türki̇ye i̇ş bankasi a

Transcription

Türkiye İş Bankası Anonim Şirketi and Its Subsidiaries
TABLE OF CONTENTS
Page
-----Independent auditors’ report on review of condensed consolidated interim financial information
Condensed consolidated statement of financial position
1-2
Condensed consolidated statement of income
3
Condensed consolidated profit or loss and other comprehensive income
4
Condensed consolidated statement of changes in equity
5-6
Condensed consolidated statement of cash flows
7-8
Notes to the condensed consolidated interim financial statements
9-45
TÜRKİYE İŞ BANKASI ANONİM ŞİRKETİ AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated)
Assets
Note
Cash and cash equivalents
Balances with central bank
Loans and advances to banks
Financial assets at fair value through profit or loss
- Trading investment securities
- Derivative financial instruments
Derivative assets held for risk management
Loans and advances to customers
Trade receivables
Insurance receivables
Inventories
Investment securities
- Available for sale investment securities
- Held to maturity investment securities
Current tax assets
Investments in equity-accounted investees
Property, plant and equipment
Investment properties
Intangible assets and goodwill
Non-current assets held for sale
Deferred tax assets
Other assets
8
9
22
22
10
9
9
11
Total assets
30 June
2015
31 December
2014
2,189,989
29,176,074
7,577,887
2,571,107
1,206,578
1,364,529
79,148
191,915,300
2,379,607
1,991,047
1,895,019
50,143,060
49,864,357
278,703
44,257
959,147
8,344,904
1,182,785
669,753
53,795
1,110,328
4,450,605
2,531,902
22,557,364
6,504,828
2,267,013
1,185,942
1,081,071
84,342
170,346,056
2,001,207
1,630,744
1,551,889
47,068,631
45,676,771
1,391,860
35,946
977,918
7,853,098
1,117,023
560,385
72,647
1,057,817
3,029,086
306,733,812
271,247,896
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
1
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Liabilities and equity
Note
Deposits
- Deposits from banks
- Deposits from customers
Obligations under repurchase agreements
Derivative financial instruments
Derivative liabilities held for risk management
Funds borrowed
Debt securities issued
Payables to stock exchange money market
Trade payables
Taxes and dues payable
Employee benefits
Corporate tax liability
Insurance contract liabilities
Provisions
Deferred tax liabilities
Other liabilities
Subordinated liabilities
22
22
12
14
Total liabilities
Share capital
Share premium
Legal reserves
Fair value reserve
Hedging reserve
Translation reserve
Other reserve
Remeasurement of the defined benefit plans, net of tax
Retained earnings
15
15
15
15
15
Total equity attributable to equity holders of the Bank
Non-controlling interest
Total equity
Total liabilities and equity
22
Commitment and contingencies
30 June
2015
31 December
2014
149,599,434
7,436,071
142,163,363
22,377,400
978,953
10,832
45,060,573
24,304,949
2,320,894
2,891,380
404,896
2,824,567
113,659
6,568,617
1,255,908
13,777
8,522,087
3,871,066
131,836,478
6,689,292
125,147,186
20,011,731
749,841
-36,617,271
19,731,592
2,291,363
2,374,759
376,011
2,755,540
488,183
5,894,351
1,228,466
13,979
7,956,823
3,384,849
271,118,992
235,711,237
6,115,938
38,435
3,203,179
(596,505)
1,030
(242,109)
7,017
(19,359)
19,234,133
6,115,938
38,435
2,912,743
775,524
6,313
(222,840)
7,017
(19,359)
18,389,047
27,741,759
28,002,818
7,873,061
7,533,841
35,614,820
35,536,659
306,733,812
271,247,896
97,558,771
87,495,717
The accompanying notes form an integral part of these condensed consolidated interim financial statements.
2
CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2015
1 January30 June 2015
Interest income on loans
Interest income on securities
Interest income on deposits at banks
Interest Income on reserve deposit at central banks
Interest income on finance leases
Interest income on factoring transactions
Other interest income
Total interest income
7,696,612
1,981,040
135,522
19,856
122,792
54,685
57,919
10,068,426
6,288,653
2,022,262
77,894
-81,016
36,939
26,658
8,533,422
Interest expense on deposits
Interest expense on borrowings
Interest expense on interbank borrowings
Interest expense on debt securities issued
Other interest expense
Total interest expense
(3,038,984)
(657,317)
(1,043,014)
(733,006)
(29,456)
(5,501,777)
(2,850,090)
(436,380)
(827,543)
(471,501)
(46,354)
(4,631,868)
4,566,649
3,901,554
1,364,343
(500,918)
863,425
1,162,781
(424,212)
738,569
424,043
(388,262)
3,528,783
1,899,997
323,948
(2,482,180)
(1,580,415)
(343,668)
444,961
(4,196,889)
273,043
(419,848)
18,983
(5,476)
201,657
(427,422)
3,421,366
1,732,282
249,167
(2,452,975)
(1,344,381)
(284,643)
523,332
(4,068,478)
327,767
(318,329)
15,026
9,757
2,927,094
2,224,249
(542,809)
(485,542)
Profit for the period
2,384,285
1,738,707
Profit attributable to:
Equity holders of the Bank
1,845,909
538,376
1,290,498
448,209
2,384,285
1,738,707
0.0164
0.0115
Note
Net interest income
Fee and commission income
Fee and commission expense
Net fee and commission income
Securities trading income, net
Derivative trading expense, net
Income from manufacturing operations
Income from insurance operations
Income from other operations
Cost of manufacturing operations
Cost of insurance operations
Cost of other operations
Other operating income
Other operating expenses
Foreign exchange gains, net
Impairment losses on financial assets, net
Dividend income
Share of income from equity-accounted investees
16
16
16
17
18
Profit before income tax
Income tax expense
Basic and diluted earnings per share (Full TL)
13
20
The accompanying notes form an integral part of these consolidated interim financial statements.
3
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
2,384,285
1,738,707
(1,584,429)
1,585,406
(136,010)
288,054
(57,022)
(5,283)
--
(109,699)
(246,127)
(73,669)
2,035
3,715
(1,494,690)
1,161,661
Total comprehensive income for the period
889,595
2,900,368
Attributable to
449,328
440,267
2,340,152
560,216
889,595
2,900,368
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Change in fair value of available for sale investments
Net change in fair value of available for sale financial assets transferred to
profit or loss
Related tax
Foreign currency translation differences
Cash flow hedges- effective portion of changes in fair value
Change in other reserves
Other comprehensive income/(expenses), net of tax
4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Bank
Balance at 1 January 2015
Net profit for the period
Other comprehensive income, net of tax
Change in unrealised losses on available for sale
investments
Net gains on available for sale assets transferred to the
income statement on disposal
Cash flow hedges effective portion of changes in fair value
Foreign currency translation differences for foreign
operations
Total other comprehensive income/(expense)
Total comprehensive income/(expense) for the period
Contributions and distributions
Dividend distribution
Transfer to legal reserves
Other(*)
Total contributions and distributions
Changes in ownership interests
Changes in non-controlling interests without a change in
control
Total transactions with owners
Balance at 30 June 2015
Remeasurement of the
defined
benefit
Other plans, net of
reserve
tax
Total
Noncontrolling
interest
Total
Equity
18,389,047
28,002,818
7,533,841
35,536,659
--
1,845,909
1,845,909
538,376
2,384,285
--
--
--
(1,222,350)
(74,025)
(1,296,375)
---
---
---
---
(149,679)
(5,283)
13,669
--
(136,010)
(5,283)
-(5,283)
(5,283)
(19,269)
(19,269)
(19,269)
----
----
--1,845,909
(19,269)
(1,396,581)
449,328
(37,753)
(98,109)
440,267
(57,022)
(1,494,690)
889,595
-----
-----
-----
-----
-----
(841,011)
(290,436)
130,624
(1,000,823)
(841,011)
-130,624
(710,387)
(168,186)
-646
(167,540)
(1,009,197)
-131,270
(877,927)
--(596,505)
--1,030
--(242,109)
--7,017
--(19,359)
-(1,000,823)
19,234,133
-(710,387)
27,741,759
66,493
(101,047)
7,873,061
66,493
(811,434)
35,614,820
Share
capital
Share
premium
Legal
reserves
Fair value
reserve
Hedging Translation
reserve
reserve
Retained
earnings
6,115,938
38,435
2,912,743
775,524
6,313
(222,840)
7,017
(19,359)
--
--
--
--
--
--
--
--
--
--
(1,222,350)
--
--
---
---
---
(149,679)
--
-(5,283)
----
----
----
-(1,372,029)
(1,372,029)
-----
-----
-290,436
-290,436
--6,115,938
--38,435
-290,436
3,203,179
(*)
According to the Articles of Incorporation of the Bank, a portion of the net profit for the period is distributed to the employees as a dividend. Provision recognized in 2014 for dividends to be distributed to employees
within the scope of “IAS 19 – Employee Benefits” has been added to distributable profit.
5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Bank
Balance at 1 January 2014
Income for the period
Other comprehensive income, net of tax
Change in unrealised losses on available for sale
investments
Net gains on available for sale assets transferred to the
income statement on disposal
Change in other reserves
Cash flow hedges effective portion of changes in fair value
Foreign currency translation differences for foreign
operations
Total other comprehensive income/(expense)
Total comprehensive income/(expense) for the period
Contributions and distributions
Dividend distribution
Transfer to legal reserves
Other(*)
Total contributions and distributions
Changes in ownership interests in subsidiaries
Acquisition of non-controlling interests without a change
in control
Total transactions with owners
Balance at 30 June 2014
Remeasurement of the
defined
Other benefit plans,
reserve
net of tax
Share
capital
Share
premium
Legal
reserves
Fair value
reserve
Hedging
reserve
Translation
reserve
6,115,938
38,434
2,657,122
(799,363)
(461)
361,631
7,017
--
--
--
--
--
--
--
Total
Noncontrolling
interest
Total
Equity
15,437,453
23,846,904
6,277,209
30,124,113
1,290,498
1,290,498
448,209
1,738,707
Retained
earnings
29,133
--
--
--
--
1,280,040
--
--
--
--
--
1,280,040
59,239
1,339,279
----
----
----
(104,915)
---
-2,035
----
-2,250
--
----
----
(104,915)
2,250
2,035
(4,784)
1,465
--
(109,699)
3,715
2,035
----
----
----
-1,175,125
1,175,125
-2,035
2,035
(129,756)
(129,756)
(129,756)
-2,250
2,250
----
--1,290,498
(129,756)
1,049,654
2,340,152
56,087
112,007
560,216
(73,669)
1,161,661
2,900,368
-----
-----
-254,161
-254,161
-----
-----
-----
-----
-----
(649,410)
(254,161)
96,431
(807,140)
(649,410)
-96,431
(552,979)
(136,242)
-569
(135,673)
(785,652)
-97,000
(688,652)
--6,115,938
1
1
38,435
354
254,515
2,911,637
--375,762
--1,574
--231,875
--9,267
--29,133
(17)
(807,157)
15,920,794
338
(552,641)
25,634,415
(4,576)
(140,249)
6,697,176
(4,238)
(692,890)
32,331,591
(*)
According to the Articles of Incorporation of the Bank, a portion of the net profit for the period is distributed to the employees as a dividend. Provision recognized in 2013 for dividends to be distributed to employees within the
scope of “IAS 19 – Employee Benefits” has been added to distributable profit.
6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Note
Cash flows from operating activities:
Adjustments for:
Depreciation and amortization
Net interest income
Income tax expense
Impairment losses on financial assets
Increase in provision for employee benefits
Unearned premium reserve
Provision for outstanding claims
Life mathematical provisions
Other provision expenses
Loss / (gain) from equity accounted investees
Allowance for doubtful trade receivables
Allowance for doubtful insurance receivables
Provisions for / (reversal of) impairment losses on inventory
Impairment losses / (reversal of) on property, plant and equipment
Gain on sale of property, plant and equipment
Change in trading assets
Change in reserve deposits
Change in loans and advances to banks
Change in loans and advances to customers
Change in trade receivables
Change in insurance receivables
Change in inventories
Change in other assets
Change in deposits from banks
Change in deposits from customers
Change in obligations under repurchase agreements
Change in trade payables
Change in other liabilities and provisions
Interest received
Interest paid
Income taxes paid
Net cash from / (used in) operating activities
Cash flows from investing activities:
Dividends received
Acquisition of equity accounted investees
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of investment properties
Proceeds from sale of equity participations
Proceeds from the sale of property, plant and equipment
Acquisition of investment securities
Proceeds from sale of investment securities
Net cash (used in) investing activities
17
1 January 30 June 2015
2,384,285
1,738,707
539,065
(4,566,649)
542,809
419,848
69,027
293,448
257,299
45,839
26,612
5,476
3,146
14,560
1,240
1,364
(57,326)
(19,957)
526,551
(3,901,554)
485,542
318,329
42,335
238,165
213,162
(48,067)
153,933
(9,757)
14
7,080
(1,608)
(87,711)
(39,474)
(364,353)
(20,840)
(7,135,552)
692,112
(15,343,327)
(381,546)
(374,863)
(344,370)
(2,711,418)
322,722
11,901,743
2,363,328
274,299
843,082
(9,934,587)
204,271
(4,253,902)
(411,242)
(5,485,488)
(24,745)
(136,920)
(123,207)
410,311
160,352
4,043,052
(1,325,057)
(124,693)
2,325,649
(5,105,972)
10,124,370
(5,204,187)
(773,241)
(5,787,645)
11,155,267
(4,431,654)
(671,454)
946,187
18,983
(250)
(825,875)
(210,541)
(54,061)
-329,999
(13,271,572)
9,536,439
(4,476,878)
15,026
(5,515)
(1,002,594)
(158,201)
(118,594)
19,873
187,936
(11,731,387)
7,891,979
(4,901,477)
7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
12,247,641
(7,758,335)
(5,043,275)
11,881,640
66,493
(1,009,197)
10,384,967
8,926,425
(5,981,127)
(2,220,169)
2,483,645
(4,238)
(785,652)
2,418,884
120,444
(1,536,406)
Effects of movements in exchange rates on cash held
Cash and cash equivalents at 1 January
777,654
13,884,443
(56,620)
13,074,103
Cash and cash equivalents at 30 June
14,782,541
11,481,077
Note
Cash flows from financing activities:
Proceeds from issue of debt securities
Repayments of debt securities
Repayments of funds borrowed
Proceeds from funds borrowed
Changes in non-controlling interest
Dividends paid
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
8
Notes to the consolidated financial statements
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
Note 13
Note 14
Note 15
Note 16
Note 17
Note 18
Note 19
Note 20
Note 21
Note 22
Note 23
Pages
10 – 13
14 - 15
15 – 19
19
19
19
20-22
22
22-24
25-27
28
28-29
30
31
32-33
33
34
34
35-39
40
40
41-43
44-45
Activities of the Bank and the Group
Basis of preparation
Significant accounting policies
Financial risk management
Management of insurance risk
Business combinations
Financial instruments
Securities portfolio
Funds borrowed
Taxation
Provisions
Capital and reserves
Operating segments
Earnings per share
Related parties
Events after the reporting period
9
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS AT AND FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2015
1.
Activities of the Bank and the Group
Türkiye İş Bankası Anonim Şirketi (“the Bank”) was incorporated in Turkey in 1924. The Bank provides
private, retail, commercial and corporate banking, money market and securities market operations as well as
international banking services. The Bank now operates a nationwide network of 1,342 (31 December 2014:
1,333) branches, 6,402 ATMs (31 December 2014: 6,290 ATMs), foreign branches in England (LondonEdmonton), Bahrain, Iraq (Erbil-Bagdad), Georgia (Batumi-Tiflis), Kosovo (Pristine, Prizren) and 16
branches in the Turkish Republic of Northern Cyprus and two banking subsidiaries in Germany and Russia.
The Bank directly invests in equity participations of 25 companies operating mainly in industry and the
financial sector.
Address
Phone
Fax
Website
: İş Kuleleri, 34330, Levent / İstanbul
: +90 212 316 00 00
: +90 212 316 09 00
: www.isbank.com.tr
The Bank and its subsidiaries are herein after referred to as the “Group”.
The Group controls equity stakes in companies that are active in the areas of banking, insurance, private
pensions, capital market brokerage, asset management, venture capital, factoring, reinsurance, finance leasing,
investment banking, real estate investment, service and manufacturing. Activities carried out in these business
areas and main companies are explained below in summary.
Financial services
Anadolu Anonim Türk Sigorta Şirketi (“Anadolu Sigorta”)
The Company was established in 1925 and operates in almost all non-life insurance branches. The
headquarters of the Company is in İstanbul. The Company’s shares are traded in Borsa İstanbul A.Ş.
Anadolu Hayat Emeklilik A.Ş. (“Anadolu Hayat”)
The Company was founded in 1990 and its headquarters is in İstanbul. The Company’s main activities are
private individual or group pension and life insurance. There are 24 private pension funds founded by the
Company. The Company’s shares are traded in Borsa İstanbul A.Ş.
Closed Joint Stock Company İşbank (“CJSC İşbank”)
CJSC İşbank, which was founded in 1998 and headquartered in Moscow, provides banking services by
focusing on deposit, loan and brokerage operations with its 10 branches in several regions of the Russian
Federation. The title of the Company was changed to “Joint Stock Company İşbank” on 9 September 2015.
Efes Varlık Yönetim A.Ş. (“Efes Varlık”)
The field of activity of the Company, which was founded in February 2011, is to purchase and sell the
receivables and other assets of deposit banks, participation banks and other financial institutions. The
Company’s headquarters is in İstanbul.
İş Faktoring A.Ş. (“İş Faktoring”)
The Company, which operates in the factoring sector since 1993, is engaged in domestic and foreign factoring
operations. The Company’s headquarter is in İstanbul.
İş Finansal Kiralama A.Ş.
The Company, whose field of activity is financial leasing within the country and abroad, started its operations
in 1988. The headquarters of the Company is in İstanbul. The Company’s shares are traded in Borsa İstanbul
A.Ş.
10
1.
Activities of the Bank and the Group (continued)
Financial services (continued)
İş Gayrimenkul Yatırım Ortaklığı A.Ş. (“İş GYO”)
The Company, whose main field of activity is investing in real estate, capital market instruments backed by
real estate, real estate projects and capital market instruments, is conducting its business in the sector as a real
estate investment trust since 1999. The Company’s shares are traded in Borsa İstanbul A.Ş. since its
establishment.
İş Girişim Sermayesi Yatırım Ortaklığı A.Ş. (“İş Girişim”)
The Company, which began its venture capital operations in 2000, is making long-term investments in
entrepreneurships founded or to be found in Turkey with a development potential and in need of capital. The
Company’s shares are traded in Borsa İstanbul A.Ş. since 2004.
Is Investment Gulf Ltd.(“Is Investment”)
The purpose of Is Investment, which was founded in Dubai in 2011, is to operate in capital markets in the
Gulf Region.
İş Portföy Yönetimi A.Ş. (“İş Portföy”)
The purpose of the Company, which was founded in 2000, is to engage in capital market operations stated in
its articles of association. Among the capital market operations, the Company offers portfolio management
and investment consulting services for corporate investors exclusively.
İş Yatırım Menkul Değerler A.Ş. (“İş Menkul”)
The Company is mainly engaged in intermediation, corporate finance, investment consulting and private
portfolio management services. The Company’s shares are traded in Borsa İstanbul A.Ş. since May 2007.
İş Yatırım Ortaklığı A.Ş.
The field of activity of the Company, which was founded in İstanbul in 1995, is portfolio management. The
Company’s shares are traded in Borsa İstanbul A.Ş. since April 1996.
İşbank AG
İşbank AG was founded to carry out the banking transactions of the Bank in Europe. İşbank AG has 17
branches in total, 13 branches in Germany, 1 branch in the Netherlands, 1 branch in France, 1 branch in
Switzerland and 1 branch in Bulgaria.
Maxis Investments Ltd.
The purpose of the Company, which was founded in England in 2005, is to engage in activities in foreign
capital markets.
Milli Reasürans T.A.Ş. (“Milli Reasürans”)
The Company, which was founded in 1929 to provide reinsurance services, is located in İstanbul.
11
1.
Financial services (continued)
TSKB Gayrimenkul Yatırım Ortaklığı A.Ş. (“TSKB GYO”)
The main field of activity of the Company, which was founded in 2006, is to create and develop an investment
property portfolio and to invest in capital market instruments that are based on investment properties. The
Company’s shares are traded in Borsa İstanbul A.Ş. since April 2010.
Türkiye Sınai Kalkınma Bankası A.Ş. (“TSKB”)
TSKB, the first private industrial development and investment bank of Turkey, is founded especially to
support private sector investments and facilitate contribution of domestic and foreign capital to Turkish
companies. The Bank’s shares are traded in Borsa İstanbul A.Ş.
Yatırım Finansman Menkul Değerler A.Ş. (“Yatırım Finansman”)
The purpose of the Company, which was founded in 1976, is to engage in capital market operations stated in
its articles of association. The Company is located in İstanbul.
Arap Türk Bankası A.Ş. (“Arap Türk”)
Arap Türk has been established on 18 July 1976 as a joint stock entity in accordance with an agreement signed
between the Republic of Turkey and the Libyan Arab Republic. In accordance with the Articles of Association,
the Board of Directors shall elect a Chairman among its Turkish members and a Deputy Chairman among its
Arab members. The General Manager shall always be nominated by the Arab shareholders and assigned by
the Board.
Glass
Türkiye Şişe ve Cam Fabrikaları A.Ş. (“Şişecam Group”)
Şişecam Group consists of a holding company, Türkiye Şişe ve Cam Fabrikaları A.Ş., 54 subsidiaries, 5 joint
ventures and 3 associates. Türkiye Şişe ve Cam Fabrikaları A.Ş. started its glass production in 1935. Besides
Turkey, Şişecam Group operates in various countries such as Bosnia-Herzegovina, Bulgaria, Georgia,
Netherlands, Egypt, Ukraine, Russia, Romania, Slovakia, Hungary, Germany, England, Italy, Austria and
India
Şişecam Group’s core business is mainly glass production. In addition, Şişecam Group is engaged in
complementary industrial and commercial operations related to glass production and has participated in
various industrial and commercial companies’ capital and management.
Telecommunications
Avea İletişim Hizmetleri A.Ş (“Avea”)
Avea is a mobile communications operator officially founded on 19 February 2004 with the merger of Türk
Telekomünikasyon Anonim Şirketi’s (“Türk Telekom”) GSM operator Aycell with Is-TIM, joint venture of
the Group and Telecom Italia Mobile. In September 2006, Türk Telekom increased its stake in Avea by
acquiring Telecom Italia’s stake in the Company. As at 30 June 2015, the Group holds 9.57% of Avea’s shares
while Türk Telekom’s stake in Avea is 89.99%.
12
1.
Others
Bayek Tedavi Sağlık Hizmetleri ve İşletme A.Ş. (“Bayek”)
The Company was founded in 1992 and operates in medical and education services sectors.
İş Net Elektronik Bilgi Üretim Dağıtım Ticaret ve İletişim Hizmetleri A.Ş. (“İş Net”)
İş Net locally and globally provides services in information and technology sectors since 1999.
İş Altınhas İnşaat Taahhüt ve Ticaret A.Ş. (“İş Altınhas”)
The Company operates as a contractor of large size construction projects since its establishment in 1997. The
title and the capital structure of İş Koray Turizm Ormancılık İnşaat Taahhüt ve Ticaret A.Ş. was changed to
İş Altınhas İnşaat Taahhüt ve Ticaret A.Ş. on 13 January 2015.
Nemtaş Nemrut Liman İşletmeciligi A.Ş. (“Nemtaş”)
Nemtaş is a Turkish registered shipping company which was established in 1981, operating a fleet of dry bulk
vessels. Nemtaş engages in ship management and related activities such as chartering and brokering facilities,
and ship agency services.
Numnum Yiyecek ve İçecek AŞ. (“Numnum”)
Numnum opened its first restaurant in İstanbul, in 2013. The Company is managing and operating 10
restaurants, 6 in İstanbul and 4 in Ankara.
Toksöz Spor Malzemeleri Tic A.Ş. (“Toksöz Spor”)
Toksöz Spor is selling sporting goods and products since 1985.
Ortopro Tıbbi Aletler Sanayi ve Ticaret A.Ş. (“Ortopro”)
Ortopro was founded in 2002 and it produces, trades, exports and imports orthopedics, medical and surgical
instruments.
Nevotek Bilişim Ses ve İletişim Sistemleri San. ve Tic. A.Ş. (“Nevotek”)
Nevotek provides project consultancy, research and development services about software and hardware for
computer, audio technologies and telecommunication systems in domestic and foreign markets. The Company
conducts exporting, importing, distributorship, agency, installation, maintenance, after sale services, training
and management, and marketing of these systems.
Radore Veri Hizmetleri A.Ş. (“Radore”)
Radore was established in 2004 with the aim of developing individual and corporate web hosting services.
Kanyon Yönetim İşletim ve Pazarlama Ltd. Şti. (“Kanyon”)
Kanyon was established on 6 October 2004. The main objective and operation of the investment is the
management of Kanyon Complex, which includes residences, offices and shops; providing maintenance,
security, basic environmental set up and similar activities as well as acting as an agent for introduction and
marketing of the projects belonging to the complex, including property letting and sale.
13
2.
Basis of preparation
2.1
Basis of accounting
The Bank and its subsidiaries operating in Turkey maintain their books of account and prepare their statutory
financial statements in Turkish Lira (“TL”) in accordance with the accounting principles as promulgated by
the Banking Regulation and Supervision Agency (“BRSA”), Capital Markets Board of Turkey, the Turkish
Commercial Code and tax legislation. The foreign subsidiaries maintain their books of account in accordance
with the laws and regulations in force in the countries in which they are registered.
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting. They do not include all the information required for a complete set of IFRS
financial statements. However selected explanatory notes are included to explain events and transactions that
are significant to an understanding of the changes in the Group’s financial position and performance since the
last annual consolidated financial statements as at and for the year ended 31 December 2014.
2.2
Use of estimates and judgments
The preparation of these condensed consolidated interim financial statements in accordance with IFRS requires
management to make estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets and liabilities, income and expense. The estimates and associated assumptions are
based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgments about carrying values of assets and
liabilities that are not readily apparent from other sources. The actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the year in which the estimate is revised and in any future years affected. The significant
judgements made by management in applying the Group’s accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated financial statements as at and for the year
ended 31 December 2014.
Measurement of fair values
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the principal or, in its absence, the most
advantageous market to which the Group has access at that date. The fair value of a liability reflects its nonperformance risk.
When available, the Group measures the fair value of an instrument using the quoted price in an active market
for that instrument. A market is regarded as active if transactions for the asset or liability take place with
sufficient frequency and volume to provide pricing information on an ongoing basis.
If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use
of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique
incorporates all of the factors that market participants would take into account in pricing a transaction.
The best evidence of the fair value of a financial instrument at initial recognition is normally the transaction
price – i.e. the fair value of the consideration given or received. If the Group determines that the fair value at
initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price
in an active market for an identical asset or liability nor based on a valuation technique that uses only data
from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the
difference between the fair value at initial recognition and the transaction price. Subsequently, that difference
is recognized in profit or loss on an appropriate basis over the life of the instrument but no later than when the
valuation is wholly supported by observable market data or the transaction is closed out.
14
2.
Basis of preparation (continued)
2.2
Use of estimates and judgments (continued)
Measurement of fair values (continued)
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as
possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in
the valuation techniques as follows.
Level 1: inputs that are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of
the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the
fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period
during which the change has occurred.
3.
Significant accounting policies
The accounting policies applied in these interim financial statements are the same as those applied in the
Group’s consolidated financial statements as at and for the year ended 31 December 2014.
The Group has applied fair value hedge accounting as explained below after 31 December 2014.
Fair value hedges
When a derivative is designated as the hedging instrument in a hedge of the change in fair value of a recognised
asset or liability or a firm commitment that could affect profit or loss, changes in the fair value of the derivative
are recognised immediately in profit or loss together with changes in the fair value of the hedged item that are
attributable to the hedged risk (in the same line item in the statement of profit or loss and OCI as the hedged
item).
If the hedging derivative expires or is sold, terminated or exercised, or the hedge no longer meets the criteria
for fair value hedge accounting, or the hedge designation is revoked, then hedge accounting is discontinued
prospectively. However, if the derivative is novated to a central counterparty by both parties as a consequence
of laws or regulations without changes in its terms except for those that are necessary for the novation, then
the derivative is not considered as expired or terminated.
Any adjustment up to the point of discontinuation to a hedged item for which the effective interest method is
used is amortised to profit or loss as part of the recalculated effective interest rate of the item over its remaining
life.
3.1
Basis of consolidation
Subsidiaries
The condensed consolidated interim financial statements incorporate the financial statements of the Bank and
entities controlled by the Bank (its subsidiaries). The control exists if and only if; 1) when the Bank has the
power over an affiliate which that power, directly or indirectly, give rights to govern the financial and
operating policies of the entity so as to obtain benefits from its activities, 2) exposure, or rights, to variable
returns from its involvement with the affiliate, 3) the ability to use its power over the affiliate to affect the
amount of its returns. The Bank reassess its control power over its subsidiaries if there is an indication that
there are changes to any of the three elements of control.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement
of income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
15
3.
3.1
Significant accounting policies (continued)
Basis of consolidation (continued)
The Group accounts for business combinations using the acquisition method when control is transferred to the
Group.
The Group measures goodwill at the acquisition date as:
 the fair value of the consideration transferred; plus
 the recognised amount of any non-controlling interests in the acquiree; plus
 if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the
acquiree; less
 the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts generally are recognised in profit or loss.
Transactions costs, other than those associated with the issue of debt or equity securities, that the Group incurs
in connection with a business combination are expensed as incurred.
Any contingent consideration is measured at fair value at the acquisition date. If the contingent consideration
is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise,
subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.
Interests in equity-accounted investees
The Group’s interests in equity-accounted investees comprise interests in associates and joint ventures.
Associates are those entities in which the Group has significant influence, but not control or joint control, over
the financial and operating policies. A joint venture is an arrangement in which the Group has joint control,
whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations
for its liabilities.
Interests in associates and the joint ventures are accounted for using the equity method. They are recognised
initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial
statements include the Group’s share of the profit or loss and other comprehensive income of equity-accounted
investees, until the date on which significant influence or joint control ceases.
Special purpose entities
Special purpose entities are entities that are created to accomplish a narrow and well defined objective such
as the securitisation of particular assets, or the execution of a specific borrowing or lending transaction. The
Group does not have any direct or indirect shareholdings in these entities. Special purpose entities are
consolidated when the substance of the relationship between the Group and the special purpose entity indicates
that the special purpose entity is controlled by the Group.
Non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at
the acquisition date. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions.
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and
any related non-controlling interests and other components of equity. Any resulting gain or loss is recognised
in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are
eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are
eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
16
3.
3.1
Group entities
Subsidiaries
Country of Incorporation
Effective Ownership Rate %
30 June
31 December
2015
2014
Manufacturing (Glass industry)
Anadolu Cam Eskişehir Sanayi A.Ş.
Anadolu Cam Investment BV
Anadolu Cam San. A.Ş.
Anadolu Cam Yenişehir Sanayi A.Ş.
Automotive Glass Alliance Rus Trading OOO
Automotive Glass Alliance Rus AO
Balsand BV
CJSC Brewery Pivdenna
Camiş Ambalaj San. A.Ş.
Çayırova Cam San. A.Ş.
Denizli Cam San. A.Ş.
Glass Corp SA
JSC Mina
Merefa Glass Company Ltd.
OAO Ruscam Pokrovsky
OOO Posuda
OOO Ruscam Glass Packaging Holding
OOO Ruscam Glass
OOO Ruscam
OOO Ruscam Management Company
OOO Ruscam Sibir
Paşabahçe Cam San. ve Tic. A.Ş.
Paşabahçe Investment BV
Paşabahçe Mağazaları A.Ş.
Paşabahçe SRL
Richard Fritz Holding GmbH (1)
Richard Fritz Kft
Richard Fritz Prototype+Spare Parts GmbH
Richard Fritz Spol SRO
Trakya Cam Investment BV
Trakya Cam Sanayii A.Ş.
Trakya Glass Bulgaria EAD
Trakya Glass Rus AO
Trakya Glass Rus Trading OOO
Trakya Investment BV
Trakya Polatlı Cam Sanayii A.Ş.
Trakya Yenişehir Cam Sanayi A.Ş.
TRSG Autoglass Holding BV (2)
TRSG Glass Holding BV
Türkiye Şişe ve Cam Fab. A.Ş.
Turkey
Netherlands
Turkey
Turkey
Russia
Russia
Netherlands
Ukraine
Turkey
Turkey
Turkey
Romania
Georgia
Ukraine
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Turkey
Netherlands
Turkey
Italy
Germany
Hungary
Germany
Slovakia
Netherlands
Turkey
Bulgaria
Russia
Russia
Netherlands
Turkey
Turkey
Netherlands
Netherlands
Turkey
53.88
39.35
51.83
53.88
45.71
45.71
26.43
26.43
65.50
59.94
30.17
41.14
51.76
26.43
26.43
55.03
26.43
26.43
39.24
26.43
26.43
55.03
55.03
50.06
55.03
45.71
45.71
45.71
45.71
48.51
45.71
48.51
32.00
32.00
45.71
48.68
48.68
45.71
32.00
65.51
53.88
39.35
51.83
53.89
45.71
45.71
26.43
26.43
65.50
59.94
30.44
41.14
51.76
26.43
26.43
55.03
26.43
26.43
39.24
26.43
26.43
55.03
55.03
50.11
55.03
45.71
45.71
45.71
45.71
48.51
45.71
48.51
32.00
32.00
45.71
48.69
48.69
45.71
32.00
65.51
Manufacturing (Other)
Cam Elyaf San. A.Ş.
Camiş Egypt Mining Co.
Camiş Elektrik Üretim A.Ş.
Camiş Limited
Camiş Madencilik A.Ş.
Cromital S.p.A.
Madencilik San. ve Tic. A.Ş.
Nemtaş
Ortopro
SC Glass Trading BV
Soda San. A.Ş.
Şişecam Bulgaria EOOD
Şişecam Chem Invesment BV
Şişecam Enerji A.Ş.
Turkey
Egypt
Turkey
England
Turkey
Italy
Turkey
Turkey
Turkey
Netherlands
Turkey
Bulgaria
Netherlands
Turkey
62.99
65.31
55.08
62.36
65.51
51.29
65.25
100.00
11.39
65.51
51.14
51.22
51.22
65.51
62.99
65.31
55.09
62.36
65.51
52.97
65.23
100.00
11.34
65.51
52.83
52.90
52.90
65.51
17
3.
3.1
Group entities (continued)
Subsidiaries
Manufacturing (Other)
Şişecam Soda Lukavac DOO
Toksöz Spor
Holding
Camiş Yatırım Holding A.Ş.
Trakya Yatırım Holding A.Ş.
Service
Bayek
İş Merkezleri Yön. ve İşl. A.Ş.
İş Net
Mipaş Mümessillik İth. İhr.ve Paz. A.Ş.
Nevotek
Num Num
Şişecam Dış Ticaret A.Ş.
Banking
CJSC İşbank
İşbank AG
TSKB
Reinsurance
Milli Reasürans
Insurance
Anadolu Hayat
Anadolu Sigorta
Şişecam Sigorta Aracılık Hizmetleri A.Ş.
Leasing
İş Finansal Kiralama A.Ş.
Factoring
İş Faktoring
Other financial
Efes Varlık
İş Girişim
İş GYO
Is Investment
İş Menkul
İş Portföy
İş Yatırım Ortaklığı A.Ş.
Maxis Investments Ltd.
TSKB GYO
Yatırım Finansman
(1) The
(2) The
Effective Ownership Rate %
30 June
31 December
2015
2014
Bosnia Herzegovina
Turkey
45.74
19.28
47.24
19.18
Turkey
Turkey
99.99
88.05
99.99
88.05
Turkey
Turkey
Turkey
Turkey
Turkey
Turkey
Turkey
95.36
99.33
98.14
100.00
28.48
21.61
65.51
95.15
99.31
98.10
100.00
28.34
21.51
65.50
Russia
Germany
Turkey
100.00
100.00
48.88
100.00
100.00
48.85
Turkey
76.72
76.72
Turkey
Turkey
Turkey
72.96
50.97
65.51
72.45
48.42
65.48
Turkey
42.73
42.72
Turkey
44.07
44.06
Turkey
Turkey
Turkey
United Arab Emirates
Turkey
Turkey
Turkey
England
Turkey
Turkey
65.66
35.05
53.26
67.93
67.93
67.01
24.75
67.93
29.47
47.37
65.65
34.88
53.10
67.93
67.93
66.91
24.71
67.93
29.45
47.34
title of Fritz Holding GmbH was changed to Richard Fritz Holding GmbH on 25 February 2015.
title of TRSG Autoglass Holding BV was changed to Trakya Autoglass Holding BV on 29 June 2015.
18
3.
3.1
Group entities (continued)
Special purpose entities
TIB Card Receivables Funding Company Limited
TIB Diversified Payment Rights Finance Company
England
England
The following investments in associates and joint ventures which the Group has significant influences have
been accounted for using the equity method:
Investment in associates
Adana Otel Projesi Adi Ortaklığı
Anavarza Otelcilik A.Ş.
Arap Türk
Avea
HNG Float Glass Ltd.
İş Altınhas
Kanyon
OAO Form Mat
Omco İstanbul Kalıp Sanayii ve Tic. A.Ş.
OOO Balkum
Oxyvit Kimya San. ve Tic. A.Ş.
Radore
Rudnika Krecnjaka Vijenac DOO Lukavac
Saint Gobain Glass Egypt SAE
Solvay Şişecam Holding AG
4.
Turkey
Turkey
Turkey
Turkey
India
Turkey
Turkey
Russia
Turkey
Russia
Turkey
Turkey
Bosnia Herzegovina
Egypt
Austria
30 June 2015 31 December 2014
Ownership %
Ownership %
50.00
50.00
20.58
9.57
50.00
50.00
50.00
48.46
50.00
50.00
50.00
28.50
50.00
30.00
25.00
50.00
-20.58
9.57
50.00
50.00
50.00
48.46
50.00
50.00
50.00
28.50
50.00
30.00
25.00
Financial risk management
The Group’s financial risk management objectives and policies are consistent with those disclosed in the
financial statements as at and for the year ended 31 December 2014.
5.
Management of insurance risk
The Group’s insurance risk management objectives and policies are consistent with those disclosed in the
financial statements as at and for the year ended 31 December 2014.
6.
There is no business combination within the scope of IFRS-3 “Business Combinations” between 1 January
and 30 June 2015 (Between 1 January and 31 December 2014: None).
19
7.
Financial instruments
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy for financial
instruments measured at fair value. It does not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
Financial assets
30 June 2015
Financial assets measured at fair value
Investment securities - Trading
Derivatives used for hedging purposes
Investment securities - Available-for-sale (1)
Financial assets not measured at fair value
Due from banks (including central banks)
Investment securities - Held-to-maturity
(1)As
Carrying amount
Investments,
including derivatives
Fair value
Total
Level 1
Level 2
Level 3
Total
-----
1,206,578
1,364,529
79,148
49,864,357
1,206,578
1,364,529
79,148
49,864,357
913,010
--37,370,745
289,274
1,364,529
79,148
9,838,406
4,294
--2,590,108
1,206,578
1,364,529
79,148
49,799,259
36,753,961
191,915,300
-1,991,047
230,660,308
--278,703
-52,793,315
36,753,961
191,915,300
278,703
1,991,047
283,453,623
----38,283,755
----11,571,357
----2,594,402
----52,449,514
of 30 June 2015, securities that are not publicly traded and the determination of fair values could not be obtained reliably amounting to TL 65,098 have been measured at cost.
31 December 2014
Financial assets measured at fair value
Investment securities - Trading
Derivatives used for hedging purposes
Investment securities - Available-for-sale (1)
Financial assets not measured at fair value
Due from banks (including central banks)
Investment securities - Held-to-maturity
(1)
Loans and
receivables
-----
1,185,942
1,081,071
84,342
45,676,771
1,185,942
1,081,071
84,342
45,676,771
871,981
--37,015,110
312,889
1,081,071
84,342
7,846,058
1,072
--744,601
1,185,942
1,081,071
84,342
45,605,769
29,062,192
170,346,056
-1,630,744
201,038,992
--1,391,860
-49,419,986
29,062,192
170,346,056
1,391,860
1,630,744
250,458,978
----37,887,091
----9,324,360
----745,673
----47,957,124
As at 31 December 2014, securities that are not publicly traded and the determination of fair values could not be obtained reliably amounting to TL 71,002 have been measured at cost.
20
7.
Financial instruments (continued)
Carrying amounts and fair values (continued)
Carrying amount
Financial liabilities
30 June 2015
Financial liabilities measured at fair value
Derivative financial instruments held for trading
Derivative liabilities held for risk management
Financial liabilities not measured at fair value
Deposits from banks
Deposits from customers
Funds borrowed
31 December 2014
Financial liabilities measured at fair value
Financial liabilities not measured at fair value
Deposits from banks
Deposits from customers
Funds borrowed
Fair value
Loans and
borrowings
Derivatives
Total
Level 1
Level 2
Level 3
Total
---
978,953
10,832
978,953
10,832
---
978,953
10,832
---
978,953
10,832
7,436,071
142,163,363
22,377,400
45,060,573
2,320,894
24,304,949
3,871,066
247,534,316
-------989,785
7,436,071
142,163,363
22,377,400
45,060,573
2,320,894
24,304,949
3,871,066
248,524,101
---------
-------989,785
---------
-------989,785
--
749,841
749,841
--
749,841
--
749,841
6,689,292
125,147,186
20,011,731
36,617,271
2,291,363
19,731,592
3,384,849
213,873,284
-------749,841
6,689,292
125,147,186
20,011,731
36,617,271
2,291,363
19,731,592
3,384,849
214,623,125
---------
-------749,841
---------
-------749,841
21
TÜRKİYE İŞ BANKASI ANONİM ŞİRKETİ AND ITS SUBSIDIARES
7.
Financial instruments (continued)
Carrying amounts and fair values (continued)
The reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3
of the fair value hierarchy as at and for the periods ended 30 June 2015 and 30 June 2014 are as follows:
Balance at the beginning of the period
Purchases
Redemption or sales
Valuation difference
Transfer
745,673
3,469
(11,577)
96,007
1,760,830
4,145,290
1,081,237
(523,679)
603,705
1,049,846
Balance at the end of the period
2,594,402
6,356,399
Level 3 of the fair value hierarchy includes all instruments where the valuation technique includes inputs not
based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation.
This category includes instruments that are valued based on quoted prices for similar instruments where
significant unobservable adjustments or assumptions are required to reflect differences between the
instruments.
During 2015, due to changes in market conditions for certain investment securities, quoted prices in active
markets were no longer available for these securities. Hence, these securities amounting to TL 1,760,830 were
transferred into Level 3 of the fair value hierarchy.
During 2014, due to changes in market conditions for certain investment securities, quoted prices in active
markets were no longer available for these securities. Hence, these securities amounting to TL 1,049,846 were
transferred into Level 3 of the fair value hierarchy.
8.
Unrestricted balances with central bank
Demand deposits – Turkish Lira
Demand deposits – Foreign currency
Reserve deposits
Demand deposits – Foreign currency
Total balances with central bank
30 June 2015
31 December 2014
1,880,814
3,359,557
3,138,527
2,627,004
5,240,371
5,765,531
23,935,703
16,791,833
23,935,703
16,791,833
29,176,074
22,557,364
As per the Communiqué numbered 2013/15 “Reserve Deposits” of the Central Bank of the Republic of Turkey
(CBRT), banks keep reserve deposits at the CBRT for their TL and FC liabilities mentioned in the
communiqué. The reserve deposit rates vary according to their maturity compositions; the reserve deposit rates
are realized between 5%-11.5% for TL deposits and other liabilities, between 9%-13% for FC deposits and
between 6%-20% for other FC liabilities. Reserves are calculated and set aside every two weeks on Fridays
for 14-day periods. In accordance with the related communiqué, CBRT pays interest for TL and USD reserves.
22
9.
Securities portfolio
At 30 June 2015 and 31 December 2014, financial assets at fair value through profit or loss comprised the
following items:
Treasury bills and government bonds
Debt securities issued by corporations
Mutual funds
Equity shares
Total of financial assets at fair value through profit or loss
30 June 2015
31 December 2014
605,409
289,177
255,653
56,339
490,328
299,450
326,321
69,843
1,206,578
1,185,942
Financial assets at fair value through profit and loss, which are subject to repurchase agreements as at 30 June
2015 are amounting to TL 410,091 (31 December 2014: TL 318,315).
At 30 June 2015 and 31 December 2014, available for sale securities portfolio comprised the following:
30 June 2015
31 December 2014
Debt securities issued by corporations
Credit linked notes
Mutual funds
Equity shares
Allowance for impairment on securities
47,913,101
886,106
719,707
253,061
99,573
(7,191)
43,878,530
818,990
629,656
247,864
110,374
(8,643)
Total of available for sale securities
49,864,357
45,676,771
Financial assets available for sale which are subject to repurchase agreements amount to TL 23,267,601 as at
30 June 2015 (31 December 2014: TL 20,785,043).
TL 1,667,809 of the available for sale investment comprise marketable securities of Anadolu Hayat, reserved
in the name of life insurance policy holders (31 December 2014: TL 1,736,239).
The equity shares in available for sale portfolio are detailed as follows:
30 June 2015
31 December 2014
İMKB Takas ve Saklama Bankası A.Ş.
Kültür Yayınları İş-Türk Ltd. Şti.
Kredi Garanti Fonu
Bankalararası Kart Merkezi A.Ş.
Kredi Kayıt Bürosu A.Ş.
T.C. Merkez Bankası
Stock Exchange (Borsa İstanbul A.Ş.)
Other
Allowance for impairment
43,079
11,591
4,719
1,986
1,685
1,452
1,589
33,472
(7,191)
43,079
5,591
4,211
1,986
1,685
1,452
1,589
50,781
(8,643)
Total equity shares in available for sale investments
92,382
101,731
23
9.
Securities portfolio (continued)
The details of allowance for impairment on available for sale portfolio is as follows:
30 June 2015
31 December 2014
Bakırsan Bakır Sanayi Mamülleri Tic. A.Ş.
Kültür Yayınları İş-Türk Ltd. Şti.
Paşabahçe Mağazaları BV
Other
2,107
1,559
-3,525
2,107
1,559
1,452
3,525
Allowance for impairment on securities
7,191
8,643
30 June 2015
31 December 2014
Debt securities issued by financial institutions
172,286
106,417
1,307,192
84,668
Total of held to maturities portfolio
278,703
1,391,860
Held to maturity investments comprised the following items:
There are no held to maturity investment securities subject to a repurchase agreement as at 30 June 2015 (31
December 2014: TL 348,913).
There is not any reclassification between securities portfolio in the current period.
The following table summarizes the securities that were deposited as collaterals with respect to various
transactions:
Guarantee given for borrowing funding loans
Guarantee given for Export Finance Intermediary Loan (“EFIL”)
Turkish Treasury
International Foreign Banks
Clearing House
Central Bank of Turkey
Stock Exchange (Borsa İstanbul A.Ş.)
Central Banks of other countries
Interbank money market
Derivative exchange market
Securities deposited as collaterals
24
30 June 2015
31 December 2014
6,499,267
2,550,550
1,899,039
602,475
94,785
73,863
73,358
23,086
21,460
12,222
6,069,559
2,019,957
1,820,055
144,767
91,786
198,021
193,735
46,269
21,074
12,002
11,850,105
10,617,225
10.
Short term loans
Other guaranteed loans
Other non-guaranteed loans
Guaranteed export loans
Loans provided to financial sector
Discount and purchase bills
Factoring receivables
Loans provided to foreign institutions
Finance lease receivables
Non-guaranteed export loans
Domestic precious metals loans
Indemnified non-cash loans
Medium and long term loans
Guaranteed other investment and operating loans
Non-guaranteed loans
Finance lease receivables
Loans provided to foreign institutions
Loans provided to financial sector
Interest accruals on loans
Total performing loans and advances to customers
Non-performing loans and advances to customers
Non-performing loans
Non-performing leasing receivables
Non-performing factoring receivables
Allowance for impairment
Specific allowance for impairment on loans (-)
Portfolio allowance for impairment on loans (-)
Allowance for impairment on leasing receivables (-)
Allowance for impairment on factoring receivables (-)
Loans and advances to customers, net
25
30 June 2015
31 December 2014
20,059,762
19,298,011
4,647,686
3,141,329
1,786,676
1,459,000
1,101,846
994,698
665,581
193,667
6,643
18,300,728
20,156,703
4,743,236
3,653,908
289,583
1,416,718
514,661
838,144
498,356
149,263
12,633
53,354,899
50,573,933
100,225,374
31,341,180
2,132,703
1,864,949
880,165
85,510,347
28,952,829
1,920,390
1,505,259
307,361
136,444,371
118,196,186
2,072,686
1,743,287
191,871,956
170,513,406
3,168,398
127,058
31,663
2,712,288
135,390
24,348
3,327,119
2,872,026
(1,768,043)
(1,394,228)
(93,907)
(27,597)
(1,536,539)
(1,398,347)
(80,142)
(24,348)
(3,283,775)
(3,039,376)
191,915,300
170,346,056
10.
Loans and advances to customers (continued)
The movement in the allowance for impairment on loans for the six-month period ended 30 June is as follows:
Balance as at 1 January
Provision set during the period
Collection and recoveries
Effects of exchange rates in movements
Loans written-off during the period(*)
2,934,886
763,527
(368,668)
(5,926)
(161,548)
2,598,023
540,808
(255,011)
6,495
(225,965)
Balance as at 30 June
3,162,271
2,664,350
(*)
In the current period, portion of non-performing loans amounting to TL 189,224 including previously written-off receivables
amounting to TL 10 has been sold to Final Varlık Yönetim A.Ş. for TL 29,091 (30 June 2014: TL 272,517 has been sold to Girişim
Varlık Yönetimi A.Ş. for TL 44,017 ).
As at 30 June 2015 and 31 December 2014, details of finance lease receivables are as follows:
30 June 2015
Short term
Long term
Total
39,167
1,173,232
(217,701)
---
-2,330,740
(288,808)
48,232
42,539
39,167
3,503,972
(506,509)
48,232
42,539
Total performing finance lease receivables
994,698
2,132,703
3,127,401
101,996
(75,384)
25,062
(18,523)
127,058
(93,907)
1,021,310
2,139,242
3,160,552
Short term
Long term
Total
32,660
1,002,907
(197,423)
---
-2,100,927
(277,731)
44,935
52,259
32,660
3,103,834
(475,154)
44,935
52,259
Total performing finance lease receivables
838,144
1,920,390
2,758,534
104,487
(61,850)
30,903
(18,292)
135,390
(80,142)
Finance lease receivables, net
880,781
1,933,001
2,813,782
Invoiced finance lease receivables
Uninvoiced finance lease receivables
Unearned interest income (-)
Ongoing leasing contracts (*)
Advances given for lease transactions
Finance lease receivables, net
31 December 2014
Invoiced finance lease receivables
Uninvoiced finance lease receivables
Unearned interest income (-)
Ongoing leasing contracts(*)
Advances given for lease transactions
(*)
The Group purchases machinery and equipment from domestic and foreign suppliers on behalf of the lessees on the basis of the
leasing contract terms. As at 30 June 2015 and 31 December 2014, the balance includes the total amount paid for these machinery and
equipment but not charged to the lessees yet.
26
10.
Loans and advances to customers (continued)
The movement in the allowance for impairment on finance lease receivables loans for the six-month periods
ended 30 June is as follows:
Loans written off during the period
80,142
25,433
(1,798)
(9,870)
52,653
4,292
(410)
--
93,907
56,535
As at 30 June 2015 and 31 December 2015, details of factoring receivables are as follows:
30 June 2015
31 December 2014
Domestic factoring receivables, net
Export and import factoring receivables
Interest income accrual on factoring receivables
Unearned interest income
1,050,189
408,870
9,041
(9,100)
1,191,009
228,314
9,672
(12,277)
Total performing factoring receivables
1,459,000
1,416,718
31,663
(27,597)
24,348
(24,348)
1,463,066
1,416,718
Non-performing factoring receivables
Allowance for impairment on factoring receivables (-)
Factoring receivables, net
The movement in the allowance for impairment on factoring receivables loans for the six-month periods ended
30 June is as follows:
24,348
3,344
(95)
14,564
10,671
(2,948)
27,597
22,287
27
11.
During the six-month period ended 30 June 2015 the Group acquired assets with a cost of TL 883,974 (sixmonth period ended 30 June 2014: TL 1,002,594). The current period additions include property, plant and
equipment obtained as collection from non-performing loans amounting to TL 58,099 (six-month period ended
30 June 2014: TL 118,138).
Other property, plant and equipment with a carrying amount of TL 122,902 were disposed of during six-month
period ended 30 June 2015 (six-month period ended 30 June 2014: TL 93,387), resulting in a gain on disposal
of TL 57,326 (six-month period ended 30 June 2014: TL 39,474), which is included in other income.
12.
Funds borrowed
At 30 June 2015 and 31 December 2014, funds borrowed comprised the following:
30 June 2015
Short term Long term
Funds borrowed from domestic banks and institutions
Funds borrowed from foreign banks and institutions
Funds borrowed
31 December 2014
Short term
Long term
3,071,512
9,769,907
737,556
31,481,598
3,000,731
11,502,403
1,084,089
21,030,048
12,841,419
32,219,154
14,503,134
22,114,137
Borrowings from foreign banks and institutions include syndicated loans, securitization transactions and other
borrowings. The Bank obtains funds by securitization of all rights, title and interest to USD, EURO or GBP
payment orders under a Diversified Payment Rights (“DPR”) Securitization Program through TIB Diversified
Payment Rights Finance Company, which is a special purpose entity established in England.
Details of syndicated loans and securitization transactions as at 30 June 2015 are as follows:
Remaining principal
USD 38 Million (1)
EURO 20 Million (1)
EURO 30 Million (1)
EURO 42 Million (1)
EURO 46 Million (2)
EURO 69 Million (2)
USD 131 Million (2)
USD 37 Million (2)
USD 50 Million (3)
EURO 60 Million (3)
EURO 75 Million (3)
EURO 50 Million (3)
USD 326 Million (4)
EURO 756 Million (4)
USD 30 Million (5)
USD 220 Million (5)
USD 10 Million (6)
EURO 91 Million (6)
USD 334 Million (7)
USD 60 Million (8)
USD 15 Million (8)
USD 55 Million (8)
USD 200 Million (8)
USD 75 Million (8)
USD 150 Million (8)
Maturity
November 2016
November 2016
November 2016
November 2018
August 2024
August 2024
August 2017
August 2017
November 2018
November 2018
November 2018
November 2025
September 2015
September 2015
November 2019
November 2028
July 2015
July 2015
May 2016
May 2016
February 2022
February 2030
February 2020
February 2020
February 2020
February 2020
28
12.
Funds borrowed (continued)
Details of syndicated and securitization transactions as at 31 December 2014 are as follows:
Remaining Principal
Maturity
USD 50 Million (1)
November 2016
EURO 27 Million (1)
November 2016
EURO 40 Million (1)
November 2016
EURO 48 Million (1)
November 2018
EURO 49 Million (2)
August 2024
EURO 73 Million (2)
August 2024
USD 160 Million (2)
August 2017
USD 46 Million (2)
August 2017
USD 50 Million (3)
November 2018
EURO 60 Million (3)
November 2018
EURO 75 Million (3)
November 2018
EURO 50 Million (3)
November 2025
USD 326 Million (4)
September 2015
September 2015
USD 30 Million (5)
November 2019
USD 220 Million (5)
November 2028
USD 10 Million (6)
July 2015
EURO 91 Million (6)
July 2015
USD 2 Million (9)
February 2015
USD 400 Million (10)
May 2015
May 2015
(1) In October 2011, the Bank utilized the DPR program once again for the additional issuance of EURO 160 million and
USD 75 million by TIB Diversified Payment Rights Finance Company (USD 75 million Series 2011-A Notes, EURO 40
million Series 2011-B Notes, EURO 60 million Series 2011-C Notes, EURO 60 million Series 2011-D Notes).
(2) In June 2012, the Bank utilized the DPR program for the additional issuance of USD 225 million and EURO 125
million by TIB Diversified Payment Rights Finance Company. (EURO 50 million Series 2012-A Notes, EURO 75 million
Series 2012-B Notes, USD 175 million Series 2012-C Notes, USD 50 million Series 2012-D Notes).
(3) In December 2013, the Bank utilized the DPR program for the additional issuance of EURO 185 million and USD 50
million by TIB Diversified Payment Rights Finance Company (USD 50 million Series 2013-A Notes, EURO 60 million
Series 2013-B Notes, EURO 75 million Series 2013-C Notes, EURO 50 million Series 2013-D Notes).
(4) In September 2014, the Bank signed a syndicated loan agreement with one-year maturity in two tranches amounting
to USD 326 million and EURO 756 million, with an optional one-year extension of maturity.
(5) In December 2014, the Bank utilized the a DPR program for the additional issuance of USD 220 million and USD 30
million by TIB Diversified Payment Rights Finance Company (USD 220 million Series 2014-B Notes and USD 30 million
Series 2014-C Notes).
(6) On 8 July 2014, TSKB has signed a syndicated loan agreement with one-year maturity in two tranches amounting to
EURO 91 million and USD 10 million, under the coordination Commerzbank Aktiengesellschaft.
(7) In May 2015, the Bank has signed a syndicated loan agreement with one-year maturity amounting to USD 334 million
and EURO 919 million.
(8) In March 2015, the Bank utilized the DPR program once again for the additional issuance of USD 555 million by TIB
Diversified Payment Rights Finance Company (USD 60 million Series 2015-A Notes, USD 15 million Series 2015-B
Notes, USD 55 million Series 2015-C Notes, USD 200 million Series 2015-D Notes, USD 75 million Series 2015-E
Notes, USD 150 million Series 2015-F Notes).
(9) In March 2007, the Bank utilized the DPR program once again for the additional issuance of USD 550 million by TIB
Diversified Payment Rights Finance Company (USD 400 million Series 2007-A Notes, USD 150 million Series 2007-B
Notes). Both of the Series have been totally repaid in February 2015.
(10) On 9 May 2014, the Bank has signed a syndicated loan agreement with one-year maturity in two tranches amounting
to USD 400 million and EURO 672 million, with an optional one-year extension of maturity. The loans have been totally
repaid in May 2015.
29
13.
Taxation
The consolidated companies operating in Turkey are subject to taxation in accordance with the tax procedures
and the legislation effective in Turkey. Corporate income tax in Turkey, is 20% on the statutory corporate
income tax base, which is determined by modifying accounting income for certain exclusions and allowances
for tax purposes as at 30 June 2015 (31 December 2014: 20%). Provision is made in the accompanying
consolidated financial statements for the estimated charge based on the Group’s results for the period. The
Group’s consolidated effective tax rate in respect of continuing operations as at an for the six-month period
ended 30 June 2015 is 18.54% (30 June 2014: 21.83%).
Tax applications for foreign branches and foreign operations
The principal tax rates (%) of the tax authorities in each country used to calculate deferred taxes as of 30 June
2015 is as follows:
Country
Bosnia Herzegovina
Bulgaria
Egypt
Georgia
Germany
Italy
Kosovo
Northern Cyprus
Romania
Russia(*)
The Republic of Iraq
Ukraine
United Kingdom
(*)The
Tax rate
10.0
10.0
25.0
15.0
15.0
31.4
10.0
10.0
16.0
2.0-20.0
15.0
18.0
20.0
tax rate in Tatarstan region of Russia is 2.0% while the tax rate in other regions is 20.0%.
Tax legislation in Russia is dependent on different interpretations and changes frequently. Interpretations of
tax legislation made by tax authorities regarding with the Group’s activities may not be the same as
management’s.
30
14.
Provisions
Developments about tax audit
As announced by material event disclosures dated 31 December 2012 and 19 December 2013, an inspection
was conducted by Tax Audit Committee Inspectors regarding payments (contributions) made by Bank to
“Türkiye İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı” (“Pension
Fund”), which is founded according to Turkish Commercial Law and Civil Law, for fulfilling Bank’s
obligations within the framework of the Foundation Share and the relevant legislation.
As a result of this investigation, tax audit reports were prepared for 2007, 2008, 2009, 2010, 2011 claiming
that the aforementioned contributions should be taxed in terms of wage base. According to these reports, the
total amount of tax and penalties notified to Bank was TL 74,353 for 2007 and 2008; and as of reporting date
TL 151,899 for 2009, 2010 and 2011. Bank applied to tax courts to cancel these tax notifications and some of
the court decisions were in favor of the Bank and some others were against the Bank.
In this context, for the finalized decisions of Regional Administrative Courts related to 2007 and 2008 against
the Bank, the Bank applied to the Constitutional Court. As considering one of the Bank’s applications, the
Constitutional Court made its decision court file numbered 2014/6192 amounting to TL 39,378.20 (full
amount). The court decision dated 12 November 2014 appeared in the official gazette dated 21 February 2015
and numbered 29274. According to this decision, there is no predictability in legal conformity for taxing the
Bank's contributions to the Pension Fund in terms of wage base and for this reason it was accepted that property
rights of the Bank which is secured by the 35th article of Constitution has been violated. Finally the Court
decided that the amount of tax, penalties and default interest which was paid by the Bank should be paid back
to the Bank with legal interest as for compensation.
Besides the Bank, inspections were conducted by Tax Audit Committee Inspectors for the period 2007-2011
regarding the contributions of TSKB, Milli Reasürans and Anadolu Sigorta to their supplementary pension
funds which are founded according to Turkish Commercial Law and Civil Law. As a result of the issued
reports, aforementioned Companies were notified a total of TL 33 million (full amount) tax penalty notices.
The Companies assessed their practice regarding the contributions and concluded that their practice is in
conformity with the legislation and the tax penalty notices lack legal basis. They filed lawsuits at various tax
courts against the tax penalties, some of the court decisions were in favor of the Companies and some others
were against them.
According to the decision of the Constitutional Court, it is expected that all of the cases related to the periods
2007, 2008, 2009, 2010 and 2011 will conclude in favor of the Bank and the Group companies. The effects of
this court case is assessed as an adjusting event in 2014 financial statements and previously recognised
provisions are reversed accordingly in 2014 financial statements.
The path to be followed for other provisions allocated for the same reason for the year 2012 and subsequent
periods will be determined depending on the process. Within the scope of these developments, the Bank
recognized provisions amounting to TL 16,554 as at 30 June 2015 (30 June 2014: TL 18,440).
31
15.
Capital and reserves
The Bank’s share capital is divided into Group A, Group B and Group C shares.
With nominal values of full 0.01 TL (full amount) Group A shares have the privileges:
- to obtain 20 times share at the distribution of bonus shares issued from conversion of extraordinary reserves
and revaluation funds generated in accordance with the relevant laws (Article 18 of the Articles of
Incorporation)
- to exercise 20 times of pre-emption rights (Article 19 of the Articles of Incorporation)
- for 20 voting rights (Article 49 of the Articles of Incorporation)
Despite having a lower nominal value, Group (B) shares, each with a nominal value of 0.01 TL (full amount),
have the same rights with the Group (C) shares having a nominal value of 0.04 TL (full amount) each.
Furthermore, Group (A) and (B) shares, each with a nominal value of 0.01 TL (full amount), are granted
privileges in distribution of profits pursuant to Article 58 of the Articles of Incorporation.
The Bank has accepted the registered capital system set out in accordance with the Law No: 2499 of the Capital
Markets Board. The registered capital of the Bank is TL 10,000,000.
Authorized and nominal paid in capital can be analysed as follows:
30 June 2015
Group
A
B
C
31 December 2014
Par Value
Full TL
Authorized
Paid-in
Authorized
Paid-in
0.0100
0.0100
0.0400
1
29
4,499,970
1
29
4,499,970
1
29
4,499,970
1
29
4,499,970
4,500,000
4,500,000
4,500,000
4,500,000
The shareholders’ structure of the Bank is presented below:
30 June 2015
Paid-up
capital
Supplementary Pension Fund of İşbank Members
Republican People's Party (“CHP”)
Publicly traded
(%)
31 December 2014
Paid-up
capital
(%)
2,455,549
1,717,967
1,942,422
40.15
28.09
31.76
2,455,549
1,717,967
1,942,422
40.15
28.09
31.76
6,115,938
100.00
6,115,938
100.00
Share premium
Excess amount of selling price and nominal value for each share was recorded as share premium in equity.
Legal reserves
The legal reserves consist of first and second legal reserves in accordance with the Turkish Commercial Code.
The first legal reserve is appropriated out of the statutory profits at the rate of 5%, until the total reserve reaches
a maximum of 20% of the entity’s share capital. The second legal reserve is appropriated at the rate of 10% of
all distributions in excess of 5% of the entity’s share capital. The first and second legal reserves are not
available for distribution unless they exceed 50% of the share capital, but may be used to absorb losses in the
event that the general reserve is exhausted.
32
15.
Capital and reserves (continued)
As at 30 June 2015, the Group has legal reserves amounting to TL 3,203,179 (31 December 2014: TL
2,912,743).
Fair value reserve
The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments,
excluding impairment losses, until the investment is derecognised.
Hedging reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of the
hedging instruments used in cash flow hedges pending subsequent recognition in profit or loss as the hedged
cash flows affect profit or loss.
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
Dividends
Regarding the profit for the year 2014, at the Ordinary General Assembly of the Bank held on 31 March 2015,
it was decided to distribute a dividend of TL 841,011 to Group A, Group B and Group C shareholders, founder
shareholders, Board of Directors, management and personnel and to allocate TL 237,052 to legal reserves from
retained earnings. According to Turkish legislation, unconsolidated current year profit is used or profit
distribution.
16.
An analysis of the Group’s net fee and commission income for the six-month periods ended 30 June is as
follows:
501,438
183,894
123,699
100,668
98,781
64,069
48,597
47,457
28,092
167,648
471,910
135,438
98,307
54,785
96,994
55,019
31,552
50,500
30,762
137,514
1,364,343
1,162,781
Fee and commission expense
Deferred acquisition costs
Commissions given for credit cards
Brokerage and other commission
Stock exchange operations commission
(340,683)
(127,441)
(19,681)
(13,113)
(315,307)
(82,692)
(10,298)
(15,915)
Total fee and commission expense
(500,918)
(424,212)
863,425
738,569
Credit card fees and commission
Non-cash loan commission
Money transfer charges
Collection and payment commissions
Bank account charges
Mutual funds portfolio management commission
Brokerage
Customer investigation charges
Commission income from reinsurers
Other
Total fee and commission income
33
17.
An analysis of the Group’s other operating income for the six-month periods ended 30 June is as follows:
18.
Reversal of excess provision
Gain on sale of premises and equipment (net)
Insurance refund
Other
76,792
57,326
74,553
236,290
319,200
39,474
1,691
162,967
Total other operating income
444,961
523,332
An analysis of the Group’s other operating expenses for the six-month periods ended 30 June is as follows:
General administrative expenses
Marketing, selling and distribution expenses
Provision expenses, net
Deposit insurance premium expense
Research and development expenses
3,302,668
477,708
223,631
148,012
44,870
3,003,913
427,951
479,509
127,410
29,695
Total of other operating expenses
4,196,889
4,068,478
An analysis of the Group’s general administrative expenses for the six-month periods ended 30 June is as
follows:
Salaries and employee benefits
Depreciation and amortisation expenses
Administration expenses
Rent expense
Judiciary expenses
Communication expense
Maintenance expense
Outsourcing services
Taxation expense other than income
Other
1,740,084
228,754
216,984
167,372
84,912
74,422
65,432
37,925
33,367
653,416
1,600,351
212,594
206,623
140,492
74,437
55,937
41,384
21,558
30,724
619,813
Total general administrative expenses
3,302,668
3,003,913
General administrative expenses
34
19.
Operating segments
The Group is organized in two main business segments as described below, which are the Group’s strategic
business units: Banking and non-banking. The strategic business units offer different products and services,
and are managed separately based on the Group’s management and internal reporting structure. For each of
the strategic business units, the Board of Directors reviews internal management reports on at least a semiannually basis.
Banking segment includes corporate, commercial, retail and private banking, as well as treasury. Non-banking
operations are followed according to insurance, ‘investment and finance’ and ‘manufacturing, trading and
service’ segments.
The following summary describes the operations in each of the Group’s reportable segments:
Banking business
The Group provides services to the large corporations, SMEs and other trading companies (excluding real
trading persons) within the course of its corporate and commercial operations through various financial media.
Services such as project financing, operating and investment loans, deposit and cash management, credit cards,
cheques and bills, foreign trade transactions and financing, letter of guarantee, letter of credit, forfeiting,
foreign currency trading, bill collections, payrolls, investment accounts, tax collections and other banking
services are being provided for the aforementioned customer segments.
Services are being provided to individuals, real trading persons and non-trading corporations and institutions
within the context of “Retail Banking”. This customer segment’s requirements are met by banking services
such as deposits, consumer loans, overdraft accounts, credit cards, bill collections, remittances, foreign
currency trading, safe-deposit boxes, insurance, tax collections, investment accounts and by other banking
services. As for the private banking category, any kind of financial and cash management services are provided
for individuals in the high-income group.
Within the context of treasury transactions, medium and long term funding is being fulfilled by tools such as
security trading, money market transactions, spot and installment based TL and foreign currency trading, and
derivative transactions such as forward, swap, futures and options, as well as syndication and securitization.
All other banking segments include combined information about operating segments that do not meet the
quantitative thresholds.
Non-banking business
Insurance segment includes the Group’s insurance and reinsurance activities.
Investment and finance operations include the Group’s leasing, factoring, brokerage, corporate finance,
investment advisory, private portfolio management and real estate investment activities.
Core business of the manufacturing, trading and service segment is mainly glass production. In addition,
complementary industrial and commercial operations related to glass production are included into
manufacturing and trading segment as well as food production operations.
Information regarding the results of each reportable segment is included below. Performance is measured based
on segment profit before income tax, as included in the internal management reports that are reviewed by the
Board of Directors. Segment profit is used to measure performance as management believes that such
information is the most relevant in evaluating the results of certain segments relative to other entities that
operate within these industries. Inter-segment pricing is determined on an arm’s length basis.
Measurement of segment assets and liabilities and operating segment results is based on the accounting policies
set out in the accounting policy notes.
35
19.
Operating segments (continued)
Based on the internal reporting, the Group reports to the management based on the IFRS figures.
Banking business
Corporate
Commercial
Retail
Private
Treasury
investment
All other
banking
segments
Manufacturing,
Investment
trading and
Insurance
and finance
service
Combined
Consolidation
adjustments
Total
At 30 June 2015
Total assets
69,210,583
74,974,938
40,271,745
193,539
62,902,920
41,246,573
10,039,463
14,549,726
22,379,885
335,769,372
(29,035,560) 306,733,812
38,632,039
30,387,092
67,159,938
15,931,949
75,538,625
61,129,426
10,039,463
14,570,955
22,379,885
335,769,372
(29,035,560)
306,733,812
Total assets
62,616,334
64,034,399
36,598,119
250,548
57,652,494
33,976,790
9,140,909
13,539,079
20,754,406
298,563,078
(27,315,182)
271,247,896
29,378,678
27,546,652
59,404,921
17,447,516
62,515,541
58,822,675
9,140,909
13,551,780
20,754,406
298,563,078
(27,315,182)
271,247,896
At 31 December 2014
36
19.
Banking business
1 January – 30 June 2015
Income statement
Private
Insurance
Investment
and finance
Manufacturing
trading and
service
Combined
Consolidation
adjustments
Corporate
Commercial
Interest income
1,906,616
3,443,396
2,201,849
8,414
1,870,914
165,454
262,174
329,808
114,989
10,303,614
(235,188)
10,068,426
Interest expense
(514,187)
(506,332) (1,357,506)
(480,109)
(1,934,344)
(388,186)
--
(352,844)
(204,732)
(5,738,240)
236,463
(5,501,777)
Net interest income
1,392,429
2,937,064
844,343
(471,695)
(63,430)
(222,732)
262,174
(23,036)
(89,743)
4,565,374
1,275
4,566,649
863,425
Retail
Treasury
investment
All other
banking
segments
Total
197,114
668,346
465,562
5,731
(728)
(173,994)
(339,803)
63,516
(277)
885,467
(22,042)
--
--
--
--
296,828
--
46,727
6,845
73,643
424,043
--
424,043
Derivative trading income / (expense), net
--
--
--
--
(500,521)
--
692
83,153
--
(416,676)
28,414
(388,262)
--
--
--
--
--
--
--
--
6,042,267
6,042,267
(2,513,484)
3,528,783
--
--
--
--
--
--
1,924,461
--
--
1,924,461
(24,464)
1,899,997
--
--
--
--
--
--
--
--
(4,919,004)
(4,919,004)
2,436,824
(2,482,180)
--
--
--
--
--
--
(1,589,915)
--
--
(1,589,915)
9,500
(1,580,415)
2,076
71,512
34,427
168
1
43,026
56,349
193,043
512,065
912,667
(143,758)
768,909
Other operating expense
(28,519)
(405,650)
(815,815)
(5,953)
(17)
(1,802,618)
(270,452)
(301,989)
(1,222,867)
(4,853,880)
313,323
(4,540,557)
Foreign exchange gains / (losses), net
Impairment losses on loans and advances,
net
--
--
--
--
--
45,082
34,349
97,991
95,621
273,043
--
273,043
--
--
--
--
--
(389,978)
--
(29,870)
--
(419,848)
--
(419,848)
Dividend income
--
--
--
--
--
588,544
60,985
68,802
291,465
1,009,796
(990,813)
18,983
Share of losses of equity accounted investees
--
--
--
--
--
--
--
(1,229)
--
(1,229)
(4,247)
(5,476)
1,563,100
3,271,272
528,517
(471,749)
(267,867)
(1,912,670)
185,567
157,226
783,170
3,836,566
(909,472)
2,927,094
--
--
--
--
(409,017)
--
(24,106)
(15,066)
(74,753)
(522,942)
(19,867)
(542,809)
1,563,100
3,271,272
528,517
(471,749)
(676,884)
(1,912,670)
161,461
142,160
708,417
3,313,624
(929,339)
2,384,285
---
---
---
---
---
2,301,586
--
161,461
--
144,102
(1,942)
708,417
--
3,315,566
(1,942)
(1,469,657)
540,318
1,845,909
538,376
Profit / (loss) before taxation
Income tax expense
Net profit / (loss)
37
19.
Banking business
1 January – 30 June 2014
Income statement
Interest income
Corporate Commercial
1,527,969
2,825,194
Retail
Treasury
investment
Private
All other
banking
segments
1,755,779
12,141
1,879,503
222,299
Insurance
Investment
and finance
Manufacturing,
trading and
service
Combined
191,021
259,819
115,825
8,789,550
Consolidation
adjustments
Total
(256,128)
8,533,422
Interest expense
(502,633)
(487,231) (1,196,214)
(541,681)
(1,376,541)
(303,032)
--
(281,645)
(159,688)
(4,848,665)
216,797
(4,631,868)
Net interest income
1,025,336
2,337,963
559,565
(529,540)
502,962
(80,733)
191,021
(21,826)
(43,863)
3,940,885
(39,331)
3,901,554
153,156
531,078
436,750
6,054
(467)
(121,907)
(312,680)
49,853
740
742,577
(4,008)
738,569
--
--
--
--
165,781
--
29,009
6,857
10
201,657
--
201,657
Derivative trading income / (expense), net
--
--
--
--
(752,129)
--
(15)
313,760
--
(438,384)
10,962
(427,422)
--
--
--
--
--
--
--
--
5,637,431
5,637,431
(2,216,065)
3,421,366
--
--
--
--
--
--
1,689,697
--
--
1,689,697
42,585
1,732,282
--
--
--
--
--
--
--
--
(4,586,571)
(4,586,571)
2,133,596
(2,452,975)
--
--
--
--
--
--
(1,297,390)
--
--
(1,297,390)
(46,991)
(1,344,381)
9,605
219,175
102,740
240
147,707
(89,608)
26,784
184,259
342,242
943,144
(170,645)
772,499
(4,353,121)
(60,450)
(368,828)
(759,114)
(7,860)
(135,852)
(1,761,841)
(243,566)
(268,527)
(1,025,436)
(4,631,474)
278,353
Foreign exchange gains / (losses), net
--
--
--
--
--
485,912
(15,330)
(112,499)
(30,574)
327,509
258
327,767
Impairment losses on loans and advances, net
--
--
--
--
--
(306,704)
--
(11,625)
--
(318,329)
--
(318,329)
Dividend income
--
--
--
--
--
607,869
40,692
42,738
297,066
988,365
(973,339)
15,026
Share of gains of equity accounted investees
--
--
--
--
--
--
--
367
--
367
9,390
9,757
1,127,647
2,719,388
339,941
(531,106)
(71,998)
(1,267,012)
108,222
183,357
591,045
3,199,484
(975,235)
2,224,249
--
--
(427,978)
--
(15,779)
(21,138)
(23,286)
(488,181)
2,639
(485,542)
Profit / (loss) before taxation
Income tax expense
-1,127,647
2,719,388
339,941
(531,106)
(499,976)
(1,267,012)
92,443
162,219
567,759
2,711,303
(972,596)
1,738,707
--
--
--
--
--
1,888,882
92,443
162,719
567,759
2,711,803
(1,421,305)
1,290,498
--
--
--
--
--
--
--
(500)
--
(500)
448,709
448,209
38
19.
Geographic information
Financial position
Turkey
Consolidation
adjustments Consolidated
Europe
Russia
Other
Combined
Assets
325,151,850 7,405,890
3,151,112
60,520
335,769,372
(29,035,560)
306,733,812
Liabilities
274,773,704 4,209,570
2,342,117
137,504
281,462,895
(10,343,903)
271,118,992
808,995 (76,984)
54,306,477
(18,691,657)
35,614,820
(29,035,560)
306,733,812
At 30 June 2015
Total equity
Total liabilities and
equity
50,378,146 3,196,320
3,151,112
60,520
335,769,372
Europe
Russia
Other
Combined
Assets
289,390,337 6,583,582
2,510,646
78,513
298,563,078
(27,315,182)
271,247,896
Liabilities
239,292,376 3,727,189
2,030,255
138,521
245,188,341
(9,477,104)
235,711,237
50,097,961 2,856,393
480,391
(60,008)
53,374,737
(17,838,078)
35,536,659
289,390,337 6,583,582
2,510,646
78,513
298,563,078
(27,315,182)
271,247,896
Financial position
325,151,850 7,405,890
Turkey
Consolidation
adjustments Consolidated
At 31 December 2014
Total equity
Total liabilities and
equity
39
20.
Earnings per share
Basic earnings per share (“EPS”) are calculated by dividing the net income for the period attributable to
ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
There is no dilution of shares as at 30 June 2015.
The following reflects the comprehensive income and share data used in the basic earnings per share
computations:
Profit available to shareholders
Weighted average number of shares during the period (Million)
Basic earnings per share (full TL per share)
21.
30 June 2015
30 June 2014
1,845,909
1,290,498
112,502
112,502
0.0164
0.0115
Related parties
In the course of conducting its banking business, the Group conducted various business transactions with
related parties. These include loans, customer accounts, funds borrowed and non-cash transactions. These are
all commercial transactions and realised on an arms-length basis. The volumes of related party transactions,
outstanding balances at the period end and relating expense and income for the periods are as follows:
Direct and indirect shareholders
30 June 2015
31 December 2014
30 June 2014
358,450
206,316
331,879
15,705
29,940
17,621
Deposits
Interest expense
Others
30 June 2015
31 December 2014
30 June 2014
8,820
90,471
75,423
21,570
65,774
5,714
77,166
45,305
19,295
49,477
5,277
72,098
23,662
37,428
49,226
390
(1,827)
133
5,950
(103,804)
316
1,409
209
18,063
(190,086)
317
(539)
117
6,478
(91,267)
---
---
---
Loans and advances
Non-cash loans
Deposits
Trade receivables
Trade payables
Interest income
Interest expense
Derivative instruments
Derivative trading income, net
Compensation of key management personnel of the Group
The executive and non-executive member of Board of Directors and management received remuneration and
fees amounted to TL 60,278 (30 June 2014: TL 49,993) comprising salaries and other short-term benefits.
40
22.
30 June 2015
31 December 2014
39,235,349
21,245,664
10,460,400
10,787,406
6,060,510
1,896,916
1,126,547
6,745,979
34,649,566
20,489,527
9,956,796
7,763,406
5,875,007
1,229,731
920,067
6,611,617
97,558,771
87,495,717
Letters of guarantee
Commitments for credit card expenditure limits
Loan granting commitments
Letters of credit
Commitments for check payments
Acceptance loans
Endorsements and other guarantees
Other commitments
The Group has forward, swap, option and future transactions as of the reporting date. The Group’s derivative
transactions predominantly consist of currency swaps, forward foreign currency trading, credit default swaps,
currency options and option contracts on securities. The Group has no derivative products that are detached
from the host contract. Derivative financial instruments are carried at their fair value at the contract date and
re-measured by their prevailing fair value in the following reporting periods. Even though some derivative
transactions economically provide risk hedging, since all necessary conditions to be defined as items suitable
for financial risk hedging accounting are not met, they are recognised as “held for trading purposes” within the
framework of IAS 39 “Financial Instruments: Recognition and Measurement” and the profit and loss resulting
from such instruments are associated with the income statement.
30 June 2015
Buy
Sell
Currency swaps
Interest rate swaps
Currency options
Forward foreign exchange contracts
Interest rate options
Marketable security and index options
Currency futures
Other
31 December 2014
Buy
Sell
37,201,268
15,235,938
4,596,207
12,803,730
777,981
20,893
4,296
666,032
34,359,812
15,235,938
4,484,008
13,015,419
777,981
15,406
4,274
3,872,269
24,539,669
13,710,176
5,488,778
4,692,452
718,420
21,813
-373,710
22,704,772
13,710,176
5,454,351
4,689,703
718,420
32,704
-1,934,118
71,306,345
71,765,107
49,545,018
49,244,244
41
22.
Commitment and contingencies (continued)
Derivative financial instruments held for trading (continued)
30 June 2015
Asset
Liability
Interest rate swaps
Currency swaps
Interest rate options
Forward foreign exchange contracts
Currency options
Other
Fair value of derivatives
31 December 2014
Asset
Liability
674,694
463,817
46,154
118,148
50,631
11,085
(158,790)
(559,788)
(48,382)
(150,988)
(58,086)
(2,919)
544,574
396,077
21,155
57,698
48,275
13,292
(159,503)
(449,535)
(20,935)
(58,528)
(57,509)
(3,831)
1,364,529
(978,953)
1,081,071
(749,841)
Derivative assets and liabilities designed as cash flow hedges
The Şişecam Group entered into a loan agreement with HSBC London in 27 November 2013 and fixed the
interest rates of variable interest rate loans that were denominated in USD along the maturity with the purpose
of making the liability position of the companies located in Russia and operating under glass packaging
segment compatible with their asset position in terms of currency and hedging the companies against the
possible increases in interest rates.
Hedging instruments include, interest rate swaps converting floating rate of Libor+2.55% to fixed rate of
9.30% with 3-month intervals for a USD denominated borrowing of USD 70 million and cross currency swaps
converting USD denominated capital and interest payables into RUB denominated ones.
The fair values of derivatives designed as cash flow hedges are as follows.
30 June 2015
Asset
Liability
31 December 2014
Asset
Liability
Interest rate swaps
76,729
84,342
--
Total derivative assets/(liabilities) held for risk
management
76,729
84,342
--
Derivative assets and liabilities designed as fair value hedges
Fixed rate Eurobonds issued by TSKB and a portion of fixed rate borrowings of TSKB are subject to fair value
hedge accounting. TSKB entered into interest rate swap agreements in order to hedge the change in fair value
of its fixed rate financial liabilities.
The fair values of derivatives designed as fair value hedges are as follows.
30 June 2015
Asset
Liability
31 December 2014
Asset
Liability
Interest rate swaps
2,419
(10,832)
--
--
Total derivative assets/(liabilities) held for risk
management
2,419
(10,832)
--
--
42
22.
Commitment and contingencies (continued)
Fiduciary activities
The Group provides custody, investment management and advisory services to third parties. Those assets that
are held in a fiduciary capacity are not included in the accompanying consolidated financial statements.
The Group also manages 95 mutual funds, which were established under the regulations of the Turkish Capital
Markets Board (31 December 2014: 96). In accordance with the funds’ charters, the Group purchases and sells
marketable securities on behalf of funds, markets their participation certificates and provides other services in
return for a management fee and undertakes management responsibility for their operations.
Litigations
In the normal course of its operations, the Group can be constantly faced with legal disputes, claims and
complaints. The necessary provision, if any, for those cases are provided based on management estimates and
professional advice.
Put/call option agreements
Put/call option agreements were signed between Şişecam Group and European Bank for Reconstruction and
Development (“EBRD”) on 24 October 2014 and 10 November 2014. Accordingly, Şişecam Group has call
option for Paşabahçe Cam San. ve Tic. A.Ş. (“Paşabahçe”) while it has granted a put option to EBRD. If
Paşabahçe’s public offering occurs until 24 October 2019, related put/call options will be invalid.
Put/call option agreements were signed between Şişecam Group and International Finance Corporation
(“IFC”) on 18 November 2014. Accordingly, Şişecam Group has granted a put option to IFC for noncontrolling shares of Soda Sanayii A.Ş. If Soda Sanayii A.Ş.’s second public offering occurs in 6 years after
the signature date (until 6th anniversary), related put option will be invalid.
Other commitments
According to the agreements made among Şişecam Group, Türkiye Petrolleri Anonim Ortaklığı A.Ş., Shell
Enerji A.Ş., Mersin O.S.B., Aygaz Doğal Gaz Toptan Satış A.Ş., Boru Hatları and Petrol Taşıma A.Ş.
(BOTAŞ) and Eskişehir Organize Sanayii Bölge Müdürlüğü, Palgaz Doğalgaz A.Ş., Enerya Denizli Gaz
Dağıtım A.Ş., Akfel Petrol ve Doğalgaz Mühendislik A.Ş. the Group has a commitment to purchase
851,009,153 sm3 of natural gas between 1 July 2015 and 31 December 2015 (30 June 2014: 718,547,169 sm3).
Government grants
Certain expenses regarding industries related to research and development projects which have been certified
by expert organizations are reviewed and evaluated so that specific proportion of these expenses are considered
as grants and can be refunded within the context of the Decision No: 94/6401 made on the government grants
for exporting activities in accordance with the Money Credit Coordination Board’s Communiqué No: 98/10
on Research and Development Grants published by the Undersecretariat of Foreign Trade based on the decision
No: 98/16 made as at 9 September 1998.
Exporting activities and other foreign currency generating operations, within the scope of the standards
determined by the Ministry of Finance and Undersecretariat of Foreign Trade, are exempt from stamp tax and
fees. Government grants are paid to support participating in international fairs in accordance with the decision
No: 2004/11 of the Money Credit and Coordination Committee issued at 16 December 2004.
A memorandum for government incentive was signed between Trakya Glass Bulgaria EAD and Ministry of
Economy of Bulgaria and Ministry of Energy of Bulgaria on behalf of the Republic of Bulgaria under
“Regulation of Investment Incentive and Implementation” of Bulgaria and “Government Incentive
Legislation” of European Union. Glass Corp S.A. utilizes government grants in Romania within this scope.
43
23.
Events after the reporting period
Explanations regarding issuance of bills and bonds and other borrowings
Between 1 July 2015 and the report date, Group companies carried out several issues of bills and bonds that
are denominated in TL, USD and EURO. Nominal values of TL denominated issues amount to TL 6.5 million
with interest rates ranging between 9.58% and 12.53%, and redemption dates between 10 August 2015 and 26
September 2016. Nominal values of USD denominated issues amount to USD 401.9 million with interest rates
ranging between 1.28% and 3.20%, and redemption dates between 5 November 2015 and 28 July 2018.
Nominal values of EURO denominated issues amount to EURO 164 million with interest rate ranging between
0.89% and 1.00%, and redemption dates between 12 January 2016 and 20 April 2016.
Between 1 July 2015 and the report date, İş Yatırım Menkul Değerler A.Ş. carried out several issues of
structured instruments to qualified investors that are denominated in TL. The nominal values of the issues
amount to TL 129,540 with interest rates ranging between 0.90% and 32.60%, and redemption dates between
5 August 2015 and 16 December 2015.
On 14 September 2015, the Bank has signed a syndicated loan agreement in the amount of EURO 796.5 million
and USD 281 million with a maturity of 367 days. The all-in cost for the highest participation level is
Libor/Euribor+0.75%.
On 2 July 2015, TSKB has signed a syndicated term loan agreement with two tranches of EURO 213 million
and USD 17.5 million in total and a maturity of 367 days.
Explanations regarding the merger, acquisition settlements, establisment and liquidation of subsidiaries
On 29 April 2015, sale of shares of Avea held by Group companies (Türkiye İş Bankası A.Ş., Türkiye Şişe ve
Cam Fabrikaları A.Ş., Trakya Yatırım Holding A.Ş., Anadolu Hayat Emeklilik A.Ş., and Anadolu Anonim
Türk Sigorta Şirketi) to Türk Telekomünikasyon A.Ş. for TL 837 million (full amount) was decided. The sale
price will be received approximately in 4.5 years in 6 installments after the share transfer date. The necessary
legal authorizations for the share transfer has been obtained as of 30 July 2015 and the procedures of share
transfer are finalized as of the approval of these financial statements.
On 3 August 2015, the Group established JSC Isbank Georgia, a wholly-owned subsidiary that obtained a
banking license in Georgia and had a starting capital of Lari 30,000,000 (approximately USD 13.2 million as
of 3 August 2015). The Bank’s branches in Batumi and Tbilisi were converted into branches of JSC Isbank
Georgia.
On 10 July 2015, due to the restructuring of companies operating in Russia the shares of Sudel Invest S.a.r.l
held by Group companies (Anadolu Cam Investment BV and Balsand BV) were sold to AC Glass Holding BV
(another Group company) for EURO 66 million. The sale price will be received through a 4 year payment plan
beginning at December 2015.
Other disclosures
The Ministry of Customs and Trade initiated an investigation under Law No: 6502 and now-abolished Law
No: 4077 and has imposed an administrative fine of TL 110,110 to the Bank pursuant to this investigation. On
16 September 2015, the Bank paid TL 82,582, which is the amount calculated by benefiting from the discount
within the framework of Article 17 of Misdemeanor Law No: 5326, provided that the Bank reserves its right
to litigate against the related decision and to claim for refund. The Bank has filed a lawsuit in İstanbul 11th
Administrative Court for the cancellation of administrative fine imposed against the Bank in due time.
44
23.
Events after the reporting period (continued)
Other disclosures (continued)
On 29 September 2015, Moody’s affirmed the Bank’s ratings. The ratings assigned by Moody’s is as follows:
MOODY’S – 29 September 2015
Rating
Baa3
Baa3
Baa3
P-3
P-3
Long-term Foreign Currency Deposit
Long-term Local Currency Deposit
Long-term Foreign Currency Senior Debt
Short-term Foreign Currency Deposit
Short-term Local Currency Deposit
45
Outlook
Negative
Negative
Negative
---

türki̇ye i̇ş bankasi a

Transcription

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