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TÜRKİYE İŞ BANKASI ANONİM ŞİRKETİ THE CONSOLIDATED INTERIM FINANCIAL REPORT
AS AT AND FOR THE NINE-MONTH PERIOD ENDED
30 SEPTEMBER 2015
Headquarters Address: İş Kuleleri, 34330, Levent/İstanbul Telephone: 0212 316 00 00
Fax: 0212 316 09 00Web Site: www.isbank.com.tr
E-mail: [email protected]
The consolidated interim financial report as at and the for the nine-month period ended prepared in accordance with the communiqué of “FinancialStatements and Related Disclosures and Footnotes to be Announced to Public by Banks” as regulated by Banking Regulation and Supervision Agency,comprises the following sections:
GENERAL INFORMATION ABOUT THE PARENT BANK
CONSOLIDATED INTERIM FINANCIAL STATEMENTS OF THE PARENT BANK
EXPLANATIONS ON THE ACCOUNTING POLICIES
INFORMATION ON FINANCIAL STRUCTURE AND RISK MANAGEMENT
DISCLOSURES AND FOOTNOTES ON THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
OTHER EXPLANATIONS
AUDITORS’ REVIEW REPORT
Associates, subsidiaries and special Purpose Entities whose financial statements have been consolidated in the consolidated financial report are as
follows:
Subsidiaries Associates
ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ ARAP-TÜRK BANKASI A.Ş.
ANADOLU HAYAT EMEKLİLİK A.Ş.
JOINT STOCK COMPANY İŞBANK (JSC İŞBANK)
JOINT STOCK COMPANY İŞBANK GEORGIA (JSC GEORGIA)
EFES VARLIK YÖNETİM A.Ş.
IS INVESTMENTS GULF LTD.
İŞ FAKTORİNG A.Ş.
İŞ FİNANSAL KİRALAMA A.Ş.
İŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
İŞ GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş.
İŞ PORTFÖY YÖNETİMİ A.Ş.
İŞ YATIRIM MENKUL DEĞERLER A.Ş.
İŞ YATIRIM ORTAKLI I A.Ş
İŞBANK AG
MAXIS INVESTMENTS LTD.
MİLLİ REASÜRANS T.A.Ş.
TSKB GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
TÜRKİYE SINAİ KALKINMA BANKASI A.Ş.
YATIRIM FİNANSMAN MENKUL DEĞERLER A.Ş.
Special Purpose Entities
TIB CARD RECEIVABLES FUNDING COMPANY LIMITED
TIB DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY
The consolidated financial statements and related disclosures and footnotes in this report are prepared, in accordance with the Regulation on the
Procedures and Principles for Accounting Practices and Retention of Documents by Banks, Banking Regulation and Supervision Agency (BRSA)
regulations, Turkish Accounting Standards, Turkish Financial Reporting Standards and the related statements and guidance and in compliance with
the financial records of our Bank. Unless otherwise stated the accompanying consolidated financial report is presented in thousands of Turkish Lira(TL), and has been subjected to limited review and presented as the attached.
Prof. Dr. Turkay Berksoy Füsun Tümsavaş H. Ersin zince Member of the Board andthe Audit Committee
Deputy Chairman of the Board of Directorsand Chairman of the Audit Committee
Chairman of the Board of Directors
Ali Tolga Ünal Mahmut Magemizoğlu Adnan BaliHead of Financial Management Division Deputy Chief Executive
In Charge of Financial Reporting
Chief Executive Officer
The authorized contact person for questions on this consolidated financial report:
Name – Surname / Title: Süleyman H. Özcan / Head of Investor Relations Division
Phone No : +90 212 316 16 02Fax No : +90 212 316 08 40E-mail : [email protected]
http://www.isbank.com.tr/http://www.isbank.com.tr/http://www.isbank.com.tr/mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]://www.isbank.com.tr/
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Page:
SECTION I
General Information about the Parent Bank I. Explanations on the Establishment Date and Initial Status of the Parent Bank, and History Including the Changes in the Former Status 1II. Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and Control of the
Parent Bank, any Changes in the Period, and Information on the Parent Bank’s Risk Group 1
III. Explanations on the Chairman’s, Directors’, Auditors’, Chief Executive Officer’s and Deputy Chief Executives’ Shares, if any, and the Areas oftheir Responsibility at theBank
1
IV. Information on the Parent Bank’s Qualified Shareholders 2V. Summary Information on the Parent Bank’s Functions and Business Lines 2VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and
Explanation about the Institutions Subject to Line-By-Line Method or Proportional Consolidation and Institutions which are Deducted from Equityor not Included in These Three Methods
2
VII. Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders’ Equity Between the Parent Bank and its Subsidiaries or theReimbursement of Liabilities
4
VIII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of the RelatedDisclosures
4
SECTION II
Consolidated Interim Financial Statements
I. Consolidated Balance Sheet (Statement of Financial Position) – Assets 5II. Consolidated Balance Sheet (Statement of Financial Position) – Liabilities and Equity 6III. Consolidated Off-Balance Sheet Items 7IV. Consolidated Income Statement 8V. Consolidated Statement of Income and Expense Items Accounted under Shareholders’ Equity 9VI. Consolidated Statement of Changes in the Shareholders’ Equity 10VII. Consolidated Statement of Cash Flows 11
SECTION III Explanations on Accounting Policies
I. Basis of Presentation 12
II. Strategy for Use of Financial Instruments and on Foreign Currency Transactions 13
III. Information on the Consolidated Companies 14IV. Forward, Option Contracts and Derivative Transactions 15V. Interest Income and Expenses 16VI. Fees and Commission Income and Expenses 16VII. Financial Assets 16VIII. Impairment of Financial Assets 17IX. Offsetting Financial Instruments 18X. Sale and Repurchase Agreements and Securities Lending Transactions 18XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities 18XII. Goodwill and Other Intangible Assets 18XIII. Tangible Assets 19XIV. Investment Property 19
XV. Leasing Transactions 19XVI. Insurance Technical Income and Expense 20XVII. Insurance Technical Reserves 20XVIII. Provisions and Contingent Liabilities 21XIX. Contingent Assets 21XX. Liabilities Regarding Employee Benefits 21XXI. Taxation 22XXII. Borrowings 24XXIII. Equity Shares and Issuance of Equity Shares 25XXIV. Bank Acceptances and Bills of Guarantee 25XXV. Government Incentives 25XXVI. Segment Reporting 25XXVII. Other Disclosures 25
SECTION IV Information on the Financial Position and Risk Management of the Group
I. Explanations on Consolidated Capital Adequacy Ratio 26II. Explanations on Consolidated Market Risk 31III. Explanations on Consolidated Currency Risk 32IV. Explanations on Consolidated Interest Rate Risk 34V. Explanations on Equity Shares Risk Arising from Banking Book 37VI. Explanations on Consolidated Liquidity Risk 38VII. Explanations on Securitization Positions 39VIII. Explanations on Credit Risk Mitigation Techniques 40IX. Explanations on Risk Management Objectives and Policies 40X. Explanations on Consolidated Business Segmentation 42
SECTION V Disclosures and Footnotes on the Consolidated Interim Financial Statements
I. Disclosures and Footnotes on Consolidated Assets 44II. Disclosures and Footnotes on Consolidated Liabilities 60III. Disclosures and Footnotes on Consolidated Off-Balance Sheet Items 69IV. Disclosures and Footnotes on Consolidated Income Statement 71V. Disclosures and Footnotes on the Group’s Risk Group 74VI. Subsequent Events 77
SECTION VI Other Explanations
I. Explanation on the Group’s Credit Ratings 78
SECTION VII Auditors’ Review Report
I. Explanations on the Auditors’ Review Report 80II. Explanations and Footnotes of the Independent Auditors 80
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TÜRKİYE İŞ BANKASI AŞ NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2015(Amounts expressed in thousands Turkish Lira (TL) unless otherwise stated.)
1
SECTION ONE: GENERAL INFORMATION ABOUT THE PARENT BANK
I. Explanations on the Establishment Date and Initial Status of the Parent Bank, and History Including the
Changes in the Former Status
TÜRKİYE İŞ BANKASI A.Ş. (“the Bank” or “the Parent Bank”) was established on 26 August 1924 to operate in allkinds of banking activities and to initiate and/or participate in all kinds of financial and industrial sector undertakings
when necessary. The Bank status has not been changed since its establishment.
II. Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly
Undertake the Management and Control of the Parent Bank, any Changes in the Period, and Information on the
Parent Bank’s Risk Group
As at 30 September 2015, 40.15% of the Bank’s shares are owned by Türkiye İş Bankası A.Ş. Members’ SupplementaryPension Fund (Fund), 28.09% are owned by the Republican People’s Party-CHP (Atatürk’s shares) and 31.76% are onfree float (31 December 2014: Fund 40.15%, CHP 28.09%, free float 31.76%).
III. Explanations on the Chairman’s, Directors’, Auditors’, Chief Executive Officer’s and Deputy ChiefExecutives’ Shares, if any, and the Areas of their Responsibility at the Bank
Board of Directors:
Name and Surname Areas of Responsibility
H. Ersin Özince Chairman of the Board and the Remuneration Committee
Füsun Tümsavaş Deputy Chairman, Audit Committee, TRNC Internal Systems Committee and the Risk Committee, Chairman of theCorporate Governance Committee, Member of the Credit Committee
Adnan BaliChief Executive Officer and Director, Chairman of the Credit Committee, Member of the Risk Committee, Chairman of
the Executive Committee, Chairman of the Human Resources Committee
Hasan Koçhan Director, Member of the Credit Committee
Mustafa Kıcalıoğlu Director
Aysel Tacer Director, Member of the Corporate Social Responsibility Committee, Alternate Member of the Credit Committee
Hüseyin Yalçın Director
Murat Vulkan Director
Prof.Dr.Turkay BerksoyDirector, Audit Committee, TRNC Internal Systems Committee, Remuneration Committee, and Corporate GovernanceCommittee, Alternate Member of the Credit Committee
Kemal Meral Director
Ulaş Moğultay Director, Member of Corporate Social Responsibility Committee
Chief Executive Officer and Deputy Chief Executives:
Name and Surname Areas of Responsibility
Adnan BaliChief Executive Officer and Director, Chairman of the Credit Committee, Member of the Risk Committee, Chairman of
Executive Committee, Chairman of the Human Resources Committee
Mahmut Magemizoğlu Financial Management, Investor Relations, Managerial Reporting and Internal Accounting, Member of the Risk Committee
Suat İnce Corporate and Commercial Banking Marketing, Sales and Product Management, SME and Business Banking Sales, Free
Zone BranchesHakan Aran Digital Banking, Information Technology Management, Data Management
Levent KorbaBanking Operations, Retail Loan and Card Operations, Support Services and Purchasing, Foreign Trade and CommercialLoan Operations, Internal Operations Management, Construction and Real Estate Management, Branch Network
Development
Ertuğrul Bozgedik Corporate Loans, SME Loans, Commercial Loans and Consumer Loans Underwriting, Loans Portfolio Management,
Member of the Risk Committee
Yalçın Sezen Consumer Loans, Card Payment Systems, Retail Banking Marketing, Sales and Product Management, Private Banking
Marketing and Sale Management, Member of the Corporate Social Responsibility Committee
Rıza İhsan Kutlusoy Human Resources, Enterprise Architecture, Strategy and Corporate Performance Management and Talent Management,
Coordination of Consumer Relations Officer
Senar Akkuş Treasury Management, Corporate Communication Management, Corporate Social Responsibility Committee Member of
the Risk Committee
İlhami KoçAssociates, Cross-Border Banking and Foreign Subsidiaries, Branches and Representative Offices, Capital Markets
Management and the Risk Committee (1)
Yılmaz Ertürk Economic Research, International Financial Institutions
Ergün Yorulmaz Commercial Banking, Retail Banking and General Legal Counsellorship, Financial Analysis, Commercial and CorporateLoans and Retail Loans Monitoring and Recovery Management
(1) İlhami Koç, participate s in the meetings of the Risk Committee on a consolidated basis.
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TÜRKİYE İŞ BANKASI AŞ NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2015(Amounts expressed in thousands Turkish Lira (TL) unless otherwise stated.)
2
The Parent Bank’s shares attributable to the Directors and members of the Audit Committee, to the CEO and the Deputy ChiefExecutives are of minor importance.
IV. Information on the Parent Bank’s Qualified Shareholders
Name Surname/Company Shares Ownership Paid-in CapitalUnpaid
Capital
T. İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik veYardımlaşma Sandığı Vakfı (“İşbank Members’ SupplementaryPension Fund”)
1,806,553 40.15 % 1,806,553
Cumhuriyet Halk Partisi – Republican People’s Party (Atatürk’sShares)
1,264,142 28.09 % 1,264,142
V. Summary Information on the Parent Bank’s Functions and Business Lines
In line with the relevant legislation and principles stated in the Articles of Incorporation of the Bank, the Parent Bank’sactivities include operating in retail, commercial, corporate and private banking, foreign currency and money market
operations, marketable securities operations, international banking services and other banking operations, as well asinitiating or participating in all kinds of financial and industrial sector corporations as may be required.
VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banksand Turkish Accounting Standards and 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
Banks are obligated to prepare consolidated financial statements for credit institutions and financial subsidiaries for
creating legal restrictions on a consolidated basis based on the “Communiqué on Preparation of Consolidated FinancialStatements of Banks” by applying Turkish Accounting Standards. There is not any difference between the relatedCommuniqué and the consolidation operations that is based on Turkish Accounting Standards and Turkish FinancialReporting Standards. The consolidated financial statement includes the subsidiaries of the Bank which are credit
institutions or financial institutions accordance with the BRSA regulations. As of current there is no credit institution or
financial institution subsidiaries which are excluded in the scope of the consolidation.
The information about the organizations in the scope of the consolidation:
The Parent Bank and its subsidiaries;
- ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ - ANADOLU HAYAT EMEKLİLİK A.Ş. - JSC İŞBANK - JSC İŞBANK GEORGIA- EFES VARLIK YÖNETİM A.Ş. - IS INVESTMENTS GULF LTD.
- İŞ FAKTORİNG A.Ş. - İŞ FİNANSAL KİRALAMA A.Ş. - İŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
- İŞ GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş. - İŞ PORTFÖY YÖNETİMİ A.Ş. - İŞ YATIRIM MENKUL DEĞERLER A.Ş. - IŞ YATIRIM ORTAKLIĞI A.Ş.- İŞBANK AG - MAXIS INVESTMENTS LTD.- MİLLİ REASÜRANS T.A.Ş. - TSKB GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş. - TÜRKİYE SINAI KALKINMA BANKASI A.Ş.- YATIRIM FİNANSMAN MENKUL DEĞERLER A.Ş.
and Special Purpose Entities,
- TIB Diversified Payment Rights Finance Company - TIB Card Receivables Funding Company Limited
are fully consolidated,
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TÜRKİYE İŞ BANKASI AŞ NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2015(Amounts expressed in thousands Turkish Lira (TL) unless otherwise stated.)
3
Its associate;
- ARAP-TÜRK BANKASI A.Ş.
is accounted under equity accounting method.
Consolidated companies are active in the areas of banking, insurance and reinsurance, private pensions, finance leasing,
factoring, real estate investment, venture capital investment, brokerage, investment consulting, portfolio and asset
management. Those companies are explained below.
Anadolu Anonim Türk Sigorta Şirketi
The Company was established in 1925 and operates in almost all non-life insurance service. The headquarter of theCompany is in Istanbul. The Company’s shares are traded in the Borsa İstanbul A.Ş.
Anadolu Hayat Emeklilik A.Ş.
The Company was founded in 1990 and its’ headquarter is in Istanbul. The company’s main activities are privateindividual or group pension and life/death insurance and due to this branch are engaged in all kinds of insurance. There
are 24 private pension funds founded by the company. The company’s shares are traded in the Borsa Istanbul A.Ş.
JSC İşbank
The Bank, which was founded in 1998 and headquartered in Moscow, operating banking services by focusing on deposit,
loan and brokerage operations with its 10 branches in several regions of Russian Federation. The title of the Bank was
Closed Joint Stock Company and was changed to Joint Stock Company on 1 September 2015.
JSC İşbank Georgia
The Bank which was established in Georgia in the third quarter of 2015, is operating banking services mainly deposit,
loan and exchange transactions. As part of the organizational structure of Parent Bank in abroad, Batumi and Tbilisi branches which were established in 2012 and 2014 respectively and proceed its operations as JSC Isbank Georgia.
Efes Varlık Yönetim A.Ş.
The field of activity of the company, which was founded in February 2011 is to purchase and sell the receivables with
other assets of deposit banks, participation banks and other financial institutions. The Company’s headquarter is locatedİstanbul.
Is Investments Gulf Ltd.
The purpose of the Company, which was founded in Dubai in the year 2011, is to operate brokerage activities mainly
capital markets in the gulf region.
İş Faktoring A.Ş.
The field of operation of the Company, which operates in the factoring sector since 1993, is domestic and foreign
factoring operations. The Company’s headquarter is in Istanbul.
İş Finansal Kiralama A.Ş.
The Company, whose field of activity is financial leasing within the country and abroad started its business in 1988. Theheadquarters of the Company is in Istanbul. The Company’s shares are traded in the Borsa İstanbul A.Ş .
İş Gayrimenkul Yatırım Ortaklığı A.Ş.
The Company whose main field of activity is investing in real estate, capital market instruments backed by real estate,
real estate projects and capital market instruments is conducting its business in the sector as a real estate investment trust
since 1999. The Company’s shares are traded in the Borsa İstanbul A.Ş. since its establishment .
İş Girişim Sermayesi Yatırım Ortaklığı A.Ş.
Having started its venture capital business in the year 2000, the aim of the company is performing long-term investments
to venture companies which have potential development and need resources where was founded and established in
Turkey. The company’s shares are traded in the Borsa İstanbul A.Ş. since the year 2004 .
İş Portföy Yönetimi A.Ş.
The purpose of the Company, which was founded in 2000, is to engage in capital market operations stated in its articles
of association. Among the capital market operations, the company offers portfolio management and investment
consulting services only to corporate investors.
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TÜRKİYE İŞ BANKASI AŞ NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE NINE-MONTH PERIOD ENDED 30 SEPTEMBER 2015(Amounts expressed in thousands Turkish Lira (TL) unless otherwise stated.)
4
İş Yatırım Menkul Değerler A.Ş.
The Company’s main field of activity is composed of intermediary, corporate finance, investment consulting and private portfolio management services. The Company’s shares are traded in the Borsa İstanbul A.Ş. since May 2007.
İş Yatırım Ortaklığı A.Ş.
The aim of the Company, which was founded in İstanbul in the year 1995, is operating capital market activities which islocated in the principal agreement, is portfolio management. The Company’s shares are traded in the Borsa İstanbul A.Ş.since April 1996.
İşbank AG
İşbank AG was founded to carry out the banking transactions in Europe. İşbank AG has 17 branches in total, 13 branchesin Germany, 1 branch in Netherlands, France, Switzerland and Bulgaria.
Maxis Investments Ltd.
The purpose of the Company, which was founded in England in the year 2005, is to operate in activities in foreign capital
markets.
Milli Reasürans T.A.Ş.
The Company, which was founded in 1929 to provide reinsurance services is located in Istanbul.
TSKB Gayrimenkul Yatırım Ortaklığı A.Ş.
The major field of activity of the Company, which was founded in 2006, is to create and develop an investment property
portfolio and to invest in capital market instruments that are based on investment properties. The Com pany’s shares aretraded in the Borsa İstanbul A.Ş. since April 2010.
Türkiye Sınai Kalkınma Bankası A.Ş.
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) which is an industrial development and an investment bank is foundedespecially to support private sector investments in industry and to provide domestic and foreign capital to Turkish
companies. The Bank’s shares are traded in the Borsa İstanbul A.Ş .
Yatırım Finansman Menkul Değerler A.Ş.
The Company was founded in İstanbul in 1976 . The purpose of the Company is to engage in capital market operationsstated in its articles of association. The company's headquarters is in Istanbul.
VII. Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders’ Equity Between theParent Bank and its Subsidiaries or the Reimbursement of Liabilities
None.
VIII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations,
Frequency and Accuracy of the Related Disclosures
The Parent Bank has written policies on assessment of ensuring compliance on market discipline, disclosure obligations,frequency and accuracy of related disclosures. The mentioned policies which are agreed by Board can be obtained from
the Parent Bank’s website.
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5
CURRENT PERIOD PRIOR PERIODASSETS Footnotes (30/09/2015) (31/12/2014)
TL FC Total TL FC TotalI . CASH AND BALANCES WITH THE CENTRAL BANK V-I-a 2,985,376 30,976,133 33,961,509 4,762,412 20,381,135 25,143,547II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (Net) V-I-b 1,108,242 2,254,319 3,362,561 1,367,861 892,309 2,260,1702.1 Financial Assets Held for Trading 1,108,242 2,254,319 3,362,561 1,367,861 892,309 2,260,170
2.1.1 Government Debt Securities 492,104 6,088 498,192 480,074 10,254 490,328
2.1.2 Equity Secur it ies 35,969 - 35,969 69,843 - 69,843
2.1.3 Derivative Financial Assets Held for Trading 54,240 2,216,470 2,270,710 231,499 849,572 1,081,071
2.1.4 Other Marketable Securities 525,929 31,761 557,690 586,445 32,483 618,928
2.2 Financial Assets at Fair Value Through Profit and Loss - - - - - -
2.2.1 Government Debt Securities - - - - - -
2.2.2 Equity Secur it ies - - - - - -
2.2.3 Loans - - - - - -
2.2.4 Other Marketable Securities - - - - - -
III. BANKS V-I-c 1,846,019 6,102,541 7,948,560 3,409,819 2,596,638 6,006,457
IV. MONEY MARKET PLACEMENTS 1,333,274 44,750 1,378,024 256,548 7,011 263,559
4.1 Interbank Money Market Placements - - - - - -
4.2 Istanbul Stock Exchange Money Market Placements 1,331,253 - 1,331,253 210,109 - 210,1094.3 Receivables from Reverse Repurchase Agreements 2,021 44,750 46,771 46,439 7,011 53,450
V. FINANCIAL ASSETS AVAILABLE-FOR-SALE (Net) V-I-d 36,395,164 11,433,741 47,828,905 37,461,468 8,215,661 45,677,129
5.1 Equity Securities 82,222 11,694 93,916 94,073 6,492 100,565
5.2 Government Debt Secur it ies 35,698,415 10,029,890 45,728,305 36,694,393 7,184,137 43,878,530
5.3 Other Marketable Securi ties 614,527 1,392,157 2,006,684 673,002 1,025,032 1,698,034
VI. LOANS AND RECEIVABLES V-I-e 115,752,672 81,580,957 197,333,629 103,048,356 65,279,732 168,328,088
6.1 Loans and Receivables 114,845,420 81,571,389 196,416,809 102,362,890 65,270,402 167,633,292
6.1.1 Loans to the Bank's Risk Group 110,856 246,587 357,443 117,710 327,516 445,226
6.1.2 Government Debt Securities - - - - - -
6.1.3 Other 114,734,564 81,324,802 196,059,366 102,245,180 64,942,886 167,188,066
6.2 Non-Performing L oans 3,322,095 129,247 3,451,342 2,579,077 120,424 2,699,501
6.3 Specif ic Provi sions (-) 2,414,843 119,679 2,534,522 1,893,611 111,094 2,004,705
VII. FACTORING RECEIVABLES 1,164,187 298,897 1,463,084 1,203,167 230,042 1,433,209
VIII. HELD TO MATURITY INVESTMENTS (Net) V-I-f 2,392,583 244,459 2,637,042 1,340,853 51,007 1,391,860
8.1 Government Debt Secur it ies 2,341,285 160,896 2,502,181 1,307,192 - 1,307,192
8.2 Other Marketable Securi ties 51,298 83,563 134,861 33,661 51,007 84,668
IX. INVESTMENTS IN ASSOCIATES (Net) V-I-g 147,729 - 147,729 800,199 - 800,199
9.1 Associates Accounted for Using the Equity Method 120,093 - 120,093 111,422 - 111,4229.2 Unconsolidated Associates 27,636 - 27,636 688,777 - 688,777
9.2.1 Financial Investments - - - - - -
9.2.2 Non-Financial Investments 27,636 - 27,636 688,777 - 688,777
X. INVESTMENTS IN SUBSIDIARIES (Net) V-I-h 4,372,652 - 4,372,652 4,810,446 - 4,810,446
10.1 Unconsolidated Financial Subsidiaries - - - - - -
10.2 Unconsolidated Non-Financial Subsidiaries 4,372,652 - 4,372,652 4,810,446 - 4,810,446
XI. JOINTLY CONTROLLED ENTITIES (JOINT VENTURES) (Net) V-I-i 1,260 - 1,260 510 - 510
11.1 Jointly Controlled Entities Accounted for Using the Equity Method - - - - - -
11.2 Unconsolidated Jointly Controlled Entities 1,260 - 1,260 510 - 510
11.2.1 Jointly Controlled Financial Entities - - - - - -
11.2.2 Jointly Controlled Non-Financial Entities 1,260 - 1,260 510 - 510
XII. LEASE RECEIVABLES V-I-j 1,129,556 2,159,683 3,289,239 933,928 1,812,271 2,746,19912.1 Finance Lease Receivables 1,358,303 2,432,219 3,790,522 1,137,663 2,081,338 3,219,001
12.2 Operating Lease Receivables 4,707 - 4,707 2,352 - 2,352
12.3 Other - - - - - -
12.4 Unearned Income (-) 233,454 272,536 505,990 206,087 269,067 475,154
XIII. DERIVATIVE FINANCIAL ASSETS HELD FOR HEDGING V-I-k - 38,628 38,628 - - -
13.1 Fa ir Value Hedges - 38,628 38,628 - - -
13.2 Cash Flow Hedges - - - - - -
13.3 Net Foreign Investment Hedges - - - - - -
XIV. TANGIBLE ASSETS (Net) V-I-l 5,497,532 56,668 5,554,200 2,300,532 83,156 2,383,688
XV. INTANGIBLE ASSETS (Net) 469,190 43,750 512,940 374,598 6,899 381,497
15.1 Goodwill 35,974 - 35,974 35,974 - 35,974
15.2 Other 433,216 43,750 476,966 338,624 6,899 345,523
XVI. INVESTMENT PROPERTY (Net) V-I-m 2,805,644 1,119 2,806,763 2,698,312 - 2,698,312
XVII. TAX ASSETS V-I-n 628,855 12,603 641,458 645,923 15,049 660,972
17.1 Current Tax Asset s 125,021 5,918 130,939 29,060 4,676 33,736
17.2 Deferred Tax Asset s 503,834 6,685 510,519 616,863 10,373 627,236
XVIII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) V-I-o 52,942 3,873 56,815 65,908 85 65,99318.1 Held for Sale 52,942 3,873 56,815 65,908 85 65,993
18.2 Discontinued Operations - - - - - -
XIX. OTHER ASSETS V-I-p 13,821,105 2,353,216 16,174,321 10,834,402 1,186,995 12,021,397
TOTAL ASSETS 191,903,982 137,605,337 329,509,319 176,315,242 100,757,990 277,073,232
TÜRK İYE İŞ BANKASI A.Ş. CONSOLIDATED FINANCIAL STATEMENTS (STATEMENT OF FINANCIAL POSITION)
THOUSAND TL
8/19/2019 ISBTR Consolidated Financials 2015
10/84
6
CURRENT PERIOD PRIOR PERIOD
LIABILITIES Footnotes (30/09/2015) (31/12/2014)
TL FC Total TL FC TotalI. DEPOSITS V-II-a 69,023,993 88,553,363 157,577,356 72,045,192 62,456,034 134,501,2261.1 Deposits from the Bank's Risk Group 719,826 3,257,026 3,976,852 560,159 2,639,078 3,199,237
1.2 Other 68,304,167 85,296,337 153,600,504 71,485,033 59,816,956 131,301,989
II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING V-II-b 757,974 797,058 1,555,032 260,929 488,912 749,841III. FUNDS BORROWED V-II-c 4,092,537 43,197,622 47,290,159 5,094,210 28,965,797 34,060,007IV. MONEY MARKET FUNDS 21,450,180 2,992,939 24,443,119 19,104,474 3,200,295 22,304,7694.1 Interbank Money Market Funds - - - - - -
4.2 Istanbul Stock Exchange Money Market Funds 2,044,657 - 2,044,657 2,291,363 - 2,291,363
4.3 Funds Provided Under Repurchase Agreements 19,405,523 2,992,939 22,398,462 16,813,111 3,200,295 20,013,406
V. MARKETABLE SECURITIES ISSUED (Net) V-II-d 8,140,356 17,298,655 25,439,011 6,146,268 12,450,824 18,597,0925.1 Bills 6,966,471 2,666,776 9,633,247 4,561,693 2,339,748 6,901,441
5.2 Asset-backed Securities - - - - - -
5.3 Bonds 1,173,885 14,631,879 15,805,764 1,584,575 10,111,076 11,695,651
VI. FUNDS 422 68,782 69,204 623 38,458 39,0816.1 Borrower funds 422 68,782 69,204 623 38,458 39,081
6.2 Other - - - - - -
VII. MISCELLANEOUS PAYABLES 15,956,225 1,346,286 17,302,511 13,547,566 847,934 14,395,500VIII. OTHER LIABILITIES V-II-e 2,596,890 1,056,972 3,653,862 1,483,272 1,714,707 3,197,979IX. FACTORING PAYABLES - - - - - -X. LEASE PAYABLES (Net) V-II-f - - - - - -10.1 Finance Lease Payables - - - - - -
10.2 Operating Lease Payables - - - - - -
10.3 Other - - - - - -
10.4 Deferred Financial Lease Expenses (-) - - - - - -
XI. DERIVATIVE FINANCIAL LIABILITIES HELD FOR RISK MANAGEMENT V-II-g - - - - - -
11.1 Fair Value Hedges - - - - - -
11.2 Cash Flow Hedges - - - - - -
11.3 Net Foreign Investment Hedges - - - - - -
XII. PROVISIONS V-II-h 12,059,698 1,018,049 13,077,747 11,272,580 810,935 12,083,51512.1 General Loan Loss Provisions 2,961,068 44,665 3,005,733 2,447,646 32,124 2,479,770
12.2 Provision for Restructuring - - - - - -
12.3 Reserves for Employee Benefits 585,476 1,067 586,543 522,159 1,817 523,976
12.4 Insurance Technical Reserves (Net) 4,919,023 948,265 5,867,288 4,533,412 753,987 5,287,399
12.5 Other Provisions 3,594,131 24,052 3,618,183 3,769,363 23,007 3,792,370XIII. TAX LIABILITIES V-II-i 394,525 2,403 396,928 752,251 2,556 754,80713.1 Current Tax Liabilities 388,338 2,403 390,741 745,675 2,556 748,231
13.2 Deferred Tax Liabilities 6,187 - 6,187 6,576 - 6,576
XIV. LIABILITIES RELATED TO ASSETS HELD FOR SALE ANDDISCONTINUED OPERATIONS - - - - - -
14.1 Held for Sale - - - - - -
14.2 Discontinued Operations - - - - - -
XV. SUBORDINATED DEBT - 4,421,474 4,421,474 - 3,384,849 3,384,849XVI. SHAREHOLDERS' EQUITY V-II-j 34,504,626 (221,710) 34,282,916 32,618,652 385,914 33,004,56616.1 Paid-in Capital 4,500,000 - 4,500,000 4,500,000 - 4,500,000
16.2 Capital Reserves 4,638,037 (363,046) 4,274,991 4,746,508 331,840 5,078,348
16.2.1 Share premium 33,941 - 33,941 33,941 - 33,941
16.2.2 Share Cancellation Profits - - - - - -
16.2.3 Marketable Securities Value Increase Fund 389,447 (367,228) 22,219 3,107,282 331,840 3,439,122
16.2.4 Tangible Assets Revaluation Reserve 2,609,364 4,182 2,613,546 - - -
16.2.5 Intangible Assets Revaluation Reserve - - - - - -
16.2.6 Investment Property Revaluation Reserve - - - - - -16.2.7 Bonus Shares Obtained from Associates, Subsidiaries and Jointly Controlled
Entities (Joint Ventures)
(1,179) - (1,179) (1,179) - (1,179)
16.2.8 Hedging Reserves (Effective Portion) - - - - - -
16.2.9 Accumulated Revaluation Reserves on Assets Held for Sale and Discontinued
Operations
- - - - - -
16.2.10 Other Capital Reserves 1,606,464 - 1,606,464 1,606,464 - 1,606,464
16.3 Profit Reserves 18,579,142 231,565 18,810,707 15,811,864 113,192 15,925,056
16.3.1 Legal Reserves 2,773,526 1,363 2,774,889 2,510,521 1,106 2,511,627
16.3.2 Statutory Reserves 71,201 - 71,201 64,234 - 64,234
16.3.3 Extraordinary Reserves 15,770,545 26,761 15,797,306 13,278,217 22,129 13,300,346
16.3.4 Other Profit Reserves (36,130) 203,441 167,311 (41,108) 89,957 48,849
16.4 Profit or Loss 2,385,015 (86,223) 2,298,792 3,503,004 (87,426) 3,415,578
16.4.1 Prior Years' Profit/Loss 30,316 (92,314) (61,998) (54,198) (53,943) (108,141)
16.4.2 Current Period Profit/Loss 2,354,699 6,091 2,360,790 3,557,202 (33,483) 3,523,719
16.5 Non-controlling Interest V-II-k 4,402,432 (4,006) 4,398,426 4,057,276 28,308 4,085,584
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 168,977,426 160,531,893 329,509,319 162,326,017 114,747,215 277,073,232
TÜRK İYE İŞ BANKASI A.Ş. CONSOLIDATED FINANCIAL STATEMENTS (STATEMENT OF FINANCIAL POSITION)
THOUSAND TL
8/19/2019 ISBTR Consolidated Financials 2015
11/84
7
(30/09/2015) (31/12/2014)TL FC Total TL FC Total
A. OFF-BALANCE SHEET CONTINGENCIES AND COMMITMENTS (I+II+III) 1 06,306,293 176,084,297 282,390,590 85,747,317 109,096,113 194,843,430I. GUARANTEES AND SURETYSHIPS V-III 2 0,944,307 37,703,577 58,647,884 18,327,481 26,335,832 44,663,3131.1 Letters of Guarantee 2 0,595,689 21,225,348 41,821,037 18,080,951 16,568,615 34,649,566
1.1.1 Guarantees Subject to State Tender Law 777,969 2,542,897 3,320,866 741,815 2,975,340 3,717,155
1.1.2 Guarantees Given for Foreign Trade Operations 3,715,150 7,572,303 11,287,453 3,205,517 5,001,864 8,207,381
1.1.3 Other Letters of Guarantee 16,102,570 11,110,148 27,212,718 14,133,619 8,591,411 22,725,030
1.2 Bank Acceptances 8,604 1,962,542 1,971,146 9,813 1,219,918 1,229,731
1.2.1 Import Letters of Acceptance - 422,435 422,435 - 413,697 413,697
1.2.2 Other Bank Acceptances 8,604 1,540,107 1,548,711 9,813 806,221 816,034
1.3 Letters of Credit 6,845 13,547,291 13,554,136 - 7,763,406 7,763,406
1.3.1 Documentary Letters of Credit - 10,206,047 10,206,047 - 5,580,303 5,580,303
1.3.2 Other Letters of Credit 6,845 3,341,244 3,348,089 - 2,183,103 2,183,103
1.4 Prefinancing Given as Guarantee - - - - - -
1.5 Endorsements - - - - - -
1.5.1 Endorsements to the Central Bank of Turkey - - - - - -
1.5.2 Other Endorsements - - - - - -
1.6 Purchase Guarantees for Securities Issued - - - - - -
1.7 Factoring Guarantees 35,899 10,860 46,759 88,602 11,941 100,543
1.8 Other Guarantees 297,270 957,536 1,254,806 148,115 771,952 920,067
1.9 Other Suretyships - - - - - -
II. COMMITMENTS 4 3,451,835 18,784,639 62,236,474 41,486,251 10,949,790 52,436,0412.1 Irrevocable Commitments 4 3,031,466 6,783,131 49,814,597 40,998,494 2,863,091 43,861,585
2.1.1 Forward Asset Purchase Commitments 291,203 4,707,892 4,999,095 67,689 977,497 1,045,186
2.1.2 Forward Deposit Purchase and Sale Commitments - - - - - -
2.1.3 Capital Commitment for Associates and Subsidiaries - - - - 121,296 121,296
2.1.4 Loan Granting Commitments 10,079,494 516,223 10,595,717 9,429,052 527,744 9,956,796
2.1.5 Securities Underwriting Commitments - - - - - -2.1.6 Commitments for Reserve Deposit Requirements - - - - - -
2.1.7 Commitments for Cheque Payments 5,939,254 - 5,939,254 5,875,007 - 5,875,007
2.1.8 Tax and Fund Liabilities from Export Commitments 21,078 - 21,078 17,932 - 17,932
2.1.9 Commitments for Credit Card Expenditure Limits 21,141,118 - 21,141,118 20,489,527 - 20,489,527
2.1.10 Commitments for Credit Cards and Banking Services Promotions 97,092 - 97,092 93,072 - 93,072
2.1.11 Receivables from Short Sale Commitments - - - - - -
2.1.12 Payables for Short Sale Commitments 11,056 - 11,056 9,784 - 9,784
2.1.13 Other Irrevocable Commitments 5 ,451,171 1,559,016 7,010,187 5,016,431 1,236,554 6,252,985
2.2 Revocable Commitments 420,369 12,001,508 12,421,877 487,757 8,086,699 8,574,456
2.2.1 Revocable Loan Granting Commitments 420,369 12,001,508 12,421,877 487,757 8,086,699 8,574,456
2.2.2 Other Revocable Commitments - - - - - -
III. DERIVATIVE FINANCIAL INSTRUMENTS 4 1,910,151 119,596,081 161,506,232 25,933,585 71,810,491 97,744,0763.1 Derivative Financial Instruments held for risk management - 4,860,000 4,860,000 - - -
3.1.1 Fair Value Hedges - 4,860,000 4,860,000 - - -
3.1.2 Cash Flow Hedges - - - - - -
3.1.3 Net Foreign Investment Hedges - - - - - -
3.2 Derivative Financial Instruments Held for Trading 4 1,910,151 114,736,081 156,646,232 25,933,585 71,810,491 97,744,076
3.2.1 Forward Foreign Currency Buy/Sell Transactions 4,205,426 9,554,109 13,759,535 2,714,269 5,622,700 8,336,969
3.2.1.1 Forward Foreign Currency Buy Transactions 1 ,742,382 5,107,801 6,850,183 1,822,359 2,346,843 4,169,2023.2.1.2 Forward Foreign Currency Sell Transactions 2,463,044 4,446,308 6,909,352 891,910 3,275,857 4,167,767
3.2.2 Currency and Interest Rate Swaps 31,236,615 87,547,154 118,783,769 20,108,674 54,556,119 74,664,793
3.2.2.1 Currency Swap Buy Transactions 6,976,092 34,256,479 41,232,571 5,688,362 18,851,307 24,539,669
3.2.2.2 Currency Swap Sell Transactions 2 0,795,683 16,371,307 37,166,990 10,533,432 12,171,340 22,704,772
3.2.2.3 Interest Rate Swap Buy Transactions 1,732,420 18,459,684 20,192,104 1,943,440 11,766,736 13,710,176
3.2.2.4 Interest Rate Swap Sell Transactions 1,732,420 18,459,684 20,192,104 1,943,440 11,766,736 13,710,176
3.2.3 Currency, Interest Rate and Security Options 6,455,324 11,336,337 17,791,661 3,089,757 9,344,729 12,434,486
3.2.3.1 Currency Call Options 3 ,959,922 4,225,262 8,185,184 1,671,738 3,817,040 5,488,778
3.2.3.2 Currency Put Options 2 ,399,512 5,472,837 7,872,349 1,391,746 4,062,605 5,454,351
3.2.3.3 Interest Rate Call Options 0 819,034 819,034 - 718,420 718,420
3.2.3.4 Interest Rate Put Options 0 819,034 819,034 - 718,420 718,420
3.2.3.5 Securities Call Options 40,561 160 40,721 21,813 - 21,813
3.2.3.6 Securities Put Options 55,329 10 55,339 4,460 28,244 32,704
3.2.4 Currency Futures 6,180 5,866 12,046 - - -
3.2.4.1 Currency Buy Futures 4,988 1,110 6,098 - - -
3.2.4.2 Currency Sell Futures 1,192 4,756 5,948 - - -
3.2.5 Interest Rate Futures - - - - - -
3.2.5.1 Interest Rate Buy Futures - - - - - -
3.2.5.2 Interest Rate Sell Futures - - - - - -
3.2.6 Other 6,606 6,292,615 6,299,221 20,885 2,286,943 2,307,828
B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) 354,233,165 223 ,790 ,180 578 ,023 ,345 310 ,820,922 163,759,459 474 ,580 ,381
IV. ITEMS HELD IN CUSTODY 125,685,782 13,855,307 139,541,089 127,338,013 10,976,275 138,314,2884.1 Customers’ Securities Held - - - - - -
4.2 Investment Securities Held in Custody 1 05,535,070 652,674 106,187,744 109,012,485 816,659 109,829,144
4.3 Cheques Received for Collection 1 4,224,895 4,533,459 18,758,354 12,836,400 3,297,909 16,134,309
4.4 Commercial Notes Received for Collection 2,794,085 7,352,612 10,146,697 2,464,130 5,685,294 8,149,424
4.5 Other Assets Received for Collection 14,110 4,282 18,392 9,682 4,143 13,825
4.6 Assets Received for Public Offering 2,541 - 2,541 2,541 - 2,541
4.7 Other Items under Custody 1 ,253,071 1,312,280 2,565,351 1,259,262 1,172,270 2,431,532
4.8 Custodians 1,862,010 - 1,862,010 1,753,513 - 1,753,513
V. PLEDGED ITEMS 228,547,383 209 ,934 ,873 438 ,482 ,256 183 ,482,909 152,783,184 336 ,266 ,0935.1 Marketable Securities 11,847,360 18,853,649 30,701,009 9,424,785 12,662,712 22,087,497
5.2 Guarantee Notes 6,006,710 13,656,395 19,663,105 6,034,317 11,016,838 17,051,155
5.3 Commodity 5 0,117,725 13,145,624 63,263,349 39,383,197 10,293,413 49,676,610
5.4 Warranty - - - - - -
5.5 Real Estates 1 45,785,544 102,969,594 248,755,138 118,504,932 77,658,683 196,163,615
5.6 Other Pledged Items 1 4,790,044 61,309,611 76,099,655 10,135,678 41,151,538 51,287,216
5.7 Pledged Items-Depository - - - - - -
VI. ACCEPTED BILL GUARANTEES AND SURETIES - - - - - -
TOTAL OFF-BALANCE SHEET ITEMS (A+B) 460,539,458 399 ,874 ,477 860 ,413 ,935 396 ,568,239 272,855,572 669 ,423 ,811
TÜRK İYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS
CURRENT PERIOD PRIOR PERIODOFF-BALANCE SHEET ITEMS
Footnotes
THOUSAND TL
8/19/2019 ISBTR Consolidated Financials 2015
12/84
8
Footnotes CURRENT PERIOD PRIOR PERIOD CURRENT PERIOD PRIOR PERIOD(01/01-30/09/2015) (01/01-30/09/2014) (01/07-30/09/2015) (01/07-30/09/2014)
I. INTEREST INCOME V-IV-a 15,690,686 13,062,474 5,630,655 4,527,060
1.1 Inter est Inco me o n Loans 12,066,157 9,708,033 4,347,529 3,402,809
1.2 Interest Income on Reserve Deposits 39,788 0 19,932 -
1.3 Inter est Inco me o n Banks 191,117 132,360 66,391 50,905
1.4 Interest Income on Money Market Placements 58,824 13,231 32,116 5,455
1.5 Interest Income on Marketable Securities Portfolio 3,040,512 3,002,721 1,058,064 995,964
1.5.1 Financial Assets Held for Trading 54,638 92,421 15,025 12,106
1.5.2 Financial Assets at Fair Value Through Profit and Loss - - - -
1.5.3 Financial Assets Available for Sale 2,938,379 2,258,648 1,035,044 813,466
1.5.4 Held to Maturity Investments 47,495 651,652 7,995 170,392
1.6 Finance Lease Income195,135 132,096 71,425 50,063
1.7 Other Interest Income 99,153 74,033 35,198 21,864
II. INTEREST EXPENSE V-IV-b 8,293,303 6,850,771 2,894,654 2,273,9412.1 Interest on Deposits 4,651,195 4,263,321 1,580,728 1,381,683
2.2 Inter est on Funds Bo rrowed 862,991 550,571 305,837 196,161
2.3 Interest on Money Market Funds 1,598,430 1,225,035 555,416 397,492
2.4 Interest on Securit ies Issued 1,150,664 756,982 446,999 285,481
2.5 Other Interest Expense 30,023 54,862 5,674 13,124
III. NET INTEREST INCOME / EXPENSE (I - II) 7,397,383 6,211,703 2,736,001 2,253,119IV. NET FEES AND COMMISSIONS INCOME / EXPENSE 1,295,406 1,113,435 426,479 383,6164.1 Fees and Commissions Received 2,090,152 1,762,402 722,430 602,608
4.1.1 Non-cash Loans 287,841 210,239 101,094 71,432
4.1.2 Other 1,802,311 1,552,163 621,336 531,176
4.2 Fees and Commissio ns Paid 794,746 648,967 295,951 218,992
4.2.1 Non-cash Loans 5,779 6,136 1,822 2,048
4.2.2 Other 788,967 642,831 294,129 216,944
V. DIVIDEND INCOME 256,686 291,988 248 68VI. TRADING INCOME / LOSS (NET) V-IV-c (299,376) 394,123 (364,945) 253,2996.1 Gains/Losses on Securit ies Trading 372,640 262,413 21,431 59,266
6.2 Derivative Financial Transactions Gains/Losses (44,767) (609,554) 343,495 (182,132)
6.3 Foreign Exchange Gains/Losses (627,249) 741,264 (729,871) 376,165
VII. OTHER OPERATING INCOME V-IV-d 4,330,588 3,721,146 1,544,986 1,143,036VIII. TOTAL OPERATING INCOME / EXPENSE (III+IV+V+VI+VII) 12,980,687 11,732,395 4,342,769 4,033,138IX. PROVISION FOR LOSSES ON LOANS AND OTHER RECEIVABLES (-) V-IV-e 1,770,282 1,299,713 511,035 306,863X. OTHER OPERATING EXPENSES (-) V-IV-f 7,856,929 6,938,937 2,827,884 2,376,535XI. NET OPERATING INCOME (VIII-IX-X) 3,353,476 3,493,745 1,003,850 1,349,740XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - - -XIII. PROFIT/LOSS FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD 8,671 12,280 2,295 3,642XIV. NET MONETARY POSITION GAIN/LOSS - - - -XV. PROFIT/LOSS ON CONTINUING OPERATIONS BEFORE TAX (XI+…+XIV) 3,362,147 3,506,025 1,006,145 1,353,382XVI. TAX PROVISION FOR CONTINUING OPERATIONS (±) V-IV-g 655,620 773,635 193,295 294,73316.1 Current Tax Provision 100,029 855,400 (50,605) 165,002
16.2 Deferred Tax Provision 555,591 (81,765) 243,900 129,731
XVII. NET PERIOD PROFIT/LOSS FROM CONTUNUING OPERATIONS (XV±XVI) 2,706,527 2,732,390 812,850 1,058,649XVIII. INCOME ON DISCONTINUED OPERATIONS - - - -18.1 Income on Assets Held for Sale - - - -
18.2 Gain on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) - - - -
18.3 Other Income on Discontinued Operations - - - -
XIX. EXPENSE ON DISCONTINUED OPERATIONS(-) - - - -
19.1 Expense on Assets Held for Sale - - - -19.2 Loss on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) - - - -
19.3 Other Expense on Discontinued Operations - - - -
XX. PROFIT/LOSS ON DISCONTINUED OPERATIONS BEFORE TAX (XVIII-XIX) - - - -XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) V-IV-g - - - -21.1 Cur rent Tax Pro visio n - - - -
21.2 Deferred Tax Provision - - - -
XXII. NET PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - - - -XXIII. NET PERIOD PROFIT/LOSS (XVII+XXII) V-IV-h 2,706,527 2,732,390 812,850 1,058,64923.1 Group’s Pro fit / Lo ss 2,360,790 2,452,355 655,086 977,716
23.2 Non-controlling Interest (-) 345,737 280,035 157,764 80,933
Earnings per Share (in full TL) 0 .020984380 0.021798275 0.005822870 0.008690635
INCOME STATEMENT
THOUSAND TL
TÜRK İYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF INCOME
8/19/2019 ISBTR Consolidated Financials 2015
13/84
TÜRK İYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF INCOME AND EXPENSE ITEMS UNDER
INCOME AND EXPENSE ITEMS ACCOUNTED UNDER SHAREHOLDERS’ EQUITY
I. ADDITIONS TO MARKETABLE SECURITIES VALUE INCREASE FUND FROM FINANCIAL ASSETS AVAILABLE FOR SALE
II. REVALUATION SURPLUS ON TANGIBLE ASSETS
III . REVALUATION SURPLUS ON INTANGIBLE ASSETS
IV. TRANSLATION ADJUSTMENT FOR FOREIGN CURRENCY TRANSACTIONS
V. PROFIT/LOSS ON DERIVATIVE FINANCIAL ASSETS HELD FOR CASH FLOW HEDGES (Effective Portion of the Changes in Fair Value)
VI. PROFIT/LOSS ON DERIVATIVE FINANCIAL ASSETS HELD FOR NET FOREIGN INVESTMENT HEDGES (Effective Portion of the Changes in Fair Value)
VII. THE EFFECT OF CORRECTIONS OF THE ERRORS AND CHANGES IN THE ACCOUNTING POLICIES
VIII. OTHER INCOME AND EXPENSES RECOGNISED UNDER SHAREHOLDERS’ EQUITY ACCORDANCE WITH TAS
IX. DEFERRED TAX EFFECT OF REVALUATION AND VALUE INCREASES
X. NET INCOME/EXPENSE DIRECTLY RECOGNISED UNDER SHAREHOLDERS’ EQUITY (I+II+…+IX)
XI. PROFIT/LOSS FOR THE PERIOD
11.1 Net Changes in the Fair Values of Marketable Securities (Transfer to Profit/Loss)
11.2 The Portion of Derivative Financial Assets Held for Cash Flow Hedges Reclassified in and Transferred to Income Statement
11.3 The Portion of Derivative Financial Assets Held for Net Foreign Investment Hedges Reclassified in and Transferred to Income Statement
11.4 Other
XII. TOTAL PROFIT/LOSS RECOGNISED FOR THE PERIOD (X±XI)
8/19/2019 ISBTR Consolidated Financials 2015
14/84
8/19/2019 ISBTR Consolidated Financials 2015
15/84
11
CURRENT PERIOD PRIOR PERIOD(01/01-30/09/2015) (01/01-30/09/2014)
A. CASH FLOWS FROM BANKING OPERATIONS1.1 Operating Profit Before Changes in Operating Assets and Liabilities 8,850,877 3,351,488
1.1.1 Interest Received 15,369,941 11,943,351
1.1.2 Interest Paid (7,876,195) (6,647,972)
1.1.3 Dividend Received 90,979 71,859
1.1.4 Fees and Commissions Received 2,090,152 1,762,402
1.1.5 Other Income 4,216,321 3,374,035
1.1.6 Collections from Previously Written Off Loans and Other Receivables 781,547 716,478
1.1.7 Cash Payments to Personnel and Service Suppliers (3,731,683) (3,455,101)
1.1.8 Taxes Paid (697,947) (991,824)
1.1.9 Other (1,392,238) (3,421,740)
1.2 Changes in Operating Assets and Liabilities (4,709,641) (8,262,188)
1.2.1 Net (Increase) Decrease in Financial Assets Held for Trading 77,245 83,372
1.2.2 Net(Increase) Decrease in Financial Assets at Fair Value through Profit or Loss - -
1.2.3 Net (Increase) Decrease in Due From Banks (9,606,594) (4,116,181)
1.2.4 Net (Increase) Decrease in Loans (15,771,642) (16,771,774)
1.2.5 Net (Increase) Decrease in Other Assets (3,383,101) (1,267,120)
1.2.6 Net Increase (Decrease) in Bank Deposits 330,636 1,939,250
1.2.7 Net Increase (Decrease) in Other Deposits 10,693,520 6,428,891
1.2.8 Net Increase (Decrease) in Funds Borrowed 8,240,736 2,700,040
1.2.9 Net Increase (Decrease) in Matured Payables - -
1.2.10 Net Increase (Decrease) in Other Liabilities 4,709,559 2,741,334
I. Net Cash Provided From Banking Operations 4,141,236 (4,910,700)
B. CASH FLOWS FROM INVESTING ACTIVITIES
II. Net Cash Provided from / Used in Investing Activities (5,210,320) (481,785)
2.1 Cash Paid for Purchase of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) (750) (5,715)
2.2 Cash Obtained from Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) 23,195 20,126
2.3 Tangible Asset Purchases (696,750) (368,743)
2.4 Tangible Asset Sales 316,256 224,940
2.5 Cash Paid for Purchase of Financial Assets Available for Sale (14,725,940) (15,078,839)
2.6 Cash Obtained from Sales of Financial Assets Available for Sale 9,039,432 10,617,634
2.7 Cash Paid for Purchase of Investment Securities Held to Maturity (176,390) (38,311)
2.8 Cash Obtained from Sales of Investment Securities Held to Maturity (*) 1,292,043 4,316,510
2.9 Other (281,416) (169,387)
C. CASH FLOWS FROM FINANCING ACTIVITIES
III. Net Cash Provided from / Used in Financing Activities 2,118,558 3,811,660
3.1 Cash Obtained from Funds Borrowed and Securities Issued 16,779,385 12,947,001
3.2 Cash Used for Repayment of Funds Borrowed and Securities Issued (13,690,084) (8,384,415)
3.3 Equity Instruments - -
3.4 Dividends Paid (970,743) (750,926)
3.5 Payments for Finance Leases - -
3.6 Other - -
IV. Effect of Change in Foreign Exchange Rate on Cash and Cash Equivalents 1,118,685 129,211
V. Net Increase / (Decrease) in Cash and Cash Equivalents 2,168,159 (1,451,614)
VI. Cash and Cash Equivalents at Beginning of the Period 13,562,316 13,042,609
VII. Cash and Cash Equivalents at End of the Period 15,730,475 11,590,995
(*) Redeemed invesment securities are included.
TÜRK İYE İŞ BANKASI A.Ş. CONSOLIDATED STATEMENT OF CASH FLOWS
THOUSAND TL
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SECTION THREE: EXPLANATIONS ON ACCOUNTING POLICIES
I. Basis of Presentation
1. Basis of Presentation
The consolidated financial statements, related notes and explanations in this report are prepared in accordance with the
Turkish Accounting Standards issued by the Public Oversight Accounting and Auditing Standards Authority (Turkish
Financial Reporting Standards-TFRS, Turkish Accounting Standards-TAS, TFRS and TMS interpretations) and
“Regulation on Accounting Applications for Banks and Safeguarding of Documents and other communiqués andinterpretations of Banking Regulation and Supervision Agency (“BRSA”) on accounting and financial reporting.
As indicated in Note XIII and Note XIV of Section Three, changes in the current period on accounting policies from
historical cost method to revaluation / fair value method for the real estates which held for the Group’s own use andinvestment properties. Accounting policy is applied retrospectively due to the changes in measurement of investment
properties and the financial statements of prior period are restated in accordance with the TAS 8 “Accounting Policies,Changes in Accounting Estimates and Errors”. The effects of aforementioned adjustments on financial statements dated 31December 2014, 30 September 2014 and 31 December 2013 are summarized below.
31 December 2014 Reported Adjustments Restated
Tangible assets(1) 2,386,849 (3,161) 2,383,688
Investment Properties 1,387,651 1,310,661 2,698,312
Deferred Tax Asset 637,937 (10,701) 627,236
Deferred Tax Liabilities 1,882 4,694 6,576
Prior Years' Profit/Loss (648,918) 540,777 (108,141)
Net Period Profit/Loss 3,351,828 171,891 3,523,719
Non-controlling Interest 3,506,147 579,437 4,085,584
(1) The effect of the reclassification of costs related to real estates which are held for Group’s own use and classified as tangible assets on consolidated financial statementsfrom investment properties in the financial statements.
30 September 2014 Reported Adjustments Restated
Other Operating Expense 6,954,108 (15,171) 6,938,937
Deferred Tax Provision (81,817) 52 (81,765)
Net Period Profit/Loss 2,717,271 15,119 2,732,390
Group’s Profit / Loss 2,445,110 7,245 2,452,355
Non-controlling Interest’s Profit/Loss 272,161 7,874 280,035
31 December 2013 Reported Adjustments Restated
Tangible assets(1) 2,234,328 (3,161) 2,231,167
Investment Properties 1,342,182 1,020,822 2,363,004
Deferred Tax Asset 666,543 (10,735) 655,808
Deferred Tax Liabilities 2,599 3,202 5,801
Prior Years' Profit/Loss 2,621,162 540,777 3,161,939
Non-controlling Interest 3,133,450 462,947 3,596,397
(1) The effect of the reclassification of costs related to real estates which are held for Group’s own use and classified as tangible assets on consolidated financial statementsfrom investment properties in the financial statements.
The accounting policies are consistent with the financial statements in prior period, except the changes in the current period
on accounting policies for real estates. Accounting policies applied and valuation methods used in the preparation of the
consolidated financial statements are expressed in detail below.
2. Additional paragraph for convenience translation to English
The differences between accounting principles, as described in the preceding paragraphs, and the accounting principles
generally accepted in countries, in which the accompanying consolidated financial statements are to be distributed, and
International Financial Reporting Standards (“IFRS”), may have significant influence on the accompanying consolidatedfinancial statements. Accordingly, the accompanying consolidated financial statements are not intended to present the
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financial position and results of operations in accordance with the accounting principles generally accepted in such countries
and IFRS.
II. Strategy for Use of Financial Instruments and on Foreign Currency Transactions
1. The Group’s Strategy on Financial Instruments
The Group’s main financial activities comprise a wide range of activities such as banking, insurance and reinsuranceservices, brokerage services, investment consulting, real estate portfolio and asset management, financial lease, factoring
services, portfolio and asset management. The liabilities on the Group’s balance sheet are mainly composed of relativelyshort-term deposits, parallel to general liability structure of the banking system, which is its main field of other activity. As
for the non-deposit liabilities, funds are collected through medium and short-term instruments. The liquidity risk that may
arise from this liability structure can be easily controlled through deposit continuity, as well as widespread network of thecorrespondent banks, market maker status (The Parent Bank is one of the market maker banks) and by the use of liquidity
facilities of the Central Bank of the Republic of Turkey (CBRT). The liquidity of the Group and the banking system can be
easily monitored. On the other hand, foreign currency liquidity requirements are met by the money market operations and
currency swaps.
Most of the funds collected bear fixed-interest, and by monitoring the developments in the sector fixed and floating rate
placements are made according to the yields of alternative investment instruments.
The fixed rate Eurobond issued and a portion of fixed rate funds borrowed are subject to fair value hedge accounting. The
Group enter into interest rate swap agreements in order to hedge the change in fair values of its fixed rate financial liabilities.
The changes in the fair value of the hedged fixed rate financial liabilities and hedging interest rate swaps are recognized
under the statement of profit/loss. At the beginning and later period of the hedging transaction, the aforementioned hedgingtransactions are expected to offset changes occurred in the relevant period of the hedging transaction and hedged risk
(attributable to hedging risk) and effectiveness tests are performed in this regard.
The hedge accounting is discontinued when the hedging instrument expires, is exercised, sold or no longer effective. When
discontinuing fair value hedge accounting, the cumulative fair value changes in carrying value of the hedged item arising
from the hedged risk are amortized and recognized in income statement over the life of the hedged item from that date of
the hedge accounting is discontinued.
By taking into account the global and national economic outlook, market conditions, current and potential credit customers’
expectations and tendencies, and risks such as; interest rate, liquidity and currency risks, the Group’s placements are focusedon high yielding and low risk assets and safety principle has always been the top priority. Generally a pricing policy aiming
at high return is implemented in the long-term placements of the Group, and attention is paid to the maximum use of non-
interest income generation opportunities. In management of Financial Statements, this strategy is parallel to and acts within
legal limits.
The primary objectives related to balance sheet components are set by the long-term plans shaped along with budgeting;
and the Parent Bank takes the required positions against the short-term currency, interest rates and price fluctuations in
accordance with these plans and the course of the market conditions.
Foreign currency, interest rate and price fluctuations in the markets are monitored instantaneously. While taking positions,
in addition to the legal limits, the Parent Bank’s own transaction and control limits are also effectively monitored in orderto avoid limit overrides.
The Parent Bank’s asset-liability management is executed by the Asset-Liability Management Committee, within the risk
limits determined by the Board of Directors, in order to keep the liquidity risk, interest rate risk, currency risk and creditrisk within certain limits depending on the equity adequacy and to maximize profitability.
2. Foreign Currency Transactions
The financial statements of the Parent Bank’s br anches and financial institutions that have been established abroad are prepared in functional currency prevailing in the economic environment that they operate in; and when they are
consolidated, they are presented in TL, which are the functional currency of the Parent Bank and also the currency used in
presentation of the financial statements.
Foreign currency monetary assets and liabilities on the balance sheet are converted into Turkish Lira by using the prevailingexchange rates at the balance sheet date. Non-monetary items in foreign currencies carried at fair value are converted into
Turkish Lira by the rates at the date of which the fair value is determined. Exchange rate differences arising from the
conversions of monetary foreign currency items and the collections of and payments in foreign currency transactions are
reflected to the income statement. In accordance with TAS 21 “Effects of Changes In Foreign Exchange Rates”, netinvestments in non-domestic companies are considered as non-monetary items, measured on the basis of historical cost and
converted into Turkish Currency at the currency rates at the transaction date, and also in accordance with TAS 29 “FinancialReporting In Hyperinflationary Economics”, the inflation adjusted value is calculated by using the inflation indices
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prevailing between the date of transaction and final date that the inflation adjustment is applied, 31 December 2004, and it
is accounted by allocating provision amounts for any permanent impairment losses.
While the Parent Bank and Türkiye Sınai Kalkınma Bankası A.Ş., one of the consolidated subsidiaries, use their own foreign
currency exchange rates for their foreign currency transactions, other institutions residing domestically use the CBRT ratesfor their foreign currency transactions.
Assets and liabilities of the foreign branches of the Parent Bank and financial institutions that have been established abroad
are converted into TL by using the prevailing exchange rates at the balance sheet date. Income and expenses are converted
by at exchange rates at the dates of the transactions. Incomes and expenses of foreign financial institutions are converted
into TL at average foreign currency rates as long as there is not a significant fluctuation in currency rates during the period.
The exchange rate differences arising from the conversion are recognized in the “Other Profit Reserves” account under theshareholders’ equity.
III. Information on the Consolidated Companies
1. Basis of Consolidation:
The consolidated financial statements have been prepared in accordance with the procedures listed in the “Communiqué Related to Regulation on the Preparation of the Consolidated Financial Statements of Banks” published in the OfficialGazette numbered 26340 dated 8 November 2006.
a. Basis of consolidation of subsidiaries:
A subsidiary is an entity that is controlled by the Parent.
Control is the power of the Parent Bank to appoint or remove from office the decision-taking majority of members of board
of directors through direct or indirect possession of the majority of a legal person’s capital irrespective of the requiremen tof owning minimum fifty-one per cent of its capital; or by having control over the majority of the voting right as a
consequence of holding privileged shares or of agreements with other shareholders although not owning the majority of
capital.
As per the “Communiqué Related to the Preparation of Consolidated Financial Statements of Banks” published in theOfficial Gazette numbered 26340 dated 8 November 2006, as at the current period, the Parent Bank has no subsidiaries,
qualified as credit institutions or financial institutions, excluded from consolidation. Detailed information about the
consolidated subsidiaries is given in Section Five, Note I.h.3.Under full consolidation method, the assets, liabilities, income and expenses and off-balance sheet items of subsidiaries are
combined with the equivalent items of the Parent Bank on a line-by-line basis. The book value of the Parent Bank's
investment in each of the subsidiaries and the Group’s portion of equity of each subsidiary are eliminated. All significanttransactions and balances between the Parent Bank and its consolidated subsidiaries are eliminated reciprocally. Non-
controlling interests in the net income and in the equity of consolidated subsidiaries are calculated separately from the
Group’s net income and the Group’s shareholders ' equity. Non-controlling interests are presented separately in the balancesheet and in the income statement.
Accounting policies used by the subsidiaries, that are included in the consolidated financial statements, are not different
than the Parent Bank’s. TFRS 3 “Business Combinations” standard prescribes no depreciation to be recognized for goodwill arising on theacquisitions on or after 31 March 2004, realizing positive goodwill as an asset and application of impairment analysis as of
balance sheet dates. In the same standard, it is also required from that date onwards that the negative goodwill, which occursin the case of the Group’s interest in the fair value of acquired identifiable assets and liabilities exceeds the acquisition costto be recognized in profit or loss.
Details of positive goodwill arising from Bank ’s investments to its subsidiaries in investment basis are as follows:
Name of the Investment Amount of the Positive Consolidation Goodwill
İş Finansal Kiralama A.Ş. 611
Türkiye Sınai Kalkınma Bankası A.Ş. 4,792
Anadolu Anonim Türk Sigorta Şirketi 1,767
JSC İşbank 28,804
Total 35,974
Due to the Bank does not have any associates and subsidiaries, the special purpose entities established within the Bank’ssecuritization loan transactions are included to the financial statements.
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b. Basis of consolidation of associates:
An associate is a domestic or foreign entity which the Parent Bank participates in its capital and over which it has a
significant influence but no control.
Significant influence is the power to participate in the financial and operating policy of the investee. If the Parent Bank
holds qualified shares in the associate, it is presumed that the Parent Bank has significant influence unless otherwise
demonstrated. A substantial or majority ownership by another investor does not necessarily preclude the Parent Bank from
having significant influence.
Qualified share is the share that directly or indirectly constitutes ten or more than ten percent of an entity’s capital or votingrights and irrespective of this requirement, possession of privileged shares giving right to appoint members of board of
directors.
Equity accounting method is an evaluation method of associates by which the Parent Bank’s share in the associates’ equityis compared with the book value of the associate accounted in the Parent Bank’s balance sheet. The difference is recognizedin profit or loss in the consolidated income statement.
Accounting policies of Arap Türk Bankası A.Ş., the only associate that is included in the consolidated financial statements by using the equity accounting method are not different than the Parent Bank’s. Detailed information about Arap TürkBankası A.Ş. is given in Section Five Note I.g.2
c. Basis of consolidation of joint ventures:
A joint venture is an agreement in which the Group has joint control, whereby the Group has rights to the net assets of the
arrangement, rather than rights to its assets and obligations for its liabilities.
The Bank does not have any jointly controlled entities which are financial institutions in nature and to be consolidated in
the financial statements by the equity method.
d. Principles applied during share transfer, merger and acquisition: None.
2. Presentation of unconsolidated subsidiaries, associates and jointly controlled entities in consolidated
financial statements:
In the consolidated financial statements, unconsolidated subsidiaries, associates and jointly controlled entities are presented
in accordance with TAS 39 “Turkish Accounting Standard for Financial Instruments: Recognition and Measurement”.Subsidiaries, whose equity shares are traded in an active market (stock market), are presented in the financial statements
with their fair values. Subsidiaries, associates and jointly controlled entities whose shares are not traded in an active market
(stock market), are recognized at cost of acquisition less any accumulated impairment losses.
IV. Forward, Option Contracts and Derivative Instruments
Derivative transactions of the Group consist of foreign currency and interest rate swaps, forwards, foreign currency optionsand interest rate options. The Group has no derivative instruments decomposed from the main contract.
The derivative instruments including both economic hedges and derivatives specified as hedging items are classified as
either “derivatives held for trading” or “derivatives held for hedging” as per the Turkish Accounting Standard (“TAS 39”)“Financial Instruments: Recognition and Measurement”.
Derivative instruments held for trading are carried at their fair values at the contract dates and the receivables and payables
arising from these transactions are followed under off-balance sheet accounts. Derivative transactions are valued at theirfair values in the reporting periods following their recording and the valuation differences are shown under the accounts,
“Derivative Financial Assets Held for Trading” and “Derivative Financial Liabilities Held for Trading”, depending on thedifference being positive or negative. Although some derivative transactions are qualified as economical hedging items,
they do not meet all the definition requirements of hedge accounting items. Therefore, under the Turkish Accounting
Standard No: 39 “Financial Instruments: Recognition and Measurement” (TAS 39), these derivative instruments arerecognized as held for trading. The valuation differences arising from the valuation of derivative transactions are associated
with the income statement.
Derivatives are designated as “derivative financial instruments held for hedging” if all necessary conditions are met toevaluate those as financial instruments for hedge accounting. Those derivatives are recognized initially at fair value; and
subsequent to initial recognition, derivatives are measured at fair value, and notional amounts are recognized in off-balance
sheet. Changes in fair value are recognized in “derivative financial assets held for hedging” and “derivative financialliabilities held for hedging” and therein recognized in profit or loss.
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On off-balance sheet items table, options which generated assets for the Parent Bank are presented under “call options” lineand which generated liabilities are presented under “put options” line.
V. Interest Income and Expenses
Interest income and expenses are recognized on an accrual basis using the effective interest method (the rate that equals the
future cash flows of a financial asset or liability to its present net book value) in conformity with TAS 39 “FinancialInstruments: Recognition and Measurement”.
In accordance with the related legislation, realized and unrealized interest accruals of the non-performing loans are reversed
and interest income related to these loans are recognized as an interest income only when they are collected.
VI. Fees and Commission Income and Expenses
Fees and commission income and expenses are recognized either on accrual basis or by using the effective interest method.
Income earned in return for services rendered contractually or due to operations like sale or purchase of assets on behalf of
a third party real person or corporate body are recognized in income accounts in the period of collection.
VII. Financial Assets
Financial assets are comprised of cash, contractual rights to obtain cash or another financial asset from or to exchangefinancial instruments with the counterparty, or the capital instrument transactions of the counterparty. According to the
Parent Bank management’s purpose of holding, the financial assets are classified into four groups as “Financial Assets atFair Value through Profit And Loss”, “Financial Assets Available for Sale”, “Held to Maturity Investments” and “Loansand Receivables”.
1. Cash and Banks
Cash consists of cash in vault, foreign currency cash, and money in transit, cheques purchased and precious metals. Foreign
currency cash and banks are shown in the balance sheet by their amounts converted into TL at the foreign exchange rate on
the balance sheet date. The carrying values of both the cash and banks are their estimated fair values.
2. Marketable Securities
a. Financial Assets at Fair Value through Profit And Loss
a.1. Financial Assets Held for Trading
Financial assets held for trading are those acquired for the purpose of generating profit from short term market fluctuations
in prices or similar elements, or securities which are part of a portfolio set up to realize short term profit regardless of the
purpose of acquisition.
Financial assets held for trading is presented in the balance sheet with their fair values are subject to valuation at fair values
after the initial recognition. In cases where values that form the basis for the fair value do not exist in active market
conditions, it is accepted that the fair value is not reliably determined and “amortized cost”, calculated by the internal ra teof return method, is taken into account as the fair value.
Any gains or losses resulting from such valuation are recognized in the profit and loss accounts. As per the explanations of
the Uniform Code of Accounts (UCA), any positive difference between the historical cost and amortized cost of financial
assets are recognized under the “Interest Income” account, and in case the fair value of the asset is over the amortized cost,the positive difference is recognized in the “Gains on Securities Trading” account. If the fair value is less than the amortizedcost, the negative difference is recognized under the “Losses on Securities Trading” account. Any profit or loss resultingfrom the disposal of those assets before their maturity date is recognized within the framework of the same principles.
a.2. Financial Assets at Fair Value through Profit and Loss
Financial assets at fair value through profit and loss represent the financial assets at fair value through profit and loss at the
initial recognition and those are not obtained for trading purposes. Recognition of fair value differences of those assets are
similar to the financial asset held for trading.
b. Financial Assets Available for Sale and Held to Maturity Investments
b.1. Financial Assets Available for Sale
Financial assets available for sale represent non-derivative financial assets other than bank loans and receivables, held to
maturity investments and financial assets at fair value through profit and loss. Initial recognition and subsequent valuationof financial assets available for sale are performed based on the fair value including transaction costs. The amount arising
from the difference between cost and amortized value is recognized through income statement by using the internal rate of
return. If a price does not occur in an active market, fair value cannot be reliably determined and “Amortized Value” is
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determined as the fair value using the internal rate of return. Unrealized gains and losses arising from changes in fair value
of the financial assets available for sale are not recognized in the income statement, they are recognized in the “MarketableSecurities Revaluation Fund” until the disposal, sale, redemption or incurring loss of those assets. Fair value differencesaccounted under equity arising from the application of fair value are reflected to the income statement when these assets
are sold or when the valuation difference is collected.
b.2. Held to Maturity Investments
Held to maturity investments are the investments, for which there is an intention of holding until maturity and the relevant
conditions for fulfillment of such intention, including the funding ability, and for which there are fixed or determinable
payments with fixed maturity; and which are recognized at fair value at initial recognition. Held to maturity investments
with the initial recognition at fair value including transaction costs are subject to valuation with their discounted cost value by using the internal rate of return method less provision for any impairment, if any. Interest income from held to maturity
investments are recognized in the income statement as an interest income.
There are no financial assets that are classified by the Group as held to maturity investments; however, they cannot be
classified under this classification for two years for not satisfying the requirements of the related classification.
3. Loans and Receivables
Loans and receivables represent unquoted financial assets in an active market that provide money, goods or services to the
debtor with fixed or determinable payments.
Loans and receivables are initially recognized with their fair values including settlement costs and carried at their amortized
costs calculated using the internal rate of return at the subsequent recognition.
Retail and commercial loans that are followed under cash loans are accounted at original maturities, based on their contents.
Foreign currency indexed consumer and corporate loans are followed at TL accounts after converting into TL by using the
opening exchange rates. At the subsequent periods, increases and decreases in the loan capital are recognized under theforeign currency income and expense accounts in the income statement depending on foreign currency rates being higher
or lower than opening date rates. Repayments are calculated using the exchange rates at the repayment dates and exchange
differences are recognized under the foreign currency income and expense accounts in the income statement.
VIII. Impairment of Financial Assets
At each balance sheet date, the Group companies evaluate the carrying amount of its financial assets or a group of its
financial assets to determine whether there is an objective indication that those assets have suffered an impairment loss. If
such indication exists, the Group determines the related impairment amount.
A financial asset or a group of financial assets is subject to impairment loss only if there is an objective indication that the
occurrence of one or more than one event (“loss event”) subsequent to the initial recognition of that asset has an effect onthe reliable estimate of the expected future cash flows of the related financial asset and asset group. Irrespective of their
high probability of incurrence, future expected losses are not recognized.
Impairment losses attributable to the held to maturity investments are measured as the difference between the present values
of estimated future cash flows discounted using the original interest rate of financial asset and the book value of asset. The
related difference is recognized as a loss and it decreases the book value of the financial asset. At subsequent periods, if the
impairment loss amount decreases, impairment loss recognized is reversed.
When an impairment occurs in the fair values of the “financial assets available for sale” of which value decreases andincreases are recognized in equity, the accumulated profit/loss that had been recognized directly in equity is transferred
from equity to period profit or loss. If the fair value of the related asset increases in a subsequent period, the amount of
increases are recognized in equity.
Loans are classified and followed in line with the provisions of the “Regulation on Procedures And Principles ForDetermination of Qualifications of Loans And Other Receivables By Banks And Provisions To Be Set Aside” , publishedon the Official Gazette numbered 26333 dated 1 November 2006. Within the scope of the relevant legislation the Parent
Bank was allocating specific provision for the non-performing loans and other receivables, the Parent Bank calculated to
allocate specific provisions in accordance with the minimum provision rates mentioned. Among the activities of the Group,
for the receivables from the financial leasing and factoring companies provisions are set aside in accordance with the
communiques “Financial Leasing, Factoring and Financing Companies and Financial Statements of the Regulation onAccounting Policy” published on the Official Gazette numbered 28861 dated 24 December 2013 and “Communiqué onPrinciples and Procedures for Financial Leasing, Factoring and Financing Companies’ Provisions To Be Set Aside” underthe special provision is made and published on the Official Gazette numbered 26558 dated 20 July 2007 and for receivables
acquired through the asset management activities in “Regulation on the Establishment and Operations of Asset ManagementCompanies” published on the Official Gazette numbered 26333 dated 1 November 2006 under the special provision are
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made. Specific provisions are reflected in the income statement. Provisions released in the same year, "Provision Expense"
account are credited in the past years, the remaining part of the provisions in the "Other Operating Income" account
transferred to and recognized.
Other than specific allowances, the Parent Bank and the financial institutions affiliated to the Group also provide “generalallowances” for loan and other receivables classified in accordance with the abovementioned legal regulations andcommuniqués.
IX. Offsetting Financial Instruments
A financial asset and a financial liability shall be offset and the net amount shall be presented in the balance sheet onlywhen a party currently has a legally enforceable right to set off the recognized amounts or intends either to settle on a net
basis or to realize the asset and settle the liability simultaneously.
X. Sale and Repurchase Agreements and Securities Lending Transactions
Marketable securities subject to repurchase agreements are classified under “Available for Sale Financial Assets” or “Heldto Maturity Investments” in the Parent Bank’s portfolio and they are valued according to the valuation principles of therelated portfolios.
Funds obtained from the repurchase agreements are recognized under “Funds from Repurchase Transactions” account inliabilities. For the difference between the sale and repurchase prices determined by the repo agreements for the period;expense accrual is calculated using the internal rate of return method.
Reverse repo transactions are recognized under the “Receivables from Reverse Repurchase Transactions” account. For thedifference between the purchase and resale prices determined by the reverse Repurchase agreements for the period; income
accrual is calculated using the internal rate of return method.
XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities
Assets that meet the criteria to be classified as held for sale are measured at the lower of its carrying amount and fair value
less costs to sell and presented in the financial statements separately. In order to classify a tangible fixed asset as held for
sale, the asset (or the disposal group) should be available