RNS Number:6619O
Turk Ekonomi Bankasi A.S.
14 August 2003
Part 2
SECTION FIVE
FOOTNOTES AND EXPLANATIONS ON
UNCONSOLIDATED FINANCIAL STATEMENTS
I- Footnotes And Explanations Related to the Assets
1. Information related to the account of the Central Bank of Turkey:
Current Period Prior Period
Demand Unrestricted Amount 13,468 16,498
Time Unrestricted Amount 351,960 365,632
Total 365,428 382,130
2. Information about trading portfolio:
a) Trading securities given as collateral or blocked: None.
b) Trading securities subject to repurchase agreements:
Current Prior
Period Period
TL FC TL FC
Government bonds 19,206 - 18,645 -
Treasury bills 1,349 - 6,321 -
Other debt securities - - - -
Bank bonds and bank guaranteed bonds - - - -
Asset backed securities - - - -
Other - - - -
Total 20,555 - 24,966 -
3. Information on available for sale portfolio:
a) Main types of available for sale securities: public sector debt
securities, and other marketable securities and share certificates.
b) Information on available for sale portfolio:
Current Period Prior Period
Debt securities 29,018 18,790
Quoted in a stock exchange 6,571 -
Not quoted 22,447 18,790
Share certificates 8 10
Quoted in a stock exchange - -
Not quoted 8 10
Provision for impairment (-) - -
Total 29,026 18,800
c) Available for sale securities given as collateral or blocked: None.
d) Information on investment securities available-for-sale given as
collateral or blocked: None
e) Information on investment securities available-for-sale subject to
repurchase agreements: None.
4. Information on loans :
a) Information on all types of loans and advances given to shareholders and
employees of the Bank:
Current Period Prior Period
Cash Loans Non-Cash Loans Cash Loans Non-Cash
Loans
Direct loans granted to shareholders 902 1,193 663 7,502
Corporate shareholders 902 1,193 663 7,502
Real person shareholders - - - -
Indirect loans granted to - - - -
shareholders
Loans granted to employees 674 - 839 -
Total 1,576 1,193 1,502 7,502
b) Information about the first and second group loans and other receivables
including loans that have been restructured or rescheduled:
Loans and Other Receivables Under
Close Monitoring
Standard Loans and Other Receivables
Loans and Other Restructured or Loans and Other Restructured or
Cash Loans Receivables Rescheduled Receivables Rescheduled
Non-specialized loans 880,793 - 547 4,305
Discount notes 21,526 - - -
Export loans 450,772 - - -
Import loans - - - -
Loans given to financial sector 23,575 - - -
International loans 29,708 - - -
Consumer loans 23,499 - - -
Credit cards 16,415 - - -
Precious metals loans 5,422 - 547 -
Other 309,777 - - 4,305
Specialized loans - - - -
Other receivables - - - -
Total 880,793 - 547 4,305
c) Information on consumer loans :
Medium and Long Interest Income
Short Term Term Total Accrual
Consumer loans-TL 8,753 5,712 14,465 427
Real estate loans 153 1,000 1,153 30
Automotive loans 1,693 4,535 6,228 138
Consumer loans - - - -
Personnel loans 634 40 674 19
Other consumer loans 6,273 137 6,410 240
Consumer loans- Indexed to FC 1,342 7,692 9,034 42
Real estate loans 193 2,445 2,638 10
Automotive loans 660 5,068 5,728 24
Consumer loans 489 179 668 8
Personnel loan - - - -
Other consumer loans - - - -
Credit cards 16,415 - 16,415 -
Total Consumer Loans 26,510 13,404 39,914 469
d) Domestic and foreign loans:
Current Period Prior Period
Domestic loans 871,887 873,986
Foreign loans 13,758 14,363
Total 885,645 888,349
e) Loans granted to subsidiaries and investments:
Current Period Prior Period
Direct loans granted to subsidiaries and investments 139 205
Indirect loans granted to subsidiaries and investments - -
Total 139 205
f) Specific provisions provided against loans:
Current Period Prior Period
Specific provisions
Loans and receivables with limited collectibility 104 70
Loans and receivables with doubtful collectibility 254 200
Uncollectible loans and receivables 14,673 16,730
Total 15,031 17,000
g) Information on loans under follow-up account (Net) :
g.1) Information on loans and other receivables included in loans under
follow-up account which are restructured or rescheduled: None.
g.2) The movement of loans under follow-up:
III. Group IV. Group V. Group
Loans and
receivables with
Loans and doubtful
receivables with colectibility
limited Uncollectible
collectibility loans and
receivables
Prior period end balance 1,017 400 21,115
Additions (+) 673 - 1,767
Transfers from other categories of loans under - 1,108 328
follow-up (+)
Transfers to other categories of loans under 1,108 328 -
follow-up (-)
Collections (-) 85 56 2,144
Write-offs (-) - - 29
Index difference (-) 144 40 2,243
Current period end balance 353 1,084 18,794
Specific provision (-) 105 253 14,673
Net Balances on Balance Sheet 248 831 4,121
g.3) Information on foreign currency loans and other receivables under
follow-up: None.
h) Liquidation policies for the uncollectible loans and other receivables :
The loans and other receivables decided to be uncollectible are written off from
the assets according to the Tax Law by the decision of the top management 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"
related to the clause 12 of article 11 and clause 11 of the article 3 of the
Bank Law 4389 changed by the laws 4672 and 4491 and announced at the Official
Gazette numbered 24448 and dated June 30, 2001.
5. Information on held to maturity portfolio (Net) :
a) Information on held to maturity portfolio:
Current Period Prior Period
Debt securities 38,367 40,752
Quoted in a stock exchange 38,367 40,752
Not quoted - -
Provision for impairment (-) - -
Total 38,367 40,752
b) Movement of held to maturity portfolio :
Current Period Prior Period
Beginning balance 40,752 96,617
Effect of inflation (-) (4,174) (22,770)
Foreign currency differences on monetary assets - 5,890
Purchases during year 2,008 40,752
Disposals through sales and redemptions (219) (79,737)
Impairment provision - -
Closing Balances 38,367 40,752
c.1) Information on accounts in which investment securities
held-to-maturity recorded:
Current Period Prior Period
Historical Cost Valuation Historical Cost Valuation
TL FC TL FC TL FC TL FC
Held to Maturity Portfolio
Given as collateral or blocked 38,367 - 37,489 - 40,752 - 41,486 -
Subject to repo transactions - - - - - - - -
Held for structural position - - - - - - - -
Receivables from securities lending - - - - - - - -
Collaterals on securities lending - - - - - - - -
Closing Balances 38,367 - 37,489 - 40,752 - 41,486 -
Other than the above items, there are no held to maturity securities which are
not given as collateral.
c.2) Marketable securities held to maturity given as collateral consist
of public sector debt securities of TL 38,367, given as collateral for statutory
requirements.
Securities held-to-maturity given as collateral or blocked:
Current Period Prior Period
TL FC TL FC
Share certificates - - - -
Bonds and similar investment securities 38,367 - 40,752 -
Other - - - -
Total 38,367 - 40,752 -
c.3) Securities held-to-maturity subject to repurchase agreements :
None.
c.4) Securities held-to-maturity held for structural position: None.
6. Information on participations (Net):
a.1) Information on participations :
Current Period Prior Period
Balance at the beginning of the period 6,291 5,150
Movements during the period (111) 1,141
Purchases - 750
Free shares obtained profit from current 121 434
year's share
Dividends from current year income - -
Sales - -
Revaluation increase (232) (43)
Provision for impairment - -
Balance at the end of the period 6,180 6,291
Capital commitments - -
Share percentage at the end of the period (%) - -
a.2) Valuation of participations:
Current Period Prior Period
Valuation with cost 5,931 5,931
Valuation with fair value 249 360
Valuation with equity method - -
Total 6,180 6,291
a.3) Participations which are quoted to a stock exchange:
Current Period Prior Period
Other Financial Participation / Varlik 249 360
Yatirim Ortakligi A.S.
Total 249 360
a.4) Information related to participations:
Bank's share percentage-If Bank's risk group
different voting share percentage (%)
Description Address (City / percentage(%)
Country))
TEB Sigorta A.S. Istanbul /Turkey 50.00 50.00
Varlik Yatirim Ortakligi A.S. Istanbul /Turkey 24.40 31.58
Information on participations as presented in table a.4:
Income from
Marketable
Securities Prior Period
Portfolio (*) Profit / Loss
Shareholders'Equity(*) Total Fixed Interest Current (*) Fair
Assets(*) Income (*) Period Profit Value (*)
Total / Loss (*)
Assets
28,354 4,866 466 211 - (2,945) 582 -
1,400 1,376 5 - - 6 55 1,020
(*) Financial statements of Varlik Yatirim Ortakligi A.S. have been prepared in
accordance with the incumbent Capital Market Board legislation. Financial
statements of TEB Sigorta have been prepared in accordance with principles
stated in the Insurance Control Law. Current period information is expressed in
the equivalent purchasing power at June 30, 2003, while prior period information
are historical and are expressed with nominal figures at December 31, 2002.
a.5) Information on investments which are sold in current period :
None.
a.6) Investments purchased in the current period: None.
7. Information on subsidiaries (Net):
a) Information on subsidiaries:
a.1) Information on subsidiaries:
Current Period Prior Period
Balance at the beginning of the period 112,781 100,432
Movements during the period 2,422 12,349
Purchases - 7,665
Free shares obtained profit from current 10,236 3,668
year's share
Dividends from current year income - -
Sales - -
Revaluation increase (*) (7,814) 1,016
Provision for impairment - -
Balance at the end of the period 115,203 112,781
Capital commitments - -
Share percentage at the end of the period (%) - -
(*) The exchange (expense)/income generated from the difference between
the devaluation and inflation of the foreign subsidiaries.
a.2) Valuation of subsidiaries:
Subsidiaries denominated in Turkish Lira are reflected by restating their costs
with the conversion factors applicable for the relevant dates after deducting
the capital increases generated by funds like the revaluation fund. When there
is a permanent diminution in value of the subsidiaries then a provision is set.
Subsidiaries denominated in foreign currency are translated into Turkish Lira by
applying the exchange rates prevailing at balance sheet dates.
Current Prior
Period Period
Valuation with cost 115,203 112,781
Valuation with fair value - -
Valuation with equity method - -
a.3) Subsidiaries which are quoted to a stock exchange: None.
a.4) Information on subsidiaries:
Bank's share Bank's risk group
percentage-If different share percentage
voting percentage(%) (%)
Description Address(City/ Country)
The Economy Bank N.V. Netherlands 100.00 100.00
Petek International Holdings B.V. Netherlands 100.00 100.00
TEB Yatirim Menkul Degerler A.S. Istanbul/Turkey 74.80 91.81
TEB Finansal Kiralama A.S. Istanbul/Turkey 68.76 72.53
TEB Kiymetli Madenler A.S. Istanbul/Turkey 66.00 71.81
TEB Factoring A.S. Istanbul/Turkey 65.80 70.77
TEB Portfoy Yonetimi A.S. Istanbul/Turkey 55.89 88.61
Information on subsidiaries as presented in table a.4 (*) :
Income from
Marketable
Securities
Portfolio
Shareholders' Total Fixed Interest Current Prior Period
Equity Assets Income Period Profit Profit / Loss
Total Assets / Loss Fair Value
1,058,720 74,250 1,407 26,505 (571) 239 8,112 -
1,630 1,630 - - - (26) 3,262 -
16,281 13,983 464 728 - 156 2,983 -
185,328 61,569 159,531 642 - 29,987 4,141 -
237 231 - - - (40) 40 -
85,621 7,951 178 6,608 - 1,274 500 -
4,843 4,305 602 432 76 617 876 -
(*) Information is disclosed in statutory amounts.
a.5) Information on the subsidiaries that were disposed in current period:
None.
a.6) Information on the subsidiaries purchased in current period: None.
8. Information on financial lease receivables (Net): None.
9. Explanations related to interest and income accruals :
a) Information about accrued interest and income receivables:
Current Prior
Period Period
Accrued interest and income receivables TL FC TL FC
Interest accruals - due 242 1 254 -
Interest accruals - not due 7,657 2,946 10,136 2,923
Loan commissions and other income accruals - due - - - -
Loan commissions and other income accruals - not 17 5 13 1
due
Total 7,916 2,952 10,403 2,924
b) Information on other interest and income accruals :
Current Period Prior Period
Other interest and income accruals TL FC TL FC
Trading securities 5,862 52 3,732 18
Securities available for sale - 479 - 398
Securities held to maturity 709 - 734 -
Interest accruals of reverse repo transactions - - - -
Interest accruals of reserve deposits 1,163 175 1,026 276
Income accruals of financial derivative instruments 5,406 - 4,899 -
Interest and income accruals - - - -
Income accrual of foreign exchange gains 5,406 - 4,899 -
Income accruals of financial lease income - - - -
Other 7,699 66 6,027 140
Total 20,839 772 16,418 832
10. Information on other assets:
a) Information on prepaid expenses, taxes and similar items :
Current Period Prior Period
Deferred tax 4,266 2,267
Assets held for sale - -
Advances given 59 206
Prepaid rent expenses 400 420
Transaction cost related to financial liabilities - 2,291
Prepaid taxes 4,824 10,165
Other 11,462 7,632
Total 21,011 22,981
b) Other assets and liabilities which exceed 10 % of the balance sheet total
(excluding off-balance sheet commitments) and breakdown of these which
constitute at least 20% of grand total: None
II- Footnotes And Explanations Related to the Liabilities
1. a) Information on maturity structure of deposits:
a.1) Current period :
Demand 7 day Call Up to 1 1-3 Month 3-6 Month 6 Month-1 1 Year and
Accounts month Year over
Saving deposits 12,394 - 60,284 57,204 38,158 6,696 12,012
Foreign currency 367,171 - 436,261 281,985 25,980 7,365 373
deposits
Residents in Turkey 349,973 - 426,501 277,533 25,304 6,177 357
Residents abroad 17,198 - 9,760 4,452 676 1,188 16
Public sector 10,863 - - - - - -
deposits
Commercial deposits 47,809 - 51,578 15,194 4,191 468 13
Other institutions 38,938 - 5,458 307 11 1 -
deposits
Precious metals 4,000 - - 4,688 - 637 -
deposits
Interbank deposits 8,403 - 21,931 42,565 1,200 - -
Central Bank of - - - - - - -
Turkey
Domestic Banks 141 - 40 - - - -
Foreign Banks 3,761 - 21,891 42,565 1,200 - -
Special finance 4,501 - - - - - -
houses
Other - - - - - - -
Total 489,578 - 575,512 401,943 69,540 15,167 12,398
a.2) Prior period :
Demand 7 day Call Up to 1 1-3 Month 3-6 Month 6 Month-1 1 Year and
Accounts month Year over
Saving deposits 19,577 - 87,222 42,901 13,971 3,646 15,014
Foreign currency 455,616 - 567,281 348,058 35,668 9,346 395
deposits
Residents in Turkey 437,565 - 549,799 341,790 32,943 7,880 376
Residents abroad 18,051 - 17,482 6,268 2,725 1,466 19
Public sector 39 - - - - - -
deposits
Commercial deposits 59,685 - 84,009 4,766 9,485 6 15
Other institutions 36,517 - 478 16 9 1 -
deposits
Precious metals 10,828 - - 12,627 - 1,576 -
deposits
Interbank deposits 22,011 - 29,477 14,219 - 1,115 -
Central Bank of - - - - - - -
Turkey
Domestic Banks 12,291 - - - - 1,115 -
Foreign Banks 9,720 - 29,477 14,219 - - -
Special finance - - - - - - -
houses
Other - - - - - - -
Total 604,273 - 768,467 422,587 59,133 15,690 15,424
b.1) Information on saving deposits under the guarantee of saving deposit
insurance and exceeding the limit of saving deposit insurance:
Under the guarantee of Exceeding the limit of
saving deposit insurance
Saving Deposits saving deposit
Current Prior Period Current Prior Period
Period Period
Saving deposits 70,102 27,164 116,646 155,167
Foreign currency saving deposits 260,263 214,995 454,612 703,850
Other deposits in the form of saving 513 758 1,216 7,363
deposits
Foreign branches' deposits under foreign - - -
authorities' insurance
-
Off-shore banking regions' deposits under -
foreign authorities' insurance
- - -
Total 330,878 242,917 572,474 866,380
b.2) The bank which has settled abroad should disclose, the total amount
of savings deposit in Turkey branch, and insured in the country of head office :
None
2. Information on funds provided from repurchase agreement
transactions:
Prior
Current Period Period
TL FC TL FC
From domestic transactions 21,928 - 24,415 -
Financial institutions and organizations 16,500 - 14,492 -
Other institutions and organizations 1,657 - 4,509 -
Real persons 3,771 - 5,414 -
From foreign transactions 2 - 1,001 -
Financial institutions and organizations - - - -
Other institutions and organizations - - 1,000 -
Real persons 2 - 1 -
Total 21,930 - 25,416 -
3. a) Information on funds borrowed:
Prior
Current Period Period
TL FC TL FC
Short-term 21,138 236,902 17,775 211,227
Medium and long-term - 41,476 - 64,218
Total 21,138 278,378 17,775 275,445
4. a) Information on debt securities issued: None.
b) The explanation on the maturity structure, interest rate, type of currency
of the issued marketable securities : None.
5. Explanation on funds: None
6. Explanation on miscellaneous payables:
Current Period Prior Period
Total amount of cash collateral obtained 104 134
The table consists of blocked accounts regarding cash collateral, loans, import
and export transactions
7. Other assets and liabilities which exceed 10 % of the balance sheet
total (excluding off-balance sheet commitments) and breakdown of these which
constitute at least 20% of grand total: None
8. Explanation on leasing operations:
Current Prior
Period Period
Gross Net Gross Net
Less than a year 2,366 1,767 2,367 2,185
1-4 years 4,891 4,255 6,746 5,335
More than 4 years - - - -
Total 7,257 6,022 9,113 7,520
9. Information on interest and expense accruals:
Prior
Current Period Period
TL FC TL FC
Accrued interest on deposits 7,427 1,364 5,845 1,128
Accrued interest on funds borrowed 1,638 964 1,808 1,588
Accrued interest on bonds - - - -
Accrued interest on repurchase 23 - 31 -
agreement transactions
Accrued interest on derivative 15,850 - 5,091 -
financial instruments
Accrued interest and expense - - - -
Foreign exchange losses accrued 15,850 - 5,091 -
Other interest and expense accruals 8,585 - 1,109 -
Total 33,523 2,328 13,884 2,716
10. Provisions and subordinated loans :
a) Information on general provisions::
Current Period Prior Period
General provisions 6,753 6,792
Provisions for First Group Loans and Receivables 5,711 5,762
Provisions for Second Group Loans and Receivables 21 35
Provisions for Non Cash Loans 1,021 995
Others - -
Total 6,753 6,792
b) Information on employee termination benefits and notice indemnity:
5 PP 4 PP 3 PP 2 PP Prior Current
Period Period
Actual Payments of Employee Termination 56 107 947 662 435 421
Benefits (*)
Reserve for Employee Termination Benefits 1,580 3,140 4,456 6,912 10,972 14,350
and Notice Indemnity (*)
Actual Payment Ratio %3.57 %3.40 %21.24 %9.59 %3.96 %8.35
Ratio of reserve for Employee Termination - - - - - %8.35
Benefits and Notice Indemnity (**)
Possible reserve for Employee Termination - - - - - 912
Benefits and Notice Indemnity
(*) Reflected with statutory figures
(**) 5-year actual payment ratio
As of June 30, 2003, TL 912 of reserve for employee termination benefits and
notice indemnity was reflected to the financial statements corresponding to
8.35% of total liability of TL 14,350.
c) Information on free reserves for possible losses : None.
d) Information on subordinated loans:
Prior
Current Period Period
TL FC TL FC
From Domestic Banks - - - -
From Other Domestic Institutions - - - -
From Foreign Banks - - - -
From Other Foreign Institutions - 21,115 - 27,418
Total - 21,115 - 27,418
11. Information of Shareholders' Equity:
a) Presentation of paid-in capital:
Current Period Prior Period
Common stock 55,125 55,125
Preferred stock - -
b) Paid-in capital amount, explanation as to whether the registered share
capital system is applicable to the Bank if so, amount of registered share
capital ceiling :
Capital System Paid-in capital Ceiling
Registered capital system 55,125 100,000
c) Information on share capital increases and their sources; other
information on increased capital shares in current period: None
d) Information on share capital increases from revaluation funds: None.
e) Capital commitments in the last fiscal year and at the end of the
following interim period, the general purpose of these commitments and projected
resources required to meet these commitments : None.
f) Indicators of the Bank's income, profit and liquidity for the previous
periods and within these indicators possible affects on capital fore sighting
uncertainty : Not applicable.
g) Information on privileged shares :
7 % of the Bank's remaining net income and tax after deducting legal
reserves and first dividends, corresponding to the Bank's 60,000 shares of TL
30,000,000 (in full TL) is distributed to the founder shares.
12. a) Common stock issue premiums, shares and equity instruments: None
13. Information on shareholders having more than 10 % share:
Name/Commercial title Amounts Share Percentage Paid-in capital Unpaid portion
Teb Mali Yatirimlar A.S. 38,631 70.08% 38,631 -
III- Footnotes And Explanations Related To the Income Statement
There is no fundamental error for any groups or items related to the prior
period. There is no change in accounting estimates for the fiscal year.
The breakdown of other interest and non-interest income and expense accounts
that exceed 10% of the related totals are shown below.
Other interest expense amounting to TL 21,074 includes foreign exchange losses
amounting to TL 11,039 of foreign currency indexed loans occurred from the
devaluation of foreign currencies against TL and interest expenses on marketable
securities subject to repurchase agreements amounting to TL 9,891.
Other fees and commission income amounting to TL 10,284 includes fees and
commissions on credit cards amounting to TL 3,482, and other fee and commission
expense amounting to TL 6,082 includes fees and commissions on credit card and
interbank money marked transactions amounting to TL 3,045 and TL 817,
respectively.
1. a) Information on interest income received from investments and
subsidiaries:
Current Period Prior Period
Interest received from investments and subsidiaries 14 5
b) Information on financial lease income: None.
c) Interest received from reverse repurchase agreement transactions:
2. a) Information on interest expense to investments and subsidiaries: None
Current Period Prior Period
Interest expense to investments and subsidiaries 161 318
b) Information on financial lease expenses :
Current Period Prior Period
Financial lease expense 116 175
c) Distribution of interest expense on deposits based on maturity of
deposits :
Time Deposits
Demand Up to 1 Up to 3 Up to 6 More than 1
Deposits Month Months Months Year
Account name Up to 1 Total
Year
TL
Bank deposits 2 4,557 - - - - 4,559
Saving deposits 112 13,619 11,135 4,847 1,012 2,997 33,722
Public sector deposits - - - - - - -
Commercial deposits 227 9,864 1,819 466 27 3 12,406
Other deposits 12 157 24 2 - - 195
7 days call accounts - - - - - - -
Total 353 28,197 12,978 5,315 1,039 3,000 50,882
FC
Foreign currency 660 6,279 4,452 400 119 6 11,916
deposits (*)
7 days call accounts - - - - - - -
Precious metal - 8 62 - 11 - 81
deposits
Total 660 6,287 4,514 400 130 6 11,997
Total 1,013 34,484 17,492 5,715 1,169 3,006 62,879
(*) Interest expense on foreign currency demand deposits includes TL 585 of
foreign bank deposits interest expense.
d) Interest expense on repurchase agreements :
Current Prior Period
Period
TL FC TL FC
Interest expense on repurchase agreements 9,891 - 19,084 -
3. Net income/losses from marketable securities for investment purposes:
None
4. Information on other operating income :
The information on the factors affecting the Bank's income including
extraordinary items and new developments, and the explanation on nature and
amount of income earned from extraordinary items : None.
5. Provision expenses of banks for loans and other receivables:
Current Period Prior Period
Specific provisions for loans and other receivables 609 6,052
Unsecured - 5,152
Other groups 609 900
General provision expenses 1,251 2,034
Marketable securities impairment expense 29 1,469
Provision for impairment* - -
Other 472 -
Total 2,361 9,555
(*) Provision for impairment related to participations, subsidiaries and
securities held to maturity.
6.a) Income and expenses relating to investments and subsidiaries : None
b) Income / loss from investments, which are accounted for under the equity
method : None.
c) The information on income and expense from related party
transactions:
The Bank has certain banking transactions with group companies. These are
commercial transactions, which are realized in line with market rates. These are
reflected in income statement. The related amounts are presented in Part V,
section VI.
7. The explanations on net income / loss for the period:
a) The nature and amount of certain income and expense items from ordinary
operations is disclosed if the disclosure for nature, amount and repetition rate
of such items is required for a complete understanding of the Bank's performance
for the period : None
b) Effect of changes in accounting estimates on income statement for the
current and, if any for subsequent periods : None.
8. Nature and amount of changes in accounting estimates, which have a
material effects on current period or expected to have a material effect on
subsequent periods : None.
IV. Footnotes And Explanations Related To the Off-Balance Sheet
Commitments
1.a) Disclosure to be made separately from other contingent liabilities :
a.1) The Bank's share in contingent liabilities of joint ventures together
with other ventures : None.
a.2) Share of joint ventures in their own contingent liabilities: None.
a.3) The Bank's contingent liabilities resulting obligations of other
ventures in joint ventures : None.
b) Accounting and presentation of contingent assets and liabilities in the
financial statements :
b.1) For contingent assets, if realization probability is close to certain,
then it is accounted. If realization probability is low, then it is explained in
the footnotes. As of June 30, 2003 there are no contingent assets needed to be
explained.
b.2) For contingent liabilities, if realization probability is close to
certain, then provision is set. If there is low or no realization probability,
then it is explained in the footnotes : None.
2. Information on off-balance sheet liabilities :
a) Nature and amount of irrevocable loan commitments : Credit card
expenditure limit commitments are
TL 93,239 and TL 75,062 as of June 30, 2003 and December 31, 2002 respectively.
b) Nature and amount of contingent loss and commitments from off-balance
sheet items including below statements:
The Bank, within the context of banking activities, undertakes certain
commitments, consisting of loan commitments, letters of guarantee, acceptance
credits and letters of credit.
b.1) Non-cash loans including guarantees, acceptances, financial collaterals
and other letters of credits:
As of June 30, 2003 total guarantees and commitments consist of
letter of guarantees amounting to TL 572,313, acceptances amounting to TL 43,754
and letters of credit amounting to TL 318,583.
b.2) Guarantees, surety ships and similar transactions : None other than the
ones explained in article b.1).
3.a) Non-cash loans:
Current Period Prior Period
Guarantees given against cash loans 57,017 66,829
With maturity of 1 year or less than 1 year 21,366 25,040
With maturity of more than 1 year 35,651 41,789
Other non-cash loans 882,521 833,782
Total 939,538 900,611
b) Collateral, mortgage and other restrictions on tangible fixed assets, the
amount of capital expenditures related to expenses construction of tangible
fixed assets, intangible fixed asset purchase commitments: None.
4. The information on the Bank's rating by in the international rating
introductions :
The results of the trading performed by Moody's Investor Services and Fitch
Ratings are shown below:
Moody's Investor Services: March 2003
Bank Financial Strength D+
Long Term FX Deposits B3
Fitch Ratings: March 2003
Foreign Currency Commitments
Long Term B-
View Negative
Turkish Lira Commitments
Long Term B-
View Negative
National
Long Term A (tur)
View Negative
Individual Rating C/D
Support Points 4T
Additionally, Fitch Ratings have made an announcement at July 22, 2003 with
respect to the changes in its rating methodology and stated that the support
points rate for the Bank has been decreased to 5 from 4T.
V. Footnotes And Explanations Related To Statement Of Cash Flows
1. Cash and cash equivalents at beginning and end of periods:
The reconciliation of the components of cash and cash equivalents, accounting
policies used to determine these components, the effect of any change made in
accounting principle in the current period, the recorded amounts of the cash and
cash equivalent assets at the balance sheet and the recorded amounts in the cash
flow statement:
Current Period Prior Period
30.06.2003 30.06.2002
Cash 71,584 48,384
Cash equivalents 897,126 1,076,546
Cash includes of cash in TL and cash in foreign currency, cash equivalents
include the balances of the Central Bank, banks and interbank funds sold which
mature in less than three months.
2. Amount of cash and cash equivalents restricted for the usage of the
Bank and the shareholders by legal limitations and other reasons: None.
VI- Footnotes And Explanations on the Risk Group of the Bank
1. Volume of related party transactions, income and expense amounts
involved and outstanding loan and deposit balances :
a) Current Period :
Related Parties (*) Investments and Direct and indirect Other entities included
subsidiaries shareholders of the Bank in related parties
Cash Non-cash Cash Non-cash Cash Non-cash
Loans and other receivables
Balance at beginning of period 205 16,368 663 7,502 11,319 2,769
Balance at end of period 139 11,116 902 1,193 95 4,907
Interest and commission income 382 26 376 4 1,673 14
b) Prior Period :
Related Parties (*) Investments and Direct and indirect Other entities included
subsidiaries shareholders of the Bank in related parties
Cash Non-cash Cash Cash Non-cash
Loans and other receivables
Balance at beginning of period 90 40,448 834 1,335 5,454 6,166
Balance at end of period 205 16,368 663 7,502 11,319 2,769
Interest and commission income 1,806 109 39 510 2,316 511
received
c.1) Information on related party deposits balances:
Related parties (*) Investments and Direct and indirect Other entities included
subsidiaries shareholders of the Bank in related parties
Deposits Current Prior Current Prior Current Prior
period period period period period period
Balance at beginning of period 6,651 10,407 202,930 66,206 15,526 13,685
Balance at end of period 4,647 6,651 165,592 202,930 1,704 15,526
Interest on deposits 161 536 2,536 2,731 154 12,417
c.2) Information on forward and option agreements and other similar
agreements made with related parties :
Related Parties (*) Investments and Direct and indirect Other entities included
subsidiaries shareholders of the in related parties
Bank
Current Prior Current Prior Current Prior
period period period period period period
Trading transactions
Beginning of period 58,473 60,129 48,281 25,826 27,295 17,475
End of period 67,583 58,473 13,222 48,281 24,052 27,295
Total income/loss 1,492 899 (2,091) (384) 26 689
Hedging transactions purposes - - - - - -
Beginning of period - - - - - -
End of period - - - - - -
Total income/loss 1,492 899 (2,091) (384) 26 689
(*) The scope of the related parties are defined in the Article 20-2 of
the "Regulation on the Establishment and Operations of Banks".
2. Disclosures for related parties
a) The relations of the Bank with the entities controlled by the Bank and
its related parties, regardless of whether there are any transactions or not:
The Bank enters into baking transactions with related parties. These are
commercial transactions and realized on an arms-length basis.
a) Besides the structure of relationship, nature of the transaction,
amount and ratio to the total volume of transactions, amount of major items and
ratio to all items, pricing policies and other factors:
% According to the Amounts at
the Financial Statements
Amount
Cash loans 1,136 0.13
Non-cash loans 17,216 1.83
Deposits 171,943 10.99
Forward transactions and option agreements 104,857 13.71
These transactions are priced in accordance with the general pricing policies of
the Bank and are in line with market rates.
b) In the case that disclosing items separately, total of similar items
is disclosed in order to present the total impact on financial statements :
Explained in the article b.
c) Investments accounted for under the equity method : None.
e) Disclosures related to purchase and sale of real estate and other
assets, trading of services, agency contracts, leasing contracts, transferring
information as a result of research and development, license contracts,
financing (loans and cash or real capital supports included), guarantees, and
management contracts :
The Bank has financial lease agreements with TEB Finansal Kiralama A.S.. As of
June 30, 2003 the total leasing obligations related to these agreements amounted
to TL 6,022. Additionally, the Bank provides agency services for TEB Sigorta
A.S. and TEB Yatirim Menkul Degerler A.S.
Within the limits of the Banking Law, the Bank renders cash and non-cash
loans to its related parties and the ratio of these to the Bank's total cash and
non-cash loan portfolio is 1.01 %. Amounts of these loans are explained in the
note V- 1a.
As of June 30, 2003 the Bank has no purchases and sale of real estate
and other assets, transfer of information as a result of research and
development, license and management contracts with the related parties.
VII- Footnotes And Explanations on Inflation Accounting
Inflation Accounting
The accompanying financial statements are prepared by applying inflation
accounting to the financial statements, which are prepared on a historical cost
basis, except for the revaluation of fixed assets in line with Turkish Tax
Legislation, in accordance with the provisions of Communique No : 14 "Accounting
Standard Related to the Preparation of Financial Statements in Hyperinflationary
Periods" related to ARR. Communique No:14 requires banks to restate their
financials in the equivalent purchasing power of Turkish Lira 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%. As of June 30, 2003 based on the
wholesale price indices announced by the State Institute of Statistics, the
cumulative three-year inflation rate in Turkey is 208%.
Communique No:14 requires that the financial statements should be restated in
the equivalent purchasing power at the balance sheet date and the financial
statements of prior year should be restated in their entirety to the measuring
unit current at the balance sheet date.
The main guidelines for inflation accounting are as follows:
Cash and monetary assets and liabilities, which maintain their nominal balances
but experience a decline in purchasing power are not restated because they are
already expressed in terms of the monetary unit current at that balance sheet
date.
Non-monetary assets and liabilities which are not carried at amounts current at
the balance sheet date and other components of shareholders' equity (except for
the revaluation surplus which is eliminated) are restated by applying the
relevant conversion factors; being the change in the general price index from
the date of acquisition to the closing date. The inflation adjusted share
capital amount has been derived by indexing each capital increase other than
bonus shares from statutory revaluation fund from the date they were
contributed. Transfers to share capital from general reserves, gain on sale of
property and investments and inappropriate profits are considered as cash
contributions and are restated from the date of contribution.
Fixed assets subject to depreciation are restated from their historical
acquisition costs after eliminating the statutory revaluation increments.
Depreciation is not separately restated in the income statement since it is
computed over restated amounts.
Non-monetary items reflected at current values are not restated since they are
already stated in the current purchasing power.
Investments and subsidiaries denominated in Turkish Lira are reflected at
restated costs by converting historical acquisition costs, excluding free shares
from revaluation fund, with the relevant conversion factors. Transfers to share
capital from general reserves, gain on sale of property and investments and
inappropriate profits are considered as cash contributions and are restated from
the date of contribution. Investments and subsidiaries denominated in foreign
currency are converted to Turkish Lira with the exchange rates prevailing and
year-end.
All items in the statements of income are restated by applying the appropriate
conversion factors.
The effect of inflation on the Bank's net monetary position is included in the
statements of income and separately disclosed as a net monetary gain or loss.
The effect of inflation accounting on prior year financial statements in
included in retained earnings and the effect of restatement is disclosed
separately under shareholders' equity.
Indices and conversion factors that are used to restate the accompanying the
financial statements as of December 31, 2002, reflecting the restatement for the
changes in the general purchasing power of the Turkish is as follows;
Dates Index Conversion Factors
December 31, 2002 6,478.8 1.115
December 31, 2001 4,951.7 1.459
December 31, 2000 2,626.0 2.750
June 30, 2003 7,222.2 1.000
June 30, 2002 5,572.0 1.296
Restatement of balance sheet and income statement items through the use of a
general price index and relevant conversion factors does not necessarily mean
that the Bank could realize or settle the same values of assets and liabilities
as indicated in the balance sheets. Similarly, it does not necessarily mean that
the Bank could return or settle the same values of equity to its shareholders.
In accordance with Communique No :14, the Bank obtains expertise reports for its
buildings.
As of June 30, 2003 the total amount of legal reserves and general reserves are
TL 7,555 and TL 28,769, respectively, in the Bank's statutory books of account.
Balance sheet and income statement for the period ended June 30, 2003 are
reviewed. Balance sheet as of December 31, 2002, is audited. Income statement
for the period ended June 30, 2002 is reviewed by other auditors who have ceased
operations.
Income statement items do not have seasonality. However, restatement of income
statement items were made with monthly indices.
VIII- Explanations Related To Subsequent Events
a) Disclosure related to subsequent events and their impact on the financial
statements as required by the related standard: There are no significant
matters.
b) The impact of significant changes in foreign exchange rates subsequent to
the balance sheet date on the foreign currency transactions, items and on the
financial statements of the Bank : There are no significant changes.
SECTION SIX
INDEPENDENT LIMITED REVIEW REPORT
I- Explanations on The Independent Limited Review Report
The unconsolidated interim financial statements of the Bank were reviewed by
Guney Serbest Muhasebeci Mali Musavirlik A.S. (An Affiliated Firm of Ernst &
Young International) and the review report dated August 12, 2003 is presented
preceding the interim financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
IR GUUBARUPWUQC