Garanti Factoring

Garanti Factoring was established in 1990 as one of the first factoring companies in Turkey. Currently, 34.82% of its shares are traded on the ISE National Market. Garanti Factoring provides value-added financial products to corporations with extensive dealer/supplier networks, importers, exporters and SMEs. Catering to business partners' needs for collection, financing and guarantee services, Garanti Factoring also makes a significant contribution to their operational productivity. In 2007, Garanti Factoring continued the restructuring efforts it had launched in 2005 and 2006. Large-scale investments allow the Company to meet the needs of customers in different segments with innovative, creative, dynamic and customer-oriented concepts and high-quality factoring products and services.

Activities in 2007

• In addition to traditional services such as domestic export and import factoring, Garanti Factoring diversified services in 2007 by focusing on factoring products customized for different industries and customer profiles.
• Customers served by Garanti Factoring in 2007 were primarily involved in trade (32%), machinery (11%), iron and steel (11%), textile (7%), food (6%) and automotive (5%).
• In 2007, there has been intensive cross-selling cooperation with all delivery channels of Garanti Bank, especially in the branches which were effectively used to offer factoring services to customers all over Turkey, not only in big cities. In this way, a productive working environment was created within the Group and greater diversity was achieved in terms of geographic location, customers and products.
• Through sales and marketing activities, Garanti Factoring increased its market share from 12% in 2006 to 14% in 2007. With a factoring volume of US$ 3 billion in 2007, Garanti Factoring ranked second among the members of the Factoring Association. The Company aims to achieve a minimum volume of US$ 4 billion in 2008. In 2007, Garanti Factoring increased its profit from YTL 4.6 million to YTL 5.7 million and total net assets from YTL 673 million to YTL 758 million. This growth came as a result of the Company's emphasis on human resources and training.
• In the same period, Garanti Factoring also increased international factoring volume and strengthened its position within IFG (International Factoring Group) and FCI (Factors Chain International), which further developed its correspondent network. At the end of 2007, Garanti Factoring was a member on the Board of the IFG Group.

Future Outlook

• To ensure fast and efficient access to customers in the SME segment, Garanti Factoring contacted organized industrial zones, chambers of commerce and industrialists' associations, taking the initial steps for introductory meetings and cooperation projects in 2008.
• Garanti Factoring's strategies for 2008 can be summarized as follows:
  • Focusing on SME segments,
  • Increasing market share in international factoring transactions through closer contacts with multinationals and corporate enterprises,
  • Becoming a market maker on both domestic and international platforms;
  • Increasing IT investments and operational productivity,
  • Increasing commission income and the number of customers contacted,
  • Emphasizing high-return products
  • Developing the infrastructure established with the delivery channels of Garanti Bank.

Through these strategies, Garanti Factoring will continue to improve its performance in 2008 and take critical steps toward becoming the leading factoring company in Turkey.

Credit Ratings of Garanti Factoring

In December 2007, Garanti Factoring was assigned the following grades from international credit rating agency Fitch Ratings:

Foreign currency long-term BB
Foreign currency short-term B
Turkish Lira long-term BBBTurkish
Lira short-term F3
National long-term AAA (tur)
Support rating 3