Milli Re 2025 Annual Report

Board of Directors Report Esteemed Shareholders, We hereby present to our esteemed shareholders the Balance Sheet, Income Statement, Profit Distribution Statement, Statement of Changes in Equity, and Cash Flow Statement, which reflect the results achieved in 2025, our Company’s 97th year in operation, and have been prepared in accordance with the applicable legislative provisions and the principles and regulations prescribed by the Republic of Türkiye Ministry of Treasury and Finance, for your review and approval. During 2025, global economy proceeded on a moderate growth path owing to the gradual exit from tight monetary policies. Global disinflation process continued, but not without decoupling among countries; rate cuts by central banks varied in terms of timing and magnitude depending on economic circumstances. While uncertainties stemming from tariffs relatively eased, geopolitical frictions continued to put pressure on global financial markets and supply chains, which led to continued fragility of the growth outlook. In 2025, the US economy grew by 2.2%; the rise in consumer expenditures and the positive contribution lent by net exports backed growth, while labor market kept sending weakening signals. As inflation indicators remained above the target, the Fed pulled the policy rate down to the 3.50%-2.75% interval with a total rate cut by 75 bps throughout the year. While the euro area economy grew by 1.5% across 2025, the ECB kept the interest rates unchanged in the last four meetings of the year; forecasts suggest that investments, rising public expenditures and resilient domestic demand will support growth. The Chinese economy ended the year with a 5% growth rate; while consumer inflation displayed limited recovery, the downtrend in producer prices persisted. In its January update, the IMF upgraded its global growth forecast for 2025 and 2026 to 3.3%, estimating growth at 1.7% for developed economies and 4.4% for developing economies. The IMF suggested that technology investments and improved financial conditions supported growth, and underscored that uncertainties in relation to trade policies, geopolitical developments, high public indebtedness and possible sudden corrections in financial markets constituted a downside risk. During 2025, the Turkish economy registered 3.6% growth despite the ongoing inflationist environment and the tight monetary policy. While investment expenditures provided strong support to growth, the momentum in private consumption indicated at the lively domestic demand, whereas the contribution of net exports remained limited. At the end of 2025, annual CPI declined to 30.89%, demonstrating that the disinflation process is ongoing. While core inflation indicators point at improving main trend, housing, food and transportation groups extended high contributions to inflation. Annual domestic CPI, on the other hand, was measured as 27.67%. The CBRT sustained the rate cut process it initiated by end-2024 gradually, except for an interim hike occasioned by periodic volatilities; accordingly, the policy rate was reduced to 38% at the end of the year. Total reserves reached USD 189 billion, country risk premium declined, and external financing terms improved. Although net services revenues reached a record level owing to the rise in tourism revenues throughout 2025, the current accounts deficit 88 MİLLİ RE 2025 Annual Report