With investments aimed at supporting Turkey’s economic development and outstanding production performance, OYAK has worked toward adding value to this country for 57 years. Continuing to add value to the Turkish economy and its members’ savings in 2017, OYAK recorded a 24.7% rate of return rate for member savings, significantly above the rate of inflation.
Valued members, dear employees and esteemed business partners,
Following various political and economic developments the previous year, 2017 was a time of recovery with the world economy expanding 3.1% according to World Bank figures. Despite emerging geopolitical risks in different regions, new worldwide growth trends boosted confidence in the global economy. Meanwhile, the US Federal Reserve Bank (Fed) adopted a balance sheet reduction strategy that led to steps to raise interest rates. As a result, the US Dollar is expected to continue gaining in value compared to other foreign currencies in the coming period.
Turkey’s Economy Continued to Expand…
In 2017, the Turkish economy faced economic pressure on two fronts. Foreign capital inflows to emerging markets significantly slowed with the Fed’s decision to hike interest rates while the appreciation of the US Dollar against TRY negatively impacted the Turkish economy. In addition, ongoing geopolitical risks in neighboring countries led to more problems around various issues, such as refugee movements and border security. Despite these significant political and economic challenges, the Turkish economy performed better in 2017 compared to the previous year. In fact, Turkey outperformed all OECD countries by expanding 11.3% in third quarter 2017. The Turkish economy wound up completing the year with overall growth of 7.4%. At OYAK, we firmly believe in the strength and resilience of Turkey’s economy. We think the domestic economy will continue to expand and improve with the same robust performance in 2018.
Interest Payments Outpacing the Inflation Rate for 23 Years
OYAK has an optimistic outlook for the future with its solid financial structure and balanced portfolio strategy. The Company operates with a strong belief in the future of Turkey and its members. Aiming to boost its efficiency, OYAK effected a change in management 2016 and underwent an organizational restructuring in 2017. Thanks to new housing development projects and industry investments in varied locations around Turkey, OYAK once again posted a real return that outpaced inflation for its members in 2017 – as has been the case over the last 23 years.
OYAK is an example of a successful occupational pension fund based on mandatory savings, with a total of 322,412 members – 78.3% (252,299) still on duty and 21.7% (70,113) part of the Pension Benefit System. The Group’s nearly 90 companies operating in Turkey and 20 other countries generate added value and employment, significantly contributing to the growth of Turkey’s economy. As of end-2017, OYAK reported consolidated net assets of USD 19.6 billion, net assets (member savings) of USD 7.9 billion and consolidated revenue of USD 10.2 billion. Distributable resources generated by OYAK totaled USD 1.6 billion, while the rate of return on member savings was 24.7%.
Compulsory (legal) benefits paid to OYAK members totaled USD 838.5 million, up 32.4%. Retirement benefit payments accounted for the biggest share in compulsory (legal) benefit payments at 67.7%. Meanwhile, 9,955 members who became entitled to receive retirement benefits and exited the system were paid a total of USD 567.9 billion. In addition to compulsory (legal) benefits, OYAK supports its membership by offering social services – such as personal loans and home financing – to meet their needs. In 2017, social service payments made by OYAK totaled USD 195.5 million. Committed to the corporate target of enabling members to purchase real estate, OYAK has helped more than 100 thousand members become homeowners by offering them mortgage financing.
Initiatives to Move Forward into the Future
In 2017, OYAK continued to develop real estate projects for its members. Residential tract investments were undertaken in Ankara’s Balıkuyumcu, Izmir’s Urla and Yalova’s Çiftlikköy. At the same time, the Göksupark Project in Ankara’s Eryaman district, consisting of 1,876 housing units, began to be implemented in 2017.
We Will Continue Adding Value to Our Members’ Savings…
Offering a unique, successful occupational pension scheme based on mandatory savings in Turkey, OYAK looks ahead to 2018. We will reliably continue working for the Turkish economy and our members in the coming year. OYAK plans to keep producing and contributing to the country’s economy, with its expertise, know-how and experience of more than half a century, while maintaining its deep trust in Turkey’s economic strength and human capital.
In light of a deep-rooted corporate culture spanning 57 years, OYAK will also continue offering sustainable rates of return to our members’ savings while generating added value for Turkey’s economy in the coming period.
On behalf of the OYAK Board of Director’s and myself, I would like to express my sincerest gratitude to, first and foremost, our members, who have always supported OYAK and helped us in reaching our current vaunted position; all our honorable board members; our managers and employees for their selfless efforts; and our esteemed business partners.
(Ret.) Major General Chairman of the Board of Directors