Dear stakeholders,

When we look back at the last 75 years of the world and our country, we see that we see that our journey has been shaped by significant turning points. In the 1950s, the changing global and national landscape created an imperative for the transformation of Turkish private industry and the business world in general. Our young economy, built from scratch with the proclamation of the Republic, was poised for a new phase of expansion and growth. At that time, investments, long-term funding, and know-how were urgently needed in many areas.

In response to the mounting demand for specialized services, TSKB’s organization began to take shape. With the support of the World Bank, the initiative took on tangible form on 11 March 1950, when the founding members of our Bank came together at the Istanbul Branch of the Turkish Central Bank. During this meeting, they approved our Articles of Association and elected our inaugural Board of Directors. This marked the beginning of our Bank’s commitment to delivering dependable and qualified services to our stakeholders.

For 75 years, we have played a key role in every phase of Türkiye’s sustainable growth journey, creating lasting value and our innovations and contributions across diverse sectors have been instrumental in numerous projects.

The only privately-owned development bank: TSKB

Our status as the only privately-owned development bank in the world sets us apart in Türkiye and on the global stage. We carry out all our activities in alignment with our strategy, which we have structured with a long-term perspective. And today, we design and implement our roadmap in line with the necessary investments in the strategic development areas of our country, as we did in the past. We consider it our primary duty to leverage our financial resources and technical expertise to invest in areas where our country requires development, using our experience and knowledge to drive these initiatives.

We are working closely with the public sector. The majority of the long-term funding that we provide in Türkiye’s strategic development areas is guaranteed by the Ministry of Treasury and Finance of the Republic of Türkiye. Development banks are among the key stakeholders in our value creation journey. The shared objective of reducing inequalities and ensuring sustainable development is the foundation for our collaboration with these institutions. In our relations with these institutions, we give priority to social development and just transition through themes focusing on inclusiveness as well as climate risk mitigation and adaptation.

Our efforts to develop cooperation and funding for the economic, social, and cultural reconstruction of the region following the earthquake disaster we suffered on 6 February 2023, which devastated 11 provinces, are among the most tangible and recent examples of this.

Differentiating ourselves in our sector with our technical expertise and intellectual capital

While our technical expertise and intellectual capital set us apart in our industry, we measure the non-financial impact of the projects we engage in at every stage, take action to improve and increase that impact, and work with our stakeholders.

Borrowing from TSKB helps our stakeholders achieve further environmental, social, and governance gains. The loans we provide have environmental, social, and governance (ESG) performance targets that are independent of where the loans are used. The fulfillment of the criteria set in this regard is as important to us as the financial performance of the loan. By meeting these criteria, we expand the non-financial impact we have on the economy and society and fulfill our commitments to funding institutions.

Increasing importance of development banks around the world

Our Bank has been a member of the Executive Committee of the International Development Finance Club (IDFC) since 2019. In July of 2024, we had the privilege of hosting the club’s Management Committee Meeting. This prestigious event, which was held for the first time in our country, was hosted at our headquarters in Istanbul and brought together leaders of development banks from various regions worldwide, spanning from Europe to South America. During this meeting, we engaged in insightful discussions on the current state and future direction of development banking.

The IDFC Executive Committee is an important platform where development finance institutions from different regions come together to discuss sustainability goals, and we had the opportunity to discuss the Club’s global strategic roadmap and agenda, as well as the expansion of our relationships and areas of cooperation with member banks, which are important financial actors in Türkiye for green transformation and inclusive development.

Working for the deepening and development of capital markets in Türkiye

As an institution that has played an important and pioneering role in the development of capital markets in Türkiye since its inception, we took a major step towards linking traditional capital markets with development banking in 2024 by establishing the Türkiye Green Fund in cooperation with the World Bank under the guarantee of the Ministry of Treasury and Finance of the Republic of Türkiye.

Türkiye Green Fund, the first loan-financed venture capital investment fund focused on emission reduction and inclusive transformation in Türkiye and globally, will contribute significantly to our nation’s 2053 Net Zero target with a roadmap that puts the management of climate risks at the center. The fund also aims to mobilize private sector capital and has started to provide capital investments to companies. We expect the size of this fund that will contribute to the development of capital markets with its innovative structure to reach USD 405 million with new participants.

Advisory services maintained their successful performance in 2024

We offer our clients, through both the Bank and our subsidiaries, the advisory services that are the result of our intellectual strength.

In 2024, we had the opportunity to expand our impact by working with a large number of companies through our advisory services, and our subsidiaries Yatırım Finansman, TSKB Gayrimenkul Değerleme, Escarus and TSKB Gayrimenkul Yatırım Ortaklığı successfully closed the year with strong results. Additionally, our commission income from advisory services increased significantly.

Organizational improvements in 2024

As part of our sustainable banking efforts, we took an important step in 2024 and established the TSKB Climate Change and Sustainability Management Department. We have brought together the activities carried out by different units within the Bank and organized this function, which we believe is very important for our Bank, under a single unit. This structure, which gives us significant strength, supports the necessary review of each loan file by measuring its impact on long-term targets and commitments while enabling us to develop new medium- and long-term targets and effectively manage our position in these targets.

Our most valuable asset for 75 years: our employees

Our employees—the most valuable asset of our organization and the driving force behind our sustainable performance—hold a key position at TSKB. We integrate inclusive and equitable approaches into our human resources policies, embracing the UN Global Compact principles, and strive to set an example in this field. We prioritize our employees in all business processes, aiming to provide them with the greatest benefits while enhancing our reputation as an employer of choice. The surveys we conducted in 2024 indicate that our employees continue to demonstrate strong commitment and take pride in being part of TSKB.

The second development hub in Ankara is fully operational

Immediately after the earthquake disaster we suffered in 2023, we started TSKB Second Development Hub in Ankara, our capital city located in the heart of our country. The Hub is fully operational, and we believe that it contributes significantly to our business continuity. In addition to the wide range of banking services it offers, the Ankara hub also provides access to a significant talent pool. Ankara is also advantageous because of its proximity to the earthquake zone where we operate.

Continuing to create lasting value through socially beneficial projects

We strive to create lasting value in a variety of areas, from education to the arts, with projects that benefit the community in the long term. Our Bank, working with the vision of inclusive and high-quality development for a sustainable future, has launched nine TSKB Centennial Republic Libraries as part of the “11 Libraries in 11 Provinces” project in the earthquake zone, which it has committed to complete by 2025, starting from September 2023. With the opening of two additional libraries by the end of May 2025, we will have fulfilled our commitment to open 11 libraries in 11 provinces.

In addition to our ongoing projects focused on creating social benefit, we launched the TSKB 75th Anniversary Kindergarten project in 2025, in celebration of our Bank’s 75-year milestone, to support pre-school education and we opened our first kindergarten in Kilis/Öncüpınar. We recognize this stage as the most critical in fostering the cognitive and emotional development of our children, and we also aim to encourage women’s active participation in the economy.

Dear Stakeholders,

Before concluding my message, I would like to share my observations on our financial performance in 2024 and my thoughts on the future.

Our financial performance throughout 2024 demonstrated remarkable success, owing to our solid financial standing and the effectiveness of our business model. In 2024, our loan portfolio grew by 11.6% on an FX-adjusted basis as we extended more than USD 1.8 billion worth of long-term cash loans to our clients. I’d like to emphasize that a considerable portion of this growth can be attributed to investment loans that play a vital role in the development of our nation.

Loans accounted for 72% of our total assets, while investment loans accounted for 74% of our total loans. We are pleased to say that this is by far the highest level in our industry.

During the reporting period, we executed six funding agreements with Development Finance Institutions, two of which were with new partners, focusing on green and social themes such as climate action and inclusive economic growth, in addition to earthquake resilience. In 2024, we were very active in international capital markets, strengthening our diverse funding structure with a total of USD 1.7 billion in funding, which represents a record high in TSKB’s history. Our Additional Tier-1 Eurobond issuance in March and our successful Eurobond issuance in October supported our operations with our effective liquidity and capital management strategy.

Our asset quality strengthened even further in 2024. In 2024, our collection performance strengthened, driven by changes in our loan categorization. The Stage 2 loan ratio dropped to 6.8%, while the Stage 3 ratio remained steady at 2.2%. We announced the highest return on equity in the sector and further strengthened our shareholders’ equity with these results. Our net profit for the period exceeded TL 10 billion, up 44% compared to the previous year.

Despite having more than TL 2 billion of free provisions, we recorded the best return on equity ratio in the sector at 38.5%. Our fee and commission revenues increased by 13% year-on-year, maintaining their significant contribution to the total banking revenues.

Looking to the future;

Since our founding 75 years ago with a mission to support the growth of Turkish industry, we’ve contributed to the country’s long-term development. In light of the evolving global landscape, where the role of development banks in promoting sustainable, equitable, and inclusive growth is becoming increasingly pivotal, our Bank remains committed to fulfilling its responsibility.

We will continue to allocate increasing resources to the economy, contribute to the welfare of all segments of society through quality credit programs, and support the private sector with our inclusive development vision and the transformative power we create together with our stakeholders.

I would like to extend my sincere gratitude to our valuable stakeholders with whom we have been creating value for 75 years.

Yours sincerely,

MURAT BİLGİÇ

Board Member and CEO