Message from the CEO

We have based our corporate culture entirely on financial technologies.

Esteemed Stakeholders,

In 2018, while exchange and interest rates remained high due to macroeconomic conditions, Aktif Bank managed its resource costs and sustainability in the best way possible with a disciplined, rational and prudent approach to risks. We successfully maintained our liquidity indicators and balance sheet strength. Despite the growing competition in technology, our Bank sustained its market share, customer segments and customers in 2018 with its innovations and investments.

Profits as of the end of 2018 were 48% (BRSA Standalone Figure) higher compared to the previous year.

Since our establishment, we have introduced the sector to a brand new banking approach thanks to our investments in digital transformation and our unique business models tailored to the needs of our customers. We have based our corporate culture entirely on financial technologies. Yielding rapid, flexible and cost-effective results with a unique and authentic business model, Aktif Bank positions itself as more than a bank: we are not only one of Turkey's largest investment banks, but also one of the country's largest fintech companies.

In order to develop new products that will make customers' lives easier and increase our productivity through technology, we continued to invest in fintech in 2018. As part of N Kolay, the key component of our digital service and product universe, we continued providing innovative solutions to customers by developing digital banking products such as N Kolay Bond and N Kolay Loan. In 2018, we increased the digital customer balance of N Kolay Bond by 4.5-fold compared to the previous year.

Last year, we launched the N Kolay Ankara Card project, addressing all urban transportation-related needs, and brought transportation and shopping together under a single platform. In a short amount of time, N Kolay Ankara Card reached 50,000 users. By the end of 2018, more than TRY 1.1 million was deposited to the cards, which were used 700,000 times for public transportation. With the Ankara mobile application launched in 2018, we were able to touch the lives of Ankara residents. We are also looking forward to introducing a brand new application to facilitate the use of N Kolay Bond in early 2019.

Employing a business model that is based on digital banking and innovative channels, Aktif Bank has managed to acquire a market share of 20 percent with only 10 physical branches, against the 10,000 bank branches in the sector. Thanks to our brand strength supported by a high production volume and extensive customer base, we increased the number of customers from 6.5 million in 2018 to 8 million in 2018.

In addition to Yeşilyurt and Antalya branches we opened this year, we renewed our branch concept, focusing on "high street banking". Our branches have demonstrated an extraordinary performance, reaching a work volume twice that of peer bank branches and five times that of sector average.

In 2018, we added new companies to our subsidiaries, which greatly contribute to our profitability. As the first bank in Turkey to invest in blockchain technologies, we established Attivo Bilişim A.Ş., through which we aim to support Turkey's development in this field while providing secure crypto-asset trading services via a new platform we will establish. Furthermore, in March, we established a subsidiary, Inovaban, with an objective to provide strategic growth consultancy services to 20,000 SMEs in 5 years. Inovaban already served 2,200 SMEs within the first six months of its inception. In 2018, our subsidiary UPT launched SendUPT, an innovative service that enables Turks residing in Europe to transfer money to Turkey in a convenient and affordable manner.

Our subsidiary E-Kent, a pioneer in developing and integrating smart urban solutions, continued to provide 1 billion smart transportation transactions per year through its transportation solutions infrastructure. Turkey's innovative insurance broker Sigortayeri carried its high growth rates of 2016 and 2017 into 2018, cementing its position as "Turkey's largest domestic insurance broker" with 150% growth in policies over 2017. Building on its extensive expertise on the cash register systems sector, PAVO continues to serve its customers with over 200,000 value-added applications and software integrations. Within only two years of its inception, Mükafat Asset already manages a portfolio worth over TRY 500 million, expanding its range of alternative products on a course of continuous growth. N Kolay Payment Institution, with Turkey's most expansive network in its sector, continues to offer its services through 575 N Kolay Transaction Centers and 3,940 N Kolay Kiosks.

Continuing to embrace and support Turkish football, the Bank has published the third Ekolig - Football Economy Report focusing on revenues and economic outlook of football. According to the report, the total revenues of Super League reached TRY 3.2 billion as of the end of the 2017-2018 season. Working to improve the quality and standards in Turkish football and enabling digital integration between clubs and fans, Passolig card has surpassed 4.2 million users. Passo mobile application was downloaded 2.5 million times.

In 2018, we launched the first brand image campaign in our history with the motto: "The sun provides light, heat, and energy. Aktif Bank provides the rest", reaching a wide audience through various communication channels. Keeping abreast of global developments, Aktif Bank we carried out 10 R&D projects, including three TUBITAK TEYDEB (Technology and Innovation Grant Programs Directorate) projects in order to facilitate the transfer of know-how with global companies. In 2018, within the scope of European Union H2020 program, we took part as an R&D Center in three consortiums, which include only a limited number of companies from Turkey.

We crowned our contributions to the national economy by expanding our services in the African continent. In 2018, we became the leading Turkish bank in terms of international trade with African countries. We partnered with 162 banks in Africa alone. Under the guarantee agreement with Afrexim, we offered foreign trade limits worth USD 1 billion for approximately 60 banks and Turkish exporters operating in 50 countries. Through our efforts in international trade and regional strategies, in 2018 our number of correspondent banks increased to 1,000 and the volume of brokered international trade reached USD 500 million.

In parallel with significant changes in legislation that aim to support ABS issuances in Turkey, in 2018 we provided brokering and consultancy services in Turkey's biggest ABS issuance worth TRY 3.15 billion financed by four major banks. We will continue to serve in these issuances that are important to the national economy and create added value.

With the synergy they create, Aktif Bank and its subsidiaries will continue to create value for our country, economy and society. We will continue working with dedication in 2019 to meet the needs of all segments of society with innovative and beneficial solutions.

Dr. Serdar Sümer