2011 annual report 2011 annual report - Garanti Bankası

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Assessment of Financial Position, Profitability AndDebt Payment CapabilityGaranti’s consolidated net income reached TL3 billion 345 million 806 thousand in 2011.The Bank’s commitment to sustainability wasproven with its track record of delivering anaverage of 25% return on equity in the last 5years. Garanti reinforced its solid stance withthe remarkable performance achieved in 2011.The Bank delivered an ROAE (Return On AverageEquity) of 20% in 2011.Today, Garanti Bank has leading position inmany of the segments it operates in. Withits customer oriented approach; Garantiprovides services to approximately 11 millioncustomers through an extensive distributionnetwork that includes 918 branches, over3,250 ATMs, Turkey’s largest financial CallCenter, and the state-of-the-art internet andmobile banking platforms. With its massivepayment systems infrastructure consisting ofmore than 15 million debit and credit cardsand 460 thousand POS terminals, Garantitoday manages Turkey’s largest merchantnetwork via its innovative products and services.Garanti, with its 68 new branch openings in2011 aiming to provide greater access to andconvenience for its customers, continuedto be the driver of the economy by itsuninterrupted support. Garanti’s assetsincreased by 20% in 2011, reaching TL 163billion 475 million 323 thousand; while thesupport provided to the economy throughcash and non-cash lending reached TL 112billion 971 million 518 thousand. Expandingits cash loans by 30% in 2011, Garantiincreased its share of loans in assets, by 410basis points, to 54.5% of assets. Garanti, withits disciplined growth target, did not pursuemarket share increasing efforts based purelyon pricing competition and in this respect,has been selective in terms of growth so as tomanage the increasing pressure on margins inan effective and balanced manner. Garantisustained its leadership in consumer loansincluding credit cards and preserved itsleadership position as the largest lenderin mortgages in Turkey. General purposelending expanded by 44% in 2011 resulting inincreased market share of 40 basis points yearon year, which in turn, further reinforced theBank’s market position.Garanti sustained its sound asset quality in2011. Collections normalized but remained stillstrong and the nominal non-performing loan(NPL) stock* declined by 9% versus sector’s3% increase, which is a clear evidence of theBank’s success in collections since 2008.Garanti’s NPL ratio decreased from 3.1% in2010 to 2.1% in 2011.Garanti stands out with its well-diversifiedand solid funding structure. In 2011,customer deposits increased by 18% ascompared to 2010 and rapid expansion ofthe customer base continued. As a naturalconsequence of Garanti’s successful businessmodel, which has been solidified through theBank’s effective strategy to capture widercustomer base, high demand deposit levelswere maintained. As of the end of 2011,the share of demand deposits in totaldeposits increased to 22%. Garanti realizedtwo Eurobond issues worth USD 800 millionin total, with 5-year and 10-year maturity. Thefixed rate tranche with a nominal value of USD500 million is the longest tenor Eurobondissued by a private company in Turkey. TheUSD 300 million floating rate tranche becamethe first and only floating rate Eurobondissued in Central and Eastern Europedenominated in USD for the year. Garantifurther supported its funding structure with TLbond issuances and managed the cost andmaturity of its TL funding effectively with TL 2.5billion outstanding TL bonds.In 2011, Garanti exercised its option tosell 20% of Eureko Sigorta to Eureko B.V.In addition, the Bank sold its stakes inMasterCard and Visa and the total proceeds ofTL 246 million was utilized to further reinforceits sustainable customer oriented bankingstretegy.In 2011, Garanti sustained its strongcapitalization ratios due to high internalcapital generation capability. As of year-end2011, the Bank’s consolidated capitaladequacy ratio stood at 15.8%. Free fundsgrew by 18.5% on an annual basis, and theBank funded around 1/5 of its assets throughfree funds.Garanti’s dynamic balance sheet managementwith timely repricing resulted in limited margincontraction in 2011 despite regulatorypressures and lower interest rates. Garanti,prioritizing its customer-oriented bankingstrategy, managed to grow refraining fromirrational competition. With its continuousimprovement culture and its visionary movesthat lead the sector, Garanti contained itsOPEX growth below inflation while expandingits branch network.Based on BRSA consolidated financials*Adjusted with write-offs in 2008,2009,2010 and 2011.26 GARANTI BANK 2011 ANNUAL REPORT
Garanti’s Credit RatingsRatings of Garanti Bankrepresent the highestratings assessedfor Turkish Banks.The Long Term TL and FCratings assessed by FitchRatings, the Long Term TLrating by Moody’s andThe Long Term TL and FCratings by JCR EurasiaRatings and standalonecredit profile(bbb-) by S&P representinvestment grade.Long Term FCLong Term TLLong Term FCLong Term TLFItch RatIngsMoody’sStandard & Poor’sLong Term FC ICRLong Term TL ICRBBB-BBB-Outlook:StableBa3Baa1Outlook:PositiveBBBBOutlook:PositiveJCR EurasIa RatıngsYou may find detailed informationabout Garanti’s credit ratings in theconsolidated financial statements6.1 and unconsolidated financialstatements 6.2 or you may followGaranti Investor Relations web sitefor any developments.Long Term International FCLong Term International TLBBB-BBBOutlook:Stablehttp://www.garanti.com.tr/investorrelationsGARANTI BANK 2011 ANNUAL REPORT 27
Page 1 and 2: 2011 ANNUAL REPORT
Page 3 and 4: IntroductionFood is an essential ne
Page 5 and 6: DRT Bağımsız Denetim veSerbest M
Page 8 and 9: 6 GARANTI BANK 2011 ANNUAL REPORT
Page 12 and 13: Main Pillars of our StrategyFocus o
Page 14 and 15: Milestones in Garanti’s HistoryFo
Page 17 and 18: will be realized around 8-8.5%. Acc
Page 19 and 20: Letter from the CEODear Stakeholder
Page 21 and 22: Letter from the CEOlife for many ye
Page 23 and 24: “All happiness depends on a leisu
Page 25: Garanti’s Competitive Advantages
Page 30 and 31: Auditors’ ReportTo the General Sh
Page 34 and 35: AwardsHonored with numerousnational
Page 36 and 37: AwardsAwards” Garanti Pension’s
Page 40 and 41: Retail BankingGaranti Bank continue
Page 42 and 43: Private BankingIn line with its hig
Page 44 and 45: SME BankingGaranti acts as an agent
Page 46 and 47: Housing FinanceGaranti offers thefi
Page 48 and 49: Corporate BankingGaranti sustains i
Page 50 and 51: Project FinanceGaranti with itsexpe
Page 52 and 53: Branchless Banking / Alternative De
Page 54 and 55: Call CenterGaranti Bank Call Center
Page 56 and 57: Payment Systems/Credit and Debit Ca
Page 58 and 59: Payment Systems/Credit and Debit Ca
Page 60 and 61: Investment BankingPresenting altern
Page 62 and 63: Insurance and PensionReinforcing it
Page 64 and 65: International BankingGaranti contin
Page 66 and 67: TreasuryMinimizing risks witha bala
Page 68 and 69: AbacusABACUS ensurescentralized,err
Page 70 and 71: Human ResourcesThe first Turkishcom
Page 72 and 73: “Food is our common ground, a uni
Page 74 and 75: GarantiBank International N.V.Succe
Page 76 and 77: GarantiBank MoscowWith its ability
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Garanti SecuritiesGaranti Securitie
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Garanti Asset ManagementGaranti Ass
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Garanti Factoring“Turkey’s Most
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Garanti Payment SystemsReshaping sh
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Garanti MortgageGaranti Mortgagemai
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Garanti TechnologyAs a creator of m
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88 GARANTI BANK 2011 ANNUAL REPORT
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Research and Innovation ManagementP
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an important tool of access for the
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Sustainability and GarantiGaranti t
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Sustainability and GarantiApart fro
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“You can’t just eat good food.
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Summary of the Board of Directors
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Senior ManagementErgun Özen - Boar
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Senior ManagementA. Aydın Düren -
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Committees and Committee Meetings A
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Risk Management PoliciesGaranti Ban
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Risk Management Policiesprocesses a
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Audit Committee’s Assessment of I
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Related Party RisksLoans and other
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“A good cook is like a sorceress
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Corporate Governance Principles Com
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DRT Bağımsız Denetim veSerbest M
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Türkİye Garantİ Bankası Anonİm
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Türkiye Garanti Bankası AŞUncons
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Türkiye Garanti Bankası Anonim Ş
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Türkİye Garantİ Bankası Anonİm
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SECTION ONE - General InformationPa
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Türkiye Garanti Bankası AŞ and I
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www.garantibank.comwww.garantiannua
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