1

Investor PresentationBRSA Bank Only Results

1st Half, 2006August,2006

2

History

Established in April 1954 under the special law “Türkiye Vakıflar Bankasi Türk Anonim OrtaklığıKanunu” to manage cash derived from revenues and expenditures of charitable organisationsset up during the Ottoman Empire period, conducting banking activities with branch offices in Ankara, Istanbul and IzmirIn 1957, made its first venture towards broadening its sevices by establishing Güneş InsuranceCompanyOver the next 20 years continued to expand its geographic presence in Turkey reaching 206 branches by 1977Since the early 1990s, Vakifbank has increased the scope of its retail banking and diversified its loan portfolio by including equipment financing, enterprise loans, auto loans, mortgage loans, and credit cards. In 2000, Vakifbank began offering internet banking servicesVakifbank is now a full service commercial and retail bank headquartered in Ankara, providing retail, commercial and investment banking services through a network of 306 branches, 116satellite branches and five mobile branches, covering 81 Turkish citiesInternationally, Vakifbank has subsidiaries in Austria (which operates a branch in Frankfurt anda branch in Köln) and the Turkish Republic of Northern Cyprus and two branches in New York and Bahrain.

3

52 years of evolving strategy and product innovation

Established in Ankara

Opens 10 branches

Reaches 206 branches

Reaches 269 branches

Focus on retail lendingInitiates overdraft facilities (Bankomat-724) and telephone bankingPOS project

Overhaul and modernisation of management structure

New York branch opens

Begins to issue Visa and MasterCard

Begins to grant housing loans with maturities up to 20 years

Expansion of retail savings products—mutual funds or foreign currency products

Syndicated loans of US$850m

Completion of very successfulIPO

Fitch and Moody’s upgrade credit rating

Company-wide restructuring programme to boost efficiency

US$750m diversified payment rights securitisation

19541956

19771984

19921995

1998

20032004

2005

2000

Internet banking launched

Upgrade of IT

Fitch and Moody’supgrade creditrating

Fitch upgrades credit rating

4

Following successful IPO in November 2005, c. 25% of Vakifbank of is now listed

Main Shareholders General Directorate of Foundations The GDF manages foundations owning 58.45% of the shares in the Bank (43.0% in the form of Class A shares and 15.45% in the form of Class B shares). The GDF was established in 1924 to administer and regulate existing and future Turkish charitable foundations as a state entity directly reporting to the Prime Minister. Non-Affiliated Foundations The non-affiliated foundations are independent foundations with separate boards of trustees. They currently hold Class B shares, constituting 0.19% of the Bank’s equity. Vakifbank Pension Fund The Vakifbank Pension Fund has a 16.10% stake in the Bank’s capital as a Class C shareholder. The Bank’s employees contribute to the Vakifbank Pension Fund as opposed to the mandatory social security coverage provided by the state Social Insurance Institution. Other Shareholders The other shareholders consist of individual or legal entities that together own 0.08% of the Bank’s equity as Class C Shareholders. Free Float Public domestic and international shareholders.

Ownership structure

General Directorate

of Foundations58,45%

VakifBankEmployee

Pension fund16,10%

Other0,27%

Free float25,18%

5

Vakıfbank: An Overview of 1H2006 results & financial performance trends

Total Assets 33,828.3

Gross Loans 17,163.9

Securities 10,204.8

Total Deposits 22,633.2

Shareholders’ Equity 3,848.5

Net Interest Income 781.5

Net Profit 423.2

Branch Network 308

Customer Number Over 6 million

B/S mixIncreased share of loans in total assetsDecreasing securities portfolioIncreased funding from retail deposits

B/S growth

Strong asset growth driven primarily by rapid loan expansion (retail and SME loans)

Asset quality

Decreasing level of NPLs, stringent credit review/scoring systems100% NPL coverage

Capitalisation

Strong capitalisation levels, allowing for future growth

Revenue mix

Increased share of interest income from loans, rather than securitiesFocus on generating fee & commission income

Profitability Well managed cost base and efficient network

6

Financial performance 1st Half 2006Balance sheet highlights

Continued rapid expansion of credit portfolio supported by growth in deposits and fundsborrowed.

• Gross loan portfolio increased by 75.4% to YTL17.2bn YoY

• Customer deposits grew by 17.1% to YTL22.6bn YoY

• Significant growth in higher yielding YTL products: YTL loans grew by 66.2%; YTL deposits registered a 8.8% growth YoY

• Funds borrowed grew by 90.3% to YTL4.9bn YoY

Share of loans in total assets increased to 47.6% compared to 32.5% in 1H2005, while the share of securities portfolio contracted to 30.2% from 35.6% in 1H2005

Loan to deposit ratio reached 71.2% in 1st H 2006 compared to 44.0% in 1st H 2005

Prudent provisioning and improving loan quality: NPLs down to 6.1% of gross loan portfolio in 1st Half 2006 and are fully provisioned

During the fluctuation in 2Q06, long in FX position and has no P&L effect.98% of YTL securities are carried under available-for-sale portfolio, profits and losses beingbooked under equity where the loss was YTL 421 mn.

7

VakifBank is a market leader, particularly in retail and SME finance

Total market share (%) (31.03.2006)

9.0%

29.0%

9.9%

4.9%

8.1% 8.3%

3.8%

15.0%12.3%

4.9%

17.8%

6.5%

TotalDeposits

Publicsalary

accounts*

YTLdeposits

Mutualfunds**

Total Loans Retailloans***

Credit Card

CommercialInstallment

Loans

ATMs Branches Debit Card #

Credit Card #

Deposits / Funding Credits Distribution

Source: Turkish Banks Association reports under BRSA standards as of March 31 2006, Capital Markets Board* VakıfBank estimates** Data based on CMB as of June 30, 2006*** Includes home, auto and other. Credit card loans, overdrafts, and State Mass Housing Authority (TOKI) loans not included

8

Diversification of asset mix towards interest-earning assets

Breakdown of assets (YTLbn) Interest earning assets (YTLbn)

1.5 2.3 2.54.7 4.8 2.6

9.810.5

10.2

8.9

11.9 16.11.0

1.00.91.91.5

1.4

1H05 2005 1H06

Cash and central bank Interbank Securities LoansFixed assets Other

Strong growth in assets driven by rapid expansion of loan portfolioContinued diversification away from securities–from 35.9% of total assets in 1H 2005 to 30.2% in 1H 2006

Inte

rest

ear

ning

asse

ts: 8

5.5%

Inte

rest

ear

ning

asse

ts: 8

3.1%

23.6%

4.7 4.8 2.6

9.8 10.510.2

8.911.9 16.1

1H05 2005 1H06

Interbank Securities Loans

23.5%

23.4

27.2

28.9

33.8

27.3

7.4%

7.7%

30.2%

47.6%

2.7%4.4%

5.5%17.2%

35.6%

32.5%

3.7%5.2%

9

Rapid expansion of loan portfolio continued…

2,426 2,533 2,966 3,253 4,2385,526

6,5377,524

7,9499,651

10,312

11,638

8,9639,787

10,915

12,904

14,549

17,164

Q1 Q2 Q3 Q4 Q1 Q2

FX YTL

Gross loans (YTLmm) Comments

Loan portfolio registered a CAGR of 45.7% increasein 1H2006 from 1Q2005

After a slowdown in the first three quarters of 2005 due to IPO preparations, gross loan growth resumed with total portfolio increasing by 33.0% in 1H2006

YTL loans grew by 54.7% while FX-denominated loans increased by 118.4% from 1H2005 to1H2006.

2005 2006

CAGR: 45.7%

+33.0%

32.2%

67.8%

10

Rapid expansion of loan portfolio continued…

Strong growth on loan to deposit ratio with focus on profitability.

27.5% 33.3% 36.8%47.6%

2003 2004 2005 1H2006

Loan/Asset (%)Loan/Deposit (%)

37.1% 45.9% 51.9%71.2%

2003 2004 2005 1H2006

11

…with strong focus on retail and SME lending…

Breakdown of loans by sector Comments

Good position in traditionally strong regions of central and eastern Turkey • Selective expansion in

Istanbul region To strengthen its retail franchise, VakifBankintroduced 637 SME portfolio managers, 388 retail portfolio managers and 477 marketing associates within 1H2006As a result of these initiatives, cross-selling ratio for SME portfolio managers is 2.09x and for retail portfoliomanagers is 2.03x in June2006

YE2005 1H2006

Overdraft 2.7%Credit card

3.9%

Mortgages 11.6%

Auto 1.6%

Other11.3%

SME19.6%

Commercial 49.3%

Overdraft 3.6%Credit card

5.8%

Mortgages 8.4%

Auto 2.2%

Other10.6%

SME21.5%

Commercial 47.9%

12

…and in particular on high margin products

3,8455,698

7,9381,966

2,554

3,149

627

994

1,870

678

694

638

408

429

439

333

262

256

1,043

1,274

1,819

1H05 2005 1H06

Commercial SME Mortgages *Credit cards Overdraft AutoOther

81.0%

Retail, SME and COMM. loans (YTLmm) Comments

High yields in retail & SME lending: credit card 36%, commercial installment loans22%, retail loans 18%For the 1st half 2006; averageyield on YTL loans is 19.78%, average yield on FX loans is 7.21% where average cost on YTL deposits is 13.33% andaverage cost on FX deposits3.55%Loans grew by 35.3 in 1H2006 comparing to the end of 2005. driven by commercial loansgrowth of 39.3%, SME loansgrowth of 23.3% and housingloans growth of 88.1%.

16.112

11.905

8.900

*:Includes Housing Loans+TOKI. (YTLmm)

1H2005: 485 Housing Loans+142 TOKI

2005:860 Housing Loans+134 TOKI

1H2006: 1.741 Housing Loans+129 TOKI

13

Steady and significant improvement in asset quality

9.1% 7.7% 6.1%

1H05 2005 1H06

Gross NPLs as % of gross loans Comments

Despite rapid expansion of the loan portfolio, NPLscontinued to decrease reaching 6.1% of total gross loan portfolio in 1H2006 compared to 9.1% in 1H2005Since 2003, loan loss provisions cover 100% of NPLs

-3.0 p.p.

Gross NPLs and provisions (YTLmm)

885,762998,927 1,051,767

885,762998,927 1,051,767

1H05 2005 1H06

Gross NPLs Provisions

14

Securities portfolio evolution

Securities 1H 2006 (YTLmm)

1,313 879 650

7,867 9,275 9,507

577 361 47

1H05 2005 1H06

Trading securities portfolio Portfolio available for sale Securities held to maturity

9,757 10,515

5.9%

80.6%

13.5%

3.4%

88.2%

8,4 %

Security portfolio breakdown by interest 1H 2006

10,205

0.5 %

93.2%

6,3%

Comments

The securities portfolio increased by 5% in YoYbut its share in total assets continued to decline—from 35.6% in 1H05 to 30.2% in 1H06

Portfolio of securities available for sale stood at 93.2% of total securities portfolio in 1H06 compared to 80.6% in 1H05

For the 1st half 2006; average yield on YTL security portfolio is 16.3% and average yield on FX security portfolio is 7.7%

YTL FX

Fixed; 61.4%

Variable; 38.6% Fixed;

44.9%Variable; 55.1%

15

Strong deposit growth is supporting the expansion of credit portfolio

19.322.3 22.5

2.8

3.75.1

1.6

0.7

1.0

0.5

0.6

0.4

0.9

0.8

1.0

25.1

28.1

30.0

1H05 2005 1H06

Customer deposits FundsInterbank ProvisionsOther

Breakdown of liabilities (YTLbn) Comments

Total liabilities grew by 19.5% in 1H2006 comparingto 1H2005, driven by continued expansion of deposit base and increase in external fundingCustomer deposits posted a 16.6% growth in 1H2006 and accounted for 75.0% of total liabilities

19.5%

19.3 22.3 22.5

8.9 11.916.1

1H05 2005 1H06

Customer deposits Loans

Loans and customer deposits (YTLbn)

46.1% 53.3% 71.6%

Loans/Deposits

75.0%

3.3%1.4%3.3%

17.0%3.6%2.0%6.4%

11.2%

76.8%

2.8%2.1%2.5%

13.2%

79.4%

Note: Customer deposits exclude interbank depositsTotal liabilities excluding equity

16

Deposit base composition and evolution

Customer deposit breakdown by type and currency Comments

Ensured strong profitability bymaintaining liquidity levels andcontrolling interest expensesthrough slightly increasing of customer deposits.Despite the FX rate increase in 2Q06, YTL deposit base is almost flat.

Deposit composition by type

1H2005Amount % Amount % %Amount

2005 1H2006

¹ Represents deposits taken from retail customers² Represents deposits taken from government related corporates, SMEs and other entities which are not individuals³ Totals do not include Interbank deposits

(YTLmm)

Total: YTL19.3bn Total: YTL22.6bn

1H2005 1Q2006

YTL-demand14.2%

YTL-term56.7%FX-demand

5.0%

FX-term24.1%

YTL-demand12.8%

YTL-term56.0%

FX-demand8.5%

FX-term22.8%

Saving deposits¹ 2,745 14.2% 3,664 16.4% 4,447 19.7%Demand 456 2.4% 548 2.4% 725 3.2%Term 2,289 11.9% 3,116 14.0% 3,722 16.5%Public and Commercial² 10,921 56.6% 12,262 54.9% 11,070 49.0%Demand 2,279 11.8% 2,282 10.2% 2,160 9.6%Term 8,642 44.8% 9,980 44.7% 8,910 39.5%Foreign currency 5,627 29.2% 6,398 28.7% 7,067 31.3%Demand 968 5.0% 778 3.5% 1,922 8.5%Term 4,659 24.1% 5,620 25.2% 5,145 22.8%

Total³ 19,293 100.0% 22,324 100.0% 22,584 100.0%

17

State deposits remained almost unchanged

State deposits (YTLmm) Comments

2,992

4,853

7,2847,307

20.7%

32.2%31.8%

27.6%

2003 2004 2005 1H06

State Deposits Share of state depositsVakifBank did not experience a significant withdrawal of state deposits after IPOMuch less pressure feltafter two largest depositdepartures in Q3 2005 andQ1 2006

18

Strengthened capitalisation to support rapid growth

Paid in share capital 1,000.0 1,279.0 1,279.0 Adjustment to paid-in capital 605.8 605.8 605.8Share premium 0 1,172.3 1,172.1

Reserves 326.9 326.9 421.8

Profit 208.4 535.2 423.2

Prior year income/loss 0 0 0

Total core capital 2,141.1 3,919.2 3,901.9Supplementary capital 569.9 540.2 167.9

Total capital 2,711.0 4,459.4 4,069.8Deductions (260.4) (403.0) (381.4)

Total shareholders’ equity 2,450.6 4,056.4 3,688.4

RWA 11,823.9 14,498.5 18,224.5Market risk 1,509.1 1,474.9 1,557.6

Capital adequacy ratios 18.4% 25.4% 18.6%

Capital position Comments

The bank successfully raised YTL1,45mm through an IPO in November 2005

Subordinated debt of YTL213mm was paid back to SDIF

In General Assembly, the bank has decidedto pay YTL 399.4mm tothe shareholders andYTL 100.5mm waspaid to D Groupshareholders (freefloat) in 2Q06.

Despite the turmoil in 2Q06, Vakifbank’sCAR is still one of thehighest in TurkishBanking Sector.

1H2005 2005YE 1H2006(YTLmm)

19

Net banking income posted healthy growth in 1H2006

Net banking income grew by a CAGR of 9.7% overthe last 1 year, with a growth rate of 10.1% in 1H2006 comparing to 1H2005Continuous diversification from securities to more client-driven business

(YTLmm) 2004 2005 1H05 1H06 Net interest income 1,185 1,318 693 782

Net F&C income 250 294 145 155

Net trading income 117 176 82 (12)

Dividend income 4 3 3 6

Other operating income 246 129 81 177

Total operating income 1,801 1,919 1,004 1,108

Total operating expenses (-)

722 732 361 402

Operating profit 1,079 1,188 643 706

Provisions (-) 344 434 329 136

Tax provisions (-) 143 226 109 157

Income from investments and associates

48 7 3 9

Net monetary gain/loss (16) 0 0 0

Net income 624 535 208 423

693 782

14515582

-12

81177

1H05 1H06

Net interest income Net F&C income Net trading income Other

Net banking income composition (YTLmm)

1,0011,102

CAGR: 9.7%

20

Net fee and commission income continues to grow

Non-interest income composition (YTLmm) Net F&C income % of operating income

26.6% 29.4%

-3.6%

48.4% 49.1%

48.4%

26.3% 21.5%

48.0%

1H05 2005 1H06

Trading Income Net F&C Other

14.4% 15.3% 14.0%

1H05 2005 1H06

308 599 320

Net F&C income up by 7.3% driven by increase in cash loansTrading income is -12 mm YTL due to foreign exchange losses• Trading account securities gains : 44 mm YTL• Foreign exchange losses : -56 mm YTL

Other income is increased by FX Denominated Loans and Securities FX rate increase gains.• FX Denominated Loans : 49 mm YTL• FX Denominated Securities : 40 mm YTL

21

Increasing interest income from loan activities

Net interest income up by 12.8% comparingto 1H2005, despite declining margins• From 1st quarter 2006 net interest

income grew by 3.2% in 2nd quarter2006

• increasing income from lending activityFurther move toward higher margin loans in YTL

Net interest income(YTLmm)

397352 341

309

385

315

1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006

Yield on loans and deposits (%)Interest income (YTLmm)

27.0%

19.8%

6.2% 7.2%

13.8% 13.3%

2.9% 3.6%

1H05 1H06YTL LOANS FX LOANS YTL DEPOSITS FX DEPOSIT

38.2% 36.6% 32.5%

52.6% 52.3% 54.7%

9.2% 11.1% 12.8%

1H05 2005 1H06

Securities Loans Money Market&Banks

1,734 3,591 2,082

22

Operating expenses under control

Virtually no growth in costs, despite going through restructuring at branch andheadquarter level.

2.8% 2.6% 2.4%

1H05 2005 1H06

Operating expenses/average assets (%)Other expenses composition (YTLmm)

43.6% 44.3% 43.1%

8.3% 8.1% 7.8%

48.1% 47.5% 49.1%

1H05 2005 1H06Personnel Expenses Amortisation Other Expenses

361 732 402

23

Expansion on NIM and ROE, decrease on C/I

NIM (%) Despite margin pressure NIM is almost flatcompared to 1Q06 in 2Q06Further growth in loans/assets expected to provide more support to Vakifbank’s NIM

Maintained ROE above stated target of 20%

7.10

6.36

5.274.97

5.51 5.52

1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006

ROE (%) Cost/Income (%)

33.3

38.6 37.8

42.7

33.6

38.1

1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006

33.2

4.2

25.6

15.5

20.9 22.1

1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006

24

Performance in line with peer group in 1H2006

5.205.46 5.36

5.57

Isbank Akbank Garanti Vakifbank

31.8

41.2

54.952.3

Isbank Akbank Garanti Vakifbank

NIM (%)

34.33 35.00

43.06

35.95

Isbank Akbank Garanti Vakifbank

Net Profit/Number of Branches (thousandYTL)

Cost/Income (%)

846

1,371

1,108

1,374

Isbank Akbank Garanti Vakifbank

Loans/Number of Branches (mmYTL)

25

Balance Sheet Details for 1H2006: Assets

(Thousand YTL) 2005 1H2006 Growth %

Cash&Balances with Central Bank 1,655,463 1,672,178

1,843,164

747,000

650,264

9,507,210

47,374

16,112,127

573,824

874,986

1,800,158

33,828,285

Banks&Other FI 2,125,899

1.0

(13.3)

(71.8)

(26.1)

2.5

(86.9)

35.3

2.4

(13.1)

(8.4)

Money Market Securities 2,649,000

Trading Securities 879,405

Available for Sale Portfolio 9,275,282

Held to Maturity Securities 360,767

Loans (net) 11,905,056

Subsidiaries&Associates 560,606

Premises&Equipment 1,006,918

Other Assets 1,964,404

Total Assets 32,382,800 4.5

26

Balance Sheet Details for 1H2006: Liabilities

(Thousand YTL) 2005 1H2006 Growth %

Deposits 22,945,691 22,633,191

965,606

4,940,434

146,642

58,051

398,148

3,848,498

837,715

Total Liability 32,382,800 33,828,285 4.5

Interbank Money Market 108,046

(1.4)

793.7

40.6

(3.3)

29.8

(31.9)

(9.7)

Funds Borrowed 3,512,824

Funds 151,597

Taxes and Dues Payable 44,739

Provisions 584,636

Shareholder’s Equity 4,261,408

Other Liability 773,859 8.3

27

P&L for 1st H 2006

(Million YTL) 1H2005 1H2006 Growth %

Net Interest Income 693,092 781,520

155,496

(12,239)

177,388

1,108,541

(401,863)

(136,252)

(156,569)

Net Profit 208,376 423,241 103.1

Net F&C Income 144,907

12.8

7.3

(114.9)

120.2

10.4

11.3

(58.6)

Net Trading Income 82,247

Other Operating Income 80,553

Total Operating Income 1,004,171

Total Operating Expenses (360,968)

Provisions (328,961)

Tax Provisions (108,278) 44.6

28

Subsidiaries and affiliates

Türkiye Vakıflar BankasiT.A.O

Financial Subsidiaries Non-Financial Subsidiaries

Vakıf Yatırım Menkul Degerler A.Ş 99%

Vakifbank International A.G 90%

World Vakıf Off Shore Banking Ltd. 82%

Vakıf Finans Factoring Hizmetleri A.Ş 78%

Vakıf Deniz Finansal Kiralama A.Ş 69%

Vakıf Finansal Kiralama A.Ş 59%

Vakıf Emeklilik A.Ş 54%

Vakıf Girisim Sermayesi Yatırım Ortaklığı A.Ş 46%

Gunes Sigorta A.Ş 35%

Vakıf Gayrimenkul Yatırım Ortaklığı A.Ş 28%

Kıbrıs Vakıflar Bankası Ltd. 15%

Vakıf Menkul Kıymetler Yatırım Ortaklığı A.Ş 12%

Vakıf Sistem Paz.Yaz.Ser.Tic San A.Ş 73%

Vakıf Enerji ve Madencilik A.Ş 66%

Taksim Otelcilik A.Ş 51%

Ataköy Mağazacılık Ticaret A.Ş. 46%

İşkur İşçi İşadamı Kimya Kur. A.Ş. 25%

Vakıf Gayrimenkul Ekspertiz ve Deg. A.Ş 20%

Orta Dogu Yatırım Hizmetleri A.Ş 9%

29

THANK YOU

investor.relations@vakifbank.com.tr+90-212-3167120+90-212-3167121