2020 PARTICIPATION BANKS PowerBalance Stability Responsibility Resilience Performance About the cover image Six participation banks operating in Turkey achieved successful results on the axes of durability, strength, balance, responsibility, You may follow our social media accounts to have updated stability and performance in 2020. market information about Participation Finance sector. Serving as the common roof and harmonious voice of the sector, the Participation Banks Association of Turkey continued to provide a versatile and strong contribution to the sector’s development and growth throughout the year. Divriği Great Mosque and Hospital, Sivas Divriği Great Mosque and Hospital (Turkish: Divriği Ulu Cami ve Darüşşifası) is an ornately decorated mosque and hospital complex built in 1228 ‑1229 by the local dynasty of the Mengujekids in the small Anatolian town of Divriği, now in Sivas Province, Turkey. The complex is located in the upper town, below the citadel. The building complex consists of a mosque which adjoins the hospital with which it shares its southern, qibla wall. The exquisite carvings and architecture of both buildings place them among the most important works of architecture in Anatolia and led to their inclusion on UNESCO’s World Heritage List in 1985. Colophon ESTABLISHED IN SECRETARY GENERAL E‑MAIL 2002 Osman AKYÜZ [email protected] MEMBERS AUDITORS WEBSITE Participation banks operating in Turkey Süleyman SAYGI‑İsmail GERÇEK www.tkbb.org.tr CHAIRMAN HEAD OFFICE Metin ÖZDEMİR Saray Mahallesi, Dr. Adnan Büyükdeniz Ziraat Katılım Bankası A.Ş. Caddesi Akofis Park C Blok No: 8 Kat: 8, 34768 Ümraniye/İstanbul/ BOARD MEMBERS TURKEY Albaraka Türk Katılım Bankası A.Ş. Türkiye Emlak Katılım Bankası A.Ş. PHONE Kuveyt Türk Katılım Bankası A.Ş. +90 216 636 95 00 (PBX) Türkiye Finans Katılım Bankası A.Ş. Vakıf Katılım Bankası A.Ş. FAX Ziraat Katılım Bankası A.Ş. +90 216 636 95 49 A sector that has grown sustainably and steadily for 37 years and works in close cooperation with global markets Göbeklitepe, Şanlıurfa 2 PARTICIPATION BANKS 2020 PARTICIPATION BANKS 2020 3 A sector that has proven its resilience many times over in all kinds of difficult market conditions and conjunctures presented by the recent period, and which is a reliable port and business partner for its customers Diyarbakır Castle, Diyarbakır 4 PARTICIPATION BANKS 2020 PARTICIPATION BANKS 2020 5 A sector that constantly reinforces its robustness with the courtesy and trust of stakeholders in all segments of society, especially its customers, and carries its market presence and assertion to the future Galata Tower, İstanbul 6 PARTICIPATION BANKS 2020 PARTICIPATION BANKS 2020 7 A sector that fulfills the responsibility it has taken on under the principles of participation finance which it has adopted and internalized in the product-service cycle, and which channels the assets entrusted by its stakeholders to create value for the entire society and economy Nemrut Mountain National Park, Adıyaman 8 PARTICIPATION BANKS 2020 PARTICIPATION BANKS 2020 9 CONTENTS 30 38 46 After the world economy slowed down in The Turkish economy grew by 1.8% in 2020 The year 2020 will be a turning point in history. 2019, it ground to a standstill in 2020 with the compared to the previous year. With this More than a hundred years after the Spanish Flu, impact of the Covid‑19 pandemic. Lockdown performance, Turkey was one of the few which affected 500 million people and caused measures aimed at controlling the pandemic countries to record positive growth in 2020. the loss of 50 million lives worldwide, humanity have taken their toll on our daily lives as well has begun to experience the devastating as the production, trade and logistics cycles. consequences of the Covid‑19 pandemic. 56 66 70 The Turkish banking sector’s total loan volume increased by 34.7% compared to the previous The total unconsolidated asset volume of the While most service providers consolidated year to reach TL 3,577 billion. This growth was six participation banks operating in Turkey their presence during the pandemic in 2020 driven by a reduction in loan interest rates, the reached TL 437.1 billion in 2020, while the total with their services accessible through digital announcement of support packages, and the volume of funds allocated, which indicates the platforms, FinTech proved its indispensability base effect from the previous year. support extended to the real sector, exceeded with the digital solutions which it produced. TL 240 billion. 10 PARTICIPATION BANKS 2020 PARTICIPATION BANKS 2020 11 INTRODUCTION PARTICIPATION BANKS ASSOCIATION OF PARTICIPATION BANKING TURKEY IN BRIEF KEY INDICATORS 2020 Highlights In the difficult and volatile global conditions of 2020, 6 participation banks operating in Turkey reinforced their » A year in which TKBB activities diversified and Established in accordance gained momentum contributions to the real economy, ensuring economic stability with the Banking Act, and sustaining growth. » Activities focused on multifaceted and strong contribution to the development and growth of the participation banking sector in Turkey TKBB » Deepening the contribution produced by is a professional public domestic and international collaborations institution of legal » Efforts to make participation banking reach wider audiences through careful perception and personality. reputation management » Close cooperation with the regulatory authority The Participation Banks Association of Turkey (TKBB), to implement legislation, standards and headquartered in İstanbul and established in accordance with the regulations Banking Act, is a professional public institution of legal personality. 1,255 16,849 TL 437.1 billion The foundations of the TKBB, the umbrella organization of the » Diversifying and strengthening international participation banks operating in Turkey, were laid in 2001 by Number of Branches Number of Personnel Total Assets relations The total number of branches of participation the Association of Special Finance Institutions. The title of the Total employment of participation banks Total assets of participation banks grew by banks that have a widespread branch network increased by 6.4% in 2020. 53.7% in 2020. Association was amended as Participation Banks Association of was up by 5% in 2020. » Launch of the International Relations Unit Turkey in 2005. The aim of the TKBB is to defend the rights and interests of participation banks within the framework of a free market economy Detailed explanations about the activities of the TKBB in and the principle of full competition in accordance with banking TL 27.6 billion TL 322.0 billion TL 240.1 billion 2020 are given in the Interview with the Secretary General regulations, principles and rules, to work for the healthy growth of Total Equity Funds Collected Funds Disbursed section on page 22. the banking system and development of the banking profession, Total shareholders’ equity of participation Funds collected by participation banks grew by Total funds disbursed by participation banks increase competitiveness, ensure that necessary decisions are banks increased by 26.8% in 2020. 49.1% in 2020. rose by 60.7% in 2020. taken, implemented and demand to be implemented for the creation of a competitive environment. In accordance with the legislation, a participation bank is required to be a member of the Participation Banks Association of Turkey within one month of being granted an operating license. Six participation banks operating in Turkey as of April 2021 are members of the TKBB. 12 PARTICIPATION BANKS 2020 PARTICIPATION BANKS 2020 13 INTRODUCTION BOARD OF DIRECTORS Metin ÖZDEMİR İkram GÖKTAŞ Melikşah UTKU Nevzat BAYRAKTAR Ufuk UYAN Murat AKŞAM Chairman of the Board Vice Chairman of the Board Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Member of the Board of Directors Metin Özdemir graduated from Born in Mutki, Bitlis in 1969. İkram Göktaş Mr. Utku was born in Ankara in 1968. Nevzat Bayraktar graduated from Business Born is Eskişehir in 1958, Mr. Uyan Murat Akşam graduated from the İstanbul University (Faculty of Business graduated from the Department of He graduated from the Mechanical Administration Department at Faculty of graduated from the Economics Department of Management Engineering Administration) in 1990. He started his Business Administration, Faculty of Political Engineering Department of Boğaziçi Economics and Administrative Sciences Department of Boğaziçi University in at Istanbul Technical University in career at Kuveyt-Türk Finans Kurumu A.Ş. Sciences, at Ankara University. Between University (Istanbul, 1990). He completed in Eskişehir Anadolu University in 1993. 1981. He received an MBA degree from 1990. He was appointed as a Sales in 1992, and from 1996, he carried on 1992 and 1997, he served as an Inspector his graduate studies at the London School He studied English in Leeds Metropolitan the Business Administration Department Representative at Beko between 1991 of Economics (1990- 1992) and Master’s with his business life as an executive in on the Board of Inspectors of the Garanti University, England in 1993-1994. He of the same university in 1983. He began and 1993 and Regional Officer at Ram Degree in economic development at the retail sector. Mr. Özdemir functioned Bank. Mr. Göktaş worked as the Assistant started his professional career in Foreign his professional career as a Research Dış Ticaret A.Ş. between 1993 and Marmara University (Istanbul, 1998).