Report of the Board of Directors
Welcome to the 86th Ordinary General Assembly of our Bank.
Before presenting the Board of Directors Report, Auditors’ Report and the Profit and Loss Statement including the operating results of the financial year 2009 for your review, we respectfully greet you.
2009 was a year in which the adverse effects of the global crisis were intensely felt in our country, as well. Especially due to the serious slowdown in the economy in the first half of the year, the economy contracted by 8.4% in the first 9 months of 2009. In 2009, current account deficit decreased significantly compared to previous year, to USD 13.9 billion, in parallel with the contraction of foreign trade deficit. On the other hand, the weakening domestic demand exerted a downward pressure on inflation, and at the end of 2009, inflation declined to 6.53% according to Consumer Price Index (CPI) and 5.93% according to Producer Price Index (PPI).
Banking sector continued to grow in 2009, despite the contraction in the economy. Due to the decrease in demand for loans, share of securities as a percentage of total assets increased. Beginning from the second quarter of the year, consumer loans and personal credit card loans increased, although at a limited rate, as a result of the financial incentive packages aiming to increase domestic demand, in the same period short term loans as well increased at a limited rate. Due to the slowdown in the economy and increasing unemployment, asset quality was one of the main focuses of the banks throughout the year. While the volume of deposits in the sector increased at a limited rate, Central Bank’s substantial policy rate cuts during the year contributed significantly to the decline in funding costs.
and our profit was TL 2,372,407 thousand.
Recent indicators show that a partial recovery in the economy has started and the recovery will continue gradually in 2010. In the upcoming period, in line with the economic recovery, it is anticipated that loan volume will increase and there will be a tendency of improvement in problems regarding asset quality of the banking sector.
We hereby submit our Balance Sheet and Profit and Loss Statement within our 2009 Annual Report for your examination and approval.
We would like to express our gratitude to Turkish public for their unswerving trust in our Bank, to the institutions of the Turkish State for their continuous support, to our employees for unstinting contribution, and to our distinguished shareholders who have honored this General Assembly with their presence.
TÜRKİYE İŞ BANKASI A.Ş.
BOARD OF DIRECTORS