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TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2014
195
İŞBANK
ANNUAL REPORT 2014
FINANCIAL INFORMATION AND
RISK MANAGEMENT
Prior Period
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Forwards Contracts- Buy
3,217,380
1,016,225
1,640,998
130,120
6,004,723
Forwards Contracts- Sell
3,231,421
1,036,552
1,642,433
129,205
6,039,611
Swaps Contracts -Buy
12,142,112
4,603,190
4,102,853
12,016,447
2,576,593
35,441,195
Swaps Contracts -Sell
12,138,490
4,576,290
4,109,040
11,843,280
2,576,570
35,243,670
Futures Transactions-Buy
15,802
15,802
Futures Transactions-Sell
16,276
16,276
Options-Call
1,534,622
1,222,704
3,316,450
471,158
520,828
7,065,762
Options-Put
1,523,863
1,214,926
3,317,007
471,158
520,828
7,047,782
Other
52,397
246,730
145,623
444,750
Total
33,840,285
13,948,695
18,274,404
25,061,368
6,194,819
97,319,571
IX. Explanations on Securitization Positions
None.
X. Explanations on Credit Risk Mitigation Techniques
In the calculation of the Group’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 Group 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:
Amount
(1)
Financial
Collateral
Other/Physical
Collateral
Guaranties and
Credit Derivatives
Risk Groups
Contingent and Non-Contingent Receivables from Central Governments or Central Banks
71,360,034
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
181,818
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
15,564,509
2,005
Contingent and Non-Contingent Corporate Receivables
126,104,300
1,829,436
Contingent and Non-Contingent Retail Receivables
52,291,137
477,836
Contingent and Non-Contingent Receivables Secured by Residential Property
13,038,213
18,838
Non-Performing Receivables
(1)
694,796
Receivables are identified as high risk by the Board
17,817,392
20,995
Secured Marketable Securities
Securitization Positions
Short-term Receivables and Short-term Corporate Receivables from Banks and Intermediaries
Investments as Collective Investment Institutions
187,831
Other Receivables
13,812,265
(1)
Includes total risk amounts before the effect of credit risk mitigation but after credit conversions.
XI. Explanations on Risk Management 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 Parent 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 Parent 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 Parent 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.
In the Parent Bank’s credit risk management, along the limits as required by legal regulations, the Parent Bank utilizes the risk limits to undertake the maximum credit risk within risk
groups or sectors that the Board of Directors determines. These limits are determined such a way that prevents risk concentration on particular sectors.