Green, Social and Sustainable Finance Framework & Sustainability Strategy 1 Leading Bank in with a Diversified Business Model

2 Ziraat Bank – Strengths and Strategy

Well-established Nationwide Experienced and Dedicated Franchise Diversified Funding Sources Management Team • 158 years of banking legacy • High service quality with more than 24,000 • Deposits are the major source of funds for lending personnel • Senior management comprised of industry leaders and investment activities, constituting 66.8% of • Sole bank providing services to customers in 400 with diverse backgrounds total liabilities and equity sub-provinces in Turkey • 7,274 ATMs, representing 13.8% of total ATMs in • The first sustainability bond was issued in January (¹) Turkey 2021; 600m USD amount, 5Y maturity and 5.375% coupon

Full State-ownership Solid Capital Structure and • Fully owned by Turkey Wealth Management Sound Asset Quality Company under the as a state-owned entity • One of three state deposit banks qualified to hold • 18.2% CAR and 17.1% Tier 1 ratio deposits from public bodies under current • Well capitalized with low NPL ratio of 2.3% vs regulations 4.1% for the sector • Dividend policy allows Ziraat to retain significant • Low cost of risk of 1.2% earnings

One of the leading agricultural loans Robust Profitability & lenders in terms of market share Income Generation

• High market penetration • Leading position in Turkish banking space with • Only bank authorised for government subsidised top-class profitability metrics agro-lending • Strong NIM at 5.0% • Efficient return metrics with RoAE of 9.8% and RoAA of 1.0%

Source: Company information, BRSA monthly interactive bulletin (1) Interbank Card Center of Turkey 3 Ziraat Bank – Ziraat Highlights

NPL Robust asset quality supported by Largest asset size TL 943 bn 2.3% prudent provisioning approach

Widest local and international geographic footprint • TL 7 bn. capital increase in May 1,752 CAR • Only bank in more than 400 2020 points in Turkey 18.2% • CET 1 capital ratio 15.1% • Operating in 18 countries

Extensive customer base ~36 mn TL 13.1 bn Paid in Capital

High level of funding 92.3% intermediation through moderate LtD level Market Shares(1) ROAA : 1.0% Assets : 17.8% ROAE : 9.8% Cash Loans : 18.7% CoR : 1.2% Deposits : 19.1% C/I : 33.3%

(1) Based on BRSA data 4 Ziraat Bank – Ziraat Finance Group

Germany

Presence in UK 18 countries Bosnia & Herzegovina with 113 service points Montenegro Russia Kosovo Kazakhstan Bulgaria Greece Turkish Rep. of Northern Cyprus Iraq Georgia Uzbekistan Saudi Arabia Turkmenistan Subsidiaries Bahrain Azerbaijan International Branches Local Subsidiaries Overseas Subsidiaries Overseas Branches

Ziraat Katılım Bankası (Participation Banking) Ziraat Bank Int. AG (Germany) United Kingdom Ziraat Yatırım (Securities Brokerage & Investment House) Ziraat Bank BH. (Bosnia) Greece Ziraat Portföy (Asset Management) Ziraat Bank Montenegro Bulgaria Ziraat GYO (Real Estate Investment Trust) Ziraat Bank Azerbaycan Iraq Ziraat Teknoloji (IT) Ziraat Bank Moscow Saudi Arabia Ziraat GSYO (Venture Capital Investment Trust) KZI Bank (Kazakhstan) Kosovo Turkmen Turk JSC Bank Bahrain UT Bank (Uzbekistan) Turkish Republic of Northern Cyprus Ziraat Bank Georgia

9 Sustainability Strategy

6 Ziraat Bank – Sustainability Strategy of Ziraat

SUSTAINABILITY VISION SUSTAINABILITY STRATEGY To use our unrivalled Ziraat adopted its Sustainability Policy in 2014 and has a sustainability structure experience and know-how in place to guide the Policy’s implementation. we built in more than 150 years for the benefit of the The policy is focused on providing environmentally and socially impactful financing economy, the environment based on the following four pillars: and society; to produce (1) long-term environmental and social perspectives; enduring values for our (2) financing climate change action and the transition to a low carbon economy; stakeholders and to be a (3) approach decision-making considering environmental and social issues and Bank that embraces whole associated potential risks; and society by improving its (4) continuous development and integration of universally-accepted sustainability customer oriented business principles into the Bank’s business model. model ZIRAAT BANK’S POLICIES

SUSTAINABILITY TARGET To further develop both the Bank’s strong position in the • Sustainability Policy domestic market and its • Disclosure Policy global competitive strength by • Prevention of Money the corporate, environmental Laundering and Combating and social sustainability Terrorism Financing practices that will be adopted Compliance Policy (AML Policy) by this policy

7 Ziraat Bank – Sustainability Organization

Established under the auspices of the Ziraat Bank Board of Directors, sustainability plans have been enforced within a lean and efficient organizational structure

Corporate Governance Monitoring sustainability Committee practice and policies

Coordinating the relevant Investor Relations Department parties for implementation CEO of sustainability practice

Sustainable Finance Execution of sustainability Working Group practice and policies

o Enterprise Architecture o Investor Relations o Financial Reporting o Corporate Communications o Treasury Management o Lending Policies and Procedures o SME Banking and Corporate Banking

8 – Sustainable Projects

Ziraat supports sustainable projects to further Upcoming Projects sustainable economic and social development

Ziraat Towers In 2019, 34 energy efficiency projects in a LEED Certificate total amount of USD 23.3 mio have been target financed under World Bank Energy Efficiency Loan Project. Ziraat Bank aims to obtain LEED Certification by designing new head quarter buildings in IFC/Atasehir in In 2018, 51 loans making a total of EUR 15 accordance with mio have been extended under AFD international environmental project to our customers who are operating standards in agricultural value chain, in order to contribute to development of agrobusiness. Electric tractor

The production of the tractor is In 2019, 107 loans in the total amount of expected to start in 2021. By EUR14 mio were granted to approved production and use of electric IPARD projects under our EIB Loan, tractors, carbon emissions will b contributing to the sustainable adaptation of e lowered in agriculture. the agricultural sector and rural . areas. Largest solar panel factory in Europe

The investment is expected to start in the first quarter of 2021

9 – Sustainability Journey

Sustainability Policy

On 30 September 2014, the Board of Directors approved and GSS Finance Framework announced the Sustainability Policy which summarizes Ziraat Bank’s In August 2020 GSS finance framework sustainability vision, goals and was prepared and a second party approach and defines the Bank’s Sustainability Policy of Subsidiaries opinion was obtained from stance on the pillars of the The first sustainability Sustainalytics. Both the framework and environment, society and products Sustainability policy for each subsidiary of SPO are published on the Bank’s bond issued in and services. the Bank was announced. website. January 2021

Integrated Report Sustainability Report Responsible Banking and website First integrated annual report was The Bank officially recognized In 2014 Ziraat Bank published its published in 2020 Responsible Banking as one of first sustainability report, which The report won 10 awards from its main business strategies in was GRI rated at A+ standards. LACP; Platin award in Commercial 2020. banks class and Gold award in It aims to integrate the Financial Companies Group class environmental and social risk A dedicated Sustainability section published governance principles to the on the Bank’s website. Bronz Stevie Award for best annual business model. report in private companies class

10 – Environmental Highlights

GHG Emissions intensity Waste IT sent for recycling (tCO2e/TL million turnover) (kg)

0.08 10,660 (2,870 units)

Waste paper sent for recycling (tons)

28% savings of paper compared to previous year

955 Ongoing studies to establish zero waste management system

Financing of renewable energy and Project for digitalization energy efficiency projects of agreements and forms 93 million sheets of paper were saved with the Project.

In loan agreements with IFC or EBRD consortiums

Commitments to comply with IFC Performance Standards , EBRD Performance Requirements and Over 31 million sheets of paper were saved through Equador Principles centralized bulk statement dispatch Project, e-invoice, e-signature and electronic mortgage release transactions

11 – Corporate Social Responsibility

Ziraat Bank conducts enduring social responsibility projects whose aims are to protect cultural values, to contribute to the communal heritage, and to uphold traditions and customs.

Ziraat Bank Banking Museum Ziraat Bank the Turkish Cup name sponsor The Ziraat Bank Art Collection

Established in 1981. Turkey’s first museum Both in keeping with its efforts to support sports in The Ziraat Bank art collection consists of devoted to banking. Occupying the ceremonial general and in recognition of their contributions more than 2,500 works, the majority of hall of the Bank’s original headquarters building both to social wellbeing and the Bank’s public face, which are oil paintings but which in , the museum provides a look at the Ziraat Bank served as the Turkish Cup name also include watercolors, gouaches, Bank’s 158-year history. sponsor. pastels, prints, ceramics, and sculptures.

Ziraat Bank Young Farmers Academy Ziraat Bank Sports Club

Launched in 2018. To increase interest in Ziraat Bank has been supporting volleyball agriculture among youth, teach agricultural through the Ziraat Bank Sports Club established production and investment, train educated in 1981. and conscious young farmers, give young people an entrepreneurial awareness in the field of agriculture

12 Green, Social and Sustainable Finance Framework

13 Ziraat Bank – Sustainable Finance

Consistent with Ziraat’s Support the goal of contributing to the Decarbonisation of the achievement of UN’s economy SDGs

Sustainable Finance Z

Diversify Ziraat’s investor base

Further the Align funding strategy with development of the mission, sustainability Sustainable Bond strategy and objectives market

14 Ziraat Bank – Green, Social and Sustainable Finance Framework

Alignment with best market practices Use of Proceeds: Financing and / or refinancing, in whole or in part, Ziraat Bank Green, Social and Sustainable Finance new and / or existing eligible loans. Exclusionary criteria are related Framework is aligned with: to loans that are linked to fossil energy generation, nuclear energy • ICMA Green Bond Principles 2018 generation, weapons and defense, mining, gambling, alcohol or • ICMA Sustainability Bond Guidelines 2018 tobacco • ICMA Social Bond Principles 2020 • LMA Green Loan Principles 2020 When drafting the Framework, Ziraat Bank has taken into Project Evaluation and Selection: A dedicated Sustainable consideration the recommendation of the final Technical Finance Working Group (the “Group”) has been established to create Expert Group (TEG) report on the EU Taxonomy this Green, Social and Sustainable Finance Framework. The Group [ https://ec.europa.eu/knowledge4policy/publication/sustai will manage any future updates to the Framework and oversee its nable-finance-teg-final-report-eu-taxonomy_en ] implementation.

Management of Proceeds: The net proceeds of the Sustainable Finance Instruments under this Framework will be managed by Ziraat in a portfolio approach

Reporting: Ziraat Bank will report on the allocation and impact of the Sustainable Finance Instruments within its Annual Report and / or via a separate Sustainable Finance Reporting document which will be made available to investors at Ziraat Bank’s website

External Review: Sustainalytics issued a Second Party Opinion for Ziraat Bank’s Green, Social and Sustainable Finance Framework. Ziraat Bank may request a limited assurance report of the allocation of the Sustainable Finance Instruments proceeds to Green and Social Eligible Loans

15 Ziraat Bank – Use of Proceeds

Green Use of Proceeds Contribution to UN SDG’s • Renewable Energy • Green Buildings • Clean Transportation • Energy Efficiency • Environmentally Sustainable Management of Living Natural Resources and Land • Sustainable Water and Wastewater Management • Pollution Prevention and Control • Eco-efficient and / or Circular Economy Adapted Products, Production Technologies and Processes

Social Use of Proceeds • Employment Generation Including Through The Potential Effect of SME Financing and Microfinance

• Access to Essential Services Contribution to 6 EU Environmental Objectives • Affordable Housing i. climate change mitigation; ii. climate change adaptation; iii. sustainable use and protection of water and marine resources; iv. transition to a circular economy, waste prevention and recycling;

Contribute to United Nations Sustainable Development Goals (“UN v. pollution prevention and control; SDGs”) and EU environmental Objectives vi. protection of healthy ecosystems.

16 Ziraat Bank – Eligible Green and Social Loan Portfolio Snapshot

$ 2.1 billion* Sustainable Portfolio

$ 1.1 bn eligible green loans $ 1.0 bn eligible social loans Ziraat supported real sector through employment 13% 3% Renewable Energy focused loans and business continuity loan packages 37% 5% Green Buildings Employment focused loans are offered to support sectors that have the potential to contribute to the creation of additional employment. Environmentally sustainable management of living natural resources and land use Business continuity loan packages have been Sustainable water and wastewater management introduced to support businesses suffering from the negative impact of Covid 19 epidemic 42% Pollution prevention control We have more social loans in the portfolio, however Solar power we prefer to keep them for alternative projects plants 18% Hydroelectric 81% of eligible green portfolio has a look back period of 3 years. 18% Solar panel 100% of social loans were originated in 2020. investments 15% Wind Distribution of Green Eligible Loans by 49% Year of Origination

19% 58% $ 467 mn Ziraat grants low carbon green building loans before 2018

2018 $ 143 mn Ziraat issues long-term loans for modern pressurized 3% irrigation systems in order to prevent waste and soil erosion 2019 due to traditional irrigation 2020

$ 60 mn Ziraat supports investment for organic 20% agriculture and good agricultural practices

*As of 31 December 2020 17 Ziraat Bank – Process for Project Evaluation and Selection

Sustainable Finance Working Group (the “Group”) Members of Investor Relations, Treasury, Enterprise Architecture, Corporate Communications, SME Banking and Corporate Banking, Financial Reporting, Lending Policies and Procedures and other parties to be nominated as subject matter experts from Internal policies and the various sectors of allocated assets external regulations mitigate risks associated with Eligible Projects

Ziraat Bank Sustainability Policy

Exclusionary Criteria Sustainable Finance Instruments will not be used to finance loans linked to: • Fossil energy generation, Eligible Green or Social Loans • Nuclear energy generation, • Weapons and defense, • Mining, • Gambling, • Alcohol1, or • Tobacco. National and Sustainable Finance International Instruments Standards

1. In accordance with the IFC Exclusion List, production or trade in alcoholic beverages (except for beer and wine) is excluded. Link to IFC Exclusion List: https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sustainability-at-ifc/company-resources/ifcexclusionlist 18 Ziraat Bank – Management of Proceeds

The net proceeds of the Sustainable Finance Instruments under this Framework will be managed by Ziraat in a portfolio approach

• Ziraat intends to allocate the proceeds from the Sustainable Finance Instruments to the Eligible Sustainable Finance Loan Portfolio, a portfolio of loans that meet the Green and Social Eligibility Buffer Criteria and in accordance with the evaluation and Inclusion of selection process existing and new Green, • Ziraat will strive, over time, to achieve a level of Social or allocation for the Eligible Sustainable Finance Sustainable Loan Portfolio that matches or exceeds the Loans Green, Social balance of net proceeds from its outstanding Sustainable Finance Instruments. Additional and Eligible Loans will be added to the Eligible Sustainable Green, Social Sustainable Finance Loan Portfolio over time and and to the extent required to ensure that the net Finance proceeds from outstanding Sustainable Finance Portfolio Sustainable Instruments will be allocated to Green and / or Finance Social Eligible Loans Deletion of ineligible or Instruments • Whilst any Sustainable Finance Instruments’ net amortising proceeds remain unallocated, Ziraat will hold and Green, Social Outstanding / or invest, at its own discretion, in its treasury or Sustainable liquidity portfolio, in cash or other short-term Loans and liquid instruments, the balance of net proceeds not yet allocated to the Eligible Sustainable Finance Loan Portfolio

19 Ziraat Bank – Allocation Reporting

Allocation of net proceeds to the Eligible Loan Portfolio will be available after a year from the issuance of the applicable Green, Social and Sustainable Finance Instruments, and it will be renewed annually until full allocation of the respective Green, Social and / or Sustainable Finance Instruments’ net proceeds

The allocation report will provide, on indicators such as:

The size of the identified Eligible Sustainable Finance Framework

The total amount of proceeds allocated to Eligible Green / Social loans

The balance (if any) of unallocated proceeds

The amount or the percentage of new financing and refinancing

20 Ziraat Bank – Impact Reporting

Ziraat Bank intends to align the reporting with the portfolio approach described in:  Handbook - Harmonized Framework for Impact Reporting (April 2020)  Working Towards a Harmonized Framework for Impact Reporting for Social Bonds (June 2020)

Renewable Energy Green Buildings Clean Transportation Energy Efficiency

• Capacity of renewable energy (in • Level of certification Low carbon public transportation and vehicles: • Distance of transmission (Km) MW) • Estimated annual reduced and/or • Number of vehicles • Energy transmitted (MWh/year) • Estimated annual CO2 emissions avoided emissions in tons of CO2 • GHG savings (in TCO2eq.) • Energy savings (MWh / year) (if applicable) avoided (in TCO2eq.) equivalent Low carbon transportation infrastructure: • GHG savings (tonnes / year) • Estimated annual energy consumption • GHG savings (tonnes / year) due to the installed in KWh / m2 technology (direct), by transferring freight or passenger transport from road to e.g. railway (indirect) or both (as applicable) • Number of units installed (if applicable)

Environmentally Sustainable Eco-efficient and / or Circular Economy Adapted Pollution Prevention and Control Management of Living Natural Sustainable Water Management Products, Production Technologies and Processes Resources and Land • Type and annual amount of • Sustainable Agriculture • Annual savings of relevant resources (e.g. ton raw • Annual absolute (gross) water savings (in recycled waste (ton) • Agriculture land area (hectares) material / year) m3 or in %) • Energy generation (MW / year) • Sustainable and / or organic farming • Estimated annual GHG emission avoided or reduced • Annual absolute (gross) amount of certification scheme (if available) (tCO2e) and / or energy savings (MWh / year) (if wastewater treated, reused or avoided (in • Type of crop and its proportion applicable) m3 or in %) • No. of people with access to improved sanitation facilities

Employment Generation, and Programs Designed to Prevent and / or Alleviate Unemployment Affordable Housing Access to Essential Services Stemming From Socioeconomic Crises, Including Through the Potential Effect of SME Financing and Microfinance

• Number of mortgages provided • Number of structures financed • Number of loans granted to SMEs as per Turkish Government • Number of beneficiaries • Number of jobs created at SMEs requirements • Number of enrolled students • Number of loans to companies and SMEs facing natural and or pandemic disasters • Number of disadvantaged families • Number of training program graduates • Split of loans per district's deprivation rate housed in social housing successfully employed

21 Ziraat Bank – External Review

Pre-issuance verification: Second party opinion by Sustainalytics

Sustainalytics is of the opinion that the Ziraat Bank Green, Social and Sustainable Finance Framework aligns with the Green Bond Principles (GBP) 2018, Sustainability Bond Guidelines 2018, Social Bond Principles (SBP) 2020 and the Green Loan Principles 2020

The eligible categories for the use of proceeds are aligned with those Use of recognized by both the GBP and SBP. Sustainalytics considers that the Proceeds eligible categories generate positive impacts and advance the UN Sustainable Development Goals, specifically SDG 3, 4, 7, 8, 11, 12 & 15

Project Sustainalytics considers the project selection process in line with market Evaluation practice and Selection

Management Ziraat Bank’s management of proceeds process is in line with market of Proceeds practice

Sustainalytics views Ziraat Bank’s allocation and impact reporting as Reporting aligned with market practice

Post-issuance verification: Verification on the allocation of proceeds • Ziraat Bank may request on an annual basis, starting one year after issuance and until full allocation of the Sustainable Finance Instruments proceeds, a limited assurance report of the allocation of the Sustainable Finance Instruments proceeds to Green and Social Eligible Loans, provided by its external auditor or any other qualified party.

22 Appendix

23 Ziraat Bank – Balance sheet summary

TL mn Dec-18 Dec-19 Dec-20 Cash and balances with the Central Bank of Turkey(1) 46,237 57,389 91,038 Securities(2) 95,374 130,335 225,621 Performing Loans 371,871 435,292 586,765 -Gross NPL 7,460 12,690 13,895 -Expected Credit Loss (-) 8,386 13,011 18,757 Others(3) 24,601 27,061 29,816 Total assets 537,156 649,756 942,601 Deposits 331,066 447,251 629,874 Funds borrowed 34,172 34,528 36,950 Interbank money market 68,351 49,275 116,401 Provisions 2,832 3,819 7,059 Others(4) 43,334 44,818 59,039 Total liabilities 479,755 579,692 849,323 Shareholders’ equity 57,401 70,065 93,278 Total liabilities and shareholders’ equity 537,156 649,756 942,601

Source: Unconsolidated financial statements (1) Includes cash and balances with Central Bank of Turkey and banks (2) Comprised of Financial assets measured at FVTPL + Financial assets held for sale + Investments held till maturity or other financial assets measured at amortised date (3) Comprised of Derivative financial assets + Non-current assets or disposal groups “held for sale” and “from discontinued operations” (net) + Investments in associates, subsidiaries and joint ventures + Tangible assets (net) + Intangible assets (net) + Current tax asset + Deferred tax asset + Other assets (4) Comprised of Securities issued (net) + Funds + Derivative financial liabilities + Lease payables + Current tax liability + Subordinated debt + Other liabilities

24 Ziraat Bank – Income statement summary

TL mn 2018 2019 2020 Interest income 53,054 65,602 69,476 -From loans 41,028 52,764 52,330 -From securities 10,977 11,966 16,696 Interest expense 31,138 40,290 34,862 -On deposits 19,675 27,989 22,812 Net interest income 21,916 25,312 34,615 Net fees & commissions 2,638 3,590 3,093 -Fees and commissions received 3,558 5,708 4,817 -Fees and commissions paid 920 2,118 1,724 Other operating income 1,434 1,614 5,182 Gross operating income / expense 22,444 23,759 36,264 Expected credit losses 4,719 6,313 10,691 Personnel expenses 2,840 3,460 4,396 Other operating expense 4,852 6,225 7,695 Net operating income / loss 10,034 7,648 10,834 Taxes 2,073 1,461 3,009 Net profit 7,961 6,187 7,825

Source: Unconsolidated financial statements

25 Ziraat Bank – Key financial ratios

(%) 2018 2019 2020 Return on average total assets(1) 1.6 1.1 1.0

Return on average shareholders’ equity(2) 15.2 10.1 9.8

Cost/income ratio(3) 34.3 40.8 33.3

Net Interest Margin(4) 5.0 5.0 5.0

Loans(5) (6)/deposits 110.6 96.0 92.3

Loans/assets 68.9 67.1 62.3

Securities/assets 17.8 20.1 23.9

NPL 2.0 2.8 2.3

Stage 3 Coverage(6) 73.9 66.4 77.0

Cost of Risk 1.2 1.3 1.2

Capital Adequacy Ratio 14.8 17.0 18.2

Source: Unconsolidated financial statements

(1) Average total assets represent weekly averages (2) Average shareholders’ equity represent weekly averages (3) İncludes dividend income (4) Average interest earning assets represent weekly averages (5) Performing Loans (6) Intermediated loans of public funds are excluded

26 For further information please contact

Finance Group Companies Management and Investor Relations Department

Eski Büyükdere Cad. No: 39 B Blok, 6. Kat Maslak-/Turkey Phone: (+90) 212 363 11 01 E-mail: [email protected] www.ziraatbank.com.tr

DISCLAIMER The information contained in this presentation has been prepared by T.C. Ziraat Bankası A.S. for informational purposes only. Although the information in t his presentation has been obtained from sources which we believe to be reliable, we cannot guarantee that the information is without fault or entirely accur ate. The information contained in this presentation has not been independently verified. No representation or warranty express or implied is made as to, an d no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The information an d opinions in this presentation are provided as at the date of this presentation and are subject to change without notice. T.C. Ziraat Bankası A.S. does not accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or otherwise arising in connec tion with this presentation. This presentation cannot be interpreted as an advice to anyone and is also strictly confidential and may not be reproduced, distr ibuted or published for any purpose.

27