Message from the Chairman

The US Federal Reserve (Fed) lowered its federal funds rate by a total of 75 basis points in 2025, in line with expectations, bringing it to the 3.50%-3.75% range. The European Central Bank (ECB), after cutting interest rates by a total of 100 basis points in the first half of the year, kept them steady in the second half, consistent with annual inflation rates remaining close to the ECB's 2% target. Both the Fed and the ECB reiterated that they are not bound by a set interest rate path and will follow a data-driven approach to determining their monetary policy stance. Meanwhile, the Chinese government announced it will continue implementing comprehensive monetary and fiscal stimulus measures to counter the slowdown in the country's economy, and plans to continue these policies in 2026.

Despite global and regional uncertainties and geopolitical risks, the Turkish economy has maintained uninterrupted growth for the past 21 quarters. In the coming period, a gradual recovery in growth is anticipated, driven by the expected rebound in our trading partners and more favorable financial conditions. Meanwhile, the unemployment rate has remained in single digits for nearly three years.

In 2025, despite challenges in global trade, geopolitical tensions, and increased gold imports, the annual current account deficit remained at sustainable levels, supported by the resilient structure of exports, increased tourism revenues, and moderate commodity prices, while the current account deficit as a percentage of national income continued its positive trend below historical averages.

Despite high earthquake-related expenditures, the budget deficit decreased compared to the previous year thanks to the government's continued fiscal discipline in public spending to support the disinflation process, effective income policies, and regulations to reduce the informal economy. Furthermore, the budget deficit/GDP ratio was at a more favorable level than the Medium-Term Program forecasts.

With the continuation of a cautious stance in monetary policy, the delayed effects of steps strengthening fiscal discipline, stable exchange rates, increased demand for Turkish Lira assets, and improved inflation expectations, the disinflation process continued, and the year 2025 ended with an annual CPI of 30.89%. In the coming period,it is projected that the decline in inflation will continue through a holistic approach and coordinated steps taken with determination across monetary, fiscal, and income policies.

The Central Bank of the Republic of Türkiye (CBRT), supported by the room for improvement in inflation in 2025, gradually reduced the policy interest rate by a total of 700 basis points throughout the year, and implemented a further 100 basis point reduction at its first meeting of 2026. In addition to macroprudential measures, the CBRT continued its selective credit and quantitative tightening practices to support the monetary tightening process.

Driven by international investor interest in Türkiye and the increasing investment of Turkish Lira-denominated assets by domestic residents, the Central Bank of Türkiye's reserves have reached historical record levels. Positive economic developments and strengthening financial stability, supported by the implemented economic program, have led international credit rating agencies to continue upward revisions to Türkiye's credit rating and outlook. Along with strengthened financial stability, the improvement in Türkiye's CDS risk premium has continued, falling to its lowest levels since 2018.

Globally, uncertainties and volatility are expected to remain high, making a robust banking sector increasingly crucial for our economy. As the leading bank in the sector, we continue to develop our service network and strengthen our financial structure to secure the resources our economy needs, to channel these resources effectively into higher value-added areas, and to provide financial services to the areas in need and to our customers in the fastest and most convenient way. Following 2025, a year in which we achieved positive financial results within the framework of our efficiency and customer-focused business model, we will continue our efforts to provide even greater added value to our economy and our customers within the framework of our strategies.

On behalf of our Board of Directors, I would like to thank our employees and customers, who have made the greatest contribution to the successful work of our bank.