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Financial Information and Risk
Management
İş Bankası
Annual Report 2013
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2013
XXVI. Segment Reporting
Business segment is the part of an enterprise,
• which conducts business operations where it can gain revenues and make expenditures (including the revenues and expenses
related to the transactions made with the other parts of the enterprise),
• whose operating results are regularly monitored by the authorities with the power to make decisions related to the operations of
the enterprise in order to make decisions related to the funds to be allocated to the segment and to evaluate the performance of
the segment, and
• which has its separate financial information.
Information on the Group’s business segmentation and related information is explained in Section Four Note XV.
XXVII. Other Disclosures
To adapt to the financial statements 31 December 2013, reclassifications have been made on off-balance sheet on 31 December
2012.
SECTION FOUR: INFORMATION ON THE FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP
I. Explanations on Consolidated Capital Adequacy Ratio
The Group’s and the Parent Bank’s capital adequacy standard ratios are 14.34% and 14.38%, (31 December 2012: 16.28, 16.33)
respectively. 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 no.28337 dated 28 June 2012, effectiveness date is 1 July 2012, and
the calculations are made according to the “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 no.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 Parent 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 Parent Bank’s operational risk, “Basic Indicator Method” is used.
