82 İşbank
Annual Report 2015
İşbank employs internal credit risk rating systems that are developed to service the needs for credit management, credit granting decisions,
credit process audits and credit provision calculations. Internal audit and risk management functions regularly assess the internal credit risk
rating systems according to their compatibility with the structure, size and complexity of the Bank’s operations. If diverse circumstances
required, necessary adjustments and/or modifications are made to the system. Internal credit risk rating systems are assessed by the Risk
Committee and approved by the Board of Directors.
Asset and Liability Management Risk Policy
Asset and liability management risk is defined as; loss risk caused by Bank’s failure to effectively manage all financial risks arising from the
bank’s assets, liabilities and off-balance sheet transactions. Market risk of trading book, structural interest rate risk of banking book and
liquidity risk are all within the scope of asset and liability management risk.
All principles and procedures related to constitution and management of Bank’s asset-liability structure and Bank’s risk appetite is
established by the Board of Directors. Ensuring asset and liability management risk being within the levels imposed by legal legislation and
internal risk limits is the primary priority. Internal risk limits are determined by Board of Directors taking into consideration liquidity, target
income level, general expectations about the changes in risk factors and risk appetite of the Bank.
Board of Directors and Audit Committee are obliged to track that Bank’s capital is used optimally. For this purpose they have to keep risk
limits under control and ensure necessary actions being taken.
Asset-Liability Management Committee is responsible for governance of asset and liability management risk in accordance with the risk
appetite and risk limits determined by Board of Directors and within the principles and procedures expressed in this policy.
Measuring asset and liability management risk, reporting the results and monitoring the compliance with the risk limits are the
responsibilities of Risk Management Division. The course of the risk taken is reviewed under different scenarios. Measurement results are
tested in terms of reliability and integrity. Asset and liability management risk is reported to Risk Committee and reported to the Board of
Directors through Audit Committee.
Compliance with risk limits is closely and continuously monitored by Risk Management Division, Asset-Liability Management Committee
and related business units. In the event of a breach in the risk limits, the breach and its reasons are instantly reported to Board of Directors
through Audit Committee. Course of action needed to be taken in order to eliminate the breach is determined by the Board.
Asset and liability management processes and compliance with the policy rules are audited by internal audit system. The principles
regarding the audit process, audit reports and fulfillment of action plans to eliminate the errors and gaps determined by internal audit are
established by the Board of Directors.
Information on Risk Management Policies Applied Per Risk Types
