CEO's Message

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Esteemed Stakeholders,

The year 2020, which started with great expectations and record-high growth for the markets, has taken its place in history as a year full of disappointments and loss for the economies worldwide, contrary to the expected. In a world under the effect of a pandemic unprecedented in recent years, country economies strived to get through the year with minimum damage through incentive packages and interest rate cuts while habits and methods of operation changed rapidly to adapt to the new normal.

Having celebrated its fifth year in Turkey in March, our bank increased its total assets by 26.3% at the end of this challenging year 2020 compared to the prior year, to reach TRY 2,179 million in line with our sustainable growth goal. Compared to 2019, our gross cash loan increased 36.6% to reach TRY 1,493 million and we closed the year with a profit of TL 31.4 million.

In October, Fitch Ratings increased Pasha Bank's National Long Term Rating to A-(tur), thus affirming the accuracy of the strategy we pursue. JCR Eurasia Rating revised PASHA Bank's Corporate Governance Principles rating upwards from 9.11 to 9.20 and has determined the outlook as "Stable".

As a consequence of the spreading of the new type coronavirus in China in March followed by an accelerated expansion to the whole world and global recession concerns escalating with the sharp drop observed in oil prices, the Fed and subsequently other central banks resorted to interest rate cuts after extraordinary meetings. Central Bank of the Republic of Turkey (CBRT) lowered the policy rate to a level of 8.25%.

The markets came to life during summer months owing to incentive packages provided by the government, the measures taken by the BRSA and the interest rate cuts with state banks leading the way. During summer, as the number of cases declined and the restrictions on the economies eased, Borsa İstanbul hit new records, and exchange rates showed a falling trend again. Nevertheless, as of September when the second wave of coronavirus set in the whole world and primarily in the European countries, the markets started a negative course once more, of which the effects lasted until the end of the year.

As the increase in consumer expenditure trends and the hike in exchange rates due to low interest rates and incentives in our country started creating pressure on inflation, CBRT reverted to tight monetary policy after two years by hiking the policy rate in the Monetary Policy Meeting in September. The policy rate hiked to 17% with repeated increases in November and December. BRSA repealed the regulations which it introduced on swaps with non-residents and on asset ratios in the first quarter of the year, and this was perceived positively by the markets as moving towards normalization.

The markets closed the year with a smooth trend due to the messages of the new economy administration, following the changes in the governorship of CBRT and the economy administration. While the US Dollar / TRY exchange rate receded to 7.40 and Borsa İstanbul closed the year 2020 at 1,476 points, with an annual yield of 29%, thus being one of the exchanges delivering the highest yield in the world.

During the rather extraordinary year of 2020, we continued to take sides with the real economy by increasing our credits on an ongoing basis. Despite the rapidly changing market conditions, we proceeded to issue bills and bonds in Turkey and abroad while we obtained sources for our bank through the issue of lease certificate in line with our strategy of diversifying our funding sources.

This year, our bank kept on its progress for diversifying its operations in investment banking. As PASHA Bank, we gave our customers in the agricultural and automotive industry access to a total of TRY 90 million of financial resources while investing in technology dominated venture capital funds and intermediating funding from capital markets with issues of Asset-Based Securities. Likewise during this period, our bank increased the funding limits obtained from domestic and foreign banks and played an important role in foreign trade investment among Turkey-Azerbaijan-Georgia with an expanding network of correspondents.

Within the framework of the pandemic dynamics and measures, the technological infrastructure enabling our employees for homeworking has been put into effect in just three days' time. Support and guidance activities were performed, alongside technological resources, for adapting our human resources to the new remote working environment. During this period in which our investments and strategic projects were carried on uninterruptedly, our employees' health and taking the necessary physical precautions have been our priority.

With the consciousness of the threat imposed by the pandemic over individual and public health, we realized a joint project with İstanbul Technical University (ITU) Arı Teknokent. We contributed to the health professionals and our country's battle against the pandemic by supporting the digital production centre ITU MAGNET FAB TRIDI in producing protective shield masks.

In September 2020, our bank upgraded its Main Banking System to a higher version, thus putting into effect work flow and document management applications and new reporting functions along with the internal and external integrations for system productivity.

In order to serve our customers better, our processes and systems are renovated and the work on new digital processes is initiated. The model for defining the financial analysis of our customers and for monitoring the early warning signals in a healthy manner is reviewed and structured.

We continued with our technological investments on the cyber security side for the infrastructural innovations that were updated one year ago. One of our most important agendas was to work on compliance to the BRSA's new procedure on the area of Information Technologies.

Alongside our human resources projects and projects for spreading our corporate values throughout our corporation in alignment with PASHA Holding, we also demonstrated continuous improvement on the areas of automation on the side of Risk Management and Risk Health indicators on which our Group focuses substantially.

We designed the strategy that will shape our bank for the years 2021-2023 together with our consultants and PASHA Holding. The foremost objectives within our strategy are; to create healthy and sustainable growth, to improve product diversity and customer service quality, to strengthen our role in the capital markets and to increase our share in funding the foreign trade of the region. We pursue our goal of "Being the first bank that comes to mind in the region" also in 2021, in line with our strategy. The artwork of sculptor Mert Ege Köse, "Unity" which symbolizes the unity and strength of Turkey, Azerbaijan and Georgia for PASHA Holding was made to commemorate the 5th anniversary of the foundation of our bank and it is currently exhibited in the Conference Hall of our bank. The sculpture symbolizes the dynamic, visionary and well-established nature of these three countries being in the same geography, having common values and being beautiful together, despite the borders in between.

As we say farewell to 2020, I would like to express my thanks to my devoted colleagues, customers, Members of the Board of Directors and stakeholders for their contribution to our success and I would like to sincerely celebrate once more the victory Azerbaijan has won in Karabakh. I wish that the whole world becomes healthy again in 2021 since "Health is always priority number one". 

Sincerely Yours,

General Manager and Board Member