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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
h.
Information on Derivative Financial Liabilities Held for Risk Management:
The Bank does not have any derivative financial liabilities held for risk management purposes.
i.
Information on Provisions:
i.1. Information on general loan loss provisions:
Current Period
(1)
Prior Period
General Loan Loss Provisions
1,972,588
1,613,677
Provision for Group I Loans and Receivables
1,661,838
1,345,971
Additional Provision for Loans and Receivables with Extended Maturities
113,530
73,259
Provision for Group II Loans and Receivables
89,839
69,570
Additional Provision for Loans and Receivables with Extended Maturities
9,874
7,257
Provision for Non-cash Loans
142,185
127,290
Other
78,726
70,846
(1)
General provision for current year consider with the scope of temporary 8 Substance of the Procedures and principles related to determination of loans and other
receivables by the Banks and allocation of provision for those.
i.2. Reserves for employee benefits:
According to the related regulation and the collective bargaining agreements, the 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 3,254.44 (full TL amount as of 31 December 2013),
which is one month salary for each service year and cannot exceed the base wage ceiling for employee termination benefits. A
provision for severance pay to allocate that employees need to be paid upon retirement is calculated by estimating the present
value of probable amount. The bank’s obligation arising from severance pay was determined in accordance with the actuarial
report regulated according to “IAS 19-Employee Benefits” provisions by an independent valuation company. In this context, as of
31 December 2013 TL 338,434 provision was set aside and reflected to the financial statements. (31 December 2012: TL 342,205).
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 wage was taken as
2%.
• TL 3,254.44 (full TL amount) wage ceiling, which was effective as at 31 December 2013 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
342,205
235,821
Service Cost
29,612
20,043
Interest Cost
24,749
20,751
Benefits paid
(19,434)
(18,222)
Loss/(Gain) due to Settlements/Reductions/Terminations
2,473
3,475
Actuarial loss/(gain)
(41,171)
80,337
Defined benefit obligation at the end of the period
338,434
342,205
In addition to the employee termination benefits, the Bank also allocates provision for the unused vacation pay liability. As of
31 December 2013, provision for unused vacation pay is amounting to TL 26,513 (31 December 2012: TL 20,316).
