CEO's Message
As we move past another year, I would like to say how honored I am to share Akbank’s success with you, our distinguished shareholders.
This past year all of us continued to strive toward our common goal of becoming the most valuable, stable and innovative bank in Turkey. With that always in mind, we developed new products and channels best able to respond to the needs of our customers. These include the ‘Mobile Phone Credit’ able to approve credit in just three minutes, ‘Big Red House’ branches and a web portal designated only for the delivery of mortgage loan services, Credit Express branches dealing with consumer loan services and Neo bank card, a pioneer in the sector with its unique features.
This year again, we have maintained our position as the most profitable private bank in Turkey with a net profit of YTL 1,600 million and a gross profit of YTL 1,936 million. Akbank’s after-tax profit stood at YTL 1,600 million; in 2006, after YTL 336 million tax provision. The Bank’s net profit increased by 9% compared to the figures from 2005.
In the last year, loans totaled YTL 28.3 billion, an increase of 27% attributed to rising consumer loans and loans extended to small and medium-scale enterprises (SMEs). Akbank’s SME loans have increased by 47% compared to last year, now reaching YTL 11.3 billion. The share of consumer and SME loans in our total loan book is 73%. Thanks to free equity capital totaling YTL 5.4 billion, we were able to provide more loans to customers and expand our loan portfolio faster. The growth potential of small and medium-scale enterprises in the rapidly growing Turkish economy has encouraged us to combine a customer-focused philosophy with our corporate banking strategy to develop new loan and cash management products.
By the end of 2006, Akbank’s assets demonstrated a growth of 9% to total YTL 57.3 billion. Akbank has raised its return on equity to 24.4% and maintained its capital adequacy at the high level of 20.7%, in spite of its strong loan growth. The ratio of loans to total assets increased to 49.5%, from 42.6%, for the same period. In spite of these developments, the Bank’s non-performing loans ratio remains low, at around 2.1%.
According to the year-end figures for 2006, Akbank’s total deposits reached YTL 34.2 billion, an increase of 8%; Turkish lira deposits showed a 9% rise. These enhancements are an indication of the confidence our customers have in our bank. Our CRM practices have also served as an important pillar of support for Akbank during the year.
The strategic partnership with Citigroup has opened new doors for growth and expansion at Akbank. There are synergies, expanded know-how and market advantages from the joint venture we established with a world brand. The agreement brings about a strategic collaboration to pursue new commercial activities, joint investments and to share expertise and technology. Akbank will be able to provide its customers with world-class products and services.
For the last five years, Akbank has undergone transformation and has strengthened its leadership in the banking sector. As Akbank’s management, our primary objective is to create and implement strategies that will maximize the Bank’s share value; presently 31.6% of the Bank’s shares are quoted on the Istanbul Stock Exchange. The market value of the Bank, as of December 31, 2006 stood at US$ 13.5 billion. At the end of 2006, Akbank was the corporation with the highest market value on the ISE.
Our goal is to exhibit profitable, steady growth and to create greater added value for our shareholders by differentiating our Bank from the competition. To attain these goals, we continually invest in human resources, distribution channels and our brand. I am convinced that through the combined efforts taken with our shareholders, employees and economic and social stakeholders, we will continue to make this a success story.
I would like to thank you all and hope that the synergy we have created together brings new achievements to our country and to Akbank, the innovative power of Turkey.
ZAFER KURTUL
PRESIDENT AND CEO
