Policy and Approach

Yapı Kredi stands firmly against all kinds of bribery and corruption and is determined to ensure compliance with relevant laws, regulations and principles; to this end, Yapı Kredi issued its Bribery and Anti - Corruption Policy. The policy has been approved by the Board of Directors, and was revised and enhanced in 2015.

Yapı Kredi is keen on operating at the highest standards of integrity and consistency. For this purpose, Yapı Kredi issued its Code of Ethics and Business Conduct, approved by the Board of Directors. Yapı Kredi has embraced the ten principles of the United Nations Global Compact, which require companies to establish ethical practices at higher standards and shape their operations in line with these standards. Yapı Kredi is considered a signatory to the United Nations Global Compact (UNGC), since its main shareholders Koç Holding and UniCredit are signatories of the UNGC, and fulfill its ensuing responsibilities accordingly.

Communication

Bribery and Anti - Corruption Policy, and Code of Ethics and Business Conduct have been shared with all Yapı Kredi (the Bank and its Subsidiaries) employees and managers, and are instantly and easily accessible via internal communication channels (intranet and internal announcements). Furthermore, in order to broaden employee awareness on the issue, employees are reminded of the rules of conduct on a monthly basis. On the other hand, the said policy documents are published on Yapı Kredi web site (in English and Turkish), and thus shared with all business partners and stakeholders.

All employees state in writ their acceptance of and commitment to the Code of Ethics and Business Conduct, including newly recruited personnel. Furthermore, the Bribery and Anti - Corruption Policy has been added to the group of documents shared with new employees during the recruitment process, to ensure that they are fully aware of anti-bribery and corruption issues.

Training

All Yapı Kredi employees and managers receive regularly in-class training or distance learning programs with regards to the Bribery and Anti - Corruption Policy, and Code of Ethics and Business Conduct. The completion of these training programs is mandatory for employees and managers, where they need to pass exams to be considered to have completed the program successfully.

Supply Chain

Yapı Kredi ensures that suppliers' employees watch the training videos on bribery and anti -corruption. Meanwhile, subcontractor firms' employees who serve in Yapı Kredi facilities are expected to complete an obligatory distance learning program on fighting bribery and corruption.

As part of its Anti-Corruption Program, Yapı Kredi demands its suppliers to operate in compliance with Yapı Kredi's anti-corruption policies, and ensure that their employees embrace the principles embodied in these policies and shape their activities accordingly. To this end, contracts signed with suppliers include clauses on anti-corruption efforts. Yapı Kredi has also issued its “Principles on Fighting Corruption in the Acquisition Process of Intermediaries, Suppliers and Contractors”. Accordingly, the concerned departments perform a due-diligence prior to signing a contract with these companies and supplier audits with regards to bribery aand anti - corruption has been iniated as of 2015.

In 2015, no case of bribery or corruption involving intermediaries, suppliers and subcontractors was reported, and no contract was cancelled due to such a concern.

In all of its operations, Yapı Kredi keeps track of blacklisted individuals and companies through information obtained from international data providers and social media resources, in order to comply with domestic/international legislation and the Bank's rules. Based on the information from these resources, Yapı Kredi identifies those intermediaries, suppliers, subcontractors and customers which are known to, or suspected to give bribes. In case suppliers or customers are added to the blacklist, Yapı Kredi starts the due process for cancelling its contracts with these companies.

Responsibility and Reporting

The responsibility with regards to internal management of Bribery and Anti - Corruption Policy, and Code of Ethics and Business Conduct is conducted by Compliance and Internal Control Management.

Compliance and Internal Control Management is in charge of regulations and internal control activities concerning banking and capital markets legislation, foreign exchange regimes, anti-money laundering efforts, internal and external fraud detection systems, data protection, Bribery and Anti - Corruption Policy, conflicts of interest, Code of Ethics and Business Conduct, as well as Turkish Commercial Code.

The Bank has set up robust systems and structures in line with the ongoing efforts of its "Internal Audit", "Risk Management” and "Compliance and Internal Control” departments as well as international best practices. Reporting directly to the Audit Committee under the umbrella of the Board of Directors, these departments monitor and report risks in order to ensure that the Bank's operations are in accordance with relevant laws and legislation, corporate policies and procedures, Code of Ethics and Business Conduct, Bribery and Anti - Corruption Policy, and the Policy on Prevention of Laundering Proceeds of Crime and Financing of Terrorism; and also perform control and audit activities for this purpose, providing (monthly, quarterly and annual) reports to the Audit Committee and Board of Directors.

Audit Committee is responsible for assessing the company's ethical climate, controlling ethical compliance in existing processes, and submitting independent annual reports to the Board of Directors.

Yapı Kredi provides its employees communication channels where they can submit their questions on issues of ethics, corruption and bribery, and confidentially and anonymously report on those who breach the rules in vigor or suspicious cases. In order to broaden their awareness, employees are periodically reminded of Bribery and Anti - Corruption Policy, and Code of Ethics and Business Conduct. Further information on reporting channels for ethics, bribery and corruption-related issues can be found in the Yapı Kredi Statement on Whistleblowing, which is accessible here.

In addition to its efforts for compliance with the anti-corruption laws and legislation in force, Yapı Kredi has established an Anti-Corruption Program. In this context, Yapı Kredi has established its risk assessment methodology in order to ensure the efficient functioning of an analysis, assessment and decision-making mechanism with regards to the main risk areas in anti-corruption issues.

Within the scope of the risk assessment methodology,

• A periodically upgraded risk assessment is performed to create a comprehensive picture as to which aspects of the business could be most prone to corruption and bribery. The results of the risk assessment are reviewed by the Audit Committee,
• Within the scope of the anti-corruption program, employees are trained on relevant legal requirements andawareness raising activities are conducted,
• First and second degree anti-corruption controls are put into practice,
• Secure and reliable information channels are established to allow employees to report on these issues,
• Reports on the efficiency of the anti-corruption program aresubmitted monthly, quarterly and annually to the Audit Committee,
• Information is provided as regards the necessity to register all transactions accurately in the official ledgers and records, as well as the obligation to avoid any unexplained or unregistered accounts, funds or assets and transactions in this scope, under any condition.

Reports on issues falling under the scope of the anti-corruption program and on acts of bribery and corruption are submitted to the Audit Committee on a quarterly basis and to the Head of Anti-Corruption on a monthly basis.

Yapı Kredi has identified the risky areas within the scope of its efforts to determine and mitigate corruption and bribery. Joint efforts were carried out with the relevant departments as regards the areas which could be most prone to corruption and bribery. The purpose of the risk assessment is to identify the weight of the main risk areas in total corruption risk, to perform second degree controls, to establish transparent processes to this end, and to determine other bribery and corruption measures. The findings of the efforts carried out with the relevant departments have been submitted to the Audit Committee and additional training programs have been planned.

In 2015, no reports on bribery or corruption were received through the communication channels set up for bribery and anti - corruption purposes; likewise, no accusations were made through external channels on bribery or corruption-related issues.

Dialogue with Stakeholders

In line with its principles of transparency and accountability, Yapı Kredi is intent on going the extra mile by establishing practices to prevent risky activities related to bribery and corruption. In this respect, Yapı Kredi has become a member of Association for Ethics and Reputation (TEİD). With its innovative efforts and initiatives in ethics, bribery and corruption-related issues, TEİD has provided support and guidance to Yapı Kredi.

Accordingly, Yapı Kredi cooperates with TEİD of which it is a member, with a view to identifying bribery and corruption risks which constitute a key element affecting sustainability and corporate governance performance, as well as to making improvements to and receiving opinions on the Bribery and Anti - Corruption Policy and relevant reporting mechanisms. Yapı Kredi’s activities within this scope have been reviewed by TEİD, comments and opinions were received, necessary measures were taken in line with these comments and opinions, and the stakeholder dialogue process was duly completed.

Yapı Kredi attended the conference “Best Practices from Turkey and the World: Anti-Corruption Efforts in the Private Sector” organized by the non-governmental organization Transparency International, and shared there its best practices in the field of bribery and anti - corruption.

On the other hand, Yapı Kredi receives questions and reports on corruption, bribery and general audit-related issues through the Audit Line set up in 2006, Ethical Reporting Line and Anti-Corruption Report Line set up in 2009, as well as relevant e-mail channels.

For further information, Yapı Kredi's Bribery and Anti - Corruption Policy, Code of Ethics and Business Conduct, as well as Statement on Whistleblowing are accessible at:

https://www.yapikredi.com.tr/en/investor-relations/corporate-governance/