Dear Stakeholders,

In its eighth year of operation, Ziraat Participation maintained its rapid growth in line with its vision of being the industry’s leading participation financial institution, achieving a performance which brought satisfaction to our stakeholders.

As of the end of 2023, our total assets, which represent our balance sheet size, had increased by 80% compared to the previous year to reach TL 384.3 billion. In line with its strategic goals, our bank rounded off the year with steady growth in profitability and efficiency and returned a profit of TL 4 billion.

Continued support for the real sector

Ziraat Participation meets the needs and expectations of its customers by offering the most appropriate solutions and value propositions through the most appropriate channels. It continues its work in line with its vision of becoming an effective participation financial institution in the international markets as well as in its region.

Ziraat Participation continued to contribute to the financing of the real sector, especially SMEs, in 2023, with the cash funds provided by Ziraat Participation as of the end of the year marking an increase of 79% when compared to the end of the previous year, to reach TL 259.8 billion, with a 73% increase in non-cash funds to TL 78.3 billion. With these results, the total resources provided by the Bank to the Turkish economy reached TL 338 billion.

As of the end of 2023, the funds collected had increased by 76% compared to the previous year to reach TL 304.4 billion.

A focus on growth while maintaining asset quality

Ziraat Participation’s strategy is based around achieving growth while maintaining and improving asset quality. In this regard, the existing allocation and fund allocation processes, along with early warning and risk monitoring infrastructure, have been developed by taking account of market dynamics and changing risks and opportunities.

TL 304.4 billion
As of the end of 2023, the funds collected increased by 76% compared to the previous year and reached TL 304.4 billion.

In line with its strategies of sustainable growth and customer focus, the volume of funds provided continued to grow rapidly in 2023. With risk management policies implemented uncompromisingly in this period, the non-performing loans ratio remained at 0.8%, well below the sector average. Our capital adequacy ratio, another important indicator of our financial health, ended 2023 at 15.10%.

Lease certificate issuances reach TL 70.3 billion

Ziraat Participation successfully completed the issuance of 33 lease certificates with a total sum of TL 7.1 billion in 2023. Ziraat Participation, which plays an active role in the capital markets as a part of its strategy to enrich its resource structure, along with its subsidiaries, Ziraat Katılım Varlık Kiralama A.Ş. and ZKB Varlık Kiralama A.Ş., received approval from the CMB to issue lease certificate issuance ceilings of TL 30 billion, TL 15 billion, TL 400 million, TL 250 million and TL 200 million in order to issue lease certificates in TL in the local market. The total amount of issuances of various amounts carried out by the Bank since it entered operation had reached TL 70.3 billion by the end of 2023.

A first in international Sukuk issuance

Ziraat Participation signed the first international sukuk issuance by a public participation bank in Turkey, providing USD 500 million worth of resources from international markets. This Sukuk transaction, which has a three-year maturity, provided a positive contribution both to the Bank’s balance sheet structure and its resource diversity and maturity structure. Described as a strong first issue for Ziraat Participation, 135 investors from 24 different countries demonstrated interest in the issuance, which was five times oversubscribed.

USD 500 million
Ziraat Participation raised funds worth USD 500 million from international markets with the first international Sukuk issuance by a public participation bank in Turkey.

Our Somalia Branch opens.

Ziraat Participation, which broke new ground in Turkish banking history with its Sudan Branch which started operating in the African continent in 2020, opened its second foreign branch in Mogadishu, the capital of Somalia, on 29 October 2023, marking the 100th anniversary of the founding of our Republic. The Somalia Branch will serve as a bridge in the development of foreign trade between Turkey and Somalia and in strengthening economic relations.

Large scale support for businesses affected by disasters.

Within the scope of the protocols signed between KOSGEB and Ziraat Participation, Financial support was provided to businesses affected by natural disasters such as rains, floods, storms and landslides in the provinces of Amasya, Kastamonu, Sinop, Samsun, İstanbul (Başakşehir, Şile and Ağva), Bursa (Gemlik), Diyarbakır (Bismil), Batman (Central), Zonguldak (Alaplı and Ereğli) and Düzce, as well as to the businesses damaged by the wildfires in Bursa’s İnegöl district.

Emergency working capital financing for 81 companies

In 2023, the Islamic Development Bank (IDB) extended resources to Ziraat Participation in return for a Treasury guarantee provided by the Republic of Turkey.

A total of EUR 45 million was provided to 44 companies in the first tranche of the Emergency Working Capital Financing package, created in this context and aimed at supporting SMEs operating in Turkey, with EUR 32 million provided to 37 companies in the second tranche of the resource package.

On-demand Export financing for members of exporters’ associations

In line with the goal of contributing to the Turkish economy, the on-demand Export Finance product was designed and brought into use to help SME and non-SME member businesses of exporters’ associations access long-term financing with appropriate profit share rates. Within the scope of this product package, USD 48 million was made available to resource companies in 2023.

“Instant Financing” product also made available for the service sector

Ziraat Participation has also made use of the Instant Financing product in the service sector, which allows individual customers to easily and quickly finance the products they want to buy from businesses that have agreements with the Bank, through digital channels at any time of the day, without having to go to the branch. Thus, individual financing began to be provided within the scope of the ijarah contract for transactions in service sectors such as education, hajj-umrah and tourism.

TOGG vehicle financing product now available

Within the scope of the cooperation agreement signed between Turkey’s Motor Vehicle Enterprise Group Inc. (TOGG) and Ziraat Participation, the TOGG Vehicle Finance product was developed to meet the financing demands of real persons seeking to purchase the national motor vehicle brand, TOGG. A total of TL 237 million was provided to 352 customers within the context of this product in 2023.

A range of environmental financing products

Considering the benefits such as financing the green transformation, reducing the country’s economy’s dependence on foreign energy resources, contributing to sustainable development goals and minimizing environmental damage, “Environmental Financing Products within the Scope of Sustainability” have been made available to our customers in order to support efforts in this direction.

Implementation of agricultural financing

We launched our “Agricultural Finance” product in line with the principles of Participation Banking, becoming the first participation bank to implement state-supported agricultural financing.

With the aim of developing agricultural production activities in our country, various forms of financial support are provided for conscious, high-quality and efficient production by expanding agricultural land, strengthening animal husbandry, minimizing imports and maximizing exports in agriculture. The aim is to develop agriculture in our country, ensure mechanization and modernization and increase the efficiency and production of agricultural products within the scope of a sustainable ecosystem.

TARSİM policies introduced

State Supported Agricultural Insurance contracts are issued on a participation basis through member insurance companies and/or agencies which hold a participation insurance license, and all kinds of business and transactions related to state supported agricultural insurance policies issued on a participation basis are carried out within the framework of participation principles under the supervision of the Advisory Committee. In this vein, the systemic integration for issuing TARSİM policies to our bank’s customers was completed and the policies were made available.

An expanding range of insurance products

In 2023, Start-up SME Insurance, Limit Protection Insurance, Corporate Package Insurance, Individual Assurance Insurance, Personal Accident Insurance, Entrepreneur Support Insurance, Farmer Support Insurance, Farmer Friendly Insurance, Agricultural Finance Life Insurance and State Supported Credit Insurance products were prepared and made available to our customers.

Maintaining our leadership in financial leasing products

Ziraat Participation maintained its leadership in the participation finance sector in financial leasing transactions, which bring a range of advantages in areas such as maturity, guarantee structure, VAT and payment options in line with cash flow.

First phase of our SME value proposition project completed

We continued to increase our support to the real sector, focusing on producers and exports. Work on the first phase of our SME Value Proposition project, which will meet the financial needs of SMEs on a 360 degree basis with our products and services, has been completed. In this vein, a number of innovations have been introduced in the areas of new cash transactions, foreign trade, insurance and energy consultancy in order to bring ease to our customers’ financial transactions.

The “SME Participation Digital” brand

The “SME Participation Digital” brand was developed to facilitate our customers “ERP Solutions”, “Open Banking” and “Smart Cash Flow” financial transactions. SME Participation Digital allows customers to create e-documents (such as invoice issuances, storage, tracking) while offering preliminary accounting (such as account statements, stock tracking, barcode definition and credit card withdrawals), payments (instant withdrawals, payment link sending and invoice matching) and products and services for bank account transactions.

New salary protocol with the Presidency of Religious Affairs

An additional new salary protocol was signed between the Presidency of Religious Affairs and the Bank in 2023, covering a total of 45,880 personnel in 349 mufti offices. This protocol, which enriches the Bank’s customer portfolio, marks an important step towards deepening customer relations.

Important innovations in information systems and digital banking

With the instant market application, our customers were able to perform transactions and place orders based at real-time rates. With the improvements carried out in the Internet Banking module regarding DBS, companies and dealers have been able to perform transactions such as uploading, reporting, cancelling and the payment of invoices in a shorter space of time. Our device activation structure has been updated to enable faster login and transactions using the device identification method through the Katılım Mobile app. Customers may now perform their transactions quickly and safely through Mobile app and the Internet Branch. The Katılım Mobile Send Document function was offered to our customers for the completion of missing documents or documents which need to be updated, which can now be done through the Katılım Mobile app without going to the branch. The Somalia corporate website is also now available for our customers. The Forgot My Password, Get Password, Sim Card Verification and Mobile Phone Number Update transactions can also be completed over the Katılım Mobile app using the national ID card and facial recognition. Informative boxes (stories) have been added to the Katılım Mobile app for marketing activities. Customers may also monitor their bank accounts from other bank applications and transfer money from these accounts.

Even more valuable human resources with our new employees

In 2023, Ziraat Participation developed its human resources, its most valuable asset, with new entrants. In our rapidly growing organizational structure, 674 new colleagues joined us to meet the growing needs of our branches and head office units, with our number of personnel reaching 2,430 by the end of 2023.

In 2023, a total of 34 domestic branches as well as the Somali branch abroad were added to the Ziraat Participation branch network, raising the number of branches to 191.

A big thanks to all of our stakeholders who contributed to Ziraat Participation’s performance in 2023

We continue to work with devotion to increase our contribution to the real economy, in line with our values and ethical principles, which are the reflection of our deeply rooted corporate culture.

While we press ahead determinedly with our projects, strictly adhering to our mission of popularizing participation banking, our ultimate goal is to generate increasing value for the Turkish economy and support sustainable development in all aspects.

On behalf of myself and the management of Ziraat Participation, I would like to thank all of our stakeholders, especially our employees, who walk with us to the future and who contributed to our success in 2023, when we celebrated the 100th anniversary of our Republic with great enthusiasm as a nation.

Kind regards,