İŞBANK ANNUAL REPORT 2014

TÜRKİYE İŞ BANKASI A.Ş.

Notes to the Consolidated Financial Statements for the Year Ended

31 December 2014

225

İŞBANK

ANNUAL REPORT 2014

FINANCIAL INFORMATION AND

RISK MANAGEMENT

Number of employees of consolidated companies that does not have agencies and branches abroad:

Employees

Anadolu Anonim Türk Sigorta Şirketi

1,050

Anadolu Hayat Emeklilik A.Ş.

876

Efes Varlık Yönetimi A.Ş.

İş Investments Gulf Ltd.

(1)

İş Faktoring A.Ş.

İş Finansal Kiralama A.Ş.

143

İş Gayrimenkul Yatırım Ortaklığı A.Ş.

İş Girişim Sermayesi Yatırım Ortaklığı A.Ş.

İş Portföy Yönetimi A.Ş.

İş YatırımMenkul Değerler A.Ş.

404

İş Yatırım Ortaklığı A.Ş.

Maxis Investments Ltd.

(2)

TSKB Gayrimenkul Yatırım Ortaklığı A.Ş.

Türkiye Sınai Kalkınma Bankası A.Ş.

334

Yatırım Finansman Menkul Değerler A.Ş.

137

(1)

The company, which is headquartered in Dubai, does not have any branch or representative office beside its head office.

(2)

The company, which is headquartered in London, does not have any branch or representative office beside its head office.

IX. Subsequent Events

Within the framework of the resolution of the Bank’s Board of Directors dated 28 August 2014 regarding issuance of securities, on January 2015, the Bank has issued Bank bonds

with a nominal value of TL 124,635 with a maturity of 75 days; bonds with a nominal value of TL 735,865 and with a maturity of 241 days; and discounted bills with a nominal

value of TL 96,794 and with a maturity of 383 days.

Within the framework of the resolution of the Bank’s Board of Directors dated 25 December 2013, regarding issuance of securities abroad, the Bank issued securities with a total

amount of USD 139.5 million on January 2015.

It was announced within the context of public disclosure dated 30 September 2014 that the Board of Directors of the Bank had decided to increase the paid-in capital of the

subsidiary CJSC İşbank to 5,184 million Rubles by increasing 3,040 million Rubles, and it was also decided to exercise Bank’s preferential rights amounting to 3,040 million Rubles

arising from the capital increase. The amount related to the mentioned preferential rights amounting to 3,040 million Rubles was paid on 21 January 2015.

SECTION SIX: OTHER EXPLANATIONS

I. Explanation on the Group’s Credit Ratings:

Türkiye İş Bankası A.Ş.

Rating

Outlook

(1)

Explanation

MOODY’S

Bank Financial Strength

D+

Stable Indicates that the Bank’s stand-alone financial strength is adequate.

Long-termForeign Currency Deposit

Baa3

Negative It is the highest rating in this category determined ceiling of Turkey.

Long-termLocal Currency Deposit

Baa3

Negative Indicates that the Bank’s credibility is adequate.

Short-termForeign Currency Deposit

P-3

The Highest rating depending on the country ceiling for Turkey in this category.

Short-termLocal Currency Deposit

P-3

Indicates that the Bank’s credibility ismoderate.

FITCHRATINGS

Long-termForeign Currency Issuer Default Rating

BBB-

Stable At investment level. Shows that the Bank’s credibility is good.

Long-termLocal Currency Issuer Default Rating

BBB-

Stable At investment level. Shows that the Bank’s credibility is good.

Short-termForeign Currency Issuer Default Rating

At investment level. Shows that the capacity for timely payment of financial commitments is adequate.

Short-termLocal Currency Issuer Default Rating

At investment level. Shows that the capacity for timely payment of financial commitments is adequate.

National Long-termRating

AA+ (tur)

Stable Shows high credit quality (national).

Viability Rating

bbb-

Shows that the Bank’s credibility is “good”. Basic financial indicators are adequate.

Support Rating

There is amoderate probability of support.

STANDARD&POOR'S

Long-termCounterparty Credit Rating

BB+

Negative Same as the FC country rating given for Turkey.

Short-termCounterparty Credit Rating

Indicates that it has the capacity tomeet its financial commitment on the obligation.

Long-termNational Scale Rating

trAA+

Indicates that its capacity tomeet its financial commitments on the obligation is strong.

Short-termNational Scale Rating

trA-1

It is the highest rating in this category and indicates that the Bank’s capacity to pay its short-termdebt is

higher than the other institutions in the country.

The dates below given are on which the Parent Bank’s credit ratings/outlook was last updated:

Moody's: 3 June 2014, Fitch Ratings: 24 June 2014, Standard & Poor's: 11 February 2014.

(1)

Outlook:

“Stable” indicates that the current rating will not be changed in the short term; “positive” indicates that the current rating is very likely to be upgraded and “negative” indicates that the

current rating is very likely to be downgraded.