SUSTAINABLE BANKING AT TSKB

TSKB believes to be responsible in the sustainable future of the world as well as Turkey’s. The Bank demonstrates its contribution in its funding activities, the largest part of its product line, by protecting the environment and supporting to finance the investments with less negative impact on climate change.

As an exemplary implementing institution, TSKB focuses on financing clients which shares its
  • philosophy of sustainable economic development,
  • policies and principles adopted for the sake of society and environment and
  • goals concerning the future.

As a “business partner” TSKB works with its clients interactively, manages the risks regarding regulations, environment and society and considers creating value for the society progressively.

TSKB forms its loaning policies taking the needs of Turkey into consideration in line with its core mission.
The mission of existence for TSKB is “Financing private sector investments in Turkey”.

The Bank has achieved its mission by financing investments and projects of different sectors and satisfying the new needs of the markets successfully. TSKB has supported the private sector industry of developing Turkey by providing the long term resource needs.

TSKB has been the absolute exemplary of sustainable banking for 59 years in the world.
Since the beginning of 2000’s TSKB acted in the light of the rapidly changing realities of the Turkish economy. Foreseeing the future energy need of Turkey, the Bank has set the financing of renewable energy and environment investments, which gains importance regarding climate change, as one of its primary businesses.

In 2009, the Bank has designated the financing of energy efficiency projects as a new component of its lending policy.

TSKB’s main manifest is to support the low carbon economy.
Besides consulting and financial mediation services, TSKB realizes its mission of supporting sustainable development by providing resources to clients of various sectors, mainly energy.

Activities to gain new clients are undertaken by the Corporate Marketing Department while ratings are done by Technical Services Department independently.

TSKB’s project evaluation approach differs from the conventional commercial banking applications in Turkey and is not limited with financial analyses, but rather implements project rating with a comprehensive methodology taking economy and engineering disciplines into consideration. TSKB’s Technical Appraisal Department consists of expert financial analysts, economists and engineers with approximately over 10 years of experience. For each and every credit file a technical evaluation report is prepared covering environmental impacts. Credits Department presents the report to Credits Committee chaired by the CEO. The applications approved by the Credits Committee are then presented to TSKB Board of Directors for approval.

TSKB’s Technical Appraisal Department is structured based on knowledge.
Having financial analysts, economists and engineers together in the same department enables the Bank to consider all the dynamics of project evaluation at the same time. While engineers consider the technical feasibility of the project at length, economists with their long term financial projections position the project at the right place in the market.

TSKB lends disbursement controlled credits.
In line with its mission, the Bank considers every credit it lends to be supportive investments to Turkey’s development.

With a business partner approach, TSKB uses disbursement control mechanism on the credit it lends throughout the life of the project which prevents the usage of the resources for different purposes and enabling them to turn to investments.

TSKB Rating Model was formed in 2003 and revised in 2008.

TSKB Rating Model was formed in 2003 and revised in 2008.

The basic aim of the model is calculating the probability of the Bank’s non-financial credit portfolio clients and the borrower client’s obligations to be completed accurately and on time and to rate them. The model enables to gather the information needed about credit decision, pricing, setting limits, correspondence and economic capital need and serves to meet the standards (within the Basel II framework) planned to be effective in Turkey.

TSKB Rating Model consists of 9 different levels from AAA to C.

As one of the primary indicators of international comparisons, the AR (Accuracy Ratio) of TSKB Rating Model is 78-80% which is expected as a quite high compared to its peers.

For each credit application TSKB rates the applying company before the credit decision. The Bank also rates the companies in its portfolio regularly with the aim of monitoring their annual financial results and evaluating their risks.

TSKB’s recognition and prestige in the international finance markets serve as a valuable component for sustainable banking. This recognition is an important advantage and privilege that TSKB presents to its clients.
Since its foundation TSKB has built long term cooperation with supranational institutions like the World Bank (IBRD), European Investment Bank (EIB), Council of Europe Development Bank (CEB), Kreditanstalt für Wiederaufbau (KfW), Agence Française de Développement (AFD), International Finance Corporation (IFC), Japan Bank for International Cooperation (JBIC) and Instituto de Crédito Oficial (ICO). It has also established correspondent relationships with the largest commercial banks of the world.

TSKB is in a powerful and advantageous position in assuring long term resources.
TSKB’s prestigious position in the international finance markets is also its competitive advantage in providing foreign resources. Its strong and long term resource structure has served as a sustainability factor in the rapidly changing market conditions during 2008-2009.

TSKB continued to supply the needed resources for Turkey’s sustainable development within the context of the relationships it developed with supranational institutions, international finance companies and banks.

2009/3rd quarter results show that 96% of TSKB credit portfolio is comprised of mid and long term placements.
During 2008-2009/3rd quarter TSKB continued mid and long term resource distribution activities to its large client portfolio with a risk sensitive approach focused on market dynamics.

TSKB mainly assures mid and long term finance for its clients. 2009/3rd quarter data show that 10.2% of the credits TSKB provided were placements of less than 1 year and 54.4% (43% in 2008) were over 5 years and longer.

Mid and long term credit portfolio is an important indicator of the Bank’s sustainable banking approach for sustainable development.

2009/3rd quarter results-Maturity distribution of TSKB risk portfolio
Maturity Risk Balance (%)
<1 year 10.2
2 years 14.4
3 years 14.5
4 years 6.5
5 years 16.8
6 years 11.4
7 years 8.1
8 years 5.3
9 years 4.4
10 years 4.3
>10 years 4.1
Genel Toplam 100,0