232 İşbank
Annual Report 2015
Türkiye İş Bankası A.Ş.
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2015
h. Information on Derivative Financial Liabilities Held for Risk Management:
Negative valuation differences on derivative financial instruments held for hedging purposes:
Current Period
Prior Period
TL
FC
TL
FC
Fair Value Hedges
5,799
Cash Flow Hedges
Net Foreign Investment Hedges
Total
5,799
i. Information on Provisions:
i.1. Information on general loan loss provisions:
Current Period
Prior Period
General Loan Loss Provisions
3,015,392
2,479,770
Provision for Group I Loans and Receivables
2,548,121
2,111,676
-Additional Provision for Loans and Receivables with Extended Maturities
131,960
115,516
Provision for Group II Loans and Receivables
181,112
130,332
-Additional Provision for Loans and Receivables with Extended Maturities
20,499
19,541
Provision for Non-cash Loans
168,605
153,972
Other
117,554
83,790
i.2. Reserves for employee benefits:
According to the related regulation and the collective bargaining agreements, the Parent Bank is obliged to pay employee termination benefits to employees who retire, die, quit for
their military service obligations, who have been dismissed as defined in the related regulation or to the female employees who have voluntarily quit within one year after the date of
their marriage. In accordance with the related regulations, the amount of employee termination benefits is TL 3,828.37 (full TL amount as of 31 December 2015), which is one month
salary for each service year and cannot exceed the base salary ceiling for employee termination benefits. A provision for severance pay to allocate that employees need to be paid
upon retirement is TL 566,473 as of 31 December 2015. (31 December 2014: TL 482,111).
The main actuarial assumptions used in the calculation of the employee termination benefits are as follows:
- Discount and inflation rates, which vary by years, were used for the calculation and the real rate of increase in salaries was taken as 2%.
- TL 3,828.37 (full TL amount) salary ceiling, which was effective as at 31 December 2015 was taken into account for the calculations.
- The age of retirement is considered as the earliest age possible that an individual can retire.
- CSO 1980 table is used for the mortality rate for female and male employees
The movements related to provision for employee termination benefits are given below.
Current Period
Prior Period
Present value of defined benefit obligation at the beginning of the period
482,111
376,229
Service Cost
40,153
32,554
Interest Cost
40,114
38,395
Benefits paid
(29,878)
(21,175)
Loss/(Gain) due to Settlements / Reductions / Terminations
5,083
2,785
Actuarial loss/(gain)
28,890
53,323
Defined benefit obligation at the end of the period
566,473
482,111
In addition to the employee termination benefits, the Parent Bank and consolidated Group companies also allocate provisions for the unused vacation pay liability. As at 31 December
2015, provision for unused vacation pay is amounting to TL 49,176 (31 December 2014: TL 41,865).
i.3. Provisions for exchange losses in the principal amount of foreign currency indexed loans:
Since foreign currency indexed loans are followed based on the rates on the lending date, the Parent Bank incurs a loss if the exchange rates decrease and makes profit if the
exchange rate increases. As of 31 December 2015, provision amount for the currency evaluation losses in the principal amount of foreign currency indexed loans is TL 14,373 and this
amount is offset against foreign currency indexed loan balance in the financial statements.
i.4. Specific provisions for non-cash loans, which are not indemnified and not converted into cash:
As at 31 December 2015, TL 81,143 provision (31 December 2014: TL 66,882) is allocated for the non-cash loans of companies whose loans are followed under non-performing loans
accounts.
i.5. Information on other provisions:
i.5.1.
Provisions for potential risks:
After the reversal of TL 200,000 which is recognized as income in the current period, the Bank has net TL 800,000 general provisions recognized as expense in the prior periods for
the possible result of the negative circumstances which may arise from any changes in economy or market conditions (31 December 2014: TL 1,000,000).
i.5.2.
Liabilities arising from retirement benefits:
