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  1. CREDITS 20.10.2011

  2. CALIBRI BOLD 42 pt OUTLINES • Organization Chart • Roles and Responsibilities • Credit Policy • Banking Law • Credit Committees • Minimum Requirement For Applicant Firms • Credit Approval Process • Credit Process • Revision of Credit Limits

  3. CALIBRI BOLD 42 pt ORGANIZATION CHART Chief Executive Officer Chief Credit Officer Financial Analysis & Intelligence Department Corporate & Commercial Credits Department SME Credits Department Retail Credits Department Credit Risk Monitoring Department

  4. CALIBRI BOLD 42 pt ROLES AND RESPONSIBILITIES • Preparing Financial Analysis and Intelligence Reports, • Evaluating Branch Credit Proposals in compliance with credits process, • Preparing the final opinion of Credit Departments and documentations to be • proposed to the committee, • Defining the requirements of credit assignment and credit utilization, • Approving the committee resolutions onBanking System, • Monitoring and reporting of outstanding risks, • Developing Credit Policies,

  5. CALIBRI BOLD 42 pt CREDIT POLICY Kuwait Turk Participation Bank establishes its lending policies in compliance with its purpose of organisation and management philosophy. Our associates give utmost consideration to the management principles and rules of our Bank and the requirements of our clients in every step of the lending process. Our credit policy is designed to ensure a reliable, qualified, productive and continuously improving credit portfolio. In line with this objective our associates shall take great care in the following rules and principles and recognize their responsibilities. In accordance with our purpose, our main principle is to conduct and manage the lending process in compliance with the applicable laws and legislations. Any transaction or action that may place our Bank in a difficult situation before legal authorities is not allowed.

  6. CALIBRI BOLD 42 pt CREDIT POLICY The main targets and policies of credits are as follows; • To follow a strong values-driven credit culture by focusing on loan quality; thus, increasing the asset quality of the Bank with strong risk management systems and controls. • To approach credit extension process by being resultoriented on individual concerns in the spirit of teamwork to achieve success. • To maximize targeted profits from the loans with fewer loan losses as they are the dominant assets for ourportfolio.

  7. CALIBRI BOLD 42 pt CREDIT APPROVAL PROCESS • FirstBranchManagementorFinancialAnalysis and IntelligenceDepartmentprepares a financial analysis and intelligence report. • Then the branch management makesan initial decision aboutcreditproposal. Once completed, the credit proposal is submitted to therelevant credit departments. • 3. Therelevant credit departmentsindependently reviews and evaluates the credit proposals and decides whether or not to reject or submit the credit proposal to the related credit committees. • 4. The credit committees or the Board of Directors makes the final decision. • The creditdepartmentsinsert the agreed limits into the limits management system and notify the branches. • The relevant branch completes the necessary documents and set collaterals, beforethe operation team disburses the creditfacility(ies) to the customer.

  8. CALIBRI BOLD 42 pt CREDIT PROCESS Customer selection Our clients that will be granted credit facilities will be selected by our Bank in accordance with the policies, and legal and ethical rules of our Bank. The major criteria in selecting credit-worthy customers are the financial situation of the customer, sharing of necessary information in a clear and transparent manner, commercial performance and the reputation and morality of its shareholders. The necessary information and documents for credit evaluation When financing the business activities of commercial and corporate clients, our Bank receives all supporting information and documents required for determining creditworthiness as detailed in our procedures and evaluates accordingly. The information and documents supplied by our client shall be kept confidential. The bank will cease to provide services to customers who do not provide the necessary information and documents or who gives false or misleading information.

  9. CALIBRI BOLD 42 pt CREDIT PROCESS Analysis and Risk rating/scoring All information and documents received from our customers are analyzed and associated risks are rated by generally accepted analysis and risk-scoring methods. The most powerful support in making the credit decision is the report prepared and approved by our competent employees and managers. Credit proposal Credit proposals are prepared by our branch officers taking into consideration customer’s needs for finance, past performance, current and expected cash flow and with due care for maintaining a level of risk exposure within prescribed limits. Credit proposals are approved by branch managers.

  10. CALIBRI BOLD 42 pt CREDIT PROCESS Evaluation The primary objective of credit evaluation is to provide the best tailored loan for the customer by accurately forecasting the future cash flow and performance of the customer and to ensure smooth prepayment of the loan on due date. While making forecasts for future, together with the past performance of the customer the expected developments in the sector where the customer is involved, local and regional estimates, the foreseen trend in national and international economy, environmental expectations must also be taken into consideration. Credit approval The credit approval authorities of the executive managers of our bank are clearly defined in our procedures. All executive managers authorized to approve credit facilities evaluate the credit proposal in an impartial manner without being under any pressure or influence and clearly deliver their opinions in the relevant credit committee.

  11. CALIBRI BOLD 42 pt CREDIT PROCESS Credit monitoring Branch officers will continuously monitor the conditions of competition that prevail in the market, sector specific and economic developments, juristic changes, changes in the financial and shareholding structure of the company, market intelligence, etc., and conduct evaluations by considering the possible impacts of such developments on repayment of the credit.

  12. CALIBRI BOLD 42 pt MINIIMUM REQUIREMENT FOR APPLICANT FIRMS • The firm must have at least 3 years of operation in its own sector. • For last three years, the firm should not have loss in balance sheet, • the amortization and leasing expenses should be taken into account. • For last three years, the firm should not have operating loss in • balance sheet more than one year or last year, the amortization and • leasing expenses should be taken into account. • Net working capital must be positive and cash flow chart must have • surplus of source. • The inquiry about the Company through its own industry where it • operates and in the banking sector must have positive references, • The Company must not be subjected to defaultcredit according to Central Bank’s records.

  13. CALIBRI BOLD 42 pt BANKING LAW Banking Regulation and Supervision Agency is the only authority in Turkey to regulate banking and credit applications. All lending limits are determined in Banking Law No: 5411, dated October 19th, 2006. According to Article 54 of Banking Law, the total amount of loans to be extended by a bank to a real person or a legal person or a risk group shall not be more than twenty-five percent of its own funds. According to Article 54 of Banking Law, the loans made available to a real person or legal person or a risk group that equals to or exceeds ten per cent of own equity shall be considered large loans and the total of such loans shall not exceed eight times of the own equity.

  14. CALIBRI BOLD 42 pt BANKING LAW According to Article 51 of Banking Law, the power to extend loans shall be held by the Board of Directors. The board of directors shall be responsible for ensuring the establishment, implementation and monitoring of policies for extending and approving loans and other administrative matters and for taking the necessary measures. Board of directors may assign the power to extend loans to the credit committee or head office within the framework of principles and procedures to be set by the Board. The head office may use the power to extend loans by way of other units, regional directorates or branches.

  15. CALIBRI BOLD 42 pt CREDIT COMMITTEES The authority to credit extension belongs only to The Board of Directors according to Banking Law, number 5411, dated October 19th, 2006. According to the 5th article of this regulation, the authority to extend credit is mainly vested in the Board of Directors. However, the Board of Directors may delegate this authority to a Credit Committee to be set up or to the General Management. The Credit Committee which may be set up should be composed of, at least, 2 Board Members and the General Manager. The Board of Directors may delegate its authority to give credit to the Credit Committee that the maximum amount of such credit is to be 10% of the equity, and to the General Management with the maximum amount of such credit being 1% of the equity.

  16. CREDIT COMMITTEES The authorities for credit extension in KTPB are stated as follows; Name of the CommitteeMembersAuthority Limits Board of Directors Members of the Board Over 10% of the Equity Credit Committee 2 Board Members and Between 1% and 10% of General Managerthe Equity General Management Credit Com. General ManagerUp to 1% of the Equity EVP (Marketing) Chief Credit Officer Manager of Marketing Dept. Managers of Corp. and Comm. Credit Dept. Manager of Fin. Analysis and Inquiry Dept. Supervisors/Experts of Corp. and Comm. Credit Dept. Regional Credit CommitteeArea ManagerUp to TL2,500,000 Supervisors/Experts of Corp. and Comm. Credit Dept.

  17. CREDIT COMMITTEES Name of the CommitteeMembersAuthority Limits Retail Credit Com. 1 Chief Credit Officer Up to TL 850,000 Manager of Retail Credit Dept. Supervisor of Retail Credit Dept. Retail Credit Com. 2 General Manager Up to TL 3,000,000 Chief Credit Officer Manager of Retail Credit Dept. SME Credit Committee Managerof SME Credit Dept. Up to TL 850,000 Supervisors/Experts of SME Credit Dept. Branch Committee Branch Manager Up to TL 500,000 Branch Marketing Supervisors/Experts

  18. TO RENEW OF CREDIT LIMITS In KTPB validity of corporate and commercial credit limits is one year. Therefore current credit customers are visited and reported by Branch Management or Financial Analysis and Inquiry Department at least once a year and prepared for related committees.