Annual Review 2011 Contents

3 ABank in Brief 3 Vision, Mission and Working Principles 4 Financial Highlights 6 Message from the Chairman 8 Board of Directors 10 Message from the CEO 12 Senior Management 14 Highlights from 2011… 15 A Review of 2011 Activities 32 Corporate Governance 34 Anadolu Group in Brief 38 Subsidiaries 39 Consolidated Financial Statements Together With Auditor’s Report 31 December 2011 99 ABank’s Network in Turkey 100 Directory resources teamof1,185staff. delivery channelsandacompetenthuman in 24citiesTurkey aswellalternative service quality, workingthrough its63branches profitable bankwithoutcompromising its goes togreat lengthstobeanefficient and customers underallmarketconditions,ABank potential, whichproduces solutionsforits and competitivebankwithsteadygrowth Acting uponthevisionofbecomingapreferred 1 ABank Annual Review 2011 2 ABank Annual Review 2011 quality servicesandtherightsolutions. customers onsuchpillarsasqualitytime, targets withitscommitmenttosatisfy ABank hastakenfirmstepstowards its relationship managementapproach, is anadvancedversionoftheBank’s the concept,“HappyBanking”,which customers through anewroadmap with Aiming todifferentiate itselftoits happy customers! Happy servicesto services intheregion. solution-oriented andworld-class customers, through catering To bethe“preferred bank”ofits Vision customer-oriented anddynamic customers, whilesustainingits its confidenceamong shareholder, theBankstrengthens Anadolu Group, asthemajor thestrong supportofthe With business activities. SME bankingtosupportitsmajor particular firmstepsindeveloping approach, ABankalsotakes solutions withhighaddedvalue Providing products, servicesand financial foundations. strategy onrobust corporateand Bank maintainsitssteadygrowth requirements ofitsclientele.The commercial andretail banking sector cateringforthecorporate/ the activeparticipantsin system in1992,ABankisamong Having entered intothefinancial of 1,185staff. competent humanresources team deliverychannelsanda alternative in 24citiesTurkey aswell working through its63branches compromising itsservicequality, efficient andprofitable bankwithout goes togreat lengthstobean under allmarketconditions,ABank produces solutionsforitscustomers with steadygrowth potential,which a preferred andcompetitivebank Acting uponthevisionofbecoming platforms. both atdomesticandinternational brand recognition inrecent years ABank hasmanagedtoincrease its the servicesitoffers. human resources andthequalityof technological solutions,professional service approach, sophisticated employees. and shareholders clientele, its of satisfaction and benefit the value,economic while pursuing of creating by means institution financial To pioneer the be Mission Vision, Missionand Vision, Working Principles ABank inBrief product rangesintheretail activity. SME segmentwhileexpandingits its tailor-made servicesinthe penetration particularlyextending In 2011ABankincreased itsmarket share waspubliclyheld. Group, andtheremaining 4.161% various companiesoftheAnadolu 18.124% oftheshares were heldby a 77.714%share inABankwhile Anadolu EndüstriHoldingAŞheld 1995. AsofDecember31st,2011, the ALNTFtickersinceJuly3rd, Istanbul StockExchangeunder ABank hasbeenlistedatthe · · · · · · Working Principles social responsibilities Not tocompromise from our To encouragecreativity where successisawarded To create aworkingenvironment discipline To becommitted to thebanking principles To be strictly committed to moral rationale customers withintheeconomic To provide excellenceforour 3 ABank Annual Review 2011 4 ABank Annual Review 2011 Changes in2011(YoY %),ABankvsSector Financial Highlights *Banking sectorfigures are based onBRSABank-Onlyfinancials (Based onAuditedIFRSFinancialStatements) Total Assets Total Assets (TL million) CashLoans Non-CashLoans Total Deposits Total Securities Total Equity Subordinated Loan NetIncome Total Revenues External Funds External CAR (%) Cost/Income ROE External Funds/TotalExternal Funds Number ofBranches (#) Number ofEmployees ABank 50% Banking Sector* 21% Cash Loans 12.9% 16.0% 2009 3,653 2,721 1,573 2,650 6.9% 58% ABank 534 462 260 211 999 32% 64 46 0 Banking Sector* 30% 15.2% 16.4% 2010 4,287 3,231 1,923 2,757 1,086 6.7% 78% 599 492 162 200 586 31 53 Total Deposits 13.7% 18.2% 1,318 2011 6,438 4,281 2,165 4,308 1,028 1,185 4.2% 86% 507 274 280 ABank 56% 21 63

Banking Sector* 13% Change 120% -33% 50% 32% 13% 56% 69% 40% 75% 3% Total Assets External Funds External Non-Cash Loans 3,653 1,573 2009 2009 2009 211 (TLmillion) 4,287 1,923 2010 2010 2010 586

(TL million)

(TL million) +75 Change +13 Change +50 Change 6,438 1,028 2,165 2011 2011 2011 % %

Cash Loans External Funds/TotalExternal Funds Total Securities 2,721 2009 2009 534 18.2% (TLmillion) 3,231 2010 2010 599 2011 (TLmillion) +120 Change +32 Change 4,281 1,318 2011 2011

(%) % Total Deposits Number ofBranches Total Equity 2,650 2009 2009 2009 462 46 (TLmillion) 2,757 2010 2010 2010 492 53 (TLmillion) +3 Change +56 Change 4,308 2011 2011 2011 507 63 %

5 ABank Annual Review 2011 6 ABank Annual Review 2011 Message from theChairman quality. maintained itsprofitability andgoodasset financial markets,Turkish bankingsector Despite therisksprevailing intheglobal other. curb inflationarypressures onthe growth atonehand,andstriving to policies tosupporteconomic central banksare tryingto pursue We are experiencingtimesinwhich tremendously. cost offinancingdebtincreased in related countryrisksandthe value dependingonthebriskrise experienced extreme lossesintheir by countriesindifficultieshave The sovereign bondsissued following theglobalfinancialcrisis. in severalEurozone countries debts reached unsustainablelevels global marketsaftersovereign become more prominent inthe The conceptofcountryriskhas economy continue. The uncertaintiesintheglobal by external sources,by external hascome to 2011. Thistrend, mainlyfunded in thefirst9monthsofyear in sustain itshighgrowth momentum The Turkish economymanagedto its strong performance. banking sectorproved tokeep Turkish economyandthe during thelastquarter. In2011,the the marketthrough repo tenders decreasing theavailablefundingto the interest ratecorridorand which consistedofexpanding Central Bank’s tightening measures lending andinthecontextof changes thatincreased cost of half becauseoftheregulatory assets deceleratedinthesecond stood at13.8%.Thegrowth of the yearhowever, thisgrowth rate previous year. Atthefirsthalfof the endof2011compared tothe 21% toreach TL1,218billionat Total assetsofthesectorgrew by profitability andgoodassetquality. banking sectormaintainedits global financialmarkets, Turkish Despite therisksprevailing inthe profitability fortheperiodahead. sector intermsofgrowth and constraints fortheTurkish banking current accountdeficit,implysome the economywithrespect tohigh implemented inorder tocooldown Both fiscalandmonetarymeasures last quarter. slow-down duringthecourseof managed tosustainitsloanquality the increasing competition, ABank unfavorable impactasaresult of In spiteofexperiencingcertain at theendofyear. the totalnumberofbranchesto63 opened during2011,whichbrought strategy. 10newbrancheswere while pursuingitsorganicgrowth expand itscustomerportfolio ABank continuedtodiversifyand its organic growth strategy. achieving itstargets inlinewith ABank closedtheyearby at theendof2011. ratio ofthesectorstoodat16.5% and theaveragecapitaladequacy general, bankswere wellcapitalized portfolio revaluation differentials. In the 93.7%declineinsecurities compared totheprevious yearand in thesector’s profitability figure because ofthe10.3%decrease the growth rateintotalassets, the bankingsectorlaggedbehind The growth inthetotalequityof the totalassetsstoodat56.1% figure. Theshare oftheloanswithin compared totheend-year2010 682.9 billionwitha29.9%increase sector’s totalloansreached TL As oftheendyear and securitiesissued. obligations toforeign institutions in deposits,repo transactions, items, were fundedbytheincrease ‘receivables from theCentralBank’ which originatedfrom ‘loans’and asset growth ofthebankingsector, human resources. quality servicesandprofessional by combiningitsstrength with its credible standinginthe sector utmost confidenceand reinforces The Banklookstothefuture with investments required forgrowth. well positionedtomaterializethe structure andresources, ABankis itsstrong shareholderWith market dynamics. proactive approach andinlinewith and itscustomersegments,witha range ofproducts andservices by furtherdevelopingitsexisting lending activityandprofitability, will endeavourtoenhanceits a growing franchise.Ourbank be astrong mid-sizedbankwith implementing itsstrategiesto ABank hasbeensuccessfully penetration. for thebanktoincrease itsmarket strategies inorder topavetheway supporting ABankinitsgrowth Anadolu Group willcontinue productivity intheshortrun.The to exhibitpositiveoutcomeson customer satisfactionisexpected aiming forhigherefficiencyand major conversioninitsITsystem markets. Investmentsleadingto strong reputation intheinternational 125%, whichisanevidenceofits loan facilitywitharollover ratioof successfully renewed itssyndicated funding,ABank In termsofexternal to loangrowth. while attainingitstargetspertinent Yours faithfully, confidence extendedtoABank. correspondent banksfortheir goals andtoourclients their dedicationinreaching our sincere thankstoourstaff for I wouldliketoconveymy Chairman Tuncay Özilhan 7 ABank Annual Review 2011 8 ABank Annual Review 2011 Board ofDirectors 11 7 5 3 1 9 10 4 2 8 6 Supervisory Board ofDCommerce 2006 hebecametheMember of to Turkish Foreign Trade Bank.In 2004-2005, heservedasConsultant of PoliportKimyaSanayi.Between the ExecutiveMemberofBoard the sameperiod,healsoserved as Leasing, andDışbankMalta.During of Directors ofDışFactoring, served astheMemberofBoard 2004. Between1997and2004he various positionsbetween1983and Trade BankasanAuditorandheld In 1983,HejoinedTurkish Foreign Foreign OperationsDepartment. İşbank, KayseriinExport-Importand started hisprofessional career at Management Institute.Hehas Executive MBAfrom Kavrakoğlu Public Administration.Heholdsan Department ofPoliticalScienceand Middle EastTechnical University, in1954.GraduatedfromBorn Board 3 BahattinGürbüz,Memberofthe Companies. Chairman ofseveralAnadoluGroup has actedastheChairmanandVice positions until1990.Since1990he where heheldvariousmanagement Anadolu EndüstriHoldingin1980, MBA from AtlantaUniversity. Joined Commercial Sciences.He holds an Department, FacultyofEconomicand University BusinessAdministration in1949.GraduatedfromBorn Bursa 2 İbrahimYazıcı, Vice Chairman 1996. the ChairmanofABanksinceApril the AnadoluEfesSportsClub.Heis Republic ofEstoniaandPresident of (DEİK), HonoraryConsulofthe Foreign EconomicRelationsBoard – JapaneseBusinessCouncilofthe (TÜSIAD), ChairmanoftheTurkish Industry &BusinessAssociation High AdvisoryCounciloftheTurkish PresidentÖzilhan istheVice ofthe some oftheGroup companies.Mr. He alsoservesastheChairmanfor the AnadoluGroup sinceMay2007. in 1984andheistheChairmanof as theCEOofAnadoluGroup Group. Mr. Özilhanwasappointed General Coordinator oftheAnadolu Coordinator oftheBeerGroup and General Director ofErciyas Brewery, States. Hehasservedasthe Long IslandUniversityintheUnited and hasreceived hisMBAfrom University, FacultyofEconomics He hasgraduatedfrom İstanbul Joseph highschoolinİstanbul. his secondaryeducationinSaint- in1947,Mr.Born Özilhancompleted 1 Tuncay Özilhan,Chairman the Department of International the Department ofInternational she holdaMastersDegree from Literature atBoğaziçiUniversity, College andtheFacultyofEnglish graduated from theİstanbulRobert in1963.Ms.Şengölge Born Board 6 GünizS.Şengölge,Memberofthe as aBoard Member. and hasjoinedABankinApril2011 has joinedArasHoldingastheCFO ING Leasing.InJanuary2011she Board MemberofINGFactoringand Banking Departmentandalsoas President positionsattheCommercial PresidentVice andExecutiveVice and heldRegionalManager, Senior In 2002shejoinedINGBankA.Ş. and KablonetIletişimSistemleri. İktisat Yatırım MenkulDeğerler BKM-Bankalararası KartMerkezi, served astheBoard Member of Bank. Duringthesameperiod,she Credit RiskManagementat İktisat President ofCorporateBanking- she becametheExecutiveVice Department atUlusalbank.In2001 President atCorporateBanking 2000 shebecameExecutiveVice Corporate BankingDepartment.In Presidentserved asSeniorVice at 1995 shejoinedtoDemirbankand Corporate BankingDepartment.In Branch asAccountManagerat 1994 shejoinedWestLB, Istanbul Corporate BankingDepartment.In she workedasAccountOfficerat joined İktisatBankanduntil1994 Manager in1990.In1991she Sanayi/Koç HoldingasProduct started hercareer atBekoteknik Administration Department.She from BoğaziçiUniversity, Business in1966,Istanbul.Graduated Born Board 5 DidemÇerçi,Memberofthe Group. other companieswithintheAnadolu Member ofALeaseandAYatırım and ABank andsince2008,asaBoard also actedasaBoard Memberof Group in1999,Sincehehas General LegalCounselofAnadolu Director in1994andbecamethe He joinedAnadoluGroup asLegal for ENKAandCoşarMüşavirlikA.Ş. Group, heworkedasLegalCounsel of Law. PriortojoiningAnadolu from theİstanbulUniversityFaculty inIstanbul1957.Graduated Born 4 Cesur Kılınç, Member of the Board joined ABankasaBoard Member. Group Companies.InApril2011he time heservedasConsultanttoAlfa Bank AD,Bulgariaandatthesame Credit Lyonnais, İstanbuloffice,as at İktisatBank.In1988,hejoined as amarketingandcredit analyst has startedhisprofessional career Florida InstituteofTechnology. He Department. MBAdegree from University, MechanicalEngineering in1960.GraduateofBoğaziçi Born and President ofFinanceGroup 9 MuratArığ,MemberoftheBoard Member ofABank. CFO ofAnadoluGroup andBoard 2008, hehasbeenappointedasthe Relations Director andCFO.InApril, Business DevelopmentandInvestor Project DevelopmentManagerand Asst. Project DevelopmentManager, including Asst.MarketingManager, Zorlu wasappointedtovariousposts with theEfesBeverageGroup, Mr. Specialist. Throughout his career Group) in1984,asaMarketing in theEfesBeverageGroup (Anadolu Turkish Airlines. Hebeganhiscareer previously workedwithToz Metaland from IstanbulUniversity. Mr. Zorlu has aBScdegree ineconomics in1959,Mr.Born HurşitZorlu the Board 8 MehmetHurşitZorlu,Memberof Member oftheBoard. In March 2010hejoinedABank asa in severalaffiliatesof Yapı Kredi Bank. Board MemberandAuditor positions tenure, hehasalsoheldvarious CEO inYapı Kredi Bank.Duringhis has servedastheconsultantto 2008. Between2008and2009he of Compliancebetween2006and Assistant GeneralManagerincharge Yapı Kredi Bankandservedasthe Department, Board ofInspectorsin Control Department,Accounting managerial positionsintheFinancial as aninspector. Heheldvarious career in1981Yapı Kredi Bank Administrative Sciences.Startedhis Faculty ofEconomicand graduated from UludağUniversity, in1958,Mr.Born Semerciler Board 7 KemalSemerciler, Memberofthe a Board Member. banking. In2007shejoinedABankas President inchargeofCorporate 6 yearsshewasExecutiveVice positions for11years.Forthelast Division andheldvariousmanagerial Assistant ManagerintheMarketing 1993, shejoinedGarantiBankas and SocieteGenerale,İstanbul.In moved ontoCredit Lyonnais, İstanbul 1985 atCitibank,İstanbulandlater She beganherbankingcareer in Management ofİstanbulUniversity. CEO sinceFebruary2010. Member andhasbeenservingasthe Member andtheCredit Committee ABank inAugust2009astheBoard Bank between2003-2009.Hejoined President atKoçbankandYapı Kredi served astheFirstExecutiveVice Leasing between1997-2003,helater CEO ofYapı Kredi LeasingandKoç Factoring. Afterworkingasthe Yapı Kredi LeasingandYapı Kredi held Board Memberpositions in Marketing inYapı Kredi Bankand responsible forCorporate Credits Presidentas theExecutiveVice Between 1993-1997heserved regions between1986and 1993. positions inbranchesvarious Auditor in1981,laterheldManagerial He joinedYapı Kredi Bankasan Science andPublicAdministration. East Technical University, Political in1958.GraduatedfromBorn Middle Board andCEO 11 HamitAydoğan, Member ofthe a Board MemberinApril2008. of IsLeasing.HehasjoinedABankas and 2006hewastheBoard Member from 1989to2005.Between 2005 auditor andBoard Member atTSKB 2002. Hehasalsoservedasan PresidentVice between 1996and positions, latestbeinganExecutive İşbank in1971where heheldseveral Sciences. Hestartedhiscareer at of EconomicandAdministrative Akpınar graduatedfrom İzmirSchool in1944,Mr.Born MustafaMurat of theBoard 10 MustafaMuratAkpınar, Member in AnadoluEndüstriHoldingA.Ş. been thePresident ofFinanceGroup 2010. SinceFebruary2010hehas CEO ofABankbetween2003and Manager ofALease.Heservedas In 1997,hebecameGeneral Banking atCredit Lyonnais İstanbul. for CorporateandCorrespondent Presidentbecame ExecutiveVice Branch ofCredit Lyonnais, Mr. Arığ in Paris.Afterheadingtheİzmir Credit Lyonnais LeasingInternational Cross Border LeasingManagerat he assumedresponsibilities as for marketing.From 1991to1994, an AssistantManagerresponsible 9 ABank Annual Review 2011 10 ABank Annual Review 2011 Message from theCEO economic conditionsstartedtoposedifficulties. performance inayearwhentheglobal exhibited asuccessfulfinancialandoperational the scopeofitsprudentgrowth strategyand ABank hasreached its2011targetswithin banking sectorgrew itsassetsize the worldeconomyin2011, Turkish Despite theongoingdifficulties in financing. demand andfundedbyforeign was supportedbystrong domestic the lastquarterofyear, which surpassed expectationsupuntil demonstrated agrowththat pattern the Lira.TheTurkish economyhas to adoptatighterpolicysupport return prompted theCentral Bank time inflationarypressures whichin Turkish Lira,creating atthesame a significantdepreciation of the increasing globalrisksresulted in interest rateenvironment and the beginningof2011.Thelow Bank havebeeninfluentialsince In Turkey thepoliciesofCentral as well. countries andtheglobalmarkets shadow ontheeconomiesofthese problems willcontinuetocast developments havecaused.These markets thattheseunfavourable and thefluctuationsin countries intheEuropean Union the debtsustainabilityofcertain with growingabout concerns The year2011willberemembered and thebankingsector. have beenlimitedonoureconomy The adverseeffects ofthe crisis in assetquality, thenarrowing of in fundingsources, improvement GDP ratio.Theincreased diversity higher levelsintermsofloans to robust indicators,andreached sector closedtheyear2011 with In general,theTurkish banking global financialmarkets. in absorbingpossibleshocksfrom based onstrong equityiscrucial and maintenanceofthecapital The favorabletrend inasset quality markets. foreign fundingfrom international comfortable intermsofsecuring and thesectorbecamemore through bondissuanceexpanded funding secured bythesector competitive environment, alsothe Attracting depositscreated a policy andliquidityinthemarkets. Bank squeezedthemonetary environment where theCentral become muchmore criticalinan Diversifying fundingresources have half oftheyear. within thesectorduringsecond resulted inincreasing competition restrained growth inloans;which Regulation andSupervisionAgency, Republic ofTurkey andBanking adopted bytheCentralBankof On theotherhandmeasures and maintaineditsstrong standing. international arena.international We havealso thanks toourcredibility inthe year amountingEUR30million loan received attheendof the supportofsubordinated base wasfurtherenhancedby the levelofTL 507million.Capital equity basewhichhasreached of theyear, asaresult ofoursound at acomfortable13.7%theend Our capital adequacy ratio prevailed strategy. terms ofimplementingourgrowth provides acomfortablecushion in than makingupfortheexpenses been soundandtherevenues more Our expenditure ratioshave also and improvements intechnology. of theorganizationalrestructuring months oftheyearwithsupport during thecourseoflasttwo revenues corresponds to60% base. Theincrease onbranch which hasbecomeastableincome income recorded a25%increase improvement andnon-interest income haveshownsubstantial Interest andnon-interest amounted toTL 21million. billion. Profit fortheyear2011 expanded by50%toreach TL 6.4 conditions. Ourbalancesheet difficulties andunfavourablemarket targets fortheyeardespiteall 2011 successfullybyachievingits ABank hascompletedtheyear present conjuncture. successful performanceinthe ABank hasdemonstrateda the period. direction ofthenetprofit figures for will becrucialindeterminingthe of loansandthispositivereflection derived through risinginterest rates positively onthenetinterest margin period ahead,willcertainlyreflect hikes incostoffundingduringthe It hasbeenarguedthatpossible period. important developmentsforthe efficiency canbenamedasother interest marginsandincreased peer group. ranked number2initsimmediate assets reaching 67%,our bank itsratioofcashloans tototal With and mediumsizedenterprises. focusing onthefinancingofsmall kept itsmodestlevelforabank Standing at4.8%,ourNPLratio in 2011toreach TL 4,281million. Our loanportfoliogrew by32.5% liabilities. base comprised67%ofourtotal the endofyearourdeposit that endedtheyearat116%.At in ourloanstodepositsratio contributed totheimprovement TL 4.3 billionattheendofyear growth. Total depositsequaling the sector’s performanceindeposit in totaldepositswhichoutscores We haverecorded a56% increase funds secured from abroad. funds, 80%wascomprisedbythe total foreign currency denominated liabilities was18.2%andofthe fundswithinthetotal the external At theendofyear, theshare of liability sideofourbalancesheet. capabilities inbuildingupthe significantly enhanceour fundsraised The external its kindinthecountry. also forTurkey, sinceitisthefirstof milestone notonlyforABankbut in Turkey wasanotherimportant supporting womenentrepreneurs IFC andFMO,forthepurposeof 5-year loanfacilitysecured from the Furthermore, theUSD 40million financialinstitutions. international the participationof25localand of USD 235million-supportedby facility intheequivalentamount secured a1yearsyndicatedloan of retail banking activity, structuring of processing activity, resumption expansion schemes,enhancement infrastructure, progress inbranch the conversionoftechnological Completion oftheinvestment for transition yearforABank. 2011 hasbeenanimportant Yours sincerely, support inachievingourtargets. Banking” clientsfortheircontinuous correspondents andour“Happy my colleagues,ourvalued our Board ofDirectors, allof appreciation toourshareholders, I wouldliketoextendmy the AnadoluGroup. corporate andbusinessculture of which embracesthedeep-rooted success withitshighlyskilledstaff ABank isfocusedongrowth and funding base. network aswellourinternational continue expandingourbranch and ourbusinessvolume,to number ofclientsinmainsegments determination toincrease the this process, wewillproceed with cautious approach. Throughout short andmediumtermwitha its organicgrowth strategyinthe ABank willcontinuetoimplement SME weightedportfolio. commercial enterprisesinamainly client basethatspreads intosmaller medium termwe’re targetinga also attractingnewclientele.Inthe number ofactivecustomerswhile of thecredit riskandexpandthe to furtherimprove concentration ABank isimplementingstrategies 2011. have concentratedduringtheyear constituted themainissuesthatwe to increase brandrecognition Banking” conceptandefforts centered around the“Happy work ofcorporatecommunication individual bankingandcontinuous portfolio, gainingmomentumin of anSMEweightedcustomer CEO Hamit Aydoğan 11

ABank Annual Review 2011 12 ABank Annual Review 2011 Senior Management Senior Management 10 5 10 8 6 4 2 1 9 11 3 7 9 5 Vice President,Vice Treasury. joined ABankin2011asExecutive Group HeadatAnadolubank.He 2007-2011 heservedasTreasury Management Consultants.Between he movedtoProject ManageratHelix Ziraat PortfolioManagement.Later he servedasGeneralManagerat Invest Istanbul.Between2004-2006 he workedasdirector atStandard at UlusalYatırım. From 2002-2003 served asDeputyGeneralManager Ulusal Bank.From 2000-2002 he 2000 heworkedasmanagerat at AlfaSecurities.Between1997- Presidenthe servedasSeniorVice Department. From 1995to 1997 Inspector attheBoard ofInspections Exchange in1992asAssistant started hiscareer atIstanbul Stock of AccountingandFinance.He Marmara University, Department and holdsamaster’s Degree from University, Faculty ofEconomics in1969.GraduateofIstanbul Born 2 A.TolgaŞenefe,EVP,Treasury CEO sinceFebruary2010. Member andhasbeenservingasthe Member andtheCredit Committee ABank inAugust2009astheBoard Bank between2003-2009.Hejoined President atKoçbankandYapı Kredi served astheFirstExecutiveVice Leasing between1997-2003,helater CEO ofYapı Kredi LeasingandKoç Factoring. Afterworkingasthe Yapı Kredi LeasingandYapı Kredi held Board Memberpositionsin Marketing inYapı Kredi Bankand responsible forCorporateCredits Presidentas theExecutiveVice Between 1993-1997heserved regions between1986and1993. positions inbranchesvarious Auditor in1981,laterheldManagerial He joinedYapı Kredi Bankasan Science andPublicAdministration. East Technical University, Political in1958.GraduatedfromBorn Middle Board andCEO 1 HamitAydoğan,Memberofthe 12 responsible forOperationsat the AssistantGeneralManager in severalbanks.Afterserving as within theOperationsDepartments he heldvariousmanagerialpositions Exchange Chief.From 1983onwards, at Akbankin1980asAssistant Literature. Hestartedhiscareer Department oftheFaculty from AtatürkUniversityFrench in1954,Mr.Born Saraçgraduated 6 MehmetSaraç,EVP,Operations Information Technology in2007. President,ABank asExecutiveVice positions, Mr. Güvenerjoined After servinginvariousmanagerial Information Technology Department. 1985 asManagerresponsible forthe his bankingcareer atCitibank in from thesamefaculty. Hestarted and heholdshismaster’s degree Department ofElectronic Engineering Middle EastTechnical University, Mr. Güvener graduated from the Technologies 5 ErtanGüvener,EVP,Information Restructuring &LegalFollow-up. President,Vice Credit Monitoring, joined ABankin2011asExecutive Credits atthesameinstitution. She President Corporate,SME andMicro and 2011sheservedasSeniorVice joıned Finansbankandbetween2008 Group inFortisbank.In2008 she Restructuring andLegalFollow-up 2008 shemanagedRiskSurveillance, President,Vice between2003and Fortisbank RiskSurveillanceUnitas 2003. In2003shestartedtomanage held variousmanagerialpositionsuntil career atDışbankin1995where she - Economics.Shestartedherbanking University, FacultyofPoliticalScience in1972.GraduateofAnkara Born Follow-up Department Monitoring, RestructuringandLegal 4 DilekAlgan,EVP,Credit ABank in2001. positions atdifferent levels.Hejoined Department, where heheldvarious 10 yearsintheFinancialControl 1991, hejoinedKoçbankandspent worked intheCredit Department.In He firstjoined Yatırımbank and degree from KoçUniversityin1995. Department. Hereceived hisMBA from İstanbulUniversityEconometrics in1964.Mr.Born Şipalgraduated 3 CemŞipal,EVP,FinancialControl in February2011. and SMEMarketing.Hejoined ABank appointed asEVPinchargeof Retail branches. InOctober2000,he was responsible from different groups of of CorporateBankingCoordinator 1997 to2000heheldtheposition branches inthesamebank.From from 1993to1997servingatvarious 1991. HebecameBranchmanager President oftheInspectionBoard in 1984 andbecametheAssistantVice Istanbul asanAssistantInspectorin his bankingcareer atYapı Kredi Bank, and AdministrativeSciences.Started University, Bursa,FacultyofEconomic in1957.GraduatedfromBorn Uludağ and CommercialBanking 9 MuzafferÖztürk,EVP,Corporate the Board ofInspections. was appointedasEVPinchargeof Department. InNovember2011he Controla managerattheInternal In 2008hereturnedtoABankas A.Ş where hestayedforthree years. Control DepartmentofRenault Mais Accounting, BudgetandManagement 2005 hebecametheDirector ofthe Board ofInspectionsatABank. In he workedasamanageratthe 2002. Between2003and2005 Department between1998and Audit as amanagerattheInternal he servedfirstasanauditorthen joined İktisatBankin1996,where Garanti Bankin1994.Lateronhe career asanassistantauditor at Economics in1993.Hestartedhis and IstanbulUniversityFacultyof from GalatasarayHighSchool in1969,Mr.Born Çalışkangraduated Inspections 8 MutluÇalışkan,EVP,Boardof June 2011. in chargeofHumanResources in Presidentbecame theExecutiveVice PresidentExecutive Vice in2004.He Department before becoming held severalpositionsintheTreasury joined ABankin1992,where he career atTurkishbank in1991.He Economics. Hestartedhisbanking from İstanbulUniversity, Facultyof in1967,Mr.Born Özergraduated Resources 7 MuratÖzer,EVP,Human President, Operations. ABank in2007astheExecutiveVice DenizBank forfouryears,hejoined President ofRetailBanking. joined ABankastheExecutiveVice Banking Department.In2007,he PresidentExecutive Vice oftheRetail where hewasappointedthe he joinedDışbank(FortisBank), Yapı Kredi Bankin1985.In1997, He startedhisbankingcareer at from İstanbulTechnical University. in1959,Mr.Born Alpmangraduated 12 ZiyaAlpman,EVP,RetailBanking position in2008. Presidentto theExecutiveVice Department where hewas promoted FinancialInstitutions the International joined ABankin1998astheHeadof Institutions Department.Mr. Sömek held variouspositionsintheFinancial he hasjoinedKörfezbank,where he & MarketingOfficerin1990.In1995, Industrial BankofCyprusasaCredit Account Officer. Laterhehasjoined at Turkish Bank in1988asan 1987. Hebeganhisbankingcareer University, Washington, D.C.,in in EconomicsatTheAmerican 1985 andreceived hisM.A.degree RiverFallsin University ofWisconsin, Administration Departmentof graduated from theBusiness inCyprus1963.Mr.Born Sömek Financial Institutions 11 ŞakirSömek,EVP,International Department, from 1998until2012. held theEVPpositionatABankCredit Credit Department.Mr. Saygıcıhas at İktisatBankastheEVPof Assistant Inspector. Laterheworked career atAkbankin1977asan Economics. Hebeganhisbanking from İstanbulUniversity, Facultyof in1952,Mr.Born Saygıcıgraduated Administration 10 SadıkSaygıcı,EVP,Credit 13

ABank Annual Review 2011 14 ABank Annual Review 2011 · · · · In 2011,ABank: medium-sized bankwith150brancheswithin5years. ABank pursuesitsefforts inlinewithitsstrategiesofbecominga Highlights from 2011… sound medium-sizedbank; in 2010abidtobecome plan, whichithadlaunched implement its5-yearstrategic successfully continuedto countries; this facilityfrom 12different institutions contributingto financial known international strong relations with25well- credibilityits international and syndicated loanbyvirtueof obtaining aUSD 235million achieved anothersuccessby volumes; loan andindividual also expandeditsenterprise individual banking;theBank middle incomegroups through and themiddleupper through enterprisebanking address small-sizedenterprises the area ofretail bankingto accelerated itsactivitiesin its targetsinbothareas in2011; the Banksuccessfullyreached focus togainnewcustomers, broader clientbase;witha segment inorder toreach a and enteringtheretail banking the numberofitsbranches corporate strategyasexpanding determined thepillarsofits · · · · · entered intowithGarantiBank; line withthePOSagreement it management product range in further reinforced itscash reached withGarantiBank; the outsourcing agreement customers in2012,linewith with theBonusfeature toits introduce newcredit cards finalized thegroundwork to with theBoğaziçiUniversity; held forSMEsincooperation which isaneducationprogram social responsibility project, SME istheStarofFuture) KOBİM GeleceğinYıldızı”(My proceeded withits“Benim in Turkey; owned bywomenentrepreneurs medium-sized enterprises in order tofinancesmalland Bank oftheNetherlands(FMO) Entrepreneurial Development Corporation (IFC)andthe from Finance theInternational term loanworthUSD 40million project byproviding a5-year intermediating inaninnovative Turkish FinancialInstitutionto long-term loanasthefirst received aspecialpurpose support itsorganicgrowth; infrastructure efforts, whichwill organizational andsystem virtually completedits · · · · · effective manner; such processes inamore automation inorder torender were executedthrough system that itsbusinessprocesses accelerated itsefforts toensure and operationalaspects; efficiency indecisionmaking order toimprove flexibilityand Head Office andbranchesin and credit organizationatthe restructured itsmarketing 2012; banking systemon1January seamlessly launchedanew generated. of Turkey’s GDPisbeing regions where around 90% Turkey withapresence in branch networkthroughout the Bankthusgainedabroader 10 newbranchesin9cities; to reach 63in2011byopening expanded itsbranchnetwork and openingnewbranches; reorganizing thedepartments of employeesto1,185by increased itstotalnumber known multilateralinstitutions. for SoutheastEurope (EFSE),globally Institution) andTheEuropean Fund German InvestmentandDevelopment Entwicklungsgesellschaft mbH (DEG– jointly byDeutscheInvestitions- und of 10yearsandwasextended This specificborrowing had a maturity amounting to€30millionin2011. by obtainingasubordinated loan equity by3%YoY toTL 507million by expandingitsshareholders’ ABank supporteditsgrowth strategy firms fittinginSMEdefinition. entities whichare ingeneral typical revenue generationfrom these ABank captures sustainable customers oftheAnadoluGroup, of thesynergyobtainedthrough segment. Taking intoaccount with particularinterest inthis peer group banksasaninstitution The Bankstandsoutamongits and expanditsSMEclientbase. develop itsretail bankingsegment the Bankpursuesitsobjectivesto In parallelwithitsgrowth strategy, around 20%. of securitiesinitstotalassetsat of liquidity, thuskeepingtheratio the Bankmaintainedahighlevel of uncertaintiesinglobalmarkets, billion. In2011,whichwasayear the 2010figure to reach TL 6.4 grew by50%whencompared to ABank’s consolidatedtotalassets sector’s average. to TL 4.3billion,wellabovethe cash loansincreased by32% quality structure. TheBank’s total risk policiesreflected initsasset strongly supportedbyitsprudent robust loangrowth, whichis In 2011,ABankmaintainedits growth targets in2011 performance inlinewithits ABank demonstratedastrong A Reviewof2011Activities cycle byproviding effective and value inallphasesoftheproduction solutions; andaimstogenerate capital needsthrough flexiblecredit chain; meetsitsclients’working in accordance withtheirvalue Bank outlinesitscustomerprofile expectations. Inthisapproach, the meet alltheirrequirements and with complementaryproducts to holistic serviceapproach, supported ABank reaches itscustomers witha standards. firms withfinancialservicesatglobal catering smallandmedium-sized and solution-orientedapproach specialized bank,withrelationship marketing strategyistobea ABank’s fundamentalandprimary Turkey. branches in24citiesthroughout staff, servinginatotalof63ABank through its215marketingsales customers from different sectors of products andservicesto ABank offers itsdiversifiedportfolio more inthesetwosegments. ofTL 5millionor annual turnover and servesthecompanieswithan corporate andcommercial banking oriented approach intheareas of adopted acustomer- andsolution- segmentation scheme,ABankhas In linewithitscustomer and commercial banking A stronger presence incorporate end oftheyear. Loan/deposit ratiowas116%atthe TL 4,308 millionbytheendof2011. primary source offunding,reached same time,represent theBank’s Bank’s totalliabilities,and,atthe currently comprise67%ofthe end of2011.Total deposits,which adequacy ratioof13.7%atthe The Bankrecorded acapital TL 4.3 billion. increased by32%reaching to 7,859anditscashloanvolume corporate customersrose by 52% the Bank’s active commercial/ In thiscontext,thenumberof partnership approach. its customerswithabusiness commercial banking,andby serving its salesteamsincorporateand efficient growth bystrengthening sustainable, welldiversifiedand In 2011ABankfocusedon of itsmarketingstrategies. fundamental factorrightattheheart of companies,whileplacingthis dependent onalimitednumber to divertitsprofitability from being increasing numberofclientsand aims todistributeitsrisksan SME penetrationrate,ABank ahigh segment companies.With banking iscomprisedofSME in corporateandcommercial 80% ofABank’s customerportfolio through increasing product diversity. sustainable andprofitable growth and atthesametimetoachieve balance, tocapture newcustomers concentration andcost/income risk profile, toimprove customer strategy; tobroaden itsexisting In 2011ABankestablisheda profile Maintaining awelldiversifiedrisk and establishingcustomerloyalty. enhancing relations withcustomers the core oftheBank’s successin This approach alsorepresents management products. of deposit,investmentandcash timely solutionsthrough avariety 15

ABank Annual Review 2011 Happy loans to happy enterprises! ABank’s fundamental and primary marketing strategy is to be a specialized bank, with a relationship and solution oriented approach, providing small and medium-sized companies with financial services at global standards. requirements ofitscustomers. (EIB), forthelongtermborrowing and European InvestmentBank Europe (EFSE),World Bank, European FundforSoutheast Development Institution),The (DEG –GermanInvestmentand Entwicklungsgesellschaft mbH Deutsche Investitions-und Bank oftheNetherlands(FMO), Entrepreneurial Development Development Bank(BSTDB), (IFC), BlackSeaTrade and FinanceCorporation International the multilateralinstitutionssuchas resourcesexternal provided by ABank alsoallocatesloansfrom product portfolio. transactions withitsdiversified requirements inforeign trade its customers’expectationsand The Bankonceagainsurpassed exporters asofDecember2011. USD 130 millionresources to Eximbank loansandhasallocated export financingbyintermediatingin The Bankcontinuedtocontribute bank. ABank actedasanintermediary through Turk Eximbank,where which was€30million,were utilized These loans,thetotalamountof from theEuropean InvestmentBank. lending process oftheloansreceived successfully completedtheon- facilities. In2011,theBank tradefinance well asinternational loans tocorporateclientelesas continued toextendproject-based In additiontoSMEloans,ABank the tourismandagriculturalsectors. tailor-made product packagesfor long-term fundingneedsthrough resources tomeetitscustomers’ In 2011,ABankstartedtoprovide customers’ needs tailor madesolutionstomeet Offering adiverserangeof banking. Also,TheBank’s loansportfoliogrew rapidlyandconsistently. the numberofitsactivecustomersinindividual,enterpriseandretail In linewiththeintensifiedmarketingactivitiesin2011,ABankincreased office building. cash financingforabusinesscenter/ project andUSD 20millioninnon- loan forahydroelectric powerplant Bank provided €19millioncash project financingduring2011:the ABank steppedupitsefforts in diversified customer portfolio. and astrongly collateralizedand through effective riskmanagement to supportsustainableprofitability banking strategyin2012willbe ABank’s corporateandcommercial A welldefinedstrategy though DDSexceededTL 4billion. intermediated bytheBankin2011 The totalvolumeoftransactions collection capabilities. advantage bystrengthening their operating costsandgainacost help itscustomersreduce their and suppliersABankaimsto the parent companyanditsdealers as DDS,provides abridgebetween Cash managementproducts such systems. integrated intotheiraccounting by implementinganinfrastructure cash managementrequirements tailored solutionsforitscustomers’ System) products andproduces project-based DDS(Direct Debit management team,ABankdevelops itsexperiencedcash With systems. automatic billpayment/collection payments, collectivepaymentsand tax andsocialsecuritypremium payments (utilities,etc.),alongwith check book,salarypayments,bill management products, suchasa and corporateclientswithcash ABank servesallofitsindividual In parallelwithitscustomers’needs, cash managementproducts Expanding itsclientbasewith sectors. customers indiversebusiness to meettherequirements of products andservicesare developed the existingsynergy. Tailor-made companies byfurtherimproving relations withotherAnadoluGroup ABank alsoaimstoenhanceits areas. itself from unprofitable business customer portfolioswhiledivesting capabilities through selective maximizing itsprofit generating asset-liability structure, aswell by focusingonimproving its strengthening itsdepositbase The Bankisalsofocusedon requirements ofindividualcustomer and servicesthat aimtomeetthe market withaportfolioofproducts principal ofbuildingapresence inthe banking activitiesbasedonthe The Banksetupitsindividual client base. market share bymeansof a broad risk distributionandtoincrease its ABank aimstoensure adiversified the scopeofenterprisebanking, ofuptoTL 5millionwithin turnover Catering SMEswithanannual Bank’s totalloan portfolio. loans aswelltheirshare inthe volume ofSMEandmicro enterprise stepped upitsefforts toincrease the Bank’s branchnetwork,ABankhas activities andtheexpansionof thelaunchofretail banking With segments. individual andenterprisebanking particularly focusingonboththe continued toexpandin2011 the Bank’s retail bankingoperations completed attheendof2010and Banking Departmenthasbeen The organizationoftheRetail activities Emphasizing RetailBanking 17

ABank Annual Review 2011 18 ABank Annual Review 2011 specific targets alsotoincrease billion. Besides,brancheswere given deposits rose by49%YoY toTL 3.7 these activities,theBank’s customer deposit accounts;asaresult of various campaignstopromote time as well.TheBankimplemented to increasing itsdepositsbase significant achievementwith regard In 2011ABankchalkedupa to theprevious year. twentyfold increase whencompared loans volumerecorded more thana fourfold increase anditsenterprise loans volumerecorded more thana consistently. TheBank’s individual loans portfoliogrew rapidlyand of customers,theBank’s retail In linewiththeincreasing number exceeded 21,000. in theretail bankingbusinessline the totalnumberofactivecustomers demonstrated an8-foldincrease; customers inenterprisebanking by 130%whilethenumberof customers inretail bankingincreased activities, thetotalnumberofactive As aresult ofintensifiedmarketing reflecting thegrowth anddynamism. recognition washighlyemphasized strong mediasupport,brand customer satisfaction.Through new philosophyinmarketingand motto hasbeenadoptedasthe with customers.“HappyBanking” are theprimarypointofcontact working initsbranches-which number ofmarketingsalesstaff target, theBankincreased the banking approach. To reach this customers basedontherelationship needs, byallocatingqualifiedtimeto can betailored tocustomers’ Bank aimstooffer products which In itsretail bankingactivities,the as welltheprofessionals. segments inmass–affluentsegment at just4.8%in2011. management approach, ABank’s non-performingloansratiostood As aresult oftheBank’s prudentpoliciesandeffective risk on YoY basis. 34% increase indemanddeposits liabilities. Eventuallythere hasbeen demand depositcompositionofthe its positioninthesector. customer acquisitionandstrengthen loyalty; increase therateofnew increase customersatisfactionand these efforts, theBankaims to its deliverychannels.Asaresult of diversity, whilefocusingonimproving quality andenhanceditsproduct Bank hasfurtherimproved itsservice enterprise bankingsegments,the For itscustomersinindividualand in retail banking Pursuing amore efficient strategy retail business. to gainnewcustomersparticularlyin this network,theBankwillbeable POS network.Through providing cooperation withsalespointsinthe credit card wassupportedbythe the Bank’s movewiththeBonus collaborations. Inthiscontext, grows stronger through sectoral use ofthetechnologyandwhich approach whichmakesefficient aims togenerateaninnovative In retail banking,theBank Group companies. as tostaff andfamiliesofAnadolu existing customerportfolioaswell set tomarketcredit cards tothe activities. Theinitialtargethasbeen in retail andcommercial business boost cross-sell opportunitiesboth This outsourcing effort isexpectedto enjoying alargemarketingnetwork. which isapopularbrandinTurkey cards bearing“Bonus”features, product diversitybyoffering credit ABank willfurtherimprove its 2012 credit card toitscustomersin ABank tointroduce ABank Bonus Bank’s financials. further positivecontributiononthe credit cards in2012willprovide The introduction ofABankBonus and profitability becamemore visible. retail bankingtothebalancesheet this momentum,thecontributionof last quarterof2011.Asaresult of momentum particularlyduringthe Retail bankingactivitiesgained customers. demands ofitsretail banking base andtobestrespond tothe order toserveabroader customer deliverychannels in and alternative management products, credit cards products, insuranceproducts, cash with depositandinvestment expanding itsproducts andservices established withtheaimof ABank’s businessplansare · 2011: Major organizationalchangesin credit allocation. system andtobetterconcentrateon a more efficientcredit allocation designated unitsaimstoestablish accordingly. Theseparationofthese Department wasrestructured units, andtheCredit Allocation functions are executedby separate allocation andcredit monitoring structure inthewaythatcredit reorganized underawell-defined In thiscontext,theBankwas the processes. changes, ensuringtheefficiencyof been supportedbyorganizational The newrestructuring process has in credit allocationprocesses Restructuring toensure efficiency TL 25 millionwere categorized ofmore annual turnover than two groups: companieswithan portfolio were classifiedunder and commercial banking Customers intheBank’s corporate · · · · system forcredit allocation,while converting completelytoanonline a numberofactivities,suchas purpose, theBankengagedin services toitsclientele.Forthis the Bank’s abilitytoprovide quality particularly developedtoenhance IT infrastructure whichhas been a result ofimprovements initsnew the flowofitsdailyoperations,as ABank aimstofurtheraccelerate its competitors. a timeliermannerincomparisonto responding tocustomerneeds on competitiveness intermsof 15 days,increasing theBank’s were halvedfrom 30daysto of credit allocationperiods number ofbranches,duration improve. Despitetheincreasing allocation processes beganto technological system,credit After theconversionofnew department. are onlyundertakenbyone that thecredit allocationactivities Allocation Department,ensuring was transferred totheCredit Sales andMarketingDepartment, operated undertheRetailBanking Allocation Unit,whichhad The RetailBankingCredit departments. are managedbydifferent and restructuring activities allocation andcredit monitoring the Bankensured thatthecredit up Department.Consequently, Restructuring andLegalFollow- established Credit Monitoring were assignedtotherecently risk structuringfunctions The credit monitoringand based onthisclassification. customers were alsoseparated credit proposals infavourofthese departments processing the (T2). Accordingly, therespective TL 25 millionwere categorizedas oflessthan annual turnover as (T1)andcompanieswithan approval. to theBoard ofDirectors fortheir made bythemajorityare submitted directly allocated,whereas decisions made bythecredit committeeare Head Office.Decisionsunanimously upon theproposal madebythe the decisionofcredit committee credit limitsare allocatedfollowing by theBoard ofDirectors. These authority ofthecommitteedelegated collateralized credits underthe collateralized credits andnon- final decisionsoncredit limitsfor The Credit Committeeundertakes · 1.6% in2011. loan portfoliostoodatamodest Group companiesintheBank’s total Total RelatedPartyexposure to the Bank’s totalriskportfolio. customers comprisea29%share in loan exposure. TheBank’s top100 should exceed15%ofthetotal a policyinwhichnosinglesector in theallocationofloans,itpursues principle, applyprioritytoanysector Although theBankdoesnot,asa economic sectors. thus ensuringabalancebetween the basisofcustomersandsectors, and avoidsriskconcentrationon and widespread riskdistribution its loanportfoliohasabalanced ABank endeavourstoensure that good assetquality ABank’s priorityistosustain position. further enhanceitscompetitive its expandingclientbaseandto rapid andhigh-qualityservicesto to ensure thattheBankprovided Committee tobranches,inorder were grantedbyABankCredit in credit allocationprocesses Limited authorizationrights processes. efficiency ofthecredit allocation further improving thespeedand segment. bank focusedmainlyontheSME deemed areasonable levelfora at just4.8%in2011,whichcanbe non-performing loansratiostood management approach, ABank’s policies andeffective risk As aresult oftheBank’s prudent portfolio atthetargetedlevel. the structure andqualityof thecredit periodical basisinorder to balance size andratingisanalyzedona portfolio bysector, collateral,loan The breakdown ofthecredit methodologies. use ofcurrent international management modelthatmakes an IT-supported effective risk and onaportfoliobasisthrough and managedbothexclusively balance sheet,are monitored subject to,bothonandoff the The credit risksthattheBankis any bank. would demonstratetheactualriskof ratingmethods,which internal the implementationofadvanced criteria istoprovide thefacilitiesfor The ultimategoaloftheBaselII Basel IIFramework. management criteriasetforthinthe of compliancewiththerisk Bank hasalsoadoptedaprinciple its corporateorganization.The as oneofthebasicguidelines Risk ManagementPrinciples” ABank acceptedthe“International system the Bank’s riskmanagement revisions andimprovements to Basel IIcriteriabringssignificant 19

ABank Annual Review 2011 20 ABank Annual Review 2011 140 banks at the end of 2011. 140 banksatthe endof2011. network comprisedofmore than The Bank’s activecorrespondent communication basedapproach. institutions through arelationship and world’s leadingbanks andfinancial based onmutualbenefitswiththe aims toestablishlong-termrelations Institutions Departmentprimarily The Bank’s Financial International shareholder suchasAnadolu Group. place undertheroof ofarespected robust financialstructure andits arena international thankstoits a prestigious positioninthe of itsreputation. TheBankenjoys competencies andakeyelement banking are oneofABank’s basic Its efforts inthearea ofinternational success an invaluableelementofABank’s financial institutionsrepresents relations withinternational A strategyofestablishingstrong requirements astheyarise. successful statisticalmodelstomeet new systemandtodesignmore pursues efforts toimprove the capabilities, theBankintensively organizational andtechnological thesupportofitsstrong With measurement capabilities. objective criteriaandimprove itsrisk customer evaluationundermore with theBaselIIcriteria,toconduct rating systeminorder tocomply In 2011ABankrenewed itsexisting Management Department. independently bytheRisk monitored fortheirperformance are continuouslyreviewed and rating systems.Thesystems credit teamsworkingwithinternal ratings are performedbyexpert monitoring ofcustomers’credit Customer selectionandthe in itsfundingcostsandthematurityofportfolio. fundingbaseandthusenabledimprovements ABank diversifieditsexternal Having increasedtradevolumesinlinewithitsstrategies, itsinternational its products, servicesandsolutions. credit supplyfacilitiesandtodiversify with themtoexpandtheBank’s institutions andundertakesinitiatives rating agenciesandsupranational to itscorrespondent banks,credit Department promotes theBank FinancialInstitutions International In linewiththesestrategies,the institutions. credit agenciesandsupranational with theworld’s leadingexport ABank alsoenjoysstrong relations financial markets. as wellthedevelopmentsinglobal and demandsofABankcustomers, to expandinparallelwiththeneeds correspondent networkcontinues This widespread andeffective and emergingmarkets. but alsowithrelatively riskycountries not onlywithdevelopedcountries, tradetransactions, their international business partnerofitscustomersin The Bankisanefficientandprimary customer-oriented approach. correspondent networkand operating infrastructure, effective experienced staff, sophisticated tradewithits in international requirements ofitscustomers flexible andrapidsolutionstothe ABank provides optimum, funding portfolio. costs andinthematurityof enabled improvements initsfunding fundingbaseandthus external strategies, ABankdiversifiedits trade volumesinlinewithits Having increased itsinternational a challengingglobalconjuncture providing funds,despite external A successfulyearforABankin international banks. banks. international enjoys intheeyesofleading confirming theconfidenceABank loan isquitesignificantintermsof of theglobalfinancialcrisis,this in particular, wasundertheeffects conjuncture, inwhichtheEurozone, Completed inachallengingglobal on May17th,2011. ABank andtheparticipatingbanks loan agreement wassignedbetween intermediated tofinanceexports.The from 12different countries andwas Bank. Itwasprovided by25banks maturity sincetheinceptionof amount tobereceived atoneyear funding activities,asbeingthelargest the highlightsofABank’s external This borrowing hasmarkedoneof USD 45 million. two tranches-€133.5millionand banks. Theloanwascomprisedof from agroup ofitsmajorrelationship currency tranchesyndicatedloan USD 235 millionequivalentdual In May2011,ABankreceived a ABank demonstrates theconfidencein USD 235 millionsyndicatedloan provided by the International Finance provided Finance by theInternational the fundrepresents afirst ofitskind supporting womenentrepreneurs, Designed withthepurposeof initiatives offemaleentrepreneurs A firstintermsofsupporting the women entrepreneurs inTurkey. enterprises ownedormanagedby to financesmallandmedium-sized of theNetherlands(FMO)inorder Entrepreneurial DevelopmentBank Finance Corporation(IFC)andthe term loanfrom theInternational received aUSD 40million5-year In October2011,theBank from theIFCandFMO loan forwomenentrepreneurs A 5-yearmaturity, USD 40million investment inTurkey. institution EFSEtoinitiateitsfirst the globallywellknownmultilateral this fundinghaspavedthewayfor Through the intermediation of ABank, Bank’s activitiesin SMEbanking. in Turkey, alsocontributing tothe smallandmedium-sizedenterprises and willbeutilizedtofinancemicro, strengthened ABank’s capitalbase contributing €10million,hasfurther € 20millionandwithEFSE The loan,towhichDEGcontributed (EFSE). European FundforSoutheastEurope Development Institution)andThe (DEG –GermanInvestmentand Entwicklungsgesellschaft mbH from DeutscheInvestitions-und 30 millionsubordinated loanfacility financial marketsby € receiving a up anothersuccessininternational In December2011,ABanknotched to ABank’s capitalbase from DEGandEFSEcontributes € 30millionsubordinated loan portfolio. brand recognition andnewcustomer attention contributingtoABank’s funding received agreat media for otherwomen.Furthermore, this for children, aswellmore jobs improved nutritionandschooling household povertyreduction, as additionalincomecontribution, bringanarrayofbenefits, such turn in women’s economicpowerwillin women entrepreneurs; theincrease financial supportistobeprovided to the SMEsegment.Moreover, the ABank’s strength andpresence in This innovativeproject reconfirms Corporation (IFC)toTurkey. foreign banksalsoincreased. the amountoffundsprovided from in 2011.Inparallelwiththistrend, by ABankreached USD 2.4billion trade transactionsintermediated The totalvolumeofinternational bank. undertakes theriskofissuing of “IssuingBanks”,whiletheIFC banks thatare listedonIFC’s list trade transactionsissuedbythe is provided guaranteeforitsforeign Agreement oftheprogram, ABank In linewiththeConfirmingBank Finance Program. included intheIFC’s GlobalTrade new agreement withIFC,ABankwas a tradein2011.With in international (IFC), theBanktookasignificantstep FinanceCorporation the International Supported byitscloserelations with funds increasing volumeofexternal transaction volumeand A growingtrade international Volume (USD million) TradeABank International Export 2009 470 1,281 1,751 Import

2010 476 1,610 2,086 Total

2011 489 1,896 2,385 foreign countries. years through bondissuances in successfully makinguseofinrecent which Turkish bankshavebeen capitalmarkets in theinternational a closeviewoftheopportunities borrowing facilities,ABankkeeps theframeworkofnew Within facilities. and generatingnewborrowing provided from correspondent banks network, increasing thecredit lines expanding thecorrespondent tradeproducts, international Department worksondiversifying FinancialInstitutions The International principle ofreciprocity. correspondent banksbasedonthe maintaining strong relations with helps theTreasury Departmentin Institutions Departmentalso ABank’s Financial International transactions. trade for itscustomers’international is abletoquotecompetitiveprices Thanks tosuchcredibility, theBank markets. international Bank’s highlevelofcredibility in financial institutionsconfirmthe from theworld’s leadingbanksand The credit limitsprovided toABank competitive pricingpolicy supporting theBank’s credit International limits processes regarding loansupply. into ABank’s decisionmaking andthesystemwasintegrated System Environmental RiskManagement way inestablishinganewSocial and supranational institutionspaved the relations betweenABankand The strong andlong-standing Management System Social andEnvironmental Risk conscious bankbymeansofits becoming anenvironmentally- ABank tookstepstowards 21

ABank Annual Review 2011 22 ABank Annual Review 2011 a competitiveedgeinthisarea. expertise inderivativestransactionsandaimstobeamajorplayerwith Besides beingastrong marketplayer, ABankhasrapidlygained banking sector. good ratingprofile inthe Turkish time in2011.TheBankenjoysa which wasintroduced forthefirst framework ofthenewmethodology, was determinedasbbwithinthe Moreover, theBank’s Rating Viability its report datedAugust2nd,2011. ABank’s credit ratingsasfollowsin agency, FitchRatings,confirmed credit The international rating ABank isratedbyFitchRatings · · · to Launched in2011,thesystemaims System. Environmental RiskManagement reporting ofABank’s Socialand respect tothemonitoringand set forththeruleswith the Bankpersonnel;and authorities andresponsibilities of criteria aswelltoidentifythe of non-compliancewiththese Bank musttakeintheevent determine theactionsthat Bank wouldsupplyloansto; of personsorprojects thatthe environmental risksandimpacts for theevaluationofsocialand set theprinciplesandcriteria Fitch RatingsannouncedtheBank’slong-term outlookas“Stable”. National LongTermRating Viability Rating Support RatingFloor Support Rating Short TermForeignCurrencyRating Short TermLocalCurrencyRating Long TermForeignCurrencyRating Long TermLocalCurrencyRating ABank RatingNotes financial crisis. financial crisis. the mostturbulentdaysofglobal was successfullyperformedevenin tasks oftheTreasury Department, which isoneofthemostfundamental TL andFXliquiditymanagement, transactions volumein2011 Rapid growth inTreasury qualified personnel. of informationandprofit withits important functionasacenter Treasury Departmentfulfillsan of marketsandliquidityrisks,the In additiontothemanagement from over-the-counter markets. helps theBanktoprovide liquidity Department infinancialtransactions The successoftheTreasury importance infinancialmarkets. criterion whichhasgraduallygained a competitiveedgeinthisarea, a and aimstobeamajorplayerwith expertise inderivativestransactions player, ABankhasrapidlygained Besides beingastrong market and moneymarkets. involved infixedincomesecurities experience, ABankisactively itsmarketknow-howand With transactions management andtreasury A strong marketplayerin fund AA (tur) BB BB NF bb B B 5 markets inTreasury transactions. active participantsofthefinancial become oneofthemostprominent ABank hasalsopursuedefforts to performance inthismarket. have alsoconfirmedABank’s rising derivatives transactionsin2011 Likewise, thegrowth intheBank’s ranking inthebondsandbillsmarket. Bank rapidlyclimbeditstransaction fixed-income transactions,the the volumeofover-the-counter performance in2011.Byincreasing demonstrate anothersuccessful income balanceenabledABankto expertise inmaintainingtherisk- strategies basedontheBank’s FX andfixed-incomesecurities income securities FXandderivatives. is responsible fortradingTLfixed- The Trading Unit,ontheotherhand, securities. of TLdepositsandfixed-income liquidity anddeterminesthepricing Desk managestheBank’s TL The TL/FixedIncomeSecurities providing competitiveprices. transactionsby in international Treasury MarketingUnitparticularly FX/FX operationsandsupportsthe The FXDeskcarriesoutTL/FXand Desk. Money Market/LiquidityManagement Foreign ExchangeDeskandTL been categorizedundertwodesks: Liability ManagementUnithas positions inTLandFX.TheAsset/ of theBank’s assetsandliabilities responsible forthemanagement Asset/Liability ManagementUnitis responsible forsalesandthe The Treasury MarketingUnitis is constitutedoffoursub-units. ABank’s Treasury Department basis Multi-structuring onafunction products. success inthesaleofderivatives segment, andachievedsignificant customers, particularlyinthe SME branches, theBankattracted new cooperation andsynergybuiltwith products. Asaresult oftheclose by developingarangeoftailored customers’ financial requirements in markets.Theyresponded to discussing recent developments and howtheyare used,and also the benefitsofderivativesproducts throughout 2011,informing themof the Bank’s customers andbranches The representatives oftheunitvisited risks. protect itscustomersagainstvarious Unit intensivelyundertakesefforts to markets, ABank’s Treasury Marketing with highaddedvalueinderivatives Also offering servicesandsolutions of thefinancialmarkets. the real sectorandtherapidgrowth risk perceptions, therequirements of interest inderivativesamidchanging has developedanincreasing levelof country, asintherest oftheworld, the businessenvironment inour In thelightofglobaldevelopments, importance Derivatives gainingmore and English. and privatereports inbothTurkish Research Unitprepares itsperiodic market dynamics.TheEconomic to theBank’s customersregarding presenting comprehensive analyses markets andsupportsbranchesby trends andrisksintheeconomy on aregular basiswithrespect tothe customers. Thisunitprepares reports Treasury DepartmentandtheBank’s for ABank’s seniormanagement,the Unit performsresearch andstudies Department, theEconomicResearch Functioning undertheTreasury transactions. interest transactionsandinterbank buying &sellingtransactions,forward and discountbonds,forward FX products, includingloans,coupon made forvariousmoneymarket allows sensitivityanalysestobe through theVaR model.Thismodel ABank monitorsinterest rate risk the balancesheetindetail. management tocontinuouslymonitor carried bycustomers,allowstheBank reports withrespect tothepositions software, whichproduces detailed The currently usedin-housecomputer specifically designedforeachproduct. This modelsetsoutlimitsthatare markets. and usingthedataofTurkish capital meticulously analyzing,studying the Value atRisk(VaR) methodby risks are calculatedaccording to At ABank,FX,interest andliquidity management Prudential marketrisk market. and strong playersofthederivatives ABank aimstobeoneoftheleading gained more importance. effective andcomplicatedhave while exoticproducts thatare more of assets-liabilitiesmanagement, risks inthebalancesheetterms used toprovide aguaranteeagainst a highernumberofderivativesare to hedgerisks.Atthesametime, derivatives transactionsinorder increased demandandinterest in real sector’s requirements have economic growth andtheTurkish strong growth potential.Turkey’s European economies,Turkey offers Eurozone andsomeemerging Despite thechallengesfacing profit fortheTreasury Department become asignificantsource of Derivatives transactionshave following a7-monthtransition period. operation onJanuary2nd,2012 platform, Inter-Next, entered ABank’s newsysteminfrastructure · · · · which is: initiation ofitsnewbankingsystem technological infrastructure and history withtherenewal ofits milestone intheBank’s corporate plans, theyear2011represented a In parallelwithABank’s growth Inter-Next –entersoperation ABank’s newbankingsystem– the Bank. assures ahighlevelofproductivity for ability tomonitorthesystemdata to produce automaticreporting. The 2011, entered operationandbegan which wascompletedattheendof ABank’s newsystem,Inter-Next through marketactivities. of anyrisksitmaybeexposedto assist theBankinkeepingcontrol Liability Committee.Thesereports results ofsuchauditstotheAsset- counterparty limits,andtoreport the prices andrisklimits,aswell is toconductnecessaryauditson Audit Coordination Department, Unit, whichreports totheInternal The functionoftheTreasury Control Treasury ControlUnit a weeklybasis. reported ofcustomers’positionson of theAsset-LiabilityCommitteeare Board ofDirectors, andthemembers position limitsare determinedbythe At ABank,allpurchase-sale and opportunities. reporting andanalysismaking offers easydatareceiving, and user-friendly; security standards; more compliantwithinformation more flexibleandup-to-date; 23

ABank Annual Review 2011 24 ABank Annual Review 2011 increase andcostcontrol. of expertiseandare manyinnumberensuringriskcontrol, efficiency ABank centrallyprocesses transactionswhichrequire aspecificlevel · · · · · · · · Inter-Next: system. all thesophisticatedfeatures ofthe system efficientlyandmakinguseof and betterservicesbyusingthenew customers withmore comprehensive ABank’s nexttargetistoprovide its free adaptation. Bank experiencedrapidandtrouble- During andafterthetransition, profit basis. customer, employeeorsource of numeric measurements ona managerial capabilitywith will increase theBank’s productivity; and operating costsandincrease its will allowtheBanktoreduce its dependencies; reduced systemicrisksand customer-oriented structure; and fasterservicesthankstoits opportunity tooffer improved provided theBankwith accordance withdesired criteria; and analyzedrapidlyin new system,wasreceived and auditablethankstothe which ismeasurable,traceable effective asdatafrom customers, management processes more would beabletorender itsrisk access andreporting; theBank environment intermsofdata a more flexibleandsimplified allowed theBanktoestablish with CoBITstandards; structure thatismore compliant allowed theBanktoestablisha and serviceswiththesystem; easily harmonizenewproducts rapidly; thisway, theBankwould new developmentsmuchmore so thattheBankcouldadaptto introduced systemicflexibilities advanced level; infrastructure toahighly carried theBank’s technological By undertaking regular visitsto that eachbranchisacustomer. acts upontheunderstanding In operationalservices,theBank Bank’s operatingresults in2011. was increasingly reflected tothe increases employees’motivation, satisfaction. Thispractice,whichalso increasing thelevelofcustomer and speedontheother, thus one handandtransactionquality This approach raisesefficiency on perform alloperationaltransactions. to their ownfunction,butalsolearns is notonlyresponsible forfulfilling been clearlydefined,eachemployee operating unitsinbrancheshave Although thefunctionsof customers, marketingandsales. maximize thetimetheyallocatetotheir allow branches’marketingunitsto burden, thecentraloperations By removing theoperationalwork solutions forproblems. by branchesandproduces rapid responds toallquestionsforwarded such documents.Thesupportdesk present ornot)andthecontentsof presence (whetherdocumentsare are minimizedbycheckingthe of centralizationis100%andrisks all ofthesetransactions,therate as EFTandSWIFTtransactions.In processes andqueryletters,aswell company payments,centralseizure check andbondtransactions, tradetransactions, international of credit extensionprocesses, are responsible forthemanagement The CentralOperationDepartments efficiency increase andcostcontrol. in numberensuringriskcontrol, level ofexpertiseandare many transactions whichrequire aspecific ABank centrallyprocesses central operations Maximizing efficiency through transactions was99%. accuracy rateinoperational In 2011,therateofABank’s quality. processes andincrease service excellence istorender flawless efforts thatfocusonoperational The ultimatepurposeofallthese efficiency. business processes intermsof reviewing itshumanresources and efficient processes bycontinually branches. TheBankcreates more increase theservicequalityof new solutionsinorder tofurther to-one negotiationsandproduces and recommendations through one- feedback from branches,opinions branches, theBankreceives were defined underthetitle; with respect toriskmanagement At ABank,allpoliciesandprocesses principle. forth intheBaselIIFramework asa principles ofriskmanagementset adopted compliancewiththe organization. TheBankhasalso basic guidelinesforitscorporate Risk Management”asoneofthe the “PrinciplesofInternational the risktaken.ABankhasadopted the returnoncapitalcompared to the addedvaluebymaximizing the riskstheycarryandtoincrease to thebusinesslinesinlinewith allocate capital(economiccapital) purpose ofriskmanagementisto throughout theBank.Themain means ofaneffective coordination that theBankcouldbesubjecttoby management ofthepossiblerisks is responsible forthecentral The riskmanagementdepartment Risk Management Audit Mechanism Risk ManagementandInternal they determine all the principles they determine alltheprinciples under theirresponsibility. Moreover, that fallundertheriskcategories measurement methodsforallrisks monitoring andevaluating are responsible fordesigning, The individualriskcommittees exchange raterisk. liquidity riskandforeign currency controlling, generalmarket risks, the Bank,aswellmonitoringand structural assetliabilitymismatchof for monitoringandmanagingany Directors. TheALCOisresponsible the limitsdeterminedbyBoard of manage therisksincompliancewith departments oftheBankandto income balanceofallcommercial make basicdecisionsontherisk- of theBank’s RiskCommitteeto it isthedutyandresponsibility they are implemented.Moreover, of Directors andmonitoringhow policies totheapproval oftheBoard as presenting suchstrategiesand to bepursuedbytheBank,aswell management strategiesandpolicies responsible fordefiningtherisk The Bank’s RiskCommitteeis Bank. risk policyandtheappetiteof of Directors determinesthegeneral management structure. TheBoard other importantbodiesintherisk Management Departmentare the Committee (ORC))andtheRisk Committee (MRC),OperationalRisk Committee (CRC),MarketRisk committees (suchasCredit Risk Committee (ALCO),individualrisk Risk Committee,AssetLiability Board ofDirectors. TheBank’s Bank issubjecttostartsatthe management oftherisksthat measurement, monitoringand includes effective identification, Management Process, which Management System”.TheRisk “Working PrinciplesfortheRisk requirements whichmay arise. circumstances andanypossible criteria inaccordance withchanging implements credit riskmeasurement The Committeealsoupdates and defined credit limitsintoaccount. by takingscenarioanalysesand monitoring riskycredit amounts control byallocatingnewlimits, and Bank, keepingtheserisksunder the credit limitsdetermined bythe responsible forregularly reviewing credit risks,theCommittee isalso Risk Committee.Whenitcomesto criteria determinedbytheBank’s Directors andtheriskevaluation determined bytheBoard of framework ofthecredit policies with legalcredit limitswithinthe and checkwhethertheycomply evaluate theBank’s credit risks Risk Committeeistomonitorand The basicfunctionoftheCredit scenarios. tests andalternative methodologies bydesigningstress efforts tosupportriskmeasurement retroactive testresults andperforms from bankingproducts, analyzes measure andlimitrisksarising the determinationofmethodsto Risk Committeewithrespect to recommendations totheBank’s value. TheCommitteeprovides Bank’s profitability andeconomic effects ofmarketconditionsonthe and minimizethepotentialadverse Committee’s responsibility tolimit In addition,itistheMarketRisk establish relevant control systems. and theinvestmentbookto regarding boththetradingbook established toimplementriskpolicies The MarketRiskCommitteewas how thoseplansare implemented. to minimizetherisksandmonitor the necessaryactionplansinorder management processes andprepare and policieswithrespect torisk of aPresident, Presidents, twoVice a no. 5411.TheBoard isconstituted as perArticle24oftheBanking Law Audit Committee,whichwas set up its inspectionactivitiesunder the The Board ofInspectionscarriesout Board ofInspections AuditSystem Internal Committee andseniormanagement. and dulynotifyingtheBank’s Risk for monitoringanylimitbreaches the Departmentisalsoresponsible risk. Aspartofthesameprocess, credit portfoliossubjectto financial liability managementandtheBank’s Directors regarding trading, asset- limits asdeterminedbytheBoard of of shareholders’ equityandrisk profit centers,byusingtheamount limits tobeappliedtherespective Department determinesrisk-based the definedlimits.Moreover, the reports whethersuchrisksare within The Departmentalsochecksand by theBank’s RiskCommittee. Risk Committeesandapproved Risk, Credit RiskandOperational are recommended bytheMarket assumptions andparameters,which framework ofmodelsandsuitable and evaluatingtheriskswithin responsible forregularly monitoring Management Departmentis to theAuditCommittee,Risk executive functionsandreporting Working independentlyofthe and AuditBoard. the reportingControl oftheInternal eliminate problems associatedwith the actionsthatmustbetakento these studies,priorityisgivento minimize theserisks.Inperforming necessary actionstobetaken Bank’s operationsanddefiningthe risks thatmayariseduringthe reviewing anddiscussingthe is responsible fordetermining, The OperationalRiskCommittee 25

ABank Annual Review 2011 26 ABank Annual Review 2011 management systems, soundness management systems, soundness control adequacy ofinternal and risk audits, theBoard checksthe means ofperiodicandrisk-sensitive and theseniormanagement. By reports submittedtotheBank and reliability ofinformation and resources. Itcheckstheaccuracy ensure effective andefficient useof repeat ofsuchdeficiencies andto recommendations toprevent any states itsopinionsandundertakes inadequacy orabuse.TheBoard order toreveal anydeficiencies, basis inarisksensitivemanner Office, are analyzedonaregular those inbranchesandtheHead all in-houseactivities,including auditactivitiesaswell internal to yieldtheexpectedresults, all In orderauditactivities forinternal providing consultancyservices. and toaddvaluetheBankby AuditStandards Internal International risk-oriented auditsinlinewiththe the planningstage,toperform with theBankmanagementduring they arise,aswelltoacttogether problems insteadoffixingthemafter order toplanactivitiesprevent a partnerofthemanagementin preemptive approach”, i.e.tobe Inspections are “proactive audit, audit approach oftheBoard of The fundamentalprinciplesofthe the Bank. subsidiaries thatare controlled by Risk Managementfunctions,andin Control for fulfillingInternal and departments thatare responsible departments intheHeadOffice, ABank branches,aswellthe behalf oftheAuditCommitteein investigation andexaminationon has therighttoperforminspection, Secretary. TheBoard ofInspections information systemsauditing,anda are specializedinbankauditingand sufficient numberofInspectors,who Department include: The monitoringfunctionsofthe intrinsic policiesandprinciples. as theBank’s procedures, internal other official communiqués aswell with Turkish laws,regulations and conducts itsactivitiesincompliance of theBank’s daily functioningand Department isdesignedtobeapart ControlThe Internal Coordination assigned accordingly. controland internal personnelare Units operateundertheDepartment, Fundamental Control andSupport Branches Control Unitand The HeadOffice Control Unit, the SupervisionCommittee. responsibilities totheBoard through The Departmentperformsits to theBoard ofDirectors. Committee anddirectly reports the guidanceofSupervision Department operatesunder ControlThe Internal Coordination Department Internal ControlCoordination subsidiaries subjecttoconsolidation. legal authorities,andtheactivitiesof reports submittedtotherespective and theAuditCommittee submitted totheBoard ofDirectors precision andreliability ofreports policies andotherarrangements, regulations, in-housestrategiesand of transactionswiththelaw, to audittheoperations,compliance control procedures are conducted defined procedures andhowinternal compliance ofoperationswith registry entriesandfinancialreports, accuracy andreliability ofaccounting and electronic bankingservices, of electronic informationsystems · activities implementation ofbanking processes related tothe Monitoring theoperational a rangeofcontrol andsupervisory various departmentsthatconduct so, theDepartmentalsocoordinates control internal personnel.Indoing auditing, andthenbytheassigned personnel, whoare responsible for the Bankare checkedfirst by the the transactionsandactivitiesof operates thestructure inwhich The Departmentbuildsand of theoverallcontrol function. duties inorder toassure theintegrity a rangeofcontrol andsupervisory various departmentsthatconduct System, theUnitalsocoordinates Control foundations oftheInternal In additiontolayingthevery relevant departments. the participationofmanagers the Bank’s intrinsicactivities,with according tothespecialfeatures of its dutiesare setoutanddesigned the mannerinwhichitcarriesout Control The Internal Systemand with thecardinal rulesofbanking. laws andrelated regulations, along efficiently andincompliancewiththe Bank’s activitiesare implemented processes, andtoensure thatthe timeliness ofthedatacollection financial reporting systemsandthe reliability oftheaccountingand supervision toassure theintegrity, assets andconductmonitoring Department istoprotect theBank’s The fundamentaldutyofthe · · · principles. customary bankingpracticesand house policiesandrules, and related regulations, in- activities oftheBankwithlaws other outstandingorplanned new products, transactionsand Checking thecompatibilityof systems Monitoring financialreporting and communicationchannels Monitoring informationsystems rating systems. customers are performedbyexpertcredit teamswith theuseofinternal Customer selectionandthemonitoringofcredit ratingsof Department’s findings. problem asdeterminedthrough the relating tothecorrection ofthe Control Coordination Department relevant departmenttotheInternal information isprovided by the deficiencies. Asteadyflowof on corrections toanyreported Department alsofollowsup ControlThe Internal Coordination controlled, examinedandmonitored. opinion regarding mattersthatare the Bank’s employees orseektheir demand additionalexplanationsfrom Department staff isauthorized to relevant departments.Moreover, the tobenotifiedthe as warnings findings are reported orprocessed or generalobservations.The other processes basedonspecific control documentsandconducts the Departmentexaminesvarious from relevant departments,and information basedonreporting Coordination Departmentrequires the staffControl oftheInternal control its internal mechanisms, of eachfunctiontheBankfrom control thesafeimplementation In order tomonitor, examineand and theSupervisoryCommittee. checks asrequested bytheBoard Department alsoconductsspecial perform spotinspections.The basis, andisalsoauthorizedto weekly, monthlyandotherperiodical subject toconsolidationonadaily, Departments andsubsidiaries activities ofbranches,HeadOffice monitor, examineandcontrol the The Departmentisauthorizedto rules ofbanking. proceduresinternal andtheethical compliance withthelaw, regulations, are continuouslyauditedfortheir ensures thattheBank’s activities of theoverallcontrol functionand duties inorder toassure theintegrity quarterly meetings. the SupervisoryCommitteeduring These discussionsare presented to necessary precautions are taken. control systemsandtoensure that to developandamendexisting based onthesereports serve necessary. Periodicassessments smaller unitmanagersifdeemed findings withthebranchandother Coordinator mayalsoshare the advice andrecommendations. The the seniormanagement,alongwith CEO andtherelevant membersof relevant membersoftheBoard, the the Supervisorycommittee, communicates monthlyreports to The Coordinator thenprepares and Controlthe Internal Coordinator. the outcomesoftheirstudiesto The staff oftheDepartmentpresents on aregular basis andreported in level, thecredit portfolioisanalyzed Bank’s credit portfolio atapredefined In order tomaintainthequalityof individually andonaportfoliobasis. sheet, are monitored and managed to, eitheron-balanceoroff-balance credit riskswhichtheBankis subject reach similaractions,ifnecessary. All same viewsinsimilarmattersand the decisionmakingprocess share that allpersonnelwhoare involved in policies andprocedures istoensure practices. Anotherpurposeofthese and integrityoftheriskevaluation set uptoensure theindependence credit riskmanagementpolicies were manage itappropriately. Therefore, the Bankanditisvitallyimportantto for is theriskofhighestconcern obligations totheBank.Credit risk to meetitscontractualfinancial loss arisingfrom aborrower’s inability Credit riskisdefinedasthepotential Credit Risk Type Management PoliciesbyRisk Information onAppliedRisk the next business day and any the nextbusiness dayandany compared tothereal losses/gains calculated intheVaR model,are theoretical losses/gains,whichare methodology. Inthismethodology, through retroactively appliedtest of theVaR modelismonitored based tradinglimits.Thevalidity the basisofBank’s risk- last 250businessdays,constitute weighted parametric,VaR, overthe performed usingtheexponentially method. Measurements, which are basis through theValue atRisk(VaR) quantified andmonitored on adaily associated withtradingaccountsare regulations. Moreover, marketrisks which complieswiththeBRSA’s by usingthestandard method, capital requirement formarketrisk rates. ABankcalculatesthelegal rates, share pricesandexchange due tomovementsininterest of positionsintradingaccounts loss thatmayoccurinthevalue Market riskrefers totheriskofany Market Risk arising requirements. successful statisticalmodelsfor the newsystemandtodesignmore intensively pursuesefforts toimprove measurement capability. TheBank criteria andtoimprove itsrisk evaluation withmore objective Basel criteria,tomakecustomer rating systeminorder tocomplywith 2011 ABankrenewed itsexisting Risk ManagementDepartment.In performance independentlybythe reviewed andmonitored fortheir rating systemsare continuously ratingsystems.The of internal expert credit teamswiththeuse of customersare performedby monitoring ofthecredit ratings Customer selectionandthe various aspects. structure, loansize,ratingandother terms ofsectors,exposure, collateral 27

ABank Annual Review 2011 28 ABank Annual Review 2011 below apre-determined ratioofthe available totheBankfrom falling Bank andtheborrowing resources prevent thesumofcashheldby Management Departmentisto The purposeoftheLiquidityRisk Liquidity Risk stable incomestructure. net economicvalueandtocreate a necessary actiontomaintainthe The AssetLiabilityCommitteetakes compliance withdeterminedlimits. is continuouslymonitored for its a maturityslicebasisandtherisk interest rateshockstothe gaps on is measured byapplyingstandard to becauseofmaturitymismatch rate riskthattheBankissubject or durations.Thestructuralinterest according tothere-pricing periods statements onacurrency basis, accounts intothecashflow that are monitored innon-trading placing thosefinancialproducts interest raterisk,are produced by management ofthestructural used inthemeasurement and Duration/gap reports, whichare defined standard interest shocks. event thattheBankissubjectto on itsshareholders’ equity, inthe which havebeendeterminedbased its economicvaluewithinthelimits the Bankaimstokeepchangesin interest raterisks.Inthismanner, accounts are monitored asstructural being monitored innon-trading that bearinterest sensitivitydespite as credits, securitiesanddeposits exposed tothrough products such Market risks,whichtheBankis Structural InterestRateRisk were recognized. the previous day, only4deviations VaR whichhadbeenprojected on value in2011wascompared tothe tests, where theactualdailyP/L thescopeofretroactiveWithin deviations, ifany, are monitored. regulations and theBank’s current compliance ofserviceswithrelevant during theBank’s operations.The the operationalrisksthatarise aimed atdeterminingandeliminating Committee, contributetothe efforts Control the Internal andAudit All respective units,particularly of respective managerialinitiatives. well asestablishingcoordination that fallundertheriskdefinition,as and followingupoperationalrisks responsible fordefining, measuring Risk ManagementDepartmentis factors.The systems andexternal loss, causedbypeople,processes, the possibilityofadirect or indirect An operationalriskisdefinedas Operational Risk Directors. the CommitteeandBoard of while testresults are reported to under various“stress” assumptions, are determined,andtested internally ratios andvariousparametersthat according tolegalliquidityadequacy The Bank’s liquidityismonitored and theMarketRiskCommittee. reports ontheissuetoALCO Risk ManagementDepartment on November1st,2006;whilethe Supervision andRegulationAgency which waspublishedbytheBanking the Bank’s LiquidityAdequacy”, Measurement andAssessmentof of the“Communiquéon is monitored withintheframework Moreover, theBank’s liquiditystatus well asintermsoftotalliquidity. position inTLandFXterms,as The Bankmonitorsitsliquidity Bank’s balancesheetstructure. by marketconditionsand/orthe with cash-flowvolatilitycaused possible liquidityrisksassociated timely andproper mannertotackle necessary precautions are takenina department aimstoensure that that require creation ofliquidity. The sum ofdepositsandotherliabilities and auditactivities. losses andincreasingcontrol internal determining thereasons ofsuch the necessaryactionplansafter are managedbyundertaking Risk Committee,whiletheseevents are evaluatedattheOperational occur orleadtosignificantlosses Operational eventsthatfrequently of followingupoperationalrisks. database establishedwiththeaim to monetarylossesare stored ina closely. Records ofeventsleading procedures andpoliciesisfollowed Training”. of itshumanresources via “Career Bank aimstoensure thecontinuity career managementefforts. The attaches great importancetoits branches. To this end,theBank to therespective departments and training, therecruits are appointed Following 3monthsofbasicbanking a seriesoftestsandinterviews. and Engineeringdepartments,after Economics, BusinessAdministration English speakinggraduatesfrom The Bankrecruits andtrains to trainthemanagersoffuture. programs are organizedinorder At ABank,“ManagementTrainee” “Vacant PositionsModel”. their ownpreferences through the own future career plansandworkto offered thechancetomapouttheir portal, whiletheemployeesare employees firstthrough theintranet within theBankare announcedtothe vertical career opportunitiesarising levels internally. Allhorizontaland usually fills its vacancies at managerial highest positions,whiletheBank opportunity tobepromoted tothe produce addedvalue,are giventhe high levelperformanceandwho those whohavedisplayeda At ABank,successfulemployees, Human Resources its mainbankingsystem. employed inthebrancheswithinframeworkoftransformation ABank heldtrainingprograms onafunctionbasisforallpersonnel · activities in2011: Highlights oftheBank’sHR interview. required credentials are invitedfor database andthosewhohavethe candidates are selectedfrom this or incaseofanyvacantpositions, set outinthebeginningofeachyear, Bank’s annuallaborforce planning staffing requirement aspartofthe for oneyear. Incaseofanyadditional The entriesinthedatabaseare kept Bank’s humanresources database. applications are recorded onthe website, bye-mailorfax.All be submittedthrough theBank’s At ABank,jobapplicationscan Human Resources Statistics improve theBank’s Human Efforts were conductedto Average Seniority Number ofPersonnelFluentin aForeignLanguage Post GraduateDegrees University Graduates High SchoolGraduates Primary SchoolGraduates Educational BackgroundofStaff Average Age Female Staff Male Staff Gender andAge TOTAL Branches Head Office Number ofPersonnel · · · joined ABank. After the training joined ABank.Afterthetraining employees, whohadrecently for aperiodof49days26 “Management Trainee” program The Bankcompleteda communication. and forthepurposeofin-house motivation ofbranchpersonnel visited inorder toincrease the 31 brancheshavebeen branches. has beenintroduced forthe The salespremium practice banking system. during theconversionofcore software intothenewsystem integrate itshumanresources the Bankcarriedoutefforts to reporting processes. Additionally, Resources software and 2009 2009 2009 2009 47% 53% 380 673 204 999 607 392 91 31 34 5 · · 1,086 2010 2010 2010 2010 47% 53% 443 794 188 651 435 76 28 34 employee overtheyear. an averageof43hoursper hours in2011,representing system training,was48,737 The totaltrainingtime,excluding hours oftrainingwasprovided. 48 days,where atotalof7,966 training sessionsthatlastedfor employees participatedinthese banking system.Atotalof572 of thetransformationitsmain branches withintheframework personnel employedinthe on afunctionbasisforall ABank heldtrainingprograms branches. Head Officedepartmentsandthe appointed totheirpositionsinthe programs, theseemployeeswere 5 1,185 2011 2011 2011 2011 48% 52% 471 114 857 186 733 452 5.7 25 35 29

ABank Annual Review 2011 Happy practices in happy banking! With its experience and vision, ABank brings its customers the best practices at international standards, while raising its quality trend by combining its expertise with technology. “Benim KOBİM GeleceğinYıldızı” responsibility project, entitled ABank launchedasocial (My SMEistheStarofFuture) Benim KOBİMGeleceğinYıldızı Our socialcontributionproject: sector. increase people’s confidenceinthe improving thebankingsector andto also endeavourstocontributein lines andtheenvironment. ABank as wellallrespective business pursues policiesthatrespect thelaw, to raisethevalueofBank;it while continuingitsactivitiesaiming the community’s quality oflife, development inorder toimprove principle, supportseconomic framework ofitssocialresponsibility The ABankmanagement,withinthe Social Responsibility to achievetheBank’s goals. that are basedonsuccessinorder humanresourcesmodern programs other units,thedepartmentexecutes for theBank.Incoordination with Department playsastrategicrole ABank’s HumanResources · · · · · · encompasses thefollowingvalues: ABank’s humanresources policy systems. evaluation andcareer planning customer performance andinternal targets andstrategiesbymeansof employees inlinewiththeBank’s the continuousdevelopmentofits ABank’s HRpolicyaimstosupport Human Resources Policy Adhering tosocialresponsibilities Encouraging creativity and success, rewarding theemployees’ all times, Upholding bankingdisciplineat honesty, An unwaveringcommitmentto economic rationale, customers withinthelimitsof Delivering excellenceto would supplyloans to,aswell people orprojects thattheBank environmental risksandimpactsof for theevaluationofsocialand set outtheprinciplesandcriteria by theBank.Thesystemaims to risks ofthefinancingprovided of thesocialandenvironmental the determinationandevaluation ABank establisheditsprinciplesfor thissystemlaunched in2011, With allocation procedures. the procedure intoitscredit necessary trainings;andintegrated Procedure” in2011;provided the Environmental RiskManagement the Banksetupits“Socialand with anundestroyed nature, development canbeonlyachieved sustainable bankingand anunderstandingthat With Management Procedure Social andEnvironmentalRisk certificates. and Mersin,received their programs heldinBursa,Gaziantep people completedthetraining Boğaziçi University. In2011,379 received theircertificatesfrom the Kayseri, SamsunandMersin) Turkey (Eskişehir, Trabzon, Denizli, managers in6citiesthroughout second year, more than800SME In theproject, whichcompletedits labor force. the required educatedandqualified ultimately ensuringthatSMEsgain personal andprofessional skills, and knowledgetoimprove their necessary managerialcapabilities positions ofSMEs,acquire the people, whoworkintheexecutive (BÜYEM) aimedtoensure that University LifetimeTraining Center between ABankandBoğaziçi organized withthecooperation Training programs thathavebeen designed forSMEs. which isatrainingprogram (My SMEistheStarofFuture), health andsafety. the community, butalsoonpublic not onlyontheenvironment and have minimumnegativeimpact Bank isinaloanrelationship with, and corporatebodies,whothe ABank thattheactivitiesofreal It isanimportantcriterionfor System. Environmental RiskManagement reporting ofABank’s Socialand with respect tothemonitoringand personnel, andtosetforththerules and responsibilities oftheBank criteria, toidentifytheauthorities of non-compliancewiththese the Bankmusttakeinevent as todeterminetheactionsthat 31

ABank Annual Review 2011 32 ABank Annual Review 2011 duly informing the public. Questions duly informing the public.Questions Increases, AGM,etc),aswellfor actions regarding investors (Capital Group isresponsible for procedural The AccountingandFinance (www.abank.com.tr). updated website be accessedthrough itsregularly information onABankcanalso community. Comprehensive such informationtotheinvestment and orderly fashionanddistributes in atimely, reliable, consistent, ABank communicatesinformation and regulatory requirements, manner. Incompliancewithlegal rational, interpretable andaccessible content, inanaccurate,thorough, the Bank,withorwithoutfinancial ABank disclosesinformationabout and isnotyetavailabletothepublic, deemed tocontaintradesecrets theexceptionofinformation With iv) Accountability. iii) Responsibilityand ii) Equality, i) Transparency, corporate governance; practices dependonfourpillarsof all managementprocedures and Accordingly,corporate governance. implementing acceptedstandards of ABank iscommittedto Board (CMB). and theTurkish CapitalMarket setoutbytheOECD Governance line withthePrinciplesofCorporate stakeholders hasbeenstructured in board, itsshareholders andother among theBank’s management,its Therefore, thesetofrelationships functioning ofamarketeconomy. confidence necessaryfortheproper as awhole,helpsprovide the company andacross aneconomy system, withinanindividual an effective corporategovernance ABank’s managementbelievesthat Corporate Governance tracks strategic objectives, budget tracks strategic objectives,budget decisions. TheBoard ofDirectors from thebudget,andfollowsupits receives informationaboutvariations and itsactualimplementation, which alsofollowsupthebudget approved bytheBoard ofDirectors, the Bankanditsstrategicplanare performance. Theannualbudgetof strategic objectivesandevaluates the Bank’s progress againstits the Board ofDirectors measures meets atleasttwiceamonth,where strategic objectives.TheBoard mission, andshortlong-term Directors formulatesABank’s vision, are independent.TheBoard of eleven members,fiveofwhom The Board ofDirectors has decision-making andaccountability. provide clarityandtransparency in and regulatory frameworkandto designed tocomplywiththelegal ABank’s managementstructure are The processes andpoliciesof vote byproxy. shares intheBank.Itispossibleto of Association.Nosubsidiaryowns voting rightsstatedintheArticles website. There are noprivileged headquarters anditsinternet be obtainedfrom ABank’s branches, about procedures andvotingmay the AGM.Informationandguidance Shareholders mayapplytoattend the İstanbulStockExchange(ISE). communicated totheCMBand AGM, theinformationisimmediately Directors decidesonthedateof the AGM.WhenBoard of shareholders are invitedtoattend the CMBandrelated regulations. All all oftherequirements stipulatedby meeting via themediaandinternet, Meeting (AGM)noticeisprovided appropriately. TheAnnualGeneral are answered immediatelyand regarding proprietary information, by investors,exceptthose forwarded tothemanagement 01.08.2011 as “Instructions on 01.08.2011 as “Instructionson by ABank’s Board ofDirectors on Banks Associationandapproved with theEthicalCodeofTurkish has beenrevised in2011line conduct. Ethicalprinciplesof ABank standards ofprofessional andethical to conductthemselveswithinthe employees are guidedand educated employees; aspartofthiseffort, by providing guidancetoall its to maintainthehigheststandards website.ABankstrives internet annual reports andonthe Bank’s of theBankare announced in The ultimatecontrolling shareholders Committee monitorscompliance. independent Board member. The 2005 andisalsoheadedbyan Committee wasestablishedin The CorporateGovernance stakeholders. financial informationprovided toall of ensuringtheaccuracy Board, bearingtheresponsibility heads theAuditCommitteeof independent Board memberalso an independentBoard member. An The RiskCommitteeisheadedby activities oftheRiskCommittee. and procedures through the strategies, policies,limitsystems, risk exposure bydeveloping in themanagementofBank’s members playanimportantrole Committee. TheBank’s Board ABank hasestablishedaRisk In compliancewithBankingLaw, Directors. audit reports directly totheBoard of responsible forsubmittinginternal The BoardAuditorsis ofInternal business unit,orgeneralbasis. on aparticularcustomer, branch, financial andnon-financialindicators The Board alsomonitorsvarious auditsystems. andexternal internal targets, andactualfigures through the Bank’s procedures, and take confines ofgeneralprinciples and provided thattheyfallwithinthe to solveanycustomerproblems, accordingly. Employeesendeavor best servicetocustomersand act over competitorsistoprovide the means ofcreating anadvantage are aware thatthemostimportant written procedures. Allemployees rules andinaccordance with out withintheframeworkofethical customers andsuppliersare carried as stakeholders.Relationswith employees andothersare defined bodies, customers,suppliers, investors, thepublic,regulatory shareholders, butalsopotential the Bank’s stakeholders.Notonly the managementofrelations with ABank placesgreat emphasison from tradingitsequityshares. position toobtaininsiderinformation ABank restricts thoseindividualsina position toobtaininsiderinformation. of alllevelsandemployeesare ina ABank’s Board members,managers common corporateculture. to underscore theimportanceofa communications, theintranetaims addition tocostcuttingandefficient environment toanelectronic site.In have beentransferred from apaper to employees;allannouncements been setuptoprovide information or “Intranet.”TheIntranethasalso on aclosedcircuit corporateportal, related issuesare availabletoallstaff and allotherrightsemployee- rules, ethicalcodes,fringebenefits, professional training,disciplinary regarding career planning, principles ofABank.Allapplications with therulessetbyethical employees andmanagerscomply of theBankensures thatallthe ABank’s website.Top management announced brieflytopublicon Regulations”. Theprinciplesare Ethical PrinciplesandWorking received from employees.ABank discriminationhavebeen concerning resources issues.Nocomplaints support theseunitsonallhuman the otherbusinessunitssoas to requirements, andexpectations of in conformitywiththestructures, Human Resources Unitisorganized system thatisanalyzedcarefully. The are collectedthrough anevaluation on improvements todailyworkload the personalopinionsofstaff management isalwaysencouraged; number 26333.Participationin Gazette dated01.11.2006 has beenpublishedintheOfficial Principles”which Governance BRSA’s “RegulationonCorporate conducts itsactivitiesinlinewith new committee.Thecommittee assigned asthemembersof Board Membershavebeen of Directors and2oftheBank’s practices onbehalfoftheBoard and auditingtheBank’s payroll for thepurposeofmonitoring been establishedon19.09.2011 the Banks”,anewcommitteehas Principlesof Corporate Governance article 6ofthe“Regulationon performance. Inaccordance with encourages andsupportshigh system andreward systemwhich fair performancemanagement Bank hasatransparent and career planningsystem.The its performanceevaluationand efficiency, andsatisfactionthrough employees’ competencies, ABank seekstomaximizeits Department. are evaluatedbythePurchase resolved appropriately. Suppliers immediately bythisdepartmentand are analyzedthoroughly and where allcustomercomplaints dedicated tocustomerrelations, a CustomerComplaintsDivision prevent recurrence. TheBankhas measures andexerteveryeffort to courses, andprotective medication. patient educationprograms, firstaid awareness offree checkups, special programs tospread public provides seminarsandorganizes charge. TheAnadoluMedicalCenter Medical Centerare treated free of 10% ofthepatientsatAnadolu and research expenditures. Atleast be channeledtomeeteducation this contemporaryhealthcenterwill Center. Allincomegeneratedfrom the non-profit AnadoluMedical 2005, thefoundationcompleted in needoffinancialsupport.In granted tocompetentstudents to thestate,free scholarshipsare While thesehavebeendonated buildings, andsportcomplexes. health centers,schools,dormitory of projects, includinghospitals, sport; ithascompletedawiderange in education,health,thearts,and years agoandisengagedprimarily Foundation wasestablished30 Articles ofAssociation.TheAnadolu policy isdefinedintheBank’s of oursociety. TheBank’s donation is committedtothedevelopment 33

ABank Annual Review 2011 34 ABank Annual Review 2011 Sınai Yatırım A.Ş. Yazıcılar Holding A.Ş.andÖzilhan their respective holdingcompanies, of allGroup operationsthrough are jointlythemajorshareholders Yazıcı andÖzilhanfamilies,which founded intheearly1950’s bythe Anadolu Group (“Group”) was countries withover80companies. finance andenergysectorsin16 beer, softdrinks,automotive,retail, leading conglomeratesoperatingin Anadolu Group; oneofTurkey’s Anadolu Group inBrief McDonald’s andJohnsHopkins. Geely, Lombardini, Faber-Castell, Beck’s, Foster’s, Isuzu,Kia,Lada, such asCoca-Cola,SABMiller, reputable companiesandbrands, business inpartnershipwithglobally has strong expertiseindoing and healthcare services.The Group tourism, consumerdurables,IT, operations, whichincludeenergy, financial services, retail and other beer, softdrinks,automotive, managed infiveprincipalsectors; The Group isstructured andprimarily Group isaround 23,000. total numberofemployeesinthe to approximately TL 8.9billion.The Group asofyear-end 2011equal The combinedrevenues of the Coca Colaİçecek(CCI)MarketInformation Anadolu Group’s ExtensiveOperatingGeography Sources: IMF, EIU,UNEstimate,TCCC,Nielsen MEMRB Azerbaijan Kazakhstan Pakistan Turkey Country Efes Germany Market Share Serbia 2011-end Coca-Cola 57% 37% 28% 70% Belarus Moldova Ukraine Turkey Jordan Syria Georgia akt Position Market Iraq Azerbaijan 2011-end 1 1 2 1 Turkmenistan Kazakhstan Russia Tajikistan Kyrgyzstan Pakistan Anadolu EfesMarketInformation Ukraine Georgia Moldova Russia Kazakhstan Turkey Country Market Share 2011-end 18% 47% 87% n.a. n.a. n.a. Market Position 2011-end 4 1 1 2 1 1 35

ABank Annual Review 2011 36 ABank Annual Review 2011 April 2012--end. approximately USD 8.4billionasof a marketcapitalization(Mcap)of Istanbul StockExchange(ISE)with Anadolu Efesislistedonthe Efes were transferred toSABMiller. transaction, 24%shares of Anadolu brewery inUkraine.Asapart ofthis eight breweries andoneadditional largest beercompanyinRussiawith which thereby becamethe second were acquired byAnadoluEfes, Russian andUkrainianoperations SABMiller. Inthiscontext,SABMiller’s established astrategicalliancewith Anadolu Efeshasrecently million, withaYoY growth of14%. and netsalesrevenues ofTL 4,761 45 mhl,withaYoY growth of4%, generated salesvolumefigure of tons. Asof2011-end,AnadoluEfes with atotalmaltcapacityof290,000 35 millionhectolitersand7malteries producing atotalbeercapacityof Belarus) with14breweries Moldova, Georgia,Serbiaand (Turkey, Russia,Kazakhstan, division operatesin7countries Netherlands. AnadoluEfesbeer (EBI),basedinthe International through itssubsidiaryEfesBreweries beeroperations runs international with over85%share andalso leader intheTurkish beermarket Currently, AnadoluEfesisthe which wasestablishedin1969. beer, 2maltfactories,thefirstof existence through themergerof5 in 2000.AnadoluEfescameinto A.Ş. (AnadoluEfes)established Efes, BiracılıkveMaltSanayi Group’s beeroperationsisAnadolu The flagshipcompanyofAnadolu Beer Operations Operations Highlights from Anadolu Group alsoproduces Through AnadoluMotorCompany, license agreement. accordance withtheIsuzuMotors vehicles havebeenmanufactured in in 1984,more than125,000 the establishmentofcompany duty trucksandmidibuses.Since production andmarketing of light main fieldsofoperationare the and ItochuCo.from Japan. Its from Turkey, andIsuzuMotors shareholders are theAnadoluGroup companies inEurope whose major medium-size coachmanufacturing Isuzu) isoneoftheleading A.Ş.(Anadolu Sanayi veTicaret sector. AnadoluIsuzuOtomotiv manufacturer intheautomotive Anadolu Group isalsoa 10,000 vehiclesfleetsize. leasing operations,withanoverall Turkey, andrunsoperationalfleet Cooper andAvon brandedtires in light commercial vehiclesandalso Geely brandedpassengercarsand imports andmarketsKIA,Lada automotive sector, AnadoluGroup the beginningof1960s.In in theautomotivesectorsince Anadolu Group hasbeenactive Automotive Operations April 2012-end. approximately USD 3.6billionasof CCI islistedontheISEwithMcapof YoY growth of23%. revenues ofTL 3,409million,witha a YoY growth of15%andnetsales volume figure of762millionu/cwith of 2011-end,CCIgeneratedsales capacity of980millionunit/case.As facilities yieldingatotalbottling Iraq, Syria)with20production Tajikistan, Turkmenistan, Jordan, Azerbaijan, Pakistan,Kyrgyzstan, in 10countries(Turkey, Kazakhstan, runs Coca-Colabottlingoperations is 50.3%ownedbyAnadoluEfes, Coca-Cola İçecekA.Ş.(CCI),which Soft DrinksOperations and Gallignanibrandedbalers. applications, LSbrandedtractors & Hondabrandedenginesand imports anddistributesLombardini generators, engines,spare parts; in theITandtourismsectors. employees. TheGroup alsooperates as of2011-endwithover4,000 177 restaurants around Turkey 2005, whichisoperatingwith of McDonald’s inTurkey since has exclusiveoperatingrights the retail sector, AnadoluGroup As animporteranddistributorin Russia (Faber-Castell Anadolu). company withFaberCastellin established atradeanddistribution Gıda). Recently, AdelKalemcilik Kırlangıç brandsinTurkey (Ana edible oilsectorwithKomiliand a leadingproduction companyin Faber-Castell (AdelKalemcilik),and instruments inpartnershipwith production andexportofwriting as amanufacturer includeimport, Anadolu Group’s retail operations Retail Operations plant in Georgia (Paravani), with plant inGeorgia (Paravani),with constructing ahydroelectric power end of2013.AnadoluGroup isalso expected tobeoperationalby the is intheconstructionphaseand Black Searegion (120MW),which Aslancık hydroelectric power plantin Turkey-based DoğanHoldingin Turkey-based DoğuşHoldingand Anadolu Group ispartners with players intheenergysector. targeting tobeoneoftheleading Anadolu Group isstrategically Energy Operations brokerage firm(AYatırım). a leasingcompany(ALease)and finance divisionGroup also operates a focusontheSMEsegment.Under commercial/corporate bankingwith A.Ş., whichismainlyactivein banking sectorwithAlternatifbank The Group hasoperationsinthe Finance Operations *Excluding financialservicessectoroperations packaging industry. manufacturer intheflexible 23% share inPolinas,aleading Anadolu Group alsoholds East. Europe, Russia,CISandthe Middle made products, primarilyin Turkey, and foodindustrywithmanytailor- the companyisservingbeverage nectars forCoca-Cola.Inaddition, filling Cappybrandedfruitjuiceand ingredients inTurkey andiscurrently largest manufacturers offruit juice 2009. Thecompanyisoneofthe Efes, hasjoinedAnadoluGroup in which is33.3%ownedbyAnadolu Anadolu EtapTarım ÜrünleriA.Ş., Other Operations environmental report stage. of Turkey, whichiscurrently inthe MW inGerzetheBlackSearegion plant withatotalcapacityof1,200 in energysectorisathermalpower flagship project ofAnadoluGroup be completedin2014.Finally, the 85.5 MWcapacityandexpectedto (TL billion) EBITDA* (TL billion) Net Sales Anadolu Group Financial Indicators 2009 2009 1.22 7.0 11% 7% 2010 2010 1.35 7.5 19% 2% 2011 2011 1.37 8.9 basketball team thatbrought the Sports Clubwasthefirst Turkish Established in1976,Anadolu Efes contributions tosportsaswell. Anadolu Group hasmademajor healthcare investmentintheregion. technologically mostadvanced USA andhasthelargest Hopkins MedicineofBaltimore, has exclusiveaffiliationwithJohns Anadolu MedicalCenter(Istanbul) granted thusfar. of 15,000scholarshipshavebeen year toaround 850students; atotal is alsograntingscholarshipsevery since itsestablishmentin1979.It such aseducationandhealthcare, 40 perpetualpiecesinsocialfields, Foundation hascreated more than Education andSocialAssistance responsibility projects. Anadolu attention oncorporatesocial Anadolu Group paysspecial Responsibility Corporate Social Breakdown ofRevenuesin 2011 (TL billion) Asset Size 2009 10.2 12% 9% 9% 34% 7% 2010 11.1 28% 38% eastern regionseastern ofTurkey. new tourismprojects especially in been alsoveryactiveinsupporting the recent years,theGroup has of variousprojects eachyear. In music festivalsandsponsorship and culture withorganizationsof Anadolu Group alsosupportsarts Euroleague. in that wasqualifiedforfinalfour and onlyTurkish basketballteam toTurkeyEuropean Title andthefirst 2011 14.2 Beer SoftDrinks Finance Retail Automotive 37

ABank Annual Review 2011 38 ABank Annual Review 2011 December, 2011. capital wasTL 8.5millionasof31 while theCompany’s paid-in is ABank,witha99.99%share, The Company’s largest shareholder also actasagentsofAYatırım. ABankbranches and theInternet. through fivebranches,acall center AYatırım distributesitsproducts million inDecember, 2011. institutional investorstotaledUSD 18 total fundsizeheldbyindividual/ offered tolarge-scaleinvestors.The portfolio managementserviceis at theendof2011.Adiscretionary fund sizeofaround USD 66million ISE withatotalmutualfund/closed company) whichislistedonthe Ortaklığı (aninvestmenttrust Yatırımmutual fundsandAlternatif manages sixABankdomestic The AssetManagementUnit market in2011. of 0.7%intheTurkish derivatives the İstanbulStockExchangeashare 0.6% intheoveralltradingvolumeof The Companyhadamarketshare of Capital MarketsBoard ofTurkey. Exchange andisregulated bythe Exchange, theTurkish Derivatives is amemberoftheİstanbulStock markets. Foundedin1997,AYatırım Turkish equityandderivatives clientsinthe and international and brokerage servicesfordomestic specialized inassetmanagement as aboutiqueinvestmentbank subsidiary ofABankandacts AYatırım isawholly-owned AYatırım ABank FinancialSubsidiaries Subsidiaries Exchange (ISE). trading ontheİstanbulStock 31, 2011,with95.96%ofitsshares at TL 22.3millionasofDecember The Company’s paid-incapitalstood trusts inTurkey. assets managedbyinvestment commands a6%marketshare of 3th largestinvestmenttrustand YatırımAlternatif OrtaklığıisTurkey’s portfolios ondomesticexchanges. of stock,repo andothersecurities activities involvethemanagement Markets Board, theCompany’s main regulatory frameworkoftheCapital in 1995.Operatingunderthe ABank subsidiaryestablished YatırımAlternatif Ortaklığıisan Alternatif YatırımOrtaklığı signed. million onthebasisof355contracts a businessvolumeofUSD 93 volume by6%yearonandcaptured 2011, ALeaseincreased its business ALease’s clientportfolio. Intheyear SMEs are thekeyconstituents of customers. with theexpectationsofitsselected quality solutionsproduced in line market owingtofast,flexibleand enjoys arespected presence inthe ethics initsoperations,ALease to adhere tothehighestbusiness clientele. Havingmadeitaprinciple leasing servicestoawell-diversified Company offers highqualityfinancial sector sinceitsinception.The a prominent playeroftheleasing Group’s leasingarm,ALeaseis Established in1997astheAnadolu ALease Subsidiaries Anadolu Group Financial employed atotalof61people. As ofyear-end 2011ALease enhanced managementreporting. for operationalproductivity and invested inanewsoftware designed In thiscontext,theCompany business continuityandproductivity. ALease attachesimportanceto net profit. Company postedUSD 1.3millionin respectively in2011andthe million andUSD 193 and totalassetsstoodatUSD 150 ALease’s netleasereceivables and İzmir. addition tothoseactiveinAnkara representative officeinAdana, network in2011,through anew Company expandeditsdelivery ALease has3representative offices. company ABankhave63%share. in 2011,thosereferred byitssister total transactionsrealized byALease representative Within the offices. via ABankbranchesandthe diversifying itsdeliverychannels ALease putsintothestrategyof Consolidated Financial Statements Together With Auditor’s Report 31 December 2011 40 ABank Annual Review 2011 www.pwc.com/tr Telephone: +90(212) 3266060Facsimile:+90(212)6050 BJK Plaza,SüleymanSebaCaddesiNo:48B BlokKat9Akaretler Beşiktaş 34357İstanbul-Turkey Başaran NasBağımsızDenetimveSerbest MuhasebeciMaliMüşavirlikA.Ş.amemberofPricewaterhouseCoopers Istanbul, 22March 2012 Partner Talar Gül,SMMM PricewaterhouseCoopers a memberof Serbest MuhasebeciMaliMüşavirlikA.Ş. Başaran NasBağımsızDenetimve accordance FinancialReportingStandards. withInternational of theGroup asof31December 2011,andofitsfinancialperformancecashflowsfortheyearthenendedin In ouropinion,theaccompanyingconsolidatedfinancialstatementsgiveatrueandfairviewofposition Opinion We believethattheauditevidence wehaveobtainedissufficientandappropriate toprovide abasisforourauditopinion. the overallpresentation of the financialstatements. accounting policiesusedandthereasonableness ofaccountingestimatesmadebymanagement,aswellevaluating an opinionontheeffectiveness oftheentity’s control. internal Anauditalsoincludesevaluatingtheappropriateness of in order todesignauditprocedures thatare appropriate inthecircumstances, butnotforthepurposeofexpressing controlauditor considersinternal relevant totheentity’s preparation andfairpresentation ofthefinancialstatements material misstatementofthefinancialstatements,whetherduetofraudorerror. Inmakingthoseriskassessments,the statements. Theprocedures selecteddependontheauditor’s judgement,includingtheassessmentofrisks An auditinvolvesperformingprocedures toobtainauditevidenceabouttheamountsanddisclosures inthefinancial from materialmisstatement. requirements andplanperformtheaudittoobtainreasonable assurancewhether thefinancialstatementsare free our auditinaccordanceStandards with International onAuditing.ThoseStandards require thatwecomplywithethical Our responsibility istoexpress anopinionontheseconsolidatedfinancialstatementsbasedouraudit. We conducted Auditor’s responsibility accounting estimatesthatare reasonable inthecircumstances. material misstatement,whetherduetofraudorerror; selectingandapplyingappropriate accountingpolicies;andmaking controlmaintaining internal relevant tothepreparation andfairpresentation offinancialstatementsthatare free from accordance FinancialReportingStandards. withInternational Thisresponsibility includes:designing,implementingand Management isresponsible forthepreparation andfair presentation oftheseconsolidatedfinancialstatementsin Management’s responsibility forthefinancialstatements explanatory notes. consolidated cashflowstatementfortheyearthenendedandasummaryofsignificantaccountingpoliciesother statement, consolidatedstatementofcomprehensive income,consolidatedstatementofchangesinequityand (“the Group”) whichcomprisetheconsolidatedbalancesheetasof31December2011andincome We (“theBank”)anditssubsidiaries haveauditedtheaccompanyingconsolidatedfinancialstatementsofAlternatifbank To theBoard ofDirectorsA.Ş. ofAlternatifbank Independent Auditor’s Report NOTE 34 NOTE 33 NOTE 32 NOTE 31 NOTE 30 NOTE 29 NOTE 28 NOTE 27 NOTE 26 NOTE 25 NOTE 24 NOTE 23 NOTE 22 NOTE 21 NOTE 20 NOTE 19 NOTE 18 NOTE 17 NOTE 16 NOTE 15 NOTE 14 NOTE 13 NOTE 12 NOTE 11 NOTE 10 NOTE 9 NOTE 8 NOTE 7 NOTE 6 NOTE 5 NOTE 4 NOTE 3 NOTE 2 NOTE 1 NOTES TOTHECONSOLIDATEDFINANCIALSTATEMENTS: CONSOLIDATED CASHFLOWSTATEMENT CONSOLIDATED STATEMENTOFCHANGESINEQUITY CONSOLIDATED STATEMENTOFCOMPREHENSIVEINCOME CONSOLIDATED INCOMESTATEMENT CONSOLIDATED BALANCESHEET CONTENTS (Amounts expressed inthousandsofTurkish Lira(“TL”).) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank POST BALANCE SHEETEVENTS ASSETS UNDERMANAGEMENT RELATED PARTY TRANSACTIONS SEGMENT ANALYSIS COMMITMENTS ANDCONTINGENT LIABILITIES ASSETS PLEDGEDANDRESTRICTED IMPAIRMENT LOSSESONLOANSANDCREDIT RELATED COMMITMENTS OTHER OPERATING EXPENSES TRADING GAINSANDLOSSES,NET NET FEEANDCOMMISSIONINCOME NET INTERESTINCOME RETAINED EARNINGSANDOTHERRESERVES SHARE CAPITAL ANDSHAREPREMIUM OTHER LIABILITIES RETIREMENT BENEFITOBLIGATIONS OTHER PROVISIONS TAXATION OTHER BORROWEDFUNDSANDSUBORDINATED DEBT DUE TOCUSTOMERS DEPOSITS FROMBANKS OTHER ASSETS ANDEQUIPMENT PROPERTY OTHER INTANGIBLE ASSETS INVESTMENT SECURITIES LOANS ANDADVANCES TOCUSTOMERS DERIVATIVE FINANCIALINSTRUMENTS FINANCIAL ASSETSHELDFORTRADING LOANS ANDADVANCES TOBANKS CASH ANDBALANCESWITHTHECENTRALBANKOFTURKEY CASH ANDEQUIVALENTS FINANCIAL RISKMANAGEMENT CRITICAL ACCOUNTINGESTIMATES ANDJUDGEMENTSINAPPLYING ACCOUNTINGPOLICIES SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES GENERAL INFORMATION PAGE 47-97 97 97 96 95 93 93 92 92 92 91 91 90 89 89 88 88 85 85 84 84 83 82 81 80 79 77 77 77 76 76 60 59 47 47 46 45 44 43 42 41

ABank Annual Review 2011 42 ABank Annual Review 2011 The accompanying notessetoutonpages47 to97formanintegralpartofthese consolidated financialstatements. Total liabilitiesandequity Total equity Non-controlling interests inequity Equity attributabletoshareholders oftheParent Retained earnings Other reserves Share premium Share capital EQUITY Total liabilities Subordinated debt Other liabilities Retirement benefitobligations Other provisions Current incometaxespayable Derivative financialinstruments Obligations underfinanceleases Other borrowed funds Due tocustomers Deposits from banks LIABILITIES Total assets Other assets Deferred incometaxassets Property andequipment Other intangibleassets -Held-to-maturity -Available-for-sale Investment securities Loans andadvancestocustomers -Derivativefinancialinstruments -Trading securities Financial assetsheldfortrading Loans andadvancestobanks Cash andbalanceswiththeCentralBankofTurkey ASSETS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Consolidated BalanceSheetAt31December A.Ş. Alternati̇fbank Note 23 23 22 22 17 21 20 19 18 17 16 15 14 18 13 12 11 11 9 9 8 7 6

6,438,116 5,930,890 1,064,537 3,647,555 6,438,116 4,280,845 507,226 487,667 183,746 300,000 274,470 235,926 660,555 142,719 828,300 290,592 199,321 111,650 503,029 19,559 15,654 23,841 24,237 45,733 3,836 4,081 3,915 8,248 3,442 2011 2010 356 85

4,287,139 3,794,666 2,448,372 4,287,139 3,231,021 492,473 472,637 164,535 300,000 162,374 201,318 642,594 309,062 120,030 391,159 207,632 230,359 19,836 10,871 15,168 19,295 70,603 8,017 3,907 9,443 2,526 4,889 991 182 85 9 The accompanying notessetoutonpages47 to97formanintegralpartofthese consolidated financialstatements. of theBank(expressed in TL perthousandshare) pershareBasic earnings attributabletotheequityholders Non-controlling interest Equity holdersoftheBank Attributable to: Profit fortheyear Income taxexpense Profit before incometax Other operatingexpenses Other provisions Impairment lossesonloansandcredit related commitments,net Operating income Other operatingincome Gains /lossesfrom investment securities,net Trading gainsandlosses,net Foreign exchangegainsandlosses,net Net feeandcommissionincome Fee andcommissionexpense Fee andcommissionincome Net interest income Interest expense Interest income (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) for theYear Ended31December Consolidated IncomeStatement A.Ş. Alternati̇fbank Note 2.23 18 27 28 26 26 25 25 24 24

(168,857) 0.06927 236,262 283,895 520,157 (83,857) (15,683) 20,885 31,040 20,782 20,885 27,043 10,915 40,277 43,710 (6,158) 3,494 4,052 4,210 3,433 2011 2010 (276) 103

(140,179) 0.09575 175,972 170,300 346,272 (23,319) (27,285) 28,726 31,040 35,910 14,399 32,140 35,078 (8,007) (4,870) 2,314 4,523 2,938 (697) 356 43

ABank Annual Review 2011 44 ABank Annual Review 2011 The accompanying notessetoutonpages47 to97formanintegralpartofthese consolidated financialstatements. Non-controlling interests (total) Equity holdersoftheparent entity(total) Total comprehensive incomeattributableto: Total comprehensive incomefortheyear Other comprehensive incomefortheperiod,netoftax Income taxrelating tocomponentsofothercomprehensive income incomestatement - Netchangeinfairvalueoffinancialassetstransferred to - Unrealised netgainsarisingduringtheyear, before tax Net gainsonavailable-forsalefinancialassets,netoftax Foreign exchangegain/loss Profit fortheyear (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) for theYear Ended 31December Income Consolidated StatementofComprehensive A.Ş. Alternati̇fbank Note

15,030 15,133 20,885 (5,752) (3,451) (2,301) 2011 2010 103 - - 28,438 30,752 31,040 2,314 (288) (361) 73 - - The accompanying notessetoutonpages47 to97formanintegralpartofthese consolidated financialstatements. (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) for theYear Ended31December Consolidated StatementOfChangesInEquity A.Ş. Alternati̇fbank Balance at31December2011 Transfer tostatutoryreserves Total recognised incomefortheyear Profit fortheyear Net incomerecognised directly inequity investments, netoftax Net changeinavailableforsale Balance at31December2010 Transfer tostatutoryreserves Total recognised incomefortheyear Profit fortheyear Net incomerecognised directly inequity investments, netoftax Net changeinavailableforsale Balance at1 January2010 Note 23 23 300,000 300,000 300,000 capital Share ------Attributable toequityholdersoftheBank premium Share 85 85 85 ------Reserves (5,752) (5,752) (5,752) 3,836 1,571 8,017 2,895 5,410 Other (288) (288) (288) - - Retained earnings 28,726 28,726 (2,895) 183,746 164,535 138,704 20,782 20,782 (1,571) - - - - 487,667 472,637 444,199 28,438 15,030 20,782 28,726 (5,752) (5,752) (288) (288) Total - - Non-cont. 17,522 interest 103 19,559 19,836 2,314 2,314 (380) 103 - - - - - 507,226 15,133 20,885 (5,752) (5,752) 492,473 461,721 (380) 30,752 31,040 equity (288) (288) Total - 45

ABank Annual Review 2011 46 ABank Annual Review 2011 The accompanying notessetoutonpages47 to97formanintegralpartofthese consolidated financialstatements. Cash andcashequivalentsat endoftheyear Cash andcashequivalentsat beginningoftheyear oncashandequivalents Effects offoreign exchange-ratechanges Net increase incashandequivalents Net cashfrom /(usedin)financingactivities Paymentsoffinanceleaseliabilities Proceeds from /(paymentsfor)fundsborrowed Cash flowsfrom financingactivities Net cashfrom /(usedin)investingactivities Purchase ofintangibleassets Proceeds from saleproperty andequipment Purchases ofpremises andequipment Redemptionofheldtomaturitysecurities Purchases ofheldtomaturity securities Proceeds from saleandredemption ofavailable-for-sale securities Purchases ofavailablefor salesecurities Cash flowsfrom investing activities Net cash(usedin)operatingactivities Assets classifiedasheldforsale Other liabilities Other moneymarketdeposits Deposits Deposits from otherbanks Other assets Loans andadvances Trading securities Changes inoperatingassetsandliabilities: changes inoperatingassetsandliabilities Cash flowsfrom operating profits before Taxes paid Cash paidforotheroperatingactivities Cash received from otheroperatingactivities Cash paymentstoemployeesandotherparties Fees andcommissionspaid Recoveries ofloanspreviously writtenoff Trading income Income from bankingservices Fees andcommissionsreceived Interest paid Interest received Cash flowsfrom operatingactivities (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) for theYear Ended31December Consolidated CashFlowStatement A.Ş. Alternati̇fbank Note 5 5

(1,041,367) (1,049,823) 1,203,338 (704,625) (841,231) (147,209) (100,288) (283,895) 360,259 193,640 192,667 527,655 528,290 435,901 749,097 324,391 349,477 520,157 (26,048) (14,283) (57,617) (66,150) (86,551) 18,779 45,246 10,917 11,973 37,324 (1,862) (1,193) (3,434) 9,120 8,310 6,386 2011 2010 (635) (864) (605,517) (217,202) (509,933) (180,396) (170,299) 193,640 217,576 406,455 407,742 115,644 310,384 214,450 335,908 (24,657) (61,523) (82,594) (44,840) (49,481) (75,648) (35,692) 31,594 59,291 58,761 21,418 31,029 (1,287) (8,169) (4,872) (2,937) 5,286 4,049 (962) 721 28 (1) - The principalactivitiesoftheconsolidatedsubsidiariesare asfollows: (2) (1) December 2011and2010are asfollows: The subsidiariesandtheBank’s shareholding includedinconsolidationandtheirshareholding percentages at31 The Bankprovides banking servicesthrough 63(2010:53)branchesinTurkey. mainly withlocalcustomers. The operationsoftheGroup consistofbanking,brokerage andportfoliomanagementincapitalmarketsconducted “the Group”. For thepurposesofconsolidatedfinancialstatements,Bankanditssubsidiariesare referred toas The BankisamemberofAnadoluGroup. The ultimateparents oftheBankare Yazıcılar HoldingA.Ş.,ÖzilhanSınaiYatırım A.Ş.andAnadoluEndüstriHolding The consolidatedfinancialstatementsoftheBankwere authorizedforissuebythemanagementon22March, 2011. The registered officeaddress oftheBankisatCumhuriyetCaddesiNo:46Elmadağ/Istanbul. representing 4.16%ofthetotal,are listedontheIstanbulStockExchange(“ISE”). started operationsinFebruary1992,TheBankwasacquired byAnadoluGroup in1996,Certainshares oftheBank, A.Ş.(aTurkishAlternatifbank jointstockcompany-“theBank”)wasincorporatedinIstanbulon6November1991and NOTE 1-GENERALINFORMATION (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank financial instruments thathavebeenmeasured atfairvalue. convention, exceptforavailable-for-sale securities, financialassetsatfairvaluethrough profit andloss andderivative Reporting Standards (IFRS).Theconsolidatedfinancial statements havebeenprepared underthehistorical cost The consolidatedfinancialstatements oftheGroup have beenprepared inaccordanceFinancial withInternational 2.1 BasisofPresentation ofFinancialStatements These policieshavebeenconsistentlyappliedtoalltheyears pr The principalaccountingpoliciesappliedinthepreparation oftheseconsolidatedfinancial statementsare setout below. NOTE 2-SUMMARY OFSIGNIFICANTACCOUNTING POLICIES equity holdersoftheBank.Nogoodwillisrecognized onasuchtransaction. controlling interest issoadjustedandtheconsiderationpaid,ifany, isrecognized directly inequityandattributedto reflect thechangeinitsinterest inthesubsidiary’s netassets.Thedifference betweentheamountbywhichnon- increase intheownershipinterest inthissubsidiary, thecarryingamountofnon-controlling interest isadjustedto entity conceptmethodforthechangesinownershipinterests inthissubsidiary. Therefore; where there isasubsequent at themeetingsofboard ofdirectors. TheBankholdsalsoagoldenshare whichleadstofullcontrol. TheBankapplied a statute,toappointorremove themajorityofmembersboard ofdirectors andtocastthemajorityofvotes thefinancialandoperatingpoliciesofsuchsubsidiaryunder A.Ş. isasubsidiarysincetheBankhaspowertogovern market instrumentsaccording totherulesofrelated regulation andtheCapital MarketLaw. Yatırım Alternatif Ortaklığı Capital MarketBoard ofTurkey. Alternatif YatırımAlternatif OrtaklığıA.Ş. YatırımAlternatif A.Ş. Alternatif YatırımAlternatif OrtaklığıA.Ş.isaclosedendedmutualfundmanagingportfolioswhichare madeupofthecapital YatırımAlternatif A.Ş.renders brokerage andinvestmentbankingservicestocustomersinlinewiththerulesof (1) (2) Istanbul/Turkey İstanbul/Turkey Place ofIncorporation esented, unlessotherwisestated. shareholding % Effective 52.60 99.99 2011 shareholding % Effective 52.60 99.99 2010 47

ABank Annual Review 2011 48 ABank Annual Review 2011 presentation currency. The consolidatedfinancialstatements are presented inTL,whichistheCompany’s functionalandtheGroup’s economic environment inwhichtheentityoperates(“thefunctionalcurrency”). Items includedinthefinancialstatementsofeachGroup’s entities are measured usingthecurrency oftheprimary 2.4 FunctionalandPresentation Currency the consolidatedfinancialstatementsare disclosedin related accountingpolicies. areas involvingahigherdegree ofjudgmentorcomplexity, orareas where assumptionsandestimatesare significantto and, asadjustmentsbecomenecessary, theyare reportedintheperiodswhichtheybecome known.The inearnings of future eventsthatare believedtobereasonable underthecircumstances. Theseestimatesare reviewed periodically, judgments are continuallyevaluatedandare basedonhistoricalexperienceandotherfactors,includingexpectations assumptions thataffect thereported amountsofassetsandliabilitieswithinthenextfinancialyear. Estimatesand The preparation offinancial statementsinconformitywithIFRS requires management tomakeestimatesand 2.3 UseofEstimatesandJudgments evidence ofimpairmenttheassettransferred. company profits andunrealized profits andlosses.Unrealized losses are alsoeliminatedunlessthetransaction provides All intra-group balances,transactions andunrealized gainsonintra-group transactions are eliminatedincludinginter- balance sheetandincomestatement,respectively. The equityandnetincomeattributabletominorityshareholders’ interests are shown separatelyintheconsolidated consistent accountingpolicies. The financialstatementsofthesubsidiariesare prepared forthesame reporting periodastheparent Bank,using from thedateonwhichcontrol istransferred outoftheGroup. Subsidiaries are consolidated from thedateonwhichcontrol istransferred totheGroup andceasetobeconsolidated of board ofdirectors. appoint orremove themajority ofthemembersboard ofdirectors andto castthemajorityofvotesatmeetings shareholding thefinancialandoperatingpoliciesofsuchsubsidiaryunderastatute,to sinceithaspower togovern an enterprisesoastobenefitfrom itsactivities.TheBankalsoconsolidatesasubsidiaryinwhichithaslessthan50% than 50%ofthevotingrightsacompany’s sharethefinancialandoperatingpoliciesof capitalandisabletogovern to benefitfrom itsactivities. Thiscontrol isnormallyevidencedwhentheGroup owns,eitherdirectly orindirectly, more Subsidiaries are allentities overwhichtheGroupfinancialandoperatingpoliciessoas hasthepowertogovern 31 December2011. The consolidatedfinancialstatementscomprisethestatementsofBankandallitssubsidiaries,drawnupto 2.2 BasisofConsolidation comparative purposes. In theaccompanyingfinancialstatements,certain reclassifications are madetoprioryearfinancialstatementsfor which are notrecorded intheaccountingbooksofGroup’s entities. adjustments, appropriate topresent thefinancialposition, results ofoperationsandcashflowsinaccordance withIFRS, financial statementsdiffer from thefinancialstatements prepared forstatutorypurposesinthatthey reflectcertain financial statementsinaccordance withthe regulations onaccountingandtaxlegislationin Turkey. Theaccompanying The Bankanditssubsidiariesare incorporatedinTurkey maintaintheirbooksofaccountandprepare theirstatutory (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank derecognized. disposal proceeds andthecarryingamountofassetare recognized intheincomestatementwhenassetis Gains orlossesarisingfrom de-recognition ofanintangibleassetare measured asthedifference between thenet economic usefullivesof5years.There are nointangibleassetswithindefiniteusefullives. amortized overtheirusefuleconomiclivesof5years.Development costsforsoftware were amortizedovertheiruseful appropriate, andtreated aschangesinaccountingestimates.Patentsandlicensesmainlyrelate tosoftware andwere of future economicbenefitsembodiedintheassetisaccountedforbychangingamortization periodormethod,as reviewed atleasteachfinancialyear-end. ofconsumption Changesintheexpectedusefullifeorpattern intangible assets.Theamortizationperiodandthe methodforanintangibleassetwithafiniteusefullifeare whenever there isanindicationthattheintangibleassetmaybeimpaired. There isnoimpairmentrecorded related to finite livesare amortizedonastraight-linebasisoverthebestestimateoftheirusefullives andassessedforimpairment are carriedatcostlessany accumulatedamortizationandanyimpairmentlosses.Intangibleassetswith Intangible assets acquired separately from a business are capitalized at cost. Following initial recognition intangible assets 2.7 IntangibleAssets derecognized. net disposalproceeds and thecarryingamountofasset)isincludedinincomestatementyearasset from itsuseordisposal.Any gainorlossarisingonderecognizing oftheasset(calculatedasdifference betweenthe An itemofpremises andequipment isderecognized upondisposalorwhennofuture economicbenefitsare expected premises andequipment. and valueinuse.Impairmentlossesare recognized intheincomestatement.There isnoimpairmentrecorded related to amount. Therecoverable amount isdefinedastheamountthathigherofasset’s fairvaluelesscoststosell values exceedtheestimatedrecoverable amount,theassetsofcashgeneratingunitsare writtendowntotheirrecoverable circumstances indicatethe carryingvaluemaynotberecoverable. Ifanysuchindicationexistsandwhere thecarrying year end.Thecarryingvaluesofpremises andequipmentare reviewed forimpairment wheneventsorchangesin The residual values,useful livesanddepreciation methodsare reviewed, andadjustedifappropriate, ateachfinancial Leasehold improvements Office equipment Furniture andfixtures and motorvehicles Buildings Depreciation iscalculatedonastraight-linebasisovertheestimatedusefullifeofassetasfollows: Premises andequipmentare statedatcostlessaccumulated depreciation andanyimpairmentinvalue. 2.6 Premises andEquipment Exchange differences are recognized inprofit orlossintheperiodwhichtheyarise. determined. Non-monetaryitemsthatare measured intermsofhistoricalcostaforeign currency are notretranslated. that are denominatedinforeign currencies are retranslated attheratesprevailing atthedatewhenfairvaluewas currencies are retranslated attheratesprevailing atthebalancesheetdate.Non-monetaryitemscarriedfairvalue exchange prevailing atthedatesoftransactions.Ateachbalancesheetdate,monetaryitemsdenominatedinforeign Transactions incurrencies otherthantheentity’s functionalcurrency (foreign currencies) are recorded attheratesof 2.5 Foreign Currency Transactions andTranslation (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 5 years,orovertheperiodoflease if lessthan5years 50 years 5 years 5 years 49

ABank Annual Review 2011 50 ABank Annual Review 2011 securities isreported asinterest income. derecognized orimpaired, aswellthrough the amortizationprocess. Interest withholdingheldtomaturity earned For investmentscarriedatamortized cost,gainsandlossesare recognized inincome whentheinvestmentsare the contractthatare anintegralpartoftheeffective interest rate,transactioncostsandallotherpremiums ordiscounts. any impairmentinvalue.Amortizedcostiscalculatedbytaking intoaccountallfeespaidorreceived betweenpartiesto Held-to-maturity investmentsare subsequentlymeasured atamortizedcostusingtheeffective interest method,less class asavailable-for- sale.Theinvestmentswouldtherefore bemeasured atfairvalue;notamortizedcost. circumstances -forexamplesellinganinsignificantamountclosetomaturityitwillbe required toclassifytheentire hold suchinvestmentstomaturity. IftheGroup failstokeeptheseinvestmentsmaturityotherthan forthespecific classification requires significantjudgments.Inmakingthisjudgment,the Group evaluatesitsintentionandability to non-derivative financialassetswithfixedordeterminable payments andfixedmaturityasheld-to-maturity. This an undefinedperiodare notincludedinthisclassification.The Group followstheguidanceofIAS39onclassifying the intentandabilitytoholdmaturityare classifiedasheld-to-maturity. Investmentsintended tobeheldfor Non-derivative financialassetswithfixedordeterminable payments andfixedmaturitywhere managementhasboth Held- to-maturitysecurities income. they are designatedaseffective hedginginstruments.Gainsorlossesoninvestmentsheld-for-trading are recognized in ofshorttermprofitin aportfoliowhichpattern takingexist.Derivativesare alsoclassifiedasheld-for-trading unless either acquired forgenerating aprofit from shorttermfluctuationsinpriceor dealer’s margin,or are securitiesincluded Financial assetsclassifiedasheld-for-trading are includedinthiscategory. Trading securitiesare securities,whichwere Financial assetsatfairvaluethrough profit orloss the samewayasacquired assetsi.e.forcarriedatcostoramortizedcost;changeinvalueisnotrecognized. fair valueofassetstobereceived duringtheperiodbetweentradedateandsettlementare accountedforin delivery ofassetswithinthetimeframegenerallyestablishedbyr is delivered toorbytheGroup. Regularwaypurchases orsalesare purchases orsalesoffinancialassetsthat require All regular waypurchases andsalesoffinancialassetsare recognized onthesettlementdatei.e.thatasset recognition. recognized initially, theyare measured atfairvalue.TheGroup determinestheclassificationofitsfinancialassetsatinitial loans andreceivables; held-to-maturity investmentsandavailable-for-sale financialassets.Whenassets are The Group classifiesitsfinancial assetsinthefollowingcategories:financialatfairvalue through profitorloss; 2.9 InvestmentsandOtherFinancialAssets commencement ofowner-occupation orcommencementofdevelopmentwithaviewtosale. Transfers are madefrom investmentproperty when,andonlythere isachangeinuse,evidencedbythe owner-occupation, commencementofanoperatingleasetoanotherpartyorendingconstructiondevelopment. Transfers are madetoinvestmentproperty when,andonlythere isachangeinuse, evidenced byendingof disposal. the retirement ordisposalofaninvestmentproperty are recognized intheincomestatementyearofretirement or permanently withdrawnfrom useandnofuture economic benefitisexpectedfrom itsdisposal.Anygainsorlosseson Investment properties are derecognized wheneithertheyhavebeendisposedofortheinvestmentproperty is properties are depreciated onastraight-linebasisovertheestimatedusefullivewhichis50years. Investment properties are statedatcostlessaccumulated depreciation andanyimpairmentinvalue.Investment 2.8 IntangibleAssets (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank egulation orconventioninthemarketplace.Changes and settletheliabilitysimultaneously. enforceable righttosetoff therecognized amountsandthere isanintentiontosettleonanetbasisorrealize theasset Financial assetsandliabilitiesare offset andthenetamountreported inthebalancesheetwhenthere isalegally Netting off FinancialAssetsandLiabilities interest method. price istreated asinterest incomeandaccruedoverthelifeofreverse repurchase agreement usingtheeffective under theseagreements are includedinothermoneymarketplacements.Thedifference betweenpurchase andresale repos’) are notrecognized inthebalancesheet,asGroup doesnotobtaincontrol overtheassets.Amountspaid Securities purchased with a corresponding commitmenttoresell atafixedprice ataspecifiedfuture date(‘reverse market deposits. pledge thecollateral.Thecounterpartyliabilityforamountsreceived undertheseagreements isincludedinothermoney in thefinancialstatementsasloanedsecuritieswhentransfer agreement usingtheeffective interest method.Securitiessoldsubjecttorepurchase agreements (‘repos’) are reclassified difference betweensaleandrepurchase priceistreated asinterest expenseandaccruedoverthelifeofrepurchase sheet andare measured inaccordance withtheaccountingpolicyofsecurity portfoliowhichtheyare partof.The date. Suchsecurities,whichhavebeensoldsubjecttoarepurchase agreement (‘repos’), are recognized inthebalance The Group entersintosales ofsecuritiesunderagreements torepurchase suchsecuritiesatafixedpricefuture Repurchase andResaleTransactions well asthrough theamortization process. Interestonsuchloansandreceivables earned isreported asinterest income. in value.Gainsandlossesare recognized inincomewhentheloansandreceivables are derecognized orimpaired, as trading thereceivable. Such assetsare carriedatamortizedcostusingtheeffective interest methodlessanyimpairment active market.TheyarisewhentheGroup provides money, goods orservicesdirectly toadebtorwithnointentionof Loans andreceivables are non-derivativefinancialassetswithfixedordeterminablepaymentsthat are notquotedinan Loans andreceivables investment. Equitysecuritiesforwhichfairvaluescannotbemeasur is substantiallythesameorcalculatedbasedonexpectedcashflowsofunderlyingnetassetbase no quotedmarketprice,fairvalueisdeterminedbyreference tothecurrent market valueofanotherinstrumentwhich Exchange quotedmarketbidpricesatthecloseofbusinessonbalancesheetdate.Forinvestmentswhere there is For investmentsthatare activelytradedinorganizedfinancialmarkets,fairvalueisdeterminedby reference toStock dividend income,ifany. Interest onavailable-for-sale earned investmentsisreported asinterest income. Dividendsreceived are includedin financial assetsusingeffective interest methodis reported asinterest income. loss previously reported inequityisincludedtheincome statement.However, interest calculated onavailable-for-sale investment isderecognized, oruntiltheinvestmentisdeterminedtobeimpaired, atwhichtimethecumulativegainor at fairvalue.Gainsorlossesonre-measurement tofair valueare recognized asaseparatecomponentofequityuntilthe not classifiedinanyofthethree othercategories.Afterinitial recognition, available-for-sale financialassets are measured Available-for-sale financialassetsare thosenon-derivativefinancialassets that are designatedasavailable-for-sale or are Available- for- salesecurities (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank ee hastherightbycontractorcustomtosellre- ed reliably are recognized atcostlessimpairment. 51

ABank Annual Review 2011 52 ABank Annual Review 2011 impairment. with principaland/orinterest overdue formore than 90daysare considered asnon-performingandare assessedfor individually significant,and orcollectivelyforfinancialassetsthatare notindividuallysignificant.Loans The Group firstassesseswhetherobjectiveevidenceof impairment existsindividuallyforfinancialassetsthat are costs forobtainingandselling the collateral,whetherornotfor of acollateralizedfinancialasset ismeasured basedon the amountthatisexpectedtobe realized from foreclosure less an allowanceaccount.Theamountofthelossisrecognized intheincomestatement.The estimatedrecoverable amount carrying amountandtheestimatedrecoverable amount.Thecarryingamountoftheasset isreduced through theuseof at amortizedcosthasbeenincurred, theamountoflossismeasured basedonthedifference betweentheasset’s If there isobjectiveevidencethatanimpairmentlossonloansandreceivables orheld-to-maturityinvestmentscarried individual financialassetsinthegroup, including: financial assetssincetheinitial recognition ofthoseassets,althoughthedecrease cannotyetbeidentifiedwith the f) Observabledataindicatingthatthere isameasurabledecrease intheestimatedfuture cashflowsfrom agroup of e) Thedisappearanceofanactivemarketforthatfinancialasset becauseoffinancialdifficulties;or d) Itbecomingprobable that theborrower willenterbankruptcyorotherfinancial reorganization; concession thatthelenderwouldnototherwiseconsider; c) TheGroup grantingtothe borrower, foreconomicorlegalreasons relating totheborrower’s financialdifficulty, a b) Abreach ofcontract,such asadefaultordelinquencyininterest orprincipalpaymentsbymore than90days; a) Significantfinancialdifficultyoftheissuerorobliger; the followinglossevents: financial assetorgroup of assetsisimpaired includesobservabledatathatcomestotheattentionofGroup about recoverable from aportfolioofloansandindividualheldtomaturityinvestments.Objectiveevidencethat as towhetherthere isany observable dataindicatingthatthere isameasurabledecrease intheestimatedamounts In determiningwhetheranimpairmentlossshouldberecorded intheincomestatement,Group makesjudgments Assets carriedatamortizedcost 2.10 ImpairmentofFinancialAssets or loss. liability andtherecognition ofanewliability, andthedifference intherespective carryingamountsisrecognized inprofit existing liabilityare substantially modified,suchanexchangeormodificationis treated asade-recognition oftheoriginal When anexistingliabilityisreplaced byanotherfrom thesamelenderonsubstantiallydifferent terms,orthetermsofan The Group derecognizes afinancialliabilitywhentheobligationunderisdischargedorcancelledexpires. the considerationthatGroup couldberequired torepay. the transferred assetismeasured attheloweroforiginalcarryingamountassetandmaximum extent oftheGroup’s continuinginvolvementintheasset.Continuingthattakesformofaguaranteeover substantially alltherisksandrewards oftheassetnor transferred control oftheasset,assetisrecognized tothe Where theGroup hastransferred itsrightstoreceive cashflowsfrom anassetandhasneithertransferred nor retained all therisksandrewards oftheasset,orhastransferred thecontrol oftheasset. party; ortheGroup hastransferred itsrightstoreceive cashflowsfrom theassetandeitherhastransferred substantially cash flowsfrom theassetGroup hasalsoassumed anobligationtopaytheminfullwithoutmaterialdelayathird financial assets)whentherightsto receive cashflows from theassethaveexpired; orwhile retainingtherightto receive The Group derecognizes afinancialasset(or, where applicableapartoffinancialasset or partofa group ofsimilar the contractualprovisions oftheinstrument. The Group recognizes afinancialassetorliability initsbalancesheetwhenandonlyitbecomesapartyto Recognition andDerecognition ofFinancialInstruments (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank ii) Nationalorlocaleconomicconditionsthatcorrelate withdefaultsontheassetsin group offinancialassets. i) Adversechangesinthepaymentstatusofborrowers; or eclosure isprobable. liabilities are derecognized aswellthrough theamortizationprocess. amortized costusingtheeffective interest method.Gainsorlossesare recognized intheincomestatementwhen transaction costs.Afterinitialrecognition interest-bearing depositsandborrowings are subsequentlymeasured at All depositsandborrowings are initiallyrecognized atthefairvalueofconsiderationreceived lessdirectly attributable 2.12 Interest -bearingDepositsandBorrowings an originalmaturityofthree monthsorless. the CentralBankofTurkey, depositswithbanksandotherfinancialinstitutions moneymarketplacementswith For thepurposesofconsolidatedcashflowstatement, cash andequivalentscomprisebalanceswith 2.11 CashandEquivalents the impairmentlosswasrecognized inprofit orloss. through profit orloss,iftheincrease infairvalueoftheinstrumentcanbeobjectively related toaneventoccurringafter is transferred from equitytotheincomestatement.Reversalsofimpairmentlossesondebtinstrumentsare reversed payment andamortization)itscurrent fairvalue,lessanyimpairmentlosspreviously recognized inprofit orloss, If anavailable-for-sale assetisimpaired, anamount comprisingthedifference betweenitscost(net ofanyprincipal judgment. or prolonged declineinthe fairvaluebelowitscost.Thisdeterminationofwhatissignificantorprolonged requires The Group determinesthat available-for-sale equity investmentsare impaired whenthere hasbeenasignificant Available-for-sale financialassets related toassetscarriedat cost. between theasset’s carryingamountandthepresent valueofitsrecoverable amount.There isnoimpairmentrecorded delivery ofsuchanunquotedequityinstrumenthasbeenincurred, theamountoflossismeasured asthedifference because itsfairvaluecannotbereliably measured, oronaderivativeassetthatislinkedtoandmustbesettledby If there isobjectiveevidence thatanimpairmentlossonunquotedequityinstrumentisnotcarriedatfairvalue Assets carriedatcost recoveries ofamountspreviously writtenoff are includedinincome. Write offs are chargedagainstpreviously establishedallowancesandreduce theprincipalamountofaloan.Subsequent written off afterallthenecessaryprocedures havebeencompletedandtheamountoflosshasdetermined. A writeoff ismadewhenallorpartofaloandeemeduncollectibleinthecasedebtforgiveness.Suchloansare amortized costatthereversal date. impairment lossisrecognized inincomestatement,totheextentthatcarryingvalueofassetdoesnotexceedits previously recognized impairmentlossisreversed byadjustingtheallowanceaccount.Anysubsequentreversal of to aneventoccurringaftertheimpairmentwasrecognized (suchasanimprovement inthedebtor’s credit rating),the If, inasubsequentperiod,theamountofimpairmentlossdecr which animpairmentlossisorcontinuestoberecognized are notincludedinacollectiveassessmentofimpairment. of financialassetsiscollectivelyassessedforimpairment.Assetsthatare individuallyassessedforimpairmentand significant ornot,theassetisincludedinagroup offinancialassetswithsimilar credit riskcharacteristicsandthat group If itisdeterminedthatnoobjectiveevidenceofimpairmentexistsforanindividuallyassessedfinancialasset,whether (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank eases andthedecrease canberelated objectively 53

ABank Annual Review 2011 54 ABank Annual Review 2011 takes place. required tobemade thelesserbywayofpenaltyisrecognized asanexpenseintheperiodwhichtermination basis overtheleaseterm.When anoperatingleaseisterminatedbefore theleaseperiodhasexpired, anypayment operating leases.Operatingleasepaymentsare recognized asanexpenseintheincomestatementonastraight-line Leases where thelessorretains substantiallyalltherisksandbenefitsofownershipassetare classifiedas Operating leases useful lifeoftheasset. Finance chargesare chargeddirectly againstincome.Capitalizedleasedassetsare depreciated overtheestimated liability soastoachieveaconstantrateofinterest ontheremaining balanceoftheliability. the minimumleasepayments.Leasepaymentsare apportionedbetweenthefinance charges and reduction ofthe lease item, are capitalizedattheinceptionofleasefairvalueleasedproperty or, iflower, atthepresent valueof Finance leases,whichtransfertotheGroup substantiallyalltherisksandbenefitsincidentaltoownershipofleased Finance leases 2.16 Leases of abusinessare shownin equityasadeduction. share premium account.Incremental costsdirectly attributabletotheissueofnewshares oroptionstotheacquisition Share capitalisrecognized atthenominalamountandamountsreceived inexcess oftheparvalueare recognized in 2.15 Share Capital due tothepassageoftimeisrecognized asinterest expense. money and,where appropriate, therisksspecifictoliability. Where discountingisused,theincrease intheprovision discounting theexpectedfuture cashflowsatapre-tax ratethat reflects current marketassessmentsofthetimevalue statement netofanyreimbursement. Iftheeffect ofthetimevaluemoneyismaterial,provisions are determinedby estimate canbemadeoftheamountobligation.Theexpenserelating toanyprovision ispresented intheincome probable thatanoutflow of resources embodyingeconomicbenefitswillbe required tosettletheobligationanda reliable Provisions are recognized whentheGroup hasapresent obligation(legalorconstructive)asaresult ofapastevent,itis 2.14 Provisions recognized asemployeebenefit expensewhentheyare due. basis. TheGroup hasnofurther paymentobligationsoncethecontributionshavebeenpaid.Theare For definedcontributionplanstheGroup payscontributionstotheSocialSecurityInstitutionof Turkey onamandatory Defined ContributionPlans the projected unitcredit method.Allactuarialgainsand lossesare recognized intheincomestatement. Such definedbenefitplanisunfunded.Thecostof providing benefitsunderthedefinedbenefitplanisdeterminedusing retirement orforreasons otherthanresignation ormisconduct. each employeewhohascompletedoveroneyearofservicewiththeGroup andwhoseemploymentisterminateddueto In accordance withexistingsociallegislationinTurkey, theGroup isrequired topaylump-sumterminationindemnities Defined BenefitPlans 2.13 EmployeeBenefits (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank difference canbecontrolled anditisprobable thatthetemporarydifference willnotreverse intheforeseeable future. differences associatedwithinvestmentsinsubsidiariesandassociates,where thetimingofreversal ofthetemporary Deferred incometaxliabilitiesare recognized foralltaxabletemporarydifferences, exceptforthetaxabletemporary between thetaxbasesofassetsandliabilitiestheircarrying amountsforfinancial reporting purposes. Deferred incometaxisprovided, usingtheliabilitymethod,onalltemporarydifferences atthebalancesheetdate Deferred tax substantively enactedbythebalancesheetdate. or paidtothetaxationauthorities.Thetaxratesandlawsusedcomputeamountare thosethatare enactedor Current taxassetsandliabilities forthecurrent andpriorperiodsare measured attheamountexpectedtoberecovered Current tax respect ofcurrent anddeferred tax. Tax expense/(income)istheaggregate amountincludedinthedeterminationofnetprofit orlossfortheperiodin 2.18 IncomeTax thereon isnotrecognized untilcollection. Loans withprincipaland/orinterest overdue formore than90daysare considered asnon-performingandinterest services are recorded asincomewhencollected. of timeare recognized ratablyovertheperiodserviceisprovided. Feeforbank transfersandotherbankingtransaction contracts. Assetmanagementfeesandcustodyservicethatar transaction. Portfolioandothermanagementadvisoryservicefeesare recognized basedontheapplicableservice or participatinginthenegotiationofatransactionforthird partyare recognized oncompletionoftheunderlying recognized asanadjustment totheeffective interest rateoftheloan.Commission andfeesarisingfrom negotiating commitment feesforloansthatare likelytobedrawndownare deferred (together withrelated direct costs)and Fees andcommissionsare generallyrecognized onanaccrualbasiswhentheservicehasbeenprovided. Loan part oftheeffective interest rate,transactioncosts,and allotherpremiums ordiscounts. future credit losses.Thecalculationincludesallfees paid orreceived betweenpartiestothecontractthatare anintegral contractual termsofthefinancialinstrument(forexample,prepayment, callandsimilaroptions)butdoesnotconsider asset orfinancialliability. Whencalculatingtheeffective interest rate,theGroup estimates cash flowsconsideringall expected lifeofthefinancialinstrumentor, whenappropriate, ashorterperiodtothenetcarryingamountoffinancial The effective interest rateisthethatexactlydiscounts estimatedfuture cashpaymentsorreceipts through the or interest expenseovertherelevant period. financial assetoraliability(or group offinancialassetsorliabilities)andallocatingtheinterest income basis usingtheeffective interest method.Theeffective interest methodisaofcalculatingtheamortizedcost Interest incomeandexpenseare recognized intheincomestatementforallinterest bearinginstrumentsonanaccrual 2.17 IncomeandExpenseRecognition (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank e continuouslyprovided over anextendedperiod 55

ABank Annual Review 2011 56 ABank Annual Review 2011 Changes inassumptionsabout thesefactorscouldaffect thereported fairvaluesof financialinstruments. rates andtheresulting gainorlossisreflected totheincomestatementtakinginto accountexercisability ofthe option. determined bycomparingthe option ratesdiscountedtobalancesheetdatewiththeperiodend foreign exchange floating interest ratesbetweenthetransactiondateand re-pricing dateare used.Fairvalueofoptiontransactionsare statement. Indeterminationofthefairvaluesinterest rateswaps,discountedvalues calculated usingthefixedand rates withtheforward ratesdiscountedtothebalancesheetdate.Theresulting gainorlossisreflected totheincome of foreign currency forward andswaptransactionsare determinedbycomparingtheperiodendforeign exchange In theabsenceofforward foreign currency marketratesandreliable forward rateestimationsinavolatilemarket,values is negative. Group usesthattechnique.Allderivativesare carriedasassetswhenfairvalueispositiveandliabilities value that techniquehasbeendemonstratedtoprovide reliable estimatesofpricesobtainedinactualmarkettransactions, the valuation techniques.Ifthere isavaluationtechniquecommonlyusedbymarketparticipants topricetheinstrumentand publicly available,andthefairvalueoffinancialinstrumentsthat ar Fair valuesare obtainedfrom quotedmarketpricesinactivemarkets,includingrecent markettransactions,totheextent recognized intheincomestatement. value. Anygainsorlossesarisingfrom changesinfairvalueonderivativesthatdonotqualifyforhedgeaccountingare recognized atfairvalueon thedatewhichaderivativecontractisentered intoandsubsequentlyre-measured atfair specific provisions ofIAS 39, theyare treated asderivativesheld-for-trading. Derivativefinancialinstruments are initially under theGroup’s riskmanagementpolicies;howeversincetheydonotqualifyforhedgeaccountingunderthe exchange andcapitalmarkets.Mostofthesederivativetransactionsare considered aseffective economichedges The Group entersintotransactions withderivativeinstrumentsincludingforwards, swapsandoptionsintheforeign 2.19 DerivativeFinancialInstruments Income taxrelating toitems recognized directly inequityisrecognized inequityandnottheincomestatement. against current taxliabilities, anddeferred taxesrelated tothesametaxableentity andthesametaxationauthority. Deferred taxassetsanddeferred taxliabilitiesare offset, ifalegallyenforceable rightexiststosetoff current taxassets enacted atthebalancesheetdate. the assetisrealized orthe liabilityissettled,basedontaxrates(andlaws)thathavebeenenactedorsubstantively Deferred incometaxassets andliabilitiesare measured atthetaxratesthatare expectedtoapplytheperiodwhen to theextentithasbecomeprobable thatfuture taxableprofit willallowthedeferred taxassettobe recovered. asset to be utilized. Unrecognized deferred income tax assets are reassessed at each balance sheet date and recognized that itisnolongerprobable thatsufficienttaxableprofit willbeavailabletoallowallorpartofthedeferred incometax The carryingamountofdeferred incometaxassetsisreviewed ateachbalancesheetdateandreduced totheextent • • temporary differences, carry-forward ofunusedtaxassetsandlossescanbeutilized: and unusedtaxlosses,totheextentthatitisprobable thattaxableprofit willbeavailableagainstwhichthedeductible Deferred incometaxassetsare recognized foralldeductibletemporarydifferences, carry-forward ofunusedtaxassets (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank utilized. will reverse intheforeseeable future andtaxableprofit willbeavailableagainstwhichthetemporarydifference canbe joint ventures, deferred taxassetsare onlyrecognized totheextentthatitisprobable thatthetemporarydifferences in respect ofdeductibletemporarydifferences associatedwithinvestmentsinsubsidiaries,associatesandinterests in affects neithertheaccountingprofit nortaxableprofit orloss;and recognition ofanassetorliabilityinatransactionthatisnotbusinesscombinationand,atthetimetransaction, except where thedeferred incometaxassetrelating tothedeductibletemporarydifference arisesfrom theinitial e notquotedinactivemarketsare determinedbyusing • • • • • • (a) Newstandards andamendments 2.22 AdoptionofNewandRevisedStandards different from thoseofsegmentsoperatinginothereconomicenvironments. providing products andserviceswithinaparticulareconomic environment thatare subjecttorisksandreturnthatare to risksandreturnsthatare different from thoseofotherbusinesssegments.Ageographicalsegmentisengagedin A businesssegmentisagroup ofassetsandoperationsengagedinproviding products orservicesthatare subject 2.21 SegmentReporting sheet, sincesuchitemsare nottreated asassetsof the Group. Assets heldbytheGroup inafiduciary, agencyorcustodiancapacityforitscustomersare notincludedinthebalance 2.20 FiduciaryAssets (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 27, IAS34andIFRIC13. Annual Improvements toIFRSs2010.Amendmentseffect sixstandards andoneIFRIC:IFRS1,3,7,IAS permitted. than anexpense.Itwillapplyfrom thebeginningofearliestcomparativeperiodpresented. Earlieradoptionis amendment alsoresults inpre-payments ofcontributionsincertaincircumstances beingrecognised asanassetrather consequences arisingfrom thetreatment ofpre-payments where there isaminimumfundingrequirement. The interaction”, iseffective forannualperiodsbeginningonorafter1January2011.Theamendment removes unintended IFRIC 14(amendment),“IAS19-Thelimitonadefinedbenefit asset,minimumfundingrequirements andtheir adoption ispermittedeitherfortheentire standard orforthereduced disclosures forgovernment-relatedentities. andothergovernment-relatedentities.Italsoclarifiessimplifiesthedefinitionof government a relatedparty. Earlier revised standard removes therequirement forgovernment-relatedentitiestodisclosedetailsofalltransactionswiththe IAS 24(revised), “Related party disclosures”, iseffective forannualperiodsbeginning onorafter1January2011.The July 2010inorder tobenefit from thedisclosure relief. permitted. Earlyadoptionisrequired forafirst-timeadopterthathasfirst reporting periodthatbeginsearlierthan1 of theamendmentstoIFRS7.Alsoclarifiestransitionprovisions oftheamendmentstoIFRS7.Earlieradoptionis The amendmentprovides the samerelief tofirst-timeadoptersaswasgivencurrent usersofIFRSsuponadoption IFRS 1(amendment),“First-timeadoptionofIFRS”,iseffective forannualperiodsbeginningonorafter1July2010. period presented, asadoption inearlierperiodswouldresult onlyinareclassification ofamountswithinequity. adoption ispermitted.Theinterpretation shouldbeappliedretrospectively from thebeginningofearliestcomparative extinguished bythedebtorissuingitsownequityinstrumentstocreditor (referred toasa‘debtforequityswap’).Early 2010. IFRIC19clarifiestheaccountingwhenanentity renegotiates thetermsofitsdebtwith result thattheliabilityis 19, “Extinguishingfinancialliabilitieswithequityinstruments”,iseffective forannualperiods beginningonorafter1July amendment tobeclassifiedasequity. Theamendmentshouldbeapplied retrospectively. Earlyadoptionispermitted. therefore creates anexceptiontothe‘fixedforfixed’ruleinIAS32and requires rightsissueswithinthescopeof of thetransaction,whichrepresents atransactionwithownersactingintheircapacityassuch.Theamendment rights issuedtoallexistingshareholders onapro ratabasisasderivativeliabilitiesisnotconsistentwiththesubstance February 2010.Theamendmentrecognizes thattheprevious requirement toclassifyforeign-currency-denominated IAS 32(amendment),“Financialinstruments:Presentation”, iseffective forannualperiodsbeginningonorafter1 57

ABank Annual Review 2011 58 ABank Annual Review 2011 • • • • • • • • (b) Forthcomingrequirements (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank allowed. of thearrangementandhence equityaccountsforitsinterest. Proportional consolidation ofjointventures isno longer in assets,liabilities,revenue andexpenses.Jointventures arisewhere thejointoperatorhasrightstonet assets a jointoperatorhasrightstothe assetsandobligationsrelating tothearrangementandhenceaccountsforitsinterest legal form.There are two typesofjointarrangement:operationsandventures. Jointoperationsarise where realistic reflection ofjoint arrangementsbyfocusingontherightsandobligations of thearrangementratherthanits IFRS 11,“Jointarrangements”, iseffective forannualperiods beginningonorafter1January2013.IFRS11isamore additional guidancetoassistinthedeterminationofcontrol where thisisdifficulttoassess. entity shouldbeincludedwithintheconsolidatedfinancialstatemen ts oftheparent company. Thestandard provides The standard buildsonexistingprinciplesbyidentifyingtheconceptofcontrol asthedeterminingfactorinwhether an IFRS 10,“Consolidatedfinancialstatements”,iseffective forannualperiodsbeginning on orafter1January2013. this creates anaccountingmismatch. due toanentity’s owncredit riskisrecorded inothercomprehensive incomeratherthanthestatement,unless main changeisthat,incaseswhere thefairvalueoptionistakenforfinancialliabilities, thepartofafairvaluechange flow characteristicsoftheinstrument.Forfinancialliabilities, thestandard retains mostoftheIAS39requirements. The classification dependsontheentity’s business modelformanagingitsfinancialinstrumentsandthecontractualcash measured asatfairvalueand thosemeasured atamortisedcost.Thedeterminationismadeinitialrecognition. The of financialinstruments.IFRS9 requires financialassetstobeclassifiedintotwomeasurement categories:those in November2009andOctober2010.Itreplaces thepartsofIAS39thatrelate totheclassificationandmeasurement addresses theclassification, measurement and recognition offinancialassets andfinancialliabilities.IFRS9wasissued IFRS 9,“Financialinstruments”,iseffective forannualperiodsbeginningonorafter1January2015.Thestandard permitted. amendments eliminatethecorridorapproach andcalculatefinancecostsonanetfundingbasis.Earlyadoptionis IAS 19(amendment),“Employeebenefits”,iseffective forannualperiodsbeginningonorafter1January2013.These adoption ispermitted. subsequently (reclassification adjustments).Theamendmentsdonotaddress whichitemsare presented inOCI.Early in ‘othercomprehensive income’ (OCI)onthebasisofwhethertheyare potentiallyreclassifiable toprofit orloss 2012. Themainchangeresulting from theseamendmentsisarequirement forentitiestogroup itemspresented IAS 1(amendment),“Presentation offinancialstatements”,iseffective forannualperiodsbeginningonorafter1July Early adoptionispermitted. amendments alsoincorporateintoIAS12theremaining guidancepreviously containedinSIC21,whichiswithdrawn. recovery ofrevalued non-depreciable assets”,willnolongerapplytoinvestment properties carriedatfairvalue.The arising oninvestmentproperty measured atfairvalue.Asaresult oftheamendments, SIC21,“Incometaxes- amendment introduces an exceptiontotheexistingprincipleformeasurement ofdeferred taxassetsorliabilities IAS 12(amendment),“Incometaxes”,iseffective forannualperiodsbeginningonorafter1January2012.This Earlier adoptionispermitted. when theentitywasunabletocomplywithIFRSsbecauseitsfunctionalcurrency wassubjecttosevere hyperinflation. guidance onhowanentityshouldresume presenting financialstatementsinaccordance withIFRSsafteraperiod derecognition transactionsthatoccurred before thedateoftransitiontoIFRSs.Thesecondamendmentprovides with ‘thedateoftransitiontoIFRSs’,thuseliminatingtheneedforentitiesadoptingIFRSsfirsttime restate These amendmentsincludetwochangestoIFRS1.Thefirst replaces references toafixeddateof1January2004 IFRS 1(amendment),“First-timeadoptionofIFRS”,iseffective forannualperiodsbeginningonorafter1July2011. the firstyearofadoption.Earlieradoptionispermitted. financial position,particularlythoseinvolvingsecuritisationoffinancialassets.Comparativeinformationisnotneededin understanding oftheriskexposures relating totransfers offinancialassetsandtheeffect ofthoserisksonanentity’s July 2011.Thisamendmentwillpromote transparency inthereporting oftransfertransactionsandimprove users’ IFRS 7(amendment),“Financialinstruments:Disclosures”, iseffective forannualperiodsbeginningonorafter1 and liabilitieswithinthenextfinancial yearinclude: consolidated financialstatementsandestimatesthatcancause asignificantadjustmenttothecarryingamountofassets financial riskmanagement(Note4).Judgementsthathavethe mostsignificanteffect ontheamounts recognised inthe accounting policies.Thesedisclosures supplementthecommentarysignificantaccounting policies(Note2)and Management alsomakescertainjudgements,apartfrom thoseinvolvingestimations,in theprocess ofapplyingthe other factors,includingexpectationsoffuture eventsthatare believedtobereasonable underthecircumstances. financial year. Estimatesandjudgementsare continuallyevaluatedandare basedonManagement’s experience and The Group makesestimatesandassumptionsthataffect thereported amountsofassetsandliabilitieswithinthenext NOTE 3-CRITICALACCOUNTINGESTIMATES ANDJUDGEMENTS IN APPLYING ACCOUNTINGPOLICIES expenses accountedundershareholders’ equityandconsolidatedcashflowstatements at31December2010. consolidated statementofchangesinequity, consolidatedstatementsofchangesinequity, consolidatedincomeand December 2011, there are certain reclassifications made on consolidated balance sheet, consolidated income statement, 2010 consolidatedfinancialstatements.Inorder tobeconsistentwiththepresentation offinancialstatementsdated31 Comparative figures are reclassified, where necessary, toconformchangesin presentation ofthe31December 2.24 Comparatives Basic earnings pershareBasic earnings (expressed inTLper1,000share) Weighted averagenumber ofordinary shares inissue(thousand) Profit attributabletoequity holdersoftheBank weighted averagenumberofshares outstandingduringtheyearconcerned. pershareEarnings disclosedintheconsolidatedincomestatementare determinedbydividingnetincomethe pershare2.23 Earnings • • • • • (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank IFRIC 20,Strippingcostsintheproduction phaseofasurfacemine. issue ofIFRS11. The standard includesthe requirements forjointventures, aswellassociates,tobeequityaccountedfollowingthe IAS 28(revised), “Associates andjointventures”, iseffective forannualperiods beginning onorafter1January2013. have beenincludedinthenewIFRS10. The standard includestheprovisions onseparatefinancial statementsthatare leftafterthecontrol provisions ofIAS27 IAS 27(revised), “Separatefinancialstatements”,iseffective forannualperiodsbeginningonorafter1January2013. be appliedwhere itsuseisalready required orpermittedbyotherstandards withinIFRSsorUSGAAP. between IFRSsandUSGAAP, donotextend theuseoffairvalueaccountingbutprovide guidanceonhowitshould fair valuemeasurement anddisclosure requirements foruseacross IFRSs.Therequirements, whichare largelyaligned aims toimprove consistencyandreduce complexity by providing aprecise definitionoffairvalueandasinglesource of IFRS 13,“Fairvaluemeasurement”, iseffective forannual periodsbeginningonorafter1January2013.Thestandard arrangements, associates,specialpurposevehiclesandotheroff balancesheetvehicles. 2013. Thestandard includesthedisclosure requirements forallformsofinterests inotherentities,includingjoint IFRS 12,“Disclosures ofinterests inotherentities”,is effective forannualperiodsbeginningonorafter1January 0.06927 300,000 20,782 2011 2010 0.09575 300,000 28,726 59

ABank Annual Review 2011 60 ABank Annual Review 2011 limits. All risks(market,credit orliquidity),arisingfrom anytypefinancialinstrumentare subjecttoaforementioned riskbased these limits. The Bankdeterminesrisk-basedlimits,withrespect toavailableeconomiccapitalandmonitorsactualrisksagainst risks establishmentofdynamicrisklimit. units across thebank.Risk ManagementPolicycoverssoundandoptimumcapitalallocationquantificationoftheactual includes detailsabouttheframeworkfordefining,measuring,monitoringandmanagingriskstakenbybusiness various RiskCommitteesandControl Unitcarryouttheriskmanagementrelated tasks.RiskManagementPolicy composed ofMarket,Credit andLiquidityrisks.Theserisksare supervisedbythe“BankRiskCommittee”while risk managementsystemsandcapabilities.According totheBank’s “RiskManagementPolicy”,FinancialRisksare To maintainandimprove thesoundnessofitsoperations,Bankaccords topmanagementprioritytoupgradingits Strategy inusingfinancialinstruments NOTE 4-FINANCIALRISKMANAGEMENT based onManagementexpectationsthatare believedtobereasonable underthecircumstances. based onmediumtermbusinessplanprepared byManagementandextrapolatedresults thereafter. Thebusinessplan is related taxbenefitisprobable. Thefuture taxableprofits andtheamountoftaxbenefitsthat are probableinthefuture are Deferred incometaxasset recognition. Deferred incometaxassets are recorded totheextentthatrealisation ofthe Tax legislation.Turkish tax,currency andcustomslegislationissubjecttovaryinginterpretations asdisclosedinNote18. assets ortotalliabilities. observable marketdatatoareasonablywouldnotresult possiblealternative inasignificantlydifferent profit, income,total in assumptionsaboutthesefactorscouldaffect reported fairvalues.Changingtheassumptionsnotsupportedby credit risk(bothownandcounterparty),volatilitiescorrelations require Managementtomakeestimates.Changes validated andperiodicallyreviewed. To theextentpractical,modelsuseonlyobservabledata,howeverareas suchas Fair valueofderivatives.Where valuationtechniques(forexample,models)are usedtodeterminefairvalues,theyare estimates andactuallossexperience. and timingoffuture cashflowsfrom aportfolioofloans are reviewed regularly to reduce anydifferences betweenloss Impairment lossesonloansandadvances.Themethodologyassumptionsusedforestimatingboththeamount therefore bemeasured atfairvalueratherthanamortisedcost. amount closetomaturity-itwillberequired toreclassify theentire classasavailable-for-sale. Theinvestmentswould keep theseinvestmentstomaturityotherthanforcertainspecificcir categorised asheld-to-maturity, inparticularitsintentionandabilitytoholdtheassetsmaturity. IftheGroup failsto Held-to-maturity financialassets.Managementappliesjudgementinassessingwhetherassetscanbe (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank cumstances -forexample,sellinganinsignificant a. Informationontypesofloansandspecificprovisions: Credit qualityperclassoffinancial assetsisasfollows; evaluation oftherisk-adjustedperformanceeach. of economiccapital.Thefinalstepistheoptimumallocationcapitalacross theprofit centersandeventuallythe Unexpected loss,however, isdefinedasthevolatilityofaveragelossrateandcovered withabalancesheetcushion The Bankseestheexpectedlossasapredictable costofdoingbusinessandpassonthistotheborrowers. key dataforcalculatingcredit riskprovisions (expected loss),andtherequired economiccapital(unexpectedloss). professional judgmenttosignificantlyinfluencearatingwhere thisisappropriate. Theriskratingsystemgeneratesthe rating process ismainlybuiltuponthescore-sheet, which takesbothfinancialandqualitativedataasinput,yetitallows severity incaseofdefault,suchasthequalitycollateralandguaranteesseniorityfacility. Obligor rating system;firstanobligormappedtoadefaultprobability bucket.Second,afacilityratingthatdeterminesthe tool inmanagingthecredit portfolio,settinglimits,andpoliciesofpricingcollateralization.Thistoolusesatwo-tier a strong credit culture. TheBankhasitsownscore-sheetrating andratingscaleusestheoutputofthisinternal credit approval process, comprisewelldefinedoperatingandlendingpolicies, reflecting theBank’s commitmentto related departmentsandcredit managementdepartment. Credit OfficersattheBankworkunderastrictandcentralized Seeking tomaintainasoundassetportfolioandprevent non-performingloans,theBankhasclearlyseparateditssales- A. Credit risk (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank b. Informationonloansandreceivables pastduebutnotimpaired: Past due60-90days Past due30-60days Past dueupto30days 2011 2010 Total Specific andgenericprovision (-) Non-performing loans Loans underclosemonitoring Standard Loans 2011 Total Total Past due60-90days Past due30-60days Past dueupto30days 2010 Standard Loans Loans underclosemonitoring Non-performing loans Specific andgenericprovision (-) Total Corporate 1,775,761 1,697,991 Corporate Corporate Corporate 1,639,402 1,662,644 112,851 68,028 77,829 67,969 59,223 36,787 70,388 69,582 67,969 44,882 806 448 358 - 2,406,517 2,284,557 1,471,806 1,527,448 144,834 134,764 99,431 89,469 75,464 66,629 91,009 78,205 90,738 45,058 2,978 6,984 2,741 9,962 SME SME SME SME Consumer Consumer Consumer Consumer 100,098 98,567 41,108 40,929 1,152 6,173 8,158 5,234 1,985 1,718 124 698 574 833 124 391 88 - 4,280,845 4,082,646 3,152,316 3,231,021 164,271 148,159 214,311 144,266 117,684 265,843 170,517 159,625 150,049 10,892 82,236 3,893 3,426 7,466 Total Total Total Total 61

ABank Annual Review 2011 62 ABank Annual Review 2011 Not rated Impaired (E) Sub Standard Grade(D) Standard Grade(C) High Grade(A,B) indicates thatdebtor’s financialpositionisnotsound. displays thatdebtorhasagoodandsatisfactoryfinancialstructur The ratingcategorynamedas‘’high’’ indicatesthatdebtorhasasoundfinancialstructure, thecategory‘’standard’’ (impaired ones)are shownatthebottomoftable. default, are alignedfrom highest(thebest)ratingstolowest(sub-standard) ratings asbelowandnon-performingloans Credit assessmentsystem.Loansare riskoftheBankisevaluated viainternal gradedonthebasisoftheirprobability of d. Informationonratingconcentration: (*) (**) (*) c. Informationondebtsecurities,treasury billsandotherbills: (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Total Unrated AAA Fitch’s Rating 2010 Fitch’s Rating 2011 Unrated BB+ Total ConsistsofTurkish bondsandtreasury Republicgovernment bills. ConsistsofTurkish bondsandtreasury Republicgovernment bills. Held-to-maturity investmentsconsistofYapı veKredi BankasıA.Ş.bondsamountedtoTL42,020. (*) (*) Fair Value through P/L(Net) Fair Value through P/L(Net) Financial Assetsat Financial Assetsat 174,892 161,601 186,428 186,630 13,291 202 Financial Assets(Net) Financial Assets(Net) Available forSale Available forSale e, whilethecategorynamedas‘’sub-standard’’ 290,592 290,592 12 12 - - Securities (Net) Held toMaturity Held toMaturity Securities (Net) 828,300 828,300 391,159 391,159 46.26% 49.32% 0.17% 0.65% 3.59% 2011 2010 (**) - - 1,293,784 1,280,493 577,599 577,801 37.58% 54.61% 13,291 2.09% 1.17% 4.55% Total Total 202 Total Loans underlegalfollow-up Watch listedloans 2010 Total Loans underlegalfollow-up Watch listedloans 2011 vehicles. mortgages ofreal estatebuilt onallocatedland,exportdocuments,guarantees,andacceptancespledge Collateral mainlycomprisesthefollowing:cashfunds,deposits,mortgagesofreal estateatthe landregistry and f. Fairvalueofcollaterals(loansandadvancestocustomers): Total Credit commitmentsandother liabilities Financial guarantees Off- balancesheetitems subject tocredit risk: Other assets - Share certificates - Government bonds - Government Investment securities - Othersecurities - Government bonds - Government Trading financialassets - Consumer - SME - Corporate Loans andadvancestocustomers Loans andadvancestobanksfinancialinstitutions Balance sheetitemssubjecttocredit risk: e. Informationontheamountsubjecttocredit risk: (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Type ofCollaterals Real-estate mortgage Car pledge Cash andcashequivalents Other Total Corporate Corporate 114,821 225,875 114,798 570,508 388,729 181,779 23 1,045,079 976,477 66,646 196,302 464,850 273,301 191,549 1,105 29,573 2011 851 SME Consumer SME Consumer 10,328,675 7,410,776 2,406,464 2,164,639 4,571,103 1,118,892 1,118,892 2,406,517 1,775,761 4,280,845 5,757,572 161,601 199,321 111,650 46,864 37,720 98,567 1,743 342,439 1,730 9,721 1,045,079 1,117 8,604 2011 2010 13 - 1,540,758 1,922,881 3,463,639 1,527,448 1,662,644 3,231,021 3,947,137 319,679 342,439 311,113 663,147 381,932 391,171 391,341 186,428 207,632 21,936 31,326 46,540 21,204 40,929 70,603 2010 Total Total 824 170 - 63

ABank Annual Review 2011 64 ABank Annual Review 2011 As of31December2010 As of31December2011 Other commitmentsandcontingencies Acceptance credits Letter ofcredits Letter ofguarantees As of31December2010 As of31December2011 Other assets Deferred incometaxassets Property andequipment Other intangibleassets -Held-to-maturity -Available-for-sale Investment securities - Consumer - SME - Corporate Loans andadvancestocustomers,net -Trading derivatives -Trading securities Financial assetsheldfortrading Loans andadvancestobanks Cash andbalanceswiththeCentralBankofTurkey g. Concentrationofcredit riskbasedongeographicalregions: (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 1,922,881 2,164,639 1,533,919 4,232,809 6,330,956 2,406,517 1,756,905 216,104 373,495 131,250 828,300 290,592 199,321 503,029 41,121 24,237 98,567 23,767 56,781 Turkey 8,248 3,442 22,796 78,309 10,486 21,879 45,944 EU Other ------31,534 28,851 18,856 8,925 983 87 ------1,775,761 1,922,881 2,164,639 1,533,919 4,287,139 6,438,116 2,406,517 216,104 373,495 142,719 828,300 290,592 199,321 111,650 503,029 98,567 41,121 24,237 45,733 8,248 3,442 Total capital allocatedbytheBoard. balance sheettotheshiftsof yieldcurve,Marketriskexposur Secondly, StructuralInterest Rate,addresses theriskwhichstemsfrom sensitivityoftherelatively illiquiditemsofthe Board, Treasury Departmentisobliged tounwinditsexcesspositionsthefollowingday, the related memberoftheBoard andseniormanagementonadailybasis,Unless otherwise toldbythememberof under normalmarketcircumstances, Trading limitviolationsare reported through alllevelsofriskmanagementincluding risk, VaR isastatisticalmeasure ofthepotentiallossesthatcouldoccurduetomovementsinmarketrates andprices related derivativeinstruments,Value-at-Risk (VaR) istheprimarytoolforday-to-daymonitoringoftrading-related market refers tothedailyvolatilityofvaluestradableassets,suchasForeign Exchange,FixedIncomeSecurities,Stocks, and categories, Trading andStructuralInterest RateRisk,whichrequires different models andassumptions,Trading Risk products allofwhichare exposedtogeneralandspecificmarketmovements,Thisriskgroup ishandledintwobroad The Group takesanexposure tomarketriskswhicharisefrom openpositionsininterest rate,currency andequity B. MarketRisk Total - Consumerlending - Smallbusinesslending Total - Corporatelending Loans andadvancestocustomers i. Carryingamountsperclassoffinancialassetswhosetermshavebeenrenegotiated: Allowance forcollectivelyimpaired loans Allowance forindividuallyimpaired loans Loans inarrears Total Others Electrics andElectronics Petroleum Paper Chemical Machinery Forest Product andAgriculture Tourism Automotive Food andBeverage Mining Transportation Iron andSteel Production Textile Construction Finance Trade h. Sectoralconcentration: (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank e oftheGroup asawholeisboundbytheeconomic 4,280,845 2,164,639 4,230,805 2,164,639 1,168,142 (108,130) 214,311 501,813 131,697 126,760 120,046 191,108 111,089 215,119 179,285 327,541 305,461 451,216 106,159 (56,141) 30,390 51,858 33,154 91,734 88,233 Cash Non-cash 2011 2010 178,649 102,739 189,938 168,646 124,282 443,428 511,702 51,880 16,867 35,579 61,239 48,477 41,328 25,454 88,163 64,575 6,890 4,803 - - - 3,231,021 1,922,881 3,163,208 1,922,881 150,049 416,043 114,080 127,911 141,658 176,155 190,959 210,265 317,362 384,421 664,561 (29,269) (52,967) 20,460 23,645 24,939 51,389 55,173 72,812 74,674 96,701 6,723 23,224 6,707 Cash Non-cash 2011 2010 16 - 158,438 163,223 124,790 114,131 391,735 108,190 376,888 19,646 60,979 11,570 33,344 48,314 63,236 39,578 93,125 33,628 89,216 3,578 6,882 5,614 - - - - 65

ABank Annual Review 2011 66 ABank Annual Review 2011 Net foreign currency position net notionalposition Off-balance sheetderivativeinstruments Net balancesheetposition Total liabilities Total assets 31 December2010 Net foreign currency position instrumentsnetnotionalposition Off-balance sheetderivative Net balancesheetposition Total liabilities Other liabilities Retirement benefitobligations Other provisions Current incometaxespayable Derivative financialinstruments Obligations underfinanceleases Other borrowed fundsandsubordinated debt Due tocustomers Deposits from banks Liabilities Total assets Other assets Deferred incometaxassets Property andequipment Other intangibleassets - Held-to-maturity - Available-for-sale Investment securities (1) Loans andadvancestocustomers - Trading derivatives - Trading securities Financial assetsheldfortrading Loans andadvancestobanks Cash andbalanceswiththeCentralBankofTurkey Assets 2011 Risk limitsandnominalsetbytheBoard. sheet isassumedtobecurrency riskfree. Anyresidual currency riskistreated astradingriskanditissubjecttoValue-at- The Group centralizeditscurrency riskandassigned Treasury Departmenttomanagethisrisk. Inprinciple,thebalance C. Currency Risk (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank above intherelevant currency ofindexation. For thepurposeofcalculating currency risks,foreign currency indexedloansandsecuritieshavebeenreported intable exchange rateofTL1.9065=US$1, andTL2.4592=EUR1(2010:TL1,5460=US$1,2,0491 = EUR1). At 31December2011,assets andliabilitiesdenominatedinforeign currency were translatedintoTLusinga foreign CollectiveimpairmentallowanceofTL56,141ispresented asTLbalanceintheabove currency positiontable. (1)

1,052,718 1,649,800 1,386,751 1,185,157 (263,049) 964,596 286,332 747,154 863,851 116,766 (17,452) (88,122) 70,670 23,283 32,747 10,685 42,021 20,610 11,016 6,048 US$ 496 ------

(109,668) (224,656) 678,594 453,938 115,726 929,127 542,914 345,464 819,459 219,391 532,156 222,645 40,393 63,859 (5,265) 6,058 EUR Other 356 794 5 ------

Foreign currency (11,358) 12,185 13,541 12,675 (1,880) 3,012 1,132 2,183 2,044 1,553 164 827 866 630 ------2,592,468 1,290,068 1,221,990 1,734,324 1,419,666 2,208,393 1,717,313 (384,075) (314,658) 414,243 292,105 340,041 (22,553) 30,168 74,006 11,479 42,021 76,428 20,610 6,048 Total 356 501 ------

3,338,422 2,425,565 2,552,815 2,867,473 4,229,723 2,563,532 (287,113) (386,674) 504,627 891,301 290,592 161,920 314,658 654,507 131,240 786,279 162,988 198,820 27,545 15,654 23,841 48,939 24,237 35,222 25,123 4,081 3,915 8,248 3,442 TL -

5,930,890 1,339,007 3,647,555 4,287,139 4,287,139 6,438,116 4,280,845 534,795 507,226 290,592 235,926 660,555 142,719 828,300 503,029 111,650 199,321 27,569 15,654 23,841 24,237 45,733 4,081 3,915 8,248 3,442 4,992 4,992 Total 356 - Group’s: If interest rateshadbeenincreased /decreased by1%inTLandFCallother variableswere heldconstant,the Interest ratesensitivity: balance sheetdatetothere-pricing date. The tablebelowsummarizestheGroup’s exposure tointerest rateriskonthebasisofremaining periodatthe liability mismatchesare derived from thecapitalsetasidebyBoard forAsset-Liability Managementpurposes. relevant riskismeasured withsimulationbasedinterest ratemodels.Appliedlimits ontherisksposedbyasset- assumed tobesensitivethestructuralchangesininterest ratesandthusclassifiedinthebankingbook.The subject toValue-at-Risk limits.Itemssuchasloans,depositsandotherinterest ratesensitiveassetsandliabilitiesare characteristics. Trading securitiesare sensitivetotreasury billrates, therefore theyare treated inthetradingbookand The netpresent valueofthe BankingBookare drivenbyinterest ratedifferentials intermsofmaturityandmarket D. Interest RateRisk the relevant currency. currencies. Apositivenumberindicatesanincrease in profit orlossandotherequitywhere theTLstrengthens against The followingtabledetailstheGroup’s sensitivitytoa10%increase anddecrease intheTLagainstrelevant foreign The Group ismainlyexposedtoEURandUSDcurrencies. Foreign currency sensitivity (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 31 December2010 Change ininterest rate 31 December2011 Change ininterest rate EUR USD 2010 EUR USD 2011 (- )1% (+) 1% (- )1% (+) 1% (+/-)10% (+/-)10% currency Change inforeign (+/-)10% (+/-)10% currency Change inforeign Effect ofprofit /loss Effect ofprofit /loss Effect ofprofit /loss Effect ofprofit /loss (18,566) 16,350 (3,572) 4,313 +/- 1,745 +/- 2,328 +/- 527 +/- 606 Effect ofequity Effect ofequity Effect ofequity Effect ofequity +/- 1,745 +/- 2,328 (18,566) +/- 527 +/- 606 16,350 (3,572) 4,313 67

ABank Annual Review 2011 68 ABank Annual Review 2011 Net interest repricing gap Total liabilities Other liabilities Retirement benefitobligations Other provisions Current incometaxespayable Derivative financialinstruments Obligations underfinanceleases subordinated debt Other borrowed fundsand Due tocustomers Deposits from banks Liabilities Total assets Other assets Deferred incometaxassets Property andequipment Other intangibleassets - Held-to-maturity - Available-for-sale Investment securities Loans andadvancestocustomers - Trading derivatives - Trading securities Financial assetsheldfortrading Loans andadvancestobanks Central BankofTurkey Cash andbalanceswiththe Assets

2011 repricing dates. table are theGroup’s assetsandliabilitiesincarryingamountsclassifiedtermsofperiods remaining tocontractual The tablebelowsummarisestheGroup’s exposure tointerest rateriskat31December2011and2010.Includedinthe (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 4,505,056 3,179,053 3,721,301 2,992,698 3 months (783,755) 658,629 654,490 535,887 61,339 31,549 11,334 88,290 4,477 8,267 Up to 140 204 ------1,017,754 572,297337,157789,607 3 months to 1year 177,219 840,535 680,378 133,532 292,413 542,813 112,520 15,574 55,814 14,184 5,116 5,719 216 10 ------1 yearto 556,412 525,004 5 years 15,885 15,801 43,265 4,028 84 ------337,157 130,174 160,072 5 years 46,911 Over - 1,076,6406,438,116 ------Non-interest (287,033) 717,758 334,886 142,505 503,029 bearing 15,654 24,237 60,258 24,528 23,360 4,081 3,915 8,248 3,442 346 ------1,339,007 3,647,555 6,438,116 4,280,845 743,152 660,555 142,719 828,300 290,592 199,321 111,650 503,029 15,654 23,841 24,237 45,733 4,081 3,915 8,248 3,442 Total 356 - Net interest repricing gap Total liabilities Other liabilities Retirement benefitobligations Other provisions Current incometaxespayable Derivative financialinstruments Obligations underfinanceleases subordinated debt Other borrowed fundsand Due tocustomers Deposits from banks Liabilities Total assets Other assets Deferred incometaxassets Property andequipment Other intangibleassets - Held-to-maturity - Available-for-sale Investment securities Loans andadvancestocustomers - Trading derivatives - Trading securities Financial assetsheldfortrading Loans andadvancestobanks Central BankofTurkey Cash andbalanceswiththe Assets

2010 (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 3,008,093 310,944 2,175,406 2,919,724 224,364598,132 2,551,689 3 months 524,284 302,389 294,167 (88,369) 10,876 60,320 5,499 2,516 Up to 343 172 144 12 ------3 months to 1year 280,684 198,487 (86,580) 23,332 23,630 6,414 1,968 514 270 9 ------1 yearto 587,784 363,374 160,991 5 years 10,348 73,362 3,255 6,788 305 405 ------5 years 64,151 64,151 480,768 49,658 14,493 Over - 957,754 ------Non-interest (476,986) 693,447 242,846 119,877 230,359 bearing 10,871 19,295 67,813 21,002 10,283 3,908 6,673 9,443 2,526 170 9 - - - - - 4,287,139 2,448,372 4,287,139 3,231,021 693,790 804,968 309,062 120,030 391,159 207,632 230,359 10,871 15,168 19,295 70,603 3,908 9,443 2,526 4,889 Total 991 182 9 - 69

ABank Annual Review 2011 70 ABank Annual Review 2011 investments. The Group’s fundresources consistmainlyofdeposits.Theinvestmentsportfolioconsiststheheldtomaturity repurchase transactionsinforeign marketswithEurobonds intheportfolio. needed. Thepotentialcashresources are: moneymarketdebtswhichcanbeobtained from thedomesticbanksand to otherbankswithsimilar-sized balancesheets;thisindicatesthatlargerloanscanbeobtainedfrom themarketswhen market, ISESettlementandCustodyBankothermarkets).TheGroup hasalowerratioof thedepositscompared loan borrowing from thecorresponding markets(CentralBankoftheRepublic of Turkey ISE,Interbankmoney (“CBRT”), The Group usesdomestic and foreign marketsforitsliquidityneeds,Lowlevelofneedsenablesaneasyway for theseniormanagementtoadjustcompositionand/orpricingofborrowing instruments. The keylimitputsaceilingontheshareborrowing ofovernight inthecurrentsignal fundingpoolandactsasawarning To address liquidityrisk,theGroup hasadoptedaunifiedapproach toTLandforeign currency fund-raisingopportunities. capacity, The Group closelymonitorsitsoverallliquiditylevelandoperatesunderstrictlimitsbasedonstress conditions. Liquidity riskrefers tothepossibility ofaninstitutionbeingunabletoaccessnecessaryfundsduedecliningfund-raising E. LiquidityRisk and subordinated debt Other borrowed funds Due tocustomers Deposits from banks Liabilities Loans andadvancestocustomers -Held-to-maturity -Available-for-sale Investment securities Financial assetsheldfortrading Loans andadvancestobanks the CentralbankofTurkey Cash andbalanceswith Assets 31 December2011and2010basedonyearlycontractualrates. The tablebelowsummarisesweightedaverageinterest ratesforfinancialinstrumentsbymajorcurrencies outstandingat (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank US$ (%) 10.47 2.71 5.27 3.90 7.72 6.00 2.94 - - EUR (%) 2011 2010 3.44 4.94 7.91 5.50 0.30 - - - - TL (%) 11.54 17.83 10.79 7.34 8.95 9.54 0.83 - - US$ (%) 3.24 3.15 6.04 8.84 0.50 - - - - EUR (%) 3.98 3.07 6.58 0,53 - - - - - TL (%) 11.71 8.12 8.71 7.92 7.42 6.60 7.17 7.13 - Total liabilities Other borrowed funds Due tocustomers Deposits from banks Liabilities 2010 Total liabilities Other borrowed funds Due tocustomers Deposits from banks Liabilities 2011 cash flows,whereas the Group managestheinherent liquidityriskbasedonexpected undiscountedcashinflows. contractual maturitiesatthebalancesheetdate.Theamountsdisclosedintableare thecontractual undiscounted The followingtablepresents thecashflowspayablebyGroup undernon-derivativefinancialliabilities remaining during theyearwasasfollows: relating toboththemarketingeneralandspecificallyGroup. According toBRSA regulations theliquidityratios The liquiditypositionisassessedandmanagedunderavarietyofscenarios,givingdueconsiderationtostress factors (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 2010 2011 Lowest (%) Highest (%) Average (%) Lowest (%) Highest (%) Average (%) Primary MaturitySegment Primary MaturitySegment 104.83 335.51 152.74 146.63 415.32 222.11 FX FX 2,966,486 450,091 2,429,119 4,318,617 808,660226,726502,275 3,522,277 FX +TL FX +TL and upto and upto 3 months 3 months 140.54 312.47 198.28 149.26 255.04 196.05 Demand Demand 228,203 309,164 141,427 654,913 3 months 3 months Secondary MaturitySegment Secondary MaturitySegment to 1year to 1year 426,274 661,374 141,567 23,817 5,719 142.58 111.27 105.15 232.20 146.59 94.79 - FX FX 1 yearto 1 yearto 226,632 5 years 5 years 35,360 206,669 28,192 7,168 94 FX +TL FX +TL - - 119.80 162.45 137.66 110.34 155.77 135.96 206,669 502,275 5 years 5 years Over Over Stock Values Stock Values - - - - FX +LT FX +LT 3,658,606 2,460,104 5,856,278 1,531,708 3,663,938 13.81 11.86 7.13 9.72 8.08 8.82 889,338 309,164 660,632 Total Total 71

ABank Annual Review 2011 72 ABank Annual Review 2011 requirement isTL35,668(2010:TL35,166). amount subjecttooperationalriskiscalculatedasTL445,848 (2010:TL439,573)andtheamountofrelated capital based onthegross incomeoftheGroup fortheyearsended2010,2009and2008,Asof31December2011, total Gazette No,26333dated1November2006,namely“TheCalculation oftheAmountSubjecttoOperationalRisk”, the “RegulationRegarding Measurement andEvaluationofBanks’CapitalAdequacyRatio”publishedintheOfficial calculates theamountsubjecttooperationalriskwithbasic indicatormethodinaccordance withtheSection4of For theregulatory purposesandconsiderationinstatutorycapitaladequacyratio,ona consolidatedbasetheGroup media. Risk Managementpoliciesandcontingencyprocedures, are keptup-to-dateand accessibletoallstaff inelectronic operational risksundercontrol andminimizeitbyoperatingunderdetailedwrittenprocedures. Alldocuments,including prescribed practicesorethical standards, TheGroupControl hasRiskManagementand Internal practicestokeep fromoperational risk:itistherisktoearnings violationsornoncompliancewithlaws,rules,regulations, agreements, processes events.Legalandcomplianceriskisasub-categoryof orpersonnel systemsorcausedbyexternal Operational riskisdefinedastheoflossesduetoerrors, infringements,interruptions,damagescausedbyinternal F. Operationalrisk Total inflow Total outflow - Inflow - Outflow Foreign exchangederivatives: Derivatives heldfortrading:

2010 Total inflow Total outflow - Inflow - Outflow Foreign exchangederivatives: Derivatives heldfortrading:

2011 Derivatives settledonagross basis basis: The followingtablerepresents theoutstandingderivative cashflowsoftheGroup onundiscountedcontractualmaturity (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 1 month months 405,145 401,928 405,145 401,928 665,501 670,706 665,501 670,706 Up to1 month months Up to 362,816 358,437 362,816 358,437 93,761 93,830 93,761 93,830 1-3 1-3 279,926 281,718 279,926 281,718 580,296 565,837 580,296 565,837 3-12 3-12 119,065 111,700 119,065 111,700 70,660 77,045 70,660 77,045 years years 1-5 1-5 Over 5 Over 5 years years ------1,727,678 1,706,680 1,727,678 1,706,680 849,492 854,521 849,492 854,521 Total Total Group couldrealise inacurrent marketexchange. the estimatedfairvalue.Accordingly, theestimatespresented herein are notnecessarilyindicativeoftheamounts and appropriate valuationmethodologies.However, judgementisnecessarilyrequired tointerpret marketdatatodevelop The estimatedfairvaluesoffinancialinstrumentshavebeen determined bytheGroup usingavailablemarketinformation parties, otherthaninaforced saleorliquidation,andisbestevidencedbyaquotedmarketprice,ifoneexists. Fair valueistheamountatwhichafinancialinstrumentcouldbeexchangedincurrent transaction betweenwilling H. Fairvalueoffinancialinstruments Capital adequacyratio(%) Amount subjecttooperationalrisk Amount subjecttomarketrisk Amount subjecttocredit risk Total regulatory capital Deductions Tier IIcapital Tier Tier Icapital Tier The Group’s regulatory capitalposition onaconsolidatedbasisisasfollows: throughout theperiod. The Bankanditsindividuallyregulatedimposedcapitalrequirements operationshavecompliedwithexternally banks mustmaintainatotalcapitaladequacyratioofminimumof8%. aggregate byriskweightedassets,whichreflect both credit riskandmarketrisk,Inaccordance withtheseguidelines, fair andbookvaluesofsubsidiaries,subordinated loansextended,goodwillandcapitalizedcosts),dividingthis participations tofinancialinstitutions,specialandpreliminary andpre-paid expenses,negativedifferences between comprises certainqualifiedsubordinated loansinaccordance withBISguidelines)minusdeductions(whichcomprises general loanandfree reserves, revaluation IIIcapital(which fundsandsubordinated loansobtained)anditsTier reserves, retainedandprofitTier IIcapital(whichcomprises earnings forthecurrent periodsminusperiodloss(ifany))its A bank’s Icapital(whichcomprisespaid-incapital, capitaladequacyratioiscalculatedbytakingtheaggregate ofitsTier maintain adequatelevelsofregulatory capitalagainstrisk-bearingassetsandoff-balance sheetexposures. upon thestandardsSettlements(“BIS”),Theseguidelinesrequire establishedbytheBankofInternational banksto Banks inTurkey are required tocomplywithcapitaladequacyguidelinespromulgated bytheBRSA,whichare based G. Capitalmanagement (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 5,072,733 445,848 150,013 775,609 281,107 495,020 13.68 2011 2010 518 3,762,371 439,573 649,808 189,111 460,697 70,225 15.21 - 73

ABank Annual Review 2011 74 ABank Annual Review 2011 future cashflowsexpectedtobepaid. The estimatedfairvalueofinterest bearingliabilitiesduetocustomersisbasedondiscounted cashflowsofestimated remaining maturity. to bepaidusingmoneymarketinterest ratesprevailing atthebalancesheetdatewithsimilarcredit risk,currency and The estimatedfairvalueofotherborrowings withoutquotedmarketpriceisofestimated future cashflowsexpected repayable ondemand. The estimatedfairvalueofdepositswithnostatedmaturity, whichincludes non-interest bearingdeposits, istheamount Due tocustomers,depositsfrom banks,otherborrowed funds announced bytheISE. Fair valueforheld-to-maturitysecuritiesisbasedonmarketpricesorprevailing atthebalance sheetdate Investment securities fair value. flows are discountedatcurrent marketrateswithsimilarcredit risk,currency and remaining maturitytodeterminetheir to customersrepresent thediscountedamountofestimatedfuture cashflows expectedtobe received. Expectedcash Loans andadvancestocustomersare netofallowancesforimpairment.Theestimatedfairvalueloansandadvances Loans andadvancestocustomers balance sheetdatewithsimilarcredit riskandremaining maturity. term interest bearingplacements isbasedondiscountedcashflowsusingprevailing moneymarketinterest ratesatthe depositsisconsideredThe fairvalueofovernight toapproximate itscarryingamounts.Theestimatedfairvalueoflong Loans andadvancestobanks The followingmethodsandassumptionswere usedtoestimatethefairvalueofGroup’s financialinstruments: Other borrowed fundsand subordinated debt Due tocustomers Deposits from banks Financial liabilities: Loans andadvancestocustomers Investment securities(held-to-maturity) Loans andadvancestobanks Financial assets: on theGroup’s balancesheetattheirfairvalue. The followingtablesummarisesthecarryingamountsandfairvaluesofthosefinancialassetsliabilitiesnotpresented (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 1,339,007 3,647,555 4,280,845 Carrying Fair 660,555 828,300 111,650 value 2011 2010 1,481,984 3,662,749 4,630,672 660,666 823,689 111,650 2,448,372 3,231,021 Carrying Fair 804,968 309,062 391,159 70,603 2,453,705 3,396,489 810,232 309,062 397,913 70,603

Commercial notesreceived forcollection Cheques received forcollection Total liabilities Investment securitiesheldincustody in theseconsolidatedfinancialstatements.Fiduciarycapacity oftheGroup isasfollows: The Group provides custodyservicestothird parties.Thoseassetsthatare heldinafiduciarycapacityare notincluded F. Fiduciaryactivities Share certificatesthatare notquotedintheexchangeare recognized atcostandare notincludedinthetableabove. - Derivatives Financial liabilitiesatfairvaluethrough profit andloss Total assets - Investmentssecuritiesdebt Available-for-sale financialassets - Equitysecurities - Derivatives - Debtsecurities Financial assetsheldfortrading 2011 Assets andliabilitiesmeasured atfairvalue their fairvalueare asfollows: According totheseclassification principlesstated,theGroup’s classificationoffinancialassetsandliabilitiescarriedat There are notanysignificanttransfersbetweenLevel 1andLevel2ofthefairvaluehierarchy. Level 3:Assetsandliabilitieswhere noobservablemarketdatacanbeusedforvaluation observable derivedthrough pricesobservablefrom similar assetsorliabilities Level 2:Assetsorliabilitiesthatare excludedintheLevel1ofrecorded pricesdirectly observablebypricesorindirectly Level 1:Assetsorliabilitieswithpricesrecorded (unadjusted) inactivemarkets generated asfollowedbelow: levels. Theselevelsdependontheobservabilityofdatausedduringfairvaluecalculations,Classificationforis IFRS 7requires classificationoflineitemsatfairvalue presented atfinancialstatementsaccording tothedefined Fair valuehierarchy (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 476,632 290,592 161,601 Level 1 24,439 - 23,841 - - Level 2 23,841 59,014 45,733 13,281 - - 1,172,871 1,005,900 280,203 860,824 Level 3 31,844 2011 2010 - 23,841 ------116,385 859,415 535,646 290,592 174,892 30,100 23,841 24,429 45,733 Total 75

ABank Annual Review 2011 76 ABank Annual Review 2011 No interest forTurkish ischargedbyCBRT Liraandforeign currency denominatedreserve requirements. more than3-yearsmaturity6%. maturity 11%;forFCliabilities other thandepositsupto3-yearsmaturity9%;andforFCliabilities otherthandeposits up to3-months,6-monthsand1-yearmaturities 11%;forFCliabilitiesotherthandepositsupto1-year liabilities otherthandepositsmore than3-yearsmaturity5%;forFCdepositaccounts, demand deposits,upto1-month, deposits upto1-yearmaturity11%;forTLliabilitiesotherthan depositsbetween1-and3-yearsmaturity8%;forTL 8%; fordepositsupto1-yearmaturity6%; 1-yearandlongermaturity5%;forTLliabilitiesotherthan deposits upto1-monthmaturity11%;for3-months maturity11%;fordepositsupto6-months reserves ratiosforcommercial banksoperatinginTurkey are asfollows:fordemanddeposits,noticedepositsand As ofthebalancesheetdate,according toCBRT’s Communiqué aboutRequired Reserves No.2005/1,therequired required reserves liabilities. of foreign branchesfrom Turkey andloansobtainedbythebanksbutfollowedunderforeign branchesconstitutethe domestic liabilitiesexcludingtheitemsstatedinCommuniqué asdeductibles,thedepositsacceptedonbehalf the CentralBankofRepublicTurkey’s Communiquénumbered 2005/1“Required Reserves”.TheBank’s total Banks thatare established inTurkey orperformingtheiroperationsbyopeningnewbranchesinTurkey are subjectto Total Foreign currency Reserve depositsatcentralbanks TL Foreign currency Demand depositsatcentralbanks Cash inhand-TL Cash inhand-foreign currency Cash andcashequivalents NOTE 6-CASHANDBALANCESWITHTHECENTRALBANKOFTURKEY Total Loans andadvancestobanks(withoriginalmaturitylessthanthr Demand depositswiththeCentralBankofTurkey Cash andcashequivalents three monthsmaturityfrom thedateofacquisition: For thepurposesofcashflowstatement,andequivalentscomprisefollowingbalanceswithlessthan NOTE 5-CASHANDEQUIVALENTS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank ee months) 503,029 230,359 254,388 107,179 254,388 202,620 94,389 142,895 360,259 193,640 111,618 202,620 59,725 46,021 28,791 20,093 25,928 46,021 2011 2010 2011 2010 107,179 54,108 40,281 10,600 18,191 70,596 94,253 28,791 level ofrisktaken,theGroup assessescounterpartiesusing thesametechniquesasforitslendingactivities. risk ismonitored onanongoingbasiswithreference tothecurrent fairvalue andtheliquidityofmarket.To control the are represented bythepotentialcostofreplacing theswapcontractsifcounterparties failtoperformtheirobligation.This exchange ofcurrencies orinterest rates.Currency swapsinvolvetheexchangeofprincipalaswell.TheGroup risks “Currency swaps”are commitmentstoexchangeonesetofcashflowsforanother. Swaps result inaneconomic spot transactions. “Currency forwards” represent commitments topurchase orsellforeign anddomesticcurrency, includingundelivered The Group utilisesthefollowingderivativeinstruments: NOTE 9-DERIVATIVE FINANCIALINSTRUMENTS Turkey. Otherdebtsecuritiesrepresent corporatebondsissuedbycompaniesincorporatedinTurkey. bondsandtreasuryGovernment billsareoftheRepublic discountandcouponsecuritiesissuedbytheGovernment Total financialassetsheldfortrading Derivative financialinstruments Total equitysecurities Equity securities-listed Total debtsecurities Other debtsecurities Government bondsandtreasuryGovernment billssoldunderrepurchase agreements Government bondsandtreasuryGovernment bills NOTE 8-FINANCIALASSETSHELDFORTRADING Total Time deposits Time Nostro/ demanddeposits Foreign currency: 35,220 Interbank moneymarket Time deposits Time Nostro/ demanddeposits TL: NOTE 7-LOANSANDADVANCES TOBANKS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Domestic Foreign 56,782 21,562 54,86876,430 18,444 34,801 3,118 419 - 2011 2010 54,868 111,650 35,044 19,824 - - - - 53,488 22,942 35,220 34,801 Total 419 - Domestic Foreign 52,690 17,91370,603 30,872 16,91247,784 30,041 21,818 21,492 831 326 - 245,054 174,882 136,021 45,733 24,439 24,439 13,281 25,580 7,786 9,126 1,001 22,819 1,001 2011 2010 - - 212,521 186,630 164,547 21,002 21,002 21,881 37,827 21,492 4,889 9,957 1,001 Total 202 326 77

ABank Annual Review 2011 78 ABank Annual Review 2011 Non-current Current Total derivativeassets/(liabilities)heldfortrading OTC currency options Currency swaps Currency forwards Foreign exchangederivatives: Derivatives heldfortrading 2010 Non-current Current Total derivativeassets/(liabilities)heldfortrading Interest rateswaps OTC currency options Currency swaps Currency forwards Foreign exchangederivatives: Derivatives heldfortrading 2011 and interest ratesrelative totheirterms. instruments becomefavourable(assets)orunfavourable(liabilities)asaresult offluctuationsinforeign exchangerates fair valueoftheinstruments,andtherefore, donotindicate theGroup’s exposure tocredit orpricerisks.Thederivative recognised onthebalancesheetbutdonotnecessarilyindicateamountsoffuture cashflowsinvolvedorthecurrent The notionalamountsofcertaintypesfinancialinstrumentspr specified expirationdate.Optionsare tradedforclients’needs. Options are therighttobuyorsellforbuyerandare theobligationsforwriteranassetataspecifiedpriceuntil (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank ovide abasisforcomparisonwithinstruments Contract/ notional Contract/ notional 1,704,013 1,096,657 3,434,358 2,092,318 423,966 183,390 200,000 838,223 303,817 amount amount

36,373 45,733 19,778 19,023 Assets Assets 4,889 4,889 2,790 1,279 9,360 4,204 2,728 820 Fair values Fair values - Liabilities Liabilities 15,168 15,168 11,917 23,841 23,841 19,788 2,789 3,488 462 565 - - - At 31December Loans writtenoff duringtheyearasuncollectible(-) Amounts recovered during theyear Provision forloanimpairment At 1January Reconciliation ofallowanceaccountforlossesonloansand advances byclassisasfollows: Non-current Current Net Total allowanceforimpairment Collective allowanceforimpairment Specific allowanceforimpairment Gross Loans underlegalfollow-up Loans underclosemonitoring Performing loans 2010 Non-current Current Net Total allowanceforimpairment Collective allowanceforimpairment Specific allowanceforimpairment Gross 1,843,789 Loans underlegalfollow-up Loans underclosemonitoring Performing loans 2011 NOTE 10-LOANSANDADVANCES TOCUSTOMERS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Corporate 68,028 37,112 36,787 (5,871) - Corporate Corporate 1,662,644 1,527,448 1,699,431 1,572,506 1,639,402 1,775,761 2,406,517 1,697,991 91,009 48,362 45,058 36,787 12,351 24,436 59,223 68,028 18,211 49,817 77,829 67,969 (2,411) SME 806 -

2011 2010 Consumer Total Total 1,471,806 2,497,526 2,284,557 134,764 45,058 16,615 28,443 90,738 91,009 33,468 57,541 78,205 5,234 4,846 9,962 SME Consumer SME Consumer 391 (3) -

164,271 103,801 4,445,116 100,098 90,320 82,236 40,929 3,231,021 41,320 3,313,257 41,108 98,567 4,280,845 (8,285) 5,234 164,271 4,462 1,718 1,985 391 303 124 772 88 88 -

2,728,213 3,152,316 3,451,544 4,082,646 (128,782) 131,659 502,808 150,049 829,301 108,130 214,311 148,159 82,236 79,359 82,236 29,269 52,967 10,892 56,141 Total Total - 79

ABank Annual Review 2011 80 ABank Annual Review 2011 Total investmentsecurities Non-current Current Total securitiesheld-to-maturity Debt securities-atamortisedcostlisted: (ii) Securitiesheld-to-maturity At 31December Changes infairvalue Disposals /redemption Additions At 1January The movementinavailable-for-sale securitiesat31Decemberisasfollows: losses). There isanimpairment amountingtoTL2,865recognised foravailable-for-sale debtsecurities. Net lossesfrom changesin thefairvalueofavailable-for-sale investmentsecurities,netoftaxTL5,752(2010:288 Turkey. bondsandtreasuryGovernment billsareoftheRepublic discountandcouponsecuritiesissuedbytheGovernment Non-current Current Total securitiesavailable-for-sale Unlisted Equity securities-atfairvalue bondsandtreasuryGovernment bills Debt securities-atfairvalue: (i) Securitiesavailable-for-sale NOTE 11-INVESTMENTSECURITIES (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Government bondsandtreasuryGovernment billssoldunderrepurchase agreements Corporate bondsandtreasury bills Government bondsandtreasuryGovernment bills 1,039,507 (749,097) 828,300 492,660 335,640 828,300 474,956 311,323 290,592 282,403 290,592 290,592 42,021 8,189 2011 2010 2011 2010 2011 2010 182 - - 391,159 309,655 391,159 147,719 243,440 (31,593) 81,504 31,775 182 182 182 170 12 - - - - Net bookamountat31December At 31December Disposals Amortisation charge(Note27) At 1January Accumulated amortisation At 31December Disposals - - Additions At 1January Cost 2011 Movements ofotherintangibleassetswere asfollows: Net bookamount Accumulated amortisation Cost NOTE 12-OTHERINTANGIBLE ASSETS Turkey. bondsandtreasuryGovernment billsareoftheRepublic discountandcouponsecuritiesissuedbytheGovernment At 31December Impairment losses Disposals /redemption Additions At 1January The movementinheld-to-maturitysecuritiesat31Decemberisasfollows: (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Rights and licenses (29,671) (28,907) 32,844 31,150 3,173 1,694 (764) - Software 828,300 518,181 391,159 (34,107) (83,207) 37,549 (4,436) (4,254) 4,705 4,537 3,442 2,167 2011 2010 2011 2010 (182) 269 168

(310,384) 391,159 232,472 475,337 (34,107) (33,161) (33,161) 37,549 35,687 35,687 (6,266) 3,442 1,862 2,526 (946) Total 81

ABank Annual Review 2011 82 ABank Annual Review 2011 Net bookamountat31December At 31December Disposals Depreciation charge(Note27) At 1January Accumulated depreciation andimpairment At 31December Disposals Additions At 1January Cost 2011 Net bookamount Accumulated depreciation andimpairment Cost NOTE 13-PROPERTY AND EQUIPMENT Net bookamountat31December At 31December Disposals Amortisation charge(Note27) At 1January Accumulated amortisation At 31December Disposals Additions At 1January Cost 2010 (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Office Equipment Furniture and (31,674) (29,695) 10,713 42,387 35,967 (2,240) 6,776 (356) 261 Improvements Leasehold (19,007) (15,082) 12,823 31,830 26,612 (3,925) 5,218 - - Rights and Vehicles licenses (28,907) (28,166) 31,150 30,281 Motor 2,243 (154) (741) 186 932 (81) (90) (63) 15 80 96 (7) - - Software (58,342) Leasing 24,237 82,579 (7,580) (6,805) (4,254) (4,071) 8,266 8,266 4,537 4,507 2011 2010 (775) (183) 686 283 30 - - - -

(58,342) (51,736) (33,161) (32,237) (51,736) 24,237 82,579 11,994 71,031 19,295 71,031 35,687 34,788 (6,947) 2,526 (446) (924) Total Total 341 962 (63) Net bookamountat31December Impairment chargefortheyear, net Disposals Additions Net bookamountat1January were asfollows: customers, tobesoldasrequired bytheTurkish BankingLaw. Movementsinassetsheldforresale at31December Assets heldforresale represent mainlyforeclosed assetsreceived againstuncollectibleloansandadvancesto Non-current Current Total Others Prepaid expenses Collaterals givenforderivativetransactions Collaterals givenforsecurities Contractually soldrepossessed assets Asset heldforresale Receivables from checkclearance NOTE 14-OTHERASSETS At 31December2011,there isnoprovision forimpairmentonproperty andequipment (2010:None). Net bookamountat31December At 31December Disposals Depreciation charge(Note27) At 1January Accumulated depreciation andimpairment At 31December Disposals Additions At 1January Cost 2010 (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Office Equipment Furniture and (29,695) (33,571) 35,967 37,907 (1,369) (5,293) 6,272 5,245 3,353 Improvements Leasehold (15,082) (13,010) 11,530 26,612 22,912 (2,695) (1,088) 4,788 623 Vehicles Motor (154) (175) 186 191 (12) (33) 32 33 28 142,719 120,030 (17,173) Leasing 34,509 23,728 28,189 98,809 43,910 11,469 16,076 29,802 34,509 36,670 (6,805) (7,282) (1,157) (1,641) 6,521 7,672 1,461 1,634 8,266 9,907 2011 2010 2011 2010 (235) -

(51,736) (54,038) (23,859) 28,189 39,916 12,355 86,367 33,663 13,245 12,423 28,938 28,189 27,109 19,295 71,031 70,917 (5,233) (8,055) 6,555 3,571 7,535 8,169 (223) Total 83

ABank Annual Review 2011 84 ABank Annual Review 2011 Non-current Current Total Public sectordeposits repurchase agreements Funds depositedunder Commercial deposits Saving deposits TL deposits: Commercial deposits Saving deposits Foreign currency deposits: NOTE 16-DUETOCUSTOMERS Non-current Current Total repurchase agreements Funds depositedunder Foreign banks Domestic banks TL: Domestic banks Foreign banks Foreign currency: NOTE 15-DEPOSITSFROMBANKS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Demand Term Demand Term 334,886 334,886 3,312,6693,647,555 178,268 2,247,2982,425,566 135,716 156,618 1,065,3711,221,989 128,123 42,552 28,495 346 346 660,209660,555 329 5,7196,0486,662 329 17 654,490654,507 17 ------3,312,585 1,012,973 1,223,471 572,426 492,945 660,209 654,490 10,854 2011 2010 2011 2010 5,719 84 - - - - - 3,647,471 1,148,689 1,266,023 700,549 521,440 660,555 654,490 10,854 5,719 Total Total 329 84 17 - - - Demand Term Demand Term 242,846 242,846 2,205,5262,448,372 139,713 1,422,3871,562,100 103,133 783,139886,272 35,978 76,781 26,954 81,585 21,548 6,673 6,673 302,389309,062 6,662 11 302,389302,400 11 ------2,198,738 531,603 875,772 408,606 374,533 302,389 300,854 15,012 6,788 1,535 - - 6,662 - - - - 2,441,584 608,384 902,726 490,191 396,081 309,062 300,854 35,978 15,012 6,788 1,535 6,662 Total Total 11 - - published on21June2006.By theissueofthislaw, CorporateTax Lawnumbered 5422wasabolished. Corporate Tax Lawnumbered 5520 became effective asof1January 2006withtheOfficialGazettenumbered 26205 basis, provisions fortaxes,asreflected intheseconsolidatedfinancialstatements,havebeencalculatedonaseparate-entity Turkish taxlegislationdoesnotpermitaparent companyanditssubsidiariestofileaconsolidated tax Therefore,return, Deferred tax(expense) Current taxexpense NOTE 18-TAXATION to meetcertainkeyperformanceindicators. Group’s borrowing contractsincluding subordinated debtare subjecttocovenantclauses, whereby theGroup isrequired be takenintoconsiderationassupplementarycapitalwithinthelimitsof“CapitalAdequacyRegulation”.Some EFSE SA.Sıcav-SIF. thewrittenapproval ofBRSA,theloanshavebeenapproved With assubordinated loansandcan EUR 30million,withtenyearsmaturityaninterest rateofLibor+4.5%.Theloanwasobtainedfrom DEGKolnand Development BankandFMOAmsterdam. At29December2011,theBankobtainedasubordinated loanamountingto with aninterest rateofLibor+4.5%. TheloanwasobtainedfromFinanceCorporation,BlackSeaTrade International and At 29December2010,theBankobtainedasubordinated loanamountingtoUS$105million,withtenyearsmaturity EUR 31millionobtainedon20April2009withamaturityof12months.Fundsborrowed are unsecured. As ofDecember31,2009,theBank’s foreign currency fundsborrowed includeasyndicatedloanofUS$30millionand May 2012. rate ofannualLibor+1.70%providedbankswithCommerzbankactingasagent,andmatures by25international on23 EUR 133.5millionandUSD45dual-tranchemulti-currency termloanfacilitydated25May2011,withaninterest As of31December2011,fundsborrowed from foreign institutionsincludeasyndicated credit facility, intheamount of Non-current Current Total Total domestic Domestic banks Total foreign Other Subordinated debt Syndication loans Foreign institutionsandbanks NOTE 17-OTHERBORROWEDFUNDSANDSUBORDINATED DEBT (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 1,339,007 804,968 1,025,112 544,396 794,611 313,895 313,895 335,617 274,470 415,025 (6,158) (4,870) (1,195) (4,963) 2011 2010 2011 2010 804,968 220,872 220,872 584,096 123,630 162,374 298,092 (7,039) 2,169 - 85

ABank Annual Review 2011 86 ABank Annual Review 2011 Income taxexpense Effect ofnon-taxableconsolidationadjustments Non taxableincome Expenditure notallowableforincometaxpurposes Theoretical incometaxoftheapplicablerate20% Profit before incometaxes taxation chargefortheyearisstatedbelow: Reconciliation betweenthetheoretical taxamountthatwouldariseusingthebasicrateofParent andtheactual liabilities sideofthebalancesheetfor5years, at leastfortwoyearsisexemptfrom corporatetaxprovided thatthisamountiskeptinaspecialreserve accountinthe 75% ofthecapitalgainscorporations’from saleofparticipationshares andproperty whichhavebeenintheirassets years, Tax lossescannotbecarriedbacktooffset profits from previous periods. Under theTurkish taxationsystem,taxlossescanbecarriedforward tooffset againstfuture taxableincomeforupto5 purposes. audit taxdeclarationsandaccountingrecords for5years,andmayissuere-assessment basedontheirfindingsfortax In Turkey, there isnoprocedure forafinalanddefinitiveagreement ontaxassessments, Taxauthoritieshave therightto Inflation adjustmenthasnotbeenappliedastheseconditionswer cumulative inflationrate(SIS-WPI)overlast36monthsand12mustexceed100%10%,respectively, power oftheTurkish Lira,Inaccordance withtheaforementioned lawprovisions, inorder toapplyinflationadjustment, financial statementsbyadjustingthenon-monetaryassetsandliabilitiesforchangesingeneralpurchasing assets andliabilities,effective from 1January2004,theincomeandcorporatetaxpayerswillprepare thestatutory Tax Law”thatwaspublishedontheOfficialGazette30December2003toamendtaxbasefornon-monetary In accordance withTax LawNo:5024“LawRelatedtoChangesinTax Procedure Law, IncomeTax LawandCorporate liability. Thebalanceoftheadvancetaxpaidmayberefunded orusedtooffset againstotherliabilitiestothegovernment. payable onthe17thofsamemonth,Advancetaxpaidbycorporationsiscredited againsttheannualcorporationtax corporate income.Advancetaxreturnisfiledbythe14thofsecondmonthfollowingeachquarterlyperiodand Corporations are required topayadvancecorporationtaxquarterlyattherateof20%ontheirdetermined not incurwithholdingtax,Provisions ofbilateraltreaties are reserved. the rateof15%Anincrease incapitalviaissuingbonusshares isnotconsidered asaprofit distributionandthusdoes or resident corporationsare notsubjecttowithholding tax.Otherwise,dividendspaidare subjecttowithholdingtaxat Dividends paidtonon-resident corporations,whichhaveafixedplaceofbusinessorpermanent representative in Turkey, be carriedoutinsingleinstallmentuntiltheendofmonthwhichtaxreturnistofiled. return isrequired tobefileduntil25thdayofthefourth monthfollowingthecloseof related fiscalyear. Paymentswill expenses, exemptincome,investmentallowanceandotheradditionsdeductions.Theannualcorporateincometax tax ispayableatarateof20%overthecorporatebasecompanyafteradjustingforcertaindisallowable Under theCorporateTax Lawnumbered 5520,theapplicablecorporatetaxrateis20%for2011(2010:20%).Corporate (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank e notfulfilledintheyear2009. 12,519 27,043 (6,158) (4,839) (8,429) (5,409) 2011 2010 (10,525) 11,088 35,910 (4,870) (7,182) 1,749 Income taxeffects relating tocomponentsofothercomprehensive income balance sheet(2010:None). At 31December2011,there are nodeductibletemporarydifferences forwhichnodeferred taxassetisrecognised inthe 31 December Tax assetschargedtoequity Charge fortheyear, net 1 January The movementsofdeferred incometaxesat31Decemberwere asfollows: Deferred incometaxassets, net Deferred incometaxliabilities Valuation differences oninvestmentsecurities Revaluation ofderivativeinstrumentsatfairvalue tax baseofproperty andequipment Difference betweencarryingvalueand Reversal ofspecificloanprovision deductedfortaxpurposes Deferred incometaxassets Other Court caseprovision Employee terminationbenefitsandvacationpayliability Bonus provision Valuation differences oninvestmentsecurities Revaluation ofderivativeinstrumentsatfairvalue Loan lossimpairmentprovision The temporarydifferences givingrisetothedeferred incometaxassetsanddeferred incometaxliabilitiesare asfollows: in accordance withtheapplicabletaxlaw. treatment ofcertainitemsincomeandexpensesincludedinthefinancialstatementscompared tothelocaltax return The deferred incometaxassetandliabilityrepresent thetaxeffect oftemporarydifferences arisingduetothedifferent of 20%at31December2011(2010:20%). be realised orsettledbasedonthetaxableincomeinfiscalyear2010underliabilitymethodusingaprincipaltaxrate For allsubsidiariesandtheParent, deferred income taxes are calculatedontemporarydifferences thatare expectedto Deferred incometaxes (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Cumulative Temporary 41,247 46,862 10,234 21,513 10,389 88,109 70,032 4,726 1,384 6,954 8,752 2011 2010 987 Differences - - 47,215 23,556 19,365 70,771 10,364 38,766 4,191 1,144 6,329 6,585 6,757 826 - - 17,622 14,007 (1,195) 8,248 9,443 8,248 9,374 2,047 4,303 2,078 1,391 1,750 2011 2010 946 277 197 Asset/Liability Deferred Tax - - - 14,155 9,443 2,169 7,214 9,443 4,712 3,873 1,266 1,317 1,351 2,074 7,753 839 229 165 60 - - 87

ABank Annual Review 2011 88 ABank Annual Review 2011 not funded,asthere isnofundingrequirement. There are noagreements forpensioncommitmentsotherthanthelegalrequirement asexplainedabove.Theliabilityis limited toamaximumofTL2,805.04(1January2010:2,623.23 ) foreachyearofservice. transitional provisions relating tolengthofservicepriorretirement, Theamountpayableconsistsofonemonth’s salary age (63forwomenand64men),Sincethelegislationwas changedon8September1999,there are certain military service,diesorwhoretires aftercompleting25yearsofservice(20forwomen)andachievestheretirement who hascompletedatleastoneyearofserviceandwhoseemploy ment isterminatedwithoutduecause,calledupfor Under theTurkish LabourLaw, theParent anditssubsidiariesare required to pay terminationbenefitstoeachemployee 31 December Paid duringtheyear Annual charge Actuarial gainsandlosses Interest costs 1 January The movementinthereserve foremployeebenefitsisasfollows: -Reserveforemploymentterminationbenefits Balance sheetobligationsfor: NOTE 20-RETIREMENTBENEFITOBLIGATIONS recognised aprovision ofTL987(2010:826)asthebestestimateamounttosettlethesepotentialobligations. developments insomeofthesecases;itisprobable thattheGroup willbefoundliable.Therefore, themanagementhas At 31December2011,theGroup isinvolvedinnumberoflegaldisputes,TheGroup’s lawyersadvisethat,owingto Other legalprovisions Non-current Current Total Other Other legalprovision Provision forlossesoncredit related commitments NOTE 19-OTHERPROVISIONS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 15,654 15,654 10,871 13,891 (1,380) 4,081 1,027 3,907 4,081 3,907 4,081 2011 2010 2011 2010 2011 2010 345 182 776 987 - 10,871 3,907 1,152 3,000 3,907 9,502 (482) 140 543 826 97 - Total share capitalandshare premium Share premium Historical share capital Other Anadolu EndüstriHoldingA.Ş. Shareholders The issuedandfullypaid-inshare capitalandshare premium are asfollows: nominal valueofTL1each.TheCompany’s authorisedcapitalamountstoTL300,000(2010:300,000). The historicamountofshare capitaloftheCompanyconsists300million(2010:million)authorisedshares witha NOTE 22-SHARECAPITAL ANDSHAREPREMIUM Non-current Current Total Other Provision forunusedannual vacation Bonus Taxes otherthanincomeandwithholdings Collaterals received forsecurities Cheques incollection Clearing accounts Blocked accounts NOTE 21-OTHERLIABILITIES The probability ofretirement (%) Discount rate(%) provision: Accordingly thefollowingfinancialanddemographicalactuarialassumptionswere usedinthecalculationsof the future probable obligationoftheGroup arisingfrom theretirement oftheemployees. eligible toreceive employmentterminationbenefits.Theprovision hasbeencalculatedbyestimatingthepresent valueof method andbaseduponthefactorsderivedusingtheirexperienceofpersonnelterminatingservicesbeing plans. Intheconsolidatedfinancialstatements,Group reflected aliabilitycalculatedusingthe projected unit credit IFRS requires actuarialvaluationmethodstobedeveloped toestimatetheenterprise’s obligationunderdefinedbenefit (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Participation TL rate (%) 22.29% 77.71% 100.00 2011 2010

thousand 300,085 300,000 233,142 66,858 85 Participation TL 205,648 235,926 201,318 rate (%) 100.00 300,000 30,278 36,893 14,363 16,076 27,491 36,670 92,706 22.29 77.71 2,895 8,832 90.48 2011 2010 2011 2010 4.66 300,085 thousand 233,142 197,758 66,858 29,222 29,959 27,109 94,285 3,560 2,434 6,675 8,062 3,572 90.48 4.66 85 89

ABank Annual Review 2011 90 ABank Annual Review 2011 available fordistributiontoshareholders. After deductingtaxesandsettingasidethelegalreserves asdiscussedabove,theremaining balanceofnetprofit is share capital,withoutlimit.Itmaybeusedtoabsorblosses. b) Secondlegalreserve, appropriated attherateofleast10%distributioninexcess5%issuedandfully paid-in fully paid-inshare capital. a) Firstlegalreserve, appropriated attherateof5%netincome,untiltotalreserve isequalto20%ofissuedand whichareearnings, availablefordistributiononlyintheeventofliquidationorlosses: Under theTurkish Commercial Code,theGroup isrequired tocreate thefollowinglegalreserves from appropriation of the legalreserve requirement referred tobelow. asperthestatutoryfinancialstatementsotherthanlegal Retained earnings reservesare availablefordistribution,subjectto At 31December2010 Transfer tostatutory reserves Net changeinavailable-for-sale investments,netoftax At 1January2010

At 31December2011 Transfer tostatutory reserves Net changeinavailable-for-sale investments,netoftax At 1January2011 Movements inotherreserves were asfollows: Retained earnings Total otherreserves Revaluation reserve -available-for-sale investments Statutory reserve NOTE 23-RETAINED EARNINGSANDOTHERRESERVES (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Statutory Revaluation Statutory Revaluation reserves reserves reserves reserves 8,016 2,895 5,121 9,587 1,571 8,016 - - 183,746 (5,751) (5,752) (5,751) 3,836 9,587 2011 2010 (288) 289 1 1 - - 164,535 (5,752) 8,017 2,895 5,410 3,836 1,571 8,017 8,017 8,016 (288) Total Total 1 Net feeandcommissionincome Total feeandcommissionexpense Other Transfer commissions Effective andfuture transactioncommissions Correspondent bankcommissions CBRT Interbankmoneymarkettransactioncommissions CBRT Debit card commissions Fee andcommissionexpenseon: Total feeandcommissionincome Other Portfolio andothermanagementfees Letter ofcredit Banking services Brokerage Letter ofguarantee Fee andcommissionincomeon: NOTE 25-NETFEEANDCOMMISSIONINCOME Net interest income Total interest expense Other Deposits from banks Repurchase agreement Other borrowed fundsand subordinated debt Due tocustomers Interest expenseon: Total interest income Other Trading andinvestmentsecurities -tocustomers -tobanks Loans andadvances: Interest incomeon: NOTE 24-NETINTERESTINCOME (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 236,262 283,895 214,554 520,157 436,780 40,277 43,710 25,061 23,550 36,279 74,605 3,433 1,185 3,949 6,386 7,687 2,572 6,940 7,383 1,389 2011 2010 2011 2010 763 127 626 712 627 20 -

175,972 170,300 142,214 346,272 286,870 32,140 35,078 20,462 10,632 16,555 49,081 2,938 1,548 3,400 4,049 5,109 5,798 4,523 736 123 583 542 928 510 649 250 26 91

ABank Annual Review 2011 92 ABank Annual Review 2011 Total Impairment lossesoncredit related commitments(Note19) Impairment lossesonloansandreceivables (Note10) NOTE 28-IMPAIRMENT LOSSESONLOANS ANDCREDITRELATED COMMITMENTS included inthestaff costs in thetableabove. Reserve foremploymentterminationbenefit,accrualunusedvacationrightsandprovision forpersonnelbonusare Total General administrativeexpenses Other Repair andmaintenanceexpenses Marketing andadvertisementcosts Operational leaseexpenses Depreciation andamortisation Amortisation ofintangibleassets(Note12) Depreciation onproperty andequipment(Note13) Staff costs NOTE 27-OTHEROPERATING EXPENSES available forsalefinancialassets. Net gainsfrom investmentsecuritiesamountingtoTL4,052(2010:356)compriseofnetresults ondisposalsof options, futures, andswapsduetochangesininterest rates. Net tradingincomefrom derivativefinancialinstrumentsincludesgainsandlossesfrom spotandforward contracts, Net Income/(Loss) Derivative financialtransactions Trading securities NOTE 26-TRADINGGAINSANDLOSSES,NET (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank 168,857 140,179 (83,857) (23,319) (79,468) 61,264 41,296 16,824 99,700 12,560 (4,389) (8,350) 2,247 7,893 6,947 4,210 2011 2010 2011 2010 2011 2010 897 946 (27,285) (24,723) (34,948) 52,984 37,833 13,064 81,063 1,404 1,365 6,132 5,233 7,663 722 899 Other assetspledged Investment securities(Note11) Total (1) Trading securities(Note8) The Group hasthefollowingassetspledgedascollateral: NOTE 29-ASSETSPLEDGEDANDRESTRICTED (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank merit, canbesuccessfullydefendedorwillnothaveamaterial adverseeffect ontheGroup’s financialposition. been provided for, itistheopinionofmanagementanditsprofessional advisorsthatsuchclaimsare eitherwithout In respect ofthefurtherclaimsassertedagainstGroup ,whichaccording totheprinciplesoutlinedabove,havenot estimated (Note19). its professional advisors,itisprobable thatapaymentwillbemadebytheGroup, andtheamountcanbereasonably ordinary courseofbusiness.TheGroup recognises provisions forsuchmatterswhen,intheopinionofmanagementand Due tothenature ofitsbusiness, theGroup isinvolvedinanumberofclaimsandlegalproceedings, arisinginthe Legal proceedings following isasummaryofsignificantcommitmentsandcontingentliabilitiesat31December. that are notpresented inthesefinancialstatements,includinglettersofguarantee,acceptancesandcredit. The In thenormalcourseofitsactivities,Group undertakesvariouscommitmentsandincurscertaincontingentliabilities NOTE 30-COMMITMENTSANDCONTINGENTLIABILITIES amount toTL254,388(2010:107,179). At 31December2011,theGroup’s reserve depositsthatare notavailabletofinancetheGroup’s day-to-dayoperations Settlement andCustodyBankotherfinancialinstitutionsamounttoTL82,151(2010:60,752). financial institutionsasaguaranteeforstockexchangeandmoneymarketoperations.Theseare mainlytheCBRT, ISE Held fortradingandheld-to-maturitysecuritiesare alsopledgedtoregulatory authoritiesforlegalrequirements andother December 2011(2010:TL307,064). agreements (Note15and Note 16).Total amountoffundsobtainedunderrepurchase agreements isTL658,840asof31 (2010: TL312,266)are pledged tobanksandotherfinancialinstitutionsagainstfundsobtainedunder repurchase Held fortradingandheld-to-maturitysecuritieswhosetotalcarryingamountisTL500,536asof31December2011 collaterals given. Otherassetspledgedare the collateralsgiventocounterpartiesofderivativefinancialinstrumentsandother (1)

474,956 528,081 658,840328,200 25,580 27,545 Assets liability Related Related 2011 2010 633,751 25,089 - 147,719 164,547 15,934 Assets liability 147,500 159,564 307,064 - 93

ABank Annual Review 2011 94 ABank Annual Review 2011 Total 2010 Total Other commitments Other commitments Acceptance credits Acceptance credits Letter ofguarantees Letter ofguarantees Letter ofcredits Letter ofcredits (1) 2011 The followingtableshowstheoutstandingcredit related commitmentsoftheGroup: requirements, sincemanyofthesecommitmentswill expire orterminatewithoutbeingfunded. The totaloutstandingcontractualamountofcommitmentstoextendcredit doesnotnecessarilyrepresent future cash commitment. Cash requirements underguaranteesandstandbyletters ofcredit are considerablylessthantheamountof the underlyingshipmentsofgoodstowhichtheyrelate andtherefore havesignificantlylessrisk. party todrawdraftsontheGroup uptoastipulatedamountunderspecifictermsandconditions,are collateralisedby and commercial lettersofcredit, whichare writtenundertakingsbytheGroup onbehalfofacustomerauthorisingthird the eventthatacustomercannotmeetitsobligationstothird parties,carrythesamecredit riskasloans.Documentary Guarantees andstandbylettersofcredit, whichrepresent irrevocable assurancesthattheGroup willmakepaymentsin The primarypurposeoftheseinstrumentsistoensure thatfundsare availabletoacustomerasandifrequired. Credit related commitments (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Based onoriginalmaturities, (1) (1)

1,351,843 370,542200,496 1,533,919 511,481119,239 1,351,843 1,533,919 Indefinite Indefinite ------

than 1year than 1year Not later Not later 132,451 319,297 348,960 30,070 45,798 5,447 - - 1-5 years 1-5 years 151,331 16,606 11,051 83,653 32,559 24,535 - -

5 years 5 years Over Over ------1,922,881 2,164,639 1,351,843 1,533,919 216,104 197,129 351,856 373,495 22,053 41,121 Total Total Total liabilities Unallocated liabilitites Total assets Segment liabilities Segment assets Asset Net profit Non-controlling interest Profit from afterincometax Tax provision Other operatingexpenses (Provisions for)/recoveries from impairmentloanreceivables Profit before incometax Net interest income Net feesandcommissionincomeotheroperating Trade gain/ loss Dividend income 2011 nature oftheproducts andservicesprovided. The Group isorganizedintotwomainbusinesssegmentswhichare organizedandmanagedseparatelyaccording tothe geographically. are affected predominantly bydifferences intheproducts andservicesprovided. Secondaryinformationisreported The primarysegmentreporting formatisdeterminedtobebusinesssegmentsastheGroup’s risksandratesofreturn NOTE 31-SEGMENTANALYSIS (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank and liabilities (1)

(1)

3,750,725 1,849,813

4,476,059 1,920,093

Banking

(1) (1)

Commercial

3,750,725 4,476,059 (110,628) 144,425 (82,901) 35,727 35,727 35,727 81,875 2,956 - - - - Investment 1,849,813 1,920,093 (10,512) (19,825) 32,820 (1,761) 1,402 (602) 800 800 680 - - - 837,578 6,438,116 507,226 330,352 (15,642) (15,745) (10,189) (40,560) 41,964 6,438,116 41,964 30,879 (5,556) Other (540) 103 32 - - 5,930,890 6,438,116 (171,013) 507,226 208,124 (82,901) 20,885 20,782 26,940 79,574 (6,158) (7,556) Group 103 712 95

ABank Annual Review 2011 96 ABank Annual Review 2011 Total liabilities Unallocated liabilitites Total assets Segment liabilities Segment assets Asset andliabilities Net profit Non-controlling interest Profit from afterincometax Total commitments andcontingentliabilities Tax provision Credit related commitments Total liabilities (Provisions for)/recoveries from impairmentloanreceivables Obligations underfinanceleases Profit before incometax Net interest income Net feesandcommissionincomeotheroperating Due tocustomers Total assets Dividend income Other operatingexpenses 2010 Loans andadvancestocustomers,net (1) (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank (i) Balanceswithrelated parties: A numberoftransactionswere entered intowithrelated partiesinthenormalcourse ofbusiness. A.Ş. owning77.71%oftheordinary shares. over theotherpartyinmakingfinancialoroperationaldecisions,TheGroup iscontrolled byAnadoluEndüstriHolding Parties are considered toberelated ifonepartyhastheabilitytocontrol theotherpartyorexercise significantinfluence NOTE 32-RELATED PARTY TRANSACTIONS Classificationdifferences withincomestatementexistsincebusiness reporting oftheBankwasused. (1)

(1)

2,517,149 1,050,322

3,336,671

Banking

(1)

Commercial

2,517,149 3,336,671 Share in 776,542 776,186 101,713 (99,417) (24,591) 28,193 28,193 95,571 95,571 28,193 50,488 5,439 5,439 Total 356 - - - - 2011 2010 Investment 1,050,322 877,336 877,336 (16,901) (26,003) total % 36,776 (5,859) (5,859) (5,664) 21.03 (195) 4.42 0.13 100 464 - - -

Share in 719,668 4,287,139 492,473 227,195 484,039 483,048 (17,839) 73,132 4,287,139 73,132 94,961 94,961 11,069 11,808 32,824 11,808 (4,677) (3,916) 8,706 2,314 6,392 Other Total 991 - - 3,794,666 4,287,139 (134,157) 492,473 171,313 (24,591) total % 31,040 28,726 33,598 100.00 20,569 (4,872) Group 2,314 19.73 4.94 0.37 464 Total interest andfeeexpense extraordinary reserves asitisfree ofcostwithBODdecisionthenumber4/A anddated20February2012. TL 300,000to420,000asitisbelowauthorizedcapitalceiling,1,000,000,andoffset additionalTL120,000from Parent company, theBank,hasauthorizedGeneralManagementaboutlegalprocedures toincrease itsissuedcapital from NOTE 34-POSTBALANCESHEETEVENTS bytheGroupmanagement feesearned amountedtoTL1,598(2010:TL1,550). and chargesmanagementfeesrangingfrom 0,005%to0,010%(2010:0.005%0.012%).At31December2011, purchases andsellsmarketable securitiesfortheFunds,marketstheirparticipationcertificatesandprovides otherservices bills andshare certificates amountingtoTL51,115(2010:51,115).Inaccordance withtheFunds’statute,Group Board bonds,treasury Regulations.At31December 2011,theFunds’investmentportfoliomainlyincludesgovernment At 31December2011,theGroup manages6(2010:6)mutualfundswhichwere establishedunderCapitalMarkets NOTE 33-ASSETSUNDERMANAGEMENT 2011 (2010:TL6,977). Salaries andotherbenefitspaidtotheGroup’s keymanagementapproximately amounttoTL8,276asof31December Other operatingexpense Interest expenseondeposits Total interest andfeeincome Interest incomeonloansandadvancestocustomers

(ii) Transactions withrelated parties: (Amounts expressed inthousandsofTurkish Lira(“TL”)unlessotherwiseindicated.) Notes totheConsolidatedFinancialStatements A.Ş. Alternati̇fbank Share in 45,961 44,336 1,625 3,353 3,353 Total 2011 2010 total % 20,66 0.96 0,77

23,034 23,034 1,776 2,960 2,960 Total

Share in total % 16.20 1.32 1.03 97

ABank Annual Review 2011 42 ABank Annual Review 2011 through 63branches in 24citiesofTurkey approach. its customizedservice throughout Turkey with Banking” concept to spread the“Happy ABank willcontinue ABank’s Network in Turkey

ABank expanded its branch network to reach 63 in 2011 by opening 10 new branches in 9 cities; the Bank thus gained a broader branch network throughout Turkey with a presence in regions where around 90% of Turkey’s GDP is being generated.

TEKİRDAĞ

İSTANBUL (26) İZMİR (4)

BURSA (2) ÇORUM KOCAELİ (3) TRABZON

ADAPAZARI SAMSUN ESKİŞEHİR

ANKARA (5)

MALATYA

GAZİANTEP (2) ANTALYA (3) HATAY AFYONKARAHİSAR

DENİZLİ KAYSERİ

MUĞLA (2) KONYA ADANA MANİSA MERSİN AYDIN ABank Annual Review 2011 99 Directory Phone Fax Head Office Cumhuriyet Cad. No: 46 Şişli 34367 İstanbul +90 212 315 65 00 +90 212 233 15 00 Kaptanpaşa Mah. Piyalepaşa Bulvarı Ortadoğu Plaza Kat: 13-14-15-16-17 No: 73 Operations Center +90 212 314 27 00 +90 212 314 29 69 Şişli İstanbul Adana Adana Branch Ziyapaşa Bulvarı Refah Apt. No: 29/A 01130 Adana +90 322 459 18 88 +90 322 458 35 73 Dumlupınar Mah. Ordu Bulvarı, Süleyman Göncen Cad. No:2 Merkez/ Afyonkarahisar Afyonkarahisar Branch +90 272 213 22 40 +90 272 213 22 16 Afyonkarahisar Adapazarı Adapazarı Branch Yenigün Mah.Yenicami Sk. Palmiye İş Merkezi No:8 Sakarya +90 264 272 25 10 +90 264 272 25 22 Ankara Ankara Branch Cinnah Cad. 56/14 06690 Çankaya Ankara +90 312 442 21 40 +90 312 442 41 61 Balgat Branch Ceyhun Atuf Kansu Cad. No: 106/A Çankaya Ankara +90 312 472 18 00 +90 312 472 10 40 Ostim Branch Alınteri Bulvarı No: 80 06370 Ostim Ankara +90 312 385 69 10 +90 312 385 69 20 Siteler Branch Demirhendek Cad. No: 128 06160 Siteler Ankara +90 312 348 34 00 +90 312 348 68 08 İvedik Branch İvogsan Melih Gökçek Bulvarı,1476 Sk. No.8/2 Yenimahalle/Ankara +90 312 395 71 18 +90 312 395 87 14 Güllerpınarı Mah. Çevreyolu Cad. Bulvar Palas Apt. No: 286 Dükkan No: 1 ve 2, Antalya Alanya Branch +90 242 511 06 08 +90 242 513 89 02 Daire No: 3 Alanya Antalya Antalya Branch Balbey Mah. İsmet Paşa Cad. No: 3-4 07040 Antalya +90 242 243 22 03 +90 242 247 77 85 Vatan Bulvarı Güvenlik Mah. 282 Sok. Kadri Melli İş Merkezi No: 10/1 ve 3 Çallı Çallı Branch +90 242 345 36 80 +90 242 346 22 18 Antalya Aydın Aydın Branch Hasanefendi Mah. Hükümet Bulvarı 1905. Sk. No: 11 Merkez Aydın +90 256 214 75 44 +90 256 214 43 12 Bursa Bursa Branch Kırcaali Mah. Kayalı Sok. Ortaklar İş Merkezi No: 34/ B 16220 Bursa +90 224 272 68 80 +90 224 272 68 90 Nilüfer Branch İzmir Yolu Girişi F. S. M Bulvarı No: 128/19 16010 Bursa +90 224 247 36 00 +90 224 245 40 97 Çorum Çorum Branch İnönü Cad. No:61 Çorum +90 364 201 03 10 +90 364 201 03 22 Denizli Denizli Branch Saraylar Mah. 2. Ticari Yol No: 32 Bayramyeri 20100 Denizli +90 258 262 42 62 +90 258 242 65 90 Eskişehir Eskişehir Branch Sakarya Cad. No: 56/A 26100 Eskişehir +90 222 230 71 72 +90 222 230 70 92 İncirlipınar Mah. Prof. Muammer Aksoy Bulvarı F&H İş Merkezi No: 9-10 Şehitkamil Gaziantep Gaziantep Branch +90 342 215 31 15 +90 342 215 31 14 Gaziantep Gatem Branch Gatem Toptancılar Sitesi, Mavi Ada 3.Blok No:2 Şehitkamil/Gaziantep +90 342 238 21 80 +90 342 238 21 96 Hatay Antakya Branch Yavuz Selim Cad. Zühtiye Ökten Çarşısı A Blok No: 7-8-16 Antakya Hatay +90 326 225 37 37 +90 326 225 37 08 İstanbul Alltunizade Branch Mahir İz Caddesi No: 20 A Blok Altunizade 34662 İstanbul +90 216 474 74 88 +90 216 474 70 99 Avcılar Branch Cihangir Mah. E-5 Yanyol Düz Sok. No: 1 34840 Avcılar İstanbul +90 212 422 24 10 +90 212 422 87 97 Bakırköy Branch İncirli Cad. No: 106 Bakırköy 34144 İstanbul +90 212 542 56 54 +90 212 543 53 18 Bakırköy Çarşı Branch Cevizlik Mah. Hüsreviye Sok. No: 14 Bakırköy İstanbul +90 212 660 30 46 +90 212 572 53 02 Bayrampaşa Branch Yeni Maltepe Cad. No: 2 Doğa Plaza 34030 Bayrampaşa İstanbul +90 212 501 53 00 +90 212 501 43 15 Beylikdüzü Branch Yakuplu Merkez Mah. Hürriyet Bulvarı No:1 SkyPort Residence Beylikdüzü +90 212 879 26 80 +90 212 879 26 93 Caddebostan Branch Bağdat Cad. Çetintaş Apt. No: 265/A Caddebostan 34728 İstanbul +90 216 363 49 90 +90 216 411 89 07 Efes Merter Branch Bahçelievler Mah. Şehit İbrahim Koparır Cad No: 4 Bahçelievler İstanbul +90 212 449 38 67 +90 212 677 55 13 Gaziosmanpaşa Branch Cumhuriyet Meydanı No:19 Gaziosmanpaşa/İstanbul +90 212 581 83 83 +90 212 581 85 08 Güneşli Branch Gülbahar Cad. Evren Mah. Günnur Sok No: 1 34212 Güneşli İstanbul +90 212 550 63 53 +90 212 550 81 37 Hadımköy Branch Akçaburgaz Mah. Hadımköy Yolu No: 190 Esenyurt Hadımköy İstanbul +90 212 886 85 50 +90 212 886 11 82 İkitelli Organize Sanayi Bölgesi Demirciler Sanayi Sitesi G-1 Blok No: 484 İkitelli Branch +90 212 671 46 43 +90 212 671 46 67 Küçükçekmece 34306 İstanbul İstanbul Leather and Industry Free Zone Hakkı Matraş Cad. No: 11 34953 Tuzla İstanbul +90 216 394 26 67 +90 216 394 26 72 Branch Kartal Branch Ankara Asfaltı Yan Yol. Kurfalı Mah. Kartal İş Merkezi B Blok 34861 Kartal İstanbul +90 216 452 44 44 +90 216 452 44 37 Ankara Asfaltı Üzeri F. S. M. Hastanesi Yanı Umut Sok. No: 12 İçerenköy 34752 Kozyatağı Branch +90 216 574 79 74 +90 216 573 74 10 İstanbul Levent Branch Sanayi Mah. Eski Büyükdere Cad. No: 31/A Kağıthane İstanbul +90 212 280 62 10 +90 212 280 60 72 Maltepe Branch Atatürk Cad. No: 41/2 Maltepe İst +90 216 442 00 85 +90 216 442 00 79 Maslak Branch Büyükdere Cad. Nurol Plaza No: 255-F Maslak 34398 İstanbul +90 212 276 57 00 +90 212 276 43 72 Main Branch Cumhuriyet Cad. No: 46 A Şişli 34367 İstanbul +90 212 315 65 00 +90 212 232 99 07 Rami Topçular Branch Rami Kışla Cad. Cicoz Yolu Bülent Kuşcu İş Merkezi No: 1 Eyüp İstanbul +90 212 544 62 10 +90 212 544 62 40 Sahra-i Cedit Branch Şemsettin Günaltay Cad. Osmanlı Sitesi No: 213 Erenköy 34738 İstanbul +90 216 363 48 10 +90 216 360 03 20 Sirkeci Branch Bahçekapı Cad. No: 29 Arpacılar 34112 Sirkeci İstanbul +90 212 511 95 09 +90 212 511 99 48 Şişli Branch Halaskargazi Cad. Çankaya Apt No: 150/ A Şişli 34371 İstanbul +90 212 219 41 51 +90 212 219 41 63 Tuzla Organized Industry Kimya Sanayicileri Organize Sanayi Bölgesi Melek Aras Bulvarı A Blok No: 2 Kat: 2 +90 216 593 17 99 +90 216 593 17 95 Zone Branch Tuzla İstanbul Ümraniye - İmes Branch İmes Sanayi Sitesi C Blok 302 Sok. No: 2 Yukarı Dudullu 34735 İstanbul +90 216 364 53 53 +90 216 364 53 52 Ümraniye Branch Alemdağ Cad. No: 160 Ümraniye İstanbul +90 216 505 70 20 +90 216 505 70 18 İzmir Gaziemir Branch Akçay Cad. No: 213/1 35410 Gaziemir İzmir +90 232 252 55 77 +90 232 252 18 45 İzmir Branch Şehit Nevres Bulvarı No: 23/A Alsancak 35210 İzmir +90 232 422 69 10 +90 232 463 90 19 Karşıyaka Branch Cemal Gürsel Cad. 164/1 Karşıyaka 35600 İzmir +90 232 369 99 00 +90 232 369 19 67 Pınarbaşı Branch Kemalpaşa Cad. No: 19/A Zemin Kat Pınarbaşı 35060 İzmir +90 232 479 90 10 +90 232 479 90 14 Kayseri Kayseri Branch Cumhuriyet Mah. Millet Cad. No: 36 38040 Kayseri +90 352 222 11 11 +90 352 222 35 40 Anadolu Sağlık Merkezi Kocaeli Cumhuriyet Mah. 2255. Sok. No: 3 Çayırova Gebze Kocaeli +90 212 314 29 21 +90 262 653 63 14 Branch Gebze Branch Osman Yıldız Mah. İstanbul Cad. No: 64 Gebze 41400 Kocaeli +90 262 643 20 00 +90 262 643 61 44 İzmit Branch Karabaş Mah. Cumhuriyet Cad. No: 180 İzmit 41100 Kocaeli +90 262 322 06 05 +90 262 322 06 30 Konya Konya Branch Fevzi Çakmak Mah Ankara Yolu Üzeri No 212 Karatay 42090 Konya +90 332 342 54 66 +90 332 342 24 29 Malatya Malatya Branch İzzetiye Mah. Posta Cad. No: 14 Malatya +90 422 324 95 95 +90 422 324 95 82 Manisa Manisa Branch 75. Yıl Mah. Bahri Sarıtepe Cad. No: 67/A Manisa +90 236 233 94 30 +90 236 236 03 78 Mersin Mersin Branch Camiişerif Mah. İstiklal Cad. No: 32 33060 Mersin +90 324 237 90 00 +90 324 237 78 71 Muğla Bodrum Branch Kıbrıs Şehitleri Cad. No 112 Bodrum 48400 Muğla +90 252 313 90 07 +90 252 313 42 30 Marmaris Branch Tepe Mah. Ulusal Egemenlik Cad. 71. Sokak No: 1 Marmaris Muğla +90 252 413 21 00 +90 252 413 21 13 Samsun Samsun Branch Merkez Kale Mah Kazımpaşa Cad. No: 21 55000 Samsun +90 362 432 34 55 +90 362 432 63 87 Kazimiye Mah. Omurtak Cad. Kılıçoğlu Plaza (Kipa Karşısı) A blok Zemin Kat No: 4 Tekirdağ Çorlu Branch +90 282 673 63 63 +90 282 673 63 73 Çorlu 59850 Tekirdağ Trabzon Trabzon Branch Kemerkaya Mah. Maraş Cad. Ahmet Selim Teymur Sokak No: 5/A 61200 Trabzon +90 462 322 31 55 +90 462 321 95 46 ABank Annual Review 2011 10 0 Produced by Tayburn Tel: (90 212) 227 04 36 www.tayburnkurumsal.com Head Office: Cumhuriyet Cad. No: 46 34367 Şişli / İstanbul / TURKEY T: +90 212 315 65 00 F: +90 212 233 15 00 www.abank.com.tr