RNS Number:6618O
Turk Ekonomi Bankasi A.S.
14 August 2003
PART 1
Turk Ekonomi Bankasi
Anonim Sirketi
Unconsolidated Financial Statements
As of June 30, 2003
Together With Review Report
(CONVENIENCE TRANSLATION OF A REPORT AND FINANCIAL STATEMENTS
ORIGINALLY ISSUED IN TURKISH- SEE SECTION III, NOTE XXV)
(Convenience Translation of A Report And Financial Statements
Originally Issued In Turkish - See Section III, Note XXV)
TURK EKONOMI BANKASI ANONIM SIRKETI
REVIEW REPORT AS OF JUNE 30, 2003
We have reviewed the balance sheet of Turk Ekonomi Bankasi Anonim Sirketi as of
June 30, 2003 and the related statements of income, shareholders' equity and
cash flows for the interim period then ended. These financial statements are
expressed in the equivalent purchasing power of Turkish lira as of June 30,
2003. These financial statements are the responsibility of the Bank's
management. Our responsibility as independent auditors is to issue a review
report on these financial statements based on our review.
We conducted our review in accordance with the auditing standards which were
determined under the provisions of Banking Law Number 4389. These standards
require that the review should be planned and performed to obtain limited
assurance as to whether the financial statements are free of material
misstatement. A review is limited primarily to inquires of bank personnel and
analytical procedures applied to financial data and thus provides less assurance
than an audit. We have not performed an audit and, accordingly we do not
express an opinion.
The financial statements of Turk Ekonomi Bankasi Anonim Sirketi for the period
ended June 30, 2002 were examined by other auditors who have ceased its
operations and whose report dated July 26, 2002 expressed that nothing has come
to their attention that causes them to believe that those interim financial
statements were not presented fairly, in all material respects, in accordance
with the accounting principles and standards that are based on the Article 13 of
the Banking Law number 4389.
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial statements of Turk Ekonomi Bankasi
Anonim Sirketi at June 30, 2003 are not presented fairly, in all material
respects, in accordance with the accounting principles and standards that are
based on the Article 13 of the Banking Law number 4389.
Additional paragraph for convenience translation to English:
The above mentioned accounting principles differ from International Financial
Reporting Standards (IFRS) issued by International Accounting Standards Board
and so far as such differences apply to the financial statements of the Bank
they mainly relate to the format of financial statements and disclosure
requirements, accounting for deferred taxes and accounting for retirement pay
liabilities. The effects of the differences between these accounting principles
and accounting principles generally accepted in the countries in which the
accompanying financial statements are to be used and IFRS have not been
quantified in the accompanying financial statements. Accordingly, the
accompanying financial statements are not intended to present the financial
position and results of operations in accordance with the accounting principles
generally accepted in the countries of users of the financial statements and
IFRS. The Bank's consolidated financial statements prepared in accordance with
the accounting principles and standards that are based on the Article 13 of the
Banking Law number 4389 will be issued separately.
Guney Serbest Muhasebeci Mali Musavirlik Anonim Sirketi
An Affiliated Firm of Ernst & Young International
Esra Peri, SMMM
August 12, 2003
Istanbul, Turkey
INDEX
SECTION ONE Page no.
General Information
I. Footnotes and Explanations on the Bank's Service Activities and Operating Areas 1
II. The Explanations and Footnotes Regarding the Including Group of the Bank 1
III. The Explanations Regarding the Interim Financial Statements of the Bank 1
SECTION TWO
Unconsolidated Interim Financial Statements
I. Balance Sheets - Assets 3
II. Balance Sheets - Liabilities 4
III. Statements of Income 5
IV. Statements of Off Balance Sheet Commitments 6
V. Statements of Changes in Shareholders' Equity 7
VI. Statements of Cash Flows 8
SECTION THREE
Accounting Principles
I. Basis of Presentation 9
II. Explanations on Forward, Option Contracts and Derivative Instruments 10
III. Netting of Financial Assets and Liabilities 10
IV. Interest Income and Expense 10
V. Fees and Commission Income and Expenses 10
VI. Securities Held for Trading 11
VII. Sales and Repurchase Agreements and Lending of Securities 11
VIII. Securities Held to Maturity, Securities Available for Sale and Bank Originated Loans
and Receivables 11
IX. Participations 12
X. Subsidiaries 12
XI. Originated Loans and Receivables and Provisions for Loan Impairment 12
XII. Goodwill and Other Intangible Fixed Assets 13
XIII. Tangible Fixed Assets 13
XIV. Leasing Transactions 14
XV. Provisions and Contingent Liabilities 14
XVI. Liabilities Regarding Employee Benefits 15
XVII. Taxation 15
XVIII.Additional Explanations on Borrowings 16
XIX. Paid-in Capital and Share Certificates 16
XX. Acceptances 16
XXI. Government Incentives 16
XXII. Securities at Custody 16
XXIII. Impairment of Assets 16
XXIV. Segment Reporting 16
XXV. Other Matters 17
SECTION FOUR
Information on Financial Structure
I. Capital Adequacy Standard Ratio 18
II. Market Risk 21
III. Foreign Currency Risk 21
IV. Interest Rate Risk 23
V. Liquidity Risk 25
SECTION FIVE
Footnotes and Explanations on Unconsolidated Financial Statements
I. Footnotes and Explanations Related to the Assets 27
II. Footnotes and Explanations Related to the Liabilities 35
III. Footnotes and Explanations Related to the Income Statement 39
IV. Footnotes and Explanations Related to the Off-balance Sheet Commitments 41
V. Footnotes and Explanations Related to the Statements of Cash Flows 43
VI. Footnotes and Explanations on the Risk Group of the Bank 44
VII. Footnotes and Explanations on Inflation Accounting 46
VIII. Explanations Related to Subsequent Events 48
SECTION SIX
Independent Limited Review Report
I. The Explanations on the Independent Limited Review Report 48
SECTION ONE
GENERAL INFORMATION
I- Footnotes and Explanations on the Bank's Service Activities and Operating Areas
a) Commercial name of the Bank : Turk Ekonomi Bankasi Anonim Sirketi (the Bank)
Reporting period : 1 January - 30 June 2003
Address of the head office : Meclis-i Mebusan Caddesi No: 35
Findikli 34427 - ISTANBUL
Telephone number : (0212) 251 21 21
Facsimile number : (0212) 249 65 68
Web page : www.teb.com.tr
E-mail address : www.teb.com.tr
b) The Bank's service activities and operating areas: The Bank's operating
areas include, commercial financing and corporate banking, fund management
operations, retail banking and credit card operations.
c) Financial statements and relevant explanations together with the
footnotes are stated in Billions of Turkish Lira.
II. The Explanations and Footnotes Regarding the Group of the Bank
The Group of the Bank: Turk Ekonomi Bankasi Anonim Sirketi ("the Bank") is
included in the Colakoglu Group. 70.08% of the shares of the Bank belongs to TEB
Mali Yatirimlar Anonim Sirketi (TEB Mali Yatirimlar) and 8.60% of the shares
belongs to Colakoglu Metalurji Anonim Sirketi.
III. Explanations on The Interim Financial Statements
a) Accounting principles and basis of valuation used in the preparation of
year-end financial statements are also used for the preparation of interim
financial statements without any changes or exceptions, and are summarized in
Section Three below.
b) There are no transactions realized in the interim period that display a
seasonal or a periodical nature.
c) There are no non-recurring transactions or basic accounting
misstatements.
d) There are no extraordinary items in terms of nature or amount that
effect the assets, liabilities, equity, net income or the cash flow of the Bank.
e) Prior period interim financial statements, do not contain any changes
with respect to the estimated values related with the current period. There are
no items in the prior period financial statements that are recorded with their
estimated value.
f) There are no convertible bonds or any other debt securities issued
during the current period.
g) In accordance with the decision related with the distribution of
profit, declared at the Annual General Meeting of the Bank dated March 27, 2003,
the Bank distributed dividends to its shareholders in the current period
starting at April 4, 2003.
h) There are no subsequent events that occurred after the preparation date
of the interim financial statements which have a material impact on the interim
financial statements.
i) There are no transactions that may cause a structural change for the
Bank such as restructuring, mergers and acquisitions, or discontinue of any
operations.
j) There are no changes in the subsequent commitments and contingencies
of the Bank that have arisen after the year-end balance sheet date.
SECTION TWO
UNCONSOLIDATED INTERIM FINANCIAL STATEMENTS
I. Balance Sheets - Assets
II. Balance Sheets - Liabilities
III. Statements of Income
IV. Statements of Off Balance Sheet Commitments
V. Statements of Changes in Shareholders' Equity
VI. Statements of Cash Flows
I- BALANCE SHEETS - ASSETS
Reviewed Audited
Current Period Prior Period
Note Ref. 30.06.2003 31.12.2002
ASSETS (Section TL FC Total TL FC Total
five)
I. CASH AND BALANCES WITH THE CENTRAL 24,040 412,972 437,012 23,252 455,508 478,760
BANK OF TURKEY
1.1 Cash 10,572 - 10,572 6,755 - 6,755
1.2 Foreign currency - 61,012 61,012 - 89,875 89,875
1.3 Balances with the Central Bank of I-1 13,468 351,960 365,428 16,497 365,633 382,130
Turkey
II. TRADING SECURITIES (Net) 69,999 11,888 81,887 27,861 3,277 31,138
2.1 Public sector debt securities I-2 69,999 11,536 81,535 27,861 2,974 30,835
2.1.1 Government bonds I-2 54,168 655 54,823 21,461 2,974 24,435
2.1.2 Treasury bills I-2 15,830 - 15,830 6,399 - 6,399
2.1.3 Other I-2 1 10,881 10,882 1 - 1
2.2 Share certificates - - - - - -
2.3 Other marketable securities - 352 352 - 303 303
III. BANKS AND OTHER FINANCIAL 44,554 261,698 306,252 25,650 339,125 364,775
INSTITUTIONS
3.1 Due from banks 44,554 261,698 306,252 25,650 339,125 364,775
3.1.1 Domestic banks 39,514 91,519 131,033 25,650 117,920 143,570
3.1.2 Foreign banks 5,040 170,179 175,219 - 221,205 221,205
3.2 Other financial institutions - - - - - -
IV. MONEY MARKET PLACEMENTS 153,850 90,089 243,939 253,325 199,241 452,566
4.1 Interbank money market placements 153,850 90,089 243,939 253,325 199,241 452,566
4.2 Istanbul Stock Exchange money market - - - - - -
placements
4.3 Receivables from reverse repurchase - - - - - -
agreements
V. SECURITIES AVAILABLE FOR SALE (Net) 8 29,018 29,026 10 18,790 18,800
5.1 Share certificates I-3 8 - 8 10 - 10
5.2 Other marketable securities I-3 - 29,018 29,018 - 18,790 18,790
VI. LOANS 433,523 457,322 890,845 396,907 496,974 893,881
6.1 Short term I-4 395,410 436,402 831,812 368,121 478,649 846,770
6.2 Medium and long term I-4 32,913 20,920 53,833 23,254 18,325 41,579
6.3 Loans under follow-up I-4 20,231 - 20,231 22,532 - 22,532
6.4 Specific provisions (-) I-4 (15,031) - (15,031) (17,000) - (17,000)
VII. FACTORING RECEIVABLES - - - - - -
VIII. SECURITIES HELD TO MATURITY (Net) 38,367 - 38,367 40,752 - 40,752
8.1 Public sector debt securities I-5 38,367 - 38,367 40,752 - 40,752
8.1.1 Government bonds I-5 38,367 - 38,367 40,752 - 40,752
8.1.2 Treasury bills I-5 - - - - - -
8.1.3 Other I-5 - - - - - -
8.2 Other marketable securities I-5 - - - - - -
IX. INVESTMENTS AND ASSOCIATES (Net) 6,180 - 6,180 6,291 - 6,291
9.1 Financial investments and associates I-6 6,180 - 6,180 6,291 - 6,291
9.2 Non-Financial investments and - - - - - -
associates
X. SUBSIDIARIES (Net) 66,194 49,009 115,203 64,014 48,767 112,781
10.1 Financial subsidiaries I-7 66,194 49,009 115,203 64,014 48,767 112,781
10.2 Non-Financial subsidiaries - - - - - -
XI. OTHER INVESTMENTS (Net) - - - - - -
XII. FINANCE LEASE RECEIVABLES (Net) - - - - - -
12.1 Gross finance lease receivables I-8 - - - - - -
12.2 Unearned income ( - ) I-8 - - - - - -
XIII. RESERVE DEPOSITS - 9,624 113,193 122,817 10,302 136,738 147,040
XIV. MISCELLANEOUS RECEIVABLES 417 461 878 291 43 334
XV. ACCRUED INTEREST AND INCOME 28,755 3,724 32,479 26,821 3,756 30,577
RECEIVABLES
15.1 Loans I-9 7,916 2,952 10,868 10,403 2,924 13,327
15.2 Marketable securities I-9 6,571 531 7,102 4,466 416 4,882
15.3 Other I-9 14,268 241 14,509 11,952 416 12,368
XVI. PROPERTY AND EQUIPMENT (Net) 39,987 - 39,987 41,507 - 41,507
16.1 Book value 93,339 - 93,339 93,357 - 93,357
16.2 Accumulated depreciation ( - ) (53,352) - (53,352) (51,850) - (51,850)
XVII. INTANGIBLE ASSETS (Net) 3,603 - 3,603 3,303 - 3,303
17.1 Goodwill - - - - - -
17.2 Other 8,211 - 8,211 7,347 - 7,347
17.3 Accumulated amortization ( - ) (4,608) - (4,608) (4,044) - (4,044)
XVIII. OTHER ASSETS I-10 17,922 3,089 21,011 20,991 1,990 22,981
TOTAL ASSETS 937,023 1,432,463 2,369,486 941,277 1,704,209 2,645,486
The accompanying notes are an integral part of these balance sheets.
II- BALANCE SHEETS - LIABILITIES
Reviewed Audited
Current Period Prior Period
Note Ref. 30.06.2003 31.12.2002
LIABILITIES (Section TL FC Total TL FC Total
five)
I. DEPOSITS 391,990 1,172,148 1,564,138 397,767 1,487,807 1,885,574
1.1 Bank deposits II-1 30,411 43,688 74,099 20,410 46,412 66,822
1.2 Saving deposits II-1 186,748 - 186,748 182,331 - 182,331
1.3 Public sector deposits II-1 10,863 - 10,863 39 - 39
1.4 Commercial deposits II-1 119,253 - 119,253 157,966 - 157,966
1.5 Other institutions deposits II-1 44,715 - 44,715 37,021 - 37,021
1.6 Foreign currency deposits II-1 - 1,119,135 1,119,135 - 1,416,364 1,416,364
1.7 Precious metals deposit accounts II-1 - 9,325 9,325 - 25,031 25,031
II. MONEY MARKET BALANCES 21,930 - 21,930 25,416 - 25,416
2.1 Interbank money market takings - - - - - -
2.2 Istanbul Stock Exchange money market - - - - - -
takings
2.3 Funds provided under repurchase II-2 21,930 - 21,930 25,416 - 25,416
agreements
III. FUNDS BORROWED 21,138 278,378 299,516 17,775 275,445 293,220
3.1 Funds borrowed from the Central Bank - - - - - -
of Turkey
3.2 Other funds borrowed II-3 21,138 278,378 299,516 17,775 275,445 293,220
3.2.1 Domestic banks and institutions II-3 21,138 22,389 43,527 17,775 13,538 31,313
3.2.2 Foreign banks, institutions and II-3 - 255,989 255,989 - 261,907 261,907
funds
IV. MARKETABLE SECURITIES ISSUED (Net) - - - - - -
4.1 Bills II-4 - - - - - -
4.2 Asset backed securities II-4 - - - - - -
4.3 Bonds II-4 - - - - - -
V. FUNDS II-5 - - - - - -
VI. MISCELLANEOUS PAYABLES II-6 12,056 27,873 39,929 12,097 27,462 39,559
VII. OTHER EXTERNAL RESOURCES II-7 42,473 14,019 56,492 20,785 7,363 28,148
VIII. TAXES AND OTHER DUTIES PAYABLE 9,222 - 9,222 6,630 - 6,630
IX. FACTORING PAYABLES - - - - - -
X. FINANCE LEASE PAYABLES (Net) - 6,022 6,022 - 7,520 7,520
10.1 Finance Lease Payables II-8 - 7,257 7,257 - 9,113 9,113
10.2 Deferred finance lease expenses ( - ) II-8 - 1,235 1,235 - 1,593 1,593
XI. ACCRUED INTEREST AND EXPENSES PAYABLE 33,523 2,328 35,851 13,884 2,716 16,600
11.1 Deposits II-9 7,427 1,364 8,791 5,845 1,128 6,973
11.2 Borrowings II-9 1,638 964 2,602 1,808 1,588 3,396
11.3 Repurchase agreements II-9 23 - 23 31 - 31
11.4 Other II-9 24,435 - 24,435 6,200 - 6,200
XII. PROVISIONS 26,148 - 26,148 30,267 - 30,267
12.1 General provisions II-10 6,753 - 6,753 6,792 - 6,792
12.2 Reserve for employee termination II-10 912 - 912 1,032 - 1,032
benefits
12.3 Provisions for income taxes II-10 17,947 - 17,947 21,840 - 21,840
12.4 Insurance technical reserves (Net) - - - - - - -
12.5 Other provisions II-10 536 - 536 603 - 603
XIII. SUBORDINATED LOANS II-10 - 21,115 21,115 - 27,418 27,418
XIV. SHAREHOLDERS' EQUITY 289,060 63 289,123 285,134 - 285,134
14.1 Paid-in capital II-11 55,125 - 55,125 55,125 - 55,125
14.2 Supplementary capital 209,152 63 209,215 209,371 - 209,371
14.2.1 Share premium II-12 - - - - - -
14.2.2 Share cancellation profits - - - - - -
14.2.3 Marketable securities value increase 5 63 68 224 - 224
fund
14.2.4 Revaluation fund - - - - - -
14.2.5 Value increase in revaluation fund - - - - - -
14.2.6 Other capital reserves - - - - - -
Effect on inflation accounting on 209,147 - 209,147 209,147 - 209,147
14.2.7. share capital
14.3 Profit reserves 2,390 - 2,390 - - -
14.3.1 Legal reserves 2,390 - 2,390 - - -
14.3.2 Status reserves - - - - - -
14.3.3 Extraordinary reserves - - - - - -
14.3.4 Other profit reserves - - - - - -
14.4 Profit or loss 22,393 - 22,393 20,638 - 20,638
14.4.1 Prior year income/loss 2,275 - 2,275 - - -
14.4.2 Current year income/loss 20,118 - 20,118 20,638 - 20,638
TOTAL LIABILITIES 847,540 1,521,946 2,369,486 809,755 1,835,731 2,645,486
The accompanying notes are an integral part of these balance sheets.
Reviewed Reviewed Reviewed Not
Reviewed
Current Prior 01.04.2003 01.04.2002
Period Period
Note Ref. - -
30.06.2003 30.06.2002 30.06.2003 30.06.2002
INCOME AND EXPENSES (Section Total Total Total Total
five)
I. INTEREST INCOME III-1 159,764 197,619 74,266 100,915
1.1 Interest on loans 82,250 87,453 39,847 46,389
1.1.1 Interest on TL loans 69,320 72,255 33,829 38,029
1.1.1.1 Short term loans 65,803 67,847 32,682 35,381
1.1.1.2 Medium and long term loans 3,517 4,408 1,147 2,648
1.1.2 Interest on foreign currency loans 12,770 14,932 5,966 8,164
1.1.2.1 Short term loans 12,128 14,366 5,669 7,898
1.1.2.2 Medium and long term loans 642 566 297 266
1.1.3 Interest on loans under follow-up 160 266 52 196
1.1.4 Premiums received from Resource Utilisation - - - -
Support Fund
1.2 Interest received from reserve deposits 2,815 1,924 1,308 928
1.3 Interest received from banks 13,730 5,973 6,811 3,136
1.3.1 The Central Bank of Turkey - - - -
1.3.2 Domestic banks 10,416 3,688 5,321 2,124
1.3.3 Foreign banks 3,314 2,285 1,490 1,012
1.4 Interest received from money market 48,196 56,467 19,945 22,339
transactions
1.5 Interest received from marketable securities 12,561 45,529 6,243 28,010
portfolio
1.5.1 Trading securities 2,217 45,529 1,220 28,010
1.5.2 Available-for-sale securities 791 - 49 -
1.5.3 Held to maturity securities 9,553 - 4,974 -
1.6 Other interest income 212 273 112 113
II. INTEREST EXPENSE III-2 92,857 103,452 52,953 47,832
2.1 Interest on deposits 62,879 62,908 31,668 26,557
2.1.1 Bank deposits 5,145 4,972 2,688 3,178
2.1.2 Saving deposits 33,734 30,501 17,061 11,912
2.1.3 Public sector deposits - 4 - 3
2.1.4 Commercial deposits 12,401 17,422 5,786 6,623
2.1.5 Other institutions deposits 195 41 100 (33)
2.1.6 Foreign currency deposits 11,323 9,895 6,015 4,837
2.1.7 Precious metals vault accounts 81 73 18 37
2.2 Interest on money market transactions - 36 - 1
2.3 Interest on funds borrowed 8,904 20,510 4,306 8,450
2.3.1 The Central Bank of Turkey - - - -
2.3.2 Domestic banks 4,267 3,782 2,189 1,778
2.3.3 Foreign banks 4,637 14,101 2,117 5,326
2.3.4 Other financial institutions - 2,627 - 1,346
2.4 Interest on securities issued - - - -
2.5 Other interest expense 21,074 19,998 16,979 12,824
III. NET INTEREST INCOME (I - II) 66,907 94,167 21,313 53,083
IV. NET FEES AND COMMISSIONS INCOME 9,232 10,666 4,387 4,417
4.1 Fees and commissions received 16,658 15,791 7,966 7,180
4.1.1 Cash loans 1,872 1,361 822 534
4.1.2 Non-cash loans 4,502 4,010 2,257 1,939
4.1.3 Other 10,284 10,420 4,887 4,707
4.2 Fees and commissions paid 7,426 5,125 3,579 2,764
4.2.1 Cash loans 1,327 743 671 (380)
4.2.2 Non-cash loans 17 23 12 17
4.2.3 Other 6,082 4,359 2,896 3,127
V. DIVIDEND INCOME - - - -
5.1 Trading securities - - - -
5.2 Available-for-sale securities - - - -
VI. NET TRADING INCOME 20,856 (1,173) 25,768 (7,295)
6.1 Profit/losses on trading account securities 12,705 2,937 10,837 1,170
(Net)
6.2 Foreign exchange gains/losses (Net) 8,151 (4,110) 14,931 (8,465)
VII PROFIT/LOSS FROM HELD TO MATURITY MARKETABLE III-3
SECURITIES
- - - -
VIII. OTHER OPERATING INCOME III-4 8,384 6,779 3,503 3,525
IX. TOTAL OPERATING INCOME (III+IV+V+VI+VII+VIII) 105,379 110,439 54,971 53,729
X. PROVISION FOR LOAN LOSSES OR OTHER RECEIVABLES III-5 2,361 9,555 939 644
(-)
XI. OTHER OPERATING EXPENSES (-) III-6 58,751 58,549 29,024 32,459
XII. NET OPERATING INCOME (IX-X-XI) 44,267 42,335 25,008 20,626
XIII. PROFIT/LOSSES FROM ASSOCIATES AND SUBSIDIARIES III-7 11,668 3,825 121 438
XIV. NET POSITION INCOME/EXPENSE (20,160) (20,544) 824 (6,670)
XV. INCOME BEFORE TAXES (XII+XIII+ XIV) 35,775 25,616 25,953 14,394
XVI. PROVISION FOR TAXES ON INCOME (-) 15,657 11,376 10,183 3,132
XVII. NET OPERATING INCOME/EXPENSE AFTER TAXES 20,118 14,240 15,770 11,262
(XV-XVI)
XVIII. EXTRAORDINARY INCOME/EXPENSE AFTER TAXES - (1,259) - (1,259)
18.1 Extraordinary net income/expense before taxes - - - (1,259)
18.1.1 Extraordinary income - - - -
18.1. 2 Extraordinary expense (-) - (1,259) - (1,259)
18.2 Provision for taxes on extraordinary income - - - -
XIX. NET PROFIT/LOSSES (XVII+XVIII) III-8 20,118 12,981 15,770 10,003
XX. Earnings/Losses per share 182.47 117.74 143.03 90.71
The accompanying notes are an integral part of these statements.
IV- STATEMENTS OF OFF-BALANCE SHEET COMMITMENTS
Reviewed Audited
Current Period Prior Period
Note Ref. 30.06.2003 31.12.2002
OFF BALANCE SHEET COMMITMENTS (Section TL FC TOTAL TL FC TOTAL
five)
A. OFF BALANCE SHEET COMMITMENTS 655,501 1,369,975 2,025,476 586,006 1,545,250 2,131,256
(I+II+III)
I. GUARANTEES IV-2,3 325,610 613,928 939,538 291,967 608,644 900,611
1.1. Letters of guarantee 325,538 246,775 572,313 291,887 283,275 575,162
1.1.1. Guarantees subject to State 34,889 69 34,958 31,778 282 32,060
Tender Law
1.1.2. Guarantees given for foreign 77,313 15,510 92,823 77,750 10,587 88,337
trade operations
1.1.3. Other letters of guarantee 213,336 231,196 444,532 182,359 272,406 454,765
1.2. Banks loans - 43,754 43,754 - 44,992 44,992
1.2.1. Import letter of acceptance - 43,754 43,754 - 44,992 44,992
1.2.2. Other bank acceptances - - - - - -
1.3. Letters of credit 72 318,511 318,583 80 271,873 271,953
1.3.1. Documentary letters of credit 72 278,931 279,003 80 229,272 229,352
1.3.2. Other letters of credit - 39,580 39,580 - 42,601 42,601
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. Securities issue purchase - - - - - -
guarantees
1.7. Other guarantees - - - - - -
1.8. Other collaterals - 4,888 4,888 - 8,504 8,504
II. COMMITMENTS 194,460 126,688 321,148 202,034 367,010 569,044
2.1. Irrevocable commitments 194,460 126,688 321,148 202,034 367,010 569,044
2.1.1. Asset purchase commitments - - - 1,115 - 1,115
2.1.2. Deposit purchase and sales 6,000 126,688 132,688 - 367,010 367,010
commitments
2.1.3. Share capital commitment to - - - - - -
associates and subsidiaries
2.1.4. Loan granting commitments 94,821 - 94,821 125,857 - 125,857
2.1.5. Securities issue brokerage - - - - - -
commitments
2.1.6. Commitments for reserve deposit 400 - 400 - - -
requirements
2.1.7. Commitments for credit card IV-2 93,239 - 93,239 75,062 - 75,062
limits
2.1.8. Other irrevocable commitments - - - - - -
2.2. Revocable commitments - - - - - -
2.2.1. Revocable loan granting - - - - - -
commitments
2.2.2. Other revocable commitments - - - - - -
III. DERIVATIVE FINANCIAL 135,431 629,359 764,790 92,005 569,596 661,601
INSTRUMENTS
3.1. Forward foreign currency buy/ 135,431 434,162 569,593 92,005 237,153 329,158
sell transactions
3.1.1. Forward foreign currency 50,620 226,459 277,078 23,414 139,825 163,240
transactions-buy
3.1.2. Forward foreign currency 84,811 207,703 292,515 68,591 97,328 165,918
transactions-sell
3.2. Swap transactions related to - 185,095 185,095 - 332,443 332,443
f.c. and interest rates
3.2.1. Foreign currency swap-buy - 92,794 92,794 - - -
3.2.2. Foreign currency swap-sell - 92,301 92,301 - 165,432 165,432
3.2.3. Interest rate swaps-buy - - - - - -
3.2.4. Interest rate swaps-sell - - - - 167,011 167,011
3.3. Foreign currency and interest - - - - - -
rate options
3.3.1. Foreign currency options-buy - - - - - -
3.3.2. Foreign currency options-sell - - - - - -
3.3.3. Interest rate options-buy - - - - - -
3.3.4. Interest rate options-sell - - - - - -
3.4. Foreign currency futures - 10,102 10,102 - - -
3.4.1. Foreign currency futures-buy - 5,051 5,051 - - -
3.4.2. Foreign currency futures-sell - 5,051 5,051 - - -
3.5. Interest rate futures - - - - - -
3.5.1. Interest rate futures-buy - - - - - -
3.5.2. Interest rate futures-sell - - - - - -
3.6. Other - - - - - -
B. CUSTODY AND PLEDGED ITEMS 1,680,255 420,643 2,100,898 1,288,226 428,327 1,716,553
(IV+V)
IV. ITEMS HELD IN CUSTODY 1,225,118 276,248 1,501,366 901,397 286,425 1,187,822
4.1. Assets under management - - - - - -
4.2. Investment securities held in 508,675 163,666 672,341 313,989 161,469 475,458
custody
4.3. Checks received for collection 687,753 50,011 737,764 573,379 49,267 622,646
4.4. Commercial notes received for 27,604 15,990 43,594 14,029 23,373 37,402
collection
4.5. Other assets received for 1,086 46,581 47,667 - 52,316 52,316
collection
4.6. Assets received for public - - - - - -
offering
4.7. Other items under custody - - - - - -
4.8. Custodians - - - - - -
V. PLEDGED ITEMS 455,137 144,395 599,532 386,829 141,902 528,731
5.1. Marketable securities 16,983 9,445 26,428 10,295 9,329 19,624
5.2. Guarantee notes 7,467 1,156 8,623 6,920 1,470 8,390
5.3. Commodity 206,295 12,745 219,040 210,235 - 210,235
5.4. Warranty - - - - - -
5.5. Immovables 120,265 50,420 170,685 124,568 41,300 165,868
5.6. Other pledged items 104,127 70,629 174,756 34,811 89,803 124,614
5.7. Pledged items-depository - - - - - -
TOTAL COMMITMENTS (A+B) 2,335,756 1,790,618 4,126,374 1,874,232 1,973,577 3,847,809
The accompanying notes are an integral part of these statements.
V- STATEMENTS OF SHAREHOLDERS' EQUITY
Effect of
Note Paid-in inflation Share Legal Status Extraordinary Other
Current Period Ref. Capital Accounting premium Reserves Reserves Reserves Reserves
on
Capital
1 Balances at the 55,125 209,147 - - - - -
beginning of the
period - January 1,
2003
Increases in the - - - - - - -
period :
2 Available for sale - - - - - - -
investment
2.1 Net fair value - - - - - - -
gain/losses
3 Cash flow hedge: - - - - - - -
3.1 Net fair value - - - - - - -
gain/losses
4 Foreign exchange - - - - - - -
difference
Transferred Amount :
5 Available for sale - - - - - - -
investment
5.1 Transferred to net - - - - - - -
income
6 Cash flow hedge: - - - - - - -
6.1 Transferred to net - - - - - - -
income
6.2 Transferred to assets - - - - - - -
7 Net Income - - - - - - -
8 Dividend - - - - - - -
9 Transferred to legal - - - 2,390 - - -
reserves
10 Issuance of share - - - - - - -
certificate
Closing Balance - June 55,125 209,147 - 2,390 - - -
30 2003
(1+2+3+4+5+6+7+8+9+10)
Value Marketable
Current Increase Securities
Note Period Prior Period Revaluation Fund Value
Current Period Ref. Net Net Fund Revaluation Increase Total
Income/(Loss) Income/(Loss) Fund Fund
1 Balances at the 20,638 - - - 224 285,134
beginning of the
period - January 1,
2003
Increases in the - -
period :
2 Available for sale - - - - - -
investment
2.1 Net fair value - - - - - -
gain/losses
3 Cash flow hedge: - - - - - -
3.1 Net fair value - - - - - -
gain/losses
4 Foreign exchange - - - - - -
difference
Transferred Amount :
5 Available for sale - - - - - -
investment
5.1 Transferred to net - - - - - -
income
6 Cash flow hedge: - - - - (156) (156)
6.1 Transferred to net - - - - - -
income
6.2 Transferred to assets - - - - (156) (156)
7 Net Income 20,118 - - - - 20,118
8 Dividend - (15,973) - - - (15,973)
9 Transferred to legal (20,638) 18,248 - - - -
reserves
10 Issuance of share - - - - - -
certificate
Closing Balance - 20,118 2,275 - - 68 289,123
June 30 2003
(1+2+3+4+5+6+7+8+9+10)
Effect of
Prior Period Note Paid-in inflation Share Legal Status Extraordinary Other
Ref. Capital Accounting premium Reserves Reserves Reserves Reserves
on
Capital
1 Balances at the 55,125 458,414 - 56,297 - - -
beginning of the
period - January 1,
2002
Increases in the
period :
2 Available for sale - - - - - - -
investment
2.1 Net fair value - - - - - - -
gain/losses
3 Cash flow hedge: - - - - - - -
3.1 Net fair value - - - - - - -
gain/losses
4 Foreign exchange - - - - - - -
difference
Transferred Amount :
5 Available for sale - - - - - - -
investment
5.1 Transferred to net - - - - - - -
income
6 Cash flow hedge: - - - - - - -
6.1 Transferred to net - - - - - - -
income
6.2 Transferred to assets - - - - - - -
7 Net Income - - - - - - -
8 Dividend - - - - - - -
9 Transferred to legal - - - - - - -
reserves
10 Issuance of share - - - - - - -
certificate
Closing Balance - June 55,125 458,414 - 56,297 - - -
30 2002
(1+2+3+4+5+6+7+8+9+10)
Value Marketable
Current Increase
Prior Period Note Period Prior Period Revaluation Fund Securities
Ref. Net Net Fund Revaluation Value Total
Income/(Loss) Income/(Loss) Fund Increase
Fund
1 Balances at the (19,374) (286,189) - - - 264,273
beginning of the
period - January 1,
2002
Increases in the
period :
2 Available for sale - - - - - -
investment
2.1 Net fair value - - - - - -
gain/losses
3 Cash flow hedge: - - - - - -
3.1 Net fair value - - - - - -
gain/losses
4 Foreign exchange - - - - - -
difference
Transferred Amount :
5 Available for sale - - - - - -
investment
5.1 Transferred to net - - - - - -
income
6 Cash flow hedge: - - - - - -
6.1 Transferred to net - - - - - -
income
6.2 Transferred to assets - - - - - -
7 Net Income 12,981 - - - - 12,981
8 Dividend - - - - - -
9 Transferred to legal 19,374 (19,374) - - - -
reserves
10 Issuance of share - - - - - -
certificate
Closing Balance - 12,981 (305,563) - - - 277,254
June 30 2002
(1+2+3+4+5+6+7+8+9+10)
VI- STATEMENTS OF CASH FLOWS Current Prior Period
Period
01.01.2003 01.01.2002
Note Ref - 30.06.2003 - 30.06.2002
A. CASH FLOWS FROM BANKING OPERATIONS
1.1 Operating profit before changes in operating assets and 29,142 27,582
liabilities(+)
1.1.1 Interest received(+) 160,003 188,923
1.1.2 Interest paid(-) (91,841) (97,971)
1.1.3 Dividend received(+) - 3,825
1.1.4 Fees and commissions received(+) 16,658 15,791
1.1.5 Other income(+) 18,841 8,457
1.1.6 Collections from previously written off loans and other 2,248 1,918
receivables(+)
1.1.7 Payments to personnel and service suppliers(-) (27,055) (23,966)
1.1.8 Taxes paid(-) (40,769) (32,234)
1.1.9 Other (8,943) (37,161)
1.2 Changes in operating assets and liabilities (88,495) (40,261)
1.2.1 Net (increase) decrease in trading securities(+/-) 50,749 (10,454)
1.2.2 Net (increase) decrease in due from banks and other financial 129,350 (2,581)
institutions(+/-)
1.2.3 Net (increase) decrease in loans 2,704 (173,952)
1.2.4 Net (increase) decrease in other assets(+/-) (715) (978)
1.2.5 Net increase (decrease) in bank deposits(+/-) 7,277 19,921
1.2.6 Net increase (decrease) in other deposits(+/-) (332,199) 36,653
1.2.7 Net increase (decrease) in funds borrowed(+/-) 6,296 120,639
1.2.8 Net increase (decrease) in matured payables(+/-) - -
1.2.9 Net increase (decrease) in other liabilities(+/-) 48,043 (29,509)
I. Net cash provided from banking operations(+/-) (59,353) (12,679)
B. CASH FLOWS FROM INVESTING ACTIVITIES
II. Net cash provided from investing activities(+/-) (12,861) (95,741)
2.1 Cash paid for purchase of investments, associates and - (17,895)
subsidiaries(-)
2.2 Cash obtained from sale of investments, associates and - -
subsidiaries(+)
2.3 Fixed assets purchases(-) (2,659) (1,690)
2.4 Fixed assets sales(+) 1,813 3,189
2.5 Cash paid for purchase of securities available for sale (-) (29,026) -
2.6 Cash obtained from sale of securities available for sale (+) 18,800 -
2.7 Cash paid for purchase of investment securities(-) (2,008) (175,970)
2.8 Cash obtained from sale of investment securities(+) 219 96,625
2.9 Extraordinary items(+/-) - -
2.10 Other (+/-) - -
C. CASH FLOWS FROM FINANCING ACTIVITIES
III. Net cash provided from financing activities(+/-) (16,088) (1,918)
3.1 Cash obtained from funds borrowed and securities issued(+) - -
3.2 Cash used for repayment of funds borrowed and securities - -
issued(-)
3.3 Capital increase(+) - -
3.4 Dividends paid(-) (15,973) -
3.5 Payments for finance leases(-) (115) (1,918)
3.6 Extraordinary items(+/-) - -
3.7 Other(+/-) - -
IV. Effect of change in foreign exchange rate on cash and cash (91,246) 18,092
equivalents
V. Net increase / (decrease) in cash and cash equivalents (179,548) (92,246)
(I+II+III)
VI. Cash and cash equivalents at beginning of the year(+) VI-1 1,148,258 1,217,176
VII. Cash and cash equivalents at end of the year VI-1 968,710 1,124,930
SECTION THREE
ACCOUNTING PRINCIPLES
I- Basis of Presentation
The Bank prepares its financial statements in accordance with the "Accounting
Application Regulations" (AAR) based on Article 13 named as "Accounting and
Recording System" of the Banking Law 4389 and related communiques and related
explanations and further communiques that add or cause a change on the content
of the relevant communiques.
Restatement of Financial Statements in Accordance with The Current Period
Purchasing Power
The "Accounting Standard on Financial Statements at Hyperinflation Periods",
Communique No:14 of "Accounting Application Regulations" (AAR) became effective
from July 1, 2002.
In accordance with the communique No:14, the Bank's financial statements should
be restated, taking the current period equivalent purchasing power of Turkish
lira into account. In other words, Communique No:14 states that, financial
statements prepared in terms of the domestic currency of a country with high
inflation rate should be restated in accordance with the equivalent purchasing
power of the domestic currency at the balance sheet date. Prior period financial
statements should also be restated in their entirety to the measuring unit
current at the balance sheet date. One characteristic that necessitates the
application of inflation accounting under the provisions of Communique No : 14
is a cumulative three-year inflation rate approaching or exceeding 100%.
Restatement of financial statements is based on both the principles described in
Communique No.14 and the wholesale price indices published in its appendix and
the wholesale price indices announced by the State Institute of Statistics.
Detailed information on the application of inflation accounting is given in the
section V, footnote VII, "Footnotes and Explanations on Inflation Accounting" of
the following footnotes.
Other Basis of Valuation
Other basis of valuation used for assets and liabilities in the preparation of
financial statements are explained among the accounting principles for the
related assets and liabilities.
Changes in Accounting Policies and Valuation Methods in the Current Period
Changes in Accounting Policies
Until September 30, 2002, the Bank's financial statements were being prepared in
accordance with the Uniform Chart of Accounts, standard balance sheet, income
statement, supplementary financial statements and footnotes to these financial
statements and the explanations related to the applications of such financial
statements and the accounting and valuation principles thereto that are based on
the article 13 of the Banking Law 4389 as revised by Law Number 4672 and 4491
and the "Accounting Standard on Financial Statements at Hyperinflation Periods",
Communique No:14, published at Official Gazette dated June 22, 2002 and numbered
24793 and which is related to the "Regulation of Accounting Applications" and
became effective from July 1, 2002. After October 1, 2002, the Bank's financial
statements are prepared in accordance with the accounting policies explained
below and included in both Communique No:14 and the other communiques related to
the Regulation of Accounting Applications effective from October 1, 2002.
Accordingly, assets and liabilities were classified as of October 1, 2002 in
accordance with the provisions of the related communiques and the required
changes for the other accounts were made and the effects of such changes were
reflected in the income statement for 2002.
II- Explanations on Forward, Option Contracts and Derivative
Instruments
The Bank makes forward currency agreements and swap transactions to reduce the
foreign currency risk. In accordance with Communique No:1, "Accounting Standards
of Financial Instruments" of AAR, derivative financial instruments that are not
designated as hedging instruments are classified as held-for-trading and carried
at fair value.
Foreign currency forward and swap transactions are evaluated by comparing the
period end Bank foreign exchange rates with the forward rate amortized to the
balance sheet date since the book values approximate their fair values. The
resulting gain or loss is reflected to the income statement.
There are no embedded derivatives separated from the host contract or that are
designated as hedging instruments.
Before the effective date of AAR, above-mentioned transactions had been recorded
by means of arbitrage accounting, the changes at the foreign currencies had been
recorded through evaluation under accounts and the liabilities at the maturity
had been followed under off balance sheet commitments. In order to avoid the
effects of the changes at the rates on the income statement, the amounts
followed under off balance sheet commitments had been evaluated and the
generated differences had been recorded under the income and expense accrual
accounts.
Foreign Currency Assets and Liabilities
Gains or losses arising from foreign currency transactions are reflected in the
statement of income as they are realized during the year. Foreign currency
assets and liabilities at each year-end are translated into Turkish lira at the
year-end foreign exchange buying rates announced by the Bank and the resulting
foreign exchange gains or losses are recorded in the statement of income as
foreign exchange loss, net. The net investment in foreign entities as of the
related year-ends were translated into Turkish lira by applying the exchange
rates prevailing at respective dates. The resulting foreign exchange gains or
losses are recorded in the statement of income.
The differences resulting from the translation of the securities issued and
monetary financial assets into Turkish lira are reflected to the statement of
income.
III- Netting of Financial Assets and Liabilities
Financial assets and liabilities are netted off when the Parent Bank has a legal
right and sanction regarding netting off, and when the Bank has the intention of
collecting or paying the net amount of related assets and liabilities or when
the Bank has the right to off set the assets and liabilities simultaneously.
There is no netting of financial assets and liabilities at the accompanying
financial statements as of June 30, 2003.
IV- Interest Income and Expense
Interest income and expense are recognized in the income statement for all
interest bearing instruments on an accrual basis using the effective interest
method. In accordance with the related regulation, the due and not due interest
accruals of the non-performing loans are cancelled and interest income related
to these loans are recorded as interest income only when collected.
V- Fees and Commission Income and Expense
Commission income and fees for various banking services in the period of
collection.
Fees and commissions for funds borrowed paid to other financial institutions,
which is a part of the transaction costs, are recorded as prepaid expenses and
considered as a part of interest of the related funds borrowed and accordingly,
recorded as expense monthly.
The dividend income is reflected to the financial statements on cash basis when
the profit distribution is realized by the participations and the subsidiaries.
VI- Securities Held for Trading
Trading securities are securities which were either acquired for generating a
profit from short-term fluctuations in price or dealer's margin, or are
securities included in a portfolio in which a pattern of short-term profit
taking exists. Trading securities are initially recognized at cost. Transaction
costs of the related securities are included in the initial cost. The positive
difference occurred between the cost and fair value of the marketable security
is accounted as interest and income accrual. The negative difference occurred is
accounted under marketable security diminution in value account.
Since the foreign currency financial assets held at the same portfolio
(Eurobond) do not hold a price formed in an active market and since the fair
values of these securities could not be determined reliably, they are valued at
amortized cost by using relevant interest rates as stated in the articles 8 and
9 of the AAR's Communique No:1, "Accounting Standards of Financial Instruments."
VII- Sales and Repurchase Agreements and Lending of Securities
The Bank has been following the repurchase agreements made with the clients as a
balance sheet item since February 1, 2002 in accordance with the Uniform Chart
of Accounts. Accordingly, the government bonds and treasury bills sold to
clients under repurchase agreements are recorded under the related securities
account in the financial statements and are valued according to the valuation
principles of the related account. Funds obtained by repurchase agreements are
classified as a separate sub account under money markets account in the
liabilities. The interest expense accruals calculated by means of effective
interest method for the funds obtained by means of repurchase agreements are
reflected to the interest and other expense accruals account in the balance
sheet.
The above-mentioned transactions are short term and consists of domestic public
sector debt securities.
The income and expenses generated from above mentioned operations are reflected
to the "Interest Income on Marketable Securities" and "Interest Expense on
Marketable Securities subject to Repurchase Agreement" accounts in the statement
of income.
As of June 30, 2003, the Bank does not have any reverse repo transactions
(December 31, 2002 - None).
As of June 30, 2003, the Bank does not have any lent marketable securities
(December 31, 2002 - None).
VIII- Securities Held to Maturity, Securities Available for Sale and Bank
Originated Loans and Receivables
Securities held to maturity are obtained with the intention of holding till the
maturity of the security, and accordingly, including the funding abilities, the
relevant conditions for this exist. This portfolio includes securities with
fixed or determinable payments and with a fixed maturity, excluding bank
originated loans and receivables.
Securities available for sale include all securities other than bank originated
loans and receivables, securities held to maturity and securities held for
trading.
The marketable securities are initially recognized at cost including the
transaction costs.
Foreign currency denominated financial assets included in the available for sale
securities portfolio (Eurobonds) is stated by translating the cost value to
Turkish lira at The Bank's exchange rates. The differences generated from the
translation is reflected to foreign currency gains and losses account at the
relevant period. Since these securities do not hold a price formed in an active
market and since the fair values of these securities could not be determined
reliably, they are valued at amortized cost by using relevant interest rates as
stated in the articles 8 and 9 of the AAR's Communique No:1, "Accounting
Standards of Financial Instruments." The differences between the cost and the
valued amounts are reflected to the income accrual accounts.
Loans and receivables originated by the Bank are those generated by lending
money and exclude those that are held with the intention of trading or selling
in near future.
Held to maturity securities are remeasured at amortized cost by using original
effective interest rate and reserve for impairment in value is provided, if any.
The interests received from securities held to maturity are recorded as interest
income. There are no dividends related with any marketable securities that are
held to maturity.
There are no financial assets that were previously classified as securities held
to maturity but cannot be currently classified as held to maturity for the next
two years due to the breaching of "tainting" rules by the Bank.
The Bank classifies securities according to above-mentioned portfolios at the
acquisition date of the related security.
The sale and purchase transactions of the securities held to maturity are
recorded at the delivery dates.
Prior to the effective date of AAR, the Bank had initially recorded marketable
securities held with the intention of not selling till maturity (investment
portfolio), which were given as collateral at cost, and the income accruals of
these securities were calculated by straight line method and reflected to the
financial statements.
IX- Participations
Turkish lira participations which are quoted at the stock exchange are valued at
fair value and any positive difference between fair value price and cost is
included under shareholders' equity at "Marketable Securities Value Increase
Fund" account in the financial statements. The others are valued by means of
restating their costs and the capital increases after deducting the ones
generated by means of adding the values accumulated at the revaluation like
funds to the capital of the participations, with the rates applicable for the
relevant dates. A provision is provided when there is a permanent diminution in
value.
X- Subsidiaries
Turkish lira subsidiaries are valued by means of restating their costs and the
capital increases after deducting the ones generated by means of adding the
values accumulated at the revaluation like funds to the capital of the
subsidiaries, with the rates applicable for the relevant dates. Foreign currency
denominated subsidiaries are valued with year-end foreign exchange rates. A
provision is provided when there is a permanent diminution in value of the
subsidiaries.
XI- Originated Loans and Receivables and Provisions for Loan Impairment
The Bank initially records originated loans and receivables at cost, and at the
following periods, in accordance with the AAR, Communique No:1, these loans are
remeasured at amortized cost by means of effective interest rate method. The
taxes, transaction expenses and other expenses paid for the guarantees taken for
the originated loans are taken into consideration while calculating the banks
financing cost and these are reflected to the interest rates of the loans.
Cash loans are recorded in accordance with the regulations stated at the
Communique on the Uniform Chart of Accounts and Its Explanations.
Provision is set for the loans that may be doubtful and the amount is expensed
at the current period. The provisioning criteria for the non-performing loans
are determined by the Bank's management for compensating the probable losses of
the current loan portfolio, by means of evaluating the portfolio for its quality
and risk factors and by means of considering the economical conditions, other
facts and related regulations.
Allowances are computed and reflected in accordance with the Banking Law No.4389
as revised by Law Number 4672 and 4491, Article 3, Sub Article 11 and Article
11, Sub Article 12 published on the Official Gazette No. 24448 dated 30.06.2001
on "Methods and Principles for the Determination of Loans and Other Receivables
to be Reserved for and Allocation of Reserves" amended by Communiques dated
31.01.02 in the current period financial statements. Furthermore, a general
reserve of 0.5% is being provided for the cash loans and other receivables and
0.1 % is provided for non-cash loans. These provisions are reflected to the
statement of income under "Provision and Diminishing in Value Expenses - Special
Provision Expense". The collection made regarding these loans are first deducted
from the principal amount of the loan and the remaining collections are deducted
from interest receivables.
The collections made regarding the current year provision of the above mentioned
loans are deducted from the "Provision for Loans and Other Receivables" account
in the income statement. The collections made related to the previous years'
written-off loans or allowances are recorded under "Other Operating Income"
account and interest incomes are recorded under the "Interest Received from
Non-performing Loans" account.
Release of provision are removed by means of reversing the amount to the "
Provision and Diminishing in Value Expense - Provision Expense" account.
Allowances recorded in the previous periods and lost its necessity in the
current period are credited to "Collections Regarding Previous Year's Expenses"
account.
XII- Goodwill and Other Intangible Fixed Assets
There is no goodwill regarding the participations and subsidiaries.
The intangible fixed assets are reflected with their restated costs in
accordance with inflation accounting and depreciated with straight-line method.
The depreciation rate is 20%. The cost of assets subject to depreciation is
restated after deducting the exchange differences, capitalized financial
expenses and revaluation increases, if any, from the cost of the assets.
Major group classified as other intangible fixed assets by the Bank is
softwares. While determining the depreciation periods of these, the essentials
of General Tax Regulations are taken in to consideration and no special criteria
are used. The useful lives of these assets are determined as 5 years. Softwares
mainly used are developed within the Bank by the Bank's personnel, and the
expenses regarding these are not capitalized. Software is purchased only in
emergency cases and for special projects.
There are no expected changes in the accounting estimates about the depreciation
rate and method and residual values for the current and future periods.
XIII- Tangible Fixed Assets
Buildings are reflected to the financial statements at their restated costs and
reserve for impairment is provided, if any. In accordance with the Communique
No:14, buildings are valued by real estate expertise companies and the expertise
value is higher than the restated costs at June 30, 2003. The straight-line
method for depreciation is used and economical life is accepted to be 50 years.
Other tangible fixed assets are reflected with their restated cost in accordance
with inflation accounting, and depreciated by straight-line depreciation method.
The depreciation rate is 20%. A prorate basis is used for depreciating assets
held less than one year as of the balance sheet date. The leasehold improvements
are depreciated in accordance with the lease period by means of straight-line
method. The annual rates used, which approximate rates based on the estimated
economic lives of the related assets, are as follow:
%
Buildings 2
Motor vehicles 20
Furniture, fixtures and office equipment 20
Leasehold improvements Lease period-not less than 5 years
Gain profit or loss resulting from disposals of the tangible fixed assets are
reflected to the statement of income as the difference between the net proceeds
and net book value.
The repairment costs of the tangible fixed assets are capitalized if the
operation lengthens the economic life of the asset. Otherwise the repairment
costs are expensed. There are no pledge, mortgage or other restrictions on the
tangible fixed assets.
There are no purchase commitments related to the tangible fixed assets.
There are no expected changes in the accounting estimates, which could have a
significant impact on the current and future periods.
XIV- Leasing Transactions
Leasing of fixed assets are recorded in accordance with AAR, Article 7 of the
Communique No:4, "Accounting Standard for Leasing Transactions." In accordance
with the above-mentioned article, the leasing transactions, which consist only
foreign currency liabilities, are translated to Turkish lira with the exchange
rates effective at the transaction dates and they are recorded both as an asset
and a liability. The foreign currency liabilities are translated to Turkish lira
with the Bank's period end exchange rate. The increases resulting from the
differences in the foreign exchange rates are recorded as expense in the
relevant period. Rent payments consist of financing costs generated due to
leasing, and the amount of the leased asset corresponding to the relevant
period. The financing cost resulting from leasing is distributed through the
agreement period to form a fixed interest rate.
In addition to interest expense, the Bank records depreciation expense in each
period for the leased assets. The depreciation rate is determined in accordance
with "Accounting Standard of Tangible Fixed Assets" and the depreciation rate is
20%.
Operating lease expenses are recognized as expense in the income statements in
the periods in which they are incurred.
The Bank has no leasing transactions as lessor.
XV- Provisions and Contingent Liabilities
The provisions and contingent liabilities are determined in accordance with the
Communique No:8 of AAR, except for the general and specific provisions set for
the loans and other receivables. Liabilities generated from previous events are
recorded by the Bank immediately at the estimated amounts.
XVI- Liabilities Regarding Employee Benefits
In accordance with the existing social legislation, the Bank is required to make
lump-sum termination indemnities including retirement and notice payments to
each employee whose employment is terminated due to resignment or for reasons
other than misconduct. The retirement pay is calculated for every working year
within the Bank over the wage for 30 days and the notice pay is determined by
the relevant notice period time calculated over the years worked within the
Bank. In accordance with AAR, Communique No:10, the Bank sets provision for
retirement and notice pay liabilities by taking the actual payment rates for the
previous 5 years into consideration.
The Bank has no employees contracted for determined periods.
As of June 30, 2003 and December 31, 2002, the arithmetical averages of the
actual payments realized for the previous five years are 8.35% and 8.44%
respectively and this forms the base of the provision amount that will be set
for the retirement and notice pay liabilities.
The Bank employees are members of Tebliler foundation. The Bank does not have
any liability to this foundation.
There are no liabilities that require additional provisions related to other
employee rights.
XVII- Taxation
Corporate tax
In accordance with the incumbent tax Law, Corporate Tax is computed over
statutory net income that is subject to tax, without taking into account the
effects of inflation accounting.
In line with the new tax Law number 4842, published in the Official Gazette
dated April 24, 2003, starting with the current year income, the corporate tax
rate to be applied is 30 % (December 31, 2002 - 33%, including fund share).
Corporate tax is to be paid in a lump sum payment within the specified period
allowed by the law for the declaration of tax.
As long as the Bank does not distribute the yearly income for 2003, there will
not be any withholding taxes with regards to this income.
The addition of current year profit to the share capital will not be regarded as
a profit distribution and thus, will be exempt from any withholding taxes.
The Bank's distribution of profit to "Fully-liable" institutions will also be
exempt from any withholding taxes. The Bank's distribution of profit to real
persons, "semi-liable" institutions, and those institutions that are not liable
and or exempt from both corporation tax and income tax, will be subject to
withholding taxes.
In accordance with the Tax Procedural Code explained above, in every three-month
period the Bank's tax assessment is made and the temporary corporate tax is
calculated over the income generated in the three-month period at a rate of 30%
and paid in cash up to the fifth day of the second month following the period.
The corporate tax provision is recorded under "Provisions and Diminishing in
Value Expenses-Tax Provision" account and expensed at every three month period
end. At the corporate tax payment periods, the cash payments made are deducted
from the tax liability calculated over the yearly income and the remaining
liability is paid in cash.
In accordance with the Tax Procedural Code, the losses presented in the tax
declarations can be deducted from the tax assessments at the current period
within five years.
In Turkey, tax returns are filed during the fourth month following the year-end.
According to existing tax regulations, the tax authorities may examine such
returns and the underlying accounting records within five years.
Deferred tax
Certain income and expense items are taxable in periods different from those in
which they are recognized in the financial statements. Deferred taxes on such
timing differences are calculated and reflected in full in the accompanying
financial statements. The Bank does not compute deferred tax on the effects of
inflation accounting.
As of June 30, 2003 and December 31, 2002, the deferred tax asset is included in
other assets in the accompanying balance sheet and the deferred tax provision is
stated under the tax provision in the accompanying income statement.
XVIII- Additional Explanations on Borrowings
The Bank has not issued any debt securities.
The Bank has not issued convertible bonds. There are no debt securities issued
by the Bank.
XIX- Paid-in Capital and Share Certificates
The Bank does not have any costs related to share issue as of June 30, 2003. In
the General Assembly meeting of the Bank, dated March 27, 2002, it was decided
that the profit for the year 2002 will be distributed to the shareholders after
providing the legal reserves, which will amount to 276 (Nominal full TL) of
dividend for every 1,000 TL nominal shares owned by each shareholder. The
payment of dividends to the shareholders were started at April 4, 2003 and
completed as of June 30, 2003.
XX- Acceptances
Acceptances are realized simultaneously with the payment dates of the clients
and they are presented as commitments in off-balance sheet accounts.
There are no acceptances presented as liabilities against any assets.
XXI- Government Incentives
There are no government incentives utilized by the Bank.
XXII- Securities at Custody
Securities at custody held by the Bank on behalf of clients are not reflected to
the financial statements since they are not Bank's assets.
XXIII- Impairment of Assets
At every balance sheet date, the evidence on impairment in value of assets is
evaluated objectively for existence. When an evidence regarding impairment in
value exists, the market value of the asset is determined. The difference
between book and net realizable values of the asset is recorded as provision for
impairment in the balance sheet and as an expense in the income statement.
XXIV- Segment Reporting
Segment reporting will be made effective January 1, 2004.
XXV- Other Matters
Explanation for convenience translation to English
The accounting principles used in the preparation of the accompanying financial
statements differ from International Financial Reporting Standards (IFRS) and so
far as such differences apply to the financial statements of the Bank they
relate mainly, but not limited, to the format of financial statements and
disclosure requirements, accounting for deferred taxes and reserve for
retirement pay liabilities. The effects of the differences between these
accounting principles and the accounting principles generally accepted in the
countries in which the accompanying financial statements are to be used and IFRS
have not been quantified in the accompanying financial statements. Accordingly,
the accompanying financial statements are not intended to present the financial
position and results of operations in accordance with accounting principles
generally accepted in the countries of users of the financial statements and
IFRS. The Bank's consolidated financial statements prepared in accordance with
the accounting principles and standards that are based on the Article 13 of the
Banking Law number 4389 will be issued separately.
There are no other matters required to be disclosed.
SECTION FOUR
INFORMATION ON FINANCIAL STRUCTURE
I- Capital Adequacy Standard Ratio
The method used for risk measurement for capital adequacy standard ratio is
performed in accordance with the Communique on "Measurement and Assessment of
Banks Capital Adequacies ", which was published on January 31, 2002 in the
Official Gazette numbered 24657. As of June 30, 2003, the Bank's capital
adequacy ratio is % 14.96 (December 31, 2002 - %15.40).
In the computation of capital adequacy standard ratio, information prepared in
accordance with statutory accounting requirements are used. Additionally, the
market risk amount is calculated in accordance with the communique on the
"Internal Control and Risk Management Systems of the Banks" and is taken in to
consideration in the capital adequacy standard ratio calculation
The values deducted from the capital in the shareholders' equity computation are
not considered while calculating risk-weighted assets, non-cash loans and
contingent liabilities. Assets subject to depreciation and depletion among
risk-weighted assets are included in the calculations over their net book values
after the relative depreciations and provisions are deducted.
When calculating the basic amounts subject to credit risk regarding the
transactions on the non-cash loans, the net receivable amount from the counter
parties found by means of deducting the provision amount set in accordance with
the "Communique on Methods and Principles for the Determination of Loans and
Other Receivables to be Reserved for and Allocation of Reserves" is multiplied
by the rates presented at the Clause 1, Article 21 of the "Communique on
Regulations on the Establishment and Operations of Banks", and included in the
related risk group and weighted by the related group's risk.
Receivables from counter parties generated from foreign currency and interest
rate transactions are included in the related risk group at the loan conversion
rates stated in Clause 2, Article 21 of the "Communique on Regulations on the
Establishment and Operations of Banks" and weighted for a second time by the
weight of the related risk group.
Information related to the capital adequacy ratio:
Risk Weight
0% 20% 50% 100%
Risk Weighted Assets, Liabilities and Non-Cash Loans
Balance Sheet items (Net) 844,543 300,652 38,434 873,726
Cash 71,584 - - -
Due from banks 365,428 300,652 - 5,600
Interbank money market placements 243,939 - - -
Receivables from reverse repo transactions - - - -
Reserve deposits 122,817 - - -
Special finance houses - - - -
Loans 32,982 - 38,434 814,229
Loans under follow-up (Net) - - - 5,200
Subsidiaries, associates and investments held to maturity - - - -
Miscellaneous receivables - - - 878
Marketable securities held to maturity (Net) - - - -
Advances for assets acquired by financial leasing - - - -
Financial lease receivables - - - -
Leased assets (Net) - - - -
Fixed assets (Net) - - - 33,964
Other assets 7,793 - - 13,855
Off balance sheet items 146,584 393,615 262,602 39,281
Guarantees and pledges 16,527 387,889 68,142 24,321
Commitments 126,688 - 194,460 -
Other off balance sheet items - - - -
Transactions related with derivative financial - - - 4,085
instruments
Interest and income accruals 3,369 5,726 - 10,875
Non risk weighted accounts - - - -
991,127 694,267 301,036 913,007
Total Risk Weighted Assets - 138,853 150,518 913,007
Summary information related to the capital adequacy ratio:
Current Prior
Period Period
Total Risk Weighted Assets (*) 1,247,112 1,229,328
Shareholders' Equity 186,619 189,301
Shareholders' Equity / Total risk weighted assets (CAR (%)) 14.96 15.40
(*) As of June 30, 2003, the amount includes TL 44,734 (2002 - TL 21,933)
of market risk amount.
Information related to the shareholders' equity components :
Current Prior Period
Period
MAIN CAPITAL
Paid-in Capital 55,125 55,125
Nominal capital 55,125 55,125
Capital commitments (-) - -
Effect on Inflation Accounting on Share Capital 209,147 209,147
Share Premium - -
Legal Reserves 2,390 -
First legal reserve (Turkish Commercial Code 466/1) 2,390 -
Second legal reserve (Turkish Commercial Code 466/2) - -
Other legal reserve per special legislation - -
Statute Reserves - -
Extraordinary reserves - -
Reserves allocated by the General Assembly - -
Retained earnings - -
Accumulated loss - -
Foreign currency share capital exchange difference - -
Profit 22,393 20,638
Current period profit 20,118 20,638
Prior period profit 2,275 -
Loss (-) - -
Current period loss - -
Prior period loss - -
Total Main Capital 289,055 284,910
SUPPLEMENTARY CAPITAL
Revaluation Fund - -
Furniture, fixture and vehicles - -
Buildings - -
Profit on sale of associates, subsidiaries and buildings to be transferred to share - -
capital
Revaluation fund of leasehold improvement - -
Increase in the Value of Revaluation Fund - -
Foreign Exchange Differences - -
General Reserves 6,753 6,792
Provisions for Possible Losses - -
Subordinated Loans 21,115 27,418
Marketable Securities and Investment Securities Value Increase Fund 68 224
Associates and subsidiaries 68 224
Available for sale securities - -
Structured positions - -
Total Supplementary Capital 27,936 34,434
TIER III CAPITAL - -
CAPITAL 316,991 319,344
DEDUCTIONS FROM THE CAPITAL 130,372 130,043
Investments in unconsolidated financial companies whose main activities are money
and capital markets, insurance and that operate with licenses provided in
accordance with special laws 121,383 119,072
Leasehold improvements 6,023 7,113
Start-up costs - -
Prepaid expenses 2,966 3,858
The negative difference between the market values and the carrying amounts for
unconsolidated investments, subsidiaries, other investments and fixed assets
- -
Subordinated loans given to other banks which operate in Turkey - -
Goodwill (Net) - -
Capitalized expenses - -
- -
Total Shareholder's Equity 186,619 189,301
II- Market Risk
The Bank has determined market risk management operations and has taken the
necessary precautions in order to hedge market risk within its financial risk
management purposes, in accordance with the Communique on "Internal Control and
Risk Management Systems of Banks" announced in the Official Gazette dated
February 8, 2001.
The interest rate and exchange rate risks of the financial positions taken by
the Bank related to balance sheet and off-balance sheet accounts are measured
and while calculating the capital adequacy, the amount subject to VAR is taken
into consideration by the standard method. Scenario analysis and stress tests
are used additionally in market risk computations.
In order to measure the market risk of the Bank, the Board of Directors has
determined risk management strategies in accordance with the proposals of the
Top Management Risk Committee and these strategies are forced to be followed up
periodically. The Board of Directors evaluates the basic risks faced and
determines limitations accordingly. The limits are revised periodically.
Additionally the Board of Directors has urged the risk management group and the
top management to take necessary precautions to consider, evaluate, control and
to control the variety of risks the Bank faces.
Amount
Capital to be employed for interest rate risk - standard method 2,431
Capital to be employed for general market risk 2,431
Capital to be employed for specific risk -
Capital to be employed for options subject to interest rate risk -
Capital to be employed for common stock position risk - Standard method -
Capital to be employed for general market risk -
Capital to be employed for specific risk -
Capital to be employed for options subject to common stock position risk -
Capital to be employed for currency risk - Standard method 1,148
Capital liability 1,148
Capital to be employed for options subject to currency risk -
Total Value-at-risk (VAR)-Internal Model -
Total capital to be employed for market risk 3,579
Amount subject to market risk 44,734
III- Foreign Currency Risk
Foreign currency risk indicates the possibilities of the potential losses that
banks are subject to due to the exchange rate movements in the market. While
calculating the share capital requirement, all foreign currency assets,
liabilities and forward transactions of the Bank are taken into account. Net
short and long position of Turkish Lira equivalent of each foreign currency is
calculated. The value, which will be a base for calculating the share capital
requirement, is computed by taking the higher absolute value of the position by
adding to absolute net gold position. Share capital requirement is computed over
of this amount. The Board of Directors sets limits for the positions, which are
followed up daily. Additionally, possible value changes in the existing or
possible foreign currency positions are observed together with the follow-up of
the foreign currency risk in accordance with the provisions of the "Communique
on Internal Control and Risk Management Systems of Banks".
As an element of the Bank's risk management strategies, foreign currency
liabilities are hedged against exchange rate risk by derivative instruments.
The Board of Directors of the Bank determines the short position limits that the
Bank can hold in accordance with the present legal limitations. The Treasury
Department of the Bank is responsible for the management of Turkish Lira or
foreign currency price, liquidity and affordability risks that could occur in
the domestic and international markets. The Risk Control Department continuously
controls risk and risk related transactions occurring in the money markets and
prepares weekly reports for the Bank's Asset-Liability Committee. The related
principles and limitations of the counterparties are determined by the Loan
Committee. The limits concerning the maturity structure of the foreign currency
transactions and interest rates are examined by the Asset-Liability Committee.
As of June 30, 2003, the Bank's net short position is TL 11,156 (December 31,
2002 - TL 726) resulting from short position amounting to TL 30,405 (December
31, 2002 - TL 41,647) on the balance sheet and long position amounting to TL
19,249 (December 31, 2002 - TL 40,921) on the off-balance sheet.
The announced current foreign exchange buying rates of the Bank at the balance
sheet date and the previous five working days are as follows:
23/6/03 24/6/03 25/6/03 26/6/03 27/6/03 30/6/03
USD 1,425,412 1,430,099 1,431,814 1,426,927 1,421,717 1,407,647
CHF 1,070,660 1,077,748 1,076,602 1,062,049 1,048,790 1,035,502
GBP 2,364,948 2,384,162 2,385,588 2,375,020 2,352,848 2,322,246
JPY 12,052 12,118 12,160 12,006 11,849 11,712
EUR 1,646,066 1,653,338 1,650,882 1,637,255 1,623,601 1,609,503
The simple arithmetical average of the major current foreign exchange buying
rates of the Bank for the thirty days before the balance sheet date is as
follows:
Monthly Average
Foreign Exchange
Rate
USD 1,418,523
CHF 1,072,841
GBP 2,354,887
JPY 11,958
EUR 1,655,554
Information on the foreign currency risk of the Bank:
Current Period EUR USD YEN OTHER FC TOTAL
Assets
Cash (cash in vault, foreign currency cash, money in
transit, cheques purchased) and balances with the
Central Bank of Turkey 21,824 388,543 - 2,605 412,972
Due from other banks and financial institutions 17,819 184,294 403 59,182 261,698
Trading securities (***) 1,298 10,457 - 352 12,107
Investment securities available-for-sale - 29,018 - - 29,018
Loans (**) 210,768 297,007 - 8,343 516,118
Investments in subsidiaries and participations 49,009 - - - 49,009
Investment securities held-to-maturity - - - - -
Property and equipment - - - - -
Goodwill - - - - -
Other assets 20,530 187,042 - 2,984 210,556
Total Assets 321,248 1,096,361 403 73,466 1,491,478
Liabilities
Bank deposits 3,905 7,948 119 31,716 43,688
Foreign currency deposits (*) 246,361 843,536 574 37,989 1,128,460
Funds provided from other financial institutions 6,819 292,208 - 466 299,493
Marketable securities issued - - - - -
Miscellaneous payables 10,494 16,172 - 1,207 27,873
Other liabilities 3,634 18,008 - 727 22,369
Total liabilities 271,213 1,177,872 693 72,105 1,521,883
Net Balance Sheet Position 50,035 (81,511) (290) 1,361 (30,405)
Net Off-Balance Sheet Position (47,769) 67,758 - (740) 19,249
Financial derivative assets 123,723 189,432 - 11,149 324,304
Financial derivative liabilities 171,492 121,674 - 11,889 305,055
Non-cash loans (****) 180,617 402,468 6,287 24,556 613,928
Prior Period
Total Assets 396,433 1,281,968 20,663 95,020 1,794,084
Total Liabilities 296,363 1,454,169 226 84,973 1,835,731
Net Balance Sheet Position 100,070 (172,201) 20,437 10,047 (41,647)
Net Off-Balance Sheet Position (98,996) 168,691 (20,158) (8,616) 40,921
Non-cash loans 184,397 391,877 7,456 24,914 608,644
(*) Gold account deposits amounting to TL 9,325 (December 31, 2002 - TL
25,031) are included in the foreign currency deposits.
(**) foreign currency indexed loans amounting to TL 58,796 (December 31,
2002 - TL 89,632) are included in the loan portfolio.
(***) Foreign currency indexed government bonds and treasury bills amounting to
TL 219 (December 31, 2002 - TL 243) are included in the trading portfolio.
(****) There are no effects on the net off-balance sheet position.
IV- Interest Rate Risk
Interest rate risk shows the loss probability related to the changes in the
interest rates depending on the Bank's position, and it is managed by the
Treasury Department. The interest rate sensitivity of assets, liabilities and
off-balance sheet items related to this risk are measured by using the standard
method. The first step at calculation of interest rate risk, is to place the
instruments subject to interest rate risk in the appropriate one of the 13
maturity sections according to the remaining time to maturity or to the
repricing. At the second step, the instruments with variety of maturities are
weighted according to their risks for reflecting the interest rate risk
volatilities that match their maturities.
The first priority of the Bank's risk management is to protect from interest
rate volatility. All types of sensitivity analysis performed within the context
is calculated by the risk management and reported to the Asset-Liability
Committee.
Work is performed regarding interest income according to the macro economical
indicators in the Bank's budget estimations and the effects of the market
interest fluctuations on the financial position and cash flow are purified at
the maximum level possible by means of target revisions.
The Bank management follows the market interest rates daily and determines the
interest rates of the Bank when necessary.
Since the Bank does not permit or imposes limits, on maturity mismatches it is
not expected that the Bank will face a significant interest rate risk.
Information related to the interest rate sensitivity of assets, liabilities and
off-balance sheet items based on repricing dates):
Up to 1 1-3 3-6 6-12 1 Year and
Months Months Months Months Over Demand Total
Current Period
Assets
Cash (cash in vault, foreign
currency cash, money in transit,
cheques purchased) and balances
with the Central Bank of Turkey 488,245 - - - - 71,584 559,829
Due from banks and other
financial institutions 423,267 17,500 14,493 4,000 - 90,931 550,191
Trading securities 1,472 3,032 9,591 21,494 46,298 - 81,887
Securities available-for-sale 8 - - 6,572 22,446 - 29,026
Loans 360,003 236,310 156,105 78,345 54,882 - 885,645
Securities held-to-maturity 1,743 36,350 - 274 - - 38,367
Other assets 9,936 8,402 3,518 7,008 889 194,788 224,541
Total Assets 1,284,674 301,594 183,707 117,693 124,515 357,303 2,369,486
Liabilities
Bank deposits 60,801 12,098 1,200 - - - 74,099
Other deposits 1,350,553 108,186 29,064 2,236 - - 1,490,039
Miscellaneous payables - - - - - 39,929 39,929
Marketable securities issued - - - - - - -
Funds provided from other 41,031 12,715 257,039 5,906 3,940 - 320,631
financial institutions
Other liabilities 40,656 8,834 7,051 2,356 4,906 380,985 444,788
Total Liabilities 1,493,041 141,833 294,354 10,498 8,846 420,914 2,369,486
Balance Sheet Interest (208,367) 159,761 (110,647) 107,195 115,669 (63,611) -
Sensitivity Gap
Off Balance Sheet Interest - - - - - - -
Sensitivity Gap
Total Interest Sensitivity Gap (208,367) 159,761 (110,647) 107,195 115,669 (63,611) -
The other assets line at the without interest column consists of tangible fixed
assets amounting to TL 39,987, intangible fixed assets amounting to TL 3,603,
participations amounting to TL 6,180 and subsidiaries amounting to TL 115,203
and the other liabilities line consists of shareholders' equity with a total
amount of TL 289,123.
Up to 1 1-3 3-6 6-12 1 Year
and Over
Month Month Months Months Demand Total
Prior Period
Assets
Cash (cash in vault, foreign 529,171 - - - - 96,888 626,059
currency cash, money in transit,
cheques purchased) and balances with
the Central Bank of Turkey
Due from banks and other financial 721,694 12,263 8,917 2,856 - 71,611 817,341
institutions
Trading securities 2,818 14,108 6,922 6,560 428 302 31,138
Investment securities - 18,790 - - - 10 18,800
available-for-sale
Loans 364,679 179,348 238,332 60,072 45,918 - 888,349
Investment securities 231 40,521 - - - - 40,752
held-to-maturity
Other assets - - - - - 223,047 223,047
Total Assets 1,618,593 265,030 254,171 69,488 46,346 391,858 2,645,486
Liabilities
Banks deposits 65,525 182 1,115 - - - 66,822
Other deposits 1,658,400 132,980 11,489 15,443 440 - 1,818,752
Miscellaneous payables - - - - - 39,559 39,559
Marketable securities issued - - - - - - -
Funds provided from other financial 4,548 204,684 19,770 91,636 - - 320,638
institutions
Other liabilities 122 388 627 1,051 5,334 392,193 399,715
Total Liabilities 1,728,595 338,234 33,001 108,130 5,774 431,752 2,645,486
On Balance Sheet Interest (110,002) (73,204) 221,170 (38,642) 40,572 (39,896) -
Sensitivity Gap
Off Balance Sheet Interest - - - - - - -
Sensitivity Gap
Total Interest Sensitivity Gap (110,002) (73,204) 221,170 (38,642) 40,572 (39,896) -
The other assets line at the without interest column consists of tangible fixed
assets amounting to TL 41,507, intangible fixed assets amounting to TL 3,303,
participations amounting to TL 6,291 and subsidiaries amounting to TL 112,781
and the other liabilities line consists of shareholders' equity with a total
amount of TL 285,134.
Average interest rates applied to monetary financial instruments:
EURO USD Yen TL
% % % %
Current Period
Assets
Cash (cash in vault, foreign currency cash, money in -
transit, cheques purchased) and balances with the Central 1.00 0.39 25.00
Bank of Turkey
Due from banks and other financial institutions - 1.37 - 40.91
Trading securities 10.58 10.68 - 54.30
Securities available-for-sale - 10.23 - -
Loans 5.96 6.20 6.36 48.63
Securities held-to-maturity - - - 58.18
Liabilities
Bank deposits 3.37 2.10 4.33 39.64
Other deposits 3.05 3.03 3.04 33.20
Miscellaneous payables - - - -
Marketable securities issued - - - -
Funds provided from other financial institutions 4.51 2.98 5.93 39.23
V- Liquidity Risk
Liquidity risk occurs when there is not sufficient amount of cash or cash flows
to fulfill the cash outflows completely and on time, resulting from the unstable
cash inflows.
Liquidity risk may occur when the market penetration is not enough, when the
open positions cannot be closed urgently with a suitable price and sufficient
amount due to barriers and break-ups at the markets.
The Bank's policy is to establish a liquid asset structure that can afford all
kinds of liabilities by liquid sources. In this scope liquidity problem does not
happen at any period. The Board of Directors of the Bank continuously determines
the liquidity ratios and related standards, and controls them, in order to keep
this structure.
There is a system worked on to apply international measurement methods. However,
according to the general policies of the Bank, the adaptation of the assets,
liabilities, the interest rates to the payments are always established within
the asset liability management strategies. A positive difference is tried to be
established between the yields of TL and foreign currency assets and liabilities
at the balance sheet and their costs. According to this strategy, the Bank pays
special attention not to take maturity risk, and no banking service is marketed
when the price is lower than the financing cost.
When the funding and liquidity sources are considered, the Bank covers majority
of its liquidity need by deposits, and in addition to this source, it makes use
of prefinancing and syndication products to generate additional sources.
Generally, the Bank does not prefer to utilize liquidity from interbank money
markets and is in a net lender position in interbank money markets.
Presentation of assets and liabilities according to their remaining maturities :
1-3 3-6 6-12 1 Year and
Months Months Months Over
Current Period Demand (*) Total
(**)
Assets
Cash (cash in vault, foreign currency
cash, money in transit, cheques
purchased) and Balances with the Central 559,829 - - - - 559,829
Bank of Turkey
Due from banks and other financial 514,198 17,500 14,493 4,000 - 550,191
institutions
Trading securities 809 1,981 9,591 22,051 47,455 81,887
Securities available-for-sale 9 - - 6,571 22,446 29,026
Loans 360,003 236,310 156,105 78,345 54,882 885,645
Securities held-to-maturity - - - 38,367 - 38,367
Other assets 35,939 7,837 3,518 7,729 940 224,541
Total Assets 1,470,787 263,628 183,707 157,063 125,723 2,369,486
Liabilities
Bank deposits 60,801 12,098 1,200 - - 74,099
Other deposits 1,350,553 108,186 29,064 2,236 - 1,490,039
Funds provided from other financial 41,031 12,715 198,387 5,906 62,592 320,631
institutions
Marketable securities issued - - - - - -
Miscellaneous payables 39,929 - - - - 39,929
Other liabilities 113,940 8,834 7,051 20,935 294,028 444,788
Total Liabilities 1,606,254 141,833 235,702 29,077 356,620 2,369,486
Net Liquidity Gap (135,466) 121,795 (51,995) 127,986 (230,897) -
Prior Period
Total Assets 1,797,604 218,712 271,052 78,169 106,066 2,645,486
Total Liabilities 1,867,199 160,751 57,192 200,269 360,075 2,645,486
Net Liquidity Gap (69,595) 57,961 213,860 (122,100) (254,009) -
(*) The maturity of up to 1 month of Interbank funds sold amounting to TL
243,939, loans amounting to TL360,003, and domestic and foreign banks placements
amounting to TL 270,259 are shown in the demand column. Furthermore, demand
deposits amounting to TL 1,349,097 is included in the other deposits and shown
at the demand column.
(**) Total column includes other assets amounting to TL 168,578 consists of
TL 121,383 of subsidiaries and participations, TL 39,987 of tangible assets, TL
3,603 of intangible fixed assets, TL 2,966 of prepaid expenses and TL 639 of
office supply inventory that are not taken in to consideration at the maturity
distribution. Other liabilities which matures up to 1 year and over includes
shareholders' equity amounting to TL 289,123.
This information is provided by RNS
The company news service from the London Stock Exchange
MORE TO FOLLOW
IR KGGMRVDLGFZG