Interim report
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TÜRKİYE HALK BANKASI ANONİM ŞİRKETİ Consolidated Financial Statements As of 31 December 2025 With Auditors' Report Thereon (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)
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Convenience Translation of the Independent Auditor’s Report Originally Prepared and Issued in Turkish to English To the General Assembly of Türkiye Halk Bankası A.Ş. A) Report on the Audit of the Consolidated Financial Statements Opinion We have audited the consolidated financial statements of Türkiye Halk Bankası A.Ş. (“the Bank”) and its subsidiaries (together will be referred as “the Group”) which comprise the consolidated balance sheet as at 31 December 2025 and the consolidated statement of profit or loss, consolida ted statement of profit or loss and other comprehensive income, consolidated statement of changes in shareholders’ equity, consolidated statement of cash flows for the year then ended, and notes, comprising material accounting policies and other explanatory information. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Türkiye Halk Bankası A.Ş. and its consolidated financial subsidiaries as at 31 December 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the “Banking Regulation and Supervision Agency (“BRSA”) Accounting and Reporting Legislation” which includes the “Regulation on Accounting Application s 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 requirements of Turkish Financial Reporting Standards (“TFRS”) for the matters not regulated by the aforementioned legislations. Basis for Opinion We conducted our audit in accordance with the “Regulation on Independent Audit of the Banks” (“BRSA Audit Regulation”) published in the Official Gazette No.29314 dated 2 April 2015 by BRSA and Standards on Auditing which is a component of the Turkish Auditing Standards published by the Public Oversight Accounting and Auditing Standa rds Authority (“POA”) (“Standards on Auditing issued by POA”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We declare that we are independent of the Bank in accordance with the Code of Ethics for Auditors (including Independence Standards) issued by POA (“POA’s Code of Ethics”), as applicable to audits of the consolidated financial statements of public interest entities, and the ethical requirements in other regulations that are relevant to our audits of the consolidated financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with the POA’s Code of Ethics and regulations. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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Emphasis of Matter As detailed in footnote number one of section six , a criminal case was filed against the Bank 15 October 2019 by the United States of America (“the U.S.”) Attorney for the Southern District of New York for alleged violations of the U.S. sanctions on Iran. By the date of the report the case has not been concluded yet, and the Bank management stated that no penalties, judgements, sanctions or measures arising from said lawsuit and proceedings have been imposed, nor any liabilities have arisen which would require the Bank to make provisions in its financial statements. Even though the uncertainty as to the lawsuit’s process continues, this fact does not affect the conclusion provided by us. Key Audit Matter Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opi nion on these matters. Impairment of loans measured at amortised cost The details of accounting policies and significant estimates and assumptions for impairment of loans measured at amortised cost are presented in Section III, No: VIII of the consolidated financial statements. Key audit matter As of 31 December 2025, loans measured at amortised cost comprise 47% of the Group’s total assets. The total provision for expected credit loss amounting to TRY 67.446.514 Thousand as of 31 December 2025. The Group recognizes expected credit loss allowances for its loans measured at amortized cost in accordance with TFRS 9 Financial Instruments (“the Standard”). The Group applies the “expected credit loss model” in determining the impairment of financial assets in accordance with the Standard. The model which contains significant assumptions and estimates is reviewed by the Group management annually. The significant assumptions and estimates of the Group's management are as follows: • Significant increase in credit risk; • Incorporating the forward -looking macroeconomic information in calculation of credit risk; • Design and implementation of expected credit loss model. How the matter is addressed in our audit Our procedures for testing the impairment of loans included below: • We tested the design and operating effectiveness of the controls on lending, collateralization, collection, follow -up, classification and impairment procedures are tested with the involvement of information risk management specialists. • We evaluated the adequacy of the subjective and objective criteria that are defined in the Group’s impairment accounting policy compared with the Standard. • We evaluated the Group’s business model and methodology and the evaluation of the calculations w ere carried out with the control testing and detailed analysis by the involvement of specialist. • We performed loan reviews for selected loan samples which include a detailed examination of loan files and related information and testing their classification. • We evaluated the accuracy of the expected credit loss calculations by selecting sample for the loans which are assessed on individual basis.
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The determination of the impairment of loans measured at amortised cost depends on the default status of loan, the model based on the change in the credit risk since initial recognition and whether these loans are placed at the appropriate stage within that model. Establishing stage allocation is a significant process as the calculation of expected credit loss varies to the staging of the financial assets. The Group calculates expected credit losses on both an individual and a collective basis. Individual provisions consider the estimated future performance of the business and the fair value of the collateral provided for credit transactions. The collective basis expected credit loss calculation is based on complex processes which are modelled by using current and past data sets and expectations including collaterals. The completeness and accuracy of data sets in the model are also considered. In addition, the future expectations are reflected through macroeconomic models. As explained above, impairment on loans measured at amortised cost has been identified as key audit matter, due its complex nature and the involvement of management judgments and significant estimates and assumptions. • We tested the accuracy and completeness of the data in the calculation models for the loans which are assessed on collective basis. The expected credit loss calculation was tested through recalculation. The models used for the calculation of the risk parameters were examined and the risk parameters for the selected sample portfolios were recalculated. • We assessed the macroeconomic models, that are used to reflect forw ard looking expectations and tested the effect of the risk parameters by recalculation method. • We evaluated the qualitative and quantitative assessments which are used in determining the significant increase in credit risk. • We also evaluated the adequa cy of the consolidated financial statements disclosures related to impairment provisions. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the “BRSA Accounting and Reporting Legislation”, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Group’s financial reporting process. Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Responsibilities of auditors in an audit are as follows: Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with BRSA Auditing Regulation and Standards on Auditing issued by POA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
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As part of an audit in accordance with BRSA Auditing Regulation and Standards on Auditing issued by POA, we exercise professional judgement and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting fro m error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on t he Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Plan and per form the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group as a basis for forming an opinion on the group financial statements. We are responsible for the dire ction, supervision and review of audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we de termine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes p ublic disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
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B) Report on Other Legal and Regulatory Requirements 1) Pursuant to the fourth paragraph of Article 402 of the Turkish Commercial Code (“TCC”) No. 6102; no significant matter has come to our attention that causes us to believe that the Bank’s bookkeeping activities for the period 1 January - 31 December 2025 are not in compliance with TCC and provisions of the Bank’s articles of association in relation to financial reporting. 2) Pursuant to the fourth paragraph of Article 402 of the TCC; the Board of Directors provided us the necessary explanations and required documents in connection with the audit. KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş. Orhan Akova, SMMM Partner 20 February 2026 Istanbul, Türkiye
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THE CONSOLIDATED FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEMBER 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 the year ended 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 :OTHER EXPLANATIONS • Section Seven :AUDITOR’S 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, 20 February 2026 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 Chairman 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 VII. Consolidated Statement of Profit Distribution 17 SECTION THREE Explanations on Accounting Policies I. Explanations on Basis of Presentation 18 II. Explanations on the Strategy of Use of Financial Instruments and Foreign Currency Transactions 19 III. Information About the Consolidated Associates and Subsidiaries 19 IV. Explanations on Forward and Option Contracts and Derivative Products 22 V. Explanations on Interest Income and Expenses 22 VI. Explanations on Fee and Commission Income and Expenses 22 VII. Explanations on Financial Assets 22 VIII. Explanations on Impairment of Financial Assets 26 IX. Explanations on Offsetting Financial Instruments 30 X. Explanations on Sales and Repurchase Agreements (Repos) and Transactions on Securities Loaned 30 XI. Explanations on Assets Held For Sale, Assets of Discontinued Operations and Related Liabilities 30 XII. Explanations on Goodwill and Other Intangible Assets 30 XIII. Explanations on Tangible Assets 30 XIV. Explanations on Investment Properties 31 XV. Explanations on Leasing Transactions 31 XVI. Explanations on Provisions and Contingent Liabilities 33 XVII. Explanations on Employee Benefit Liabilities 33 XVIII. Explanations on Taxation 34 XIX. Additional Explanations on Borrowings 36 XX. Explanations on Shares Issued 36 XXI. Explanations on Bill Guarantees and Acceptances 37 XXII. Explanations on Government Incentives 37 XXIII. Explanations on Segment Reporting 37 XXIV. Explanations on Earnings Per Share 37 XXV. Explanations on Other Matters 38
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SECTION FOUR Information Related to Financial Position and Risk Management of the Group I. Explanations on Consolidated Equity 39 II. Explanations on Consolidated Credit Risk 45 III. Explanations on Consolidated Currency Risk 57 IV. Explanations on Consolidated Interest Rate Risk 60 V. Explanations on Consolidated Position Risk of Shares 65 VI. Explanations on Consolidated Liquidity Risk, Liquidity Coverage Ratio and Net Stable Funding Ratio 66 VII. Explanations on Consolidated Leverage Ratio 77 VIII. Explanations Related to Consolidated Business Segmentation 79 IX. Explanations on Presentation of the Consolidated Financial Assets and Liabilities at Fair Value 82 X. Explanations Related to Transactions Made on Behalf of Others Transactions Based on Trust 84 XI. Explanations on Consolidated Risk Management and Risk Weighted Amounts 85 XII. Explanations on Remuneration Policies 97 SECTION FIVE Explanations and Notes Related to the Consolidated Financial Statements I. Explanations and Notes Related to the Assets 99 II. Explanations and Notes Related to the Liabilities 123 III. Explanations and Notes Related to the Off-Balance Sheet Items 132 IV. Explanations and Notes Related to the Consolidated Statement Of Profit Or Loss 135 V. Explanations and Notes Related to the Consolidated Statement of Changes in Shareholders’ Equity 140 VI. Explanations and Notes Related to the Consolidated Cash Flow Statements 141 VII. Explanations Related to the Risk Group of the Parent Bank 142 VIII. Explanation on The Parent Bank’s Domestic Branches, Agencies/Branches Abroad and Off-Shore Brances 144 IX. Fees Related with the Services Provided by Independent Audıtors/Independent Audit Agencies 145 X. Explanation Related to the Subsequent Events 145 SECTION SIX Other Explanations I. Other Explanations on the Parent Bank’s Activity 146 SECTION SEVEN Auditors’ Report I. Explanations on the Independent Auditor’s Report 148 II. Explanations and Notes Prepared by the Auditors 148
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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 31 December 2025 the shareholders’ structure and their respective ownerships are summ arized as follows: Shareholders 31 December 2025 % 31 December 2024 % Türkiye Varlık Fonu(1) 6.573.604 91,49 6.573.604 91,49 Public shares(1) 611.095 8,51 611.093 8,51 Other shareholders(2) 79 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 79 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 31 DECEMBER 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 Altan TAŞKIRAN Executive Vice President, Retail and Digital Banking Seyit Mehmet YAYDEMİR Executive Vice President, Loan Policies, Monitoring and Specialized Loans Murat YILDIRIM Executive Vice President, SME and Retail Banking Ahmet HOŞCAN Executive Vice President (p.), Treasury and Resource Management Miraç TAŞ Executive Vice President (p.), International Banking 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 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 Executive Vice President (p.) Ahmet HOŞCAN 27 November 2025 Executive Vice President (p.) Miraç TAŞ 2 January 2026 b) The Parent Bank’s top management members who have left their position 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 Executive Vice President Ali ŞÖNER 27 November 2025
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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 31 DECEMBER 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 31 December 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 35 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 31 DECEMBER 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 collecting potential investors’ book building, Halk GYO’s shares started to be traded on Borsa İstanbul AŞ since 22 February 2013. Halk Finansal Kiralama AŞ was established in September 1991 in Türkiye and its main l ine of business is financial leasing. Halk Leasing operates under the provisions of the Turkish financial leasing 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, oper ating in 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 was established in June 2012 in Türkiye and its main line of business is to provide factoring services that include legitimate commercial lending 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, 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 Communiqué and the related regulations of the CMB. Halk Elektronik Para ve Ödeme Hizmetle ri 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 of participation banking and economic growth 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 31 DECEMBER 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, a re 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 Re porting 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 Katılım 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 31 DECEMBER 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 VII. Statement of Profit Distribution
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TÜRKİYE HALK BANKASI AŞ CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 10 I. CONSOLIDATED BALANCE SHEET (CONSOLIDATED STATEMENT OF FINANCIAL POSITION) Audited Audited Current Period Prior Period 31 December 2025 31 December 2024 CONSOLIDATED ASSETS Note TRY FC TOTAL TRY FC TOTAL I. FINANCIAL ASSETS (NET) 577.247.788 775.925.056 1.353.172.844 480.536.227 427.063.217 907.599.444 1.1 Cash and Cash Equivalents 434.043.067 497.279.378 931.322.445 370.307.065 298.593.643 668.900.708 1.1.1 Cash and Balances with Central Bank (1) 397.944.998 470.362.667 868.307.665 356.954.461 276.472.432 633.426.893 1.1.2 Banks (3) 36.300.283 26.927.964 63.228.247 13.297.023 20.938.433 34.235.456 1.1.3 Money Markets Placements 23.734 - 23.734 220.000 1.192.154 1.412.154 1.1.4 Expected Loss Provision (-) 225.948 11.253 237.201 164.419 9.376 173.795 1.2 Financial Assets at Fair Value Through Profit or Loss (2) 10.424.506 103.189.636 113.614.142 2.226.939 56.553.648 58.780.587 1.2.1 Government Debt Securities 18.900 102.616.342 102.635.242 148.643 56.220.365 56.369.008 1.2.2 Equity Instruments 121.099 35.396 156.495 1.380 63.284 64.664 1.2.3 Other Financial Assets 10.284.507 537.898 10.822.405 2.076.916 269.999 2.346.915 1.3 Financial Assets at Fair Value Through Other Comprehensive Income (4) 132.780.215 172.296.751 305.076.966 108.002.223 70.472.511 178.474.734 1.3.1 Government Debt Securities 132.613.001 170.558.375 303.171.376 107.887.190 69.194.517 177.081.707 1.3.2 Equity Instruments 167.214 1.738.376 1.905.590 115.033 1.277.994 1.393.027 1.3.3 Other Financial Assets - - - - - - 1.4 Derivative Financial Assets (2)(12) - 3.159.291 3.159.291 - 1.443.415 1.443.415 1.4.1 Derivative Financial Assets at Fair Value Through Profit or Loss - 3.159.291 3.159.291 - 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) 2.056.039.001 804.095.067 2.860.134.068 1.538.387.567 522.954.687 2.061.342.254 2.1 Loans (5) 1.403.039.961 692.947.008 2.095.986.969 1.091.295.923 430.347.527 1.521.643.450 2.2 Lease Receivables (10) 9.929.325 10.417.066 20.346.391 7.460.984 5.589.692 13.050.676 2.3 Factoring Receivables (11) 14.116.938 3.788.873 17.905.811 8.858.683 1.131.056 9.989.739 2.4 Other Financial Assets Measured at Amortised Cost (6) 694.821.347 99.510.537 794.331.884 474.074.684 87.534.263 561.608.947 2.4.1 Government Debt Securities 694.821.347 99.510.537 794.331.884 471.665.583 87.534.263 559.199.846 2.4.2 Other Financial Assets - - - 2.409.101 - 2.409.101 2.5 Expected Credit Loss (-) 65.868.570 2.568.417 68.436.987 43.302.707 1.647.851 44.950.558 III. NON CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (NET) (17) 212 - 212 1.034 - 1.034 3.1 Held for Sale 212 - 212 1.034 - 1.034 3.2 Discontinued Operations - - - - - - IV. EQUITY INVESTMENTS 791.411 4.146.393 4.937.804 502.770 2.902.429 3.405.199 4.1 Investments in Associates (Net) (7) 650.838 4.146.393 4.797.231 502.770 2.902.429 3.405.199 4.1.1 Associates Valued Based on Equity Method 497.098 4.146.393 4.643.491 349.030 2.902.429 3.251.459 4.1.2 Unconsolidated Associates 153.740 - 153.740 153.740 - 153.740 4.2 Subsidiaries (Net) (8) 140.573 - 140.573 - - - 4.2.1 Unconsolidated Financial Subsidiaries - - - - - - 4.2.2 Unconsolidated Non- Financial Subsidiaries 140.573 - 140.573 - - - 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) (13) 82.911.372 4.131.631 87.043.003 46.772.727 2.319.320 49.092.047 VI. INTANGIBLE ASSETS (Net) (14) 4.598.156 1.135.535 5.733.691 2.671.140 780.022 3.451.162 6.1 Goodwill - - - - - - 6.2 Other 4.598.156 1.135.535 5.733.691 2.671.140 780.022 3.451.162 VII. INVESTMENT PROPERTIES (Net) (15) 49.684.304 46.564 49.730.868 25.315.013 35.074 25.350.087 VIII. CURRENT TAX ASSET - 103.388 103.388 - 7.140 7.140 IX. DEFERRED TAX ASSET (16) 19.358.532 21.597 19.380.129 23.835.883 14.114 23.849.997 X. OTHER ASSETS (Net) (18) 107.326.224 9.507.997 116.834.221 63.937.962 5.822.424 69.760.386 TOTAL ASSETS 2.897.957.000 1.599.113.228 4.497.070.228 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 11 I. CONSOLIDATED BALANCE SHEET (CONSOLIDATED STATEMENT OF FINANCIAL POSITION) Audited Audited Current Period Prior Period 31 December 2025 31 December 2024 CONSOLIDATED LIABILITIES Note TRY FC TOTAL TRY FC TOTAL I. DEPOSITS (1) 2.208.356.919 1.399.481.174 3.607.838.093 1.608.960.582 851.659.873 2.460.620.455 II. FUNDS BORROWED (3) 3.564.960 112.646.007 116.210.967 23.738.099 40.732.710 64.470.809 III. MONEY MARKET FUNDS 132.187.642 109.005.826 241.193.468 170.933.569 85.791.960 256.725.529 IV. SECURITIES ISSUED (Net) (4) 21.760.480 - 21.760.480 12.192.983 - 12.192.983 4.1 Bills 3.242.154 - 3.242.154 4.836.295 - 4.836.295 4.2 Assets Backed Securities 18.518.326 - 18.518.326 7.356.688 - 7.356.688 4.3 Bonds - - - - - - V. FUNDS 442.915 - 442.915 927.087 - 927.087 5.1 Borrower Funds - - - - - - 5.2 Other 442.915 - 442.915 927.087 - 927.087 VI. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS - - - - - - VII. DERIVATIVE FINANCIAL LIABILITIES (2)(7) - 2.778.458 2.778.458 - 2.493.751 2.493.751 7.1 Derivative Financial Liabilities at Fair Value Through Profit or Loss - 2.778.458 2.778.458 - 2.493.751 2.493.751 7.2 Derivative Financial Liabilities at Fair Value Through Other Comprehensive Income - - - - - - VIII. FACTORING LIABILITIES 21.683 21 21.704 33.256 - 33.256 IX. LEASE LIABILITIES (6) 7.685.484 952.968 8.638.452 3.599.700 624.020 4.223.720 X. PROVISIONS (8) 14.025.018 1.469.018 15.494.036 9.861.995 925.102 10.787.097 10.1 Restructuring Provisions - - - - - - 10.2 Reserve for Employee Benefits 9.515.292 470.779 9.986.071 6.801.655 282.743 7.084.398 10.3 Insurance for Technical Provision (Net) - 852.503 852.503 - 555.471 555.471 10.4 Other Provisions 4.509.726 145.736 4.655.462 3.060.340 86.888 3.147.228 XI. CURRENT TAX LIABILITIES (9) 18.914.095 254.888 19.168.983 9.627.765 60.267 9.688.032 XII. DEFERRED TAX LIABILITIES (9) 9.185.826 42.166 9.227.992 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) 50.403.797 42.955.243 93.359.040 50.184.304 - 50.184.304 14.1 Loans 17.108.662 - 17.108.662 16.577.458 - 16.577.458 14.2 Other Debt Instruments 33.295.135 42.955.243 76.250.378 33.606.846 - 33.606.846 XV. OTHER LIABILITIES (5) 122.684.170 15.306.444 137.990.614 91.183.092 7.341.733 98.524.825 XVI. SHAREHOLDERS’ EQUITY (12) 205.975.522 16.969.504 222.945.026 161.080.798 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 43.826.920 1.037.982 44.864.902 26.124.794 4.930 26.129.724 16.4 Accumulated Other Comprehensive Income or Loss Reclassified Through Profit or Loss (5.322.875) 10.103.885 4.781.010 (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) 30.188.923 2.191.548 32.380.471 29.220.638 2.236.744 31.457.382 16.6.1 Prior Periods’ Income or (Loss) 5.096.744 153.031 5.249.775 9.076.636 342.925 9.419.561 16.6.2 Current Period Income or (Loss) 25.092.179 2.038.517 27.130.696 20.144.002 1.893.819 22.037.821 16.7 Minority Shares 4.518.870 60.255 4.579.125 3.337.485 39.665 3.377.150 TOTAL LIABILITIES 2.795.208.511 1.701.861.717 4.497.070.228 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 12 II. CONSOLIDATED STATEMENT OF OFF BALANCE SHEET Audited Audited Current Period Prior Period 31 December 2025 31 December 2024 CONSOLIDATED OFF-BALANCE SHEET Note TRY FC TOTAL TRY FC TOTAL A. COMMITMENTS AND CONTINGENCIES (I+II+III) 1.486.233.226 922.957.284 2.409.190.510 937.838.680 558.949.112 1.496.787.792 I. GUARANTEES AND WARRANTIES (1) 785.286.053 419.263.790 1.204.549.843 551.997.849 265.935.019 817.932.868 1.1 Letters of guarantee 655.674.701 364.718.713 1.020.393.414 461.327.649 245.392.301 706.719.950 1.1.1 Guarantees subject to public procurement law 29.085.593 47.971.407 77.057.000 22.250.844 29.830.050 52.080.894 1.1.2 Guarantees given for foreign trade operations 1.117.755 87.899.666 89.017.421 570.974 58.677.011 59.247.985 1.1.3 Other letters of guarantee 625.471.353 228.847.640 854.318.993 438.505.831 156.885.240 595.391.071 1.2 Bank loans 73.466.549 5.080.327 78.546.876 54.059.349 1.139.027 55.198.376 1.2.1 Import acceptances - 2.350.876 2.350.876 - 894.738 894.738 1.2.2 Other bank acceptances 73.466.549 2.729.451 76.196.000 54.059.349 244.289 54.303.638 1.3 Letters of credit 597.496 49.369.716 49.967.212 194.998 19.244.049 19.439.047 1.3.1 Documentary letters of credit 597.496 49.369.716 49.967.212 194.998 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 55.547.307 95.034 55.642.341 36.415.853 159.642 36.575.495 1.9 Other sureties - - - - - - II. COMMITMENTS 560.690.141 105.794.642 666.484.783 305.071.914 50.674.890 355.746.804 2.1 Irrevocable commitments (1) 535.711.471 42.886.225 578.597.696 294.458.436 9.150.337 303.608.773 2.1.1 Forward asset purchase commitments 37.854.910 38.726.094 76.581.004 884.087 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 30.331.401 342.953 30.674.354 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) 38.797.420 - 38.797.420 30.831.741 - 30.831.741 2.1.8 Tax and fund liabilities from export commitments 1.342.798 - 1.342.798 1.224.652 - 1.224.652 2.1.9 Commitments for credit card expenditure limits 345.814.552 1.159.280 346.973.832 184.400.885 780.109 185.180.994 2.1.10 Commitments for credit cards and banking services promotions 426.744 - 426.744 243.446 - 243.446 2.1.11 Receivables from short sale commitments - - - - - - 2.1.12 Payables for short sale commitments - - - - - - 2.1.13 Other irrevocable commitments 81.143.646 2.657.898 83.801.544 52.390.328 1.578.176 53.968.504 2.2 Revocable commitments 24.978.670 62.908.417 87.887.087 10.613.478 41.524.553 52.138.031 2.2.1 Revocable loan granting commitments - 27.673.707 27.673.707 - 18.776.645 18.776.645 2.2.2 Other revocable commitments 24.978.670 35.234.710 60.213.380 10.613.478 22.747.908 33.361.386 III. DERIVATIVE FINANCIAL INSTRUMENTS (2) 140.257.032 397.898.852 538.155.884 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 140.257.032 397.898.852 538.155.884 80.768.917 242.339.203 323.108.120 3.2.1 Forward foreign currency buy/sell transactions 29.692.119 79.884.440 109.576.559 46.932.595 69.222.684 116.155.279 3.2.1.1 Forward foreign currency transactions-buy 14.192.584 38.083.896 52.276.480 19.381.549 32.894.610 52.276.159 3.2.1.2 Forward foreign currency transactions-sell 15.499.535 41.800.544 57.300.079 27.551.046 36.328.074 63.879.120 3.2.2 Currency and interest rate swaps 105.759.732 246.315.052 352.074.784 33.561.628 156.699.977 190.261.605 3.2.2.1 Currency swap-buy - 119.007.842 119.007.842 - 41.750.662 41.750.662 3.2.2.2 Currency swap-sell 105.759.732 76.281.812 182.041.544 33.421.628 10.466.143 43.887.771 3.2.2.3 Interest rate swap-buy - 25.512.699 25.512.699 70.000 52.241.586 52.311.586 3.2.2.4 Interest rate swap-sell - 25.512.699 25.512.699 70.000 52.241.586 52.311.586 3.2.3 Currency, interest rate and marketable securities options 4.805.181 5.284.263 10.089.444 274.694 435.323 710.017 3.2.3.1 Currency call options 2.402.590 2.642.037 5.044.627 137.200 217.767 354.967 3.2.3.2 Currency put options 2.402.591 2.642.226 5.044.817 137.494 217.556 355.050 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 - 66.415.097 66.415.097 - 15.981.219 15.981.219 B. CUSTODY AND PLEDGED ASSETS (IV+V+VI) 14.981.881.960 3.541.976.343 18.523.858.303 10.279.340.011 2.220.065.134 12.499.405.145 IV. CUSTODIES 7.364.642.673 1.063.135.782 8.427.778.455 4.685.802.836 453.982.800 5.139.785.636 4.1 Assets under management - - - - - - 4.2 Custody marketable securities 675.013.346 179.303.021 854.316.367 421.524.393 50.307.830 471.832.223 4.3 Cheques in collection process 274.645.982 648.339.043 922.985.025 201.701.445 243.321.652 445.023.097 4.4 Commercial notes in collection process 5.982.821.879 61.282.166 6.044.104.045 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 7.828.870 1.782.238 9.611.108 3.140.918 89.950 3.230.868 4.8 Custodians 424.332.596 172.429.314 596.761.910 247.968.435 113.486.920 361.455.355 V. PLEDGED ASSETS 7.617.239.287 2.478.840.561 10.096.079.848 5.593.537.175 1.766.082.334 7.359.619.509 5.1 Marketable securities 41.725.330 5.472.046 47.197.376 26.583.329 4.617.115 31.200.444 5.2 Collateral notes 85.676.626 12.048.826 97.725.452 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 6.863.434.506 1.787.028.469 8.650.462.975 4.981.187.961 1.287.544.896 6.268.732.857 5.6 Other pledged assets 573.895.716 508.725.289 1.082.621.005 411.522.779 391.246.849 802.769.628 5.7 Pledges 52.481.296 165.565.931 218.047.227 105.645.363 75.213.610 180.858.973 VI. ACCEPTED BILL GUARANTEES AND SURETIES - - - - - - TOTAL OFF-BALANCE SHEET ACCOUNTS (A+B) 16.468.115.186 4.464.933.627 20.933.048.813 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 13 III. CONSOLIDATED STATEMENT OF PROFIT OR LOSS Audited Audited Current Period Prior Period INCOME AND EXPENSES Note 1 January -31 December 2025 1 January -31 December 2024 I. INTEREST INCOME (1) 918.258.634 678.010.748 1.1 Interest on Loans 546.737.055 436.691.079 1.2 Interest on Reserve Requirements 81.334.302 45.173.425 1.3 Interest on Banks 10.924.779 6.568.655 1.4 Interest on Money Market Transactions 3.047.883 1.100.386 1.5 Interest on Marketable Securities 265.395.016 179.074.905 1.5.1 Fair Value Through Profit or Loss 2.123.738 929.490 1.5.2 Fair Value Through Other Comprehensive Income 51.476.672 39.549.985 1.5.3 Measured at Amortized Cost 211.794.606 138.595.430 1.6 Financial Lease Interest Income 4.448.485 4.164.211 1.7 Other Interest Income 6.371.114 5.238.087 II. INTEREST EXPENSE (-) (2) 821.739.361 634.949.484 2.1 Interest on Deposits 699.524.876 559.153.479 2.2 Interest on Funds Borrowed 19.036.077 9.108.086 2.3 Interest Expense on Money Market Transactions 76.627.560 56.718.762 2.4 Interest on Securities Issued 18.591.121 6.659.056 2.5 Interest on Leases 2.064.950 847.376 2.6 Other Interest Expenses 5.894.777 2.462.725 III. NET INTEREST INCOME (I - II) 96.519.273 43.061.264 IV. NET FEES AND COMMISSIONS INCOME 61.847.539 41.740.995 4.1 Fees and Commissions Received 88.958.851 60.970.381 4.1.1 Non – cash Loans 13.800.152 10.044.750 4.1.2 Other (11) 75.158.699 50.925.631 4.2 Fees and Commissions Paid (-) 27.111.312 19.229.386 4.2.1 Non – cash Loans 91.037 78.112 4.2.2 Other (11) 27.020.275 19.151.274 V. DIVIDEND INCOME 61.380 33.244 VI. TRADING INCOME / LOSS (Net) (3) (12.068.473) (21.097.692) 6.1 Trading Gains / (Losses) on Securities 1.261.455 8.410.563 6.2 Gains / (Losses) on Derivate Financial Transactions 10.551.403 (20.054.283) 6.3 Foreign Exchange Gains / (Losses) (23.881.331) (9.453.972) VII. OTHER OPERATING INCOME (4) 39.946.374 29.632.372 VIII. GROSS OPERATING INCOME (III+IV+V+VI+VII+VIII) 186.306.093 93.370.183 IX. EXPECTED LOSS PROVISIONS EXPENSES (-) (5) 38.544.281 10.139.775 X. OTHER PROVISION EXPENSES (-) (5) 234.033 57.942 XI. PERSONNEL EXPENSES (-) 52.200.497 31.773.575 XII. OTHER OPERATING EXPENSES (-) (6) 60.029.284 32.710.445 XIII. NET OPERATING INCOME /LOSS (IX-X-XI) 35.297.998 18.688.446 XIV. INCOME AFTER MERGER - - XV. INCOME /( LOSS ) FROM INVESTMENTS IN SUBSIDIARIES CONSOLIDATED BASED ON EQUITY METHOD 463.332 351.901 XVI. INCOME / (LOSS) ON NET MONETARY POSITION - - XVII. PROFIT / LOSS BEFORE TAX FROM CONTINUED OPERATIONS (XIII+...+XVI) (7) 35.761.330 19.040.347 XVIII. TAX PROVISIONS FOR CONTINUED OPERATIONS (±) (8) (6.840.539) 4.186.699 18.1 Current Tax Provision 3.968.691 2.502.773 18.2 Deferred Tax Income Effect (+) 17.098.737 17.241.224 18.3 Deferred Tax Expense Effect (-) 14.226.889 23.930.696 XIX. CURRENT PERIOD PROFIT / LOSS FROM CONTINUED OPERATIONS (XVII±XVIII) (9) 28.920.791 23.227.046 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) 28.920.791 23.227.046 25.1 Profit / (Loss) of Group 27.130.696 22.037.821 25.2 Profit / (Loss) of Minority Shares (-) 1.790.095 1.189.225 Profit / (Loss) Per Share (full TRY) 3,77613560 3,06729324 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 14 IV. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Audited Audited Current Period Prior Period 1 January -31 December 2025 1 January -31 December 2024 I. CURRENT PERIOD INCOME/LOSS 28.920.791 23.227.046 II. OTHER COMPREHENSIVE INCOME 25.743.242 3.846.473 2.1 Not Reclassified Through Profit or Loss 18.751.497 8.348.024 2.1.1 Revaluation Increase/Decrease of Tangible Assets 23.864.616 11.547.973 2.1.2 Revaluation Increase/Decrease of Intangible Assets - - 2.1.3 Defined Benefit Pension Plan Remeasurement Gain/Loss 474.851 (761.730) 2.1.4 Other Comprehensive Income Items Not Reclassified Through Profit or Loss 1.099.704 (497.764) 2.1.5 Tax on Other Comprehensive Income Items Not Reclassified Through Profit or Loss (6.687.674) (1.940.455) 2.2 Reclassified Through Profit or Loss 6.991.745 (4.501.551) 2.2.1 Foreign Currency Translation Differences 20.071.885 466.655 2.2.2 Valuation and/or Reclassification Income/Expense of the Financial Assets at Fair Value through Other Comprehensive Income 3.724.449 (7.299.697) 2.2.3 Cash Flow Hedge Income/Loss - - 2.2.4 Foreign Net Investment Hedge Income/Loss (15.717.036) - 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 (1.087.553) 2.331.491 III. TOTAL COMPREHENSIVE INCOME (I+II) 54.664.033 27.073.519 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 31 DECEMBER 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 Audited (1 January -31 December 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 - - - - 9.378.862 (533.074) (497.764) 466.655 (4.968.206) - - - 22.037.821 25.884.294 1.189.225 27.073.519 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 - - - 707.032 - - - 3.105.660 - - (3.112.247) 15.972.050 (16.830.755) (158.260) 105.915 (52.345) 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 - 1.736.817 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 Audited (1 January -31 December 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 - - - - 17.322.639 328.845 1.083.694 20.071.885 2.636.896 (15.717.036) - - 27.130.696 52.857.619 1.806.414 54.664.033 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) - - - - - - - 22.710.631 (22.037.821) (1.047.747) (607.377) (1.655.124) 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 45.629.634 (2.081.578) 1.316.846 23.214.139 (2.716.093) (15.717.036) 84.633.281 5.249.775 27.130.696 218.365.901 4.579.125 222.945.026 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 16 VI. CONSOLIDATED STATEMENT OF CASH FLOW Audited Audited Current Period Prior Period Note 1 January -31 December 2025 1 January -31 December 2024 A. CASH FLOWS FROM BANKING OPERATIONS 1.1 Operating Profit Before Changes in Operating Assets and Liabilities (44.752.845) (91.676.485) 1.1.1 Interest received 755.733.201 520.548.062 1.1.2 Interest paid (828.244.810) (627.533.361) 1.1.3 Dividend received 61.380 33.244 1.1.4 Fees and commissions received 88.960.020 61.204.363 1.1.5 Other income 37.196.104 26.427.487 1.1.6 Collections from previously written off receivables 11.771.019 10.454.147 1.1.7 Cash payments to personnel and service suppliers (52.405.780) (32.915.899) 1.1.8 Taxes paid (11.050.693) (3.323.572) 1.1.9 Other (1) (46.773.286) (46.570.956) 1.2 Changes in Assets and Liabilities Subject to Banking Operations 265.382.919 392.251.623 1.2.1 Net (increase)/decrease in financial assets at fair value through profit or loss (2.890.316) (12.768.835) 1.2.2 Net (increase)/decrease in due from banks (234.987) 181.354 1.2.3 Net (increase)/decrease in loans (426.417.658) (143.681.938) 1.2.4 Net (increase)/decrease in other assets (208.073.055) (109.995.360) 1.2.5 Net increase/(decrease) in bank deposits 130.946.871 55.715.768 1.2.6 Net increase/(decrease) in other deposits 742.192.636 337.367.202 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 35.857.525 45.528.138 1.2.9 Net increase/(decrease) in matured payables - - 1.2.10 Net increase/(decrease) in other liabilities (1) (5.998.097) 219.905.294 I. Net Cash Provided from Banking Operations 220.630.074 300.575.138 B. CASH FLOWS FROM INVESTMENT ACTIVITIES II. Net Cash Provided from/(used in) Investing Activities (199.236.212) (72.857.425) 2.1 Cash paid for purchase of joint ventures, associates and subsidiaries (100.000) - 2.2 Cash obtained from sale of entities joint ventures, associates and subsidiaries - - 2.3 Fixed assets purchases (18.128.905) (16.715.370) 2.4 Fixed assets sales 5.570.287 3.643.101 2.5 Cash paid for purchase of financial assets at fair value through other comprehensive income (211.781.558) (61.941.452) 2.6 Cash obtained from sale of financial assets at fair value through other comprehensive income 109.078.428 20.632.561 2.7 Cash paid for purchase of investment securities (121.726.026) (129.889.648) 2.8 Cash obtained from sale of investment securities 41.880.721 113.607.026 2.9 Other (4.029.159) (2.193.643) C. CASH FLOWS FROM FINANCING ACTIVITIES III. Net Cash Flow from Financing Activities 48.176.779 10.699.552 3.1 Cash obtained from loans borrowed and securities issued 54.761.428 45.677.492 3.2 Cash used for repayment of loans borrowed and securities issued (4.118.277) (34.260.288) 3.3 Bonds issued - - 3.4 Dividends paid (2.938) - 3.5 Payments for leases (2.463.434) (717.652) 3.6 Other - - IV. Effect of Change in Foreign Exchange Rate on Cash and Cash Equivalents (1) 37.918.178 23.772.920 V. Net Increase/(decrease) in Cash and Cash Equivalents 107.488.819 262.190.185 VI. Cash and Cash Equivalents at Beginning of the Period (4) 413.712.128 151.521.943 VII. Cash and Cash Equivalents at End of the Period (5) 521.200.947 413.712.128 The accompanying notes are an integral part of these consolidated financial statements.
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TÜRKİYE HALK BANKASI AŞ STATEMENT OF PROFIT DISTRIBUTION FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 17 VII. STATEMENT OF PROFIT DISTRIBUTION Audited Audited Current Period (*) Prior Period (**) 31 December 2025 31 December 2024 I. DISTRIBUTION OF CURRENT YEAR PROFIT 1.1. Current Period Profit 29.869.548 8.510.404 1.2. Taxes and Legal Duties Payables (-) (2.738.852) 6.595.049 1.2.1. Corporate Tax (Income Tax) (1.079.999) (955.643) 1.2.2. Withholding Tax - - 1.2.3. Other Taxes and Duties (1.658.853) 7.550.692 A. Net Profit For The Period (1.1-1.2) 27.130.696 15.105.453 1.3. Accumulated Losses (-) - - 1.4. First Legal Reserves (-) - 755.273 1.5. Other Statutory Reserves (-) - - B. Net Profit Available for Distribution [(A-(1.3+1.4+1.5)] - 14.350.180 1.6. First Dividend to shareholders (-) - - 1.6.1. To Owners of Ordinary Shares - - 1.6.2. To Owners of Privileged Shares - - 1.6.3. To Owners of Redeemed Shares - - 1.6.4. To Profit Sharing Bonds - - 1.6.5. To Holders of Profit and Loss Sharing Certificates - - 1.7. Dividends to personnel (-) - - 1.8. Dividends to Board of Directors (-) - - 1.9. Second Dividend to Shareholders (-) - - 1.9.1. To Owners of Ordinary Shares - - 1.9.2. To Owners of Privileged Shares - - 1.9.3. To Owners of Redeemed Shares - - 1.9.4. To Profit Sharing Bonds - - 1.9.5. To Holders Of Profit And Loss Sharing Certificates - - 1.10. Second Legal Reserves (-) - - 1.11. Status Reserves (-) - 15.158.652 1.12. Extraordinary Reserves - - 1.13. Other Reserves - - II. Distribution of Reserves 2.1. Appropriated Reserves - - 2.2. Second Legal Reserves (-) - - 2.2.1. Dividends to Shareholders (-) - - 2.2.2. To Owners of Ordinary Shares - - 2.3.3. To Owners of Privileged Shares - - 2.3.4. To Profit Sharing Bonds - - 2.3.5. To Holders of Profit and Loss Sharing Certificates - - 2.3. Dividends to Personnel (-) - - 2.4. Dividends to the Boards of Directors (-) - - III. Earnings per Share 3.1. To Owners of Ordinary Shares 3,78 2,10 3.2. To Owners of Ordinary Shares (%) 377,61% 210,24% 3.3. To Owners of Privileged Shares - - 3.4. To Owners of Privileged Shares (%) - - IV. Dividend per Share 4.1. To Owners of Ordinary Shares - - 4.2. To Owners of Ordinary Shares (%) - - 4.3. To Owners of Privileged Shares - - 4.4. To Owners of Privileged Shares (%) - - (*) As of 31 December 2025 financial repoting date, General Assembly has not been held yet. (**) The profit distribution table approved during the annual general assembly of 2023 includes the balances pertaining to the distributed period profits. (***) The balance of 808.471 TRY, which occurred due to the change in accounting policy taking place in November 2023 regarding the adoption of the fair value method within the scope of Turkish Accounting Standards (TAS) 40 “Investment Property Standard” for investment pro perties and was monitored in the accumulated profit account, is also transferred to the extraordinary reserves account. 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 18 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 aforementioned 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 dated 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 Hyperinflationary 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. However, 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 31 December 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 19 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 subsidiaries 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 branche s 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 determined to be effective, is presented under the heading “Accumulated Other Comprehensive Income or Expense to be Reclassifi ed to Profit or Loss” under Equity. There is no ineffective portion of the financial hedging transaction. 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 cent 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 31 DECEMBER 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) 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, appropriate adjustments are made to subsidiarie s’ 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 equity method of consolidation. An associate is an entity established domestically and abroad in which the Parent Bank invests w ith a significant influence but no control. Significant influence is the power to participate in the financial and operating policy 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. Equity accounting method is an evaluation method of as sociates 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 21 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, th e 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 liabi lities 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 account ed 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 acquiree. 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 22 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 purpos es and recognises them in accordance with the provisions of TFRS 9. Pledges arising from derivative transactions recorded in off -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”, respectively 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. The Parent Bank, within the scop e of TFRS 9 Financial Instruments, recognizes interest income on non - performing loans that have been classified as credit impaired (Stage 3), by applying the effective interest method based on the net carrying amount of related loans. Within this context, the accounting principles and practices related to recognizing interest income on non -performing loans were reviewed within the reporting period and adjustments were made in the current period. Based on the performed assessment, it was concluded that the n on-recognition of interest income from non - performing loans in prior periods, did not have a material impact on the financial statements of the previous period. Therefore, no adjustments have been made to the prior period financial statements. 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 method 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. The regular-way purchases or sales of financial instruments are recognized or derecognized in the financial statements using one of the recognition methods; on the trade date or the settlement date. Securities purchase and sale transactions are recognized on the settlement date. 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 31 DECEMBER 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 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 bu siness 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 İs 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 İs Achieved By Both Collecting Contractual Cash Flows And Selling Financial Assets: The Group may hold financial assets in a business model w hose 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 principal 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 value. Therefore, if the financial assets are held for the purpose of obt aining 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 31 DECEMBER 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) 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. 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. 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. The related financial assets have been measured at amortized cost. 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. Transa ction 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. Consumer Price Indexed Government Bonds Accounting Policy The Parent Bank’s securities portfolio includes government bonds, issued by the Republic of Türkiye Ministry of Treasury and Finance, that are indexed to the Consumer Price Index (CPI). The effective interest method is used to account for securities that are classified as measured at amortized cost, whereas those securities classified as measured at fair value through other comprehensive income (FVOCI) are presen ted in the financial statements at their fair value. For the valuation calculations of these securities, the bond’s real coupon rate, the reference inflation index at the issuance date and the projected inflation rates for the bond’s maturity date and coupon payment dates are taken into consideration. The inflation assumptions applied during the valuation of the CPI-indexed securities are determined by taking the bonds’ maturity profile and coupon repayment dates into account, with the Parent Bank using swap curves that are reflective of market data. Given that inflation has become more predictable in both the medium and long term, and also taking the maturity structure of the relevant securities into account, the assumptions applied when determining inflation forecasts during the reporting period have been reviewed and the forecast horizon has been updated to align with the coupon rates and maturities of the relevant securities. Changes in the inflation assumptions used have an impact on the interest income obtained from CPI-indexed securities. If inflation rates are decreased or increased by 1%, the interest income from such securities decreases or increases by TRY 4.452.818 respectively.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 25 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VII. EXPLANATIONS ON FINANCIAL ASSETS (continued) Measurement Categories of Financial Assets and Liabilities (continued) 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. Equity Instruments Measured at Fair Value through Other Comprehensive Income At initial recognition, the Parent Bank may make an irrevocable election, in accordance with TFRS 9, to present subsequent changes in the fair value of an investment in an equity instrument in Other Comprehensive Income. The Parent Bank makes this election separately for each financial instrument. Changes in the fair value of the relevant instruments recognized in Other Comprehensive Income are not reclassified to profit or loss in subsequent periods but are transferred to retained earnings instead. 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 value 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.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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 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 measured 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 in 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 collective 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 recognition 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, wh ich the Group expects to collect, with the initial effective interest rate. The Group estimates the cash flows over the expected life of the 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 risk probabilities for determining expected credit losses. TFRS 9 Financial Instruments permits the measurement of expected credit loss allowances on either a collective or an individual basis by grouping financial assets that share similar credit risk characteristics. In the case that the Group performs the expected credit loss calculation on an individual basis for financial instruments, it determines the credit loss risk by jointly evaluating the possible outcomes related to the credit loss and the likelihood of these outcomes occurring. Within this context, the estimated expected credit losses are calculated in a manner that reflects an unbiased, probability‑weighted figure, taking into consideration the range of possible outcomes. Under the scope of the collective assessment approach, financial assets are grouped based on shared credit risk characteristics, and the expected credit loss is calculated using the relevant risk parameters. Expect ed Credit Loss is measured on either a 12‑month or lifetime basis depending on whether there has been a significant increase in credit risk since the initial recognition or whether an asset is considered credit‑impaired or not. Expected credit loss is calc ulated using the components of Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD). Macroeconomic indicators are taken into consideration in the determination of the probability of default component in the calculation of exp ected credit losses. Forward -looking macroeconomic forecasts are incorporated into expected credit losses through the use of multiple scenarios. Forward -looking macroeconomic information is included in the risk parameters used in TFRS 9 calculations. When incorporating macroeconomic information, econometric models and projections that reflect the relationships between the model risk parameters and macroeconomic variables are taken into consideration. The expected credit loss calculation is performed by taking three different scenarios into account; optimistic, pessimistic, and baseline. The final outcomes are calculated by weighing them according to the scenario probabilities. Within the scope of TFRS 9, models have been developed for EAD, PD and LGD. During the reporting period, the PD model used for commercial and retail segment customers was updated by calibrating it with recent data and subsequently putting it into use. The Credit Conversion Factor (CCF) and LGD models were reviewed using updated data as part of the annual TFRS 9 model review activities. The models developed under TFRS 9 have a detailed segmentation structure. Loans with similar characteristics have been segmented for the purpose of recognising expected credit losses on a collective basis in the financial statements.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) 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. This ratio is calculated for each loan based on various statistical assumptions depending on the maturity, internal behavioral model, external behavioral model and fin ancial module data. The Group uses two different PD values when calculating expected credit losses in accordance with TFRS 9: 12‑month PD, which is the estimated probability of default within the 12 months following the reporting date, and Lifetime PD, which is the estimated probability of default over the expected life of the financial instrument. The definition of default used in PD calculations is determined within the scope of the Bank’s policies and practices. The models are created in accordance with this definition and are calibrated based on past default events. The Group uses internal rating approaches for both retail and corporate portfolios. The PD is determined by taking into account historical data, current conditions, and forward‑looking macro economic expectations (scenarios), and it is updated on a periodic basis. Loss given Default (LGD) LGD represents the percentage parameter that shows the economic loss the Group will incur in the event of a credit default. LGD is determined based on histor ical cash flows related to post‑default recoveries, collateral realizations, and collection costs. LGD rates are developed on a segment basis by considering past realizations that best reflect current conditions, as well as collateral information and defau lt amounts assessed within the portfolio’s risk drivers. These rates are reviewed regularly. LGD calculations incorporate the “time value of money” effect by discounting recovery and collateral cash flows using the effective interest rate, taking the timing of these cash flows into account. For Stage 3 loans, increasing LGD rates that reflect the post‑default recovery cycle are used, based on the time spent in default and also past recovery performance. In the Group’s LGD estimates, changes in post‑default recovery performance and collateral valuation assumptions are monitored, and the parameters are updated when deemed necessary. 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 factor (CCF). 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. The Group’s “three‑stage” impairment model under TFRS 9, which is based on changes in credit quality after initial recognition, is explained below. 12 Month Expected Credit Losses It represents the portion of lifetime expected credit losses that corresponds to the expected credit losses arising from default events that may occur within 12 months after the reporting date. Paragraph 5.5.5 of the TFRS 9 Standard states that: “...if the credit risk on a financial instrument has not increased significantly since its initial recognition, the entity shall measure the loss allowance for that financial instrument at an amount equal to the 12‑month expected credit losses.” According to this, the 12‑month expected credit loss is calculated based on the 12‑month probability of default (PD) associated with default events expected to occur within 12 months after the reporting date, and is determined by multiplying this probability by the loss given default (LGD) and exposure at default (EAD) components for the relevant period. In this calculation, the 12‑month probabilities of default (PD) generated under good, adverse, and baseline scenarios —reflecting forward‑looking macroeconomic expectations —are weighted based on the assigned scenario probabilities to obtain a single weighted PD. The 12‑month expected credit loss is then calculated using this weighted PD. If a loan is classified under Group 1 – Standard Loans (Stage 1), a 12‑month expected credit loss is calculated over 365 days even if the maturity of the loan exceeds one year. However, when the remaining maturity of the loan falls below one year, the number of days to maturity is used in the calculation (excluding revolving loans and credit cards).
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 28 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VIII. EXPLANATIONS ON IMPAIRMENT OF FINANCIAL ASSETS (continued) Lifetime Expected Credit Losses This refers to the expected credit losses arising from all possible default events that may occur over the expected life of the financial instrument. The TFRS 9 standard states that: “…if the credit risk on a financial instrument has increased significantly since initial recognition, an entity shall measure the loss allowance for that financial instrument at an amount equal to the lifetime expected credit losses at each reporting date.” If a customer or a loan is classified under Group 2 – Under‑Monitoring Loans (Stage 2) or Group 3 – Non‑Performing Loans (Stage 3), a lifetime expected credit loss provision is calculated for the loan based on the probabilities of default associated with all possible default events that may occur over the entire life of the loan. Based on this, the lifetime expected credit loss is determined by multiplying the probability of default (PD) for the relevant period by the loss given default (LGD) and exposure at default (EAD) components. In this calculation, the probabilities of default (PD) generated under good, adverse, and baseline scenarios — reflecting forward‑looking macroeconomic expectations—are weighted by the probabilities assigned to each scenario to obtain a single weighted PD. The lifetime expected credit loss is then calculated using this weighted PD. The methods used to calculate expected credit loss provisions for Stage 2 and Stag e 3 loans are similar; however, for Stage 3 loans, the probability of default is assumed to be 100%. Furthermore, in the expected credit loss calculations for Stage 3 loans, increasing LGD rates that reflect the post‑default recovery cycle are applied, taking into account the time spent in default and historical recovery performance. If the time spent in default exceeds a certain threshold and additional time does not lead to a meaningful change in the expected loss, an LGD rate of 100% is assumed for the relevant loans, and it is considered that no further recoveries are expected. Definition of Default 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 Gr oup 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 past due unless an entity has reasonable and s upportable information to demonstrate that a more lagging default criterion is more appropriate. In accordance with the article “The definition of default used for these purposes is applied consistently to all financial instruments unless information is av ailable 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 occ urs 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 Bank’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 remaini ng amount after the collection made within the period after each segment has defaulted.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 29 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) VIII. EXPLANATIONS ON IMPAIRMENT OF FINANCIAL ASSETS (continued) 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. The Group performs both qualitative and quantitative assessments to determine whether there has been a significant increase in credit risk. Under TFRS 9, a holistic approach is adopted in assessing changes in credit risk; while quantitative criteria form the basis of the assessment, qualitative indicators are also incorporated into the evaluation. In determining whether there has been a significant increase in credit risk based on quantitative criteria, the Group uses an approach that focuses on the deterioration in the probability of default (PD). Qualitative Assessment: The Group classifies a financial asset as Stage 2 (Significant Increase in Credit Risk) if any of the following conditions determined through qualitative assessment are met: • Receivables that are more than 30 days past due as of the reporting date • Receivables classified under the “Under‑Monitoring” category • Restructuring arrangements granted to a borrower due to financial difficulties that the borrower is experiencing or is likely to experience —where such concessions would not be granted to a borrower that is not experiencing repayment difficulties • The Group’s assessment that the customer is a risky borrower, in line with the principle of prudence • The customer has a partnership or ownership relationship with another borrower whose exposures have been classified as non‑performing Quantitative Assessment: The quantitative assessment used to determine a significant increase in credit risk is based on comparing the probability of default calculated at loan origination with the updated probability of default at the reporting date. The absolute and relative thresholds used in assessing probability of default may vary across segments or loan groups. The Bank classifies a financial asset as Stage 2 (Significant Increase in Credit Risk) when both of the following quantitative criteria are met: • Relative change in Probability of Default (PD): The relative difference between the PD at the reporting date and the PD at initial recognition exceeds the defined threshold. • Absolute change in Probability of Default (PD): The absolute difference between the PD at the reporting date and the PD at initial recognition exceeds the defined threshold.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 30 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 order 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 ar e purchased prior to 1 January 2005 are carried at their restated historical costs and intangible assets that are 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 str aight line method over 5 years. There is no significant change in the accounting estimates expected or to be expected 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 31 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 Turk ish 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 % Assets Acquired in Settlement of the Group’s Receivables are classified under Tangible Assets in the financial statements and are accounted for by deducting accumulated depreciation and, if any, accumulated impairment losses. The assets acquired in settlement of the Group’s receivables consist of properties, movable properties, and other similar assets held for disposal. 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 si gnificant 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 used by an owner and th e 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 change 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 Pro perty Standard. The appraisal values calculated by independent appraisal companies are reflected in the financial statements at 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 payable 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 32 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 tenure 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 Gro up 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 payme nts 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 33 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 outflo w 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 an d essentials 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 executi on has been 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 n umbered 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 a nd Certain 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 fun ds 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 h as 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. 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.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 34 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XVII. EXPLANATIONS ON EMPLOYEE BENEFIT LIABILITIES (continued) The transferable rights have been calculat ed in accordance with the transfer conditions, and it has been concluded that there is no technical deficit as of 31 December 2025. Therefore, no liability emerges for the Parent Bank. The benefits that are not subject to the transfer have been measured in alignment with the TAS 19 “Benefits Provided for Employees” standard, and no liability has emerged for the Parent Bank. XVIII. EXPLANATIONS ON TAXATION Corporate Tax: The commercial profits of corporations in Türkiye face a corporate tax that is based on the statuorty tax base that is calculated by adding non -deductible expenses imposed by tax legislation and subtracting exemptions and allowances. The Parent Bank has calculated corporate tax at a rate of 30% on its corporate earnings for the taxation period ended 31 December 2025 (31 December 2024: 30%). Income tax expense consists of the total of current tax and deferred tax expense. The current period tax liability is calculated based on the portion of that period’s profit that is subjec t to be taxxed. There is a difference between taxable profit and profit reported in the income statement because taxable profit excludes items that are taxable or deductible in other periods, as well as items that are not taxable or deductible. There is an offset between the payable current tax amounts and the prepaid tax amounts in the non‑consolidated financial statements of the consolidated entities and are included in consolidation accordingly. Pursuant to Repetitive Article 298 of the Tax Procedure Law No. 213, an inflation adjustment for the financial statements would have been required for the 2021 fiscal year due to an increase in the price index exceeding 100% over the last three fiscal years, including the current period, and more than 10% in the current fiscal year. However, under Temporary Article 33, added to the Tax Procedure Law by Law No. 7352, it is stipulated that the financial statements for the 2021 and 2022 fiscal years, including temporary tax periods, and the temporary tax periods in t he 2023 fiscal year shall not be subject to inflation adjustments under Article 298, regardless of whether the conditions for such adjustments are met. Accordingly, under the Tax Procedure Law, the financial statements for the 2021 and 2022 fiscal years wi ll not be subject to inflation adjustments. The financial statements as of 31 December 2023 however, will be subject to inflation adjustments regardless of whether the conditions are met. Any gains or losses resulting from the inflation adjustment will be presented in the retained earnings account. Under the paragraph added to Temporary Article 33 of Law No. 213 by Article 17 of Law No. 7491 on Amendments to Certain Laws and Decrees, it is stipulated that any gains or losses arising from inflation adjustments made by banks, including temporary tax periods, for the 2024 and 2025 fiscal years shall not be taken into account in the determination of taxable profit. Furthermore, the President has been granted the authority to issue regulations stipulating that, if an inflation adjustment is made by the aforementioned institutions in the 2026 fiscal year, including temporary tax periods, any gains or losses resulting from such adjustments shall not be taken into account in the determination of taxable profit. Under Temporary Article 37, added to the Tax Procedure Law by Article 34 of Law No. 7571, it is stipulated that the financial statements for the 2025 fiscal year, and for the 2026 and 2027 fiscal years including temporary tax periods (and, for those with a special fiscal year, for the periods ending in 2026, 2027, and 2028), shall not be subject to inflation adjustments under Article 298, regardless of whether the conditions for such adjustments are met. For the purposes of the application of paragraph (ç) of Repetitive Article 298, the periods for which it is stated in the first paragraph that no inflation adjustment shall be made (including periods extended under the granted authority) are considered as periods in which the conditions for inflation adjustment have not been met. In addition, under the additional articles added to the Corporate Tax Law by Law No. 7524 dated 2 August 2024, the profits of subsidiaries of multinational groups are subject to a 15% global minimum top-up corporate tax.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 35 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XVIII. EXPLANATIONS ON TAXATION (continued) Deferred Tax: Deferred tax is recognized by the Parent Bank in its accounts, aligned with TAS 12 Income Taxes for taxable or deductible temporary differences arising between the carrying amount of an asset or liability and its tax base. For all taxable temporary differences, deferred tax liabilities are calculated. Deferred tax assets arising from deductible temporary differences are recognized when it is highly probable that future taxable profits will be available against which these differences can be utilized. As of the current period, a tax rate of 30% has been used in the calculation of deferred tax assets and liabilities (31 December 2024: 30%). The carrying amount of deferred tax assets is reviewed at each balance sheet date. A reduction takes place for the carrying amount of a deferred tax asset, to the extent that is it no longer likely that sufficient taxable profit will be available to allow all or part of the benefit of that deferred tax asset to be realized. The tax rates applicable in the period in which the assets/liabilities are realized or settled respectively and is recognized as income or expense in the income statement, are used to calculate deferred tax. However, if the deferred tax relates to items that are recognized directly in equity in the same or a different period, it is also recognized directly in equity. Deferred tax assets and liabilities are also offset in the unconsolidated financial statements of the consolidated entities and are included in the consolidation on a net basis. Within the framework of Temporary Article 37 and Repetitive Article 298 of the Tax Procedure Law, the tax effects arising from the revaluation of the financial statements as of 31 December 2025 in accordance with the Tax Procedure Law have been included in the deferred tax calculation as of 31 December 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. 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, numbere d 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 36 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 Artic le 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. With the Law on Amendments to Tax Laws and Certain Laws and Legislative Decree No. 375 published in the Official Gazette dated 2 August 2024, the corporate tax exemption was abolished and a d eferred 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 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 in previous periods. However, any current year losses disclosed in t he 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. 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.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 37 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) XX. EXPLANATIONS ON SHARES ISSUED (continued) 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 s ales 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 with 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 r elevant 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 cap ital 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, were 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 477. 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. 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 VIII. 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 Basic Earnings Per Share Diluted Earnings Per Share Basic Earnings Per Share Diluted Earnings Per Share Net Income/(Loss) to be Appropriated to Ordinary Shareholders 27.130.696 27.130.696 22.037.821 22.037.821 Number of Issued Ordinary Shares (Thousand) 7.184.778 7.184.778 7.184.778 7.184.778 Earnings Per Share (In full TRY) 3,77614 3,77614 3,06729 3,06729 There are no paid-in shares issued during the current period. (31 December 2024: None.)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 38 SECTION III: EXPLANATIONS ON ACCOUNTING POLICIES (continued) 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”. The international rating agency Fitch Ratings has upgraded Parent Bank's Long-Term Foreign Currency Issuer Default Rating from “B+” to “BB-”, and its Government Support Rating from “b+” to “bb-” on 17 November 2025. The outlook of the relevant ratings remain unchanged. JCR-Eurasia Rating has affirmed the Parent Bank's Long Term National Rating as “AAA (tr)” and Short Term National Rating as “J1+ (tr)” along with a “Stable” outlook which denotes the highest investment g rade category on 28 November 2025. For the Long Term International Local and Foreign Currency Ratings category, the Parent Bank has been affirmed as “BB”, along with a “Stable” outlook. 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 c onsider this situation as a reclassification 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, a s 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 31 DECEMBER 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 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 resolution 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 January 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 31 December 2025, the capital adequacy ratio and the capital amount of the Group were realized as 15,56% (31 December 2024: 15,10%) and TRY 332.973.482 (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 31 DECEMBER 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: 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 83.137.815 38.521.259 Profit 32.380.471 31.457.382 Current Period Profit 27.130.696 22.037.821 Prior Period Profit 5.249.775 9.419.561 Bonus Shares from Associates, Affiliates and Joint-Ventures not Accounted in Current Period's Profit 1.083.694 777.659 Minority Interest 15.149 9.477 Common Equity Tier 1 Capital Before Deductions 254.160.838 181.432.007 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 (-) 24.048.850 3.796.604 Leasehold Improvements on Operational Leases (-) 4.611.963 3.467.598 Goodwill Netted with Deferred Tax Liabilities - - Other Intangible Assets Netted with Deferred Tax Liabilities Except Mortgage Servicing Rights 5.733.691 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 (-) - 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 34.865.745 14.962.225 Total Common Equity Tier I Capital 219.295.093 166.469.782
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) (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 59.355.000 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 59.355.000 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 59.355.000 16.500.000 Total Tier I Capital (Tier I Capital=Common Equity+Additional Tier I Capital) 278.650.093 182.969.782 TIER II CAPITAL Debt Instruments and the Related Issuance Premiums Defined by the BRSA 30.143.036 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) 24.371.587 16.810.684 Tier II Capital Before Deductions 54.514.623 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 54.514.623 48.139.479 Total Equity (Total Tier I and Tier II Capital) 333.164.716 231.109.261 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 191.234 231.088
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) (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) 332.973.482 230.878.173 Total Risk Weighted Assets 2.140.213.990 1.529.345.939 Capital Adequacy Ratios CET1 Capital Ratio (%) 10,25 10,89 Tier I Capital Ratio (%) 13,02 11,96 Capital Adequacy Ratio (%) 15,56 15,10 BUFFERS Bank-specific total CET1 Capital Ratio (a+b+c) 3,581 3,580 a) Capital Conservation Buffer Ratio (%) 2,500 2,500 b) Bank-specific Counter-Cyclical Capital Buffer Ratio (%) 0,081 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 (%) 5,746 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 1.872.908 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 10.152.137 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) 24.371.587 27.572.009 General Loan Provisions for Exposures in Standard Approach Limited by 1.25% of Risk Weighted Assets 29.934.824 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 31 DECEMBER 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) (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 31 DECEMBER 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) 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 T. Halk Bankası AŞ Türkiye Varlık Fonu Unique identifier (CUSIP, ISIN etc.) TRSTHALE2716 TRSTHAL83015 TRSTHALK3419 XS3094751198 XS3246998135 - Governing Law(s) of the instrument BRSA and CMB Legislation 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 No Eligible at unconsolidated / consolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Consolidated - Unconsolidated Instrument type (types to be specified by each jurisdiction) Bond Bond Bond Bond Bond Loan Amount recognized in regulatory capital (Currency in mil, as of most recent reporting date) 200 3.943 26.000 29.999 12.856 16.500 Par value of instrument (Currency in mil) 1.000 4.929 26.000 29.999 12.856 - Accounting classification 346.011 346.011 346.011 347.001 347.001 346.0001 Original date of issuance 20.10.2017 27.08.2024 11.12.2024 26.06.2025 11.12.2025 27.12.2024 Demand or time Time Time Time Demand Demand Demand Original maturity date 20.10.2017 27.08.2024 11.12.2024 26.06.2025 11.12.2025 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 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 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% 8,90% 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 31 DECEMBER 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) 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% Decrease in core capital adequacy ratio below 5,125% If write-down, full or partial - - - Fully or partially Fully or partially Fully or partially If write-down, permanent or temporary - - - 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 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. 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. The instrument is not in compliant with article numbered 8. II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK Credit risk is defined as risks and losses that may occur if the counterparty fails to comply with the agreement’s requirements and cannot perform its obligations partially or completely on the terms set. In compliance with the legislation, the credit limits are set for the financial position and credit requirements of customers within the authorization limits assigned for Branches, , Regional Lending Committees, Lending Departments, Executive Vice President responsible of Lending, General Manager, Credit Committee and Board of Directors. The limits are subject to revision if necessary. In accordance with the risk management policies of the Group, the limits are specified in respect of the main and sub-sectors. Those limits are monitored periodically. The Group, in the credit allocation process, restricts its risk exposure by working with highly credible banks and entities considering the credit ratings for the purpose of managing its risks. Under the scope of credit risk management, the Parent Bank rates all of its borrowers’ credit and requires additional collaterals from whose risk is higher. The Parent Bank has the policy of not granting loans/credits and/or limiting the amount of such loans/credits. The Group’s risk is concentrated in Türkiye. As per the loan procedures, limits are determined based on the type of loans and customers and risk and limit information is controlled periodically. Loans granted to other banks and risk limits set for the correspondent bank transactions are controlled on a daily basis. Risk concentrations concerning the off-balance sheet operations based on the customers and banks are monitored on daily basis. Except for the restructured loan follow -up system determined in the related communiqué, such loans are incorporated into the new rating groups or risk weightings under the risk management systems of the banks, and new precautionary measures are taken for these processes. Since long -term commitments are more risky than the short -term commitments, risks are diversified in accordance with the Group’s risk management system. As prescribed in the related Communiqué, the credit worthiness of the debtors of the loans and other receivables is monitored regularly and statements of accounts taken for the loans are audited in line with the related regulations. Guarantee factors are developed in accordance with the decision of the cred it committee and updated according to the top management’s initiatives and changes in the economic conditions. The Group receives sufficient collaterals in consideration of the loans and other receivables granted. Guarantees obtained are surety ships, immovable mortgages, cash blockages and customer or real person cheques. When the Group is exposed to significant credit risks, it has the tendency to discontinue cease its forward or similar type of transactions by exercising rights, fulfilling the requirements of the acquisitions or disposing of the agreements entered into to mitigate the total risk.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK The Group’s largest 100 and 200 cash loan customers compose 26,19% and 32,47% of the total cash loan, respectively. The Group’s largest 100 and 200 non-cash loan customers compose 31,35% and 41,92% of the total non-cash loan, respectively. The Group’s largest 100 ve 200 cash and non-cash loan customers represent 12,80% and 17,00% of the total “on and off balance sheet” assets, respectively. Stage I and Stage II expected losses for credit risks of the Group is TRY 26.227.747. (31 December 2024: TRY 24.729.266). Current Period Prior Period Exposure Categories: Credit Risk Amount (1) Average Risk Amount Credit Risk Amount (1) Average Risk Amount Conditional and unconditional exposures to central governments or central banks 1.727.019.787 1.496.811.550 1.215.039.556 1.015.791.219 Conditional and unconditional exposures to regional governments or local authorities 5.748.592 5.213.309 5.404.740 4.866.292 Conditional and unconditional exposures to administrative bodies and non-commercial undertakings 12.343.112 10.602.316 9.599.422 6.794.197 Conditional and unconditional exposures to multilateral development banks - - - - Conditional and unconditional exposures to international organisations - - - - Conditional and unconditional exposures to banks and brokerage houses 69.469.720 45.916.969 37.697.271 30.298.591 Conditional and unconditional exposures to corporates 1.034.369.936 973.547.878 768.882.163 676.527.182 Conditional and unconditional retail exposures 762.546.535 610.399.333 535.724.024 493.295.421 Conditional and unconditional exposures secured by real estate property 613.351.085 549.590.159 463.323.520 394.697.893 Past due items 43.008.698 28.602.788 14.255.507 9.171.869 Items in regulatory high-risk categories - - 1.932.302 73.929.723 Exposures in the form of bonds secured by mortgages - - - - Securitisation positions - - - - Short term exposures to banks, brokerage houses and corporates - - - - Exposures in the form of collective investment undertakings - - - - Stock Investments 13.348.073 9.839.014 3.205.658 3.043.591 Other Receivables 256.109.572 208.573.137 156.471.410 136.621.037 (1) Includes the risk amounts after credit conversions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Profile of significant exposures in major regions: Risk Classifications (1) Conditional and unconditional exposures to central governments or central banks Conditional and unconditional exposures to regional governments or local authorities Conditional and unconditional exposures to administrative bodies and non- commercial undertakings Conditional and unconditional exposures to Multilateral Development Banks Conditional and unconditional exposures to banks and brokerage houses Conditional and unconditional exposures to corporates Conditional and unconditional retail exposures Conditional and unconditional exposures secured by real estate property Past due receivables Items in regulatory high-risk categories Stock Investments Other Total Current Period 1. Domestic 1.707.792.964 5.711.214 9.504.278 - 45.176.258 1.007.416.186 729.904.115 583.777.254 42.358.396 - 13.309.566 244.531.816 4.389.482.047 2. European Union (EU) Countries - - - - 7.038.856 336.082 77.013 91.098 735 - 126 566.154 8.110.064 3. OECD Countries(2) - - - - 625.338 343.783 9.750 9.482 - - - 5 988.358 4. Off-Shore Banking Regions - - - - 85.029 1.521.918 1.340 913.186 - - - 20.015 2.541.488 5. USA, Canada - - - - 3.002.783 - 5.489 4.510 - - - 248 3.013.030 6. Other Countries 19.226.823 37.378 2.838.834 - 13.541.456 24.751.967 32.548.828 28.555.555 649.567 - 38.381 10.991.334 133.180.123 7. Associates, Subsidiaries and Joint Ventures - - - - - - - - - - - - - 8. Unallocated Assets/Liabilities (3) - - - - - - - - - - - - - Total 1.727.019.787 5.748.592 12.343.112 - 69.469.720 1.034.369.936 762.546.535 613.351.085 43.008.698 - 13.348.073 256.109.572 4.537.315.110 Prior Period 1. Domestic 1.202.236.166 5.339.252 8.647.139 - 17.307.521 747.041.194 515.620.901 444.216.970 13.602.120 1.932.302 3.145.368 148.572.143 3.107.661.076 2. European Union (EU) Countries - - - - 6.563.357 265.305 44.525 22.967 547 - 101 248.040 7.144.842 3. OECD Countries(2) 1 - - - 1.333.971 637.196 664 1.428 1 - - 3 1.973.264 4. Off-Shore Banking Regions - - - - 177.670 664.961 1.028 8.322 - - - 20.013 871.994 5. USA, Canada - - - - 1.703.332 - 9.538 3.342 1 - - 72 1.716.285 6. Other Countries 12.803.389 65.488 952.283 - 10.611.420 20.273.507 20.047.368 19.070.491 652.838 - 60.189 7.631.139 92.168.112 7. Associates, Subsidiaries and Joint Ventures - - - - - - - - - - - - - 8. Unallocated Assets/Liabilities (3) - - - - - - - - - - - - - Total 1.215.039.556 5.404.740 9.599.422 - 37.697.271 768.882.163 535.724.024 463.323.520 14.255.507 1.932.302 3.205.658 156.471.410 3.211.535.573 (1) Refers to the risk classifications in the “Regulation on Measurement and Evaluation of Capital Adequacy of Banks”. (2) OECD Countries other than the EU Countries, USA and Canada. (3) Assets and liabilities that are not consistently allocated.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Profile of significant exposures by sectors: Current Period Risk Sınıfları(1) Conditional and unconditional exposures to central governments or central banks Conditional and unconditional exposures to regional governments or local authorities Conditional and unconditional exposures to administrative bodies and non- commercial undertakings Conditional and unconditional exposures to Multilateral Development Banks Conditional and unconditional exposures to banks and brokerage houses Conditional and unconditional exposures to corporates Conditional and unconditional retail exposures Conditional and unconditional exposures secured by real estate property Past due receivables Items in regulatory high-risk categories Stock Investments Other TRY FC Total Agriculture 254.110 233 98 - - 1.939.860 6.157.545 2.824.523 349.372 - - 54 10.795.347 730.448 11.525.795 Farming and Stockbreeding 156.575 - 85 - - 576.875 2.926.509 1.631.597 122.874 - - 18 4.939.095 475.438 5.414.533 Forestry 76.771 233 13 - - 745.497 2.852.250 935.431 188.893 - - 32 4.641.016 158.104 4.799.120 Fishery 20.764 - - - - 617.488 378.786 257.495 37.605 - - 4 1.215.236 96.906 1.312.142 Manufacturing 14.586.346 - 538.406 - - 376.681.115 98.883.466 157.058.417 11.482.656 - - 533 415.692.745 243.538.194 659.230.939 Mining and Quarrying 201.963 - - - - 20.422.428 1.926.096 3.519.935 113.693 - - 22 16.543.263 9.640.874 26.184.137 Production 14.244.497 - 538.406 - - 299.091.942 96.150.724 151.998.738 11.339.071 - - 511 379.618.724 193.745.165 573.363.889 Electricity, Gas and Water 139.886 - - - - 57.166.745 806.646 1.539.744 29.892 - - - 19.530.758 40.152.155 59.682.913 Construction 2.727.326 - 78 - - 255.890.992 34.645.301 106.415.920 6.449.685 - - 10 313.027.920 93.101.392 406.129.312 Services 955.955.633 5.649.577 8.933.580 - 22.905.953 265.874.938 367.634.500 225.986.006 18.743.706 - - 7.612 1.476.848.211 394.843.294 1.871.691.505 Wholesale and Retail Trade 9.369.383 - 402 - - 155.946.574 226.004.286 135.590.321 13.523.370 - - 1.036 485.520.334 54.915.038 540.435.372 Accommodation and Dining 1.363.510 86 - - - 30.388.000 24.016.936 47.864.565 949.341 - - 30 55.892.528 48.689.940 104.582.468 Transportation and Telecom. 563.750 - 48 - - 20.119.754 97.704.682 10.555.749 1.349.735 - - 63 114.440.762 15.853.019 130.293.781 Financial Institutions 67.851 - 334 - 22.905.953 18.866.186 682.056 5.064.495 111.128 - - 6.223 30.775.076 16.929.150 47.704.226 Real Estate and Rental Services 354.042 - 9 - - 23.923.890 8.121.775 15.024.863 474.077 - - 10 36.066.724 11.831.942 47.898.666 Professional Services 38.524 - - - - 13.296 5.137.130 1.033.017 63.797 - - 182 6.285.372 574 6.285.946 Educational Services 339.957 - 4.468.991 - - 1.267.659 2.216.942 6.281.208 49.375 - - 14 11.813.405 2.810.741 14.624.146 Health and Social Services 943.858.616 5.649.491 4.463.796 - - 15.349.579 3.750.693 4.571.788 2.222.883 - - 54 736.054.010 243.812.890 979.866.900 Other 753.496.372 98.782 2.870.950 - 46.563.767 133.983.031 255.225.723 121.066.219 5.983.279 - 13.348.073 256.101.363 1.033.057.964 555.679.595 1.588.737.559 Total 1.727.019.787 5.748.592 12.343.112 - 69.469.720 1.034.369.936 762.546.535 613.351.085 43.008.698 - 13.348.073 256.109.572 3.249.422.187 1.287.892.923 4.537.315.110 (1)Refers to the risk classifications in the “Regulation on Measurement and Evaluation of Capital Adequacy of Banks”.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Profile of significant exposures by sectors (continued): Prior Period Risk Classifications(1) Conditional and unconditional exposures to central governments or central banks Conditional and unconditional exposures to regional governments or local authorities Conditional and unconditional exposures to administrative bodies and non- commercial undertakings Conditional and unconditional exposures to Multilateral Development Banks Conditional and unconditional exposures to banks and brokerage houses Conditional and unconditional exposures to corporates Conditional and unconditional retail exposures Conditional and unconditional exposures secured by real estate property Past due receivables Items in regulatory high-risk categories Stock Investments Other TRY FC Total Agriculture 184.955 - 82 - - 1.729.927 4.324.679 2.555.798 77.539 4.720 - 55 8.050.759 826.996 8.877.755 Farming and Stockbreeding 122.561 - 65 - - 652.054 2.123.024 1.235.729 40.131 - - 18 3.897.453 276.129 4.173.582 Forestry 43.187 - 17 - - 685.431 2.026.474 977.166 36.444 4.720 - 33 3.485.107 288.365 3.773.472 Fishery 19.207 - - - - 392.442 175.181 342.903 964 - - 4 668.199 262.502 930.701 Manufacturing 13.351.634 - 204.131 - - 301.540.562 60.585.804 111.295.095 3.964.304 1.119.149 - 533 334.614.311 157.446.901 492.061.212 Mining and Quarrying 221.818 - - - - 14.683.165 905.944 2.598.488 17.450 - - 22 8.181.625 10.245.262 18.426.887 Production 12.685.243 - 204.131 - - 241.374.829 59.155.075 107.177.237 3.942.209 1.119.149 - 511 311.040.370 114.618.014 425.658.384 Electricity, Gas and Water 444.573 - - - - 45.482.568 524.785 1.519.370 4.645 - - - 15.392.316 32.583.625 47.975.941 Construction 3.214.142 - 41 - - 162.784.404 17.208.684 64.913.323 2.077.075 108.103 - 10 204.613.596 45.692.186 250.305.782 Services 592.617.475 5.261.971 8.425.101 - 13.963.083 203.591.217 275.151.192 180.969.507 5.508.389 618.906 - 7.920 1.080.285.792 205.828.969 1.286.114.761 Wholesale and Retail Trade 6.121.172 - 276 - - 122.412.090 162.421.322 104.852.237 3.908.073 514.006 - 1.061 364.361.511 35.868.726 400.230.237 Accommodation and Dining 1.472.624 86 - - - 23.257.624 16.433.582 42.326.290 447.891 42.173 - 30 41.439.110 42.541.190 83.980.300 Transportation and Telecom. 499.894 - 57 - - 13.101.379 79.791.989 7.618.366 560.719 - - 63 93.918.942 7.653.525 101.572.467 Financial Institutions 9.133 - 88 - 13.963.083 13.134.956 475.334 3.047.921 80.946 - - 6.508 22.513.618 8.204.351 30.717.969 Real Estate and Rental Services 258.337 - 5 - - 16.584.521 5.824.332 11.799.518 268.232 28.785 - 10 26.585.617 8.178.123 34.763.740 Professional Services 27.731 - - - - 3.545 5.207.479 1.066.658 31.637 621 - 182 6.337.388 465 6.337.853 Educational Services 365.659 - 3.697.927 - - 889.967 1.607.698 3.758.490 29.212 33.321 - 12 9.271.550 1.110.736 10.382.286 Health and Social Services 583.862.925 5.261.885 4.726.748 - - 14.207.135 3.389.456 6.500.027 181.679 - - 54 515.858.056 102.271.853 618.129.909 Other 605.671.350 142.769 970.067 - 23.734.188 99.236.053 178.453.665 103.589.797 2.628.200 81.424 3.205.658 156.462.892 790.811.593 383.364.470 1.174.176.063 Total 1.215.039.556 5.404.740 9.599.422 - 37.697.271 768.882.163 535.724.024 463.323.520 14.255.507 1.932.302 3.205.658 156.471.410 2.418.376.051 793.159.522 3.211.535.573 (1)Refers to the risk classifications in the “Regulation on Measurement and Evaluation of Capital Adequacy of Banks”.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Analysis of maturity-bearing exposures according to remaining maturities(*): Current Period Term to Maturity Exposure Categories 1 month 1-3 months 3-6 months 6-12 months Over 1 year 1. Conditional and unconditional exposures to central governments or central banks 747.463.839 33.478.552 18.429.333 58.021.020 869.627.043 2. Conditional and unconditional exposures to regional governments or local authorities 171.879 42.797 83.167 569.685 4.881.064 3 Conditional and unconditional exposures to administrative bodies and non-commercial undertakings 1.854.301 495.929 455.292 2.157.946 7.379.644 4. Conditional and unconditional exposures to Multilateral Development Banks - - - - - 5. Conditional and unconditional exposures to banks and brokerage houses 61.993.201 1.954.225 2.643.415 197.029 2.681.850 6. Conditional and unconditional exposures to corporates 276.697.768 41.880.511 61.220.125 178.448.500 476.123.032 7. Conditional and unconditional retail exposures 200.017.709 28.695.672 43.658.901 104.059.942 386.114.311 8. Conditional and unconditional exposures secured by real estate property 117.190.553 28.175.799 39.253.397 132.132.934 296.598.402 9. Past due items 42.982.907 84 120 1.556 24.031 10. Items in Regulatory High-Risk Categories - - - - - 11. Stock Investments 13.348.073 - - - - 12. Other Items 256.053.018 21.194 17.736 7.542 10.082 Total 1.717.773.248 134.744.763 165.761.486 475.596.154 2.043.439.459 (*) Includes risk amounts after the effect of credit risk mitigation and after the credit conversions. Prior Period Term to Maturity Exposure Categories 1 month 1-3 months 3-6 months 6-12 months Over 1 year 1. Conditional and unconditional exposures to central governments or central banks 559.557.486 4.762.469 18.172.011 36.040.659 596.506.931 2. Conditional and unconditional exposures to regional governments or local authorities 115.762 317.865 73.282 287.454 4.610.377 3 Conditional and unconditional exposures to administrative bodies and non-commercial undertakings 1.302.700 612.797 641.561 1.019.788 6.022.576 4. Conditional and unconditional exposures to Multilateral Development Banks - - - - - 5. Conditional and unconditional exposures to banks and brokerage houses 36.269.126 415.146 143.090 69.783 800.126 6. Conditional and unconditional exposures to corporates 195.610.130 44.499.865 47.336.737 145.142.297 336.293.134 7. Conditional and unconditional retail exposures 121.664.202 15.395.325 25.420.333 63.654.659 309.589.505 8. Conditional and unconditional exposures secured by real estate property 82.598.129 19.240.554 32.466.748 96.345.351 232.672.738 9. Past due items 14.228.848 115 577 4.748 21.219 10. Items in Regulatory High-Risk Categories 325.792 45.238 134.841 195.275 1.231.156 11. Stock Investments 3.205.658 - - - - 12. Other Items 156.418.891 22.910 17.976 4.241 7.392 Total 1.171.296.724 85.312.284 124.407.156 342.764.255 1.487.755.154 (*) Includes risk amounts after the effect of credit risk mitigation and after the credit conversions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Information on the risk classifications as per the Article 6 of the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks: Fitch Ratings' rating grades are used for the risk classes listed below, provided that they are resident abroad. • Receivables on banks and intermediary institutions • Receivables on regional governments or local authorities • Receivables on administrative bodies and other non-commercial undertakings • Receivables on multilateral development banks • Corporate receivables The relevant risk classification is used in determining the risk weights on a receivable that is classificated as per the second section, Article 8 of the Additional Regulatio n 1 on Measurement and Assessment of Capital Adequacy Ratios of Banks. In the absence of a specific rating, the provisions of paragraph a,b and c of Article 9 of the regulation mentioned should be used. In the case of other risk classes included in the tab le, Fitch Ratings notes are taken into account if the rated party is a foreign resident, the supervisor of the relevant country has equivalent regulation and supervision structure, authorized in the country notes. Implementation of the risk weights to receivables from Regional Governments or local authorities are subject to the same conditions as receivables from banks and intermediary institutions but this implementation exemption cannot be applied for the receivables from banks and intermediary institutions which have less than 90 days to maturity. National long-term local currency notes issued by JCR-Eurasia are used to determine the risk weights of firms that are classified as corporate receivables and have Turkish Lira receivables from the Parent Bank. The implementation of the risk weights to receivables from multilateral development banks except those listed in the Additional Regulation 1 on Measurement and Assessment of Capital Adequacy Ratios of Banks, are subject to the same conditions as receivables from banks and intermediary institutions but this implementation exemption cannot be applied for the receivables from banks and intermediary institutions which have less than 90 days to maturity. The implementation of the risk weight for unrated receivab les from banks and intermediary institutions can not be lower than the risk weight of receivables from sovereigns which they are settled in.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Information on the risk classifications as per the Article 6 of the Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks (continued): Credit Quality Grade and Rating Matching Table Credit Quality Grade Fitch JCR Eurasia Exposures to administrative bodies and other non- commercial undertakings Exposures to Banks and Brokerage Houses Exposures to Corporates Rating Exposures to Corporates (TRY) Rating Institutions and Organizations included in the tables (I), (II), (III) and (IV) annexed to the Public Financial Management and Control Law No. 5018 Other Public Institutions and Organizations Exposures with Original Maturities Less Than 90 Days Exposures with Original Maturities Less More 90 Days 1 AAA 0% 20% 20% 20% 20% AAA 20% AA+ AA+ AA AA AA- AA- 2 A+ 20% 50% 20% 50% 50% A+ 50% A A A- A- 3 BBB+ 50% 100% 20% 50% 100% BBB+ 100% BBB BBB BBB- BBB- 4 BB+ 100% 100% 50% 100% 100% BB+ 100% BB BB BB- BB- 5 B+ 100% 100% 50% 100% 150% B+ 150% B B B- B- 6 CCC+ 150% 150% 150% 150% 150% CCC+ 150% CCC CCC CC CC C C D D
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Information on receivables from the private sector: Country RWAs of Banking Book for Private Sector Lending RWAs of Trading Book Total Türkiye 1.644.939.878 - 1.644.939.878 North Macedonia 22.803.887 - 22.803.887 Serbia 20.377.439 - 20.377.439 Cyprus 3.329.323 - 3.329.323 Marshall Islands 1.860.642 - 1.860.642 Other* 3.091.787 - 3.091.787 (*) Risk-Weighted Assets below TRY 500.000 are grouped under other headings. Exposures by Consolidated risk weights: Current Period Risk Weights 0% 10% 20% 35% 50% 75% 100% 150% 200% 250% 2% 500% Deductions from Equity 1 Exposures before Credit Risk Mitigation 1.711.974.962 - 327.446.892 - 262.546.985 1.489.016.313 1.683.938.200 27.695.762 - 4.022.461 - - 191.234 2. Exposures after Credit Risk Mitigation 1.795.393.101 - 292.246.911 304.427.176 512.674.535 529.228.305 1.082.994.238 16.328.384 - 4.022.461 - - 191.234 Prior Period Risk Weights 0% 10% 20% 35% 50% 75% 100% 150% 200% 250% 2% 500% Deductions from Equity 1 Exposures before Credit Risk Mitigation 1.195.750.390 - 297.513.793 - 166.268.263 940.866.824 1.190.094.091 21.554.206 - 2.713.974 - 1.932.302 231.088 2. Exposures after Credit Risk Mitigation 1.268.466.026 - 273.523.849 239.436.879 348.091.398 343.112.352 719.371.930 14.886.865 - 2.713.974 - 1.932.302 231.088
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Information by major sectors and type of counterparties: Current Period Credits Major Sectors /Counterparties Significant Increase in Credit Risk (Stage II)(1) Credit – Impaired Losses (Stage III)(2) Expected Credit Loss (TFRS 9)(3) Agriculture 1.074.126 667.323 430.364 Farming and Stockbreeding 915.343 592.540 384.468 Forestry 60.884 17.642 12.552 Fishery 97.899 57.141 33.344 Manufacturing 56.428.870 17.419.362 11.421.589 Mining and Quarrying 2.321.555 170.500 166.103 Production 37.632.881 16.549.161 9.626.623 Electricity, Gas and Water 16.474.434 699.701 1.628.863 Construction 22.184.803 8.215.744 5.907.704 Services 66.780.828 25.744.007 17.139.535 Wholesale and Retail Trade 31.880.660 17.223.493 9.897.189 Accommodation and Dining 17.825.965 1.755.120 2.349.858 Transportation and Telecommunication 6.126.547 1.173.772 1.052.844 Financial Institutions 37.252 429.446 335.443 Real Estate and Rental Services 9.416.669 2.281.242 2.098.696 Professional Services 277.599 72.923 63.954 Educational Services 384.654 457.292 447.313 Health and Social Services 831.482 2.350.719 894.238 Other 28.557.955 12.875.325 12.070.676 Total 175.026.582 64.921.761 46.969.868 (1) Income accruals amounting to TRY 16.129.734 are not included in the table. (2) Income accruals amounting to TRY 16.632.096 are not included in the table. (3) The accruals of amounting to TRY 9.234.360 are not included in the table. Prior Period Credits Major Sectors /Counterparties Significant Increase in Credit Risk (Stage II)(1) Credit – Impaired Losses (Stage III)(2) Expected Credit Loss (TFRS 9)(3) Agriculture 1.096.832 356.702 247.009 Farming and Stockbreeding 1.047.187 328.440 224.781 Forestry 27.847 13.433 7.358 Fishery 21.798 14.829 14.870 Manufacturing 35.149.929 8.741.470 8.544.411 Mining and Quarrying 1.082.623 56.406 67.325 Production 22.280.165 8.079.623 5.318.926 Electricity, Gas and Water 11.787.141 605.441 3.158.160 Construction 15.799.073 4.206.532 5.109.363 Services 54.808.342 11.268.299 14.808.796 Wholesale and Retail Trade 19.029.332 7.006.727 5.297.957 Accommodation and Dining 20.335.316 1.195.030 3.589.195 Transportation and Telecommunication 4.024.657 537.985 606.268 Financial Institutions 35.233 375.979 298.252 Real Estate and Rental Services 8.521.941 1.509.871 4.208.913 Professional Services 309.162 48.909 49.688 Educational Services 330.469 411.252 431.448 Health and Social Services 2.222.232 182.546 327.075 Other 16.712.752 6.206.796 5.987.791 Total 123.566.928 30.779.799 34.697.370 (1) Income accruals amounting to TRY 8.270.468 are not included in the table. (2) Income accruals amounting to TRY 1.635.374 are not included in the table. (3) The accruals of amounting to TRY 3.191.272 are not included in the table.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) Movements in value adjustments and loan loss provisions: Current Period Opening Balance Provision for Period Provision Reversals Other Adjustments Closing Balance 1. Stage III expected credit loss 19.588.091 26.076.456 (4.445.780) - 41.218.767 2. Stage I and Stage II expected credit loss 24.729.266 10.725.806 (9.227.325) - 26.227.747 Prior Period Opening Balance Provision for Period Provision Reversals Other Adjustments Closing Balance 1. Stage III expected credit loss 15.845.130 7.738.992 (3.996.031) - 19.588.091 2. Stage I and Stage II expected credit loss 33.595.979 1.529.129 (10.395.842) - 24.729.266 The net value of the close monitoring loan collaterals and the separation of collateral types are given in the table below. Net Value of Collateral Collateral Types Current Period (1) Real estate mortgage 47.935.714 Salary pledge, vehicle pledge and pledge of commercial undertaking 5.820.706 Financial collaterals (cash, securities pledge, etc.) 145.226 Cheque / bills 1.047.184 Sureties 80.818.849 CGF 855.142 Other (2) 38.403.761 Total 175.026.582 (1) Income accruals amounting TRY 16.129.734 are not included in the table. (2) Comprised of share certificates, blockage on receivables, uncollateralized etc. Net Value of Collateral Collateral Types Prior Period (1) Real estate mortgage 33.693.172 Salary pledge, vehicle pledge and pledge of commercial undertaking 3.835.730 Financial collaterals (cash, securities pledge, etc.) 40.855 Cheque / bills 647.420 Sureties 60.119.361 CGF 1.218.857 Other (2) 24.011.533 Total 123.566.928 (1) Income accruals amounting TRY 8.270.468 are not included in the table. (2) Comprised of share certificates, blockage on receivables, uncollateralized etc.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) II. EXPLANATIONS ON THE CONSOLIDATED CREDIT RISK (continued) The net value of the non-performing loan collaterals and the separation of collateral types are given in the table below. Net Value of Collateral Collateral Types Current Period (1) Cash 30.764 Mortgage 23.576.983 Pledge 965.692 Cheque / bills 122.980 Sureties 24.849.470 Other(2) 15.375.872 Total 64.921.761 (1) Income accruals amounting to TRY 16.632.096 are not included in the table. (2) Comprised of share certificates, blockage on receivables, uncollateralized etc. Net Value of Collateral Collateral Types Prior Period (1) Cash 26.956 Mortgage 10.260.041 Pledge 440.696 Cheque / bills 162.069 Sureties 12.155.195 Other(2) 7.734.842 Total 30.779.799 (1) Income accruals amounting to TRY 1.635.374 are not included in the table. (2) Comprised of share certificates, blockage on receivables, uncollateralized etc.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) III. 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 Gr oup 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: 42,8550000 50,3032000 53,9980000 57,5278000 0,2723250 Before the balance sheet date; Current foreign exchange buying rate on the 1st business day 42,8747000 50,4142000 54,1595000 57,7127000 0,2734786 Current foreign exchange buying rate on the 2nd business day 42,8648000 50,5097000 54,2396000 57,7892000 0,2737833 Current foreign exchange buying rate on the 3rd business day 42,7675000 50,4165000 54,1543000 57,7050000 0,2727163 Current foreign exchange buying rate on the 4th business day 42,7797000 50,4137000 54,2385000 57,7663000 0,2736693 Current foreign exchange buying rate on the 5th business day 42,7398000 50,3582000 54,1432000 57,6378000 0,2732825 Last 30 days arithmetic average: 42,6152696 49,9426739 53,4564261 57,0072435 0,2726003
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) III. 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 162.203.095 176.781.106 131.378.466 470.362.667 Banks 11.962.331 6.683.933 8.281.700 26.927.964 Financial assets at fair value through profit and loss 124.455 129.247 102.935.934 103.189.636 Money market placements - - - - Financial assets at fair value through other comp. income 16.527.054 135.026.866 20.742.831 172.296.751 Loans 431.031.552 186.854.863 75.060.593 692.947.008 Subsidiaries, associates and joint ventures 4.146.393 - - 4.146.393 Financial assets measured at amortised cost 361.092 98.752.409 397.036 99.510.537 Derivative financial assets held for risk management - - - - Tangible assets - 2.766 4.128.865 4.131.631 Intangible assets - - 1.135.535 1.135.535 Other assets(2) 12.266.413 8.397.718 2.360.087 23.024.218 Total assets 638.622.385 612.628.908 346.421.047 1.597.672.340 Liabilities Bank deposits 229.343.875 55.506.645 1.339.696 286.190.216 Foreign currency deposits 423.917.033 316.539.326 372.834.599 1.113.290.958 Money market funds 15.854.971 93.150.855 - 109.005.826 Funds provided from other financial institutions 26.150.897 84.794.119 1.700.991 112.646.007 Securities issued - - - - Miscellaneous payables 3.966.320 4.262.481 2.025.498 10.254.299 Derivative financial liabilities held for risk management - - - - Other liabilities(2) 3.264.027 45.031.956 3.916.617 52.212.600 Total liabilities 702.497.123 599.285.382 381.817.401 1.683.599.906 Net balance sheet position (63.874.738) 13.343.526 (35.396.354) (85.927.566) Net off-balance sheet position 50.280.191 (10.707.394) 69.495.751 109.068.548 Financial derivative assets(3)(4) 77.002.230 93.035.378 75.184.449 245.222.057 Financial derivative liabilities(3)(4) 26.722.039 103.742.772 5.688.698 136.153.509 Non-cash loans(1) 206.953.059 173.147.734 39.162.997 419.263.790 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 income discou nts, 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 5.471.777. Financial derivative liabilities include forward precious metal sale transactions amounted to TRY 372.560. Besides, derivative transactions under forward foreign curr ency 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 31 DECEMBER 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) III. EXPLANATIONS ON THE CONSOLIDATED CURRENCY RISK (continued) Exposure to currency risk 10% depreciation of the TRY against US Dollar and EUR as at and for the period ended 31 December 2025 and 31 December 2024 would have effect on equity and profit or loss (without tax effects) by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. (*) Equity effect also includes profit or loss effect of 10% devaluation of TRY against related currencies. (**) Associates, subsidiaries, and jointly controlled entities have been included in statement of profit or loss impact calculatio n, but not in the equ ity impact calculation. The amounts of tangible and intangible fixed assets are not included in the equity and statement of profit or loss impact calculations. 10% appreciation of the TRY against US Dollar and EUR as at and for the period ended 31 December 2025 and 31 December 2024 would have effect on equity and profit or loss (without tax effects) by the amounts shown below. (*) Equity effect also includes profit or loss effect of 10% revaluation of TRY against related currencies. (**) Associates, subsidiaries, and jointly controlled entities have been included in statement of profit or loss impact calculatio n, but not in the equ ity impact calculation. The amounts of tangible and intangible fixed assets are not included in the equity and statement of profit or loss impact calculations Current Period Prior Period Profit or loss Equity(*) Profit or loss Equity(*) USD 263.337 532.187 (210.307) (144.346) EUR (1.359.455) (1.321.399) (1.089.675) (1.077.887) Other Currencies 2.883.500 2.921.247 2.284.987 2.284.987 Total (Net)(**) 1.787.382 2.132.035 985.005 1.062.754 Current Period Prior Period Profit or loss Equity(*) Profit or loss Equity(*) USD (263.337) (532.187) 210.307 144.346 EUR 1.359.455 1.321.399 1.089.675 1.077.887 Other Currencies (2.883.500) (2.921.247) (2.284.987) (2.284.987) Total (Net)(**) (1.787.382) (2.132.035) (985.005) (1.062.754)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) IV. 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 r isk. 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 intere st rate risks are monitored with internal limits determined within the scope of the “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 we ighted 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 261.042.308 - - - - 607.265.357 868.307.665 Banks 36.581.417 2.367.918 127.459 388.950 - 23.762.503 63.228.247 Financial assets at fair value through profit and loss 288.214 62.040.141 42.331.682 43 - 8.954.062 113.614.142 Money market placements 23.734 - - - - - 23.734 Financial assets at fair value through other comprehensive income 48.539.614 28.092.983 96.106.133 69.853.122 60.579.524 1.905.590 305.076.966 Loans 943.975.011 336.428.719 287.751.068 269.772.885 90.727.791 167.331.495 2.095.986.969 Financial assets measured at amortised cost 189.212.358 88.793.964 112.455.507 195.829.314 208.040.741 - 794.331.884 Other assets(1)(4) 18.812.550 10.981.979 16.931.981 11.381.434 1.698.633 196.694.044 256.500.621 Total assets 1.498.475.206 528.705.704 555.703.830 547.225.748 361.046.689 1.005.913.051 4.497.070.228 Liabilities Bank deposits 219.787.807 20.262.776 1.136.691 - - 241.815.112 483.002.386 Other deposits 1.607.663.159 591.670.557 89.045.396 10.426.606 661.008 825.368.981 3.124.835.707 Money market funds 202.858.636 38.056.422 - - - 278.410 241.193.468 Miscellaneous payables 10.599.691 - - - - 83.180.749 93.780.440 Securities issued 5.747.293 7.203.653 8.809.534 - - - 21.760.480 Funds provided from other financial institutions(3) 25.173.264 58.807.737 26.066.031 3.524.925 340.176 2.298.834 116.210.967 Other liabilities (1)(2) 1.000.000 30.926.697 59.357.183 - - 325.002.900 416.286.780 Total liabilities 2.072.829.850 746.927.842 184.414.835 13.951.531 1.001.184 1.477.944.986 4.497.070.228 Balance sheet long position - - 371.288.995 533.274.217 360.045.505 - 1.264.608.717 Balance sheet short position (574.354.644) (218.222.138) - - - (472.031.935) (1.264.608.717) Off-balance sheet long position 166.172.912 58.014.060 29.372.810 14.324.404 - - 267.884.186 Off-balance sheet short position (166.104.730) (60.482.571) (29.694.740) (13.989.657) - - (270.271.698) Total position (574.286.462) (220.690.649) 370.967.065 533.608.964 360.045.505 (472.031.935) (2.387.512) (1) TRY 19.380.129 of deferred tax assets is disclosed under the non-bearing interest column in other assets, TRY 9.227.992 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 31 DECEMBER 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) IV. 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 f or 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 31 DECEMBER 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) IV. 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 - 1,76 - 20,77 Banks(1) 2,90 3,85 - 37,23 Financial assets at fair value through profit and loss 3,86 4,65 - 36,24 Money market placements - - - 37,98 Financial assets at fair value through other comprehensive income 4,81 6,13 - 36,05 Loans(2) 6,43 8,19 - 43,59 Financial assets measured at amortised cost 4,31 5,76 - 36,50 Liabilities Bank deposits(4) 0,39 2,34 - 37,10 Other deposits (4) 1,01 1,54 - 34,02 Money market funds 3,87 3,99 - 44,70 Miscellaneous payables(3) - - - 5,00 Securities issued (5) - 4,59 - 53,35 Funds provided from other financial institutions 4,46 6,30 - 41,83 (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 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 63 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) IV. EXPLANATIONS ON THE CONSOLIDATED INTEREST RATE RISK (continued) 3. Explanations on interest rate risk of the banking book: In accordance with the “Regulation on the Mea surement and Assessment of Interest Rate Risk Arising from Banking Books (IRRBB) Using the Standardized Approach,” published in the Official Gazette dated 12 May 2025 and numbered 32898, the measurement based on the Change in Economic Value of Equity ( CEVE) calculation method is performed on a solo basis, and is calculated and reported monthly as of 1 October 2025. Interest Rate Risk Arising from Banking Book Accounts (IRRBB) is defined as the adverse impact of changes in market interest rates on the ban k’s economic value or net interest income, resulting from inconsistencies between the repricing periods and maturities of on - and off-balance sheet items in the banking book, as well as from the optionality embedded in such items. Interest rate risk is man aged through specific risk metrics, taking both the market conditions as well as the Bank’s processes and organizational structure into account. The management of Interest Rate Risk in the Banking Book (IRRBB) encompasses processes for the regular monitori ng of its impact on economic value and net interest income, in line with the Bank’s risk appetite framework that establishes certain limits. Both the Bank’s interest rate risk appetite and trigger levels are governed by limits that are based on the CEVE and NII ratios. The IRRBB ratio is monitored through scenario analyses on a weekly basis. Furthermore, a variety of stress test scenarios are analyzed and reported through the monthly interest rate risk assessment report. These related analysis reports as we ll as the IRRBB ratio are submitted on a daily/weekly/monthly basis to Senior Management, and on a quarterly basis, to the Audit Committee and the Board of Directors. Strategies to mitigate Interest rate risk are formulated through action proposals that are related to balance sheet management, also taking both foreign exchange rates as well as yield curves into account. Risks can be managed through both strategies aimed at addressing interest rate and maturity mismatches, as well as through the use of off-balance sheet derivative instruments. To ensure the monitoring of interest rate risk and compliance with the established limits, a calculation and reporting system supported by information systems is in place. To measure sensitivity to IRRBB, duration, gap, and sensitivity analyses are performed. In calculating the CEVE risk amount, scenarios applied to the yield curve include parallel upward and parallel downward shifts, short-term upward and short-term downward shocks, as well as steepening and flattening scenarios. In net interest income analyses, changes in the Bank’s net interest income over a one-year horizon are generally assessed within the framework of specified parallel interest rate shocks. This way, both static and dynamic simulation studies are conducted under the net interest income framework, and potential changes in the Bank’s net interest income over a minimum one-year period are calculated. To allocate demand deposits across maturities, the bank uses an internal model. Rates that are related to early loan repayments and early term deposit withdrawals are applied in accordance with the regulations specified in the BRSA Communiqué. If the interest rate risk profile approaches the Parent Bank’s risk appetite level more than originally anticipated, early warning signal signs are exceeded, or if there is a significant increase in concentration of certain risk factors, the Bank may need to take certain actions to mitigate the interest rate risk and hedging strategies may be implemented through derivative transactions. The CEVE risk amount is calculated in accordance with the Interest Rate Risk Management Regulation for Banking Accounts published by the BDDK on 12 May 2025. In relation to the CEVE risk amount, work is in progress to include margins related to interest rates in the cash flows used in the calculation. The average repricing period for demand deposits is determined according to Bank's core demand deposit model. Rates related to early loan repayments and early term deposit terminations have been applied in accordance with the BRSA Communiqué.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) IV. EXPLANATIONS ON THE CONSOLIDATED INTEREST RATE RISK (continued) 3. Explanations on interest rate risk of the banking book: (continued) In net interest income analyses, under static simulations, the net interest income change over a one-year horizon is analyzed by calculating interest income and expense under shocks on the repricing principal/nominal amounts of on- and off-balance sheet items, taking the remaining maturities to repricing of the Bank’s existing positions into account. In the dynamic simul ation approach, more detailed assumptions are developed regarding expected market changes and the future level of interest rates over a specific period. Thereby, in the current analyses, moving balance sheet assumptions can be applied together with market forward rates, whether shocked or unshocked. As stated in the Regulation on the Measurement and Assessment of Interest Rate Risk Arising from Banking Book Accounts (IRRBB) Using the Standard Approach, all asset items tracked in the banking book—excluding deductions from core capital, tangible fixed assets, intangible fixed assets, and equity investments —whose share exceeds 5% of total assets, as well as all liability items outside core capital whose share exceeds 5% of total liabilities, are reported by cur rency, specifically in TRY, USD, EUR, and XAU. For each currency, the shock rates assigned to it as specified in the Regulation have been applied. Interest rate correlations between different currencies have not been included, as they would reduce the repo rted risk amount and would not comply with the prudence principle. Current Period CEVE (*) Parallel Up (-) 16.760.553 Parallel Down (+) (18.373.744) Steepener (-) (5.779.515) Flattener (+) 8.479.580 Short-Term Up (-) 11.087.852 Short-Term Down (+) (10.581.583) Maximum 16.760.553 Tier I Capital 269.487.023 (*) The amounts presented in the table above have been converted into T RY equivalents based on the currencies and interest -related commodities specified in Article 5, paragraph 2(a) of the Regulation on the Measurement and Assessment of Interest Rate Risk Arising from Banking Book Accounts Using the Standard Approach. In calculating the EVE risk amount, the TLREF yield curve was used for TRY, SOFR for USD, and ESTR for EUR. Among the various shock scenarios provided in the Regulation, the upward interest rate shock scenario producing the worst outcome is reported in the calculation of the interest rate risk ratio. The sensitivity of IRRBB is 6,22%, resulting from the loss amount under the Parallel Upward scenario divided by the Bank’s Core Capital, which is below the regulatory limit of 15%.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 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) V. 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 4.937.804 - - 922.645 (1) Includes TRY 153.740 of unconsolidated associates, TRY 140.573 of unconsolidated subsidiaries and TRY 4.643.491 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 66 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 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 67 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) 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 fourth quarter of 2025, the Parent Bank’s total unrestricted securities and the balance of liquid assets held at the CBRT increased, resulting in a n increase 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 increase 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 net cash outflows from foreign currency, the increase in high -quality foreign currency liquid assets improved the foreign currency liquidity coverage ratio during the fourth quarter. On a consolidated basis, 50,99% 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, 47,91% of securities classified as high quality liquid assets and 1,10% 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 outflow 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 si de. 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 3.776.326.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 68 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAG EMENT 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 (%) October 2025 223,90 185,73 November 2025 239,43 182,14 December 2025 236,66 180,14 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 69 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) 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 1.506.639.753 654.408.013 Cash Outflows Retail and Small Business Customers Deposits; 1.573.051.089 607.316.378 142.580.393 60.731.638 Stable Deposits 294.494.327 - 14.724.716 - Less Stable Deposits 1.278.556.763 607.316.378 127.855.676 60.731.638 Unsecured wholesale funding; 1.595.590.038 597.132.137 774.149.474 258.663.121 Operational Deposits 315.990.231 209.933.354 78.997.556 52.483.339 Non-operational Deposits 1.170.013.190 357.288.345 614.158.646 176.681.477 Other Unsecured Funding 109.586.617 29.910.437 80.993.273 29.498.305 Secured Funding - - Other cash outflows; 33.254.832 4.152.498 28.310.007 4.143.193 Derivatives cash outflow and liquidity needs related to market valuation changes on derivatives or other transactions 4.395.964 3.776.326 4.395.964 3.776.326 Obligations related to structured financial products 360.664 360.664 360.664 360.664 Commitments related to debts to financial markets and other off- balance sheet obligations 28.498.205 15.508 23.553.380 6.203 Other revocable off-balance sheet commitments and Contractual Obligations - - - - Other irrevocable or conditionally revocable off-balance sheet Obligations 1.608.293.203 395.133.339 114.392.018 29.538.254 Total Cash Outflows 1.059.431.892 353.076.206 Cash Inflows Secured Lending - - - - Unsecured Lending 368.390.184 51.339.215 232.118.369 40.417.919 Other Cash Inflows 1.429.168 30.838.026 1.429.168 30.838.026 Total Cash Inflows 369.819.352 82.177.241 233.547.538 71.255.945 Total Adjusted Value Total HQLA Stock 1.506.639.753 654.408.013 Total Net Cash Outflows 825.884.354 281.820.261 Liquidity Coverage Ratio (%) 182,68% 233,26% (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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 70 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) 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 71 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) 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 486.199.870 371.925.807 1.105.186 8.719.225 297.214 60.363 - 868.307.665 Banks 24.000.706 36.088.874 2.374.269 148.859 421.370 151.933 42.236 63.228.247 Financial assets at fair value through profit and loss 681.458 269.367 62.040.141 42.336.010 14.562 - 8.272.604 113.614.142 Money market placements - 23.734 - - - - - 23.734 Financial assets at fair value through other comprehensive income - 20.189.142 12.634.662 91.791.374 107.143.656 71.412.542 1.905.590 305.076.966 Loans(4) 26.215.318 245.414.597 389.325.217 391.813.606 802.866.399 158.797.975 81.553.857 2.095.986.969 Financial assets measured at amortised cost - 69.974.464 22.293.197 71.704.800 369.010.815 261.348.608 - 794.331.884 Other assets (2) 2.127.846 17.502.820 11.360.563 17.529.291 11.766.239 1.647.152 194.566.710 256.500.621 Total assets 539.225.198 761.388.805 501.133.235 624.043.165 1.291.520.255 493.418.573 286.340.997 4.497.070.228 Liabilities Bank deposits 240.121.120 221.343.600 19.894.574 1.643.092 - - - 483.002.386 Other deposits 803.894.460 1.619.623.798 600.379.681 89.625.917 10.615.170 696.681 - 3.124.835.707 Funds provided from other financial institutions (3) 11.433 10.361.915 12.820.826 40.581.297 43.512.656 8.922.840 - 116.210.967 Money market balances - 203.070.938 11.940.117 - 26.182.413 - - 241.193.468 Bonds issued - 5.747.293 7.203.653 8.809.534 - - - 21.760.480 Miscellaneous Payables 196.612 56.306.635 1.293.083 5.516.732 16.062.030 18.430 14.386.918 93.780.440 Other liabilities (1) 4.147.922 40.918.523 2.647.654 1.531.392 66.965.246 33.205.146 266.870.897 416.286.780 Total liabilities 1.048.371.547 2.157.372.702 656.179.588 147.707.964 163.337.515 42.843.097 281.257.815 4.497.070.228 Liquidity Gap (509.146.349) (1.395.983.897) (155.046.353) 476.335.201 1.128.182.740 450.575.476 5.083.182 - Net off-Balance Sheet Position - 68.182 (2.468.511) (321.933) 334.750 - - (2.387.512) Derivative Financial Assets - 166.172.912 58.014.060 17.191.153 26.506.061 - - 267.884.186 Derivative Financial Liabilities - (166.104.730) (60.482.571) (17.513.086) (26.171.311) - - (270.271.698) Non-Cash Loans 413.617.318 28.541.795 92.247.736 393.214.975 228.104.488 48.823.531 - 1.204.549.843 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 72 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) 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 stabl e 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 acco rdance 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 fourth quarter of 2025, deposits of real persons and retail customers constitute 58,77% of the total available stable fund amount on a consolidated basis, while payables to other persons constitute 27,83% of the available stable fund amount. The largest share of the required stable fund amount, 71,04%, 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 73 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) Net Stable Funding Ratio: Current Period a b c d e Unweighted Amount According to Residual Maturity Weighted value Demand* Less than 6 months 6 months to < 1 year 1 year and more than 1 year Available stable funding 1 Capital 246.030.408 - - 56.213.242 302.243.650 2 Tier I and tier II capital 246.030.408 - - 56.213.242 302.243.650 3 Other capital instruments - - - - - 4 Deposits from natural persons and small business customers 523.369.484 1.077.199.258 32.631.708 8.897.060 1.493.036.587 5 Stable deposits /participation funds 104.925.679 196.642.179 680.730 727.969 287.827.729 6 Less stable deposits /participation funds 418.443.805 880.557.079 31.950.978 8.169.091 1.205.208.858 7 Wholesale funding 236.058.629 1.075.676.036 33.812.903 34.209.408 706.983.192 8 Operational deposits 44.262.084 124.431.555 - - 84.346.820 9 Other wholesale funding 191.796.545 951.244.481 33.812.903 34.209.408 622.636.373 10 Liabilities with matching interdependent assets 11 Other liabilities 425.883.299 365.983.519 9.466.148 33.609.773 38.342.847 12 Derivative liabilities 3.693.806 13 All other equity and liabilities not included in the above categories 425.883.299 362.289.713 9.466.148 33.609.773 38.342.847 14 Available stable funding 2.540.606.276 Required stable funding 15 High-quality liquid assets (HQLA) 136.726.036 16 Deposits held at credit institutions or financial institutions for operational purposes - - - - - 17 Performing loans and securities 12.384.903 54.161.130 378.861.736 1.402.930.908 1.310.168.184 18 Performing loans to credit institutions or financial institutions secured by Level 1 HQLA 81 - - - 8 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 10.909.092 18.882.509 592.299 6.570.135 11.335.025 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 - 27.500.016 296.207.508 1.223.428.681 1.140.252.653 21 Loans with a risk weight of less than or equal to 35% - - 307.577.440 199.925.336 22 Performing loans encumbered with residential mortgages 7.778.605 82.061.929 172.932.092 157.326.127 23 Loans with a risk weight of less than or equal to 35% 7.778.605 82.061.929 172.932.092 157.326.127 24 Exchange traded equities and securities that are not in default and do not qualify as HQLA 1.475.730 - - - 1.254.371 25 Assets with matching interdependent liabilities 26 Other assets 310.701.034 - - 3.806.193 314.507.141 27 Physical traded commodities, including gold - - 28 Assets posted as initial margin for derivative contracts or contributions to default funds of central counterparties 574 488 29 Derivative assets 3.436.238 3.436.238 30 Derivative liabilities before deduction of variation margin posted 369.381 369.381 31 All other assets not included in the above categories 310.701.034 - - - 310.701.034 32 Off-balance sheet items 1.657.166.351 - - 82.858.318 33 Required Stable Fund 1.844.259.679 34 Net Stable Funding Ratio (%) 137,76% (*) 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 74 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) Net Stable Funding Ratio: Prior Period a b c d e Unweighted Amount According to Residual Maturity Weighted value Demand* 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 75 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) Analysis of non-derivative financial liabilities by remaining contractual maturities: Current Period Up to 1 month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Adjustments (1) Total Liabilities Deposits 2.901.482.235 646.812.198 94.042.894 10.723.903 697.761 (45.920.898) 3.607.838.093 Funds provided from other financial intuitions 11.095.171 13.744.335 44.021.538 47.753.300 9.692.948 (10.096.325) 116.210.967 Money market borrowings 203.559.082 12.218.194 914.021 28.150.678 - (3.648.507) 241.193.468 Securities issued 5.747.293 7.203.653 8.809.534 - - - 21.760.480 Funds 17.452 35.032 178.988 198.794 12.649 - 442.915 Subordinated Debt Instruments 27.959 3.853.175 21.054.716 155.124.660 69.894.240 (156.595.710) 93.359.040 Total 3.121.929.192 683.866.587 169.021.691 241.951.335 80.297.598 (216.261.440) 4.080.804.963 Prior Period Up to 1 month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Adjustments (1) Total Liabilities Deposits 1.825.117.078 537.778.273 140.806.111 9.293.724 938.274 (53.313.005) 2.460.620.455 Funds provided from other financial intuitions 23.737.783 8.739.171 6.439.930 24.640.635 8.119.257 (7.205.967) 64.470.809 Money market borrowings 239.665.578 13.929.966 241.530 4.407.777 - (1.519.322) 256.725.529 Securities issued 4.799.003 5.957.984 2.182.582 - - (746.586) 12.192.983 Funds 50.232 70.834 317.377 447.400 41.244 - 927.087 Subordinated Debt Instruments 28.483 4.851.660 16.059.158 79.236.654 54.790.846 (104.782.497) 50.184.304 Total 2.093.398.157 571.327.888 166.046.688 118.026.190 63.889.621 (167.567.377) 2.845.121.167 (1) Adjustments column represents the difference between the total expected cash flows and the carrying values of non-derivative financial liabilities.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 76 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) Analysis of Group’s derivative financial instruments according to their remaining maturities: Current Period:(1) Up to 1 month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total Forwards Contracts- Buy 58.501.291 20.284.647 11.543.589 - - 90.329.527 Forward Contracts – Sell 63.535.675 20.304.949 11.520.250 - - 95.360.874 Swaps – Buy 75.941.325 36.899.511 4.024.256 2.142.750 - 119.007.842 Swaps – Sell 136.512.825 39.351.199 4.369.520 1.808.000 - 182.041.544 Credit Default Swap – Buy - - - - - - Credit Default Swap – Sell - - - - - - Forward Precious Metal - Buy 5.471.777 - - - - 5.471.777 Forward Precious Metal - Sell 372.560 - - - - 372.560 Money Buy Options 3.740.812 829.890 473.925 - - 5.044.627 Money Sell Options 3.744.467 826.425 473.925 - - 5.044.817 Swaps Interest – Buy - - 1.149.388 24.363.311 - 25.512.699 Swaps Interest – Sell - - 1.149.388 24.363.311 - 25.512.699 Currency Futures-Buy - - - - - - Currency Futures-Sell - - - - - - Swaps Precious Metal - Buy 60.570.760 - - - - 60.570.760 Swaps Precious Metal - Sell - - - - - - Total 408.391.492 118.496.621 34.704.241 52.677.372 - 614.269.726 Prior Period: (2) Up to 1 month 1-3 Months 3-12 Months 1-5 Years Over 5 Years Total Forwards Contracts- Buy 16.340.632 22.365.302 16.145.913 297.647 - 55.149.494 Forward Contracts – Sell 27.648.923 22.675.703 16.124.575 297.576 - 66.746.777 Swaps – Buy 23.797.022 17.953.640 - - - 41.750.662 Swaps – Sell 24.387.125 19.500.646 - - - 43.887.771 Credit Default Swap – Buy - - - - - - Credit Default Swap – Sell - - - - - - Forward Precious Metal - Buy 13.487.198 4.076 - - - 13.491.274 Forward Precious Metal - Sell 2.489.945 - - - - 2.489.945 Money Buy Options 118.892 - 236.075 - - 354.967 Money Sell Options 118.892 - 236.158 - - 355.050 Swaps Interest – Buy 15.000 55.000 - 34.392.161 17.849.425 52.311.586 Swaps Interest – Sell 15.000 55.000 - 34.392.161 17.849.425 52.311.586 Currency Futures-Buy - - - - - - Currency Futures-Sell - - - - - - Swaps Precious Metal - Buy - - - - - - Swaps Precious Metal - Sell - - - - - - Total 108.418.629 82.609.367 32.742.721 69.379.545 35.698.850 328.849.112 (1) Foreign exchange purchase and sale commitments of TRY 76.113.842 are included in the table (1) Foreign exchange purchase and sale commitments of TRY 5.740.992 are included in the table
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 77 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VII. 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) 254.858.921 158.535.730 The difference between total amount of risk investment securities or commodity collateral financing transactions in the consolidated financial statement s prepared in accordance with the Communiqué on Preparation of Consolidated Financial Statements of Banks, and total risk amount of such instruments(2) 264.148.541 165.132.856 The difference between total amount of off -balance sheet transactions in the co nsolidated financial statements prepared in accordance with the Communiqué on Preparation of Consolidated Financial Statements of Banks, and total risk amount of such items(2) 77.951.694 46.042.642 The other differences between amount of assets in the con solidated 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 6.038.531.748 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 78 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VII. 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) 4.364.880.848 3.066.125.212 2.Assets That Are Deducted from Core Capital (34.190.498) (27.057.120) 3.Total on Balance Sheet Exposures 4.330.690.350 3.039.068.092 Derivative Exposures And Credit Derivatives 4.Replacement Cost Associated with Derivative Financial Instruments and Credit Derivatives 2.476.539 5.815.075 5.The Potential Amount of Credit Risk with Derivative Financial Instruments and Credit Derivatives 4.364.140 3.255.446 6.The Total Amount of Risk on Derivative Financial Instruments and Credit Derivatives 6.840.679 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) 13.562.906 12.927.295 8.Risk Amount of Exchange Brokerage Operations - - 9.Total Risks Related to Securities or Commodity Financing Transactions 13.562.906 12.927.295 Off -Balance Sheet Items 10.Gross Notional Amount of Off-Balance Sheet Items 1.765.389.507 1.142.515.143 11.Adjustments for Conversion to Credit Equivalent Amounts (77.951.694) (46.042.642) 12.The Total Risk of Off-Balance Sheet Items 1.687.437.813 1.096.472.501 Capital And Total Exposures 13.Tier 1 Capital 246.030.408 174.591.120 14.Total Exposures 6.038.531.748 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 79 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VIII. EXPLANATIONS RELATED TO THE CONSOLIDATED BUSINESS SEGMENTATION The Group’s operations are grouped under the corporate, commercial, integrated banking and treasury/investment banking categories. Integrated branches primarily serve SMEs and individual customers. The Parent Bank is rendering services to a wide range of compa nies 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 reimbursements 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 instruments such as; credit cards, cash cards and travel cheques, and performing related transactions, • Inc luding 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, m oney 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 80 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VIII. 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 31 December 2025 are presented in the table below. Current Period Commercial/ Corporate Integrated Treasury/ Investment(1) Other(1) Total 1 January -31 December 2025 OPERATING INCOME / EXPENSES Interest Income 115.721.287 410.461.570 381.213.157 10.862.620 918.258.634 Interest on Loans 115.503.436 410.194.270 20.281.895 757.454 546.737.055 Interest Income on Marketable Securities 15.549 104.446 265.275.021 - 265.395.016 Interest from Banks 107.757 - 10.541.083 275.939 10.924.779 Other Interest Income 94.545 162.854 85.115.158 9.829.227 95.201.784 Interest Expense 257.783.346 415.424.168 141.387.832 7.144.015 821.739.361 Interest on Deposits 257.152.045 409.883.412 32.146.943 342.476 699.524.876 Funds Borrowed 188.364 512.040 16.862.459 1.473.214 19.036.077 Interest on Money Market Transactions - 292.834 71.252.912 5.081.814 76.627.560 Securities Issued - - 18.351.549 239.572 18.591.121 Other Interest Expense 442.937 4.735.882 2.773.969 6.939 7.959.727 Net Interest Income (142.062.059) (4.962.598) 239.825.325 3.718.605 96.519.273 Net Fees and Commissions Income 15.903.364 39.965.560 7.132.381 (1.153.766) 61.847.539 Trading Income/Loss (Net) 168.527 10.801.106 (23.310.658) 272.552 (12.068.473) Dividend Income 1.999 - 59.381 - 61.380 Other Income 3.340.549 3.293.302 31.197.675 2.578.180 40.409.706 Expected Loss Provisions Expenses 3.645.879 19.235.018 15.036.279 627.105 38.544.281 Other Expenses 4.678.651 44.560.816 59.904.071 3.320.276 112.463.814 Income Before Taxes (130.972.150) (14.698.464) 179.963.754 1.468.190 35.761.330 Income Tax Provision - - (6.117.387) (723.152) (6.840.539) Net Profit For The Period (130.972.150) (14.698.464) 173.846.367 745.038 28.920.791 SEGMENT ASSETS 31 December 2025 Marketable Securities(2) - 2.322.612 1.210.605.355 1.107 1.212.929.074 Derivative Financial Assets 2.529 89.328 3.067.434 - 3.159.291 Banks and Money Market Placements(2) 1.609.878 3.868 60.462.422 1.133.857 63.210.025 Investment in Associates and Subsidiaries (Net) - - 4.937.804 - 4.937.804 Loans(2) 761.137.857 1.254.737.212 324.776 12.340.610 2.028.540.455 Other Assets(2) 16.385.649 53.269.211 1.051.885.533 62.753.186 1.184.293.579 TOTAL ASSETS 779.135.913 1.310.422.231 2.331.283.324 76.228.760 4.497.070.228 SEGMENT LIABILITIES 31 December 2025 Deposits 1.245.646.429 1.982.923.150 356.419.189 22.849.325 3.607.838.093 Derivative Financial Liabilities 1.451 125.462 2.651.545 - 2.778.458 Money Market Funds - - 226.913.432 14.280.036 241.193.468 Borrowing Funding Loans 6.272.802 8.012.462 88.724.128 13.201.575 116.210.967 Securities Issued - - 2.188.631 19.571.849 21.760.480 Other Liabilities 29.551.435 55.231.747 152.958.660 2.710.883 240.452.725 Provisions and Current Tax Liabilities 4.492.224 9.217.933 29.583.259 597.595 43.891.011 Shareholders’ Equity (130.972.150) (14.698.464) 362.095.981 6.519.659 222.945.026 TOTAL LIABILITIES 1.154.992.191 2.040.812.290 1.221.534.825 79.730.922 4.497.070.228 OFF-BALANCE SHEET ITEMS 31 December 2025 Guarantees and Warranties 540.310.100 492.693.660 171.449.563 96.520 1.204.549.843 Commitments 19.361.834 147.870.918 498.931.630 320.401 666.484.783 Derivative Financial Instruments - 31.715.457 506.440.427 - 538.155.884 TOTAL OFF-BALANCE SHEET ITEMS 559.671.934 672.280.035 1.176.821.620 416.921 2.409.190.510 (1) Amounts arising from transactions of general directorate and Halk Yatırım Menkul Değerler AŞ and Halk Gayrimenkul Yatırım Ortaklığı 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 81 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) VIII. EXPLANATIONS RELATED TO THE CONSOLIDATED BUSINESS SEGMENTATION (continued) Prior Period Commercial/ Corporate Integrated Treasury/ Investment(1) Other(1) Total 1 January -31 December 2024 OPERATING INCOME / EXPENSES Interest Income 111.884.634 309.884.168 247.438.743 8.803.203 678.010.748 Interest on Loans 111.512.798 306.027.901 18.566.798 583.582 436.691.079 Interest Income on Marketable Securities 10.823 3.636.168 175.427.914 - 179.074.905 Interest from Banks 94.508 - 6.272.003 202.144 6.568.655 Other Interest Income 266.505 220.099 47.172.028 8.017.477 55.676.109 Interest Expense 208.822.837 333.290.523 87.022.244 5.813.880 634.949.484 Interest on Deposits 208.488.853 328.679.794 21.694.617 290.215 559.153.479 Funds Borrowed 223.138 457.241 6.852.045 1.575.662 9.108.086 Interest on Money Market Transactions 457 1.494.737 51.446.992 3.776.576 56.718.762 Securities Issued - - 6.490.947 168.109 6.659.056 Other Interest Expense 110.389 2.658.751 537.643 3.318 3.310.101 Net Interest Income (96.938.203) (23.406.355) 160.416.499 2.989.323 43.061.264 Net Fees and Commissions Income 9.748.567 23.482.544 8.273.091 236.793 41.740.995 Trading Income/Loss (Net) 138.529 8.161.744 (29.610.144) 212.179 (21.097.692) Dividend Income - - 33.244 - 33.244 Other Income 2.938.937 2.098.167 23.836.057 1.111.112 29.984.273 Expected Loss Provisions Expenses 1.858.546 5.958.459 1.883.314 439.456 10.139.775 Other Expenses 3.098.567 26.259.058 33.184.945 1.999.392 64.541.962 Income Before Taxes (89.069.283) (21.881.417) 127.880.488 2.110.559 19.040.347 Income Tax Provision - - 4.814.607 (627.908) 4.186.699 Net Profit For The Period (89.069.283) (21.881.417) 132.695.095 1.482.651 23.227.046 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 82 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) IX. EXPLANATIONS ON PRESENTATION OF THE CONSOLIDATED FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE Current Period Prior Period Book Value Fair Value Book Value Fair Value Financial Assets 4.182.080.914 4.333.650.643 2.972.709.553 2.942.766.888 Cash and Balances with the Central Bank of Türkiye 868.307.665 868.307.665 633.426.893 633.426.893 Financial assets at fair value through P&L(3) (4) 111.884.218 111.884.218 58.174.029 58.174.029 Banks 63.228.247 50.528.711 34.235.456 34.217.102 Money Market Placements 23.734 23.734 1.412.154 1.412.154 Financial Assets at Fair Value Through Other Comprehensive Income (1) 292.487.330 292.487.330 172.006.293 172.006.293 Other Financial Assets Measured at Amortised Cost 794.331.884 709.668.937 561.608.947 503.009.887 Loans(2) 2.014.433.112 2.263.365.324 1.489.228.277 1.517.903.026 Lease Receivables 19.964.065 19.964.065 12.784.503 12.784.503 Factoring Receivables 17.420.659 17.420.659 9.833.001 9.833.001 Financial Liabilities 4.092.200.358 4.051.632.491 2.866.530.774 2.872.104.678 Banks Deposits 483.002.386 448.289.992 282.332.874 282.498.464 Other Deposits 3.124.835.707 3.135.557.181 2.178.287.581 2.181.008.115 Derivative financial liabilities held for trading 2.778.458 2.778.458 2.493.751 2.493.751 Funds provided from other financial institutions 116.210.967 101.636.135 64.470.809 67.896.119 Money market borrowings 241.193.468 240.996.256 256.725.529 255.505.084 Securities issued 21.760.480 19.955.577 12.192.983 12.675.898 Miscellaneous payables 93.780.440 93.780.440 65.803.527 65.803.527 Leasing payables 8.638.452 8.638.452 4.223.720 4.223.720 (1) As of 31 December 2025, TRY 12.589.636 (31 December 2024: TRY 6.468.441) of "equity investments not quoted on stock exchange" followed in financial assets at fair value through other comprehensive income are not included. (2) Net of follow-up loans has not been included in the table above. (3) As of 31 December 2025, marketable securities amounting to TRY 1.729.924 (31 December 2024: TRY 606.558) that are not valued with market price, are not included in financial assets at fair value through Profit and Loss.. The methods and assumptions used in calculating the fair value of financial instruments carried at values other than their fair value in the financial statements; • The fair value of financial assets valued at amortized cost is determined based on market prices or, w here this price cannot be determined, on quoted market prices for other securities with the same characteristics subject to amortization in terms of interest, maturity and other similar conditions. • Interest rates applicable as of the balance sheet date have been used in calculating the fair value of receivables from the money market, loans given to banks, deposits, funds obtained from other financial institutions and prospective liabilities.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 83 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) IX. EXPLANATIONS ON PRESENTATION OF THE CONSOLIDATED FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE (continued) Classification of Fair Value Measurement TFRS 7 – Financial Instruments requires the classific ation of fair value measurements into a fair value hierarchy by reference to the significance of the inputs used in measuring fair value of financial instruments measured at fair value to be disclosed. This classification basically relies on whether the re levant inputs are observable or not. Observable inputs refer to the use of market data obtained from independent sources, whereas unobservable inputs refer to the use of predictions and assumptions about the market made by the Parent Bank. This distinction brings about a fair value measurement classification generally as follows: Level 1: Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 : Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3: Fair value measurements using inputs for the assets or liability that are not based on observable market data (unobservable inputs). Classification requires using observable market data if possible. In this context, the fair value classification of financial assets and liabilities measured at fair values are as followed: Current Period Level 1 Level 2 Level 3 Total Financial Assets Measured at Fair Value: Financial Assets Measured at Fair Value through Profit/Loss(2) 111.884.218 - - 111.884.218 Derivative financial assets - 3.159.291 - 3.159.291 Financial Assets at Fair Value through Other Comprehensive Income(1) 292.487.330 - - 292.487.330 Total Financial Assets 404.371.548 3.159.291 - 407.530.839 Financial Liabilities Measured at Fair Value: Derivative financial liabilities - 2.778.458 - 2.778.458 Total Financial Liabilities - 2.778.458 - 2.778.458 (1) As of 31 December 2025, share certificates amounting to TRY 12.589.636 of “securities not quoted on the stock exchange” in financial assets at fair value through other comprehensive income are not included in the above table. (2) As of 31 December 2024, marketable securities amounting to TRY 1.729.924 that are not valued at fair value, are not included in financial assets 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 84 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) IX. EXPLANATIONS ON PRESENTATION OF THE CONSOLIDATED FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE (continued) Classification of Fair Value Measurement (continued) Prior Period Level 1 Level 2 Level 3 Total Financial Assets Measured at Fair Value: Financial Assets Measured at Fair Value through Profit/Loss(2) 58.174.029 - - 58.174.029 Derivative financial assets - 1.443.415 - 1.443.415 Financial Assets at Fair Value through Other Comprehensive Income(1) 172.006.293 - - 172.006.293 Total Financial Assets 230.180.322 1.443.415 - 231.623.737 Financial Liabilities Measured at Fair Value: Derivative financial liabilities - 2.493.751 - 2.493.751 Total Financial Liabilities - 2.493.751 - 2.493.751 (1) As of 31 December 2024, share certificates amounting to TRY 6.468.441 of “securities not quoted on the stock exchange” in financial assets at fair value through other comprehensive income are not included in the above table. (2) As of 31 December 2024, marketable securities amounting to TRY 606.558 that are not valued at fair value, are not included in financial assets at fair value through profit or loss. The movement of financial assets in the third level: None. (31 December 2024: None.) X. EXPLANATIONS RELATED TO TRANSACTIONS MADE ON BEHALF OF OTHERS AND TRANSACTIONS BASED ON TRUST The Parent Bank performs buying transactions on behalf of customers, and gives custody, administration and consultancy services. The Group does not engage in fiduciary transactions.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 85 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. 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 ac tivities 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 risk 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 th e 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 Internal 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 arisi ng from the business model. The Parent Bank regularly revises the 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 86 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. 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) (**) 1.925.744.202 1.321.251.380 154.059.536 105.700.110 2 Standardized approach (SA) 1.925.744.202 1.321.251.380 154.059.536 105.700.110 3 Internal rating-based (IRB) approach - - - - 4 Counterparty credit risk (**) 13.926.643 16.818.429 1.114.131 1.345.474 5 Standardized approach for counterparty credit risk (SA-CCR) 13.926.643 16.818.429 1.114.131 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 58.595.788 89.151.963 4.687.663 7.132.157 17 Standardized approach (SA) 58.595.788 89.151.963 4.687.663 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) 10.056.152 6.784.935 804.492 542.795 24 Floor adjustment - - - - 25 Total ( 1+4+7+8+9+10+11+12+16+19+23+24) 2.140.213.990 1.529.345.939 171.217.118 122.347.675 (*) 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 87 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Differences and Matching Between Accounting and Regulatory Scopes of Consolidation(*): Carrying values in financial statements prepared as per TAS Carrying values of items in accordance with Turkish Accounting Standards Assets Credit Risk Counterparty credit risk Securitization positions Market Risk Not subject to capital requirements or subject to deduction from capital Cash and Balances with the Central Bank 868.195.800 868.195.800 - - - - Derivative Financial Assets 3.159.291 - 1.027.276 - 2.132.015 - Financial assets at fair value through profit and loss 113.614.142 112.819.255 - - 794.887 - Banks 63.186.291 63.186.291 - - - - Receivables from Money markets 23.734 - 23.734 - - - Financial assets at fair value through OCI (net) 305.076.966 170.703.477 - - 134.373.489 - Loans 2.028.540.455 2.028.349.221 - - - 191.234 Receivables from factoring 17.420.659 17.420.659 - - - - Financial assets measured at amortised cost (net) 794.237.966 794.237.966 - - - - Subsidiaries (net) 4.797.231 4.797.231 - - - - Associates (net) 140.573 140.573 - - - - Jointly controlled entities (joint ventures) (net) - - - - - - Finance lease receivables 19.934.988 19.934.988 - - - - Derivative financial liabilities held for risk management - - - - - - Tangible Assets (net) 87.043.003 82.579.819 - - - 4.463.184 Intangible Assets (net) 5.733.691 1.223.356 - - - 4.510.335 Real estate for investment purpose (net) 49.730.868 49.730.868 - - - - Tax asset 103.388 103.388 - - - - Deferred Tax Assets 19.380.129 - - - - 19.380.129 Assets Held For Sale and Discontinued Operations (net) 212 212 - - - - Other assets 116.750.841 116.746.462 - - 4.379 - Total Assets 4.497.070.228 4.330.169.566 1.051.010 - 137.304.770 28.544.882 Liabilities Deposits 3.607.838.093 - - - - 3.607.838.093 Derivative financial liabilities 2.778.458 - - - 1.023.310 1.755.148 Loans 116.210.967 - - - - 116.210.967 Money market borrowings 241.193.468 - 241.193.468 - - - Securities issued 21.760.480 - - - - 21.760.480 Funds 442.915 - - - - 442.915 Other liabilities 137.990.614 - - - - 137.990.614 Factoring payables 21.704 - - - - 21.704 Finance lease payables 8.638.452 - - - - 8.638.452 Derivative financial liabilities held for risk management - - - - - - Provisions 15.494.036 - - - - 15.494.036 Tax Liability 19.168.983 - - - - 19.168.983 Deffered Tax Liability 9.227.992 - - - - 9.227.992 Liabilities regarding assets held for sale and discontinued operations (net) - - - - - - Subordinated Loans 93.359.040 - - - - 93.359.040 Shareholders’ equity 222.945.026 - - - - 222.945.026 Total liabilities 4.497.070.228 - 241.193.468 - 1.023.310 4.254.853.450 * Expected Loss Provisions presented in related lines.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 88 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Main Sources of Differences between Regulatory Exposure Amounts and Carrying Values in Financial Statements: Total Credit risk Securitization positions Counterparty credit risk Market Risk 1 Asset carrying value amount under scope of regulatory consolidation 4.497.070.228 4.330.169.566 - 1.051.010 137.304.770 2 Liabilities carrying value amount under regulatory scope of consolidation - - - 241.193.468 1.023.310 3 Total net amount under regulatory scope of consolidation 4.497.070.228 4.330.169.566 - (240.142.458) 136.281.460 4 Off-balance Sheet Amounts(*) 2.409.190.510 718.958.608 - 6.964.025 278.184.739 5 Differences in valuations - - - - - 6 Differences due to different netting rules, other than those already included in row 2 - - - - - 7 Differences due to consideration of provisions - - - - - 8 Differences due to prudential filters - - - - - 9 Differences due to risk reduction - 5.049.128.174 - (233.178.433) 414.466.198 Explanations of differences between accounting and regulatory exposure amounts: There is no material differences between the carrying values in financial statements and the risk amounts in capital adequacy calculation of assets and liabilities. Explanations Related to Counterparty Credit Risk The Parent Bank provides the necessary definitions and classifications for the CCR that take into account the clearing and pre -clearing risk in relation to the management policies and procedures of the CCR, thereby managing these risks on a counterparty basis and across the bank. The impact of the new products and activities on the Parent Bank's CCR level is assessed and these evaluations are included in the product / activity approval process. The market, liquidity, compliance risk and operational risk that may be associated with the CCR are taken into account and the general / specific limit levels of the Parent Bank's transactions to the CCR are determi ned. These limits established within the framework of the CCR are regularly monitored. The Parent Bank uses risk mitigation techniques to the extent that it is appropriate, through applications such as margin taking and margin fulfillment. The Parent Bank uses methods and models in accordance with international standards for the identification, measurement, monitoring, control and reporting of the CCR. Independent scrutiny and supervision is carried out on the integrity, correctness and effectiveness of the CCR management systems. These activities are carried out by the Parent Bank's internal audit units and independent audit institutions. Agreements entered into with counterparty financial institutions resulting in credit risk according to the attributes of the transaction are evaluated by taking into account ISDA framework and CSA framework for derivative transactions, GMRA framework for repurchase agreements. The risk is mitigated by receiving cash or other forms of collaterals as per the counterparty limits designated by the Board of Directors. In secured lending and repo transactions, the haircut amounts are reduced from the counterparty limits. In cases whereby possible decreases or increases in ratings affects the current replacement cost, margin call agreements are used as a risk mitigator.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 89 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Counterparty Credit Risk (CCR) Approach Analysis: Replacement cost Potential Future exposure EEPE(*) Alpha used for computing regulatory EAD EAD post- CRM Risk Weighted Assets Standardised Approach - CCR (for derivatives) 995.597 3.654.797 1,4 6.510.551 2.931.816 Internal Model Method (for repo transactions, securities or commodity lending or borrowing transactions, long settlement transactions and securities financing transactions) - - - - Simple Approach for credit risk mitigation (for repo transactions, securities or commodity lending or borrowing transactions, long settlement transactions and securities financing transactions) - - Comprehensive Approach for credit risk mitigation (for repo transactions, securities or commodity lending or borrowing transactions, long settlement transactions and securities financing transactions) 12.294.830 10.197.800 Value-at-Risk (VaR) for repo transactions, securities or commodity lending or borrowing transactions, long settlement transactions and securities financing transactions - - Total 18.805.381 13.129.616 * Expected effective positive risk amount. Capital requirement for credit valuation adjustment (CVA): EAD post-CRM Risk weighted amount Total portfolios subject to the Advanced CVA capital obligation - - (i) VaR component (including the 3*multiplier) - - (ii) Stressed VaR component (including the 3*multiplier) - - All portfolios subject to the Standardised CVA capital obligation 6.510.551 456.263 Total subject to the CVA capital obligation 6.510.551 456.263
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 90 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Standardised Approach - Counterparty Risk Per Risk Classification And Risk Weighted Amounts: Risk weight / Risk Classifications 0% 10% 20% 50% 75% 100% 150% 2% 4% Total Credit Risk Claims on sovereigns and Central Banks 144.379 - - - - - - - - 144.379 Claims on regional governments or local authorities - - - - - - - - - - Claims on administrative bodies and other non-commercial undertakings - - - - - 7 - - - 7 Claims on multilateral development banks - - - - - - - - - - Claims on international organizations - - - - - - - - - - Claims on banks and intermediary institutions - - 5.952.576 1.184.500 - 8.054.520 - - - 15.191.596 Claims on corporates - - 189.279 19.239 - 3.196.752 - - - 3.405.270 Claims included in the regulatory retail portfolios - - - - 64.128 - - - - 64.128 Claims secured by residential property - - - - - - - - - - Overdue loans - - - - - - - - - - Higher risk categories decided by the Board - - - - - - - - - - Secured by mortgages - - - - - - - - - - Securitization positions - - - - - - - - - - Short-term claims and short-term corporate claims on banks and intermediary institutions - - - - - - - - - - Undertakings for collective investments in mutual funds - - - - - - - - - - Equity share investments - - - - - - - - - - Other receivables - - - - - - - - - - Other assets - - - - - 456.263 - - - 456.263 Total 144.379 - 6.141.855 1.203.739 64.128 11.707.542 - - - 19.261.643 Collaterals for Counterparty Credit Risk: Collateral for derivative transactions Collateral for other transactions Received Collaterals Given Collaterals Received Collaterals Given Collaterals Segregated Nonsegregated Segregated Nonsegregated Cash-domestic currency - 2.784 - - - - Cash-foreign currency - 4.664.839 - 118.280 - - Domestic sovereign debts - - - - - - Other sovereign debts - - - - - - Government agency debts - - - - - - Corporate debts - - - - - - Equity securities - - - - - - Other collateral - - - - - - Total - 4.667.623 - 118.280 - - Counterparty Credit Risk-Credit Derivatives: None.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 91 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Exposures to Central Counterparty (CCP): Exposure post-CRM RWA Total Exposure to Qualified Central Counterparties (QCCPs) 340.764 Exposures for trades with QCCPs (excluding initial margin and guarantee fund) 453.474 340.106 (i) Over the counter derivative financial instruments - - (ii) Other derivative financial instruments 453.474 340.106 (iii) Repo-reverse repo transactions, margin trading and securitites or commodity lending or borrowing - - (iv) Counterparties where cross product netting applied - - Reserved initial collateral 32.802 Unreserved initial collateral - - Pre-funded guarantee fund contributions 32.885 658 Unfunded guarantee fund contributions - - Total Exposures to Non-QCCPs - Exposures for trades with QCCPs (excluding initial margin and guarantee fund) - - (i) Over the counter derivative financial instruments - - (ii) Other derivative financial instruments - - (iii) Repo-reverse repo transactions, margin trading and securitites or commodity lending or borrowing - - (iv) Counterparties where cross product netting applied - - Reserved initial collateral - - Unreserved initial collateral - Pre-funded guarantee fund contributions - - Unfunded guarantee fund contributions - - Securitisations: None.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 92 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Qualitative Disclosure on Credit Risk: Credit risk, which is the most important risk profile of the Parent Bank's business model, refers to risks and losses arising from counterparty’s failure to meet its obligations under contracts that the Parent Bank is a party to. Credit limits are set according to the risk appetite and capacity of the Parent Bank. Credit limits are assigned according to the custom er's financial condition and credit need by the branches, regional credit committee, head of credit department, executive vice president in charge of loans, general manager, credit committee and board of directors and revised whenever required. As part of its risk policies, the Parent Bank monitors limits designated by sectors and sub sectors. Within the scope of internal systems, internal audit activities are carried out by the Board of Inspectors and the Internal Audit Department in order to ensure that the activities of the Parent Bank are carried out in accordance with the Parent Bank’s policies determined in compliance with the legal regulations. The Risk Management Department, which is the risk unit within the internal systems, performs th e functions of measuring, monitoring, controlling and reporting on the credit risk to which the Parent Bank is exposed to. These units are regularly reporting the risks exposed to the Parent Bank's Senior Management. The Parent Bank, in the credit allocati on process, restricts its risk exposure by working with highly creditworthy banks and institutions considering the credit ratings for the purpose of managing its risks. Under the scope of credit risk management, the Parent Bank rates all of its borrowers’ credit and requires additional collaterals from whose risk is higher. The Parent Bank has the policy of not granting loans/credits and/or limiting the amount of such loans/credits. The Parent Bank’s risk is concentrated in Türkiye. Limits are determined based on the type of loans and customers and risk and limit information is controlled periodically. Loans granted to other banks and risk limits set for the correspondent bank transactions are controlled on a daily basis. Risk concentrations are monitored systematically, concerning the off-balance sheet operations based on the customers and banks. Credit Quality of Assets Gross carrying value as per TAS Allowances/ amortisation and impairments Net values Defaulted Non-Defaulted 1 Loans 81.553.857 2.014.433.112 67.446.514 2.028.540.455 2 Debt Securities - 1.214.056.651 1.127.577 1.212.929.074 3 Off-balance sheet exposures 8.030.240 1.863.004.386 3.604.401 1.867.430.225 4 Total 89.584.097 5.091.494.149 72.178.492 5.108.899.754 Changes in Stock of Defaulted Loans and Debt Securities 1 Defaulted loans and debt securities at end of the previous reporting period 32.415.173 2 Loans and debt securities defaulted since the last reporting period 65.098.330 3 Receivables back to preforming status 8.797 4 Amounts written off 1.086.539 5 Other changes (14.864.310) 6 Defaulted loans and debt securities at end of the reporting period (1+2-3-4±5) 81.553.857
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 93 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Additional Disclosure Related To The Credit Quality Of Assets: Breakdown According to Maturity: 31 December 2025 Demand Up to 1 Month 1-3 Months 3-12 Months 1-5 Years 5 years and Over Total Loans 107.769.175 245.414.597 389.325.217 391.813.606 802.866.399 158.797.975 2.095.986.969 Exposures Provisioned Against By Major Regions: 31 December 2025 Non-Performing Loans ECL (Stage 3) Domestic 78.953.157 39.570.106 European Union (EU) Countries 4.200 3.582 OECD Countries 43 39 Off-Shore Banking Regions - - USA, Canada 7 7 Other Countries 2.596.450 1.645.033 Total 81.553.857 41.218.767 Exposures Provisioned Against By Sectors: Explained in Section 4 Credit Risk Information according to sectors and counterparties Aging analysis of overdue but not impaired financial assets: 31 December 2025 30-60 days overdue 18.381.949 60-90 days overdue 15.211.253 Total 33.593.202 Breakdown of restructured receivables based on whether or not provisions are allocated: 31 December 2025 Loans Structured from Standard Loans 12.417 Loans Composed of Follow-up Loans 83.625.255 Loans Restructured from Non-Performing Loans 2.095.907 * Rediscounts are not included in the amount.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 94 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) The risk mitigation factors used in the lending activities of the Parent Bank are listed below. • Financial warranties (Treasury Bills, Government Bonds, Cash, Pledged Deposits, Gold, Pledged Securities) • Guarantees • Mortgage (Although mortgage lending in Basel II has been considered as a risk class, it has also been included in this section in terms of valuation methods and concentrations). The financial guarantees in the Parent Bank are subject to valuation on a daily basis. The creditworthinesses of guarantors are monitored and assessed within the framework of credit revision schedules. As long as the mortgage that constitutes the collateral of the credits continues to be related to the loan, the risk- guarantee balances are monitored and revalued each year. Action plans are developed for the possibility of diminution in value of collaterals. As per the BRSA regulations, guarantees given by the Treasury and banks are regarded as risk red uction elements and the creditworthiness of banks is regularly monitored. The volatility in the real estate market is closely monitored by the Parent Bank and fluctuations that may occur depending on the market movements related to the mentioned risk class , are taken into account according to the principles stated in the related regulation. In the portfolios where the comprehensive financial guarantee method is used, the risk mitigating effects of collateral are determined through standard volatility adjustments. Concentration checks are conducted on guarantors and collateral providers. There is no on-balance sheet or off-balance sheet offsetting. Credit Risk Mitigation Techniques- Overview Exposures unsecured: carrying amount as per TAS Exposures secured by collateral Exposures secured by collateral, of which secured amount Exposures secured by financial guarantees Financial guarantees, of which secured amount Exposures secured by credit derivatives Exposures secured by credit derivatives, of which secured amount 1 Loans (1) 1.200.904.111 824.415.263 673.114.585 115.060.948 105.964.634 - - 2 Debt Securities 1.212.929.074 - - - - - - 3 Total 2.413.833.185 824.415.263 673.114.585 115.060.948 105.964.634 - - 4 Of which defaulted 15.454.299 25.122.429 20.719.537 1.824.136 1.487.739 - - (1) Carrying amount as per TAS includes Lease Receivables and Factoring Receivables. Information about the Banks’ Use of Ratings in Calculating Credit Risk by Using Standard Approach Explained in risk classifications related to Article 6 of Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks in 4-II Financial Position and Risk Management of Bank – Credit Risk section.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 95 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Standardised Approach- Credit Risk Exposure and Credit Risk Mitigation Techniques Exposures before CCF and CRM Exposures post-CCF and CRM RWA and RWA density Risk Classification On-balance sheet amount Off-balance sheet amount On-balance sheet amount Off-balance sheet amount RWA RWA density Claims on sovereigns and Central Banks 1.640.970.173 2.611.524 1.725.514.958 1.504.829 1.958.825 0,11% Claims on regional governments or local authorities 5.523.160 530.218 5.522.554 226.038 2.874.296 50,00% Claims on administrative bodies and other non- commercial undertakings 10.738.941 4.957.387 10.534.497 1.808.616 12.343.113 100,00% Claims on multilateral development banks - - - - - - Claims on international organizations - - - - - - Claims on banks and intermediary institutions 56.649.430 17.675.947 56.617.735 12.851.985 42.252.830 60,82% Claims on corporates 622.752.606 768.693.490 557.569.821 476.800.115 925.097.852 89,44% Claims included in the regulatory retail portfolios 700.191.699 617.469.642 665.425.034 97.121.501 462.855.394 60,70% Claims secured by residential property 261.523.969 84.201.090 261.523.969 42.903.207 106.549.512 35,00% Claims secured by commercial property 236.478.247 113.864.909 236.478.247 72.445.664 162.300.308 52,54% Overdue loans 42.209.912 6.732.854 40.405.886 2.602.810 35.967.463 83,63% Higher risk categories decided by the Board - - - - - - Secured by mortgages - - - - - - Short-term claims and short-term corporate claims on banks and intermediary institutions - - - - - - Undertakings for collective investments in mutual funds - - - - - - Equity share investments 9.325.613 - 9.325.613 - 9.325.613 100,00% Other receivables 256.004.554 43.513.748 255.998.638 110.933 164.218.999 64,12% Total 3.842.368.304 1.660.250.809 3.824.916.952 708.375.698 1.925.744.205 42,48% Standardised Approach- Claims By Risk Classification And Risk Weights Risk Classification 0% 10% 20% 35% 50% 75% 100% 150% 200% 250% 2% 500% Total risk amount (pt- CCF and CRM) Claims on sovereigns and Central Banks 1.724.975.849 - 106.391 - - - 1.937.547 - - - - - 1.727.019.787 Claims on regional governments or local authorities - - - - 5.748.592 - - - - - - - 5.748.592 Claims on administrative bodies and other non- commercial undertakings - - - - - - 12.343.113 - - - - - 12.343.113 Claims on multilateral development banks - - - - - - - - - - - - - Claims on international organizations - - - - - - - - - - - - - Claims on banks and intermediary institutions - - 26.167.824 - 12.565.263 - 30.736.633 - - - - - 69.469.720 Claims on corporates - - 75.382.540 - 111.882.714 2.564 833.150.225 13.951.893 - - - - 1.034.369.936 Claims included in the regulatory retail portfolios - - 165.206.119 - 72.764.570 524.575.846 - - - - - - 762.546.535 Claims secured by residential property - - - 304.427.176 - - - - - - - - 304.427.176 Claims secured by commercial property - - - - 293.247.205 - 15.676.706 - - - - - 308.923.911 Overdue loans - - - - 16.458.958 - 24.173.247 2.376.491 - - - - 43.008.696 Higher risk categories decided by the Board - - - - - - - - - - - - - Secured by mortgages - - - - - - - - - - - - - Short-term claims and short-term corporate claims on banks and intermediary institutions - - - - - - - - - - - - - Undertakings for collective investments in mutual funds - - - - - - - - - - - - - Equity share investments - - - - - - 9.325.613 - - - - - 9.325.613 Other receivables 70.417.252 - 25.384.037 - 7.233 4.649.895 155.651.154 - - - - - 256.109.571 Total 1.795.393.101 - 292.246.911 304.427.176 512.674.535 529.228.305 1.082.994.238 16.328.384 - - - - 4.533.292.650
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 96 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XI. EXPLANATIONS ON THE CONSOLIDATED RISK MANAGEMENT AND RISK WEIGHTED AMOUNTS (continued) Publicly Announced Qualitative Disclosure on Market Risk The Parent Bank's market risks are managed within the framework of the “Policies Related to the Management of the Market Risk” approved by the Board of Directors, and the trading activities of the positions and portfolios subject to the market risks are carried out in accordance with the “Trading Strategy Policy”. The Parent Bank's market risks are measured by two methods, namely the standard method and the risk measurement method. In statutory reporting, the standard method is used in accordance with the “Regulation Regarding the Measurement and Evaluation of Parent Banks' Capital Adequacy”. In add ition, the risk measurement model and the value at risk (VAR) are measured in accordance with the “Communiqué on Calculation of Market Risk and Risk Measurement Models and Evaluation of Risk Measurement Models”. Historical simulation method is used in VAR measurements. Within the scope of the Parent Bank's "Policies for the Management of Market Risks"; VAR based limit and risk appetite has been determined and VAR results calculated by historical simulation method have been associated with statutory equity. The level of compliance with these limits is monitored daily. On the other hand, periodic stress tests are applied for market risks. Concerning market risks, the results obtained by both the standard method and the risk measurement model and the level of c ompliance with the limits are reported to the Parent Bank's Top Management and related business units on a daily basis. The following table discloses the amounts that are calculated using the standard method. Market Risk: Standardised approach RWA Direct (cash) products Interest rate risk (general and specific) 19.882.662 Equity risk (general and specific) 3.715.825 Foreign exchange risk 31.896.688 Commodity risk 2.827.338 Options Simplified approach - Delta-plus method 273.275 Scenario approach - Securitization - Total 58.595.788 Information related to Operational Risk The value at operational risk is calculated according to the basic indicator approach and once a year with year- end datas. 2 PP Amount 1 PP Amount CP Amount Total/ No. Of Years of Positive Gross Rate (%) Total Gross Income 74.627.921 59.619.508 76.778.499 70.341.976 15 10.551.296 Amount at Operational Risk (Total * 12,5) 131.891.205
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 97 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XII. EXPLANATIONS ON REMUNERATION POLICIES Explanations on Remuneration Committee The Parent Bank’s Remuneration Committee is comprised of two board members. The committee has convened for once during the year. The duties and responsibilities of the Committee include the following: • The scope and structure of the Parent Bank's operations and strategies ensure the effectiveness of a wage policy and wage policy that is consistent with its long -term goals and risk management structures, prevents excessive risk taking and contributes to effective risk management. • Controls and follows the remuneration practices on behalf of the Board of Directors • Ensures accordance of ethical values, strategical targets and internal balance of the Parent Bank with the wage policy. • Evaluates the remuneration policy and its practices in the context of risk management and submits proposals to the Board of Directors. • Fulfills the other duties specified in the related regulations The fundamental principles of the remuneration policy are applicable for General Manager, Deputy General Managers, and all bank employees. Key personnel refer to the bank employee who performs a function that has a significant impact on the Parent Bank's risk profile. Establishment of a good governance system in banks is possible by organizing an effective risk management and creating environments where effective communication, transparency and accountability are ensured; for this reason, the Parent Bank gives importance to identify and separate key personnel. Positions specified below are considered as key personnel by the Parent Bank: • Board Members • Deputy General Managers • Group Presidents • Head of the Supervisory Board • Head of Internal Control Department • Head of Risk Management Department • Head of Compliance Department As of the end of 2025, the number of critical key personnel is 26. Information on the design and structure of remuneration process Benefits to be paid to the managers and employees at all levels are in line with the Parent Bank's ethical values, internal balances and strategic objectives and cannot be associated only with the short term performance of the Parent Bank. Regardless of the performance of the units that are audited by internal audit, the benefits of are determined on the basis of the general wage increase rate set by the Parent Bank. Remuneration policy and practices are one of the important factors in ensuring employee engagement and improving performance. While determining the remuneration policy created to protect employees with high performance, sectoral data are taken into consideration by taking the internal wage balance and budget possibilities into account. Remuneration Committee at its meeting in December 2025 reviewed the remuneration policy and practices.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 98 SECTION IV: INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP (continued) XII. EXPLANATIONS ON REMUNERATION POLICIES (continued) Evaluation about how the Parent Bank’s remuneration processes take the current and future risks into account The Parent Bank follows the Risk Management Principles while implementing all the remuneration processes. Evaluation about how the Parent Bank associates variable remunerations with performance Although it is possible to make payments to the senior management and other personnel of the Parent Bank depending on the Parent Bank's performance, these payments are subject to objective conditions and in a way that will positively affect the Parent Bank's corporate values. Evaluation about the Parent Bank’s methods to adjust remunerations according to long -term performance There are no variable remunerations (performance premium, gesture, etc.) to be deferred due to long -term performance for the critical key personnel. Evaluation about the instruments used by the bank for variable remunerations and the purposes of use of such instruments In the Parent Bank cash and non -cash instruments are not used for the payment, wherefore no variable remunerations (performance premium, gesture, etc.) to be deferred due to long -term performance for the critical key personnel.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 99 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 balances 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 6.889.379 17.638.655 5.602.032 12.806.124 CBRT 389.965.013 432.931.008 350.667.221 254.337.728 Other(1) 1.090.606 19.793.004 685.208 9.328.580 Total 397.944.998 470.362.667 356.954.461 276.472.432 (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) 244.993.235 131.134.598 237.862.360 123.094.238 Time unrestricted amount - 59.997.000 - - Time restricted amount - - - - Other(2) 144.971.778 241.799.410 112.804.861 131.243.490 Total 389.965.013 432.931.008 350.667.221 254.337.728 (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: between 3% -33%) varied according to their maturity compositions, for their FC liabilities and precious metal liabilities at TRY, US Dollar, Euro and/or standard gol d 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. Mandatory reserves established for TRY 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 TRY Share” and “Legal Person TRY 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 e ight-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 TRY 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 purchases 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. With the Board of Directors decisions of the Central Bank of Macedonia, banks maintain reserve requirement of 9% for short term MKD liabilities with maturities less than two years and 0% for long term MKD liabilities with maturities more than two years, 22% for short term foreign liabilities with maturities less than two years and 10% for long term foreign liabilities with maturities more than two years. 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, 23% for short term foreign liabilities with maturities less than two years and 16% for long term foreign liab ilities with maturities more than two years and 100% for foreign currency index liabilities.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 100 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (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 - 101.743.404 - 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 - - 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 - 1.408.964 - 892.632 Swap transactions - 1.743.005 - 550.783 Futures transactions - - - - Options - 7.322 - - Other - - - - Total - 3.159.291 - 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 22.557.722 5.662.255 3.632.035 662.571 Foreign banks 13.742.561 21.265.709 9.664.988 20.275.862 Branches and offices abroad - - - - Total 36.300.283 26.927.964 13.297.023 20.938.433 b) Information on foreign banks: Unrestricted Balance Restricted Balance Current Period Prior Period Current Period Prior Period EU Countries 5.552.028 2.920.299 111.960 125.975 USA and Canada 3.923.164 2.357.176 39.973 - OECD Countries (1) 4.168.471 2.297.045 118.280 4.651.642 Offshore Banking Regions - - - - Other (2) 21.094.394 17.588.713 - - Total 34.738.057 25.163.233 270.213 4.777.617 (1) OECD Countries other than EU countries, USA and Canada (2) The other group generally consists of the TRNC and North Macedonia.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 101 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 12.874.307 20.136.541 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 191.610 81.751.244 - 43.169.595 b) Information on financial assets at fair value through other comprehensive income: Current Period Prior Period Debt securities 304.094.854 178.429.967 Quoted on a stock exchange 291.702.394 172.098.959 Not quoted 12.392.460 6.331.008 Equity Securities 1.922.871 1.410.308 Quoted on a stock exchange 1.708.414 1.255.594 Not quoted 214.457 154.714 Impairment provision (-) 940.759 1.365.541 Total 305.076.966 178.474.734
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 102 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 7.808.161 - 4.552.899 - Total 7.808.161 - 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 1.510.661.919 90.376.808 401.794 83.223.461 Corporation loans 880.245.972 55.733.527 361.256 82.063.299 Export loans 121.696.924 5.067.219 - - Import loans - - - - Loans given to financial sector 3.324.639 - - - Consumer loan 170.327.073 5.232.408 40.538 979.939 Credit cards 141.136.673 17.839.026 - 1.125 Other 193.930.638 6.504.628 - 179.098 Specialized lending 312.614.877 17.154.253 - - Other receivables - - - - Total 1.823.276.796 107.531.061 401.794 83.223.461 Standard Loans Loans Under Close Monitoring Current Period Prior Period Current Period Prior Period 12 Months Expected Loss Provision 11.242.286 6.428.715 - - Significant Increase in Credit Risk - - 14.985.461 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. Current Period Commercial/Corporate Loans Consumer Loans Total Standard Loans 1.579.848.125 243.428.671 1.823.276.796 Loans Under Follow-up 169.522.611 21.633.705 191.156.316 Total 1.749.370.736 265.062.376 2.014.433.112 12 Months Expected Loss Provision 9.991.595 1.250.691 11.242.286 Significant Increase in Credit Risk 14.347.593 637.868 14.985.461 Total Expected Loss Provisions 24.339.188 1.888.559 26.227.747 Standard Loans (Net) 1.569.856.530 242.177.980 1.812.034.510 Loans Under Follow-up (Net) 155.175.018 20.995.837 176.170.855 Net Balance on Balance Sheet 1.725.031.548 263.173.817 1.988.205.365
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 103 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) b) Information on the first and second group loans including loans that have been restructured or rescheduled : (continued) Prior Period Commercial/Corporate Loans Consumer Loans Total Standard Loans 1.163.398.593 193.992.288 1.357.390.881 Loans Under Follow-up 121.766.389 10.071.007 131.837.396 Total 1.285.164.982 204.063.295 1.489.228.277 12 Months Expected Loss Provision 5.898.898 529.817 6.428.715 Significant Increase in Credit Risk 18.019.706 280.845 18.300.551 Total Expected Loss Provisions 23.918.604 810.662 24.729.266 Standard Loans (Net) 1.157.499.695 193.462.471 1.350.962.166 Loans Under Follow-up (Net) 103.746.683 9.790.162 113.536.845 Net Balance on Balance Sheet 1.261.246.378 203.252.633 1.464.499.011 c) Distribution of cash loans by maturity structure: Loans under close monitoring Current Period Standard Loans Loans Not Subject To Restructuring Restructured Short Term Loans 614.964.490 43.840.676 9.118.156 Medium and Long Term Loans 1.208.312.306 63.690.385 74.507.099 Prior Period Short Term Loans 416.723.834 25.579.183 2.475.265 Medium and Long Term Loans 940.667.047 52.120.364 51.662.584
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 104 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 consumer loans, individual credit cards, personnel loans and credit cards(*): Current Period Short-term Medium and long- term Total Consumer loans-TRY 10.576.058 90.640.519 101.216.577 Real estate loans 23.438 78.656.720 78.680.158 Automobile loans 800.687 1.606.101 2.406.788 Consumer loans 9.751.933 10.377.698 20.129.631 Other - - - Consumer loans- Indexed to FC 2.504 4.655.158 4.657.662 Real estate loans - 4.283.471 4.283.471 Automobile loans - 163.968 163.968 Consumer loans 2.504 207.719 210.223 Other - - - Consumer loans- FC 109.081 32.878.121 32.987.202 Real estate loans 3.818 11.036.648 11.040.466 Automobile loans 61 51.421 51.482 Consumer loans 105.202 21.787.972 21.893.174 Other - 2.080 2.080 Individual credit cards-TRY 83.083.174 3 83.083.177 Installment 26.647.044 3 26.647.047 Non-installment 56.436.130 - 56.436.130 Individual credit cards-FC 46.653 1.003.528 1.050.181 Installment - 917.828 917.828 Non-installment 46.653 85.700 132.353 Personnel loans-TRY 2.151.525 1.342.456 3.493.981 Real estate loans - - - Automobile loans - - - Consumer loans 2.151.525 1.342.456 3.493.981 Other - - - Personnel loans-Indexed to FC 25 264.063 264.088 Real estate loans - 247.188 247.188 Automobile loans - 6.017 6.017 Consumer loans 25 10.858 10.883 Other - - - Personnel loans-FC 4.319 778.506 782.825 Real estate loans 27 399.875 399.902 Automobile loans - - - Consumer loans 4.292 378.631 382.923 Other - - - Personnel credit cards-TRY 1.899.305 - 1.899.305 Installment 540.896 - 540.896 Non-installment 1.358.409 - 1.358.409 Personnel credit cards-FC 4.398 26.225 30.623 Installment - 21.339 21.339 Non-installment 4.398 4.886 9.284 Overdraft accounts-TRY (Retail customers)(**) 30.694.798 - 30.694.798 Overdraft accounts-FC (Retail customers)(***) 756.369 84.626 840.995 Total 129.328.209 131.673.205 261.001.414 (*) Interest income accruals and rediscounts are not included in the table above. (**) TRY 1.328.898 of the overdraft account consists of loans given to personnel. (**) TRY 8.441 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 105 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 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 106 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) Information on commercial installments loans and corporate credit cards(*): Current Period Short-term Medium and long- term Total Commercial installment loans-TRY 28.571.563 141.714.686 170.286.249 Business premises loans - 1.114.897 1.114.897 Automobile loans 224.842 3.214.363 3.439.205 Consumer loans 28.346.721 137.385.426 165.732.147 Other - - - Commercial installment loans- Indexed to FC 2.795.677 14.447.315 17.242.992 Business premises loans - - - Automobile loans - - - Consumer loans - - - Other 2.795.677 14.447.315 17.242.992 Commercial installment loans - FC 12.460.459 202.002.676 214.463.135 Business premises loans - - - Automobile loans - - - Consumer loans 2.320.082 155.963.152 158.283.234 Other 10.140.377 46.039.524 56.179.901 Corporate credit cards-TRY 69.411.581 94 69.411.675 Installment 14.631.543 94 14.631.637 Non-installment 54.780.038 - 54.780.038 Corporate credit cards-FC 6.456 82.597 89.053 Installment - 29.164 29.164 Non-installment 6.456 53.433 59.889 Overdraft accounts-TRY (Commercial customers) 63.970.348 - 63.970.348 Overdraft accounts-FC (Commercial customers) 243.211 203 243.414 Total 177.459.295 358.247.571 535.706.866 (*) 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 107 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) f) Loans by customers (*): Current Period Prior Period Public 21.720.830 25.086.732 Private 1.992.712.282 1.464.141.545 Total 2.014.433.112 1.489.228.277 (*) Non-performing loans balance is not included in the table above. g) Domestic and foreign loans(*): Current Period Prior Period Domestic loans 1.895.756.090 1.415.895.552 Foreign loans 118.677.022 73.332.725 Total 2.014.433.112 1.489.228.277 (*) Non-performing loans balance is not included in the table above. h) Loans granted to subsidiaries and associates: None. (31 December 2024: None.) i) Specific provisions related to loans or credit-impaired losses (Stage III): Current Period Prior Period Loans with Limited Collectability 5.623.385 3.163.227 Loans with Doubtful Collectability 10.377.538 2.491.815 Uncollectible Loans 25.217.844 13.933.049 Total 41.218.767 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. j) Information on non-performing loans (Net): j.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 873.891 530.019 691.997 Restructured loans 873.891 530.019 691.997 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 108 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) Information on non-performing loans (Net): (continued) j.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 (+) 49.385.579 7.063.775 8.648.976 Transfers from Other NPL Categories (+) - 35.337.165 18.454.337 Transfers to Other NPL Categories (-) 36.018.391 17.773.111 - Collections (-)(*) 6.225.203 3.834.522 4.813.382 Write-offs (-) 42 35 1.086.462 Sold (-) - - - Corporate and Commercial Loans - - - Consumer Loans - - - Credit Cards - - - Other - - - Current period end balance 16.582.889 27.051.112 37.919.856 Provision (-) 5.623.385 10.377.538 25.217.844 Net balance on balance sheet 10.959.504 16.673.574 12.702.012 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. i.3. Information on non-performing loans segments.: Current Period Commercial/Corporate Loans Consumer Loans Total Non-Performing Loans 72.890.634 8.663.223 81.553.857 Stage 3 Loan Provisions 36.012.415 5.206.352 41.218.767 Non-Performing Loans (Net) 36.878.219 3.456.871 40.335.090 Prior Period Commercial/Corporate Loans Consumer Loans Total Non-Performing Loans 28.688.360 3.726.813 32.415.173 Stage 3 Loan Provisions 17.278.875 2.309.216 19.588.091 Non-Performing Loans (Net) 11.409.485 1.417.597 12.827.082
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 109 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) i) Information on non-performing loans (Net): (continued) i.4. 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 1.394.507 3.053.117 7.720.977 Provisions (-) 529.738 1.268.068 5.770.941 Net balance in the balance sheet 864.769 1.785.049 1.950.036 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. i.5. 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) 10.959.504 16.673.574 12.702.012 Loans to granted individuals and corporates (Gross) 16.582.889 27.051.112 37.919.856 Provisions (-) 5.623.385 10.377.538 25.217.844 Loans to granted real persons and legal entities (Net) 10.959.504 16.673.574 12.702.012 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) - - -
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 110 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) i) Information on non-performing loans (Net): (continued) i.6. 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) 1.600.464 3.736.484 3.260.740 Interest Accruals and Valuation Differences 2.440.090 5.893.791 8.298.215 Provision (-) 839.626 2.157.307 5.037.475 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 j) Information on expected credit losses: Current Period Stage 1 Stage 2 Stage 3 Total Period Beginning Balance 6.428.715 18.300.551 19.588.091 44.317.357 Additions 4.966.864 4.478.144 22.628.703 32.073.711 Transfer to Stage 1 1.358.717 (1.350.611) (8.106) - Transfer to Stage 2 (807.542) 1.340.841 (533.299) - Transfer to Stage 3 (267.942) (1.960.311) 2.228.253 - Collections (-) 436.526 5.823.153 1.598.336 7.858.015 Sold (-) - - - - Write-offs (-) - - 1.086.539 1.086.539 Period end Balance 11.242.286 14.985.461 41.218.767 67.446.514 Prior Period Stage 1 Stage 2 Stage 3 Total Period Beginning Balance 11.188.618 22.407.362 15.845.130 49.441.110 Additions 834.181 2.274.350 6.005.770 9.114.301 Transfer to Stage 1 293.129 (288.716) (4.413) - Transfer to Stage 2 (682.540) 917.196 (234.656) - Transfer to Stage 3 (223.500) (706.315) 929.815 - Collections (-) 4.981.173 6.303.326 2.470.107 13.754.606 Sold (-) - - 166.688 166.688 Write-offs (-) - - 316.760 316.760 Period end Balance 6.428.715 18.300.551 19.588.091 44.317.357
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 111 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) k) 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 lower amount of receivables. Within the context of this collection policy, nonp erforming loans are collected in considerable amounts. Collections are firstly offset against lawsuits and expenses, interest and principle receivables from loans. l) Explanations on write-off policy: In the current period, the Group derecognised the non -performing loan amounting to TRY 1.086.539 on the grounds that there was no reasonable expectation, and the Group's non -performing loan ratio decreased from 3,94% to 3,89% 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.) Derecognition does not mean that the Group has waived its right to the receivable, therefore legal and administrative follow-up procedures continue effectively for derecognized receivables, just as they do for receivables that remain recognized in the statement of financial position.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 112 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 37.868.233 49.818.119 106.094.488 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 127.446.468 42.065.504 188.359.942 58.855.898 b) Information on public sector debt investments financial assets measured at amortised cost: Current Period Prior Period Government bonds 765.284.729 545.492.281 Treasury bills 397.036 223.183 Other public sector debt securities 28.650.119 13.484.382 Total 794.331.884 559.199.846 c) Information on financial assets measured at amortised cost: Current Period Prior Period Debt securities 794.331.884 561.608.947 Quoted on a stock exchange 793.934.848 558.976.663 Not quoted 397.036 2.632.284 Impairment provision (-) - - Total 794.331.884 561.608.947 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 18.615.952 32.692.096 Purchases during the year(1) 255.987.706 211.766.428 Disposals through sales and redemptions (41.880.721) (113.607.026) Impairment provision (-) - - Balance at the end of the period 794.331.884 561.608.947 (1) The difference between the discount amount of TRY 352.845.329 as of 31 December 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 113 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 Statements 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. 6.821.231 2.613.321 2.178.914 1.044.388 - 1.773.715 636.361 - 2. 1.266.533 864.218 461.987 111.748 - 96.701 56.875 - 3. 12.558.845 9.959.937 1.157.373 2.851.180 - 4.981.467 3.157.519 - 4. 1.330.896 1.005.314 209.171 170.721 60.402 570.247 395.897 - (1) The financial data is obtained from unaudited 31 Decembember 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. 104.256.048 13.821.307 108.756 6.471.756 310.035 1.068.849 938.114 - 2. 697.607 689.839 770 238.706 - 198.084 164.405 - 3. 93.604 93.202 110 5.977 - (825) (1.011) - 4. 1.932.729 1.541.557 26.944 863.229 - 250.388 119.326 - (1) The amounts are obtained from the unconsolidated financial statements of the companies used in consolidation as of 31 Decembember 2025.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 114 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 1.392.032 571.920 Purchases (1) 15.211 - Bonus shares obtained profit from current year’s share - 1.428 Dividends from current year income 422.759 351.901 Sales - - Transfers - - Revaluation decrease (-) / increase (2) 954.062 218.591 Impairment provisions (-)/ reversals - - Balance at the end of the period 4.797.231 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. g) Sectorial information and related carrying amounts of associates: Current Period Prior Period Banks 4.146.393 2.902.429 Insurance companies - - Factoring companies - - Leasing companies - - Financing companies - - Other financial investments 497.098 349.030 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 115 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 10.528.650 882.094 2.038.822 1.076.769 1.579.866 14.210 - 1.554 - Other Comprehensive Income according to TAS 16.034 37.554.107 2.652 11.484.394 - 8.831.635 - 1.195.617 - - Profit / Loss 2.952.248 16.849.534 519.700 1.265.554 838.603 696.085 17.640 (156.846) 152.297 850.955 Net Profit 1.820.552 16.849.534 519.700 1.347.012 838.603 696.085 17.640 10.751 140.672 850.955 Prior Period Profit/Loss 1.131.696 - - (81.458) - - - (167.597) 11.625 - 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 (-) 3.030 6.239.555 - - 5.360 7.651 - - - - Leasehold Improvements (-) - 3.394 - 47.182 - 98.204 - - - - Intangible Assets (-) 28.057 1.629 11.375 243.827 29.626 876.527 - 85.901 17.134 - Total Core Capital 3.580.760 62.578.085 2.916.071 17.472.490 3.126.386 11.652.858 32.350 1.238.000 386.717 12.350.955 SUPPLEMENTARY CAPITAL - - 161.720 669.360 304.024 224.445 - - - - CAPITAL 3.580.760 62.578.085 3.077.791 18.141.850 3.430.410 11.877.303 32.350 1.238.000 386.717 12.350.955 NET AVAILABLE CAPITAL 3.580.760 62.578.085 3.077.791 18.141.850 3.430.410 11.877.303 32.350 1.238.000 386.717 12.350.955 (1) The amounts are obtained from the unconsolidated financial statements of the companies used in consolidation as of 31 December 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 inflation adjustment on shareholders' equity items. Extraordinary reserves are the status reserves which have bee n appropriated with the General Assembly decision after distributable profit have been transferred to legal reserves. Legal reserves are the status reserves 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 116 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) e) 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 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. 122.957 121.247 561 22.552 - 21.247 - - (1) The financial data is obtained from 31 December 2025 financial statements. g) 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 h) Information related to the subsidiaries as shown in (g): (1) Total assets Shareholders’ equity Total fixed assets Interest/Profit Share income Income from marketable securities portfolio Current period profit/loss Prior period profit/loss Fair value 1. 8.385.504 3.608.817 115.678 2.895.824 90.335 1.820.552 1.777.311 - 2. 85.143.019 62.506.498 38.506.724 482.000 - 16.849.534 4.204.012 - 3. 24.191.290 2.927.446 44.930 4.487.050 - 519.700 442.349 - 4. 104.694.899 17.763.499 2.619.713 4.143.978 572.700 1.347.012 972.584 - 5. 18.683.495 3.156.012 40.027 5.639.880 - 838.603 743.290 - 6. 71.863.691 12.627.589 2.555.523 2.809.282 325.875 696.085 739.954 - 7. 18.556.555 32.350 36 9.609 - 17.640 7.001 - 8. 1.469.958 1.323.901 280.074 29.856 15.549 10.751 734 - 9. 1.243.312 403.851 28.556 118.783 - 140.672 10.461 - 10. 12.886.790 12.350.955 - 1.320.541 - 850.955 - - (1) The financial data is obtained from 31 December 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 commenced operations. i) 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 46.755.206 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 10.727.418 6.580.467 Sales - - Transfer - - Revaluation increase/decrease (5) 22.312.648 7.316.353 Impairment Provisions (-)/ Reversals - - Balance at the end of the period 101.539.282 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.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 117 SECTION V: EXPLANATIO NS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (8) Information on subsidiaries (Net): (continued) j) Sectorial information on subsidiaries and the related carrying amounts: Current Period Prior Period Banks 42.677.438 20.192.300 Insurance companies 242.107 242.107 Factoring companies 3.161.941 1.728.708 Leasing companies 2.987.739 1.667.458 Financing companies - - Other financial subsidiaries 52.329.484 30.953.503 Other non-financial subsidiaries 140.573 - k) Subsidiaries quoted in the stock exchange: Current Period Prior Period Quoted to domestic stock(1) 48.329.544 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 1.891.588 1.677.359 1.156.893 1.004.639 1 - 4 years 13.031.627 10.177.413 14.063.918 9.113.247 More than 4 years 20.103.974 8.101.067 4.254.970 2.684.645 Total 35.027.189 19.955.839 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 35.027.189 19.475.781 Unearned revenues from financial lease (15.071.350) (6.673.250) Total 19.955.839 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 79.562 42.813 Financial lease receivables with doubtful collectability 91.086 8.951 Uncollectible financial lease receivables 219.904 196.381 Provisions (249.683) (166.926) Total 140.869 81.219
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 118 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (10) Information on finance lease receivables (Net): (continued) d) Information on finance lease receivables and provision movement: Current Period Commercial/Corporate Receivables Consumer Receivables Total Standard Receivables 19.287.844 - 19.287.844 Receivables Under Follow-up 667.995 - 667.995 Non-Performing Receivables 390.552 - 390.552 Total 20.346.391 - 20.346.391 Stage 1 Loan Provisions 160.324 - 160.324 Stage 2 Loan Provisions 1.396 - 1.396 Stage 3 Loan Provisions 249.683 - 249.683 Total Provision 411.403 - 411.403 Standard Receivables (Net) 19.127.520 - 19.127.520 Receivables Under Follow-up (Net) 666.599 - 666.599 Non-Performing Receivables (Net) 140.869 - 140.869 Net Balance on Balance Sheet 19.934.988 - 19.934.988 Prior Period Commercial/Corporate Receivables Consumer Receivables Total Standard Receivables 12.205.058 - 12.205.058 Receivables Under Follow-up 597.473 - 597.473 Non-Performing Receivables 248.145 - 248.145 Total 13.050.676 - 13.050.676 Stage 1 Loan Provisions 228.634 - 228.634 Stage 2 Loan Provisions 12.653 - 12.653 Stage 3 Loan Provisions 166.926 - 166.926 Total Provision 408.213 - 408.213 Standard Receivables (Net) 11.976.424 - 11.976.424 Receivables Under Follow-up (Net) 584.820 - 584.820 Non-Performing Receivables (Net) 81.219 - 81.219 Net Balance on Balance Sheet 12.642.463 - 12.642.463
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 119 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (11) Information on factoring receivables: a) Maturity structure of factoring receivables: Current Period Prior Period TRY FC TRY FC Short-term 14.116.938 3.788.873 8.858.683 1.131.056 Medium and long-term - - - - Total 14.116.938 3.788.873 8.858.683 1.131.056 b) Information on factoring receivables and provision movement: Current Period Commercial/Corporate Receivables Consumer Receivables Total Standard Receivables 17.623.914 - 17.623.914 Receivables Under Follow-up - - - Non-Performing Receivables 281.897 - 281.897 Total 17.905.811 - 17.905.811 Stage 1 Loan Provisions 304.024 - 304.024 Stage 2 Loan Provisions - - - Stage 3 Loan Provisions 181.128 - 181.128 Total Provision 485.152 - 485.152 Standard Receivables (Net) 17.319.890 - 17.319.890 Receivables Under Follow-up (Net) - - - Non-Performing Receivables (Net) 100.769 - 100.769 Net Balance on Balance Sheet 17.420.659 - 17.420.659 Prior Period Commercial/Corporate Receivables Consumer Receivables Total Standard Receivables 9.841.765 - 9.841.765 Receivables Under Follow-up - - - Non-Performing Receivables 147.974 - 147.974 Total 9.989.739 - 9.989.739 Stage 1 Loan Provisions 69.904 - 69.904 Stage 2 Loan Provisions - - - Stage 3 Loan Provisions 86.834 - 86.834 Total Provision 156.738 - 156.738 Standard Receivables (Net) 9.771.861 - 9.771.861 Receivables Under Follow-up (Net) - - - Non-Performing Receivables (Net) 61.140 - 61.140 Net Balance on Balance Sheet 9.833.001 - 9.833.001 Current Period Stage 1 Stage 2 Stage 3 Total Period Beginning Balance 69.904 - 86.834 156.738 Additions 393.586 - 96.006 489.592 Transfer to Stage 1 (42) - 42 - Transfer to Stage 2 - - - - Transfer to Stage 3 - - - - Collections (-) 159.424 - 1.754 161.178 Sold (-) - - - - Write-offs (-) - - - - Period end Balance 304.024 - 181.128 485.152 Prior Period Stage 1 Stage 2 Stage 3 Total Period Beginning Balance 87.370 - 31.281 118.651 Additions 142.998 - 60.725 203.723 Transfer to Stage 1 (1.465) - 1.465 - Transfer to Stage 2 - - - - Transfer to Stage 3 - - - - Collections (-) 158.999 - 6.637 165.636 Sold (-) - - - - Write-offs (-) - - - - Period end Balance 69.904 - 86.834 156.738
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 120 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (12) Information on derivative financial assets for hedging purposes: None. (31 December 2024: None.) (13) Information on tangible assets: Current Period Balance at the end of the prior period Additions Revaluation Increase Disposals (-) Transfer Balance at the end of the period Cost: Immovable 37.629.664 8.061.645 25.215.988 1.974.311 (5.432.403) 63.500.583 Right of use assets – Immovable 5.324.252 4.076.936 - 836.412 - 8.564.776 Right of use assets – Movable 669.271 1.162.186 - 869.926 - 961.531 Office machines 4.940.358 2.077.251 - 383.692 - 6.633.917 Fixed assets obtained due to non-performing loans 3.454.017 7.975.578 - 1.550.635 - 9.878.960 Lease hold improvements costs 4.761.840 2.283.968 - 19.676 - 7.026.132 Other 1.906.176 2.491.176 - 115.081 - 4.282.271 Total Cost 58.685.578 28.128.740 25.215.988 5.749.733 (5.432.403) 100.848.170 Accumulated depreciation (-) Immovable 2.900.057 354.710 3.654.801 2.570.306 - 4.339.262 Right of use assets – Immovable 1.950.840 607.606 - 872.740 - 1.685.706 Right of use assets – Movable 227.049 369.612 - 141.599 - 455.062 Office machines 2.431.993 1.166.149 - 99.310 - 3.498.832 Fixed assets obtained due to non-performing loans 37.829 216.448 - 101.175 - 153.102 Lease hold improvements costs 1.294.736 1.142.543 - 22.616 - 2.414.663 Other 658.596 423.089 - 23.332 - 1.058.353 Total Accumulated Depreciation 9.501.100 4.280.157 3.654.801 3.831.078 - 13.604.980 Provision for impairment (-) Immovable 92.431 - 107.756 - - 200.187 Fixed assets obtained due to non-performing loans - - - - - - Total provision for impairment (-) 92.431 - 107.756 - - 200.187 Net Book Value 49.092.047 23.848.583 21.453.431 1.918.655 (5.432.403) 87.043.003 Prior Period Balance at the end of the prior period Additions Revaluation Increase Disposals (-) Transfer Balance at the end of the period Cost: Immovable 23.434.379 1.558.704 13.017.555 380.974 - 37.629.664 Right of use assets – Immovable 3.266.259 2.493.664 - 435.671 - 5.324.252 Right of use assets – Movable 170.295 584.365 - 85.389 - 669.271 Office machines 3.379.002 1.785.637 - 224.281 - 4.940.358 Fixed assets obtained due to non-performing loans 3.422.100 2.019.182 - 1.987.265 - 3.454.017 Lease hold improvements costs 2.414.763 2.370.537 - 23.460 - 4.761.840 Other 1.276.262 791.450 - 161.536 - 1.906.176 Total Cost 37.363.060 11.603.539 13.017.555 3.298.576 - 58.685.578 Accumulated depreciation (-) Immovable 1.784.935 227.183 898.380 10.441 - 2.900.057 Right of use assets – Immovable 1.264.590 904.071 - 217.821 - 1.950.840 Right of use assets – Movable 98.129 194.847 - 65.927 - 227.049 Office machines 1.756.436 747.580 - 72.023 - 2.431.993 Fixed assets obtained due to non-performing loans 15.423 35.505 - 13.099 - 37.829 Lease hold improvements costs 689.737 620.570 - 15.571 - 1.294.736 Other 519.004 179.488 - 39.896 - 658.596 Total Accumulated Depreciation 6.128.254 2.909.244 898.380 434.778 - 9.501.100 Provision for impairment (-) Immovable 49.560 - 54.314 11.443 - 92.431 Fixed assets obtained due to non-performing loans 278 - - 278 - - Total provision for impairment (-) 49.838 - 54.314 11.721 - 92.431 Net Book Value 31.184.968 8.694.295 12.064.861 2.852.077 - 49.092.047
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 121 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (14) Information on intangible assets: Current Period Balance at the end of the prior period Additions Disposals (-) Transfer Balance at the end of the period Cost: Goodwill - - - - - Other intangible assets 5.599.030 4.029.159 313.357 - 9.314.832 Total Cost 5.599.030 4.029.159 313.357 - 9.314.832 Accumulated Depreciation (-) Goodwill - - - - - Other intangible assets 2.147.868 1.433.634 361 - 3.581.141 Total Accumulated Depreciation 2.147.868 1.433.634 361 - 3.581.141 Net Book Value 3.451.162 2.595.525 312.996 - 5.733.691 Prior Period Balance at the end of the prior period Additions Disposals (-) Transfer Balance at the end of the period Cost: Goodwill - - - - - Other intangible assets 3.501.255 2.193.643 95.868 - 5.599.030 Total Cost 3.501.255 2.193.643 95.868 - 5.599.030 Accumulated Depreciation (-) Goodwill - - - - - Other intangible assets 1.399.614 757.302 9.048 - 2.147.868 Total Accumulated Depreciation 1.399.614 757.302 9.048 - 2.147.868 Net Book Value 2.101.641 1.436.341 86.820 - 3.451.162 (15) 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 24.380.781 10.262.284 Purchase 3.214.865 722.291 Sales (2.844.159) (1.072) Transfer(1) 5.432.403 - Revaluation increase/decrease 18.577.672 9.541.065 Balance at the end of the period 49.730.868 25.350.087 (1) The Parent Bank has reclassified a real estate property previously classified as Property, Plant and Equipment to Investment Property due to a change in its intended use. 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. (16) Information on deferred tax assets: Current Period Prior Period Deferred Tax Asset /(Liability) Provisions(1) 12.067.381 10.686.922 Revaluation of Financial Assets (24.104.729) (9.888.345) Other 22.189.485 20.000.635 Deferred Tax Asset /(Liability)(2): 10.152.137 20.799.212 Deferred tax accounted under shareholders’ equity (7.900.320) (125.093) Fair value through other comprehensive income arising from securities’ internal efficiency-stock market difference 1.136.573 2.224.126 Actuarial gains/losses 888.692 1.034.389 Valuation of subsidiaries (9.925.585) (3.383.608) (1) Includes reserve for employee benefits and other provisions. (2) Net deferred tax assets amounting to TRY 10.152.137 (31 December 2024: TRY 20.799.212) consists of deferred tax assets which amounting to TRY 19.380.129 (31 December 2024: TRY 23.849.997) and deferred tax liabilities amounting to TRY 9.227.992 (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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 122 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) I. EXPLANATIONS AND NOTES RELATED TO THE ASSETS (continued) (17) Information on assets held for sale and held from discontinued operations: Current Period Prior Period Cost 212 1.034 Accumulated Depreciation (-) - - Net book value 212 1.034 Opening Balance 1.034 3.522 Acquisition - - Transfer (Net) - - Disposals (Net) (822) (2.488) Revaluation Increase - - Impairment (-) / Reversal - - Depreciation (-) - - Closing net book value 212 1.034 (18) Information on other assets: Other assets balance in the balance sheet amounts to TRY 116.834.221 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 123 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 66.091.355 - 37.967.182 594.969.973 137.788.391 1.342.905 1.692.681 167.806 840.020.293 Foreign currency deposits 313.360.885 - 80.033.835 312.327.025 54.694.729 40.811.543 29.135.106 33.590 830.396.713 Residents in Türkiye 230.397.249 - 58.873.433 284.603.214 34.415.591 13.964.938 13.858.742 32.685 636.145.852 Residents abroad 82.963.636 - 21.160.402 27.723.811 20.279.138 26.846.605 15.276.364 905 194.250.861 Public sector deposits 44.447.525 - 119.206.645 40.976.883 3.472.609 1.810.897 425.800 - 210.340.359 Commercial inst. deposits 118.468.819 - 225.184.397 350.577.488 70.946.372 11.548.628 256.173 - 776.981.877 Other inst. deposits 12.352.921 - 16.251.821 114.623.597 35.473.854 5.269.092 230.935 - 184.202.220 Precious metals 249.172.955 - 171.215 29.727.610 2.614.571 749.960 457.934 - 282.894.245 Interbank deposits 240.121.120 - 125.427.115 116.172.344 266.916 493 1.014.398 - 483.002.386 CBRT 21.227 - - - - - - - 21.227 Domestic banks 1.279.263 - 106.957.374 67.089.727 229.362 - - - 175.555.726 Foreign banks 208.736.077 - 1.452.491 49.082.617 37.554 493 1.014.398 - 260.323.630 Participation banks 30.084.553 - 17.017.250 - - - - - 47.101.803 Total 1.044.015.580 - 604.242.210 1.559.374.920 305.257.442 61.533.518 33.213.027 201.396 3.607.838.093 (*) As of 31 December 2025, the Parent Bank has a total of TRY 4.689.122 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 124 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL 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 253.697.150 186.351.060 582.917.707 552.799.325 Foreign currency saving deposits 120.060.051 87.087.942 284.682.937 181.515.249 Other deposits in the form of saving deposits 109.853.116 59.340.316 128.886.497 42.686.712 Foreign branches’ deposits under foreign authorities' insurance 6.955.260 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 participatio n 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 Insurance 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 90.593.025. 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 ins urance 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 434.858 900.174 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 58.548 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 - 1.280.492 - 1.108.679 Swap transactions - 1.489.964 - 1.385.029 Future transactions - - - - Options - 8.002 - 43 Other - - - - Total - 2.778.458 - 2.493.751
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 125 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 1.927.815 19.687.225 4.380.802 7.348.326 Foreign banks, institutions and funds 1.637.145 92.958.782 19.357.297 33.384.384 Total 3.564.960 112.646.007 23.738.099 40.732.710 b) Maturity structure of funds borrowed: Current Period Prior Period TRY FC TRY FC Short-term 2.469.982 28.288.688 22.889.399 6.779.705 Medium and long-term 1.094.978 84.357.319 848.700 33.953.005 Total 3.564.960 112.646.007 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 23,28% of saving deposits and 23,02% of foreign currency deposits. In order to fulfill the short term liquidity requirements, the Group borrows loans from interbank money markets. The Group’s 59,25% of bank deposits and 35,63% of other deposits consist of foreign currency deposits. (4) Securities issued (Net): Current Period Prior Period TRY FC TRY FC Bills 3.242.154 - 4.836.295 - Bonds - - - - Assets Backed Securities 18.518.326 - 7.356.688 - Total 21.760.480 - 12.192.983 - (5) Explanations to the funds: Funds are granted as loans in conformity with the protocols between the Parent Bank and fund owner ministry or institutions. These funds include funds from the Ministry of Industry and Technology, Ministry of Treasury and Finance, and other funds. Maturity structure of funds: Current Period Prior Period Short Term 1.629 711 Long Term 441.286 926.376 Total 442.915 927.087 (5) Information on other liabilities: Other liabilities balance in the balance sheet amounts to TRY 137.990.614 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 126 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 - - - - 1 - 4 years 4.618 4.207 - - More than 4 years - - - - Total 4.618 4.207 - - c) Explanations on operational leases: Current Period Prior Period Gross Net Gross Net Up to 1 year 363.628 307.491 293.300 247.191 1 - 4 years 1.909.285 1.309.602 1.497.157 1.010.321 More than 4 years 10.185.331 7.017.152 5.665.543 2.966.208 Total 12.458.244 8.634.245 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 31 December 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 31 December 2025, the Group’s stage 3 expected credit losses for unindemnified and unfunded non-cash loans balance is TRY 694.187. (31 December 2024: TRY 386.979). c) Information on other provisions: Total other provision balance amounting to TRY 4.655.462 (31 December 2024: TRY 3.147.228) consists of TRY 694.187 (31 December 2024: TRY 386.979) for stage 3 expected credit losses of unindemnified and unfunded non -cash loans, TRY 2.910.214 (31 December 2024: TRY 2.289.507) for stage 1 and stage 2 expected credit loss amount of non -cash loans, TRY 174.820 (31 December 2024: TRY 170.779) for legal cases filed against the Group, and TRY 876.241 (31 December 2024: TRY 299.963) of other provisions. d) Movement of employee termination benefits: Severance indemnity provision of the Parent Bank as of 31 December 2025 is calculated by an independent company by using the actuarial conjectures. The amount calculated for the employee termination benefits of the Parent Bank as a result of the actuarial valuation according to TAS 19, is as follows; Current Period Prior Period Inflation Rate 23,38% 23,33% Discount Rate 28,93% 28,70% Estimated Real Wage Growth Rate Inflation Rate + 0,2%(*) 11,54% / 23,53%(**) (*) For the year 2026, used 0.2% above the inflation rate. (*) For the first half of the 2025, a utilization rate of 11,54% is applied, while a rate of 23,53% is used for subsequent periods/years.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 127 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (9) Explanations on provisions: (continued) d) Movement of employee termination benefits: (continued) Calculated amounts as a result of actuarial conjectures are as follows: Current Period Prior Period As of 1 January 5.647.616 4.497.855 Charge for the year 766.942 609.043 Interest Expense 1.552.758 1.070.100 Actuarial gain/loss (477.101) 764.664 Prior period service cost composed current period 6.172 285 Payment/The limitation of benefits/ Loss (Gain) therefore discharge 5.194 3.075 Benefits paid within the period (-) (278.385) (1.297.406) Total 7.223.196 5.647.616 e) Liabilities for employee benefits: Total employee benefits provision amounting to TRY 9.986.071 (31 December 2024: TRY 7.084.398) consists of TRY 2.382.218 (31 December 2024: TRY 1.206.445) for unused vacation accruals, TRY 6.581.637 (31 December 2024: TRY 5.266.718) for severance indemnity provision for Group personnel, TRY 641.559 (31 December 2024: TRY 380.898) for severance indemnity provision for outsources, and TRY 380.657 (31 December 2024: TRY 230.337) for other personnel provision. The Group’s accounts for actuarial gains / losses under equity commencing from 1 January 2013. f) Liabilities arising from retirement benefits: f.1. Liabilities of pension funds founded as per the Social Security Institution: None. f.2. Liabilities resulting from all kinds of pension funds, foundations et c. which provide post-retirement benefits for the employees: Based on the results of the actuarial reports prepared as of 31 December 2025, it was determined that there is no technical deficit for Türkiye Halk Bankası AŞ Emekli Sandığı and T.C. Ziraat Ban kası ve Türkiye Halk Bankası Çalışanları Emekli Sandığı Vakfı. The above mentioned actuarial review, which was made in accordance with the principles of the related law, measures the present value of the liability as of 31 December 2025, in other words; it measures the amount to be paid to the Social Security Institution by the Parent Bank. Actuarial assumptions used in the calculation are given below. Assumptions Current Period Prior Period Discount Rate 9,80% 9,80% Mortality Rate CSO 1980 women/men CSO 1980 women/men T. Halk Bankası Çalışanları Emekli Sandığı Vakfı, (“Fund”) which was established by 20th provisional article of Social Security Law numbered 506. As of 31 December 2025, the number of personnel who benefit from the Fund is 44.242 (31 December 2024: 43.130 personnel).
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 128 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (9) Explanations on provisions: (continued) f) Liabilities arising from retirement benefits: (continued) f.2. Liabilities resulting from all kinds of pension funds, foundations etc. which provide post-retirement benefits for the employees: (continued) Below table shows the present values of premiums and salary payments as of 31 December 2025, by taking into account the health expenses within the Social Security Institution limits. Transferable Pension and Medical Benefits: Current Period Prior Period Net Present Value of Total Liabilities Other Than Health (61.967.070) (40.250.568) Net Present Value of Long Term Insurance Line Premiums 77.618.017 40.814.221 Net Present Value of Total Liabilities Other Than Health 15.650.947 563.653 Net Present Value of Health Liabilities (8.320.561) (6.233.013) Net Present Value of Health Premiums 46.177.909 25.492.263 Net Present Value of Health Liabilities 37.857.348 19.259.250 Pension Fund Assets 42.555.268 25.377.367 General Administration Expenses (1%) (702.876) (464.836) Amount of Actuarial and Technical Deficit 95.360.687 44.735.434 Total Assets Current Period Prior Period Banks 31.789.135 20.540.171 Marketable Securities 6.752.940 1.939.538 Property and Equipment 1.480.953 1.222.987 Other 2.532.240 1.674.671 Total 42.555.268 25.377.367 On the other hand, after the transfer, the currently paid health benefits will be revised within the framework of the Social Security Institution legislation and related regulations. Change in Assumptions (%) Assumptions Death Benefits Medical Benefits Total Discount rate 1% (15,60%) (17,90%) (17,90%) Discount rate (1%) 20,10% 23,60% 23,60% Inflation rate 1% 21,00% 29,10% 29,10% Inflation rate (1%) (16,30%) (21,30%) (21,30%) g) Insurance Technical Provisions (Net): Current Period Prior period Life-Mathematical Provisions 461.568 260.249 Provision for outstanding claims 390.935 292.894 Other - 2.328 Total 852.503 555.471
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 129 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 31 December 2025, the Group’s calculated current tax liability is amounting to TRY 2.042.479 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 2.042.479 866.392 Income on securities tax 11.208.057 4.977.394 Property income tax 24.214 14.680 Banking and insurance transactions tax (BITT) 3.358.775 2.435.237 Foreign exchange transactions tax 72.459 22.521 Value added tax payable 18.741 21.321 Other 1.369.462 773.441 Total 18.094.187 9.110.986 a.3. Information on premiums: Current Period Prior Period Social insurance premiums-employee 10.041 5.603 Social insurance premiums-employer 13.512 7.607 Bank social aid pension fund premium-employee 383.430 205.145 Bank social aid pension fund premium-employer 571.193 306.385 Pension fund membership fees and provisions-employee - - Pension fund membership fees and provisions-employer - - Unemployment insurance-employee 28.227 15.055 Unemployment insurance-employer 56.425 30.221 Other 11.968 7.030 Total 1.074.796 577.046 b) Explanations related to deferred tax liability: It is explained in the 16th 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 17.108.662 42.955.243 16.577.458 - Subordinated loans 17.108.662 - 16.577.458 - Subordinated debt instruments - 42.955.243 - - Debt instruments to be included in contribution capital calculation 33.295.135 - 33.606.846 - Subordinated loans - - - - Subordinated debt instruments 33.295.135 - 33.606.846 - Total 50.403.797 42.955.243 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 130 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 – 31 December 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 effects 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 7.497.103 15.040 3.733.735 Valuation differences 15.040 - 15.040 - Exchange rate difference - 7.497.103 - 3.733.735 Financial assets at fair value through other comprehensive income (5.322.875) 2.606.782 (6.276.513) 332.043 Valuation differences (6.776.704) 4.060.611 (6.276.513) 923.524 Exchange rate difference 1.453.829 (1.453.829) - (591.481) Total (5.307.835) 10.103.885 (6.261.473) 4.065.778 j) Information on Profit Distribution: The Ordinary General Assembly Meeting of the Parent Bank was held on 25 April 2025. At the General Assembly Meeting, it was decided to transfer the remaining amount of TRY 14.350.180 to extraordinary reserves, after allocating TRY 755.273 of the unconsolidated net profit amounting to TRY 15.105.453 from the activities of the year 2025 as general legal reserves.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 131 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) II. EXPLANATIONS AND NOTES RELATED TO THE LIABILITIES (continued) (13) Information on shareholders’ equity: (continued) k) Information on Legal Reserves: Current Period Prior Period I. Legal Reserve 5.077.622 3.575.565 II. Legal Reserve 948.669 788.348 Special Reserves 2.046.961 971.362 Share Buyback Reserve Fund 1.243.639 1.169.931 Total 9.316.891 6.505.206 l) Information on Extraordinary Reserves: Current Period Prior Period Legal reserves that was allocated to be in compliance with the decisions made on the Annual General Assembly 66.217.303 50.025.890 Retained Earnings 9.051.906 1.177.525 Accumulated Losses - - Exchange Rate Difference on Foreign Currency Capital (-) - - Total 75.269.209 51.203.415 (14) Information on minority interest shares: Current Period Prior Period Opening Balance 3.377.150 2.070.949 Dividends Paid (2.938) (11.061) Non-controlling Interests in Subsidiaries’ Net Profit/Loss for the Period 1.790.095 1.189.225 Effect of Changes in Subsidiaries’ Equity (585.182) 128.037 Closing Balance 4.579.125 3.377.150
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 132 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 346.973.832 185.180.994 Payment commitments for cheques 38.797.420 30.831.741 Loan granting commitments 30.674.354 24.627.013 Forward asset purchase and sale commitments 76.581.004 7.532.423 Forward deposit purchase and sale commitments - - Commitments for credit cards and banking services promotions 426.744 243.446 Tax and fund liabilities from export commitments 1.342.798 1.224.652 Share capital commitments to associates and subsidiaries - - Other irrevocable commitments 83.801.544 53.968.504 Total 578.597.696 303.608.773 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 49.967.212 19.439.047 Bank acceptances 78.546.876 55.198.376 Other guarantees 55.642.341 36.575.495 Total 184.156.429 111.212.918 b.2. Certain guarantees, tentative guarantees, sureties and similar transactions: Current Period Prior Period Letters of certain guarantees 170.289.610 112.757.973 Letters of advance guarantees 31.319.637 23.779.476 Letters of tentative guarantees 18.219.373 8.923.483 Letters of guarantee given to customs offices 27.970.672 21.213.680 Other letters of guarantee 772.594.122 540.045.338 Total 1.020.393.414 706.719.950 c) Information on non-cash loans: c.1. Total non-cash loans: Current Period Prior Period Non-cash loans for providing cash loans 179.361.982 122.759.940 Within one year or less original maturity 18.411.457 15.274.837 Within more than one year maturity 160.950.525 107.485.103 Other non-cash loans 1.025.187.861 695.172.928 Total 1.204.549.843 817.932.868
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 133 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) III. EXPLANATIONS AND NOTES RELATED TO THE OFF-BALANCE SHEET ITEMS (continued) c) Information on non-cash loans: (continued) c.2. Sectoral risk concentration of non-cash loans: Current Period Prior Period TRY (%) FC (%) TRY (%) FC (%) Agriculture 2.662.407 0,34 187.456 0,05 1.586.816 0,27 144.392 0,05 Farming and Stockbreeding 1.332.280 0,17 81.107 0,02 961.597 0,16 64.325 0,02 Forestry 257.106 0,03 - - 192.253 0,03 - - Fishery 1.073.021 0,14 106.349 0,03 432.966 0,08 80.067 0,03 Manufacturing 195.518.802 24,89 170.831.175 40,74 149.358.072 27,06 115.661.259 43,49 Mining and Quarrying 13.502.957 1,72 3.081.161 0,73 7.800.465 1,41 2.533.131 0,95 Production 173.261.745 22,06 155.019.032 36,97 136.335.415 24,70 102.682.948 38,61 Electricity, Gas and Water 8.754.100 1,11 12.730.982 3,04 5.222.192 0,95 10.445.180 3,93 Construction 282.366.317 35,96 126.764.643 30,22 183.632.974 33,27 82.770.367 31,12 Services 300.309.169 38,25 118.894.258 28,37 211.583.738 38,34 64.501.270 24,27 Wholesale and Retail Trade 189.713.137 24,16 59.144.529 14,11 135.352.945 24,52 36.008.178 13,54 Accommodation and Dining 16.962.701 2,16 10.714.292 2,56 14.004.337 2,54 10.151.906 3,82 Transportation and Telecom. 12.889.362 1,64 16.135.603 3,85 8.444.849 1,53 4.562.613 1,72 Financial Institutions 33.484.486 4,26 8.368.805 2,00 19.913.094 3,61 2.413.001 0,91 Real Estate and Rental Services 40.565.281 5,17 23.635.702 5,64 29.283.898 5,31 10.525.695 3,96 Professional Services 217.992 0,03 519.658 0,12 119.356 0,02 561.612 0,21 Educational Services 2.035.700 0,26 230.994 0,06 914.209 0,17 176.557 0,07 Health and Social Services 4.440.510 0,57 144.675 0,03 3.551.050 0,64 101.708 0,04 Other 4.429.358 0,56 2.586.258 0,62 5.836.249 1,06 2.857.731 1,07 Total 785.286.053 100,00 419.263.790 100,00 551.997.849 100,00 265.935.019 100,00 c.3. Non-cash loans classified under I. and II. Group Current Period Group I Group II TRY FC TRY FC Non-Cash Loans 772.080.412 394.480.162 10.856.858 19.102.171 Letters of Guarantee 643.091.229 342.949.015 10.251.675 17.547.012 Bills of Exchange and Bank Acceptances 72.844.866 5.080.327 605.183 - Letters of Credit 597.496 46.355.787 - 1.555.159 Endorsements - - - - Underwriting Commitments - - - - Factoring Related Guarantees - - - - Other Guarantees and Sureties 55.546.821 95.033 - - Prior Period Group I Group II TRY FC TRY Non-Cash Loans 541.699.382 245.180.321 8.539.257 19.309.952 Letters of Guarantee 451.304.001 224.880.858 8.269.175 19.066.697 Bills of Exchange and Bank Acceptances 53.784.767 1.139.027 270.082 - Letters of Credit 194.998 19.000.794 - 243.255 Endorsements - - - - Underwriting Commitments - - - - Factoring Related Guarantees - - - - Other Guarantees and Sureties 36.415.616 159.642 - -
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 134 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) III. EXPLANATIONS AND NOTES RELATED TO THE OFF-BALANCE SHEET ITEMS (continued) 2) Information on derivative financial instruments: Derivative transactions according to purposes Trading Derivatives Derivative Financial Instruments held for Risk Management Current Period Prior Period Current Period Prior Period Types of trading transactions Foreign Currency related Derivative Transactions (I): 420.715.389 202.503.729 - - Currency Forwards-Purchases/Sales 109.576.559 116.155.279 - - Currency Swaps-Purchases/Sales 301.049.386 85.638.433 - - Currency Futures-Purchases/Sales - - - - Currency Options-Purchases/Sales 10.089.444 710.017 - - Interest Rate related Derivative Transactions (II) 51.025.398 104.623.172 - - Interest Rate Contracts - - - - Interest Rate Swaps- Purchases/Sales 51.025.398 104.623.172 - - Interest Rate Options- Purchases/Sales - - - - Interest Rate Futures- Purchases/Sales - - - - Other Trading Derivatives (III) (1) 66.415.097 15.981.219 - - A. Total Trading Derivatives (I+II+III) 538.155.884 323.108.120 - - Derivative Financial Instruments held for Risk Management - - - - Fair Value Hedges - - - - Cash Flow Hedges - - - - FC investment in associates risk hedge - - - - B. Total Derivative Financial Instruments held for Risk Management - - - - Total Derivative Transactions (A+B) 538.155.884 323.108.120 - - (1) Other trading derivative transactions include forward precious metal purchase and sale transactions of TRY 5.471.777 and TRY 372.560; respectively. 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 31 December 2025, the Parent Bank has credit default conditioned cross currency swap transaction amounting to USD 50 million with 5 year maturity (weighted average remaining maturity 4,1 years). In this transactions the Parent Bank sells protection. 3) Explanations on contingent liabilities and assets: Group’s commitments for the cheques given to customers are TRY 38.797.420 (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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 135 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 222.513.003 5.440.366 166.242.711 3.804.340 Medium and long term loans 259.691.483 37.295.017 231.129.990 26.852.120 Interest on non-performing loans 21.677.649 119.537 8.620.564 41.354 Premiums from resource utilization support fund - - - - Total 503.882.135 42.854.920 405.993.265 30.697.814 (1) Includes fees and commissions obtained from cash loans. b) Interest received from banks: Current Period Prior Period TRY FC TRY FC CBRT - 2.507.095 - 2.041.963 Domestic banks 4.151.151 3.057 1.658.742 8.047 Foreign banks 3.989.158 274.318 2.566.894 293.009 Foreign headquarters and branches - - - - Total 8.140.309 2.784.470 4.225.636 2.343.019 c) Interest income on marketable securities: Current Period Prior Period TRY FC TRY FC Financial Assets at Fair Value through Profit or Loss 562.527 1.561.211 354.415 575.075 Financial Assets at Fair Value through Other Comprehensive Income 44.528.631 6.948.041 35.665.977 3.884.008 Financial Assets Measured at Amortized Cost 206.217.012 5.577.594 132.812.193 5.783.237 Total 251.308.170 14.086.846 168.832.585 10.242.320 d) Interest income from subsidiaries and associates 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 136 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 5.017.392 4.578.613 5.058.864 1.848.926 CBRT - - - - Domestic banks 1.549.705 969.534 2.121.339 283.944 Overseas banks 3.467.687 3.609.079 2.937.525 1.564.982 Overseas head office and branches - - - - Other institutions 9.369.703 70.369 77.458 2.122.838 Total 14.387.095 4.648.982 5.136.322 3.971.764 (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 1.577.597 964.314 c) Information on interest expenses to securities issued: Current Period Prior Period TRY FC TRY FC Interest on securities issued 17.114.182 1.476.939 6.659.056 -
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 137 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 99.510 39.690.940 15.384.259 221.864 2.730 - - 55.399.303 Saving deposits 275 12.543.329 224.491.178 84.482.175 926.370 657.323 22.282 323.122.932 Public deposits 57 10.257.492 11.341.688 1.571.171 434.393 35.816 - 23.640.617 Commercial deposits 77 83.753.555 107.772.347 27.064.470 3.763.813 672.941 - 223.027.203 Other deposits 9 3.676.178 37.326.767 14.717.193 4.714.638 23.271 - 60.458.056 7 days call accounts - - - - - - - - Total 99.928 149.921.494 396.316.239 128.056.873 9.841.944 1.389.351 22.282 685.648.111 Foreign currency Deposits 241.113 1.556.652 6.829.390 1.328.491 1.087.807 824.724 63 11.868.240 Bank deposits 2.767 19.454 1.922.563 4.580 17.519 28.284 - 1.995.167 7 days call accounts - - - - - - - - Precious metal - 53 11.267 1.085 450 503 - 13.358 Total 243.880 1.576.159 8.763.220 1.334.156 1.105.776 853.511 63 13.876.765 Grand total 343.808 151.497.653 405.079.459 129.391.029 10.947.720 2.242.862 22.345 699.524.876 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 159.010 26.239.843 11.095.777 223.398 318 - - 37.718.346 Saving deposits 6 5.735.648 128.896.192 88.637.283 35.132.670 1.483.381 19.384 259.904.564 Public deposits 3 14.552.219 8.717.484 3.034.365 97.960 141.424 - 26.543.455 Commercial deposits 3 50.193.159 65.460.060 37.512.341 23.286.528 4.233.535 - 180.685.626 Other deposits 2 2.876.063 18.324.937 15.931.340 6.830.107 24.253 - 43.986.702 7 days call accounts - - - - - - - - Total 159.024 99.596.932 232.494.450 145.338.727 65.347.583 5.882.593 19.384 548.838.693 Foreign currency Deposits 182.894 1.096.793 5.159.012 758.979 618.250 913.792 221 8.729.941 Bank deposits 2.055 32.242 1.497.996 48 4.862 875 - 1.538.078 7 days call accounts - - - - - - - - Precious metal - 248 33.772 3.976 1.712 7.059 - 46.767 Total 184.949 1.129.283 6.690.780 763.003 624.824 921.726 221 10.314.786 Grand total 343.973 100.726.215 239.185.230 146.101.730 65.972.407 6.804.319 19.605 559.153.479 (3) Information on dividend income: Current Period Prior Period Financial Assets at Fair Value Through Profit or Loss 253 229 Financial Assets at Fair Value Through other Comprehensive Income 57.233 31.586 Other 3.894 1.429 Total 61.380 33.244
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 138 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) (4) Explanations on trading profit/loss: Current Period Prior Period Profit 569.161.027 273.474.836 Profit from the capital market transactions 5.674.100 8.433.922 Profit on derivative financial transactions 58.874.624 33.114.564 Foreign exchange gains 504.612.303 231.926.350 Loss (-) 581.229.500 294.572.528 Loss from the capital market transactions 4.412.645 23.359 Loss from derivative financial transactions 48.323.221 53.168.847 Foreign exchange losses 528.493.634 241.380.322 Explanations on derivative financial instruments: Current Period Prior Period Profit on derivative financial instruments 58.874.624 33.114.564 Effect of the change in foreign exchange on profit 58.007.026 31.998.281 Effect of the change in interest rate on profit 867.598 1.116.283 Loss on derivative financial instruments (-) 48.323.221 53.168.847 Effect of the change in foreign exchange on loss 47.489.133 52.078.233 Effect of the change in interest rate on loss 834.088 1.090.614 Profit/loss on derivative financial instruments 10.551.403 (20.054.283) (5) Information on other operating income: Current Period Prior Period Adjustments for prior period expenses 13.993.243 15.875.207 Insurance technical income 726.736 478.482 Income from the asset sale 807.473 789.952 Rent income 634.901 330.387 Other income(*) 23.784.021 12.158.344 Total 39.946.374 29.632.372 (*)Other consists of valuation differences of investment properties. (6) Information on Expected Credit Losses and other provisions: Current Period Prior Period Expected Credit Losses 38.544.281 10.139.775 12 Month Expected Credit Loss (Stage 1) 7.867.272 989.345 Significant Increase in Credit Risk (Stage 2) 4.289.415 1.075.047 Non – Performing Loans (Stage 3) 26.387.594 8.075.383 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 234.033 57.942 Total 38.778.314 10.197.717
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 139 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 2.034.560 379.965 Bank social aid provision fund deficit provision - - Fixed assets impairment expense 107.756 54.314 Depreciation expenses of fixed assets 3.888.864 2.873.739 Intangible assets impairment expense - - Goodwill impairment expense - - Amortization expenses of intangible assets 1.433.634 757.302 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 216.448 35.505 Impairment expense for property and equipment held for sale - - Other operating expenses 31.656.584 17.518.455 Leasing Expenses on TFRS 16 Exceptions 925.105 712.449 Maintenance expenses 1.084.858 631.472 Advertisement expenses 3.251.026 2.039.176 Other expenses(*) 26.395.595 14.135.358 Loss on sales of assets 2.436 1.673 Other(**) 20.689.002 11.089.492 Total 60.029.284 32.710.445 (*) Other expenses mainly comprise fees related to credit card and other banking transactions. (**) Other consists of TRY 4.099.606 (31 December 2024: TRY 2.884.129) SDIF premium expenses , TRY 9.194.927 (31 December 2024: TRY 3.699.112) tax and fee 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 96.519.273 (31 December 2024: TRY 43.061.264), net fees and commisions income is TRY 61.847.539 (31 December 2024: TRY 41.740.995) and the profit before tax from continued operations is TRY 35.761.330 (31 December 2024: TRY 19.040.347) (8) Information on tax provisions for continued and discontinued operations: For the period then ended 31 December 2025, the Group’s tax provision expense amounting to TRY 6.840.539 (31 December 2024: TRY 4.186.699 tax provision income) consists of TRY 3.968.6 91 (31 December 2024: TRY 2.502.773) of current tax charge and TRY 17.098.737 (31 December 2024: TRY 17.241.224) of deferred tax expense, TRY 14.226.889 (31 December 2024: TRY 23.930.696) of deferred tax income. (9) Information on net operating income/expense from continued and discontinued operations after tax: For the period then ended 31 December 2025, the Group’s net operating income after tax is amounting to TRY 28.920.791. (31 December 2024: TRY 23.227.046) (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 period, 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. (12) Minority interest profit/losses: Current Period Prior Period Minority interest profit/losses 1.790.095 1.189.225 (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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 140 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) V. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY Explanations on adjustment differences of equity items according to inflation: As per the BRSA circular announced on 28 April 2005, inflation accounting applied in the banking system has been ceased as of 1 January 2005 in accordance with the BRSA decree numbered 1623 and dated 21 April 2005. According to this circular, TRY 1.220.451 of inflation adjustment related to paid in capital was transferred to the “Other Capital Reserves” account, which was previously recognized in “Paid -in Capital Inflation Adjustment” account before 31 December 2005. However, inflation adjustments related to other equity items are presented under the related equity item.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 141 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) VI. EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED CASH FLOW STATEMENT (1) Disclosures for the “other” and “the effect of foreign exchange differences on cash and cash equivalents” items of cash flow statement: The “net increase/(decrease) in other liabilities” under the changes in operating assets and liabilities is resulted from the changes in the funds obtained through repurchase agreements, money market borrowings, payables from miscellaneous payables, other external funding payables and taxes, duties and premiums payables and amounts to TRY 5.998.097 decrease (31 December 2024: TRY 219.905.294 increase) for the year 2025. The “Others” item under operating income composes of fees and commissions paid, foreign exchange gains, other operating income and other operating expenses excluding empl oyee costs, and amounts to TRY 46.773.286 decrease for the year 2025 (31 December 2024: TRY 46.570.956 decrease). For the year ended 31 December 2025, the effect of change in foreign exchange rate on cash and cash equivalents is TRY 37.918.178 increase (31 December 2024: TRY 23.772.920 increase). The average exchange rates of last five weekdays were taken into consideration as of the balance sheet date when calculating the effect of change in the exchange rates. (2) Items used in determination of cash and cash equivalents, accounting policies used in the determination of those items: Cash in TRY and cash in foreign currency, Central Bank and bank deposits having maturity less than three months are defined as cash and cash equivalents. (3) The effect of any change in accounting policies: None. (4) Cash and cash equivalents balance at the beginning of the period: Current Period Prior Period Cash 400.349.725 137.260.549 Cash in TRY, foreign currency and others(1) 19.129.382 16.166.723 Demand CBRT and Banks 381.220.343 121.093.826 Cash equivalents 13.362.403 14.261.394 Time Deposits Up to 3 Months 11.950.249 11.373.270 Money Market Placements 1.412.154 2.888.124 Total Cash and Cash Equivalents 413.712.128 151.521.943 (1) Other items include cheques received and precious metal. (5) Cash and cash equivalents balance at the end of the period: Current Period Prior Period Cash 424.430.330 400.349.725 Cash in TRY, foreign currency and others(1) 25.747.176 19.129.382 Demand CBRT and Banks 398.683.154 381.220.343 Cash equivalents 96.770.617 13.362.403 Time Deposits Up to 3 Months 96.746.883 11.950.249 Money Market Placements 23.734 1.412.154 Total Cash and Cash Equivalents 521.200.947 413.712.128 (1) Other items include cheques received and precious metal.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 142 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) VII. 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 Bank’s 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 - 68.910 - - - - Interest and commissions income - 391 - - - - Prior Period Bank’s 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 - 115 - - - - b) Deposits held by the Parent Bank’s risk group: Bank’s 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 5.211.245 2.964.083 - - - - Interest expense on deposits 1.577.597 964.314 - - - - 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 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 143 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) VII. 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 vo lume 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 68.910 <0,01 Deposits 5.211.245 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 386.269. (31 December 2024: TRY 244.183)
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 144 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) VIII. EXPLANATIONS ON THE PARENT BANK’S DOMESTIC BRANCHES, AGENCIES/BRANCHES ABROAD AND OFF-SHORE BRANCHES (1) Explanations on the Parent Bank’s domestic branches, agencies/branches abroad and off-shore branches Current Period Quantity Number of Employees Countries Domestic Branch 1.097 22.444 Abroad Agencies 1 1 IRAN 1 2 ENGLAND Total Assets Statutory Capital Overseas Branch 7 124 T.R.N.C. 36.789.795 - 1 4 BAHRAIN 89.746.527 - Off-shore Branches - - - - Prior Period Quantity Number of Employees Countries Domestic Branch 1.084 21.402 Abroad Agencies 1 1 IRAN 1 1 ENGLAND - - Total Assets Statutory Capital Overseas Branch 7 112 T.R.N.C. 23.819.800 - 1 4 BAHRAIN 108.714.818 - Off-shore Branches - - - - (2) Explanations on branch and agency openings or closings or other significant operational changes of the Parent Bank: During the year 2025, the Parent Bank opened 17 branches.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 145 SECTION V: EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) IX. FEES RELATED WITH THE SERVICES PROVIDED BY INDEPENDENT AUDITORS/INDEPENDENT AUDIT AGENCIES In accordance with the decision of the POA dated 26 March 2021, the fee information for the reporting period regarding the services received from the independent au ditor or independent audit firm is given in the table below over VAT excluded amounts. Current Period Prior Period a. Independent audit fees 62.213 38.173 b. Fees for other services 20.819 2.764 Fees for other assurance services 19.940 2.211 Fees for tax advisory 879 - Fees for other services except independent audit - 553 Total 83.032 40.937 X. EXPLANATIONS RELATED TO THE SUBSEQUENT EVENTS The international rating agency Fitch Ratings has affirmed Parent Bank's Long-Term Foreign Currency Issuer Default Rating “BB-”, Long-Term Local Currency Issuer Default Rating “BB-” and its Government Support Rating “bb -” on 28 January 2026. The outlook of the relevant ratings have been revised to “Positive” from “Stable”.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 146 SECTION VI: OTHER EXPLANATIONS I. OTHER EXPLANATIONS ON THE PARENT BANKS’ ACTIVITY On October 15, 2019, the United States Attorney’s Office for the Southern District of New York under the U.S. Department of Justice 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. The Parent Bank’s personal jurisdiction and recusal objections were denied by the District Court on December 5, 2019, and the same objections the Parent Bank appealed with the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) were denied on February 21, 2020. 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, 202 0. 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 d ismissal 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. The Second Circuit ruled to stay the Parent Bank’s proceedings at the D istrict Court on December 23, 202 0, and also agreed to hear the appeal on the merits. Following the oral argument presented on April 12, 2021, the Second Circuit denied the Parent Bank’s appeal on October 22, 2021. Because the Parent Bank would escalate its sovereign immunity appeal with the Supreme Court of the United States, the Second Circuit ruled on January 14, 2022 to stay the District Court proceedings until the Supreme Court process is completed. Following the oral argument at the U.S. Supreme Court on January 17, 2023, the opinion was announced on April 19, 2023. The Supreme Court ruled that FSIA applied only in civil cases and not in criminal cases. On the other hand, 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 Court of Appeals for reconsideration. Upon further review, with its decision dated October 22, 2024 the Second Circuit rejected the Parent Bank's common law immunity request an d affirmed the District Court's order. On December 12, 2024, the Parent Bank filed a motion to stay the Second Circuit’s mandate, which was granted on December 18, 2024, and the mandate was stayed pending the filing and disposition of the Parent Bank’s pet ition 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. The Parent Bank’s petition for a writ of certiorari was denied by the U.S. Supreme Court on O ctober 6, 2025. Accordingly, the legal process regarding the Parent Bank’s objections under sovereign immunity was completed. The District Court is expected to set a schedule to proceed with the hearing of the case on the merits, and a status conference will take place at the District Court on February 24, 2026. The Parent Bank’s efforts to resolve the case by settlement are also ongoing.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 147 SECTION VI: OTHER EXPLANATIONS I. OTHER EXPLANATIONS ON THE PARENT BANKS’ ACTIVITY (continued) 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, and thus to dismiss the case on September 25, 2020, and the case was fully briefed on December 16, 2020. The District Court conditionally granted Parent Bank’s motion to dismiss on the grounds of forum non conveniens on February 16, 2021, and 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 appli cation 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 fi led 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 connection between certain aggrievements they have suffered in various countries and the supposed alle gations 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 proceedings against the Parent Bank. Therefore, the Hughes case is stayed until the final decisio n 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. Even though the uncertainty as to the processes of the lawsuits continue, as a result of the assessment made by the Bank’s management the afore -mentioned cases are not expected to affect the Parent Bank’s financial statements.
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TÜRKİYE HALK BANKASI AŞ EXPLANATIONS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2025 (Amounts expressed in thousand Turkish Lira (TRY) unless otherwise stated.) 148 SECTION VII: AUDITORS’ REPORT I. EXPLANATIONS ON INDEPENDENT AUDITORS’ REPORT The consolidated financial statements of the Parent Bank as at and for the period ended 31 December 2025 have been reviewed by KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik AŞ and the independent auditors’ report dated 20 February 2026 is presented before the consolidated financial statements. II. EXPLANATIONS AND NOTES PREPARED BY THE INDEPENDENT AUDITOR None.