197
Financial Information and Risk Management
Türkiye İş Bankası A.Ş.
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2015
16. Miscellaneous Information According to Type of Counterparty of Major Sectors
Loans
Significant Sectors/Counterparty
(1)
Impaired
Non-
performing
(2)
Value
Adjustments
(3)
Provisions
(4)
Agricultural
58,259
15,648
694
42,860
Farming and Raising Livestock
53,178
13,974
565
38,406
Forestry
3,765
1,418
63
3,278
Fishing
1,316
256
66
1,176
Industry
760,308
96,589
4,368
608,963
Mining
74,757
4,168
208
72,043
Production
630,294
79,294
4,095
483,187
Electricity, gas, and water
55,257
13,127
65
53,733
Construction
495,894
107,108
4,997
407,222
Services
1,031,918
285,214
15,722
794,244
Wholesale and Retail Trade
588,281
144,031
8,003
485,251
Hotel, Food and Beverage Services
142,996
27,653
1,271
81,297
Transportation and Telecommunication
100,345
62,456
4,425
71,741
Financial Institutions
9,502
1,730
60
9,032
Real Estate and Renting Services
109,592
36,441
924
91,620
Self-Employment Services
61,355
9,418
528
40,161
Education Services
4,783
758
325
4,079
Health and Social Services
15,064
2,727
186
11,063
Other
1,573,852
919,384
101,816
1,038,574
Total
3,920,231
1,423,943
127,597
2,891,863
(1)
Amount includes finance lease and factoring receivables.
(2)
Refers to loans overdue up to 90 days and financial leasing receivables overdue up to 150 days. Related items included in the invoiced leasing receivables, commercial installment loans and installment consumer
loans are given only in the overdue amounts, the payment of these loans outstanding principal amounts of TL 1,161,793 and TL 1,962,187 respectively. Invoiced but not matured leasing receivables is amounting to TL
210,022.
(3)
Refers to the general provisions for non-performing loans.
(4)
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 Adjustments
(1)
Ending Balance
Specific Provisions
2,004,705
1,474,489
(597,825)
10,494
2,891,863
General Provisions
2,479,770
569,074
(35,760)
2,308
3,015,392
(1)
Stating foreign exchange gains and losses.
III. Explanations on Consolidated Market Risk:
1. Explanations on Consolidated Market Risk:
The market risk carried by the Group is measured by two separate methods known respectively as the Standard Method and the Value at Risk (VAR) Method 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 consolidated market
risk measurements are carried out on a quarterly basis, using the Standard Method. The results are accounted in the legal reporting and evaluated with the top management.
The VAR Method is another alternative for the Standard Method in measuring and monitoring market risk carried by the Parent Bank. 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 Parent 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 method 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 Parent Bank’s portfolio are determined and the results are reported to the Top Executive
Management. Financial participations also make VAR calculations within the frame determined by the Parent Bank, and the results are reported to the Parent Bank’s top management.
The limits set for the market risk management within the framework of the Parent 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 consolidated market risk calculations carried out within the context of “Standard Method for Market Risk Measurement” and in compliance
with “Regulation on Measurement and Evaluation of Capital Adequacy of Banks” as at 31 December 2015.
