Unremitting and rigorous implementation of the stabilization program whose objective is to achieve growth that is both sustainable and enduring made it possible for the Turkish economy to continue growing in 2006 and to be pointed to as a model country among the world's developing economies. Despite short-lived volatilities experienced in the first half-year, Turkey's economic performance remained strong and on course in 2006. The great majority of the year's macroeconomic targets, foremost among them being growth, were successfully achieved. This positive appearance at the macroeconomic level allowed the business climate to thrive and domestic demand was high. Capacity utilization rates in a great many production sectors continued to rise as did both production and investment volumes. At the same time, the growth in the country's foreign trade volumes, which are so important to the national economy, also continued and the year-on rises in exports and imports were 15.9% and 17.3% respectively. In November of the year, our country's one-month exports topped USD 8 billion for the first time in history. The banking sector also continued to grow and remained a center of attraction for foreign investment. Lending activities, the essential function of banking, increased the share of loans in banks' balance sheets overall while retail banking and SMEs were the forces that drove the banking industry's growth.

Another important development in the banking industry last year was the increasing need for investment banking products and for long-term project financing. Low inflation changed the rules of the game for all economic actors as the need for long-term thinking, planning, and investing began to dominate everyone's minds. In the macroeconomic and sectoral environments that I have briefly summarized above, Türkiye Sınai Kalkınma Bankası made the best possible use of all of its competencies and demonstrated an excellent performance as it continued resolutely on its journey to fulfill its mission.

Since the day we were founded…
TSKB is Turkey's first privately-owned development and investment bank. It was founded with the mission of supporting economic development and of transferring resources to enterprises that are productive, provide jobs, export, and otherwise create economic value while fostering their growth and development through a diversity of services.

It gives me pride to say that, since the day it was founded in 1950, our bank has been the author of numerous “firsts” that have contributed significantly to Turkey's economic development and that it has been providing increasingly more resources to support industrial development without regard for sector.

TSKB is also an institution that spearheaded the development of our country's capital markets. The first corporate bond issues, the first international borrowing instruments, and the first brokerage house are just three of the entries in the roster of our bank's successes.

Another important feature of our bank is the deep-rooted relationships that it has had with the rest of the world since the day it was founded. Many international financial institutions, not least of which is the World Bank, regard TSKB today as an indispensable partner when doing business in Turkey.

Our bank transferred USD 631 million in resources to the national economy in 2006.
2006 was a year during which we continued to support the private sector in keeping with our mission.
TSKB supplied a total of USD 631 million in resources to customers in a wide range of sectors while the bank further strengthened its position as a guide and a leader for a growing and developing Turkish economy through its successful participation in a variety of company merger, acquisition, and consultancy projects.

For the future
TSKB is focused on and ready for even more growth in line with its mission. We believe in Turkey and in its economy.
We see signs of continued stability in the period immediately ahead of us even though passing volatilities may be experienced. In periods of stability and development, there is still a great need for strong, deep-rooted institutions such as TSKB whose objectives and strategies are clearly defined. Changing market conditions in recent years have once again revealed the validity and strength of our business model. The members of our professional management team and our employees are committed and disciplined in the performance of their jobs. So long as it remains true at TSKB, this seemingly simple fact is what will make it possible for us to always achieve our corporate goals.

Cahit Kocaömer
Chairman of the Board of Directors