Sekerbank footnotes 30.09.2015 BRSA Consolidated

Transcription

Şekerbank
Türk Anonim Şirketi and
Its Financial Subsidiaries
Consolidated Interim Financial Statements
As of and for the Nine-Month Period Ended 30 September 2015
With Auditors’ Review Report Thereon
(Convenience Translation of Consolidated Interim
Financial Statements and Related Disclosures and Footnotes
Originally Issued in Turkish)
Akis Bağımsız Denetim ve Serbest
Muhasebeci Mali Müşavirlik
Anonim Şirketi
13 November 2015
This report contains “Auditors’ Review
Report” comprising 1 page and;
Consolidated Interim Financial Statements
and Related Disclosures and Footnotes”
comprising 95 pages.
REVIEW REPORT ON INTERIM CONSOLIDATED FINANCIAL INFORMATION
To the Board of Directors of Şekerbank T.A.Ş.
Introduction
We have reviewed the consolidated statement of financial position of Şekerbank T.A.Ş. (the “Parent Bank”) and
its financial subsidiaries (collectively the “Group”) at 30 September 2015 and the related consolidated income
statement, consolidated statement of gains and losses recognized in equity, consolidated statement of changes in
shareholders’ equity, consolidated statement of cash flows and a summary of significant accounting policies and
other explanatory notes to the consolidated financial statements for the nine-month-period then ended. The
Parent Bank Management is responsible for the preparation and fair presentation of interim financial information
in accordance with the “Regulation on Accounting Applications for Banks and Safeguarding of Documents”
published in the Official Gazette no.26333 dated 1 November 2006, and other regulations on accounting records
of banks published by Banking Regulation and Supervision Board and circulars and interpretations published by
the Banking Regulation and Supervision Agency (“BRSA”) and the Turkish Accounting Standard 34 “Interim
Financial Reporting” except for the matters regulated by the BRSA Legislation. Our responsibility is to express
a conclusion on these consolidated interim financial statements based on our review.
Scope of Review
We conducted our review in accordance with the Standard on Review Engagements (SRE) 2410, “Limited
Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of
interim financial information consists of making inquiries, primarily of persons responsible for financial
reporting process, and applying analytical and other review procedures. A review of interim financial
information is substantially less in scope than an independent audit performed in accordance with the
Independent Auditing Standards and the objective of which is to express an opinion on the financial statements.
Consequently, a review of the interim financial information does not provide assurance that the audit firm will
be aware of all significant matters which would have been identified in an audit. Accordingly, we do not express
an opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
consolidated financial information do not give a true view of the financial position of the Group at 30 September
2015 and of the results of its operations and its cash flows for the nine-month-period then ended in all aspects in
accordance with the “Regulation on Accounting Applications for Banks and Safeguarding of Documents”
published in the Official Gazette no.26333 dated 1 November 2006, and other regulations on accounting records
of Banks published by the Banking Regulation and Supervision Board and circulars and interpretations
published by the Banking Regulation and Supervision Agency and the Turkish Accounting Standard 34 “Interim
Financial Reporting” except for the matters regulated by BRSA Legislation.
Akis Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi
A Member of KPMG International Cooperative
Orhan Akova
Partner, SMMM
Istanbul, 13 November 2015
Additional paragraph for convenience translation to English
As explained in detail in Section 3.I, the accompanying financial statements are not intended to present the
financial position and results of operations in accordance with the accounting principles and practices generally
accepted in countries and jurisdictions other than Turkey.
THE CONSOLIDATED INTERIM FINANCIAL REPORT OF ŞEKERBANK T.A.Ş.
FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2015
Address
:
Telephone
Fax
Web Site
E-mail Address
:
:
:
:
Emniyet Evleri Mah. Eski Büyükdere Cad. No:1/1A
34415 Kağıthane / İstanbul
(212) 319 70 00
(212) 319 73 79
www.sekerbank.com.tr
[email protected]
The consolidated financial report for the nine months designed by the Banking Regulation and Supervision
Agency in line with Communiqué on Financial Statements to be Publicly Announced and the Related Policies
and Disclosures consists of the sections listed below:
 GENERAL INFORMATION ABOUT THE PARENT BANK
 CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK
 EXPLANATIONS ON THE CORRESPONDING ACCOUNTING POLICIES APPLIED
 INFORMATION ON FINANCIAL STRUCTURE OF THE GROUP WHICH IS UNDER
CONSOLIDATION
 EXPLANATORY DISCLOSURES AND FOOTNOTES ON CONSOLIDATED FINANCIAL
STATEMENTS
 LIMITED REVIEW REPORT
The subsidiaries financial statements of which are consolidated within the framework of the reporting package
are as follows:
Subsidiaries
Şekerbank (Kıbrıs) Ltd.
Şekerbank International Banking Unit Ltd.
Şeker Faktoring A.Ş.
Şeker Yatırım Menkul Değerler A.Ş.
Şeker Finansal Kiralama A.Ş.
Şeker Mortgage Finansman A.Ş.
Zahlungsdienste GmbH der Şekerbank T.A.Ş.
The consolidated interim financial statements and the explanatory footnotes and disclosures, unless otherwise
indicated, are prepared in thousands of Turkish Lira, in accordance with the Communiqué on Banks’
Accounting Practice and Maintaining Documents, Turkish Accounting Standards, Turkish Financial Reporting
Standards, related communiqués and the Banks’ records, have been reviewed and presented as attached.
The consolidated interim financial statements 30 September 2015 are reviewed and they do not include any false
explanation in material subjects and absences that may result in misleading statements and fairly reflect the
Bank’s financial position, the risks faced and uncertainty.
Dr. Hasan Basri GÖKTAN
Chairman of The Board of
Directors
Halit Haydar YILDIZ
Murat ISHMUKHAMEDOV
General Manager
Member of the Audit Committee
Victor ROMANYUK
Member of the Audit Committee
Selim Güray ÇELİK
Executive Vice President
Orhan ULUYOL
Group Head
Information related to responsible personnel for the questions about financial statements:
Name-Surname / Title
: Oya SARI / Investor Relations and Structured Finance Manager
Telephone No
: (212) 319 71 58
Fax No
: (212) 319 71 62
INDEX
Page Number
SECTION ONE
General Information
I.
II.
III.
IV.
V.
VI.
VII.
The Parent Bank’s Incorporation Date, Beginning Statue, Changes in the Existing Statue
Explanations Regarding the Parent Bank’s Shareholding Structure, Shareholders Holding Directly or Indirectly, Collectively or Individually, the Managing
and Controlling Power and Changes in Current Year, if any and Explanations on the Controlling Group of the Parent Bank
Explanations Regarding the Chairman and the Members of Board of Directors, Audit Committee, General Manager and Executive Vice Presidents and
Their Shares in the Parent Bank
Information About the Persons and Institutions that Have Qualified Shares in the Parent Bank
Summary on the Parent Bank’s Functions and Areas of Activity
Differences Between The Communique On Preparation Of Consolidated Financial Statements Of Banks And Turkish Accounting Standards And Short
Explanation About The Institutions Subject To Line-By-Line Method Or Proportional Consolidation And Institutions Which Are Deducted From Equity
Or Not Included In These Three Methods
The Existing Or Potential, Actual Or Legal Obstacles On The Transfer Of Shareholders’ Equity Between The Parent Bank And its Subsidiaries Or The
Reimbursement Of Liabilities
1
1
2
2
3
3
3
SECTION TWO
Consolidated Financial Statements
I.
II.
III.
IV.
V.
VI.
Consolidated Balance Sheet (Consolidated Statement of Financial Position)
Consolidated Statement of Off Balance Sheet Contingencies and Commitments
Consolidated Statement of Income
Consolidated Statement of Profit and Loss Accounted for Under Equity
Consolidated Statement of Changes in Shareholders’ Equity
Consolidated Statement of Cash Flow
5
7
8
9
10
11
SECTION THREE
Accounting Principles
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.
XV.
XVI.
XVII.
XVIII.
XIX.
XX.
XXI.
XXII.
XXIII.
XXIV.
Basis of Presentation
Information about the Consolidated Subsidiaries
Explanations on Usage Strategy of Financial Assets and Foreign Currency Transactions
Explanations on Foreign Currency Transactions
Explanations on Forward and Option Contracts and Derivative Instruments
Interest Income and Expenses
Fees and Commission Income and Expenses
Explanations on Financial Assets
Explanations on Impairment on Financial Assets
Offsetting of Financial Assets and Liabilities
Explanations on Sales and Repurchase Agreements and Lending of Securities
Explanations on Assets Held For Sale and Discontinued Operations
Explanations on Goodwill and Other Intangible Assets
Explanations on Tangible Fixed Assets
Explanations on Leasing Transactions
Explanations on Provisions and Contingent Liabilities
Explanations on Liabilities Regarding Employee Benefits
Explanations on Taxation
Additional Explanations on Borrowings
Explanations on Share Certificates
Explanations on Acceptances
Explanations on Government Incentives
Explanations on Segment Reporting
Explanations on Other Matters
12
12
13
13
14
14
14
14
18
18
18
18
19
19
20
20
21
23
23
24
24
25
25
25
SECTION FOUR
Information on Financial Structure
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
Explanations Related to the Consolidated Capital Adequacy Standard Ratio
Explanations Related to Consolidated Credit Risk
Explanations Related to Consolidated Market Risk
Explanations Related to Consolidated Currency Risk
Explanations Related to Consolidated Interest Rate Risk
Explanations Related to Consolidated Stock Position Risk
Explanations Related to Consolidated Liquidity Risk
Explanations Related to Consolidated Securitization Position Risk
Explanations Related to Consolidated Credit Risk Mitigation Techniques
Explanations Related to Consolidated Risk Management Objective and Policies
Explanations Related to Transactions Made on Behalf of Others and Transactions Based On Trust
26
35
38
39
42
47
48
49
50
51
52
SECTION FIVE
Explanations and Disclosures on Consolidated Financial Statements
I.
II.
III.
IV.
V.
VI.
Explanations Related to the Consolidated Assets
Explanations Related to the Consolidated Liabilities
Explanations Related to the Consolidated Off-Balance Sheet Contingencies and Commitments
Explanations Related to the Consolidated Income Statement
Explanations on the Risk Group of the Parent Bank
Explanations and Notes Related to Subsequent Events
53
71
82
88
93
95
SECTION SIX
Auditor’s Review Report
I.
II.
Explanations on the Auditors’ Review Report
Other Footnotes and Explanations Prepared by the Independent Auditors
95
95
ŞEKERBANK T.A.Ş. AND ITS FINANCIAL SUBSIDIARIES
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE INTERIM PERIOD FROM 1 JANUARY TO 30 SEPTEMBER 2015
(Amounts expressed in thousands of Turkish Lira (TRL) unless otherwise stated.)
SECTION ONE
GENERAL INFORMATION
I.
The Parent Bank’s Incorporation Date, Beginning Statue, Changes in the Existing Statue
Şekerbank T.A.Ş. (“the Parent Bank”) founded as a Turkish bank by 14 partners started its operations in 1953 as
Pancar Kooperatifleri Bankası A.Ş. in Eskişehir, and in 1956 the Bank changed its name to Şekerbank T.A.Ş and
moved its headquarters to Ankara in 1956. 15 % of the Parent Bank shares were offered to public in 1997 and
currently 34.19 % of the Parent Bank shares are publicly traded. The Parent Bank’s one of the main
shareholders, Şekerbank T.A.Ş. Personeli Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı, provide its
members with additional social rights and retirement guarantees within the social security system. The Parent
Bank has affiliates and subsidiaries in the finance and tourism sectors.
Business line of the Parent Bank covers extending all kinds of cash and non-cash loans in Turkish Lira and
foreign currency and carrying out capital market transactions, accepting deposits in TRL and FC and providing
other banking services.
II.
Explanations Regarding The Parent Bank’s Shareholding Structure, Shareholders Holding
Directly or Indirectly, Collectively or Individually, the Managing and Controlling Power and
Changes in Current Year, if any and Explanations on the Controlling Group of the Parent Bank
Name of Shareholders
Şekerbank T.A.Ş. Personeli
Munzam Sosyal Güvenlik ve
Yardımlaşma Sandığı Vakfı
Samruk-Kazyna, the National
Well-fare Fund of Kazakhstan
BTA Securities JSC
Public offerings
Others
Total
Amounts
of Share
Share
(%)
Paid in
Capital
Unpaid
Capital
410,389
35.4395
410,389
-
224,353
126,295
395,954
1,009
1,158,000
19.3742
10.9063
34.1928
0.0872
100.0000
224,353
126,295
395,954
1,009
1,158,000
-
1
SECTION ONE (cont’d)
GENERAL INFORMATION (cont’d)
III. Explanations Regarding the Chairman and the Members of Board of Directors, Audit
Committee, General Manager and Executive Vice Presidents and Their Shares in the Parent
Bank
Title
Name and Surname
Responsibility Areas
Chairman & Executive Board Member, Credit Committee,
Corporate
Governance
Committee,
Remuneration
Committee
Chairman of the Board of Directors
Dr.Hasan Basri Göktan
General Manager
Halit Haydar Yıldız
Members of the Board of Directors
Victor Romanyuk (*)
Emin Erdem
Erdal Batmaz
Nariman Zharkinbayev
Halil Can Yeşilada
Üzeyir Baysal
Khosrow Kashani Zamani
Murat Ishmukhamedov (*)
Daniyar Amanov
Executive Vice Presidents
Board Member, General Manager, Credit Committee
Ali Güray Demir
Çetin Aydın
Nejat Bilginer
Nihat Büyükbozkoyun
Vice-Chairman,
Remuneration
Committee,
Audit
Committee
Executive Board Member, Credit Committee
Executive Board Member
Executive Board Member, Credit Committee
Corporate Governance Committee, Internal Systems
Independent Director, Remuneration Committee
Corporate Governance Committee
Corporate Governance Committee, Audit Committee
Credit Legal and Administrative Follow -up
Audit
Human Resources
Operations
Financial Control, Budgeting and Strategic Planning,
Corporate Governance Committee
Retail Banking Marketing
Internal Control and Risk Management
Corporate and Commercial Banking Marketing
Retail Credit Management
Financial Institutions
Treasury
Support Services
Corporate and Commercial Credit Management and
Monitoring
Selim Güray Çelik
Gökhan Ertürk
Ramazan Karademir
Orhan Karakaş
Fatin Rüştü Karakaş
Salih Zeki Önder
Feyza Önen
Hüseyin Serdar
Ahmet İlerigelen
(*) According to Communiqué Regarding Determination and Enforcement of Corporate Governance Principles of CMB, Serial: II No:
17.1, Audit Committee members of the banks are accepted as independent members of the Board of Directors. Murat Ishmukhamedov and
Victor Romanyuk are Audit Committee Members of the Bank.
The Chairman of the Board of Directors Dr. Hasan Basri Göktan has total shares of 0.05 % in nominal,
amounting to TRL 577 Thousand, Khosrow Kashani Zamani who is the Board of Directors Member has total
shares of 0.013 % in nominal, amounting to TRL 148 Thousand which they obtained from public offering.
IV. Information About the Persons and Institutions That Have Qualified Shares in the Parent
Bank
Name/ Commercial Name
Amounts of Share
TRL Thousand
Şekerbank T.A.Ş.
Personeli Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı
Samruk-Kazyna, the National Well-fare Fund of Kazakhstan (*)
BTA Securities JSC
410,389
224,353
126,295
2
Share (%)
35.4395
19.3742
10.9063
Paid in Capital
TRL Thousand
410,389
224,353
126,295
Unpaid
Capital
-
SECTION ONE (cont’d)
GENERAL INFORMATION (cont’d)
V.
Summary on the Parent Bank’s Functions and Areas of Activity
Business line of the Parent Bank covers extending all kinds of cash and non-cash loans in Turkish Lira and
foreign currency and carrying out capital market transactions, accepting deposits in TRL and FC and providing
other banking services. As of 30 September 2015, the Parent Bank has 301 domestic branches (31 December
2014 - 312 domestic branches).
VI. Differences Between The Communiqué On Preparation Of Consolidated Financial
Statements Of Banks And Turkish Accounting Standards And Short Explanation About The
Institutions Subject To Line-By-Line Method Or Proportional Consolidation And Institutions
Which Are Deducted From Equity Or Not Included In These Three Methods
The Parent Bank’s subsidiaries Şekerbank (Kıbrıs) Ltd., Şeker Finansal Kiralama A.Ş., Şekerbank International
Banking Unit Ltd., Şeker Yatırım Menkul Değerler A.Ş., Şeker Faktoring A.Ş., Şeker Mortgage Finansman A.Ş.
and Zahlungsdienste GmbH der Şekerbank T.A.Ş. are included in the scope of consolidation by line-by-line
method.
Seltur Turistik İşletmeler Yatırım A.Ş. is not consolidated in the financial statements and is recorded at cost
since the Parent Bank has no control and it is not a financial subsidiary.
VII.
The Existing Or Potential, Actual Or Legal Obstacles On The Transfer Of Shareholders'
Equity Between The Parent Bank And its Subsidiaries Or The Reimbursement Of Liabilities
There is no transfer of the shareholder’s equity between the Parent Bank and its subsidiaries. Dividend
distribution from shareholders equity is done according to related regulations. There is no existing or potential,
actual or legal obstacle to the payback of liabilities between the Parent Bank and its subsidiaries.
3
SECTION TWO
CONSOLIDATED FINANCIAL STATEMENTS
I.
II.
III.
IV.
V.
VI.
Consolidated Balance Sheet (Consolidated Statement of Financial Position)
Consolidated Statement of Off-Balance Sheet Contingencies and Commitments
Consolidated Statement of Income
Consolidated Statement of Gains And Losses Recognised In Equity
Consolidated Statement of Changes in Shareholders’ Equity
Consolidated Statement of Cash Flows
SECTION THREE
ACCOUNTING PRINCIPLES
I.
Basis of Presentation
The Parent Bank prepares financial statements and notes according to Communiqué on Banks’ Accounting
Practice and Maintaining Documents, other regulations, communiqués and circulars in respect of accounting and
financial reporting and pronouncements issued by the Banking Regulation and Supervision Agency (BRSA) and
the Turkish Accounting Standards (TAS) and the Turkish Financial Reporting Standards (TFRS) and the related
statements and guidances announced by the Public Oversight, Accounting and Auditing Standards Authority
(“POA”).
Additional paragraph for convenience translation to English
The effects of differences between accounting principles and standards set out by regulations in conformity with
Article 37 of the Banking Act No. 5411, accounting principles generally accepted in countries in which the
accompanying consolidated financial statements are to be distributed and the International Financial Reporting
Standards (“IFRS”) have not been quantified in the accompanying unconsolidated financial statements.
Accordingly, the accompanying unconsolidated financial statements are not intended to present the financial
position, results of operations and changes in financial position and cash flows in accordance with the accounting
principles generally accepted in such countries and IFRS.
II.
Information about the Consolidated Subsidiaries
The accompanying consolidated financial statements are prepared in accordance with “Communiqué on
Preparation of Consolidated Financial Statements of Banks” published in the Official Gazette dated November 8,
2006 numbered 26340. The Parent Bank and the entities included in the consolidation are referred to as “the
Group” in this report.
The financial statements of the subsidiaries, which were prepared in accordance with the prevailing principles
and rules regarding financial accounting and reporting standards in their respective country of incorporation and
the Turkish Commercial Code and/or Financial Leasing, Factoring and Financing Companies Law and/or
communiqués of the Capital Market Board and/or the BRSA, are duly adjusted in order to present their financial
statements in accordance with the accounting policies of the Parent Bank.
Explanations on Consolidation Method and Scope
The commercial names of the entities included in consolidation and the locations of the head offices of these
institutions are:
Commercial Name
Şekerbank (Kıbrıs) Ltd.
Zahlungsdienste GmbH der Şekerbank T.A.Ş.
Head Office
Nicosia/TRNC
Istanbul/Turkey
Nicosia / TRNC
Istanbul/Turkey
Istanbul/Turkey
Istanbul/Turkey
Cologne/Germany
Consolidation Method
full consolidation
full consolidation
full consolidation
full consolidation
full consolidation
full consolidation
full consolidation
When there are differences between the accounting policies of the subsidiaries and the Parent Bank, the financial
statements are adjusted in accordance with the principle of materiality. The financial statements of the
subsidiaries are prepared as of 30 September 2015 .
The transactions and balances between the consolidated entities belonging to the financial group and the Parent
Bank are eliminated.
12
SECTION THREE
ACCOUNTING PRINCIPLES (cont’d)
III.
Explanations on Usage Strategy of Financial Assets and Foreign Currency Transactions
The Parent Bank aims to keep up its activities in every line of banking.
The Parent Bank shapes its strategies for financial instruments depending on the source of funds, which mainly
consists of deposits. Investment instruments are selected among liquid instruments. A level of liquidity which
allows for covering obligations is kept.
The Group controls risk by managing positions in harmony with market movements on the strength of short-term
strategies instead of carrying long-term currency positions in big amounts, in order to avoid risks which might
arise from floating currency (exchange rate) regime. A currency risk arising from customer transactions, the
Group tries to close by carrying out counter-transactions.
Yield (return) and risk analyses are made in regard of maturity structure of balance sheet items, re-pricing
periods and interest rates, and appropriate investment decisions are made. Budget contains limits on maturity
basis and distributions of assets items are defined.
The Group Off-balance sheet term transactions are managed by including such transactions in the total currency
and interest positions. Term transactions to be made by customers are carried out within loan and risk limits
established on customer basis. Currency swaps, in particular, being a larger part of the off-balance sheet
transactions, are carried out to manage the currency cash flow without causing currency and interest risks.
The Parent Bank aims to get longer-term funds (resources) in order to be able to hedge itself against risks arising
from short-term character of deposits, while trying to increase the share of floating interest rate items in its
assets.
IV.
Explanations on Foreign Currency Transactions
Gains or loss arising from foreign currency transactions are reflected to the income statement as they are realized
during the year. Foreign currency assets and liabilities at each period-end are translated into Turkish lira at the
period-end foreign exchange buying rates announced by the Parent Bank and the resulting foreign exchange
gains or losses are recorded in the income statement as foreign exchange gain or loss. The Parent Bank translates
its foreign currency transactions with the Parent Bank’s exchange rates and subsidiaries of the Parent Bank
translate their foreign currency transactions with the Central Bank’s exchange rates.
There are no capitalized foreign exchange differences.
The information regarding the principles of foreign currency risk management are stated in Section Four, Note
IV.
Foreign exchange gains and losses arising from translating monetary financial assets are reflected to “Foreign
Exchange Gains / Losses” in the income statement.
The foreign currency net investment in consolidated foreign subsidiaries are translated into Turkish Lira using
the Parent Bank’s exchange rate prevailing at the balance sheet date for their assets and liabilities and twelve
months average exchange rate for their income statement items. The currency translation cost derived from the
consolidated subsidiaries’ currency translation differences amounting to TRL 4,347 Thousand (31 December
2014 - TRL 1,061 Thousand) has been recorded in “Other Profit Reserves” under shareholders’ equity.
13
SECTION THREE
V.
Explanations on Forward and Option Contracts and Derivative Instruments
The Group’s derivative instruments consist of foreign currency swaps, interest swaps, option and forward
foreign currency buy/sell transactions. Fair values of foreign currency forward and swap transactions are
determined by comparing the period end foreign exchange rates and current market foreign exchange rates to the
balance sheet date. The resulting gain or loss is reflected in the income statement. In calculation of fair values of
the interest swap contracts, interest amounts to be paid or received upon the fixed interest rate in the contract and
interest amounts to be received or paid upon the floating interest rates in the contracts have been recalculated and
discounted in accordance to valid interest rates in the current market and the differences have been reflected to
the current term income statement. Discounted values calculated using the interest rates between the transaction
date and repricing date are used in determination of the fair values of interest rate swaps. Some of the derivative
instruments, although made for economical hedging purposes, are accounted as trading transactions since they
are not qualified to be a hedging instrument as per “Financial Instruments: Recognition and Measurement”
(“TAS 39”). Realized gains or losses are reflected in the statement of income on these derivative instruments.
VI.
Interest Income and Expenses
The interest income and expenses are accounted by accrual basis of accounting using the effective interest rate
(the ratio that equalizes the future cash flow of financial assets and liabilities to the current net book value).
According to the related legislation, interest accruals and discounts on loans and other receivables which become
doubtful are cancelled and such amounts are recorded as interest income when they are collected.
VII.
Fees and Commission Income and Expenses
Fees for various banking services are recorded as income when collected and prepaid commission income on
cash loans using the effective interest rate rediscount method and then recorded as income in the related period.
Fees and commissions for funds borrowed paid to other financial institutions, as part of the transaction costs, are
recorded as prepaid expenses and using the effective interest rate expensed within the related periods.
The dividend income is reflected in the financial statements on a cash basis when the profit distribution is
realized by the associates and subsidiaries.
VIII.
Explanations on Financial Assets
Financial instruments comprise financial assets, financial liabilities and derivative instruments. Financial
instruments form a significant part of the Group’s operations. Financial instruments affect liquidity, market, and
credit risks on the Group’s balance sheet in all respects. The Group trades these instruments on behalf of its
customers and on its own behalf.
Financial instruments expose, affect credit and interest risks and diminish the liquidity in the financial
statements. All regular way purchases and sales of financial assets are recognized on the settlement date i.e. the
date that the asset is delivered to or by the Group. Settlement date accounting requires (a) accounting of the asset
when acquired by the institution and (b) disposing of the asset out of the balance sheet on the date settled by the
institution; and accounting of gain or loss upon disposal. In case of application of settlement date accounting, for
the financial assets at fair value through profit and loss, available for sale financial assets and securities held for
trading, the Group accounts for the changes that occur in the fair value of the asset in the period between trade
transaction date and settlement date.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the
time frame generally established by regulation or convention in the market place. Changes in fair value of assets
to be received during the period between the trade date and the settlement date are accounted for in the same way
as the acquired assets. Fair value differences are not accounted for assets presented at cost or amortized cost;
gain or loss of financial assets at fair value through profit and loss are reflected in the statement of income; gain
or loss of available for sale assets are accounted for in the shareholders’ equity.
14
SECTION THREE
VIII.
Explanations on Financial Assets (cont’d)
The financial instruments are mentioned below with regard to their accounts classified in the financial statements
and their valuations according to these classifications.
Cash, Banks, and Other Financial Institutions
Cash and cash equivalents comprise cash on hand, demand deposits, and highly liquid short-term investments
with maturity of 3 months or less following the purchase date, not bearing risk of significant value change, and
these investments that are readily convertible to a known amount of cash. The book values of these assets
approximate their fair values.
Financial Assets at Fair Value Through Profit and Loss
Trading securities are securities which were either acquired to generate a profit from short-term fluctuations in
price or dealer’s margin, or they are the securities included in a portfolio with a pattern of short-term profit
taking.
Trading securities are initially recognized at cost. Transaction costs of the related securities are included in the
initial cost. The positive difference between the cost and fair value of such securities is accounted for as interest
and income accrual, and the negative difference is accounted for as “Impairment Provision on Marketable
Securities”.
In addition to customer deposits, the Parent Bank is funding its growing long term and fixed interest rate TRL
loan portfolio through long term floating interest rate foreign currency resources provided from international
markets. The Parent Bank transforms the foreign currency liquidity which is created by funds provided from
international markets to TRL liquidity through long term swap contracts, as a result of this situation the Parent
Bank can both provide TRL funds for the long term fixed rate loans and provide protection against interest rate
risk.
The Group reflects swaps, used for funding long term and fixed interest rate TRL loan portfolio, with fair value
in the financial statements. The Group has initially classified these long term and fixed interest rate TRL loan
portfolio funded through swaps as “financial assets at fair value through profit and loss” and follows them at fair
value in the financial statements.
TRL 374,701 Thousand of the housing, commercial installment, consumer, vehicle and finance lendings’
principal amounts are classified as under the account of financial asset at fair value through profit and loss (31
December 2014 - TRL 348,713 Thousand).
Held to Maturity Investments, Financial Assets Available for Sale and Loans
Investments held to maturity include securities with fixed or determinable payments and fixed maturity where
there is an intention of holding till maturity and the relevant conditions for fulfillment of such intention,
including the funding ability and excluding loans and receivables.
Available for sale financial assets include all securities other than loans and receivables, securities held to
maturity and securities held for trading.
The securities are initially recognized at cost including the transaction costs.
After the initial recognition, available-for-sale securities are measured at fair value and the unrealized gain/loss
originating from the difference between the amortized cost and the fair value is recorded in “Marketable
Securities Value Increase Fund” under the equity. Fair values of debt securities that are traded in an active
market are determined based on quoted prices or current market prices. In the absence of prices formed in an
active market, fair values of these securities are determined using the Official Gazette prices or other valuation
methods stated in TAS. In case there is no market price in an active market, the other methods explained in TAS
No: 39 are used for determination of the fair value.
15
SECTION THREE
VIII.
Held to Maturity Investments, Financial Assets Available for Sale and Loans (cont’d)
The real coupon rates for government bonds indexed to consumer price index are fixed throughout maturities. As
per the statements made by the Turkish Treasury on the dates of issuance, such securities are valued taking into
account the difference between the reference index at the issue date and the reference index at the balance sheet
date to reflect the effects of inflation.
Loans and receivables are financial assets raised by the Group providing money to debtors, other than assets held
for trading purposes or for the purpose of selling in the short-term.
After initial recognition held to maturity investments are measured at amortized cost by using effective interest
rate less impairment losses, if any.
The interests received from held-to-maturity investments are recorded as interest income.
There are no financial assets that have been previously classified as held-to-maturity investments but cannot be
currently classified as held-to-maturity for two years due to “tainting” rules.
The Group classifies its securities as referred to above at the acquisition date of related assets.
Shares unquoted on the stock exchange amounting to TRL 7,396 Thousand are classified under “Other
Marketable Securities” of Financial Assets Available for Sale of the Parent Bank in the current period (31
Loans and Provisions for Impairment
Loans and receivables are initially recognized at cost according to their original balances, after the initial
recognition, they are accounted at amortized cost by using effective interest rate as stated in the TAS No: 39.
Foreign currency-indexed individual and commercial loans are shown under Turkish Currency (“TRL”) accounts
after having been converted into Turkish Lira at exchange rate at transaction date. Repayments are calculated at
exchange rate at date of payment and exchange rate differences encountered are reflected in profit and loss
accounts. Net foreign exchange gains of the foreign currency indexed loans are presented under foreign
exchange gain/loss.
Provision is set for the doubtful loans and the amount is charged in the current period income statement. The
provisioning amount for non-performing loans are determined by the Parent Bank’s management for
compensating the probable losses of the doubtful loan portfolio, by evaluating the quality of loan portfolio, risk
factors and considering the economy conditions, other facts and related regulations.
The Parent Bank Management applies provision policy for the “non-performing loans” in accordance with the
requirements of the Turkish banking regulation adopted by the BRSA.
The provisions are reflected in the income statement under “Provision and Impairment Expenses - Specific
Provision Expense". The collections made regarding these loans are first deducted from the principal amount of
the loan and the remaining collections are deducted from interest receivables.
16
SECTION THREE
VIII.
Loans and Provisions for Impairment (cont’d)
The collections related to loans for which provision is made in the current period are reversed from the
“Provision for Loans and Other Receivables” account in the income statement.
The collections related to loans written off or provisioned in prior years are recorded to “Collections Related to
the Prior Period Expenses” under “Other Operating Income” account and related interest income is credited to
the “Interest Received from Non-performing Loans” account.
Within the framework of the regulation and principles referred to in explanations above, in addition to specific
loan loss provisions; the Parent Bank records general loan loss provisions for loans and other receivables. The
Parent Bank, as a consequence of the regulation published in the Official Gazette No. 27119 dated 23 January
2009 amending the “Regulation of Methods and Principles for the Determination of Loans and Other
Receivables to be Reserved for and Allocation of Reserves”, payment obligation arising from the Law No. 3167,
“Arrangements of the Payments Made Through Cheque and Protection of the Cheque Holders” and other related
regulations, applies one fourth of the related provision group rate for each leaf of the cheques given to loan
customers whose loans are in third, fourth or fifth groups, and for those cheques which were delivered at least
five years before the reporting period.
Subsequent to the change in the regulation on “Change in the Methods and Principles for the Determination of
Loans and Other Receivables to be Reserved for and Allocation of Reserves” published in the Official Gazette
No. 27947 dated 28 May 2011; the banks can change the conditions of the payment plan of the loans which are
followed under standard loans and receivables. However, if the original payment plan is changed, the general
loan loss provision ratio for standard and for the loans and receivables under close monitoring should be 5 %.
In accordance with the communiqué “The Change in the Determining the Nature of Loans and Receivables and
Principles and Procedures on the Allocation of Loan and Receivable Provisions” published on 21 September
2012 No: 28418 of the Official Gazette, as of the latest month-end prior the effective date of the Communiqué,
the Bank should provide provision amounted with the rates stated in the first paragraph of the Article 7 of the
Communiqué, 40 % until 31 December 2012, 60% until 31 December 2013, 80% until 31 December 2014 and
100% until 31 December 2015, in general allowances for cash loans, close monitoring loans, letters of
guarantees, sureties and other non-cash loans. The Parent Bank has reflected 100% of the occurred difference in
31 December 2012 financial statements.
As a consequence of the regulation published in the Official Gazette No. 28789 dated 8 October 2013 amending
the “Change in the Methods and Principles for the Determination of Loans and Other Receivables to be Reserved
for and Allocation of Reserves” in case consumer loans other than mortgage loans exceed 25 % of total loans
and non performing consumer loans other than mortgage loans exceeds 8 % of total consumer loans other than
mortgage loans, general loan loss provision ratio is 4 % during maturity of consumer loans which are followed
under standard loans and receivables except for mortgage loans; for the loans under close monitoring except for
mortgage loans, the general loan provision ratio is 8 %. Also for export cash and non-cash loans followed under
standard loans general loan provision ratio is 0 % and for SME cash loans general loan provision ratio is 0.5 %
and for non-cash SME loans ratio is 0.1 %.
17
SECTION THREE
IX.
Explanations on Impairment of Financial Assets
At each balance sheet date, the Group evaluates the carrying amounts of its financial asset or a group of financial
assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If
any such indication exists, the Group determines the related impairment.
A financial asset or a financial asset group incurs impairment loss only if there is an objective indicator related to
the occurrence (or non-occurrence) of one or more than one event (“loss event”) after the recognition of that
asset; and such loss event (or events) causes, an impairment as a result of the effect on the reliable estimate of
the expected future cash flows of the related financial asset and asset group. Irrespective of high probability, the
expected losses caused by the future events are not recorded.
X.
Offsetting of Financial Assets and Liabilities
Financial assets and liabilities are offset when the Group has a legally enforceable right to set off, and the
intention of collecting or paying the net amount of related assets and liabilities or the right to offset the assets
and liabilities simultaneously.
XI.
Explanations on Sales and Repurchase Agreements and Lending of Securities
The sales and purchase of government securities under repurchase agreements made with the customers are being
recorded in balance sheet accounts in accordance with the Uniform Chart of Accounts. Accordingly in the
financial statements, the government bonds and treasury bills sold to customers under repurchase agreements are
classified under securities held for trading, available for sale and held to maturity depending on the portfolio they
are originally included in and are valued according to the valuation principles of the related portfolios. Funds
obtained from repurchase agreements are classified as a separate sub-account under money market borrowings
account in the liabilities.
These transactions are short-term and consist of domestic public sector debt securities.
The income and expenses from these transactions are reflected in the “Interest Income on Marketable Securities”
and “Interest Expense on Money Market Borrowings” accounts in the income statement.
As of 30 September 2015 the Group has TRL 8,000 Thousand reverse repo transactions (31 December 2014 –
TRL 8,000 Thousand).
As of 30 September 2015 the Group does not have marketable securities lending transactions (31 December
2014 - None).
XII.
Explanations on Assets Held for Sale and Discontinued Operations
Assets held for sale are those assets or group of assets, which will be disposed under a plan prepared by the
management regarding the sale of those asset or the group of assets together with an active program for
determination of buyers and plan completion date. Those assets (or else the group of assets) are marketed in
conformity with its fair value. On the other hand, the sale is expected to be recorded at the completed sale within
one year after the classification date; and the necessary transactions and procedures to complete the plan should
demonstrate the fact that the possibility of making significant changes or cancelling the plan is low.
As of 30 September 2015, the Group has TRL 6,443 Thousand assets held for sale (31 December 2014 - TRL
672 Thousand).
A discontinued operation is a division of a Group that is either disposed or held for sale. Results of discontinued
operations are included in the income statement separately. The Group does not have any discontinued
operations.
18
SECTION THREE
XIII.
Explanations on Goodwill and Other Intangible Assets
There is no goodwill regarding the investments in associates and subsidiaries.
Intangible assets are accounted for at restated cost until 31 December 2004 in accordance with inflation
accounting and are amortized with straight-line method. After 31 December 2004 the cost of assets subject to
amortization is restated as the acquisition cost and any other costs incurred in order to make the intangible asset
ready for use less reserve for impairment, if any, are amortized on a straight-line method. The cost of assets
subject to amortization is restated after deducting the exchange differences, capitalized financial expenses and
revaluation increases, if any, from the cost of the assets.
Those items classified as intangible assets mainly consist of software. As being different from determination of
other intangible assets’ amortization periods, these items are determined to have 5 years of amortization.
Software is mainly outsourced and the related expenses are not capitalized.
There are no anticipated changes in the accounting estimates about the amortization rate and method and residual
values that would have a significant impact in the current and future periods.
The Group has no written-off intangible fixed assets, which are fully amortized, in the current period (31
December 2014 - None).
XIV.
Explanations on Tangible Fixed Assets
Costs of the Parent Bank’s immovables have been adjusted for inflation until 31 December 2004. As of 31
December 2006, the Parent Bank changed its accounting policy and adopted revaluation method on annual basis
under scope of Standard on Tangible Fixed Assets (TAS 16) with respect to valuation of immovables included in
its tangible fixed assets. Tangible Fixed Assets’ appraisal valuation was conducted by an independent valuation
company as at 31 December 2014 reflected in the financial statements, accordingly. The difference between
expertise value and cost as of 30 September 2015 is TRL 253,826 Thousand gross (after net off deferred tax, net
amount is TRL 203,724 Thousand) (31 December 2014 gross: TRL 253,826 Thousand, net-off deferred tax
amount TRL 203,724 Thousand).
Other tangible fixed assets were accounted at their restated costs in line with inflation accounting until 31
December 2004; afterwards the acquisition cost and any other cost incurred to prepare the fixed asset for usage
are reflected less reserve for impairment, if any, and depreciated on a straight-line method. Depreciation of assets
held less than one year as of the balance sheet date is accounted for proportionately. There is no change in
amortization method in current period and the annual rates used, which approximate rates based on the estimated
economic useful lives of the related assets, are as follows:
%
2
20
2 – 33
During Leasehold
Buildings
Motor vehicles
Furniture, fixtures and office equipment and others
Leasehold improvements
Gain or loss resulting from disposals of the tangible fixed assets is reflected to the income statement as the
difference between the net proceeds and net book value.
Maintenance costs of tangible fixed assets are capitalized if they extend the economic useful life of related
assets. Other maintenance costs are expensed. There are no pledges, mortgages or other restrictions on the
tangible fixed assets.
There is no purchase commitments related to the tangible fixed assets.
19
SECTION THREE
XIV.
Explanations on Tangible Fixed Assets (cont’d)
The Group reviews the residual value and the useful life of buildings at least at each financial year-end and, if
expectations differ from previous estimates, the changes accounted for as a change in an accounting estimate in
accordance with TAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.
The Group has no written-off fixed assets in the current period (31 December 2014 - TRL 47 Thousand).
XV.
Explanations on Leasing Transactions
Tangible fixed assets acquired by financial leases are accounted for in accordance with TAS No: 17 “Leases”. In
accordance with this standard, the leasing transactions, which consist of foreign currency liabilities, are
translated to Turkish Lira with the exchange rates prevailing at the transaction dates and they are recorded as an
asset or a liability. The foreign currency liabilities are translated to Turkish Lira with the Parent Bank’s period
end exchange rates. The increases/decreases resulting from the differences in the foreign exchange rates are
recorded as expense/income in the relevant period. The financing cost resulting from leasing is distributed
through the lease period to form a fixed interest rate.
In addition to the interest expense, the Group records depreciation expense for the depreciable leased assets in
each period. The depreciation rate is determined in accordance with TAS No: 16 “Accounting Standard for
Tangible Fixed Assets” and the depreciation rate of these assets is 20 %.
Operating lease payments are recognized as expenses in the income statement on a straight line basis over the
lease term.
The gross lease receivables including interest and principal amounts regarding the Group’s financial leasing
activities conducted by Şeker Finansal Kiralama A.Ş. as “Lessor” are stated under the receivables from the
financial leasing activities. The difference between the total of rent payments and the cost of the related fixed
assets are reflected to the “unearned income” account. The interest income is calculated and recorded to create a
constant rate of return over the lessor’s net investment on the leased item.
XVI.
Explanations on Provisions and Contingent Liabilities
Provisions are recognized when there is a present obligation, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Provisions are determined by using the Group’s best expectation of expenses in
fulfilling the obligation, and discounted to present value if material.
20
SECTION THREE
XVII. Explanations on Liabilities Regarding Employee Benefits
Defined Benefit Plans
In accordance with existing social legislation in Turkey, the Group is required to make lump-sum termination
indemnities over a 30 day salary for each employee who has completed over one year of service, whose
employment is terminated due to retirement or for reasons other than resignation or misconduct. The Group is
also required to make a payment for the period of notice calculated over each service year of the employee
whose employment is terminated for reasons other than resignation or misconduct. Total benefit is calculated in
accordance with TAS No: 19 “Turkish Accounting Standard on Employee Benefits”.
Such benefit plans are unfunded since there is no funding requirement in Turkey. The cost of providing benefits
to the employees for the services rendered by them under the defined benefit plan is determined by independent
actuaries annually using the projected unit credit method.
In calculating the related liability to be recorded in the financial statements for these defined benefit plans, the
Group uses independent actuaries and also makes assumptions and estimation relating to the discount rate to be
used, turnover of employees, future change in salaries/limits, etc. These estimations are reviewed annually.
According to revised TAS 19 effective from 1 January 2013, actuarial gain/losses are recorded under equity. As
of 30 September 2015, the carrying value of employee benefit provisions is TRL 74,114 Thousand that consists
of employee termination benefit provisions amounting to TRL 69,896 Thousand and employee vacation pay
provisions amounting to TRL 4,218 Thousand (31 December 2014 - total employee benefit provision was TRL
64,310 Thousand, employee termination benefit provisions was TRL 61,319 Thousand and employee vacation
pay provisions was TRL 2,991 Thousand).
Şekerbank T.A.Ş. Pension Fund, of which most of the Parent Bank’s employees are members, is established in
accordance with the provisional Article 20 of the Social Security Act No: 506. As per the provisional article No:
23 of the Banking Law No: 5411, the Parent Bank pension funds, which were established within the framework
of Social Security Institution Law, should be transferred to the Social Security Institution within 3 years after the
issuance of the related law. Methods and principles related to the transfer have been determined as per the
Cabinet decision no: 2006/11345 made on 30 November 2006. However, the related article of the act has been
cancelled upon the President’s application filed on 2 November 2005 by the Supreme Court’s order no:
E.2005/39, K.2007/33 issued on 22 March 2007, which was published in the Official Gazette No: 26479 on 30
September 2007 and the execution of the decision was ceased as of the issuance date of the order.
Following the issuance of the justified order in relation to the annulment of the provisional Article 23 of the
Banking Law by the Constitutional Court in the Official Gazette No: 26731 on 15 December 2007, the Turkish
Grand National Assembly (TBMM) started to work on establishing new legal regulations, the Law No: 5754.
21
SECTION THREE
XVII. Explanations on Liabilities Regarding Employee Benefits (cont’d)
“Amendments to the Social Security and General Health Insurance Act Including Certain Laws and Decrees”,
which was published in the Official Gazette No: 26870 on 8 May 2008 has become effective following the
approval of the General Assembly of the TBMM. The new law decrees that the contributors of the bank pension
funds, the ones who receive salaries or income from these funds and their rightful beneficiaries will be
transferred to the Social Security Institution and will be subject to this Law within 3 years after the release date
of the related article, without any need for further operation, and that the three-year transfer period can be
prolonged for maximum 2 years by the Cabinet decision. The related three-year transfer period has been
prolonged for 4 years by the Cabinet decision dated 1 March 2012, which was published in the Official Gazette
dated 8 March 2012 and No: 28227. The above mentioned law also includes the following:


Through a commission constituted by the attendance of one representative separately from the Social
Security Institution, Ministry of Finance, Turkish Treasury, State Planning Organization, Banking
Regulation and Supervision Agency, Savings Deposit Insurance Fund, one from each pension fund, and
one representative from the organization employing pension fund contributors, related to the transferred
persons, the cash value of the liabilities of the pension fund as of the transfer date will be calculated by
considering their income and expenses in terms of the lines of insurance within the context of the
related Law, and technical interest rate of 9.8% will be used in the actuarial calculation of the value in
cash,
And that after the transfer of the pension fund contributors, the ones who receive salaries or income
from these funds and their rightful beneficiaries to the Social Security Institution, these persons’
uncovered social rights and payments, despite being included in the trust indenture that they are subject
to, will be continued to be covered by the pension funds and the employers of pension fund
contributors.
On the other hand, the application made on 19 June 2008 by the Republican People’s Party to the Constitutional
Court for the annulment and motion for stay of some articles, including the first paragraph of the provisional
article 20 of the Law, which covers provisions on transfers, was rejected in accordance with the decision taken at
the meeting of the afore-mentioned court on 31 March 2011.
The technical financial statements of the Pension Fund are reviewed by an actuary registered audit company in
accordance with the Article 21 of the Insurance Law numbered 5684 and the requirements of the “Actuary
Regulations” issued based on the Article 38. There was TRL 42,553 Thousand actuarial surplus in the actuary
report dated February 2015 which was prepared using a technical interest rate of 9.80 % in accordance with the
basis set out in the Council of Ministers decision no: 2006/11345 on 30 November 2006 (31 December 2014TRL 42,553 Thousand actuarial surplus).
As of 30 September 2015, no provision is recorded on the financial statements of the Group (31 December 2014
- None).
22
SECTION THREE
XVIII. Explanations on Taxation
Corporate tax
According to the Article 32 of the Corporate Tax Law No. 5520, accepted in the meeting of the Turkish Grand
National Assembly of Turkey on 13 June 2006 and announced in the Official Gazette dated 21 June 2006, the
corporate tax rate has been decreased from 30 % to 20 %, effective from 1 January 2006 as per the Article 37 of
the Corporate Tax Law.
The tax legislation, requires advance tax payment of 20 % to be calculated and paid based on earnings generated
for each quarter. The amounts thus calculated and paid are offset against the final tax liability for the year (31
December 2014 - 20 %).
Annual tax returns are required to be filed between the first and twenty fifth day of the fourth month following
the balance sheet date and paid in one installment until the end of the related month.
Tax provision related with items that are credited or charged directly to equity are charged or credited to equity.
According to the Corporate Tax Law, tax losses can be carried forward for a maximum period of five years
following the year in which the losses are incurred. Tax authorities can inspect tax returns and the related
accounting records for a retrospective maximum period of five years.
Deferred Tax Liability / Asset
The Group calculates and reflects deferred tax asset or liability on timing differences which will result in taxable
or deductible amounts in determining taxable profit of future periods. As of 30 September 2015, in accordance
with TAS No: 12 “Turkish Accounting Standard on Income Taxes” and the changes in the circular of the BRSA
numbered BDDK.DZM.2/13/1-a-3 dated 8 December 2004, the Parent Bank calculated deferred tax asset on all
deductible temporary differences except for general loan reserves, if sufficient taxable profit in future periods to
recover such amounts is probable; as well as deferred tax liability on all taxable temporary differences. Deferred
tax assets and liabilities are shown in the accompanying financial statements on a net basis.
The net deferred tax asset is included in deferred tax asset and the net deferred tax liability is reflected under
deferred tax liability on the balance sheet. The deferred tax benefit of TRL 15,777 Thousand is stated under the
tax provision line in the income statement (30 September 2014 – TRL 21,368 Thousand deferred tax expense).
The deferred tax expense of TRL 26,405 Thousand (31 December 2014 – TRL 47,258 Thousand deferred tax
expense) resulting from differences related to items that are debited or charged directly to equity is netted with
the related equity accounts.
Furthermore, as per the above circular of the BRSA, deferred tax benefit balance resulting from netting of
deferred tax assets and liabilities should not be used in dividend distribution and capital increase.
XIX.
Additional Explanations on Borrowings
The borrowing costs related to purchase, production, or construction of qualifying assets that require significant
time to be prepared for use and sale are included in the cost of assets until the relevant assets become ready to be
used or to be sold. Financial investment income obtained by temporary placement of undisbursed investment
loan in financial investments is offset against borrowing costs qualified for capitalization.
All other borrowing costs are recorded to the income statement in the period they are incurred.
As of 30 September 2015 bonds issued amount of the Group is TRL 335,533 Thousand (31 December 2014 –
As of 30 September 2015 outstanding marketable securities issued amount of the Group is TRL 95,929
Thousand and details are shown the in table below (31 December 2014 – TRL 75,089 Thousand).
23
SECTION THREE
XIX.
Additional Explanations on Borrowings (cont’d)
Issuer
Issuance Date
Issuance Amount
Maturity
10.12.2013
16,713
24 months
17.06.2014
11,710
24 months
11.11.2014
14,700
24 months
02.06.2015
6,258
24 months
02.06.2015
46,742
10 months
The Parent Bank issued Asset Covered Bond amounting to TRL 1,500,000 Thousand and details are shown in
the table below. The investors are International Finance Corporation (IFC), Nederlandse FinancieringsMaatschappij Voor Ontwikkelingslanden N.V. (FMO), UniCredit Bank AG, European Investment Bank (EIB),
European Bank for Reconstruction and Development (EBRD), KfW Bankengruppe and qualified institutional
investors. The transactions were conducted in line with the related Capital Market Board regulation and as a
security the Parent Bank’s SME loans were used.
Amount
61,250
Outstanding Amount
(*)
61,250
IFC
44,750
17,900
TL
12.09.2016
2011-4
2011-5
EIB
EBRD
120,000
60,000
-
TL
TL
12.01.2015
12.01.2015
2013-1
KfW/EIF
Nitelikli Kurumsal
Yatırımcılar
135,975
-
TL
12.12.2014
361,846
361,846
TL
13.03.2017
Issue Date
Series
14 September 2011
2011-2
Investors
FMO
14 September 2011
2011-3
9 December 2011
9 December 2011
28 November 2013
27 February 2014
2014-1
(*) Outstanding amounts do not include accruals.
Currency
TL
Maturity
12.09.2016
The issuance dated 27 February 2014, amounting to TRL 361,846 Thousand and the issuance dated 28
November 2013 amounting to TRL 135,975 Thousand were made via SKB VTMK International Issuer Ltd
(SPV) and there is no shareholding relationship between the Parent Bank and SKB VTMK International Issuer
Ltd. SPV is managed and controlled by another independent firm and does not have any administrative or
contractual management relationship with the Parent Bank. The Parent Bank has no control power over SPV.
SPV is the investor of some of asset covered bonds issued by the Parent Bank and also SPV issues bonds itself.
In case of default of SPV’s issued bonds, the Parent Bank has no liability. The Parent Bank is responsible for
running costs of SPV.
As of 30 September 2015 amount of Asset Covered Bond issued is TRL 444,800 Thousand (31 December 2014 TRL 642,648 Thousand).
The Group has not issued convertible bonds.
XX.
Explanations on Share Certificates
The Parent Bank’s paid-in capital has been increased to TRL 1,158,000 Thousand by contribution in kind in the
amount TRL 25,000 Thousand, which composed of TRL 16,475 Thousand from extraordinary reserves, TRL
4,262 Thousand from subsidiaries and real estate sale profit, TRL 4,263 Thousand from share premium and by
cash in the amount of TRL 45,813 Thousand.
XXI.
Explanations on Acceptances
Acceptances are realized simultaneously with the payment dates of the customers and they are presented as
probable commitments in off-balance sheet accounts.
24
SECTION THREE
XXII. Explanations on Government Incentives
The Parent Bank’s subsidiary Şeker Finansal Kiralama A.Ş. has TRL 58,480 Thousand of unused investment
incentives as of 30 September 2015 (31 December 2014 – TRL 67,301 Thousand).
XXIII. Explanations on Segment Reporting
The Group primarily deals with and engages in corporate, retail and SME banking in line with its strategy.
Current Period
Corporate
Net Interest Income
Net Fees and Commission
Income and Other Operating
Income
SME
Retail
Other
Total
288,722
584,212
(195,726)
131,335
808,543
192,941
67,978
39,062
103,806
403,787
Dividend Income
1,753
-
-
-
1,753
Trading Profit/(Loss)
Impairment provision for loans
and other receivables
267,020
(521,473)
561
90,008
(163,884)
(840)
(15,587)
(1,099)
(317,910)
(335,436)
Other Operating Expenses
(23,426)
-
(2,217)
(633,986)
(659,629)
Profit/(Loss) before taxes
726,170
115,130
(159,419)
(626,747)
55,134
Taxation
-
-
-
-
10,713
Net Profit for the Period
-
-
-
-
65,847
Prior Period
Corporate
Net Interest Income
Net Fees and Commission
Income and Other Operating
Income
SME
Retail
Other
Total
133,070
633,207
(172,616)
163,412
757,073
102,784
93,827
43,788
77,105
317,504
1,269
-
-
-
1,269
35,405
29,855
(14,966)
(83,726)
(33,432)
(310)
(9,648)
(318)
(256,726)
(267,002)
Other Operating Expenses
-
-
-
(627,053)
(627,053)
Profit/(Loss) before taxes
272,218
747,241
(144,112)
(726,988)
148,359
Taxation
-
-
-
-
(29,688)
-
-
-
-
118,671
Dividend Income
Trading Profit/(Loss)
Impairment provision for loans
and other receivables (-)
Current Period
Commercial
SME
Retail
Treasury
/Investment
Undistributed
Total
Assets
9,583,367
6,035,561
2,193,110
5,511,833
1,762,407
25,086,278
Liabilities
4,715,692
1,203,252
9,017,117
6,506,528
3,643,689
25,086,278
Prior Period
Commercial
SME
Retail
Treasury
/Investment
Undistributed
Total
Assets
6,664,963
6,827,085
2,254,014
4,905,089
1,621,574
22,272,725
Liabilities
4,903,442
1,276,049
7,440,044
5,146,518
3,506,672
22,272,725
XXIV. Explanations on Other Matters
None.
25
SECTION FOUR
INFORMATION ON FINANCIAL STRUCTURE
I. Explanations Related to the Consolidated Capital Adequacy Standard Ratio
The method used for risk measurement in determining capital adequacy standard ratio; capital adequacy standard
ratio is calculated in accordance with the Communiqué on “Measurement and Assessment of Capital Adequacy
of Banks”, which was published on 28 June 2012 in the Official Gazette numbered 28337 and effective since 1
July 2012 and Communiqué on “Banks’ Equity” which was published on 5 September 2013 and in the Official
Gazette numbered 28756 effective since 1 January 2014. In the current period, consolidated capital adequacy
standard ratio is calculated in accordance with the Communiqué which is effective since 1 January 2014. The
Group’s consolidated capital adequacy ratio in accordance with the related communiqué is 12.55% (31
December 2014 - 14.11 %).
In the computation of capital adequacy standard ratio, data prepared in accordance with statutory accounting
requirements are used. Additionally, the market risk exposure as well as the operational risk exposure are
calculated in accordance with the communiqué on the Communiqué on “Measurement and Assessment of
Capital Adequacy of Banks” and is taken into consideration in the capital adequacy standard ratio calculation.
The values deducted from the capital base in the shareholders’ equity computation are excluded while
calculating risk-weighted assets, non-cash loans and contingent liabilities. Assets subject to depreciation and
impairment among risk-weighted assets are included in the calculations over their net book values after
deducting the relative depreciations and provisions.
In the calculation process of credit risk, risk types are classified based on “Measurement and Assessment of
Capital Adequacy of Banks-Appendix 1” and financial collaterals taken into account according to the credit risk
mitigation techniques communiqué and classified in the related risk weight. While simple approach is taken into
account for banking book items, the Bank uses comprehensive approach for trading book items in the credit
mitigation process.
While calculating the basis of non-cash loans subject to credit risk, the net receivable amount from the counter
parties net of provision amount set in accordance with the “Communiqué on Methods and Principles for the
Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves” is multiplied by
the loan conversion rates presented in the Article 5 and related clauses of the Communiqué on “Measurement
and Assessment of Capital Adequacy of Banks”, and calculated by applying the risk weights presented in the
Capital Adequacy Analysis Form.
In the calculation of counterparty credit risk, the current exposure method is used according to the Communiqué
on “Measurement and Assessment of Capital Adequacy of Banks” the Article 21 and Appendix 2.
26
SECTION FOUR (cont’d)
INFORMATION ON FINANCIAL STRUCTURE (cont’d)
I. Explanations Related to the Consolidated Capital Adequacy Standard Ratio (cont’d)
0%
10%
20%
35%
Consolidated
The Parent Bank
Risk Weight
Risk Weight
50%
75%
100%
150%
250
%
200%
0%
10% 20% 35%
50%
75%
100%
150%
200%
250%
The Amount Subject to
Credit Risk
Risk Types
Contingent and NonContingent Claims on
Sovereigns
Regional Governments and
Local Authorities
Administrative Units and
Non-commercial
Enterprises
5,182,188
-
1,272
-
-
-
54,642
-
-
- 5,165,715
-
1,272
-
-
-
419
-
-
-
-
-
75,405
-
-
-
2,335
-
-
-
-
- 75,405
-
-
-
-
-
-
-
737
-
-
-
-
-
4,416
-
-
-
737
-
-
-
-
-
4,416
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
111,137
-
-
-
-
-
-
-
-
-
-
-
-
-
- 9,138,028
-
-
-
-
- 97,956
-
47,042
-
111,137
-
-
-
72,058
-
-
-
80,793
-
3,075
-
-
- 8,305,157
-
-
-
- 5,518,444
68,774
-
-
-
Multilateral Development
Banks
International Organizations
Banks and Capital Market
Intermediary
-
-
102,695
-
47,042
80,793
-
3,075
-
-
Corporate Receivables
- 5,518,444
54,248
-
-
-
Contingent and NonContingent Claims
Included in the Regulatory
Retail Portfolios
-
-
-
- 5,183,182
-
58,330
-
-
-
54,248
-
-
-
Contingent and NonContingent Claims
Secured by Residential
Property
-
-
-
-
-
-
289,101
-
-
-
-
-
-
- 4,769,159
-
4,662
-
-
-
Past Due Loans
-
-
-
-
-
-
-
457,076
668,256
4
-
-
-
-
-
-
293,242
-
-
-
Higher-Risk Categories
Defined by Agency
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
407,903 635,322
4
Collateralized Mortgage
Marketable Securities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
189,072
-
4
-
-
0 1,435,813
-
-
-
189,072
-
4
-
-
- 1,531,115
-
-
-
Securitization Exposures
Short-Term Claims on
Banks and Corporate
Undertakings for
Collective Investments in
Transferable Securities
Other Claims
27
Summary information related to the capital adequacy ratio:
Required Capital Liabilities for Credit Risk (Main Amount related
with Credit Risk*0.08) (RCLCR)
Consolidated
The Parent Bank
Consolidated
The Parent Bank
Current Period
Current Period
Prior Period
Prior Period
1,598,274
1,502,712
1,441,845
45,940
41,099
47,057
35,980
166,324
154,136
146,719
136,233
2,840,798
2,798,715
2,884,597
2,800,841
Shareholders’ Equity/((RCLCR+RCLMR+RCLOR) *12.5*100)
12.55
13.19
14.11
14.60
Core Capital/((RCLCR+RCLMR+RCLOR) *12.5*100)
10.36
10.85
11.48
11.80
Tier I Capital/((RCLCR+RCLMR+RCLOR) *12.5*100)
10.66
11.10
11.82
12.22
Required Capital Liabilities for Market Risk (RCLMR)
Required Capital Liabilities for Operational (RCLOR) (*)
Shareholders’ Equity
1,362,581
(*) Calculated based on basic indicator approach.
Prior Period
Current Period
TIER 1 CAPITAL
Paid-in Capital to be Entitled for Compensation after All Creditors
Share Premium
Share Cancellation Profits
Legal Reserves
Other Comprehensive Income according to TAS
Profit
Net Current Period Profit
Prior Period Profit
Provisions for Possible Losses
Bonus Shares from Associates, Subsidiaries and Joint-Ventures not Accounted in Current
Period’s Profit
Minority Shares
Tier I Capital Before Deductions
Deductions From Tier I Capital
Current and Prior Periods' Losses not Covered by Reserves, and Losses Accounted under
Equity according to TAS (-)
Leasehold Improvements on Operational Leases (-)
Goodwill and Intangible Assets and Related Deferred Tax Liabilities (-)
Net Deferred tax assets / liabilities (-)
Shares Obtained against Article 56, Paragraph 4 of the Banking Law (-)
Investments in own common equity (-)
Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and
Financial Institutions where the Bank does not own 10% or less of the Issued Share Capital
Exceeding the 10% Threshold of above Tier I Capital (-)
Financial Institutions where the Bank owns 10% or less of the Issued Share Capital Exceeding
the 10% Threshold of above Tier I Capital (-)
Mortgage Servicing Rights Exceeding the 10% Threshold of Tier I Capital (-)
Net Deferred Tax Assets arising from Temporary Differences Exceeding the10% Threshold of
Tier I Capital (-)
Amount Exceeding the 15% Threshold of Tier I Capital as per the Article 2, Clause 2 of the
Regulation on
Measurement and Assessment of Capital Adequacy Ratios of Banks (-)
28
1,158,000
1,830
1,123,822
203,724
74,777
64,107
10,670
-
1,087,187
4,815
904,055
207,986
243,565
243,075
490
-
22,163
2,584,316
21,242
2,468,850
95,168
33,109
35,286
9,228
-
11,757
22,435
14,817
2,712
-
-
-
-
-
-
-
-
-
The Portion of Net Long Position of the Investments in Equity Items of Unconsolidated Banks
and Financial
Institutions where the Bank Owns 10% or more of the Issued Share Capital not deducted from
Tier I Capital (-)
Mortgage Servicing Rights not deducted (-)
Excess Amount arising from Deferred Tax Assets from Temporary Differences (-)
Other items to be Defined by the BRSA (-)
Deductions from Tier I Capital in cases where there are no adequate Additional Tier I or Tier
II Capitals (-)
Total regulatory adjustments to Tier 1 capital
Tier 1 capital
ADDITIONAL CORE CAPITAL
Preferred Stock not Included in Tier I Capital and the Related Share Premiums
Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Issued or
Obtained after 1.1.2014)
Obtained before 1.1.2014)
Third Parties’ shares in capital
Additional Core Capital before Deductions
Deductions from Additional Core Capital
Direct and Indirect Investments of the Bank on its own Additional Core Capital (-)
Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding
The Total of Net Long Position of the Direct or Indirect Investments in Additional Tier I
Capital of Unconsolidated Banks and Financial Institutions where the Bank Owns more than
10% of the Issued Share Capital (-)
Deductions from Additional Core Capital in cases where there are no adequate Tier II Capital
(-)
Total Deductions from Additional Core Capital
Total Additional Core Capital
Deductions from Core Capital
Goodwill and Other Intangible Assets and Related Deferred Taxes not deducted from Tier I
Capital as per the Temporary Article 2, Clause 1 of the Regulation on Measurement and
Assessment of Capital Adequacy Ratios of Banks (-)
Net Deferred Tax Asset/Liability not deducted from Tier I Capital as per the Temporary
Article 2, Clause 1 of the Regulation on Measurement and Assessment of Capital Adequacy
Ratios of Banks (-)
Total Core Capital
TIER II CAPITAL
Obtained after 1.1.2014)
Obtained before 1.1.2014)
Pledged Assets of the Shareholders to be used for the Bank's Capital Increases
General Provisions
Third Parties’ shares in Tier II Capital
Tier II Capital before Deductions
Deductions from Tier II Capital
Direct and Indirect Investments of the Bank on its own Tier II Capital (-)
Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding
The Total of Net Long Position of the Direct or Indirect Investments in Additional Core
Capital and Tier II Capital of Unconsolidated Banks and Financial Institutions where the Bank
Owns 10% or more of the Issued Share Capital Exceeding the 10% Threshold of Tier I Capital
(-)
Total Deductions from Tier II Capital
Total Tier II Capital
29
-
-
172,791
2,411,525
51,721
2,417,129
-
-
-
-
-
-
-
-
-
-
-
-
-
-
52,929
59,266
13,842
2,344,754
10,848
2,347,015
-
-
356,475
180,556
537,031
417,005
164,430
581,435
-
-
-
537,031
581,435
CAPITAL
Loans Granted against the Articles 50 and 51 of the Banking Law (-)
Net Book Values of Movables and Immovables Exceeding the Limit Defined in the Article 57,
Clause 1 of the Banking Law and the Assets Acquired against Overdue Receivables and Held
for Sale but Retained more than Five Years (-)
Loans to Banks, Financial Institutions (domestic/foreign) or Qualified Shareholders in the
form of Subordinated Debts or Debt Instruments Purchased from Such Parties and Qualified as
Subordinated Debts (-)
Deductions as per the Article 20, Clause 2 of the Regulation on Measurement and Assessment
of Capital Adequacy Ratios of Banks (-)
The Portion of Total of Net Long Positions of the Investments in Equity Items of
Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the
Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital not deducted from
Tier I Capital, Additional Core Capital or Tier II Capital as per the Temporary Article 2,
Clause 1 of the Regulation (-)
The Portion of Total of Net Long Positions of the Investments in Equity Items of
Unconsolidated Banks and Financial Institutions where the Bank Owns more than 10% of the
Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital not deducted from
Additional Core Capital or Tier II Capital as per the Temporary Article 2, Clause 1 of the
Regulation (-)
The Portion of Net Long Position of the Investments in Equity Items of Unconsolidated Banks
and Financial Institutions where the Bank Owns 10% or more of the Issued Share Capital, of
the Net Deferred Tax Assets arising from Temporary Differences and of the Mortgage
Servicing Rights not deducted from Tier I Capital as per the temporary Article 2, Clause 2,
Paragraph (1) and (2) and Temporary Article 2, Clause 1 of the Regulation (-)
EQUITY
Amounts lower than Excesses as per Deduction Rules
Remaining Total of Net Long Positions of the Investments in Equity Items of Unconsolidated
Banks and
Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital
Remaining Total of Net Long Positions of the Investments in Tier I Capital of Unconsolidated
Banks and
Financial Institutions where the Bank Owns more than 10% or less of the Tier I Capital
Remaining Mortgage Servicing Rights
Net Deferred Tax Assets arising from Temporary Differences
30
2,881,785
-
2,928,450
-
10,576
10,325
23,088
23,088
7,323
10,440
-
-
-
-
2,840,798
2,884,597
-
-
-
-
Components of items of shareholders’ equity subject to temporary applications
Amount Included
in Equity
Calculation
Minority shares in Tier I Capital
Third Parties’ shares in capital
Third Parties’ shares in Tier II Capital
Debt Instruments and the Related Issuance Premiums Defined
by the BRSA (Issued before 1.1.2014)
31
Total Amount
22,163
-
44,148
-
356,475
515,590
Details on Subordinated Liabilities:
Current Period
İssuer
Unique identifier (eg CUSIP,
ISIN or Bloomberg identifier
for private placement)
Governing law(s) of the
instrument
KFW
(KREDİTANSTALT
FÜR
WİEDERAUFBAU)
Regulation on Equity
of Banks (Published
in the Official
Gazette Nr. 28756
dated 5 September
2013)
EFSE (European Fund For
Southeast Europe)
EFSE (European Fund For
Southeast Europe)
Regulation on Equity of
Banks (Published in the
Official Gazette Nr.
28756 dated 5
September 2013)
IFC (International Finance
Corporation)
28756 dated 5
September 2013)
EBRD (European Bank
for Reconstruction and
Development)
28756 dated 5
September 2013)
ECO Trade and
Development Bank
-
EBRD (European Bank
for Reconstruction and
Development)
-
-
28756 dated 5
September 2013)
28756 dated 5
September 2013)
28756 dated 5
September 2013)
Regulatory treatment
Subject to 10% deduction as
of 1/1/2015
Eligible on Unconsolidated/
consolidated / both
unconsolidated and
consolidated
Instrument type
Amount recognised in
regulatory capital (Currency
in million TRL, as of most
recent reporting date)
Par value of instrument
(Million TRL)
Accounting classification
Original date of issuance
Demand or time
Original maturity date
Issuer call subject to prior
supervisory approval
Yes
Valid on
Consolidated and
Unconsolidated
Basis
Subordinated Loan
Yes
Yes
Yes
Yes
Yes
Yes
Valid on Consolidated
and Unconsolidated
Basis
Subordinated Loan
and Unconsolidated
Basis
Subordinated Loan
and Unconsolidated
Basis
Subordinated Loan
and Unconsolidated
Basis
Subordinated Loan
and Unconsolidated
Basis
Subordinated Loan
and Unconsolidated
Basis
Subordinated Loan
4.07
38.17
25.44
104.71
83.78
20.94
79.37
13.58
347
30.06.2008
50.91
347
07.09.2012
33.94
347
30.09.2013
151.26
347
30.09.2013
121.00
347
30.09.2013
30.25
347
27.12.2013
114.65
347
30.12.2013
Time
Time
Time
Time
Time
Time
Time
25.06.2018
07.09.2022
29.09.2023
15.12.2023
29.09.2023
27.12.2023
27.12.2023
Yes
Yes
Yes
Yes
Yes
Yes
Yes
32
Optional call date,
contingent call dates and
redemption amount
Subsequent call dates, if
applicable
-
15,000
10,000
-
07.09.2017
28.09.2018
50,000
40,000
10,000
37,900
28.09.2018
28.09.2018
27.12.2018
27.12.2018
Coupons / dividends
Fixed or floating
dividend/coupon
Coupon rate and any related
index
Existence of a dividend
stopper
Fully discretionary, partially
discretionary or mandatory
Existence of step up or other
incentive to redeem
Noncumulative or
cumulative
If convertible, conversion
trigger (s)
If convertible, fully or
partially
If convertible, conversion
rate
If convertible, mandatory or
optional conversion
If
convertible,
specify
instrument type convertible
into
If convertible, specify issuer
of instrument it converts int
If write-down, write-down
trigger(s)
If write-down, full or partial
If write-down, permanent or
temporary
If temporary write-down,
description
of
write-up
mechanism
Fixed
Floating
Floating
Floating
Floating
Floating
Floating
2% p.a.
6m Euribor + 4.25% p.a.
6m Euribor + 5.25% p.a.
6m Libor + 5.25% p.a.
6m Libor + 5.25% p.a.
6m Libor + 5.25% p.a.
6m Libor + 6.50% p.a.
-
-
-
-
-
-
-
Mandatory
-
Mandatory
2% step-up for interest if
the loan is not repaid at
the end of the 5th year
Mandatory
Mandatory
Mandatory
Mandatory
Mandatory
Noncumulative
Noncumulative
Noncumulative
Noncumulative
Convertible or non-convertible
Noncumulative
Noncumulative
Noncumulative
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Write-down feature
33
Position in subordination
hierarchy in liquidation
(specify instrument type
immediately
senior
to
instrument)
Whether conditions which
stands in article of 7 and 8 of
Banks’ shareholder equity
law are possessed or not
According to article 7 and 8
of Banks' shareholders equity
law that are not possesed
Before core capital,
aftter all creditors
Yes
Yes
Yes
Yes
Yes
Yes
Yes
8-2-(a), (ç), ( e), (ğ)
8-2-(a), (ç), (e), (ğ)
8-2-(a), (ç), ( e), (ğ)
8-2-(a), (ç), (e), (ğ)
8-2-(a), (ç), (e), (ğ)
8-2-(a), (ç), (e), (ğ)
8-2-(a), (ç), (e),(ğ)
34
The Parent Bank, within the framework of its capital adequacy assessment process, determines limits for risks
(credit risk, market risk and operational risk) covered under the Capital Adequacy calculations as well as for
risks (concentration risk, interest rate risk in the banking book, liquidity risk, etc.) which are not covered under
these calculations. Thus, the Parent Bank determines its “Risk Limits” and with the help of these limits and by
means of applying stress tests and scenario analyses, it evaluates the adequacy of its capital level against a
background of its current and also projected activities.
The Parent Bank determines “Key Risk Indicators” as “early warning signals” within the context of the “Risk
Limits”. Both the “Risk Limits” and “Key Risk Indicators” are determined by taking into consideration the
Parent Bank’s annual budget and strategy; its risk appetite; the volume, qualifications and complexity of its
products/services; its experience and prior performance as well as the market conditions. The “Risk Limits” and
“Key Risk Indicators” are determined through risk based amounts and nominal amounts. In this scope,
regulatory limits and applications, Basel Committee applications, international best practices, concentrations and
tolerance levels as well as criteria based on the Parent Bank’s capital levels are used. In any case, the “Risk
Limits” and “Key Risk Indicators” cannot violate the Banking Law and related regulations.
The “Risk Limits” and “Key Risk Indicators” are reviewed and revised at least annually by the senior
management with respect to market conditions and changes in the Parent Bank’s strategies. The review process
aims to determine whether the current “Risk Limits” and “Key Risk Indicators” are meaningful and sufficient
enough compared to the Parent Bank’s risk appetite. The revised “Risk Limits” and “Key Risk Indicators” all
take effect upon the approval of the Board of Directors.
II. Explanations Related to the Consolidated Credit Risk
Credit risk is the possibility of loss that the Group may face, in the event that the counter party fails to fulfil
wholly or partly of its obligations in a timely manner, by breaching of its contractual obligations.
The Group’s lending activities are executed in line with the legislation and in accordance with the policies and
procedures approved by the Boards of Directors under the principle of “segregation of duties” throughout
marketing, allocation, monitoring, controlling and auditing activities.
Credit allocation is performed on a debtor or a debtor group basis within certain limits. These are determined
within a framework of authorisation limits, set in line with the legislation, for the Board of Directors, Credit
Committee, Head Office Credit Allocation Council (as of January 2015 this Committee has been abolished),
General Manager, Assistant General Managers (Corporate and Commercial Banking, Retail Banking, Financial
Institutions), Regional Office Managers, Regional Office Credit Committee as well as the Branch Credit
Committees and are approved taking into consideration the financial position and needs of the credit customer.
Similiar structures are applied in the Parent Bank’s subsidiaries.
The rating / scoring systems are effectively used in credit allocation. As per the Group’s credit policies, limits
and collaterals are regarded as risk mitigating factors complementary to each other. As provided by the
“Regulation on the Procedures and Principles for Determination of Qualifications of Loans and Other
Receivables by Banks and Provisions to Be Set Aside”, credit qualities of the debtors are regularly monitored,
and credit limits are revised once a year or whenever deemed necessary parallel to the economic conditions. The
majority of the statements of accounts received for loans are derived from audited financial statements. The
Group also receives sufficient amounts of collateral for loans and other receivables. These can be in the form of
guarantees, mortgages on real estates, cash blockage or cheques depending on the customer’s financial structure
and the type of the credit facility.
35
II. Explanations Related to the Consolidated Credit Risk (cont’d)
The Boards of Directors have approved concentration limits by industries, regions, debtors / debtor groups
monitored on a regular basis; all of which are reviewed and revised at least once a year, with respect to market
conditions and changes in the Group’s strategies.
Since the volume of prolonged and restructured loans and other receivables are not material with regard to the
Group’s financial statements, no additional follow-up methodology is needed to be developed in addition to
those specified in the legislation.
Within the framework of the capital adequacy calculations, indemnified non-cash loans are subject to the same
risk weighting treatment as overdue loans.
There are transaction limits as well as dealer limits by transaction types approved by the Boards of Directors
regarding the counterparty risk arising from the Group’s on-and off-balance sheet transactions monitored on a
daily basis. The limits of correspondent banks allocated according to their credit qualities are controlled on a
daily basis, while risk concentration is monitored systematically. When reverse positions of open positions are
required in order to minimize potential risks, positions are closed through the use of derivative transactions
aiming at risk downsizing.
The Group prefers to take country risk only for those financial institutions and countries regarded at investment
level by the international rating agencies and thus, do not have the risk of failing to fulfil their minimum
liabilities. Therefore, the related potential risks do not constitute any material risk factor with regards to the
Group’s financial structure.
When evaluated together with financial activities of other financial institutions, the Group, as an active
participant in the international banking environment, has no significant credit risk concentration.
Cash loans are classified in accordance with the regulation on “Methods and Principles for the Determination of
Loans and Other Receivables to be Reserved for and Allocation of Reserves”:
- due period from 90 days up to 179 days “Loans and receivables with limited collectability”
- due period from 180 days up to 359 days “Loans and receivables with doubtful collectability”
- due period from 360 days and higher “Uncollectible loans and receivables”.
Provision is set for the doubtful loans and the amount is charged in the current period income statement by the
Group. The provisioning amount for non-performing loans are determined by the management for compensating
the probable losses of the doubtful loan portfolio, by evaluating the quality of loan portfolio, risk factors and
considering the economy conditions, other facts and related regulations.
The Parent Bank Management applies provision policy for the “non-performing loans” in accordance with the
requirements of the Turkish banking regulation adopted by the BRSA.
36
II. Explanations Related to the Consolidated Credit Risk (cont’d)
Subsidiaries of the Parent Bank apply provisions of the regulation on “Methods and Principles for the
Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves”.
The provisions are reflected in the income statement under “Provision and Impairment Expenses - Specific
Provision Expense”. The collections made regarding these loans are first deducted from the principal amount of
the loan and the remaining collections are deducted from interest receivables.
As of 30 September 2015, the receivables of the Group from its top 100 cash loan customers amount to TRL
4,117,235 Thousand (31 December 2014 – TRL 3,228,725 Thousand) with a share of 24.10% in the total cash
loans (31 December 2014 – 21.31%). The receivables of the Group from its top 200 cash loan customers amount
to TRL 5,039,823 Thousand (31 December 2014 – TRL 4,047,465 Thousand) with a share of 29.50% in the total
cash loans (31 December 2014 – 26.71%).
As of 30 September 2015, the receivables of the Group from its top 100 non-cash loan customers amount to TRL
2,532,478 Thousand (31 December 2014 – TRL 2,201,210 Thousand) with a share of 43,64% in the total noncash loans (31 December 2014 – 39.18%). The receivables of the Group from its top 200 non-cash loan
customers amount to TRL 3,129,703 Thousand (31 December 2014 – TRL 2,818,212 Thousand) with a share of
53.93% in the total non-cash loans (31 December 2014 – 50.16%).
As of 30 September 2015, the share of cash and non-cash receivables of the Group from its top 100 customers in
total balance sheet and off-balance sheet assets is 1.36% (31 December 2014 – 1.27%). The share of cash and
non-cash receivables of the Group from its top 200 customers in total balance sheet and off-balance sheet assets
is 1.67% (31 December 2014 – 1.60%).
As of 30 September 2015, the general loan loss provision related with the credit risk taken by the Group is TRL
180,556 Thousand (31 December 2014 – TRL 164,430 Thousand).
37
III.
Explanations Related to the Consolidated Market Risk
Market risk is the possibility of loss that the Group may face, in its trading books value arising from movements
in market prices.
The Parent Bank’s policies and procedures related to market risk are in line with the “Regulation on Internal
Systems of Banks” and the “Regulation on Measurement and Evaluation of the Capital Adequacy of Banks” and
approved by the Board of Directors.
The Boards of Directors have approved both nominal-based limits (transaction, dealer, desk and stop-loss limits)
and risk-based limits (Value-at-Risk limits) monitored on a daily basis; all of which are reviewed and revised at
least once a year, with respect to market conditions and changes in the Group’s strategies.
Within the context of Capital Adequacy, the Group’s market risk exposure is calculated through the use of the
“Standard Method” in line with the legislation. In these calculations, the Group’s on- and off-balance sheet
trading book items covering the portfolio of trading securities, and derivatives are all taken into consideration.
Within the Group, market risk exposure is measured, monitored and reported on a daily basis. In this context,
“Value-at-Risk (VaR) Methods” are applied as internal model.
Among these methods, the “Variance Covariance Method” also known as the “Parametric Method” is used in
reporting, while the “Historical Simulation” and the “Monte Carlo Simulation” methods, on the other hand, are
used for comparison, in times when volatility increases a great extent. VaR measurements are based on an
observation period covering the last 250 workdays and a 99 % confidence level. In “Economic Capital”
measurements based on VaR, a 10-day holding period is applied. Additionally, stress tests and scenario analyses
are applied in order to measure and monitor the impact of adverse movements in the markets, while the
effectiveness of the Parent Bank’s internal model is tested by using back tests on a daily basis.
(I) Capital requirement to be employed for general market risk - Standard method (*)
(II) Capital requirement to be employed for specific risk - Standard method
Standard method for specific risk of necessary capital requirement on securitization positions
(III)Capital requirement to be employed for currency risk - Standard method
(IV)Capital requirement to be employed for commodity risk - Standard method
(V)Capital requirement to be employed for settlement risk - Standard method
(VI)Total capital requirement to be employed for market risk resulting from options–Standard method
(VII)Counterparty credit risk capital requirement - Standard method
(VIII) Total capital requirement to be employed for market risk in banks using risk measurement model
(IX) Total capital requirement to be employed for market risk (I+II+III+IV+V+VI+VII+VIII)
(X) Market Value at Risk (12,5 x VIII) or (12,5 x IX)
Amount
5,073
5,484
16,195
1,019
18,169
45,940
574,250
(*) Capital requirement for general market risk and specific risk which is related to the Ordinary Investment Partnerships’ positions under
special approach scope, is shown under Capital requirement to be employed for general market risk.
38
III.
Explanations Related to Consolidated Market Risk (cont’d)
Average market risk table calculated at the end of the months during the period:
Current Period
Average
Interest Rate Risk (**)
Equity Risk (*)
Currency Risk
Commodity Risk
Settlement Risk
Option Risk
Counter Party Credit Risk
Total Value Subject to Risk
Prior Period
Maximum
Minimum
Average
Maximum
Minimum
12,749
21,507
12,216
16,308
14,293
12
-
12
55
168
3,324
93
9,020
11,810
8,456
15,842
28,918
12,673
-
-
-
-
-
-
-
-
-
-
-
-
654
300
2,277
788
1,017
295
20,751
22,094
15,629
18,402
19,622
14,360
539,825
696,388
482,375
642,438
800,225
384,313
(*) Market risk calculated from the investment funds is shown under equity risk.
(**) Capital requirement for general market risk and specific risk which is related to the Ordinary Investment Partnerships’ positions under
special approach scope , is shown under interest rate risk .
IV.
Explanations Related to the Consolidated Currency Risk
Currency risk is the possibility of loss that the Group may face, in its total on- and off-balance sheet accounts
and positions in foreign currencies, arising from changes in exchange rates.
The Parent Bank’s policies and procedures related to currency risk are in line with the “Regulation on Internal
The Boards of Directors have approved limits (position limits, stop-loss limits) compliant with the regulatory
“Foreign Exchange Net General Position / Equity Standard Ratio” and based on the Group’s capital. These limits
are monitored on a daily basis and reviewed and revised at least once a year, with respect to market conditions
and changes in the Group’s strategies.
Within the context of Capital Adequacy, the Group’s currency risk exposure is calculated through the use of the
“Standard Method” in line with the legislation. In these calculations, the Group’s foreign currency assets and
foreign currency liabilities together with the forward transactions and gold position are all taken into
consideration.
Within the Group, currency risk exposure is measured, monitored and reported on a daily basis. In this context,
“Value-at-Risk (VaR) Methods” are applied as internal model. Among these methods, the “Variance Covariance
Method” also known as the “Parametric Method” is used in reporting, while the “Historical Simulation” and the
“Monte Carlo Simulation” methods, on the other hand, are used for comparison, in times when volatility
increases a great extent. VaR measurements are based on an observation period covering the last 250 workdays
and a 99 % confidence level. In “Economic Capital” measurements based on VaR, a 10-day holding period is
applied.
Additionally, stress tests and scenario analyses are applied in order to measure and monitor the impact of adverse
movements in the markets, while the effectiveness of the Parent Bank’s internal model is tested by using back
tests on a daily basis.
As of 30 September 2015, the Group’s balance sheet short position is TRL 2,833,101 Thousand (31 December
2014 – TRL 2,361,552 Thousand short) and long position on the off balance sheet amounting to TRL 2,799,122
Thousand (31 December 2014 - TRL 2,441,489 Thousand long), resulting in total net short position amounting
to TRL 33,979 Thousand (31 December 2014- TRL 79,937 Thousand total net long).
39
IV.
Explanations Related to the Consolidated Currency Risk (cont’d)
The announced current foreign exchange buying rates of the Parent Bank at 30 September 2015 and the
previous five working days in full TRL are as follows:
21.09.2015
22.09.2015
23.09.2015
28.09.2015
29.09.2015
30.09.2015
USD
2.9978
3.0069
3.0069
3.0464
3.0433
3.0251
CHF
3.0922
3.0838
3.0838
3.1030
3.1250
3.0994
GBP
4.6493
4.6420
4.6420
4.6239
4.6109
4.5812
100 JPY
2.4873
2.4998
2.4998
2.5288
2.5340
2.5114
EURO
3.3847
3.3602
3.3602
3.4057
3.4212
3.3941
The simple arithmetic averages of the major current foreign exchange buying rates of the Parent Bank for the
thirty days before 30 September 2015 are as follows:
Monthly Average
Foreign Exchange Rate
USD
3.00681
CHF
3.08983
GBP
4.62009
100 JPY
2.49945
EURO
3.37961
40
IV.
Explanations Related to the Consolidated Currency Risk (cont’d)
Information on the foreign currency risk of the Group:
Other FC
Total
EUR
USD
Current Period
Assets
Cash (Cash in Vault, Foreign Currency Cash, Money in Transit,
Cheques Purchased) and Balances with the Central Bank of Turkey
Due From Other Banks and Financial Institutions
Money Market Placements
Financial Assets Available-For-Sale
Loans
Subsidiaries, Associates and Entities Under Common Control
Held-To-Maturity Investments
Tangible Assets
Intangible Assets
Other Assets
Total Assets
407,208
14,075
2,788
979,076
263,011
1,666,158
1,278,908
23,827
4,851
2,755,376
421
2,083
192,967
4,258,433
454,543
75,473
36,972
11,878
578,866
2,140,659
113,375
7,639
3,771,424
421
2,083
467,856
6,503,457
Liabilities
Bank Deposits
Foreign Currency Deposits
Money Market Borrowings
Funds Provided From Other Financial Institutions
Securities Issued
Sundry Creditors
Other Liabilities
Total Liabilities
417,303
2,508,313
808,543
132,358
2,949
3,869,466
274,116
2,279,204
2,474,891
11,807
13,973
5,053,991
8,380
255,725
145,722
3,274
413,101
699,799
5,043,242
3,283,434
289,887
20,196
9,336,558
Net Balance Sheet Position
Net Off-Balance Sheet Position
Financial Derivative Assets
Financial Derivative Liabilities
Non-Cash Loans
(2,203,308)
2,119,642
2,942,372
822,730
634,657
(795,558)
936,788
1,702,702
765,914
1,381,589
165,765
(257,308)
74,847
332,155
671
(2,833,101)
2,799,122
4,719,921
1,920,799
2,016,917
Prior Period
Total Assets
Total Liabilities
Net Balance Sheet Position
Net Off-Balance Sheet Position
Financial Derivative Assets
Financial Derivative Liabilities
Non-Cash Loans
1,087,495
3,059,585
(1,972,090)
1,973,996
2,694,941
720,945
455,187
3,865,066
4,419,355
(554,289)
623,129
2,553,200
1,930,071
1,437,310
527,794
362,967
164,827
(155,636)
103,002
258,638
232
5,480,355
7,841,907
(2,361,552)
2,441,489
5,351,143
2,909,654
1,892,729
About Currency Risk Table as of 30 September.2015;
The principal amount of currency indexed loans amounting TRL 949,069 Thousand and accruals amounting TRL 237,080 Thousand are shown under loans. The principal amount of currency indexed
funds borrowed amounting to TRL 414 Thousand and accruals amounting TRL 1 Thousand are shown in the Funds Provided From Other Financial Institutions line. According to the regulation about
Foreign Currency Net General Position / Equity Standard Ratio Calculation, Foreign Currency amounts that are not shown in the present currency risk table are as follows:
Derivative Financial Assets Held-for-Trading: TRL 39,634 Thousand
Prepaid expenses: TRL 32,803 Thousand
Derivative Financial Liabilities Held-for-Trading: TRL : 19,383 Thousand
Unearned income from instalment sale of assets: TRL 2,612 Thousand.
General Provisions:TRL 791 Thousand
Equity: TRL 7,699 Thousand
Financial Derivative Asset amount includes TRL 42,239 Thousand forward asset purchase commitment and TRL 39,874 Thousand option contracts.
Financial Derivative Liabilities amount includes TRL 16,380 Thousand forward asset selling commitment and TRL 39,869 Thousand option contracts.
About Currency Risk Table as of 31 December 2014;
The principal amount of currency indexed loans amounting TRL 856,931 Thousand and accruals amounting TRL 94,184 Thousand are shown under loans. The principal amount of currency indexed
funds borrowed amounting to TRL 19,210 Thousand and accruals amounting TRL 111 Thousand are shown in the Funds Provided From Other Financial Institutions line. According to the regulation
about Foreign Currency Net General Position / Equity Standard Ratio Calculation, Foreign Currency amounts that are not shown in the present currency risk table are as follows:
Derivative Financial Assets Held-for-Trading: TRL 40,820 Thousand
Prepaid expenses: TRL 7,365 Thousand
Derivative Financial Liabilities Held-for-Trading: TRL 52,692 Thousand
General Provisions:TRL 652 Thousand
Equity: TRL 2,678 Thousand
Financial Derivative Asset amount includes TRL 43,823 Thousand forward asset purchase commitment and TRL 29,999 Thousand option contracts.
Financial Derivative Liabilities amount includes TRL 47,536 Thousand forward asset selling commitment and TRL 29,999 Thousand option contracts.
41
V.
Explanations Related to the Consolidated Interest Rate Risk
Interest rate risk is the possibility of loss that the Group may face, in relation to its structural position arising
from adverse movements in interest rates.
The Parent Bank’s policies and procedures related to interest rate risk are in line with the “Regulation on Internal
Within the context of Capital Adequacy, the Group’s interest rate risk exposure is calculated through the use of
the “Standard Method” in line with the legislation.
The Group takes interest rate risk positions in both the trading book and banking book. The interest rate risk
arising from the trading book is evaluated within the scope of market risk, and thus, measured, monitored, and
managed in line with market risk policies and procedures.
Within the Parent Bank, interest rate risk exposure is measured, monitored and reported on a daily basis. In this
context, “Value-at-Risk (VaR) Methods” are applied as internal model.
Among these methods, the “Variance Covariance Method” also known as the “Parametric Method” is used in
reporting, while the “Historical Simulation” and the “Monte Carlo Simulation” methods, on the other hand, are
used for comparison, in times when volatility increases a great extent.
VaR measurements are based on an observation period covering the last 250 workdays and a 99 % confidence
level. In “Economic Capital” measurements based on VaR, a 10-day holding period is applied.
Additionally, stress tests and scenario analyses are applied in order to measure and monitor the impact of adverse
movements in the markets, while the effectiveness of the Parent Bank’s internal model is tested by using back
tests on a daily basis.
It is the priority of the Asset Liability Management to provide protection against adverse movements in market
interest rates. In this context, gap analyses, duration and economic value analyses as well as sensitivity analyses
are evaluated on a weekly basis by the Parent Bank’s Asset Liability Committee. Simulations on net interest
income are performed according to macroeconomic indicator estimations in the Group’s budget targets, while
the potential negative impact of adverse movements in market interest rates on the financial position and cash
flows is minimized through target revisions. The Group management monitors the market interest rates on a
daily basis, and is able to change the interest rates applied by the Group whenever it is necessary.
42
Explanations Related to the Consolidated Interest Rate Risk (cont’d)
V.
Average interest rates applied to monetary financial instruments
EUR
USD
JPY
TRL
Current Period (*)
Assets
Cash (Cash in Vault, Foreign Currency Cash, Money in Transit,Cheques Purchased) and
Balances with the Central Bank of Turkey
-
-
-
-
0.07
2.45
0.23
5.12
-
11.75
6.15
-
-
-
9.23
Financial Assets Available-for-Sale
-
-
-
4.24
5.12
6.01
5.28
16.83
-
8.08
-
4.95
Bank Deposits
1.54
0.98
-
11.25
Other Deposits
1.92
1.92
-
10.35
-
-
-
9.51
Sundry Creditors
0.01
0.13
-
-
Securities Issued
-
-
-
10.95
1.57
2.71
-
6.89
Loans
Held-to-Maturity Investments
Liabilities
(*) Interest rates belong to the Parent Bank.
EUR
USD
JPY
TRL
Prior Period (*)
Assets
Cash (Cash in Vault, Foreign Currency Cash, Money in Transit, Cheques Purchased)
and Balances with the Central Bank of Turkey
-
-
-
-
0.54
0.33
-
11.08
2.68
5.63
-
6.26
-
-
-
9.39
Financial Assets Available-for-Sale
-
-
-
5.11
5.86
6.19
5.27
15.44
-
8.08
-
4.94
Bank Deposits
2.01
1.97
-
10.8
Other Deposits
2.34
2.24
-
10.13
9.59
Loans
Held-to-Maturity Investments
Liabilities
-
-
-
Sundry Creditors
0.1
0.14
-
-
Securities Issued
-
-
-
10.64
1.94
2.79
-
6.31
(*) Interest rates belong to the Parent Bank.
43
V.
Information related to the interest rate sensitivity of assets, liabilities and off-balance sheet items (based
on repricing dates)
Current Period
Assets
Cash (Cash in Vault, Foreign
Currency Cash, Money in Transit,
Cheques Purchased and Balances
with the Central Bank of Turkey
Due From Other Banks and
Financial Assets at Fair Value
Through Profit and Loss
Loans (*)
Other Assets
Total Assets
Liabilities
Bank Deposits
Other Deposits
Sundry Creditors
Securities Issued
Funds Provided From Other
Other Liabilities
Total Liabilities
Balance Sheet Long Position
Balance Sheet Short Position
Off-Balance Sheet Long Position
Off-Balance Sheet Short Position
Total Position
Up to 1
Month
3-12
Months
1-3 Months
1-5
Years
5 Years and
Over
Non-Interest
Bearing
Total
56,714
-
-
-
-
2,631,944
2,688,658
23,547
-
-
-
-
99,919
123,466
38,482
8,000
337,769
6,544,008
540,715
468,380
8,017,615
10,622
286,411
1,463,228
251,244
175,737
2,187,242
46,459
439,583
2,530,517
460,517
205,544
3,682,620
83,325
318,522
5,517,427
216,662
6,135,936
5,119
48,264
585,217
421
8,626
647,647
641
7,396
2,729
1,672,589
4,415,218
184,648
8,000
1,437,945
16,643,126
1,252,897
2,747,538
25,086,278
135,761
7,904,218
1,889,989
122,129
-
105,845
2,869,364
5,331
363,839
721,005
1,131,839
491,157
35,135
21,266
-
349,581
1,683,313
255,309
-
1,312,192
13,623,869
1,889,989
382,769
876,262
748,917
247,247
11,048,261
1,581,047
39,120
4,964,546
1,205,597
26,572
3,576,170
137,181
127,059
320,641
794
157
951
33
2,887,473
5,175,709
3,673,569
3,327,628
25,086,278
(3,030,646)
-
(2,777,304)
-
106,450
-
5,815,295
-
646,696
-
(760,491)
-
6,568,441
(6,568,441)
-
(3,030,646)
(2,777,304)
106,450
5,815,295
646,696
(760,491)
-
(*) The Group classified Loans and Receivables amounting to TRL 374,701 Thousand, under financial assets at fair value through profit and
loss. Non performing loans classified as “Financial assets at fair value through profit and loss”amount to TRL 6,788 Thousand and Specific
provision amount to TRL 2,039 Thousand.
44
V.
Information related to the interest rate sensitivity of assets, liabilities and off-balance sheet items (based
on repricing dates) (cont’d)
Prior Period
Assets
Cheques Purchased) and Balances
with the Central Bank of Turkey
Due From Other Banks and Financial
Institutions
Loans (*)
Other Assets
Total Assets
Liabilities
Bank Deposits
Other Deposits
Sundry Creditors
Securities Issued
Funds Provided From Other Financial
Institutions
Other Liabilities
Total Liabilities
Balance Sheet Long Position
Balance Sheet Short Position
Off-Balance Sheet Long Position
Off-Balance Sheet Short Position
Total Position
Up to 1
Month
1-3
Months
3-12
Months
1-5 Years
5 Years
and
Over
NonInterest
Bearing
Total
31,869
-
-
-
-
2,312,974
2,344,843
82,456
-
707
-
-
63,019
146,182
41,851
8,000
356,875
5,577,312
207,736
330,950
6,637,049
12,803
393,099
1,044,351
395,228
115,973
1,961,454
23,810
295,098
2,463,278
766,216
163,685
3,712,794
86,819
3,246
5,222,977
230,253
5,543,295
5,108
1,555
508,851
329
21,675
537,518
437
6,884
709
1,496,592
3,880,615
170,828
8,000
1,056,757
14,817,478
1,369,509
2,359,128
22,272,725
624,046
7,194,571
1,496,282
56,033
180,935
64,267
2,665,112
4,217
765,409
3,007
1,217,968
48,388
17,557
124,201
-
277,723
1,555,284
328,634
-
969,043
12,650,492
1,496,282
388,884
1,118,933
227,002
195,652
9,974,521
867,992
122,702
4,489,699
854,279
8,124
2,131,766
185,398
32,544
359,700
337,408
8,855
346,263
22
2,809,113
4,970,776
2,472,101
3,176,990
22,272,725
(3,337,472)
3,000
-
(2,528,245)
-
1,581,028
(3,000)
5,183,595
-
191,255
-
(1,090,161)
-
6,955,878
(6,955,878)
3,000
(3,000)
(3,334,472)
(2,528,245)
1,578,028
5,183,595
191,255
(1,090,161)
-
(*) The Group classified Loans and Receivables amounting to TRL 348,713 Thousand, under financial assets at fair value through profit and
loss. Non performing loans classified as “Financial assets at fair value through profit and loss”amount to TRL 6,325 Thousand and Specific
provision amount to TRL 2,840 Thousand.
45
V.
The interest rate risk of the banking book items:
The Group may be exposed to interest rate risk in the banking book arising from:
 Repricing Risk is the major source of Interest Rate Risk. It arises from the mismatches in maturities (in
instruments with fixed interest rates) and the mismatches in repricing frequencies (in instruments with
floating interest rates) within the Group’s assets, liabilities and interest bearing off balance sheet items.
 Yield Curve Risk arises from unanticipated changes in the relationships across the spectrum of maturities; i.e.
the slope and the shape of the yield curve. Therefore, it exacerbates the impact stemming from the
mismatches in maturities and repricing frequencies.
 Basis Risk arises from imperfect correlations in the spreads due to imperfect adjustment of rates earned and
paid on different instruments within the Group’s assets, liabilities and interest bearing off balance sheet items
with otherwise similar maturities or repricing frequencies.
 Optionality Risk arises from the behavioural optionality embedded within the Group’s assets, liabilities and
interest bearing off balance sheet items, differing from their contractual maturities; such as prepayment (in
part or in full) of loans, calling of wholesale funding, and withdrawals or roll-overs of demand deposits as
well as time deposits.
The Parent Bank’s policies and procedures related to interest rate risk are in line with the “Regulation on Internal
approved by the Parent Bank’s Board of Directors.
The Boards of Directors have approved Risk Limits regarding the interest rate risk arising from the banking
book, monitored on a weekly basis; all of which are reviewed and revised at least once a year, with respect to
market conditions and changes in the strategies. These limits are based on the capital and determine the
acceptable level of interest rate risk by certain maturity buckets.
The Group employs two separate approaches, i.e. “income approach” and “economic value approach” in order to
measure and monitor the impact of interest rate risk on its income and capital. The “income approach” is
employed in order to calculate the impact of movements in market interest rates on Net Interest Income, while
the “Economic Value Approach” is employed in order to calculate the same impact on the Economic Value of
Equity. As the “Economic Value Approach” offers a much more comprehensive view since it considers the
present value of all the future cash flows, it constitutes the base for the Parent Bank’s Asset Liability
Management. Additionally, stress tests and scenario analyses are applied in order to measure and monitor the
changes in interest rate sensitive on- and off-balance sheet items, arising from adverse movements in interest
rates.
46
V.
Explanations Related to Consolidated Interest Rate Risk (cont’d):
The interest rate risk of the banking book items (cont’d):
Economic valuation differences from fluctuations on interest rates, in different currencies, are presented in the
table below (*):
Current Period
Currency
Applied Shock
(+/- x basis point)
(Gain) / Loss
(Gain) /Shareholders’ Equity –
Loss/ Shareholders’ Equity
+500
(413,465)
(14.77)%
-400
386,469
13.81%
TRL
EURO
USD
+200
9,761
0.35%
-200
(6,616)
(0.24)%
+200
(8,544)
(0.31)%
9,256
0.33%
Total (For negative shocks)
-200
389,109
13.90%
Total (For positive shocks)
(412,248)
(14.73)%
(*) The interest rate risk table belongs to the Parent Bank.
Prior Period
Currency
Applied Shock
(+/- x basis point)
(Gain) / Loss
(Gain) /Shareholders’ Equity
– Loss/ Shareholders’ Equity
+500
(376,277)
(13.43)%
-400
346,626
12.38%
TRL
EURO
USD
+200
10,395
0.37%
-200
(1,117)
(0.04)%
+200
(8,188)
(0.29)%
8,999
0.32%
Total (For negative shocks)
-200
354,508
12.66%
Total (For positive shocks)
(374,070)
(13.36)%
(*) The interest rate risk table belongs to the Parent Bank.
VI.
Explanations Related to Consolidated Stock Position Risk
Consolidated Stock Position Risk Due from Banking Book: None.
47
VII.
Explanations Related to Consolidated Liquidity Risk
Liquidity risk is the possibility of loss that the Group may face, when there is not sufficient cash or cash inflow
to meet the cash outflow in full and in time.
Liquidity risk may also occur when market penetration is not adequate, when open positions cannot be closed
quickly at suitable prices and sufficient amounts, due to barriers and break-ups at the markets.
The Parent Bank’s policies and procedures related to liquidity risk are in line with the “Regulation on Internal
Systems of Banks” and the “Regulation on Measurement and Evaluation of the Liquidity Adequacy of Banks”
and approved by the Bank’s Board of Directors.
The Boards of Directors have approved Risk Limits compliant with the regulatory “Liquidity Adequacy Ratios”
and based on the Group’s capital, monitored on a weekly basis; all of which are reviewed and revised at least
once a year, with respect to market conditions and changes in the Group’s strategies. These limits determine the
acceptable level of liquidity risk by certain maturity buckets.
The Group employs gap analyses in order to measure and monitor the impact of liquidity risk, which shows the
current and future liquidity needs. The Group bases those analyses on certain maturity assumptions approved by
the Boards of Directors in respect of the average maturities of assets and liabilities as well as the off-balance
sheet items. These assumptions include the behavioural attributes for revolving loans and overdraft accounts as
well as sight and time deposits. These analyses are evaluated on a weekly basis by the Parent Bank’s Asset
Liability Committee.
The Group’s policy requires sustainable asset structure to satisfy any liability in time with liquid sources. The
Boards of Directors supervise the policies and procedures related to liquidity management in a sound manner.
The Group’s liquidity management ensures creation of assets easily liquidated in the markets and diversification
of funding sources in order to prevent any concentration. Within this context, the Group has never suffered a
liquidity shortage.
Considering the funding sources, the Group meets the biggest part of its liquidity needs from deposits; and also
provides sources through syndication and prefinancing products.
48
VII.
Explanations Related to the Consolidated Liquidity Risk (cont’d)
Presentation of assets and liabilities according to their remaining maturities:
Demand
Current Period
Assets
Cheques Purchased, Precious
Metals) and Balances with the
Central Bank of Turkey
Due From Other Banks and
Loans (**) (***)
Other Assets
Total Assets
Liabilities
Bank Deposits
Other Deposits
Funds Provided From Other
Securities Issued
Sundry Creditors
Other Liabilities
Total Liabilities
Liquidity Gap
Prior Period
Total Assets
Total Liabilities
Liquidity Gap
Up to 1
Month
1-3 Months
3-12
Months
1-5 Years
5 Years and
Over
Undistributed
(*)
Total
807,894
1,880,764
-
-
-
-
-
2,688,658
99,919
23,547
-
-
-
-
-
123,466
641
7,396
60,599
131,351
1,107,800
37,868
8,000
51
868,188
468,380
3,286,798
8,280
5,335,049
173,297
5,516,626
46,087
705
2,279,725
3,376
205,606
2,535,499
86,066
778,840
6,408,244
873,222
216,662
8,363,034
5,706
650,953
1,689,522
376,299
8,626
2,731,106
1,799
1,543,616
1,545,415
184,648
8,000
1,437,945
16,643,126
1,252,897
2,747,538
25,086,278
349,581
1,683,313
135,761
7,904,194
105,845
2,869,309
721,005
1,131,674
35,379
-
-
1,312,192
13,623,869
33
254,175
149,610
2,436,712
(1,328,912)
205,573
1,889,989
122,129
258,414
10,516,060
(7,229,262)
318,668
5,331
153,542
3,452,695
2,063,931
1,184,267
491,157
53,382
3,581,485
(1,045,986)
831,378
385,105
186,221
1,438,083
6,924,951
1,133,650
15,326
1,148,976
1,582,130
1,134
2,511,133
2,512,267
(966,852)
3,673,569
1,889,989
876,262
382,769
3,327,628
25,086,278
-
696,814
2,299,105
3,007,008
9,989,911
4,726,027
3,558,377
2,393,508
1,997,723
7,507,095
1,066,131
2,538,319
883,399
1,403,954
2,478,079
22,272,725
22,272,725
(1,602,291)
(6,982,903)
1,167,650
395,785
6,440,964
1,654,920
(1,074,125)
-
(*) Those assets such as tangible assets, investments in subsidiaries and associates, office supply inventory, prepaid expenses and non-performing loans,
which are necessary for continuation of banking activities, unavailable for conversion into cash in a short term and other asset qualified accounts and
equity accounts are classified under undistributed.
(**) Overdraft Loans are presented in 1-3 months period.
(***)The Group has classified Loans and Receivables amount to TRL 374,701 Thousand, under financial assets at fair value through profit and loss in the
current period. Non performing loans classified as “Financial assets at fair value through profit and loss”amount to TRL 6,788 Thousand (31 December
2014 – TRL 6,325 Thousand) and Specific provision amount to TRL 2,039 Thousand (31 December 2014 – TRL 2,840 Thousand).
VIII.
Explanations Related to Consolidated Securitization Position Risk
None.
49
IX.
Explanations Related to Credit Risk Mitigation Techniques
Credit risk mitigation techniques:
The Parent Bank uses financial collaterals (Government securities, cash, deposit, gold, stock pledge), guarantees
and credit derivatives as risk mitigators.
The financial collaterals are revaluated on a daily basis. The Group pays attention to legality of collaterals,
monitoring the fair value of collaterals and insurance agreements related with the collaterals in the name of the
Group.
While “simple approach” is taken into account for banking book items, the Parent Bank uses “comprehensive
approach” for trading book items in the credit mitigation process.
Collaterals which are grouped according to asset types (*):
Risk Types
Amount (**)
1 Contingent and Non-Contingent Claims on Sovereigns
Contingent and Non-Contingent Claims on Regional Governments and Local
2 Authorities
Contingent and Non-Contingent Claims on Administrative Units and Non3 Commercial Enterprises
4
5
6
7
8
9
10
11
12
13
14
15
16
Contingent and Non-Contingent Claims on Multilateral Development Banks
Contingent and Non-Contingent Claims on International Organizations
Contingent and Non-Contingent Claims on Banks and Capital Market Intermediary
Contingent and Non-Contingent Claims on Corporate Receivables
Other/
Physical
Collaterals
Financial
Collaterals
Guarantees
and Credit
Derivatives
5,197,840
-
-
-
78,442
-
-
-
7,401
985
-
-
-
-
-
-
-
-
-
356,337
-
-
-
12,036,847
105,766
-
-
-
Contingent and Non-Contingent Claims Included in the Regulatory Retail Portfolios
6,856,794
68,756
-
Contingent and Non-Contingent Claims Secured by Mortgage
5,460,855
-
-
-
776,911
-
-
-
1,141,822
-
-
-
Past Due Loans
Higher-Risk Categories Defined by Agency
Collateralized Mortgage Marketable Securities
-
-
-
Securitization Exposures
-
-
-
-
Short-Term Claims on Banks and Corporate
-
-
-
-
-
-
-
1,630,176
-
-
-
33,543,425
175,507
-
-
Undertakings for Collective Investments in Transferable Securities
-
Other Claims
Total
(*) According to the Basel II, financial collaterals, guarantees and credit derivatives are taken into account in capital adequacy ratio
calculation, while the other/physical collaterals (sureties, allowance alienation, vehicle and other pledges) are not considered. Mortgage
loans are shown in the 9th line of table.
(**) Amount consists of “total credit risk amount before credit conversion rates”.
50
X.
Explanations Related to Consolidated Risk Management Objective and Policies
Risk Management System Strategy
1.
2.
3.
4.
Risk Management System in the Group is considered as a whole and is structured in all organisational and
management processes as well as Information Systems and risk awareness is enhanced.
Risk Management System is built-in into all activities of the Group and it is the responsibility of all the
Group’s personnel to enhance Risk Management System.
Risk Management System also covers the Parent Bank’s investments and associates, as well as its
subsidiaries, on a consolidated basis.
The objectives to be achieved through the Risk Management System and internal capital adequacy
assessment process are as stated:

Protection of the Group’s solid financial condition,

Determination of the Group’s risk appetite in line with its strategies and activities,

Determination of the Group’s capital level in line with its risk appetite,

Adoption of risk-based approaches:
- Across business units,
- In structuring of portfolios,
- In setting of authorizations,
- In pricing.

Enhancement of Performance Management System,

Enhancement of the principles of corporate governance and transparency.
The Structure and Scope of Risk Management System
The Risk Management System covers of all the decision-making, executing and monitoring, controlling and
auditing bodies of the Group and includes the following:





The Board of Directors
Senior Management
Internal Systems Units
Committees established by the Board of Directors within Risk Management System
Committees established by Senior Management within Risk Management System
The Goals of Risk Management System
1.
2.
3.
4.
5.
6.
Enhancement of enterprise risk management culture, by means of establishment of sound strategies and
policies,
Establishment and sound management of risk limits and applications,
Enhancement of asset structure,
Accurate fulfillment of obligations,
Determination of the Group’s risk appetite in line with the Group’s business strategies and activities,
Determination of the Group’s capital level in line with its risk appetite.
51
X.
Explanations Related to Consolidated Risk Management Objective and Policies (cont’d)
The Basic Principles of Risk Management System
1.
2.
3.
4.
5.
6.
7.
8.
The activities within the Group’s Risk Management System are regulated and supervised in a sound
manner.
Risk Management strategies, policies, risk limits and applications are established in line with the Group’s
business strategies and activities as well as the requirements within a changing environment.
In order to prevent errors and irregularities, fraud, conflicts of interest, manipulation of information and
abuse of resources, segregation of authorities is formulated for these.
Authorities and responsibilities of all the units, committees and personnel are defined precisely and in
written form.
Information Systems of the Group are structured in line with the Group’s business strategies and activities
and the qualifications and the complexity of products to be newly introduced.
Information Systems of the Group are structured so that identifying, measuring, monitoring, controlling
and reporting of risks to which the Group may be exposed, due to its strategies and activities are executed
in an effective and timely manner.
Within the scope of the organizational structure of the Group and in accordance with principles related to
security of information, vertical and horizontal flows of information are established.
All the managers and related personnel are informed precisely, concerning the Group’s strategies and
objectives, policies, risk limits and applications.
The Tools of Risk Management System
1.
2.
3.
4.
5.
6.
XI.
Establishment of Risk Limits,
Establishment of Segregation of duties and decision-making system,
Establishment of sound communication channels (financial / managerial reporting lines),
Establishment of sound process management,
Establishment of sound internal controls,
Structuring of Emergency and Business Continuity Planning.
Explanations Related to Transactions Made on Behalf of Others and Transactions Based
On Trust
The Parent Bank performs buying and selling transactions on behalf of customers but does not provide
custody administration and consultancy services.
There are no transactions made with other financial institutions within trust transaction contract and direct
financial services provided within this scope.
52
SECTION FIVE
EXPLANATIONS AND DISCLOSURES ON THE
CONSOLIDATED FINANCIAL STATEMENTS
I.
Explanations Related to the Consolidated Assets
1. a) Information on Cash and Balances with the Central Bank of Turkey:
Current Period
TRL
Prior Period
FC
TRL
FC
Cash in TRL/Foreign Currency
131,389
60,245
126,586
69,297
Balances with the Central Bank of Turkey
416,610
2,080,410
133,908
2,015,048
Other
Total
-
4
-
4
547,999
2,140,659
260,494
2,084,349
b) Information related to the account of the Central Bank of Turkey:
Current Period
TRL
Unrestricted demand deposit
Prior Period
FC
TRL
FC
416,610
2,066,903
133,908
2,015,048
Unrestricted time deposit
-
2
-
-
Restricted time deposit
-
13,505
-
-
416,610
2,080,410
133,908
2,015,048
Total
 The reserve deposits include TRL 1,843,527 Thousand of FC unrestricted demand deposit (31 December 2014 – TRL 1,818,106 Thousand)
and TRL 404,721 Thousand of the TRL unrestricted demand deposit (31 December 2014 – TRL 122,537 Thousand). TRL unrestricted
demand deposit includes the reserve deposit amount that is held in the Central Bank of the Turkish Republic on average. The Central Bank
of Turkish Republic has begun to apply interest on TRL and USD reserve deposits as of November 2014 and May 2015, respectivly.
 CBRT amounts include the funds of Şekerbank (Kıbrıs) Ltd. held with the Central Bank of Turkish Republic of Northern Cyprus. Central
Bank of Turkish Republic of Northern Cyprus amount is TRL 40,715 Thousand and it includes TRL 14,755 Thousand reserve deposit
amount (31 December 2014-TRL 30,563 Thousand Central Bank amount and it includes TRL 11,611 Thousand reserve deposit amount).
Interest rates applied by the Central Bank of Turkish Republic of Northern Cyprus to reserve deposits are regulated as follows:
- Deposits up to three month (including three month) are 8%,
- Deposits up to six month (including six month) are 7%,
- Deposits up to one year(including one year) are 5%,
-Deposits longer than one year are 5%,
-Other TRL liabilities except deposits (including one year) are 8%.
 Starting from 13.03.2015, reserve deposit ratios for TRL deposits are regulated as follows:
-Unrestricted, TRL deposit call accounts and special current accounts are 11.5 %,
- Deposits up to one month (including one month) are 11.5%,
- Deposits up to three month (including three month) are 11.5%,
- Deposits up to six month (including six month) are 8.5%,
- Deposits up to one year are 6.5%,
-Deposits/participation accounts with 1-year and longer maturity and cumulative deposits/participation accounts are 5%,
-Other TRL liabilities up to one year (including one year) are 11.5%,
-Other liabilities up to 3-year maturity (including 3-year) are 8%,
-Other liabilities longer than 3-year maturity are 5% .
For the FC deposits and precious metal deposits:
- Unrestricted FC deposit call accounts, special current accounts and precious metal deposit accounts and deposits up to one month, up to
three month, up to six month, up to one year FC deposits, FC participate accounts and precious metal deposits are 13%,
- FC Deposits, precious metal deposit and FC participate accounts and FC accumulated accounts and FC participate accounts longer than
one year (including one year) are 9%,
- Other liabilities up to one year (including one year) are 20 %,
- Other liabilities up to two year (including two year) are 14 %,
- Other liabilities up to three year (including three year) are 8%,
- Other liabilities up to five year (including five year) are 7 %,
- Other liabilities longer than five year are6 %.
53
SECTION FIVE (cont’d)
EXPLANATIONS AND DISCLOSURES ON FINANCIAL STATEMENTS (cont’d)
I.
Explanations Related to the Consolidated Assets (cont’d)
2.
Information on financial assets at fair value through profit and loss (net):
i)
Information on financial assets at fair value through profit and loss given as collateral or blocked:
None (31 December 2014 – None.)
ii)
Financial assets at fair value through profit and loss subject to repurchase agreements: None (31
December 2014 - None).
Net book value of unrestricted financial assets at fair value through profit and loss is TRL 33,300
Thousand (31 December 2014 – TRL 20,820 Thousand).
iii)
Positive differences related to derivative financial assets held-for-trading:
Current Period
Derivatives Held for Trading
TRL
Forward Transactions
Swap Transactions
FC
690
-
712
111,637
38,783
109,139
38,960
-
-
-
-
77
161
49
1,148
Options
Other
iv)
TRL
-
Futures Transactions
Total
Prior Period
FC
-
-
-
-
111,714
39,634
109,188
40,820
Loans at fair value through profit and loss
Current Period
Opening Balance
Additions (+)
Change in Interest Rates (*)
Change in Credit Risk (**)
Impairment Provision
Collections (-)
Net Balance
Prior Period
348,713
230,235
91,614
155,313
(15,717)
11,091
1,230
9,926
(1,305)
(605)
(49,834)
(57,247)
374,701
348,713
(*) Change in interest rates shows the effect of TRLIBOR (basic interest rate) difference on loans at fair value through profit and loss
between two periods.
(**) Change in credit risk shows the effect of the difference of basic interest rates and similar loans interest rates on loans at fair value
through profit and loss.
As of 30 September 2015, TRL 347,701 Thousand (31 December 2014 - TRL 348,713 Thousand) of loans
which are classified as Financial Assets at Fair Value Through Profit and Loss using effective interest rate have
fair value amount of TRL 373,461 Thousand (31 December 2014 - TRL 331,892 Thousand).
54
I.
3.
Information on banks:
Current Period
TRL
Banks
Domestic
FC
113,375
34,799
111,383
10,078
15,531
34,719
49,481
13
97,844
80
61,902
-
-
-
-
10,091
113,375
34,799
111,383
Branches and head office abroad
4.
TRL
10,091
Foreign
Total
Prior Period
FC
Information on financial assets available-for-sale:
a.1) Information on financial assets available-for-sale given as collateral or blocked:
Cari Dönem
TP
Önceki Dönem
YP
Share certificates
TP
YP
-
-
-
-
112,124
-
-
-
Other
-
-
-
-
Total
112,124
-
-
-
Bonds, Treasury bills and similar investment securities
a.2) Financial assets available-for-sale subject to repurchase agreements:
Current Period
TRL
Government bonds
Prior Period
FC
TRL
FC
1,080,319
-
738,261
-
Treasury bills
-
-
-
-
Other public sector debt securities
-
-
-
-
Bank bonds and bank guaranteed bonds
-
-
-
-
Asset backed securities
-
-
-
-
Other
-
-
-
-
Total
1,080,319
-
738,261
-
Net book value of unrestricted financial assets available-for-sale is TRL 245,502 Thousand (31 December 2014
– TRL 318,496 Thousand).
b) Information on financial assets available for sale portfolio:
Current Period
Debt securities
Quoted on a stock exchange
Not quoted on a stock exchange
Share certificates
Impairment provision (-)
Total
Prior Period
1,505,297
1,052,918
1,505,297
1,052,918
-
-
10,303
9,529
925
663
9,378
8,866
(77,655)
(5,690)
1,437,945
1,056,757
55
I. Explanations Related to the Consolidated Assets (cont’d)
5. Information on loans:
a) Information on all types of loans and advances given to shareholders and employees of the Group:
Current Period
Cash Loans
Non-Cash Loans
Direct loans granted to shareholders
Prior Period
Cash Loans
Non-Cash Loans
-
-
-
-
Corporate shareholders
-
-
-
-
Real person shareholders
-
-
-
-
425,528
49,203
367,395
42,241
30,991
-
29,784
-
456,519
49,203
397,179
42,241
Indirect loans granted to shareholders
Loans granted to employees
Total
b) Information on the first and second group loans and other receivables including restructured or rescheduled
loans:
Cash loans (*)
Standard loans and
other receivables
Loans and other
receivables (Total)
Loans and other receivable
under close monitoring
Amendments on
Conditions of Contract
Amendments
related to the
extension of the
payment plan
Loans and other
Receivables (Total)
Amendments on
Amendments
related to the
extension of the
payment plan
Other
Other
Non-specialized loans
13,183,119
383,812
-
1,287,620
672,075
-
Corporation loans
88,300
-
-
7,398
-
-
Export loans
1,890,200
18,376
-
13,037
-
-
Import loans
-
-
-
-
-
-
13,538
-
-
647
400
-
1,374,563
2,561
-
108,097
11,115
-
268,186
-
-
16,099
-
-
9,548,332
362,875
-
1,142,342
660,560
-
Specialized loans
2,082,953
58,606
-
89,434
25,396
-
Other receivables
-
-
-
-
-
-
15,266,072
442,418
-
1,377,054
697,471
-
Loans given to
financial sector
Consumer loans
Credit cards
Other
Total
(*) The Group has classified Loans and Receivables amount to TRL 374,701 Thousand, under financial assets at fair value through profit
and loss in the current period.
56
5. Information on loans (cont’d):
b) Information on the first and second group loans and other receivables including restructured or rescheduled
loans: (cont’d)
Current Period
Number of Amendments
Related to the Extension of the
Payment Plan
Standard loans and
other receivables
Extended for 1 or 2 times
Extended for 3,4 or 5 times
Extended for more than 5 times
Prior Period
Loans and other
receivable
425,658
696,586
520,135
593,733
15,575
885
1,011
2
1,185
-
3,539
-
Current Period
The Time extended via the
Amendment on Payment Plan
Loans and other
receivable
Standard loans and
other receivables
Standard loans and
other receivables
Prior Period
Loans and other
receivable
Loans and other
receivable
Standard loans and
other receivables
0-6 Months
76,239
51,349
441,020
40,640
6 Months- 12 Months
68,802
22,973
58,818
32,374
1-2 Years
5,709
119,653
9,392
52,093
2-5 Years
291,257
492,909
15,308
452,879
411
10,587
147
15,749
5 Years and More
c) Loans and other receivables according to their maturity structure:
Current Period
Standard Loans and
Other Receivables
Amendments on
Loans and Other
Receivables (*)
Short-term loans and other receivables
Loans and Other Receivables
Under Follow-Up
Amendments on
Loans and Other
Receivables (*)
7,035,549
36,266
243,463
22,538
6,180,627
33,717
223,774
12,121
Specialized loans
854,922
2,549
19,689
10,417
Other receivables
-
-
-
-
Medium and Long-term loans
7,788,105
406,152
436,120
674,933
6,618,680
350,095
391,771
659,954
Specialized loans
1,169,425
56,057
44,349
14,979
Other receivables
-
-
-
-
14,823,654
442,418
679,583
697,471
Total
(*) The Group has classified Loans and Receivables amount to TRL 374,701 Thousand, under financial assets at fair value through profit
and loss in the current period.
57
d) Information on consumer loans, individual credit cards, personnel loans and credit cards given to personnel:
Consumer Loans-TRL
Housing Loans
Car Loans
General Purpose Loans
Other
Consumer Loans –Indexed to FC
Housing Loans
Car Loans
Other
Consumer Loans-FC
Housing Loans
Car Loans
Other
Individual Credit Cards-TRL
With Instalments
Without Instalments
Individual Credit Cards-FC
With Instalments
Without Instalments
Personnel Loans-TRL
Housing Loans
Car Loans
Other
Personnel Loans- Indexed to FC
Housing Loans
Car Loans
Other
Personnel Loans-FC
Housing Loans
Car Loans
Other
Personnel Credit Cards-TRL
With Instalments
Without Instalments
Personnel Credit Cards-FC
With Instalments
Without Instalments
Overdraft Accounts-TRL(Real Person) (*)
Overdraft Accounts-FC (Real Person)
Total
Short Term
17,120
80
17,040
184,212
55,032
129,180
396
1
395
797
797
7,715
2,514
5,201
24
24
46,579
256,843
Medium and Long Term
1,792,867
656,707
23,365
1,112,795
1,956
1,956
96
96
19,844
8,247
67
11,530
2
2
1,814,765
(*) As of 30 September 2015 overdraft accounts for real persons include TRL 2,609 Thousand of personnel overdraft account.
58
Total
1,809,987
656,707
23,445
1,129,835
1,956
1,956
184,308
55,128
129,180
396
1
395
20,641
8,247
67
12,327
7,717
2,516
5,201
24
24
46,579
2,071,608
I.
5.
Information on loans (cont’d):
e)
Information on commercial loans with installments and corporate credit cards:
Commercial loans with instalment facility-TRL
Business Loans
Car Loans
Other
Commercial loans with instalment facility - Indexed to FC
Business Loans
Car Loans
Other
Commercial loans with instalment facility –FC
Business Loans
Car Loans
Other
Corporate Credit Cards-TRL
With Instalments
Without Instalments
Corporate Credit Cards-FC
With Instalments
Without Instalments
Overdraft Accounts-TRL(Legal Entity)
Overdraft Accounts-FC (Legal Entity)
Total
Short Term
249,694
180
4,064
245,450
40,600
40,600
20,365
20,365
86,705
26,921
59,784
62
62
175,369
572,795
Medium and Long Term
3,297,382
20,402
118,484
3,132,097
26,399
644,450
4,640
24,994
614,816
234,844
234,844
4,176,676
f) Loans according to borrowers:
Current Period
Prior Period
Public
84,777
71,622
Private
16,558,349
14,745,856
16,643,126
14,817,478
Total
g) Domestic and foreign loans:
Current Period
Domestic loans
16,623,517
Foreign loans
Total
h) Loans granted to subsidiaries and associates: None.
59
Prior Period
14,805,905
19,609
11,573
16,643,126
14,817,478
Total
3,547,076
20,582
122,548
3,377,547
26,399
685,050
4,640
24,994
655,416
255,209
255,209
86,705
26,921
59,784
62
62
175,369
4,749,471
i) Specific provisions provided against loans:
Specific Provisions (*)
Current Period
Prior Period
Loans and receivables with limited collectability
16,736
Loans and receivables with doubtful collectability
99,277
62,901
400,086
457,078
516,099
539,620
Uncollectible loans and receivables
Total
19,641
(*) Specific provision amounting to TRL 2,039 Thousand for loans classified as “Financial assets at fair value through profit and loss” at
the current period (31 December 2014- TRL 2,840 Thousand).
j) Information on non-performing loans (Net):
j.1) Information on loans and other receivables included in non-performing loans which are restructured or
rescheduled:
III. Group:
IV. Group:
V. Group
Loans and receivables Loans and receivables
with limited
with doubtful
Uncollectable loans
collectability
collectability
and receivables
Current period
-
3,135
Loans and other receivables which are restructured
-
-
-
Rescheduled loans and other receivables
-
3,135
62,094
-
5,070
39,839
(Gross amounts before the specific reserves)
62,094
Prior period
(Gross amounts before the specific reserves)
Loans and other receivables which are restructured
-
-
-
Rescheduled loans and other receivables
-
5,070
39,839
j.2) The movement of non-performing loans:
III. Group
IV. Group
V. Group
Loans and
receivables with
limited collectability
Loans and receivables
with doubtful
collectability
Uncollectable
loans and
receivables
Prior period end balance
Additions (+)
Transfers from other categories of non-performing loans (+)
122,437
150,757
602,406
434,458
17,677
18,511
222,184
-
406,033
(406,033)
(222,184)
-
(32,562)
(53,436)
(92,381)
(11)
(897)
(210,891)
-
-
(181,771)
Retail loans
-
-
(16,304)
Credit cards
(11)
(897)
(12,816)
118,289
297,950
539,829
16,736
99,277
400,086
101,553
198,673
139,743
Transfers to other categories of non-performing loans (-)
Collections (-)
Write-offs (-)
Corporate and commercial loans
Current period end balance (*)
Specific provision (-) (*)
Net Balances on Balance Sheet
(*) Non performing loans classified as “Financial assets at fair value through profit and loss”amounts to TRL 6,788 Thousand and Specific
provision amounts to TRL 2,093 Thousand in the current period.
60
I.
5.
j.3)
Information on non-performing loans and other receivables in foreign currency: In the current period the
Group has TRL 5,281 Thousand non-performing foreign currency loan and specific provision for these
loans amounting to TRL 5,281 Thousand (31 December 2014- TRL 4,062 Thousand non-performing loan
and TRL 4,062 Thousand specific provision).
j.4)
Information regarding gross and net amounts of non-performing loans with respect to user groups:
III. Group
Loans and
receivables with limited
collectability
Current Period (Net) (*)
Loans to Real Persons and Legal Entities (Gross)
Specific provision (-)
Loans to Real Persons and Legal Entities (Net)
Banks (Gross)
Banks (Net)
Other Loans and Receivables (Gross)
Other Loans and Receivables (Net)
Prior Period (Net) (*)
Loans to Real Persons and Legal Entities (Gross)
Loans to Real Persons and Legal Entities (Net)
Banks (Gross)
Banks (Net)
Other Loans and Receivables (Gross)
Other Loans and Receivables (Net)
IV. Group
Loans and receivables
with doubtful
collectability
V. Group
Uncollectable
loans and receivables
118,289
(16,736)
101,553
-
297,950
(99,277)
198,673
-
539,829
(400,086)
139,743
-
122,437
(19,641)
102,796
-
150,757
(62,901)
87,856
-
602,406
(457,078)
145,328
-
(*) Non-performing loans classified as “Financial assets at fair value through profit and loss” amounts to TRL 6,788 Thousand (31
December 2014 – TRL 6,325 Thousand) and Specific provision amounts to TRL 2,039 Thousand (31 December 2014 – TRL 2,840
Thousand).
k)
Main principles of uncollectable loans and receivables:
The Parent Bank Management applies provision policy for the “non-performing loans” in accordance
with the requirements of the Turkish banking regulation adopted by the BRSA.
Subsidiaries of the Parent Bank apply provisions of the regulation on “Methods and Principles for the
Determination of Loans and Other Receivables to be Reserved for and Allocation of Reserves”.
61
I.
5.
l)
Explanations on write-off policy:
The Parent Bank sold uncollectable non-performing commercial and consumer loans including credit
cards amounting to TRL 209,057 Thousand on 30 March 2015, for TRL 2,200 Thousand to Güven
Varlık Yönetim A.Ş., for TRL 7,200 Thousand to Destek Varlık Yönetim A.Ş. and for TRL 5,700
Thousand to Final Varlık Yönetim A.Ş., in total TRL 15,100 Thousand in cash. As of 20 May 2015, the
Parent Bank sold TRL 2,814 Thousand non-performing loans to RCT Varlık Yönetim A.Ş. for TRL 675
Thousand (31 December 2014 - The Bank sold non-performing loans amounting to TRL 22,255
Thousand on 4 June 2014 to Vera Varlık Yönetim A.Ş. for TRL 22,300 Thousand and TRL 4,709
Thousand on 16 December 2014 to RCT Varlık Yönetim A Ş. for TRL 1,100 Thousand).
6.
Information on held-to-maturity investments:
a.1)
Information on held-to-maturity investments given as collateral or blocked:
Current Period
Treasury Bill
Bond
Prior Period
-
-
239,573
385,479
Other
-
-
Total
239,573
385,479
a.2)
Held-to-maturity investments subject to repurchase agreements are TRL 830,610 Thousand (31
December 2014 – TRL 712,613 Thousand).
b)
Information on public sector debt investments held-to-maturity:
Current Period
Government Bonds
Prior Period
1,252,897
1,364,849
Treasury Bills
-
-
Other Public Sector Debt Securities
-
-
1,252,897
1,364,849
Total
Net book value of unrestricted held-to-maturity investments is TRL 182,714 Thousand (31 December 2014 –
62
Explanations Related to the Assets (cont’d)
I.
6.
Information on held-to-maturity investments (cont’d):
c)
Information on held-to-maturity investments:
Current Period
Debt Securities
1,123,291
1,228,944
1,123,291
1,224,438
Impairment Provision (-)
Accruals
Total
Prior Period
-
4,506
(1,448)
(1,646)
131,054
142,211
1,252,897
1,369,509
d) Movement of held-to-maturity investments:
Current Period
Beginning Balance
Foreign currency differences on monetary assets
Purchases during year
Disposals through sales and redemptions
Provision reversal / Impairment provision (-)
Closing Balance
Accruals
Total
63
Prior Period
1,227,298
1,110,073
96
27
273
219,057
(106,023)
(101,235)
199
(624)
1,121,843
1,227,298
131,054
142,211
1,252,897
1,369,509
7. Information on associates (Net):
a) Information on unconsolidated associates:
Description
Address (City/ Country)
Seltur Turistik İşletmeler Yatırım A.Ş.(*)
Muğla/Turkey
The Parent Bank’s
The Parent
Share Percentage-If
Bank’s Risk
Different Voting
Group Share
Percentage (%)
Percentage (%)
11.32
11.43
(*) Latest financial information of the related associate as of 31 December 2014 is stated below.
Total Asset
46,665
Shareholders’
Equity
Tangible Assets
30,376
40,901
Income from
Marketable Securities
Portfolio
Interest
Income
11
-
Current
Period
Profit/Loss
2,377
b) Information on consolidated associates
None.
c) Information on associates
There is no consolidated associate.
d) Valuation of associates:
Valued with cost amounts.
e) Sectoral information and the related carrying amounts on consolidated associates
None.
f) Associates quoted to stock exchange
None.
g) Information on associates which are sold in the current period:
None.
h) Information on associates purchased in the current period:
None.
64
Prior Period
Profit/Loss
(57,521)
Fair Value
123,100
8. Information on subsidiaries (Net):
a) Informations related equity components of subsidiaries (*):
Şeker
Yatırım
Menkul
Değerler
A.Ş.
Şekerbank
Şeker
International
Finansal
Banking Unit
Kiralama A.Ş. Ltd.
Şekerbank
Kıbrıs Ltd.
Şeker
Mortgage
Finansman
A.Ş.
Şeker
Faktoring
A.Ş.
Zahlungsdienste
GmbH Der
Şekerbank T.A.Ş.
Core Capital
24,104
61,808
15,126
31,195
21,041
26,000
849
-
1,207
-
-
-
-
-
-
-
-
(150)
-
-
-
1,095
1,919
2,956
1,547
1,881
614
-
Extraordinary Reserves
Tangible assets revaluation
differences
1
-
-
8,217
6,434
6,096
-
-
-
-
-
3,398
-
-
Other capital reserves
-
(19)
-
(37)
(23)
24
-
Other Income Reserves
-
-
1,124
-
-
-
(102)
Profit/Loss
Prior Years’ Profits and
Losses
(3,781)
(9,521)
(528)
(260)
3,728
(8,621)
(212)
(5,889)
(13,650)
(884)
-
(1,041)
-
(204)
2,108
4,129
356
(260)
4,769
(8,621)
(8)
Total Core Capital
21,419
55,394
18,678
40,512
36,459
24,113
535
Supplementary Capital
CAPITAL
NET AVAILABLE
EQUITY
21,419
55,394
18,678
40,512
36,459
24,113
535
21,419
55,394
18,678
40,512
36,459
24,113
535
Paid in Capital
Share Premiums
Marketable Securities Value
Increase Fund
Legal Reserves
(*) Used financial information is as of 30 September 2015 .
The objectives to be achieved through the internal capital adequacy assessment process are as follows:

Protection of the solid financial condition,

Determination of the risk appetite in line with the strategies and activities,

Determination of the capital level in line with the risk appetite,

Adoption of risk-based approaches rather than traditional ones,

Enhancement of the Performance Management System,

Enhancement of the principles of corporate governance and transparency.
65
8. Information on subsidiaries (Net) (cont’d)
b) Information on the unconsolidated subsidiaries (*):
Description
Address (City/ Country)
Sekar Oto Kiralama Turizm Kargo
Taşımacılık Hizmet ve Ticaret Ltd.Şti..
The Parent Bank’s
Share Percentage-If
Different Voting
Percentage (%)
İstanbul/Türkiye
The Parent
Bank’s Risk
Group Share
Percentage (%)
-
99
(*) Şeker Portföy Yönetimi A.Ş. was founded as the 100 % subsidiary of Şeker Yatırım Menkul Değerler A.Ş. as of 7 August 2015 and it has
been registered and announced in the Trade Registry Gazette numbered 8883 and dated 13 August 2015. Its operating permission procedure
has not been finalized yet and it has been presented in Unconsolidated Financial Subsidiaries line in 30 September 2015 financial
statements.
c) Information on the consolidated subsidiaries:
Description
Şekerbank Kıbrıs Ltd.
Zahlungsdienste GmbH Der Şekerbank T.A.Ş
Address (City/
Country)
Nicosia/TRNC
İstanbul/Türkiye
Nicosia/TRNC
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
Cologne/Germany
The Parent Bank’s Share
Percentage-If Different Voting
Percentage (%)
96.11
54.13
95.80
99.04
99.99
62.31
100.00
The Parent Bank’s Risk
Group Share Percentage
(%)
96.11
60.20
95.80
100.00
99.99
62.31
100.00
d) Information on the subsidiaries with the order as presented in the table above (*):
Total Assets
218,150
420,481
19,413
117,369
373,687
699,248
1,704
Shareholders’
Equity
21,419
55,394
18,678
40,512
36,459
24,113
535
Tangible
Assets
5,496
6,613
2,083
22,870
15,425
532
-
Interest Income
15,363
24,358
767
5,420
42,338
20,448
34
Income from
Marketable
Securities
Portfolio
202
66
18
160
-
Current Period
Profit/Loss
2,108
4,129
356
(260)
4,769
(8,621)
(8)
(*) Latest financial information of the related subsidiaries as of 30 September 2015 is stated below.
66
Prior Period
Profit/Loss
Fair Value
(5,889)
12,843
(13,650)
49,114
(884)
11,667
38,700
(1,041)
37,311
49,510
(204)
787
8. Information on subsidiaries (Net) (cont’d):
e) Information on subsidiaries:
Current Period
Prior Period
114,600
110,185
4,000
4,415
-
4,415
4,000
-
Share in the current year income
-
-
Sales (-)
-
-
Revaluation increase
-
-
118,600
114,600
Balance at the beginning of the period
Movement during the period
Purchases
Bonus shares obtained
(Provision)/Reversal of Impairment
Balance at the end of the period
-
-
100
100
Capital Commitment
Share percentage at the end of the period (%)
-
f) Valuation of Subsidiaries
Current Period
Prior Period
118,600
114,600
Valuation with fair value
-
-
Valuation with equity method
-
-
Valuation with cost
g) Sectoral information and the related carrying amounts on Subsidiaries
Subsidiaries
Banks
Current Period
15,283
Prior Period
15,283
Insurance Companies
-
-
Factoring Companies
21,908
17,908
Leasing Companies
29,108
29,108
Finance Companies
18,963
18,963
Other Financial Subsidiaries
33,338
33,338
h) Subsidiaries Quoted to Stock Exchange
Current Period
Quoted to Domestic Stock Exchange
Quoted to Foreign Stock Exchange
Prior Period
29,108
29,108
-
-
i) Information on Subsidiaries which are Sold in the Current Period:
None.
j) Information on Subsidiaries Purchased in the Current Period:
None.
67
9. Information on entities under common control: None (31 December 2014 – None).
10. Information on finance lease receivables (Net):
Gross Leasing Investment
Unearned Financial Profit from Leasing (-)
Cancelled Leasing Amounts (-)
Net Leasing Investment (*)
Current Period
433,370
Prior Period
391,298
(53,760)
379,610
(52,885)
338,413
(*)Net Leasing Investment contains non-performing leasing receivables amounting to TRL 56,533 Thousand and specific
provisions amounting to TRL 40,623 Thousand (31 December 2014 - TRL 55,285 Thousand non-performing leasing receivables
and TRL 28,489 Thousand specific provisions)
11. Information on derivative financial assets for hedging purposes: None (31 December 2014 – None).
12. Information on tangible assets :
a) If impairment amount on individual asset recorded or reversed in the current period is material for the overall
financial statements:
a.1)
Events and conditions for recording or reversing impairment: None.
a.2) Amount of recorded or reversed impairment in the financial statements: None. (31 December 2014 TRL 2,639 Thousand).
b) The impairment provision set or cancelled in the current period according to the asset groups not individually
significant but materially effecting the overall financial statements, and the reason and conditions for this:
None.
c) Pledges, mortgages and other restrictions on the tangible fixed assets, expenses arising from the construction
for tangible fixed assets, commitments given for the purchases of tangible fixed assets: None.
13. Information on intangible assets:
The useful lives of the intangible fixed assets, which are amortized with straight line amortization method, are 5
years.
a) Disclosures for book value, description and remaining depreciation time for a specific intangible fixed asset
that is material to the financial statements: None.
b) Disclosure for intangible fixed assets acquired through government grants and accounted for at fair value at
initial recognition: None.
c) The method of subsequent measurement for intangible fixed assets that are acquired through government
incentives and recorded at fair value at the initial recognition: None.
d) The book value of intangible fixed assets that are pledged or restricted for use: None.
e)
Amount of purchase commitments for intangible fixed assets: None.
68
I.
13. Information on intangible assets (cont’d):
f)
Information on revalued intangible assets according to their types: None.
g)
Amount of total research and development expenses recorded in income statement within the period if
any: None.
h)
Information on goodwill: None.
i)
Movements on goodwill in the current period: None.
14. Information on investment property: None (31 December 2014 – None).
15. Explanations on deferred tax asset:
a)
As of 30 September 2015, deferred tax asset computed on the temporary differences is TRL 23,070
Thousand (31 December 2014 – TRL 17,498 Thousand). Carried forward tax losses over which deferred
tax asset computed is TRL 22,347 Thousand (31 December 2014 - TRL 8,874 Thousand).
b)
Temporary differences over which deferred tax asset is not computed and recorded in the balance sheet in
prior periods: None (31 December 2014 – None).
c)
Allowance for deferred tax and deferred tax assets from reversal of allowance: None (31 December 2014 –
None).
d)
Movement of deferred tax/liability:
Current Period
Prior Period
Deferred Tax Assets/(Liabilities)
Tangible Assets Base Differences
(50,781)
(49,943)
37,900
24,246
Valuation of Financial Assets
4,738
(7,456)
Investment Incentive
8,866
10,719
Provisions (*)
Financial Losses
22,347
8,874
Net Deferred Tax Assets/(Liabilities)
23,070
(13,560)
(*) Provisions include employee benefit liabilities, credit card bonuses provisions, legal case provisions and other provisions.
Current and prior period deferred tax movements are shown in the table below.
Current Period
Deferred Tax (Net), Beginning of the Period
Prior Period
(13,560)
(24,138)
Current Period (Expense)/Income
15,777
15,865
Deferred Tax Classified under Equity
20,853
(5,287)
Deferred Tax Asset (Liability), End of the Period
23,070
(13,560)
Şeker Finansal Kiralama A.Ş. recognized deferred tax asset amounting to TRL 8,866 Thousand in the current
period financial statements assuming that it will take advantage of the unused investment incentive in the
subsequent periods (31 December 2014 - TRL 10,719 Thousand).
69
16. Information on assets held for sale and discontinued operations:
The Group has TRL 6,443 Thousand assets held for sale (31 December 2014 - TRL 672 Thousand).
17. Information on other assets:
a) Breakdown of other assets:
Current Period
Receivables from Installment Sales of Assets
Collaterals Given
Advances Given
Receivables from Banking Services
Clearing Account
Prior Period
7,952
-
169,741
213,291
56,661
3,367
12,522
1,445
107,069
61,584
Receivables from Credit Card Payments
28,372
14,950
Prepaid Expenses
55,780
13,463
Other Receivables
80,998
56,252
509,940
373,507
Total
b) Other assets which exceed 10 % of the balance sheet total (excluding off balance sheet commitments) and
breakdown of these which constitute at least 20 % of grand total: None.
70
II.
Explanations Related to the Consolidated Liabilities
1. a)
Information on maturity structure of deposits:
Current Period
7 Day Call
Accounts
Demand
Saving deposits
Foreign currency
deposits
Up to 1
month
1-3
Month
6
Month-1
Year
3-6
Month
Accumulated
Deposits
1 Year
And over
Total
424,961
-
261,001 5,055,014
171,028
73,908
166,381
786
6,153,079
589,607
-
29,436 2,871,789
264,424
222,632
938,997
36
4,916,921
567,282
-
21,796 2,672,237
213,703
146,712
358,786
36
3,980,552
Residents abroad
22,325
-
7,640
199,552
50,721
75,920
580,211
-
936,369
Public sector deposits
106,919
-
270
4,825
9,515
951
499
-
122,979
Commercial deposits
Other institutions
deposits
Precious metals
deposits
419,939
-
167,005 1,009,079
15,021
11,360
33,843
58
1,656,305
36,373
-
591,000
1,294
191
531
-
648,264
105,514
-
-
-
14,064
6,743
-
-
126,321
Interbank deposits
Central Bank of
Turkey
349,581
-
716,515
177,250
62,943
5,903
-
-
1,312,192
-
-
-
-
-
-
-
-
-
Domestic Banks
1,431
-
626,454
29,002
11,773
-
-
-
668,660
Residents in Turkey
Foreign Banks
18,875
538
-
90,061
148,248
51,170
5,903
-
-
295,920
347,612
-
-
-
-
-
-
-
347,612
Other
-
-
-
-
-
-
-
-
-
Total
2,032,894
-
1,193,102 9,708,957
538,289
321,688
1,140,251
880
14,936,061
Participation Banks
7 Day Call
Accounts
Prior Period
Demand
Saving deposits
Foreign currency
deposits
Up to 1
month
1-3
Month
3-6
Month
6 Month1 Year
1 Year
And over
Accumulated
Deposits
Total
331,304
-
278,147
3,861,961
309,524
189,010
189,391
736
5,160,073
454,237
-
164,841
2,821,026
291,182
314,035
659,341
35
4,704,697
439,904
-
161,356
2,679,823
226,184
223,187
241,443
35
3,971,932
14,333
-
3,485
141,203
64,998
90,848
417,898
-
732,765
61,381
-
57
3,077
14,311
658
1,348
-
80,832
Commercial deposits
Other institutions
deposits
Precious metals
deposits
463,100
-
207,363
1,130,383
99,434
42,163
32,000
51
1,974,494
24,432
-
5,630
404,787
36,474
10,784
352
-
482,459
220,830
-
-
-
20,150
6,957
-
-
247,937
Interbank deposits
277,723
-
398,414
258,036
31,863
3,007
-
-
969,043
-
-
-
-
-
-
-
-
-
Residents in Turkey
Residents abroad
Central Bank of Turkey
Domestic Banks
714
-
383,948
165,331
-
3,007
-
-
553,000
1,154
-
14,466
92,705
31,863
-
-
-
140,188
275,855
-
-
-
-
-
-
-
275,855
Other
-
-
-
-
-
-
-
-
-
Total
1,833,007
-
1,054,452
8,479,270
802,938
566,614
882,432
822
13,619,535
Foreign Banks
Participation Banks
71
II. Explanations Related to the Consolidated Liabilities (cont’d)
Information on maturity structure of deposits (cont’d)
1.
b) Information on saving deposits under the guarantee of saving deposit insurance and exceeding the
limit of saving deposit insurance :
Saving Deposits
Saving deposits
Under the guarantee of insurance
(*)
Current Period
Prior Period
2,982,032
3,550,749
Foreign currency saving deposits
2,602,565
2,178,352
1,546,175
1,385,883
2,601,479
2,387,030
-
-
-
-
-
-
-
-
Other deposits in the form of saving deposits
Branches’ deposits under foreign
authorities' insurance
Off-shore banking regions’ deposits under
foreign authorities' insurance
Total
Exceeding the limit of
insurance
Current Period
Prior Period
-
-
-
-
5,096,924
4,367,915
5,204,044
4,565,382
(*) According to the BRSA’s circular no 1584 dated 23 February 2005, accruals are included in the saving deposit amounts.
c) Information on the saving deposits of the Parent Bank with head office abroad, if the saving deposits in
the branches of the bank located in Turkey are under the guarantee of saving deposit insurance in that
country abroad:
Headquarter of the Parent Bank is in Turkey and the Parent Bank is under the coverage of saving deposit
insurance.
d) Saving deposits not guaranteed by insurance:
Deposit of real persons not under the guarantee of saving deposit insurance:
Current Period
Prior Period
Deposits and accounts in branches abroad
-
-
Deposits of ultimate shareholders and their close families
Deposits of chairman and members of the Board of
Directors and their close families
Deposits obtained through illegal acts defined in the 282nd
Article of the 5237 numbered Turkish Criminal Code
dated 26 September 2004.
Saving deposits in banks established in Turkey
exclusively for off shore banking activities
-
-
12,306
9,501
-
-
-
-
2. Information on derivative financial liabilities:
a) Negative differences table related to derivative financial liabilities held-for-trading:
Current Period
Liabilities due to held for trading derivatives
TRL
FC
4
-
618
47,234
19,218
6,459
50,887
-
-
-
-
91
161
51
1,187
Futures Transactions
Options
-
-
-
-
47,325
19,383
6,510
52,692
Other
Total
TRL
-
Forward Transactions
Swap Transactions
Prior Period
FC
72
3. a)
Information on banks and other financial institutions:
Current Period
TRL
FC
From Foreign Banks, Institutions and Funds
Total
TRL
FC
-
-
-
-
329,575
188,458
305,322
155,232
60,762
2,571,932
51,536
1,522,586
390,337
2,760,390
356,858
1,677,818
Loans from Central Bank of Turkey
From Domestic Banks and Institutions
Prior Period
b) Maturity analysis of borrowings:
Current Period
Short-term
Medium and long-term
Total
TRL
388,892
1,445
390,337
Prior Period
FC
694,351
2,066,039
2,760,390
TRL
353,158
3,700
356,858
FC
744,327
933,491
1,677,818
Due to the loan used from the Overseas Private Investment Corporation “OPIC”, Şeker Mortgage Finansman
A.Ş.’ shares, one of the subsidiaries of the Parent Bank, have been pledged to the OPIC according to the “share
pledge and share lien” agreement between the OPIC and the Company which is valid for current debt
relationship and recorded to share ledger.
c) Additional explanation related to the concentrations of the Parent Bank’s major liabilities:
The Group’s liabilities do not have any concentration in any sector.
4. Information on funds provided from repurchase agreement transactions:
Current Period
TRL
FC
1,861,338
Prior Period
TRL
1,460,419
FC
1,818,364
-
1,356,671
Other institutions and organizations
11,387
-
76,251
Real persons
31,587
-
27,497
-
-
-
Financial institutions and organizations
-
-
-
Other institutions and organizations
-
-
-
Real persons
-
-
-
-
1,861,338
-
1,460,419
-
From domestic transactions
Financial institutions and organizations
From foreign transactions
Total
-
5. Marketable Securities Issued
As of 30 September 2015 bonds issued amount of the Group is TRL 335,533 Thousand (31 December 2014 –
As of 30 September 2015 outstanding marketable securities issued amount of the Group is TRL 95,929
Thousand and details are shown the table below (31 December 2014 – TRL 75,089 Thousand).
73
Marketable Securities Issued (cont’d)
5.
Issuance
Amount
Issuer
Issuance Date
10.12.2013
16,713
Maturity
24 months
17.06.2014
11,710
24 months
11.11.2014
14,700 24 months
02.06.2015
6,258 24 months
02.06.2015
46,742 10 months
The Parent Bank issued Asset Covered Bond amounting to TRL 1,500,000 Thousand and details are shown the
table below. The investors are International Finance Corporation (IFC), Nederlandse Financierings-Maatschappij
Voor Ontwikkelingslanden N.V. (FMO), UniCredit Bank AG, European Investment Bank (EIB), European Bank
for Reconstruction and Development (EBRD), KfW Bankengruppe and qualified institutional investors. The
transactions were conducted in line with the related Capital Market Board regulation and as a security the Bank’s
SME loans were used.
Amount
Outstanding
Amount (*)
Issue Date
Series
Investors
14 September 2011
14 September 2011
2011-2
2011-3
FMO
IFC
61,250
44,750
61,250
17,900
Currency
TL
TL
Maturity
12.09.2016
12.09.2016
9 December 2011
2011-4
EIB
120,000
-
TL
12.01.2015
9 December 2011
2011-5
EBRD
60,000
-
TL
12.01.2015
28 November 2013
2013-1
135,975
-
TL
12.12.2014
27 February 2014
2014-1
KfW/EIF
Nitelikli Kurumsal
Yatırımcılar
361,846
361,846
TL
13.03.2017
(*) Outstanding amounts do not include accruals.
The issuance dated 27 February 2014, amounting to TRL 361,846 Thousand and the issuance dated 28
November 2013 amounting to TRL 135,975 Thousand were made via SKB VTMK International Issuer Ltd
(SPV) and there is no shareholding relationship between the Parent Bank and SKB VTMK International Issuer
Ltd. SPV is managed and controlled by another independent firm and does not have any administrative or
contractual management relationship with the Parent Bank. The Parent Bank has no control power over SPV.
SPV is the investor of some of asset covered bonds issued by the Parent Bank and also SPV issues bonds itself.
In case of default of SPV’s issued bonds, the Parent Bank has no liability. The Parent Bank is responsible for
running costs of SPV.
As of 30 September 2015 amount of Asset Covered Bond issued is TRL 444,800 Thousand (31 December 2014 TRL 642,648 Thousand).
Bills
Asset Backed Securities
Current Period
TRL
FC
335,533
444,800
-
Prior Period
TRL
FC
401,196
642,648
-
Bonds
95,929
-
75,089
-
Total
876,262
-
1,118,933
-
74
6.
Other liabilities which exceed 10 % of the balance sheet total (excluding off-balance sheet
commitments) and the breakdown of these which constitute at least 20 % of grand total :
Other liabilities do not exceed 10 % of the balance sheet total.
7.
Explanations on financial lease obligations (Net):
Current Period
TRL
Lease Payables
Deferred Lease Expenses
Total
8.
Prior Period
FC
TRL
FC
6,664
-
-
-
(1,266)
-
-
-
5,398
-
-
-
Information on derivative financial liabilities for hedging purposes:
The Group does not hold derivative financial liabilities for hedging purposes.
9.
Information on provisions:
a)
Information on general provisions:
Current Period
General Provision
Provisions for first group loans and receivables
Additional provisions for the loans with extended payment plan
Provisions for second group loans and receivables
Additional provisions for the loans with extended payment plan
Provisions for non cash loans
Other
Prior Period
180,556
112,459
164,430
105,965
16,115
21,085
48,290
40,596
34,873
29,701
16,300
15,517
3,507
2,352
b) Foreign exchange losses on the foreign currency indexed loans and finance lease receivables: There is TRL
14 Thousand foreign exchange losses on the foreign currency indexed loans (31 December 2014 - TRL 1,977
Thousand ).
c) The specific provisions provided for unindemnified non-cash loans amount to TRL 43,352 Thousand (31
d) Information on employee termination benefits and unused vacation accrual:
The Group has calculated reserve for employee termination benefits by using actuarial valuations as set out in
the TAS No: 19 and reflected this in the financial statements.
Main actuarial assumptions used for calculation of employment termination benefit are as follows:
- Discount rate for the current period is 8.10 %, inflation rate is 5.00% (31 December 2014-discount rate
8.10 %, inflation rate is 5.00%).
- TRL 3,438.22 (full TRL) of maximum wage amount which was in effect as of 31 December 2014, was
taken as maximum amount for the calculation regarding the current period period.
- It was assumed that maximum wage would be increased in inflation rate for every year.
- CSO 1980 table was used for mortality averages of females and males.
75
9. Information on provisions (cont’d)
d) Information on employee termination benefits and unused vacation accrual (cont’d):
As of 30 September 2015, the Group has recorded in the financial statements TRL 69,896 Thousand reserve for
employee termination benefits (31 December 2014 – TRL 61,319 Thousand).
As of 30 September 2015, the Group provided a reserve of TRL 4,218 Thousand (31 December 2014 – TRL
2,991 Thousand) for the unused vacations. This balance is classified under reserve for employee benefits
provisions in the financial statements.
d.1) Movement of employee termination benefits:
Current Period
61,319
As of 1 January,
Prior Period
53,882
Cost Service
14,412
6,622
Interest Cost
3,575
5,104
-
3,490
Indemnity Paid During the Term
(9,410)
(7,779)
Total
69,896
61,319
Actuarial Loss/Gain (*)
(*) Actuarial loss/gain shown under other capital reserves after netting of deferred tax.
e)
Information on other provisions:
e.1) Provisions for possible losses: None.
e.2) The breakdown of the sub-accounts if other provisions exceed 10 % of the grand total of provisions:
Current Period
Unindemnified Non-Cash Loans
Credit Card Liquid Point Promotion Provisions
Retirement Fund Provisions
Legal Case Provisions
Bonus Provision
SDIF Premium Provision
BRSA Pay Provision
Other Provisions
Total
Prior Period
43,352
1,221
52,444
1,401
-
-
16,455
15,749
887
19,633
3,764
5,907
2,384
-
47,879
11,398
115,942
106,532
f)
Liabilities on pension rights:
f.1)
Liabilities for pension funds established in accordance with “Social Security Institution”:
Şekerbank T.A.Ş. Pension Fund, of which each Parent Bank employee is a member, is established in accordance
with the provisional Article 20 of the Social Security Act No: 506. As per the provisional article No: 23 of the
Banking Law No: 5411, the Parent Bank pension funds, which were established within the framework of Social
Security Institution Law, should be transferred to the Social Security Institution within 3 years after the issuance
of the related law. Methods and principles related to the transfer have been determined as per the Cabinet
decision no: 2006/11345 made on 30 November 2006. However, the related article of the act has been cancelled
upon the President’s application filed on 2 November 2005 by the Supreme Court’s order no: E.2005/39,
K.2007/33 issued on 22 March 2007, which was published in the Official Gazette No: 26479 on 30 September
2007 and the execution of the decision was ceased as of the issuance date of the order.
76
f) Liabilities on pension rights (cont’d):
Following the issuance of the justified order in relation to the annulment of the provisional Article 23 of the
Banking Law by the Constitutional Court in the Official Gazette No: 26731 on 15 December 2007, TBMM
started to work on establishing new legal regulations, the Law No: 5754 “Amendments to the Social Security
and General Health Insurance Act Including Certain Laws and Decrees”, which was published in the Official
Gazette No: 26870 on 8 May 2008 has become effective following the approval of the General Assembly of the
TBMM. The new law decrees that the contributors of the bank pension funds, the ones who receive salaries or
income from these funds and their rightful beneficiaries will be transferred to the Social Security Institution and
will be subject to this Law within 3 years after the release date of the related article, without any need for further
operation, and that the three-year transfer period can be prolonged for maximum 2 years by the Cabinet decision.
The related three-year transfer period has been prolonged for 4 years by the Cabinet decision dated 1 March
2012, which was published on the Official Gazette dated 8 March 2012 and No: 28227. The above mentioned
law also includes the following:
f.1) Liabilities for pension funds established in accordance with “Social Security Institution” (cont’d):

Through a commission constituted by the attendance of one representative separately from the Social
Security Institution, Ministry of Finance, Turkish Treasury, State Planning Organization, Banking
Regulation and Supervision Agency, Savings Deposit Insurance Fund, one from each pension fund,
and one representative from the organization employing pension fund contributors, related to the
transferred persons, the cash value of the liabilities of the pension fund as of the transfer date will be
calculated by considering their income and expenses in terms of the lines of insurance within the
context of the related Law, and technical interest rate of 9.8% will be used in the actuarial calculation
of the value in cash,

And that after the transfer of the pension fund contributors, the ones who receive salaries or income
from these funds and their rightful beneficiaries to the Social Security Institution, these persons’
uncovered social rights and payments, despite being included in the trust indenture that they are
subject to, will be continued to be covered by the pension funds and the employers of pension fund
contributors.
The technical financial statements of the Pension Fund are reviewed by an actuary registered audit company in
accordance with the Article 21 of the Insurance Law numbered 5684 and the requirements of the “Actuary
Regulations” issued based on the Article 38. There was TRL 42,553 Thousand actuarial surplus in the actuary
report dated February 2015 which was prepared using a technical interest rate of 9.80 % in accordance with the
basis set out in the Council of Ministers decision no: 2006/11345 on 30 November 2006 (31 December 2014TRL 42,553 Thousand actuarial surplus).
As of 30 September 2015, no provision is recorded on the financial statements of the Group (31 December 2014None).
The actuary audit explained above and which is in compliance with the principles of the related law, calculates
the present value of the liability as of 31 December 2014, in other words, the estimated amount to be paid to
SGK (Social Insurance Institution). CSO 1980 mortality table, 9.80 % of technical interest rate, 34.50 % of
premium rate was considered in the actuarial calculation. In the table below, cash value amount of the health
expenses within the framework of Social Security Institution are shown.
77
f) Liabilities on pension rights (cont’d):
f.1) Liabilities for pension funds established in accordance with “Social Security Institution” (cont’d):
Present values of bonuses and salaries payment including health expenses reserve are shown in the following
table in accordance with SGK as of 31 December 2014.
Reserve of Probable Retirement Pensions
Reserve of Probable Widow and Orphant
Reserve of Liability Items
Reserve for Salary Portions to be Given to Social Insurance
Institution for those who leave the Pension Fund.
Health and Funeral Expenses Reserve
Assets (*)
Cash Value of the Premiums of the Active Members
Reserve of Common Members’ Salary Proportion
Receivables from other social insurance institutions.
Actual and Technical Surplus / (Deficit) Amount
31 December 2014
(169,792)
(75,930)
(628,220)
(108,436)
(118,315)
383,977
685,651
73,618
42,553
(* ) The Pension Fund records the assets by their market value and these market values were considered for the actuarial work.
Assets of the Pension Fund consist of following items:
31 December 2014
Banks and Other Financial Investments
249,850
Associates
51,381
Immovable
70,845
Other
11,901
Total
383,977
f.2) Liabilities resulting from all kinds of pension funds, foundations etc. which provide post retirement benefits
for the employees: See footnote, f.1 II/9 of Section Five.
78
10.
Explanations on taxes payable:
a)
Information on current tax liability:
a.1)
Corporate taxes:
Corporate tax to be deducted is TRL 5,272 Thousand after net off prepaid taxes (31 December 2014 TRL 23,399 Thousand corporate tax to be paid).
a.2)
Information on taxes payable:
Corporate Tax
Taxation on Securities
Capital Gains Tax on Property
Banking Insurance Transaction Tax (BITT)
Foreign Exchange Transaction Tax
Value Added Tax Payable
Current Period
(5,272)
Prior Period
23,399
13,786
12,414
544
548
15,862
17,321
2
7
812
2,155
Other
9,026
9,157
Total
34,760
65,001
a.3)
Information on premiums:
Social Security Premiums-Employee
Current Period
314
Prior Period
294
532
509
-
-
Bank Social Aid Pension Fund Premiums-Employer
Pension Fund Membership Fees and ProvisionsEmployee
Pension Fund Membership Fees and ProvisionsEmployer
-
-
-
-
-
-
Unemployment insurance-Employee
9
8
Unemployment insurance-Employer
Social Security Premiums-Employer
Bank Social Aid Pension Fund PremiumsEmployee
19
15
Other
-
-
Total
874
826
b)
Explanations on deferred tax liabilities, if any: As of 30 September 2015: None. (31 December 2014 –
TRL 31,058 Thousand deferred tax liability).
79
II.
11.
Explanations Related to the Consolidated Liabilities (cont’d)
Information on liabilities regarding assets held for sale and discontinued operations: None.
12.
Explanations on the number of subordinated loans the Bank used, maturity, interest rate,
institution that the loan was borrowed from, and conversion option, if any:
Current Period
TRL
Prior Period
FC
-
Domestic Banks
Other Domestic Institutions
Banks Abroad
Other Institutions Abroad
Total
282,559
240,070
522,629
TRL
FC
-
248,690
187,981
436,671
13.
Information on Shareholders’ Equity:
a) Presentation of Paid-in capital:
Current Period
Common stock (*)
Preferred stock
1,158,000
-
Prior Period
1,087,187
-
(*) Nominal Capital
b) Paid-in capital amount, explanation as to whether the registered share capital system is applicable at the
Parent Bank and if so amount of registered share capital ceiling:
Registered share capital system is applied in the Parent Bank. Maximum registered capital amount is TRL
1,250,000 Thousand.
Capital System
Registered Capital
Paid-in Capital
1,158,000
Maximum
1,250,000
c) Information on share capital increases and their sources; other information on increased capital shares in
current period: The Parent Bank’s paid-in capital has been increased to TRL 1,158,000 Thousand by
contribution in kind in the amount TRL 25,000 Thousand, which composed of TRL 16,475 Thousand from
extraordinary reserves, TRL 4,262 Thousand from subsidiaries and real estate sale profit, TRL 4,263
Thousand from share premium and by cash in the amount of TRL 45,813 Thousand.
d) Information on share capital increases from capital reserves: None.
e) Capital commitments in the last fiscal year and at the end of the following period, the general purpose of
these commitments and projected resources required to meet these commitments: None.
f) Indicators of the Parent Bank’s income, profitability and liquidity for the previous periods and possible
effects of these future assumptions on the Parent Bank’s equity due to the uncertainty of these indicators:
Retained and current year income, profitability and liquidity of the Parent Bank are closely monitored,
reported by the Financial Control, Budget and Strategic Planning Department to the Board of Directors and
Asset and Liability Committee. This department forecasts the effects of interest, currency and maturity
fluctuations that change these indicators with static and dynamic scenario analysis. Net asset value, which is
defined as the difference of fair values of assets and liabilities, is measured. Prognoses are made for the
Parent Bank’s future interest income via simulations of net interest income and scenario analysis.
80
13.
Information on Shareholders’ Equity (cont’d):
g) Information on preferred shares:
None.
h) Information on marketable securities value increase fund:
Current Period
TRL
From Subsidiaries, Associations and Entities Under
Common Control
Marketable Securities Available for Sale
-
-
(92,553)
-
(9,292)
-
(150)
-
-
-
-
-
-
-
(92,703)
-
(9,292)
-
Information on legal reserves:
First legal reserves
Current Period
85,243
Prior Period
73,446
Second legal reserves
Other legal reserves appropriated in accordance with
special legislation
15,664
15,485
Total
15.
-
-
100,907
88,931
Information on extraordinary reserves:
Current Period
Reserves appropriated by the General Assembly
Prior Period
1,002,592
807,260
Retained earnings
8,217
5,997
Accumulated losses
6,096
204
-
-
1,016,905
813,461
Foreign currency share capital exchange difference
Total
16.
FC
-
Foreign Exchange Difference
14.
TRL
-
Valuation Difference
Total
Prior Period
FC
Other Information on Shareholders’ Equity:
None.
17.
Information on minority shares:
TRL 44,148 Thousand of minority shares are shown in the accompanying financial statements (31
December 2014 – TRL 42,228 Thousand).
18.
Information on other capital reserves:
Actuarial gain/loss is shown under other capital reserves as of 30 September 2015 .
81
III.
Explanations Related to the Consolidated Off-Balance Sheet Contingencies and
Commitments
1. Information on off-balance sheet liabilities:
a) Nature and amount of irrevocable loan commitments:
Current Period
96,680
Prior Period
131,537
Loan Granting Commitments
654,301
552,553
Payment Commitments for Cheques
637,149
588,612
Commitments for Credit Card Expenditure limits
594,771
590,538
1,665
1,921
Forward Asset Purchase Commitments
Commitments for Promotions related with Credit Cards and Banking Transactions
Subsidiaries and Associates Capital Commitments
Tax and Fund Obligations for Export Commitments
Other Commitments
Total
-
-
6,049
6,171
53,671
2,044,286
1,917,742
46,410
b) Possible losses and commitments related to off-balance sheet items including items listed below:
The Group, within the context of banking activities, undertakes certain commitments, consisting of loan
commitments, letters of guarantee, acceptance credits and letters of credit.
b.1) Non-cash loans including guarantees, acceptances, financial guarantee and other letters of credits:
Current Period
Prior Period
Guarantees
92,405
126,437
Bank Loans
395,468
299,774
Letters of Credit
433,069
467,274
Total
920,942
893,485
b.2) Guarantees, suretyships, and similar transactions:
Definite Letter of Guarantees
Temporary Letter of Guarantees
Suretyships and Similar Transactions
Other Letter of Guarantees
Total
Current Period
3,425,025
Prior Period
3,433,478
545,201
509,180
-
-
909,684
782,136
4,879,910
4,724,794
c.1) Total amount of non-cash loans:
Letters of Guarantees issued for cash loans
With maturity of 1 year or less than 1
year
Current Period
541,167
Prior Period
473,719
163,136
344,219
378,031
129,500
Other non-cash loans
5,261,685
5,144,560
Total
5,802,852
5,618,279
With maturity of more than 1 year
82
EXPLANATIONS AND DISCLOSURES ONFINANCIAL STATEMENTS (cont’d)
III.
Commitments (cont’d)
1. Information on off-balance sheet liabilities (cont’d):
c.2) Information on sectoral risk breakdown of non-cash loans:
Current Period
TRL
Agricultural
Farming and raising livestock
Forestry
Fishery
(%)
Prior Period
FC
(%)
18,543
0.50
14,089
0.70
TRL
22,904
(%)
0.62
FC
18,334
(%)
0.97
14,245
0.38
14,089
0.70
17,044
0.46
18,334
0.97
4,057
0.11
-
-
5,569
0.15
-
-
241
0.01
-
-
291
0.01
-
-
530,041
14.22
809,029
42.74
Manufacturing
529,677
13.98
905,805
44.92
Mining
22,144
0.58
103,805
5.15
23,517
0.63
1,899
0.10
39.01
485,856
13.04
786,070
41.53
Production
486,595
12.85
786,730
20,938
0.55
15,270
0.76
20,668
0.55
21,060
1.11
Construction
1,519,679
40.14
470,506
23.33
1,410,625
37.86
382,880
20.23
Services
1,711,629
45.21
603,614
29.91
1,758,614
47.21
673,166
35.57
656,775
17.35
183,275
9.09
700,855
18.81
226,203
11.95
20,411
0.54
18,570
0.92
18,169
0.49
13,092
0.69
Electric, gas and water
Wholesale and retail trade
Hotel, food and beverage services
Transportation and
telecommunication
80,510
2.13
27,134
1.35
94,583
2.54
52,832
2.79
Financial institutions
345,530
9.12
54,120
2.68
291,300
7.82
46,910
2.49
Real estate and renting services
485,057
12.81
202,483
10.02
528,503
14.19
185,914
9.82
0.00
-
-
-
-
-
2,133
0.06
424
-
5.85
123,071
3.30
147,791
7.81
0.09
9,320
0.49
Self-employment services
84
Education services
1,744
Health and social services
0.00
3
0.05
-
121,518
3.21
118,029
Other
6,407
0.17
22,903
1.14
3,366
Total
3,785,935
100.00
2,016,917
100.00
3,725,550
100.00 1,892,729 100.00
c.3) Information on I st and II nd Group non-cash loans:
I st Group
Non-cash loans
II nd Group
TRL
FC
3,616,248
1,059,849
142,130
61,683
18,115
374,782
-
2,571
40
429,733
-
3,296
Endorsements
-
-
-
-
Underwriting commitments
-
-
-
-
Guaranteed prefinancing credits
-
-
-
-
7,402
85,003
2,000
-
Letters of guarantee
Bank acceptances
Letters of credit
Other commitments and suretyships
TRL
FC
The Group provided reserve amounting to TRL 108,893 Thousand (31 December 2014 - TRL 52,444 Thousand)
for non-indemnified non-cash loans amounting to TRL 43,352 Thousand (31 December 2014 - TRL 124,238
Thousand).
83
III.
2. Information related to derivative financial instruments:
Current Period
Prior Period
8,950,918
11,152,854
2,722
813,635
8,790,790
10,220,168
Types of trading transactions
Foreign currency related derivative transactions (I)
Forward transactions
Swap transactions
Futures transactions
-
-
Option transactions
157,406
119,051
-
6,000
Interest related derivative transactions (II)
Forward rate transactions
-
-
Interest rate swap transactions
-
6,000
Interest option transactions
-
-
Futures interest transactions
-
-
Other trading derivative transactions(III)
A. Total trading derivative transactions(I+II+III)
1,140,024
948,160
10,090,942
12,107,014
-
-
Fair value hedges
-
-
Cash flow hedges
-
-
Net investment hedges
-
-
-
-
10,090,942
12,107,014
Types of hedging transactions
B.Total hedging related derivatives
Total Derivative Transactions (A+B)
Related to agreements of forward transactions and options; the information based on the type of forward and
options transactions are disclosed separately, specified with related amounts, type of agreement, purpose of
transaction, nature of risk, strategy of risk management, hedging relationship, possible effects on the Parent
Bank’s financial position, timing of cash flows, reasons of unrealized transactions which previously projected to
be realized, income and expenses that could not be linked to income statement in the current period because of
the agreements:
The Group’s derivative instruments consist of foreign currency swaps, option and forward foreign currency
buy/sell transactions. The Parent Bank revalues foreign currency forward and swap transactions using the Parent
Bank’s end of reporting foreign exchange rates. The resulting gain or loss is reflected in the income statement. In
calculation of fair values of the interest swap contracts, interest amounts to be paid or received upon the fixed
interest rate in the contract and interest amounts to be received or paid upon the floating interest rates in the
contracts have been recalculated and discounted in accordance to valid interest rates in the current market and
the differences have been reflected to the current term’s income statement. Some of the derivative instruments,
although made for economical hedging purposes, are accounted as trading transactions since they are not
qualified to be a hedging instrument as per “Financial Instruments: Recognition and Measurement” (“TAS 39”).
84
III.
2. Information related to derivative financial instruments (cont’d):
As of 30 September 2015 breakdown of the Group’s foreign currency forward and swap transactions based on
currencies are disclosed below in their TRL equivalents:
Forward Buy
Current Period
TRL
USD
EURO
OTHER
Total
Prior Period
TRL
USD
EURO
OTHER
Total
Forward Sell
Swap Buy
Swap Sell Option Buy Option Sell
Future Buy
Future Sell
1,502
1,502
1,220
263
1,483
361,847
1,628,737
2,932,869
74,847
4,998,300
3,067,964
721,205
811,190
331,892
4,932,251
77,039
608
77,647
624
79,135
79,759
-
-
90,432
309,073
3,705
3,620
406,830
321,653
82,438
2,714
382
407,187
653,410
2,194,887
2,676,817
61,314
5,586,428
2,813,028
1,802,032
696,461
248,092
5,559,613
39,803
9,306
9,048
58,157
19,250
41,644
60,894
-
-
As of 30 September 2015, the Group has no cash flow hedges (31 December 2014 - None).
As of 30 September 2015, the Group has no hedge of net investment in foreign operations (31 December 2014 None).
3. Explanations on contingent liabilities and assets:
a.1) The Group's share in contingent liabilities arising from entities under common control together with other
venturer: None.
a.2) Share of entity under common control in its own contingent liabilities: None.
a.3) The Group’s contingent liabilities resulting from liabilities of other venturers in entity under common
control: None.
b)
Accounting and presentation of contingent assets and liabilities in the financial statements:
b.1) Contingent assets are accounted for, if probability of realization is almost certain. If probability of
realization is high, then it is explained in the footnotes. As of 30 September 2015 there are no contingent assets
that need to be explained.
b.2) A provision is made for contingent liabilities, if realization is probable and the amount can reliably be
determined. If realization is remote or the amount cannot be determined reliably, then it is explained in the
footnotes:
As of 30 September 2015, there are 1,782 continuing legal cases against the Group based on information
received from Law Departments of the Group. The total amount of these cases is TRL 58,212 Thousand.
Provision amount for these cases is TRL 16,455 Thousand (According to the information obtained from Law
Departments of the Group, as of 31 December 2014 number of continuing legal cases against the Group was
1,965. Total amount of those cases was TRL 66,162 Thousand. TRL 15,749 Thousand of provision was
allocated for those cases).
85
III. Explanations Related to the Consolidated Off-Balance Sheet Contingencies and
Explanations on contingent liabilities and assets (cont’d):
3.
c)
4.
Explanations on revocable commitments: As of 30 September 2015, the Group’s revocable commitments
amount is TRL 318,587 Thousand (31 December 2014 - TRL 330,796 Thousand).
Custodian and intermediary services:
Information related with custodian and intermediary services is given in the financial structure section under the
name of the “Explanations related to transactions made on behalf of others and fiduciary transaction based on
trust” in section four XI. item.
5.
The information on the Parent Bank’s rating by the international rating institutions:
The results of the ratings performed are shown below:
Fitch Ratings: February 2015
Foreign Currency
Long Term
Short Term
Outlook
Local Currency
Long Term
Short Term
Outlook
National
Outlook
Viability
Support Rating
JCR: July 2015
Foreign Currency
International Long Term
International Short Term
Local Currency
International Long Term
International Short Term
Outlook
Long Term National
Short Term National
Support Rating
BBB
Stable
BBB
Stable
A +(tur)
Stable
bb5
Individual Rating
Moody’s: December 2014
Foreign Currency
Long Term
Short Term
Local Currency
Long Term
Short Term
National Long Term
National Short Term
Outlook
BBBA-3
BBBA-3
Stable
AA- (Trk)
A-1+ (Trk)
2
AB
Capital Intelligence: December 2014
Foreign Currency
Ba2
NP
Long Term
Short Term
Financial Strength Rate
Support Rating
Outlook
Ba2
NP
A3.tr
TR-2
Negative
86
BB
B
BB
4
Stable
III.
5. The information on the Parent Bank Subsidiaries’ rating by the international rating institutions
(cont’d):
The results of the rating performed by JCR Eurasia Rating for Şeker Finansal Kiralama A.Ş. is shown below:
JCR Eurasia Rating: June 2015
Foreign Currency Commitments
Long term
Short term
View
Long Term National
Short Term National
Turkish Lira Commitments
Long term
Short term
View
Long Term National
Short Term National
View
Individual Rating
Support Points
BBBA-3
Stable
BBB+ (Trk)
A-2 (Trk)
BBBA-3
Stable
BBB+ (Trk)
A-2 (Trk)
Stable
AB
2
The results of the rating performed by JCR Eurasia Rating for Şeker Mortgage Finansman A.Ş. is shown below:
JCR Eurasia Rating: May 2015
Foreign Currency Commitments
Long term
Short term
View
Long Term National
Short Term National
Turkish Lira Commitments
Long term
Short term
View
Long Term National
Short Term National
View
Individual Rating
Support Points
BBBA-3
Stable
A (Trk)
A-1 (Trk)
BBBA-3
Stable
A (Trk)
A-1 (Trk)
Positive
B
2
87
IV.
Explanations Related to the Consolidated Income Statement
1. a)
Information on interest income on loans:
Current Period
TRL
1,451,360
731,212
704,823
15,325
-
Interest on Loans (*)
Short Term Loans
Medium and Long Term Loans
Interest on Non-Performing Loans
Premiums received from Resource Utilization Support Fund
Prior Period
FC
TRL
103,248
31,637
71,611
-
FC
1,372,876
724,356
633,149
15,371
-
92,879
29,897
62,982
-
(*) Includes fees and commissions obtained from cash loans.
b)
Information on interest received from banks:
Current Period
TRL
Prior Period
FC
TRL
FC
The Central Bank of Turkey
346
48
561
-
Domestic Banks
935
47
788
798
Foreign Banks
115
1,396
260
1,074
-
-
-
-
1,396
1,491
1,609
1,872
Branches and Head Office Abroad
Total
c)
Interest received income from marketable securities portfolio:
Current Period
TRL
Trading Securities
Prior Period
FC
TRL
337
243
FC
1,042
95
-
-
-
-
Available-for-Sale Securities
75,571
-
49,435
-
Held-to-Maturity Securities
79,258
24
103,578
19
155,166
267
154,055
114
Total
d)
Information on interest income received from associates and subsidiaries:
Current Period
Interest Income Received from Associates and Subsidiaries
Prior Period
1
88
154
IV.
Explanations Related to the Consolidated Income Statement (cont’d)
2. a)
Information on interest expense on funds borrowed :
Current Period
TRL
Prior Period
FC
TRL
FC
Banks(*)
The Central Bank of Turkey
Domestic Banks
Foreign Banks
-
-
-
-
26,766
5,441
21,688
5,263
4,696
51,492
4,386
34,748
-
-
-
-
-
-
-
-
31,462
56,933
26,074
40,011
Branches and Head Office Abroad
Other Financial Institutions
Total
(*) Includes fees and commission expenses of cash loans.
b)
Information on interest expense to associates and subsidiaries :
Current Period
Interest Expense to Associates and Subsidiaries
c)
Prior Period
93
Information on interest expense to marketable securities issued :
Current Period
TRL
Interest expense on securities issued
d)
9
Prior Period
FC
71,112
TRL
-
FC
82,290
-
Distribution of interest expense on deposits based on maturity of deposits :
Time Deposits
Account name
Demand
Deposits
Up to 1
Month
Up to 3
Months
Up to 6
Months
Up to 1
Year
More than 1
Year
Accumulated
Deposits
Total
TRL
Bank deposits
Saving deposits
Commercial deposits
Other deposits
7 days call accounts
Precious metal deposits
Total
Foreign Currency
Foreign currency
deposits
Bank deposits
7 days call accounts
Precious metal deposits
Total
Grand Total
67
16
83
32,300
16,691
38
10,782
366
60,177
7,741
335,957
843
83,075
50,817
478,433
293
15,385
326
7,917
746
24,667
142
9,411
50
1,680
372
11,655
11,772
78
2,652
27
14,529
25
2
27
40,476
389,308
1,335
106,124
52,328
589,571
-
41
1,540
144
1,725
1,808
1,697
257
1,954
62,131
41,900
1,670
43,570
522,003
4,102
4,102
28,769
4,537
4,537
16,192
13,289
13,289
27,818
27
65,566
3,467
144
69,177
658,748
89
IV.
3. Information on dividend income :
Current Period
Prior Period
Trading Securities
-
-
Financial assets at fair value through profit and loss
-
-
Available-for-sale securities
-
-
Other
1,753
1,269
Total
1,753
1,269
4. Information on net trading income :
Current Period
Income
Profit on capital market operations
Prior Period
9,558,579
4,375,095
6,858
30,760
Profit on derivative financial instruments
1,175,352
637,879
Foreign exchange gains
8,376,369
3,706,456
Losses (-)
9,722,463
4,408,527
Losses on capital market operations
Losses on derivative financial instruments
Foreign exchange losses
633
774
972,664
743,064
8,749,166
3,664,689
5. Information on other operating income :
The information on the factors affecting the Group’s income including new developments, and the explanation
on nature and amount of income earned from such items :
As of 30 September 2015, TRL 187,388 Thousand stated under other operating income in the income statement
includes TRL 112,406 Thousand prior years’ provisions reversal income and TRL 74,982 Thousand other
operating income.
As of 30 September 2015, prior years expense and provision reversal income includes TRL 66,508 Thousand
collection of specific provisions of cash loans, TRL 21,959 Thousand reversal of non-cash provisions, TRL 544
Thousand of securities impairment provision reversal and TRL 23,395 Thousand reversal of legal case provision
and other provisions.
As of 30 September 2014, TRL 123,088 Thousand stated under other operating income in the income statement
includes TRL 77,010 Thousand prior years’ provisions reversal income and TRL 46,078 Thousand other non
interest income.
As of 30 September 2014, prior years expense and provision reversal income includes TRL 54,231 Thousand
collection of specific provisions of cash loans, TRL 7,534 Thousand reversal of non-cash provisions, TRL 3,132
Thousand of securities impairment provision reversal and TRL 12,113 Thousand reversal of legal case provision
and other provisions.
90
IV.
6. Provision expenses of banks for loans and other receivables:
Current Period
266,828
Prior Period
225,565
III.Group Loans and Receivables
IV.Group Loans and Receivables
66,930
81,547
39,886
43,905
V.Group Loans and Receivables
118,351
141,774
General loan loss provision expenses
Provision expenses for possible losses
17,911
2,500
25,211
-
Specific provisions for loans and other receivables
Marketable securities impairment losses
333
4,535
Financial assets at fair value through profit and loss
116
67
Investment securities available for sale
217
4,468
303
1,775
Associates
-
-
Subsidiaries
-
-
Entities under common control
-
-
303
1,775
47,561
9,916
335,436
267,002
Impairment provision expense
Investments held to maturity
Other (*)
Total
(*) Other provisions includes TRL 12,041 Thousand unindemnified non-cash loans provision (30 September 2014 – TRL 9,374 Thousand
unindemnified non-cash loan).
7. Information on other operating expenses :
Current Period
295,363
8,577
Prior Period
273,913
7,969
Bank social aid provision fund deficit provision
-
-
Impairment losses on fixed assets
-
-
18,622
29,494
-
-
Personnel expenses
Reserve for employee termination benefits
Depreciation expenses of fixed assets
Impairment losses on intangible assets
Goodwill impairment losses
Depreciation expenses of intangible assets
Impairment for investments accounted for under equity method
Impairment losses on assets held for resale
Depreciation expenses of assets held for resale
Impairment losses on assets held for sale
81
-
16,596
12,597
-
-
51
131
9,657
2,682
-
-
Other operating expenses
Services Rent expenses
Maintenance expenses
Advertisement expenses
Other expenses (*)
220,029
42,198
11,069
9,534
157,228
214,823
38,650
9,253
7,131
159,789
Loss on sales of assets
Other
Total
500
90,153
659,629
44
85,400
627,053
(*) “Other” includes TRL 19,247 Thousand premiums paid to the Saving Deposit Insurance Fund and TRL 1,775 Thousand legal case
provision (30 September 2014 – TRL 18,662 Thousand to the Saving Deposit Insurance Fund premium provision, TRL 1,149 Thousand
legal case provision and TRL 8,500 Thousand bonus provision)
(**) Other expenses include TRL 19,478 Thousand communication expenses, TRL 13,140 Thousand computer usage expenses, TRL 4,245
Thousand promotion applications related with credit cards and banking services (30 September 2014 - TRL 17,950 Thousand
communication expenses, TRL 13,506 Thousand computer usage expenses, TRL 2,945 Thousand promotion applications related with credit
cards and banking services).
91
EXPLANATIONS AND DISCLOSURES ONFINANCIAL STATEMENTS (cont’d)
IV.
8. Information on profit/(loss) from continued and discontinued operations before taxes :
Profit before tax of the Group has decreased by 62.84 % for the period ended 30 September 2015 as compared
to the prior period. In comparison with in the same period, the Group’s operating income increased by 0.75 %,
net fees and commissions income increased by 11.31 %, other operating income increased by 5.20 %, provision
expenses increased by 25.63 % and other operating expenses increased by 52.24 %.
9. Information on tax provision for continued and discontinued operations :
a)
As of 30 September 2015, current tax charge is TRL 5,064 Thousand (30 September 2014 – TRL 51,056
Thousand current tax charge) and deferred tax charge is TRL 15,777 Thousand (30 September 2014 –
TRL 21,368 Thousand deferred tax charge).
b) Deferred tax charge on temporary differences is TRL 15,777 Thousand (30 September 2014 – TRL
21,368 Thousand deferred tax benefit).
10. Information on net profit/(loss) from continued and discontinued operations :
The net profit of the Group decreased for the period ended 30 September 2015 by 44.51 % as compared to the
prior period profit.
11. The explanations on net profit/(loss) for the period :
a) The nature and amount of certain income and expense items from ordinary operations is disclosed if the
disclosure for nature, amount and repetition rate of such items is required for the complete understanding of
the Group's performance for the period : None.
b) Effect of changes in accounting estimates on income statement for the current and, if any, for subsequent
periods : None.
c) Profit or loss attributable to minority shares: Profit attributable to minority shares is TRL 1,740 Thousand (30
September 2014- TRL 2,694 Thousand profit).
d) If the other items in the income statement exceed 10 % of the income statement total, accounts amounting to
at least 20 % of these items are shown below :
Other Fees and commissions received
Banking Services Income
Other
Total
Current Period
195,688
19,853
215,541
Prior Period
164,728
18,713
183,441
Other Fees and commissions given
Fees and commissions given to Banks
Fees and commissions given for Credit Cards
Other
Total
Current Period
11,820
16,729
18,566
47,115
Prior Period
18,258
10,482
12,417
41,157
e) Nature and amount of changes in accounting estimates, which have a material effect on current period or
expected to have a material effect on subsequent periods : None.
92
V.
Explanations on the Risk Group of the Parent Bank
1.
Volume of related party transactions, income and expense amounts involved and outstanding loan
and deposit balances :
a) Current Period:
Related Parties
Direct and Indirect
Shareholders of the Bank
Subsidiaries and Associates
Cash
Non-Cash
Cash
Other Entities Included
In the Risk Group
Non-Cash
Cash
Non-Cash
Loans and other receivables
Balance at beginning of period
-
Balance at end of period
13,057
1
Interest and commission income
17,111
61
367,395
425,528
19,034
42,241
-
-
49,203
262
-
-
-
-
b) Prior Period:
Related Parties
Direct and Indirect
Cash
Non-Cash
Cash
In the Risk Group
Non-Cash
Cash
Non-Cash
Loans and other receivables
12,875
654
317,083
40,751
-
-
-
13,057
367,395
42,241
-
-
154
54
16,894
224
-
-
Interest and commission income
c.1) Information on related party deposits balances:
Related parties
Deposits
Direct and Indirect
Current
Period
Prior
Period
3,618
1,785
1,722
3,618
93
9
Interest on deposits
Current
Period
90,946
In the Risk Group
Prior
Period
Current
Period
Prior
Period
193,553
-
-
103,690
90,946
-
-
4,837
8,183
-
-
c.2) Information on forward and option agreements and other similar agreements made with related parties :
None.
93
V.
Explanations on the Risk Group of the Parent Bank (cont’d)
2. Disclosures for related parties:
a) The relations of the Parent Bank with the entities controlled by the Parent Bank and its related parties,
regardless of whether there are any transactions or not :
In the normal course of its banking activities, the Parent Bank conducted various business transactions with
related parties at commercial terms and at rates which approximate market rates. Any transaction among the
Group subsidiaries and/or related parties are executed on arm-lengths conditions.
b) Nature of the transactions amount and ratio to the total volume of transactions, amount of major items and
ratio to all items, pricing policies and other factors :
Amount
Cash loans
Non-cash loans
Deposits
Shares %
425,528
66,314
105,412
2.56
1.14
0.71
These transactions are priced in accordance with the general pricing policies of the Parent Bank and are in line
with market rates .
c) In cases separate disclosure is not necessary, in order to present the total impact on the financial statements,
total of similar items : Explained in b).
d) Transactions accounted under the equity method : None.
e) Disclosures related to purchase and sale of real estate and other assets, services given/received, agency
contracts, leasing contracts, transferring information as a result of research and development, license
contracts, financing (including supports in the form of loans, capital in cash and capital in kind), guarantees,
and management contracts :
The Parent Bank enters into lease agreements with Şeker Finansal Kiralama A.Ş. As of 30 September 2015
the total leasing obligations related to those agreements amounted to TRL 608 Thousand (31 December 2014
- TRL 6,641 Thousand). Additionally, the Parent Bank provides agency services for Şeker Yatırım Menkul
Değerler A.Ş. through its branches.
Within the limits of the Banking Law, the Group renders cash and non-cash loans to its related parties and the
ratio of these loans to the Group’s total cash and non-cash loan portfolio is 2.19 %. Details of these loans are
explained in the Section V, Note V-1a.
As of 30 September 2015 the Group has no purchases and sale of real estate and other assets, transfer of
information as a result of research and development, and management contracts with the related parties.
f) Benefits provided to the top management of the Group during current period amount to TRL 25,787
Thousand (30 September 2014 - TRL 22,294 Thousand).
94
VI.
Explanations and notes related to subsequent events
None.
SECTION SIX
AUDITOR’S REVIEW REPORT
I. Explanations on the Auditor’s Review Report :
The consolidated interim financial statements as of and for the nine-month period ended 30 September 2015
were reviewed by Akis Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik AŞ (the Turkish member
firm of KPMG International Cooperative, a Swiss entity) and Auditors’ Review Report dated 13 November 2015
is presented in the introduction of this report.
II. Other Footnotes and Explanations Prepared by Independent Auditors :
None.
95

Sekerbank footnotes 30.09.2015 BRSA Consolidated

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