Regarding $400mn 7.85% Subordinated Notes due 2023

Disclosure Regarding $400,000,000 of 7.85% Subordinated Notes due 2023 (the "Notes")

The Banking Regulation and Supervision Agency of the Republic of Turkey (the "BRSA") recently published several amendments to its regulations and communiqués in accordance with the Basel Committee's Regulatory Consistency Assessment Programme, which is conducted by the Bank for International Settlements and reviews Turkey's compliance level with Basel regulations. These amendments, published in the Official Gazette dated 20 January 2016 and numbered 29599, entered into force on 31 March 2016.

One of these amendments introduced certain changes to the limitations to the items that are included in the capital calculations of banks that have issued Tier 2 instruments prior to 1 January 2014. According to these amendments, Tier 2 instruments that were issued after 1 January 2013 will be disqualified unless they satisfy all of the new conditions. As a result of these amendments to the BRSA's regulations and communiqués, the Notes, which were issued by the bank in December 2013, ceased to be eligible for inclusion in Tier 2 calculations of the bank's capital from 31 March 2016.

The Board of Directors of the bank has, accordingly, authorized the Head Office to carry out the work and to make the applications to the relevant authorities for the notes to become compliant with the requirements of Basel III and hence be eligible for inclusion as Tier II capital within the framework of the related regulation.