2011 annual report 2011 annual report - Garanti Bankası

Chairman’s LetterDear Stakeholders,After losing momentum with the earthquake inJapan and upsurges in commodity prices in2011, the global economy entered into a state ofdistress once again as the European debt crisisdeepened. The crisis in the euro zone indicatesa prolonged stagnation. The euro zone debtsustainability issue being political as much aseconomic as opposed to the 2008 crisis makesit more difficult to resolve in the short term. In thebackdrop of the current economic outlook wherethe European economy is showing signs ofrecession and the US economy is recovering ina slow pace, it will be inevitable for the emergingeconomies to be negatively affected as well.In a period of increased risks for the worldeconomy, the Turkish economy backed by itsstrong growth figures in the last two years, hasshown that it has come out of the global crisishonorably. With the contribution of partiallyincreasing foreign demand to the growth trendwhich has been mainly driven by domesticdemand, Turkey is also expected to reach a highgrowth performance in 2011. However in 2012,a slowdown in our national economy in parallelwith the global economy will be consistent interms of reducing risks. As the world economy isput to further tests, cautious targets, along withcomprehensive, medium-term and large-scalestructural reforms in an attempt to overcomethe country’s primary issues, has formed thedynamics of the credible long term prospects ofTurkey.Recent indicators for the Turkish banking sectorreveal that the financial sector remains robustand continues its healthy growth. More rapidrecovery of emerging economies comparedto the developed countries has strengthenedcapital flows into the emerging economiesand increased the domestic loan demand. Weare witnessing a reduction in the rate of nonperformingloans as a result of better lendingterms and low interest rates, combined withthe decreased unemployment rate and theborrowers’ improved ability-to-repay. Despite theimprovement in the quality of loans, profitabilityratios have decreased as a result of increasingcompetitiveness, but still they remained at higherlevels compared to other countries.We are going through a phase characterized bythe unresolved debt crisis and political instabilityin the regions surrounding our country. In thisperiod of economic and political instability,Garanti Bank was able to quickly adapt to thechanging conditions and dynamically managedthe ongoing crisis. Currently, Garanti hasbecome not only Turkey’s leading bank, but isalso seen as one of the most successful privatebanks within the region. We are continuing ouroperations and take solid steps with the vision ofbecoming Europe’s best bank in the future with apartner that shares our vision and adds value toour Bank with its experience in both developedand emerging markets.In a period of increasing uncertainty in the globaleconomy, it has become more critical to keepup with the new developments across theglobe and form future strategies accordingly. Inthe present conjuncture, Garanti succeeded incompleting 2011 as the most profitable bankwithin the sector, through the right steps it hastaken and to the forward-looking policies it haspursued. Our Bank will maintain its pioneeringposition in the sector, drawing on its innovativeand creative products, its dynamic structure, andits developing technology infrastructure. I wouldlike to thank our employees for their valuablecontribution to our Bank’s success, our loyalcustomers, and our social stakeholders for theirsupport.Sincerely,Ferit F. ŞahenkChairmanBoard of Directors16 GARANTI BANK 2011 ANNUAL REPORT