CEO's Message

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Dear Stakeholders,

In accordance with our sustainable growth target as stated in our “To new summits. As one.” motto, our Bank increased its asset size by 28% as of 2019 year end to reach TL 1,725 million. Gross cash credit of our Bank also increased by 28% compared with 2018 and reached TL 1,093 million. Profit for the year 2019 was realized as TL 25.7 million.

Despite the challenging first half of the year, stabilized foreign currency rates, decreasing inflation and credit interests in the second half of 2019 supported the recovery in domestic demand. Regulations in minimum reserves by TCMB and government incentives in particular had a role on the increase in Turkish Lira credits.

Following the negative growth data announced in the first two quarters of the year, the economy went back to positive growth figures in the third quarter. We expect an annual growth within the 0.50%-1.00% band based on the fact that Turkish economy had gained acceleration at the last quarter of 2019.

Policy interest, which was increased to 24% by TCMB in line with itstight monetary policy in 2018, was reduced by 1200 basis points to 12% in 2019. During the course of these actions, Turkish Lira maintaining its stable trend against USD is a positive indicator of the balancing process. Inflation being below expectations at 11.84% and current account yielding surplus after many years are other favorable developments.

Trade war between China and USA, Brexit and potential impacts on EU, geopolitical risks in the Middle East, steps to be taken by central banks of developed countries and presidential elections which will take place in November in the USA will be the key topics that will define the topics of 2020 agenda.

During these times, our Bank has stood by the real sector by continuously increasing its credits.

With funds obtained from long-term bonds issued in foreign markets in US Dollars and Euro and from foreign credits, we participated in various syndication credits in addition to project financing, forfeiting, sale and leaseback transactions. Our Bank has also been a part of Credit Guarantee Fund in 2019 and will continue to provide financial support to small and medium sized enterprises through this channel in the following period.

Change and transformation started in 2018 for PASHA Bank and our Headquarters moved to our new building purchased on Istanbul Buyukdere Street at the end of April 2019. Along with this move, our data center has been reestablished in accordance with the physical security circumstances and all system infrastructure was renewed. With the artificial intelligence features of our new generation server and storing units in our updated infrastructure, we aim to contribute to the performance and efficiency of our Bank.

In line with the improvements in our processes, we realized improvements in our document management system. We expedited our activities for upgrading of our Main Banking System to an upper version which includes new modules and new flows. Our target is to complete the project and implement the upper version in June 2020.

Within the same period, we continued our activities to develop our skilled and competent human resources in order to increase our success. As the PASHA Bank family became stronger with the addition of new colleagues, we also took part in Organizational Health Index and Risk Health Index projects conducted by PASHA Group. Outcome of these projects allows us to hold a mirror before us and improve ourselves.

In 2019, our Bank also took steps towards diversifying its operations in investment banking. As the venture capital investment funds becoming a focus area, we plan to invest in that area in 2020. Additionally, studies started to establish PASHA Bank Asset Financing Fund which will intermediate in asset backed securitization and providing funds from capital markets.

Bond issuance in Euro realized in 2019 by our Bank is a first in Azerbaijan on currency basis. US Dollar bonds issued by our Bank started to be traded in Baku Stock Exchange and became subject to repo transactions in Baku Stock Exchange Repo Market.

International Credit Agency Fitch Ratings confirmed PASHA Bank’s national credit note as BBB+(tur) and having Stable outlook. Additionally, JCR Eurasia Rating evaluated PASHA Bank’s Corporate Governance Principles Compliance Note as 9.11.

Despite challenges on global, national and sectoral scales, PASHA Bank will continue to provide financial support to our investors, provide guidance on and encourage investments and support development of trade between Turkey, Azerbaijan and Georgia. Following the completion and launch of TANAP project in particular, we believe that foreign trade within this triangle will accelerate.

We will continue to support our economy’s long-term value generating strength with our products, services and solutions in addition to our robust capital structure, qualified human resources and strong financial structure.

I would like to take this opportunity to express my gratitude to my valuable colleagues who carried our Bank to this date which will celebrate its 5th year on 6 March 2020. I would also like to thank our customers for their trust in us, members of our Board of Directors for their guidance and our shareholders for their contributions in our success.

We will continue to work with determination to reach new targets in the following period.

Yours respectfully,

CEO and Member of the Board of Directors