Türkiye Sinai Kalkinma Bankasi A.S.

Thank you, Jos, and good evening, dear participants. Welcome.

Thank you for joining our financial results webcast by the end of 2025. On this call, we are also going to disclose our 2026 expectations and guidance by the end of our presentation.

The first slide, where this demonstrates our year-end performance versus our guidance figures, we are glad to see that our realizations are well aligned with our projections. We did actually commit to our growth strategy and development mission throughout the year.

On the top of $1.5 billion of loan disbursements during the first 9 months of last year, we disbursed nearly an extra $500 million of cash loans to Turkish economy during the last quarter. As a result, we closed the year with 11.2% of FX-adjusted loan growth as we guided.

Our core net interest margin expanded during the year, whereas the security side had a constant contribution throughout the year, driven by our strategic asset management and our relatively resilient loan spreads, which stayed solid against even the market competition, we delivered 5.6% of net interest margin, which actually over beat our guidance figure. To remind, fees and commissions are generated from mainly 3 business lines of the bank, and we could name these like corporate finance, advisory and noncash loan operations.

On advisory and noncash loan operations front, we have successfully realized our targets. In terms of corporate finance activities, last year was a bit muted as communicated with yourselves during previous webcasts.

As a result, we ended up 17% below the 2024 year-end net fee income, which will actually translate into a low base for this year, where we project more favorable backdrop for capital markets. Our 29.3% cumulative ROE continued to be an example of the highest ROEs in the industry, as you will recognize.

And 2025's strong earnings performance was mainly driven by consistently solid NII generation, strong collections both in the Stage 2 and Stage 3 and also participation income contribution. And on top of that, pre-provisions gradually being released amounting to TRY 950 million throughout the year.

Still, we would like to note that we have TRY 1.1 billion free provisions in place to support our revenues throughout this year. Had we released the rest, the subject figure during last year in 2025, our ROE would have been at around 32%.

On the efficiency side, OpEx growth was in line with the sector and above the average CPI as guided. To remind, main driver of OpEx is human resources expenses.

Consequently, our cost-to-income ratio was flat on a quarterly basis, standing at 17.1%, which is still the lowest in the industry. Superior solvency ratios, which are well above the market was driven by our consistent and robust profitability.

We are gladly closing the year with 20.3% capital adequacy ratio and 19.2% Tier 1 ratio, excluding the BRSA's temporary measures, while also achieving a more than 11% of FX adjusted loan growth in addition to more than 20% of Turkish lira depreciation. Our asset quality front, we booked a large ticket NPL, which was transferred to Stage 2 during the previous quarters.

As a result, the NPL ratio rose to 2.4%, which is particularly in line with our guidance level. In addition, the problematic loans representing Stage 2 and 3 in the total loan book stood at around -- at actually 9.6%.

Given this inflow, the cumulative net cost of risk, excluding the currency impact was read at 55 basis points by the year-end, again, aligned with the expected figure. To note, we do not foresee this shift to turn into a trend market position.

Next slide shall deep dive into the last quarter's developments. Our new cash loan disbursements supporting Turkish economy reached almost $2 billion, given the accelerated FX loan growth during last quarter, bringing our FX-adjusted loan growth to 11.2%, as mentioned.

And the main finance areas with the sustainable development focus were renewable energy projects, energy storage investments, renewable energy resource area projects, capacity investments in manufacturing sectors, along with the restructuring of the earthquake affected regions and inclusiveness focused projects. With the climate finance funding agreement signed under Ministry of Treasury and Finance Guarantee with KfW amounting to EUR 250 million.

And the partial credit guarantee facility guaranteed by IBRD with the counter guarantee of the Ministry of Treasury and Finance secured through certain FIs in the amount of EUR 300 million. The total DFI funding represented to be $1.1 billion, which has been a record year.

And when we include this syndication facility, Eurobond issuances, both in benchmark size and certain private placements, total funding reached to a level of $1.8 billion. Our distinguished profitability where NIM stood at 5.6% and ROE at 29.3% continued to decouple from the sector.

Given our long-term nondeposit funding base, lease sensitivity to Turkish lira interest rates as well as strategically positioned investments in securities portfolio and also loans via our asset and liability management, our profitability figures continues to stay resilient enough. As we have just noted, we have been gradually reversing our free provisions with 4.5%.

Still, we have one of the highest coverage ratios at an additional TRY 1 billion pre-provision stock in Turkish lira terms of core stock as a buffer and a contributor to our profitability going forward this year. Being committed to expand fees and commissions to income to support banking revenues, we have successfully closed 165 advisory projects in diverse sectors and have performed well on noncash loan business as well.

And last but not the least, our comfortable solvency buffers enable us to stick to our growth strategy and meet our targets. Capital adequacy ratios supporting our internal capital -- supported by our internal capital generation capacity shall continue to stay well above the regulatory and sector levels going forward.

This slide depicts quarterly and yearly earnings performance year-on-year and quarter-on-quarter earnings performance and the superiority in return on equity of the bank. Thanks to our business model focusing on investment loans, TSKB's profitability decoupled positively from the sector for the last 3 consecutive years, which translated into above market levels of ROEs.

Posting TRY 2.1 billion of quarterly income, TSKB reached a cumulative year-end figure of TRY 11.4 billion with 12% year-on-year pickup in 2025. Quarterly net income dropped by 25% versus the previous quarter, given the high provision cost incurred as explained.

Having said that, please note that we have not been affected by the tax adjustments as a sector due to our banking model. To remind, approximately TRY 1 billion of free provisions were reversed during the year with TRY 200 million extra resolved during the last quarter.

The remaining free provision stock amounting to TRY 1.1 billion is going to support our revenues within this year, we do plan gradually reversing them with a cautiously optimistic approach. With the sustained earnings quality, the bank delivered a cumulative ROE of 29.3%, which was going up to 32% when the remaining provisions were totally released.

The performance has been in alignment with our guidance levels. On this page, I would like to go into more detail about the P&L items and explain the main developments of the last quarter, particularly.

Bank's NII, including the swap cost, continued to expand marking a surge of 22% year-on-year and 7% quarter-on-quarter. Behind the strong top line generation, loan spread was solid during the year, and we have started to reap the benefits of our leverage security investments in a timely and front-loaded manner.

To note, our swap book expanded by 50% quarter-on-quarter as we allocated some excess liquidity opportunistically. However, our total swap cost stayed almost unchanged compared to the previous quarter.

Moreover, TRY 844 million of CPI linker income was booked during the last quarter, surpassing in total TRY 3 billion, again, on a cumulative basis. The adjustment from 30.8% of our previous assumption to realized figure of 32.9% added an approximately TRY 200 million extra interest income.

Trading line showed a surge of 74% year-on-year and 365% quarter-on-quarter basis. Substantially increased valuation gains from our private equity funds, including Turkey Green Fund, also contributed this performance.

To remind, we have invested into one important project during last year in TGF, and we continue investing further, which will expand its contribution to our revenues going forward. On the fees front, the cumulative year-end performance was below our projections due to the market conditions, which has been communicated as such so far.

Over this low base, our aim is to generate a substantial growth during this year with the increasing activity in the capital markets on which we will touch upon on the guidance page going forward. Other income includes TRY 200 million of pre-provision reversal where the cumulative amount reached almost TRY 1 billion on the top of strong collection performance within this year.

As a result of resilient top line in tandem with the contribution of provision reversals and strong collections, banking income picked up by 37% compared to the previous year, whereas the quarterly figure was up by 23% on a quarter-on-quarter basis. Cumulative OpEx were up by 53% year-on-year, where the quarterly figure was also up by 20% compared to the last year -- the previous quarter, sorry.

Quarter relief was mainly driven by HR side, human resources side in addition to expenses related with the 75th year anniversary of our bank. The trend is fully aligned with our projections and in line with the banking industry.

It is certainly going to be gradually normalized by time with the improvements in the inflation front. Net banking income continues to expand by 34% year-on-year.

To note, it is also up by 23% on a quarterly basis. Due to the last quarter's loaded provision costs, the cumulative and quarterly provisions are up by 400% levels.

As a result, the total coverage surged from 3.6% to 4.5% quarter-on-quarterly change. Our income from participations continued to contribute to the bottom line with nearly 8% yearly and 20% quarterly increase.

Unlike commercial banks, we do not have any promotional expenses or fixed assets and used to have a consistently stable effective tax rate. Therefore, we haven't seen any negative impact from the withdrawal of the regulation regarding the inflation adjustment.

Consequently, the bank posted a net income of TRY 2.1 billion during last quarter, which is cumulatively up by 12% on a year-on-year basis. On this slide, we will touch upon our well diversified and long-term funding structure in a bit more detail.

As discussed, loan agreements with the DFIs remain to be the main source of the bank's funding pool and continues to dominate our liability base. 2025 has been a record year for TSKB in terms of FX funding activities.

We signed 6 new loan agreements throughout the year through the contributions of MDBs from various and different regions. In addition to the loan agreements signed in the first 9 months of the year, we've been marking the very first collaboration between TSKB and OPEC.

And also the rest of the DFI agreements were to be during the first 9 months like OPEC funds, AIB, Development Bank and EBRD. In December, we have signed a new loan agreement in the amount of EUR 250 million with KfW as discussed, which support the climate finance team investments and also strengthen the economic cooperation between Turkey and Germany.

This year also marked another first for us. We secured an RBR partial credit guarantee loan with the inclusion of financial institutions totaling to EUR 300 million.

It's been a very debut transaction for us given the structure type. And as a kind reminder, we have implemented an assessment tool, actually created an assessment tool and implemented this for being the first of its kind.

And the tool not only identifies and measures climate-related risks, but also provides a tailor-made recommendations and suggests actionable steps to our clients. So this will basically enable firms to make informed investment decisions that foster a sustainable and climate resilient transformation.

Please also note that the 100% of the DFI funding obtained during the year has been under not guarantee, Ministry of Treasury and Finance Guarantee. On top of the DFI agreements, as discussed, TSKB was quite active in Eurobonds and private placement markets and syndicated loans and bilateral loans too.

Thus, total funding from DFIs and FIs reached to $1.8 billion in a record size, which enhanced, of course, our liquidity buffers even further. To note, we have also currently by the end of the year, $982 million worth of nondrawn DFI funding, which are all guaranteed with the teams basically indicating the contribution to climate and environment and inclusiveness.

Our strong liquidity position is very well reflected also by the FX LCR ratio, which is around 58% as of the year-end. This strong capacity shall certainly support our growth targets for the future.

And going forward, we will be very proactive in new team development as discussed within the scope of climate mitigation adaptation, new incentive mechanisms and by the Ministry of Industry and Technology and also job creation, while also scaling our multilateral and bilateral FI funding activities. This slide is talking on the bank's healthy growing asset composition.

Total assets as of the fourth quarter have reached TRY 326.7 billion with an increase of 7% compared to the third quarter and nearly 41% on a yearly basis. In line with our business model, assets mainly consist of loans with a share of 72%, followed by a strategically managed securities portfolio with a share of actual limited share of 16%.

Consistent with our growth targets for 2025, total loans have expanded to nearly TRY 236 billion, reflecting an FX adjusted growth rate of 11.2%. With this realization, the 3-year average growth rate of the bank has been nearly at around 10%.

The currency breakdown of our loan portfolio is, as you know, primarily in FX terms, accounting for 94% with Turkish lira loans comprising just 6% of the total loan portfolio. In terms of currency composition of the loans, the preference changed in favor of euro-denominated loans during the year.

As a result, the share of euro loans reached 52.9% from nearly 42% compared to the previous year. We could say that these are well adjusted and secured on the funding base as well in terms of the currency breakdown, currency denomination breakdown.

When we look at the types of loans in our portfolio as a development bank, investment loans corresponded to the largest portion, representing 81% of the total book. As such, we would like to kindly remind that the bank's loan growth targets were not adversely affected by the FX loan cap and some other relevant temporary regulations to this end.

Our target is to continue our focus on sustainable development investments and expand our loan book by another low-teen figures going forward, which we will be explaining on the guidance page. And we do not foresee any change in the balance sheet composition either in terms of loans and securities and subsidiaries.

We will continue with the details of our loan book on this slide. In the final quarter of the year, we continue to maintain our strategic focus and our development-oriented lending activities to support the economy.

During the last quarter, cash loan allocation surpassed $1.9 billion, fulfilling our $200 billion -- sorry, $2 billion of year-end target, which corresponds to low teens FX adjusted loan growth for the year, meeting the year-end guidance. Within the total disbursements made last year, energy generation projects had the largest share by nearly 20%.

In the outstanding loan portfolio, electricity generation loans contribute to the largest share with nearly 30%, of which 94% is allocated to renewable projects. To note teams such as inclusive reconstruction of the earthquake affected region, hybrid renewables and distributed solar power plants are tracked under their respective sectors such as metals and machinery, chemistry, plastics as such.

And in both outstanding loan portfolio and disbursement graphs, as you could see on the slide. Again, in line with our long-term targets, SDG-linked loans continue to account over 90% of the total loan portfolio with the teams in the new loan disbursements standing up such as renewable projects, including storage investments, transformation, green transformation investments, circular economy projects.

We are also enabling technologies efficiency -- energy efficiency projects and capacity increasing investments in manufacturing industry have been also important. Regarding project finance loans, renewable energy resource areas and certain infrastructure projects were also with us.

Throughout the year, we monitored our net zero PET and performance temperature scores very closely. In that sense, last year has been a year of first.

In the first quarter, we extended our first transition loan to a cement company. In the second quarter, our first project finance deal in agriculture benefiting from geothermal energy was also dispersed to enhance access to sustainable and safe food systems while also promoting women's empowerment.

During the third quarter, consistent with our important role in financing Turkiye's renewable capacity, we signed 2 major renewable energy loan agreements as well as energy resource area project amounting with project amounting with a blue chip company actually. And in the fourth quarter, we financed the capacity enhancement investment of one of the largest renewable projects in Turkey.

Going forward, TSKB will continue to support Turkey's sustainable development with investment focus on required areas as transition and mitigation, valuable job creation, inclusiveness and climate adaptation as well as the contribution to the earthquake affected areas. This slide shall focus on the bank's asset quality.

With 9.6%, our bank's total problematic loans ratio continues to remain below 10%, which is the lowest in the sector. Despite the 2 files were transferred to Stage 3 during the last quarter of the year, NPL ratio still remained below the year-end guidance of 2.5%.

Additionally, one single file was transferred to Stage 2 during third quarter. We always find it beneficial to highlight that the number of Stage 2 and Stage 3 loans are all -- are very low actually and will continue to be low in TSKB's portfolio.

And all of them are already in operation, and these are also belonging to well-known groups or companies. We would like to also note about our collection ratio.

Our collection ratio has been hovering around 90%. In addition, 100% of our Stage 2 loans and 33% of our NPLs are restructured.

Thanks to our qualified human capital, we have the capacity to monitor these loans very closely and to conduct periodic and ad hoc analysis. And the provisions were increased in each loan group in the last quarter of the year.

There have been also a considerable lift in the Stage 3 provisioning further to a single large filing as mentioned. Moreover, with the additional increases in Stage 1 and 2 coverages, the total coverage ratio of the loan portfolio went up to 4.5% from the last figure of 3.6%.

This is still well above among the peers in line with the bank's prudent approach. In the fourth quarter, we reversed TRY 200 million free provisions following our reversals in the first and the third quarters.

This all adds up to a total reversal of TRY 950 million in the last year. Bank's total free provision stock to remind, is at TRY 1.1 billion by the year-end.

Consequently, the bank's currency adjusted net cost of risk was recorded at 55 basis points. For this year, for 2026, we would like to underline that we are not exposed to any trend in the base case scenario.

We expect to maintain our NPL ratio and net cost of risk levels as reflected within this year, but we will explain it on the last slide. On this page, you can see our security portfolio in a bit detail.

In the last quarter of the year, the share of securities book has slightly decreased to 16% of the total assets, while the composition of the portfolio has changed in favor of Turkish lira and fixed assets compared to the previous year. Share of Turkish securities in total portfolio remains to be above 50%, while the size of the total securities portfolio surpassing TRY 52.5 billion.

As a result of our strategic management, we have been gradually decreasing the share of CPI linkers and investing in high yield fixed income notes as well as floating rate notes with higher spreads. October and October inflation was realized at 32.9%, which was a bit slightly above our assumption of 30.8%.

As such, we booked TRY 844 million CPI linker income, and this was actually up by 32% quarter-on-quarter and making the whole year total amount reading at TRY 3 billion. To note, our October and October 2026 CPI assumption is 24.1%.

In this year, we will continue to closely monitor the markets and continue to strategically manage the securities book to support our income base. Next slide focuses on our successful and structurally sustainable NIM performance throughout the year.

We generated strong and resilient net interest income throughout 2025, thanks to our robust loan spread and front-loaded strategic asset management despite the increased market competition. The net interest income, excluding CPI and swap costs amounted to nearly TRY 4.5 billion during the last quarter, which corresponds to a cumulative increase of 35% year-on-year and 10% quarter-on-quarter.

CPI linker income for the whole year, as mentioned, reaching to TRY 3.1 billion showing a year-on-year drop of 40%, driven by the disinflationary backdrop. This has been well justified by shifting the securities portfolio from CPI linkers to Turkish lira reference notes and floating rate notes.

Swap utilization also picked up in the last quarter opportunistically and total swap costs have been almost flat still during the year and year-on-year basis. As a result, our strategic balance sheet as a result of our strategic balance sheet management, bank's annualized NIM realized at 5.6%, well above our year-end guidance of 5%.

The slight quarter-on-quarter decrease reflects a lower CPI impact of 0.9%, while core NIM was sustained at 4.7%. We expect FX-adjusted loan growth to continue in this year, and this shall further contribute to NII within the year 2.

And we could see some tightening in the loan spreads and the effect of the CPI linkers could come, but we will explore on this on the last slide. Slide, which you see on the screen, focuses on the bank's solvency metrics, which are beyond sector average, reflecting comfortable buffers against partly market volatilities and potential regulatory changes.

In line with the year-end guidance, the bank remained on track to achieve its growth targets for the year, maintaining a clear focus on capital efficiency, delivering risk-adjusted returns and upholding a strong balance sheet. Our capital adequacy ratio moderated by 150 basis points compared to the previous year, mainly reflecting loan growth and higher risk-weighted assets, while the credit risk increased in line with growth and net profit remains resilient and still remaining above the sector average.

In the last quarter of the year, without the temporary measures, bank's Tier 1 and capital adequacy ratios stood at 19.2% and 12.3%, respectively, well above the sector and regulatory requirements. Entering this year, the bank maintains a solvency buffer while contributing to the growth scenario and standing out favorably still against the peers.

Strong capital adequacy continues to underpin again, our long-term growth strategy while resilient asset quality, above sector loan coverage and sustainable earnings generation further reinforces our sustainable solvency profile. As a reminder, the bank holds EUR 1.1 billion in free provisions.

When adjusted for this amount, both Tier 1 and total CAR will increase by an additional 40 basis points. Last but not the least, we would like to conclude our presentations 2025 part with some highlights on sustainable banking.

By the end of the year, SDG-linked loan disbursements have exited $7 billion and with a 2030 target of out of $10 billion. And meanwhile, our climate and environment focused SDG loan disbursements have reached to $1.7 billion, positioning us well to achieve our $4 billion target by 2030.

During last year, we continued to prioritize both environmental and social development, operationalizing 2 focus areas, as discussed, adaptation finance and huge employment. And for each team, we develop internal toolkits to analyze our clients and clients' portfolio and increase our technical capacity and knowledge base as well.

Since 2013, our bank has consistently reported to CDP, carbon disclosure projects, and reflecting a long-standing commitment to climate action and transparency. This sustained approach actually has resulted in our inclusion in the global A list for climate change and water security, while 2025 also marks our second reporting year for the forest team.

In parallel, our sustainability performance continues to be recognized globally and along with external benchmarks. Our bank ranks at 39th overall the Corporate Knights Global 100 Index and List and is positioned first among 4 international banks while being the only Turkish FI represented on the list.

Looking ahead, we remain committed to supporting Turkey's sustainable development by delivering innovative financial solutions and advisory services and while also advancing green and social investments and transformation. On the last slide, you can see our guidance figures and key differentiating areas that will continue to stand out relative to sector in 2026.

Having achieved more than 11% real loan growth in the previous 3 consecutive years, the bank is committed with its sustainable development focused growth strategy. Our aim is to continue low teens real growth rate in 2026, too.

The main focus areas will be as discussed, climate fund finance, such as circular economy adaptation transition and so on as well as renewable energy, including hybrid and consumer investment, storage systems, advanced enabling technology projects, efficiency, energy efficiency infrastructure and inclusiveness. With our earlier communications, we have pointed to a normalization in our profitability in accordance with the improving macroeconomic indicators.

As very well known by the analysts and investors community, ourselves, TSKB is able to generate an average ROE above its cost of equity in the long run due to its distinctive business model. Our long-term funding base dominated by DFI sources also enables us to generate robust net interest margins.

And in 2026, we expect our NIM to be normalized to 4.5% levels. The estimated contraction will also be driven by declining years of CPI linkers, which is not a unique case for our bank.

To remind, we have been mitigating this situation, opportunistically shifting our strategy of the bank investing in Turkish lira on fixed bond securities. 2026 outlook is foreseen more favorable compared to the previous year in terms of capital market transaction, given 2025 low base for corporate finance fees and we basically estimate realizing at least 50% of yearly growth in this front.

We believe this is achievable for net total fees and commissions income going forward. On a network basis, we will also continue to fill our targets in advisory and noncash business lines, too.

Our distinguished and efficient business model enables us to deliver ROEs in the good level of ROEs in the sector. As such, we are expecting 2026 ROE to be around 25% levels.

The operating expenses of the bank is mainly driven by human resources costs. To note, we expect actually our yearly growth to come down gradually with the improving backdrop in a couple of years.

So our 2026 guidance will probably exceed the average inflation. Despite considerable loan growth guidance in alignment with our strong internal capital generation, both CAR and Tier 1 ratio are at record levels of the last decade.

While expanding our loans, we will maintain our sustainable profitability and continue to generate solid internal capital. And as such, our estimated targets of CAR is around 19% and 14% Tier 1 ratio and -- sorry, our estimated target for CAR is around 19% and for Tier 1 ratio, it's going to be 18%, still above the sector levels.

On the asset quality front, we do not foresee a deterioration as discussed in the risk profile or based on any specific sector. As 2026 guidance, we maintain our 2.5% NPL ratio and further to this 50 basis points of net cost of risk target.

So Sadrettin actually has question, meaning a very brief macro framework. Actually, we have not touched upon that but no problem.

We could elaborate on this one. Actually, we could say that the general growth still continues to be under some limits, but still for this year, we estimate a 4% of GDP growth.

Still we anticipate a growth, meaning in comparison to 3.3% of last year, 2025. And how we are going to operate in the inflation figure, we estimate that 24% will be the year-end.

But on an average terms, we anticipate 27%. And also, we do continue the CBRE, as you mentioned, the rate cuts.

The year-end figure is estimated to be under 30%, but currently, we anticipated around 27%. And we still continue -- we still expect the continuation of the real appreciation of Turkish lira and also in terms of the general macro levels, in terms of the current account deficit over GDP, we do not anticipate any substantial changes given where we've landed.

And also this well with the noninterest income, public stock, noninterest over GDP. And also, we do not anticipate big changes in relation to the budget deficit or budget balance, let's say, compared to the last year's figures.

So overall, we do not expect substantial shifts from the policy implementation, actually no shifts from the policy implementation. And in terms of the base case scenario, we do not actually price in certain elections, et cetera.

[indiscernible] has a question. I do read it.

Can you give more details about the funds you invested, revaluation gains are being recorded in trading gains? What are the areas of investments regarding these funds?

And how is the revaluation dynamics working out? Actually, what we are talking about is mainly the Turkey Green Funds investments.

And these investments -- investment actually was executed last year for a fishery. And we've been seeing -- as you know, the fund is in dollars and FX denomination basically.

And this FX denomination creates also FX valuations on the revaluation front. And also, of course, the market valuation of the investment itself happens to be the case.

So overall, in accounting terms, for some portion, it's been meant to be in the trading gains. If you have further questions, we could give details around this, if you could reach us.

And we have another question by Sadrettin Bagci. Any restrictions for a fixed loan growth rate on your side due to recent amendments?

Actually, TSKB is immune to these changes, not that we are excluded, but through the certain vehicles like we have been -- we are investing in investment loans, the green transformation. We have incentive mechanism implementations through the public and also the DFI funds that are secured under motor guarantee, we are immune to these changes.

So as observed last year has been another growth year with us. And for this year, it's the base case.

And last but not least, we have another question by [indiscernible]. Is there any restriction in terms of your funding agreement not to place any loans in defense sector?

I could not see the defense sector in your loan mix. Actually, this is not within our mission and vision.

So we are basically operating in, as you know, sustainable development focus. It's not a priority agenda with us.