed check, NEW • Date of the last check submitted and endorsed, • Number and amounts of the checks paid and endorsed SERVICE during the last 1, 3 and 12 months period, • Information on the list of up to 50 endorsed checks.
The Check Report allows monitoring the positive or negative progress Check Report is a of the account holder’s check payment performance. This report allows obtaining information about how many banks provided a check book to service providing the account holder and provides an opinion about the credibility of the information to the individual.
check holders about Obtained through the mobile devices or online, the check reports the check payment might be requested by the other real sector actors, as well as by the history of the check counter party in every platform subject to trading. With the online report applications, the real sector actors can instantly receive the check or drawers in order risk report related to the debtor from the debtor itself or directly from the to allow the check Credit Bureau query system due to the approval of the debtor. Credit Bureau has implemented an exemplary application to the world with holders to give an infrastructure operated as integrated with all banks in Turkey for effective decisions requesting online Check Reports with the consent of third parties.
34 ACTIVITIES IN 2012
RISK REPORT
Risk Report is a product providing former payment performance of real and legal entities related to the credit products they used from the banks.
While KKB was previously sharing the results of the reports only with the banks, as of September 2012, these results are also shared with individuals and organizations issuing the report, as well as third parties approved by NEW such individuals and organizations, through the branches of the banks. It is now possible for individuals and legal entities to access to all financial SERVICE information related to their outstanding and closed debts by applying through bank branches or alternative distribution channels.
The credit registry information maintained by KKB is consisted of customer information shared by all member institutions and organizations of KKB on Risk Report a monthly basis. The reports are offered based on such information without contains positive making any change on them. The report, which contains the payment performance in the financial sector, includes the individual’s risks, former information on payment performances and credit card payment information as well as; the individuals • Number of financial institutions providing data for the customer, in addition to the • Number of total credit accounts, negative ones • Total limit and balance information, • Last credit utilization date, • Number of credit accounts in default, • Sum of balances in default, • Longest delay period available, and • If exists, non-performing credit information.
The report also provides the payment performance for the last 18 months of any credit.
Risk Report contains positive information on the individuals in addition to the negative ones. As the report contains not only delayed payments or non-performing credit records, but also information on timely paid credits, this report provides a significant advantage for the ones who pay their debt in a timely manner.
With the E-Report infrastructure established, the Risk Reports are also available on mobile devices or online. NEW CONSMER INDEBTEDNESS INDEX (CII) SERVICE Consumer Indebtedness (CII) is a score based risk index. CII targets determining the individuals who tend to overindebtedness. The focal point is the individuals who do not display any payment inability recently and in the past, but tend to enter into a debt exceeding his/her ability to pay. The A new risk system is developed for determining the individuals who utilize new credits management for closing their existing debts, but getting into more debt by time. perception in the It’s been established for meeting the need for determining risky individuals banking and finance who did not experience an ability to pay in the past, ensuring responsible lending and increasing the quality of the credit decision-making system of sector with CII... the banks.
CII brings a new risk management perception to the banking and finance sector. It determines “overindebtedness” in addition to “non-performing credit” definition (used for individuals who did not make 3 payment consecutively, subject to legal proceedings and moved into loss accounts) foreseen by the Credit Bureau Score and similar risk estimation models. CII is developed only for the individuals with an unsecured debt balance of more than TL 250 and for estimating overindebtedness. 35
PLANS AND R&D ACTIVITIES FOR 2013
Swimming is one of the best entertainment of summer and is an essential branch of sports supporting all muscles in our body to work. The sea and pools are very risky places for the ones who can not swim and do not know how to behave in water.
In order to minimize these risks, you need to swim at known places and particularly under the supervision of a lifeguard.
You should stay away from bays and beaches, which you do not know about their depth, ground and flows, no matter how attractive they might seem.
facilitates swimming in risky water with the services it offers. KKB determines dangerous zones and develops an early warning system.
37 KKB 2012 ANNUAL REPORT
KKB continuously works for developing the products and services best meeting the needs of its members and real sector through its competent and experienced staff. Within this scope, it is concentrated on further improving the performances of the existing products, reducing the resources consumed and diversifying the channels for presenting the products and services. Additionally, R&D activities are carried out for developing new products and services meeting the changing market conditions and needs.
E-REPORT SYSTEM
E-Report electronically presents the risk and check reports offered to the customers through branches and alternative distribution channels by the banks. The most important feature of the product is that users other than finance sector are also able to have access to risk and check reports of third parties with the electronic approval of the relevant parties.
With E-Report system, KKB has gained a significant advantage in offering various risk management products to the companies and individuals in 2013. The System is planned to become the most essential distribution channel of KKB and is designed for allowing the Associates and Member banks to gain an income.
SMS or online The reports mentioned will take their place in the Turkish economy as access to a substantial instrument for allowing non-finance sectors to manage their risks more effectively. The increase in active quality of the real reports sector will provide serious benefits both to the Turkish economy and the financial sector.
KKB implemented SMS and online delivery of the reports as of the end of 2012 and completed the establishment of the call center for managing customer relations in this project and launched it in 2013. KKB Team completed the development activities on presenting the reports through E-Report system and continues with the product promotion activities.
During 2013, KKB will place emphasis on the training activities on the use, comprehension and interpretation of the reports offered through this channel. In addition to this, the activities for delivering the reports through mobile channels other than SMS and making alternative confirmation methods and report compatible with the needs of non- finance sectors continue in 2013.
CHECK INDEX
Check Index is an index value that will make the behavior of the relevant legal or real entity in check payments measurable and in case of any problem, calculate this problem by reflecting the quantities and amounts. It represents an indicator established based on the real and legal entity check payment information.
Calculated statistically with the analysis of the detailed data available in the Check Report, the Check Index provides saving in terms of resource and time by facilitating the interpretation of the reports and 38 decision-making process. PLANS AND R&D ACTIVITIES FOR 2013
COMMERCIAL CREDIT NOTE
Commercial Credit Note (CCN) means the rating score of the relevant company related to its credit worthiness based on the demographic, credit and guarantee information and check payment performance.
Financial institutions take several variable into account within credit granting process. The credit repayment background of the legal entities Facilitates the risk is a significant variable in this regard. CCN will eliminate a substantial evaluation of the deficiency in evaluating the behavior (credit repayment) performances commercial customers of the legal entities by providing the required information. This will enable to conveniently monitor the external behaviors of the customers.
CCN is calculated statistically with the analysis of the detailed data provided in the Risk Report and will provide a significant contribution to the user institutions in terms of resource and time saving by creating CCN an opportunity to give accurate decisions in credit decision-making and RESOURCE monitoring processes. AND TIME !SAVING GeoMIS - MAP BASED REPORTING SERVICE
This is a product based on processing the addresses contained by the data in KKB, converting them into geographical coordinates and positioning them on the map. GeoMIS is a reporting infrastructure to be established for displaying any kind of statistical data on the map by coloring them according to certain categories on province and district details. GeoMIS infrastructure is a system that can be only used by the member banks and other financial institutions. Map based The relevant institution will be determined from the IP address used reporting system for and the demonstration will be performed based on this institution. Standard reports displaying the portfolio data of the relevant member member banks and for a certain period will be obtained, as well as trend reports allowing institutions the examination of changes in data with a certain interval will also be generated. Additionally, benchmark reports displaying the member data compared with the entire sector and appropriate comparison group will be generated.
GeoMIS
STANDARD TREND BENCHMARK REPORTS REPORTS REPORTS
39 KKB 2012 ANNUAL REPORT
NEW RISK CENTER SERVICES
Founded by TBB with the Omnibus Law No. 6111, the Risk Center was launched in 2012. A service agreement has been concluded between TBB and KKB for performing all operations of the Risk Center. The new address for data sharing Considering the authorization granted by the Law, Risk Center will be the center for risk management and data sharing in Turkey. KKB will ensure that the services will achieve the targeted level soon with the RISK effective human resource and knowledge of KKB. For this purpose, TBB and KKB have signed a service agreement in December 2012. In addition to this, starting from June 2012, CENTER contribution is provided for establishing the processes and contents together with other participant banks and financial institutions by actively participating to the workgroups established. Also late in 2012, the project plans have been prepared for TCMB - Risk Center transfer process and the approvals of the parties have been obtained. The activities have been started within the scope of these approvals.
The primary target of KKB in 2013 related to Risk Center is to transfer the Risk Centralization data, which is currently kept by the Central Bank of Turkey (TCMB), according to the project plan and allowing KKB to share this data with member institutions.
In addition to this, some part of the reporting and data requirements of public institutions such as TCMB and BRSA will be provided with the reporting infrastructure to be established by KKB.
OTHER PLANNED SERVICES
COLLECTION scores KKB provides a high added value by supporting the data sharing service provided to its Members with analytic scoring models. Through the Credit Bureau Score, the Members are able to anticipate the possibility of their customers to fall in default within a year with high HIGH EFFICIENCY rates for long years. Recently developed Personal Debt Index has provided an opportunity to the Members for evaluating longer term IN COLLECTION “overindebtedness” risk. MANAGEMENT Financial institutions use KKB data not only in credit allocation and limit management, but also in collection. In order to provide an added value to the Members, it’s being planned to develop “collection scores” determining the risk of a customer delaying his/her credit repayment to fall into default within a closer term.
40 PLANS AND R&D ACTIVITIES FOR 2013
Credit Insurance In the modern finance world, Credit Insurance emerges as one of the effective risk management tools for the real sector. www.alacaksigortasi.org portal was launched in 2012 for allowing the credit insurance companies to use in their risk analysis and for facilitating the access to accounts receivable insurance in Turkey. With the easy and secure access of the entire real sector, including SMEs, to this service, it will be ensured that the practice will be better understood and become widespread. www.alacaksigortasi.org
CENTRAL DECISION SUPPORT SYSTEMS LATEST Central Decision Support Systems are decision automation systems TECHNOLOGY used for allowing the institutions to offer any kind of decision such as for low installation risk/collection, credit monitoring etc. related to the services provided to costs and short their customers more effectively and faster as a standard. application terms Despite the advantages it provides, the most important disadvantage of these systems is that they can be procured, installed and operated by the institutions for very low costs. KKB will offer this service centrally in order to provide access for institutions to these systems quickly and with the lowest costs as much as possible.
Software to be selected among the most advanced examples of its kind will be installed in KKB, the members will send their data to KKB when a decision is required and the data enriched by KKB will be processed with Decision Support System and final decisions will be communicated to the Members. Thus, the Members will be able to benefit from these systems developed with latest technology for low installation costs and short application terms. The Central Decision Support Service, where each Member will be able to customize their decision criteria according to their portfolio and manage their own decision parameters, will be applied to all decision areas such as application evaluation, customer management and collection. STRONGER ANALYTIC DATABASE AND FASTER KKB aims providing more benefit to the Turkish financial sector with its broad data resource. Accordingly, KKB provides maximum STATISTICAL information flow to its Members and public institutions from the data it REPORTING AND maintains with the continuously generated reports. “Analytic Database DATA ANALYSIS Development Project” is launched for accessing to data quickly with the required scope. This database will also be used for developing various statistical scoring models faster and stronger.
41
BOARD OF DIRECTORS REPORT 2012
The underwater world has always attracted us with its beauty, treasures and mystery.
The human beings are able to go down to deep in water with pressure resistant equipment, clothing and rebreather.
provides its Members information on how deep should one go down and up in what time, how long would one spend in which depth, and how should one act in case of any unexpected situation. KKB never leaves its Members alone in deep water.
43 KKB 2012 ANNUAL REPORT
INVESTMENTS
2012 has been a year where numerous innovations were launched and infrastructure activities were carried out for more. Investments have been made mostly for the necessity of Risk Center formation in order to expand the range of the products KKB will offer to its members, to increase the service quality and to provide value added services.
Moving into a new building had been required for providing the appropriate conditions for the Data Center, which KKB was required to establish within the scope of the agreement signed related to Risk Center, and for protecting the data. In addition to this, the increasing 2012 number of staff has also arisen the necessity for moving into a new has been a year office building. where several KKB continuously increases its service quality. KKB made new innovations were investments every year. The investments made during the last five years are as follows; launched and infrastructure • Mainframe environment leasing and maintenance agreement was renewed for 5 years on July 27, 2012, the operational activities works were and company responsibilities were rearranged and a significant carried out for saving was provided in operational expenses. • Mainframe operation was taken under KKB and it was ensured more that the responsibility of the data is under the control of solely KKB. • A new data center was established according to the requirements of the Risk Center formation, high availability was provided with physical security and redundant infrastructure, and infrastructure and device investments were made within this scope. • Significant hardware, software and human resources investments were made according to the cyber security, data backup, audit trail management and business continuity needs in accordance with the requirements of the Risk Center. • An investment was made for state-of-the-art data warehouse and reporting infrastructure with high performance reporting and the establishment works are about to be completed.
TECHNICAL SPECIFICATIONS OF NEW KKB SERVICE BUILDING
A six-floor reinforced concrete building coated with aluminum and glass on a construction area of 2 8.300 m . The building has three office floors of each 790 m2 , data center and two basement floors. The building also has two seminar halls.
There are diesel generators automatically activating in case of power failure. The water for the building is supplied from the municipal water and also has a water tank for being used when needed. The heating and cooling of the building is provided with air conditioner units connected to
VRV (Variable Refrigerant Volume) system. The building has air cleaning system and fire automation. In addition to all these, security systems are provided for the security of the building and staff.
44 BOARD OF DIRECTORS REPORT 2012
INNOVATION IN SERVICES
CHECK NEW REPORT WAS LOGO AND put INTO SERVICE CORPORATE IDENTITY WORKS Displays the positive and negative WERE COMPLETED check performance of the check drawer New logo and corporate identity components were ACCESS METHODS put into service SMS, kkb.com.tr, Bank Branches
Confirmation system on ORGANIZATION website SYSTEM WAS RENEWED
New departments were established according to requirements RISK Credit REPORT WAS Insurance PUT INTO SERVICE PORTAL WAS LAUNCHED The repayment performance for the past credits, which the person received www.alacaksigortasi.org from the banks, will be viewed.
Paving the way for credit insurance in Turkey in cooperation with ACCESS METHODS Coface, Euler Hermes and SMS, kkb.com.tr, Bank Branches Atradius and contribution to Confirmation system on risk management website
DATA SUPPLYING SUBMISSION AND SHARING PERIODS BECAME PAID CHECK STANDARD AS END OF INFORMATION FROM MONTH THE BANKS STARTED While the updated customer data were submitted at different times during In addition to negative information, the month by the banks, now it the sharing of positive information has become a standard to send has also started within the them at the end of month scope of Check Report
45 KKB 2012 ANNUAL REPORT
REPORTS WITH SEVERAL HEADINGS WERE STARTED TO BE SUBMITTED TO BRSA
BRSA is ensured to obtain information from a single resource KPS CONNECTION ESTABLISHED. DATA DATABASE OF WAREHOUSE MINISTRY OF FINANCE ESTABLISHMENT UPDATED WORKS STARTED Effective identity verification for the customers is ensured within The required infrastructure the scope of various services investment was made for making offered through different the reporting efforts meeting the channels demands of the sector and create added value
NEW CBS AND CCN THE CII DEVELOPED DEVELOPMENTS MODEL FOR AT THE LAST Presentation of indebtedness CHECK INDEX IS indicator for the first time STAGE AT FINAL STAGE in Turkey by updating the Scores will be presented current score model for legal entity and private The credit customers will be companies within the listed according to check scope of corporate performance. bureau
ALL PROCESSES INFRASTRUCTURE DOCUMENTED FOR PORTFOLIO ACCORDING TO QUERY THROUGH THE COBIT LINE IS ESTABLISHED An auditible management model The service previously offered has been established by making with a collective query method the organizational structure containing several manual steps is now available in structures and all processes compliant integrated to member with international systems standards
46 BOARD OF DIRECTORS REPORT 2012
RISK CENTER AGREEMENT SIGNED
The terms of the agreement, containing substantial expectations related to services, infrastructure requirements, security and standards of KKB, are INTERNET expected to be completed BRANCH in 2013 INFRASTRUCTURE NEW COMPLETED
data It’s ensured that KKB products center becomes reach to a wider audience OPERATIONAL through the internet branch channel • In international standards (Tier-3) • Facility to access by members from different locations CAPACITY with secure network INCREASE AND INFRASTRUCTURE MODERNIZATION INVESTMENTS REALIZED
- Open Systems Disk/Tape Capacity Increase
EMERGENCY - Server Capacity Increase
CENTER - Document Management System / Service AGREEMENT SIGNED Management
• “hot-site” Data Center available - Cyber Security Infrastructure Improvement for service at any moment • ODM Connection with high speed lines • Continuous Backup MOBILE REPORT PRESENTATION COMBINED INFRASTRUCTURE DATA FROM COMPLETED FACTORING AND LEASING COMPANIES It’s being ensured that KKB products reach to a wider audience in the STARTED TO BE fastest manner through RECEIVED user-friendly alternative channels Leasing and factoring credits will also be shared under KKB
47 KKB 2012 ANNUAL REPORT
ORGANIZATIONAL RESTRUCTURING
Organizational Restructuring Project is completed in 2012. Within this scope, the processes have been designed and IT processes have been prepared based on CoBIT. IT, Business Unit and Corporate risks and CoBIT controls have been determined. The job descriptions have been determined and process based based IT indicators have started to be established. processes The current organizational structure has been changed based on the increasing work capacity and new requirements and Legal Compliance and Internal Audit, Strategic Planning and Corporate Communication, IT, Human Resources and Financial Affairs departments have been established.
Process based performance indicators
GENERAL MANAGER
LEGAL STRATEGIC PLANNING COMPLIANCE IT FINANCIAL AFFAIRS AND CORPORATE AND INTERNAL DEPARTMENT AND HUMAN COMMUNICATIONS AUDIT RESOURCES DEPARTMENT DEPARTMENT DEPARTMENT
48 BOARD OF DIRECTORS REPORT 2012
HUMAN RESOURCES
Innovations such as the launching of the Risk Center, the new projects to be carried out according to the expectations of the sector and taking the data center under KKB have made it inevitable for KKB to grow. Our Principles
One of the biggest investments of KKB in 2012 has been made for the human resources. KKB started the year 2012 with 29 employees and Reliability closed the year with 76 employees. Transparency KKB Human Resources has adapted a working principle which acts with reliability, transparency, solution orientation and equality Solution orientation principles and always keeps the development and motivation of employees at the first place. Equality
KKB aims working with the best-in-field employees and gives priority to the individuals who may comply with the corporate culture. In addition to this, having a good experience in the relevant field and taking initiative are among the other criteria taken into consideration.
In addition to the gross salary paid, the staff also receive private health insurance and employer contribution to private pension system.
BY gender Our biggest investment is to the 40% Female 60% Male human resources!
BY EDUCATION 29% High School
58% Associate & Undergraduate
13% Master’s and Doctorate Degree
BY department
49% IT 51% Other
49 KKB 2012 ANNUAL REPORT
RISK MANAGEMENT
The control points of all activities have been determined by covering all units of KKB and based on COBIT for IT Department. In the matrices, An integrated which are called Risk Controlled Matrices, the processes are defined risk management in compliance with the control targets and also control type, frequency, procedure definition, tool used for control, applications which the control understanding gets influenced, department with the control and the individual who will with Risk Control perform the control are explained.
Matrices As a result of;
• Evaluations of internal control officers of the units and unit managers, • Regular internal control activities, • Internal audit activities, • Information security requirements, • Investigations and • Other reviews,
Risk Control Matrices are updated by the Legal Compliance and Internal Audit Department together with the Security and Risk Director or relevant unit managers.
Risk management With the Resolution of KKB Board of Directors dated 27.07.2012 and numbered 15, Corporate Process Documents as well as the risk policy and methods management policy and methods as a part of corporate governance are determined understanding are determined in detail. The procedures within this separately as a scope are; part of corporate • Corporate Risk Evaluation Procedure, • Corporate Risk Management Policy, governance • Corporate Risk Matrices, and understanding • IT Risk Management Procedure.
In the Corporate Risk Management Policy, the risk management system and its aim is evaluated, the responsibilities within this scope are determined and the method on risk evaluation and reporting in the light of risk management techniques is explained. Accordingly, IT Risk Profile constitutes a significant part of Corporate Risk Matrices where entire corporate risks are evaluated. In addition to IT Risk Profile, Corporate Risk Profile is also subject to the approval and evaluation of KKB Board of Directors.
The purpose of Risk Management System is explained as;
• Determining the risks arising from the activities of KKB that may cause damage to the risk evaluation process of the institutions receiving service and taking these risks under control, • Identifying, measuring, monitoring and controlling the risks caused by transferring, storing and entering the data subject to the services provided.
50 BOARD OF DIRECTORS REPORT 2012
Risk Management System also contains activities for establishing the policies and application methods related to monitoring, controlling and changing, when required, the quality and level of the core activities.
KKB’s Basic Risk Management System Policy contains; In 2012, • Determining the core activity targets of KKB, new products & • Determining the risks preventing the achievement of the targets, services • Determining the possible impacts of the risks and their realization possibilities, have been • Applying the risk management and controls required for reducing the risks to the levels determined by the Board of implemented for the Directors, risk management of • Regularly measuring and evaluating the exposed risks, • Establishing the coordination and communication network the real sector required for managing the risks under KKB, • Proactively evaluating the new risks that might occur related to the credit record and information systems technology and establishing recommendations for reducing possible risks, • Providing regular trainings to KKB executives and staff on risk management, • Determining the important risk indicators for measuring and monitoring the existing situations of the risks, • Regularly reviewing these indicators for ensuring their Annual plans effectiveness and actuality, • The risks determined before the institutions receiving service are prepared from KKB depending to the quality and accuracy of the data strategically, obtained and updated within the scope of data flow, collection and sharing processes. financially and operationally and This policy is supported with; business plans and • Written procedures and job descriptions established, their realization are • First level controls carried out by the units related to the risks determined on corporate level within the daily activities, reviewed • Periodical evaluation of the risk management activity results by the Board of Directors and senior management, • Preparation of the corporate risk document by the Legal Compliance and Internal Audit Department, • Auditing the first level controls.
KKB has launched new products and services related to the risk management for the real sector, which KKB targeted in 2012. In addition to this, the increase in the number of queries has realized over the expectations with the planned renewal of CBS and the increase in number of members.
KKB is an institution with a strong financial structure. Annual plans are prepared strategically, financially and operationally and the business plans and their realization are reviewed through weekly top senior management meetings and monthly and periodical board meetings. Our Institution targeted a profit meeting the operation expenses and ensuring service continuity. While profitability is not the primary target of KKB, no financial risk for the future is anticipated.
51 KKB 2012 ANNUAL REPORT
AUDIT
INTERNAL AUDIT Legal Compliance and Internal Audit Department was established with the KKB Board of Directors resolution dated 24.02.2012 and numbered 2012/4. By considering the legal liabilities, the Department established information security policies together with IT Department Internal Audit and the audits are performed by IT Department. The Department carries out routine controls related to both IT processes and financial Plan processes based on the fields of activity of KKB and performs IT audits in the light of important control points determined based on Control prepared as risk Objectives for Information and Related Technology (CoBIT) principles. oriented according The Department is also responsible for performing the internal audit activities throughout KKB. to independency principle In addition to; • Establishing KKB process documents, • Determining the risks in information security and performing activities for controlling the risk, • Preparing draft procedures and audit reports, • Implementing KKB Internal Audit Regulation and all other internal audit process and reporting documents, • Performing risk based audit (inspection, investigation and audit efforts) within the scope of IT audit, and Legal Compliance • Preparing “Daily Transactions Control Reports” regularly on and Internal Audit a monthly basis within the scope of financial controls, Department was the Legal Compliance and Internal Audit Department provides the required opinions and evaluations within the scope of legal compliance established in 2012 and legislation requirements since its establishment.
Legal Compliance and Internal Audit Department has prepared the Internal Audit Plan 2013 as risk oriented according to independency principle. Accordingly, the processes of KKB were subjected to risk analysis and the impact and importance levels of the matters that might influence the targets, activities and assets of KKB have been determined and works have been started related to high-risk processes. It’s being planned to audit high and medium importance and risk level processes initially and to take low importance and risk level processes to the audit plan within 2013. In addition to this, the audit activities for 2013 will be performed within the scope of the audit plan prepared by the Department until the end of 2012.
52 BOARD OF DIRECTORS REPORT 2012
INTERNAL CONTROL KKB is subject to the legislation within the scope of article 26 (A) of the Regulation on Bank Cards and Credit Cards and article 16 of Regulation on Risk Center related to establishing internal control. The Corporate Internal Control Procedure and IT Internal Control Procedure have come into force with the Board of Directors resolution dated 27.07.2012 and numbered 15. The internal control system operates functionally within the units according to the legislation. An Internal In addition to this, within the scope of the demands of the Risk Center related to internal control system, endeavours are carried out for Control System establishing a separate Internal Control Department during April 2013 related to the organizational structure without making any significant operates functionally change in the duties, responsibilities and functionality of the internal within the units control system. according to the COMPETITIVE STATUS OF COMPANY EXECUTIVES legislation The members of the Board of Directors do not have any business carried out with the company for and on behalf of themselves or other parties within the scope of competition ban.
FINANCIAL RIGHTS GRANTED, SANCTIONS AND PUNISHMENTS APPLIED TO BOARD MEMBERS AND TOP EXECUTIVES
The sum of the financial rights granted to the board members and top executives is TL 3.385.458. TİDE Administrative fine was imposed during 2012 within the scope of the Internal Audit Regulation on Bank Cards and Credit Cards and the Regulation on Congress the Principles and Procedures on Accounting Practices and Retention of Documents by Banks based on the resolution of the Banking sponsorship is Regulation and Supervision Agency (BRSA). No administrative or judicial sanction was applied to the board members within the scope of held the company activities.
DONATIONS, AIDS AND SOCIAL RESPONSIBILITY PROJECTS
TL 15.000+VAT sponsorship was provided for 16th Internal Audit Congress organized by the Institute of Internal Auditing - Turkey. During the congress, the representatives from the real sector and auditors thereof have met and benefits related to risk management and control have been shared. The congress hosted various sectors and there has been an opportunity to discuss the contents and benefits of KKB’s Check and Risk Report products.
DIVIDEND DISTRIBUTION PROPOSAL
According to the resolution numbered 11 of the Board of Directors taken at the meeting on 22.02.2013, it’s been unanimously resolved by the members attending the meeting to make a proposal to the General Assembly for not distributing the net profit remaining after deducting the legal liabilities of the company from the gross profit of 2012 and reserving this amount in Excess Reserves and distributing the net amount remaining after deducting the legal liabilities from the profit of 2011, which was kept in Excess Reserves Account of 2012, to the shareholders.
53 KKB 2012 ANNUAL REPORT
DECLARATION OF CONFORMITY FOR ANNUAL REPORT 2012 OF KREDİ KAYIT BÜROSU A.Ş.
We hereby declare that;
The financial statements and footnotes thereof for the period of January 1, 2012 to December 31, 2012 as well as the annual report of our Company, which were issued within the scope of the “Regulation Related to the Determination of the Minimum Content of Companies’ Annual Reports” become effective by being published in the Official Gazette dated August 28, 2012 by the Ministry of Customs and Trade and approved with the Board of Directors resolution dated February 22, 2012 and numbered 2013/8, have been reviewed by us,
Pursuant to the knowledge of our Company within the scope of its duty and responsibility, the financial statements and annual report do not contain any explanation contrary to the fact or any misleading deficiency as of the date of the declaration,
Pursuant to the knowledge of our Company within the scope of its duty and responsibility, the financial statements and the information related to financial matters in the report correctly reflect the fact about the financial status and activity results of our Company as of the period of the company.
Denizbank A.Ş. T .Garanti Bankası A.Ş. Representative Representative MUSTAFA AYDIN MEHMET SEZGİN CHAIRMAN OF THE BOARD VICE CHAIRMAN OF THE BOARD
ERTUĞRUL BOZGEDİK MEHMET CANTEKİN Yapı ve Kredi Bankası A.Ş. MEMBER MEMBER Representative MEHMET GÖKMEN UÇAR MEMBER
VEYSEL SUNMAN ABDURRAHMAN ÖZCİĞER İSMAİL HAKKI İMAMOĞLU MEMBER MEMBER MEMBER
Akbank T.A.Ş. Representative OSMAN MEHMET SİNDEL MEMBER
54 BOARD OF DIRECTORS REPORT 2012
AGENDA OF ORDINARY GENERAL ASSEMBLY TO BE HELD ON 29.03.2013
1. Opening and formation of the Council of Assembly, 2. Reading and discussion of the Annual Report prepared by the Board of Directors, 3. Reading the auditor reports, 4. Reading, discussion and approval of the financial statements, 5. Releasing the Board Members and Auditors separately, 6. Determination of the method on using the profit, the profit to be distributed and the rate of dividend shares, 7. Determination of the salaries, attendance fees, bonuses and premiums etc. rights of the Board Members, 8. General Assembly’s approval for such appointments made by the Board of Directors in case of any vacancy in the Board of Directors during the activity year 9. Election of the Board Members according to the proposal of the Board of Directors, 10. Election of the Independent Auditor, 11. Reading, discussion and approval of the draft of the Company’s articles of association showing the old/new texts of the articles related to amending the articles of association pursuant to the Turkish Trade Law No. 6102, 12. Reading, discussion and approval of the Internal Directive on the Operating Principles and Methods of the General Assembly prepared by the Board of Directors of the Company, 13. Discussion of the matter on granting the permissions stated in articles 395 and 396 of Turkish Trade Law No. 6102 to the Board Members, 14. Wishes and requests, 15. Closure. Denizbank A.Ş. T .Garanti Bankası A.Ş. Representative Representative MUSTAFA AYDIN MEHMET SEZGİN CHAIRMAN OF THE BOARD VICE CHAIRMAN OF THE BOARD
ERTUĞRUL BOZGEDİK MEHMET CANTEKİN Yapı ve Kredi Bankası A.Ş. MEMBER MEMBER Representative MEHMET GÖKMEN UÇAR MEMBER
VEYSEL SUNMAN ABDURRAHMAN ÖZCİĞER İSMAİL HAKKI İMAMOĞLU MEMBER MEMBER MEMBER
Akbank T.A.Ş. Representative OSMAN MEHMET SİNDEL MEMBER
SAMPLE POWER OF ATTORNEY We hereby appoint ...... as our deputy to represent our Bank and to vote for resolving the agenda items at the Ordinary General Assembly of KKB Kredi Kayıt Bürosu A.Ş. for 2012 to be held at Barbaros Mah. Ardıç Sokak Varyap Meridian F Blok Batı Ataşehir Istanbul on 29.03.2013 at 10:00 hours for ...... shares of our Bank in the Company with a nominal value of TL ......
PRINCIPAL Name & Surname / Title Date and Signature
NOTE: In case the power of attorney is not notarized, the notarized copy of the principal’s signature circular shall be added to the power of attorney.
55 KKB 2012 ANNUAL REPORT
AUDIT COMMITTEE REPORT SUBMITTED TO THE ORDINARY GENERAL ASSEMBLY OF KKB KREDİ KAYIT BÜROSU A.Ş. FOR THE YEAR 2012
COMPANY TITLE : KKB KREDİ KAYIT BÜROSU A.Ş.
HEAD OFFICE : ISTANBUL
FIELD OF ACTIVITY : The Company collects or purchases, evaluates and processes data from various domestic and foreign sources for the needs of commercial and the financial sectors in compliance with legal regulations. The Company also within commercial and legal regulations provides this information either against a fee or without remuneration to domestic or foreign financial institutions. Other activities of the Company are stated in its Articles of Association.
AUDITOR’S REPORT : We have examined the accounts and the transactions of the Company for the year 2012, with respect to the Turkish Commercial Code, the Company’s Articles of Association, other Legislation and Generally Accepted Accounting Principles and Standards.
In our opinion the enclosed balance sheet dated 31.12.2012, whose items we have approved represents accurately and fairly the financial position of the Company as of the said date while the profit and loss statement for the period January-December 2012 represents accurately and fairly the results of operations for the respective period.
We hereby submit the aforementioned balance sheet and profit and loss statement for the approval of the Annual General Assembly of KKB along with our proposal to approve the activities of the Board of Directors for the year 2012.
İzzet METCAN Faruk ERGİN Auditor Auditor
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