Albaraka Türk Katilim Bankasi : 2022 Integrated Annual Report

TOWARDS THE FUTURE WITH A

PRINCIPLED APPROACH

2022 INTEGRATED ANNUAL REPORT

The earthquake that ravaged Kahramanmaraş on February 6, 2023 deeply hurt our entire country and left us all in a state of mourning.

The Albaraka Türk family wish God's mercy on the souls of our citizens who lost their lives in this disaster, extend our condolences to their relatives, and pray for our injured citizens to regain their health and their loved ones as rapidly as possible.

We will overcome this challenging process with unity, resilience and solidarity

In the moments after the disaster struck, we immediately mobilized all our resources and sought to heal our wounds. At our Bank's Emergency Crisis Management Committee, we discussed all of our plans at all levels and carried out all activities necessary to swiftly overcome this sensitive process.

From the very outset, we supported the efforts to save the lives of those trapped under the rubble with our colleagues who hold search and rescue and first aid certificates and the NESAR (Search and Rescue) Association. We directed the most essential supplies to the region in order to maintain the vital functions of our citizens who were rescued from the wreckage.

In order to swiftly meet their needs for shelter and heating, we provided the most important needs such as generators, winter tents, hydrophore and water heater systems, blankets and heaters to the victims. We have continuously delivered food parcels, cleaning and hygiene materials to those in need in the region.

In coordination with various NGOs, along with official institutions and organizations, we continued to deliver our aid materials by identifying urgent vital needs on site.

With the devoted efforts of our Bank's Social Responsibility Club and our volunteer friends, we continued to work unwaveringly to meet the needs of the people of the region.

By temporarily closing our branches in the earthquake zone, we set out about ensuring the safety of life and property of our colleagues and their families in the affected area.

We maintained our support and closely monitored the situation of our personnel and their families in the disaster area. We provided cash support to all of our personnel in the affected areas. We will closely monitor the progress of the process and continue to provide support without leaving anyone behind.

Doing our part by providing additional convenience in finance

We postponed the repayment of loan installments of all retail finance customers affected by the earthquake and our customers excluding retail finance In addition to postponing the repayment of credit card debts for all our customers in the earthquake zone, we also suspended all automatic collections.

We sent mobile service vehicles to the region in order to ensure there was no disruption in banking services where branch buildings had collapsed. We also removed transaction fees for banking services.

In the coming period, we will continue to approach the needs and requirements of our customers affected by the disaster with sensitivity and take whatever measures are necessary.

Healing Wounds in the Disaster Area

Life in the disaster area is being reconstructed with the removal of the debris as we seek to heal our wounds. We have started the construction of containers and tents with vital inventories and are providing them to our citizens who were affected by the disaster.

We delivered children's books from Albaraka Publishing to the earthquake zone in order to contribute to the rehabilitation efforts which we initiated to help children overcome the psychological trauma caused by the disaster.

We will continue to work with all our might to offer support, by closely following this process which will require a long-term struggle in order to heal from the wounds of this disaster.

Wishing condolences for our Nation…

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About the Report

Nature, Period and Scope of the Report

The Integrated Annual Report includes Albaraka Türk's financial and non-financial performance in 2022 and the Board of Directors Activity Report to be submitted to the General Assembly, covering the period from January 1 to December 31, 2022.

The report has been prepared on an unconsolidated basis, excluding the independent audit report in the Financial Statements and Footnotes section, and does not cover Albaraka Türk's subsidiaries and foreign operations.

Approach to Capital Elements

The report presents the current outputs and effects of Albaraka Türk's value creation model, its risk and opportunity management and the Bank's future plans and targets on the basis of integrated thinking principles proposed by the IFRSFoundation-IntegratedReporting framework and capital classification.

Report Content

The report describes Albaraka Türk's multifaceted contribution to inclusive and sustainable development by adhering to the principles of participation banking and covers with the economic, social and environmental dimensions of the Bank's operations. The report also addresses the Bank's contribution to the United Nations 2030 Sustainable Development Goals, which it supports.

Publication of the Report

Albaraka Türk places importance and priority on ensuring that the integrated annual report is accessible to all stakeholders. In this context, the report was prepared with an environmentally friendly approach and made available on electronic media. The report can be accessed from the Public Disclosure Platform and the website, at www.albaraka.com.tr.

Compliance with Legislation and Regulatory Framework

This report has been prepared in accordance with the IFRS Foundation-Integrated Reporting framework and the GRI Standards 2021 published by the Global Reporting Initiative (GRI). The content of the report was created according to the methods of determining content, primarily the prioritization principle, as set out in the GRI Standards Guide, with performance statements broadly adhering to the same guidelines.

The 2022 Integrated Annual Report of our Bank, whose shares are traded on the Borsa Istanbul, is also in compliance with the minimum requirements as set out by the BRSA, the Capital Markets Board (CMB) and the TCC regarding activity reporting.

Audit

For the selected non-financial indicators in the report, statements of assurance within ISAE 3000 (Revised) and ISAE 3410 standards have been obtained by an independent auditor, PwC Independent Auditing and Independent Accountant Mali Müşavirlik A.Ş. Limited. The report of the Independent Assurance Statement, which includes the

list and scope of indicators receiving assurance can be viewed on page 160. The financial information in the report has been audited by the same independent audit firm.

Statements from Independent Auditors are presented on page 175 of the report.

Statement from the Senior Management

Financial and non-financial information, targets and key performance indicators in the Integrated Annual Report are reviewed by the senior management of Albaraka Türk. The Management Statement is presented on page 172.

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Indices and Reporting Frameworks in which Albaraka Türk is Included

BIST INDICES

BIST PARTICIPATION 100 / BIST CORPORATE GOVERNANCE / BIST STAR / BIST ALL / BIST 100-30 / BIST PARTICIPATION 50 / BIST PARTICIPATION ALL / BIST SUSTAINABILITY PARTICIPATION / BIST PARTICIPATION 30 / BIST 100 / BIST SUSTAINABILITY / BIST FINANCIAL / BIST BANK

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Contents

2	About the Report	32	From Management
3	Indices and Reporting Frameworks in which Albaraka Türk is Included	34	Message from the Chairman
		36	Message from the CEO
12	General Assembly Agenda
		38	Strategy
14	Summary Board of Directors Report
		40	Trends, External Factors - Albaraka Türk's Foresights
15	Amendments to the Articles of Association	44	Albaraka Türk's Strategic Objectives
		46	Stakeholders and Prioritization Analysis
17	Profit Distribution Proposal	47	Linkage of Priority Areas with Stakeholder, SDG and Strategic Areas
18	Albaraka Turk at a Glance	48	Sustainability Governance
20	About Albaraka Türk	50	Sustainability Management at Albaraka
22	Vision, Mission and Core Values	53	2021 - 2025 Al Baraka Goals
23	Shareholding Structure	54	Albaraka Türk's Sustainability and Social Responsibility Principles
24	Albaraka Türk's Quality Policy	57	Corporate Governance at Albaraka Türk
25	Key Performance Indicators	57	Policies at Albaraka Türk
26	Our Business Model and the Value Generated
28	Albaraka Türk's Sustainability Journey	58	2022 Performance
30	Achievements and Awards
31	About the Al Baraka Group (ABG)	62	Financial Capital
		70	Manufactured Capital
		78	Intellectual Capital
		86	Human Capital
		102	Social and Relationship Capital
		110	Natural Capital

https://www.albaraka.com.tr/en/investor-relations/financial-information/annual-reports

1. Management and Corporate Governance Practices
2. Organization Chart
3. Board of Directors

122 Senior Management

1. Information on the Board of Directors
2. Information on the Bank's Board of Directors and Senior Management
3. Declaration of Independence
4. Committees and Committee Meetings Attendance

137 Support Services Received in Accordance with the Regulation on Support Services for Banks and

1. Authorization of Companies to Provide These Services

1. Transactions with the Bank's Risk Group
2. Affiliation Report
3. Other Explanations on Corporate Governance
4. Corporate Governance Principles Compliance Report

1. Evaluations on Financial Information and Risk Management
2. Summary Financial Information for the Five-Year Period
3. Assessment of Financial Situation, Profitability and Solvency
4. Risk Management

150 Assessment of Internal Control, Internal Audit and Risk Management Systems by the Audit Committee

1. Managers of Internal Audit Systems
2. Albaraka Türk's Ratings by Credit Rating Agencies
3. Provision Policy

156 Advisory Board Report

1. Compliance Reports
2. Independent Auditor's Report Originally Issued in Turkish on the Board of Directors' Annual Report

160 Limited Assurance Report

1. Appendices
2. Albaraka Türk ESG Performance Indicators
3. Appendix-1:Albaraka Türk 2022 Integrated Annual Report - Reporting Principles

1. Statement of Responsibility Regarding 2022 Integrated Annual Report

1. Financial Information

174 Unconsolidated Financial Statements and Related Disclosures at December 31, 2022 Together with Independent Auditor's Report

314 Consolidated Financial Statements and Related Disclosures at December 31, 2022 Together with Independent Auditor's Report

462 Directory

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With a principled approach

As Turkey's first participation bank, Albaraka Türk offers its financial products, services and solutions to a wide range of customers in line with the principles of participation banking and creates shared value.