ZIRAAT PARTICIPATION CONTINUED ITS FAST GROWTH IN 2019 WITH ITS VISION OF BEING THE LEADING PARTICIPATION BANK OF THE INDUSTRY AND COMPLETED THE YEAR WITH A HEALTHY PERFORMANCE IN LINE WITH ITS PROFITABILITY AND EFFICIENCY GOALS.
Dear Stakeholders,
ZIRAAT PARTICIPATION COMPLETED 2019 WITH A HIGH AND HEALTHY PERFORMANCE.
Ziraat Participation continued its fast growth in 2019 with its vision of being the leading participation bank of the industry and completed the year with a healthy performance in line with its profitability and efficiency goals.
Besides unfavorable impacts of global economic factors and geopolitical developments, the impacts of fluctuations in domestic markets were also in effect in 2019. Even in these circumstances, Ziraat Participation achieved its targets with its properly structured strategy, resilient business model and strong financial structure.
Ziraat Participation reached a balance sheet size of TL 36.4 billion by increasing its total assets by 64% in comparison with prior year-end. With a customer satisfaction oriented service approach and successful execution of an efficiency-focused business cycle, Ziraat Participation completed 2019 with a profit of TL 516.7 million.
WE CONTINUE SUPPORTING THE REAL SECTOR.
Ziraat Participation responds to the needs and expectations of its customers through most accurate and appropriate channels by offering value propositions and continues its activities with its vision to be an effective participation bank in its region as well as in international markets.
In 2019, Ziraat Participation continued to support financing of real sector, particularly SMEs which are vital elements of the economy.
As of 2019 year-end, cash funds Ziraat Participation allocated increased by 63% in comparison with prior year to reach TL 28.9 billion and non-cash funds increased by 10% to reach TL 11.3 billion, hence total amount of support provided to Turkish economy by Ziraat Participation was realized as TL 40.2 billion.
Funds collected as of 2019 year-end increased by 68% to reach TL 25.5 billion.
WE CARE ABOUT MAINTAINING OUR ASSET QUALITY.
Ziraat Participation adopted a growth strategy that sets forth maintaining and improving the asset quality. The Bank’s allocation and fund use processes as well as its early warning and risk monitoring infrastructure are being developed accordingly.
In accordance with our sustainable growth and customer focus strategies, funds allocated kept growing rapidly in 2019. As we executed our hardline risk management policies, non-performing receivables ratio was considerably lower than the industry average and was realized as 2.3%. In 2019, capital adequacy ratio of Ziraat Participation was 16.6%.
ZIRAAT LEASING MERGED INTO ZIRAAT PARTICIPATION.
As Turkey’s first public participation bank, Ziraat Participation continues to take firm steps towards its vision of being the leading participation bank of the industry. Our Bank acts with the mission of financing investments by providing accurate and effective solutions that contribute to our country’s economy and the financial markets.
Ziraat Group targets operational cost reduction and efficiency increase through merging companies operating in similar areas within the Group with its objective of “Getting Stronger Together and Growing Together”.
Ziraat Leasing, which has been providing financing to various sectors such as construction, health, textile, food, iron and steel, metal processing, printing and manufacturing since its inception in 1991 under Ziraat Finance Group, started to continue its operations under Ziraat Participation as of 1 March 2019.
Ziraat Participation reinforced its strengths through this merger and will continue to grow by developing its existing financial leasing services utilizing Ziraat Leasing’s know-how and experiences.
LEASE CERTIFICATE ISSUANCES REACHED TL 13 BILLION.
In 2019, Ziraat Participation successfully completed 19 lease certificate issuances of TL 8.2 billion in total. The Bank, which has been active in capital markets as part of its strategy to enrich its resource structure, obtained six approvals from CMB for lease certificate issuances of TL 500 million, TL 1.5 billion, TL 1.5 billion, TL 2 billion, TL 4 billion and TL 8 billion each to issue lease certificates in domestic market through its subsidiaries Ziraat Katılım Varlık Kiralama A.Ş. and ZKB Varlık Kiralama A.Ş. In this context, approximately TL 13 billion worth of issuances were realized in various amounts of allocations from inception to 2019 year-end.
DIVERSIFYING OUR RESOURCES
In order to provide additional resources and diversify its resources, Ziraat Participation obtained murabaha syndication of USD 250 billion with the participation of 17 banks and financial institutions. This transaction provided resilience for balance sheet and liquidity management while receiving additional resources with appropriate terms and costs and allowing entry of foreign resources to the economy.
Moreover, to strengthen the share structure of our Bank supporting its rapid growth, a 10-year term Tier 2 credit was obtained from our majority shareholder T.C. Ziraat Bankası A.Ş. for TL 300 million as secondary capital and a Tier 1 credit was obtained from Turkey Wealth Fund for EUR 100 million as additional original capital.
FUND COLLECTION THROUGH INVESTMENT PROXY AGREEMENTS STARTED.
A new application has started to allow participation banks to collect funds through investment proxy agreements in accordance with regulation which amends the Regulation on Procedures and Principles on Acceptance and Withdrawal of Deposits and Participation Funds; Expired Deposits, Participation Funds and Receivables published in the Official Gazette no. 30569 dated 18 October 2018.
In this context, our Bank started to collect funds through Investment Proxy Agreements for corporate customers as of 15 July 2019. In accordance with Communique on Terms and Types of Deposits and Participation Funds published in the Official Gazette no. 30809 dated 22 June 2019, participation accounts based on investment proxy agreements can be opened with maturities less than 1 month and our Bank can open participation accounts with less than 1 month maturity for corporate customers.
WE STAND BY OUR SMES.
Ziraat Participation continues its operations at full speed to facilitate SMEs access to financing with favorable terms.
In this context, the Bank and Credit Guarantee Fund signed “Competitiveness of Small and Medium-Sized Enterprises-COSME” on 12 April 2019 and “CGF Support Credit” protocol on 27 May 2019.
Within the scope of protocols signed in the second quarter of 2019, our Bank provided financing support for SME customers at TL 27 million at favorable terms.
In cooperation with KOSGEB, our Bank signed Düzce and Istanbul Emergency Support Credit Protocol to provide favorable financing for businesses who were affected by the flood and landslide occurred on 17 August 2019 at Eminönü Tram Underpass and Spice Bazaar Underpass. Our Bank always stands by the tradesmen who are in need of emergency financing support. As Ziraat Participation, we will continue to perform our operations to facilitate our customers’ access to finance at favorable conditions.
WE STAND BY OUR CONSUMERS WITH OUR FINANCING CAMPAIGNS.
We conducted housing financing campaigns in cooperation with public banks to support our customers’ house purchases and to create dynamism at construction industry.
To support domestic production, we collaborated with automotive brands manufacturing in Turkey and set up vehicle financing packages specific to domestic production for our customers who wishes to purchase zero km domestic passenger and commercial vehicles.
MOBILE FINANCING WAS LAUNCHED.
Understanding the needs and expectations of our individual and corporate customers and providing the most appropriate solutions and value propositions through most appropriate channels, our Bank continues to increase its product diversity.
For our corporate customers who already have an active limit at our Bank, we launched the “Mobile Financing” option where they can process their financing transactions over Participation Mobile Application with the purpose of increasing financing transaction process quality. Digital management of transactions was provided for our customers to apply for financing through Participation Mobile without coming to the branch, ensuring effectiveness of time and cost for document uploading or approval processes.
WE CONTINUE TO CONTRIBUTE TO PRODUCTION AND EMPLOYMENT BY ESTABLISHING FINANCIAL PARTNERSHIPS.
Within the scope of financial partnerships, the Bank purchased 57.88% of shares of Yünsa with its subsidiary Sürmegöz Tekstil Yatırım A.Ş. from Hacı Ömer Sabancı Holding. Yünsa is the largest woolen fabric producer of Europe operating under one roof and 5th largest in the world.
Using its resources in an effective manner to support investment and entrepreneurship, our Bank will continue financing profitable and sustainable investments through Project Financing and Financial Partnerships.
ZIRAAT PARTICIPATION, PROJECT ACTIVITIES STARTED FOR ANALYSIS, REPORTING AND TAKING ACTIONS FOR CUSTOMER FEEDBACKS WITH “ARTIFICIAL INTELLIGENCE SUPPORTED TEXT ANALYTICS”.
WE DEVELOP OPEN SOURCE CODED TECHNOLOGIES.
In line with the “Nationalization in Technology” strategy, activities were carried on for migration to open-source operating system at client computer. A significant distance was covered and pilot tests started with user groups at the Headquarters and branches. With these activities, a performance increase at client computers is targeted as well as reductions in hardware costs and elimination of operating system software license costs in the near future.
Significant savings were realized in license costs by replacing imported software solutions such as the platform which facilitates 24/7 monitoring of accessibility of services offered for customers, corporate portal application, secure file sharing and virtual server management application with their open source technology equivalents. As we launch open source products, we continue our studies in R&D for information security.
With the implementation of open source code software solutions at our Bank, we expect that our Bank will be a significant reference among public institutions and organizations. Through sharing this important experience, a contribution to reduction of dependence on foreign resources and a significant step towards innovative technologies are targeted.
With transition to open source systems a significant gain will be achieved in terms of security of the country and organizations, important savings opportunities will be provided, opportunities will be offered for integration among companies providing technological solutions and development of fintechs operating in this area.
INVESTING IN CUSTOMER EXPERIENCE SATISFACTION
With the Contact Analysis Project, the Bank provides analysis of call center contacts with customers to increase Customer Interaction Center performance, improve operational processes and measure customer experience.
Project activities started for analysis, reporting and taking actions for customer feedbacks with “Artificial Intelligence Supported Text Analytics”.
Communication Quality Project was initiated to control the contents of written and oral messages at each interaction point with customer and to ensure these interactions are realized at highest quality standards.
IN 2019, WE ENRICHED OUR HUMAN RESOURCES EVEN MORE WITH NEW PARTICIPATIONS.
Ziraat Participation enriched its human resources which is its most valuable asset with new participations in 2019.
In line with our rapid growing organization structure and based on the needs of our Headquarter and branch units, 169 new colleagues joined us and number of employees reached 1,129 as of 2019 year-end.
Ziraat Participation added 13 new branches to its branch network and the total number of branches reached 93.
THANKS TO ALL WHO CONTRIBUTE TO OUR SUCCESS IN 2019.
We continue our devoted efforts to increase our contribution to real economy in line with our values and ethical principles which are reflections of our well-established corporate culture.
As we carry on conducting our projects staying connected to our mission of expanding participation banking, our ultimate target is to create value for Turkish economy at an increasing rate and to support sustainable development through multiple ways.
On behalf of myself and Ziraat Participation management team, I would like to express my gratitude to all our stakeholders, particularly our employees, who are with us in our journey to reach higher targets and who contribute to our successful performance.
Respectfully,
Metin ÖZDEMİR
CEO
