Türkiye İş Bankası A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2015
111
Financial Information and Risk Management
2.
There are certain control limits on forward transactions in terms of counter parties, and the risks taken for derivative instruments are evaluated along with other potential risks
resulting from the market fluctuations.
3.
As a result of the current level of customers’ needs and the progress in the domestic market in this particular area, the Bank uses derivative transactions either for hedging or for
commercial purposes.
Derivative instruments with a remarkable volume are monitored with consideration that they can always be liquidated in case of need.
4.
Indemnified non-cash loans are considered as having the same risk weights as unpaid cash loans.
The rating and scoring systems applied by the Bank, includes detailed company analysis and enables rating of all companies and loans without any restrictions regarding credibility.
Loans and companies, which have been renewed, restructured or rescheduled, are rated within the scope of this system. Specialized loans are evaluated by a special rating system,
which is based on the credibility of the counterparty as well as the feasibility and risk analysis of the cash flows created mainly by the projects undertaken or the asset financed.
5.
Lending transactions abroad are conducted by determining the country risks of related countries within the context of the current rating system and by taking the market
conditions, country risks, and the relevant legal limitations into account. Furthermore, the credibility of banks and other financial institutions established abroad is examined within
the framework of the rating system that has been developed and credit limits are assigned accordingly.
6.
i)
The share of the Bank’s receivables from the top 100 and 200 cash loan customers in the overall cash loan portfolio stands at 22%, 29%, respectively (31 December 2014: 22%, 28%).
ii)
The share of the Bank’s receivables from the top 100 and 200 non-cash loan customers in the overall non-cash portfolio stands at 51%, 61% respectively (31 December 2014:
46%, 56%).
iii)
The share of the Bank’s cash and non-cash receivables from the top 100 and 200 loan customers in the overall cash and non-cash loans stands at 16%, 22%, respectively (31
December 2014: 16%, 21%).
Companies that are among the top loan customers ranked according to cash, non-cash and total risks are leaders in their own sectors, the loans advanced to them are in line with
their volume of industrial and commercial activity. A significant part of such loans is extended on a project basis, with their repayment sources being analyzed in accordance with the
banking principles to be considered as satisfactory and associated risks are determined and duly covered by obtaining appropriate guarantees when deemed necessary.
7.
The total value of the general provisions allocated for credit risk stands at TL 2,851,829.
8.
The Bank measures the quality of its loan portfolio by applying different rating/scoring models on cash commercial/corporate loans, retail loans and credit cards. The breakdown of
the rating/scoring results, which are classified as “Strong”, “Standard” and “Below Standard” by considering their default features, is shown below.
The loans whose borrowers’ capacity to fulfill their obligations is very good, are defined as “Strong”, whose borrowers’ capacity to fulfill its obligations in due time is reasonable, are
defined as “Standard” and whose borrowers’ capacity to fulfill their obligations is poor, are defined as “Below Standard”.
Current Period
Prior Period
Strong
48.86%
52.37 %
Standard
43.16%
37.28%
Below Standard
5.55%
6.72 %
Not Rated/Scored
2.43%
3.63 %
The table data comprises behavior rating/scoring results
9.
The net values of the collaterals of the closely monitored loans are given below in terms of collateral types and risk matches.
Current Period
Prior Period
Type of Collateral
Personal
Commercial and
Corporate Credit Cards
Personal
Commercial and
Corporate Credit Cards
Real Estate Mortgage
(1)
393,980
611,286
283,998
549,334
Cash Collateral (Cash, securities pledge, etc.)
2,299
15,103
4,686
11,159
Pledge on Wages and Vehicles
383,725
115,505
284,491
68,611
Cheques & Notes
94,843
43,378
Other (Suretyship, commercial enterprise under pledge,
commercial papers, etc.)
105,728
867,935
84,626
530,086
Non-collateralized
382,950
172,283
540,311
243,783
147,764
438,143
Total
1,268,682
1,876,955
540,311
901,584
1,350,332
438,143
(1)
The mortgage and/or pledge amounts on which third parties have priorities are deducted from the fair values of collaterals in expertise reports; and after comparing the results to the mortgage/pledge amounts and
loan balances, the smallest figures are considered to be the net value of collaterals.
10.
The net values of the collaterals of non-performing loans are given below in terms of collateral types and risk matches.
Current Period
Prior Period
Type of Collateral
Net Value of
the Collateral
Loan Balance
Net Value of
the Collateral
Loan Balance
Real Estate Mortgage
(1)
485,365
485,365
278,642
278,642
Cash Collateral
Vehicle Pledge
74,667
74,667
49,746
49,746
Other (Suretyship, commercial enterprise under pledge,
commercial papers, etc.)
53,661
53,661
50,947
50,947
(1)
The mortgage and/or pledge amounts on which third parties have priorities are deducted from the fair values of collaterals in expertise reports, and after comparing the results to the mortgage/pledge amounts and
loan balances the smallest figures are considered to be the net value of collaterals.
