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İş Bankası
Annual Report 2013
Financial Information and Risk Management
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2013
SECTION FOUR: INFORMATION ON THE FINANCIAL POSITION OF THE BANK
I. Explanations on Capital Adequacy Standard Ratio
The capital adequacy of the Bank is 14.38% (31 December 2012: 16.33%). Capital adequacy ratio is calculated within the scope
of the “Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks”, “Regulation on Credit Risk Mitigation
Techniques” and “Regulation on Calculation of Risk Weighted Amounts for Securitizations” published in the Official Gazette
numbered 28337 dated 28 June 2012, effectiveness date is 1 July 2012, and the calculations are made according to “Regulation on
Equities of Banks” published in the Official Gazette numbered 26333 dated 1 November 2006.
Capital adequacy ratio is calculated from obligated required capital of the credit risk, the market risk and the operational risk.
The amount subject to credit risk on balance sheet assets and non-cash loans, commitments and types of derivative financial
instruments, risk classes and ratings of risk weights are evaluated by taking into account the relevant legislation.
The amount subject to credit risk for non-cash loans and commitments are considered by using the conversion rates which are
defined in the 5
th
article of “Regulation On Measurement And Evaluation Of Capital Adequacy Of Banks” after deducting specific
provision amount which is calculated from the article of “Determining the Nature of Loans and Receivables and Principles and
Procedures on the Allocation of Loan and Receivable Provisions” published in the Official Gazette numbered 26333 dated 1
November 2006. The items, which are considered as deductions from capital amount, are not considered in the calculation of capital
requirement of credit risk.
Such financial assets, liabilities and off-balance sheet transactions are classified in two separate portfolio as “trading accounts” and
“banking accounts” in accordance with the legal regulations and the Bank’s internal risk policies. Actively traded asset on balance
sheet, derivative transactions held for trading, and trading accounts comprising foreign currency positions are used in calculation of
market risk according to the Standard Method by the Bank. Financial instruments and non-financial assets which are excluded from
trading book and classified as banking book are subject to calculation of credit risk.
In the calculation of the Bank’s operational risk, “Basic Indicator Method” is used
