INTRODUCTION
ACTIVITIES
CORPORATE GOVERNANCE
FINANCIAL INFORMATION AND RISK MANAGEMENT
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2012
269
İŞBANK
ANNUAL REPORT 2012
f. Information on Lease Payables (Net):
The group does not have any liabilities resulting from finance lease transactions.
g. Information on Derivative Financial Liabilities Held for Risk Management:
The Group does not have any derivative financial liabilities held for risk management purposes.
h. Information on Provisions:
h.1.
Information on general loan loss provisions:
Current Period
Prior Period
General Loan Loss Provisions
1,705,153
1,315,935
Provision for Group I Loans and Receivables
1,426,251
1,103,000
- Additional Provision for Loans and Receivables with Extended Maturities
78,367
46,652
Provision for Group II Loans and Receivables
70,237
39,143
- Additional Provision for Loans and Receivables with Extended Maturities
7,257
3,182
Provision for Non-cash Loans
129,773
119,374
Other
78,892
54,418
h.2.
Reserves for employee benefits:
According to the related regulation and the collective bargaining agreements, the Parent Bank is obliged to pay employee termination
benefits to employees who retire, die, quit for their military service obligations, who have been dismissed as defined in the related
regulation or to the female employees who have voluntarily quit within one year after the date of their marriage. In accordance with the
related regulations, the amount of employee termination benefits is TL 3,033.98 (full TL amount as of 31 December 2012), which is one
month salary for each service year and cannot exceed the base salary ceiling for employee termination benefits. On Group basis, as of
31 December 2012 TL 377,765 provision was set aside and reflected to the financial statements (31 December 2011: TL 260,666).
The main actuarial assumptions used in the calculation of the employee termination benefits are as follows:
• discount and inflation rates, which vary by years, were used for the calculation and the real rate of increase in salaries was taken as 2%.
• TL 3,033.98 (full TL amount) salary ceiling, which was effective as at 31 December 2012 was taken into account for the calculations.
• the age of retirement is considered as the earliest age possible that an individual can retire.
• CSO 1980 table is used for the mortality rate for female and male employees
The movements related to provision for employee termination benefits are given below.
Current Period
Prior Period
Present value of defined benefit obligation at the beginning of the period
260,666
222,643
Service Cost
23,821
20,596
Interest Cost
26,076
19,926
Benefits paid
(21,482)
(21,491)
Loss/(Gain) due to Settlements / Reductions / Terminations
3,475
729
Actuarial loss/(gain)
85,209
18,263
Impact of Consolidated Companies
Defined benefit obligation at the end of the period
377,765
260,666
In addition to the employee termination benefits, the Parent Bank and consolidated Group companies also allocate provisions for the unused
vacation pay liability. As of 31 December 2012, provision for unused vacation pay is amounting to TL 28,926 (31 December 2011: TL 26,790).
h.3.
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 Parent 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 17,042 and this amount is offset against foreign currency indexed loan balance
in the financial statements.
h.4.
Specific provisions for non-cash loans, which are not indemnified and not converted into cash:
As of 31 December 2012, TL 102,568 provision (31 December 2011: TL 85,392) is allocated for the non-cash loans of companies whose
loans are followed under non-performing loans accounts.
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