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A&T BANK 2014 FAALİYET RAPORU
ANNU L R PORT 2014
The Board of Directors Report Submitted
to the General Assembly
Dear Shareholders,
We are honored to host you at the Annual Shareholders
Meeting of A&T Bank. We would hereby like to present you with
a brief assessment of economic and banking developments in
Turkey, followed by information on the financial and operational
performance of the Bank in 2014.
While a gradual recovery in global economic activity continues,
a slowdown has occurred in growth rates in both the most
developed countries as well in emerging markets. Even
though the outlook for the US economy has recently become
more positive, the Fed’s exit from its expansionary monetary
policy caused fluctuations in the world’s financial markets in
2014 and had a negative impact on developing countries,
including Turkey. Capital outflows from countries that are
especially burdened with a high current account deficit resulted
in depreciation of their currencies and interest rate hikes.
Meanwhile the structural problems in the Euro Zone, such
as lingering issues in the banking industry, high public debt,
the slow pace of investment, and entrenched unemployment
hindered growth, despite all countermeasures taken.
As global economic growth has weakened, commodity prices
have dropped significantly, and serious concerns about the
future of consumer spending as well as the risk of deflation in
the world economy have arisen. These concerns are mainly
centered on the economic situation in the Euro Zone, China
and Japan, which together account for the lion’s share of the
global economy. As signs of economic bottleneck emerged
in Europe, the European Central Bank began to implement
an expansionary monetary policy to counteract the risk of
recession. Meanwhile, China’s economic growth slipped to
its lowest level since 1990, and the recovery in Japan came
to a halt. Analysts agree that the risk of recession in the most
advanced economies will continue to be a cause for concern,
and will negatively affect the economic performance of
emerging markets in 2015. Even though the Fed ended its
expansionary monetary policy, uncertainties remain about the
benchmark interest rate and when it will be revised upward. All
these indicators show that 2015 will be a difficult year for both
industrialized and developing countries.
Meanwhile, Turkey’s economic expansion began to lose
momentum after the first quarter of 2014. In 2013, the Turkish
economy grew 4.1% in real terms, and then expanded at a
2.8% pace in the first nine months of 2014. Foreign trade
statistics show that in 2014, Turkey’s total exports increased
3.9% compared with 2013, rising to US$ 157.7 billion.
Meanwhile, imports decreased 3.7% to US$ 242.2 billion. The
country’s export/import ratio rose from 60.3% to 65.1% during
the same period. Due to the decline in Turkey’s foreign trade
deficit, the current account gap fell 29.1% in 2014, compared
with the previous year, to US$ 45.8 billion. The annual increase
in the Consumer Price Index went up to 9.66% during the year
but entered the downward trend with the last quarter and stood
at 8.17% at end-2014.
Indicators for the banking industry include:
• At year-end 2014, the banking industry’s total assets
increased TL 261.8 billion (15.1%), compared with the figure
at year-end 2013, climbing to TL 1,994.2 billion. The sector’s
loan and securities portfolios, key indicators, totaled
TL 1,240.7 billion and TL 302,3 billion, respectively. Total
loans extended by banks in 2014 rose 18.5% over 2013,
while the securities portfolio grew 5.4%. The ratio of
non-performing loans (gross) to total cash loans
stood at 2.8%.
• Total deposits which are core funding sources of Banks
increased 11.3% over year-end 2013, reaching
TL 1,052.7 billion while total equities amounted to
TL 232,1 billion, an increase of 19.8%.
• In 2014, the industry’s net profit stayed at the same level
compared with the previous year and realized TL 24.7 billion.
During the same period, return on equity fell from 14.2% to
12.2%.
• At year-end 2014, the capital adequacy standard ratio
realized at 16.3%, compared to 15.3% at year-end 2013.