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Aiming to use capital effectively to maximize the value created, Garanti BBVA focuses on disciplined and sustainable growth on the basis of a true banking principle with strict adherence to solid asset quality and prudent stance. Combining its unconditional customer satisfaction approach with its robust capitalization and a focus on efficiency, the Bank sustains its contribution to the economy through effective balance sheet management.

Customer-driven deposit base continued to make up the largest portion in the funding of its asset growth. 63% annual expansion of the customer deposit base was backed by both TL and FC customer deposits. The Bank’s LDR improved to 82% on a consolidated basis. The high share of demand deposits within total deposits and growth enabled by low-cost, permanent SME and retail customer deposits are among the reasons that set Garanti BBVA apart from its peers and hand the bank the highest NIM.

Possessing the highest net fees and commissions base among its peers, Garanti BBVA strongly maintained sustainable income generation thanks to its well-diversified fee sources and its digitalized processes, and enlarged its net fees and commissions by 40% during 2021.

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Garanti BBVA targets to reach its 11 million digital banking customers at the right time, with the right message, always focusing on delivering a better experience and adopting omnichannel strategy. The Bank pays attention to delivering an unrivaled user experience enabled by more detailed analysis. It allows performance of all transactions without needing assistance by offering a simple, smooth experience. The Bank constantly invests in digital platforms to provide pioneering solution suggestions. It expands its digital customer base and increases the share of digital channels in its sales. It takes precautions against all risks which could prevent secure and uninterrupted service ensuring information security.

The Bank turns digital channels into a medium where customers can obtain financial advisory. By developing financial instruments that support digital transformation, it also helps its customers be prepared for a digital future. Carrying digital channels way beyond being a mere platform for transacting and product applications, the Bank acts with the vision of smartly interacting with customers at all touchpoints and delivering them an experience that truly creates a bond of trust.

At the Bank, technology supports process efficiencies, and is an enabler for top-down fast decision-making with a single source of data and common understanding, and strong communication. It is reflected in the way the Bank does business from CRM applications and segmentation to innovative products and services, and to a paperless banking environment.

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Placing employee centricity at the heart of each and every HR practice in line with its priority to set up the best and the most engaged team, Garanti BBVA aims to create a culture that every employee will be proud and happy to be a part of and to establish a fair and transparent working environment dominated by equal opportunities and diversity. The Bank carries out a worklife balance program named Work Life Integration (İYİ) in order to enhance employee satisfaction and offer a richer working experience. Employees submit their suggestions and ideas through the platforms named Önersen, GONG, and Atölye, and the “Ask/Share” section of the intranet portal.

Having quickly adapted to remote working in the wake of the pandemic, the Bank began successfully implementing the Hybrid Working Model principles that blend the productivity of teleworking and face-to-face communication necessary for bonding socially.

The Bank promotes continuous learning culture which fully prepares the employees for the competencies of the present and the future. In 2021, 37.4 hours of training per employee was offered. The digital learning platform was redesigned, 88 thousand employees took part in 6,300 training programs, and digital training accounted for 41% of all trainings on the basis of hours. 95% of employees attended upskilling ve reskilling programs.

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By placing its more than 20 million customers at the center of all its activities and designing processes from their perspective, Garanti BBVA strives to offer a perfect customer experience. The Bank aims to be transparent, clear and responsible towards customers and establish long-lived relationships built on mutual trust.

The Bank takes care to hear its customers’ needs on every channel they are present and to develop fitting solutions. With “Garanti BBVA’ya Sor” (Ask Garanti BBVA), which is the first 24/7 social media customer satisfaction channel in the Turkish banking sector, the Bank offers an efficient customer satisfaction service.

Attaching great importance to AI and big data applications and offering its customers solutions that generate value, Garanti BBVA launched UGI, Türkiye’s first AI-based smart assistant, in 2016.

The Bank helps its customers make informed decisions by supporting financial literacy, financial health and financial inclusion through the solutions offered.

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Total financing provided by Garanti BBVA so far to sustainable development on the basis of impact investment notion reached TL 60 billion at year-end 2021. The Bank has pledged to contribute increasing amounts of financing by 2025 in parallel with the BBVA Group’s sustainable finance targets. The Bank demonstrated its commitment to this pledge by adding the financing target to be mobilized for sustainable finance in the premium eligibility criteria of all employees at any level, starting with the Board of Directors.

In 2020, Garanti BBVA announced its target to reduce its carbon emissions by 29% by 2025 and by 71% by 2035 within the frame of Science-Based Targets methodology in line with the Paris Agreement’s goal to limit temperature rise to 1.5 degrees, and has been the first company to declare such a target in Türkiye.

Helping its customers grow their businesses sustainably, Garanti BBVA works to offer instruments supporting transition to a sustainable economy by developing products and services targeted at diverse needs for a low-carbon and inclusive growth. The Bank contributes to positive change with its affiliation to 48 engagement platforms and 29 memberships. Focusing on community investment programs, the Bank invested TL 60 million delivering impactful outcomes on material issues in 2021.

MEGA TRENDS

THE ENVIRONMENT WE OPERATE IN OPPORTUNITES & RISKS

CORPORATE GOVERNANCE & RISK MANAGEMENT

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According to consolidated financial statements, Garanti BBVA booked TL 13 billion in net profit, TL 849 billion in total assets, and contributed TL 610 billion to the economy through cash and non-cash lending in 2021. The Bank registered a Return on Average Equity of 19% and a Return on Average Assets of 2% with a Capital Adequacy Ratio of 14% in 2021.

Garanti BBVA’s market capitalization reached TL 47.3 billion at the end of 2021, with an earnings per share figure of TL 3.11. On 15 November 2021, BBVA offered a voluntary takeover bid to acquire all of the shares not owned by it (50.15%) with a price of TL 12.20 per share.

Garanti BBVA contributes to the economy and the society through financial products and services, by generating market capitalization and dividends for shareholders, paying salaries to employees, making payments to suppliers and tax revenues to governments. The Bank makes a significant contribution to public finances not only through its own tax payments, but also by intermediating the collection and payment of third-party taxes. The total tax contribution of Garanti BBVA to public finances is disclosed voluntarily on Garanti BBVA Investor Relations website

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As a result of its investments in digital channels and technology, Garanti BBVA provided uninterrupted and swift access to support the increased channel use especially during the pandemic period, protected the health and safety of its customers and employees, and reached the largest digital and mobile customer base. The share of digital sales in total sales increased to 57.5%. As the pioneer in digitalization, the Bank empowers customers with state-of-the-art digital solutions and leads the sector with its applications. With its set of 500+ functions, Garanti BBVA Mobile facilitates transacting for customers independent from time and location. Garanti BBVA retains its leadership of the sector with 36% share in QR transactions that expanded in keeping with the increased need for contactless transacting during the pandemic.

Integrating the opportunities stemming from advancing technology and data sources in its business model, Garanti BBVA tackles customer management with a more analytical approach by interpreting big data clusters using machine learning with 62 projects developed and using the outputs in various ways such as resource planning, as well as design, change, transformation in its organizational model. 484 thousand questions answered by Bilge and Kobilge employee bots developed using the AI technology that can be integrated into any business process, and 26.4 million interactions of the Smart Assistant UGİ in 2021 serve as an indication of the smart and personalized communication taking advantage of DIY. At the same time, 93 processes developed using Robotic Process Automation (RPA) improves customer experience by ensuring operational efficiency, errorfree and high-speed service

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During 2021, Garanti BBVA created employment for 18,354 people, and successfully achieved its goals also on the basis of conducting its work and services remotely, which was implemented until October for roles allowing teleworking. The Bank increased the number of programs for employee happiness to 11. According to the results of the employee engagement survey conducted annually by an independent research company, 2021 engagement score was 4.22 on a scale of 5. The turnover ratio of high-performers was 3.5%. Having started to administer Employee Experience Questionnaires three times a year, the Bank builds on corporate loyalty on the back of actions designed according to employee feedbacks.

In 2021, the Young Committee started activities in an effort to better hear the young employees’ voices, to conceive ideas collectively, and to improve employee experience. “Önersen” (You Suggest) platform has been instrumental in collecting more than 27,500 ideas and suggestions since 2007. Women employees comprise 58% of all employees and 40% of senior/middle level management. Thanks to its various practices and initiatives for ensuring gender equality in human resources, among customers and the community, Garanti BBVA is the only company from Türkiye to be included for six consecutive years in the Bloomberg Gender Equality Index.

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To measure the performance in terms of fulfillment of customer expectations and to reveal improvement areas, Garanti BBVA conducts Net Promoter Score (NPS) studies and after-service questionnaires with customers receiving service from branches, Customer Contact Center, Customer Experience Support Team and digital channels. While the Bank achieved a Net TCR Score of 62% in 2021, it had the second highest NPS among retail customers representing its own profile and the highest one among SME customers, in both cases compared to its peers, according to the results of the NPS research conducted with Retail and SME customers.

The Bank sustains its support to startups within the frame of inclusive growth. Garanti BBVA Partners Accelerator Program extended support to 50 startups over the course of seven years, and the investments received by startups exceeded TL 30 million. Since 2006, the Bank has been ceaselessly supporting active participation of women in employment and economic life with the understanding that an inclusive economy where all individuals make use of opportunities equally will be more efficient and can grow faster. Financing provided to women entrepreneurs topped TL 11 billion in total.

In 2021, the number of customers who started using savings products reached 947 thousand. 37% of the customers who logged into the mobile banking app checked the “My Status” section thereon that focuses on financial health. With its enlarged transaction set and increased understanding capacity, the Smart Assistant UGI began making suggestions proactively to customers. Since 2016 to date, UGI had more than 66 million interactions with 6.3 million customers

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Garanti BBVA ended 2021 as a carbon-neutral bank, as it did the year before. Procuring electricity needs of its branches and buildings from renewables, 39,832 tCO2-equivalent emissions were avoided which corresponds to the carbon sink capacity of roughly 2.5 million trees. Through its financing of renewable energy projects, the Bank has been instrumental in avoiding 8.48 million t CO2-equivalent emissions based on the total installed capacity currently in operation.

Since 2014, 100% of total amount of financing to greenfield electricity generation investments in project finance activities has been allocated to renewable investments each year. In 2021, Garanti BBVA has been the first bank to declare its pledge to exit coal and is the one and the only Turkish signatory to the UN Net Zero Banking Alliance (NZBA).

The Bank provided investment support worth TL 43.5 million in 2021 to Community Investment Programs addressing Reduced Inequalities and Supporting Entrepreneurship, Offering Opportunities to Everyone through Education, Supporting Research and Cultural Activities.

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