RNS Number:6619O
Turk Ekonomi Bankasi A.S.
14 August 2003


Part 2


                                  SECTION FIVE


                         FOOTNOTES AND EXPLANATIONS ON

                      UNCONSOLIDATED FINANCIAL STATEMENTS

I-   Footnotes And Explanations Related to the Assets

1.   Information related to the account of the Central Bank of Turkey:


                                                                             Current Period     Prior Period

Demand Unrestricted Amount                                                           13,468           16,498
Time Unrestricted Amount                                                            351,960          365,632
Total                                                                               365,428          382,130



2.         Information about trading portfolio:

a)     Trading securities given as collateral or blocked: None.

b)    Trading securities subject to repurchase agreements:


                                                                    Current                      Prior
                                                              Period                     Period
                                                               TL           FC            TL           FC
Government bonds                                           19,206            -        18,645            -
Treasury bills                                              1,349            -         6,321            -
Other debt securities                                           -            -             -            -
Bank bonds and bank guaranteed bonds                            -            -             -            -
Asset backed securities                                         -            -             -            -
Other                                                           -            -             -            -
Total                                                      20,555            -        24,966            -



3.         Information on available for sale portfolio:



a)         Main types of available for sale securities: public sector debt
securities, and other marketable securities and share certificates.



b)        Information on available for sale portfolio:


                                                                           Current Period       Prior Period
Debt securities                                                                    29,018             18,790
Quoted in a stock exchange                                                          6,571                  -
Not quoted                                                                         22,447             18,790
Share certificates                                                                      8                 10
Quoted in a stock exchange                                                              -                  -
Not quoted                                                                              8                 10
Provision for impairment (-)                                                            -                  -
Total                                                                              29,026             18,800


c)       Available for sale securities given as collateral or blocked: None.

d)    Information on investment securities available-for-sale given as
collateral or blocked: None


e)     Information on investment securities available-for-sale subject to
repurchase agreements: None.


4.      Information on loans :



a)     Information on all types of loans and advances given to shareholders and
employees of the Bank:


                                           Current Period             Prior Period
                                     Cash Loans  Non-Cash Loans  Cash Loans    Non-Cash
                                                                                Loans

Direct loans granted to shareholders         902          1,193          663        7,502
Corporate shareholders                       902          1,193          663        7,502
Real person shareholders                       -              -            -            -
Indirect loans granted to                      -              -            -            -
shareholders
Loans granted to employees                   674              -          839            -

Total                                      1,576          1,193        1,502        7,502



b)    Information about the first and second group loans and other receivables
including loans that have been restructured or rescheduled:


                                                                      Loans and Other Receivables Under
                                                                              Close Monitoring
                                Standard Loans and Other Receivables
                                 Loans and Other     Restructured or Loans and Other     Restructured or
          Cash Loans                 Receivables         Rescheduled     Receivables         Rescheduled
          
Non-specialized loans                    880,793                   -             547               4,305
Discount notes                            21,526                   -               -                   -
Export loans                             450,772                   -               -                   -
Import loans                                   -                   -               -                   -
Loans given to financial sector           23,575                   -               -                   -
International loans                       29,708                   -               -                   -
Consumer loans                            23,499                   -               -                   -
Credit cards                              16,415                   -               -                   -
Precious metals loans                      5,422                   -             547                   -
Other                                    309,777                   -               -               4,305
Specialized loans                              -                   -               -                   -
Other receivables                              -                   -               -                   -
Total                                    880,793                   -             547               4,305


c)    Information on consumer loans :

                                                              Medium and Long                Interest Income
                                               Short Term          Term          Total              Accrual
                                                                          
Consumer loans-TL                                  8,753              5,712        14,465                427
Real estate loans                                    153              1,000         1,153                 30
Automotive loans                                   1,693              4,535         6,228                138
Consumer loans                                        -                   -            -                  -
Personnel loans                                      634                 40           674                 19
Other consumer loans                               6,273                137         6,410                240
Consumer loans- Indexed to FC                      1,342              7,692         9,034                 42
Real estate loans                                    193              2,445         2,638                 10
Automotive loans                                     660              5,068         5,728                 24
Consumer loans                                       489                179           668                  8
Personnel loan                                         -                 -              -                  -
Other consumer loans                                   -                 -              -                  -
Credit cards                                      16,415                 -        16,415                   -
Total Consumer Loans                              26,510            13,404        39,914                 469



d)    Domestic and foreign loans:


                                                                           Current Period       Prior Period
Domestic loans                                                                    871,887            873,986
Foreign loans                                                                      13,758             14,363
Total                                                                             885,645            888,349



e)     Loans granted to subsidiaries and investments:


                                                                           Current Period       Prior Period
Direct loans granted to subsidiaries and investments                                  139                205
Indirect loans granted to subsidiaries and investments                                  -                  -
Total                                                                                 139                205



f)     Specific provisions provided against loans:


                                                                           Current Period       Prior Period
Specific provisions
Loans and receivables with limited collectibility                                     104                 70
Loans and  receivables with doubtful collectibility                                   254                200
Uncollectible loans and receivables                                                14,673             16,730
Total                                                                              15,031             17,000



g)    Information on loans under follow-up account (Net) :



g.1)     Information on loans and other receivables included in loans under
follow-up account which are restructured or rescheduled: None.



g.2)    The movement of loans under follow-up:


                                                         III. Group        IV. Group         V. Group
                                                                           Loans and
                                                                        receivables with
                                                    Loans and              doubtful
                                                receivables with         colectibility
                                                     limited                             Uncollectible
                                                 collectibility                          loans and
                                                                                          receivables

Prior period end balance                             1,017              400              21,115
Additions (+)                                        673                -                1,767
Transfers from other categories of loans under       -                  1,108            328
follow-up (+)
Transfers to other categories of loans under         1,108              328              -
follow-up  (-)
Collections (-)                                      85                 56               2,144
Write-offs (-)                                       -                  -                29
Index difference (-)                                 144                40               2,243
Current period end balance                           353                1,084            18,794
Specific provision (-)                               105                253              14,673
Net Balances on Balance Sheet                        248                831              4,121



g.3)     Information on foreign currency loans and other receivables under
follow-up: None.



h)    Liquidation policies for the uncollectible loans and other receivables :



The loans and other receivables decided to be uncollectible are written off from
the assets according to the Tax Law by the decision of the top management 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"
related to the clause 12 of article 11 and clause 11 of the article 3 of the
Bank Law 4389 changed by the laws 4672 and 4491 and announced at the Official
Gazette numbered 24448 and dated June 30, 2001.



5.     Information on held to maturity portfolio (Net) :



a)     Information on held to maturity portfolio:


                                                                           Current Period       Prior Period

Debt securities                                                                    38,367             40,752
Quoted in a stock exchange                                                         38,367             40,752
Not quoted                                                                             -                  -
Provision for impairment (-)                                                           -                  -

Total                                                                              38,367             40,752



b)    Movement of held to maturity portfolio :


                                                                           Current Period       Prior Period

Beginning balance                                                                  40,752             96,617
Effect of inflation (-)                                                           (4,174)           (22,770)
Foreign currency differences on monetary assets                                         -              5,890
Purchases during year                                                               2,008             40,752
Disposals through sales and redemptions                                             (219)           (79,737)
Impairment provision                                                                    -                 -

Closing Balances                                                                   38,367             40,752



c.1)          Information on accounts in which investment securities
held-to-maturity recorded:


                                                 Current Period                    Prior Period
                                        Historical Cost    Valuation     Historical Cost     Valuation
                                             TL      FC       TL      FC       TL      FC       TL      FC

Held to Maturity Portfolio
Given as collateral or blocked           38,367       -   37,489       -   40,752       -   41,486       -
Subject to repo transactions                  -       -        -       -        -       -        -       -
Held for structural position                  -       -        -       -        -       -        -       -
Receivables from securities lending           -       -        -       -        -       -        -       -
Collaterals on securities lending             -       -        -       -        -       -        -       -

Closing Balances                         38,367       -   37,489       -   40,752       -   41,486       -



Other than the above items, there are no held to maturity securities which are
not given as collateral.



c.2)          Marketable securities held to maturity given as collateral consist
of public sector debt securities of TL 38,367, given as collateral for statutory
requirements.




Securities held-to-maturity given as collateral or blocked:


                                               Current Period                   Prior Period
                                                    TL            FC            TL            FC

Share certificates                                   -             -             -             -
Bonds and similar investment securities         38,367             -        40,752             -
Other                                                -             -             -             -

Total                                           38,367             -        40,752             -



c.3)          Securities held-to-maturity subject to repurchase agreements :
None.


c.4)          Securities held-to-maturity held for structural position: None.


6.         Information on participations (Net):

          a.1)     Information on participations :

                                                                             
                                                 Current Period   Prior Period

  Balance at the beginning of the period                 6,291          5,150 
  Movements during the period                            (111)          1,141 
  Purchases                                                  -            750 
  Free shares obtained profit from current                 121            434 
  year's share                                                                
  Dividends from current year income                         -              - 
  Sales                                                      -              - 
  Revaluation increase                                   (232)           (43) 
  Provision for impairment                                   -              - 

  Balance at the end of the period                       6,180          6,291 

  Capital commitments                                        -              - 

  Share percentage at the end of the period (%)              -              - 
                                       
                                    
a.2)     Valuation of participations:

                                                                       
                                          Current Period   Prior Period
         Valuation with cost                      5,931          5,931 
         Valuation with fair value                  249            360 
         Valuation with equity method                  -              -
         Total                                    6,180          6,291 
a.3)          Participations which are quoted to a stock exchange:

                                                                              
                                                Current Period   Prior Period 
  Other Financial Participation / Varlik                   249            360 
  Yatirim Ortakligi A.S.                                                      
  Total                                                    249            360 

a.4)          Information related to participations:



                                                       Bank's share percentage-If   Bank's risk group
                                                            different voting      share percentage (%)
         Description                   Address (City /       percentage(%)
                                             Country))
TEB Sigorta A.S.                      Istanbul /Turkey           50.00                    50.00
Varlik Yatirim Ortakligi A.S.         Istanbul /Turkey           24.40                    31.58



Information on participations as presented in table a.4:


                                                             Income from
                                                             Marketable
                                                             Securities                 Prior Period
                                                            Portfolio (*)               Profit / Loss
            Shareholders'Equity(*) Total Fixed   Interest                    Current         (*)        Fair
                                    Assets(*)   Income (*)                Period Profit               Value (*)
   Total                                                                   / Loss (*)
  Assets

  28,354            4,866              466          211           -          (2,945)         582          -
   1,400            1,376               5            -            -             6            55         1,020



(*) Financial statements of Varlik Yatirim Ortakligi A.S. have been prepared in
accordance with the incumbent Capital Market Board legislation. Financial
statements of  TEB Sigorta have been prepared in accordance with principles
stated in the Insurance Control Law. Current period information is expressed in
the equivalent purchasing power at June 30, 2003, while prior period information
are historical and are expressed with nominal figures at December 31, 2002.



a.5)          Information on investments which are sold in current period :
None.


a.6)          Investments purchased in the current period: None.


7.             Information on subsidiaries (Net):


a)     Information on subsidiaries:


a.1)      Information on subsidiaries:


                                                                              
                                                 Current Period   Prior Period
  Balance at the beginning of the period               112,781        100,432 
  Movements during the period                            2,422         12,349 
  Purchases                                                  -          7,665 
  Free shares obtained profit from current              10,236          3,668 
  year's share                                                                
  Dividends from current year income                         -              - 
  Sales                                                      -              - 
  Revaluation increase (*)                             (7,814)          1,016 
  Provision for impairment                                   -              - 
 
 Balance at the end of the period                     115,203        112,781 

  Capital commitments                                       -               - 

  Share percentage at the end of the period (%)             -               - 
                                                                            

(*)       The exchange (expense)/income generated from the difference between
the devaluation and inflation of the foreign subsidiaries.


a.2)      Valuation of subsidiaries:



Subsidiaries denominated in Turkish Lira are reflected by restating their costs
with the conversion factors applicable for the relevant dates after deducting
the capital increases generated by funds like the revaluation fund. When there
is a permanent diminution in value of the subsidiaries then a provision is set.
Subsidiaries denominated in foreign currency are translated into Turkish Lira by
applying the exchange rates prevailing at balance sheet dates.

                                                                  
                                                Current                    Prior
                                                 Period                   Period
              Valuation with cost              115,203                   112,781 
              Valuation with fair value              -                         -   
              Valuation with equity method           -                         - 


a.3)      Subsidiaries which are quoted to a stock exchange: None.



a.4)     Information on subsidiaries:


                                                                  Bank's share        Bank's risk group
                                                             percentage-If different  share percentage
                                                              voting percentage(%)           (%)

            Description              Address(City/ Country)

The Economy Bank N.V.                Netherlands                              100.00              100.00
Petek International  Holdings B.V.   Netherlands                              100.00              100.00
TEB Yatirim Menkul Degerler A.S.     Istanbul/Turkey                           74.80               91.81
TEB Finansal Kiralama A.S.           Istanbul/Turkey                           68.76               72.53
TEB Kiymetli Madenler A.S.           Istanbul/Turkey                           66.00               71.81
TEB Factoring A.S.                   Istanbul/Turkey                           65.80               70.77
TEB Portfoy Yonetimi A.S.            Istanbul/Turkey                           55.89               88.61



Information on subsidiaries as presented in table a.4 (*) :


                                                         Income from
                                                          Marketable
                                                          Securities
                                                          Portfolio
              Shareholders'   Total Fixed    Interest                     Current    Prior Period
                  Equity         Assets       Income                   Period Profit Profit / Loss
Total Assets                                                              / Loss                   Fair Value
                                                                                               
1,058,720           74,250          1,407       26,505          (571)         239         8,112             -
    1,630            1,630              -            -             -          (26)        3,262             -
   16,281           13,983            464          728             -          156         2,983             -
  185,328           61,569        159,531          642             -       29,987         4,141             -
      237             231               -            -             -         (40)            40             -
   85,621            7,951            178        6,608             -        1,274           500             -
    4,843            4,305            602          432            76          617           876             -


(*)       Information is disclosed in statutory amounts.



a.5)      Information on the subsidiaries that were disposed  in current period:
None.



a.6)      Information on the subsidiaries purchased in current period: None.



8.         Information on financial lease receivables (Net): None.



9.         Explanations related to interest and income accruals :



a)     Information about accrued interest and income receivables:


                                                                   Current                  Prior
                                                           Period                   Period
Accrued interest and income receivables                     TL           FC          TL         FC

Interest accruals - due                                    242            1         254          -
Interest accruals - not due                              7,657        2,946      10,136      2,923
Loan commissions and other income accruals - due             -            -           -          -
Loan commissions and other income accruals - not            17            5          13          1
due

Total                                                    7,916        2,952      10,403      2,924



b)    Information on other interest and income accruals :


                                                      Current Period        Prior Period
Other interest and income accruals                    TL          FC        TL          FC

Trading securities                                        5,862        52       3,732          18
Securities available for sale                                 -       479           -         398
Securities held to maturity                                 709         -         734           -
Interest accruals of reverse repo transactions                -         -           -           -
Interest accruals of reserve deposits                     1,163       175       1,026         276
Income accruals of financial derivative instruments       5,406         -       4,899           -
Interest and income accruals                                  -         -           -           -
Income accrual of foreign exchange gains                  5,406         -       4,899           -
Income accruals of financial lease income                     -         -           -           -
Other                                                     7,699        66       6,027         140

Total                                                    20,839       772      16,418         832



10.      Information on other assets:



a)     Information on prepaid expenses, taxes and similar items :


                                                                         Current Period       Prior Period

Deferred tax                                                                      4,266              2,267
Assets held for sale                                                                  -                  -
Advances given                                                                       59                206
Prepaid rent expenses                                                               400                420
Transaction cost related to financial liabilities                                     -              2,291
Prepaid taxes                                                                     4,824             10,165
Other                                                                            11,462              7,632

Total                                                                            21,011             22,981



b)    Other assets and liabilities which exceed 10 % of the balance sheet total
(excluding off-balance sheet commitments) and breakdown of these which
constitute at least 20% of grand total: None



II-            Footnotes And Explanations Related to the Liabilities



1. a)     Information on maturity structure of deposits:



a.1)      Current period :


                         Demand 7 day Call      Up to 1 1-3 Month 3-6 Month  6 Month-1   1 Year and
                                  Accounts        month                           Year         over

Saving deposits          12,394          -       60,284    57,204    38,158      6,696       12,012
Foreign currency        367,171          -      436,261   281,985    25,980      7,365          373
deposits
Residents in Turkey     349,973          -      426,501   277,533    25,304      6,177          357
Residents abroad         17,198          -        9,760     4,452       676      1,188           16
Public sector            10,863          -            -         -         -          -            -
deposits
Commercial deposits      47,809          -       51,578    15,194     4,191        468           13
Other institutions       38,938          -        5,458       307        11          1            -
deposits
Precious metals           4,000          -            -     4,688         -        637            -
deposits
Interbank deposits        8,403          -       21,931    42,565     1,200          -            -
Central Bank of               -          -            -         -         -          -            -
Turkey
Domestic Banks              141          -           40         -         -          -            -
Foreign Banks             3,761          -       21,891    42,565     1,200          -            -
Special finance           4,501          -            -         -         -          -            -
houses
Other                         -          -            -         -         -          -            -
Total                   489,578          -      575,512   401,943    69,540     15,167       12,398



a.2)      Prior period :


                         Demand 7 day Call      Up to 1 1-3 Month 3-6 Month  6 Month-1 1 Year and
                                  Accounts        month                           Year       over

Saving deposits          19,577          -       87,222    42,901    13,971      3,646     15,014
Foreign currency        455,616          -      567,281   348,058    35,668      9,346        395
deposits
Residents in Turkey     437,565          -      549,799   341,790    32,943      7,880        376
Residents abroad         18,051          -       17,482     6,268     2,725      1,466         19
Public sector                39          -            -         -         -          -          -
deposits
Commercial deposits      59,685          -       84,009     4,766     9,485          6         15
Other institutions       36,517          -          478        16         9          1          -
deposits
Precious metals          10,828          -            -    12,627         -      1,576          -
deposits
Interbank deposits       22,011          -       29,477    14,219         -      1,115          -
Central Bank of               -          -            -         -         -          -          -
Turkey
Domestic Banks           12,291          -            -         -         -      1,115          -
Foreign Banks             9,720          -       29,477    14,219         -          -          -
Special finance               -          -            -         -         -          -          -
houses
Other                         -          -            -         -         -          -          -
Total                   604,273          -      768,467   422,587    59,133     15,690     15,424



b.1)     Information on saving deposits under the guarantee of saving deposit
insurance and exceeding the limit of saving deposit insurance:


                                             Under the guarantee of    Exceeding the limit of
                                            saving deposit insurance
Saving Deposits                                                            saving deposit
                                                Current Prior Period       Current  Prior Period
                                                 Period                     Period

Saving deposits                                  70,102       27,164       116,646       155,167
Foreign currency saving deposits                260,263      214,995       454,612       703,850
Other deposits in the form of saving                513          758         1,216         7,363
deposits
Foreign branches' deposits under foreign              -                          -             -
authorities' insurance
                                                        -
Off-shore banking regions' deposits under             -
foreign authorities' insurance
                                                        -                        -             -

Total                                       330,878     242,917      572,474       866,380

b.2)         The bank which has settled abroad should disclose, the total amount
of savings deposit in Turkey branch, and insured in the country of head office :
None



2.             Information on funds provided from repurchase agreement
transactions:



                                                                                         Prior
                                                     Current Period               Period
                                                          TL          FC          TL           FC

From domestic transactions                            21,928           -      24,415            -
Financial institutions and organizations              16,500           -      14,492            -
Other institutions and organizations                   1,657           -       4,509            -
Real persons                                           3,771           -       5,414            -
From foreign transactions                                  2           -       1,001            -
Financial institutions and organizations                   -           -           -            -
Other institutions and organizations                       -           -       1,000            -
Real persons                                               2           -           1            -

Total                                                 21,930           -      25,416            -



3. a)     Information on funds borrowed:


                                                                                           Prior
                                                     Current Period               Period
                                                           TL          FC          TL          FC

Short-term                                             21,138     236,902      17,775     211,227
Medium and long-term                                        -      41,476           -      64,218

Total                                                  21,138     278,378      17,775     275,445



4. a)     Information on debt securities issued: None.



b)    The explanation on the maturity structure, interest rate, type of currency
of the issued marketable securities : None.



5.         Explanation on funds: None



6.         Explanation on miscellaneous payables:


                                                                 Current Period    Prior Period
Total amount of cash collateral obtained                              104              134



The table consists of blocked accounts regarding cash collateral, loans, import
and export transactions



7.         Other assets and liabilities which exceed 10 % of the balance sheet
total (excluding off-balance sheet commitments) and breakdown of these which
constitute at least 20% of grand total: None



8.         Explanation on leasing operations:


                                                         Current                        Prior
                                                Period                        Period
                                            Gross              Net        Gross              Net
Less than a year                            2,366            1,767        2,367            2,185
1-4 years                                   4,891            4,255        6,746            5,335
More than 4 years                               -                -            -                -
Total                                       7,257            6,022        9,113            7,520

9.             Information on interest and expense accruals:


                                                                                       Prior
                                            Current Period                   Period
                                                  TL           FC           TL               FC
Accrued interest on deposits                   7,427        1,364        5,845            1,128
Accrued interest on funds borrowed             1,638          964        1,808            1,588
Accrued interest on bonds                          -            -            -                -
Accrued interest on repurchase                    23            -           31                -
agreement transactions
Accrued interest on derivative                15,850            -        5,091                -
financial instruments
Accrued interest and expense                       -            -            -                -
Foreign exchange losses accrued               15,850            -        5,091                -
Other interest and expense accruals            8,585            -        1,109                -
Total                                         33,523        2,328       13,884            2,716



10.      Provisions and subordinated loans :



a)     Information on general provisions::


                                                                          Current Period      Prior Period

General provisions                                                                 6,753             6,792
Provisions for First Group Loans and Receivables                                   5,711             5,762
Provisions for Second Group Loans and Receivables                                     21                35
Provisions for Non Cash Loans                                                      1,021               995
Others                                                                                 -                 -
Total                                                                              6,753             6,792



b)    Information on employee termination benefits and notice indemnity:


                                             5 PP    4 PP     3 PP       2 PP     Prior    Current
                                                                                  Period    Period
                                                                                  

Actual Payments of Employee Termination          56    107        947        662      435        421
Benefits (*)
Reserve for Employee Termination Benefits     1,580  3,140      4,456      6,912   10,972     14,350
and  Notice Indemnity (*)
Actual Payment Ratio                          %3.57  %3.40     %21.24      %9.59    %3.96      %8.35
Ratio of reserve for Employee Termination         -      -          -          -        -      %8.35
Benefits and  Notice Indemnity (**)
Possible reserve for Employee Termination         -      -          -          -        -        912
  Benefits and Notice Indemnity



(*) Reflected with statutory figures

(**) 5-year actual payment ratio



As of June 30, 2003, TL 912 of reserve for employee termination benefits and
notice indemnity was reflected to the financial statements corresponding to
8.35% of total liability of TL 14,350.


c)       Information on free reserves for possible losses : None.


d)    Information on subordinated loans:

                                                                                          Prior
                                              Current Period                   Period
                                                     TL           FC            TL            FC
From Domestic Banks                                   -            -             -             -
From Other Domestic Institutions                      -            -             -             -
From  Foreign Banks                                   -            -             -             -
From Other Foreign Institutions                       -       21,115             -        27,418
Total                                                 -       21,115             -        27,418


11.      Information of Shareholders' Equity:


a)     Presentation of paid-in capital:


                                                                          Current Period      Prior Period
Common stock                                                                      55,125            55,125
Preferred stock                                                                        -                 -


b)    Paid-in capital amount, explanation as to whether the registered share
capital system is applicable to the  Bank if so, amount of registered share
capital ceiling :


                Capital System                                Paid-in capital                    Ceiling
 Registered capital system                                             55,125                    100,000


c)       Information on share capital increases and their sources; other
information on increased capital shares in current period: None


d)    Information on share capital increases from revaluation funds: None.



e)     Capital commitments in the last fiscal year and at the end of the
following interim period, the general purpose of these commitments and projected
resources required to meet these commitments : None.



f)     Indicators of the Bank's income, profit and liquidity for the previous
periods and within these indicators possible affects on capital  fore sighting
uncertainty : Not applicable.



g)    Information on privileged shares :



        7 % of the Bank's remaining net income and tax after deducting legal
reserves and first dividends, corresponding to the Bank's 60,000 shares of TL
30,000,000 (in full TL) is distributed to the founder shares.



12. a)  Common stock issue premiums, shares and equity instruments: None



13. Information on shareholders having more than 10 % share:


Name/Commercial title          Amounts       Share Percentage  Paid-in capital    Unpaid portion
Teb Mali Yatirimlar A.S.        38,631            70.08%            38,631              -




III-           Footnotes And Explanations Related To the Income Statement



There is no fundamental error for any groups or items related to the prior
period. There is no change in  accounting estimates for the fiscal year.



The breakdown of other interest and non-interest income and expense accounts
that exceed 10% of the related totals are shown below.



Other interest expense amounting to TL 21,074 includes foreign exchange losses
amounting to TL 11,039 of foreign currency indexed loans occurred from the
devaluation of foreign currencies against TL and interest expenses on marketable
securities subject to repurchase agreements amounting to TL 9,891.



Other fees and commission income amounting to TL 10,284 includes fees and
commissions on credit cards amounting to TL 3,482, and other fee and commission
expense amounting to TL 6,082 includes fees and commissions on credit card and
interbank money marked transactions amounting to TL 3,045 and TL 817,
respectively.



1. a)     Information on interest income received from investments and
subsidiaries:


                                                                    Current Period   Prior Period
Interest received from investments and subsidiaries                       14               5



    b)    Information on financial lease income: None.



    c)     Interest received from reverse repurchase agreement transactions:



2. a)     Information on interest expense to investments and subsidiaries: None


                                                                    Current Period   Prior Period
Interest expense to investments and subsidiaries                    161             318



    b)    Information on financial lease expenses :


                                                                    Current Period   Prior Period
Financial lease expense                                             116             175



c)     Distribution of interest expense on deposits based on maturity of
deposits :


                                                       Time Deposits
                         Demand    Up to 1    Up to 3    Up to 6              More than 1
                        Deposits    Month      Months     Months                 Year
     Account name                                                   Up to 1                   Total
                                                                      Year
TL
Bank deposits                   2      4,557          -          -          -           -     4,559
Saving deposits               112     13,619     11,135      4,847      1,012       2,997    33,722
Public sector deposits          -          -          -          -          -           -         -
Commercial deposits           227      9,864      1,819        466         27           3    12,406
Other deposits                 12        157         24          2          -           -       195
7 days call accounts            -          -          -          -          -           -         -
Total                         353     28,197     12,978      5,315      1,039       3,000    50,882
FC
Foreign currency              660      6,279      4,452        400        119           6    11,916
deposits (*)
7 days call accounts            -          -          -          -          -           -         -
Precious metal                  -          8         62          -         11           -        81
deposits
Total                         660      6,287      4,514        400        130           6    11,997
Total                       1,013     34,484     17,492      5,715      1,169       3,006    62,879

(*) Interest expense on foreign currency demand deposits includes TL 585 of
foreign bank deposits interest expense.



d)    Interest expense on repurchase agreements :


                                                                Current             Prior Period
                                                         Period
                                                          TL          FC        TL            FC
Interest expense on repurchase agreements              9,891           -    19,084             -



3.         Net income/losses from marketable securities for investment purposes:
None



4.         Information on other operating income :



The information on the factors affecting the Bank's income including
extraordinary items and new developments, and the explanation on nature and
amount of income earned from extraordinary items : None.



5.         Provision expenses of banks for loans and other receivables:


                                                                       Current Period         Prior Period
Specific provisions for loans and other receivables                               609                6,052
Unsecured                                                                           -                5,152
Other groups                                                                      609                  900
General provision expenses                                                      1,251                2,034
Marketable securities impairment expense                                           29                1,469
Provision for impairment*                                                           -                    -
Other                                                                             472                    -
Total                                                                           2,361                9,555

(*)       Provision for impairment related to participations, subsidiaries and
securities held to  maturity.



6.a)     Income and expenses relating to investments and subsidiaries : None



b)    Income / loss from investments, which are accounted for under the equity
method : None.



c)        The information on income  and expense from related party
transactions:



The Bank has certain banking transactions with group companies. These are
commercial transactions, which are realized in line with market rates. These are
reflected in income statement. The related amounts are presented in Part V,
section VI.



7.         The explanations on net income / loss for the period:



a)     The nature and amount of certain income and expense items from ordinary
operations is disclosed if the disclosure for nature, amount and repetition rate
of such items is required for a complete understanding of the Bank's performance
for the period :  None



b)    Effect of changes in accounting estimates on income statement for the
current and, if any for subsequent periods : None.



8.         Nature and amount of changes in accounting estimates, which have a
material effects on current period or expected to have a material effect on
subsequent periods : None.




IV.       Footnotes And Explanations Related To the Off-Balance Sheet
Commitments



1.a)     Disclosure to be made separately from other contingent liabilities :



a.1)      The Bank's share in contingent liabilities of joint ventures together
with other ventures : None.





a.2)      Share of joint ventures in their own contingent liabilities: None.





a.3)      The Bank's contingent liabilities resulting obligations of other
ventures in joint ventures : None.





b)    Accounting and presentation of contingent  assets and liabilities in the
financial statements :



b.1)     For contingent assets, if realization probability is close to certain,
then it is accounted. If realization probability is low, then it is explained in
the footnotes. As of June 30, 2003 there are no contingent assets needed to be
explained.



b.2)     For contingent liabilities, if realization probability is close to
certain, then provision is set. If there is low or no realization probability,
then it is explained in the footnotes : None.





2.         Information on off-balance sheet liabilities :



a)     Nature and amount of irrevocable loan commitments : Credit card
expenditure limit commitments are

TL 93,239 and TL 75,062 as of June 30, 2003 and December 31, 2002 respectively.



b)       Nature and amount of contingent loss and commitments from off-balance
sheet items including below statements:



The Bank, within the context of banking activities, undertakes certain
commitments, consisting of loan commitments, letters of guarantee, acceptance
credits and letters of credit.



b.1)     Non-cash loans including guarantees, acceptances, financial collaterals
and other letters of credits:



            As of June 30, 2003 total guarantees and commitments consist of
letter of guarantees amounting to TL 572,313, acceptances amounting to TL 43,754
and letters of credit amounting to TL 318,583.



b.2)     Guarantees, surety ships and similar transactions : None other than the
ones explained in article b.1).



3.a)     Non-cash loans:


                                                                           Current Period     Prior Period

Guarantees given against cash loans                                                57,017           66,829
With maturity of 1 year or less than 1 year                                        21,366           25,040
With maturity of more than 1 year                                                  35,651           41,789
Other non-cash loans                                                              882,521          833,782

Total                                                                             939,538          900,611



b)    Collateral, mortgage and other restrictions on tangible fixed assets, the
amount of capital expenditures related to expenses construction of tangible
fixed assets, intangible fixed asset purchase commitments: None.


4.         The information on the Bank's rating by in the international rating
introductions :

The results of the trading performed by Moody's Investor Services and Fitch
Ratings are shown below:


            Moody's Investor Services: March 2003



             Bank Financial Strength           D+
             Long Term FX Deposits             B3


            Fitch Ratings: March 2003

            Foreign Currency Commitments
                 Long Term                     B-
                 View                    Negative

            Turkish Lira Commitments

                Long Term                      B-
                View                     Negative

            National

                Long Term                  A (tur)
                View                      Negative
            Individual Rating                 C/D
            Support Points                     4T



Additionally, Fitch Ratings have made an announcement at July 22, 2003 with
respect to the changes in its rating methodology and stated that the support
points rate for the Bank has been decreased to 5 from 4T.



V.        Footnotes And Explanations Related To Statement Of Cash Flows

1.         Cash and cash equivalents at beginning and end of periods:



The reconciliation of the components of cash and cash equivalents, accounting
policies used to determine these components, the effect of any change made in
accounting principle in the current period, the recorded amounts of the cash and
cash equivalent assets at the balance sheet and the recorded amounts in the cash
flow statement:


                                                                   
                                             Current Period         Prior Period  
                                                 30.06.2003           30.06.2002 

             Cash                                    71,584               48,384 
             Cash equivalents                       897,126            1,076,546 




Cash includes of cash in TL and cash in foreign currency, cash equivalents
include the balances of the Central Bank, banks and interbank funds sold which
mature in less than three months.



2.         Amount of cash and cash equivalents restricted for the usage of the
Bank and the shareholders by legal limitations and other reasons: None.



VI-      Footnotes And Explanations on the Risk Group of the Bank

1.             Volume of related party transactions, income and expense amounts
involved and outstanding loan and deposit balances :


a)     Current Period :


Related Parties (*)                  Investments and      Direct and indirect       Other entities included 
                                      subsidiaries      shareholders of the Bank   in related parties
                                       Cash     Non-cash     Cash       Non-cash       Cash       Non-cash
Loans and other receivables
Balance at beginning of period           205    16,368         663        7,502       11,319        2,769
Balance at end of period                 139    11,116         902        1,193           95        4,907
Interest and commission income           382        26         376            4        1,673           14



b)    Prior Period :


Related Parties (*)                 Investments and      Direct and indirect      Other entities included
                                      subsidiaries     shareholders of the Bank   in related parties
                                    Cash     Non-cash     Cash                      Cash       Non-cash
Loans and other receivables
Balance at beginning of period            90    40,448         834        1,335        5,454        6,166
Balance at end of period                 205    16,368         663        7,502       11,319        2,769
Interest and commission income         1,806       109          39          510        2,316          511
received


c.1)          Information on related party deposits balances:


Related parties (*)                Investments and      Direct and indirect     Other entities included
                                    subsidiaries      shareholders of the Bank  in related parties
Deposits                          Current     Prior     Current         Prior      Current      Prior
                                  period     period      period        period      period      period

Balance at beginning of period        6,651    10,407      202,930      66,206      15,526      13,685
Balance at end of period              4,647     6,651      165,592     202,930       1,704      15,526
Interest on deposits                    161       536        2,536       2,731         154      12,417



c.2)          Information on forward and option agreements and other similar
agreements made with related parties :


Related Parties (*)                 Investments and     Direct and indirect   Other entities included
                                     subsidiaries       shareholders of the      in related parties
                                                                Bank
                                     Current     Prior     Current     Prior     Current       Prior
                                     period     period      period    period      period      period  
                                                          
Trading transactions
Beginning of period                   58,473    60,129      48,281     25,826     27,295        17,475
End of period                         67,583    58,473      13,222     48,281     24,052        27,295
Total income/loss                      1,492       899     (2,091)      (384)         26           689
Hedging transactions purposes              -         -           -          -          -             -
Beginning of period                        -         -           -          -          -             -
End of period                              -         -           -          -          -             -

Total income/loss                      1,492       899     (2,091)      (384)         26           689



(*)       The scope of the related parties are defined in the Article 20-2 of
the "Regulation on the Establishment and Operations of Banks".


2.     Disclosures for related parties



a)     The relations of the Bank with the entities controlled by the Bank and
its related parties, regardless of whether there are any transactions or not:



The Bank enters into baking transactions with related parties. These are
commercial transactions and realized on an arms-length basis.



a)       Besides the structure of relationship, nature of the transaction,
amount and ratio to the total volume of transactions, amount of major items and
ratio to all items, pricing policies and other factors:


                                                                           % According to the Amounts at
                                                                              the Financial Statements
                                                                    Amount

Cash loans                                                           1,136                           0.13
Non-cash loans                                                      17,216                           1.83
Deposits                                                           171,943                          10.99
Forward transactions and option agreements                         104,857                          13.71



These transactions are priced in accordance with the general pricing policies of
the Bank and are in line with market rates.



b)       In the case that disclosing items separately, total of  similar items
is disclosed in order to present the total impact on financial statements :
Explained in the article b.



c)       Investments accounted for under the equity method : None.



e)       Disclosures related to purchase and sale of real estate and other
assets, trading of services, agency contracts, leasing contracts, transferring
information as a result of research and development, license contracts,
financing (loans and cash or real capital supports included), guarantees, and
management contracts :



The Bank has financial lease agreements with TEB Finansal Kiralama A.S.. As of
June 30, 2003 the total leasing obligations related to these agreements amounted
to TL 6,022. Additionally, the Bank provides agency services for TEB Sigorta
A.S. and TEB Yatirim Menkul Degerler A.S.



        Within the limits of the Banking Law, the Bank renders cash and non-cash
loans to its related parties and the ratio of these to the Bank's total cash and
non-cash loan portfolio is 1.01 %. Amounts of these loans are explained in the
note V- 1a.



        As of June 30, 2003 the Bank has no purchases and sale of real estate
and other assets, transfer of  information as a result of research and
development, license and management contracts with the related parties.



VII-         Footnotes And Explanations on Inflation Accounting



Inflation Accounting



The accompanying financial statements are prepared by applying inflation
accounting to the financial statements, which are prepared on a historical cost
basis, except for the revaluation of fixed assets in line with Turkish Tax
Legislation, in accordance with the provisions of Communique No : 14 "Accounting
Standard Related to the Preparation of Financial Statements in Hyperinflationary
Periods" related to ARR. Communique No:14 requires banks to restate their
financials in the equivalent purchasing power of Turkish Lira 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%. As of June 30, 2003 based on the
wholesale price indices announced by the State Institute of Statistics, the
cumulative three-year inflation rate in Turkey is 208%.



Communique No:14 requires that the financial statements should be restated in
the equivalent purchasing power at the balance sheet date and the financial
statements of prior year should be restated in their entirety to the measuring
unit current at the balance sheet date.



The main guidelines for inflation accounting are as follows:



Cash and monetary assets and liabilities, which maintain their nominal balances
but experience a decline in purchasing power are not restated because they are
already expressed in terms of the monetary unit current at that balance sheet
date.



Non-monetary assets and liabilities which are not carried at amounts current at
the balance sheet date and other components of shareholders' equity (except for
the revaluation surplus which is eliminated) are restated by applying the
relevant conversion factors; being the change in the general price index from
the date of acquisition to the closing date. The inflation adjusted share
capital amount has been derived by indexing each capital increase other than
bonus shares from statutory revaluation fund from the date they were
contributed. Transfers to share capital from general reserves, gain on sale of
property and investments and inappropriate profits are considered as cash
contributions and are restated from the date of contribution.



Fixed assets subject to depreciation are restated from their historical
acquisition costs after eliminating the statutory revaluation increments.
Depreciation is not separately restated in the income statement since it is
computed over restated amounts.



Non-monetary items reflected at current values are not restated since they are
already stated in the current purchasing power.



Investments and subsidiaries denominated in Turkish Lira are reflected at
restated costs by converting historical acquisition costs, excluding free shares
from revaluation fund, with the relevant conversion factors. Transfers to share
capital from general reserves, gain on sale of property and investments and
inappropriate profits are considered as cash contributions and are restated from
the date of contribution. Investments and subsidiaries denominated in foreign
currency are converted to Turkish Lira with the exchange rates prevailing and
year-end.



All items in the statements of income are restated by applying the appropriate
conversion factors.



The effect of inflation on the Bank's net monetary position is included in the
statements of income and separately disclosed as a net monetary gain or loss.
The effect of inflation accounting on prior year financial statements in
included in retained earnings and the effect of restatement is disclosed
separately under shareholders' equity.




Indices and conversion factors that are used to restate the accompanying the
financial statements as of December 31, 2002, reflecting the restatement for the
changes in the general purchasing power of the Turkish is as follows;


Dates                                                                   Index           Conversion Factors
December 31, 2002                                                      6,478.8                1.115
December 31, 2001                                                      4,951.7                1.459
December 31, 2000                                                      2,626.0                2.750
June 30, 2003                                                          7,222.2                1.000
June 30, 2002                                                          5,572.0                1.296



Restatement of balance sheet and income statement items through the use of a
general price index and relevant conversion factors does not necessarily mean
that the Bank could realize or settle the same values of assets and liabilities
as indicated in the balance sheets. Similarly, it does not necessarily mean that
the Bank could return or settle the same values of equity to its shareholders.



In accordance with Communique No :14, the Bank obtains expertise reports for its
buildings.



As of June 30, 2003 the total amount of legal reserves and general reserves are
TL 7,555 and TL 28,769, respectively, in the Bank's  statutory books of account.



Balance sheet and income statement for the period ended June 30, 2003 are
reviewed. Balance sheet as of December 31, 2002, is audited. Income statement
for the period ended June 30, 2002 is reviewed by other auditors who have ceased
operations.



Income statement items do not have seasonality. However, restatement of income
statement items were made with monthly indices.



VIII-    Explanations Related To Subsequent Events



a)     Disclosure related to subsequent events and their impact on the financial
statements as required by the related standard: There are no significant
matters.



b)    The impact of significant changes in foreign exchange rates subsequent to
the balance sheet date on the foreign currency transactions, items and on the
financial statements of the Bank : There are no significant changes.



                                  SECTION SIX



                       INDEPENDENT LIMITED REVIEW REPORT



I-             Explanations on  The Independent Limited Review Report



The unconsolidated interim financial statements of the Bank were reviewed by
Guney Serbest Muhasebeci Mali Musavirlik A.S. (An Affiliated Firm of Ernst &
Young International) and the review report dated August 12, 2003 is presented
preceding the interim financial statements.



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