Message from the Chairman

Global economic developments in 2025 were shaped by central bank interest rate decisions, measures to combat inflation, reciprocal tariff policies, and rising trade tensions. Efforts to end the Russia'Ukraine war and initiatives aimed at restoring peace in the Middle East stood out among the key geopolitical developments. Confidence in long-standing defense alliances weakened, while the need for self-sufficiency became a primary priority for many countries. Despite geopolitical risks, the global economy showed resilience in 2025 and growth of around 3% is estimated. The outlook for 2026 points to a limited slowdown in global growth due to trade tensions and structural challenges, despite the expected impact of supportive monetary policies.

For the U.S. economy, 2025 was marked by efforts to maintain balance between inflation control and labor market conditions. The U.S. Federal Reserve (Fed) followed a cautious and data-driven approach regarding interest rate cuts. Financial conditions remained relatively tight, particularly in the first half of the year, while the rate-cutting cycle began in the second half.

Tariff measures introduced by the United States also increased concerns about the future of global trade. The National Security Strategy announced by the United States in the final month of the year provided important signals regarding the country's role in the global system and the possible actions of other actors. The document indicated a stronger focus on domestic security, a relatively reduced global role, and a policy approach that places greater responsibility on long-standing allies.

The year 2025 was marked by continuing geopolitical challenges and uncertainties for the Euro Area. Efforts to end the Russia'Ukraine war have not yet produced a definitive outcome. European countries' support for Ukraine, sanctions imposed on Russia, and Russia's countermeasures, particularly in the energy sector, remained among the main issues on the agenda. The period also witnessed diverging political tendencies across European countries. Protectionist policies implemented by the United States increased the perception in Europe that a greater role must be assumed in terms of defense, leading to a number of decisions aimed at strengthening this area. In the new period, defense and infrastructure investments are expected to become priority agenda items for Europe. The European Central Bank (ECB) reduced interest rates during the first half of 2025 and maintained a steady policy stance in the second half of the year, as inflation remained close to the targeted level.

Prices of precious metals such as gold and silver reached historic highs in 2025, while rare earth elements, battery metals including lithium, nickel, and cobalt, and advanced microchips became strategic assets of global trade and key instruments of geopolitical influence.

For China, one of the most prominent issues of the year was the reciprocal tariff measures with the United States. China responded to the increases in U.S. customs duties on the basis of reciprocity, while also seeking to strengthen its global influence through projects aimed at revitalizing the historic Silk Road. At the same time, China continued to increase pressure on Taiwan and expand its presence in the South China Sea. Rapid progress in the field of artificial intelligence, as part of the competition for digital dominance, also placed China at the center of the global agenda.

In 2025, the primary agenda for our country's economy was shaped around inflation developments and monetary policy decisions. In line with the objectives of the economic administration, the decisive steps taken throughout the year led to a significant decline in the inflation rate. Monetary policy actions of the Central Bank of the Republic of Türkiye (CBRT), conducted with a data-driven approach, also resulted in a series of policy rate cuts during the year. At the final monetary policy meeting of the year, the CBRT reduced the policy rate to 38%. During the same period, a notable decline was observed in the CDS premium, which is considered an important indicator of country risk. In the coming period, further declines in inflation and continued rate cuts are expected. Consequently, Ziraat Katilim will continue to support the economy in the coming period in line with the principles of profitability and efficiency, guided by its customer-focused service philosophy. Our country, which closely monitors all global and regional developments and remains prepared for both opportunities and risks, possesses the potential to demonstrate significant economic growth in the coming period with its dynamic structure.

Participation banking, which plays an important role in strengthening the resilience of Türkiye's financial system against risks, reached a share of 9.2% within the financial sector as of the end of 2025. Ziraat Katilim Bank, which celebrated its tenth anniversary during the year, increased its share in the participation banking sector to nearly 18% by year-end. Continuing its branch expansion in order to deliver participation banking services across the country, Ziraat Katilim reached a total of 225 branches. As Türkiye's first publicly owned participation finance institution, Ziraat Katilim Bank will continue to support the economy in the new period through its customer-focused service approach, in line with the principles of profitability and efficiency.

On behalf of our Board of Directors, I would like to thank our employees who contribute to the success of our Bank, as well as our customers and business partners who add value to our operations.

Alpaslan 'akar
Chairman of the Board of Directors