TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements for the Year Ended
31 December 2012
ANNUAL REPORT 2012
The movements related to provision for employee termination benefits are given below.
Present value of defined benefit obligation at the beginning of the period
Loss/(Gain) due to Settlements / Reductions / Terminations
Defined benefit obligation at the end of the period
In addition to the employee termination benefits, the Parent Bank allocate provisions for the unused vacation pay liability. As of
31 December 2012, provision for unused vacation pay is amounting to TL 20,316 (31 December 2011: TL 20,642).
Provisions for exchange losses in the principal amount of foreign currency indexed loans:
Since foreign currency indexed loans are followed based on the rates on the lending date, the Bank incurs a loss if the exchange rates
decrease and makes profit if the exchange rate increases. As of 31 December 2012, provision amount for the currency evaluation losses in
the principal amount of foreign currency indexed loans is TL 8,616 and this amount is offset against foreign currency indexed loan balance
in the financial statements.
As of 31 December 2012, the Bank’s specific provisions for unindemnified non-cash loans balance is TL 102,568 (31 December 2011:
TL 85,388) which is allocated for the non-cash loans of companies whose loans are followed under “Non-performing Loans” accounts.
Information on other provisions:
. Provisions for potential risks:
The Bank management provided a general provision for the possible result of the negative circumstances which may arise from any changes
in economy or market conditions amounting TL 1,000,000 thousands, TL 50,000 thousands of which was charged to the income statement
as expense in the current period.
. Liabilities arising from retirement benefits:
Liabilities of pension funds founded as per the Social Security Act:
Within the scope of the explanations given in Section Three Note XVII, in the actuarial report which was prepared as of 31 December 2012
for Türkiye İş Bankası A.Ş. Emekli Sandığı Vakfı (İşbank Pension Fund), of which each Bank employee is a member, and which has been
established according to the provisional Article 20 of the Social Security Act numbered 506, the amount of actuarial and technical deficit
stands at TL 1,778,210. The Bank, provide provisions for the foundation which is situated in the income statement for the previous years as
an amount of the TL 1,338,159 with newly identified amount of 440,051 additional provide allowance on the difference.
The above mentioned actuarial audit, which was made in accordance with the principles of the related law, measures the cash value of the
liability as of 31 December 2012, in other words, it measures the amount to be paid to the Social Security Institution by the Bank.
• 9.8% technical deficit interest rate is used.
• Published in the Official Gazette numbered 28533 dated 19 January 2013 with Law numbered 6385, after the date of 01.09.2013 taking
into account the insurance premium is fixed by 2% and the total premium rate is 33.5% until the date of 31.08.2012, after the date of
01.09.2013, the total premium rate is 34.5%.
• CSO 1980 mortality table is used.
• Collective agreement that ended on 31/03/2012, from the date of the renewal process for 1.4.2012 due to the has not expired yet,
determined fee increases used within the cautious approach in the account.
On the other hand “Provisional Article 39” is added to Social Security and General Health Insurance Law numbered 5510 via Amendment
to Social Security and General Health Insurance Law numbered 6283 published in the Official Gazette dated 8 March 2012 and numbered
28227. According to aforementioned amendment, while members payments which is paid for retired or died before January 2000 and
entitled invalidity, old-age pension per indexed system of the Law numbered 506 and members’ payments, which is paid for invalidity or
old-age before January 2000 and died after this date, will be recalculated. This application will be used from the date of 1 January 2013. In
this context, actuarial calculation, invalidity, elderliness or survivor’s pension who take salary to the foundation mentioned calculation made
considering regulation. The amount of the actual and Technical Deficit played an important role in the regulation which mentioned like
increase over the previous year.