FINANCIAL INFORMATION AND RISK MANAGEMENT
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2012
ANNUAL REPORT 2012
Quantitative information on counterparty risk:
Equity-Shares Related Contracts
Gross Positive Fair Values
Net Current Exposure Amount
Net Derivative Position
IV. Explanations on Operational Risk
Operational risk is defined in general as “the risk of loss that may be arising from inadequate or ineffective internal processes, people,
systems or other external factors”.
The classification of operational risks that might be encountered by the Parent Bank during the activities is followed by preparing the “Risk
Catalog of the Bank”. This Risk Catalogue is the basis to be used in the definition and classification of all risks that may be exposed to and is
updated parallel to the changing conditions.
The principles on specifying, defining, evaluating, measuring, monitoring, controlling and reporting the operational risk and the
responsibilities regarding operational risk management are stated in the “Operational Risk Policy”.
In the assessment of operational risk, “Self-Assessment Methodology” is applied. This method requires identifying the risks through the
participation of the personnel who is responsible for undertaking the operation. Both qualitative and quantitative methods are used in the
measurement and evaluation of operational risk. Information derived from the “Impact-Likelihood Analysis” and “Lost Case Data Analysis” is
used in the measurements.
All the operational risks that are carried during the operations, the risk levels of the operations and/or new products/services, together with
the losses of the Parent Bank arising from operational risks are regularly monitored by the Bank’s Risk Management Division, and if deemed
necessary, the risk levels are updated and periodically reported to the Risk Committee and the Board of Directors.
The operational risk, to which the Group is exposed, is measured using the Basic Indicator Approach in which the average of 15% of the
year-end gross income of the last three years is multiplied by 12.5, in line with the domestic regulations. The operational risk amount used
for the current period is TL 12,767,447 (31 December 2011: TL 12,726,641).
The information contained in the following table when using the basic indicator method:
Years of Gross
Value at operational risk
V. Explanations on Consolidated Currency Risk
Foreign currency position risk for the Group is a result of the difference between the Group’s assets denominated in and indexed to foreign
currencies and liabilities denominated in foreign currencies. Furthermore, parity fluctuations of different foreign currencies are another
element of the currency risk.
The currency risk for the Parent Bank is managed by the internal currency risk limits which are established as a part of the Parent Bank’s
risk policies. The Assets and Liabilities Committee and the Assets and Liabilities Management Unit meet regularly to take the necessary
decisions for hedging exchange rate and parity risks, within framework of the determined by the “Net Foreign Currency Overall Position/
Shareholders’ Equity” ratio, which is a part of the legal requirement and the internal currency risk limits specified by the Board of Directors.
Foreign exchange risk management decisions are strictly applied.
In measuring currency risk, which the Group is exposed to, both the Standard Method and the Value at Risk Model (VAR) are used as applied
in the statutory reporting.