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Financial Information and Risk Management
Türkiye İş Bankası A.Ş.
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2015
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 derivatives market in this particular area, the Parent 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 Parent 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 to the related banks and financial institutions accordingly.
6.
i)
The share of the Group’s receivables from the top 100 and 200 cash loan customers in the overall cash loan portfolio stands at 22% and 29% respectively (31 December 2014:
22%, 29%).
ii)
The share of the Group’s receivables from the top 100 and 200 non-cash loan customers in the overall non-cash portfolio stands at 50% and 60% respectively (31 December
2014: 47%, 57%).
iii)
The share of the Group’s cash and non-cash receivables from the top 100 and 200 credit customers in the overall assets and non-cash loans stands at 15% and 20% (31
December 2014: 15%, 20%).
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 carried by the Group stands at TL 3,015,392.
8.
The Parent 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 the behavior rating/scoring results.
9.
The net values of the collaterals of the Group’s closely monitored loans are given below in terms of collateral types and risk matches.
Type of Collateral
Current Period
Prior Period
Consumer
Commercial and
Corporate Credit Card
Consumer
Commercial and
Corporate Credit Card
Real Estate Mortgage
(1)
403,899
661,759
284,858
610,871
Cash Collateral (Cash provisions, securities pledge, etc.)
2,537
19,717
6,810
11,159
Pledges on Wages and Vehicle
383,964
115,505
284,563
68,611
Cheques & Notes
94,843
43,378
Other (Suretyships, commercial enterprise under pledge,
commercial papers, etc.)
112,125
988,465
84,876
658,814
Unsecured
383,862
178,008
540,311
243,790
152,218
438,143
Total
1,286,387
2,058,297
540,311
904,897
1,545,051
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 the Group’s 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)
549,815
549,815
375,961
375,961
Cash Collateral
878
878
213
213
Vehicle Pledge
80,112
80,112
84,369
84,369
Other (suretyships, commercial enterprise under pledge, commercial papers, etc.)
134,057
134,057
63,425
63,425
(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.
