ZIRAAT KATILIM CONTINUED ITS ACTIVITIES METICULOUSLY IN 2020 IN LINE WITH ITS VISION OF BEING AN EFFECTIVE PARTICIPATION FINANCIAL INSTITUTION IN THE INTERNATIONAL MARKETS AS WELL AS IN ITS REGION.
Dear Stakeholders,
A HEALTHY FINANCIAL PERFORMANCE IN 2020
Ziraat Katılım continued its activities meticulously in 2020 in line with its vision of being an effective participation financial institution in the international markets as well as in its region.
Our Bank, which is the pioneer of its sector, completed 2020 with a healthy growth performance, achieving its targets for profitability and efficiency.
2020 was a year in which economic activity was disrupted globally due to the Covid‑19 pandemic, with many sectors such as manufacturing, distribution and tourism being negatively affected and the negative effects of market volatility being felt deeply. Ziraat Katılım achieved its goals in this environment with its carefully structured strategy, flexible business model and strong financial structure.
As of the end of 2020, Ziraat Katılım had increased its total assets by 65% compared to the end of the previous year and reached a balance sheet size of TL 60.2 billion. Our Bank rounded off 2020 with a profit of TL 639 million as a result of the successful execution of the business cycle structured with a service understanding which prioritizes customer satisfaction and is focused on efficiency.
WE ARE STEPPING UP THE SUPPORT WE OFFER IN REAL SECTOR FINANCING
Ziraat Katılım continues to work to contribute to the participation finance system, increase its support for our economy and create more added value.
Responding to the needs and expectations of its customers by offering the most appropriate solutions and value suggestions through the most appropriate channels, Ziraat Katılım continued to support the financing of the real sector, especially SMEs, in 2020. As of the end of 2020, the cash funds disbursed by Ziraat Katılım had increased by 46% compared to the end of the previous year, reaching TL 42.2 billion, while non‑cash funds grew by 40% to reach TL 16 billion. In total, Ziraat Katılım’s support for the Turkish economy reached TL 58.2 billion, with TL 46.4 billion obtained by achieving an 82% increase in funds collected compared to the previous year.
WE PROTECT AND IMPROVE OUR ASSET QUALITY
Ziraat Katılım’s growth strategy is shaped by an approach which is focused on maintaining and improving its asset quality. The Bank’s allocation and fund disbursement processes and early warning and risk monitoring infrastructure are constantly developed in this direction.
The volume of funds disbursed continued to grow rapidly in 2020. During this period, when effective risk management policies have been implemented, the ratio of non‑performing receivables stood at 2.7%, well below the sector average. In 2020, Ziraat Katılım’s capital adequacy ratio stood at 14.8%.
WE ACHIEVED SUCCESSFUL RESULTS IN LEASE CERTIFICATE ISSUANCES
Ziraat Katılım successfully completed the issuance of 23 lease certificates, amounting to TL 12.6 billion in total, in 2020. Our Bank, which plays an active role in the capital markets as part of its strategy to enrich its resource structure, obtained lease certificate issuance ceiling approval of TL 12 billion from the CMB in order to carry out lease certificate issuances in TL in the local market with its subsidiaries, Ziraat Katılım Varlık Kiralama A.Ş. and ZKB Varlık Kiralama A.Ş.
Within this framework, since its establishment, our Bank had issued a total of TL 25.6 billion comprised of various amounts as of the end of 2020.
ZIRAAT KATILIM SUDAN ENTERS OPERATION
Expanding its branch network throughout Turkey, Ziraat Katılım opened its first branch abroad in Khartoum, the capital of Sudan. As the first Turkish Bank to open in the African continent, our Ziraat Katılım Sudan branch started its operations on 27 August 2020. We hope that our new branch will contribute to the development of foreign trade and the strengthening of economic relations between Turkey and Sudan.
Operating within the Ziraat Finance Group, Ziraat Katılım will continue to work towards becoming a universal, respected and leading participation finance institution which creates synergy not only in Turkey but also in its region, and which offers more to its customers by sharing at every stage through constantly generating value.
WE CONTRIBUTE TO PRODUCTION AND EMPLOYMENT BY ESTABLISHING FINANCIAL PARTNERSHIPS.
Our Bank also provides financing through Financial Partnership within the framework of participation finance system principles. With the capital partnership of Ziraat Katılım, LIVZYM Biotechnology, Turkey’s first domestic Industrial Enzyme Factory, started its activities with a ceremony held on 26 June 2020.
LIVZYM is the first industrial enzyme factory established in the region extending from Africa to Russia. With an annual global market size of USD 8 billion, enzymes are used as technological intermediates in the food, detergent, paper, textile, leather and feed industries.
With our LIVZYM investment, Ziraat Katılım aims to produce the imported substitute products through domestic and national means, to contribute to employment and reduce foreign dependency. The Financial Partnership established with LIVZYM Biotechnology is expected to serve as a pioneer in other initiatives in the field of biotechnology in our country and to add value to the country’s economy with its production capacity.
Continuing to use its resources effectively to support investments and initiatives, our Bank will also finance profitable and sustainable investments in the coming periods through Project Finance and Financial Partnerships.
FULL SUPPORT PROVIDED TO THE ECONOMIC STABILITY SHIELD PACKAGE
A wide range of measures have been taken around the world with the aim of minimizing the damage wrought by the Covid‑19 pandemic on economic life, which was affected by the pandemic throughout the entire year. Ziraat Katılım believes that keeping the wheels of its production infrastructure and labor market turning is the common goal for all stakeholders of the economy. With this approach, in line with the “Economic Stability Shield” implementation, significant support was mobilized to fend off a deterioration in cash flows which our citizens and the business world may experience during this period.
In this context, we received the applications to postpone payment instalments from commercial and individual customers, and we implemented appropriate term structuring practices for the existing financing of our customers for whom cash flow had been disrupted or where disruption was anticipated, as well those who could face payment problems as a result.
Provided that the companies which pay their personnel salaries through our Bank maintain their employment at the end of February 2020, we have provided additional limits equivalent to the personnel salary expenses of up to 3‑months if needed.
We urgently met the needs for additional limits of our customers who have a financing limit at our bank, for the working capital and Direct Debiting System which may arise due to the current conditions.
BUSINESS CONTINUITY FINANCING SUPPORT PACKAGE PUT IN PLACE
A protocol was signed between Credit Guarantee Fund and our Bank to finance the economic needs of our Bank’s legal customers, who were directly or indirectly affected by the pandemic, at affordable conditions within the scope of the Economic Stability Shield measures.
We created the “Business Continuity Financing Support Package” which provides the KGF guaranteed financing within the framework of the Treasury Backed Guarantee System. At the end of February 2020, real/legal person businesses which maintain the number of their registered employees and have not reduced employee numbers, and which had been directly or indirectly affected by the pandemic, were eligible to benefit from the support package.
WE CREATED THE CHEQUE PAYMENT SUPPORT PACKAGE.
Again, within the framework of the protocol signed between the KGF and our Bank, we aimed to contribute to the continuation of the commercial activities of our corporate customers who use the cheque payment tool in their commercial activities, and who are cheque drawers.
In order to provide our customers with the appropriate source of financing for the cheque fees they are obliged to pay, we created the KGF guaranteed “Cheque Payment Support Package” within the framework of the Treasury Backed Guarantee System. Through this support package, we provided benefit to our real/legal entity customers, who are cheque drawers, and who have been directly or indirectly affected by the pandemic.
MORE THAN TL 5 BILLION IN SUPPORT PACKAGES
Within the framework of the Treasury Backed Guarantee System, we provided TL 5 billion in financing to our customers within the scope of our “Business Continuity Financing Support Package” and “Cheque Payment Support Package” applications which offer the KGF guaranteed financing. Through these financing packages, we met a wide range of our customers’ needs, from personnel salary payments and cheque payments to raw material purchases and service purchases, with very favorable dividend rates as well as the opportunity for financing with a grace period.
A COMPREHENSIVE TOURISM SUPPORT FINANCING PACKAGE
In order to provide cash for the purchase of goods subject to contract or invoice, or to pay for fixed expenses and salary/rent fees with the letter of guarantee in TL of the enterprises operating in the tourism sector and their suppliers, the KGF guaranteed “Tourism Support Financing Package” was prepared within the framework of the Treasury Backed Guarantee System.
Within the scope of this package, the amount of support which we offered our customers with a grace period of 1 year and attractive dividend rates exceeded TL 170 million.
FINANCING SUPPORT PROVIDED TO SMEs
The protocol on corporate equity backed guarantees signed previously between the Credit Guarantee Fund (KGF) and our Bank aims to uphold the competitiveness and sustainability of SMEs and to promote a culture of enterprise.
In 2020, the sub‑protocol of the “KGF COSME (Competitiveness of Enterprises and Small and Medium‑sized Enterprises) 2nd Period Program and the Portfolio Guarantee System (PGS) Equity”, which is aimed at supporting the SMEs’ access to finance, was signed. Within the scope of this program, the financing support program with a grace period of up to 12 months was implemented for real and legal entity enterprises, which fit the definition of being an SME and which are established in accordance with the law of the Republic of Turkey.
5,000 CUSTOMERS BENEFIT FROM BASIC NEEDS SUPPORT FINANCING
Within the scope of the Economic Stability Shield, we prepared the “Basic Needs Support Financing” within the framework of the Treasury Backed Guarantee System in order to finance the basic needs of our individual customers, who have been directly or indirectly affected by the pandemic, in the areas of health, rent and utilities (such as electricity, water and natural gas) at affordable conditions. More than 5,000 customers have benefited from this financing support.
SUPPORT PROVIDED TO DISASTER ZONES.
The “Elazığ and Malatya Emergency Support Loan Protocol” was signed between KOSGEB and our Bank in order to provide financial support to enterprises affected by the earthquake which struck on 24 January 2020 in the Elazığ and Malatya provinces.
Within the scope of the protocol, all financing debts of our Bank’s customers who lost their first‑degree relatives were cancelled and all repayments on commercial or personal financing whose homes or places of businesses had been destroyed or severely damaged were postponed for a period of between 6 months and one year without any profit share being taken.
In addition, the commercial and personal financing instalments of our customers in the mentioned provinces and districts affected by the economic fallout of the earthquake were postponed for three months without any profit share being taken.
KAD‑SIS PROTOCOL SIGNED WITH THE ISTANBUL GOLD REFINERY
On 4 August 2020, our Bank and İstanbul Altın Rafinerisi A.Ş. (İAR‑Istanbul Gold Refinery) signed a protocol regarding the Jeweler Gold Valuation System (KAD‑SİS). The KAD‑SİS project, in which public banks are stakeholders under the leadership of the Ministry of Treasury and Finance, is aimed at stepping up collections of scrap gold, reaching wider masses and bringing gold kept “under the mattress” into the economy.
With this system, as of 26 August 2020, Ziraat Katılım customers’ have been able to transfer “under the mattress” gold to their Bank accounts through İAR contracted jewelers through special software and hardware.
Gold collection days had been organized with the limited number of specialists assigned at our Bank’s branches at certain times. Under the KAD‑ SİS system, physical gold collection can be carried out throughout the country, including on weekends, through jewelers contracted by the Istanbul Gold Refinery.
IT WAS A VERY ACTIVE YEAR FOR ZIRAAT KATILIM IN THE FIELD OF PAYMENT SYSTEMS. IN PARTICULAR, WE STEPPED UP OUR EFFORTS TO ADAPT TO CHANGES IN CONSUMERS’ SHOPPING STYLES AND PAYMENT METHODS WITH THE COVID‑19 PANDEMIC.
ZIRAAT KATILIM BANKKART INTRODUCED
It was a very active year for Ziraat Katılım in the field of Payment Systems. In particular, we stepped up our efforts to adapt to changes in consumers’ shopping styles and payment methods with the Covid‑19 pandemic.
Speed and hygiene were the most important factors in payment preferences during this period, and this played an important role in shaping our existing products and newly developed products and services.
2020 was a unique year for us, as we brought our Bank’s first credit card product to the market. We are delighted to present a card product under the Bankkart brand, allowing our customers to benefit from its many features and advantages.
Despite the pandemic and intensive competition in the sector, our card has attracted a significant amount of customer interest and satisfactory feedback. We take firm steps towards in adaptation to new features and technologies which will benefit our customers by evaluating all the feedback we receive from our customers.
OUR WEBSITE WAS RENEWED
In line with Ziraat Katılım’s digitalization strategy, the corporate website, which was developed entirely with the Open Source Code, was renewed by considering customer experience and innovative designs.
In line with the needs and expectations of our customers, advanced search options and user oriented menus were added to our website.
Ziraat Katılım aims to create value in the field of software with open source software, create sustainable digital transformation and bring effective solutions to global technologies.
In order to contribute to the development of the software ecosystem in Turkey, our bank also renewed its infrastructure by implementing the open source code based software strategy on its website.
24/7 MONEY TRANSFER WITH THE FAST SYSTEM
The new FAST (Instant and Continuous Transfer of Funds) payment system offers quick and easy money transfer using key information such as mobile phone number, e‑mail, national ID number and passport number without the need for an account number or long IBAN number with the Central Bank’s “Easy Address” application.
Ziraat Katılım is included in the FAST system, which provides the opportunity to perform these transfers for 24/7.
DIGITAL APPROVAL PROJECT PUT INTO USE
The “Digital Approval” project, which enables the forms received from our customers with a signature at our branches to be approved by customers by using the Mobile Banking and Mobile Approval facilities, is available for our individual customers. Signing up to the Internet and Mobile Banking channel can now be carried out from the branch using the SMS code sent to the customer, without the need for an application form.
API SUPPORT PROVIDED TO PROJECTS IN THE FIELD OF FINANCE
Infrastructure work was completed for the opening of our Banking Services (API) to our external customers so that individuals or organizations aiming to develop applications in the field of banking and finance can carry out application development work, and all entrepreneurs, who have an idea or project in the field of banking and finance are able to develop the most innovative and trending applications through this infrastructure.
OPEN SOURCE OPERATING SYSTEM COMPLETED IN ALL OUR BRANCHES.
Within the scope of the “Nationalization in Technology” strategy, our migration work to the open source operating system on the client computer was completed in all our branches. This work is aimed at rapidly increasing the performance of client computers, decreasing hardware costs and eliminating operating system software license costs.
In addition, the video conferencing system with an open source was implemented. The transfer of in‑house and external files was provided with the repository product, which is an open source file sharing system. The open source asset inventory and configuration management processes and systems were put into practice.
COVID‑19 MEASURES IMPLEMENTED FOR OUR CUSTOMERS AND EMPLOYEES
Ziraat Katılım has taken all necessary measures to prevent its customers and employees from being affected by the virus within the scope of the Covid‑19 pandemic, which has profoundly affected the world since March 2020, and provided effective service to its customers without sacrificing quality.
Central infrastructures were strengthened so all Bank personnel could work remotely, and the necessary software and hardware equipment were installed and delivered to the end users. The measures, which are taken within the scope of Covid‑19 actions at our Bank’s Head Office departments and in all branches, have been implemented meticulously.
THE VEFA GROUP WAS ESTABLISHED UNDER THE ROOF OF ZIRAAT KATILIM, WHICH WAS CREATED BASED ON THE SPIRIT OF “SHARING”, AN IMPORTANT AND INDISPENSABLE PART OF OUR NATIONAL VALUES, AND SET OUT WITH THE SLOGAN OF “MORE AS WE SHARE”.
ZIRAAT KATILIM VEFA GROUP ESTABLISHED.
The Vefa Group was established under the roof of Ziraat Katılım, which was created based on the spirit of “sharing”, an important and indispensable part of our national values, and set out with the slogan of “More as We Share”.
The Vefa Group was established in order to stand by those in need and show solidarity with victims of all kinds of disasters across the country and in case of other extraordinary situations or difficulties which may be encountered in life such as accident, fire, serious illness and death. The Vefa Group will also take responsibility for providing support in any adversity which our colleagues may be exposed to either individually or with their families.
Ziraat Katılım presses ahead with its social responsibility activities throughout Turkey through the Vefa Group. In the wake of the earthquakes which struck Elazığ and Malatya in 2020, food parcels were distributed to families in need in the earthquake region, and in the districts of Kâğıthane, Başakşehir, Ümraniye, Sultanbeyli, Pendik and Kartal in Istanbul at the same time.
Acting with a sense of solidarity during the pandemic, the Ziraat Katılım Vefa Group distributed tablets in 8 different provinces and 25 districts across Turkey in order to help students receive distance learning due to the Covid‑19 pandemic. The activities of the Ziraat Katılım Vefa Group within the scope of social responsibility will continue in the future.
NEW RECRUITS JOIN OUR HUMAN RESOURCES.
Ziraat Katılım enriched its human resources, which it regards as its most valuable asset, with new participations in 2020.
In 2020, a year in which we rapidly expanded the organizational structure of our bank, 177 new colleagues joined us in line with the needs of our branches and Head Office departments, and the number of our personnel reached 1,261 by the end of the year.
In 2020, 11 new branches were added to the Ziraat Katılım branch network in Turkey, with one more branch abroad, taking the total number of branches to 105.
WE THANK ALL OUR STAKEHOLDERS FOR THEIR CONTRIBUTION TO OUR ACHIEVEMENTS.
Ziraat Katılım will maintain its devoted efforts to further increase our contribution to the real economy within the framework of our values and ethical principles.
We have determined the production of increasing value for the Turkish economy and supporting sustainable development in multiple faceted ways as our ultimate goal. In line with this goal, we will resolutely press forward with our projects to expand the participation finance system.
On behalf of myself and the Ziraat Katılım management team, I would like to thank all of our stakeholders, especially our employees, who have contributed to the successful results we have achieved.
Respectfully,
Metin ÖZDEMİR
CEO
