In spite of the horrendous earthquake disaster that took place in our country in the first half of 2023, coupled with the slowdown in global economy and increased volatilities, economic growth performed solidly in the first three quarters of the year with the support lent by domestic demand and investment outlays. Although domestic lead indicators and the developments in global economy demonstrate that economic growth lost momentum somewhat in the last quarter of the year, growth rate for 2023 is anticipated to realize at 4.4%, which is in line with the projections in the MTP.
While both domestic and external demand are expected to weaken in 2024 following the anticipated deceleration in global economy and the tightening in financial conditions in the country, the improvement in net exports after the decline in gold and energy imports will likely curb the loss of momentum in growth, and thus, 2024 economic growth is projected to materialize as 4%.
We are augmenting the impact Türk Eximbank credits have on our country’s exports
Exports have been the key propellant of economic growth in recent years. In line with the export-driven growth strategy, the mission of our Bank, being our country’s official export credit agency, has gained even more significance. In this framework, Türk Eximbank’s cash loans to our exporters amounted to USD 19.6 billion in 2023; receivables amounting to USD 22.4 billion were insured/reinsured, thus providing a secure trading environment for our exporters. All in all, export credits we provided totaled USD 42 billion in the reporting period.
Last year, the Republic of Türkiye Ministry of Treasury and Finance significantly reinforced our Bank’s capital structure with the capital increases it has effected. Our shareholders’ equity grew by 79% year-on-year and reached TL 42.4 billion. Thanks to the leverage provided by TL 6.8 billion cash capital the Ministry injected in July 2023, our Bank will carry on and further increase its financing support to all exporters, and particularly to the SMEs, in the coming year.
In 2024, on the other hand, we are planning to further increase our credit and receivable insurance support to our exporters to the order of USD 50 billion to realize our country’s export target despite the negative developments tainting the global conjuncture.
Furthermore, in 2024, we will make an increased number of financing facilities available and introduce new implementations to support our exporters’ projects in relation to compliance with carbon border adjustment mechanism, green transformation and digitalization.
2023 was the year of exporter SMEs at Türk Eximbank
The number of exporter firms extended support by our Bank approached 17,000 in 2023. As Türk Eximbank, we are targeting to reach a higher number of exporter SMEs in keeping with our policy to expand our base, and we are delighted that SMEs make up 93% of 2,009 exporters that made use of the Bank’s support schemes for the first time ever in the past one year. With the contribution of the programs we develop, we increase the share SMEs that have an unchanged priority in our strategy get from our services year after year. While SMEs accounted for around 70% of the exporters supported by our Bank in 2020, this ratio rose to 84.2% in 2023.
In addition, we are attaching priority to exportation of high- and medium-high-technology products as well as the SMEs in line with our country’s export strategies. High- and medium-high-technology exports accounted for 40.7% of Türk Eximbank’s credit volume as at year-end 2023, and we are targeting to increase this ratio to 42.2% in the year coming.
We continued to be by the side of our exporters with our new products and services
While the strategic projects we have launched in 2023 and our activities with expanded scope rendered our Bank’s services more accessible, the improvements we made to the processes further enhanced our service quality.
We have taken a crucial step to facilitate access to financing by companies exporting value-added and high-technology products that we prioritize in line with our target-oriented export credit strategy and we have diversified our credit collateralization structure in line with the practices in the banking sector. Following the evaluation where we measure our exporters’ creditworthiness and export performance, companies can make use of Eximbank credit programs in return for alternative collateral types accepted by other commercial banks including securities pledge, guarantees by guarantee funds, mortgage, guarantees by real or legal persons, as well as bank letters of guarantee and our Bank’s Export Receivable Insurance Policies. With this implementation, we have reduced exporters’ cost to accessing financing and increased the accessibility of our support mechanisms.
In addition to financing programs introduced in line with interest-free banking principles, Participation-Based Export Receivable Insurance program was launched within the scope of receivable insurance that is another important area of activity of our Bank. A first in export credit insurance, the Participation-Based Export Receivable Insurance provides cover for our exporters’ export receivables with a maximum term of 360 days arising from the sales of goods to non-resident buyers in accordance with Islamic Banking Principles and Standards, and will contribute to growing our country’s exports in a safe environment. We will continue to increase our products and services compliant with interest-free banking principles in line with our exporters’ needs with the support of relevant regulatory agencies and participation banks.
Rediscount Credit Based in Swap Agreements that we have introduced with the CBRT was further expanded in 2023. Our efforts are ongoing to expand the credit to cover other countries, which was initially implemented for imports from the People’s Republic of China.
We are supporting our exporters’ green transformation journey with sustainability themed/linked funds.
As Türk Eximbank, we have secured funds worth USD 4.3 billion in 2023 from overseas capital markets and financial institutions to be on-lent to exporters within the scope of our strategy to create a stable funding structure; we are targeting to obtain additional funds in the amount of USD 5.6 billion in 2024.
At Türk Eximbank, we see that long-lived relationships our Bank establishes with domestic and overseas banks and institutions provide a solid base for the successful funding deals we carry out every year.
We have placed sustainability at the heart of our strategy with the aim of getting the exporters ready for the carbon border adjustment mechanism that will be started to be implemented in 2026, and we are taking environmental, social and governance risks into consideration when carrying out our activities. With this approach, we secured sustainability-linked/themed funds and syndicated loans worth approximately USD 3.7 billion arranged from overseas financial institutions to be allocated to our exporters from 2020 to date.
We continue to work on support models for minimizing the carbon tax costs of our exporters. We are targeting to extend credit support on the back of sustainability themed facilities for investments for achieving alignment with the Carbon Border Adjustment Mechanism, primarily to global buyers’ suppliers in Türkiye.
We increased our cooperation and agreements with international institutions
We are spending efforts to establish partnerships that will pave the way for the provision of diverse financing facilities in cooperation with other export credit agencies and regional multilateral financial institutions with the aim of improving the competitive strength of our exporters and contractors in international markets. In this framework, we signed memoranda of understanding with the Export-Import Bank of China (China Eximbank), one of the official export credit agencies in the People’s Republic of China, and Export Credit Greece (ECG), the export credit agency of Greece, in 2023.
We undersigned a strategic partnership as Türk Eximbank, and executed a shareholding agreement with the Africa Finance Corporation (AFC), one of Africa’s key multilateral financial institutions. This made us the first non-African shareholder in AFC, the continent’s leading provider of infrastructure solutions. This investment that represents our Bank’s first-ever stakeholding in an international entity is strategically important in terms of our country’s Africa Partnership Policy. Through this investment, we are targeting to strengthen the economic ties between Türkiye and AFC-member countries and to extend support to our exporters and contracting companies’ deals in Africa.
WE CONTINUE TO EXPAND OUR FIELD OF ACTIVITY IN ADDITION TO THE DEVELOPMENT AND DIVERSIFICATION OF CREDIT AND INSURANCE PRODUCTS.
We will continue to be the top solution partner of our exporters with the strategic projects we will implement in 2024.
2024 will be a year of important steps taken for Türk Eximbank’s digitalization. In addition to increasing transaction diversity on our digital channels, we will improve user experience and start seeing the results of the projects we have initiated. Furthermore, we are planning to start intermediating all kinds of foreign trade transactions of our exporters in 2024, being our country’s official export credit agency.
As our Republic embarks upon its new century, we are confident that our country will achieve major progress in growing and developing through exports. Continuously increasing and improving the support mechanisms we provide as Türk Eximbank, we will continue to stand by our exporters as their top solution partner in line with this target.
Ali GÜNEY
General Manager
