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TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements for the Year Ended
31 December 2014
FINANCIAL INFORMATION AND
RISK MANAGEMENT
123
İŞBANK
ANNUAL REPORT 2014
Prior Period
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years 5 Years and Over
Total
Forwards Contracts- Buy
1,931,447
929,102
1,563,470
137,617
4,561,636
Forwards Contracts- Sell
1,938,462
945,983
1,566,678
137,435
4,588,558
Swaps Contracts-Buy
9,363,548
4,703,135
3,701,449
11,075,371
2,340,398
31,183,901
Swaps Contracts-Sell
9,279,628
4,670,697
3,682,428
10,886,023
2,340,398
30,859,174
Futures Transactions-Buy
Futures Transactions-Sell
358
358
Options-Call
919,955
835,986
3,164,858
352,305
570,171
5,843,275
Options-Put
924,307
840,338
3,164,858
352,305
570,171
5,851,979
Other
52,397
240,338
145,519
438,254
Total
24,409,744
13,165,937
16,989,260
22,941,056
5,821,138
83,327,135
IX. Explanations on securitization positions
None.
X. Explanations on credit riskmitigation techniques:
In the calculation of the Bank’s Credit Risk Mitigation in accordance with the “Communiqué on Credit Risk Mitigation Techniques” published in the Official Gazette numbered 29111 on 6
September 2014, the financial collaterals are taken into consideration. The Bank takes local currency and foreign currency deposit pledges into consideration as financial collaterals in
calculating regulatory capital adequacy.
Collaterals on the Basis of Risk Classes
Risk Group
Amount
(1)
Financial
Collateral
Other/Physical
Collateral
Guaranties and
Credit Derivatives
Contingent and Non-Contingent Receivables from Central Governments or Central Banks
64,800,043
Contingent and Non-Contingent Receivables from Regional Government or Domestic Government
39,793
44
Contingent and Non-Contingent Receivables from Administrative Units and Non-Commercial Enterprises
152,818
4,974
Contingent and Non-Contingent Receivables fromMultilateral Development Banks
1,660
Contingent and Non-Contingent Receivables from International Organizations
Contingent and Non-Contingent Receivables from Banks and Intermediaries
8,287,887
2,005
Contingent and Non-Contingent Corporate Receivables
107,127,526
1,829,436
Contingent and Non-Contingent Retail Receivables
44,671,946
477,836
Contingent and Non-Contingent Receivables Secured by Residential Property
13,038,213
18,838
Non-Performing Receivables
(1)
558,780
Receivables are identified as high risk by the Board
17,749,443
20,995
Secured Marketable Securities
Securitization Positions
Short-term Receivables and Short-term Corporate Receivables from Banks and Intermediaries
Investments as Collective Investment Institutions
410,934
Other Receivables
14,923,630
(1)
Includes total risk amounts before the effect of credit risk mitigation but after credit conversions.
XI. Explanations on riskmanagement objectives and policies
In addition to banking activities, activities of the entire the group as a whole is exposed to financial and non-financial risks which are required to be analyzed, monitored and reported
within specific risk management principles of the bank and with the perspective of Group risk management. The risk management process is organized within the framework of risk
management and serves the creation of a common risk culture in corporate level; which brings “good corporate governance” to forefront, business units that undertaken risks and the
independence between the internal audit and surveillance units are established, risk is defined in accordance with international regulations and in this context measurement, analysis,
monitoring, reporting and control functions are carried.
Risk management process and the functions involved in the process is one of the primary responsibilities of the Board of Directors. The Risk Management Department, which
operates under the Board of Directors has been organized as Asset-Liability Management Risk Unit, Credit Risk and Economic Capital Unit, Operational Risk and Model Verification and
Subsidiary Risk Unit.
The Bank’s risk management process is carried out within the framework of risk policies which are set by recommendations of Risk Management Department and issued by the Board
of the Directors and written standards which contains risk policies and implemented by executive units.
These policies which are entered into force in line with the international practices are general standards which contains; organization and scope of the risk management function,
risk measurement policies, duties and responsibilities of the risk management group, procedures for determining risk limits, ways to eliminate limit violations and approval and
confirmation to be given in a variety of events and situations. The scope and content of the Bank’s risk management system is given by the main risk types.
Credit risk
Credit risk is defined as the risk of the failure to comply with the requirements or failing to fulfill its obligations partially or totally of the counter side of the transaction contract with
the Bank. The methodology and responsibilities of the credit risk management, controlling and monitoring and the framework of credit risk limitations specified with the credit risk
policy.
The Bank defines, measures and manages credit risk of the all products and activities. Board of Directors review the Bank’s credit risk policies and credit risk strategy on an annual
basis as a minimum. Key Management is responsible for the implementation of credit risk policies which are approved by Board of Directors.
As a result of loans and credit risks analysis all findings are reported to Board of Directors and Key Management on a regular basis. In addition to transaction and company based credit
risk assessment process, monitoring of credit risk also refers to an approach with monitoring and managing the credit as a whole maturity, sector, security, geography, currency, credit
type and credit rating.