PASHA BANK ANNUAL REPOT 2024

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 SUCCESSFULLY COMPLETED THE FIRST YEAR OF OUR THREE-YEAR STRATEGY PERIOD, WHERE SUSTAINABILITY IS AT THE FOREFRONT. WE HAVE EXCEEDED OUR TARGETS IN THE FIRST YEAR OF OUR STRATEGY. sustainability strategy 33 General Information