145
Financial Information and Risk
Management
İş Bankası
Annual Report 2013
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2013
c.
Unrealized gains and losses on investment in stocks, Revaluation increases with the amounts of additives included in the main and
capital
Portfolio
Realized Gains/
losses During the
period
Revaluation Increases
Unrealized Gains
Total
Including to
the Capital
Contribution
Total
Including in
to the main
capital
Including to
the Capital
Contribution
1 Private Equity
Investments
2 Shares Traded on a
Stock Exchange
2,618,616
1,178,377
3 Other Stocks
4 Total
2,618,616
1,178,377
VIII. Explanations on Liquidity Risk
Liquidity risk may occur as a result of funding long-term assets with short-term resources. Utmost care is taken to maintain the
consistency between the maturities of assets and liabilities; strategies are used to acquire funds over longer terms.
The Bank’s principal source of funding is deposits. While the average maturity of deposits is shorter than the average maturity
of assets as a result of the market conditions, the Bank’s wide network of branches and steady core deposit base are its most
important safeguards of the supply of funds. The Bank also borrows medium and long-term funds from institutions abroad.
In order to meet the liquidity requirements that may arise due to market fluctuations, the Bank analyses TL and FC cash flows
projections to preserve liquid assets. The term structure of TL and FC deposits, their costs and movements in the total amounts
are monitored on a daily basis, also accounting for developments in former periods and expectations for the future. Based on cash
flow projections, prices are differentiated for different maturities and thereby measures are taken to meet liquidity requirements;
moreover liquidity that may be required for extraordinary circumstances is estimated and alternative liquidity sources are
determined for possible utilization.
Furthermore, foreign currency and total liquidity adequacy ratios, which are subject to weekly legal reporting and calculated
separately for 7 and 31 days following the reporting date, and the liquidity adequacy ratios that are calculated based on the stress
scenarios built internally by the Bank, are used effectively to manage the liquidity risk.
Evaluated within the framework of the Bank’s asset-liability management risk policy, the limits determined related to the liquidity
risk management are monitored by the Risk Committee and to avoid extraordinary situations where a quick action should be taken
due to the unfavorable market conditions, emergency measures and funding plans related to liquidity risk are put into effect.
As per the Communiqué on “Measurement and Assessment of the Adequacy of Banks’ Liquidity”, the liquidity ratios that are
measured for terms of 7 and 31 days should not be less than 80% and 100%, respectively. Foreign currency liquidity adequacy ratio
mean the ratio of foreign currency assets to foreign currency liabilities and the total liquidity adequacy ratio means the ratio of total
assets to total liabilities. The highest, lowest and average liquidity adequacy ratios for the year ended 2013 with their prior year
comparatives are given below.
Current Period
First Maturity Bracket (Weekly)
Second Maturity Bracket (Monthly)
FC
FC + TL
FC
FC + TL
Average (%)
149.64
142.48
103.54
107.25
Highest (%)
179.14
179.34
126.04
116.66
Lowest (%)
100.23
114.61
86.59
100.52
Prior Period
First Maturity Bracket (Weekly)
Second Maturity Bracket (Monthly)
FC
FC + TL
FC
FC + TL
Average (%)
150.28
150.51
97.72
109.76
Highest (%)
172.36
175.69
113.42
125.15
Lowest (%)
125.96
119.19
88.25
103.75
