Dear customers, shareholders, the board of directors, and our colleagues,

The Turkish banking industry increased total assets by 18.2%, loan size by 19.3% in the last year and recorded a profit increase by 5.7% compared to 2014. The average capital adequacy ratio of the banking sector shows that the industry has a pretty solid base with 15.6%. As PASHA Bank, we left behind the year 2015 which was described as a difficult year for the financial institutions with a profit of TL 8.8 million, which was above what we had targeted with our cautious and sustainable growth strategy. At the beginning of 2015, our bank debuted with a new name in the Turkish banking sector with the change of the title to PASHA Yatırım Bankası A.Ş. Together with the capital increase made by our main shareholder and the additional funds raised, size of our assets and loans increased five times compared to the last year and our total loans reached TL 373 million.

Generally speaking, 2015 was quite demanding in terms of both global and domestic markets. While the past two elections and the uncertainty created by these elections kept the agenda busy for a long-term, the geopolitical risks rising in our region and target export markets have led assets in Turkish Lira to remain under pressure. During the year in which the agenda was set by the Central Banks again, the FED realized its first interest rate hike and the developing countries that also included us have been the group most affected from this process. While the FED’s announcement that the interest rate hikes will continue in 2016 and that such increases will be gradual calmed the markets relatively, growth concerns about China and the global economy indirectly, the tension experienced with Russia, civil war in Syria, and ongoing geopolitical risks will be the factors that would negatively affect the perception of risk for the year 2016. While expecting 2016 to be an active year just as the year 2015 was, we expect it to be a more positive year with expectations that our foreign trade will be affected in a positive way by the lifting of the embargo in Iran, that the Central Bank will follow a more austere monetary policy, and that the decline in oil prices will improve inflation and current account deficit. We anticipate the growth to occur in the range of 3.5-4% and the inflation in the range of 7.5-8%. We think that the credit growth in the banking sector will be realized in the range of 15-16% as was the case last year and that the banking sector will continue to increase its profit with steps expected to be taken by the BRSA in the issue of capital adequacy and the structural reforms that we expect the government to make regarding the economy.

PASHA Bank Turkey received its first rating in 2015 from the international credit rating agency Fitch Ratings. The long-term credit rating of our bank in national currency has been assigned by Fitch as A (Tur). At the same time, our desire to strengthen our corporate governance and willingness to manage this process in a dynamic and continual manner were confirmed in the year 2015 as well and our rating has been revised upwards to 8.94 by an independent rating agency appointed by the Capital Markets Board. Our goal is to move up our institutionalization further in the future and to keep our credibility in the eyes of our stakeholders at the highest level.

The primary goal of our Bank in 2016 will be to increase the diversity of external resources. We introduced the internet banking service for corporate customers in 2015 as part of our ongoing investments to improve our banking process. We believe that we had our name printed in the Turkish banking industry as one of the best start-up banks among the newly established banks in Turkey and swiftly increased the recognition for PASHA Bank’s service quality before target audience during the year in which the investments we made in infrastructure and human resources continued. We continued our support to corporations doing business in Turkey and Azerbaijan by expanding our portfolio of corporate clients, we provided long-term funding for projects in the energy sector, prioritized foreign trade financing, developed, and continue to develop, business partnerships with national companies that have cross-border activities.

Our priority as PASHA Bank is to able to offer our customers with fast, flexible and tailor-made solutions and to provide sustainable banking in a dynamic geography that changes constantly. Thanks to the synergy we have created with PASHA Bank Azerbaijan and PASHA Bank Georgia as well as Turkey's geopolitical position, we will continue to offer advantageous solutions to our customers in the target region. In this context, we will introduce the models for project and working capital financing in our region in 2016. We will continue to support mergers and investment advisory within the scope of investment banking as well as the industries with growth priorities, especially the financing of foreign trade, in the field of corporate banking.

I extend my sincere thanks to my teammates who created the most important value and worked with the awareness of team spirit in the attainment of the success that our Bank achieved last year, our shareholders and valuable members of our Board of Directors who did not spare their support, and our customers that preferred us. I wish the year 2016 to be a more positive and successful year both for us and for the entire banking industry.

Yours sincerely,

General Manager and
Member of the Board of Directors