IMPORTANT DEVELOPMENTS REGARDING 2022 OPERATIONS INFORMATION ON SHARE BUYBACKS BY THE BANK

The Bank did not buy back any of its own shares in 2022.

INFORMATION ON PRIVATE AUDIT AND PUBLIC AUDIT CONDUCTED DURING THE FISCAL YEAR

Under the applicable legislation, routine audits are conducted by supervisory authorities such as the Banking Regulation and Supervision Agency (BRSA), the Capital Markets Board of Türkiye (CMB), the Ministry of Treasury and Finance, the Undersecretariat of Treasury and the Central Bank of the Republic of Türkiye (CBRT). Detailed information about the administrative fines imposed against the Bank in 2022 by supervisory authorities as a result of auditing is provided herein below.

INFORMATION ON LAWSUITS FILED AGAINST THE BANK, WHICH MAY AFFECT THE FINANCIAL STATUS AND OPERATIONS OF THE BANK AND THEIR POTENTIAL RESULTS

The Competition Board decision dated 08.03.2013 and no. 13-13/198-100: As the result of the investigation conducted to determine whether 12 financial institutions including Garanti BBVA and its subsidiaries Garanti Payment Systems and Garanti BBVA Mortgage (Garanti Economic Group) violated Article 4 of the Law on the Protection of Competition no. 4054 through engaging in a deal and/or concerted act for jointly setting interest rates, fees and commissions for deposit, loan and credit card services; with its decision dated 08 March 2013, no. 13-13/198-100, the Competition Board resolved to levy an administrative fine of TL 213,384,545.76 on the grounds that Garanti Economic Group violated Article 4 of the Law on the Protection of Competition. Believing this decision to be contrary to law and was based on inadequate examination, our Bank filed a lawsuit for the annulment of the decision. Before filing lawsuit, the administrative fine has been paid benefiting from 1⁄4 early payment discount. Ankara 2nd Administrative Court disregarded our defense in its entirety and dismissed the case. This time, an appeal was lodged with the higher court against this unfair and unlawful ruling. The 13th Chamber of the Council of State adjudged dismissal of our appeal and approved the ruling of the first degree court. For this unfair and unlawful adjudgment, our Bank applied for revision of decision. In this case, the 13th Chamber of the Council of State reversed the judgment of the first degree court on the grounds that it was not established with adequate standard of proof (beyond reasonable doubt) that all of the banks investigated by the Competition Board were aware of a single framework agreement in relation to deposit, loan, credit card or public deposit services or that joint groups were aware of the said framework agreement or common plan, just like we defended, and hence the judgment was based on inadequate examination. Following reversal, the first degree court decided to sustain the original ruling. An appeal was lodged against the unfair and unlawful decision, and the Plenary Session of Administrative Law Divisions adjudged to accept our appellate plea and to reverse the first degree’s decision to sustain its original ruling. The Competition Board, applied for revision of decision, which was rejected by the Plenary Session of Administrative Law Divisions. Following this ruling, the first degree court decided annulment of the administrative fine, upon which the deposited administrative fine amount was refunded. In response, the Competition Board resorted to appeal. The post-appellate decision of the Plenary Session of Administrative Law Divisions is being awaited.

INFORMATION ON ADMINISTRATIVE OR JUDICIAL SANCTIONS IMPOSED ON THE BANK AND ITS MANAGING MEMBERS DUE TO ANY PRACTICE CONTRARY TO THE LAWS AND REGULATIONS

During 2022, administrative fines levied by regulatory and supervisory authorities on our Bank amounted to TL 14,585,831.50. Taking advantage of the cash payment discount, the discounted amount of TL 10,970,551.75 was paid and entered into accounts as expense in 2022.

INFORMATION ON REGULATORY CHANGES IN 2022 THAT MAY HAVE A MATERIAL IMPACT ON THE OPERATIONS OF THE BANK

CBRT Policy Rate

The Monetary Policy Committee (MPC) started the policy rate cuts, which is the one-week repo auction rate, on 24 September 2021. The progressive rate reduction continued through 2022, reaching 9% on November 25. In their latest statement, the MPC stated that the prevailing policy rate is adequate and they have chosen to cease the ratecutting cycle.

Policy Rate

During 2022, the MPC utilized macroprudential tools and implemented additional steps to ensure the effectiveness of the monetary policy. These measures have been tracked and modified during the year in order to assess the performance of liraizationoriented approaches and selective credit expansion. Accordingly, banks have been the primary channel to ensure the success of these strategies.

FOREIGN CURRENCY PROTECTED DEPOSIT SCHEME

Until September 2022 liraization strategy was mainly conducted by the use of Foreign Currency Protected Deposits in which their structure can be seen in Table-1. The regulator specified and adjusted particular conversion rate thresholds for banks to meet during the year. As a result, if banks were unable to fulfil the maximum threshold criterion, they were required to pay commission, increase reserve requirements, and allocate fixed coupon, long-term maturity TL securities.