PASHA_BANK ANNUAL REPORT 2021

31 Annual Report 2021 PASHA Bank Particularly, US Dollar/ Turkish Lira has gone through the most fluctuating period of all times and the currency fluctuated at a considerable wide band between 6.80 and 18.30 during the year. FX‑protected Turkish Lira deposit product, which was set up by the support of Treasury and Turkish Central Bank, was welcomed by the investors and the exchange rate went down from a record level of 18.30 to 11. We will closely observe the effect of this product on foreign exchange rates in the following period. While the inflation was high during the year, our current deficit was reduced with the support of tourism and consumption spending. It is anticipated that the Turkish economy will continue to grow strongly in 2021 and will record a growth of approximately 10%. In line with our sustainable growth goal, PASHA Bank increased its asset size by 63% in comparison with prior year to reach TL 3,563 million. Our support for the real sector continued at an increasing trend during this process. Gross cash loan size of our Bank was up by 62% in comparison with 2020 to reach TL 2,422 million and we realized a profit of TL 47 million for the year. PASHA Bank successfully completed the first year of the three‑year strategic plan covering the period 2021‑2023. Our strategy included achieving a healthy and sustainable growth, an increase in product diversity and quality of the service we provide to our customers, strengthening our role in capital markets and increasing our share in foreign trade finance in the region. Long‑term National Credit Note of PASHA Bank as confirmed by Fitch Ratings in December was A‑ (tur) which was an indication of the accuracy of our strategy. Moreover, JCR Eurasia Rating increased PASHA Bank’s Corporate Governance Principles Compliance Note from 9.20 to 9.23 and defined its outlook as “Stable”. In spite of the rapidly changing market conditions, we continued to issue bonds and securities both in Turkey and foreign countries. At the investor visits and the reception we gave at Baku, we discussed our country and opportunities in our country with the investors. Two US dollar bond issuances realized in Azerbaijan attracted attention of corporate and qualified individual investors of this country. In line with our strategy, we will pursue our goal of “Being the first bank that comes to mind in the region” in 2022. Our Bank continued to take steps towards growing its activities in investment banking during the year. In 2021, we provided financial sources of an additional TL 296 million of Asset‑backed Security issuances for our customers in agriculture and automotive industries which we started in 2020 with a fund amount of TL 89 million. Behind such issuances designed for our customers are a strong, multi‑guarantee structure and opportunity for attractive returns for investors. We wish such transactions increase in our country just like in those countries with developed capital markets and PASHA Bank is ready to provide all the support both to our customers and investors in this area. In this context, we organized a webinar during the year in “Capital Markets as a Source for Financing and Asset‑backed Securities”. Executives from Republic of Turkey Presidency Office of Finance and Capital Markets Board as well as capital markets experts participated this webinar as speakers and answered the questions of the investors. Moreover, at the “Economy Talks” we try to organize each year, Dr. Murat Üçer answered the questions of the investors this year. Long‑term National Credit Note of PASHA Bank was confirmed by Fitch Ratings as A‑ (tur). In 2021, we issued Asset Backed Securities worth TL 296 million. We played an important role in financing of foreign trade in Turkey‑Azerbaijan‑Georgia triangle. A‑(tur) asset‑backed securities foreign trade