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44 A&T BANK ANNUAL REPORT 2015
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 2015.
The global economic recovery
underperformed expectations in
2015 due in large part to lackluster
growth in emerging markets.
Developing country economies
were unable to stage a steady,
lasting recovery primarily because of
the ever slowing Chinese economy,
but also due to weak commodity
prices, the pressure placed on
local currencies by global financial
fluctuations and significantly
reduced capital inflows. Lingering
problems in public finances and
the labor market cause economic
growth in the Eurozone to trail
forecasts by a wide margin. On the
other hand, low financing costs,
improvements on the jobs front,
and weak commodity prices, the
plunging price of oil in particular,
are sparking a relative rebound in
the most developed economies. As
a result of the economic recovery in
the US, the Fed raised interest rates
for the first time in 10 years while
emphasizing that it will continue
to pursue a monetary policy that
supports the economy. After the
anxiously-awaited rate hike decision
in 2015, uncertainties surrounding
the direction of monetary policy
seem to have eased for now in
global markets.
In lock step with other emerging
market currencies, the Turkish Lira
fluctuated sharply against the US
dollar and the Euro in response to
global economic developments
in 2015. Economic activity was
moderate during this period, as
Turkish GDP expanded 3.4% in
fixed prices during the first three
quarters of 2015 after posting
growth of 2.9% in 2014. Foreign
trade volumes declined in 2015
due to slowing economic activity in
Turkey’s traditional export markets,
led by the Eurozone. The country’s
exports and imports contracted
8.7% and 14.4%, respectively,
compared to the previous year.
Meanwhile, the country’s current
account balance continues to
improve. Compared to the previous
year, Turkey’s current account deficit
fell 26.1% from USD 43.6 billion
to USD 32.2 billion in 2015. The
annual increase in the Consumer
Price Index of 8.81% in 2015
represents a minor rise from
8.17% in 2014.
Indicators for the banking industry
include:
In 2015, the banking industry’s
total assets increased TL 363.1
billion (18.2%), compared with the
figure at year-end 2014, climbing
to TL 2,357.5 billion. The sector’s
loan and securities portfolios, key
indicators, totaled TL 1,484.9 billion
and TL 329.7 billion, respectively.
Total loans extended by banks in
2015 rose 19.7% over 2014, while
the securities portfolio grew 9.1%.
The ratio of non-performing loans
(gross) to total cash loans stood at
3.1%. Total deposits which are core
funding sources of Banks increased
18.3% over year-end 2014,
reaching TL 1,245.4 billion while
total equities amounted to
TL 262.2 billion, an increase of