RNS Number:3364S                    
Turk Ekonomi Bankasi A.S.
21 November 2003

                                        Turk Ekonomi Bankasi
                                           Anonim Sirketi


                          Consolidated Financial Statements
                              As of September 30, 2003
                            Together With Review Report


     (CONVENIENCE TRANSLATION OF A REVIEW REPORT AND FINANCIAL STATEMENTS)
            ORIGINALLY ISSUED IN TURKISH- SEE SECTION III, NOTE XXV)


(Convenience Translation of A Review Report And Financial Statements
Originally Issued In Turkish - See Section III, Note XXV)



TURK EKONOMI BANKASI ANONIM SIRKETI
REVIEW REPORT AS OF SEPTEMBER 30, 2003


We have reviewed the consolidated balance sheet of Turk Ekonomi Bankasi Anonim
Sirketi as of September 30, 2003 and the related consolidated statement of
income for the interim period then ended. These financial statements are
expressed in the equivalent purchasing power of Turkish lira as of September 30,
2003. These financial statements are the responsibility of the Bank's
management. Our responsibility as independent auditors is to issue a review
report on these financial statements based on our review.



We conducted our review in accordance with the auditing standards which were
determined under the provisions of Banking Law Number 4389. These standards
require that the review should be planned and performed to obtain limited
assurance as to whether the financial statements are free of material
misstatement. A review is limited primarily to inquires of bank personnel and
analytical procedures applied to financial data and thus provides less assurance
than an audit. We have not performed an audit and, accordingly we do not express
an opinion.



Based on our review, nothing has come to our attention that causes us to believe
that the accompanying consolidated interim financial statements of Turk Ekonomi
Bankasi Anonim Sirketi at September 30, 2003 are not presented fairly, in all
material respects, in accordance with the accounting principles and standards
that are based on the Article 13 of the Banking Law number 4389.



Additional paragraph for convenience translation to English:



The above mentioned accounting principles differ from International Financial
Reporting Standards (IFRS) issued by International Accounting Standards Board
and so far as such differences apply to the financial statements of the Bank
they mainly relate to the format of financial statements and disclosure
requirements, accounting for deferred taxes and accounting for retirement pay
liabilities. The effects of the differences between these accounting principles
and accounting principles generally accepted in the countries in which the
accompanying financial statements are to be used and IFRS have not been
quantified in the accompanying financial statements.  Accordingly, the
accompanying financial statements are not intended to present the financial
position and results of operations in accordance with the accounting principles
generally accepted in the countries of users of the financial statements and
IFRS.



Guney Serbest Muhasebeci Mali Musavirlik Anonim Sirketi
An Affiliated Firm of Ernst & Young International




Esra Peri, SMMM


November 20, 2003
Istanbul, Turkiye

                                                                                  INDEX

                                                                              SECTION ONE         Page no.

                                                                             General Information



      I.    Footnotes and Explanations on the Parent Company Bank's Service
Activities and Operating Areas                                                                        1

     II.    Explanations and Footnotes Regarding the Including Group of the
Parent Company Bank                                                                                   1

    III.    Explanations on the consolidated financial statements                                     1



                                                                               SECTION TWO

                                                                    Consolidated Financial Statements



          I.        Consolidated Balance Sheets - Assets                                             3

         II.        Consolidated Balance Sheets - Liabilities                                        4

        III.        Consolidated Income Statements                                                   5

        IV.        Consolidated Statements of Off Balance Sheet Commitments                          6





                                                                                SECTION THREE
                                                                          Accounting Principles



          I.    Basis of Presentation                                                                   7

         II.    Presentation of the Information Regarding the Parent Company
Bank and the Group Companies Included in the Consolidation                                              8

        III.    Explanations on Forward, Option Contracts and Derivative
Instruments                                                                                             9

        IV.    Netting of Financial Assets and Liabilities                                              9

         V.    Interest Income and Expense                                                              10

        VI.    Fees and Commission Income and Expense                                                   10

       VII.    Securities Held for Trading                                                              10

      VIII.    Sales and Repurchase Agreements and Lending of Securities                                10

        IX.    Securities Held to Maturity, Securities Available for Sale and
              Bank Originated Loans and Receivables                                                     11

         X.    Unconsolidated Participations and Subsidiaries                                           12

        XI.    Originated Loans and Receivables and Provisions for Loan
               Impairment1                                                                              12

       XII.    Goodwill and Other Intangible Fixed Assets                                               13

      XIII.    Tangible Fixed Assets                                                                    13

     XIV.    Leasing Transactions                                                                       14

      XV.    Provisions and Contingent Liabilities                                                      14

     XVI.    Liabilities Regarding Employee Benefits                                                    14

    XVII.    Taxation                                                                                   15

   XVIII.    Additional Explanations on Borrowings                                                      16

     XIX.    Paid-in Capital and Share Certificates                                                     16

      XX.    Acceptances                                                                                16

     XXI.    Government Incentives                                                                      16

     XXII.   Securities at Custody                                                                      16

    XXIII.   Impairment of Assets                                                                       16

    XXIV.   Reporting Regarding Operational Sections                                                    16

     XXV.   Other Issues                                                                                17



                                                                                          SECTION FOUR

                                                                       Information on Financial Structure



          I.    Capital Adequacy Standard Ratio                                                        18

         II.    Consolidated Market Risk                                                               21

        III.    Consolidated Foreign Currency Risk                                                     21

        IV.    Consolidated Interest Rate Risk                                                         23

         V.    Consolidated Liquidity Risk                                                             25



                                                                                     SECTION FIVE

                                                                            Footnotes and Explanations 
                                                                   on Consolidated Financial Statements



          I.        Explanations on  Consolidated Assets                                               27

         II.        Footnotes and Explanations Related  to Consolidated
                    Liabilities                                                                        37

        III.        Footnotes and Explanations Related to Consolidated Income
                    Statement                                                                          41

        IV.        Explanations Related to Consolidated Off-balance Sheet Items                        43

         V.        Footnotes and Explanations on the Risk Group of the Bank                            45

        VI.        Footnotes and Explanations Related to Inflation Accounting                          47

       VII.        Explanations Related to Subsequent Events                                           49



                                                                                     SECTION SIX

                                                                            Independent Auditor's Report



          I.    Explanations on independent review report                                               49




                                  SECTION ONE



                              GENERAL INFORMATION



I-      Footnotes and Explanations on the Parent Company Bank's Service
Activities and Operating Areas



a)     Commercial name of the Bank            : Turk Ekonomi Bankasi Anonim Sirketi (the Bank)
Reporting period                              : 1 January - 30 September 2003
Address of the head office                    : Meclis-i Mebusan Caddesi No:35
                                                Findikli 34427 - ISTANBUL
  
Telephone number                              : (0212) 251 21 21
Facsimile number                              : (0212) 249 65 68
Web page                                      : www.teb.com.tr
E-mail address                                : investorrelations@teb.com.tr



b)    The Parent Company Bank's service activities and operating areas: The
Parent Company Bank operates in corporate, commercial, retail and private
banking areas.



c)       Financial statements and relevant explanations together with the
footnotes are stated in Billions of Turkish Lira.



II-     Explanations and Footnotes Regarding the Including Group of the Parent
Company Bank



The Including Group of the Parent Company Bank: Turk Ekonomi Bankasi Anonim
Sirketi ("the Bank") is included in the Colakoglu Group. The 70.08% of shares of
the Bank belong to TEB Mali Yatirimlar Anonim Sirketi (TEB Mali Yatirimlar) and
8.60% of the shares belong to Colakoglu Metalurji Anonim Sirketi.



III-   Explanations on Consolidated Interim Financial Statements



a)       Accounting principles and basis of valuation used in the preparation of
year-end financial statements are also used for the preparation of interim
financial statements without any changes or exceptions, and are summarized in
Section Three below.



b)       There are no transactions realized in the interim period that are of a
seasonal or periodical nature.



c)       There are no non-recurring transactions or basic accounting
misstatements.



d)       There are no extraordinary items in terms of nature or amount that
affect the assets, liabilities, equity, net income or the cash flow of the Bank.



e)       Prior period interim financial statements, do not contain any changes
with respect to the estimated values related with the current period. There are
no items in the prior period financial statements that are recorded with their
estimated value.



f)        There are no convertible bonds or any other debt securities issued
during the current period.



g)       In accordance with the decision related with the distribution of
profit, declared at the Annual General Meeting of the Bank dated March 27, 2003,
the Bank distributed dividends to its shareholders in the current period
starting at April 4, 2003.



h)       There are no subsequent events that occurred after the preparation date
of the interim financial statements which have a material impact on the interim
financial statements, and not reflected in the interim financial statements.



i)         There are no transactions that may cause a structural change for the
Bank such as restructuring, mergers and acquisitions, or discontinue of any
operations.



j)         There are no changes in the commitments and contingencies of the Bank
that have arisen subsequent to the year-end balance sheet date.







                                  SECTION TWO



                       CONSOLIDATED FINANCIAL STATEMENTS



      I.    Consolidated Balance Sheets - Assets

    II.    Consolidated Balance Sheets - Liabilities

   III.    Consolidated Statements of Income

   IV.    Consolidated Statements of Off Balance Sheet Commitments










I- CONSOLIDATED BALANCE SHEET - ASSETS


                                                                  Reviewed                      Audited
                                                               Current Period                 Prior Period
                                                                 30.09.2003                    31.12.2002
                                              Note Ref.

        ASSETS                                (Section      TL       FC       Total      TL        FC      Total
                                              Five)

 I.     CASH AND BALANCES WITH THE CENTRAL                 19,209   409,659   428,868   23,186   452,434   475,620
        BANK OF TURKEY
 1.1    Cash                                                9,798       -       9,798    6,800       -       6,800
 1.2    Foreign currency                                      -      63,534    63,534      -      89,277    89,277
 1.3    Balances with the Central Bank of        I-1        9,411   346,125   355,536   16,386   363,157   379,543
        Turkey
 II.    TRADING SECURITIES (Net)                           14,179     7,819    21,998   44,874    10,554    55,428
 2.1    Public sector debt securities            I-2       14,102     6,799    20,901   44,874    10,253    55,127
 2.1.1  Government bonds                         I-2       12,615     1,030    13,645   38,516     7,299    45,815
 2.1.2  Treasury bills                           I-2        1,486       -       1,486    6,357       -       6,357
 2.1.3  Other                                    I-2            1     5,769     5,770        1     2,954     2,955
 2.2    Share certificates                                     77       -          77      -         -         -
 2.3    Other marketable securities                           -       1,020     1,020      -         301       301
 III.   BANKS AND OTHER FINANCIAL                          77,979   819,066   897,045   43,258
        INSTITUTIONS                                                                           1,103,180 1,146,438
 3.1    Due from banks                                     77,979   819,066   897,045   43,258
                                                                                               1,103,180 1,146,438
 3.1.1     Domestic banks                                  55,613   122,689   178,302   30,617   197,835   228,452
 3.1.2     Foreign banks                                   22,366   696,377   718,743   12,641   905,345   917,986
 3.2    Other financial institutions                          -         -         -        -         -         -
 IV.    MONEY MARKET PLACEMENTS                           300,081    83,063   383,144  259,417   197,892   457,309
 4.1    Interbank money market placements                 300,000    83,063   383,063  251,610   197,892   449,502
 4.2    Istanbul Stock Exchange money market                  -         -         -        -         -         -
        placements
 4.3    Receivables from reverse repurchase                    81       -          81    7,807       -       7,807
        agreements
 V.     SECURITIES AVAILABLE FOR SALE (Net)                     9    59,018    59,027       10    18,663    18,673
 5.1    Share certificates                       I-3            9       -           9       10       -          10
 5.2    Other marketable securities              I-3          -      59,018    59,018      -      18,663    18,663
 VI.    LOANS                                             517,779                      399,060
                                                                  1,003,755 1,521,534          1,055,211 1,454,271
 6.1    Short term                               I-4      467,794   930,984            370,469   863,954
                                                                            1,398,778                    1,234,423
 6.2    Medium and long term                     I-4       42,114    72,771   114,885   23,098   191,257   214,355
 6.3    Loans under follow-up                    I-4       23,563        34    23,597   22,378        45    22,423
 6.4    Specific provisions (-)                  I-4     (15,692)      (34)  (15,726)               (45)  (16,930)
                                                                                      (16,885)
 VII.   FACTORING RECEIVABLES                              60,166    21,243    81,409   46,392    27,297    73,689
VIII.   SECURITIES HELD TO MATURITY (Net)                  42,177     2,486    44,663   40,724     3,145    43,869
 8.1    Public sector debt securities            I-5       42,177     2,486    44,663   40,724     3,145    43,869
 8.1.1     Government bonds                      I-5       41,895     1,342    43,237   40,476     3,145    43,621
 8.1.2     Treasury bills                        I-5          282       -         282      248       -         248
 8.1.3     Other                                 I-5          -       1,144     1,144      -         -         -
 8.2    Other marketable securities              I-5          -         -         -        -         -         -
 IX.    INVESTMENTS AND ASSOCIATES (Net)                      342       -         342      491       -         491
 9.1    Financial investments and associates     I-6          342       -         342      491       -         491
 9.2    Non-Financial investments and                         -         -         -        -         -         -
        associates
 X.     SUBSIDIARIES (Net)                                    371         -       371      374       -         374
 10.1   Financial subsidiaries                   I-7          371         -       371      374       -         374
 10.2   Non-Financial subsidiaries                            -         -         -        -         -         -
 XI.    OTHER INVESTMENTS (Net)                               -         -         -        -         -         -
 XII.   FINANCE LEASE RECEIVABLES (Net)                     6,692   118,101   124,793    5,184    88,979    94,163
 12.1   Gross finance lease receivables          I-8        7,556   132,649   140,205    7,262   100,062   107,324
 12.2   Unearned income ( - )                    I-8        (864)  (14,548)  (15,412)  (2,078)  (11,083)  (13,161)
 XIII.  RESERVE DEPOSITS                                   13,791   123,469   137,260   10,233   135,812   146,045
 XIV.   MISCELLANEOUS RECEIVABLES                I-9        1,003     1,176     2,179      345        46       391
 XV.    ACCRUED INTEREST AND INCOME                        29,230    11,577    40,807   26,653    13,342    39,995
        RECEIVABLES

 15.1   Loans                                   I-10       11,041     7,135    18,176   10,360    10,870    21,230
 15.2   Marketable securities                   I-10        6,101       495     6,596    4,657       595     5,252
 15.3   Other                                   I-10       12,088     3,947    16,035   11,636     1,877    13,513
 XVI.   PROPERTY AND EQUIPMENT (Net)                       42,715     5,111    47,826   46,434       455    46,889
 16.1   Book value                                        107,707     5,899   113,606  105,789     1,242   107,031
 16.2   Accumulated depreciation ( - )                   (64,992)     (788)  (65,780)              (787)  (60,142)
                                                                                      (59,355)
 XVII.  INTANGIBLE ASSETS (Net)                             3,901        81     3,982    4,168       138     4,306
 17.1   Goodwill                                              409       -         409      409      -          409
 17.2   Other                                              10,320       911    11,231    9,397     1,009    10,406
 17.3   Accumulated amortization ( - )                    (6,828)     (830)   (7,658)  (5,638)     (871)   (6,509)
 XVIII. OTHER ASSETS                            I-11       56,583    20,925    77,508   40,937     2,778    43,715

         TOTAL ASSETS                                   1,186,207 2,686,549 3,872,756  991,740 3,109,926 4,101,666





      The accompanying notes are an integral part of these balance sheets.






II- CONSOLIDATED BALANCE SHEET - LIABILITIES


                                                                  Reviewed                      Audited
                                                               Current Period                 Prior Period
                                                                  30.09.2003                   31.12.2002
                                              Note Ref.

          LIABILITIES                         (Section      TL       FC       Total      TL        FC      Total
                                              Five)

 I.       DEPOSITS                                        538,437                      431,940
                                                                  2,181,695 2,720,132          2,674,587 3,106,527
 1.1      Bank deposits                         II-1       56,087    52,276   108,363   33,580    83,164   116,744
 1.2      Saving deposits                       II-1      185,360   135,114   320,474  181,095       -     181,095
 1.3      Public sector deposits                II-1       12,518       -      12,518       39       -          39
 1.4      Commercial deposits                   II-1      228,035   829,500 1,057,535  180,457       -     180,457
 1.5      Other institutions deposits           II-1       56,437       -      56,437   36,769       -      36,769
 1.6      Foreign currency deposits             II-1          -                            -
                                                                  1,150,543 1,150,543          2,566,561 2,566,561
 1.7      Precious metals deposit accounts      II-1          -      14,262    14,262      -      24,862    24,862
 II.      MONEY MARKET BALANCES                             8,432       -       8,432   25,244       -      25,244
 2.1      Interbank money market takings                      -         -         -        -         -         -
 2.2      Istanbul Stock Exchange money                       -         -         -        -         -         -
          market takings
 2.3      Funds provided under repurchase       II-2        8,432       -       8,432   25,244       -      25,244
          agreements
 III.     FUNDS BORROWED                                   63,450   481,385   544,835   39,119   395,876   434,995
 3.1      Funds borrowed from the Central                     -         -         -        -         -         -
          Bank of Turkey
 3.2      Other funds borrowed                  II-3       63,450   481,385   544,835   39,119   395,876   434,995
 3.2.1       Domestic banks and institutions    II-3       30,889    28,948    59,837   18,655    13,445    32,100
 3.2.2       Foreign banks, institutions and    II-3       32,561   452,437   484,998   20,464   382,431   402,895
          funds
 IV.      MARKETABLE SECURITIES ISSUED (Net)                  -         -         -        -         -         -
 4.1      Bills                                 II-4          -         -         -        -         -         -
 4.2      Asset backed securities               II-4          -         -        -         -         -         -
 4.3      Bonds                                 II-4          -         -         -        -         -         -
 V.       FUNDS                                 II-5          -         -         -        -         -         -
 VI.      MISCELLANEOUS PAYABLES                II-6       22,288    25,428    47,716   24,576    41,650    66,226
 VII.     OTHER EXTERNAL RESOURCES              II-7       46,688    13,548    60,236   20,644     7,314    27,958
 VIII.    TAXES AND OTHER DUTIES PAYABLE                    9,368     3,280    12,648    7,483       -       7,483
 IX.      FACTORING PAYABLES                               20,223    11,045    31,268   14,508    16,474    30,982
 X.       FINANCE LEASE PAYABLES (Net)                        -         -         -        -         -         -
 10.1     Finance Lease Payables                II-8          -         -         -        -         -         -
 10.2     Deferred finance lease expenses ( -   II-8          -         -         -        -         -         -
          )
 XI.      ACCRUED INTEREST AND EXPENSES                    30,993    14,144    45,137   14,462    13,106    27,568
          PAYABLE
 11.1     Deposits                              II-9       10,252     5,245    15,497    5,868     9,775    15,643
 11.2     Borrowings                            II-9        2,259     4,751     7,010    2,281     2,420     4,701
 11.3     Repurchase agreements                 II-9            7       -           7       31       -          31
 11.4     Other                                 II-9       18,475     4,148    22,623    6,282       911     7,193
 XII.     PROVISIONS                                       51,135    15,084    66,219   40,578     1,865    42,443
 12.1     General provisions                    II-10       7,571       -       7,571    6,746       -       6,746
 12.2     Reserve for employee termination      II-10       2,178       -       2,178    1,939       -       1,939
          benefits
 12.3     Provisions for income taxes                      29,509  14,834      44,343   23,523     1,865    25,388
 12.4     Insurance technical reserves (Net)               11,601       -      11,601    7,769       -       7,769
 12.5     Other provisions                                    276       250       526      601       -         601
 XIII.    SUBORDINATED LOANS                    II-10         -      20,766    20,766      -      27,232    27,232
 XIV.     MINORITY INTEREST                                21,336       -      21,336   21,309       -      21,309
 XV.      SHAREHOLDERS' EQUITY                            256,130    37,901   294,031  239,107    44,592   283,699
 15.1     Paid-in capital                       II-11      55,125       -      55,125   55,125       -      55,125
 15.2     Supplementary capital                 II-11     207,477      (41)   207,436  207,580       -     207,580
 15.2.1   Share premium                         II-12         -         -         -        -         -        -
 15.2.2   Share cancellation profits                          -         -         -        -         -         -
 15.2.3   Marketable securities value                         119      (41)        78      222       -         222
          increase fund
 15.2.4   Revaluation fund                                    -           -         -      -         -         -
 15.2.5   Value increase in revaluation fund                  -         -         -        -         -         -
 15.2.6   Other capital reserves                              -         -         -        -         -         -
 15.2.7.  Effect on inflation accounting on               207,358       -     207,358  207,358       -     207,358
          share capital
 15.3     Profit reserves                                   7,370   1,828       9,198    4,883     6,478    11,361
 15.3.1   Legal reserves                                    7,370         -     7,370    4,883       -       4,883
 15.3.2   Status reserves                                       -         -       -        -         -         -
 15.3.3   Extraordinary reserves                                -         -       -        -         -         -
 15.3.4   Other profit reserves                                 -     1,828     1,828      -       6,478     6,478
 15.4     Profit or loss                                 (13,842)    36,114    22,272             38,114     9,633
                                                                                      (28,481)
 15.4.1   Prior year income/loss                         (40,708)    32,016   (8,692)             25,521  (19,151)
                                                                                      (44,672)
 15.4.1.1 Group's share                                  (30,122)    32,016     1,894             25,521   (7,790)
                                                                                      (33,311)
 15.4.1.2 Minority shares                                (10,586)       -    (10,586)                -    (11,361)
                                                                                      (11,361)
 15.4.2   Current year income/loss                         26,866     4,098    30,964   16,191    12,593    28,784
 15.4.2.1 Group's share                                    27,255     4,098    31,353   15,063    12,593    27,656
 15.4.2.2 Minority shares                                   (389)       -       (389)    1,128       -       1,128

          TOTAL LIABILITIES                             1,068,480 2,804,276 3,872,756  878,970 3,222,696 4,101,666





      The accompanying notes are an integral part of these balance sheets.








III- CONSOLIDATED STATEMENTS OF INCOME
                                                                      Reviewed    Reviewed    Reviewed    Reviewed
                                                                       Current       Prior  01.07.2003  01.07.2002
                                                                        Period      Period
                                                         Note Ref.                                   -           -
                                                                    30.09.2003  30.09.2002  30.09.2003  30.09.2002
         INCOME AND EXPENSES                             (Section        Total       Total       Total       Total
                                                           five)
I.       INTEREST INCOME                                   III-1       310,282     384,812     104,384     118,515

1.1      Interest on loans                                             154,887     167,263      55,351      55,771
1.1.1    Interest on TL loans                                          116,010     109,817      42,995      37,852
1.1.1.1  Short term loans                                              110,161     103,261      40,639      35,675
1.1.1.2  Medium and long term loans                                      5,849       6,556       2,356       2,177
1.1.2    Interest on foreign currency loans                             38,633      56,936      12,271      17,671
1.1.2.1  Short term loans                                               23,899      45,616       7,827      12,363
1.1.2.2  Medium and long term loans                                     14,734      11,320       4,444       5,308
1.1.3    Interest on loans under follow-up                                 244         510          85         248
1.1.4    Premiums received from Resource Utilization                         -           -           -           -
         Support Fund
1.2      Interest received from reserve deposits                         4,481       3,365       1,685       1,453
1.3      Interest received from banks                                   34,304      43,727      12,124      14,908
1.3.1    The Central Bank of  Turkey                                         -           -           -           -
1.3.2    Domestic banks                                                 20,670      11,323       7,174       6,141
1.3.3    Foreign banks                                                  13,634      32,404       4,950       8,767
1.4      Interest received from  money market                           66,252      76,555      18,368      20,462
         transactions
1.5      Interest received from marketable securities                   19,331      63,854       6,528      14,417
         portfolio
1.5.1    Trading securities                                              3,171      63,854         969      14,417
1.5.2    Available-for-sale securities                                   2,374           -       1,588           -
1.5.3    Held to maturity securities                                    13,786           -       3,971           -
1.6      Other interest income                                          31,027      30,048      10,328      11,504
II.      INTEREST EXPENSE                                  III-2       181,189     213,115      61,454      65,325
2.1      Interest on deposits                                          131,363     142,714      47,167      43,795
2.1.1    Bank deposits                                                  10,600       7,209       4,215       2,271
2.1.2    Saving deposits                                                57,201      42,689      18,548      12,395
2.1.3    Public sector deposits                                              -           6           -           2
2.1.4    Commercial deposits                                            46,188      25,705      18,532       9,812
2.1.5    Other institutions deposits                                       422         149         228         108
2.1.6    Foreign currency deposits                                      16,836      66,838       5,608      19,161
2.1.7    Precious metals vault accounts                                    116         118          36          46
2.2      Interest on money market transactions                               -          36           -           -
2.3      Interest on funds borrowed                                     23,440      42,104       8,745      13,868
2.3.1    The Central Bank of  Turkey                                         -           -           -           -
2.3.2    Domestic banks                                                  7,377       8,288       3,023       3,910
2.3.3    Foreign banks                                                  13,508      29,932       3,167       8,683
2.3.4    Other financial institutions                                    2,555       3,884       2,555       1,275
2.4      Interest on securities issued                                       -           -           -           -
2.5      Other interest expense                                         26,386      28,261       5,542       7,662
III.     NET INTEREST INCOME  (I - II)                                 129,093     171,697      42,930      53,190
IV.      NET FEES AND COMMISSIONS INCOME                                26,253      22,665       9,356       6,432
4.1      Fees and commissions received                                  39,478      32,692      13,882       9,749
4.1.1    Cash loans                                                      3,480       1,930         991         577
4.1.2    Non-cash loans                                                  9,588       6,197       3,609       2,372
4.1.3    Other                                                          26,410      24,565       9,282       6,800
4.2      Fees and commissions paid                                      13,225      10,027       4,526       3,317
4.2.1    Cash loans                                                      1,885       1,426         567         689
4.2.2    Non-cash loans                                                    385         370          68         225
4.2.3    Other                                                          10,955       8,231       3,891       2,403
V.       DIVIDEND INCOME                                                     -           -           -           -
5.1      Trading securities                                                  -           -           -           -
5.2      Available-for-sale securities                                       -           -           -           -
VI.      NET TRADING INCOME                                             25,261       2,113      12,456       1,783
6.1      Profit/losses on trading account securities                    26,796       8,279      13,612       2,594
         (Net)
6.2      Foreign exchange gains/losses (Net)                           (1,535)     (6,166)     (1,156)       (811)
VII      PROFIT/LOSS FROM HELD TO MATURITY MARKETABLE      III-3             -           -           -           -
         SECURITIES
VIII.    OTHER OPERATING INCOME                            III-4        13,086      23,101       4,292       5,896
IX.      TOTAL OPERATING INCOME (III+IV+V+VI+VII+VIII)                 193,693     219,576      69,034      67,301
X.       PROVISION FOR LOAN LOSSES OR OTHER RECEIVABLES    III-5         6,071      17,390       3,033       7,645
         (-)
XI.      OTHER OPERATING EXPENSES (-)                                  109,077     115,350      35,629      40,426
XII.     NET OPERATING INCOME (IX-X-XI)                                 78,545      86,836      30,372      19,230
XIII.    PROFIT/LOSSES FROM ASSOCIATES AND SUBSIDIARIES    III-6           167           -         (2)           -
XIV.     GAIN / (LOSS) ON NET MONETARY POSITION                       (23,258)    (43,584)       1,708    (13,751)
XV.      INCOME BEFORE TAXES (XII+XIII)                                 55,454      43,252      32,078       5,479
XVI.     PROVISION FOR TAXES ON INCOME (-)                              24,490      22,769       9,970       6,558
XVII.    NET OPERATING  INCOME/EXPENSE AFTER TAXES                      30,964      20,483      22,108     (1,079)
         (XIV-XV)
XVIII.   EXTRAORDINARY INCOME/EXPENSE AFTER TAXES                            -           -           -           -
18.1     Extraordinary net income/expense before taxes                       -           -           -           -
18.1.1   Extraordinary income                                                -           -           -           -
18.1. 2  Extraordinary expense (-)                                           -           -           -           -
18.2     Provision for taxes on extraordinary income                         -           -           -           -
XIX.     PROFIT/LOSSES ON UNCONSOLIDATED INVESTMENTS (-)                     -           -           -           -
XX.      NET PROFIT/LOSSES (XVI+XVII+XVIII-XIX)                         30,964      20,483      22,108     (1,079)
20.1     Group's profit/loss                                            31,353      19,546      21,593       (653)
20.2     Minority shares                                   III-7         (389)         937         515       (426)
XXI.     Earnings/Losses per share                                      280.84      185.79      200.53      (9.79)



        The accompanying notes are an integral part of these statements


IV- CONSOLIDATED STATEMENTS OF OFF-BALANCE SHEET COMMITMENTS
                                                             Reviewed                     Audited
                                                          Current Period                Prior Period

                                        Note Ref.           30.09.2003                   31.12.2002
         OFF BALANCE SHEET COMMITMENTS  (Section  TL        FC        TOTAL     TL               FC       TOTAL
                                          five)

A.      OFF BALANCE SHEET COMMITMENTS               768,495 1,830,706 2,599,201   585,375             2,243,799
        (I+II+III)                                                                        1,658,424

I.      GUARANTEES                       IV-2,3     350,608   800,937             293,328   760,775   1,054,103
                                                                      1,151,545
1.1.    Letters of guarantee                        349,565   306,696   656,261   293,202   349,674     642,876
1.1.1.  Guarantees subject to State                  33,640     1,635    35,275    31,563       280      31,843
        Tender Law
1.1.2.  Guarantees given for foreign                 75,034    20,330    95,364    77,224    52,003     129,227
        trade operations
1.1.3.  Other letters of guarantee                  240,891   284,731   525,622   184,415   297,391     481,806
1.2.    Banks loans                                     971    45,114    46,085       -      44,687      44,687
1.2.1.  Import letter of acceptance                     -      45,114    45,114       -      44,687      44,687
1.2.2.  Other bank acceptances                          971       -         971       -         -           -
1.3.    Letters of credit                                72   434,663   434,735        79   356,423     356,502
1.3.1.  Documentary letters of credit                    72   400,225   400,297        79   314,110     314,189
1.3.2.  Other letters of credit                         -      34,438    34,438       -      42,313      42,313
1.4.    Prefinancing given as guarantee                 -         -         -         -         -           -
1.5.    Endorsements                                    -         -         -         -         -           -
1.5.1.  Endorsements to the Central                     -         -         -         -        -            -
        Bank of Turkey
1.5.2.  Other endorsements                              -         -         -         -         -           -
1.6.    Securities issue purchase                       -         -         -         -         -           -
        guarantees
1.7.    Other guarantees                                -       6,884     6,884        47     1,544       1,591
1.8.    Other collaterals                               -       7,580     7,580       -       8,447       8,447
II.     COMMITMENTS                       IV-2      309,006   346,112   655,118   200,665   364,525     565,190
2.1.    Irrevocable commitments                     306,714   346,112   652,826   200,665   364,525     565,190
2.1.1.  Asset purchase commitments                      -         -         -       1,107       -         1,107
2.1.2.  Deposit purchase and sales                    7,000   346,095   353,095       -     364,525     364,525
        commitments
2.1.3.  Share capital commitment to                     -         -         -         -         -           -
        associates and subsidiaries
2.1.4.  Loan granting commitments                   109,001       -     109,001   125,004       -       125,004
2.1.5.  Securities issue brokerage                      -         -         -         -         -           -
        commitments
2.1.6.  Commitments for reserve deposit                 400       -         400       -         -           -
        requirements
2.1.7.  Commitments for credit card                  98,981       -      98,981    74,554       -        74,554
        limits
2.1.8.  Other irrevocable commitments                91,332        17    91,349       -         -           -
2.2.    Revocable commitments                         2,292       -       2,292       -         -           -
2.2.1.  Revocable loan granting                         -         -         -         -         -           -
        commitments
2.2.2.  Other revocable commitments                   2,292       -       2,292       -         -           -
III.    DERIVATIVE FINANCIAL                        108,881   683,657   792,538    91,382   533,124     624,506
        INSTRUMENTS
3.1.    Forward foreign currency buy/               108,881   513,332   622,213    91,382   195,394     286,776
        sell transactions
3.1.1.  Forward foreign currency                     32,059   274,206   306,265    23,256   118,420     141,676
        transactions-buy
3.1.2.  Forward foreign currency                     76,822   239,126   315,948    68,126    76,974     145,100
        transactions-sell
3.2.    Swap transactions related to                    -     165,955   165,955       -         -           -
        f.c.  and interest rates
3.2.1.  Foreign currency swap-buy                       -      81,963    81,963       -         -           -
3.2.2.  Foreign currency swap-sell                      -      83,070    83,070       -         -           -
3.2.3.  Interest rate swaps-buy                         -         461       461       -         -           -
3.2.4.  Interest rate swaps-sell                        -         461       461       -         -           -
3.3.    Foreign currency and interest                   -         -         -         -     337,730     337,730
        rate options
3.3.1.  Foreign currency options-buy                    -         -         -         -     168,121     168,121
3.3.2.  Foreign currency options-sell                   -         -         -         -     169,609     169,609
3.3.3.  Interest rate options-buy                       -         -         -         -         -           -
3.3.4.  Interest rate options-sell                      -         -         -         -         -           -
3.4.    Foreign currency futures                        -       4,370     4,370       -         -           -
3.4.1.  Foreign currency futures-buy                    -       2,185     2,185       -         -           -
3.4.2.  Foreign currency futures-sell                   -       2,185     2,185       -         -           -
3.5.    Interest rate futures                           -         -         -         -         -           -
3.5.1.  Interest rate futures-buy                       -         -         -         -         -           -
3.5.2.  Interest rate futures-sell                      -         -         -         -         -           -
3.6.    Other                                           -         -         -         -         -           -
B.      CUSTODY AND PLEDGED ITEMS                             554,106                       425,428   1,709,992
        (IV+V)                                    1,662,451           2,216,557 1,284,564
IV.     ITEMS HELD IN CUSTODY                                 289,336             897,566   284,487   1,182,053
                                                  1,216,213           1,505,549
4.1.    Assets under management                         -         -         -         -         -           -
4.2.    Investment securities held in               506,228   156,711   662,939   311,863   160,376     472,239
        custody
4.3.    Checks received for collection              678,609    65,593   744,202   570,415    48,933     619,348
4.4.    Commercial notes received for                27,746    19,943    47,689    13,947    23,215      37,162
        collection
4.5.    Other assets received for                       -      47,089    47,089       482    51,963      52,445
        collection
4.6.    Assets received for public                      -         -         -         -         -           -
        offering
4.7.    Other items under custody                     3,630       -       3,630       859       -           859
4.8.    Custodians                                      -         -         -         -         -           -
V.      PLEDGED ITEMS                               446,238   264,770   711,008   386,998   140,941     527,939
5.1.    Marketable securities                        13,758    12,200    25,958    13,013     9,266      22,279
5.2.    Guarantee notes                               6,128     1,190     7,318     6,873     1,460       8,333
5.3.    Commodity                                   217,142       -     217,142   208,812       -       208,812
5.4.    Warranty                                        -         -         -         -         -           -
5.5.    Immovables                                  127,622   164,128   291,750   123,725    41,020     164,745
5.6.    Other pledged items                          81,588    87,252   168,840    34,575    89,195     123,770
5.7.    Pledged items-depository                        -         -         -         -         -           -

        TOTAL COMMITMENTS (A+B)                   2,430,946 2,384,812 4,815,758 1,869,939 2,083,852   3,953,791



        The accompanying notes are an integral part of these statements.





                                 SECTION THREE



                             ACCOUNTING PRINCIPLES



I.          Basis of Presentation



The Parent Bank prepares its financial statements in accordance with the "
Accounting Application Regulations" (AAR) based on Article 13 named as "
Accounting and Recording System" of the Banking Law 4389 and related communiques
and related explanations and further communiques that add or cause a change on
the content of the relevant communiques.



Presentation of the financial statements in accordance with the current
purchasing power of money



The "Accounting Standard on Financial Statements at Hyperinflation Periods",
Communique No:14, of "Accounting Application Regulations" (AAR) became effective
from July 1, 2002.



In accordance with the communique No:14, the parent company Bank's financial
statements should be restated, taking the current period equivalent purchasing
power of Turkish lira into account. In other words, Communique No:14 states
that, financial statements prepared in terms of the domestic currency of a
country with high inflation rate should be restated in accordance with the
equivalent purchasing power of the domestic currency at the balance sheet date.
Prior period financial statements should also be restated in their entirety to
the measuring unit current at the balance sheet date. One characteristic that
necessitates the application of inflation accounting under the provisions of
Communique No: 14 is a cumulative three-year inflation rate approaching or
exceeding 100%. Restatement of financial statements is based on both the
principles described in Communique No.14 and the wholesale price indices
published in its appendix and the wholesale price indices announced by the State
Institute of Statistics. Detailed information on the application of inflation
accounting is given in the section V, footnote VI, "Footnotes and Explanations
on Inflation Accounting" of the following footnotes.



Other valuation methods



Other basis of valuation used for assets and liabilities in the preparation of
financial statements are explained among the accounting principles for the
related assets and liabilities.



Changes in Accounting Policies and Valuation Methods in the Current Period



Changes in Accounting Policies



Until September 30, 2002, the parent company Bank's financial statements were
being prepared in accordance with the Uniform Chart of Accounts, standard
balance sheet, income statement, supplementary financial statements and
footnotes to these financial statements and the explanations related to the
applications of such financial statements and the accounting and valuation
principles thereto that are based on the article 13 of the Banking Law 4389 as
revised by Law Number 4672 and 4491 and the "Accounting Standard on Financial
Statements at Hyperinflation Periods", Communique No:14, published at Official
Gazette dated June 22, 2002 and numbered 24793 and which is related to the "
Regulation of  Accounting Applications" and became effective from July 1, 2002.
After October 1, 2002, the Bank's financial statements are prepared in
accordance with the accounting policies explained below and included in both
Communique No:14 and the other communiques related to the Regulation of
Accounting Applications effective from October 1, 2002. Accordingly, assets and
liabilities were classified as of October 1, 2002 in accordance with the
provisions of the related communiques and the required changes for the other
accounts were made and the effects of such changes were reflected in the income
statement for 2002.








II-        Presentation of the Information Regarding the Parent Bank and the
Group Companies Included in the Consolidation:



Turk Ekonomi Bankasi Anonim Sirketi and its financial institutions, The Economy
Bank N.V. (Economy Bank), Petek International  Holdings B.V. (Petek
International), TEB Yatirim Menkul Degerler A.S. (TEB Yatirim), TEB Portfoy
Yonetimi A.S. (TEB Portfoy), TEB Finansal Kiralama A.S. (TEB Leasing), TEB
Factoring A.S. (TEB Factoring) and TEB Sigorta A.S. (TEB Sigorta) are included
in the accompanying consolidated financial statements by full consolidation
method. The provisions of the Communique 15 "The Standard of Preparation of
Consolidated Financial Statements and Accounting for the Subsidiaries,
Participations and the Entities and Participations Jointly Controlled" of the
AAR were considered while determining the institutions to be consolidated. The
Parent Bank and the institutions included in the consolidation will be named as
"the Group".



Certain changes were made on the financial statements of the subsidiaries, which
were prepared in accordance with the principles and rules regarding financial
statement and report presentation stated in the Turkish Commercial Code and/or
Financial Leasing Law and/or XI/1 and XI/11 numbered communiques of the Capital
Board Market and any other communiques which adds and changes statements at the
formal communiques, in order to present their financial statements in accordance
with to AAR.



Explanations on Consolidation Method and Scope



The commercial names of the institutions included in consolidation and the
locations of the head offices of these institutions:



Commercial Name:                             Head Office

----------------------                       --------------

Economy Bank                                 Netherlands

Petek International                          Netherlands

TEB Yatirim                                  Istanbul

TEB Portfoy                                  Istanbul

TEB Leasing                                  Istanbul

TEB Factoring                                Istanbul

TEB Sigorta                                  Istanbul



Full consolidation method is used for all the financial institutions included in
the consolidation.



The unconsolidated subsidiary TEB Kiymetli Madenler Anonim Sirketi (TEB Kiymetli
Madenler) is valued at cost. The financial statements of TEB Kiymetli Madenler
Anonim Sirketi is not included in the consolidation as of September 30, 2003 in
accordance with the AAR's materiality principle.



When there are differences between the accounting policies of the subsidiaries
and the Parent Bank, the financial statements are adjusted in accordance with
the ARR principles considering the materiality. The financial statements of the
subsidiaries are prepared as of September 30, 2003 and December 31, 2002 and
restated in accordance with the inflation accounting principles.



The transactions and balances between the Parent Bank and the subsidiaries are
netted off.



No subsidiaries were acquired during the current period. The Group does not have
any goodwill related to the subsidiaries. No difference occured while applying
the fair values at the foreign entities' assets and liabilities. There are no
subsidiaries disposed in at the current or previous periods.






Explanations on Foreign Currency Transactions



Gains or losses arising from foreign currency transactions are reflected in the
statement of income as they are realized during the year. Foreign currency
assets and liabilities at each year-end are translated into Turkish lira at the
year-end foreign exchange buying rates announced by the Parent Bank and the
resulting foreign exchange gains or losses are recorded in the statement of
income as foreign exchange gain or loss. The USD exchange rate used for
translating foreign currency transactions into Turkish Lira and reflecting these
to consolidated financial statements as of September 30, 2003 is TL 1,384,378
(December 31, 2002 -  TL 1,639,745 (in full TL)).



The Group's total net foreign exchange loss included in the net income of the
period is TL (1,535) (September 30, 2002 - TL (6,166)). The foreign exchange
loss results from recording of the foreign exchange gain amounting to TL 2,083
related to the foreign currency indexed loans under the "Interest Income" in
accordance with the Uniform Chart of Accounts. There are no capitalized foreign
exchange losses.



The information regarding the principles of foreign currency risk management are
stated in Section Four, Note III.



The net investment in foreign entities of the Group as of the related year-ends
were translated into Turkish lira by applying the Parent Bank's exchange rates
prevailing at respective dates. The resulting foreign exchange gains or losses
are recorded in the statement of income.



There are no debt securities issued. Foreign exchange gains and losses arising
from translating monetary financial assets are reflected to foreign exchange
gains / (losses) in the statement of income.



III-      Explanations on Forward, Option Contracts and Derivative Instruments



The Parent Company Bank makes forward currency agreements and swap transactions
to reduce the foreign currency risk. In accordance with Communique No:1, "
Accounting Standards of Financial Instruments" of AAR,  derivative financial
instruments that are not designated as hedging instruments are classified as
held-for-trading and carried at fair value.



As of September 30, 2003, foreign currency forward and swap transactions were
evaluated by comparing year- end foreign exchange rates of the Parent Bank with
the forward rate amortized to the balance sheet date, since the book values
approximate their fair values. The resulting gain or loss is reflected to the
income statement.



There are no embedded derivatives separated from the host contract or that are
designated as hedging instruments.



Before the effective date of AAR, above-mentioned transactions had been recorded
by means of arbitrage accounting, the changes at the foreign currencies had been
recorded through evaluation under accounts and the liabilities at the maturity
had been followed under off balance sheet commitments. In order to avoid the
effects of the changes at the rates on the income statement, the amounts
followed under off balance sheet commitments had been evaluated and the
generated differences had been recorded under the income and expense accrual
accounts.





















IV-       Netting of Financial Assets and Liabilities



Financial assets and liabilities are netted off when the Parent Bank has a legal
right and sanction regarding netting off, and when the Bank has the intention of
collecting or paying the net amount of related assets and liabilities or when
the Bank has the right to off set the assets and liabilities simultaneously.
There is no netting of financial assets and liabilities at the accompanying
financial statements as of September 30, 2003.



V-        Interest Income and Expense



Interest income and expense are recognized in the income statement for all
interest bearing instruments on an accrual basis using the effective interest
method. In accordance with the related regulation, the due and not due interest
accruals of the non-performing loans are cancelled and interest income related
to these loans are recorded as interest income only when collected.



VI-       Fees and Commission Income and Expense



Commission income and fees for various banking services in the period of
collection.



Fees and commissions for funds borrowed paid to other financial institutions,
which is a part of the transaction costs, are recorded as prepaid expenses and
considered as a part of interest of the related funds borrowed and accordingly,
recorded as expense monthly.



The dividend income is reflected to the financial statements on cash basis when
the profit distribution is realized by the participations and the subsidiaries.



VII-     Securities Held for Trading



Trading securities are securities which were either acquired for generating a
profit from short-term fluctuations in price or dealer's margin, or are
securities included in a portfolio in which a pattern of short-term profit
taking exists. Trading securities are initially recognized at cost. Transaction
costs of the related securities are included in the initial cost. The positive
difference occurred between the cost and fair value of the marketable security
is accounted as interest and income accrual. The negative difference occurred is
accounted under marketable security diminution in value account.



Since the foreign currency financial assets held in the same portfolio
(Eurobond) do not hold a price formed in an active market and since the fair
values of these securities could not be determined reliably, they are valued at
amortized cost by using relevant interest rates as stated in the articles 8 and
9 of the AAR's Communique No:1, "Accounting Standards of Financial Instruments."



VIII-    Sales and Repurchase Agreements and Lending of Securities



The Parent Bank has been following the repurchase agreements made with the
clients as a balance sheet item since February 1, 2002 in accordance with the
Uniform Chart of Accounts. Accordingly, the government bonds and treasury bills
sold to clients under repurchase agreements are recorded under the related
securities account in the financial statements and are valued according to the
valuation principles of the related account. Funds obtained by repurchase
agreements are classified as a separate sub account under money markets account
in the liabilities. The interest expense accruals calculated by means of
effective interest method for the funds obtained by means of repurchase
agreements are reflected to the interest and other expense accruals account in
the balance sheet.



The above-mentioned transactions are short term and consists of domestic public
sector debt securities.





The income and expenses generated from above mentioned operations are reflected
to the "Interest Income on Marketable Securities" and "Interest Expense on
Marketable Securities subject to Repurchase Agreement" accounts in the statement
of income.



As of September 30, 2003, the Parent Bank does not have any reverse repo
transactions (December 31, 2002 - None).



As of September 30, 2003, the Parent Bank does not have any lent marketable
securities (December 31, 2002 - None).



IX-       Securities Held to Maturity, Securities Available for Sale and Bank
Originated Loans and Receivables



Securities held to maturity are obtained with the intention of holding till the
maturity of the security, and accordingly, including the funding abilities, the
relevant conditions for this exist. This portfolio includes securities with
fixed or determinable payments and with a fixed maturity, excluding bank
originated loans and receivables.



Securities available for sale include all securities other than bank originated
loans and receivables, securities held to maturity and securities held for
trading.



The marketable securities are initially recognized at cost including the
transaction costs.



Foreign currency denominated financial assets included in the available for sale
securities portfolio (Eurobonds) are stated by translating the cost value to
Turkish lira at The Bank's exchange rates. The differences generated from the
translation is reflected to foreign currency gains and losses account at the
relevant period.  Since these securities do not hold a price formed in an active
market and since the fair values of these securities could not be determined
reliably, they are valued at amortized cost by using relevant interest rates as
stated in the articles 8 and 9 of the AAR's Communique No:1, "Accounting
Standards of Financial Instruments."  The differences between the cost and the
valued amounts are reflected to the income accrual accounts.



Loans and receivables originated by the Bank are those generated by lending
money and exclude those that are held with the intention of trading or selling
in near future.



Held to maturity securities are remeasured at amortized cost by using original
effective interest rate and reserve for impairment in value is provided, if any.



The interests received from securities held to maturity are recorded as interest
income. There are no profit shares.



There are no financial assets that cannot be classified as securities held to
maturity for two years because of tainting rules.



The Bank classifies securities according to above-mentioned portfolios at the
acquisition date of the related security.



The sale and purchase transactions of the securities held to maturity are
recorded at the delivery dates.



Prior to the effective date of AAR, the Bank had initially recorded marketable
securities held with the intention of not selling till maturity (investment
portfolio), which were given as collateral at cost, and the income accruals of
these securities were calculated by straight line method and reflected to the
financial statements.




X-        Unconsolidated Participations and Subsidiaries



Turkish lira participations which are quoted at the stock exchange are valued at
fair value and any positive difference between fair value price and cost is in
included under shareholders' equity in the financial statements. The others are
valued by means of restating their costs and the capital increases after
deducting the ones generated by means of adding the values accumulated at the
revaluation like funds to the capital of the participations, with the rates
applicable for the relevant dates. A provision is provided when there is a
permanent diminution in value.  The difference between the fair value and cost
value of the participations valued at fair value is recorded to " Marketable
Security Increase in Value Fund " under the Shareholders' Equity.



Turkish lira subsidiaries are valued by means of restating their costs and the
capital increases after deducting the ones generated by means of adding the
values accumulated at the revaluation like funds to the capital of the
subsidiaries, with the rates applicable for the relevant dates.



There are no foreign currency unconsolidated participations or subsidiaries.



XI-       Originated Loans and Receivables and Provisions for Loan Impairment



The Parent Bank initially records originated loans and receivables at cost, and
at the following periods, in accordance with the AAR, Communique No:1, these
loans are remeasured at amortized cost by means of effective interest rate
method. The taxes, transaction expenses and other expenses paid for the
guarantees taken for the originated loans are taken into consideration while
calculating the banks financing cost and these are reflected to the interest
rates of the loans.



Cash loans are recorded in accordance with the regulations stated at the
Communique on the Uniform Chart of Accounts and Its Explanations.



Provision is set for the loans that may be doubtful and the amount is expensed
at the current period. The provisioning criteria for the non-performing loans
are determined by the Bank's management for compensating the probable losses of
the current loan portfolio, by means of evaluating the portfolio for its quality
and risk factors and by means of considering the economical conditions, other
facts and related regulations.



Allowances are computed for group III, group IV, group V loans and reflected in
accordance with the Banking Law No.4389 as revised by Law Number 4672 and 4491,
Article 3, Sub Article 11 and Article 11, Sub Article 12 published on the
Official Gazette No. 24448 dated June 30, 2001 on "Methods and Principles for
the Determination of Loans and Other Receivables to be Reserved for and
Allocation of Reserves" amended by Communiques dated January 31,2002 in the
current period financial statements  These provisions are reflected to the
statement of income under "Provision and Diminishing in Value Expenses - Special
Provision Expense". The collection made regarding these loans are first deducted
from the principal amount of the loan and the remaining collections are deducted
from interest receivables.



The collections made regarding the current year provision of the above mentioned
loans are deducted from the "Provision for Loans and Other Receivables" account
in the income statement. The collections made related to the previous years'
written-off loans or allowances are recorded under "Other Operating Income"
account and interest incomes are recorded under the "Interest Received from
Non-performing Loans" account.



Release of provision are removed by means of reversing the amount to the "
Provision and Diminishing in Value Expense - Provision Expense" account. Foreign
currency denominated loans are recorded at the Turkish Lira equivalent values at
the recording dates and the foreign currency exchange gains generated from these
loans are recorded under the interest income accounts.









XII-     Goodwill and Other Intangible Fixed Assets



The negative difference amounting to TL 629 ( 2002 - TL 629 ), between the cost
of TEB Leasing and the Parent Bank's share in its equity, generating from the
changes at the Parent Bank's participation structure in the year 2000 has been
reflected in that related period's income statement in accordance with effective
application date of AAR. The positive difference amounting to TL 409 ( 2002 - TL
409 ), between the cost of TEB Factoring and the Parent Bank's share in its
equity is reflected under the intangible fixed assets as goodwill in the
accompanying consolidated financial statements after deducting the accumulated
amortization amounting to TL 307 ( 2002 - TL 245 ).



The intangible fixed assets are reflected with their restated costs in
accordance with inflation accounting and depreciated with straight-line method.
The depreciation rate is 20%. The cost of assets subject to depreciation is
restated after deducting the exchange differences, capitalized financial
expenses and revaluation increases, if any, from the cost of the assets.



Major group classified as other intangible fixed assets by the Parent Bank are
the softwares. While determining the depreciation periods of these, the
essentials of General Tax Regulations are taken in to consideration and no
special criteria is used. The useful lives of these assets are determined as 5
years. Soft wares mainly used are developed within the Parent Bank by the Bank's
personnel, and the expenses regarding these are not capitalized. Software is
purchased only in emergency cases and for special projects.



There are no expected changes in the accounting estimates about the depreciation
rate and method and residual values for the current and future periods.



XIII-    Tangible Fixed Assets



Buildings are reflected to the financial statements at their restated costs and
reserve for impairment is provided, if any. In accordance with the Communique
No:14, buildings are valued by real estate expertise companies and the expertise
value is close to the restated costs at September 30, 2003. The straight-line
method for depreciation is used and economical life is accepted to be 50 years.



Other tangible fixed assets are reflected with their restated cost in accordance
with inflation accounting, and depreciated by straight-line depreciation method.
The depreciation rate is 20%. A prorata basis is used for depreciating assets
held less than one year as of the balance sheet date. The leasehold improvements
are depreciated in accordance with the lease period by means of straight-line
method. The annual rates used, which approximate rates based on the estimated
economic lives of the related assets, are as follow:


                                                                      %
Buildings                                                             2
Motor vehicles                                                        20
Furniture, fixtures and office equipment                              20
Leasehold improvements                                Lease period-not less than 5 years



Gain profit or loss resulting from disposals of the tangible fixed assets are
reflected to the statement of income as the difference between the net proceeds
and net book value.



The repairment costs of the tangible fixed assets are capitalized if the
operation lengthens the economic life of the asset. Otherwise the repairment
costs are expensed. There are no pledge, mortgage or other restrictions on the
tangible fixed assets. There are no purchase commitments related to the tangible
fixed assets.



There are no expected changes in the accounting estimates, which could have a
significant impact on the current and future periods.







XIV-    Leasing Transactions



Leasing of fixed assets are recorded in accordance with AAR, Article 7 of the
Communique No:4, "Accounting Standard for Leasing Transactions." In accordance
with the above-mentioned article, the leasing transactions, which consist only
foreign currency liabilities, are translated to Turkish lira with the exchange
rates effective at the transaction dates and they are recorded both as an asset
and a liability. The foreign currency liabilities are translated to Turkish lira
with the Bank's period end exchange rate. The increases resulting from the
differences in the foreign exchange rates are recorded as expense in the
relevant period. Rent payments consist of financing costs generated due to
leasing, and the amount of the leased asset corresponding to the relevant
period. The financing cost resulting from leasing is distributed through the
agreement period to form a fixed interest rate.



In addition to interest expense, the Parent Bank records depreciation expense in
each period for the leased assets. The depreciation rate is determined in
accordance with the Communique No:2 "Accounting Standard of Tangible Fixed
Assets" and the depreciation rate is 20%.



The gross lease receivables including interest and principal amounts regarding
the Group's financial leasing activities conducted by  TEB Leasing as "Lessor"
are stated under the receivables from the financial leasing activities. The
difference between the total of rent payments and the cost of the related fixed
assets are reflected to the" unearned income" account. The interest income is
calculated and recorded as prevailing a stable periodic income ratio over the
lessor's investment on the leased item.



The Group expenses the rent payments made regarding the rent agreements made
under operational activities throughout the rent period in equal amounts.



XV-      Provisions and Contingent Liabilities



The provisions and contingent liabilities are determined in accordance with the
Communique No:8 of AAR, except for the general and specific provisions set for
the loans and other receivables. Liabilities generated from previous events are
recorded by the Group immediately at the estimated amounts. The Parent Bank did
not provide an additional provision for contingent liabilities as of September
30, 2003 apart from the doubtful receivable provision and general provision set
in accordance with the released regulations.



XVI-    Liabilities Regarding Employee Benefits



In accordance with the existing social legislation, the Group is required to
make lump-sum termination indemnities including retirement and notice payments
to each employee whose employment is terminated due to resignment or for reasons
other than misconduct. The retirement pay is calculated for every working year
within the Group over the wage for 30 days and the notice pay is determined by
the relevant notice period time calculated over the years worked within the
Group. In accordance with AAR, Communique No:10, the Group sets provision for
retirement and notice pay liabilities by taking the actual payment rates for the
previous 5 years into consideration.



The Group has no employees contracted for determined periods.



As of September 30, 2003 the arithmetical average of the actual payments
realized for the previous five years is 8.35% (December 31, 2003 - %8.44 ). The
Parent Bank's consolidated participations and subsidiaries provided full reserve
for retirement pay for the eligible personnel as of September 30, 2003 and 2002.



The Group employees are members of Tebliler Foundation. The Parent Bank does not
have any liability to this foundation. There are no liabilities that require
additional provisions related to other employee rights.











XVII-   Taxation



Corporate Tax



In accordance with the incumbent tax Law, Corporate Tax is computed over
statutory net income that is subject to tax, without taking into account the
effects of inflation accounting.



The corporate tax rate for incomes of year 2002 is 30% and after adding the 10%
of fund share, the effective corporate tax rate ia applied as 33%. 19.8%
withholding tax is calculated over the income excepted from corporate tax and
investment incentives ( except investment incomes ). Additionally, if profit is
distributed over the accumulated income including income of year 2002, the
distributed part of income over which corporate tax is calculated is subject to
5.5% and 16.5% withholding tax in accordance with the fact that the Bank is
quoted to stock exchange or not respectively.



In line with the new tax Law number 4842, published in the Official Gazette
dated April 24, 2003, starting with the current year income, the corporate tax
rate to be applied is 30 % .



As long as the Group does not distribute the yearly income for 2003, there will
not be any withholding taxes with regards to this income. The Parent Bank's
distribution of profit to "Fully-liable" institutions will also be exempt from
any withholding taxes.  The Parent Bank's distribution of profit to real
persons, "semi-liable" institutions, and those institutions that are not liable
and or exempt from both corporation tax and income tax, will be subject to
withholding taxes of 10%.



The investment incentives taken into consideration while calculating the income
subject to corporate tax, do not have to be related to any investment incentive
documents after April 24, 2003, and the minimum deduction rate will be 40%, and
additionally this amount will not be subject to witholding tax. It is possible
to state the incentive rate as 40% for the investment incentives taken before
April 24, 2003, and to except these from 19,8% of witholding tax by a written
application made to the related tax office.



In accordance with the Tax Procedural Code, in every three-month period the
temporary corporate tax is calculated at a rate of 30% ( 25% before April 24,
2003 ) and paid in cash. The paid temporary taxes are deducted from the tax
liability calculated over the yearly income. The corporate tax will be paid at
once during the yearly tax return period ( 2002- in 3 installments ).



In accordance with the Tax Procedural Code, the losses presented in the tax
declarations can be deducted from the tax assessments at the current period
within five years.



The Tax Procedural Code does not allow the corporate and income taxes to be
calculated on consolidated basis. Accordingly, the current and deffered taxes
reflected to the accompanying financial statements are calculated over company
basis, separately.



In Turkey, tax returns are filed during the fourth month following the year-end.
According to existing tax regulations, the tax authorities may examine such
returns and the underlying accounting records within five years.



Deferred tax



Certain income and expense items are taxable in periods different from those in
which they are recognized in the financial statements. Deferred taxes on such
timing differences are calculated and reflected in full in the accompanying
financial statements. The Group does not compute deferred tax on the effects of
inflation accounting.



As of September 30, 2003 and December 31, 2002, the deferred tax asset is
included in other assets in the accompanying balance sheet and the deferred tax
provision is stated under the tax provision in the accompanying income
statement.

XVIII- Additional Explanations on Borrowings



The Parent Company Bank has not issued any debt securities.



The Group has not issued convertible bonds during the current period or the
previous period.



XIX-    Paid-in Capital and Share Certificates



The Parent Bank does not have any costs related to share issue. In the General
Assembly meeting of the Parent Bank, dated March 27, 2003, it was decided that
the profit for the year 2002, will be distributed to the shareholders, which
will amount to 276 (Nominal full TL) of dividend for every 1,000 TL nominal
shares owned by each shareholder. The payment of dividends to the shareholders
were started at April 4, 2003 and completed as of September 30, 2003.



XX-      Acceptances



Acceptances are realized simultaneously with the payment dates of the clients
and they are presented as commitments in off-balance sheet accounts.



There are no acceptances presented as liabilities against any assets.



XXI-    Government Incentives



There are no government incentives utilized by the Group.



XXII-   Securities at Custody



Securities at custody held by the Parent Bank on behalf of clients are not
reflected to the financial statements since they are not the Bank's assets.



XXIII- Impairment of Assets



At every balance sheet date, the evidence on impairment in value of assets is
evaluated objectively for existence. When an evidence regarding impairment in
value exists, the market value of the asset is determined. The difference
between book and net realizable values of the asset is recorded as provision for
impairment in the balance sheet and as an expense in the income statement.



XXIV-  Segment Reporting



Segment reporting will be made effective January 1, 2004.


XXV-   Other Matters



Explanation for convenience translation to English:



The accounting principles used in the preparation of the accompanying
consolidated financial statements differ from International Financial Reporting
Standards (IFRS) and so far as such differences apply to the consolidated
financial statements of the Bank they relate mainly, but not limited, to the
format of consolidated financial statements and disclosure requirements,
accounting for deferred taxes and reserve for retirement pay liabilities. The
effects of the differences between these accounting principles and the
accounting gprinciples generally accepted in the countries in which the
accompanying financial statements are to be used and IFRS have not been
quantified in the accompanying financial statements.  Accordingly, the
accompanying consolidated financial statements are not intended to present the
consolidated financial position and results of its consolidated operations in
accordance with accounting principles generally accepted in the countries of
users of the financial statements and IFRS.



There are other matters that are required to be disclosed.


                                  SECTION FOUR



                INFORMATION ON FINANCIAL STRUCTURE OF THE GROUP





I-             Consolidated Capital Adequacy Standard Ratio



The method used for risk measurement for capital adequacy standard ratio is
performed in accordance with the Communique on "Measurement and Assessment of
Banks Capital Adequacies ", which was published on January 31, 2002 in the
Official Gazette numbered 24657. The consolidated capital adequacy ratio of the
Parent Company Bank, calculated in accordance with the Communique on
"Measurement and Assessment of Banks Capital Adequacies " is %15.57 ( December
31, 2002 - 16.75% ).



In the computation of capital adequacy standard ratio, information prepared in
accordance with statutory accounting requirements are used. Additionally, the
market risk amount is calculated in accordance with the communique on the
"Internal Control and Risk Management Systems of the Bank" and is taken in to
consideration in the capital adequacy standard ratio calculation.



The values deducted from the capital in the shareholders' equity computation are
not considered while calculating risk-weighted assets, non-cash loans and
contingent liabilities. Assets subject to depreciation and depletion among
risk-weighted assets are included in the calculations over their net book values
after the relative depreciations and provisions are deducted.



When calculating the basic amounts subject to credit risk regarding the
transactions on the non-cash loans, the net receivable amount from the counter
parties found by means of deducting the provision amount set in accordance with
the  "Communique on Methods and Principles for the Determination of Loans and
Other Receivables to be Reserved for and Allocation of Reserves" is multiplied
by the rates presented at the Clause 1, Article 21 of the "Communique on
Regulations on the Establishment and Operations of Banks", and included in the
related risk group and weighted by the related group's risk.



Receivables from counter parties generated from foreign currency and interest
rate transactions are included in the related risk group at the loan conversion
rates stated in Clause 2, Article 21 of the "Communique on Regulations on the
Establishment and Operations of Banks" and weighted for a second time by the
weight of the related risk group.




Information related to the capital adequacy ratio:


                                                 Consolidated                           Parent Bank
                                                  Risk Weight                           Risk Weight
                                            0%       20%     50%      100%         0%     20%     50%       100%
Risk Weighted Assets, Liabilities
and Non Cash Loans
Balance Sheet items (Net)            1,224,647   860,557 201,020 1,409,006  1,009,349 215,146  75,559  1,004,431
Cash                                    73,332        13       -         -     73,324       -       -          -
Due from banks                         355,536   860,544       -    36,501    355,536 215,142       -        687
Interbank  money market placements     383,063         -       -         -    383,063       -       -          -
Receivables from reverse repo               81         -       -         -          -       -       -          -
transactions
Reserve deposits                       137,260         -       -         -    137,260       -       -          -
Special finance houses                       -         -       -         -          -       -       -          -
Loans                                  241,070         -  63,587 1,290,415     42,634       -  63,587    961,556
Loans under follow-up (Net)                  -         -       -     7,871          -       -       -      7,871
Subsidiaries, associates and                 -         -       -         -          -       -       -          -

investments held to maturity
Miscellaneous receivables                    -         -       -     2,179          -       -       -      1,537
Marketable securities held to                -         -       -         -          -       -       -          -
maturity (Net)
Advances for assets acquired by              -         -       -         -          -       -       -          -

financial leasing
Financial lease receivables                  -         - 124,793         -          -       -       -          -
Leased assets (Net)                          -         -  12,640         -          -       -  11,972          -
Fixed assets (Net)                           -         -       -    27,435          -       -       -     20,705
Other assets                            34,305         -       -    44,605     17,532       4       -     12,075
Off balance sheet items                374,002   504,960 238,519    46,744    363,925 446,661 311,785     43,600
Guarantees and pledges                  19,869   493,527  73,749    30,275     15,494 439,476  73,750     25,722
Commitments                            348,387         - 164,770         -    346,095       - 238,035          -
Other off balance sheet items                -         -       -         -          -       -       -          -
Transactions related with derivative         -         -       -     4,039          -       -       -      4,175


Financial instruments
Interest and income accruals             5,746    11,433       -    12,430      2,336   7,185       -     13,703
Non risk weighted accounts                   -         -       -         -          -       -       -          -

Total Assets Subject to Risk         1,598,649 1,365,517 439,539 1,455,750  1,373,274 661,807 387,344  1,048,031
Total Risk Weighted Assets                   -   273,103 219,770 1,455,750          - 132,361 193,672  1,048,031



Summary information related to the capital adequacy ratio:


                                                                 Consolidated             Parent Bank
                                                                Current       Prior     Current       Prior
                                                                 Period      Period      Period      Period
Total Risk Weighted Assets (*)                                1,999,023   1,812,599   1,408,650   1,221,004
Shareholders' Equity                                            311,324     303,667     205,223     188,018
Shareholders' Equity / Total risk weighted assets (CAR (%))       15.57       16.75       14.57       15.40



(*)       The above mentioned amounts consist of base amounts of the market risk
which are TL 50,400 and TL 34,586 as consolidated and as for the Parent Bank
basis, respectively, for the current period and TL 55,635 and TL 21,784 for the
previous period.




Information related to the shareholders' equity components :


                                                                                           Parent Bank
                                                                 Consolidated
                                                                 Current       Prior    Current       Prior
                                                                  Period       Period     Period      Period

MAIN CAPITAL
Paid-in Capital                                                     55,125     55,125     55,125      55,125
Nominal capital                                                     55,125     55,125     55,125      55,125
Capital commitments (-)                                                  -          -          -           -
Effect on Inflation Accounting on Share Capital                    207,358    207,358    207,358     207,358
Share Premium                                                            -          -          -           -
Legal Reserves                                                       9,198     11,361      2,373           -
First legal reserve (Turkish Commercial Code 466/1)                  7,370      4,883      2,373           -
Second legal reserve (Turkish Commercial Code 466/2)                     -          -          -           -
Other legal reserve per special legislation                          1,828      6,478          -           -
Statute Reserves                                                         -          -          -           -
Extraordinary reserves                                                   -          -          -           -
Reserves allocated by the General Assembly                               -          -          -           -
Retained earnings                                                        -          -          -           -
Accumulated loss                                                         -          -          -           -
Foreign currency share capital exchange difference                       -          -          -           -
Profit                                                              30,964     28,784     40,873      20,498
Current period profit                                               30,964     28,784     38,614      20,498
Prior period profit                                                      -          -      2,259           -
Loss (-)                                                           (8,692)   (19,151)          -           -
Current period loss                                                      -          -          -           -
Prior period loss                                                  (8,692)   (19,151)          -           -
Total Main Capital                                                 293,953    283,477    305,729     282,981
SUPPLEMENTARY CAPITAL
Revaluation Fund                                                         -          -          -           -
Furniture, fixture and vehicles                                          -          -          -           -
Buildings                                                                -          -          -           -
Profit on sale of associates, subsidiaries and buildings to be           -          -          -           -
transferred to share capital
Revaluation fund of leasehold improvement                                -          -          -           -
Increase in the Value of Revaluation Fund                                -          -          -           -
Foreign Exchange Differences                                             -          -          -           -
General Reserves                                                     7,571      6,746      7,571       6,746
Provisions for Possible Losses                                           -          -          -           -
Subordinated Loans                                                  20,766     27,232     20,766      27,232
Marketable Securities and Investment Securities Value Increase          78        222       (38)         222
Fund
Associates and subsidiaries                                             78        222       (38)         222
Available for sale securities                                            -          -          -           -
Structured positions                                                     -          -          -           -
Total Supplementary Capital                                         28,415     34,200     28,299      34,200
TIER III CAPITAL                                                         -          -          -           -
CAPITAL                                                            322,368    317,677    334,028     317,181
DEDUCTIONS FROM THE CAPITAL                                         11,044     14,010    128,805     129,163
Investments in unconsolidated financial companies whose main           713        865
activities are money and capital markets, insurance and that
operate with licenses provided in accordance with special laws

                                                                                         121,064     118,266
Leasehold improvements                                               7,751      8,355      6,155       7,065
Start-up costs                                                   -                             -
Prepaid expenses                                                     2,478      4,625      1,586       3,832
The negative difference between the market values and the
carrying amounts for
                                                                         -          -          -           -
 unconsolidated investments, subsidiaries, other investments and
fixed assets
Subordinated loans given to other banks  which operate in Turkey         -          -          -           -
Goodwill (Net)                                                         102        165          -           -
Capitalized expenses                                             -                  -          -           -
Total Shareholder's Equity                                         311,324    303,667    205,223     188,018


II-        Consolidated Market Risk



The Group has determined market risk management operations and has taken the
necessary precautions in order to hedge market risk within its financial risk
management purposes, in accordance with the Communique on "Internal Control and
Risk Management Systems of Groups" announced in the 24312 numbered and February
8, 2001 dated Official Gazette.



The interest rate and exchange rate risks of the financial positions taken by
the Group related to balance sheet and off-balance sheet accounts are measured
and while calculating the capital adequacy, the amount subject to VAR is taken
into consideration by the standard method. Scenario analysis and stress tests
are used additionally in market risk computations.



In order to measure the market risk of the Parent Bank, the Board of Directors
has determined risk management strategies in accordance with the proposals of
the Top Management Risk Committee and these strategies are forced to be followed
up periodically. The Board of Directors evaluates the basic risks faced and
determines limitations accordingly. The limits are revised periodically.
Additionally the Board of Directors has urged the risk management group and the
top management to take necessary precautions to consider, evaluate, control and
to control the variety of risks the Bank faces.


                                                                                    Consolidated Parent Bank
Capital to be employed for interest rate risk - standard method                            2,181       2,165
Capital to be employed for general market risk                                             2,179       2,165
Capital to be employed for specific risk                                                       2           -
Capital to be employed for options subject to interest rate risk                               -           -
Capital to be employed for common stock position risk - Standard method                        9           -
Capital to be employed for general market risk                                                 6           -
Capital to be employed for specific risk                                                       3           -
Capital to be employed for options subject to common stock position risk                       -           -
Capital to be employed for currency risk - Standard method                                 1,842         602
Capital liability                                                                          1,842         602
Capital to be employed for options subject to currency risk                                    -           -
Total Value-at-risk (VAR)-Internal Model                                                       -           -
Total capital to be employed for market risk                                               4,032       2,767
Amount subject to market risk                                                             50,400      34,586



III-      Consolidated Foreign Currency Risk



Foreign currency risk indicates the possibilities of the potential losses 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 Parent Bank are taken into account.
Net short and long position of Turkish Lira equivalent of each foreign currency
is calculated. The value, which will be a base for calculating the share capital
requirement, is computed by taking the higher absolute value of the position by
adding to absolute net gold position. Share capital requirement is computed over
of this amount. The Board of Directors sets limits for the positions, which are
followed up daily. Additionally, possible value changes in the existing or
possible foreign currency positions are observed together with the follow-up of
the foreign currency risk in accordance with the provisions of the "Communique
on Internal Control and Risk Management Systems of Banks".



As an element of the Group's risk management strategies, foreign currency
liabilities are hedged against exchange rate risk by derivative instruments.











The Board of Directors of the Parent Bank determines the short position limits
that the Bank can hold in accordance with the present legal limitations. The
Treasury Department of the Bank is responsible for the management of Turkish
Lira or foreign currency price, liquidity and affordability risks that could
occur in the domestic and international markets. The Risk Control Department
continuously controls risk and risk related transactions occurring in the money
markets and prepares weekly reports for the Bank's Asset-Liability Committee.
The related principles and limitations of the counterparties are determined by
the Loan Committee. The limits concerning the maturity structure of the foreign
currency transactions and interest rates are examined by the  Asset-Liability
Committee.



As of September 30, 2003, the Group's net long position is TL 23,213 (December
31, 2002 - TL 23,929 net short) resulting from short position amounting to TL
16,234 (December 31, 2002- TL 63,887) on the balance sheet and long position
amounting to TL 33,973 (December 31, 2002 - 39,958 ) from off-balance sheet
position.



The announced current foreign exchange buying rates of the Parent Bank at the
balance sheet date and the previous five working days are as follows:


                   23/9/03           24/9/03           25/9/03       26/9/03       29/9/03       30/9/03
USD              1,348,023         1,349,013         1,366,040     1,365,178     1,376,707     1,384,378
CHF                995,456           994,568         1,010,555     1,013,747     1,017,541     1,048,196
GBP              2,227,117         2,231,179         2,262,756     2,264,465     2,268,864     2,313,057
JPY                 12,088            12,062            12,191        12,163        12,318        12,509
EUR              1,548,070         1,547,183         1,569,171     1,567,497     1,571,236     1,615,154



The simple arithmetical average of the major current foreign exchange buying
rates of the Bank for the thirty days before September 30, 2003 is as follows:


                                                                       Monthly Average

                                                                       FX rates
USD                                                                    1,371,963
CHF                                                                      993,589
GBP                                                                    2,208,843
JPY                                                                       11,913
EUR                                                                    1,539,809




Information on the foreign currency risk of the Group:


Current Period                                            EUR         USD       YEN   OTHER FC       TOTAL
Assets
Cash (cash in vault, foreign currency cash, money      28,063     379,740        20      1,840     409,663
in transit, cheques purchased) and balances with
the Central Bank of Turkey
Due from other Banks and financial institutions        91,191     767,770       705     42,463     902,129
Trading securities (**)                                 1,243       6,218                  358       7,819
                                                                                -
Investment securities available-for-sale                           59,018                           59,018
                                                          -                     -          -
Loans (**)                                            264,077     810,053               16,105   1,090,235
                                                                                -
Investments in subsidiaries and participations
                                                          -           -         -          -           -
Investment securities held-to-maturity                              1,342                1,144       2,486
                                                          -                     -
Property and equipment                                  5,111                                        5,111
                                                                      -         -          -
Goodwill
                                                          -           -         -          -           -
Other assets                                          126,575     162,697               15,715     304,987
                                                                                -
Total Assets                                          516,260   2,186,838       725     77,625   2,781,448
Liabilities
Bank  deposits                                          3,132       9,512         6     39,626      52,276
Foreign currency deposits (*)                         280,706   1,805,065       873     42,775   2,129,419
Funds provided from other financial institutions       71,599     415,956               14,596     502,151
                                                                                -
Marketable securities issued
                                                          -           -         -          -           -
Miscellaneous payables                                 18,005       7,294                  129      25,428
                                                                                -
Other liabilities                                      70,380      19,595                5,412      95,387
                                                                                -
Total liabilities                                     443,822   2,257,422       879    102,538   2,804,661
Net Balance Sheet Position                             72,438    (70,584)     (154)   (24,913)    (23,213)
Net Off-Balance Sheet Position                       (88,654)     100,462               22,165      33,973
                                                                                -
Financial derivative assets                           114,712     211,561               32,542     358,815
                                                                                -
Financial derivative liabilities                      203,366     111,099               10,377     324,842
                                                                                -
Non-cash loans (***)                                  202,919     555,822     9,301     32,895     800,937
Prior Period
Total Assets                                          518,338   2,547,184    21,167    112,504   3,199,193
Total Liabilities                                     457,279   2,693,343       894    111,564   3,263,080
Net Balance Sheet Position                             61,059   (146,159)    20,273        940    (63,887)
Net Off-Balance Sheet Position                      (114,971)     187,235  (20,021)   (12,285)      39,958
Non-cash loans (****)                                 196,061     531,881     4,695     28,138     760,775



(*)       Gold account deposits amounting to TL 14,262 (December 31, 2002 - TL
24,867) are included in the foreign currency deposits.

 (**)    FX-indexed loans amounting to TL 86,480 (December 31, 2002 - TL 89,025)
are included in loans, FX-indexed factoring receivables amounting to TL8,419 are
included in other assets and FX-indexed factoring payables amounting to TL 1,441
are included in other liabilities in the currency risk table of the Group.

(***)  In the prior period, foreign currency indexed government bonds and
treasury bills amounting to TL 242 are included in the trading portfolio.

(****)    There are no effects on the net off-balance sheet position.



IV-       Consolidated Interest Rate Risk




Interest rate risk shows the loss probability related to the changes in the
interest rates depending on the Parent Bank's position, and it is managed by the
Treasury Department. The interest rate sensitivity of assets, liabilities and
off-balance sheet items related to this risk are measured by using the standard
method. The first step at calculation of interest rate risk, is to place the
instruments subject to interest rate risk in the appropriate one of the 13
maturity sections according to the remaining time to maturity or to the
repricing. At the second step, the instruments with variety of maturities are
weighted according to their risks for reflecting the interest rate risk
volatilities that match their maturities.



The first priority of the Group's risk management is to protect from interest
rate volatility. All types of sensitivity analysis performed within the context
is calculated by the risk management and reported to the Asset-Liability
Committee.





Work is performed regarding interest income according to the macro economical
indicators in the Group's budget estimations and the effects of the market
interest fluctuations on the financial position and cash flow are purified at
the maximum level possible by means of target revisions.



The Bank management follows the market interest rates daily and determines the
interest rates of the Bank when necessary.



Since the Group does not permit or imposes limits on maturity mismatches, it is
not expected that the Group will face a significant interest rate risk.



Information related to the interest rate sensitivity of assets, liabilities and
off-balance sheet items based on reprising dates):



                                    Up to 1       1-3       3-6      6-12   1 Year and

                                     Months    Months    Months    Months         Over     Demand      Total
Current Period
Assets
Cash (cash in vault, foreign        492,806                                                73,335    566,141
currency cash, money in                           -         -         -            -
transit, cheques purchased) and
balances with the Central Bank
of Turkey
Due from Banks and other          1,236,218    18,962    16,000     8,321                     688  1,280,189
financial institutions                                                             -
Trading securities                    1,074     1,983     6,791     5,449        6,338        363     21,998
Securities available-for-sale                             6,462                 52,556          9     59,027
                                        -         -                   -
Loans                               522,907   329,050   331,048   221,014      109,644          -  1,513,663
Securities held-to-maturity           3,169    36,624     1,342     3,528                             44,663
                                                                                   -          -
Other assets                         70,132    88,078    42,253    45,731       66,191     74,690    387,075
Total Assets                      2,326,306   474,697   403,896   284,043      234,729    149,085  3,872,756
Liabilities
Bank deposits                        93,557    11,206     3,600                                      108,363
                                                                      -            -          -
Other deposits                    2,229,861   175,214    67,363   106,110       33,221          -
                                                                                                   2,611,769
Miscellaneous payables                1,183         -                                                 47,716
                                                            -         -            -       46,533
Marketable securities  issued
                                        -         -         -         -            -          -          -
Funds provided from other           269,892   113,551    93,814    75,761       12,583               565,601
financial institutions                                                                        -
Other liabilities                    28,217    54,079     9,995     4,958       14,093    427,965    539,307
Total Liabilities                 2,622,710   354,050   174,772   186,829       59,897    474,498  3,872,756
Balance Sheet Interest            (296,404)   120,647   229,124    97,214      174,832  (325,413)          -
Sensitivity Gap
Off Balance Sheet Interest                -         -         -         -            -          -          -
Sensitivity Gap
Total Interest Sensitivity Gap    (296,404)   120,647   229,124    97,214      174,832  (325,413)          -



The other asset line at the without interest column consists of TL 47,826 amount
tangible fixed assets, TL 3,982 of intangible fixed assets, TL 371 of
participations and TL 342 of subsidiaries and the other liability line consists
of equity with a total amount of TL 294,031 and TL 21,366 amount minority
interest.



                                   Up to 1       1-3       3-6      6-12   1 Year and

                                    Months    Months    Months    Months         Over     Demand      Total
Prior Period
Assets
Cash (cash in vault, foreign       525,587                                                96,335    621,922
currency cash, money in                          -         -         -            -
transit, cheques purchased) and
balances with the Central Bank
of Turkey
Due from Banks and other         1,498,136    16,536    12,270     2,956                  73,849  1,603,747
financial institutions                                                            -
Trading securities                   2,798    31,725    12,315     7,504          785        301     55,428
Securities available-for-sale                 18,663                                          10     18,673
                                       -                   -         -            -
Loans                              444,278   279,867   332,920   171,239      220,473      5,494  1,454,271
Securities held-to-maturity            230    40,247     1,707     1,437          248                43,869
                                                                                             -
Other assets                         6,035    89,668    16,386    25,376       34,843    131,448    303,756
Total Assets                     2,477,064   476,706   375,598   208,512      256,349    307,437  4,101,666
Liabilities
Bank deposits                      112,724     2,913     1,107                                      116,744
                                                                     -            -          -
Other deposits                   2,479,013   179,637    58,677    90,838      181,618             2,989,783
                                                                                             -
Miscellaneous payables                                                                    66,226     66,226
                                       -         -         -         -            -
Marketable securities  issued
                                       -         -         -         -            -          -          -
Funds provided from other           37,153   219,413    82,773   111,959       10,929        -      462,227
financial institutions
Other liabilities                    2,978    37,919     1,198       258          -      424,333    466,686
Total Liabilities                2,631,868   439,882   143,755   203,055      192,547    490,559  4,101,666
Balance Sheet Interest           (154,804)    36,824   231,843     5,457       63,802  (183,122)
Sensitivity Gap                                                                                         -
Off Balance Sheet Interest               -         -         -         -            -          -          -
Sensitivity Gap
Total Interest Sensitivity Gap   (154,804)    36,824   231,843     5,457       63,802  (183,122)
                                                                                                        -



The other asset line at the without interest column consists of TL 46,889 amount
tangible fixed assets, TL 4,306 of intangible fixed assets, TL 374 of
participations and TL 491 of subsidiaries and the other liability line consists
of equity with a total amount of TL 283,699 and TL 21,309 amount minority
interest.



Average interest rates applied to monetary financial instruments:


                                                                EURO %        USD %       YEN %         TL %
Current Period
Assets
Cash (cash in vault, foreign currency cash, money in              1.49         0.40           -        21.00
transit, cheques purchased) and balances with the Central
Bank of Turkey
Due from Banks and other financial institutions                   1.41         1.07        3.61        29.47
Trading securities                                                8.37        11.22           -        51.27
Securities available-for-sale                                                  8.59        9.00            -
                                                                     -
Loans                                                             5.95         5.34        7.07        37.93
Securities held-to-maturity                                          -            -           -        40.72
Liabilities
Bank deposits                                                     3.25         2.99        4.00        30.28
Other deposits                                                    3.68         2.58        3.37        27.61
Miscellaneous payables                                                            -           -            -
                                                                     -
Marketable securities issued                                                      -           -            -
                                                                     -
Funds provided from other financial institutions                  4.13         2.72        5.93        30.42



V-        Consolidated Liquidity Risk



Liquidity risk occurs when there is not sufficient amount of cash or cash flows
to fulfill the cash outflows completely and on time, resulting from the unstable
cash inflows.



Liquidity risk may occur when the market penetration is not enough, when the
open positions cannot be closed urgently with a suitable price and sufficient
amount due to barriers and break-ups at the markets.



The Group's policy is to establish a liquid asset structure that can afford all
kinds of liabilities by liquid sources.



In this scope liquidity problem does not happen at any period. The Boards of
Directors of the Group continuously determines the liquidity ratios and related
standards, and controls them, in order to keep this structure.



There is a system worked on to apply international measurement methods. However,
according to the general policies of the Group, the adaptation of the assets,
liabilities, the interest rates to the payments are always established within
the asset liability management strategies. A positive difference is tried to be
established between the yields of TL and foreign currency assets and liabilities
at the balance sheet and their costs. According to this strategy, the Group pays
special attention not to take maturity risk, and no banking service is marketed
when the price is lower than the financing cost.



When the funding and liquidity sources are considered, the Parent Bank covers
majority of its liquidity need by deposits, and in addition to this source, it
makes use of prefinancing and syndication products to generate additional
sources. Generally the Bank does not prefer to utilize liquidity from interbank
money markets and is in a net lender position in interbank money markets.



Presentation of assets and liabilities according to their remaining maturities :


                                                                     3-6  6-12      1 Year and
                                                                   Months    Months       Over
Current Period                           Demand (*)   1-3 Months                                      Total
Assets
Cash (cash in vault, foreign currency       566,141                                                 566,141
cash, money in transit, cheques                              -          -       -          -
purchased) and Balances with the Central
Bank of Turkey
Due from Banks and other financial        1,233,088       22,780   16,000     8,321               1,280,189
institutions                                                                               -
Trading securities                            2,131          976    6,659     6,028      6,204       21,998
Securities available-for-sale                     9                 6,462               52,556       59,027
                                                             -                  -
Loans                                       522,907      325,232  331,048   221,014    113,462    1,513,663
Securities held-to-maturity                   1,144          557   39,434     3,528                  44,663
                                                                                           -
Other assets(***)                            87,752       98,656   43,926    41,414     59,734      387,075
Total  Assets                             2,413,172      448,201  443,529   280,305    231,956    3,872,756

Liabilities
Bank deposits                                93,557       11,206    3,600                           108,363
                                                                                -          -
Other deposits                            2,229,861      175,214   67,363   106,110     33,221    2,611,769
Funds provided from other financial         203,757       90,166   77,965   116,781     76,932      565,601
institutions
Marketable securities issued
                                                -            -          -       -          -            -

Miscellaneous payables                       42,023        1,297              4,323         73       47,716
                                                                        -

Other liabilities(**)                       139,239       52,936   10,037    15,629    321,466      539,307
Total Liabilities                         2,708,437      330,819  158,965   242,843    431,692    3,872,756

Net Liquidity Gap                         (295,265)      117,382  284,564    37,462  (199,736)
                                                                                                        -
Prior Period
Total Assets                              2,729,741      422,582  375,169   208,398    313,707    4,101,666
Total Liabilities                         3,045,296      328,071  151,940   302,145    274,214    4,101,666
Net Liquidity Gap                         (315,555)       94,511  223,229  (93,747)     39,493
                                                                                                        -



(*) The maturity of up to 1 month of interbank funds sold amounting to TL
383,063, loans amounting to TL 511,094, and domestic and foreign Banks
placements amounting to TL 801,205 are shown in the demand column. Furthermore,
deposits with maturities up to one month amounting to TL 1,629,377 is included
in the other deposits and shown at the demand columns.



(**)The 1 year and over column of the other liabilities consist of shareholders'
equity amounting to TL 294,031 and minority interest amounting to TL 21,366.



(***) An amount of TL 55,593 of the total column consists of subsidiaries and
participations amounting to TL 713, prepaid expenses amounting to TL 2,478,
tangible fixed assets amounting to TL 47,826, intangible fixed assets amounting
to TL 3,982 and office supply inventory amounting to TL 594 and those are not
taken in to consideration at the maturity distribution.




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