Esteemed stakeholders,
In 2024, we have closely monitored the global markets, which experienced relatively calmer and more stable conditions compared to the previous year, as central banks took steps in the fight against inflation. The U.S. Federal Reserve (Fed) implemented a total of 100 basis points of policy rate cuts, bringing the policy rate down to the range of 4.25%-4.50%, while the European Central Bank (ECB) reduced its policy rate to 3.00%. While the effects of inflation were also felt domestically, the Central Bank of the Republic of Türkiye (CBRT) implemented a tighter monetary policy this year as part of the fight against inflation, raising the policy rate to 50.00%. With the return to orthodox policies and the stabilization of the exchange rate, we also saw foreign investors regain confidence and turn their attention back to Turkish bonds towards the mid-year. The successive two-notch upgrades from international credit rating agencies renewed confidence in Türkiye. The increase in CBRT’s foreign exchange reserves and the stable Exchange rate provided markets with optimism, while geopolitical risks were closely monitored. In the final meeting of the year, the CBRT made its first interest rate cut, lowering the policy rate to 47.50%.
Looking ahead to 2025, global markets will closely monitor the steps of the newly elected U.S. President, Donald Trump. High import tariffs, reducing migrant labor, and planned tax cuts and other fiscal incentives will undoubtedly put pressure on U.S. inflation. This suggests that U.S. interest rates will likely remain high. We anticipate a maximum of two interest rate cuts from the Fed in 2025. As domestic markets follow these developments, they will also monitor geopolitical risks and inflation trends. Our expectation is that the CBRT will continue with gradual interest rate cuts, as inflation is expected to decrease.
For the end of 2025, we project inflation to range between 26-28%, and we expect Türkiye to maintain a moderate growth rate of around 3.00-3.50%.
PASHA Bank has completed the first year of its three-year strategic period, covering the years 2024- 2026. Intending to achieve healthy and sustainable growth, enhancing product diversification and the quality of services we offer to our customers, strengthening our role in capital markets, and increasing our share in the financing of foreign trade in the region, we have exceeded our targets in the first year of our strategy. In this three-year strategic period, with sustainability at the forefront, we sought consultancy from leading institutions in Türkiye to establish PASHA Bank’s Sustainability Management System. We have built our Sustainability Governance Structure and defined our sustainability strategy and vision, Sustainable Development Goals (SDGs), and Environmental and Social Risk Management processes.
We established the Sustainability Committee and working groups to achieve our sustainability goals more effectively. Additionally, we have publicly disclosed our sustainability, environmental, and social responsibility policies on our corporate website. Our efforts toward calculating our carbon footprint and conducting Türkiye Sustainability Reporting Standards (TSRS) reporting are also ongoing. In line with our sustainability roadmap, we have successfully achieved our goals set for the “Green Office” program, which we started in collaboration with WWF Türkiye last year, and as PASHA Bank we have obtained the Green Office certification for the second consecutive year. We continue to implement corporate social responsibility projects, maintain our environmentally beneficial waste management system, and pursue initiatives aimed at reducing water and electricity consumption within the Bank. With each project we participate in, we remind ourselves and our employees of our sensitivity to nature and the environment. In line with our sustainability goals for the future, we are building a bridge between today and tomorrow, supporting the green transformation.
As PASHA Bank, in line with our sustainable growth objectives, we increased our asset size by 30% in 2024 compared to the previous year, reaching TL 12,913 million. While our support for the real sector continued to grow during this period, the Bank’s gross cash loan volume rose by 25% year-on-year to TL 7,028 million, and our net profit was recorded at TL 463 million by the end of the year. In September, the credit rating agency JCR Eurasia Rating reaffirmed PASHA Bank’s long-term national credit rating as A+(tr), while the corporate governance rating agency SAHA Rating revised PASHA Bank’s Compliance Score with the CMB Corporate Governance Principles upward to 9.41. Despite rapidly changing market conditions, we continued our bond and bill issuances both domestically and internationally in 2024. During our investor visits in Baku, we showcased our country and its opportunities to investors. Our USD 25 million bond issuance in Azerbaijan received significant interest from both Azerbaijani corporate and individual investors, we have offered TL-denominated PASHA Bank bonds to our qualified investors at higher volumes. PASHA Bank, as in previous years, plays a key role in financing foreign trade in the Türkiye- Azerbaijan Georgia triangle, and we remain committed to pursuing our goal of becoming “the first bank that comes to mind in the region” in line with our strategy.
Our Bank has continued to take steps this year to expand its activities in the field of investment banking. As PASHA Bank, we have maintained the momentum of our Asset-Backed Securities (ABS) issuance transactions, which we initiated in 2020. Since inception, we have provided over TL 4.5 billion in financial resources to our customers operating in the agriculture, retail, and automotive sectors. We are committed to continuing our support for the real sector through capital market instruments in the coming year.
In 2024, we also remained focused on projects and digital transformations that contribute to sustainable growth, adding value to all our stakeholders, particularly the national economy and our customers. Prioritizing digital-focused, high-quality technological infrastructure developments that contribute to our Bank’s holistic approach to sustainable and secure growth journey, we have advanced the digitalization of our business practices and services. On this journey, we launched a mobilecompatible web platform that enables qualified investors to invest in bonds, bills, and ABS instruments digitally, without the need to be a PASHA Bank customer. To make the services we offer through digital channels more integrated, we initiated the design and development of our “Digital Approval” project. As part of our efforts focused on effective risk management, we initiated development to automate the creation of financial analysis formats—essential for credit evaluations—based on rule sets determined by our Bank. To further automate our analytical processes, we established a data warehouse, enabling the seamless delivery of desired information in real time through a comprehensive MIS system. We accelerated the development of projects in information security by adhering to the highest levels of sensitivity, adopting best practices, and further enhancing compliance with legal regulations. To foster an entrepreneurial culture within the organization, raise awareness of innovation, and support innovationdriven ideas, we continued to evaluate and support our employees’ projects as part of the annual “PASHA Bank Türkiye Innovation Program”. With a commitment to social and responsible banking, we initiated our “Accessibility” project, aiming to enhance accessibility by providing voice guidance and sign language translation for banking service agreements on our corporate website.
Since its establishment, our Bank has regarded supporting culture and art as a sustainable responsibility. In 2024, in line with this vision, we took pride in supporting a remarkable project in the field of digital art, which has recently made a big breakthrough. We presented the “Dance of Symbols Exhibition” by Azerbaijan’s first artificial intelligence artist SHUSHA to art enthusiasts at PASHA Plaza. Between the dates 2-5 May, the Istanbul Digital Art Festival, held at Atatürk Cultural Center, explored how digital art and virtual worlds interact with the concept of reality and transform human experiences. By bringing together art, music, and gaming as a platform, the Festival encouraged participants to think, question, and delve into the depths of virtual worlds.
Having served as the main sponsor for the fourth consecutive year, the Festival garnered significant attention and appreciation from both local and international art enthusiasts, thanks to its innovative approach to blending technology and art. Our involvement in this significant project demonstrates our Bank’s mission to support artistic and cultural values. Looking ahead, we remain committed to contributing to pioneering initiatives that combine art and technology, striving to create a sustainable impact on our society. In the 100th year of our Republic, we took a solid step by establishing the “Future Women Leaders” scholarship fund. In 2024, we continued to contribute to this fund, which aims to support female university students in achieving both academic success and their career aspirations. This scholarship fund is dedicated to encouraging young women to join society as strong, inspiring leaders. Under our scholarship program, we contribute to students’ education and provide them with mentorship to prepare them for professional life. This mentorship program advances our commitment to cultivating future women leaders through supporting the academic, social, and personal development of students. By supporting women on their educational journey, we are collectively stepping toward a more equitable and empowered future.
Aligned with our Bank’s strategic vision, we remain committed to expanding our role in financing trade within the Türkiye-Azerbaijan-Georgia triangle, increasing our issuance volumes in capital markets through products like bonds, notes, and ABS, and bolstering the real sector by expanding our issuance volume in instruments such as bonds, bills, and ABS in the capital markets, maintaining our customercentric approach by diversifying our financing options and products to meet the needs of our customers and investing in the development of our human resources.
As we bid farewell to 2024, I would like to extend my heartfelt gratitude to our dedicated colleagues, valued customers, Board Members, and shareholders who have propelled our Bank to these days for their contributions to our success.
I wish for 2025 to be a year filled with achievements and sustainabilityfocused progress for our country and the banking sector.
H. Cenk Eynehan
CEO and Member of the Board of Directors