Akbank T.A.S. (AKBNK) Earnings Call Transcript & Summary

Hello, everyone. I'm Bilgi Aslankurt from Akbank's IR and Sustainability team. Today, we are here to discuss diversity and inclusion at Akbank with our guest, Pinar Anapa, our EVP for People and Culture. There is also an exciting new development, which I will let Pinar Anapa to announce soon. So as most of you know, we have launched our new ESG strategy at the beginning of this year and defined 4 key focus areas. These are Sustainable Finance, Ecosystems Management, Climate Change, and last but not least, People and Community. And one of the key pillars of our People and Community strategy is diversity and inclusion.

So to start off, Pinar, I'd like to ask, why do you think it's important to have a diverse and inclusive workplace?

Thank you, Bilgi. Firstly, I can say that we are fully aware that promoting diversity and creating an inclusive workplace is imperative for driving meaningful positive change in society. But it's also good for our business. A more diverse and inclusive workforce enables companies to tap into a larger talent pool and benefit from a more diverse set of talent, skills, unique perspectives and ideas. It's been proven that companies who value diversity and shape their strategy accordingly perform better than other companies who do not. For example, a McKinsey study of more than 1,000 companies in 15 countries found that organizations in the top quartile of gender diversity were more likely to outperform on profitability, 25% more likely for gender diverse executive teams. So there seems to be a direct relationship between diversity of teams and financial performance. This requires a systematic and well adopted culture throughout the company.

That's very true. And this approach is fully in line with our vision, which is to be the leading bank that drives Turkey into the future. So could you talk about Akbank's plans to promote a more diverse and inclusive culture?

We currently have a woman workforce of 53% throughout the company. This ratio is even higher, 56% in revenue-producing growth. In the upper management, the women workforce ratio is 40%. We see this as a development area to focus on. We are currently working to implement a robust diversity and inclusion plan by focusing gender equality, empowering younger generations and nurturing ECG culture both at organizational and individual level. Our strategic plan is not a set of activities. It is composed of continuous improvement strategies. I mean, we want to be sure to embed our DNA culture into each of our employee value proposition pillars, starting with assessment and hiring process. We will soon announce our strategy publicly and include it in job postings to accelerate our perspective on this matter to all Akbank candidates. It's not only going to be committed to the stakeholders, but also an attraction factor in terms of creating a responsible employee brand. I can say that we closely track our hiring numbers in terms of vulnerable groups, focusing specifically on women, disabled and young employees. We are planning activities to do our best to create equal opportunities for everyone regardless their gender, age, disability, race or belief, as well as location. And this also goes hand-in-hand with our new post-COVID working model. 55% of our HQ will be working from home, while 35% will adopt a hybrid working model after pandemic. We are also members of important local and international initiatives that guide us through our diversity and inclusion journey. One of these organizations, we are happy to be part of it, Valuable 500. It is the largest global network of CEOs committed to disability inclusion. This initiative aims to revolutionize disability inclusion through business leadership and opportunity. I'm proud to say that we are the first Turkish company to join. Another important initiative we are part of is Women's Empowerment Principles, a private sector venture by the United Nations. These principles aims to empower women to take part in all sectors and all levels of economic activity. We embrace the principle of equality of opportunity without any discrimination of gender or age. The platform offers practical guidance to the private sector on how to empower women in the workplace, marketplace and community to ensure social gender equality. We are also a member of the 30% Club that promotes to take action to increase gender diversity at board and senior management levels. So I can comfortably say that our approach in human resources is fully based on equal opportunity in line with global platforms and best practices. Also, we seek the same point of view within the bank of -- for our current employees as well. We commit to follow KPIs very closely, such as women ratio in all employees, women ratio in top management level, gender-based turnover ratios and reasons pay gap between men and women employees and so on. Disclosure of data and practices on gender equality is also crucial to drive a meaningful change in our sector and society. Therefore, we aim to inform our stakeholders in the most transparent way possible. We are proud to have been included in the Bloomberg Gender-Equality Index. I'm also very happy to announce another exciting new development. Akbank was top-ranked among emerging market banks in this year's Gender Balance Index of Official Monitor and Financial Institutions Forum. And we just received this news today. We are also among the top 5 banks globally. This index sheds light on gender diversity in the management that works on some world's largest banking institutions and we are honored to see that the number of women in our senior executive roles placed us amongst the global top performers.

Yes. This is a very exciting news indeed, and even better to receive on March 8. So Pinar, you outlined a very comprehensive strategy to further D&I at Akbank. I'd like to add one very crucial aspect in these efforts, which is leadership. We know that leadership has a very indispensable role in any kind of transformation within an organization. So what are we doing to build out the necessary leadership skills at Akbank and in what aspects do you think leaders should be more effective?

Thank you, Bilgi. As you know, expectation from the leaders are changing. They need to create an environment of trust, support. They need to inspire their teams. They need to be people-oriented. Leaders must act responsibly and become role models for their teams while they need to establish their mindset inside their teams. Leaders must be at the forefront of cultural transformation by being open, reliable and supporting in this process. We have a comprehensive leadership program with the participation of all leaders. Here, we determined the leadership competencies of the future and work on these. You can ask what these competencies are. I can summarize the META framework. What is META? Mobilize, execute, transform and agile. We are working on these competencies for leaders.

Duly noted. So we talked about the different aspects of a more inclusive working place for employees. Could you also tell us how you support positive change and create value for our communities?

Bilgi, we have a purpose. We say, let's create futures with the focus on being trusted partner. We know that in creating Turkey's future, our responsibility goes far beyond banking. And to that end, as well as supporting economic growth, we consider our primary responsibilities to be increasing the educational and cultural level of our community and supporting entrepreneurial energy. Firstly, we create a brand-new ecosystem for younger generations empowered by third-party collaborations. We offer structured programs to help young people to acquire the competencies of the future. Currently, there are about 8 million university students in Turkey. This has serious potential to save the future. We diversify what we have done so far and what we will do next under the roof of Akbank Youth Academia. We will focus on areas such as AI, UX/UI design, innovation, sustainability and entrepreneurship. We designed these programs. It's volunteer Akbank employees. By sharing the competencies we have created within the bank with young people and by using the power of our experience, we strive for them to acquire these competencies and prepare them for the future in the best way possible. In the past months, different teams and communities of Akbank participated in several trainings as part of this initiative. Secondly, Arts and Culture. With the Arts and Culture projects we have been supporting for years, we also aim to create a more inclusive art scheme in Turkey. The [ Torch Fund ] Entrepreneurship, we believe that entrepreneurs are the pioneer of innovation. They will make significant contributions to the social and economic development of our country with the opportunities they create. So we work hard to ensure they have access to correct guidance and support. In fact, we are one of the founding sponsors of Endeavor. Endeavor is one of the foremost organizations that promote entrepreneurship in Turkey. And the last one, we encourage all Akbankers to work on this project as volunteers and aim to make more contributions that are lasting to the lives of more people by sharing our experience and efforts.

Thank you. Thank you very much for the insights, Pinar. And that ends our Q&A session. Thank you all for joining us today. For further information on our ESG Strategy, please visit akbankinvestorrelations.com, and stay tuned for more initiatives to create a better world for future generations.

Thank you, Bilgi.

Thank you.