Türkiye İş Bankası A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2015
117
Financial Information and Risk Management
There is no credit rating and credit export agency has been assigned for the items that are not included to trading accounts.
Risk Weight
0% 10% 20% 50% 75% 100% 150% 200% 250% 1250%
Mitigation in
Shareholders’
Equity
Amount Before Credit Risk
Mitigation
66,704,748
3,918,797 50,657,559 35,044,178 145,387,202 5,608,370 8,514,662 725,439
693,352
Amount After Credit Risk
Mitigation
73,632,349
3,918,763 50,655,369 34,765,756 138,835,742 5,568,918 8,458,619 725,439
693,352
16. Miscellaneous Information According to Type of Counterparty or Major Sectors
Significant Sectors/Counterparty
Loans
Impaired
Non-Performing
(1)
Value Adjustment
(2)
Provisions
(3)
Agricultural
50,427
12,608
598
36,112
Farming and Raising Livestock
45,346
10,934
469
31,658
Forestry
3,765
1,418
63
3,278
Fishing
1,316
256
66
1,176
Industry
581,575
79,359
3,921
464,195
Mining
72,883
3,872
208
70,572
Production
493,418
73,653
3,648
379,873
Electricity, gas, and water
15,274
1,834
65
13,750
Construction
455,617
98,060
4,634
375,593
Services
1,113,112
251,998
15,523
814,186
Wholesale and Retail Trade
717,250
140,850
7,820
531,987
Hotel, Food and Beverage Services
137,159
26,470
1,268
76,423
Transportation and Telecommunication
79,949
41,664
4,414
60,817
Financial Institutions
8,671
1,151
60
8,235
Real Estate and Renting Services
109,180
29,458
924
91,273
Self-Employment Services
45,709
9,108
528
33,946
Education Services
4,783
752
325
4,079
Health and Social Services
10,411
2,545
184
7,426
Other
1,402,958
914,493
101,807
1,016,467
Total
3,603,689
1,356,518
126,483
2,706,553
(1)
Refers to loans overdue up to 90 days. Related Items included in the commercial installment loans and installment consumer loans are given only in the overdue amounts, the payment of these loans outstanding
principal amounts of TL 1,146,351 and TL 1,937,901 respectively.
(2)
Refers to the general provisions for non-performing loans.
(3)
Refers to specific provision for impaired loans.
17. Information on Value Adjustments and Change in Credit Provisions:
Beginning Balance
Provisions
Reversal of Provisions Other Value Adjustment
Ending Balance
Specific Provisions
1,861,791
1,415,417
(570,655)
2,706,553
General Provisions
2,328,896
530,657
(7,724)
2,851,829
III. Explanations on Market Risk:
1. Explanations on Market Risk
The market risk carried by the Bank is measured by two separate methods known respectively as the Standard Method and the Value at Risk Model (VAR) in accordance with the local
regulations adopted from internationally accepted practices. In this context, currency risk emerges as the most important component of the market risk.
The market risk measurements are carried out by applying the Standard Method at the end of each month and the results are included in the statutory reports as well as being
reported to the Bank’s top management.
The Value at Risk Model is another alternative for the Standard Method used for measuring and monitoring market risk. This model is used to measure the market risk on a daily basis
in terms of interest rate risk, currency risk and equity share risk and is a part of the Bank’s daily internal reporting. Further retrospective testing (back-testing) is carried out on a daily
basis to determine the reliability of the daily risk calculation by the VAR model, which is used to estimate the maximum possible loss for the following day.
Scenario analyses which support the VAR model used to measure the losses that may occur in the ordinary market conditions are practiced, and the possible impacts of scenarios that
are developed based on the future predictions and the past crises, on the value of the Bank’s portfolio are determined and the results are reported to the Bank’s top management.
The limits set for the market risk management within the framework of the Bank’s asset liability management risk policy, are monitored by the Risk Committee and reviewed in
accordance with the market conditions.
The following table shows details of the market risk calculations carried out within the context of “Standard Method for Market Risk Measurement” and in compliance with “Regulation
on Measurement and Assessment Evaluation of Capital Adequacy of Banks ” as at 31 December 2015.
