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
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.
Excess risk limits up to legal requirements and boundaries limits are considered as an exception. The Board of Directors has the authority
in exception process. The results of the control of risk limits and the evaluations of these limits are presented by Internal Audit and Risk
Management Group to Key Management and Board of Directors.
The Bank uses credit decision support systems which are created for the purpose of credit risk management, lending decisions, controlling
the credit process and credit provisioning. The consistency of the credit decision support systems with the structure of the Parent Bank’s
activities, size and complexity is examined continuously by internal systems. Credit decision support systems contain the Risk Committee
assessment and approval of Board of Directors.
Asset and Liability Management Risk
Asset-liability management risk defined as the risk of Bank’s incurring loss due to managing all financial risks, that are inflicted from the
Bank’s assets, liabilities and off-balance sheet transactions, ineffectively. Trading book portfolio’s market risk, structural interest rate risk
and liquidity risk of the banking portfolio; are considered within the scope of the asset liability management.
All principles and procedures related to the generating and management of asset and liability structure and “Risk Appetite” related to the
capital to be allocated, are determined by the Board of Director. Complying the established risk limits and being at the limits that stipulated
by the legislation are the primary priority of Asset-liability management risk. Risk limits are determined by the Board of Directors by taking
into consideration of the Parent Bank’s liquidity, target income level and general expectations about changes in risk factors and risk appetite.
Board of Directors and the Audit Committee are responsible for following the Parent Bank’s capital is used optimally; for this purpose,
checking the status against risk limits and providing the necessary actions are taken.
Asset and Liability Management Committee is responsible for managing the Asset and Liability risk within the framework of operating
principles that are involved in the risk appetite and risk limits are set by the Board of Directors in accordance with the policy statement.
Measurement of the Asset and Liability Management’s risk, reporting of the measurement results and monitoring the compliance with risk
limits are the responsibility of the Risk Management Department. The course of the risk taken is examined through different scenarios The
measurement results are tested in terms of reliability and integrity. Information related to asset-liability management risk are reported to
the Board of Directors by the Department of Risk Management through the Risk Committee and the Audit Committee.
Asset and liability management processes and compliance with the provisions of the policy are controlled and audited by the internal audit
system. The execution of the audit, reporting the audit results, action plans for the elimination of errors and gaps identified as a result of
inspections regarding the fulfillment of the principles, are determined by the Board of Directors.
Operational risk is defined as “the probability of loss due to the inadequate or failed internal processes, people, systems, external factors or
legal risks”. All risks except financial risks are considered within the scope of operational risk. Studies consisted and are formed of occur by
execution of identification, definition, measurement, analysis, monitoring of operational risk, providing and reporting the necessary control
related to monitoring the progress of our country and the world, the development of techniques and methods, necessary legal reporting,
notification and conduct of follow-up transactions. Studies on the subject are conducted by the Department of Risk Management.
Operational risks that arise due to the activities are defined in “Bank Risk Catalogue” and classified in respect of species. Bank Risk Catalogue
is kind of the fundamental document that used for identification and classification of all at the risk that may be encountered. It is updated in
line with the changes in the nature of the processes and activities.
Qualitative and quantitative methods are used in a combination for measurement and evaluation of the operational risks. In this process,
information use that obtained from “Impact-Probability Analysis”, “Missing Event Data Analysis”, “Risk Indicators” methods. Methods
prescribed by legal regulations are applied as minimum in determining the capital requirement level for the operating risk.
All risks are assessed in the context of operational risk, loss events and the risk indicators same as operational risks that occurred in the
Parent Bank, are monitored on a regular basis by the Department of Risk Management and reported periodically to the Risk Committee and
the Board of Directors.
XII. Explanations on Other Price Risk
The Group has investments in companies traded on the ISE is exposed to equity securities price risk. Shares are being acquired for
investment purposes rather than.
The Bank’s sensitivity to equity price risk at the reporting date an analysis was conducted to measure. In the analysis, with the assumption
of all other variables were held constant (stock prices) are 10% higher or lower and is assumed that. According to this assumption in equity