Interim report
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TÜRKİYE HALK BANKASI ANONİM ŞİRKETİ Consolidated Financial Statements As of 30 September 2025 With Review Report Thereon (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)
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Independent Auditor’s Report on Review of Consolidated Interim Financial Statements To the Board of Directors of Türkiye Halk Bankası A.Ş. Introduction We have reviewed the accompanying consolidated balance sheet of Türkiye Halk Bankası A.Ş. (“the Bank”) and its subsidiaries (together will be referred as “the Group”) as at 30 September 2025 and the consolidated statement of profit or loss, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in shareholders’ equity, the consolidated statement of cash flows for the nine -month period then ended, and notes, comprising a summary signif icant accounting policies and other explanatory information. The Group management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with the Banking Regulation and Supervision Agency ( “BRSA”) Accounting and Reporting Legislation which includes “Regulation on Accounting Applications for Banks and Safeguarding of Documents” published in the Official Gazette No. 26333 dated 1 November 2006, and other regulations on accounting records of banks published by Banking Regulation and Supervision Board and circulars and interpretations published by BRSA and the requirements of Turkish Accounting Standard 34 “Interim Financial Reporting ” for the matters not regulated by the aforementioned legislations (together referred as “BRSA Accounting and Reporting Legislation”). Our responsibility is to express a conclusion on these consolidated interim financial statements based on our review. Scope of Review We conducted our review in accordance with the Standard on Review Engagements (“SRE”) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity ”. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review of interim financial statements is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
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Conclusion Based on our review nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements do not present fairly, in all material respects, the consolidated financial position of Türkiye Halk Bankası A.Ş. as at 30 September 2025 and its consolidated financial performance and its consolidated cash flows for the nine- month period then ended in accordance with the BRSA Accounting and Reporting Legislation. Emphasis of Matter As detailed in footnote number seven of section five, we draw attention to the following issues that may affect the Group: On 15 October 2019, the United States of America (“the U.S.”) Attorney for the Southern District of New York filed a criminal case against the Bank in the Southern District of New York (“District Court”) for the alleged violations of the U.S. sanctions on Iran. The criminal procedure at the District Court has been stayed due to the Bank’s appellate process under the sovereign immunity. Upon further review, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) with its decision dated 22 October 2024, rejected the Bank’s common law immunity request and affirmed the District Court’s order. The Bank declared that it will use all its legal rights to appeal with regard to the 22 October 2024 decision of the Second Circuit, particularly with the U.S. Supreme Court. On 12 December 2024, the Bank filed a motion to stay the Second Circuit’s mandate. On 18 December 2024 the Second Circuit ordered that the motion be granted and the mandate was stayed pending the filing and disposition of the Bank’s petition for a writ of certiorari to the U.S. Supreme Court. The Bank filed its petition for a writ of certiorari with the U.S. Supreme Court on May 5, 2025, which included the Bank’s arguments regarding sovereign immunity under common law. The briefing phase regarding the appeal was completed with the opposition submitted by the U.S. Attorney’s Office on August 6, 2025 and the Bank’s reply filed on August 19, 2025. The Bank’s petition for a writ of certiorari was denied by the U.S. Supreme Court on October 6, 2025. Accordingly, the legal process regarding the Bank’s objections under sovereign immunity has been completed, and the District Court is now expected to set a schedule to proceed with the hearing of the case on the merits. In addition, a group of plaintiffs filed a civil lawsuit (the Owens or first civil case) against the Bank with a claim for damages before the District Court for the Southern District of New York on 27 March 2020, “on the grounds that they (plaintiffs) c ould not collect their judgments from Iran due to the violations of sanctions.” The case was dismissed by the District Court, the Second Circuit and the U.S. Supreme Court, respectively. Consequently, the Owens case was conclusively dismissed on 8 January 2024. Finally, on 26 July 2023, a new civil case (the Hughes or second civil case) was filed against the Bank by a group of plaintiffs in a complaint filed with the District Court, seeking to satisfy judgments similar to the Owens civil case. In accordance with the District Court’s decision dated 1 May 2024, Hughes case is stayed pending a final ruling on the criminal case against the Bank. At this stage, the Bank’s Management stated that there is no penalty, compensation, sanction or other measure arising from the pending criminal and civil cases against the Bank. There is an uncertainty if any decisions will be made by the U.S. authorities that may adversely affect the financial position of the Bank. No provision has been made in the financial statements of the Bank related to these matters. However, the above mentioned matters do not affect the conclusion provided by us.
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Report on Other Legal and Regulatory Requirements Based on our review, nothing has come to our attention that causes us to believe t hat the financial information provided in the interim activity report in section seven of the accompanying consolidated interim financial statements is not consistent, in all material respects, with the reviewed consolidated interim financial statements and explanatory notes. KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi Orhan Akova, SMMM Partner 7 November 2025 İstanbul, Türkiye
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TÜRKİYE HALK BANKASI AŞ THE CONSOLIDATED FINANCIAL REPORT FOR THE NINE-MONTH PERIOD 30 SEPTEMBER 2025 1. The Bank’s Headquarter Address: Finanskent Mahallesi Finans Caddesi No: 42/1 Ümraniye/İstanbul 2. The Bank’s Contact Phone and Fax: Phone : 0216 503 70 70 Fax : 0212 340 93 99 3. The Bank’s Website and E-mail Address: Website: www.halkbank.com.tr E-mail Address: halkbank.ir@halkbank.com.tr The consolidated financial report for nine-month prepared in accordance with the Communiqué on Financial Statements to be Disclosed to Public by Banks and Explanations and Footnotes Thereof as regulated by Banking Regulation and Supervision Agency, is comprised of the following sections: • Section One: :GENERAL INFORMATION ABOUT THE PARENT BANK • Section Two :CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK • Section Three :EXPLANATIONS ON ACCOUNTING POLICIES FOR THE RELEVANT PERIOD • Section Four :INFORMATION RELATED TO FINANCIAL STRUCTURE AND RISK MANAGEMENT OF THE GROUP • Section Five :EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS • Section Six :LIMITED REVIEW REPORT • Section Seven :INTERIM ACTIVITY REPORT Subsidiaries and associates which are consolidated within this financial report are as below: Subsidiaries Associates 1. Halk Yatırım Menkul Değerler AŞ 1. DHB Bank NV 2. Halk Gayrimenkul Yatırım Ortaklığı AŞ 2. Kobi Girişim Sermayesi Yatırım Ortaklığı AŞ 3. Halk Finansal Kiralama AŞ 3. Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ 4. Halk Faktoring AŞ 4. Birleşim Varlık Yönetim AŞ 5. Halk Banka AD, Skopje 6. Halkbank AD, Beograd 7. Halk Varlık Kiralama AŞ 8. Halk Elektronik Para ve Ödeme Hizmetleri AŞ 9. Halk Katılım Bankası AŞ The consolidated financial statements for the nine-month period ended 30 September 2025 and related disclosures and footnotes that are subject to limited review and are prepared in accordance with the Regulation on Accounting Applications for Banks and Safeguarding of Documents, Turkish Accounting Standards, Turkish Financial Reporting Standards and the related statements and guidance, and in compliance with the financial records of our Bank and, unless stated otherwise, presented in thousands of Turkish Lira. Istanbul, 7 November 2025 R. Süleyman Özdil Osman Arslan Mevlüt Uysal Yusuf Duran Ocak Osman Bektaş Chairman of the Board of Directors, Chairman of the Audit Committee Member of the Board of Directors, Chief Executive Officer Vice Chairman of the Board of Directors, Member of the Audit Committee Financial Management and Planning Vice Chief Executive Officer Head of Financial Accounting Department For any questions regarding this financial report, contact details of the personnel in charge is given below: Name-Surname/Title : Atiye Ece GÜLERGÜN/ Manager Tel No : 0216 503 52 48 Fax No : 0212 340 09 90
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SECTION ONE General Information About the Parent Bank Page No I. History of the Bank Including Foundation Date, Initial Legal Status, Amendments to Legal Status 3 II. Explanation About the Bank's Capital Structure, Shareholders of the Bank Who Are In Charge of the Management and/or Auditing of the Bank Directly or Indirectly, Changes in These Matters During the Year (If Any) and the Group the Bank Belongs to 3 III. Explanations on the Bank’s Chair man and Members of Board of Directors, Audit Committee Members, Chief Executive Officer and Executive Vice Presidents and Responsibilities and Shareholding in the Bank, If any 4 IV. Explanation on the Parent Bank's Qualified Shareholders 5 V. Summary Information on the Parent Bank's Service Type and Fields of Operation 5 VI. Explanation About Companies Within The Scope Of Consolidation 6 VII. Differences Between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and Short Explanation About the Institutions Subject to Line-by-Line Method or Proportional Consolidation and Institutions Which are Deducted From Equity or Not Included in These Three Methods 8 VIII. Current or Likely Actual or Legal Barriers to Immediate Transfer of Shareholders' Equity or the Repayment of Debts Between the Bank and Its Subsidiaries 8 SECTION TWO Consolidated Financial Statements I. Consolidated Balance Sheet (Consolidated Statement of Financial Position) 10 II. Consolidated Statement of Off-Balance Sheet Items 12 III. Consolidated Statement of Profit or Loss 13 IV. Consolidated Statement of Profit or Loss and Other Comprehensive Income 14 V. Consolidated Statement of Changes in Shareholders’ Equity 15 VI. Consolidated Statement of Cash Flows 16 SECTION THREE Explanations on Accounting Policies I. Explanations on Basis of Presentation 17 II. Explanations on the Strategy for Use of Financial Instruments and Foreign Currency Transactions 18 III. Information About the Consolidated Associates and Subsidiaries 18 IV. Explanations on Forward and Option Contracts and Derivative Products 21 V. Explanations on Interest Income and Expenses 21 VI. Explanations on Fee and Commission Income and Expenses 21 VII. Explanations on Financial Assets 21 VIII. Explanations on Impairment of Financial Assets 25 IX. Explanations on Offsetting Financial Instruments 28 X. Explanations on Sales and Repurchase Agreements (Repos) and Transactions on Securities Loaned 28 XI. Explanations on Assets Held For Sale, Assets of Discontinued Operations and Related Liabilities 28 XII. Explanations on Goodwill and Other Intangible Assets 28 XIII. Explanations on Tangible Assets 28 XIV. Explanations on Investment Properties 29 XV. Explanations on Leasing Transactions 29 XVI. Explanations on Provisions and Contingent Liabilities 31 XVII. Explanations on Employee Benefit Liabilities 31 XVIII. Explanations on Taxation 32 XIX. Additional Explanations on Borrowings 34 XX. Explanations on Shares Issued 34 XXI. Explanations on Bill Guarantees and Acceptances 35 XXII. Explanations on Government Incentives 35 XXIII. Explanations on Segment Reporting 35 XXIV. Explanations on Earnings Per Share 35 XXV. Explanations on Other Matters 36
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SECTION FOUR Information Related to Financial Position and Risk Management of the Group I. Explanations on Consolidated Equity 37 II. Explanations on Consolidated Currency Risk 44 III. Explanations on Consolidated Interest Rate Risk 46 IV. Explanations on Consolidated Position Risk of Shares 49 V. Explanations on Consolidated Liquidity Risk Management, Liquidity Coverage Ratio and Net Stable Funding Ratio 50 VI. Explanations on Consolidated Leverage Ratio 59 VII. Explanations Related to Consolidated Business Segmentation 61 VIII. Explanations on Consolidated Risk Management and Risk Weighted Amounts 64 SECTION FIVE Explanations and Notes Related to the Consolidated Financial Statements I. Explanations and Notes Related to the Assets 66 II. Explanations and Notes Related to the Liabilities 85 III. Explanations and Notes Related to the Off-Balance Sheet 91 IV. Explanations and Notes Related to the Consolidated Statement Of Profit Or Loss 92 V. Explanations Related to the Risk Group of the Parent Bank 97 VI. Explanation Related to the Subsequent Events 99 VII. Other Explanations 99 SECTION SIX Limited Review Report I. Explanations on Limited Review Report 101 II. Explanations and Notes Prepared by the Independent Auditor 101 SECTION SEVEN Interim Activity Report I. Interim Activity Report Included Chairman of the Board of Directors and CEO's Assesments for the Interim Activities 102
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 3 SECTION I: GENERAL INFORMATION ABOUT THE PARENT BANK I. HISTORY OF THE PARENT BANK INCLUDING FOUNDATION DATE, INITIAL LEGAL STATUS, AMENDMENTS TO LEGAL STATUS Türkiye Halk Bankası Anonim Şirketi (the “Parent Bank” or “Halkbank”) began its operations in accordance with the law no: 2284 in 1938 and still continues its activities as a public commercial bank. II. EXPLANATION ABOUT THE PARENT BANK'S CAPITAL STRUCTURE, SHAREHOLDERS OF THE BANK WHO ARE IN CHARGE OF THE MANAGEMENT AND/OR AUDITING OF THE BANK DIRECTLY OR INDIRECTLY, CHANGES IN THESE MATTERS DURING THE YEAR (IF ANY) AND THE GROUP THE BANK BELONGS TO The capital of the Parent Bank is controlled directly by the Türkiye Varlık Fonu. As of 30 September 2025 the shareholders’ structure and their respective ownerships are summar ized as follows: Shareholders 30 September 2025 % 31 December 2024 % Türkiye Varlık Fonu(1) 6.573.604 91,49 6.573.604 91,49 Public shares(1) 611.093 8,51 611.093 8,51 Other shareholders(2) 81 0,00 81 0,00 Total 7.184.778 100,00 7.184.778 100,00 (1) The shares of the Türkiye Varlık Fonu amounting to TRY 5.935.328 have been included in Public shares. (2) TRY 81 of the shares included in the “Other Shareholders” group belong to shareholders whose shares do not trade on the exchange. In accordance with the Law No: 6327 dated 13 June 2012 and 3rd sub-article added to the Article 2 of the Law No: 4603, as per the Turkish Commercial Code, the Public shares will be controlled and represented by the Minister the Parent Bank is reporting to, until the sale procedures of the public shares are completed.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 4 SECTION I: GENERAL INFORMATION ABOUT THE PARENT BANK (continued) III. EXPLANATIONS ON THE PARENT BANK’S CHAIRMAN AND MEMBERS OF THE BOARD OF DIRECTORS, AUDIT COMMITTEE MEMBERS, CHIEF EXECUTIVE OFFICER AND EXECUTIVE VICE PRESIDENTS AND RESPONSIBILITIES AND SHAREHOLDING IN THE BANK, IF ANY Name Title Recep Süleyman ÖZDİL Chairman of the Board of Directors, Independent Member of the Board of Directors, Chairman of the Audit Committee Mevlüt UYSAL Vice Chairman of the Board of Directors, Independent Member of the Board of Directors, Member of the Audit Committee Osman ARSLAN Member of the Board of Directors, Chief Executive Officer Şeref AKSAÇ Member of the Board of Directors Meltem TAYLAN AYDIN Member of the Board of Directors Mihrimah Belma SEKMEN Independent Member of the Board of Directors Maksut SERİM Member of the Board of Directors Ebubekir ŞAHİN Member of the Board of Directors Sezai UÇARMAK Member of the Board of Directors Mehmet AYDIN Member of the Supervisory Board Faruk ÖZÇELİK Member of the Supervisory Board Olcay ATLIOĞLU Executive Vice President, Information Technologies Celal CANDAN Executive Vice President, Credit Risk Monitoring and Legal Proceedings Tahir DEMİRKIRAN Executive Vice President, Loan Allocation and Management Mustafa ERMİŞ Executive Vice President, Banking Operations and Digital Transformation Yalçın MADENCİ Executive Vice President, Corporate and Commercial Marketing Yusuf Duran OCAK Executive Vice President, Financial Management and Planning Ali ŞÖNER Executive Vice President, Treasury and Resource Management Altan TAŞKIRAN Executive Vice President, Retail and Digital Banking Murat YILDIRIM Executive Vice President, SME Banking Seyit Mehmet YAYDEMİR Executive Vice President (p.), Loan Policies, Monitoring and Specialized Loans People mentioned above do not own any shares in the Parent Bank’s capital. a) The Parent Bank’s top management members who have assigned to their position in 2025 are listed with titles and dates of assignment. Title Name and Surname Beginning Date Executive Vice President Murat YILDIRIM 17 July 2025 Executive Vice President (p.) Seyit Mehmet YAYDEMİR 7 October 2025 b) The Parent Bank’s top management members who have left their position in 202 5 are listed with titles and dates of leaving. Title Name and Surname Beginning Date Executive Vice President Fatih ŞAHBAZ 29 August 2025 Executive Vice President İlhan BÖLÜKBAŞ 17 September 2025
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 5 SECTION I: GENERAL INFORMATION ABOUT THE PARENT BANK (continued) IV. EXPLANATION ON THE PARENT BANK'S QUALIFIED SHAREHOLDERS Except for the Türkiye Varlık Fonu, no person or institute has any qualified shares attributable to the Parent Bank. V. SUMMARY INFORMATION ON THE PARENT BANK'S SERVICE TYPE AND FIELDS OF OPERATION 1) General information about the Parent Bank: Türkiye Halk Bankası Anonim Şirketi began its operations in 1938 in accordance with the Law No: 2284 and still continues its activities as a public commercial bank. 2) Parent Bank’s restructuring process: Law numbered 4603 regarding the “Law on Türkiye Cumhuriyeti Ziraat Bankası, Türkiye Halk Bankası Anonim Şirketi and Türkiye Emlak Banka sı Anonim Şirketi”, was prepared within the framework of the “Macro Economic Program” for the period 2000-2002. The purpose of the law is to modernize the operations of the banks to arrive at a point where the requirements of the international norms and international competition can both be reached and it also aims to sell the majority of the banks’ shares to individuals or legal entities in the private sector. The Parent Bank revised its charter of establishment, elected a new board of directors and increased its nominal capital from TRY 250.000 to TRY 1.250.000 in the extraordinary general assembly held on 14 April 2001. Within the scope of the restructuring process, the Parent Bank received government bonds in settlement of the accumulated specific duty losses and the Parent Bank’s whole specific duty loss receivable was thus eliminated as at 30 April 2001. In addition, a significant number of personnel were encouraged to sign new contracts and transferred to other government institutions. According to Article 2.2 of Law No: 4603, subsequent to the completion of the restructuring procedures, the procedures involved in sale of the shares of the Parent Bank were to be concluded under the provisions of Law No: 4046 based on the “Regulation of Privatization Applications and Amendment of Some Laws and Decrees with the Force of Law”. The procedures relating to restructuring and sale of the shares were going to be completed within three years (until 25 November 2003) as of the effective date of the related law. How ever, by Law No: 5230 dated 31 July 2004, the term “ 3 years” in Article 2.2 of Law numbered 4603 was previously amended to “5 years” and subsequently by Law No: 5572 dated 10 January 2007 the related term was amended to “10 years”. As a result of these amendments, the privatization period of the Parent Bank was extended. The Council of Ministers has the authority to extend this period by the half of that period for one time only. The Council of Ministers extended the half of that “10 years” period as publi shed in the Official Gazette by the Decree numbered 2010/964 and dated 6 November 2010. As per the Higher Council of Privatization decision numbered 2006/69 dated 11 August 2006, the public shares were transferred to the Privatization Administration and 99,9% of the Parent Bank shares were decided to be sold before 25 May 2008 using the block sale method. 13th Department of Council of State with its decision numbered 2006/4258 dated 29 November 2006 to cease the execution of the High Council of Privatizatio n’s decision numbered 2006/69 dated 11 August 2006. Thereupon, as per the decision of the Higher Council of Privatization numbered 2007/8 dated 5 February 2007, up to 25% of the public shares that were previously transferred to the Privatization Administration, were decided to be privatized by a public offering and it was decided to be concluded by the end of 2007. The first phase of the privatization process of the Bank corresponding to 24,98% was completed in the first week of May 2007 and Halkbank shares were started to trade on Borsa İstanbul AŞ as of 10 May 2007 with the base price of TRY full 8,00. As per the decision of the Higher Council of Privatization numbered 2012/150 dated 4 October 2012; 23,92% of the public shares held by the Privatization Adm inistration were privatized by a second public offering and privatization was completed on 21 November 2012.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 6 SECTION I: GENERAL INFORMATION ABOUT THE PARENT BANK (continued) V. SUMMARY INFORMATION ON THE PARENT BANK'S SERVICE TYPE AND FIELDS OF OPERATION (continued) 2) Parent Bank’s restructuring process (continued): Under No: 25539 Law regarding the “Act No: 5230 with regards to the transfer of Pamukbank Türk Anonim Şirketi to Türkiye Halk Bankası AŞ and amendments to other acts” which came into force as published in the Official Gazette numbered 25539 dated 31 July 2004, Pamukbank (whose shares, management, and control were previously inherited to the Saving Deposit Insurance Fund (“SDIF”)) was transferred to the Halkbank. Insolvent Pamukbank TAŞ was a private sector deposit bank established by Çukurova İthalat ve İhracat TAO, Karamehmetler limited partnership and more than five hundred shareholders. Pamukbank started its private banking operations as an incorporation in accordance with the decision of the Council of Ministers numbered 4/4573 dated 5 March 1955. According to the decision of the Banking Regulation and Supervision Agency numbered 742 published in the Official Gazette numbered 24790 dated 19 June 2002 including 3rd and 4th Sub-articles in the Article 14 of the Banking Law No: 4389, the shareholders rights, excluding dividends, management and supervision of Pamukbank were transferred to the Saving Deposit Insurance Fund as of 18 June 2002. 3) The Parent Bank’s service activities and operating areas: The Parent Bank’s operating areas include, commercial financing and corporate banking, fund management operations, retail banking and credit card operations. As of 30 September 2025, the Parent Bank operates with a total of 1.105 branches consisting of 1.097 domestic and 8 foreign branches that are 7 in Turkish Republic of Northern Cyprus and 1 in Bahrain. Domestic branches include 32 satellite branches. The Parent Bank has also 2 representative offices in England and Iran. VI. EXPLANATION ABOUT COMPANIES WITHIN THE SCOPE OF CONSOLIDATION The Parent Bank and its subsidiaries; - Halk Yatırım Menkul Değerler AŞ - Halk Gayrimenkul Yatırım Ortaklığı AŞ - Halk Finansal Kiralama AŞ - Halk Faktoring AŞ - Halk Banka AD, Skopje - Halkbank AD Beograd - Halk Katılım Bankası AŞ - Halk Varlık Kiralama AŞ - Halk Elektronik Para ve Ödeme Hizmetleri AŞ are consolidated “line by line” in the accompanying consolidated financial statements. The Parent Bank’s associates; - DHB Bank NV - Kobi Girişim Sermayesi Yatırım Ortaklığı AŞ - Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ - Birleşim Varlık Yönetim AŞ are accounted for at “equity method” in the accompanying consolidated financial statements. Halk Gayrimenkul Yatırım Ortaklığı AŞ (“Halk GYO”), a subsidiary of the Parent Bank established in 2010, was registered on 18 October 2010. Halk GYO’s main line of business is, to form and improve real estate portfolios and to invest in real estate based capital market instruments. Halk GYO’s main operational objective is to invest in capital market instruments based on real estates, real estate projects and rights based on real estates, as per the Capital Markets Board’s (“CMB”) regulation on investment trusts.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 7 SECTION I: GENERAL INFORMATION ABOUT THE PARENT BANK (continued) VI. EXPLANATION ABOUT COMPANIES WITHIN THE SCOPE OF CONSOLIDATION (continued) As at 15 February 2013 28% shares of Halk GYO has been offered to public. After coll ecting potential investors’ book building, Halk GYO’s shares started to be traded on Borsa İstanbul AŞ since 22 February 2013. Halk Finansal Kiralama AŞ (“Halk Leasing”) was established in September 1991 in Türkiye and its main line of business is financial leasing. Halk Leasing operates under the provisions of the Turkish “Law on Financial Leasing, Factoring, Financing And Saving Financing Companies Law” number 6361. Halk Banka AD, Skopje, formerly Export and Credit Bank AD, Skopje is a subsidiary of the Parent Bank as of 8 April 2011, operating in North Macedonia. The Bank’s main activities include commercial lending, accepting deposits, and retail banking services in the country and abroad. In addition, the Company has been engaged in insurance activities through Halk Osiguruvanje purchased on 28 January 2019. Halk Faktoring AŞ (“Halk Faktoring”) was established in June 2012 in Türkiye and its main line of business is to provide factoring services that include legitimate commercial lendi ng for all domestic and international trade operation. Halkbank AD Beograd is a subsidiary of the Parent Bank as of 28 May 2015. Its main activities include commercial lending, accepting deposits, and retail banking services in the country and abroad. Halk Yatırım Menkul Değerler AŞ (“Halk Yatırım”), was established in 1997 to carry out capital markets activities, to purchase and sell capital markets instruments, and to execute stock exchange transactions. Halk Yatırım became a subsidiary in early 2006 when Halkbank bought the shares of Türkiye Halk Bankası Personnel Provident Fund. Halk Varlık Kiralama AŞ was established on 3 October 2017 with the purpose of issuing “Lease Certificate” in accordance with the Capital Markets Board Law No. 6362, the CMB Commu niqué and the related regulations of the CMB. Halk Elektronik Para ve Ödeme Hizmetleri AŞ obtained its license to operate as a payment services and electronic money institution from the CBRT on 13 February 2024 in accordance with Law No. 6493. It operates with many digital products including physical and virtual POS, link payment, digital wallet and open banking. Halk Katılım Bankası AŞ was established on 22 September 2025, to contribute to the development and economic growth of participation banking in our country, and to serve all individual and corporate customers, primarily entrepreneurs and the SME segment. As of the current period, it has not yet started its operations. For the purposes of the consolidated financial statements, the Parent Bank and its consolidated subsidiaries are referred to as “the Group”.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 8 SECTION I: GENERAL INFORMATION ABOUT THE PARENT BANK (continued) VII. DIFFERENCES BETWEEN THE COMMUNIQUE ON PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS OF BANKS AND TURKISH ACCOUNTING STANDARDS AND SHORT EXPLANATION ABOUT THE INSTITUTIONS SUBJECT TO LINE -BY-LINE METHOD OR PROPORTIONAL CONSOLIDATION AND INSTITUTIONS WHICH ARE DEDUCTED FROM EQUITY OR NOT INCLUDED IN THESE THREE METHODS Halk Elektrik Üretim AŞ, one of the Parent Bank's subsidiaries, and Bileşim Finansal Teknolojiler ve Ödeme Sistemleri AŞ, one of its associates, are not consolidated in accordance with the ‘Communiqué on the Preparation of Consolidated Financial Statements of Banks’ as they are not financial institutions. In the consolidated financial statements prepared in accordance with International Financial Reporting Standards, Halk Elektrik Üretim AŞ is fully consolidated, while Bileşim Finansal Teknolojiler ve Ödeme Sistemleri AŞ is consolidated using the equity method. The Parent Bank’s subsidiaries Halk Yatırım Menkul Değerler AŞ, Halk Gayrimenkul Yatırım Ortaklığı AŞ, Halk Finansal Kiralama AŞ, Halk Banka AD Skopje and its subsidiary Halk Osiguruvanje AD Skopje, Halk Faktoring AŞ, Halkbank AD Beograd, Halk Katılı m Bankası AŞ, Halk Varlık Kiralama AŞ and Halk Elektronik Para ve Ödeme Hizmetleri AŞ are included in the scope of consolidation by line-by-line method. DHB Bank NV, Kobi Girişim Sermayesi Yatırım Ortaklığı AŞ, Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ and Birleşim Varlık Yönetim AŞ which are classified as investments in associates, are included in the financial statements based on equity method of consolidation. Associates are the domestic or foreign subsidiaries which the Parent Bank participates to equity with significant influence but without controlling interest. VIII. CURRENT OR LIKELY ACTUAL OR LEGAL BARRIERS TO IMMEDIATE TRANSFER OF SHAREHOLDERS' EQUITY OR THE REPAYMENT OF DEBTS BETWEEN THE BANK AND ITS SUBSIDIARIES Immediate transfer of the equity between the Parent Bank and its subsidiaries is not in question. Dividend distribution from equity is made according to the related regulations. There are no current or likely actual or legal barriers to the repayment of debts between the Parent Bank and its subsidiaries. The Parent Bank collects or disburses the amounts related to the purchase or prestation of services with its subsidiaries within the scope of service contracts.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 9 SECTION II: CONSOLIDATED FINANCIAL STATEMENTS I. Consolidated Balance Sheet (Consolidated Statement of Financial Position) II. Consolidated Statement of Off-Balance Sheet III. Consolidated Statement of Profit or Loss IV. Consolidated Statement of Profit or Loss and Other Comprehensive Income V. Consolidated Statement of Changes in Shareholders’ Equity VI. Consolidated Statement of Cash Flows
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED BALANCE SHEET AS OF 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 10 I. CONSOLIDATED BALANCE SHEET (CONSOLIDATED STATEMENT OF FINANCIAL POSITION) Reviewed Audited Current Period Prior Period 30 September 2025 31 December 2024 CONSOLIDATED ASSETS Note TRY FC TOTAL TRY FC TOTAL I. FINANCIAL ASSETS (NET) 548.122.496 748.372.271 1.296.494.767 480.536.227 427.063.217 907.599.444 1.1 Cash and Cash Equivalents 402.500.174 508.004.263 910.504.437 370.307.065 298.593.643 668.900.708 1.1.1 Cash and Balances with Central Bank (1) 371.095.055 482.848.361 853.943.416 356.954.461 276.472.432 633.426.893 1.1.2 Banks (3) 31.446.147 25.164.140 56.610.287 13.297.023 20.938.433 34.235.456 1.1.3 Money Markets Placements 210.000 - 210.000 220.000 1.192.154 1.412.154 1.1.4 Expected Loss Provision (-) 251.028 8.238 259.266 164.419 9.376 173.795 1.2 Financial Assets at Fair Value Through Profit or Loss (2) 10.227.495 87.806.434 98.033.929 2.226.939 56.553.648 58.780.587 1.2.1 Government Debt Securities 82.364 87.369.780 87.452.144 148.643 56.220.365 56.369.008 1.2.2 Equity Instruments 127.958 33.699 161.657 1.380 63.284 64.664 1.2.3 Other Financial Assets 10.017.173 402.955 10.420.128 2.076.916 269.999 2.346.915 1.3 Financial Assets at Fair Value Through Other Comprehensive Income (4) 135.393.650 149.100.178 284.493.828 108.002.223 70.472.511 178.474.734 1.3.1 Government Debt Securities 135.226.436 147.474.693 282.701.129 107.887.190 69.194.517 177.081.707 1.3.2 Equity Instruments 167.214 1.625.485 1.792.699 115.033 1.277.994 1.393.027 1.3.3 Other Financial Assets - - - - - - 1.4 Derivative Financial Assets (2)(11) 1.177 3.461.396 3.462.573 - 1.443.415 1.443.415 1.4.1 Derivative Financial Assets at Fair Value Through Profit or Loss 1.177 3.461.396 3.462.573 - 1.443.415 1.443.415 1.4.2 Derivative Financial Assets at Fair Value Through Other Comprehensive Income - - - - - - II. FINANCIAL ASSETS MEASURED AT AMORTISED COST(Net) 1.892.226.559 753.119.911 2.645.346.470 1.538.387.567 522.954.687 2.061.342.254 2.1 Loans (5) 1.269.107.628 637.355.922 1.906.463.550 1.091.295.923 430.347.527 1.521.643.450 2.2 Lease Receivables (10) 8.211.569 9.642.435 17.854.004 7.460.984 5.589.692 13.050.676 2.3 Factoring Receivables 11.441.418 3.440.532 14.881.950 8.858.683 1.131.056 9.989.739 2.4 Other Financial Assets Measured at Amortised Cost (6) 660.077.618 105.175.745 765.253.363 474.074.684 87.534.263 561.608.947 2.4.1 Government Debt Securities 660.077.618 105.175.745 765.253.363 471.665.583 87.534.263 559.199.846 2.4.2 Other Financial Assets - - - 2.409.101 - 2.409.101 2.5 Expected Credit Loss (-) 56.611.674 2.494.723 59.106.397 43.302.707 1.647.851 44.950.558 III. NON CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (NET) (14) 663 - 663 1.034 - 1.034 3.1 Held for Sale 663 - 663 1.034 - 1.034 3.2 Discontinued Operations - - - - - - IV. EQUITY INVESTMENTS 749.399 3.942.160 4.691.559 502.770 2.902.429 3.405.199 4.1 Investments in Associates (Net) (7) 628.152 3.942.160 4.570.312 502.770 2.902.429 3.405.199 4.1.1 Associates Valued Based on Equity Method 474.412 3.942.160 4.416.572 349.030 2.902.429 3.251.459 4.1.2 Unconsolidated Associates 153.740 - 153.740 153.740 - 153.740 4.2 Subsidiaries (Net) (8) 121.247 - 121.247 - - - 4.2.1 Unconsolidated Financial Subsidiaries - - - - - - 4.2.2 Unconsolidated Non- Financial Subsidiaries 121.247 - 121.247 - - - 4.3 Joint Ventures (Net) (9) - - - - - - 4.3.1 Joint Ventures Valued Based on Equity Method - - - - - - 4.3.2 Unconsolidated Joint Ventures - - - - - - V. TANGIBLE ASSETS (Net) 61.105.515 3.929.699 65.035.214 46.772.727 2.319.320 49.092.047 VI. INTANGIBLE ASSETS (Net) 4.060.206 1.084.285 5.144.491 2.671.140 780.022 3.451.162 6.1 Goodwill - - - - - - 6.2 Other 4.060.206 1.084.285 5.144.491 2.671.140 780.022 3.451.162 VII. INVESTMENT PROPERTIES (Net) (12) 36.956.039 45.548 37.001.587 25.315.013 35.074 25.350.087 VIII. CURRENT TAX ASSET 21.438 76.457 97.895 - 7.140 7.140 IX. DEFERRED TAX ASSET (13) 27.328.997 18.786 27.347.783 23.835.883 14.114 23.849.997 X. OTHER ASSETS (Net) (15) 120.990.862 9.022.069 130.012.931 63.937.962 5.822.424 69.760.386 TOTAL ASSETS 2.691.562.174 1.519.611.186 4.211.173.360 2.181.960.323 961.898.427 3.143.858.750 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED BALANCE SHEET AS OF 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 11 I. CONSOLIDATED BALANCE SHEET (CONSOLIDATED STATEMENT OF FINANCIAL POSITION) Reviewed Audited Current Period Prior Period 30 September 2025 31 December 2024 CONSOLIDATED LIABILITIES Note TRY FC TOTAL TRY FC TOTAL I. DEPOSITS (1) 1.968.667.254 1.313.774.929 3.282.442.183 1.608.960.582 851.659.873 2.460.620.455 II. FUNDS BORROWED (3) 3.152.448 94.447.568 97.600.016 23.738.099 40.732.710 64.470.809 III. MONEY MARKET FUNDS 235.720.139 99.242.692 334.962.831 170.933.569 85.791.960 256.725.529 IV. SECURITIES ISSUED (Net) (4) 29.048.429 - 29.048.429 12.192.983 - 12.192.983 4.1 Bills 2.348.654 - 2.348.654 4.836.295 - 4.836.295 4.2 Assets Backed Securities 26.699.775 - 26.699.775 7.356.688 - 7.356.688 4.3 Bonds - - - - - - V. FUNDS 78.328 - 78.328 927.087 - 927.087 5.1 Borrower Funds - - - - - - 5.2 Other 78.328 - 78.328 927.087 - 927.087 VI. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS - - - - - - VII. DERIVATIVE FINANCIAL LIABILITIES (2)(7) 1.330 2.470.499 2.471.829 - 2.493.751 2.493.751 7.1 Derivative Financial Liabilities at Fair Value Through Profit or Loss 1.330 2.470.499 2.471.829 - 2.493.751 2.493.751 7.2 Derivative Financial Liabilities at Fair Value Through Other Comprehensive Income - - - - - - VIII. FACTORING LIABILITIES 12.506 2 12.508 33.256 - 33.256 IX. LEASE LIABILITIES (6) 5.013.436 881.160 5.894.596 3.599.700 624.020 4.223.720 X. PROVISIONS (8) 14.435.996 1.283.266 15.719.262 9.861.995 925.102 10.787.097 10.1 Restructuring Provisions - - - - - - 10.2 Reserve for Employee Benefits 10.003.059 369.292 10.372.351 6.801.655 282.743 7.084.398 10.3 Insurance for Technical Provision (Net) - 798.459 798.459 - 555.471 555.471 10.4 Other Provisions 4.432.937 115.515 4.548.452 3.060.340 86.888 3.147.228 XI. CURRENT TAX LIABILITIES (9) 15.177.151 137.114 15.314.265 9.627.765 60.267 9.688.032 XII. DEFERRED TAX LIABILITIES (9) 4.623.154 38.979 4.662.133 3.048.633 2.152 3.050.785 XIII. NON CURRENT LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) (10) - - - - - - 13.1 Held for Sale - - - - - - 13.2 Discontinued Operations - - - - - - XIV. SUBORDINATED DEBT INSTRUMENTS (11) 51.593.531 29.763.312 81.356.843 50.184.304 - 50.184.304 14.1 Loans 18.829.227 - 18.829.227 16.577.458 - 16.577.458 14.2 Other Debt Instruments 32.764.304 29.763.312 62.527.616 33.606.846 - 33.606.846 XV. OTHER LIABILITIES (5) 126.035.613 14.290.954 140.326.567 91.183.092 7.341.733 98.524.825 XVI. SHAREHOLDERS’ EQUITY (12) 186.745.336 14.538.234 201.283.570 161.080.798 8.855.319 169.936.117 16.1 Paid-in Capital 7.184.778 - 7.184.778 7.184.778 - 7.184.778 16.2 Capital Reserves 44.521.459 - 44.521.459 45.519.268 722.748 46.242.016 16.2.1 Share Premium 44.505.199 - 44.505.199 44.505.199 - 44.505.199 16.2.2 Share Cancellation Profits - - - - - - 16.2.3 Other Capital Reserves 16.260 - 16.260 1.014.069 722.748 1.736.817 16.3 Accumulated Other Comprehensive Income or Loss Not Reclassified Through Profit or Loss 32.769.873 991.896 33.761.769 26.124.794 4.930 26.129.724 16.4 Accumulated Other Comprehensive Income or Loss Reclassified Through Profit or Loss (5.978.830) 8.404.071 2.425.241 (6.276.513) 4.065.778 (2.210.735) 16.5 Profit Reserves 81.057.447 3.575.834 84.633.281 55.970.348 1.785.454 57.755.802 16.5.1 Legal Reserves 6.097.930 3.218.961 9.316.891 5.076.625 1.428.581 6.505.206 16.5.2 Status Reserves - - - - - - 16.5.3 Extraordinary Reserves 74.912.336 356.873 75.269.209 50.846.542 356.873 51.203.415 16.5.4 Other Profit Reserves 47.181 - 47.181 47.181 - 47.181 16.6 Income or (Loss) 23.943.547 1.509.895 25.453.442 29.220.638 2.236.744 31.457.382 16.6.1 Prior Periods’ Income or (Loss) 5.096.734 153.031 5.249.765 9.076.636 342.925 9.419.561 16.6.2 Current Period Income or (Loss) 18.846.813 1.356.864 20.203.677 20.144.002 1.893.819 22.037.821 16.7 Minority Shares 3.247.062 56.538 3.303.600 3.337.485 39.665 3.377.150 TOTAL LIABILITIES 2.640.304.651 1.570.868.709 4.211.173.360 2.145.371.863 998.486.887 3.143.858.750 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS AS OF 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 12 II. CONSOLIDATED STATEMENT OF OFF BALANCE SHEET Reviewed Audited Current Period Prior Period 30 September 2025 31 December 2024 CONSOLIDATED OFF-BALANCE SHEET Note TRY FC TOTAL TRY FC TOTAL A. COMMITMENTS AND CONTINGENCIES (I+II+III) 1.281.013.082 848.558.068 2.129.571.150 937.838.680 558.949.112 1.496.787.792 I. GUARANTEES AND WARRANTIES (1) 731.997.212 385.637.886 1.117.635.098 551.997.849 265.935.019 817.932.868 1.1 Letters of guarantee 609.233.539 340.617.287 949.850.826 461.327.649 245.392.301 706.719.950 1.1.1 Guarantees subject to public procurement law 29.145.936 41.922.418 71.068.354 22.250.844 29.830.050 52.080.894 1.1.2 Guarantees given for foreign trade operations 1.117.755 84.111.330 85.229.085 570.974 58.677.011 59.247.985 1.1.3 Other letters of guarantee 578.969.848 214.583.539 793.553.387 438.505.831 156.885.240 595.391.071 1.2 Bank loans 72.386.031 3.802.611 76.188.642 54.059.349 1.139.027 55.198.376 1.2.1 Import acceptances - 2.092.341 2.092.341 - 894.738 894.738 1.2.2 Other bank acceptances 72.386.031 1.710.270 74.096.301 54.059.349 244.289 54.303.638 1.3 Letters of credit 185.482 40.982.015 41.167.497 194.998 19.244.049 19.439.047 1.3.1 Documentary letters of credit 185.482 40.982.015 41.167.497 194.998 19.244.049 19.439.047 1.3.2 Other letters of credit - - - - - - 1.4 Guaranteed refinancing - - - - - - 1.5 Endorsements - - - - - - 1.5.1 Endorsements to Central Bank of the Republic of Türkiye - - - - - - 1.5.2 Other Endorsements - - - - - - 1.6 Purchase guarantees on marketable security issuance - - - - - - 1.7 Factoring guarantees - - - - - - 1.8 Other guarantees 50.192.160 235.973 50.428.133 36.415.853 159.642 36.575.495 1.9 Other sureties - - - - - - II. COMMITMENTS 429.342.939 76.552.110 505.895.049 305.071.914 50.674.890 355.746.804 2.1 Irrevocable commitments (1) 406.392.644 14.592.945 420.985.589 294.458.436 9.150.337 303.608.773 2.1.1 Forward asset purchase commitments 934.555 10.497.676 11.432.231 884.087 6.648.336 7.532.423 2.1.2 Forward deposit purchase and sale commitments - - - - - - 2.1.3 Capital commitments to subsidiaries and associates - - - - - - 2.1.4 Loan granting commitments 27.571.588 268.151 27.839.739 24.483.297 143.716 24.627.013 2.1.5 Securities underwriting commitments - - - - - - 2.1.6 Payment commitments for reserve deposits - - - - - - 2.1.7 Payment commitments for Cheques (3) 38.934.922 - 38.934.922 30.831.741 - 30.831.741 2.1.8 Tax and fund liabilities from export commitments 1.269.343 - 1.269.343 1.224.652 - 1.224.652 2.1.9 Commitments for credit card expenditure limits 266.672.383 1.107.189 267.779.572 184.400.885 780.109 185.180.994 2.1.10 Commitments for credit cards and banking services promotions 334.449 - 334.449 243.446 - 243.446 2.1.11 Receivables from short sale commitments - - - - - - 2.1.12 Payables for short sale commitments - - - - - - 2.1.13 Other irrevocable commitments 70.675.404 2.719.929 73.395.333 52.390.328 1.578.176 53.968.504 2.2 Revocable commitments 22.950.295 61.959.165 84.909.460 10.613.478 41.524.553 52.138.031 2.2.1 Revocable loan granting commitments - 27.974.871 27.974.871 - 18.776.645 18.776.645 2.2.2 Other revocable commitments 22.950.295 33.984.294 56.934.589 10.613.478 22.747.908 33.361.386 III. DERIVATIVE FINANCIAL INSTRUMENTS (2) 119.672.931 386.368.072 506.041.003 80.768.917 242.339.203 323.108.120 3.1 Derivative financial instruments held for risk management - - - - - - 3.1.1 Fair value risk hedging transactions - - - - - - 3.1.2 Cash flow risk hedging transactions - - - - - - 3.1.3 Net foreign investment risk hedging transactions - - - - - - 3.2 Transactions for trading 119.672.931 386.368.072 506.041.003 80.768.917 242.339.203 323.108.120 3.2.1 Forward foreign currency buy/sell transactions 58.581.495 104.801.309 163.382.804 46.932.595 69.222.684 116.155.279 3.2.1.1 Forward foreign currency transactions-buy 29.287.305 50.087.006 79.374.311 19.381.549 32.894.610 52.276.159 3.2.1.2 Forward foreign currency transactions-sell 29.294.190 54.714.303 84.008.493 27.551.046 36.328.074 63.879.120 3.2.2 Currency and interest rate swaps 57.069.313 240.841.988 297.911.301 33.561.628 156.699.977 190.261.605 3.2.2.1 Currency swap-buy - 70.505.922 70.505.922 - 41.750.662 41.750.662 3.2.2.2 Currency swap-sell 57.069.313 44.288.714 101.358.027 33.421.628 10.466.143 43.887.771 3.2.2.3 Interest rate swap-buy - 63.023.676 63.023.676 70.000 52.241.586 52.311.586 3.2.2.4 Interest rate swap-sell - 63.023.676 63.023.676 70.000 52.241.586 52.311.586 3.2.3 Currency, interest rate and marketable securities options 4.022.123 5.860.891 9.883.014 274.694 435.323 710.017 3.2.3.1 Currency call options 2.011.068 2.930.439 4.941.507 137.200 217.767 354.967 3.2.3.2 Currency put options 2.011.055 2.930.452 4.941.507 137.494 217.556 355.050 3.2.3.3 Interest rate call options - - - - - - 3.2.3.4 Interest rate put options - - - - - - 3.2.3.5 Marketable securities call options - - - - - - 3.2.3.6 Marketable securities put options - - - - - - 3.2.4 Currency futures - - - - - - 3.2.4.1 Currency futures-buy - - - - - - 3.2.4.2 Currency futures-sell - - - - - - 3.2.5 Interest rate buy/sell futures - - - - - - 3.2.5.1 Interest rate futures-buy - - - - - - 3.2.5.2 Interest rate futures-sell - - - - - - 3.2.6 Other - 34.863.884 34.863.884 - 15.981.219 15.981.219 B. CUSTODY AND PLEDGED ASSETS (IV+V+VI) 13.794.279.576 3.347.483.663 17.141.763.239 10.279.340.011 2.220.065.134 12.499.405.145 IV. CUSTODIES 6.700.518.069 995.076.343 7.695.594.412 4.685.802.836 453.982.800 5.139.785.636 4.1 Assets under management - - - - - - 4.2 Custody marketable securities 623.398.700 153.130.143 776.528.843 421.524.393 50.307.830 471.832.223 4.3 Cheques in collection process 246.081.280 618.349.612 864.430.892 201.701.445 243.321.652 445.023.097 4.4 Commercial notes in collection process 5.396.920.360 59.903.745 5.456.824.105 3.811.467.645 46.776.448 3.858.244.093 4.5 Other assets in collection process - - - - - - 4.6 Underwritten securities - - - - - - 4.7 Other custodies 6.438.905 1.728.506 8.167.411 3.140.918 89.950 3.230.868 4.8 Custodians 427.678.824 161.964.337 589.643.161 247.968.435 113.486.920 361.455.355 V. PLEDGED ASSETS 7.093.761.507 2.352.407.320 9.446.168.827 5.593.537.175 1.766.082.334 7.359.619.509 5.1 Marketable securities 39.250.116 5.306.372 44.556.488 26.583.329 4.617.115 31.200.444 5.2 Collateral notes 77.946.351 10.524.115 88.470.466 68.571.930 7.459.864 76.031.794 5.3 Commodity 25.813 - 25.813 25.813 - 25.813 5.4 Warranty - - - - - - 5.5 Land and buildings 6.407.341.623 1.692.437.662 8.099.779.285 4.981.187.961 1.287.544.896 6.268.732.857 5.6 Other pledged assets 516.764.026 492.458.273 1.009.222.299 411.522.779 391.246.849 802.769.628 5.7 Pledges 52.433.578 151.680.898 204.114.476 105.645.363 75.213.610 180.858.973 VI. ACCEPTED BILL GUARANTEES AND SURETIES - - - - - - TOTAL OFF-BALANCE SHEET ACCOUNTS (A+B) 15.075.292.658 4.196.041.731 19.271.334.389 11.217.178.691 2.779.014.246 13.996.192.937 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 13 III. CONSOLIDATED STATEMENT OF PROFIT OR LOSS Reviewed Reviewed Reviewed Reviewed Current Period Prior Period Current Period Prior Period INCOME AND EXPENSES Note 1 January -30 September 2025 1 January -30 September 2024 1 July -30 September 2025 1 July -30 September 2024 I. INTEREST INCOME (1) 673.028.663 485.428.631 236.179.616 182.090.558 1.1 Interest on Loans 397.146.988 313.185.217 149.427.585 115.781.479 1.2 Interest on Reserve Requirements 59.952.674 26.405.600 21.756.573 13.264.211 1.3 Interest on Banks 6.958.387 4.753.012 2.657.797 2.073.382 1.4 Interest on Money Market Transactions 2.020.965 823.001 984.529 282.092 1.5 Interest on Marketable Securities 199.057.653 133.809.431 58.642.356 48.231.717 1.5.1 Fair Value Through Profit or Loss 1.680.487 623.669 483.424 316.939 1.5.2 Fair Value Through Other Comprehensive Income 37.385.609 29.232.446 12.980.780 11.022.318 1.5.3 Measured at Amortized Cost 159.991.557 103.953.316 45.178.152 36.892.460 1.6 Financial Lease Interest Income 3.314.968 2.756.573 1.076.825 1.161.001 1.7 Other Interest Income 4.577.028 3.695.797 1.633.951 1.296.676 II. INTEREST EXPENSE (-) (2) 608.114.038 452.581.272 212.719.068 174.144.302 2.1 Interest on Deposits 517.307.688 394.983.527 181.214.301 150.753.076 2.2 Interest on Funds Borrowed 13.810.045 5.396.451 3.633.451 2.256.045 2.3 Interest Expense on Money Market Transactions 56.657.309 44.680.249 21.516.150 19.309.270 2.4 Interest on Securities Issued 13.990.993 4.475.658 4.866.524 1.441.650 2.5 Interest on Leases 1.377.486 563.547 636.299 228.376 2.6 Other Interest Expenses 4.970.517 2.481.840 852.343 155.885 III. NET INTEREST INCOME (I - II) 64.914.625 32.847.359 23.460.548 7.946.256 IV. NET FEES AND COMMISSIONS INCOME 43.780.491 30.259.244 16.118.372 11.413.645 4.1 Fees and Commissions Received 62.870.697 43.541.206 23.574.198 16.195.150 4.1.1 Non – cash Loans 9.311.084 7.240.117 3.669.904 2.568.472 4.1.2 Other (11) 53.559.613 36.301.089 19.904.294 13.626.678 4.2 Fees and Commissions Paid (-) 19.090.206 13.281.962 7.455.826 4.781.505 4.2.1 Non – cash Loans 67.229 44.512 31.415 13.625 4.2.2 Other (11) 19.022.977 13.237.450 7.424.411 4.767.880 V. DIVIDEND INCOME 51.552 31.104 2.231 6.503 VI. TRADING INCOME / LOSS (Net) (3) (9.134.351) (21.161.563) (2.617.252) (1.520.963) 6.1 Trading Gains / (Losses) on Securities (375.631) 5.199.623 430.279 1.062.826 6.2 Gains / (Losses) on Derivate Financial Transactions 7.061.914 (14.590.390) 2.372.673 511.657 6.3 Foreign Exchange Gains / (Losses) (15.820.634) (11.770.796) (5.420.204) (3.095.446) VII. OTHER OPERATING INCOME (4) 26.203.863 20.462.316 9.489.320 6.795.640 VIII. GROSS OPERATING INCOME (III+IV+V+VI+VII+VIII) 125.816.180 62.438.460 46.453.219 24.641.081 IX. EXPECTED LOSS PROVISIONS EXPENSES (-) (5) 25.922.524 7.105.485 12.098.481 3.585.977 X. OTHER PROVISION EXPENSES (-) (5) 422.111 286.772 215.583 252.359 XI. PERSONNEL EXPENSES (-) 37.620.098 24.289.452 13.635.997 8.403.948 XII. OTHER OPERATING EXPENSES (-) (6) 42.830.778 22.537.752 14.308.300 6.518.491 XIII. NET OPERATING INCOME /LOSS (IX-X-XI) 19.020.669 8.218.999 6.194.858 5.880.306 XIV. INCOME AFTER MERGER - - - - XV. INCOME /( LOSS ) FROM INVESTMENTS IN SUBSIDIARIES CONSOLIDATED BASED ON EQUITY METHOD 336.764 283.655 141.908 81.845 XVI. INCOME / (LOSS) ON NET MONETARY POSITION - - - - XVII. PROFIT / LOSS BEFORE TAX FROM CONTINUED OPERATIONS (XIII+...+XVI) (7) 19.357.433 8.502.654 6.336.766 5.962.151 XVIII. TAX PROVISIONS FOR CONTINUED OPERATIONS (±) (8) 1.363.131 7.237.692 575.356 (2.539.389) 18.1 Current Tax Provision 2.067.915 1.686.786 815.684 704.818 18.2 Deferred Tax Income Effect (+) 15.951.502 16.056.319 3.908.344 7.149.364 18.3 Deferred Tax Expense Effect (-) 19.382.548 24.980.797 5.299.384 5.314.793 XIX. CURRENT PERIOD PROFIT / LOSS FROM CONTINUED OPERATIONS (XVII±XVIII) (9) 20.720.564 15.740.346 6.912.122 3.422.762 XX. INCOME FROM DISCONTUNIUED OPERATIONS - - - - 20.1 Income from Non-Current Assets Held for Sale - - - - 20.2 Profit from Sales of Associates, Subsidiaries and Joint Ventures - - - - 20.3 Income from Other Discontinued Operations - - - - XXI. EXPENSES FOR DISCONTINUED OPERATIONS (-) - - - - 21.1 Expenses for Non-current Assets Held for Sale - - - - 21.2 Loss from Sales of Associates, Subsidiaries and Joint Ventures - - - - 21.3 Expenses for Other Discontinued Operations - - - - XXII. PROFIT/LOSS BEFORE TAX FROM DISCONTINUED OPERATIONS (XX-XXI) - - - - XXIII. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) - - - - 23.1 Current Tax Provision - - - - 23.2 Deferred Tax Expense Effect (+) - - - - 23.3 Deferred Tax Income Effect (-) - - - - XXIV. CURRENT PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XXII±XXIII) - - - - XXV. NET PROFIT/(LOSS) (XIX+XXIV) (10) 20.720.564 15.740.346 6.912.122 3.422.762 25.1 Profit / (Loss) of Group 20.203.677 15.056.329 7.545.893 3.476.248 25.2 Profit / (Loss) of Minority Shares (-) 516.887 684.017 (633.771) (53.486) Profit / (Loss) Per Share (full TRY) 2,81201131 2,09558723 1,05026112 0,48383513 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 14 IV. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Reviewed Reviewed Current Period Prior Period 1 January -30 September 2025 1 January -30 September 2024 I. CURRENT PERIOD INCOME/LOSS 20.720.564 15.740.346 II. OTHER COMPREHENSIVE INCOME 12.268.021 (522.490) 2.1 Not Reclassified Through Profit or Loss 7.632.045 4.337.941 2.1.1 Revaluation Increase/Decrease of Tangible Assets 7.793.056 4.930.972 2.1.2 Revaluation Increase/Decrease of Intangible Assets - - 2.1.3 Defined Benefit Pension Plan Remeasurement Gain/Loss (2.552) - 2.1.4 Other Comprehensive Income Items Not Reclassified Through Profit or Loss 1.052.243 (497.764) 2.1.5 Tax on Other Comprehensive Income Items Not Reclassified Through Profit or Loss (1.210.702) (95.267) 2.2 Reclassified Through Profit or Loss 4.635.976 (4.860.431) 2.2.1 Foreign Currency Translation Differences 3.886.933 (385.357) 2.2.2 Valuation and/or Reclassification Income/Expense of the Financial Assets at Fair Value through Other Comprehensive Income 1.082.949 (6.444.464) 2.2.3 Cash Flow Hedge Income/Loss - - 2.2.4 Foreign Net Investment Hedge Income/Loss - - 2.2.5 Other Comprehensive Income Items Reclassified Through Profit or Loss - - 2.2.6 Tax on Other Comprehensive Income Items Reclassified Through Profit or Loss (333.906) 1.969.390 III. TOTAL COMPREHENSIVE INCOME (I+II) 32.988.585 15.217.856 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 15 V. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Paid in Capital Share Premiums Share Cancellation Profits Other Capital Reserves Accumulated Other Comprehensive Income or Expense Not Reclassified through Profit or Loss Accumulated Other Comprehensive Income or Expense Reclassified through Profit or Loss Reviewed (1 January -30 September 2024) Accumulated Revaluation Increase/Decrease of Fixed Assets Accumulated Remeasurement Gain/Loss of Defined Benefit Pension Plan Other(Shares of Investments Valued by Equity Method in Other Comprehensive Income Not Classified Through Profit or Loss and Other Accumulated Amounts of Other Comprehensive Income Items Not Reclassified Through Other Profit or Loss) Foreign Currency Translation Differences Accumulated Revaluation and/or Remeasurement Gain/Loss of the Financial Assets at Fair Value Through Other Comprehensive Income Other (Cash Flow Hedge Gain/Loss, Shares of Investments Valued by Equity Method in Other Comprehensive Income Classified Through Profit or Loss and Other Accumulated Amounts of Other Comprehensive Income Items Reclassified Through Other Profit or Loss) Profit Reserves Prior Period Profit or (Loss) Current Period Profit or (Loss) Total Equity Except Minority Shares Minority Shares Total Equity I. Balances at Beginning of Period 7.184.778 44.505.199 - 1.029.785 18.928.133 (1.877.349) 730.916 (430.061) (384.783) - 48.694.309 5.632.312 16.830.755 140.843.994 2.070.949 142.914.943 II. Corrections and Accounting Policy Changes Made According to TAS 8 - - - - - - - - - - - - - - - - 2.1 Effects of Corrections - - - - - - - - - - - - - - - - 2.2 Effects of the Changes in Accounting Policies - - - - - - - - - - - - - - - - III. Adjusted Beginning Balance (I+II) 7.184.778 44.505.199 - 1.029.785 18.928.133 (1.877.349) 730.916 (430.061) (384.783) - 48.694.309 5.632.312 16.830.755 140.843.994 2.070.949 142.914.943 IV. Total Comprehensive Income - - - - 4.835.705 - (497.764) (385.357) (4.475.074) - - - 15.056.329 14.533.839 684.017 15.217.856 V. Capital Increase by Cash - - - - - - - - - - - - - - - - VI. Capital Increase by Internal Sources - - - - - - - - - - - - - - - - VII. Paid in Capital Inflation Adjustment Difference - - - - - - - - - - - - - - - - VIII. Convertible Bonds to Share - - - - - - - - - - - - - - - - IX. Subordinated Debt Instruments - - - - - - - - - - - - - - - - X. Increase / Decrease by Other Changes - - - 622.842 - - - - - - 884.078 16.758.340 (16.830.755) 1.434.505 392.553 1.827.058 XI. Profit Distribution - - - - - - - - - - 12.173.740 (12.184.801) - (11.061) 11.061 - 11.1 Dividends Paid - - - - - - - - - - - (11.061) - (11.061) 11.061 - 11.2 Transfers to Reserves - - - - - - - - - - 12.173.740 (12.173.740) - - - - 11.3 Other - - - - - - - - - - - - - - - - Period End Balance (III+IV+…...+X+XI) 7.184.778 44.505.199 - 1.652.627 23.763.838 (1.877.349) 233.152 (815.418) (4.859.857) - 61.752.127 10.205.851 15.056.329 156.801.277 3.158.580 159.959.857 Reviewed (1 January -30 September 2025) I. Prior Period End Balance 7.184.778 44.505.199 - 1.736.817 28.306.995 (2.410.423) 233.152 3.142.254 (5.352.989) - 57.755.802 9.419.561 22.037.821 166.558.967 3.377.150 169.936.117 II. Corrections and Accounting Policy Changes Made According to TAS 8 - - - - - - - - - - - - - - - - 2.1 Effects of Corrections - - - - - - - - - - - - - - - - 2.2 Effects of the Changes in Accounting Policies - - - - - - - - - - - - - - - - III. Adjusted Beginning Balance (I+II) 7.184.778 44.505.199 - 1.736.817 28.306.995 (2.410.423) 233.152 3.142.254 (5.352.989) - 57.755.802 9.419.561 22.037.821 166.558.967 3.377.150 169.936.117 IV. Total Comprehensive Income - - - - 6.582.354 (2.552) 1.052.243 3.886.933 749.043 - - - 20.203.677 32.471.698 516.887 32.988.585 V. Capital Increase by Cash - - - - - - - - - - - - - - - - VI. Capital Increase by Internal Sources - - - - - - - - - - - - - - - - VII. Paid in Capital Inflation Adjustment Difference - - - - - - - - - - - - - - - - VIII. Convertible Bonds to Share - - - - - - - - - - - - - - - - IX. Subordinated Debt Instruments - - - - - - - - - - - - - - - - X. Increase / Decrease by Other Changes - - - (1.720.557) - - - - - - - 22.710.621 (22.037.821) (1.047.757) (593.375) (1.641.132) XI. Profit Distribution - - - - - - - - - - 26.877.479 (26.880.417) - (2.938) 2.938 - 11.1 Dividends Paid - - - - - - - - - - - (2.938) - (2.938) 2.938 - 11.2 Transfers to Reserves - - - - - - - - - - 26.877.479 (26.877.479) - - - - 11.3 Other - - - - - - - - - - - - - - - - Period End Balance (III+IV+…...+X+XI) 7.184.778 44.505.199 - 16.260 34.889.349 (2.412.975) 1.285.395 7.029.187 (4.603.946) - 84.633.281 5.249.765 20.203.677 197.979.970 3.303.600 201.283.570 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 16 VI. CONSOLIDATED STATEMENT OF CASH FLOW Reviewed Reviewed Current Period Prior Period Note 1 January -30 September 2025 1 January -30 September 2024 A. CASH FLOWS FROM BANKING OPERATIONS 1.1 Operating Profit Before Changes in Operating Assets and Liabilities (29.191.163) (48.466.512) 1.1.1 Interest received 547.884.856 364.496.586 1.1.2 Interest paid (610.305.962) (431.422.537) 1.1.3 Dividend received 51.552 31.104 1.1.4 Fees and commissions received 62.870.697 43.731.567 1.1.5 Other income 23.874.739 18.054.503 1.1.6 Collections from previously written off receivables 7.918.486 4.335.487 1.1.7 Cash payments to personnel and service suppliers (37.762.474) (24.687.511) 1.1.8 Taxes paid (7.697.924) (2.123.966) 1.1.9 Other (16.025.133) (20.881.745) 1.2 Changes in Assets and Liabilities Subject to Banking Operations 246.046.434 274.867.343 1.2.1 Net (increase)/decrease in financial assets at fair value through profit or loss (3.754.140) (37.705.690) 1.2.2 Net (increase)/decrease in due from banks (110.473) 187.640 1.2.3 Net (increase)/decrease in loans (260.302.299) (118.714.309) 1.2.4 Net (increase)/decrease in other assets (208.928.223) (102.824.514) 1.2.5 Net increase/(decrease) in bank deposits 77.635.200 76.250.730 1.2.6 Net increase/(decrease) in other deposits 506.676.436 245.962.644 1.2.7 Net increase/(decrease) in financial liabilities at fair value through profit or loss - - 1.2.8 Net increase/(decrease) in funds borrowed 19.455.055 38.396.399 1.2.9 Net increase/(decrease) in matured payables - - 1.2.10 Net increase/(decrease) in other liabilities 115.374.878 173.314.443 I. Net Cash Provided from Banking Operations 216.855.271 226.400.831 B. CASH FLOWS FROM INVESTMENT ACTIVITIES II. Net Cash Provided from/(used in) Investing Activities (202.398.364) (21.563.216) 2.1 Cash paid for purchase of joint ventures, associates and subsidiaries (115.211) (19.225) 2.2 Cash obtained from sale of entities joint ventures, associates and subsidiaries - - 2.3 Fixed assets purchases (12.007.484) (9.268.428) 2.4 Fixed assets sales 3.229.168 2.231.348 2.5 Cash paid for purchase of financial assets at fair value through other comprehensive income (178.028.794) (50.533.137) 2.6 Cash obtained from sale of financial assets at fair value through other comprehensive income 72.786.418 14.238.748 2.7 Cash paid for purchase of investment securities (116.958.590) (86.892.398) 2.8 Cash obtained from sale of investment securities 31.635.043 110.180.777 2.9 Other (2.938.914) (1.500.901) C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net Cash Flow from Financing Activities 46.533.777 (6.853.413) 3.1 Cash obtained from loans borrowed and securities issued 46.241.786 16.956.135 3.2 Cash used for repayment of loans borrowed and securities issued 1.923.269 (21.965.230) 3.3 Bonds issued - - 3.4 Dividends paid (2.938) - 3.5 Payments for leases (1.628.340) (1.844.318) 3.6 Other - - IV. Effect of Change in Foreign Exchange Rate on Cash and Cash Equivalents 33.803.572 22.549.023 V. Net Increase/(decrease) in Cash and Cash Equivalents 94.794.256 220.533.225 VI. Cash and Cash Equivalents at Beginning of the Period 413.712.128 151.521.943 VII. Cash and Cash Equivalents at End of the Period 508.506.384 372.055.168 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 17 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES I. EXPLANATIONS ON BASIS OF PRESENTATION The Parent Bank prepares its consolidated financial statements in accordance with the BRSA Accounting and Reporting Regulation” which includes the regulation on “The Procedures and Principles Regarding Banks’ Accounting Practices and Maintaining Documents” published in the Official Gazette dated 1 November 2006 with No. 26333, and other regulations on accounting records of banks published by the Banking Regulation and Supervision Board (“BRSA”) and circulars and pronouncements published by the BRSA and Turkish Financial Reporting Standards published by the Public Oversight Accounting and Auditing Standards Authority (“POA”) for the matters not regulated by the aforementioned legislations. The consolidated financial statements are prepared in accordance with the historical cost basis except for financial assets and liabilities measured at fair value through profit/loss, financial assets measured at fair value through other comprehensive income and real estates. Amounts expressed in thousand Turkish Lira (“TRY”) unless otherwise stated. Accounting policies and valuation principles used in the preparation of financial statements, have been determined and implemented in accordance with accounting and financial reporting principles in scope of the regulations, communiqués, explanations and circulars issued by the BRSA and for the matters not legislated by the aforemention ed regulations, in accordance with TAS / TFRS principles (all together referred to as “BRSA Accounting and Financial Reporting Regulations”) issued by the POA. Public Oversight Accounting and Auditing Standards Authority ( “POA”), with its announcement date d 23 November 2023, applied that the financial statements of businesses applying Turkish Financial Reporting Standards for the annual reporting period ending on or after 31 December 2023 should be prepared in accordance with the Financial Reporting in Hype rinflationary Economies (“TAS 29”), however, institutions or organizations authorized to regulate and supervise in their own fields may determine different transition dates for the applying of TAS 29. According to the decision numbered 10825 dated 11 January 2024, by BRSA, it was decided that banks, financial leasing, factoring, financing, savings finance, and asset management companies would transition to “TAS 29 Financial Reporting Standard in High Inflation Economies” from 1 January 2025, onwards. Howeve r, with the decision numbered 11021 dated 5 December 2024, by BRSA, it was decided that inflation accounting will not be applied in 2025. Therefore, inflation adjustment according to TAS 29 was not applied in the financial statements as of 30 September 2025. Additional Paragraph for English Translation BRSA Accounting and Reporting Regulations explained in detail in this Section differ from International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board with respect to the application of inflation accounting. Accordingly, the accompanying consolidated financial statements are not intended to present fairly the financial position, results of operations, changes in equity and cash flows of the Group in accordance with IFRS.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 18 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) II. EXPLANATIONS ON THE STRATEGY FOR USE OF FINANCIAL INSTRUMENTS AND FOREIGN CURRENCY TRANSACTIONS a) The Group’s strategy on financial instruments: Due to its historical mission, the Parent Bank focuses on granting loans to Small and Medium Size Enterprises and craftsmen besides corporate, commercial and individual segmented customers. In addition to the main fund source deposits, the Group can raise funds from money markets and borrowings abroad. The Group follows the developments in the markets and uses funds raised in most yielding areas. The strategies of the Parent Bank are evaluated Asset and Liability Committee meetings. b) The Group’s explanations on foreign currency transactions: In the statutory records of the Parent Bank, transactions accounted in foreign currencies (currencies except for TRY) are converted into TRY by using the prevailing exchange rates at the transaction dates. Foreign currency monetary asset and liability items are converted into TRY by using the prevailing exchange rate at the balance sheet date. Non-monetary items in foreign currencies carried at fair value are converted into TRY by using the exchange rates at the date of which the fair value is determined. Exchange differences arising from the conversions of monetary foreign currency items and collections of foreign currency transactions are reflected to the profit or loss statement. The financial statements of the foreign branches and subsidia ries of the Parent Bank are prepared in the currency of the primary economic environment in which the entity operates (functional currency). The financial statements of foreign branches and subsidiaries are expressed in TRY which is the functional currency of the Group and the presentation currency of the financial statements. Assets and liabilities of the foreign branches and subsidiaries of the Parent Bank are converted into TRY by using the prevailing exchange rates at the balance sheet date. The foreign branches’ income and expenses are converted by at exchange rates at the dates of the transactions. The foreign subsidiaries’ income and expenses are converted by average rate of the exchange of the current year. The Group applies net investment hedging to protect against currency risk arising from Halkbank AD Beograd (subsidiary), Halk Banka AD Skopje (subsidiary), and DHB Bank NV (affiliate) located abroad. Within this scope, the Group designates its investments in subsidiaries as items subject to hedge accounting and applies net investment hedge accounting by using Euro-denominated deposits as hedging instruments. The change in value of the hedging instrument arising from exchange rate fluctuations, which arose during the current period and was determin ed to be effective, is presented under the heading “Accumulated Other Comprehensive Income or Expense to be Reclassified to Profit or Loss” under Equity. III. INFORMATION ABOUT THE CONSOLIDATED ASSOCIATES AND SUBSIDIARIES 1. Basis of consolidation: The accompanying consolidated financial statements are prepared in accordance with the communiqué on “Preparation of Consolidated Financial Statements of Banks” and the Turkish Accounting Standards are applied in the consolidation. a) Basis of consolidation of subsidiaries: The Parent Bank’s subsidiaries Halk Yatırım Menkul Değerler AŞ, Halk Gayrimenkul Yatırım Ortaklığı AŞ, Halk Finansal Kiralama AŞ, Halk Faktoring AŞ; Halk Banka AD, Skopje, Halkbank Osiguruvanje AD; Skopje (subsidiary), Halkbank AD Beograd, Halk Katılım Bankası AŞ, Halk Varlık Kiralama AŞ and Halk Elektronik Para ve Ödeme Hizmetleri AŞ are included in the scope of consolidation. Subsidiaries are entities that are controlled by the Parent Bank. Control is the power of the Parent Bank to appoint or remove from office the decision-taking majority of members of board of directors through direct or indirect possession of the majority of a legal person’s capital irrespective of the requirement of owning minimum fifty-one per cen t of its capital; or by having control over the majority of the voting right as a consequence of holding preferred shares or of agreements with other shareholders although not owning the majority of capital.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 19 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) III. INFORMATION ABOUT THE CONSOLIDATED ASSOCIATES AND SUBSIDIARIES (continued) 1. Basis of consolidation: (continued) a) Basis of consolidation of subsidiaries: (continued) Under line -by-line method, the assets, liabilities, income and expenses and off -balance sheet items of subsidiaries are combined with the equivalent items of the Parent Bank on a line-by-line basis. The book value of the Parent Bank’s investment in each subsidiary and the Group’s each subsidiary are eliminated. All significant transactions and balances between the Parent Bank and its consolidated subsidiaries are eliminated. Minority interests in the net income and in the equity of consolidated subsidiaries are calculated separately from the Group’s net income and the Group’s equity. Minority interests are identified separately in the balance sheet and in the income statement. In preparing the consolidated financial statements, if a subsidiary uses accounting policies other than those adapted by the Parent Bank, appropr iate adjustments are made to subsidiaries’ financial statements. There is no item that a different accounting policy is applied. b) Basis of consolidation of associates: The Parent Bank’s investments in associates, DHB Bank NV, Kobi Girişim Sermayesi Yatırım Ortaklığı AŞ, Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ and Birleşim Varlık Yönetim AŞ are presented in the accompanying financial statements based on the eq uity method of consolidation. An associate is an entity established domestically and abroad in which the Parent Bank invests with a significant influence but no control. Significant influence is the power to participate in the financial and operating polic y of the investee. If the Parent Bank holds ten percent or more of the voting power of the associate, it is presumed that the Parent Bank has significant influence unless otherwise demonstrated. A substantial or majority ownership by another investor does not necessarily preclude an investor from having significant influence. Qualified share is the share that directly or indirectly constitute ten percent of a subsidiary’s capital or voting rights and irrespective of this requirement, possession of preferred shares giving right to appoint members of board of directors. Equity accounting method is an evaluation method of associates by which the Parent Bank’s share in the associates’ equity is compared with the book value of the associate accounted for in the Parent Bank’s balance sheet. Accounting principles used by the consolidated associates accounted for at equity method, DHB Bank NV, Kobi Girişim Sermayesi AŞ, Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ and Birleşim Varlık Yönetim AŞ are the same of the Parent Bank. c) Basis of consolidation of joint ventures: The Parent Bank does not have any joint ventures which subject to consolidation.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 20 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) III. INFORMATION ABOUT THE CONSOLIDATED ASSOCIATES AND SUBSIDIARIES (continued) 1. Basis of consolidation: (continued) d) Principles applied during share transfer, merger and acquisition: Accounting for business combinations From 1 January 2010, the Group applies TFRS 3 Business Combinations (2008) in accounting for business combinations. Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. Acquisitions after 1 January 2010 Goodwill at the acquisition date for business combinations on or after 1 January 2010 are measured as below: • The fair value of the acquisition cost; plus • The recognized amount of any non -controlling interest in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less • The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When this total is negative, the gain on acquisition is recognized immediately in profit or loss. Fair values of the identifiable acquired assets, liabilities and contingent liabilities if the initial recognition of the combination is to be made temporarily at the end of the period in which the combination takes place since the cost of the combination can be determined only temporarily on the basis of the carrying values, the acquirer accounts for the business combination on with temporary amounts. The temporary acquisition value of the combination should be adjusted within 12 months to reflect the completion of the transaction, including adjusting the goodwill. The acquisition cost does not include amounts related to the settlement of pre -existing relationships. Such amounts are generally recognized in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent liability is recognized at fair value at the acquisition date. If the contingent amount is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent amount are recognized in profit or loss. For acquisitions before 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the recognized amount (generally fair value) of the identifiable assets, liabilities and contingent liabilities of the acquir ee. When the excess is negative, the gain on acquisition is recognized immediately in profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations are capitalized as part of the cost of the acquisitions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 21 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) IV. EXPLANATIONS ON FORWARD AND OPTION CONTRACTS AND DERIVATIVE INSTRUMENTS Derivative transactions of the Group consist of foreign currency and interest rate swaps, options and forwards. The Group uses derivative instruments for economic hedging purposes and recognises them in accordance with the provisions of TFRS 9. Pledges arising from derivative transactions recorded in of f-balance sheet accounts with their agreement amounts. Derivative transactions are valued at their fair values and the changes in their fair values are recorded on balance sheet under “Derivative Financial Assets” or “Derivative Financial Liabilities”, res pectively depending on the fair values being positive or negative. Fair value changes of derivative instruments are recorded under "Statement of Profit or Loss" in the "Gains and Losses on Derivative Financial Transactions" line. Fair values of derivatives are calculated using discounted cash flow model or market value. V. EXPLANATIONS ON INTEREST INCOME AND EXPENSES Interest income and expenses are recognized on an accrual basis using the effective interest method (the rate that equals the future cash flows of a financial asset or liability to its present net book value) in conformity. VI. EXPLANATIONS ON FEE AND COMMISSION INCOME AND EXPENSES Some of the banking service incomes are recorded as income in the period they are collected. Prepaid fees and commission income obtained from cash and non -cash loans are recorded in the related period by using discounting method with internal rate of return according to the loan maturity within the matching principle. Fee and commission expenses on borrowings that are paid to other institutions and incorporations for financial liabilities comprise operational costs. These fee and commission expenses are booked under prepaid expenses and transferred to expense accounts in the related periods by using the accrual meth od according to the financial borrowing maturity within the matching principle. VII. EXPLANATIONS ON FINANCIAL ASSETS Financial instruments comprise financial assets, financial liabilities and derivative instruments. The financial assets are included in the balance sheet of the Group, if the Group is a legal party of these financial assets. Financial assets mainly constitute the majority of the commercial activities and operations of the Group. These instruments have the ability to expose, affect and diminish the risks of liquidity, credit and interest in the financial statements. Fair value is the amount for which an asset could be exchanged or a liability could be settled, between knowledgeable willing parties in an arm’s length transaction. Market value is the amount obtainable from the sale or payable on the acquisition of a financial instrument in an active market, if one exists. The estimated fair values of financial assets have been determined by the Group using the available market information and appropriate valuation methodologies. However, judgment is necessarily required to interpret market data to develop the estimated fair value. Hence, estimations presented in this report may not be same with the prices in the current market conditions in the case of assets disposals. Book values of some financial assets (which equals to their costs) are assumed to approximate to their fair values due to their short term nature. Classification of the category of a financial instrument at initial recognition depends on both the business model for managing the financial assets and their contractual cash flow characteristics.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 22 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VII. EXPLANATIONS ON FINANCIAL ASSETS (continued) Assessment of Business Model The Group classifies its financial assets in accordance with TFRS 9 through its business model which is used for financial assets management. The Group’s business model is related to how the Group manages its financial assets to generate cash flows. In other terms, the source of cash flows depends on the Group’s business model whether the cash flow is generated from contractual terms or through sale of financial asset or both. Classification of financial assets is made at initial recognition considering the aim of purchase of the financial asset. The Group’s business models are classified in three main categories in accordance with TFRS 9. 1. A business model whose objective is to hold to collect contractual cash flows: A business model whose objective is to hold to collect contractual cash flows are managed to realise cash flows by collecting contractual payments over the life of the instrument. The purpose of the business model does not require to hold to collect the contractual cash flows of the instruments over their life, even the aim of the business model is to hold the instruments up to maturity for the contractual cash flows. Therefore, even when financial asset sales are anticipated or expected to occur in the future, the business model may still be a model that aims to retain financial assets in order to collect contractual cash flows. The financial assets that are held within the scope of this business model are measured at amortized cost when the contractual terms of the financial assets meet the condition of giving rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. 2. A business model whose objective is achieved by both collecting contractual cash flows and selling financial assets: The Group may hold financial assets in a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. Fair value changes of the financial assets that are held within the scope of this business model are accounted for under other comprehensive income when the contractual terms of the financial asset meet the condition of giving rise on specified dates to cash flows that are solely payments of principal and interest on the princi pal amount outstanding. 3. Other Business Models: Financial assets are measured at fair value through profit or loss if they are not held within a business model whose objective is to hold assets to collect contractual cash flows or within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. The Group makes its decisions on the basis of business model, which is based on the fair value of the assets and manages the assets to obtain their fair valu e. Therefore, if the financial assets are held for the purpose of obtaining cash flows arising from their sale, the change in fair value are measured at fair value through profit or loss.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 23 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VII. EXPLANATIONS ON FINANCIAL ASSETS (continued) Assessment of Business Model (continued) 3. Other Business Models: (continued) Measurement Categories of Financial Assets and Liabilities The Group classified all its financial assets based on the business model for managing the financial assets. Accordingly, the financial assets are classified as per TFRS 9 in three main categories listed below: 1. Financial assets measured at amortized cost, 2. Financial assets measured at fair value through other comprehensive income 3. Financial assets measured at fair value through profit/loss. TFRS 9, explains how financial assets are classified in accordance with above methods explained in Article 1 and 2 and other than these financial assets, remaining financial assets are classified in accordance with the method detailed in Article 3. Consumer Price Indexed Government Bonds Accounting Policy There are government bonds indexed to consumer prices (CPI) in the Parent Bank's securities portfolio. These securities are measured and accounted for using the effective interest method, based on an index calculated by taking into account the real coupon rates, the reference inflation index at the issuance date, and the estimated inflation rates for both the maturity date of the securities and each coupon payment date. The Parent Bank determines the estimated inflation rates for the maturity and coupon dates of the securities based on swap curves. Estimated inflation rates, taking into account long-term yield rates and expectations, are updated at the end of the year and/or during the year when deemed necessary. If the inflation rates used are reduced/increased by 1%, the interest income from CPI-indexed securities decreases/increases by 4,720,282 TL. a. Financial Assets Measured at Amortised Cost A financial asset is measured at amortized cost if both of the following conditions are met: a) Asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows. b) Contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets measured at amortised cost are loans and receivables and financial assets. Subsequent to the initial recognition, financial investments are accounted for at amortised cost calculated by using the effective interest rate method. Loans are initially recognized with their cost and carried at their amortized costs calculated using the internal rate of return subsequent to recognition. b. Financial Assets Measured at Fair Value through Other Comprehensive Income A financial asset is measured if both of the following conditions are met: a) Financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and b) Contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. A gain or loss on a financial asset measured at fair value through other comprehensive income shall be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified from equity to profit or loss as a reclassification adjustment at the reclassification date.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 24 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VII. EXPLANATIONS ON FINANCIAL ASSETS (continued) Assessment of Business Model (continued) 3. Other Business Models: (continued) Measurement Categories of Financial Assets and Liabilities (continued) c. Financial Assets Measured at Fair Value through Profit or Loss In accordance with TFRS 9; Unless a financial asset is measured at amortized cost or at fair value through other comprehensive income, it is measured at fair value through profit or loss. However, the Group may irrevocably prefer to apply to the financial assets at fair va lue through other comprehensive income for reflecting future changes in fair value for certain investments in equity instruments that would normally be measured at fair value through profit or loss at the time of initial inception in the financial statements. Cash Equivalents and Banks Cash and bank balances denominated in foreign currencies are valued by using the Group’s current period end exchange rates. The presented values of cash in TRY, foreign currency cash and banks at balance sheet are the estimated fair values of these assets. Loans and Receivables Loans and receivables represent unquoted financial assets in an active market that provide money, goods or services to the debtor with fixed or determinable payments. Loans and receivables are initially recognized with their fair values including settlement costs and carried at their amortized costs calculated using the internal rate of return subsequent to recognition. Transaction fees, dues and other expenses paid for loan guarantees are recognized under the profit and loss accounts. Consumer and corporate cash loans are recognized under the accounts specified by the Uniform Chart of Accounts and Explanations with their original balances based on their context.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 25 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VIII. EXPLANATIONS ON IMPAIRMENT OF FINANCIAL ASSETS As of 1 January 2018, the Group recognizes loan loss allowances for expected credit losses on financial assets and loans measured at amortised cost and me asured at fair value through other comprehensive income, loan commitments and financial guarantee contracts not measured at fair value through profit / loss based on TFRS 9 and the regulation published in the Official Gazette no. 29750 dated 22 June 2016 i n connection with “Procedures and Principals regarding Classifications of Loans and Allowances Allocated for Such Loans” effective from 1 January 2018. Financial assets measured at fair value are not assessed for impairment. In accordance with TFRS 9, the Group assesses all financial instruments for which there has been a significant increase in credit risk since initial recognition, by taking into account all supportable information, including reasonable and prospective ones. As of the reporting date, if the credit risk on a financial instrument has not increased significantly since initial recognition, the Group shall measure the loss allowance for that financial instrument at an amount equal to 12 month expected credit losses. However, if there is a significant increase in credit risk of a financial instrument since initial recognition, the Group measures loss allowance regarding such instrument at an amount equal to lifetime expected credit losses. The Group calculates the expected credit loss on a colle ctive or individual basis by grouping the financial assets having common credit risk features. The Group constituted a policy in order to make an assessment whether the credit risk on a financial instrument has increased significantly since initial recogni tion by taking into consideration the change in the risk of a default event occurring over the expected life of the financial instrument. Calculation of Expected Credit Losses A credit loss is present value of calculated difference between the total cash flows that will occur based on the contractual terms of financial instruments and the total cash flows, which the Group expects to collect, with the initial effective interest rate. The Group estimates the cash flows over the expected life of t he financial instrument by taking into account all contractual terms of the financial instrument, and considers the weighted average of loan losses according to the relevant default risks for determining expected credit losses. TFRS 9 Financial Instruments Standard allows the calculation of expected credit loss provisions in aggregate or individually by grouping financial assets with common credit risk characteristics.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 26 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VIII. EXPLANATIONS ON IMPAIRMENT OF FINANCIAL ASSETS (continued) Probability of Default (PD) It is defined as the probability that the debtor does not fulfill its obligations to the Group or in other words it can not repay its debts to the Group. Thi s ratio is calculated for each loan based on various statistical assumptions depending on the maturity, internal behavioral model, external behavioral model and financial module data. The probability values take a value between 0 and 1, and as the probabil ity value increases, the likelihood of the credit defaulting increases. Loss given Default (LGD) This is the parameter indicates the expected economic loss of the Group if the credit defaults. In the case of the credit defaults and the Group collects the entire amount of the default, LGD is zero, in the case of no collection, LGD is 100%. LGD rates are reviewed on a maximum of 1 year basis. Exposure at Default (EAD) It is the parameter that indicates how much of a loan will default. The default amount for a spot or installment loan is the amount, which is listed on the payment schedule at the time of default. Additionally, the default amount for the credit cards and limit gaps of overdraft accounts and non -cash loans, are calculated with a parameter called credit conversion rate (CCR). The default risk amount in the future is estimated by calculating by the statistical methods with the credit conversion rate, since it is not known at the time of loan origination due to undrawn commitment for limit of credit cards and overdraft accounts. 12 Month Expected Credit Losses It is the estimated expected credit losses occurring within the next 12 months following the balance sheet date. According to Article 5.5.5 of TFRS 9 standard, in the case of that there is no significant increase in credit risk of a financial instrument since its first recognition, the Group shall measure at the provision for loss of the related financial instrument as equal as 12 month expected credit losses. In the case of a customer or a loan that is classified under Standard Loans (Stage I), the provision for loan is calculated on 365 days even if the maturity of the loan is above 1 year. In the case of maturity of the loan is under 1 year, number of days left to maturity (except revolving loans and credit cards) are used in calculations. Lifetime Expected Credit Losses It is the estimated probability of default occurring over the remaining life of the financial instrument. According to TFRS 9 standard, in case o f a significant increase in credit risk for a financial instrument since its initial recognition, the Parent Bank shall measure provision for loss of related financial instrument as equal as expected lifetime expected credit loss amount. In the case of a customer or loan is classified as loans under follow-up (Stage 2) and/or non-performing loans (Stage 3), the provision for expected credit loss is measured at the lifetime probability of default. Despite the fact that the methods for used calculation for provision of expected credit loss are similar for Stage 2 and Stage 3 loans, the probability of default for Stage 3 credits is accepted as 100%. TFRS 9 Standard does not include a direct definition of default, but requires a consistent definition of default to be used in credit risk management. The Group is considering qualitative indicators (e.g. financial commitments), if appropriate, when defining a default according to TFRS 9, for the purpose of determining the risk of business default and adopts a definition of default, consistent with the definition used for in-house credit risk management purposes for the relevant financial instruments. However, there is a rebuttable presumption that default does not occur later than when a financial asset is 90 days pa st due unless an entity has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 27 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VIII. EXPLANATIONS ON IMPAIRMENT OF FINANCIAL ASSETS (continued) Lifetime Expected Credit Losses (continued) In accordance with the article "The definition of default used for these purposes is applied consistently to all financial instruments unless information is available that proves that another definition of default is more appropriate for a particular financial instrument.", it takes into account past due more than 90 days and accepts that the debt is in default if at least one of the following two conditions occurs within the framework of the default definition of the Communiqué on Calculation of the Risk Weighted Exposure Amount for Credit Risk by Internal-ratings Based Approaches. a) Considering that a debtor is unlikely to pay credit obligations to the Parent Bank or to the Parent Ba nk’s consolidated financial subsidiaries without using guarantees. b) Considering that a debtor having past due more than 90 days to the Parent Bank or its consolidated financial subsidiaries. The expected loan loss provision for the loans classified as non-performing loans (Stage 3) is calculated using the estimation of loss given default (LGD). Aforementioned estimation is based on the historical data on a segment basis and determined by the principle loss charge, being the remaining amount after the coll ection made within the period after each segment has defaulted. Portfolios with Low Credit Risk Since accurate results cannot be obtained for those portfolios which previous default information is not available, TFRS 9 Standard states that, the expected credit loss can be calculated by using low default rate for these portfolios. If the entity determines that a financial instrument has a low credit risk as of the reporting date, it assumes that the credit risk on the financial instrument has not increased significantly following its initial recognition in the financial statement. Those transactions in the Group are classified as follows: a) CBRT transactions (Currencies held in CBRT and reserve requirements) b) Securities (Fair value through other comprehensive income and financial assets measured at amortised cost) c) Treasury Loans d) Transactions guaranteed by Treasury of Republic of Türkiye Significant Increase in Credit Risk Significant increase in credit risk requires measurement of the Group’s provision for expected credit losses at lifetime probability of default instead of 12 month expected credit loss. In the event of a significant increase in credit risk since initial recognition, the financial asset is transferred to Stage 2.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 28 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) IX. EXPLANATIONS ON OFFSETTING FINANCIAL INSTRUMENTS A financial asset and a financial liability shall be offset and the net amount shall be presented in the balance sheet only when a party currently has a legally enforceable right to set off the recognized amounts or intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. X. EXPLANATIONS ON SALES AND REPURCHASE AGREEMENTS (REPOS) AND TRANSACTIONS ON SECURITIES LOANED Marketable securities subject to repurchase agreements are valued according to the valuation principles of the related portfolios. Funds obtained from the repurchase agreements are recognized under “Money Market Funds” account in liabilities. For the difference between the sale and repurchase prices determined by the repo agreements for the period; expense accrual is calculated using the internal rate of return method. Reverse repo transactions are recognized under the “Money Market Placements" account. For the difference between the purchase and resale prices determined by the reverse repo agreements for the period; income accrual is calculated using the internal rate of return method. XI. EXPLANATIONS ON ASSETS HELD FOR SALE, ASSETS OF DISCONTINUED OPERATIONS AND RELATED LIABILITIES Assets that meet the criteria to be classified as held for sale are measured at carrying amount and depreciation of such assets is ceased and they are presented separately in the balance sheet. In o rder to classify an asset as held for sale, the asset (or the disposal group) should be available for an immediate sale in its present condition subject to the terms of any regular sales of such assets (or such disposal groups) and the sale should be highly probable. For a highly probable sale, the appropriate level of management must be committed to a plan to sell the asset (or the disposal group), and an active program to complete the plan should be initiated to locate a customer. Also, the asset (or the disposal group) should have an active market sale value, which is a reasonable value in relation to its current fair value. Events or circumstances may extend the completion of the sale more than one year. Such assets are still classified as held for sale if there is sufficient evidence that the delay in the sale process is due to the events and circumstances occurred beyond the control of the entity or the entity remains committed to its plan to sell the asset (or disposal group). A discontinued operation is a component of the Group that either has been disposed of, or is classified as held for sale. Gains or losses relating to discontinued operations are presented separately in the statement of profit or loss. XII. EXPLANATIONS ON GOODWILL AND OTHER INTANGIBLE ASSETS As at the balance sheet date, there is no goodwill recorded in the consolidated balance sheet of the Group. Intangible assets that are purchased prior to 1 January 2005 are carried at their restated historical costs and intangible assets that a re purchased in the subsequent periods are carried at their historical cost, less any accumulated amortization and any impairment losses. Intangible assets are amortized by using the straight line method based on their useful lives. Amortization method and period are assessed periodically at the end of each year. Intangible assets consist of software expenses and they are amortized by using the straight line method over 5 years. There is no significant change in the accounting estimates expected or to be ex pected having a significant effect on the amortization method, amortization period or residual value. XIII. EXPLANATIONS ON TANGIBLE ASSETS Tangible assets that are purchased prior to 1 January 2005 are carried at their 31 December 2004 dated restated costs and tangible assets that are purchased in the subsequent periods are carried at cost, less any accumulated depreciation and any impairment losses. Tangible assets are amortized by using the straight line method during their useful lives.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 29 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XIII. EXPLANATIONS ON TANGIBLE ASSETS (continued) Gain or loss arising from the disposal or retirement of an item of tangible assets is determined as the difference between the sales proceeds and the carrying amount of that asset. As of 1 April 2015, the Group adopted the revaluation method for buildings in tangible assets in accordance with Turkish Accounting Standard No: 16 “Property, Plant and Equipment” (TAS 16). Expertise values calculated by independent appraisal companies are reflected in the financial statements as of related period. Revaluation differences are recorded in shareholders’ equity. Ordinary maintenance and repair expenses of tangible assets items are recognized as expenses. Estimated useful lives of tangible assets are as follows: Estimated Useful Lives (Year) Depreciation Rate Buildings 50 2% Safes 50 2% Other movable properties 3-25 33,33-4 % Leasehold improvements are depreciated over the useful lives, on a straight-line basis. In any case useful life cannot exceed the lease period. If the duration of lease agreement is not determined or longer than five years, depreciation duration is considered as five years. There is no change in accounting estimates that is expected to have significant effect in current period and subsequent periods. There are no material mortgages, pledges or similar in cumbrances designated for the tangible assets. Classification of Investment Properties: If a land or building is being u sed by an owner and the intention is changed to an investment property, this property is classified as an investment property. When the use of an immovable is changed and reclassified as an investment property, the actual value of the date on which the ch ange in the use of the named property takes place will be the cost of the subsequent accounting. XIV. EXPLANATIONS ON INVESTMENT PROPERTIES Investment properties are properties held to earn rentals and/or for capital appreciation. While these properties were accounted for at acquisition cost less accumulated depreciation and permanent impairment losses if any, the Group changed its accounting policy as of November 2023 and adopted the fair value method for investment properties within the scope of TAS 40 Investment Property Standard. The appraisal values calculated by independent appraisal companies are reflected in the financial statements during the related period. Revaluation differences are recognized in the Statement of Profit or Loss. XV. EXPLANATIONS ON LEASING TRANSACTIONS Assets acquired under financial leases are carried at the lower of their fair values or amortized value of the lease payments. Leasing payables are recognized as liabilities in the balance sheet while the interest payab le portions of the payables are recognized as a deferred amount of interest. Assets held under financial leases are recognized under the tangible assets at account and are depreciated by using the straight line method. The Parent Bank does not participate in the financial leasing transactions as a “lessor”. Lease transactions recognised under “Tangible Assets” as an asset (tenure) and under “Lease Liabilities” as a liability.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 30 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XV. EXPLANATIONS ON LEASING TRANSACTIONS (continued) The Group assesses whether the contract has the quality of a lease or whether the transaction includes a lease at the beginning of a contract. A lease agreement is an agreement between two or more parties that gives the t enure the legally enforceable rights and obligations of the underlying asset. In case the contract is transferred for a certain period of time to control the use of the asset defined for a price, it is either leased or includes a lease. The Group reflects the existence of a right-of-use and a lease liability to the financial statements at the effective date of the lease. Existence of right-of-use: As a result of internal evaluations, the Parent Bank accounts real estate and vehicles subject to operational lease in accordance with TFRS 16. ATMs, and other leasing transaction balances are not considered within the scope of TFRS 16 as they are below the materiality level and the corresponding rent payments are recognized under Current Period Expense. At the commencement date, the Group measures the right -of-use real estates considered as the cost of right - of-use asset being the right-of-use asset in accordance with TFRS 16. The cost of the right-of- use; a) The amount of the initial measurement of the lease liability, b) Any lease payments made at or before the commencement date, less any lease incentives received, c) Any initial direct costs incurred by the lessee and an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease. The Group takes into account the accumulated depreciation and impairment losses for the subsequent period measurement of the existence of right -of-use. The Group applies the depreciation requirements in TAS 16 Property, Plant and Equipment in depreciating real assets considered as right-of-use asset. The Group applies TAS 36 Impairment of Assets to determine whether the real estates considered as right-of- use assets are impaired and to account for any impairment loss identified. The Lease Obligations: Based on TFRS 16, at the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the alternative borrowing interest rate. After the commencement date, the Group measures the lease liability as follows: a) Increasing the carrying amount to reflect interest on the lease liability, b) Reducing the book value to reflect the lease payments made, c) Reducing the carrying amount to reflect the lease payments made; and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect revised in-substance fixed lease. Interest on the lease liability in each period during the lease term shall be the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability. In the event of a modification in the lease agreement which affects the lease payments or defined assets, the Group re-measures its lease liability by using the current borrowing rate. The Group reflects the remeasured leasing liability and the right -of-use in the financial statements. On the other hand, changes such as the shortening of the lease term, the termination of the contract and the decreases in the scope of the underlying asset, the gains or losses are recognized in profit or loss.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 31 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XVI. EXPLANATIONS ON PROVISIONS AND CONTINGENT LIABILITIES Provision and contingent liabilities are accounted in conformity with TAS 37 “Provisions, Contingent Liabilities and Contingent Assets”. In the financial statements, a provision is made for an existing commitment resulted from past events if it is probable that the commitment will be settled and a reliable estimate can be made of the amount of the obligation. Provisions are calculated based on the best estimates of the Group’s management on the expenses to incur as of the balance sheet date and, if material, such expenses are discounted for their present values. If the amount is not reliably estimated and there is no probability of cash outflow from the Group to settle the liability, the related liability is considered as “contingent” and disclosed in the notes to the financial statements. XVII. EXPLANATIONS ON EMPLOYEE BENEFIT LIABILITIES Employee benefits liabilities are recognized in accordance with the TAS 19 “Employee Benefits”. According to related legislation and union agreements, the Parent Bank is required to make lump sum retirement payments to employees who has completed one year of service, is called up for military service, dies, resigns, retires or whose employment is terminated without due cause, or for female employees who resigns subsequent to her marriage within one year. The Group provides provision by estimating the present value of the future retirement pay liability. The retirement pay provision of the Parent Bank has been determined by the actuarial report of an independent actuary firm. As of 1 January 2013, actuarial gains and losses are recorded under the shareholders’ equity according to the revised TAS 19. T. Halk Bankası Pension Fund, T. Ziraat Bankası and T. Halk Bankası Employee Pension Fund Foundations were founded in accordance with the provisional article 20 of the Social Insurance Act (SIA) No: 506 and their members including employees of the Parent Bank. Provisional article 23 of the Banking Act No: 5411 requires the Parent Bank’s pension funds founded in the scope of SIA to be transferred to the Social Insurance Institution (SII) within 3 years subsequent to the publishing date of the act. The procedure and essent ials for the transfer were determined by the Council of Ministers’ decision dated 30 November 2006 and numbered 2006/11345 and accordingly, both pension funds would have been transferred to SSI. However, with the decree of the Constitutional Court numbered E.2005/139, K.2007/13 and K.2007/33 published in the Official Gazette dated 31 March 2007 and numbered 26479, the first paragraph of the temporary first article of the provisional article 23 of the Banking Act No: 5411 is cancelled and the execution has b een ceased starting from the date the decree is published. After the justified decree related to cancelling the provisional article 23 of the Banking Law was announced by the Constitutional Court on the Official Gazette dated 15 December 2007 and numbered 26731, Turkish Grand National Assembly (TGNA) started to work on establishing new legal regulations, and after it was approved at the General Assembly of the TGNA, the Law numbered 5754 “Emendating Social Security and General Health Insurance Act and Certa in Laws and Decree Laws”, which was published on the Official Gazette dated 8 May 2008 and numbered 26870, came into effect. The new law decrees that the contributors of the bank pension funds, the ones who receive salaries or income from these funds and their rightful beneficiaries will be transferred to the Social Security Institution and will be subject to this Law within 3 years after the release date of the related article, without any need for further operation. The three year transfer period can be prolonged for maximum 2 years by the Cabinet decision. However related transfer period has been prolonged for 2 years by the Council of Ministers decision dated 14 March 2011, which was published on the Official Gazette dated 9 April 2011 and numbered 27900. In addition, by the Law numbered 6283 “Emendating Social Security and General Health Insurance Act”, which was published on the Official Gazette dated 8 March 2012 and numbered 28227, the authority of the Council of Ministers extending 2 years has been raised to 4 years. The statement “The Council of Ministers have entitled to determine transfer period” has taken place in the scope of the Article 51 of the Law No: 6645 which was published on the Gazette on 23 April 2015 and numbered 29335.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 32 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XVII. EXPLANATIONS ON EMPLOYEE BENEFIT LIABILITIES (continued) In accordance with the related legislation, as of the transfer date, the income and expenses of the transferred funds will be considered by the insurance branches and the present value of the actuarial liabilities will be calculated with the technical interest rate of 9,8%. Moreover, after the transfer to Social Insurance Institution, the unfulfilled other social rights and payments existed in the settlement deeds of the subjected pension funds of the transferred participants, members or the rightful owners will be continued to be fulfilled by the employer entities of the funds and its participants. Based on the results of the actuarial report prepared as of 31 December 2024 no technical deficit has been reported. XVIII. EXPLANATIONS ON TAXATION The Parent Bank has calculated 30% corporate tax on corporate profits for the taxation period of 30 September 2025. (31 December 2024: 30%) As of the current period, 30% tax rate is used by the Parent Bank in the calculation of deferred tax assets and liabilities. The carrying amount of the deferred tax asset is reviewed at each balance sheet date. Carrying value of deferred tax asset is reduced when it is not probable that a financial profit will be obtained to allow some or all of the deferred tax asset to be benefited. Tax expense is the sum of the current tax expense and deferred tax charge. Current year tax liability is calculated over taxable profit. Taxable profit is different from the profit in the statement of profit or loss since taxable income or deductible expenses for the following years and non -taxable and non-deductible items are excluded. Deferred tax liability or assets are determined by calculating the tax effects of temporary differences between the amounts of assets and liabilities shown in the financial statements and the amounts taken into account in the calculation of legal tax base, according to the balance sheet method, taking into account the enacted tax rates.While deferred tax liabilities are calculated for all taxable temporary differences, deferred tax assets consisting of deductible temporary differences are calculated provided that it is highly probable to benefit from these differences by generating taxable profit in the future. Deferred tax is calculated over the tax rates valid in the period when the assets are realized or the liabilities are fulfilled and recorded as expense or income in the income statement. H owever, deferred tax is associated directly with the equity account group if it relates to assets directly associated with equity in the same or a different period. Since current tax payable amounts are related to prepaid tax amounts, consolidated entities are included in consolidation by offsetting in their non -consolidated financial statements. Deferred tax asset and liability is included in consolidation by offsetting in consolidated entities’ non-consolidated financial statatements.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 33 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XVIII. EXPLANATIONS ON TAXATION (continued) Pursuant to the Repetitive Article 298 of the Tax Procedure Law No. 213, the inflation adjustment requirement for the financial statements has occured depending on the fact that the increase in the price index in the 2021 accounting period is more than 100% in the last three accounting periods, including the current period, and more than 10% in the current accounting period. However, with the Provisional Article 33 added to the Tax Procedure Law with the Law No. 7352, the financial statements should be prepared regardless of whether the conditions for the inflation adjustment within the scope of the repetitive article 298 are met in the 2021 and 2022 accounting periods and the 2023 accounting period temporary tax periods, including the temporary tax periods. Accordingly, it is stated that, the financial statements for the 2021 and 2022 are not subject to inflation adjustment in accordance with the TPL, and the financial statements dated 31 December 2023 will be subject to inflation adjustment regardless of whether the inflation adjustment conditions have been met, and the profit/loss difference arising from the inflation adjustment will be presented in the retained earnings. Within the scope of the paragraph added to Article 33 of the Law No. 213 with Article 17 of the Law No. 7491 on the Amendment of Certain Laws and Decree Laws, it is regulated that the profits or losses that will arise as a result of the inflation adjustment to be made by the banks in the 2024 and 2025 accounting periods, including the temporary tax periods, will not be taken into account in the determination of earnings. In addition, the President of the Republic of Türkiye is authorized to make a regulation to disregard the profits or losses that will arise as a result of inflation adjustment in the 2026 accounting period, including the temporary tax periods, in the determination of earnings. In accordance with the Provisional Article 33 and Repetitive Article 298 of the Tax Procedure Law, the tax effects arising from the inflation adjustment of the financial statements as of 30 September 2025 in accordance with TPL are included in the deferred tax calculation as of 30 September 2025. Tax Practices in the Countries That Foreign Branches Operate: Turkish Republic of Northern Cyprus (TRNC) According to the tax regulations in the Turkish Republic of Northern Cyprus, corporate gains are subject to 10% of corporate tax and this taxed amount is subject to 15% of income tax. Advance corporate tax is calculated as 15% of taxable income. Temporary taxes paid are deducted from the corporate tax and income tax calculated at the end of the year. The tax bases for corporate are determined by adding the expenses that cannot be deducted according to TRNC regulations, to commercial gains and by subtracting exemptions and deductions from commercial gains. On the other hand, withholding tax is paid over interest income in TRNC. The relevant withholding tax payments are deducted from the corporate taxes paid. The first period temporary corporate tax return for the period 1 January 2025 – 31 March 2025 is was paid on 30 May 2025 and the second period temporary corporate tax return for the period 1 April 2025 – 30 June 2025 is was paid on 29 August 2025. The third period temporary corporate tax return for the period 1 July 2025 – 30 September 2025 is due in November 2025 and the fourth period temporary corporate tax return for the period 1 October 2025 – 31 December 2025 will be declared to the Revenue and Tax Office in February 2026 and payment transactions will be made until the last working day of the month following the accrual. Bahrain Banks operating in Bahrain are subject to the Global Minimum Corporate Tax starting from 1 January 2025. Tax Practices of the Consolidated Subsidiaries: Halk Gayrimenkul Yatırım Ortaklığı AŞ According to Article 5/1(d) (4) of the Corporate Tax Law No. 5520 (“CTL”), the income obtained from real estate investment partnerships is exempted from Corporate Tax. This exemption is also applied to interim temporary tax. With the Law on Amendments to Tax Laws and Certain Laws and Decree Law No. 375, numbered 7524, published in the Official Gazette dated 2 August 2024, with an effective date of 1 January 2025;
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 34 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XVIII. EXPLANATIONS ON TAXATION (continued) Tax Practices of the Consolidated Subsidiaries: (continued) • The application of the corporate tax exemption provided to the earnings of Real Estate Investment Partnerships (“REITs”) and Real Estate Investment Funds (“REITs”) is made conditional on the distribution of at least 50% of the earnings obtained from the real estates owned by the mentioned funds and partnerships as dividends by the end of the second month following the month in which the corporate tax return must be filed. • With the addition of subparagraph c to Article 32 of the Corporate Tax Law, a 10% domestic minimum corporate tax application was introduced and it was stipulated that the profits obtained by REITs and REIFs from real estates cannot be taken into account as an exception or deduction from the corporate profit for which the minimum corporate tax will be calculated. Since Halk GYO has a corporate tax exemption for 2023 and before, no deferred tax asset or liability has been calculated. With the Law on Amendments to Tax Laws and Certain Laws and Legislative Decree No. 375 published in the Official Gazette dated 2 Aug ust 2024, the corporate tax exemption was abolished and a deferred tax of 30% was calculated starting from 2024. Halk Banka AD Skopje The Parent Bank’s subsidiary, acquired in 2011, Halk Banka AD, Skopje is subject to tax regulations in the Republic of North Macedonia and the corporate tax is 10%. Alongside this, as of 1 January 2024, the provisions of the Minimum Global Income Tax Law have come into effect, and under this regulation, an additional tax amount is determined for companies that meet certain criteria. The minimum effective tax rate is applied for Halk Banka AD, Skopje is 15%. Halk Bank AD Beograd The Parent Bank’s subsidiary, acquired in 2015, Halk Bank AD, Beograd is subject to tax regulations in the Republic of Serbia. The annual corporate income tax is payable at the rate of 15% on profit before tax, adjusted for temporary differences. The Law on Corporate Income Tax in the Republic of Serbia does not allow any tax losses of the current period to be used to recover taxes paid i n previous periods. However, any current year losses disclosed in the tax balance up to 2009 used to reduce tax base for future periods, but only for a period not longer than ten years. Tax losses carried forward after 2010 may be used for reduction of tax base for the following accounting periods for a maximum 5 years. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. XIX. ADDITIONAL EXPLANATIONS ON BORROWINGS The Group borrows funds from domestic and foreign institutions and issues marketable securities when needed. These borrowing activities are recognized at fair value including the acquisition costs at the transaction date and they are valued at amortized costs by using the internal rate of return method. Interest rate and liquidity risks are reduced by having assets with shorter or equal maturity terms than borrowing instruments such as syndication, securitization and borrowing with collateral and bears higher interest than costs of those instruments. Also, asset composition is designed in accordance with the fixed/variable cost nature of borrowing instruments.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 35 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XX. EXPLANATIONS ON SHARES ISSUED Cost related to share issuances are recognized as expense. Dividends related to the equity shares are determined by the General Assembly of the Parent Bank. In accordance with the decision of the Higher Council of Privatization dated 5 February 2007 and numbered 2007/8, the process of public offering for the 24,98% of shares pertaining to the Privatization Administration was completed and the Parent Bank shares were registered with the Capital Markets Board as per the CMB decision dated 26 April 2007 and numbered 16/471, and the shares were traded on the Borsa İstanbul AŞ as of 10 May 2007. As per the decision of the Higher Council of Privatization numbered 2012/150 and dated 4 October 2012; 23,92% of the public shares that were previously held by the Privatization Administration were privatized by a second public offering and privatization was completed on 21 November 2012. On 20 May 2020, share capital increased by amounting to TRY 1.223.776 from TRY 1.250.000 to TRY 2.473.776 by the way of the private placement without a public offering. In accordance with the decision of the Board of Directors of the Parent Bank dated 9 February 2022, the capital is increased, where the total sales proceeds through the capital increase shall amount to TRY 13.400.000, by the total nominal capital amount to be calculated based on the share sale price to be determined in accordance with the Wholesale Transactions Procedure of Borsa İstanbul AŞ w ith the Decision of the Capital Markets Board dated 17 February 2022. Accordingly, the recognition of the capital increase of TRY 2.495.345 on 9 March 2022 was realized on 14 March 2022, based on the permission obtained from the BRSA. The change made to the relevant Articles of Association was registered on 22 March 2022, and it was announced in the Trade Registry Gazette dated 23 March 2022 and numbered 10543. After the increase, TRY 2.495.345 of nominal and TRY 10.904.655 of share premium, amounting to a capital increase of TRY 13.400.000, were recognized in the financial statements. Mentioned capital increase was made by the Parent Bank's main shareholder Türkiye Varlık Fonu. As a result of the capital increase, the issued capital increased from TRY 2.473.776 to TRY 4.969.121. In accordance with the decision of the Board of Directors of the Parent Bank dated 21 March 2023, the capital is increased, where the total sales proceeds through the capital increase shall amount to TRY 30.000.000, by the total nominal capital amount to be calculated based on the share sale price to be determined in accordance with the Wholesale Transactions Procedure of Borsa İstanbul AŞ with the Decision of the Capital Markets Board dated 27 March 2023. Accordingly, the recognition of the capital increase of TRY 2.215.657 was realized on 31 March 2023, based on the permission obtained from the BRSA. After the increase, TRY 2.215.657 of nominal and TRY 27.784.343 of share premium, amounting to a capital increase of TRY 30.000.000, we re recognized in the financial statements. The change made to the relevant Articles of Association was registered on 17 April 2023, and it was announced in the Trade Registry Gazette dated 18 April 2023 and numbered 10814. Mentioned capital increase was made by the Parent Bank's main shareholder Türkiye Varlık Fonu. As a result of the capital increase, the issued capital increased from TRY 4.969.121 to TRY 7.184.778. Halk GYO has applied to the CMB on 29 August 2012 to increase its issued capital from TRY 4 77.000 to TRY 662.500 within TRY 1.500.000 registered capital ceiling, by public offering of the corresponding B group bearer shares of TRY 185.500. Application was approved in accordance with the decision promulgated by the CMB’s decision numbered 4/97 dated 8 February 2013. As at 15 February 2013 the public offering of B group bearer shares of TRY 185.500 was made by restricting the preemptive rights of the existing shareholders. After completing the investors’ book building, Halk GYO’s shares started to be traded on Borsa İstanbul AŞ on 22 February 2013. XXI. EXPLANATIONS ON BILL GUARANTEES AND ACCEPTANCES Bill guarantees and acceptances are realized simultaneously with the customer payments and they are presented as possible liabilities and commitments in the off-balance sheet accounts. XXII. EXPLANATIONS ON GOVERNMENT INCENTIVES The Parent Bank has no government incentives in the current or prior period.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 36 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XXIII. EXPLANATIONS ON SEGMENT REPORTING Segment reporting focuses on business segment considering the main source and nature of the risks and returns of the Group. The Parent Bank operates mainly in corporate, commercial and entrepreneur banking. The information of the Group’s business segments is explained in Section Four, disclosure numbered VII. XXIV. EXPLANATIONS ON EARNINGS PER SHARE Earnings per share calculated under the TAS 33 Earnings Per Share Standard is determined by dividing the net profit by the number of shares outstanding for the relevant period. Current Period Prior Period Earnings Per Common Share Diluted Earnings Per Share Earnings Per Common Share Diluted Earnings Per Share Net Income/(Loss) to be Appropriated to Ordinary Shareholders 20.203.677 20.203.677 15.056.329 15.056.329 Number of Issued Ordinary Shares (Thousand) 7.184.778 7.184.778 7.184.778 7.184.778 Earnings Per Share (In full TRY) 2,81201 2,81201 2,09559 2,09559 There are no paid-in shares issued during the current period. (31 December 2024: None.) XXV. EXPLANATIONS ON OTHER MATTERS The international rating agency Fitch Ratings has affirmed Parent Bank's Long-Term Foreign Currency Issuer Default Rating "B+", Short -Term Foreign Currency Issuer Default Rating "B", Long -Term Local Currency Issuer Default Rating "BB -", Short-Term Local Currency Issuer Default Rating "B", Viability Rating "b-", Government Support Rating "b+" on 18 June 2025. The outlooks of the relevant ratings have been revised to "Stable" from "Rating Watch Negative". As of 1 January 2018, upon the initial adoption of TFRS 9 “Financial Instruments,” the Parent Bank classified certain securities in its portfolio as financial assets measured at fair value through other comprehensive income. However, shortly thereafter, on 23 May 2018, the Parent Bank reclassified these securities as financial assets measured at amortized cost, despite not meeting the reclassification criteria set out in paragraph 4.4.1 of TFRS 9 “Financial Instruments.” In the current period, the Parent Bank reassessed the classification process it applied during the initial adoption of TFRS 9 and determined that, as of the date the business model was identified, not all relevant conditions and circumstances existing at that time, nor all reasonably available information, had been taken into account. The Parent Bank did not consider this situation as a reclas sification under paragraph 4.4.1 of TFRS 9 “Financial Instruments,” but rather assessed it as a correction of an error in accordance with TAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors.” Although, as part of this error correction, the Parent Bank would be required to retrospectively restate its financial statements as if these assets had been measured at amortized cost since the initial adoption of TFRS 9, there is no impact on the financial statements, as these financial assets had already been measured at amortized cost prior to the beginning of the comperative period.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 37 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP I. EXPLANATIONS ON THE CONSOLIDATED EQUITY Equity amount and capital adequacy standard ratio calculation is made within the framework of “Regulation on Equities of the Banks” and “Regulation on Measurement and Evaluation of Banks’ Capital Adequacy” and in accordance with the amendment announced by the BRSA in the resolutio n dated 12 December 2023, 19 December 2024 and 25 March 2025. Within the scope of the regulations that the net valuation differences of the securities held in the “Marketable Securities at Fair Value Through Other Comprehensive Income” portfolio as of 1 Ja nuary 2024 are negative, these differences will not be taken into account in the equity amount to be used for the capital adequacy ratio and the amount subject to credit risk will be calculated using the Central Bank foreign exchange buying rates as of 28 June 2024 and the bank’s own shares acquired through repurchase from Borsa Istanbul AŞ Equity Market after 17 March 2025 are not considered to deduction item from Tier l Capital until 31 December 2025. As of 30 September 2025, the capital adequacy ratio an d the capital amount of the Group were realized as 14,93% (31 December 2024: 15,10%) and TRY 295.599.421 (31 December 2024: TRY 230.878.173) which were calculated within the scope of the above-mentioned regulation amendments.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 38 SECTION IV: INFORMATION RELA TED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) I. EXPLANATIONS ON THE CONSOLIDATED EQUITY (continued) (1) Information About Total Consolidated Equity Items: Current Period Prior Period COMMON EQUITY TIER 1 CAPITAL Paid-in Capital to be Entitled for Compensation after All Creditors 8.405.229 8.405.229 Share Premium 44.505.199 44.505.199 Reserves 84.633.281 57.755.802 Other Comprehensive Income according to TAS 50.857.393 38.521.259 Profit 25.453.442 31.457.382 Current Period Profit 20.203.677 22.037.821 Prior Period Profit 5.249.765 9.419.561 Bonus Shares from Associates, Affiliates and Joint-Ventures not Accounted in Current Period's Profit 1.052.243 777.659 Minority Interest 13.661 9.477 Common Equity Tier 1 Capital Before Deductions 214.920.448 181.432.007 Deductions from Common Equity Tier 1 Capital Valuation adjustments calculated as per the article 9. (i) of the Regulation on Bank Capital - - Current and Prior Periods' Losses not Covered by Reserves, and Losses Accounted under Equity according to TAS (-) 5.083.368 3.796.604 Leasehold Improvements on Operational Leases (-) 4.189.325 3.467.598 Goodwill Netted with Deferred Tax Liabilities - - Other Intangible Assets Netted with Deferred Tax Liabilities Except Mortgage Servicing Rights 5.144.491 3.451.162 Remaining after deducting from the related deferred tax liability with the deferred tax asset based on future taxable income, except for deferred tax assets based on temporary differences - - Differences arise when assets and liabilities not held at fair value, are subjected to cash flow hedge accounting - - Total credit losses that exceed total expected loss calculated according to the Regulation on Calculation of Credit Risk by Internal Ratings Based Approach - - Securitization gains - - Unrealized gains and losses from changes in bank’s liabilities’ fair values due to changes in creditworthiness - - Net amount of defined benefit plans - - Direct and Indirect Investments of the Bank on its own Tier I Capital (-) 471.241 471.241 Shares Obtained against Article 56, Paragraph 4 of the Banking Law (-) - - Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital (-) - - Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or more of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital (-) - - Mortgage Servicing Rights Exceeding the 10% Threshold of Tier I Capital (-) - - Net Deferred Tax Assets arising from Temporary Differences Exceeding the10% Threshold of Tier I Capital (-) 2.683.814 3.775.620 Amount Exceeding the 15% Threshold of Tier I Capital as per the Article 2, Clause 2 of the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks (-) - - The Portion of Net Long Position of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or more of the Issued Share Capital not deducted from Tier I Capital (-) - - Mortgage Servicing Rights not deducted (-) - - Excess Amount arising from Deferred Tax Assets from Temporary Differences (-) - - Other items to be Defined by the BRSA (-) - - Deductions from Tier I Capital in cases where there are no adequate Additional Tier I or Tier II Capitals (-) - - Total Deductions from Common Equity Tier I Capital 17.572.239 14.962.225 Total Common Equity Tier I Capital 197.348.209 166.469.782
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 39 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) I. EXPLANATIONS ON THE CONSOLIDATED EQUITY (continued) (1) Information About Total Consolidated Equity Items: (continued) ADDITIONAL TIER I CAPITAL Preferred Stock not Included in Common Equity Tier I Capital and the Related Share Premiums - - Debt Instruments and the Related Issuance Premiums Defined by the BRSA 45.557.840 16.500.000 Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Covered by Temporary Article 4) - - Additional Tier I Capital before Deductions 45.557.840 16.500.000 Deductions from Additional Tier I Capital Direct and indirect investments of the Bank in its own Additional Tier I Capital - - Investments of Bank to Banks that invest in Bank's additional equity and components of equity issued by financial institutions with compatible with Article 7. - - Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital - - The Total of Net Long Position of the Direct or Indirect Investments in Additional Tier I Capital of Unconsolidated Banks and Financial Institutions where the Bank Owns more than 10% of the Issued Share Capital - - Other items to be defined by the BRSA - - Items to be Deducted from Tier I Capital during the Transition Period Goodwill and Other Intangible Assets and Related Deferred Taxes not deducted from Tier I Capital as per the Temporary Article 2, Clause 1 of the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks (-) - - Net Deferred Tax Asset/Liability not deducted from Tier I Capital as per the Temporary Article 2, Clause 1 of the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks (-) - - Deduction from Additional Tier I Capital when there is not enough Tier II Capital (-) - - Total Deductions From Additional Tier I Capital - - Total Additional Tier I Capital 45.557.840 16.500.000 Total Tier I Capital (Tier I Capital=Common Equity+Additional Tier I Capital) 242.906.049 182.969.782 TIER II CAPITAL Debt Instruments and the Related Issuance Premiums Defined by the BRSA 30.343.036 31.328.795 Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Covered by Temporary Article 4) - - Provisions (Amounts explained in the first paragraph of the article 8 of the Regulation on Bank Capital) 22.542.735 16.810.684 Tier II Capital Before Deductions 52.885.771 48.139.479 Deductions From Tier II Capital Direct and indirect investments of the Bank on its own Tier II Capital (-) - - Investments of Bank to Banks that invest on Bank's Tier 2 and components of equity issued by financial institutions with the conditions declared in Article 8. - - Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital (-) - - Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or more of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital - - Other items to be defined by the BRSA (-) - - Total Deductions from Tier II Capital - - Total Tier II Capital 52.885.771 48.139.479 Total Equity (Total Tier I and Tier II Capital) 295.791.820 231.109.261 Total Tier I and Tier II Capital (Total Equity) Loans Granted against the Articles 50 and 51 of the Banking Law - - Net Book Values of Movables and Immovable Exceeding the Limit Defined in the Article 57, Clause 1 of the Banking Law and the Assets Acquired against Overdue Receivables and Held for Sale but Retained more than Five Years - - Other items to be defined by the BRSA 192.399 231.088
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 40 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) I. EXPLANATIONS ON THE CONSOLIDATED EQUITY (continued) (1) Information About Total Consolidated Equity Items: (continued) Items to be Deducted from the Sum of Tier I and Tier II Capital (Capital) During the Transition Period The Portion of Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital not deducted from Tier I Capital, Additional Tier I Capital or Tier II Capital as per the Temporary Article 2, Clause 1 of the Regulation (-) - - The Portion of Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns more than 10% of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital not deducted from Additional Tier I Capital or Tier II Capital as per the Temporary Article 2, Clause 1 of the Regulation (-) - - The Sum of net long positions of investments in the common stock of banking, financial and insurance The Portion of Net Long Position of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or more of the Issued Share Capital, of the Net Deferred Tax Assets arising from Temporary Differences and of the Mortgage Servicing Rights not deducted from Tier I Capital as per the Temporary Article 2, Clause 2, Paragraph (1) and (2) and Temporary Article 2, Clause 1 of the Regulation (-) - - TOTAL CAPITAL Total Capital (Total of Tier I Capital and Tier II Capital) 295.599.421 230.878.173 Total Risk Weighted Assets 1.979.839.738 1.529.345.939 Capital Adequacy Ratios CET1 Capital Ratio (%) 9,97 10,89 Tier I Capital Ratio (%) 12,27 11,96 Capital Adequacy Ratio (%) 14,93 15,10 BUFFERS Bank-specific total CET1 Capital Ratio (a+b+c) 3,584 3,580 a) Capital Conservation Buffer Ratio (%) 2,500 2,500 b) Bank-specific Counter-Cyclical Capital Buffer Ratio (%) 0,084 0,080 c) Systemic significant bank buffer ratio % 1,000 1,000 Additional CET1 Capital Over Total Risk Weighted Assets Ratio Calculated According to the Article 4 of Capital Conservation and Counter-Cyclical Capital Buffers Regulation (%) 5,468 5,964 Amounts Lower Than Excesses as per Deduction Rules Remaining Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital 1.760.932 1.367.956 Remaining Total of Net Long Positions of the Investments in Tier I Capital of Unconsolidated Banks and Financial Institutions where the Bank Owns more than 10% or less of the Issued Share Capital - - Remaining Mortgage Servicing Rights - - Net Deferred Tax Assets arising from Temporary Differences 20.001.836 17.023.592 Limits for Provisions Used in Tier II Capital Calculation General Loan Provisions for Exposures in Standard Approach (before limit of one hundred and twenty five per ten thousand) 22.542.735 27.572.009 General Loan Provisions for Exposures in Standard Approach Limited by 1.25% of Risk Weighted Assets 24.783.483 16.810.684 Total Loan Provision that Exceeds Total Expected Loss Calculated According to Communiqué on Calculation of Credit Risk by Internal Ratings Based Approach - - Total Loan Provision that Exceeds Total Expected Loss Calculated According to Communiqué on Calculation of Credit Risk by Internal Ratings Based Approach, Limited by 0,6% Risk Weighted Assets - - Debt Instruments Covered by Temporary Article 4 (effective between 1.1.2018-1.1.2022) Upper Limit for Additional Tier I Capital Items subject to Temporary Article 4 - - Amount of Additional Tier I Capital Items Subject to Temporary Article 4 that Exceeds Upper Limit - - Upper Limit for Additional Tier II Capital Items subject to Temporary Article 4 - - Amount of Additional Tier II Capital Items Subject to Temporary Article 4 that Exceeds Upper Limit - - *Amounts in this column represents the amounts of items that are subject to transitional provisions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 41 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) I. EXPLANATIONS ON THE CONSOLIDATED EQUITY (continued) (2) Information on Differences Between Equity Items Calculated in Accordance with the Regulation on Equity of Banks and Balance Sheet Amounts: Within the scope of the “Regulation on Banks' Equity” (Regulation), the equity that is the basis for the capital adequacy standard ratio calculation is calculated after deducting the values to be deducted from the equity from the total capital and supplementary capital. The main difference between the “Equity” in the balance sheet and the equity calculated within the scope of the Regulation arises from the Stage 1 and Stage 2 expected credit loss allowances in the Tier II capital, and the subordinated debt instruments included in the Tier II capital. In addition, within the scope of the BRSA's Board Decision dated 12 December 2023, in case the net valuation differences of the securities in the portfolio of “Securities at Fair Value through Other Comprehensive Income” as of 1 January 2024 are negative, these differences may not be taken into account in the calculated equity amount. In addition, within the scope of the BRSA’s Board Decision dated 25 March 2025, the bank’s own shares acquired through repurchase from the Borsa Istanbul AŞ Equity Market after 17 March 2025, are not considered to deduction item from Tier I Capital until 31 December 2025. In accordance with the regulation, operating lease development costs, which are presented under the Tangible Assets item in the balance sheet and Intangible Fixed Assets for the calculation of capital adequacy are taken into account as a discount item from the core capital. In addition; in accordance with the regulation, operating lease development costs, which are presented under the Tangible Assets item in the balance sheet and Intangible Fixed Assets for the calculat ion of capital adequacy are taken into account as a discount item from the core capital. Similarly, some accounts determined by the Board are deducted from the total Equity in the calculation of the “Equity” amount, which is the basis for the capital adequacy calculation.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 42 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) I. EXPLANATIONS ON THE CONSOLIDATED EQUITY (continued) (3) Information about instruments to be included in the Equity Calculation : Information about instruments included in total capital calculation: Issuer T. Halk Bankası AŞ T. Halk Bankası AŞ T. Halk Bankası AŞ T. Halk Bankası AŞ Türkiye Varlık Fonu Unique identifier (CUSIP, ISIN etc.) TRSTHALE2716 TRSTHAL83015 TRSTHALK3419 XS3094751198 - Governing Law(s) of the instrument BRSA and CMB Legislation BRSA and CMB Legislation BRSA and CMB Legislation BRSA and CMB Legislation BRSA Legislation Regulatory treatment Subject to 10% deduction as of 1/1/2015 No No No No No Eligible at unconsolidated / consolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Instrument type (types to be specified by each jurisdiction) Bond Bond Bond Bond Loan Amount recognized in regulatory capital (Million TRY, as of most recent reporting date) 400 3.943 26.000 29.058 16.500 Par value of instrument (Million TRY) 1.000 4.929 26.000 29.058 - Accounting classification 346.011 346.011 346.011 347.001 346.0001 Original date of issuance 20.10.2017 27.08.2024 11.12.2024 26.06.2025 27.12.2024 Demand or time Time Time Time Time Demand Original maturity date 20.10.2017 27.08.2024 11.12.2024 26.06.2025 27.12.2024 Issuer call subject to prior supervisory approval Early redemption option at the end of the fifth year Early redemption option at the end of the fifth year Early redemption option at the end of the fifth year Early redemption option at the end of the fifth year Early redemption option at the end of the fifth year Optional call date, contingent call dates and redemption amount - - - - - Subsequent call dates, if applicable - - - - - Coupons / dividends Fixed or floating dividend/coupon Floating Coupon Indexed to TLREF Indexed to TLREF Fixed Indexed to TLREF Coupon rate and any related index Government Debt Security for 5 years +350 base points 6 months TLREF+0,50 bps 3 months TLREF+0,875 bps 9,30% TLREF Existence of a dividend stopper - - - - - Fully discretionary, partially discretionary or mandatory - - - - - Existence of step up or other incentive to redeem - - - - - Noncumulative or cumulative - - - - - Convertible or non-convertible If convertible, conversion trigger (s) - - - - - If convertible, fully or partially - - - - - If convertible, conversion rate - - - - - If convertible, mandatory or optional conversion - - - - - If convertible, specify instrument type convertible into - - - - - If convertible, specify issuer of instrument it converts into - - - - -
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 43 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) I. EXPLANATIONS ON THE CONSOLIDATED EQUITY (continued) (3) Information about instruments to be included in the Equity Calculation: (continued) Write-down feature If write-down, write-down trigger(s) - - - Decrease in core capital adequacy ratio below 5,125% Decrease in core capital adequacy ratio below 5,125% If write-down, full or partial - - - Fully or partially Fully or partially If write-down, permanent or temporary - - - Permanent or temporary Permanent or temporary If temporary write-down, description of write-up mechanism - - - - - Position in subordination hierarchy in liquidation (specify instrument type immediately senior to instrument) After borrowing, before Additional Tier I Capital After borrowing, before Additional Tier I Capital After borrowing, before Additional Tier I Capital After borrowings and Tier II Capital After borrowings and Tier II Capital In compliance with article number 7 and 8 of “Own fund regulation” The instrument is in compliance with article number 8. The instrument is in compliance with article number 8. The instrument is in compliance with article number 8. The instrument is in compliance with article number 7. The instrument is in compliance with article number 7. Details of incompliances with article number 7 and 8 of “Own fund regulation” The instrument is not in compliant with article numbered 7. The instrument is not in compliant with article numbered 7. The instrument is not in compliant with article numbered 7. The instrument is not in compliant with article numbered 8. The instrument is not in compliant with article numbered 8.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 44 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) II. EXPLANATIONS ON THE CONSOLIDATED CURRENCY RISK Foreign currency risk indicates the probability of loss that banks are subject to due to the exchange rate movements in the market. While calculating the share capital requirement, all foreign currency assets, liabilities and forward transactions of the Group are taken into consideration. Net short term and long term positions of each currency are calculated in terms of the Turkish Lira. In accordance with “Regulation on Measurement and Evaluation of Capital Adequacy of Banks”, the foreign currency position risk of the Group is measured by “standard method” and is calculated daily and is reported monthly. In addition to the standard method, foreign currency risk is also calculated by using internal methods and the value at risk (VaR) calculated in this way is reported to the senior management. In addition, the value at risk limit determined by the Parent Bank's Board of Directors for the value at risk, including the currency risk, is monitored daily and reported to the senior management. As a foreign currency risk management policy, the Parent Bank is not exposed to currency risk to a significant extent and positions related to currency risk are balanced with derivative transactions made when deemed necessary. Current foreign exchange buying rates announced by the Parent Bank as of the financial statement date and the last 5 business days before that, and foreign exchange buying rates of the Parent Bank for the thirty days before the financial statement date are as follows: USD EUR CHF GBP JPY Balance sheet valuation rate: 41,5112000 48,7508000 52,0846000 55,7467000 0,2800654 Before the balance sheet date; Current foreign exchange buying rate on the 1st business day 41,5075000 48,6924000 51,9429000 55,6237000 0,2785419 Current foreign exchange buying rate on the 2nd business day 41,4198000 48,4280000 51,8267000 55,4007000 0,2760950 Current foreign exchange buying rate on the 3rd business day 41,4095000 48,3829000 51,6939000 55,2691000 0,2761464 Current foreign exchange buying rate on the 4th business day 41,3903000 48,5819000 52,0015000 55,5699000 0,2775966 Current foreign exchange buying rate on the 5th business day 41,3382000 48,7625000 52,0507000 55,7848000 0,2789171 Last 30 days arithmetic average: 41,2477273 48,4133182 51,7187273 55,6274045 0,2782148
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 45 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) II. EXPLANATIONS ON THE CONSOLIDATED CURRENCY RISK (continued) Information related to currency risk: Current Period EUR USD OTHER FC TOTAL Assets Cash (cash in vault, foreign currency cash, money in transit, cheques purchased, precious metals) and balances with the CBRT 224.831.671 147.668.350 110.348.340 482.848.361 Banks 7.332.557 8.508.279 9.323.304 25.164.140 Financial assets at fair value through profit and loss - 126.710 87.679.724 87.806.434 Money market placements - - - - Financial assets at fair value through other comp. income 14.772.223 116.490.431 17.837.524 149.100.178 Loans 390.472.037 178.494.833 68.389.052 637.355.922 Subsidiaries, associates and joint ventures 3.942.160 - - 3.942.160 Financial assets measured at amortised cost 345.545 104.473.714 356.486 105.175.745 Derivative financial assets held for risk management - - - - Tangible assets - 2.766 3.926.933 3.929.699 Intangible assets - - 1.084.285 1.084.285 Other assets(2) 11.143.568 8.559.542 2.149.090 21.852.200 Total assets 652.839.761 564.324.625 301.094.738 1.518.259.124 Liabilities Bank deposits 231.518.569 23.693.016 1.051.333 256.262.918 Foreign currency deposits 422.883.401 333.652.296 300.976.314 1.057.512.011 Money market funds 17.967.898 81.274.794 - 99.242.692 Funds provided from other financial institutions 25.943.675 66.797.760 1.706.133 94.447.568 Securities issued - - - - Miscellaneous payables 3.892.477 3.451.705 2.002.309 9.346.491 Derivative financial liabilities held for risk management - - - - Other liabilities(2) 3.415.010 32.316.208 3.025.514 38.756.732 Total liabilities 705.621.030 541.185.779 308.761.603 1.555.568.412 Net balance sheet position (52.781.269) 23.138.846 (7.666.865) (37.309.288) Net off-balance sheet position 39.540.273 (21.062.677) 38.251.761 56.729.357 Financial derivative assets(3)(4) 68.145.990 48.720.453 43.860.996 160.727.439 Financial derivative liabilities(3)(4) 28.605.717 69.783.130 5.609.235 103.998.082 Non-cash loans(1) 190.691.558 161.133.683 33.812.645 385.637.886 Prior period Total assets 408.489.628 365.126.798 188.255.234 961.871.660 Total liabilities 451.336.626 362.397.477 174.930.168 988.664.271 Net balance sheet position (42.846.998) 2.729.321 13.325.066 (26.792.611) Net off-balance sheet position 31.950.248 (4.829.621) 12.621.379 39.742.006 Financial derivative assets 40.355.188 31.814.453 19.751.730 91.921.371 Financial derivative liabilities 8.404.940 36.644.074 7.130.351 52.179.365 Non-cash loans(1) 128.243.109 113.626.566 24.065.344 265.935.019 (1) Non-cash loans are not included in the off-balance sheet position items. (2) In accordance with the principles of the “Regulation on Measurement and Practices of Banks’ Net Overall FC Position / Shareholders’ Equity Ratio on a Consolidated and Unconsolidated Basis”, Foreign currency derivative financial instruments foreign currency in come discounts, equity and derivative financial instruments foreign currency expense discounts in liabilities are not taken into consideration in the currency risk measurement. (3) Financial derivative assets include forward precious metal purchase transactions amounted to TRY 4.998.143. Financial derivative liabilities include forward precious metal sale transactions amounted to TRY 79.802. Besides, derivative transactions under forward foreign curre ncy purchase and sale commitments are included. (4) In accordance with the provisions of the “Regulation on the Calculation and Application of the Standard Foreign Currency Net General Position/ Equity Ratio by Banks on a Consolidated and Unconsolidated Basis”, money options are included in the calculation of exchange rate risk with delta equivalents.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 46 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) III. EXPLANATIONS ON THE CONSOLIDATED INTEREST RATE RISK Loss that may arise due to asset-liability and interest -sensitive assets mismatches based on the repricing (interest rate change) periods of the off -balance sheet positions represent the interest rate risk. Among the positions subject to these risks, those evaluated in trading accounts are taken into account in market risk, while positions in banking books are subject to interest rate risk calculations arising from banking books. The Parent Bank's interest rate risks are monitored with internal limits determined within the scope of t he "Policies for the Management of Interest Rate Risk" which is approved by the Board of Directors. Interest rate risks are measured on a daily basis primarily through risk weighted asset and economic value change measurements, sensitivity, duration and gap analyses. Measurement results are daily reported to the Parent Bank's Top Management and related business units. 1. Information related to the interest rate sensitivity of assets, liabilities and off-balance sheet items (based on re- pricing dates): Current Period Up to 1 month 1-3 months 3-12 months 1-5 years 5 years and over Non-bearing interest Total Assets Cash (cash in vault, foreign currency cash, money in transit, cheques purchased, precious metals) and balances with the CBRT 241.485.692 - - - - 612.457.724 853.943.416 Banks 24.301.140 12.199.473 77.834 415.706 - 19.616.134 56.610.287 Financial assets at fair value through profit and loss 1.087.390 535.570 70.259.797 16.425.101 - 9.726.071 98.033.929 Money market placements 210.000 - - - - - 210.000 Financial assets at fair value through other comprehensive income 37.880.255 31.891.890 102.904.030 58.711.272 51.313.682 1.792.699 284.493.828 Loans 860.868.388 283.868.106 272.073.369 240.884.879 98.098.224 150.670.584 1.906.463.550 Financial assets measured at amortised cost 146.048.016 127.576.875 126.011.445 167.068.013 198.549.014 - 765.253.363 Other assets(1)(4) 14.352.080 15.935.023 9.271.334 11.298.066 325.934 194.982.550 246.164.987 Total assets 1.326.232.961 472.006.937 580.597.809 494.803.037 348.286.854 989.245.762 4.211.173.360 Liabilities Bank deposits 158.597.316 50.224.406 - - - 210.995.868 419.817.590 Other deposits 1.537.582.786 502.268.805 88.899.732 11.271.111 622.829 721.979.330 2.862.624.593 Money market funds 293.680.595 40.515.961 - - - 766.275 334.962.831 Miscellaneous payables 8.764.225 - - - - 69.859.810 78.624.035 Securities issued 2.333.347 11.532.593 15.182.489 - - - 29.048.429 Funds provided from other financial institutions(3) 26.887.333 42.398.704 21.267.361 4.373.198 365.420 2.308.000 97.600.016 Other liabilities (1)(2) 1.000.000 30.928.795 16.500.000 29.057.840 - 311.009.231 388.495.866 Total liabilities 2.028.845.602 677.869.264 141.849.582 44.702.149 988.249 1.316.918.514 4.211.173.360 Balance sheet long position - - 438.748.227 450.100.888 347.298.605 - 1.236.147.720 Balance sheet short position (702.612.641) (205.862.327) - - - (327.672.752) (1.236.147.720) Off-balance sheet long position 90.553.459 96.372.977 34.784.928 30.918.133 - - 252.629.497 Off-balance sheet short position (89.898.156) (98.130.871) (34.732.012) (30.650.467) - - (253.411.506) Total position (701.957.338) (207.620.221) 438.801.143 450.368.554 347.298.605 (327.672.752) (782.009) (1) TRY 27.347.783 of deferred tax assets is disclosed under the non-bearing interest column in other assets, TRY 4.662.133 of deferred tax liability is disclosed under the non-bearing interest column in other liabilities. (2) Shareholders’ equity balance is disclosed under the non-bearing interest column in other liabilities line. (3) Funds provided from other financial institutions include borrowings. (4) Other asset items which are not expected to be converted into cash in short term but required for continuity of banking operations like lease receivables, factoring receivables, non current assets held for sale and discontinued operations, tangible and intangible assets, office supply inventory, associates and subsidiaries and prepaid expenses and expected credit losses are disclosed in other assets under the interest-free column.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 47 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) III. EXPLANATIONS ON THE CONSOLIDATED INTEREST RATE RISK (continued) 1. Information related to the interest rate sensitivity of assets, liabilities and off-balance sheet items (based on re- pricing dates): (continued) Prior Period Up to 1 month 1-3 months 3-12 months 1-5 years 5 years and over Non-bearing interest Total Assets Cash (cash in vault, foreign currency cash, money in transit, cheques purchased, precious metals) and balances with the CBRT 234.712.270 - - - - 398.714.623 633.426.893 Banks 11.011.793 572.450 82.474 257.727 - 22.311.012 34.235.456 Financial assets at fair value through profit and loss 245.087 3.903.056 11.899.259 40.928.144 20 1.805.021 58.780.587 Money market placements 1.412.154 - - - - - 1.412.154 Financial assets at fair value through other comprehensive income 44.850.983 20.878.074 48.638.907 34.179.380 28.534.363 1.393.027 178.474.734 Loans 486.916.663 252.615.654 264.977.515 330.978.876 90.412.995 95.741.747 1.521.643.450 Financial assets measured at amortised cost 163.290.253 46.574.574 91.333.679 77.245.449 183.164.992 - 561.608.947 Other assets(1)(4) 16.599.155 5.039.545 6.755.066 7.637.865 468.678 117.776.220 154.276.529 Total assets 959.038.358 329.583.353 423.686.900 491.227.441 302.581.048 637.741.650 3.143.858.750 Liabilities Bank deposits 101.037.008 15.109.465 1.989.772 - - 164.196.629 282.332.874 Other deposits 1.053.173.612 482.029.889 124.677.499 8.947.466 414.111 509.045.004 2.178.287.581 Money market funds 238.980.242 17.250.157 21.107 - - 474.023 256.725.529 Miscellaneous payables 4.499.440 - - - - 61.304.087 65.803.527 Securities issued 4.580.613 5.429.788 2.182.582 - - - 12.192.983 Funds provided from other financial institutions(3) 26.804.900 26.159.258 5.247.208 3.435.820 389.914 2.433.709 64.470.809 Other liabilities(1)(2) 1.000.000 30.928.795 16.000.000 - - 236.116.652 284.045.447 Total liabilities 1.430.075.815 576.907.352 150.118.168 12.383.286 804.025 973.570.104 3.143.858.750 Balance sheet long position - - 273.568.732 478.844.155 301.777.023 - 1.054.189.910 Balance sheet short position (471.037.457) (247.323.999) - - - (335.828.454) (1.054.189.910) Off-balance sheet long position 52.177.035 39.086.386 42.502.786 17.493.729 8.924.712 - 160.184.648 Off-balance sheet short position (53.091.135) (40.932.445) (42.481.523) (17.493.657) (8.924.712) - (162.923.472) Total position (471.951.557) (249.170.058) 273.589.995 478.844.227 301.777.023 (335.828.454) (2.738.824) (1) TRY 23.849.997 of deferred tax assets is disclosed under the non-bearing interest column in other assets, TRY 3.050.785 of deferred tax liability is disclosed under the non-bearing interest column in other liabilities. (2) Shareholders’ equity balance is disclosed under the non-bearing interest column in other liabilities line. (3) Funds provided from other financial institutions include borrowings. (4) Other asset items which are not expected to be converted into cash in short term but required for continuity of banking operations like lease receivables, factoring receivables, non current assets held for sale and discontinued operations, tangible and intangible assets, office s upply inventory, associates and subsidiaries and prepaid expenses and expected credit losses are disclosed in other assets under the interest-free column.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 48 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) III. EXPLANATIONS ON THE CONSOLIDATED INTEREST RATE RISK (continued) 2. Average interest rates applied to the monetary financial instruments of the Group (%): Current Period EUR USD JPY TRY Assets Cash (cash in vault, foreign currency cash, money in transit, cheques purchased) and balances with the CBRT - 1,52 - 22,43 Banks(1) 1,92 4,21 - 39,01 Financial assets at fair value through profit and loss - 4,57 - 30,79 Money market placements - - - 48,50 Financial assets at fair value through other comprehensive income 4,75 6,19 - 37,52 Loans(2) 6,35 8,16 - 44,42 Financial assets measured at amortised cost 4,89 5,56 - 37,82 Liabilities Bank deposits(4) 0,43 5,28 - 40,51 Other deposits (4) 1,26 1,87 - 36,10 Money market funds 3,73 3,90 - 40,50 Miscellaneous payables(3) - - - 5,00 Securities issued (5) - 4,65 - 53,59 Funds provided from other financial institutions 4,29 6,50 - 41,80 (1) Interest rates are calculated using weighted average method for placements as of the balance sheet date. (2) Interest rates for loans given as of the balance sheet date are calculated by using client based weighted average interests. (3) Equals to 12-month TRY deposit base interest rate announced as of 30 September 2025. (4) Demand deposit amounts are considered in the average interest rate calculation. (5) Subordinated debt instruments are presented under securities issued. Prior Period EUR USD JPY TRY Assets Cash (cash in vault, foreign currency cash, money in transit, cheques purchased) and balances with the CBRT - - - 22,89 Banks(1) 2,88 4,03 - 47,03 Financial assets at fair value through profit and loss - 4,62 - 33,19 Money market placements - - - 52,50 Financial assets at fair value through other comprehensive income 4,43 6,91 - 39,55 Loans(2) 6,45 8,90 - 43,39 Financial assets measured at amortised cost - 5,71 - 38,99 Liabilities Bank deposits(4) 0,29 5,88 - 48,73 Other deposits (4) 0,99 1,63 - 40,85 Money market funds 3,37 4,36 - 48,77 Miscellaneous payables(3) - - - 5,00 Securities issued (5) - - - 53,16 Funds provided from other financial institutions 3,89 5,57 - 48,88 (1) Interest rates are calculated using weighted average method for placements as of the balance sheet date. (2) Interest rates for loans given as of the balance sheet date are calculated by using client based weighted average interests. (3) Equals to 12-month TRY deposit base interest rate announced as of 31 December 2024. (4) Demand deposit amounts are considered in the average interest rate calculation. (5) Subordinated debt instruments are presented under securities issued.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 49 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) IV. EXPLANATIONS ON THE CONSOLIDATED POSITION RISK OF SHARES Information on the carrying value, fair value, market value and capital requirement amounts of equity investments resulting from banking accounts: Comparison Equities Carrying Value(1) Fair Value Change(2) Market Value Capital Requirements Stock investment excluding A,B,C,D group 4.691.559 - - 822.604 (1) Includes TRY 153.740 of unconsolidated associates, TRY 121.247 of unconsolidated subsidiaries and TRY 4.416.572 of associates accounted for under the equity method. (2) Investments that are not measured at fair value are not included in the table above. Realized gains/losses, revaluation surpluses and unrealized gains/losses on equity securities and results included in Common Equity and Tier II Capital: Realized gains/ losses in the current period Revaluation Increases Unrealized gains and losses Portfolio Total Included To Total Core Capital Total Included To Total Core Capital Included to Supplementary Capital 1. Private equity investments - - - - - - 2. Share certificates quoted on a stock exchange - - - - - - 3. Other share certificates - 15.040 15.040 - - - Total - 15.040 15.040 - - -
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 50 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO The liquidity risk occurs when there is insufficient cash or cash inflows to meet the cash outflows fully and timely. Liquidity risk may also occur when the market penetration is not adequate, when the open position cannot be closed immediately at the suitable prices in sufficient amounts due to barriers and break -ups in the markets. The liquidity risks of the Parent Bank are managed within the framework of risk and transaction limits approved by the Board of Directors, and the written duties and responsibilities of the units related to liquidity risk management is established. Although the Board of Directors is primarily responsible for managing liquidity risk, committees have been established to ensure the efficient function. T he committees responsible for managing liquidity risk are the Asset-Liability Committee (ALCO) and the Liquidity Risk Committee. The desired level of risk that the bank intends to assume with regard to liquidity risk is determined within the Risk Appetite Framework Directive approved by the Parent Bank's Board of Directors. Within the scope of the risk appetite framework, the level of risk capacity, risk appetite, and trigger levels have been determined on both consolidated and non-consolidated bases. Regarding treasury transactions; maturity and amount limits are determined for TRY and FC transactions made in the interbank over-the-counter market, and limits are set on the maximum foreign currency position, forward and swap transactions that can be carried. Liquidity risk analyzes are conducted on a daily/weekly/monthly basis and shared with the Parent Bank's top management and related departments. Periodical stress tests are performed in line with the Parent Bank’s liquidity management policies. The Parent Bank has determined a high-quality liquid asset stock as a liquidity buffer for managing liquidity risk. Extending the maturity structure of the time deposits, which constitute a significant source of funds for the Parent Bank, developing new products to e ncourage savings, and maintaining the core deposit level are adopted as strategic objectives to reduce liquidity risk. Limits and principles regarding the issuance of bonds and bills in TRY have been determined to provide long-term funding other than deposits as part of extending the maturity structure of liabilities. In line with the Parent Bank's needs, new borrowing opportunities are utilized, and within this framework, price/cost movements in international capital markets are closely monitored, and alternative sources of funding are evaluated when conditions are favorable. The Parent Bank aims to obtain its funding sources from the longest -term and most stable sources possible, taking into account legal and internal limits as well as cost factors. In this context, concentration ratios such as the share of retail funding sources in total sources, the share of high -value deposits in total deposits, and the share of money market funds in bank borrowings and market volumes are monitored daily within the framework of the Liquidity Early Warning System. Short-term or daily foreign currency liquidity needs can be met through swap transactions, and sufficient liquidity is kept with correspondent banks for effective management of repayments. Adequate liquidity buffer is maintained by the Parent Bank to meet its intraday liquidity and short -term liquidity needs. In general context, liquidity management is managed within the limits defined by the market makers for the Parent Bank and the limit structures defined by the Parent Bank on the basis of counterparty and transaction type. The reduction of liquidity risk is provided by effective collateral management structure. Upper borrowing limits are determined under certain criteria and balance sheet size related to the do mestic organized markets (CBRT, BIST and Takasbank) by the relevant authorities. Existing limits available to use are continuously monitored, through the Parent Bank’s projected and instant liquidity needs under the condition that depositing and/or withdrawing additional collateral. The Risk Management Department conducts routine and periodic stress tests based on rapid deposit outflows, defaults on cash and non -cash loans, liquidity outflows with significant loan expansions that may affect the Parent Bank's liquidity such as pandemics and natural disasters, potential losses in the Parent Bank's securities portfolio, FC outflows, scenarios related to the obligations of subsidiaries, and similar fundamental issues. Stress test scenarios that are for other all matters related to liquidity risk management are prepared in collaboration with relevant business units. Analysis of stress test scenarios is shared with the Parent Bank's Top Management and relevant business units, and necessary actions are taken.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 51 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) Systemic and bank specific metrics within the scope of “Liquidity Emergency Action Plan” (LEAP) approved by the Board of Directors and early warning indicators related to these metrics are monitored on a daily basis. Written actions, if required, to be taken as part of this plan are determined. In extent with LEAP, necessary actions and their priority for possible liquidity stress/crisis have been determined. The Parent Bank does not have any operational or legal restrictions on liquidity transfer to subsidiaries or foreign branches. Each of the consolidated subsidiaries manage their own liquidity risk and liquidity adequacy is ensured on a consolidated basis. Liquidity Coverage Ratio: According to the BRSA’s “Regulation for Banks’ Liquidity Coverage Ratio Calculations” publi shed in the Official Gazette No. 28948 dated 21 March 2014, FC and TRY+FC liquidity coverage ratios are calculated by using high quality liquid assets divided by net cash outflows. Within this context, the Parent Bank is required to have the ability to cover net cash outflows with high quality liquid assets and its related ratios should be in compliance with the legal limits. In accordance with the relevant Regulation, liquidity coverage ratio is calculated by taking the monthly simple arithmetic average on a consolidated basis and by taking the weekly simple arithmetic average on a non-consolidated basis. In the third quarter of 2025, the Parent Bank’s total free securities and the balance of liquid assets held at the CBRT increased, resulting in an increas e in the total high -quality liquid assets in TRY+FC. The increase in net cash outflows occurred as a result of the growth in deposit balances with a remaining maturity of 30 days or less. As the growth in net cash outflows in TRY+FC terms exceeded the incr ease in high -quality liquid assets, a decline was recorded in the TRY+FC liquidity coverage ratio during the period. On the other hand, despite the growth in FC high -quality liquid assets, the increase in FC net cash outflows led to a decrease in the FC liquidity coverage ratio in the third quarters. On a consolidated basis, 53,53% of total high quality liquid assets consist of assets held at the Central Bank of the Republic of Türkiye and central banks with foreign branches, 45,06% of securities classified as high quality liquid assets and 1,41% of cash. The Parent Bank's main source of funding is deposits. Other significant funding sources include money market borrowings and marketable securities issued. Derivative transactions did not cause a net cash out flow that would negatively affect the liquidity position. However, there are periodical fluctuations in the foreign currency liquidity coverage ratio due to foreign currency swap transactions that have TRY side. The estimated cash outflows from derivative financial instruments and other liabilities calculated on the basis of the changes in fair value in the last 24 months are TRY 3.420.490.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 52 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VI. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) The consolidated liquidity coverage ratios for the last three months are indicated in the table below. Current Period FC (%) TRY+FC (%) July 2025 230,62 184,05 August 2025 224,33 187,15 September 2025 221,30 190,35 Prior Period FC (%) TRY+FC (%) October 2024 218,33 189,07 November 2024 237,29 189,67 December 2024 218,73 185,16
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 53 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) Liquidity Coverage Ratio: Total Unweighted Value (average) (1) Total Weighted Value (average) (1) Current Period TRY+FC FC TRY+FC FC High Quality Liquid Assets High Quality Liquid Assets 1.412.855.636 615.145.429 Cash Outflows Retail and Small Business Customers Deposits; 1.445.153.950 528.081.260 134.405.191 52.775.767 Stable Deposits 248.213.620 323.590 14.711.158 - Less Stable Deposits 1.196.940.330 527.757.670 119.694.033 52.775.767 Unsecured wholesale funding; 1.441.285.183 585.326.168 698.795.853 246.155.966 Operational Deposits 298.700.644 208.390.388 74.675.163 52.097.597 Non-operational Deposits 1.054.421.398 347.738.568 558.361.547 165.574.754 Other Unsecured Funding 88.163.141 29.197.212 65.759.143 28.483.615 Secured Funding - - Other cash outflows; 32.013.946 4.103.729 27.558.885 4.094.186 Derivatives cash outflow and liquidity needs related to market valuation changes on derivatives or other transactions 4.204.931 3.861.871 4.204.931 3.861.871 Obligations related to structured financial products 416.954 225.953 416.954 225.953 Commitments related to debts to financial markets and other off- balance sheet obligations 27.392.061 15.905 22.937.000 6.362 Other revocable off-balance sheet commitments and Contractual Obligations - - - - Other irrevocable or conditionally revocable off-balance sheet Obligations 1.459.004.937 366.103.849 105.823.338 27.364.272 Total Cash Outflows 966.583.267 330.390.191 Cash Inflows Secured Lending - - - - Unsecured Lending 333.070.927 43.658.931 209.803.824 35.560.324 Other Cash Inflows 752.613 21.080.381 752.613 21.080.381 Total Cash Inflows 333.823.540 64.739.312 210.556.437 56.640.705 Total Adjusted Value Total HQLA Stock 1.412.855.636 615.145.429 Total Net Cash Outflows 756.026.830 273.749.486 Liquidity Coverage Ratio (%) 187,15% 225,46% (1) Calculated by simple arithmetic average, monthly average calculated for the last three months of the values.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 54 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) Liquidity Coverage Ratio: (continued) Total Unweighted Value (average) (1) Total Weighted Value (average) (1) Prior Period TRY+FC FC TRY+FC FC High Quality Liquid Assets High Quality Liquid Assets 1.027.736.729 365.275.728 Cash Outflows Retail and Small Business Customers Deposits; 1.165.795.980 394.376.920 109.472.475 39.425.574 Stable Deposits 177.253.300 121.180 10.618.207 - Less Stable Deposits 988.542.680 394.255.740 98.854.268 39.425.574 Unsecured wholesale funding; 1.047.889.028 383.878.765 483.954.594 149.018.320 Operational Deposits 239.501.748 163.364.676 59.875.437 40.841.169 Non-operational Deposits 741.557.809 212.949.814 380.890.096 100.813.251 Other Unsecured Funding 66.829.471 7.564.275 43.189.061 7.363.900 Secured Funding - - Other cash outflows; 23.815.815 3.993.326 20.984.593 3.986.703 Derivatives cash outflow and liquidity needs related to market valuation changes on derivatives or other transactions 5.271.051 3.982.288 5.271.051 3.982.288 Obligations related to structured financial products 382.003 - 382.003 - Commitments related to debts to financial markets and other off- balance sheet obligations 18.162.761 11.038 15.331.539 4.415 Other revocable off-balance sheet commitments and Contractual Obligations - - - - Other irrevocable or conditionally revocable off-balance sheet Obligations 1.062.282.109 252.893.303 76.221.783 19.077.326 Total Cash Outflows 690.633.443 211.507.921 Cash Inflows Secured Lending - - - - Unsecured Lending 229.553.178 32.206.735 142.052.248 27.587.204 Other Cash Inflows 1.158.814 20.777.288 1.158.814 20.777.288 Total Cash Inflows 230.711.992 52.984.023 143.211.062 48.364.492 Total Adjusted Value Total HQLA Stock 1.027.736.729 365.275.728 Total Net Cash Outflows 547.422.381 163.143.429 Liquidity Coverage Ratio (%) 187,95% 224,75% (1) Calculated by simple arithmetic average, monthly average calculated for the last three months of the values.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 55 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) 1. Presentation of assets and liabilities according to their remaining maturities: The Parent Bank follows up and measures the consistency of payments comparing its assets and liabilities with the interest rates on a daily and transactional basis. Current Period Demand Up to 1 month 1-3 months 3-12 months 1-5 years 5 years and over Undistributed Total Assets Cash (cash in TRY, foreign currency cash, money in transit, cheques purchased, precious metals) and balances with the CBRT 487.325.345 357.047.063 1.253.128 7.997.128 266.089 54.663 - 853.943.416 Banks 18.781.439 24.989.490 12.199.474 77.835 415.706 146.343 - 56.610.287 Financial assets at fair value through profit and loss 1.526.092 1.085.894 459.458 70.259.797 16.502.709 - 8.199.980 98.033.929 Money market placements - 210.000 - - - - - 210.000 Financial assets at fair value through other comprehensive income - 7.263.813 10.031.901 105.480.199 99.478.510 60.446.706 1.792.699 284.493.828 Loans(4) 12.237.131 156.419.572 82.662.813 661.991.153 763.022.270 157.782.746 72.347.865 1.906.463.550 Financial assets measured at amortised cost - 7.858.135 47.095.530 101.402.041 357.575.512 251.322.145 - 765.253.363 Other assets (2) 2.884.529 12.317.146 16.785.646 10.035.324 11.766.341 276.039 192.099.962 246.164.987 Total assets 522.754.536 567.191.113 170.487.950 957.243.477 1.249.027.137 470.028.642 274.440.506 4.211.173.360 Liabilities Bank deposits 209.757.719 159.709.593 50.349.802 476 - - - 419.817.590 Other deposits 694.217.745 1.553.539.193 511.767.440 90.974.043 11.467.231 658.941 - 2.862.624.593 Funds provided from other financial institutions (3) 7.860 14.911.114 4.940.286 25.938.905 41.537.681 10.264.170 - 97.600.016 Money market balances - 294.356.872 15.237.060 - 25.368.899 - - 334.962.831 Bonds issued - 2.333.347 11.532.593 15.182.489 - - - 29.048.429 Miscellaneous Payables 230.941 49.443.567 1.085.464 4.923.752 12.850.694 21.236 10.068.381 78.624.035 Other liabilities (1) 528.899 55.888.291 5.142.449 1.680.103 47.535.830 37.835.791 239.884.503 388.495.866 Total liabilities 904.743.164 2.130.181.977 600.055.094 138.699.768 138.760.335 48.780.138 249.952.884 4.211.173.360 Liquidity Gap (381.988.628) (1.562.990.864) (429.567.144) 818.543.709 1.110.266.802 421.248.504 24.487.622 - Net off-Balance Sheet Position - 655.303 (1.757.892) 52.916 267.664 - - (782.009) Derivative Financial Assets - 90.553.459 64.861.140 37.684.679 59.530.219 - - 252.629.497 Derivative Financial Liabilities - (89.898.156) (66.619.032) (37.631.763) (59.262.555) - - (253.411.506) Non-Cash Loans 377.747.216 30.187.084 66.973.153 370.334.052 223.976.980 48.416.613 - 1.117.635.098 Prior Period Total Assets 443.939.738 497.405.117 311.109.844 421.375.809 901.132.232 418.975.183 149.920.827 3.143.858.750 Total Liabilities 636.251.739 1.525.960.895 542.431.644 142.867.411 60.346.724 41.670.168 194.330.169 3.143.858.750 Liquidity Gap (192.312.001) (1.028.555.778) (231.321.800) 278.508.398 840.785.508 377.305.015 (44.409.342) - Net off-Balance Sheet Position - (914.100) (1.846.059) 21.263 72 - - (2.738.824) Derivative Financial Assets - 52.177.035 39.086.386 16.381.993 34.689.810 17.849.424 - 160.184.648 Derivative Financial Liabilities - (53.091.135) (40.932.445) (16.360.730) (34.689.738) (17.849.424) - (162.923.472) Non-Cash Loans 267.440.078 22.080.019 73.661.138 265.415.779 148.433.306 40.902.548 - 817.932.868 (1) Shareholders’ equity is disclosed in other liabilities line under the undistributed column. (2) Other asset items which are not expected to be converted into cash in short term but required for continuity of banking operations like lease receivables, factoring receivables, non current assets held for sale and discontinued operations, tangible and intangible assets, office supply inventory, associates and subsidiaries and prepaid expenses and expected credit losses are disclosed in other assets under the interest-free column. (3) Funds provided from other financial institutions include borrowings. (4) Non-performing loans is disclosed in under the undistributed column.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 56 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) Net Stable Funding Ratio: In accordance with the “Regulation on Calculation of Net Stable Funding Ratio of Banks” published by BRSA in the Official Gazette dated 26 May 2023 and numbered 32202, foreign currency (FC) and total (TRY+FC) NSFR ratios are calculated by dividing the available stable funding amount by the required stable funding amount. In this context, the Parent Bank is required to cover the portion of equity and liabilities expected to be permanent with assets according to its liquidity capacity and to comply with the legal limits regarding the related ratios. In accordance with the related Regulation, the Net Stable Funding Ratio is calculated on a consolidated and unconsolidated basis on a monthly basis and at the end of three months by taking the simple arithmetic average. Considering the third quarter of 2025, deposits of real persons and retail custome rs constitute 59,58% of the total available stable fund amount on a consolidated basis, while payables to other persons constitute 27,06% of the available stable fund amount. The largest share of the required stable fund amount, 71,27%, is composed of performing receivables.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 57 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) Net Stable Funding Ratio: Current Period a b c d e Unweighted Amount According to Residual Maturity Weighted Value Without Maturity(*) Less than 6 Months 6 Months to < 1 year 1 Year and more than 1 Year Available Stable Funding 1 Capital 227.432.779 - - 54.840.599 282.273.378 2 Tier I and tier II capital 227.432.779 - - 54.840.599 282.273.378 3 Other capital instruments - - - - - 4 Deposits from natural persons and small business customers 427.202.202 1.085.681.576 22.799.317 8.301.353 1.404.210.369 5 Stable deposits /participation funds 97.422.067 193.897.601 557.695 609.974 277.862.970 6 Less stable deposits /participation funds 329.780.135 891.783.975 22.241.622 7.691.379 1.126.347.399 7 Wholesale funding 208.747.141 994.150.804 14.424.264 29.123.206 637.784.311 8 Operational deposits 40.014.192 100.503.326 - - 70.258.759 9 Other wholesale funding 168.732.949 893.647.478 14.424.264 29.123.206 567.525.552 10 Liabilities with matching interdependent assets 11 Other liabilities 379.319.377 329.528.870 6.636.341 29.202.504 32.520.675 12 Derivative liabilities 2.382.588 13 All other equity and liabilities not included in the above categories 379.319.377 327.146.282 6.636.341 29.202.504 32.520.675 14 Available Stable Funding 2.356.788.733 Required Stable Funding 15 High-quality liquid assets (HQLA) 124.237.080 16 Deposits held at credit institutions or financial institutions for operational purposes - - - - - 17 Performing loans and securities 10.604.820 53.353.171 336.482.138 1.303.080.325 1.208.181.781 18 Performing loans to credit institutions or financial institutions secured by Level 1 HQLA 7 - - - 1 19 Performing loans to credit institutions or financial institutions secured by non Level 1 HQLA and unsecured performing loans to credit institutions or financial institutions 8.629.265 14.936.365 637.383 5.890.998 9.744.535 20 Performing loans to non financial corporate clients, loans to natural person customers and small business customers, and loans to sovereigns, central banks and PSEs - 31.549.696 264.344.001 1.134.322.765 1.051.710.832 21 Loans with a risk weight of less than or equal to 35% - - - 302.051.834 196.333.692 22 Performing loans encumbered with residential mortgages - 6.867.110 71.500.754 162.866.562 145.047.197 23 Loans with a risk weight of less than or equal to 35% - 6.867.110 71.500.754 162.866.562 145.047.197 24 Exchange traded equities and securities that are not in default and do not qualify as HQLA 1.975.548 - - - 1.679.216 25 Assets with matching interdependent liabilities 26 Other assets 284.892.293 - - 2.859.775 287.751.990 27 Physical traded commodities, including gold - - 28 Assets posted as initial margin for derivative contracts or contributions to default funds of central counterparties 522 444 29 Derivative assets 2.620.994 2.620.994 30 Derivative liabilities before deduction of variation margin posted 238.259 238.259 31 All other assets not included in the above categories 284.892.293 - - - 284.892.293 32 Off-balance sheet items 1.502.882.381 - - 75.144.119 33 Required Stable Fund 1.695.314.970 34 Net Stable Funding Ratio (%) 139,02% (*) Items reported in the Non-maturity column do not have a specific maturity. These include, but are not limited to, equity items with no fixed maturity, demand deposits, short positions, positions with no fixed maturity, high quality illiquid equities and commodities with physical delivery.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 58 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) V. EXPLANATIONS ON THE CONSOLIDATED LIQUIDITY RISK MANAGEMENT, LIQUIDITY COVERAGE RATIO AND NET STABLE FUNDING RATIO (continued) Net Stable Funding Ratio: Prior Period a b c d e Unweighted Amount According to Residual Maturity Weighted Value Without Maturity(*) Less than 6 Months 6 Months to < 1 year 1 Year and more than 1 Year Available Stable Funding 1 Capital 174.591.120 - - 32.527.135 207.118.255 2 Tier I and tier II capital 174.591.120 - - 32.527.135 207.118.255 3 Other capital instruments - - - - - 4 Deposits from natural persons and small business customers 310.540.144 874.576.137 25.012.343 8.731.979 1.108.167.713 5 Stable deposits /participation funds 71.290.044 151.274.138 777.284 521.934 212.670.230 6 Less stable deposits /participation funds 239.250.100 723.301.999 24.235.059 8.210.045 895.497.483 7 Wholesale funding 160.069.902 745.101.629 18.805.267 21.291.397 483.279.797 8 Operational deposits 27.901.886 82.913.746 1.053 - 55.408.343 9 Other wholesale funding 132.168.016 662.187.883 18.804.214 21.291.397 427.871.454 10 Liabilities with matching interdependent assets 11 Other liabilities 289.173.788 242.868.511 3.607.125 17.083.398 18.886.960 12 Derivative liabilities 2.752.079 13 All other equity and liabilities not included in the above categories 289.173.788 240.116.432 3.607.125 17.083.398 18.886.960 14 Available Stable Funding 1.817.452.725 Required Stable Funding 15 High-quality liquid assets (HQLA) 61.446.878 16 Deposits held at credit institutions or financial institutions for operational purposes - - - - - 17 Performing loans and securities 6.894.711 32.549.792 273.957.593 1.085.669.846 985.756.490 18 Performing loans to credit institutions or financial institutions secured by Level 1 HQLA 7.230 - - - 723 19 Performing loans to credit institutions or financial institutions secured by non Level 1 HQLA and unsecured performing loans to credit institutions or financial institutions 5.579.899 9.148.328 23.039.093 4.882.594 18.611.375 20 Performing loans to non financial corporate clients, loans to natural person customers and small business customers, and loans to sovereigns, central banks and PSEs - 18.241.661 196.484.136 937.478.855 843.085.405 21 Loans with a risk weight of less than or equal to 35% - - - 305.672.601 198.687.191 22 Performing loans encumbered with residential mortgages - 5.159.803 54.434.364 143.308.397 122.947.542 23 Loans with a risk weight of less than or equal to 35% - 5.159.803 54.434.364 143.308.397 122.947.542 24 Exchange traded equities and securities that are not in default and do not qualify as HQLA 1.307.582 - - - 1.111.445 25 Assets with matching interdependent liabilities 26 Other assets 172.011.982 - - 1.833.384 173.845.258 27 Physical traded commodities, including gold - - 28 Assets posted as initial margin for derivative contracts or contributions to default funds of central counterparties 721 613 29 Derivative assets 1.557.455 1.557.455 30 Derivative liabilities before deduction of variation margin posted 275.208 275.208 31 All other assets not included in the above categories 172.011.982 - - - 172.011.982 32 Off-balance sheet items 1.087.656.641 - - 54.382.832 33 Required Stable Fund 1.275.431.458 34 Net Stable Funding Ratio (%) 142,50% (*) Items reported in the Non-maturity column do not have a specific maturity. These include, but are not limited to, equity items with no fixed maturity, demand deposits, short positions, positions with no fixed maturity, high quality illiquid equities and commodities with physical delivery.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 59 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VI. EXPLANATIONS ON THE CONSOLIDATED LEVERAGE RATIO Current Period Prior Period Total Assets in The Consolidated Financial Statements Prepared in Accordance with TAS(1) 3.834.773.798 3.142.745.946 The difference between Total Assets in the Consolidated Financial Statements Prepared in Accordance with TAS and the Communiqué on Preparation of Consolidated Financial Statements of Banks(1) (1.272.517) (1.112.804) The difference between total amount of derivative financial instruments and credit derivatives in the consolidated financial statements prepared in accordance with the Communiqué on Preparation of Consolidated Financial Statements of Banks, and total risk balances of such instruments(2) 230.385.817 158.535.730 The difference between total amount of risk investment securities or commodity collateral financing transactions in the consolidated financial statements prepared in accordance with the Communiqué on Preparation of Consolidated Financial Statements of Banks, and total risk amount of such instruments(2) 193.349.767 165.132.856 The difference between total amount of off -balance sheet transactions in the consolidated financial statements prepared in accorda nce with the Communiqué on Preparation of Consolidated Financial Statements of Banks, and total risk amount of such items(2) 69.531.785 46.042.642 The other differences between amount of assets in the consolidated financial statements prepared in accordance with the Communiqué on Preparation of Consolidated Financial Statements of Banks, and total risk amount of such items - - Total Risk Amount 5.590.030.655 4.157.538.409 (1) The amounts are represented in the table as of 30 June 2025 and 31 December 2024. (2) The amounts in the table represent three-month averages.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 60 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VI. EXPLANATIONS ON THE CONSOLIDATED LEVERAGE RATIO (continued) Leverage ratio calculated according to the article “Regulation Regarding the Measurement and Evaluation of Banks’ Leverage Level” published in the Official Gazette No. 28812 dated 5 November 2013 is as follows. Current Period (1) Prior Period (1) On-Balance Sheet Assets 1.On-Balance Sheet Assets (Excluding Derivatives and Sfts, but Including Collateral) 4.065.511.967 3.066.125.212 2.Assets That Are Deducted from Core Capital (28.851.360) (27.057.120) 3.Total on Balance Sheet Exposures 4.036.660.607 3.039.068.092 Derivative Exposures And Credit Derivatives 4.Replacement Cost Associated with Derivative Financial Instruments and Credit Derivatives 1.581.085 5.815.075 5.The Potential Amount of Credit Risk with Derivative Financial Instruments and Credit Derivatives 3.976.443 3.255.446 6.The Total Amount of Risk on Derivative Financial Instruments and Credit Derivatives 5.557.528 9.070.521 Investment Securities Or Commodity Collateral Financing Transactions 7.The Amount of Risk Investment Securities or Commodity Collateral Financing Transactions (Excluding on Balance Sheet Assets) 12.954.960 12.927.295 8.Risk Amount of Exchange Brokerage Operations - - 9.Total Risks Related to Securities or Commodity Financing Transactions 12.954.960 12.927.295 Off -Balance Sheet Items 10.Gross Notional Amount of Off-Balance Sheet Items 1.604.389.345 1.142.515.143 11.Adjustments for Conversion to Credit Equivalent Amounts (69.531.785) (46.042.642) 12.The Total Risk of Off-Balance Sheet Items 1.534.857.560 1.096.472.501 Capital And Total Exposures 13.Tier 1 Capital 227.432.779 174.591.120 14.Total Exposures 5.590.030.655 4.157.538.409 Leverage Ratio 15.Leverage Ratio 4,07% 4,20% (1) The amounts in the table represent three-month averages. The change in the leverage ratio in the current period is due to the increase in the total risk amount of on - balance sheet and off-balance sheet assets.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 61 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VII. EXPLANATIONS RELATED TO THE CONSOLIDATED BUSINESS SEGMENTATION The Group’s operations are grouped under the corporate, commercial, integrated banking and treasury/investment banking categories. The Parent Bank is rendering services to a wide range of companies in all sectors, especially to Small and Medium Size Enterprises (SMEs) as well as individual consumers. In this context, the Parent Bank has no restrictions on the area in which it operates. The Parent Bank categorizes its real and legal entities that it renders services into three groups as; firms, individual customers and other customers. Firms are composed of traders and small -scale retailers having real and legal entity status. Within the Parent Bank’s application, firms are segmented as corporate firms, commercial firms, enterprising business firms, small size enterprises and small-scale retailers. Individual customers are real persons without having any commercial or professional purposes other than their individual demands in the Parent Bank’s application. Other customers are referred to as associations, organizations, trade unions, foundations, societies, building managements, parent-teacher associations and similar institutions that are not included in the afore-mentioned classification. The following are the services provided by the Parent Bank to all of its customers: • Accepting deposits, • Issuance of cash, noncash loans, • All kinds of reim bursements and cash receipt operations, including cash and deposit reimbursements, fund transfers, correspondent banking transactions and use of checking accounts, • Purchasing cheques and bank bills, • Performing custody services, • Issuing payment instru ments such as; credit cards, cash cards and travel cheques, and performing related transactions, • Including spot transactions, foreign exchange transactions, trading of money market securities, bullion trading and/or performing the related custody services, • Trading of forward transaction agreements, option agreements and financial instruments with more than one derivative instrument and performing the related intermediary services based on the economic and financial indicators, capital markets instruments, commodities, precious metals and exchange rates, • Assuming guarantee transactions such as; warranties and other liabilities in favor of others, • Having intermediary transactions on Interbank money market transactions, • Rendering insurance agency transactions and individual pension services, • Acting as a market maker in trade operations in accordance with liabilities assumed within the context of the agreement organised by the Republic of Türkiye Ministry of Treasury and Finance and/or Central Bank and associations, • Trading capital market instruments and performing repurchase and reverse repo transactions, • Acting as an intermediary in the sale process of capital market instruments by means of issuing instruments or through a public offering, • Trading the capital market instruments in the secondary market for the purpose of performing intermediary services, • Acting as an operator in order to provide risk management systems related to technical support and consulting services, • Providing technical support and consulting services to Bank’s subsidiaries, • Acting as a custodian in order to keep client’s assets related to individual portfolio management of portfolio management companies, • Acting as a portfolio management agency Under the Treasury transactions, medium and long -term fund provision is performed through securities exchange, money market operations, spot and time TRY and foreign exchange transactions, derivative instruments (such as; forwards, swaps, futures and options), syndication and securitization, etc.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 62 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VII. EXPLANATIONS RELATED TO THE CONSOLIDATED BUSINESS SEGMENTATION (continued) Details of the segment information prepared in accordance with the Act on “Disclosure of Financial Statements of Banks and The Related Presentations and Notes” as of 30 September 2025 are presented in the table below. Current Period Commercial/ Corporate Integrated Treasury/ Investment(1) Other(1) Total 1 January -30 September 2025 OPERATING INCOME / EXPENSES Interest Income 84.814.932 297.091.609 283.147.299 7.974.823 673.028.663 Interest on Loans 84.657.023 296.863.930 15.081.205 544.830 397.146.988 Interest Income on Marketable Securities 11.049 104.446 198.942.158 - 199.057.653 Interest from Banks 77.772 - 6.568.548 312.067 6.958.387 Other Interest Income 69.088 123.233 62.555.388 7.117.926 69.865.635 Interest Expense 185.338.488 311.696.938 105.726.792 5.351.820 608.114.038 Interest on Deposits 184.780.659 307.396.984 24.880.023 250.022 517.307.688 Funds Borrowed 140.972 352.861 12.219.249 1.096.963 13.810.045 Interest on Money Market Transactions - 292.834 52.480.520 3.883.955 56.657.309 Securities Issued - - 13.874.704 116.289 13.990.993 Other Interest Expense 416.857 3.654.259 2.272.296 4.591 6.348.003 Net Interest Income (100.523.556) (14.605.329) 177.420.507 2.623.003 64.914.625 Net Fees and Commissions Income 10.662.781 28.730.050 5.043.140 (655.480) 43.780.491 Trading Income/Loss (Net) 124.502 10.633.463 (20.103.118) 210.802 (9.134.351) Dividend Income 1.931 - 49.621 - 51.552 Other Income 2.144.329 2.614.810 20.052.329 1.729.159 26.540.627 Expected Loss Provisions Expenses 4.145.740 14.615.348 6.652.290 509.146 25.922.524 Other Expenses 3.354.588 31.369.187 43.880.712 2.268.500 80.872.987 Income Before Taxes (95.090.341) (18.611.541) 131.929.477 1.129.838 19.357.433 Income Tax Provision - - 1.885.172 (522.041) 1.363.131 Net Profit For The Period (95.090.341) (18.611.541) 133.814.649 607.797 20.720.564 SEGMENT ASSETS 30 September 2025 Marketable Securities(2) - 1.403.664 1.146.289.487 1.107 1.147.694.258 Derivative Financial Assets 1.096 126.404 3.335.073 - 3.462.573 Banks and Money Market Placements(2) 6.229.468 4.675 37.858.507 12.692.241 56.784.891 Investment in Associates and Subsidiaries (Net) - - 4.691.559 - 4.691.559 Loans(2) 697.643.395 1.138.771.307 321.579 11.420.576 1.848.156.857 Other Assets(2) 15.204.287 43.641.504 1.038.829.753 52.707.678 1.150.383.222 TOTAL ASSETS 719.078.246 1.183.947.554 2.231.325.958 76.821.602 4.211.173.360 SEGMENT LIABILITIES 30 September 2025 Deposits 1.087.384.554 1.867.556.251 305.423.105 22.078.273 3.282.442.183 Derivative Financial Liabilities 1.419 200.649 2.269.761 - 2.471.829 Money Market Funds - - 323.611.126 11.351.705 334.962.831 Borrowing Funding Loans 6.242.389 7.166.373 71.960.166 12.231.088 97.600.016 Securities Issued - - 1.574.652 27.473.777 29.048.429 Other Liabilities 21.868.079 49.361.039 154.135.532 2.304.192 227.668.842 Provisions and Current Tax Liabilities 3.264.186 8.253.646 23.783.987 393.841 35.695.660 Shareholders’ Equity (95.090.341) (18.611.541) 297.343.711 17.641.741 201.283.570 TOTAL LIABILITIES 1.023.670.286 1.913.926.417 1.180.102.040 93.474.617 4.211.173.360 OFF-BALANCE SHEET ITEMS 30 September 2025 Guarantees and Warranties 500.670.368 461.055.973 155.671.344 237.413 1.117.635.098 Commitments 18.893.043 134.788.782 351.841.520 371.704 505.895.049 Derivative Financial Instruments - 76.216.871 429.824.132 - 506.041.003 TOTAL OFF-BALANCE SHEET ITEMS 519.563.411 672.061.626 937.336.996 609.117 2.129.571.150 (1) Amounts arising from transactions of general directorate and Halk Yatırım Menkul Değerler AŞ and Halk Gayrimenkul Yatırım Ort aklığı AŞ transactions are presented under the Treasury / Investment column, Halk Finansal Kiralama AŞ, Halk Faktoring AŞ, Halk Varlık Kiralama AŞ and Halk Elektronik Para ve Ödeme Hizmetleri AŞ activities presented under the Other column. (2) TFRS 9 Expected Credit Loss provisions are presented in related lines.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 63 SECTION IV: INFO RMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VII. EXPLANATIONS RELATED TO THE CONSOLIDATED BUSINESS SEGMENTATION (continued) Prior Period Commercial/ Corporate Integrated Treasury/ Investment(1) Other(1) Total 1 January -30 September 2024 OPERATING INCOME / EXPENSES Interest Income 83.262.319 221.118.761 174.919.201 6.128.350 485.428.631 Interest on Loans 82.990.775 217.962.120 11.668.725 563.597 313.185.217 Interest Income on Marketable Securities - 3.001.267 130.808.164 - 133.809.431 Interest from Banks 73.662 - 4.543.509 135.841 4.753.012 Other Interest Income 197.882 155.374 27.898.803 5.428.912 33.680.971 Interest Expense 146.774.294 236.373.090 65.286.539 4.147.349 452.581.272 Interest on Deposits 146.592.677 233.000.248 15.174.133 216.469 394.983.527 Funds Borrowed 113.336 325.762 3.863.802 1.093.551 5.396.451 Interest on Money Market Transactions - 1.184.073 40.817.486 2.678.690 44.680.249 Securities Issued - - 4.319.083 156.575 4.475.658 Other Interest Expense 68.281 1.863.007 1.112.035 2.064 3.045.387 Net Interest Income (63.511.975) (15.254.329) 109.632.662 1.981.001 32.847.359 Net Fees and Commissions Income 6.993.523 16.561.909 6.541.669 162.143 30.259.244 Trading Income/Loss (Net) 100.462 7.914.590 (29.353.299) 176.684 (21.161.563) Dividend Income - - 31.104 - 31.104 Other Income 1.425.479 1.738.108 17.138.093 444.291 20.745.971 Expected Loss Provisions Expenses 2.161.406 3.722.621 1.020.696 200.762 7.105.485 Other Expenses 2.213.089 18.911.238 25.529.267 460.382 47.113.976 Income Before Taxes (59.367.006) (11.673.581) 77.440.266 2.102.975 8.502.654 Income Tax Provision - - 7.558.104 (320.412) 7.237.692 Net Profit For The Period (59.367.006) (11.673.581) 84.998.370 1.782.563 15.740.346 SEGMENT ASSETS 31 December 2024 Marketable Securities(2) - 32.575.352 766.219.559 1.107 798.796.018 Derivative Financial Assets - 371.302 1.072.113 - 1.443.415 Banks and Money Market Placements(2) 4.796.074 65.159 29.890.887 874.892 35.627.012 Investment in Associates and Subsidiaries (Net) - - 3.405.199 - 3.405.199 Loans(2) 522.941.379 946.435.858 291.397 7.657.459 1.477.326.093 Other Assets(2) 7.183.066 21.337.835 764.152.707 34.587.405 827.261.013 TOTAL ASSETS 534.920.519 1.000.785.506 1.565.031.862 43.120.863 3.143.858.750 SEGMENT LIABILITIES 31 December 2024 Deposits 781.720.025 1.450.561.785 213.146.462 15.192.183 2.460.620.455 Derivative Financial Liabilities 1.109 330.614 2.162.028 - 2.493.751 Money Market Funds - 16.397.840 230.785.049 9.542.640 256.725.529 Borrowing Funding Loans 3.664.806 3.237.125 50.554.750 7.014.128 64.470.809 Securities Issued - - 4.836.295 7.356.688 12.192.983 Other Liabilities 13.562.076 40.135.698 99.007.567 1.187.851 153.893.192 Provisions and Current Tax Liabilities 2.122.293 4.631.466 16.319.735 452.420 23.525.914 Shareholders’ Equity (89.069.283) (21.881.417) 277.278.994 3.607.823 169.936.117 TOTAL LIABILITIES 712.001.026 1.493.413.111 894.090.880 44.353.733 3.143.858.750 OFF-BALANCE SHEET ITEMS 31 December 2024 Guarantees and Warranties 382.695.707 332.000.834 100.339.702 2.896.625 817.932.868 Commitments 11.142.941 105.665.304 238.897.538 41.021 355.746.804 Derivative Financial Instruments - 67.859.960 255.248.160 - 323.108.120 TOTAL OFF-BALANCE SHEET ITEMS 393.838.648 505.526.098 594.485.400 2.937.646 1.496.787.792 (1) Amounts arising from transactions of general directorate and Halk Yatırım Menkul Değerler AŞ and Halk Gayrimenkul Yatırım Ort aklığı AŞ transactions are presented under the Treasury / Investment column, Halk Finansal Kiralama AŞ, Halk Faktoring AŞ and Halk Varlık Kiralama AŞ activities presented under the Other column. (2) TFRS 9 Expected Credit Loss provisions are presented in related lines
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 64 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VIII. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS Explanations Related To Risk Management The Parent Bank's business model creates a comprehensive risk profile that includes all units of the Bank. Credit risk is a key component of the risk profile. The Parent Bank effectively implements risk management policies and procedures for loan and other risks which is determined within the framework of risk capacity and appetite and approved by board of directors. Risk appetite and capacity, which are directly related to the Parent Bank's strategic objectives, are limited by legal rates therefore the Parent Bank associated with them. Regarding the risk management structure; The Internal Audit Department, Internal Control Department and Risk Management Department, which are units within the scope of internal systems, carry out their activities in accordance with the Regulation on Internal Systems of Banks and the Internal Capital Adequacy Assessment Process published in the Official Gazette No. 29057 dated 11 July 2014 and subject to the Board of Directors through the Audit Committee. The structure of the internal systems determines the level of r isk by identifying the risks that the bank is exposed to. The Department of Compliance, another unit within the scope of internal systems, performs the compliance function of the Parent Bank's activities regarding MASAK and Anti -Money Laundering and Prevention of Terrorist Financing. In this direction, the relevant units are responsible for monitoring, controlling and reporting risks, limited to their areas of responsibility. Outside of internal systems, Top Management is directly responsible to the Board of Directors for the risks to which the Parent Bank is exposed in relation to its duties. The Parent Bank is using information technologies and training documents openly and effectively for the dissemination and application of risk culture, and the development of bank staff is supported in line with this goal with face to face learning and e -learning. In addition, all personnel are regularly informed and aware of the risks that the Parent Bank is exposed to. Risk measurement systems are based on accepted risk models and workflows for the identification, monitoring and reporting of risks in accordance with legislation. Methods and software that are in line with international standards are used for risk groups such as credit, market, operational and counterparty credit risk etc. Within the scope of risk management activities, regular reporting and presentations are made by related units to the board of directors, asset-liability and audit committees and to the other committees, in order to manage the risks that the Parent Bank is exposed to more effectively, to support the decision making processes related to them, to create new strategies and policies. The Parent Bank reports to the BRSA by applying the stress tests determined in accordance with the Interna l Capital Adequacy Assessment Process (ICAAP). In addition, stress tests are carried out in line with the scenarios created by the risks exposed and the macroeconomic conditions. This test which is made by applying shocks for various risk factors, shows the results on risk weighted assets, own funds and capital adequacy ratio. The Parent Bank monitors its effectiveness by closely monitoring the processes of managing and reducing the risks arising from the business model. The Parent Bank regularly revises t he strategies it has established regarding these processes in line with the existing conditions and sets policies.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 65 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VIII. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Overview of Risk Weighted Amounts (*): Risk Weighted Amounts Minimum Capital Requirements Current Period Prior Period Current Period Prior Period 1 Credit risk (excluding counterparty credit risk) (CCR) (**) 1.776.976.492 1.321.251.380 142.158.119 105.700.110 2 Standardized approach (SA) 1.776.976.492 1.321.251.380 142.158.119 105.700.110 3 Internal rating-based (IRB) approach - - - - 4 Counterparty credit risk (**) 16.794.628 16.818.429 1.343.570 1.345.474 5 Standardized approach for counterparty credit risk (SA-CCR) 16.794.628 16.818.429 1.343.570 1.345.474 6 Internal model method (IMM) - - - - 7 Basic risk weight approach to internal models equity position in the banking account - - - - 8 Investments made in collective investment companies look-through approach - - - - 9 Investments made in collective investment companies mandate-based approach - - - - 10 Investments made in collective investment companies 1250% weighted risk approach - - - - 11 Settlement risk - - - - 12 Securitization positions in banking accounts - - - - 13 IRB ratings-based approach (RBA) - - - - 14 IRB Supervisory Formula Approach (SFA) - - - - 15 SA/simplified supervisory formula approach (SSFA) - - - - 16 Market risk 44.529.725 89.151.963 3.562.378 7.132.157 17 Standardized approach (SA) 44.529.725 89.151.963 3.562.378 7.132.157 18 Internal model approaches (IMM) - - - - 19 Operational Risk 131.891.205 95.339.232 10.551.296 7.627.139 20 Basic Indicator Approach 131.891.205 95.339.232 10.551.296 7.627.139 21 Standard Approach - - - - 22 Advanced measurement approach - - - - 23 The amount of the discount threshold under the equity (subject to a 250% risk weight) 9.647.688 6.784.935 771.815 542.795 24 Floor adjustment - - - - 25 Total ( 1+4+7+8+9+10+11+12+16+19+23+24) 1.979.839.738 1.529.345.939 158.387.178 122.347.675 (*) Amounts below the thresholds for deductions from capital are excluded from credit risk standard approach of RWA amount. (**) Based on the Board Decision dated 19 December 2024 published by the BRSA, CBRT’s foreign exchange buying rates as of 28 June 2024 was used in the calculation of the amount subject to credit risk.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 66 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (1) Cash and Central Bank of the Republic of Türkiye and information on bala nces with the Central Bank of the Republic of Türkiye: a) Information on Cash and CBRT: Current Period Prior Period TRY FC TRY FC Cash and foreign currency 5.645.834 13.135.217 5.602.032 12.806.124 CBRT 364.448.819 455.001.885 350.667.221 254.337.728 Other(1) 1.000.402 14.711.259 685.208 9.328.580 Total 371.095.055 482.848.361 356.954.461 276.472.432 (1) It includes the required reserve amounts held by the Central Bank of North Macedonia, Central Bank of Serbia and the Central Bank of TRNC. b) Information on balances with the CBRT: Current Period Prior Period TRY FC TRY FC Demand unrestricted amount(1) 212.084.401 188.398.826 237.862.360 123.094.238 Time unrestricted amount - 35.284.520 - - Time restricted amount - - - - Other(2) 152.364.418 231.318.539 112.804.861 131.243.490 Total 364.448.819 455.001.885 350.667.221 254.337.728 (1) Reserve deposits kept in CBRT. (2) Blocked reserve deposits amounts held in the CBRT is included in the Other. As per the Communiqué no. 2013/15 “Reserve Deposits” of the Central Bank of the Republic of Türkiye (CBRT), banks operating in Türkiye keep reserve deposits for their TRY liabilities with reserve deposit rates between 3%- 40% (31 December 2024: betw een 3% -33%) varied according to their maturity compositions, for their FC liabilities and precious metal liabilities at TRY, US Dollar, Euro and/or standard gold with reserve deposit rates between 5%-32% (31 December 2024: between 5%-30%) varied according to their maturity compositions. In addition, an additional reserve requirement (excluding foreign bank deposits and precious metal deposit accounts) of 2,5% (31 December 2024: 4%) is established in Turkish lira for foreign currency deposits. Required reserves established for TL deposit accounts and exchange rate -protected accounts that were opened before 21 December 2024, and that have not been renewed, are paid by the CBRT. On the other hand, there is a reserve requirement commission practice that includes targets aimed at increasing the share of Turkish Lira deposits held by real and legal persons. If the targets related to the ratios calculated in four-week periods as “Real Person TL Share” and “Legal Person TL Share” are not met, a commission amount in US Dollars is calculated based on the required reserve amount for foreign currency deposit liabilities, to be paid to the CBRT. Additionally, calculated in eight -week periods, if the growth rate of Turkish Lira -denominated cash loans extended to businesses that qualify as SMEs exceeds 5%, the growth rate of TL cash loans to non-SME businesses exceeds 3%, the growth rate of foreign currency -denominated cash loans exceeds 1%, or the growth rates of consumer loans for personal needs and vehicle pu rchases exceed 4%, then the portion of loans exceeding these thresholds must be backed by blocked Turkish Lira reserve requirements for a period of one year. With the decision No.1072 dated 27 December 2019 of the Central Bank of the TRNC, reserve requirement ratio is applied between 5% to 8% (31 December 2024: between 5%-8%) for the Turkish currency and foreign currency liabilities.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 67 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (1) Cash and Central Bank of the Republic of Türkiye and information on balances with the Central Bank of the Republic of Türkiye: (continued) (b) Information on balances with the Central Bank of the Republic of Türkiye: (continued) With the Board of Directors decisions of the Central Bank of North Macedonia, banks maintain reserve requirement of 8% for short term MKD liabilities with maturities less than two years and 0% for long term MKD liabilities with maturities more than two years, 21% for short term foreign liabilities with maturities less than two years and 5% for long term foreign liabilities with maturities more than two years and 100% for foreign currency index liabilities. According to the Official Gazette of Serbia No. 76/2018 and 77/2023 of the Central Bank of Serbia, banks maintain reserve requirement of 7% for short term RSD liabilities with maturities less than two years and 2% for long term RSD liabilities with maturities more than two years, 2 3% for short term foreign liabilities with maturities less than two years and 16% for long term foreign liabilities with maturities more than two years and 100% for foreign currency index liabilities. (2) Financial assets at fair value through profit and loss: a) Financial assets at fair value through profit and loss blocked/given as collateral: Current Period Prior Period TRY FC TRY FC Given as collateral/blocked securities - 86.623.302 - 55.697.275 b) Financial assets at fair value through profit and loss subject to repurchase agreements: Current Period Prior Period TRY FC TRY FC Subject to repurchase agreements securities 79.262 - 143.615 - c) Positive differences related to the derivative financial assets at fair value through profit or loss: Current Period Prior Period TRY FC TRY FC Forward transactions - 1.714.805 - 892.632 Swap transactions - 1.743.394 - 550.783 Futures transactions - - - - Options 1.177 3.197 - - Other - - - - Total 1.177 3.461.396 - 1.443.415 (3) Information on banks and other financial institutions: a) Information on banks: Current Period Prior Period TRY FC TRY FC Banks Domestic banks 20.012.928 5.876.043 3.632.035 662.571 Foreign banks 11.433.219 19.288.097 9.664.988 20.275.862 Branches and offices abroad - - - - Total 31.446.147 25.164.140 13.297.023 20.938.433
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 68 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) 4) Information on financial assets at fair value through other comprehensive income: a) Financial assets at fair value through other comprehensive income subject to repurchase agreements or blocked/given as collateral a.1. Information on financial assets at fair value through other comprehensive income and blocked/given as collateral: Current Period Prior Period TRY FC TRY FC Given as collateral/blocked securities 12.943.777 13.280.751 16.110.473 - a.2. Information on financial assets at fair value through other comprehensive income subject to repurchase agreements: Current Period Prior Period TRY FC TRY FC Subject to repurchase agreements securities - 80.806.117 - 43.169.595 b) Information on financial assets at fair value through other comprehensive income: Current Period Prior Period Debt securities 284.210.890 178.429.967 Quoted on a stock exchange 274.492.870 172.098.959 Not quoted 9.718.020 6.331.008 Equity Securities 1.809.980 1.410.308 Quoted on a stock exchange 1.596.433 1.255.594 Not quoted 213.547 154.714 Impairment provision (-) 1.527.042 1.365.541 Total 284.493.828 178.474.734
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 69 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: a) Information on all types of loans and advances given to shareholders and employees of the Group(*): Current Period Prior Period Cash Loans Non-Cash Loans Cash Loans Non-Cash Loans Direct loans granted to shareholders - - - - Corporate shareholders - - - - Real person shareholders - - - - Indirect loans granted to shareholders - - - - Loans granted to employees 5.825.685 - 4.552.899 - Total 5.825.685 - 4.552.899 - (*) Interest income accruals and rediscounts are not included in the table above. b) Information on the first and second group loans including loans that have been restructured or rescheduled: Cash Loans Standard Loans Loans Under Close Monitoring Loans Not Subject to Restructuring Restructured Loans Loans with Revised Contract Terms Refinance Non-specialized loans 1.368.724.909 79.009.572 338.052 73.835.916 Corporation loans 794.188.071 49.424.312 298.994 72.821.596 Export loans 92.563.137 4.040.537 - - Import loans - - - - Loans given to financial sector 10.992.729 - - - Consumer loan 158.969.838 4.412.383 39.045 1.001.298 Credit cards 122.404.288 15.978.657 13 175 Other 189.606.846 5.153.683 - 12.847 Specialized lending 297.789.510 14.417.726 - - Other receivables - - - - Total 1.666.514.419 93.427.298 338.052 73.835.916 Standard Loans Loans Under Close Monitoring Current Period Prior Period Current Period Prior Period 12 Months Expected Loss Provision 8.768.921 6.428.715 - - Significant Increase in Credit Risk - - 13.087.665 18.300.551 In the current period, the increase in the Group's Stage 1 Expected Loss Provision balance is due to the increase in the balance of standard loans. In the current period, the decrease in the Group's Stage 2 Expected Loss Provision balance is due to the decrease in overall risk levels.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 70 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans (continued) : c) Information on consumer loans, individual credit cards, personnel loans and credit cards(*): Current Period Short-term Medium and long- term Total Consumer loans-TRY 7.422.647 90.402.169 97.824.816 Real estate loans 10.477 78.406.961 78.417.438 Automobile loans 471.177 1.925.634 2.396.811 Consumer loans 6.940.993 10.069.574 17.010.567 Other - - - Consumer loans- Indexed to FC 3.219 4.304.786 4.308.005 Real estate loans - 3.948.544 3.948.544 Automobile loans - 150.139 150.139 Consumer loans 3.219 206.103 209.322 Other - - - Consumer loans- FC 93.683 30.093.477 30.187.160 Real estate loans 3.706 10.080.122 10.083.828 Automobile loans 81 42.202 42.283 Consumer loans 89.751 19.969.096 20.058.847 Other 145 2.057 2.202 Individual credit cards-TRY 69.837.317 16 69.837.333 Installment 21.083.104 16 21.083.120 Non-installment 48.754.213 - 48.754.213 Individual credit cards-FC 48.173 976.758 1.024.931 Installment - 905.484 905.484 Non-installment 48.173 71.274 119.447 Personnel loans-TRY 1.882.839 1.279.784 3.162.623 Real estate loans - - - Automobile loans - - - Consumer loans 1.882.839 1.279.784 3.162.623 Other - - - Personnel loans-Indexed to FC 88 249.716 249.804 Real estate loans - 231.919 231.919 Automobile loans - 5.929 5.929 Consumer loans 88 11.868 11.956 Other - - - Personnel loans-FC 3.996 686.594 690.590 Real estate loans 113 352.613 352.726 Automobile loans - - - Consumer loans 3.883 333.905 337.788 Other - 76 76 Personnel credit cards-TRY 823.081 - 823.081 Installment 232.445 - 232.445 Non-installment 590.636 - 590.636 Personnel credit cards-FC 2.886 24.734 27.620 Installment - 20.232 20.232 Non-installment 2.886 4.502 7.388 Overdraft accounts-TRY (Retail customers)(**) 25.641.861 - 25.641.861 Overdraft accounts-FC (Retail customers)(***) 788.579 101.851 890.430 Total 106.548.369 128.119.885 234.668.254 (*) Interest income accruals and rediscounts are not included in the table above. (**) TRY 865.450 of the overdraft account consists of loans given to personnel. (**) TRY 6.517 of the overdraft account consists of loans given to personnel.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 71 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: (continued) c) Information on consumer loans, individual credit cards, personnel loans and credit cards(*): (continued) Prior Period Short-term Medium and long- term Total Consumer loans-TRY 7.676.878 98.921.467 106.598.345 Real estate loans 7.923 84.317.441 84.325.364 Automobile loans 1.685.268 4.720.588 6.405.856 Consumer loans 5.983.687 9.883.438 15.867.125 Other - - - Consumer loans- Indexed to FC 2.610 2.990.390 2.993.000 Real estate loans - 2.763.562 2.763.562 Automobile loans 255 82.663 82.918 Consumer loans 2.355 144.165 146.520 Other - - - Consumer loans- FC 70.533 20.243.768 20.314.301 Real estate loans 3.647 6.538.465 6.542.112 Automobile loans 150 16.908 17.058 Consumer loans 62.960 13.686.769 13.749.729 Other 3.776 1.626 5.402 Individual credit cards-TRY 48.220.433 774 48.221.207 Installment 13.720.658 774 13.721.432 Non-installment 34.499.775 - 34.499.775 Individual credit cards-FC 15.955 738.132 754.087 Installment - 688.506 688.506 Non-installment 15.955 49.626 65.581 Personnel loans-TRY 1.595.096 473.173 2.068.269 Real estate loans - - - Automobile loans - - - Consumer loans 1.595.096 473.173 2.068.269 Other - - - Personnel loans-Indexed to FC 43 179.859 179.902 Real estate loans - 170.606 170.606 Automobile loans - 2.644 2.644 Consumer loans 43 6.609 6.652 Other - - - Personnel loans-FC 2.477 440.579 443.056 Real estate loans 356 213.118 213.474 Automobile loans - - - Consumer loans 2.121 227.349 229.470 Other - 112 112 Personnel credit cards-TRY 1.154.295 - 1.154.295 Installment 297.617 - 297.617 Non-installment 856.678 - 856.678 Personnel credit cards-FC 1.409 20.499 21.908 Installment - 17.142 17.142 Non-installment 1.409 3.357 4.766 Overdraft accounts-TRY (Retail customers)(**) 17.960.103 - 17.960.103 Overdraft accounts-FC (Retail customers)(***) 506.661 70.214 576.875 Total 77.206.493 124.078.855 201.285.348 (*) Interest income accruals and rediscounts are not included in the table above. (**) TRY 679.685 of the overdraft account consists of loans given to personnel. (**) TRY 5.784 of the overdraft account consists of loans given to personnel.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 72 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: (continued) d) Information on commercial installments loans and corporate credit cards(*): Current Period Short-term Medium and long- term Total Commercial installment loans-TRY 23.342.467 102.335.352 125.677.819 Business premises loans - 1.178.302 1.178.302 Automobile loans 170.778 2.888.582 3.059.360 Consumer loans 23.171.689 98.268.468 121.440.157 Other - - - Commercial installment loans- Indexed to FC 2.493.804 12.888.405 15.382.209 Business premises loans - - - Automobile loans - - - Consumer loans - - - Other 2.493.804 12.888.405 15.382.209 Commercial installment loans - FC 10.485.339 195.097.022 205.582.361 Business premises loans - - - Automobile loans - - - Consumer loans 1.428.161 152.985.648 154.413.809 Other 9.057.178 42.111.374 51.168.552 Corporate credit cards-TRY 63.241.752 72 63.241.824 Installment 11.260.422 72 11.260.494 Non-installment 51.981.330 - 51.981.330 Corporate credit cards-FC 4.305 78.438 82.743 Installment - 29.711 29.711 Non-installment 4.305 48.727 53.032 Overdraft accounts-TRY (Commercial customers) 62.756.504 - 62.756.504 Overdraft accounts-FC (Commercial customers) 281.866 91 281.957 Total 162.606.037 310.399.380 473.005.417 (*) Interest income accruals and rediscounts are not included in the table above. Prior Period Short-term Medium and long- term Total Commercial installment loans-TRY 21.222.978 101.935.956 123.158.934 Business premises loans - 1.429.081 1.429.081 Automobile loans 311.883 2.048.837 2.360.720 Consumer loans 20.911.095 98.458.038 119.369.133 Other - - - Commercial installment loans- Indexed to FC 1.446.023 9.234.062 10.680.085 Business premises loans - - - Automobile loans - - - Consumer loans - - - Other 1.446.023 9.234.062 10.680.085 Commercial installment loans - FC 7.182.234 136.395.497 143.577.731 Business premises loans - - - Automobile loans - - - Consumer loans 738.148 110.002.146 110.740.294 Other 6.444.086 26.393.351 32.837.437 Corporate credit cards-TRY 57.819.382 1.808 57.821.190 Installment 12.354.903 1.808 12.356.711 Non-installment 45.464.479 - 45.464.479 Corporate credit cards-FC 6.423 52.324 58.747 Installment - 23.001 23.001 Non-installment 6.423 29.323 35.746 Overdraft accounts-TRY (Commercial customers) 43.202.153 - 43.202.153 Overdraft accounts-FC (Commercial customers) 190.965 457 191.422 Total 131.070.158 247.620.104 378.690.262 (*) Interest income accruals and rediscounts are not included in the table above.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 73 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: (continued) e) Domestic and foreign loans(*): Current Period Prior Period Domestic loans 1.725.629.931 1.415.895.552 Foreign loans 108.485.754 73.332.725 Total 1.834.115.685 1.489.228.277 (*) Non-performing loans balance is not included in the table above. f) Loans granted to subsidiaries and associates: None. (31 December 2024: None.) g) Specific provisions related to loans or credit-impaired losses (Stage III): Current Period Prior Period Loans with Limited Collectability 6.589.687 3.163.227 Loans with Doubtful Collectability 8.574.259 2.491.815 Uncollectible Loans 21.286.161 13.933.049 Total 36.450.107 19.588.091 The increase in the expected credit loss provision balance allocated for stage 3 loans is caused by the result of the increase in risk amount in the current period. h) Information on non-performing loans (Net): h.1. Information on non-performing loans and restructured loans(*): III. Group IV. Group V. Group Loans with Limited Collectability Loans with Doubtful Collectability Uncollectible Loans Current period Gross amounts before the provisions 804.687 472.877 463.965 Restructured loans 804.687 472.877 463.965 Prior period Gross amounts before the provisions 400.888 181.998 491.296 Restructured loans 400.888 181.998 491.296 (*) Rediscounts are not included.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 74 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: (continued) h) Information on non-performing loans (Net): (continued) h.2. Information on the movement of non-performing loans: III. Group IV. Group V. Group Current Period Loans with Limited Collectability Loans with Doubtful Collectability Uncollectible Loans Current period end balance 9.440.946 6.257.840 16.716.387 Additions (+) 39.279.650 5.315.092 6.245.371 Transfers from Other NPL Categories (+) - 23.737.705 11.481.011 Transfers to Other NPL Categories (-) 24.279.443 10.939.273 - Collections (-)(*) 4.586.607 2.482.389 2.835.331 Write-offs (-) 31 29 1.003.034 Sold (-) - - - Corporate and Commercial Loans - - - Consumer Loans - - - Credit Cards - - - Other - - - Current period end balance 19.854.515 21.888.946 30.604.404 Provision (-) 6.589.687 8.574.259 21.286.161 Net balance on balance sheet 13.264.828 13.314.687 9.318.243 Prior Period Prior period end balance 1.876.192 2.410.598 15.409.161 Additions (+) 23.340.610 433.220 750.542 Transfers from Other NPL Categories (+) - 12.609.699 4.633.369 Transfers to Other NPL Categories (-) 12.859.810 4.383.258 - Collections (-)(*) 2.914.857 4.779.408 3.627.437 Write-offs (-) 1.189 33.011 282.560 Sold (-) - - 166.688 Corporate and Commercial Loans - - 61.243 Consumer Loans - - 66.232 Credit Cards - - 39.213 Other - - - Current period end balance 9.440.946 6.257.840 16.716.387 Provision (-) 3.163.227 2.491.815 13.933.049 Net balance on balance sheet 6.277.719 3.766.025 2.783.338 (*) It also includes loan balances structured in non-performing loans and transferred to performing loan accounts during the period, as they meet the necessary conditions within the scope of the relevant articles of the Regulation of Allowance. h.3. Information on foreign currency non-performing loans and other receivables(*): III. Group IV. Group V. Group Loans with Limited Collectability Loans with Doubtful Collectability Uncollectible Loans Current period Balance at the end of the period 1.377.749 3.015.693 7.626.034 Provisions (-) 505.857 1.192.241 5.943.646 Net balance in the balance sheet 871.892 1.823.452 1.682.388 Prior period Balance at the end of the period 1.343.895 357.761 5.454.266 Provisions (-) 494.923 193.711 4.336.302 Net balance in the balance sheet 848.972 164.050 1.117.964 (*) Rediscounts are included.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 75 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: (continued) h) Information on non-performing loans (Net): (continued) h.4. Gross and net amounts of non-performing loans according to user groups: III. Group IV. Group V. Group Loans with Limited Collectability Loans with Doubtful Collectability Uncollectible Loans Current period (Net) 13.264.828 13.314.687 9.318.243 Loans to granted individuals and corporates (Gross) 19.854.515 21.888.946 30.604.404 Provisions (-) 6.589.687 8.574.259 21.286.161 Loans to granted real persons and legal entities (Net) 13.264.828 13.314.687 9.318.243 Banks (Gross) - - - Provisions (-) - - - Banks (Net) - - - Other loans (Gross) - - - Provisions (-) - - - Other loans (Net) - - - Prior period (Net) 6.277.719 3.766.025 2.783.338 Loans to granted individuals and corporates (Gross) 9.440.946 6.257.840 16.716.387 Specific provisions (-) 3.163.227 2.491.815 13.933.049 Loans to granted real persons and legal entities (Net) 6.277.719 3.766.025 2.783.338 Banks (Gross) - - - Provisions (-) - - - Banks (Net) - - - Other loans (Gross) - - - Provisions (-) - - - Other loans (Net) - - - i) Information on interest accruals, discounts and valuation differences calculated for non- performing loans and their provisions: III. Group IV. Group V. Group Loans with Limited Collectability Loans with Doubtful Collectability Uncollectible Loans Current Period (Net) 1.994.779 2.818.157 2.357.872 Interest Accruals and Valuation Differences 2.978.632 4.479.899 6.307.185 Provision (-) 983.853 1.661.742 3.949.313 Prior Period (Net) 1.294 1.718 11.399 Interest Accruals and Valuation Differences 14.415 14.146 1.606.813 Provision (-) 13.121 12.428 1.595.414
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 76 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (5) Information on loans: (continued) j) Main guidelines of the liquidation policy of the Bank about the uncollectible loans and receivables: The Parent Bank liquidates its uncollectible receivables through different methods. These are by making payment protocols and by presenting adequate repayment schedules for the l ower amount of receivables. Within the context of this collection policy, nonperforming loans are collected in considerable amounts. Collections are firstly offset against lawsuits and expenses, interest and principle receivables from loans. k) Explanations on write-off policy: In the current period, the Group derecognised the non -performing loan amounting to TRY 1.003.094 on the grounds that there was no reasonable expectation, and the Group's non -performing loan ratio decreased from 3,85% to 3, 79% after the loans were written off. (In the previous period, the Group has written off non - performing loans amounting to TRY 316.760 on the grounds due to the lack of expectation, and also sold non- performing loans amounting to TRY 166.688, resulting in a decrease in the Group non-performing loan ratio from 2,16% to 2,13% after the write-off and sale of non-performing loans.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 77 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (6) Information on financial assets measured at amortised cost: a) Information on financial assets measured at amortised cost blocked/given as collateral or subject to repurchase agreement transactions are explained comparatively with net value: a.1. Financial assets measured at amortised cost blocked/given as collateral: Current Period Prior Period TRY FC TRY FC Given as collateral/blocked securities 38.260.614 56.415.412 106.094.488 25.024.197 a.2. Financial assets measured at amortised cost subject to repurchase agreements: Current Period Prior Period TRY FC TRY FC Subject to repurchase agreements securities 246.259.080 31.181.982 188.359.942 58.855.898 b) Information on public sector debt investments financial assets measured at amortised cost: Current Period Prior Period Government bonds 731.944.344 545.492.281 Treasury bills 356.486 223.183 Other public sector debt securities 32.952.533 13.484.382 Total 765.253.363 559.199.846 c) Information on financial assets measured at amortised cost: Current Period Prior Period Debt securities 765.253.363 561.608.947 Quoted on a stock exchange 764.896.877 558.976.663 Not quoted 356.486 2.632.284 Impairment provision (-) - - Total 765.253.363 561.608.947 d) Movement of financial assets measured at amortised cost within the year: Current Period Prior Period Beginning balance 561.608.947 430.757.449 Foreign currency differences on monetary assets 15.336.785 32.692.096 Purchases during the year(1) 219.942.674 211.766.428 Disposals through sales and redemptions (31.635.043) (113.607.026) Impairment provision (-) - - Balance at the end of the period 765.253.363 561.608.947 (1) The difference between the discount amount of TRY 321.567.733 as of 30 September 2025 and the amount of discount amount of TRY 218.583.649 as of 31 December 2024 (31 December 2023: TRY 136.706.869) is presented in the line disposed by purchases during the year.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 78 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (7) Information on associates (Net): a) The reasons behind unconsolidated associates being out of consolidation scope: In accordance with the Communiqué on the Preparation of Consolidated Financial S tatements of Banks, associates that are financial institutions are included in the consolidation, associates that are non -financial institutions are not included in the scope of consolidation. b) Information on unconsolidated associates: Description Address (City/ Country) Bank’s share percentage, if different- voting percentage (%) Bank’s risk group share percentage (%) 1. Kredi Kayıt Bürosu AŞ (1) Istanbul/Türkiye 18,18 18,18 2. Bileşim Finansal Teknolojiler ve Ödeme Sistemleri AŞ (1) Istanbul/Türkiye 33,33 33,33 3. Bankalararası Kart Merkezi AŞ (1) Istanbul/Türkiye 9,28 9,28 4. JCR Avrasya Derecelendirme AŞ (1) Istanbul/Türkiye 2,86 2,86 c) Information related to the associates as shown in (b): Total assets Shareholders’ equity Total fixed assets Interest income Income from marketable securities portfolio Current period profit/loss Prior period profit/loss Fair value 1. 5.421.968 2.095.670 1.676.687 768.451 - 1.256.064 439.457 - 2. 833.010 569.343 166.689 84.146 - 75.892 35.157 - 3. 10.913.108 9.678.658 992.779 1.989.047 - 4.696.958 2.660.366 - 4. 1.028.155 911.865 130.469 120.912 41.724 476.797 218.600 - (1) The financial data is obtained from unaudited 30 September 2025 financial statement . d) Information on consolidated associates: Description Address (City/ Country) Bank’s share percentage, if different voting percentage (%) Bank’s risk group share percentage (%) 1. DHB Bank NV (1) Rotterdam/The Netherlands 30,00 30,00 2. Kobi Girişim Sermayesi Yatırım Ortaklığı AŞ (1) Ankara/Türkiye 31,47 33,12 3. Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ (1) Istanbul/Türkiye 35,79 35,79 4. Birleşim Varlık Yönetim AŞ (1) Istanbul/Türkiye 16,00 16,00 e) Information related to the associates as shown in (d): Total assets Shareholders’ equity Total fixed assets Interest income Income from marketable securities portfolio Current period profit/loss Prior period profit/loss Fair value 1. 100.667.916 13.040.606 101.304 4.748.878 206.850 786.995 771.689 - 2. 646.707 639.210 1.151 176.251 - 147.454 116.828 - 3. 91.635 91.200 156 2.285 - (2.826) (403) - 4. 1.869.870 1.503.829 27.409 681.691 - 212.660 97.041 - (1) The amounts are obtained from the unconsolidated financial statements of the companies used in consolidation as of 30 September 2025.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 79 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (7) Information on associates (Net): (continued) f) Movement of associates: Current Period Prior Period Balance at the beginning of the period 3.405.199 2.833.279 Movements during the period 1.165.113 571.920 Purchases (1) 15.211 - Bonus shares obtained profit from current year’s share - 1.428 Dividends from current year income 315.517 351.901 Sales - - Transfers - - Revaluation decrease (-) / increase (2) 834.385 218.591 Impairment provisions (-)/ reversals - - Balance at the end of the period 4.570.312 3.405.199 Capital commitments - - Share percentage at the end of the period (%) - - (1) In the current period, the Parent Bank made a payment of TRY 15.211 due to the paid capital increase of Yıldız Tekno Girişim Sermayesi Yatırım Ortaklığı AŞ. (2) Includes amounts accounted for using the equity method accounting. g) Sectorial information and related carrying amounts of associates: Current Period Prior Period Banks 3.942.160 2.902.429 Insurance companies - - Factoring companies - - Leasing companies - - Financing companies - - Other financial investments 474.412 349.030 Other non- financial investments 153.740 153.740 h) Associates quoted to a stock exchange: None. (31 December 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 80 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (8) Information on subsidiaries (Net): a) Information on consolidated subsidiaries (1): Halk Yatırım Menkul Değerler AŞ Halk Gayrimenkul Yatırım Ortaklığı AŞ Halk Finansal Kiralama AŞ Halk Banka AD, Skopje Halk Faktoring AŞ Halk Bank AD, Beograd Halk Varlık Kiralama AŞ Halk Osiguruvanje AD, Skopje Halk Elektronik Para ve Ödeme Hizmetleri AŞ Halk Katılım Bankası AŞ COMMON EQUITY TIER I CAPITAL Paid in Capital 250.000 3.840.000 1.523.000 2.963.096 1.246.000 754.199 500 285.130 250.000 11.500.000 Effect of Inflation Adjustment on Paid in Capital - - - - - - - - - - Share premium - 50.372 - 11.633 - 773.455 - - - - Reserves 393.565 10.309.154 882.094 2.038.822 1.076.769 1.579.866 14.210 - 1.554 - Other Comprehensive Income according to TAS 12.874 25.231.441 2.071 10.876.067 10 8.411.654 - 1.106.394 - - Profit / Loss 2.415.003 3.812.134 387.401 762.917 542.206 515.360 13.462 (161.690) 139.367 63.097 Net Profit 1.283.307 3.812.134 387.401 844.375 542.206 515.360 13.462 5.907 127.752 63.097 Prior Period Profit/Loss 1.131.696 - - (81.458) - - - (167.597) 11.615 - Bonus Shares from Associates, Subsidiaries and Joint Ventures not Accounted in Current Period’s Profit - - - - - - - - - - Current and Prior Periods' Losses not Covered by Reserves, and Losses Accounted under Equity according to TAS (-) - 2.665.970 - - - 4.423 - - - - Leasehold Improvements (-) - 3.396 - 47.931 - 79.281 - - - - Intangible Assets (-) 31.685 1.695 11.334 222.213 27.028 846.891 - 84.891 19.464 - Total Core Capital 3.039.757 40.572.040 2.783.232 16.382.391 2.837.957 11.103.939 28.172 1.144.943 371.457 11.563.097 SUPPLEMENTARY CAPITAL - - 159.393 486.255 190.824 175.720 - - - - CAPITAL 3.039.757 40.572.040 2.942.625 16.868.646 3.028.781 11.279.659 28.172 1.144.943 371.457 11.563.097 NET AVAILABLE CAPITAL 3.039.757 40.572.040 2.942.625 16.868.646 3.028.781 11.279.659 28.172 1.144.943 371.457 11.563.097 (1) The amounts are obtained from the unconsolidated financial statements of the companies used in consolidation as of 30 September 2025. There is no internal capital adequacy assessment approach for the subsidiaries. Paid in capital has been indicated as Turkish Lira in articles of incorporation and registered in trade registry. Effect of inflation adjustments on paid in capital is the difference caused by the inflatio n adjustment on shareholders' equity items. Extraordinary reserves are the status reserves which have been appropriated with the General Assembly decision after distributable profit have been transferred to legal reserves. Legal reserves are the status res erves which have been appropriated from distributable profit in accordance with the related clauses of Turkish Commercial Code no. 6102. b) Unconsolidated subsidiaries, reasons for not consolidating if any and information on total needed shareholder’s equity that is subjected to minimum capital requirements: In accordance with the Communiqué on the Preparation of Consolidated Financial Statements of Banks, subsidiaries that are financial institutions are included in the consolidation, subsidiaries that are non-financial institutions are not included in the scope of consolidation. In this context, subsidiary of the Parent Bank, Halk Elektrik Üretim AŞ, which is non-financial institution, is not included in the scope of consolidation. (31 December 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 81 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (8) Information on subsidiaries (Net): (continued) c) Information on unconsolidated subsidiaries: Description Address (City/Country) Bank’s share percentage, if different voting percentage (%) Bank’s risk group share percentage (%) 1. Halk Elektrik Üretim AŞ(1) Istanbul/Türkiye 100,00 100,00 d) Information related to the subsidiaries as shown in (c): (1) Total assets Shareholders’ equity Total fixed assets Interest income Income from marketable securities portfolio Current period profit/loss Prior period profit/loss Fair value 1. 122.957 121.247 561 22.552 - 21.247 - - (1) The financial data is obtained from 30 September 2025 financial statements. e) Information on consolidated subsidiaries: Description Address (City/Country) Bank’s share percentage, if different voting percentage (%) Bank’s risk group share percentage (%) 1. Halk Yatırım Menkul Değerler AŞ Istanbul/Türkiye 100,00 100,00 2. Halk Gayrimenkul Yatırım Ortaklığı AŞ (2) Istanbul/Türkiye 79,33 79,36 3. Halk Finansal Kiralama AŞ Istanbul/Türkiye 100,00 100,00 4. Halk Banka AD, Skopje Skopje/North Macedonia 99,66 99,66 5. Halk Faktoring AŞ Istanbul/Türkiye 100,00 100,00 6. Halkbank AD Beograd Belgrade/Serbia 100,00 100,00 7. Halk Varlık Kiralama AŞ Istanbul/Türkiye 100,00 100,00 8. Halk Osiguruvanje AD, Skopje Skopje/North Macedonia - 99,66 9. Halk Elektronik Para ve Ödeme Hizmetleri AŞ Istanbul/Türkiye 100,00 100,00 10. Halk Katılım Bankası AŞ(3) Istanbul/Türkiye 100,00 100,00 f) Information related to the subsidiaries as shown in (e): (1) Total assets Shareholders’ equity Total fixed assets Interest income Income from marketable securities portfolio Current period profit/loss Prior period profit/loss Fair value 1. 7.448.623 3.071.442 133.236 1.911.844 67.784 1.283.307 1.410.541 - 2. 61.655.942 40.500.521 26.083.053 133.995 - 3.812.134 2.550.925 - 3. 22.073.166 2.794.566 35.373 3.348.210 - 387.401 223.148 - 4. 96.272.910 16.652.535 2.496.267 2.942.408 400.175 844.375 572.220 - 5. 15.730.853 2.864.985 37.688 3.998.772 - 542.206 526.056 - 6. 62.779.635 12.030.111 2.428.324 2.028.361 235.335 515.360 513.259 - 7. 26.736.500 28.172 40 6.415 - 13.462 5.009 - 8. 1.358.734 1.229.834 248.792 21.109 11.049 5.907 (11.287) - 9. 988.614 390.921 31.484 80.411 - 127.752 5.268 - 10. 11.602.568 11.563.097 - 102.568 - 63.097 - - (1) The financial data is obtained from 30 September 2025 financial statements used in consolidation. (2) The Parent Bank’s subsidiary Halk Gayrimenkul Yatırım Ortaklığı AŞ was privatized by a public offering on 22 February 2013 and the shares are traded on the Borsa Istanbul AŞ (3) Halk Katılım Bankası AŞ was established with the permission of the Banking Regulation and Supervision Agency (BRSA) dated on 30 May 2025 and numbered 11222, and was registered on 22 September 2025. As of the current period, it has not yet started its operations. g) Movement of the subsidiaries: Current Period Prior Period Balance at the beginning of the period 54.784.076 38.535.796 Movements during the period 30.040.653 16.248.280 Purchase (1)(2)(3)(4) 13.600.000 1.966.061 Bonus shares obtained profit from current year’s share 115.140 385.399 Dividends from current year income 3.778.363 6.580.467 Sales - - Transfer - - Revaluation increase/decrease (5) 12.547.150 7.316.353 Impairment Provisions (-)/ Reversals - - Balance at the end of the period 84.824.729 54.784.076 Capital commitments - - Share percentage at the end of the period (%) - - (1) In the current period, the Parent Bank has made a payment TRY 100.000 due to the paid capital increase of Halk Elektrik Üretim AŞ. (2) In the current period, the Parent Bank made a payment of TRY 1.000.000 due to the paid capital increase of Halk Finansal Kiralama AŞ. (3) In the current period, the Parent Bank made a payment of TRY 1.000.000 due to the paid capital increase of Halk Faktoring AŞ. (4) During the current period, the Parent Bank made a payment of TRY 11.500.000 TL for the newly established Halk Katılım Bankası AŞ. (5) Includes amounts accounted for using the equity method accounting.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 82 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (8) Information on subsidiaries (Net): (continued) h) Sectorial information on subsidiaries and the related carrying amounts: Current Period Prior Period Banks 40.184.916 20.192.300 Insurance companies 242.107 242.107 Factoring companies 2.870.914 1.728.708 Leasing companies 2.854.859 1.667.458 Financing companies - - Other financial subsidiaries 38.550.686 30.953.503 Other non-financial subsidiaries 121.247 - i) Subsidiaries quoted in the stock exchange: Current Period Prior Period Quoted to domestic stock(1) 35.100.215 26.985.571 Quoted foreign stock exchange - - (1) The Parent Bank’s subsidiary Halk Gayrimenkul Yatırım Ortaklığı AŞ has privatized by a public offering on 22 February 2013 and the shares are traded on the Borsa Istanbul AŞ. (9) Information on jointly controlled entities (joint ventures): None. (31 December 2024: None.) (10) Information on finance lease receivables (Net): a) Maturity structure of investments on financial lease(*): Current Period Prior Period Gross Net Gross Net Up to 1 year 1.397.150 1.255.357 1.156.893 1.004.639 1 - 4 years 11.266.357 8.782.134 14.063.918 9.113.247 More than 4 years 13.675.018 7.504.784 4.254.970 2.684.645 Total 26.338.525 17.542.275 19.475.781 12.802.531 (*) Non-performing receivables are not included. b) Information on net investments of financial lease(*): Current Period Prior Period Gross financial lease investment 26.338.525 19.475.781 Unearned revenues from financial lease (8.796.250) (6.673.250) Total 17.542.275 12.802.531 (*) Non-performing receivables are not included. c) Information on receivables from non- performing loans of financial lease: Current Period Prior Period Financial lease receivables with limited collectability 60.386 42.813 Financial lease receivables with doubtful collectability 39.336 8.951 Uncollectible financial lease receivables 212.007 196.381 Provisions (205.799) (166.926) Total 105.930 81.219 (11) Information on derivative financial assets for hedging purposes: None. (31 December 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 83 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (12) Information on investment property: Current Period Prior Period Balance at the beginning of the period 25.350.087 15.087.803 Movements during the period 11.651.500 10.262.284 Purchase 398.634 722.291 Sales (331.824) (1.072) Transfer 2.735.894 - Revaluation increase/decrease 8.848.796 9.541.065 Balance at the end of the period 37.001.587 25.350.087 While the Group accounts for its investment properties by allocating accumulated depreciation and permanent impairment provision, if any, from their purchase cost values, it has changed its accounting policy as of November 2023 and adopted the fair value method within the scope of TAS 40 Investment Properties Standard for investment properties. Accordingly, Group has an independent valuation firm that carries out the valuation report for its investment properties and recognizes the changes in fair value in the profit or loss accounts in the period in which they occur. (13) Information on deferred tax assets: Current Period Prior Period Deferred Tax Asset /(Liability) Provisions(1) 10.596.351 10.686.922 Revaluation of Financial Assets (22.189.623) (9.888.345) Other 34.278.922 20.000.635 Deferred Tax Asset /(Liability)(2): 22.685.650 20.799.212 Deferred tax accounted under shareholders’ equity (1.669.701) (125.093) Fair value through other comprehensive income arising from securities’ internal efficiency-stock market difference 1.890.220 2.224.126 Actuarial gains/losses 1.034.389 1.034.389 Valuation of subsidiaries (4.594.310) (3.383.608) (1) Includes reserve for employee benefits and other provisions. (2) Net deferred tax assets amounting to TRY 22.685.650 (31 December 2024: TRY 20.799.212) consists of deferred tax assets which amounting to TRY 27.347.783 (31 December 2024: TRY 23.849.997) and deferred tax liabilities amounting to TRY 4.662.133 (31 December 2024: TRY 3.050.785).
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 84 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (14) Information on assets held for sale and held from discontinued operations: Current Period Prior Period Cost 663 1.034 Accumulated Depreciation (-) - - Net book value 663 1.034 Opening Balance 1.034 3.522 Acquisition - - Transfer (Net) - - Disposals (Net) (371) (2.488) Revaluation Increase - - Impairment (-) / Reversal - - Depreciation (-) - - Closing net book value 663 1.034 (15) Information on other assets: Other assets balance in the balance sheet amounts to TRY 130.012.931 and does not exceed 10% of the balance sheet total (31 December 2024: TRY 69.760.386).
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 85 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (1) Information on deposit / funds collected: a) Information on maturity structure of deposits / funds collected(*): Current Period Demand 7 day call accounts Up to 1 month 1-3 months 3-6 months 6 months to 1 year 1 year and over Accumulating Deposits Accounts Total Saving deposits 62.018.794 - 30.693.640 592.904.188 178.484.935 1.752.675 2.056.421 158.243 868.068.896 Foreign currency deposits 287.053.712 - 82.617.822 333.969.534 55.538.699 47.048.282 29.818.716 33.350 836.080.115 Residents in Türkiye 208.198.654 - 62.263.229 305.795.804 40.085.863 23.403.402 14.214.920 32.474 653.994.346 Residents abroad 78.855.058 - 20.354.593 28.173.730 15.452.836 23.644.880 15.603.796 876 182.085.769 Public sector deposits 43.876.913 - 45.212.073 28.255.470 4.046.882 1.629.269 17.970 - 123.038.577 Commercial inst. deposits 97.683.614 - 207.682.298 269.968.547 53.805.168 12.476.794 233.579 - 641.850.000 Other inst. deposits 10.565.568 - 8.535.038 106.630.138 33.895.930 12.466.404 62.031 - 172.155.109 Precious metals 193.019.144 - 140.281 25.140.218 2.042.153 629.435 460.665 - 221.431.896 Interbank deposits 209.757.719 - 103.425.310 105.357.794 281.734 476 994.557 - 419.817.590 CBRT 3.188.505 - - - - - - - 3.188.505 Domestic banks 847.981 - 87.544.525 58.766.028 133.418 - - - 147.291.952 Foreign banks 205.721.194 - 3.867.552 46.591.766 148.316 476 994.557 - 257.323.861 Participation banks 39 - 12.013.233 - - - - - 12.013.272 Total 903.975.464 - 478.306.462 1.462.225.889 328.095.501 76.003.335 33.643.939 191.593 3.282.442.183 (*) As of 30 September 2025, the Parent Bank has a total of TRY 41.123.136 without accruals FC indexed TRY deposit instrument of which published by the CBRT and Ministry of Treasury and Finance. Prior Period Demand 7 day call accounts Up to 1 month 1-3 months 3-6 months 6 months to 1 year 1 year and over Accumulating Deposits Accounts Total Saving deposits 43.122.261 - 17.579.124 377.027.263 290.068.600 9.406.341 3.098.242 143.210 740.445.041 Foreign currency deposits 214.953.442 - 49.445.032 201.349.968 38.763.979 23.210.488 25.645.152 31.754 553.399.815 Residents in Türkiye 157.379.909 - 35.409.610 183.306.654 29.493.617 6.103.787 12.378.170 31.088 424.102.835 Residents abroad 57.573.533 - 14.035.422 18.043.314 9.270.362 17.106.701 13.266.982 666 129.296.980 Public sector deposits 27.303.098 - 8.430.178 18.190.715 11.933.940 628.480 11.079 - 66.497.490 Commercial inst. deposits 80.880.900 - 164.043.332 213.213.272 103.344.416 7.000.808 4.422.137 - 572.904.865 Other inst. deposits 8.113.691 - 7.537.040 65.479.199 33.582.399 14.412.054 54.931 - 129.179.314 Precious metals 98.496.855 - 72.704 15.525.905 1.020.079 423.413 322.100 - 115.861.056 Interbank deposits 162.813.252 - 66.752.386 50.222.961 1.683.944 493.520 366.811 - 282.332.874 CBRT 13.507 - - - - - - - 13.507 Domestic banks 1.113.035 - 49.539.858 25.317.797 1.633.651 12.587 - - 77.616.928 Foreign banks 161.686.710 - 6.348.061 24.905.164 50.293 480.933 366.811 - 193.837.972 Participation banks - - 10.864.467 - - - - - 10.864.467 Total 635.683.499 - 313.859.796 941.009.283 480.397.357 55.575.104 33.920.452 174.964 2.460.620.455 (*) As of 31 December 2024, the Parent Bank has a total of TRY 166.842.496 without accruals FC indexed TRY deposit instrument of which published by the CBRT and Ministry of Treasury and Finance.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 86 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FI NANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (1) Information on deposit / funds collected: (continued) b) Information on saving deposits in the scope of Saving Deposits Insurance Fund: b.1. Amounts exceeding insurance limit: b.1.1. Saving deposits under the guarantee of deposit insurance and exceeding the insurance limit: Saving Deposits(*) Under the guarantee insurance Exceeding the insurance limit Current Period Prior Period Current Period Prior Period Saving deposits 258.539.539 186.351.060 606.510.452 552.799.325 Foreign currency saving deposits 117.330.901 87.087.942 264.871.046 181.515.249 Other deposits in the form of saving deposits 95.999.477 59.340.316 90.888.638 42.686.712 Foreign branches’ deposits under foreign authorities' insurance 6.770.146 4.406.401 - - Off-shore banking regions’ deposits under foreign authorities' insurance - - - - (*) Within the scope of the SDIF Fund Board Decision published in the Official Gazette dated 7 December 2024 and numbered 32745, deposit amount subject to insurance which was TRY 650 as of 2024 has been determined as TRY 950, starting from the beginning of the 2025 calendar year. All deposit and participation funds have been covered by insurance except official institutions, credit institutions and financial institutions in accordance with the “Amendment of Regulation on the Insurable Deposit and Participation Funds and Premiums to be Collected by the Savings Deposit Insuranc e Fund” published in the Official Gazette dated 27 August 2022 and numbered 31936. In this scope, the balance of commercial deposits of the Parent Bank subject to insurance is TRY 85.191.366. This amount is not included at the above table that includes the insurance and exceeding the insurance limit saving deposit informations. b.1.2. Saving deposits at foreign branches are excluded from the scope of Saving Deposits Insurance Fund according to the related legislation, and are subject to insurance of foreign authorities in compliance with the foreign legislations. c) Saving deposits which are not under the guarantee of deposit insurance fund: Current Period Prior Period Foreign branches’ saving deposits and other accounts 422.089 900.174 Deposits and other accounts belonging to dominant partners as well as their fathers, mothers, spouses and children under their custody - - Deposits and other accounts belonging to the chairman and members of the board of directors, general managers and deputy general managers as well as their fathers, mothers, spouses and children under their custody 53.849 58.214 Deposits and other accounts covered by assets generated through the offenses mentioned in Article 282 of the Turkish Penal Code No.5237 and dated 26 September 2004 - - Deposits in the banks to be engaged exclusively in offshore banking in Türkiye - - (2) Information on derivative financial liabilities: Negative differences table related to the derivative financial liabilities: Current Period Prior Period TRY FC TRY FC Forward transactions - 1.432.854 - 1.108.679 Swap transactions - 1.028.361 - 1.385.029 Future transactions - - - - Options 1.330 9.284 - 43 Other - - - - Total 1.330 2.470.499 - 2.493.751
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 87 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (3) Information on funds borrowed: a) Information on banks and other financial institutions: Current Period Prior Period TRY FC TRY FC Funds borrowed from CBRT - - - - Domestic banks and institutions 1.351.833 17.246.779 4.380.802 7.348.326 Foreign banks, institutions and funds 1.800.615 77.200.789 19.357.297 33.384.384 Total 3.152.448 94.447.568 23.738.099 40.732.710 b) Maturity structure of funds borrowed: Current Period Prior Period TRY FC TRY FC Short-term 1.813.809 27.095.006 22.889.399 6.779.705 Medium and long-term 1.338.639 67.352.562 848.700 33.953.005 Total 3.152.448 94.447.568 23.738.099 40.732.710 c) Additional disclosures related to the concentrations of the Group’s major liabilities: Concentrations, fund providing customers, sector groups and other criteria where risk contentration is observed: Main liability of the Group is deposits, which is composed of 26,45% of saving deposits and 25,47% of foreign currency deposits. In order to fulfill the short term liquidity requirements, the Group borrows loans from interbank money markets. The Group’s 61,04% of bank deposits and 36,94% of other deposits consist of foreign currency deposits. (4) Securities issued (Net): Current Period Prior Period TRY FC TRY FC Bills 2.348.654 - 4.836.295 - Bonds - - - - Assets Backed Securities 26.699.775 - 7.356.688 - Total 29.048.429 - 12.192.983 - (5) Information on other liabilities: Other liabilities balance in the balance sheet amounts to TRY 140.326.567 and does not exceed 10% of the balance sheet total (31 December 2024: TRY 98.524.825).
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 88 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (6) Information on finance lease payables (Net): a) The general explanations on criteria used in determining installments of financial lease agreements, renewal and purchasing options and restrictions in the agreements that create significant obligations to the Parent Bank: In the financial lease agreements, installments are based on useful life, usage periods and provisions of the related accounting standards. b) Explanation on finance lease payables: Current Period Prior Period Gross Net Gross Net Up to 1 year 7.639 6.363 - - 1 - 4 years 4.618 4.420 - - More than 4 years - - - - Total 12.257 10.783 - - c) Explanations on operational leases: Current Period Prior Period Gross Net Gross Net Up to 1 year 230.997 195.884 293.300 247.191 1 - 4 years 1.920.937 1.309.398 1.497.157 1.010.321 More than 4 years 8.436.250 4.378.531 5.665.543 2.966.208 Total 10.588.184 5.883.813 7.456.000 4.223.720 (7) Information on derivative financial liabilities for hedging purposes: None. (31 December 2024: None.) (8) Explanations on provisions: a) Provisions for the foreign currency losses on the principal amount of foreign currency indexed loans and finance lease receivables: As of 30 September 2025 the Group does not have a provision amount of the currency differences on foreign currency indexed loans and finance lease receivables (31 December 2024: None). b) Specific provisions provided for unindemnified and unfunded non-cash loans: As of 30 Septem ber 2025, the Group’s stage 3 expected credit losses for unindemnified and unfunded non - cash loans balance is TRY 642.419. (31 December 2024: TRY 386.979). c) Information on other provisions: Total other provision balance amounting to TRY 4.548.452 (31 December 2024: TRY 3.147.228) consists of TRY 642.419 (31 December 2024: TRY 386.979) for stage 3 expected credit losses of unindemnified and unfunded non -cash loans, TRY 2.230.552 (31 December 2024: TRY 2.289.507) for stage 1 and stage 2 expected credit loss amount of non -cash loans, TRY 206.109 (31 December 2024: TRY 170.779) for legal cases filed against the Group, and TRY 1.469.372 (31 December 2024: TRY 299.963) of other provisions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 89 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (9) Explanations related to tax liabilities: a) Information on current tax liability: a.1. Information on tax provision: As of 30 September 2025, the Group’s calculated current tax liability is amounting to TRY 891.898 and recognized under corporate tax provision account as of the mentioned date (31 December 2024: TRY 866.392) a.2. Information on taxes payable: Current Period Prior Period Corporate tax payable 891.898 866.392 Income on securities tax 9.602.811 4.977.394 Property income tax 18.000 14.680 Banking and insurance transactions tax (BITT) 2.985.239 2.435.237 Foreign exchange transactions tax 60.235 22.521 Value added tax payable 40.798 21.321 Other 870.000 773.441 Total 14.468.981 9.110.986 a.3. Information on premiums: Current Period Prior Period Social insurance premiums-employee 8.080 5.603 Social insurance premiums-employer 11.351 7.607 Bank social aid pension fund premium-employee 300.216 205.145 Bank social aid pension fund premium-employer 447.832 306.385 Pension fund membership fees and provisions-employee - - Pension fund membership fees and provisions-employer - - Unemployment insurance-employee 22.160 15.055 Unemployment insurance-employer 44.322 30.221 Other 11.322 7.030 Total 845.284 577.046 b) Explanations related to deferred tax liability: It is explained in the 13th footnote of Section Five, Explanations And Notes Related To The Assets. (10) Information on liabilities regarding non-current assets held for sale and discontinued operations: None (31 December 2024: None). (11) Explanations on the number of subordinated loans the Group used maturity, interest rate, institutions that the loan was borrowed from, and conversion option, if any(*): Current Period Prior Period Information on Subordinated Loans TRY FC TRY FC To be included in the calculation of additional capital borrowings instruments 18.829.227 29.763.312 16.577.458 - Subordinated loans 18.829.227 - 16.577.458 - Subordinated debt instruments - 29.763.312 - - Debt instruments to be included in contribution capital calculation 32.764.304 - 33.606.846 - Subordinated loans - - - - Subordinated debt instruments 32.764.304 - 33.606.846 - Total 51.593.531 29.763.312 50.184.304 - (*) Detailed information is disclosed in Section Four Footnote I.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 90 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (12) Information on shareholders’ equity a) Presentation of paid-in capital: Current Period Prior Period Common stock 7.184.778 7.184.778 Preferred stock - - b) Application of registered capital system and registered capital ceiling amount: There is an application of registered capital system and registered capital ceiling amount is TRY 30.000.000. c) Information on share capital increases and their sources; other information on increased capital shares in the current period: None. d) Information on additions from capital reserves to capital in the current period: None. e) Capital commitments in the last fiscal year and at the end of the following interim period, the general purpose of these commitments and projected resources required to meet these commitments: None. f) Information on the Parent Bank’s acquired shares: Between 1 January 2025 – 30 September 2025, a total of TRY 3.500 nominal worth of share buybacks were carried out, and no share sales were made. g) Indicators of the Group’s income, profitability and liquidity for the previous periods and possible effect s of these future assumptions on the Group’s equity due to the uncertainty of these indicators: The Group has sustainable profitability and equity structure. There are no uncertainties that would impact the current position. h) Information on preferred shares: None. i) Information on marketable securities revaluation fund: Current Period Prior Period TRY FC TRY FC From subsidiaries, associates and jointly controlled entities (joint ventures) 15.040 7.029.187 15.040 3.733.735 Valuation differences 15.040 - 15.040 - Exchange rate difference - 7.029.187 - 3.733.735 Financial assets at fair value through other comprehensive income (4.868.483) 1.374.884 (6.276.513) 332.043 Valuation differences (5.978.830) 2.485.231 (6.276.513) 923.524 Exchange rate difference 1.110.347 (1.110.347) - (591.481) Total (4.853.443) 8.404.071 (6.261.473) 4.065.778
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 91 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) III. EXPLANATIONS AND NOTES RELATED TO THE OFF-BALANCE SHEET ITEMS (1) Information on off-balance sheet liabilities: a) Amount and nature of irrevocable loan commitments: Types of irrevocable commitments Current Period Prior Period Commitments for credit card expenditure limits 267.779.572 185.180.994 Payment commitments for cheques 38.934.922 30.831.741 Loan granting commitments 27.839.739 24.627.013 Forward asset purchase and sale commitments 11.432.231 7.532.423 Forward deposit purchase and sale commitments - - Commitments for credit cards and banking services promotions 334.449 243.446 Tax and fund liabilities from export commitments 1.269.343 1.224.652 Share capital commitments to associates and subsidiaries - - Other irrevocable commitments 73.395.333 53.968.504 Total 420.985.589 303.608.773 b) Amount and nature of probable losses and commitments from the off-balance sheet items: b.1. Non-cash loans including bank bill guarantees and acceptances, guarantees substituting financial guarantees and other letters of credit: Current Period Prior Period Letters of credit 41.167.497 19.439.047 Bank acceptances 76.188.642 55.198.376 Other guarantees 50.428.133 36.575.495 Total 167.784.272 111.212.918 b.2. Certain guarantees, tentative guarantees, sureties and similar transactions: Current Period Prior Period Letters of certain guarantees 153.820.712 112.757.973 Letters of advance guarantees 25.838.243 23.779.476 Letters of tentative guarantees 15.576.224 8.923.483 Letters of guarantee given to customs offices 27.879.494 21.213.680 Other letters of guarantee 726.736.153 540.045.338 Total 949.850.826 706.719.950 c) Information on non-cash loans: c.1. Total non-cash loans: Current Period Prior Period Non-cash loans for providing cash loans 160.605.657 122.759.940 Within one year or less original maturity 17.743.075 15.274.837 Within more than one year maturity 142.862.582 107.485.103 Other non-cash loans 957.029.441 695.172.928 Total 1.117.635.098 817.932.868 2) Explanations related to credit derivatives and its risk exposures: The Parent Bank has credit termly derivative transactions as part of its trading transactions. These transactions include credit default swaps which based on treasury of Türkiye Republic’s credit risk. As of 30 September 2025, the Parent Bank has credit default conditioned cross currency s wap transaction amounting to USD 50 million with 5 year maturity (weighted average remaining maturity 4,4 years). In this transactions the Parent Bank sells protection. 3) Explanations on contingent liabilities and assets: Group’s commitments for the chequ es given to customers are TRY 38.934.922 (31 December 2024: TRY 30.831.741). 4) Services provided on behalf of others: None. (31 December 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 92 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) IV. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (1) Information on interest income: a) Information on interest income on loans: Current Period Prior Period TRY FC TRY FC Interest on loans(1) Short term loans 160.923.385 3.689.697 119.407.231 2.311.550 Medium and long term loans 188.735.143 26.473.658 167.276.380 20.081.889 Interest on non-performing loans 17.260.810 64.295 4.094.799 13.368 Premiums from resource utilization support fund - - - - Total 366.919.338 30.227.650 290.778.410 22.406.807 (1) Includes fees and commissions obtained from cash loans. b) Interest received from banks: Current Period Prior Period TRY FC TRY FC CBRT - 1.866.548 - 1.626.590 Domestic banks 2.017.862 1.863 1.317.927 7.310 Foreign banks 2.877.162 194.952 1.567.640 233.545 Foreign headquarters and branches - - - - Total 4.895.024 2.063.363 2.885.567 1.867.445 c) Interest income on marketable securities: Current Period Prior Period TRY FC TRY FC Financial Assets at Fair Value through Profit or Loss 579.026 1.101.461 168.514 455.155 Financial Assets at Fair Value through Other Comprehensive Income 32.731.750 4.653.859 26.392.010 2.840.436 Financial Assets Measured at Amortized Cost 155.836.882 4.154.675 99.377.556 4.575.760 Total 189.147.658 9.909.995 125.938.080 7.871.351 d) Interest income from subsidiaries and associates None. (30 September 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 93 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) IV. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued) (2) Information on interest expenses: a) Information on interest expense on funds borrowed: (1) Current Period Prior Period TRY FC TRY FC Banks 4.505.380 3.079.802 2.373.054 1.285.526 CBRT - - - - Domestic banks 1.211.351 656.478 1.583.749 173.691 Overseas banks 3.294.029 2.423.324 789.305 1.111.835 Overseas head office and branches - - - - Other institutions 6.171.666 53.197 - 1.737.871 Total 10.677.046 3.132.999 2.373.054 3.023.397 (1) Includes fees and commissions obtained from cash loans. b) Interest expenses to subsidiaries and associates: Current Period Prior Period Interest expenses given to subsidiaries and associates 1.139.266 636.806 c) Information on interest expenses to securities issued: Current Period Prior Period TRY FC TRY FC Interest on securities issued 13.285.521 705.472 4.475.658 -
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 94 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) IV. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued) (2) Information on interest expenses: (continued) d) Maturity structure of interest expenses on deposits: Current Period Time deposits Account name Demand deposits Up to 1 month Up to 3 months Up to 6 months Up to 1 year More than 1 year Accumulating Deposit Accounts Total Turkish Lira Bank deposits 69.244 30.730.955 9.064.296 216.040 2.730 - - 40.083.265 Saving deposits 273 8.983.515 162.475.476 70.910.608 779.594 542.910 15.938 243.708.314 Public deposits 67 4.165.943 8.477.072 1.279.214 278.304 3.674 - 14.204.274 Commercial deposits 107 60.519.138 79.011.997 21.446.173 2.787.506 665.455 - 164.430.376 Other deposits 13 2.672.380 25.880.950 12.252.888 3.648.577 13.296 - 44.468.104 7 days call accounts - - - - - - - - Total 69.704 107.071.931 284.909.791 106.104.923 7.496.711 1.225.335 15.938 506.894.333 Foreign currency Deposits 140.737 1.104.608 5.197.934 1.094.974 862.279 606.386 51 9.006.969 Bank deposits 1.181 11.863 1.342.731 3.318 17.041 18.666 - 1.394.800 7 days call accounts - - - - - - - - Precious metal - 51 9.883 782 413 457 - 11.586 Total 141.918 1.116.522 6.550.548 1.099.074 879.733 625.509 51 10.413.355 Grand total 211.622 108.188.453 291.460.339 107.203.997 8.376.444 1.850.844 15.989 517.307.688 Prior Period Time deposits Account name Demand deposits Up to 1 month Up to 3 months Up to 6 months Up to 1 year More than 1 year Accumulating Deposit Accounts Total Turkish Lira Bank deposits 144.727 18.271.022 7.298.420 146.721 - - - 25.860.890 Saving deposits 4 3.742.824 85.363.643 62.543.201 31.715.280 1.150.433 14.614 184.529.999 Public deposits 12 11.654.552 6.887.536 1.756.279 35.014 106.312 - 20.439.705 Commercial deposits 57 34.463.404 38.194.739 28.133.574 21.143.977 3.656.812 - 125.592.563 Other deposits 2 1.882.308 11.193.460 12.191.578 4.829.937 20.536 - 30.117.821 7 days call accounts - - - - - - - - Total 144.802 70.014.110 148.937.798 104.771.353 57.724.208 4.934.093 14.614 386.540.978 Foreign currency Deposits 95.606 936.140 4.327.587 619.454 513.952 750.337 198 7.243.274 Bank deposits 516 28.597 1.127.646 42 313 - - 1.157.114 7 days call accounts - - - - - - - - Precious metal - 231 30.127 3.528 1.444 6.831 - 42.161 Total 96.122 964.968 5.485.360 623.024 515.709 757.168 198 8.442.549 Grand total 240.924 70.979.078 154.423.158 105.394.377 58.239.917 5.691.261 14.812 394.983.527
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 95 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) IV. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued) (3) Explanations on trading profit/loss: Current Period Prior Period Profit 369.455.154 196.468.356 Profit from the capital market transactions 2.883.596 5.219.712 Profit on derivative financial transactions 35.992.979 25.454.942 Foreign exchange gains 330.578.579 165.793.702 Loss (-) 378.589.505 217.629.919 Loss from the capital market transactions 3.259.227 20.089 Loss from derivative financial transactions 28.931.065 40.045.332 Foreign exchange losses 346.399.213 177.564.498 (4) Information on other operating income: Current Period Prior Period Adjustments for prior period expenses 11.372.926 12.524.024 Insurance technical income 503.683 285.775 Income from the asset sale 605.105 528.732 Rent income 452.594 213.430 Other income(*) 13.269.555 6.910.355 Total 26.203.863 20.462.316 (*)Other consists of valuation differences of investment properties. (5) Information on Expected Credit Losses and other provisions: Current Period Prior Period Expected Credit Losses 25.922.524 7.105.485 12 Month Expected Credit Loss (Stage 1) 4.565.280 481.197 Significant Increase in Credit Risk (Stage 2) 661.857 422.661 Non – Performing Loans (Stage 3) 20.695.387 6.201.627 Marketable Securities Impairment Expense - - Financial Assets at Fair Value through Profit or Loss - - Financial Assets at Fair Value through Other Comprehensive Income - - Impairment losses from associates, subsidiaries, jointly controlled entities - - Associates - - Subsidiaries - - Joint Ventures - - Other 422.111 286.772 Total 26.344.635 7.392.257
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 96 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) IV. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS (continued) (6) Information on other operating expenses: Current Period Prior Period Reserve for employee termination benefits 1.620.814 1.114.339 Bank social aid provision fund deficit provision - - Fixed assets impairment expense - - Depreciation expenses of fixed assets 2.741.393 1.708.754 Intangible assets impairment expense - - Goodwill impairment expense - - Amortization expenses of intangible assets 813.139 478.098 Impairment expense for equity shares subject to the equity method accounting - - Impairment expense of assets to be sold - - Amortization expenses of assets to be sold 119.418 21.198 Impairment expense for property and equipment held for sale - - Other operating expenses 22.704.952 11.480.040 Leasing Expenses on TFRS 16 Exceptions 655.584 531.651 Maintenance expenses 708.426 428.744 Advertisement expenses 1.985.529 1.176.921 Other expenses(*) 19.355.413 9.342.724 Loss on sales of assets 2.257 731 Other(**) 14.828.805 7.734.592 Total 42.830.778 22.537.752 (*) Other expenses mainly comprise fees related to credit card and other banking transactions. (**) Other, primarily consists of the SDIF premium, tax, fees and various other payment expenses. (7) Information on profit/loss from continuing and discontinued operations before taxes: The Group's income before tax/loss is due from continuing activities. Net interest income is TRY 64.914.625 (30 September 2024: TRY 32.847.359), net fees and commisions income is TRY 43.780.491 (30 September 2024: TRY 30.259.244) and the profit before tax from continued operations is TRY 19.357.433 (30 September 2024: TRY 8.502.654 loss before tax from continued operations). (8) Information on tax provisions for continued and discontinued operations: For the period then ended 30 September 2025, the Group’s tax provision income amounting to TRY 1.363.131 (30 September 2024: TRY 7.237.692) consists of TRY 2.067.915 (30 September 2024: TRY 1.686.786) of current tax charge and TRY 15.951.502 (30 September 2024: TRY 16.056.319) of deferred tax expense, TRY 19.382.548 (30 September 2024: TRY 24.980.797) of deferred tax income. (9) Information on net operating income/expense from continued and discontinued operations after tax: For the period then ended 30 September 2025, the Group’s net operating income after tax is amounting to TRY 20.720.564. (30 September 2024: TRY 15.740.346) (10) Information on net profit/loss: a) If disclosure of the nature, size and recurrence rate of income and expense items arising from ordinary banking transactions is necessary to understand the bank's performance during the p eriod, the explanation regarding the nature and amount of these items is as follows: There is no issue to be disclosed. b) Effects of changes in accounting estimates on the current and future periods’ profit/loss: There is no issue to be disclosed. (11) Other items in the Income Statement: The other items under Fees and Commissions Received and Fees and Commissions Paid generally consist of credit card and other banking transaction commissions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 97 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) V. EXPLANATIONS RELATED TO THE RISK GROUP OF THE PARENT BANK (1) Volume of the Parent Bank’s transactions with its risk group and outstanding loan and deposit balances as of the period-end, period income and expenses from the risk group: a) Information on the loans of the Parent Bank’s risk group: Current Period Risk group Subsidiaries, associates and jointly controlled entities (joint ventures) Direct or indirect shareholders of the Bank Other real and legal persons in the risk group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans Beginning Balance - 15.625 - - - - Closing Balance - 23.055 - - - - Interest and commissions income - 217 - - - - Prior Period Risk group Subsidiaries, associates and jointly controlled entities (joint ventures) Direct or indirect shareholders of the Bank Other real and legal persons in the risk group Cash Non-Cash Cash Non-Cash Cash Non-Cash Loans Beginning Balance - 4.176 - - - - Closing Balance - 15.625 - - - - Interest and commissions income - 70 - - - - b) Deposits held by the Parent Bank’s risk group: Risk group Subsidiaries, associates and jointly controlled entities (joint ventures) Direct or indirect shareholders of the Bank Other real and legal persons in the risk group Deposits Current Period Prior Period Current Period Prior Period Current Period Prior Period Beginning Balance 2.964.083 2.007.811 - - - - Closing Balance 4.650.612 2.964.083 - - - - Interest expense on deposits 1.139.266 636.806 - - - - c) Forward and option contracts and similar transactions with the Parent Bank’s risk group: None. (31 December 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 98 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) V. EXPLANATIONS RELATED TO THE RISK GROUP OF THE PARENT BANK (continued) (2) Disclosures for risk group of the Parent Bank: a) The relations of the Parent Bank with the entities controlled by the Parent Bank and its related parties, regardless of whether there are any transactions or not: In the normal course of its banking activities, the Parent Bank conducted various business transactions with related parties at commercial terms and at rates which approximate market rates. The Parent Bank performs brokerage on the activities of Halk Yatırım Menkul Değerler AŞ within the scope of “the Brokerage Contract for Order Submission". b) Besides the structure of relationship, nature of the transaction, amount and ratio to the total volume of transactions, amount of major items and ratio to all items, pricing policies and other factors: Current Period Amount Compared To The Amounts In The Financial Statements (%) Cash Loans - - Non-Cash Loans 23.055 <0,01 Deposits 4.650.612 0,14 Forward and Option Contracts - - Prior Period Amount Compared To The Amounts In The Financial Statements (%) Cash Loans - - Non-Cash Loans 15.625 <0,01 Deposits 2.964.083 0,12 Forward and Option Contracts - - Pricing of these transactions are in accordance with the general pricing policies of the Parent Bank and are in line with market rates. c) In cases whereby separate disclosure is not necessary, the total of similar items in order to present the total impact on the financial statements: Explained in b). d) Transactions accounted under the equity method: None. (31 December 2024: None.) (3) Benefits given to the key management personnel: Benefits given to the key management personnel of the Group are TRY 250.529. (30 September 2024: TRY 176.018)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 99 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) VI. EXPLANATIONS RELATED TO THE SUBSEQUENT EVENTS None. VII. OTHER EXPLANATIONS On October 15, 2019, the U.S. Department of Justice, United States Attorney Southern District of New York indicted the Parent Bank by repeating the allegations set forth in the case filed against the former executive of the Parent Bank due to the Iranian sanction violations. First, the Parent Bank applied to the District Court on November 4, 2019 and requested a special appearance to discuss the issues of personal jurisdiction and recusal. On December 5, 2019, the District Court denied the request of specia l appearance. The Parent Bank objected to the District Court's decision and appealed the decision at the Second Circuit on December 17, 2019. On February 21, 2020, the Second Circuit denied Parent Bank's objection. In the meeting held by the Parent Bank's Board of Directors on March 27, 2020, it was decided to attend the District Court hearing at which the case starts to be heard on the merits on March 31, 2020, to accept the arraignment and to appoint Williams & Connolly law firm with a proxy to represent the Parent Bank. At the hearing on March 31, 2020, the District Court decided to postpone the hearing initially to June 9, 2020 and subsequently to June 30, 2020 due to the global scale COVID-19 outbreak. At the hearing held in the District Court on June 30, 2020; the schedule was determined regarding the motion to recuse, discovery motions, and filings of other motions. It was decided that the jury trials would begin on March 1, 2021 for which the schedule was revised on October 26, 2020. Accordingly, the jury trials are scheduled to be held on May 3, 2021. In this regard, the Parent Bank filed its recusal motion on July 14, 2020 and its other motions to dismiss the indictment on August 10, 2020 at the District Court. Parent Bank’s recusal motion was denied by the District Court on August 24, 2020 and the Second Circuit on December 23, 2020. District Court denied Parent Bank’s motion to dismiss the indictment on October 1, 2020. The Parent Bank appealed to the Second Circuit against the dismissal of its motion to dismiss the indictment on the grounds that the Parent Bank entitled to sovereign immunity under both the FSIA (Foreign Sovereign Immunity Act) and common law. On December 23, 2020, the Second Circuit accepted to hear the appeal on the merits and granted Parent Bank’s motion to stay the case pending sovereign immunity appeal. Before the Second Circuit, the oral argument was presented on April 12, 2021. The Second Circuit denied the Parent Bank’s appeal on October 22, 2021. The Parent Bank filed its petition with the Second Circuit for an en banc rehearing. Second Circuit denied Parent Bank’s petition on December 15, 2021. As the Parent Bank would file its petition for a writ of certiorari with the US Supreme Court in regard to the sovereign immunity decision, it requested the Second Circuit to stay the mandate so that the stay on the proceedings in the District Court continues. The petition was granted by the Second Circuit on January 14, 2022. The proceedings in the District Court are stayed until the process is completed in the US Supreme Court. The Parent Bank filed its sovereign immunity petition for a writ of certiorari with the US Supreme Court on May 13, 2022. The Solicitor General under the U.S. Department of Justice filed their brief in opposition to the Parent Bank’s writ of certiorari on July 18, 2022, and the briefing was concluded on August 2, 2022. The US Supreme Court reviewed the Parent Bank’s petition for a writ of certiorari on September 28, 2022 and announced its decision t o grant review on October 3, 2022. Following the grant of review, the Parent Bank filed its appeal on the merits with the Supreme Court on November 14, 2022. Then, the Solicitor General under the U.S. Department of Justice filed its reply brief on December 14, 2022. Briefing was concluded with the Parent Bank filing its counter reply brief with the Court on January 6, 2023. Oral argument was held before the Court on January 17, 2023.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 100 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) VII. OTHER EXPLANATIONS (continued) The US Supreme Court announced its opinion regarding the Parent Bank’s sovereign immunity appeal on April 19, 2023, ruling that FSIA applied only in civil cases and not in criminal cases. On the other ha nd, the Supreme Court ruled that the Second Circuit did not fully consider the Parent Bank’s sovereign immunity status under common law and remanded the case to the Second Circuit for reconsideration. The briefing with the Second Circuit started with the Parent Bank’s opening brief filed on July 31, 2023 and completed on January 12, 2024. The oral argument was held on February 28, 2024. Upon further review, the Second Circuit with its decision dated October 22, 2024, rejected the Parent Bank's common law immunity request and affirmed the District Court's order. The Parent Bank declared that it will use all its legal rights to appeal with regard to the October 22, 2024 decision of the Second Circuit, particularly with the U.S. Supreme Court. As a part of th at process; the Parent Bank submitted a “motion for rehearing” to the Second Circuit on November 4, 2024. On December 6, 2024, the Second Circuit denied the Parent Bank’s petition for rehearing. On December 12, 2024, the Parent Bank filed a motion to stay the Second Circuit’s mandate. On December 18, 2024 the Second Circuit ordered that the motion is granted and the mandate is stayed pending the filing and disposition of the Parent Bank’s petition for a writ of certiorari to the U.S. Supreme Court. The Parent Bank filed its petition for a writ of certiorari with the U.S. Supreme Court on May 5, 2025, which included the Parent Bank’s arguments regarding sovereign immunity under common law. The briefing phase regarding the appeal was completed with the opposition submitted by the U.S. Attorney’s Office on August 6, 2025 and the Parent Bank’s reply filed on August 19, 2025. The Parent Bank’s petition for a writ of certiorari was denied by the U.S. Supreme Court on October 6, 2025. Accordingly, the legal process regarding the Parent Bank’s objections under sovereign immunity has been completed, and the District Court is now expected to set a schedule to proceed with the hearing of the case on the merits. In addition, a civil case (the Owens or first civil case) was filed by a group of plaintiffs against the Parent Bank on March 27, 2020 with a claim for damages in the Southern District of New York Court "on the grounds that they (the plaintiffs) could not collect their judgments from Iran due to violations of sanctions" and it was served to the Parent Bank's attorneys on July 1, 2020. The Parent Bank filed a motion at the District Court to dismiss the complaint of plaintiffs, and thereby dismiss the case on September 25, 2020. The case was fully briefed on December 16, 2020. District Court conditionally granted Parent Bank’s motion to dismiss on the grounds of forum non conveniens on February 16, 2021. The case was closed at the District Court on March 3, 2021. The Plaintiffs appealed to the decision by taking the District Court’s decision to the Second Circuit on June 30, 2021. After the case is fully briefed, the oral arguments were heard before the Second Circuit on October 13, 2022. The Second Circuit ruled in the Parent Bank’s favor and dismissed the lawsuit seeking to satisfy judgements on May 2, 2023. Plaintiffs applied to the US Supreme Court on August 30, 2023 for a writ of certiorari in order to appeal the Second Circuit decision. The Supreme Court reviewed the application on January 5, 2024 and announced its decision to reject the plaintiff’s appeal on January 8, 2024. Accordingly, the Owens case brought against the Parent Bank on March 27, 2020 was conclusively dismissed. Finally, on July 26, 2023, 151 plaintiffs filed a complaint in the U.S. District Court for the Southern District of New York and a new civil case (the Hughes or second civil case) against the Parent Bank seeking to satisfy judgments similar to the Owens case. The service was processed on October 1, 2023. According to the complaint, the plaintiffs seek judgments decision from the Court to the fullest extent permitted by law, attempting to establish a connec tion between certain aggrievements they have suffered in various countries and the supposed allegations in the current criminal case against the Parent Bank, which was filed on October 15, 2019. The Parent Bank filed its motion to dismiss with the District Court on December 22, 2023 and the fully briefing is ended on April 22, 2024. On May 1, 2024, the district court in an appeal against the Government’s request, ruled to stay all judicial proceedings in the civil case until the conclusion of the criminal p roceedings against the Parent Bank. Therefore, the Hughes case is stayed until the final decision is made in the criminal case against the Parent Bank. The proceedings of both the criminal case and the civil case are closely monitored by the Parent Bank through U.S. law firms with relevant expertise.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 101 SECTION VI: LIMITED REVIEW REPORT I. EXPLANATIONS ON LIMITED REVIEW REPORT The consolidated financial statements and related footnotes of the Parent Bank as at and for the period ended 30 September 2025 have been reviewed by KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik AŞ and the review report dated 7 November 2025 is presented in the first part of this report. II. EXPLANATIONS AND NOTES PREPARED BY THE INDEPENDENT AUDITOR None.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 102 SECTION VII: INTERIM ACTIVITY REPORT I. INTERIM ACTIVITY REPORT INCLUDED CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO’S ASSESMENTS FOR THE INTERIM ACTIVITIES Chairman’s Review Valued Stakeholders, In the third quarter of 2025, the global economy continued to recalibrate amid persistent monetary tightening, geopolitical tensions, and fragile trade dynamics. Tariff escalations and technology restrictions between the United States and China, coupled with concerns over energy supply security, have placed sustaine d pressure on global markets. The IMF has maintained its global growth forecast for 2026 at 3.1 percent. The European Central Bank projects growth of 3.3 percent for 2025, while the World Bank has adopted a more cautious view, citing weakening global trade and rising public debt. Against this backdrop, whether the global economy can sustain its current resilience will largely depend on trade flows, energy market stability, and the adaptability of monetary policy frameworks. Respected Business Partners, The steps taken to end Israel’s attacks on Gaza mark a hopeful moment for the collective conscience of humanity. Achieving lasting peace in the region is of critical importance not only for the safety of local populations but also for global stability and economic balance. Within this global context, the Turkish economy continues to move forward along a path of stability and confidence, guided by the Medium-Term Program for 2026-2028. The macroeconomic framework outlined in the Program aims to establish price stability while enhancing production and export capacity. A commitment to disinflation, preservation of fiscal discipline, and continued structural reform efforts has helped strengthen our economy’s resilience. In their most recent reports pub lished in September and October, the World Bank and the IMF revised their growth forecasts for the Turkish economy upward. These revisions reflect expectations of a continued recovery in economic activity, supported by declining inflation and a rebalanced monetary policy. The reports emphasize that this positive momentum is supported by a resilient services sector, rising investments, and robust domestic demand. Moreover, they note that with gradual monetary easing and a sustained decline in inflation, Türkiye is expected to transition toward broader-based and more sustainable growth. In light of these indicators, the Turkish economy is transitioning toward a more balanced structure -anchored in stability and confidence, and propelled by investment, production, and productivity gains. Resilient domestic demand, a recovery in export markets, and ongoing structural reforms are expected to support a more inclusive, sustainable, and predictable growth trajectory. Throughout this transition, the banking sector continues to play a pivotal role in safeguarding financial stability and supporting the real economy. Turkish banks maintain robust liquidity positions, with capital adequacy ratios well above regulatory thresholds. Despite tight financial conditions, effective risk management and provisioning policies have helped preserve asset quality. Valued Stakeholders, At Halkbank, we remain committed to aligning our 87 -year legacy with today’s economic and social imperatives. We channel our financi al strength into the sustainable growth of the national economy, the expansion of social welfare, and the broadening of employment opportunities. Since our founding, we have supported production, encouraged entrepreneurship, and accelerated development-contributing to the stability of Türkiye’s banking sector. With this approach, Halkbank continues to support SMEs on their growth journey, promote women’s participation in the economy through targeted projects and competitions, and invest in the future by nurturing young entrepreneurs and their innovative ideas. We also strengthen local economic sustainability through tailored solutions for tradespeople and artisans. (*) Interim activity report information concerning amounts are unconsolidated and full TRY unless otherwise stated.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 103 SECTION VII: INTERIM ACTIVITY REPORT (continued) I. INTERIM ACTIVITY REPORT INCLUDED CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO'S ASSESMENTS FOR THE INTERIM ACTIVITIES (continued) Chairman’s Review (continued) At the same time, Halkbank is also preparing for the banking model of the future through its digitalization investments, directly contributing to the country’s development objectives with financing strategies focused on green transformation. -From energy efficiency loans to the financing of major infrastructure and energy projects, Halkbank operates across a broad spectrum of national priorities. These efforts are powered by a dedicated team, the trust of our customers, the shared vision of our shareholders, and the steadfast support of public institutions. I would like to extend my heartfelt thanks to all our stakeholders for their continued trust. Drawing strength from our heritage, Halkbank remains committed to supporting Türkiye’s development journey and enhancing social welfare with determination and purpose. Sincerely, R. Süleyman Özdil Chairman
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 104 SECTION VII: INTERIM ACTIVITY REPORT (continued) I. INTERIM ACTIVITY REPORT INCLUDED CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO'S ASSESMENTS FOR THE INTERIM ACTIVITIES (continued) General Manager’s Review Valued Stakeholders, Despite the protectionist measures implemented in global trade, the feared disruptions to supply chains did not materialize, and trade volumes have continued to maintain their momentum. Consequently, the slowdown in global growth remained modest. According to the International Monetary Fund (IMF), following a 3.3 percent expansion in 2024, the global economy is projected to grow by 3.2 percent in 2025 and 3.1 percent in 2026. Meanwhile, heightened global awareness around defense industry investments is anticipated to bolster public spending, particularly in Europe, thereby supporting global growth. Leading central banks around the world are gradually lowering interest rates while maintaining their focus on price stability. This supportive financial environment has continued to improve investment sentiment. In 2026, global liquidity conditions are expected to become even more accommodative, paving the way for increased capital inflows into emerging markets. The “Macroeconomic Stability and Reform” program outlined in Türkiye’s 2026 -2028 Medium -Term Program remains firmly on track. Macro risk management efforts have been completed, and macro imbalances that previously disrupted market dynamics are being steadily addressed. In this context, the FX-Protected Time Deposit product has been largely phased out; significant progress has been made toward achieving a sustainable current account balance; fiscal discipline has been reinforced; d isinflation has been maintained; and the resilience of the Turkish economy has been strengthened. In the second half of 2026, these achievements will serve as a foundation for productivity- and competitiveness-oriented reforms. Esteemed Stakeholders, As of the third quarter of 2025, our commercial loan portfolio reached 1.6 trillion Turkish lira, with SME loans accounting for 55 percent of total commercial lending. With a market share of 14.4 percent, we remain the leading bank in SME financing, continuing to develop tailored solutions that empower entrepreneurs and businesses. Our innovative financing tools, designed to support tradespeople and artisans, helped increase the number of active loan customers in this segment to 781,000, with a total loan volume reaching 302 billion Turkish lira. We remained firmly committed to supporting women and young entrepreneurs in the third quarter. Since 2021, we have provided 111 billion Turkish lira in financing to 259,000 women entrepreneurs, thereby strengthening their presence in the business ecosystem. We continue to lead in this area, providing 35 percent of all financial support extended to women entrepreneurs nationwide. Applications for the fifth edition of our Productive Women Competition have closed, and the winners will be announced in February 2026. In addition to cash prizes, winners will receive promotional support to amplify their visibility. Extending our commitment to women’s empowerment into sports, Halkbank has become the title sponsor of the Halkbank Women’s Basketball Super League and the Halkbank Türkiye Women’s Basketball League for the 2025–2026 season by signing a title sponsorship agreement with the Turkish Basketball Federation. Our commitment to fostering a dynamic entrepreneurship ecosystem extends beyond women to include youth- focused programs. Since 2021, we have provided 37 billion Turkish lira in financing to 222,000 young entrepreneurs. The HUBrica Acceleration Program, launched in partnership with ITU ARI Teknokent, is designed to support startups in the fintech, artificial intelligence, and sustainability sectors. The program provides mentoring, investor matchmaking, and collaboration opportunities. Additionally, our BIGE (Girls Shaping the Future of Science) initiative, developed in part nership with the Habitat Association, empowers young girls to turn their technology-driven ideas into real-world innovations. Furthermore, the second edition of our Gençİz Summit will be held on December 5, 2025, bringing together 5,000 young participants with leading experts. (*) Interim activity report information concerning amounts are unconsolidated and full TRY unless otherwise stated.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 105 SECTION VII: INTERIM ACTIVITY REPORT (continued) I. INTERIM ACTIVITY REPORT INCLUDED CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO'S ASSESMENTS FOR THE INTERIM ACTIVITIES (continued) General Manager’s Review (continued) Valued Stakeholders, In line with the national vision announced by His Excellency President Recep Tayyip Erdoğan, which designates 2025 as the Year of the Family and 2026 -2035 as the Decade of Family and Population, we have expanded our product and service offerings under the “Halkbank Ailem (Halkbank Is My Family)” umbrella. These enhancements include tailored support packages for children’s education, home purchases, home renovations, insurance solutions, and savings products. Furthermore, through our “SME Family Support Package,” we are extending a 5 billion Turkish lira loan facility designed to support women entrepreneurs, family-oriented businesses, and family-owned enterprises. The package also includes Credit Guarantee Fund (CGF) backing to ease collateral requirements. Our strategic decisions reinforce the forward-looking vision of our Bank. Within this scope, adding new value to the participation finance ecosystem is a key strategic step toward achieving our 2026 goals. In this context, Halk Katılım Bankası has received establishment approval from the Banking Regulation and Supervision Agency (BRSA) and is scheduled to commence operations in 2026. With this new initiative, we aim to advance financial inclusion and provide the real economy with a strong, participation-based financing mechanism. As of the third quarter of 2025, our Bank’s total assets exceeded 4 trillion Turkish lira, marking a 33 percent increase compared to the end of 2024. Our cash loans grew by 24 percent, reaching 1.8 trillion Turkish lira, while non-cash loans rose by 37 percent, reaching 1.1 trillion Turkish lira, bringing total lending to 2.9 trillion Turkish lira, up 29 percent year -to-date. Our deposit volume expanded by 33 percent to 3.2 trillion Turkish lira, and shareholders’ equity increased by 19 percent to 198 billion Turkish lira. Meanwhile, our securities portfolio grew by 44 percent, reaching 1.1 trillion Turkish lira. In the first nine months of 2025, our Bank’s net profit rose to 20.2 billion Turkish lira, with 1,228 service units and a w orkforce of nearly 28,000, we remain steadfast in our commitment to advancing Türkiye’s national economy. As a pillar of a time-honored financial tradition, drawing on its 87 years of sector experience, Halkbank will continue to support the real economy -from tradespeople and SMEs to women and young entrepreneurs, as well as exporters -while contributing to our nation’s objectives of balanced growth, disinflation, and sustainable development. As we advance together with a shared sense of responsibility for Türkiye’s future, I extend my sincere gratitude for your trust and continued support. Osman Arslan General Manager (*) Interim activity report information concerning amounts are unconsolidated and full TRY unless otherwise stated.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 106 SECTION VII: INTERIM ACTIVITY REPORT (continued) I. INTERIM ACTIVITY REPORT INCLUDED CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO’S ASSESMENTS FOR THE INTERIM ACTIVITIES (continued) Major Financial Information Summary Balance Sheet (TRY Million) September 2025 December 2024 Change (%) Total Assets 4.211.173 3.143.859 33,9 Loans 1.906.464 1.521.643 25,3 TRY 1.269.108 1.091.296 16,3 FC 637.356 430.347 48,1 Marketable Securities 1.147.781 798.864 43,7 Deposit 3.282.442 2.460.620 33,4 TRY 1.968.667 1.608.960 22,4 FC 1.313.775 851.660 54,3 Total Equity 201.284 169.936 18,4 Summary Statement of Profit or Loss (TRY Million) September 2025 September 2024 Change (%) Interest Income 673.029 485.429 38,6 On Loan 397.147 313.185 26,8 On Securities 199.058 133.809 48,8 Interest Expense 608.114 452.581 34,4 On Deposit 517.308 394.984 31,0 Net Interest Income 64.915 32.847 97,6 Net Fee and Commission 43.780 30.259 44,7 Net Profit 20.721 15.740 31,6 Ratio (%) September 2025 December 2024 Cash Loans/Total Asset 45,3 48,4 Non-Performing Loans/Total Cash Loans (Gross) 3,8 2,1 Demand Deposit/Total Deposit 27,5 25,8 Loan/Deposit Ratio 58,1 61,8 Average Return on Asset (ROA) 0,75 0,85 Average Return on Equity (ROE) 14,93 14,85 Capital Adequacy Ratio 14,93 15,10
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30 SEPTEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 107 SECTION VII: INTERIM ACTIVITY REPORT (continued) I. INTERIM ACTIVITY REPORT INCLUDED CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO’S ASSESMENTS FOR THE INTERIM ACTIVITIES (continued) 2025 Third Quarter Interim Developments Significant Developments ▪ Our Bank has issued bonds with a par value of 328,500,000 Turkish lira to the qualified investors throughout this period. New Products and Campaigns ▪ We launched the Rota Payroll Loan to help SMEs pay their employees on time while maintaining healthy cash flow. ▪ We launched the “Care Home Support Package for Senior Citizens and People with Disabilities” to encourage the establishment of new care homes and to meet the financing needs of existing ones, providing safe and comfortable living environments that address the physical, social, and healthcare needs of residents (*) Interim activity report information concerning amounts are unconsolidated and full TRY unless otherwise stated.