VAKIFBANK INTERNATIONAL AKTIENGESELLSCHAFT

A-1010 Wien Kärntner Ring 18 Tel.: +43/1/512 35 20 Fax.: +43/1/512 35 20-20

REUTERS-Dealing: VBIW, SWIFT CODE: TVBAATWW

www.v ak i f b ank . a t

For the year ended December 31, 2007

3

Directors and Officers of the Bank 5

Business Activities and Shareholders of the Bank 7

Key Figures of the Financial Year 2007 8

Situation Report for the Financial Year 2007 9

Report of the Supervisory Board 15

Auditor's Opinion 16

Financial Statements for the Year ended

December 31, 2007 17

Profit and Loss Account 2007 20

Development of Assets 21

Notes to the Balance Sheet and to the

Profit and Loss Account as of December 31, 2007 22

5

6

7

VakifBank International AG was established in Vienna,

Austria on July 23, 1999 and obtained a full banking

licence by the Austrian Ministry of Finance on August 4,

1999. The shareholders of the bank are Türkiye Vak›flar

Bankas› T.A.O., Ankara (90 %) and the Pension Fund of

Türkiye Vak›flar Bankas› T.A.O. (10 %).

Vak›fBank International AG sees its core activity in

providing support to European and Turkish companies

to improve and enlarge their mutual trading relations,

based on the experience, financial capability and the

international reputation of its parent Türkiye Vak›flar

Bankas› T.A.O.

VakifBank International AG is strongly committed to

provide a positive contribution to intensify trade and

investment activities. Vak›fBank International AG is offering

trade related banking services (Letters of Credit, Collections,

Guarantees, Money transfers etc), the financing of

commercial cross border transactions (Forfeiting,

Syndications, etc) and loans to European and Turkish

exporters and importers. Geographically, Vak›fBank

International AG is concentrating on Turkey, EU, CEE,

SEE and CIS regions.

VakifBank International AG of course offers all traditional

banking services (account maintenance for private and

corporate clients, savings accounts, remittances, retail and

commercial loans). A special service offered by VakifBank

International AG is a prompt and easy handling of money

transfers from Austria and Germany to more than 375

branches of its parent in Turkey. Türkiye Vak›flar Bankas›

T.A.O., Ankara was founded in 1954 and is currently

number 3 of the banks directly or indirectly controlled

by the Republic of Turkey. The branch network includes

375 branches in Turkey, one branch in New York and

Bahrain.

The shareholders of T. Vak›flar Bankas› T.A.O., Ankara

are:

General Directorate of Public Foundations 43.00%

Affiliated Foundations 15.45%

Pension Fund of Türkiye Vak›flar Bankas› T.A.O. 16.10%

Free Float (Istanbul Stock Exchange) 25.18%

Other 0 . 2 7%

The General Directorate of Public Foundations “GDF” was

established in 1924 to administer and regulate existing

and future Turkish charitable foundations as a state entity

directly reporting to the Prime Minister. GDF is a separate

legal entity and has its own budget. GDF owns the cultural

heritage of the Republic of Turkey, like museums, mosques

and historic buildings.

The Affiliated Foundations are charity organisations, which

have been established for the welfare of the general public

during the Ottoman Empire. These foundations are also

administered by the General Directorate of Public

Foundations. The Pension Fund of Türkiye Vak›flar Bankas›

T.A.O. substitutes the mandatory social security coverage

provided by Social Insurance Institution for the Bank's

employees and it is mandatory for all of the Bank's

employees to become members of the Pension Fund.

8

(in Mio EUR)

2007 2006

Balance Sheet 420.2 370.9

Claims against Customers 103.6 105.7

Claims against Credit Institutions 193.5 120.4

Liabilities to Credit Institutions 175.0 157.0

Liabilities to Customers 191.4 168.6

- hereof: Saving Deposits 71.0 50.5

Net Interest Income 9.8 9.2

Operating Earnings 11.1 9.6

Operating Expenditures 5.9 5.4

Operating Result 5.2 4.2

Result of Ordinary Business Operation 5,2 4.4

Annual Profit 5.6 5.4

Equity Resources 45.7 40

Statutory Minimum Equity 11.7 9

9

In general the business year 2007 was characterized by the following. The credit crisis triggered in the United States,caused by high default rates in the subprime segment and a loss in confidence between the banks and a greateremphasis on the risk aspects. Driven by the effects of globalisation the crises soon spilled over to the banks inEurope. In 2007 the business cycle in the US as well as in Europe has reached its peak. On the other side the fastgrowing countries in Asia have pushed commodity and raw material prices to new highs.

The price for crude oil rose steadily to hit new record levels of up to USD 100 per barrel. Due to the poorperformance and diminishing prospects of the US economy the Euro also rallied to new highs and fell only veryshort of reaching the level of 1.50 against the US Dollar and closed the year at 1.47 constituting an appreciationof the Euro by 12.2 %.

The European Central Bank hiked its key interest rate twice during 2007 to 4 % at year end. As reaction to theliquidity crisis the Federal Reserve cut interest rates several times from 5.25% to 4.25% during 2007. The yield forUS Treasuries was at 4.04% compared to a yield of 4.70% in the preceding year.

Key events for Turkey in 2007 were internally the parliamentary and the presidential elections; externally Turkeywas influenced by the uncertainties on the international arena. This inevitably led to a slowdown in the economicperformance and growth to around presumably 4%. The ambitious goals for the inflation rate could not be achieveddue to the sharp rise in the energy and food prices. The consumer price index of 8.4% at year-end improved onlyinsignificantly compared to the previous year. The Central Bank has eased its monetary policy slightly and cut thebenchmark rate by 1% during the year from 17.25% to 16.25%. The pace of the deterioration of the current accountdeficit came down a little and stabilised at around 7.5% of the GDP. Although the prospects for Turkey in 2008are optimistic, the real performance will very much depend on the global risk situation and the global growthprospects. The global growth prospects and the availability of foreign loans will broadly determine Turkey's economicperformance in 2008 while political issues should be of less relevance.

During 2007 the Turkish Lira (TRY) fluctuated within a range of 1.60 - 1.80 in the second half of the year.

60,00

50,00

40,00

30,00

20,00

10,00

0,00

3 M TRY DEPO RATES

31.0

1.20

03

31.0

5.20

03

30.0

9.20

03

31.0

1.20

04

31.0

5.20

04

30.0

9.20

04

31.0

1.20

05

31.0

5.20

05

30.0

9.20

05

31.0

1.20

06

31.0

5.20

06

30.0

9.20

06

31.0

1.20

07

31.0

5.20

07

30.0

9.20

07

10

Turkey's sovereign rating remained unchanged in 2007 and was confirmed at the level of BB- by Standard & Poor's.

BUSINESS ACTIVITIES

At the end of 2007, the balance sheet total increased by 13.3 % to EUR 420.2. The rise in the balance sheet totalresulted mainly from an increase in commercial loans (+47.2% compared to 2006). As a result of the changes dueto Basel II requirements, the bond portfolio was reduced by 23.5% whereas forfeiting business fell by 33.6%.

EUR/TRY EXCHANGE RATE2,000

1,900

1,800

1,700

1,600

1,500

Jän.

03

Mai

.03

Sep.

03

Jän.

04

Mai

.04

Sep.

04

Jän.

05

Mai

.05

Sep.

05

Jän.

06

Mai

.06

Sep.

06

Jän.

07

Mai

.07

Sep.

07BALANCE SHEET TOTAL (IN MIO EUR)

450,00

400,00

350,00

300,00

250,00

200,00

150,00

100,00

50,00

-

1999

2000

2001

2002

2003

2004

2005

2006

2007

11

RISK REPORTING

The bank uses mainly money market instruments, fixed income instruments and credits. Derivatives are only usedfor the hedging of currency risk. The bank's risk management analyses and evaluates market risk, credit defaultrisk, liquidity risk and operational risk. The supervisory board defines the risk profile, the risk tolerance and themeasures of risk monitoring.

MARKET RISK

Market risk is evaluated by using the Value at Risk (VAR) approach. 15 days are assumed for current assets as anaverage duration and 240 days for fixed assets. By using the confidence interval of 97.72% the Value at Risk (VAR)amounted to Euro 0.92 Mio by the close of 2007.

CREDIT DEFAULT RISK

Monitoring of credit default risk is based on the evaluation of the solvency of the counter parties. To measure creditdefault risk VakifBank applies the probabilities of default published by Standard & Poor's. For counter partieswithout external rating, VakifBank International AG uses an internal rating system with 10 customer categories.

CURRENCY RISK

Currency risk is calculated by netting the matching currencies on both sides of the balance sheet and is hedgedby currency swaps.

LIQUIDITY RISK

As part of the liquidity management short and medium term liquidity of the bank is mainly controlled and managedby means of money market transactions in the treasury department to ensure the coverage of liquidity needs.

OPERATIONAL RISK

Operational risk is calculated by using the Standard Approach defined in the Basel II regulations. The risk calculationis an integral part of the risk management.

The country risk profile of the bank changed slightly in favour of the European Countries and CEE/CIS countries.The share of Turkish risk was further reduced due to Basel II regulations and diversification efforts of the bank.

COUNTRY RISK

46%

33%

18%

2%1%

EU

TURKEY

CEE/CIS

USA

SONSTIGE

12

Due to the increasing engagements in the syndicated loans market mainly to banks in the CIS region the share ofthe financial institutions went up significantly.

The customer deposits rose by 13.5% to EUR 191.4 Mio during 2007. Due to aggressive competition in the depositbusiness, the German branches had to suffer a small decrease of 1.2 % to EUR 101.8 Mio compared to 2006. Thebalance sheet total was up from EUR 114.6 to EUR 115.3 Mio. The operational income in the amount of EUR 0.67Mio exceeded the preceding year's income of EUR 0.57 Mio.

COMPOSITION OF THE LOAN PORTFOLIO

1%24%

4%

3%

47%

2%

19% AGRICULTUREINDUSTRYCONSTRUCTIONTRADEFINANCIAL INSTITUTIONSSERVICESOTHER

CUSTOMER DEPOSITS (IN MIO EUR)

200

180

160

140

120

100

80

60

40

20

0

1999

2000

2001

2002

2003

2004

2005

2006

2007

13

OWN FUNDS

Based on the financial results of 2007, the available own funds to be taken into account according to § 23 BWGincreased from EUR 40.03 Mio to EUR 45.73 Mio. The reserves according to § 23 BWG increased from EUR 1.492Mio to 1.846 Mio Euro. The main part of the increase in the equity is due to retained earnings added to the equity.

EARNINGS

Net interest income was EUR 9.79 Mio (+6.18%) and net commission income was EUR 0.22 Mio. Operating costsrose to EUR 5.82 Mio. (+7.8% ) whereas operating earnings could be increased to EUR 11.14 Mio (+16.04%) therebyresulting in an operating result of EUR 5.32 Mio. The results from ordinary operations amounted to EUR 5.27 Mio(+18.43%).

OPERATING RESULTS (IN MIO EUR)

6,00

5,00

4,00

3,00

2,00

1,00

0,00

-1,00

1999

2000

2001

2002

2003

2004

2005

2006

2007

14

OUTLOOK

Due to the turmoil on the global markets and their negative impact on the liquidity in the emerging markets(especially CIS) new loans to this region will be dealt with more selectively. Contrary to the past Turkey surprisinglyremained almost unaffected by the market turbulences. Therefore VakifBank International AG will again concentrateon its core market in Turkey (33% at year-end 2007) where it can assess risks more easily due to the competencyand presence of its parent.

Our target for the balance sheet total for 2008 is EUR 450 Mio. The expected profit for 2008 is EUR 4.5 Mio. Ourfocus will be on fixed income and credit business, whereby asset quality will have major priority.

However, the realisation of our targets will depend on the development and health of the global financial sectorand global growth.

After the closing of the balance sheet there were no significant events to be reported.

Vienna, 28 March 2008

VakifBank International AG

15

The supervisory board held 4 (four) meetings in the fiscalyear 2007. The supervisory board was informed by the executiveboard about the essential matters of the business especiallyregarding general management, development and situationof the company, by continuous reporting. The reports of theexecutive board were acknowledged and the necessarydecisions were taken. The supervisory board has fulfilled thelegal and statuary requirements.

The financial statements including notes and situation reportof the financial year 2007 were audited and confirmed byDeloitte Wirtschaftsprüfungs GmbH, Vienna. The unqualifiedaudit opinion was given.

In compliance with requirements of article 92 section 4 ofthe companies act the financial statements, notes and thesituation report were examined by the elected committee.

The supervisory board has confirmed the annual reportaccording to article 125 Section 2 of the companies act at thegeneral meeting held on 10 April, 2008.

The supervisory board agrees on the proposal of the executiveboard concerning the allocation of the profit and thanks tothe executive board and employees for their performanceachieved in 2007.

Vienna, 10 April 2008

We have audited the financial statements, including the accounting records of Vak›fBank International AG,Vienna, for the fiscal year from January 1st, 2007 to December 31, 2007. Management is responsible for thepreparation and content of the financial statements and the accounting records and the management report inaccordance with Austrian regulations as well as with the articles of association and the additional regulations ofthe Austrian Banking Act. Our responsibility is to express an opinion on these financial statements based on ouraudit and to state whether the management report is in accordance with the financial statements.

We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards onAuditing. Those standards require that we plan and perform the audit to obtain reasonable assurance whether thefinancial statements are free from misstatement and whether we can state that the management report is in accordancewith the financial statements. In determining audit procedures we considered our knowledge of the business, theeconomic and legal environment of the company and as well as the expected occurrence of errors.

The audit involves procedures to obtain evidence about amounts and disclosures in the financial statementspredominantly on a sample basis. An audit also includes assessing the accounting principles used and significantestimates made by management as well as evaluating the overall financial statement presentation. We believe thatour audit provides a reasonable basis for our opinion.

Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the financialstatements are in accordance with legal requirements as well as with the articles of association and the additionalregulations of the Austrian Banking Act and present fairly in all material respects, the financial position of Vak›fBankInternational AG as of December 31, 2007 and of the results of its operations and its cash-flows for the fiscal yearfrom January 1st, 2007 to December 31, 2007 in accordance with Austrian generally accepted accounting principles.The management report is in accordance with the financial statements.

Vienna, 28 March, 2008

This English translation of the audit opinion was prepared for the client's convenience only. It is no legally relevant translation of the German audit opinion.

16

17

18

1. Cash in hand and balances with central banks 12.703.532,28 5.180.366,91

2. Debt instruments issued by public bodies 13.752.188,26 24.024.584,62

3. Loans and advances to credit institutions

a) repayable on demand 41.455.878,64 26.886.655,36

b) Other claims 152.069.111,58 193.524.990,22 93.492.265,50 120.378.920,86

4. Loans and advances to customers 103.623.588,10 105.710.706,81

5. Bonds and other fixed income instruments

a) issued by public sector entites 37.522.985,57 72.615.284,23

b) issued by other borrowers 46.652.646,62 84.175.632,19 31.549.867,85 104.165.152,08

6. Shares and other non-fixed interest securities 750.000,00 750.000,00

7. Investments 2.020,00 2.020,00

8. Intangible non current assets 95.246,28 154.913,05

9. Tangible fixed assets

thereof:

land and buildings used by the credit institution in the

course of its own business:

EUR 480.108,07 (PY: 315 T EUR) 745.427,67 758.297,98

10. Other assets 10.649.120,97 9.682.977,03

11. Accrued and deferred items 144.700,51 84.633,21

420.166.446,48 370.892.572,55

off balance sheet items

1. Foreign assets 302.534.591,58 304.474.328,75

31.12.2007 31.12.2006

ASSETS EUR EUR EUR EUR

19

1. Amounts owed to credit institutions

a) repayable on demand 20.722.214,23 15.362.615,58

b) with agreed maturity dates or

period of notice 154.258.178,80 174.980.393,03 141.632.498,10 156.995.113,68

2. Amounts owed to customers

a) Saving deposits

thereof:

aa) repayable on demand 4.103.271,28 4.237.209,53

ab) with agreed maturity dates or

period of notice 66.909.067,96 46.245.795,44

b) Other liabilities

thereof:

ba) repayable on demand 10.446.467,13 18.337.527,07

bb) with agreed maturity dates or

period of notice 109.926.739,22 191.385.545,59 99.808.764,94 168.629.296,98

3. Other liabilities 6.213.391,64 3.438.465,07

4. Accrued and deferred items 473.979,96 466.994,44

5. Provisions

a) Provisions for severance payments 84.200,00 62.765,00

b) Provisions for taxes 51.000,00 27.500,00

c) other provisions 1.154.103,59 1.289.303,59 1.084.910,17 1.175.175,17

6. Subscribed capital 16.000.000,00 16.000.000,00

7. Capital reserves

a) share premium 4.000.000,00 4.000.000,00

8. Profit reserves

a) statutory reserve 1.600.000,00 1.600.000,00

b) other reserves 22.378.331,94 23.978.331,94 17.095.732,48 18.695.732,48

9. Reserve according to section 23 (6) ABA 1.845.500,73 1.491.794,73

10. Accumulated profit 0,00 0,00

420.166.446,48 370.892.572,55

31.12.2007 31.12.2006

LIABILITIES EUR EUR EUR EUR

off balance sheet items1. Contingent liabilities 2.469.364,95 3.983.559,242. Credit risk 933.650,90 2.077.028,713. Own funds to be taken into account according to section 23 ABA 45.728.586,39 40.032.614,164. Legal minimum capital requirement according to section 22 (1) ABA 11.678.352,00 9.032.704,005. Foreign liabilities 199.964.612,44 187.942.075,42

20

1. Interest and similar income thereof: 23.473.297,64 20.309.577,97from fixed income securitiesEUR 7.922.440,91 (PY: 8.499 T EUR)

2. Interest and similar expenses -13.679.873,21 -11.093.279,43

I. NET INTEREST INCOME 9.793.424,43 9.216.298,543. Fee and commission income 819.058,06 1.073.381,704. Fee and commission expenses -598.917,11 -780.993,735. Income/Expenses from financial transactions 790.233,66 -46.337,406. Other operating income 305.347,73 135.817,28

II. OPERATING INCOME 11.109.146,76 9.598.166,397. General administrative expenses

a) Personnel expenses thereof:aa) Salaries and wages -2.678.452,38 -2.525.580,80bb) Compulsory social security contribution -677.517,49 -600.261,24cc) Other social expenses -49.171,99 -43.383,80dd) Expenses for pension benefits -33.613,35 -33.476,08ee) Expenses for severance payments

and contributionsto external pension funds -32.381,16 -3.471.136,37 -21.478,63 -3.224.180,55

b) Other administrative expenses -2.022.397,56 -1.830.256,598. Depreciation for intangible andtangible fixed assets -280.760,29 -341.295,389. Other operating expenses -108.938,86 -8.548,38

III. OPERATING EXPENSES -5.883.233,08 -5.404.280,90

IV. OPERATING RESULT 5.225.913,68 4.193.885,49

10. Allocation to /Releases of provisionson loan losses and income/loss fromsale/valuation of liquidity reserve -420.006,26 263.234,19

11. Income /Expenses from sale/valuation of securities valued as financial fixed investments 373.715,98 -11.065,50

V. RESULT FROM ORDINARY ACTIVITIES 5.179.623,40 4.446.054,18

12. Income tax 460.533,89 936.559,4513. Other taxes -3.851,83 -9.114,71

VI. ANNUAL SURPLUS 5.636.305,46 5.373.498,92

14. Changes in Reserves thereof: -5.636.305,46 -5.373.498,92Allocation to reserve according to section 23(6) ABA EUR 353.706,00; (PY: -74 T EUR) 0,00 0,00

VII. ANNUAL PROFIT 0,00 0,00

15. Profit carried forward 0,00 0,00

VIII. ACCUMULATED PROFIT 0,00 0,00

31.12.2007 31.12.2006

EUR EUR EUR EUR

Addi

tions EU

R

0,00

5.922

.179,4

0

5.92

2.17

9,40

0,00 0,00

0,00

0,00

102.9

07,88

101.6

38,31 0,0

0

3.677

,02

208

.223

,21

Dis

posa

ls EUR

10.54

7.200

,00

36.89

5.731

,76

47.

442.

931,

76

0,00 0,00

0,00

0,0

0

0,00

3.108

,80 0,00

3.677

,02

6.7

85,8

2

Recl

assi

ficat

ions

EUR

0,00

0,00

0,0

0

0,00 0,00

0,00

0,0

0

0,00

0,00

0,00

0,00

0,0

0

Acqu

isiti

on c

ost a

s

of D

ec.3

1,20

07 EUR

13.83

0.700

,00

46.27

1.514

,40

60.

102.

214,

40

2.02

0,00

259.2

07,52

214.2

35,54

473

.443

,06

1.335

.161,5

4

624.2

14,25

21.58

7,16

0,00

1.98

0.96

2,95

Accu

mul

ated

Dep

reci

atio

n

EUR

78.51

1,74

62.16

5,23

140

.676

,97

0,00

193.6

09,73

184.5

87,04

378

.196

,77

852.6

14,56

361.3

33,56

21.58

7,16

0,00

1.23

5.53

5,28

Book

val

ue a

s

of D

ec.3

1,20

07

EUR

13.75

2.188

,26

46.20

9.349

,17

59.

961.

537,

43

2.02

0,00

65.59

7,79

29.64

8,49

95.2

46,2

8

482.5

46,98

262.8

80,69 0,0

0

0,00

745.

427,

67

Book

val

ue a

s of

Dec

.31,

2006 EU

R

24.02

4.584

,62

76.97

6.733

,70

101.

001.

318,

32

2.02

0,00

102.8

79,56

52.03

3,50

154.

913,

06

494.2

10,51

259.7

70,04

4.317

,43 0,00

758.

297,

98

Acqu

isiti

on c

ost

as o

f Jan

.01,

2007

EUR

24.37

7.900

,00

77.24

5.066

,76

101

.622

.966

,76

2.02

0,00

259.2

07,52

214.2

35,54

473

.443

,06

1.232

.253,6

6

525.6

84,74

21.58

7,16

0,00

1.77

9.52

5,56

Dep

reci

atio

n

curr

ent p

erio

d

EUR

157.1

53,43

372.9

83,60

530.

137,

03

0,00

37.28

1,77

22.38

5,00

59.6

66,7

7

114.5

71,41

98.52

7,66

4.317

,43

3.677

,02

221.

093,

52

2) 2)

Appr

ecia

tion

curr

ent p

erio

d

EUR

5.320

,80

165.7

36,55

171

.057

,35

0,00 0,00

0,00

0,

00 0,00

0,00

0,00

0,00

0,0

0

1) 1)

21

I. FI

NAN

CIAL

INVE

STM

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a) S

ecur

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aa)

Issu

ed b

y pu

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secto

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bb)

Issu

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II. S

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ED IN

TERE

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III. I

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GIBL

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SETS

a) R

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b) S

tartu

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a) L

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Impr

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b) F

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and

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pro

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2) D

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) ABA

22

GENERAL REGULATIONS

The annual accounts of VakifBank International AG for the financial year 2007 were prepared in observance of the principlesof regular bookkeeping and the general standard which requires a true and fair view of the assets, financial and revenue positionof the company to be given. The balancing, valuation and reporting of the individual items in the annual accounts have beenundertaken in accordance with the rules laid down in the Austrian Enterprise Code (until December 31, 2007 named as AustrianCommercial Code (ACC)) and in accordance with the rules of the Austrian Banking Act (ABA) in the latest version.

BALANCING AND VALUATION METHODS

Balance sheet and income statement were prepared according to appendix 2 Section 43 ABA. Items showing no balance,neither 2006 nor 2007, are not included. During the preparation of the financial statements the principle of completenesswas taken into consideration and the continuation of the bank was assumed. The valuation of each asset and liability wasmade according to the valuation principle.

Due to the principle of prudence only realised profits were included and all risks and expected losses were taken intoconsideration as per the year end.

Foreign currencies were translated according to Section 58/1 ABA with medium exchange rates as per balance sheet dateDecember 31, 2007.

NAME AND HEADQUARTER OF THE PARENT COMPANY

Financial statements of VakifBank International AG have been consolidated in the financial statements of Türkiye Vak›flarBankas› T.A.O., Atatürk Bulvar› No: 207 Kavakl›dere 06680 Ankara, Turkey. The consolidated financial statements are availableat the headquarters.

ASSETS

Available for sale securities are reported at lower of costs or market at the balance sheet date. Securities held to maturity werevalued according to Section 56/2 ABA or according to section 56/3 ABA. All securities mentioned in the position bonds andother fixed income instruments and shares are fully listed. A trading book according to Section 22 B (1) ABA is not set up.

Intangible and tangible fixed assets are valued at the acquisition or production costs, reduced by planned amounts of lineardepreciation.

The development of fixed asset items and of the annual depreciation is shown in the table „development of fixed assets”.

INTANGIBLE AND TANGIBLE FIXED ASSETS YEARS

Expenditures for establishment

And extend of an enterprise 4

Intangible fixed assets 10

Investments in premises 10

Furniture and fixture 10

Office machines and IT equipment 4

Vehicles 5

Low value fixed assets (Section 13 ITA) amounting to TEUR 4 (previous year (PY) TEUR 4) are fully depreciated in the yearof acquisition and are shown in the table „development of fixed assets“ in the columns additions, disposals and amortisationof the current year.

LIABILITIES

Provisions for severance payments were calculated due to financial mathematical principles considering retirement ageas 60 (women) or 65 years (men) and a calculating interest rate of 4.75 % (PY 4%). All risks recognizable at the dateof preparation of the financial statement, together with the contingent liabilities, were taken into account in the amountof other provisions according to the principle of reasonable business appraisal.

Other provisions were set up mainly for vacation, consultancy, auditing cost, taxes, IT-projects and bonus.

CAPITAL STOCK

The capital stock is amounting to Euro 16 Mio shares with 1 Euro nominal each. Shareholders are Türkiye Vak›flarBankas› T.A.O., Atatürk Bulvar› No:207 Kavakl›dere Ankara, Turkey holding 14.40 Mio shares and Türkiye Vak›flarBankas› T.A.O. Memur ve Hizmetlileri Emekli ve Sa¤l›k Yard›m Sand›¤› Vakf›, Atatürk Bulvar› No: 87/7 Kavakl›dereAnkara, Turkey with 1.60 Mio shares.

NOTES TO THE BALANCE SHEET AND INCOME STATEMENT

MATURITY PROFILE (§ 64/1/4 ABA)

Assets sorted by maturity are listed below:

AssetsFinancial Institutions others

31.12.2007 31.12.2006 31.12.2007 31.12.2006

in EUR in T EUR in EUR in T EURUp to 3 month 56.800.114,69 56.208 9.746.502,87 10.058More than 3 months up to 1 year 59.145.764,85 19.338 18.026.420,72 24.980More than 1 year up to 5 years 36.123.232,04 17.946 52.038.180,12 52.409More than 5 years 0,00 0 11.868.159,14 16.127Total 152.069.111,58 93.492 91.679.262,85 103.574

The total amount of assets in foreign currency amounted to EUR 117,169,003.39 (PY EUR 69.70 Mio).

Liabilities included amounts with the following tenors:

LiabilitiesFinancial Institutions others

31.12.2007 31.12.2006 31.12.2007 31.12.2006

in EUR in T EUR in EUR in T EURUp to 3 month 105.897.877,19 119.039 24.229.927,34 14.769More than 3 months up to 1 year 23.586.033,56 12.593 76.703.690,86 48.202More than 1 year up to 5 years 24.774.268,05 10.000 75.902.188,98 83.084More than 5 years 0,00 0 0,00 0Total 154.258.178,80 141.632 176.835.807,18 146.055

The total amount of liabilities in foreign currency amounted to EUR 75,833,416.24 (PY EUR 57.51 Mio).

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SECURITIES AND OTHER FIXED INTEREST BEARING SECURITIESDebt instruments issued by public bodies have been reduced by EUR 10.27 Mio from EUR 24.02 Mio to EUR 13.75Mio. Securities, other fixed income assets and shares were down by EUR 19.98 from EUR 104.16 Mio to EUR 84.18Mio due to repayments and sale. Shares remained unchanged at EUR 0.75 Mio.

At the balance sheet date fixed assets securities according to Section 56/1 ABA amounted for EUR 60.10 Mio (PYEUR 101.62 Mio) valued at acquisition cost.

The difference between higher acquisition costs and repayment amount of securities which are classified as financialinvestments is amortized during the period until maturity date due to Section 56/2 second sentence of ABA. In theyear 2007 amortization amounted to EUR 0.53 Mio (PY EUR 0.79 Mio). The difference till end of maturity is amountingto EUR 0.44 Mio (PY EUR 1.04 Mio).

The difference between lower acquisition costs and repayment amount of securities which are classified as financialinvestments is credited during the period until maturity date in accordance with Section 56/3 ABA which in 2007was EUR 0.17 Mio (PY EUR 0.17 Mio). The difference until maturity is amounting to EUR 0.27 Mio (PY EUR 0.75Mio).

All assets in the position bonds and other fixed income securities are listed on international exchanges. The assetshown in the position stocks is listed on the stock exchange. Quoted bonds and other fixed interest bearing securitiesand stocks of the available for sale portfolio show the difference of EUR 0.26 Mio (PY EUR 0.52 Mio) betweenacquisitions costs and the higher fair values at the balance sheet date. A trading book is not available.

The classification according to Section 64/1/11 ABA was made by decisions of the board.

No securities were pledged in favour of other financial institutions on balance sheet date (PY EUR 20.83 Mio), shortterm repo transactions with financial institutions amounted to EUR 45 Mio (PY 63.98 Mio).

NOTES TO TRANSACTIONS WITH AFFILIATED COMPANIESRelated company transactions exist only with its parent T. Vakiflar Bankasi T.A.O. The assets are amounting to EUR5.26 Mio, EUR 4.77 Mio hereof in foreign currency. Liabilities are amounting to EUR 45.06 Mio (PY EUR 15.30 Mio),EUR 28.18 Mio hereof are in foreign currency (PY EUR 3.34 Mio). Guarantees issued by T. Vakiflar Bankasi T.A.O.in favour of VakifBank International AG show a balance of EUR 59.48 Mio which in general is given as collateralfor loans.

OTHER ASSETSOther assets amounting to EUR 10.65 Mio (PY EUR 9.68 Mio) mainly consist of accrued interest from securities,forfeiting transactions and loans in the amount of EUR 7.30 Mio (PY EUR 8.79 Mio).

OTHER LIABILITIESOther liabilities in the amount of EUR 6.21 Mio (PY EUR 3.44 Mio) include accrued interest amounting to EUR 2.99Mio (PY EUR 2.37 Mio).

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OTHERS

Liabilities owing to the utilisation of tangible assets not included in the balance sheet are amounting to TEUR 365 (PY TEUR298) for the next financial year. Total liabilities for the following 5 years are amounting to TEUR 1.825 (PY TEUR 1.490).

Expenses for the leasing of vehicles and office machines are approximately TEUR 45 (PY TEUR 42) for the next financialyear and TEUR 224 (PY TEUR 210) for the next 5 years.

The option to capitalize deferred tax assets pursuant to Section 198 (10) AEC was 11.08 TEUR (PY 9.37 TEUR).

As of balance sheet date forward transactions amounted to EUR 50.14 Mio (PY EUR 20.05 Mio).

“Expenses for severance payments and contributions to external pension funds “consist of severance payments for 21 TEUR(PY 11 TEUR) and contributions to external pension funds of 11 TEUR (PY 10 TEUR) included.

NOTES TO FINANCIAL INSTRUMENTS ACCORDING TO SECTION 237A/1/1 AEC:

FINANCIAL INSTRUMENTS VALUED ABOVE THEIR FAIR VALUES ARE LISTED AS FOLLOWS:

in T EUR Book value silent Book value silent

31.12.2007 payables 31.12.2006 payables

Debt instruments issued by public bodies 6.519 -60 16.797 -268

Bonds and other fixed income instruments 9.913 -318 19.832 -424

Silent payables are mainly caused by the latest fluctuations in the market prices of bonds, shares and investments. Generallyspeaking the issuer's credibility remained unchanged.

DETAILS CONCERNING EXECUTIVE BODIES AND STAFF

The average number of staff during the financial year amounted to 44 (PY 44).

THE SUPERVISORY BOARD WAS MADE UP AS FOLLOWS DURING THE YEAR 2007:

Bilal Karaman, Chairman

Do¤an Pençe, Deputy Chairman

Tanju Yüksel, Member of the Supervisory Board

Onur Y›lmaz, Member of the Supervisory Board

fiahin U¤ur, Member of the Supervisory Board

Remzi Alt›nok, Member of the Supervisory Board until 5 April 2007

Metin Recep Zafer, Member of the Supervisory Board until 19 March 2007

Birgül Denli, Member of the Supervisory Board since 5 April 2007

Ayd›n Deliktafll›, Member of the Supervisory Board since 19 March 2007

THE EXECUTIVE BOARD DURING THE YEAR 2007 CONSISTED OF:

Numan Bek, Chairman

Vedat Pakdil, Deputy Chairman

U¤ur Yeflil, Member of the Management Board

Erkut Akp›nar, Member of the Management Board since 14 May 2007

Ali S›tk› Karatekin, Member of the Management Board since 15 May 2007

Guarantees amounting to TEUR 3.50 were given on behalf of members of the executive board. In the year

2007 the total amount of salaries for the members of the executive board was TEUR 554.65 (PY TEUR 550.97).

Vienna, 28 March 2008

VakifBank International AG

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