INTRODUCTION
ACTIVITIES
CORPORATE GOVERNANCE
FINANCIAL INFORMATION AND RISK MANAGEMENT
137
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements for the Year Ended
31 December 2012
İŞBANK
ANNUAL REPORT 2012
16. Miscellaneous Information According to Type of Counterparty or Major Sectors
Significant Sectors/Counterparty
Loans
Impaired Non-Performing
(1)
Value Adjustment
(2)
Provisions
(3)
Agricultural
54,640
13,498
467
47,648
Farming and Raising Livestock
45,315
11,978
359
40,536
Forestry
6,595
865
66
4,990
Fishing
2,730
655
42
2,122
Industry
383,029
122,167
3,840
316,998
Mining
19,497
5,536
201
11,551
Production
360,075
115,424
3,571
302,368
Electricity, gas, and water
3,457
1,207
68
3,079
Construction
319,370
54,704
2,032
266,321
Services
559,416
194,824
9,501
451,686
Wholesale and Retail Trade
363,207
149,254
5,364
290,457
Hotel, Food and Beverage Services
29,358
6,941
500
24,429
Transportation and Telecommunication
56,897
19,240
2,280
42,469
Financial Institutions
31,890
365
62
31,423
Real Estate and Renting Services
30,921
5,952
389
25,859
Self-Employment Services
29,253
9,033
563
23,209
Education Services
4,928
1,690
108
2,673
Health and Social Services
12,962
2,349
235
11,167
Other
708,812
685,247
42,526
516,230
Total
2,025,267
1,070,440
58,366
1,598,883
(1)
Refers to loans overdue up to 90 days. Related Items included in the commercial installment loans and installment consumer loans are given only in the overdue amounts, the payment of these
loans outstanding principal amounts of TL 623,460 and TL 844,584 respectively.
(2)
Refers to the general provisions for non-performing loans.
(3)
Refers to specific provision for impaired loans.
17. Information on Value Adjustments and Change in Credit Provisions:
Beginning
Balance
Provisions
Reversal of
Provisions
Other Value
Adjustment Ending Balance
Specific Provisions
1,983,920
601,096
(986,133)
1,598,883
General Provisions
1,245,245
373,512
(5,080)
1,613,677
III. Explanations on Market Risk:
1. Information on Market Risk:
The market risk carried by the Bank is measured by two separate methods known respectively as the Standard Method and the Value at Risk
Model in accordance with the local regulations adopted from internationally accepted practices. In this context, interest rate risk emerges as
the most important component of the market risk.
The market risk measurements are carried out by applying the Standard Method at the end of each month and the results are included in the
statutory reports as well as being reported to the Bank’s top management.
The Value at Risk Model (VAR) is another alternative for the Standard Method used for measuring and monitoring market risk. This model is
used to measure the market risk on a daily basis in terms of interest rate risk, currency risk and equity share risk and is a part of the Bank’s
daily internal reporting. Further retrospective testing (back-testing) is carried out on a daily basis to determine the reliability of the daily risk
calculation by the VAR model, which is used to estimate the maximum possible loss for the following day.
Scenario analyses which support the VAR model used to measure the losses that may occur in the ordinary market conditions are practiced,
and the possible impacts of scenarios that are developed based on the future predictions and the past crises, on the value of the Bank’s
portfolio are determined and the results are reported to the Bank’s top management.
The limits set for the market risk management within the framework of the Bank’s asset liability management risk policy, are monitored by
the Risk Committee and reviewed in accordance with the market conditions.
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