PASHA BANK ANNUAL REPOT 2024

Esteemed Stakeholders, The complicated situation in our region continues due to the prolonged Russia- Ukraine war and tensions rise in the Middle East raising the risk of a war on a larger scale. The ongoing wars have the potential of spillover to other countries further complicating the conditions facing the region. These factors create a challenging geopolitical environment for Türkiye leading to obstacles in trade between countries and economic growth. Furthermore, the conditions may exacerbate the foreign exchange rate depreciating pressure and high inflation. Despite these challenges, recent macroeconomic data show that Türkiye is able to manage economic implications of the shocks from the external situation. The diplomatic efforts of the government and the adjustments in banking regulation helped to maintain the macro-financial stability. Turkish economy grew by 2.1% in the third quarter of 2024, as domestic demand started to normalize following a period of excessive growth rates. Industrial output was the main driver of the slowdown in growth, while construction activity remained strong. In this regard, it is worth to mention that last policy measures by the Government, returning to conventional economic policies, interest rate hikes by Central Bank and simplification of the micro- and macroprudential framework is quite adequate which ultimately aims to tame inflation, decrease the volatility and depreciation pace of the foreign exchange rate. Following these positive developments, rating agencies raised the credit rating of Türkiye contributing to the investment outlook in the country. On the back of the above-mentioned economic landscape, the overall banking system succeeded to maintain risks within the acceptable levels, and profitability at two-digit territory. According to the latest data, the total assets of the system in the last 12 months has increased by 42% as opposed to October 2023, approaching TL 31 trillion. A similar trend applies to the credit portfolio. Total credits of the industry reached TL 15,143 billion with 38% increase. As has become a tradition, we take pride in stating that PASHA Bank, as a dynamic market player, continues its healthy growth. In general, our uninterrupted investments in strengthening our internal capabilities— from building our core competencies for managing our business to enhancing our human capital potential—have provided a strategic return by enabling PASHA Bank to navigate challenging times in a healthy manner. As a result, the Bank’s total assets increased by 30% to reach TL 12,913 million as of the end of 2024. Our gross cash loans and leasing receivables portfolio, which constitutes 54% of our total assets, grew by 25% to reach TL 7,028 million. Due to effective risk management framework, and prudent credit policy pursued by the Bank we have been successful in preserving low level of NPL in our balance sheet. It is worth to underline that flexible revisiting of credit policy, adjusting tactics of credit and underwriting policy to the current realities of macroeconomic environment etc. are forming substance of the overall risk approach of the Bank. Moreover, it is worth to underline that quick revisit of the loan portfolio due to the on-going war, and run of the relevant stress- AS HAS BECOME A TRADITION, WE TAKE PRIDE IN STATING THAT PASHA BANK, AS A DYNAMIC MARKET PLAYER, CONTINUES ITS HEALTHY GROWTH. DUE TO OUR EFFECTIVE RISK MANAGEMENT FRAMEWORK, AND PRUDENT CREDIT POLICY, WE HAVE BEEN SUCCESSFUL IN PRESERVING LOW LEVEL OF NPL IN OUR BALANCE SHEET. healthy growth low level of NPL 29 General Information