Dear stakeholders,

We are proudly preparing to celebrate TSKB’s 75th anniversary with strong hopes for the future.

Our corporate history, captured in the phrase “75 years transforming the future,” highlights the key milestones in Türkiye’s development. This enduring journey, which bridges the past and present, also carries the codes and visions of the future.

This anniversary is significant for TSKB as it also represents a major milestone in Türkiye’s sustainable development efforts. Since its establishment in 1950, TSKB has consistently contributed to the growth of private capital investment and the development of modern industry in our country.

It introduced a wide range of areas, including privatization, consulting, mergers, and acquisitions, to our markets and the business community, generating significant value.

In summary, in 75 years of transforming the future, TSKB has played a key role in helping our country become a global player.

TSKB is ready for the rapid changes we are undergoing today. We prioritize a meticulous assessment of both risks and opportunities, addressing challenges posed by a demanding agenda and profound change. We are committed to navigating the complexities of the global climate crisis, geopolitical risks, economic fluctuations, and trade wars while maintaining our forward momentum.

In 2024, the global economy showed signs of a soft landing despite the challenges and uncertainties that persisted in global markets.

In 2024, the majority of economic administrations, particularly in advanced economies, adopted a tight monetary policy. This led to a decline in global economic activity, causing global economic growth to lag behind the historical average of 3.7% from 2000 to 2019. Growth performance varied across regions. While the Eurozone and China experienced slow growth, the US demonstrated a relatively stable outlook.

In 2024, disinflation achieved notable success in advanced economies. The tight monetary policies created an environment favorable for central banks, such as the Federal Reserve and the ECB, to lower interest rates. Interest rate cuts started in the Eurozone in June and in the US in September. This process is expected to continue gradually in 2025.

According to the IMF, global growth was 3.2% in 2024. According to the IMF’s January 2025 World Economic Outlook update, global growth is projected to increase to 3.3% in 2025 and 2026, while global consumer inflation, which stood at 5.7% in 2024, is forecast to drop to 4.2% in 2025. However, the potential for emerging geopolitical risks, particularly those stemming from the uncertainties created by rising protectionist tendencies in 2025, could lead to a decline in global growth and an increase in the inflation rate. Concurrently, developments in global demand, geopolitical risks, and supply-side factors will have a substantial impact on oil and other commodity prices.

In summary, while the global economy experienced a soft landing in 2024, the risk of recession appears to have diminished.

Disinflation played a decisive role in the performance of the Turkish economy

The tightening monetary policy, introduced in the second half of 2023, was followed uncompromisingly throughout 2024. The lagged effects of a policy set aimed to control inflation and eventually achieve single-digit figures began to be evident in the second quarter of the year. While the loss of momentum in economic growth was evident in the third quarter, year-on-year growth in the first three quarters was 3.2%.

During this period, the contribution to growth from consumption and investments declined, and the positive contribution from exports, which started in the first quarter, continued until the end of the year. While the composition of growth was balanced, industrial production began to slow in the second quarter.

The Central Bank of Türkiye used macro-prudent measures to support its tight monetary policy. The policy rate was raised from 45% to 50% in March 2024. Revisions of the required provision ratios combined with restrictions imposed on credit growth in TL and FX played a role in decreasing inflation.

The consumer price index (CPI), which remained high throughout the year, peaked at 75.5% in May. It declined in the second half of the year due to the base effect and was 44.4% as of the end of 2024. In 2024, the downward trend of inflation encouraged a rate cut starting with 250 basis points.

The Central Bank of Türkiye underlined that its interest rate decisions would be data-driven, signaling to the markets that it would follow a cautious approach.

We expect economic activity in Türkiye to converge to 2024 levels in the first three quarters of 2025, while the last quarter is expected to be the most challenging in fighting inflation.

Taking our ambition to new horizons

In 2024, we relentlessly pursued our efforts in sustainable and impact-oriented banking and made new achievements.

By providing long-term financing for efficient, productive, inclusive, and environmentally friendly projects, which we consider to be the cornerstones of national economic development, we continued to maximize our impact on the environmental, social, and governance (ESG) pillars.

During the year, we secured long-term financing totaling USD 1.7 billion from international capital markets, international financial institutions, and development finance institutions. We continued to provide multifaceted support for renewable energy, energy efficiency, climate technologies, circular economy, and gender equality while expanding our portfolio, which is primarily composed of loans linked to the Sustainable Development Goals (SDGs). We strengthened our efforts to support the redevelopment of areas affected by the devastating earthquake on February 6, 2023.

Sustainability, SDGs and ESG criteria are TSKB’s key operational anchors. We are committed to generating a positive impact, creating and sharing benefits, and pursuing inclusive development through our activities.  In the coming period, we will continue to be solution partners for projects that overlap with our risk management and lending principles and SDGs.

We will continue to leverage our investment banking and advisory services, which are fundamental to our business, as channels for creating impact.

Reinforcing our positive impact on the social axis

For many years, we have been creating value through projects in culture and arts, environment, and women’s employment, which provide significant social benefits. We are convinced that development in culture and arts is vital for social development and prosperity. We have so far reached 110 young female musicians through the “The Woman Stars Tomorrow” education fund, which we established in 2018 together with İKSV. In 2024, we had the privilege of supporting 17 young female musicians. We were both moved and proud of the outstanding performances of our valuable artists at the 52nd Istanbul Music Festival.

Focusing on Türkiye’s green transformation and sustainable development

Our experience in sustainable banking will allow us to continue improving our financial performance and increasing the value we generate for our country in 2025 and beyond. In the near future, we are committed to expanding our product, service, and solution range to include innovative ESG-related products, and we will be allocating additional resources to prioritize our efforts in mitigating the adverse impacts of climate change and ensuring inclusive development.

On behalf of the TSKB Board of Directors, I would like to express my gratitude to our shareholders, employees, retirees, business partners, and customers for their contributions and support.

Hoping to meet with our stakeholders in a beautiful future where we will continue to work and create value for our country and share,

Yours sincerely,

HAKAN ARAN

Chairperson of the Board of Directors