RNS Number:3364S
Turk Ekonomi Bankasi A.S.
21 November 2003
Turk Ekonomi Bankasi
Anonim Sirketi
Consolidated Financial Statements
As of September 30, 2003
Together With Review Report
(CONVENIENCE TRANSLATION OF A REVIEW REPORT AND FINANCIAL STATEMENTS)
ORIGINALLY ISSUED IN TURKISH- SEE SECTION III, NOTE XXV)
(Convenience Translation of A Review Report And Financial Statements
Originally Issued In Turkish - See Section III, Note XXV)
TURK EKONOMI BANKASI ANONIM SIRKETI
REVIEW REPORT AS OF SEPTEMBER 30, 2003
We have reviewed the consolidated balance sheet of Turk Ekonomi Bankasi Anonim
Sirketi as of September 30, 2003 and the related consolidated statement of
income for the interim period then ended. These financial statements are
expressed in the equivalent purchasing power of Turkish lira as of September 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.
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying consolidated interim financial statements of Turk Ekonomi
Bankasi Anonim Sirketi at September 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.
Guney Serbest Muhasebeci Mali Musavirlik Anonim Sirketi
An Affiliated Firm of Ernst & Young International
Esra Peri, SMMM
November 20, 2003
Istanbul, Turkiye
INDEX
SECTION ONE Page no.
General Information
I. Footnotes and Explanations on the Parent Company Bank's Service
Activities and Operating Areas 1
II. Explanations and Footnotes Regarding the Including Group of the
Parent Company Bank 1
III. Explanations on the consolidated financial statements 1
SECTION TWO
Consolidated Financial Statements
I. Consolidated Balance Sheets - Assets 3
II. Consolidated Balance Sheets - Liabilities 4
III. Consolidated Income Statements 5
IV. Consolidated Statements of Off Balance Sheet Commitments 6
SECTION THREE
Accounting Principles
I. Basis of Presentation 7
II. Presentation of the Information Regarding the Parent Company
Bank and the Group Companies Included in the Consolidation 8
III. Explanations on Forward, Option Contracts and Derivative
Instruments 9
IV. Netting of Financial Assets and Liabilities 9
V. Interest Income and Expense 10
VI. Fees and Commission Income and Expense 10
VII. Securities Held for Trading 10
VIII. Sales and Repurchase Agreements and Lending of Securities 10
IX. Securities Held to Maturity, Securities Available for Sale and
Bank Originated Loans and Receivables 11
X. Unconsolidated Participations and Subsidiaries 12
XI. Originated Loans and Receivables and Provisions for Loan
Impairment1 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 14
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. Reporting Regarding Operational Sections 16
XXV. Other Issues 17
SECTION FOUR
Information on Financial Structure
I. Capital Adequacy Standard Ratio 18
II. Consolidated Market Risk 21
III. Consolidated Foreign Currency Risk 21
IV. Consolidated Interest Rate Risk 23
V. Consolidated Liquidity Risk 25
SECTION FIVE
Footnotes and Explanations
on Consolidated Financial Statements
I. Explanations on Consolidated Assets 27
II. Footnotes and Explanations Related to Consolidated
Liabilities 37
III. Footnotes and Explanations Related to Consolidated Income
Statement 41
IV. Explanations Related to Consolidated Off-balance Sheet Items 43
V. Footnotes and Explanations on the Risk Group of the Bank 45
VI. Footnotes and Explanations Related to Inflation Accounting 47
VII. Explanations Related to Subsequent Events 49
SECTION SIX
Independent Auditor's Report
I. Explanations on independent review report 49
SECTION ONE
GENERAL INFORMATION
I- Footnotes and Explanations on the Parent Company 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 September 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 : investorrelations@teb.com.tr
b) The Parent Company Bank's service activities and operating areas: The
Parent Company Bank operates in corporate, commercial, retail and private
banking areas.
c) Financial statements and relevant explanations together with the
footnotes are stated in Billions of Turkish Lira.
II- Explanations and Footnotes Regarding the Including Group of the Parent
Company Bank
The Including Group of the Parent Company Bank: Turk Ekonomi Bankasi Anonim
Sirketi ("the Bank") is included in the Colakoglu Group. The 70.08% of shares of
the Bank belong to TEB Mali Yatirimlar Anonim Sirketi (TEB Mali Yatirimlar) and
8.60% of the shares belong to Colakoglu Metalurji Anonim Sirketi.
III- Explanations on Consolidated 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 are of a
seasonal or 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
affect 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, and not reflected in 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 commitments and contingencies of the Bank
that have arisen subsequent to the year-end balance sheet date.
SECTION TWO
CONSOLIDATED FINANCIAL STATEMENTS
I. Consolidated Balance Sheets - Assets
II. Consolidated Balance Sheets - Liabilities
III. Consolidated Statements of Income
IV. Consolidated Statements of Off Balance Sheet Commitments
I- CONSOLIDATED BALANCE SHEET - ASSETS
Reviewed Audited
Current Period Prior Period
30.09.2003 31.12.2002
Note Ref.
ASSETS (Section TL FC Total TL FC Total
Five)
I. CASH AND BALANCES WITH THE CENTRAL 19,209 409,659 428,868 23,186 452,434 475,620
BANK OF TURKEY
1.1 Cash 9,798 - 9,798 6,800 - 6,800
1.2 Foreign currency - 63,534 63,534 - 89,277 89,277
1.3 Balances with the Central Bank of I-1 9,411 346,125 355,536 16,386 363,157 379,543
Turkey
II. TRADING SECURITIES (Net) 14,179 7,819 21,998 44,874 10,554 55,428
2.1 Public sector debt securities I-2 14,102 6,799 20,901 44,874 10,253 55,127
2.1.1 Government bonds I-2 12,615 1,030 13,645 38,516 7,299 45,815
2.1.2 Treasury bills I-2 1,486 - 1,486 6,357 - 6,357
2.1.3 Other I-2 1 5,769 5,770 1 2,954 2,955
2.2 Share certificates 77 - 77 - - -
2.3 Other marketable securities - 1,020 1,020 - 301 301
III. BANKS AND OTHER FINANCIAL 77,979 819,066 897,045 43,258
INSTITUTIONS 1,103,180 1,146,438
3.1 Due from banks 77,979 819,066 897,045 43,258
1,103,180 1,146,438
3.1.1 Domestic banks 55,613 122,689 178,302 30,617 197,835 228,452
3.1.2 Foreign banks 22,366 696,377 718,743 12,641 905,345 917,986
3.2 Other financial institutions - - - - - -
IV. MONEY MARKET PLACEMENTS 300,081 83,063 383,144 259,417 197,892 457,309
4.1 Interbank money market placements 300,000 83,063 383,063 251,610 197,892 449,502
4.2 Istanbul Stock Exchange money market - - - - - -
placements
4.3 Receivables from reverse repurchase 81 - 81 7,807 - 7,807
agreements
V. SECURITIES AVAILABLE FOR SALE (Net) 9 59,018 59,027 10 18,663 18,673
5.1 Share certificates I-3 9 - 9 10 - 10
5.2 Other marketable securities I-3 - 59,018 59,018 - 18,663 18,663
VI. LOANS 517,779 399,060
1,003,755 1,521,534 1,055,211 1,454,271
6.1 Short term I-4 467,794 930,984 370,469 863,954
1,398,778 1,234,423
6.2 Medium and long term I-4 42,114 72,771 114,885 23,098 191,257 214,355
6.3 Loans under follow-up I-4 23,563 34 23,597 22,378 45 22,423
6.4 Specific provisions (-) I-4 (15,692) (34) (15,726) (45) (16,930)
(16,885)
VII. FACTORING RECEIVABLES 60,166 21,243 81,409 46,392 27,297 73,689
VIII. SECURITIES HELD TO MATURITY (Net) 42,177 2,486 44,663 40,724 3,145 43,869
8.1 Public sector debt securities I-5 42,177 2,486 44,663 40,724 3,145 43,869
8.1.1 Government bonds I-5 41,895 1,342 43,237 40,476 3,145 43,621
8.1.2 Treasury bills I-5 282 - 282 248 - 248
8.1.3 Other I-5 - 1,144 1,144 - - -
8.2 Other marketable securities I-5 - - - - - -
IX. INVESTMENTS AND ASSOCIATES (Net) 342 - 342 491 - 491
9.1 Financial investments and associates I-6 342 - 342 491 - 491
9.2 Non-Financial investments and - - - - - -
associates
X. SUBSIDIARIES (Net) 371 - 371 374 - 374
10.1 Financial subsidiaries I-7 371 - 371 374 - 374
10.2 Non-Financial subsidiaries - - - - - -
XI. OTHER INVESTMENTS (Net) - - - - - -
XII. FINANCE LEASE RECEIVABLES (Net) 6,692 118,101 124,793 5,184 88,979 94,163
12.1 Gross finance lease receivables I-8 7,556 132,649 140,205 7,262 100,062 107,324
12.2 Unearned income ( - ) I-8 (864) (14,548) (15,412) (2,078) (11,083) (13,161)
XIII. RESERVE DEPOSITS 13,791 123,469 137,260 10,233 135,812 146,045
XIV. MISCELLANEOUS RECEIVABLES I-9 1,003 1,176 2,179 345 46 391
XV. ACCRUED INTEREST AND INCOME 29,230 11,577 40,807 26,653 13,342 39,995
RECEIVABLES
15.1 Loans I-10 11,041 7,135 18,176 10,360 10,870 21,230
15.2 Marketable securities I-10 6,101 495 6,596 4,657 595 5,252
15.3 Other I-10 12,088 3,947 16,035 11,636 1,877 13,513
XVI. PROPERTY AND EQUIPMENT (Net) 42,715 5,111 47,826 46,434 455 46,889
16.1 Book value 107,707 5,899 113,606 105,789 1,242 107,031
16.2 Accumulated depreciation ( - ) (64,992) (788) (65,780) (787) (60,142)
(59,355)
XVII. INTANGIBLE ASSETS (Net) 3,901 81 3,982 4,168 138 4,306
17.1 Goodwill 409 - 409 409 - 409
17.2 Other 10,320 911 11,231 9,397 1,009 10,406
17.3 Accumulated amortization ( - ) (6,828) (830) (7,658) (5,638) (871) (6,509)
XVIII. OTHER ASSETS I-11 56,583 20,925 77,508 40,937 2,778 43,715
TOTAL ASSETS 1,186,207 2,686,549 3,872,756 991,740 3,109,926 4,101,666
The accompanying notes are an integral part of these balance sheets.
II- CONSOLIDATED BALANCE SHEET - LIABILITIES
Reviewed Audited
Current Period Prior Period
30.09.2003 31.12.2002
Note Ref.
LIABILITIES (Section TL FC Total TL FC Total
Five)
I. DEPOSITS 538,437 431,940
2,181,695 2,720,132 2,674,587 3,106,527
1.1 Bank deposits II-1 56,087 52,276 108,363 33,580 83,164 116,744
1.2 Saving deposits II-1 185,360 135,114 320,474 181,095 - 181,095
1.3 Public sector deposits II-1 12,518 - 12,518 39 - 39
1.4 Commercial deposits II-1 228,035 829,500 1,057,535 180,457 - 180,457
1.5 Other institutions deposits II-1 56,437 - 56,437 36,769 - 36,769
1.6 Foreign currency deposits II-1 - -
1,150,543 1,150,543 2,566,561 2,566,561
1.7 Precious metals deposit accounts II-1 - 14,262 14,262 - 24,862 24,862
II. MONEY MARKET BALANCES 8,432 - 8,432 25,244 - 25,244
2.1 Interbank money market takings - - - - - -
2.2 Istanbul Stock Exchange money - - - - - -
market takings
2.3 Funds provided under repurchase II-2 8,432 - 8,432 25,244 - 25,244
agreements
III. FUNDS BORROWED 63,450 481,385 544,835 39,119 395,876 434,995
3.1 Funds borrowed from the Central - - - - - -
Bank of Turkey
3.2 Other funds borrowed II-3 63,450 481,385 544,835 39,119 395,876 434,995
3.2.1 Domestic banks and institutions II-3 30,889 28,948 59,837 18,655 13,445 32,100
3.2.2 Foreign banks, institutions and II-3 32,561 452,437 484,998 20,464 382,431 402,895
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 22,288 25,428 47,716 24,576 41,650 66,226
VII. OTHER EXTERNAL RESOURCES II-7 46,688 13,548 60,236 20,644 7,314 27,958
VIII. TAXES AND OTHER DUTIES PAYABLE 9,368 3,280 12,648 7,483 - 7,483
IX. FACTORING PAYABLES 20,223 11,045 31,268 14,508 16,474 30,982
X. FINANCE LEASE PAYABLES (Net) - - - - - -
10.1 Finance Lease Payables II-8 - - - - - -
10.2 Deferred finance lease expenses ( - II-8 - - - - - -
)
XI. ACCRUED INTEREST AND EXPENSES 30,993 14,144 45,137 14,462 13,106 27,568
PAYABLE
11.1 Deposits II-9 10,252 5,245 15,497 5,868 9,775 15,643
11.2 Borrowings II-9 2,259 4,751 7,010 2,281 2,420 4,701
11.3 Repurchase agreements II-9 7 - 7 31 - 31
11.4 Other II-9 18,475 4,148 22,623 6,282 911 7,193
XII. PROVISIONS 51,135 15,084 66,219 40,578 1,865 42,443
12.1 General provisions II-10 7,571 - 7,571 6,746 - 6,746
12.2 Reserve for employee termination II-10 2,178 - 2,178 1,939 - 1,939
benefits
12.3 Provisions for income taxes 29,509 14,834 44,343 23,523 1,865 25,388
12.4 Insurance technical reserves (Net) 11,601 - 11,601 7,769 - 7,769
12.5 Other provisions 276 250 526 601 - 601
XIII. SUBORDINATED LOANS II-10 - 20,766 20,766 - 27,232 27,232
XIV. MINORITY INTEREST 21,336 - 21,336 21,309 - 21,309
XV. SHAREHOLDERS' EQUITY 256,130 37,901 294,031 239,107 44,592 283,699
15.1 Paid-in capital II-11 55,125 - 55,125 55,125 - 55,125
15.2 Supplementary capital II-11 207,477 (41) 207,436 207,580 - 207,580
15.2.1 Share premium II-12 - - - - - -
15.2.2 Share cancellation profits - - - - - -
15.2.3 Marketable securities value 119 (41) 78 222 - 222
increase fund
15.2.4 Revaluation fund - - - - - -
15.2.5 Value increase in revaluation fund - - - - - -
15.2.6 Other capital reserves - - - - - -
15.2.7. Effect on inflation accounting on 207,358 - 207,358 207,358 - 207,358
share capital
15.3 Profit reserves 7,370 1,828 9,198 4,883 6,478 11,361
15.3.1 Legal reserves 7,370 - 7,370 4,883 - 4,883
15.3.2 Status reserves - - - - - -
15.3.3 Extraordinary reserves - - - - - -
15.3.4 Other profit reserves - 1,828 1,828 - 6,478 6,478
15.4 Profit or loss (13,842) 36,114 22,272 38,114 9,633
(28,481)
15.4.1 Prior year income/loss (40,708) 32,016 (8,692) 25,521 (19,151)
(44,672)
15.4.1.1 Group's share (30,122) 32,016 1,894 25,521 (7,790)
(33,311)
15.4.1.2 Minority shares (10,586) - (10,586) - (11,361)
(11,361)
15.4.2 Current year income/loss 26,866 4,098 30,964 16,191 12,593 28,784
15.4.2.1 Group's share 27,255 4,098 31,353 15,063 12,593 27,656
15.4.2.2 Minority shares (389) - (389) 1,128 - 1,128
TOTAL LIABILITIES 1,068,480 2,804,276 3,872,756 878,970 3,222,696 4,101,666
The accompanying notes are an integral part of these balance sheets.
III- CONSOLIDATED STATEMENTS OF INCOME
Reviewed Reviewed Reviewed Reviewed
Current Prior 01.07.2003 01.07.2002
Period Period
Note Ref. - -
30.09.2003 30.09.2002 30.09.2003 30.09.2002
INCOME AND EXPENSES (Section Total Total Total Total
five)
I. INTEREST INCOME III-1 310,282 384,812 104,384 118,515
1.1 Interest on loans 154,887 167,263 55,351 55,771
1.1.1 Interest on TL loans 116,010 109,817 42,995 37,852
1.1.1.1 Short term loans 110,161 103,261 40,639 35,675
1.1.1.2 Medium and long term loans 5,849 6,556 2,356 2,177
1.1.2 Interest on foreign currency loans 38,633 56,936 12,271 17,671
1.1.2.1 Short term loans 23,899 45,616 7,827 12,363
1.1.2.2 Medium and long term loans 14,734 11,320 4,444 5,308
1.1.3 Interest on loans under follow-up 244 510 85 248
1.1.4 Premiums received from Resource Utilization - - - -
Support Fund
1.2 Interest received from reserve deposits 4,481 3,365 1,685 1,453
1.3 Interest received from banks 34,304 43,727 12,124 14,908
1.3.1 The Central Bank of Turkey - - - -
1.3.2 Domestic banks 20,670 11,323 7,174 6,141
1.3.3 Foreign banks 13,634 32,404 4,950 8,767
1.4 Interest received from money market 66,252 76,555 18,368 20,462
transactions
1.5 Interest received from marketable securities 19,331 63,854 6,528 14,417
portfolio
1.5.1 Trading securities 3,171 63,854 969 14,417
1.5.2 Available-for-sale securities 2,374 - 1,588 -
1.5.3 Held to maturity securities 13,786 - 3,971 -
1.6 Other interest income 31,027 30,048 10,328 11,504
II. INTEREST EXPENSE III-2 181,189 213,115 61,454 65,325
2.1 Interest on deposits 131,363 142,714 47,167 43,795
2.1.1 Bank deposits 10,600 7,209 4,215 2,271
2.1.2 Saving deposits 57,201 42,689 18,548 12,395
2.1.3 Public sector deposits - 6 - 2
2.1.4 Commercial deposits 46,188 25,705 18,532 9,812
2.1.5 Other institutions deposits 422 149 228 108
2.1.6 Foreign currency deposits 16,836 66,838 5,608 19,161
2.1.7 Precious metals vault accounts 116 118 36 46
2.2 Interest on money market transactions - 36 - -
2.3 Interest on funds borrowed 23,440 42,104 8,745 13,868
2.3.1 The Central Bank of Turkey - - - -
2.3.2 Domestic banks 7,377 8,288 3,023 3,910
2.3.3 Foreign banks 13,508 29,932 3,167 8,683
2.3.4 Other financial institutions 2,555 3,884 2,555 1,275
2.4 Interest on securities issued - - - -
2.5 Other interest expense 26,386 28,261 5,542 7,662
III. NET INTEREST INCOME (I - II) 129,093 171,697 42,930 53,190
IV. NET FEES AND COMMISSIONS INCOME 26,253 22,665 9,356 6,432
4.1 Fees and commissions received 39,478 32,692 13,882 9,749
4.1.1 Cash loans 3,480 1,930 991 577
4.1.2 Non-cash loans 9,588 6,197 3,609 2,372
4.1.3 Other 26,410 24,565 9,282 6,800
4.2 Fees and commissions paid 13,225 10,027 4,526 3,317
4.2.1 Cash loans 1,885 1,426 567 689
4.2.2 Non-cash loans 385 370 68 225
4.2.3 Other 10,955 8,231 3,891 2,403
V. DIVIDEND INCOME - - - -
5.1 Trading securities - - - -
5.2 Available-for-sale securities - - - -
VI. NET TRADING INCOME 25,261 2,113 12,456 1,783
6.1 Profit/losses on trading account securities 26,796 8,279 13,612 2,594
(Net)
6.2 Foreign exchange gains/losses (Net) (1,535) (6,166) (1,156) (811)
VII PROFIT/LOSS FROM HELD TO MATURITY MARKETABLE III-3 - - - -
SECURITIES
VIII. OTHER OPERATING INCOME III-4 13,086 23,101 4,292 5,896
IX. TOTAL OPERATING INCOME (III+IV+V+VI+VII+VIII) 193,693 219,576 69,034 67,301
X. PROVISION FOR LOAN LOSSES OR OTHER RECEIVABLES III-5 6,071 17,390 3,033 7,645
(-)
XI. OTHER OPERATING EXPENSES (-) 109,077 115,350 35,629 40,426
XII. NET OPERATING INCOME (IX-X-XI) 78,545 86,836 30,372 19,230
XIII. PROFIT/LOSSES FROM ASSOCIATES AND SUBSIDIARIES III-6 167 - (2) -
XIV. GAIN / (LOSS) ON NET MONETARY POSITION (23,258) (43,584) 1,708 (13,751)
XV. INCOME BEFORE TAXES (XII+XIII) 55,454 43,252 32,078 5,479
XVI. PROVISION FOR TAXES ON INCOME (-) 24,490 22,769 9,970 6,558
XVII. NET OPERATING INCOME/EXPENSE AFTER TAXES 30,964 20,483 22,108 (1,079)
(XIV-XV)
XVIII. EXTRAORDINARY INCOME/EXPENSE AFTER TAXES - - - -
18.1 Extraordinary net income/expense before taxes - - - -
18.1.1 Extraordinary income - - - -
18.1. 2 Extraordinary expense (-) - - - -
18.2 Provision for taxes on extraordinary income - - - -
XIX. PROFIT/LOSSES ON UNCONSOLIDATED INVESTMENTS (-) - - - -
XX. NET PROFIT/LOSSES (XVI+XVII+XVIII-XIX) 30,964 20,483 22,108 (1,079)
20.1 Group's profit/loss 31,353 19,546 21,593 (653)
20.2 Minority shares III-7 (389) 937 515 (426)
XXI. Earnings/Losses per share 280.84 185.79 200.53 (9.79)
The accompanying notes are an integral part of these statements
IV- CONSOLIDATED STATEMENTS OF OFF-BALANCE SHEET COMMITMENTS
Reviewed Audited
Current Period Prior Period
Note Ref. 30.09.2003 31.12.2002
OFF BALANCE SHEET COMMITMENTS (Section TL FC TOTAL TL FC TOTAL
five)
A. OFF BALANCE SHEET COMMITMENTS 768,495 1,830,706 2,599,201 585,375 2,243,799
(I+II+III) 1,658,424
I. GUARANTEES IV-2,3 350,608 800,937 293,328 760,775 1,054,103
1,151,545
1.1. Letters of guarantee 349,565 306,696 656,261 293,202 349,674 642,876
1.1.1. Guarantees subject to State 33,640 1,635 35,275 31,563 280 31,843
Tender Law
1.1.2. Guarantees given for foreign 75,034 20,330 95,364 77,224 52,003 129,227
trade operations
1.1.3. Other letters of guarantee 240,891 284,731 525,622 184,415 297,391 481,806
1.2. Banks loans 971 45,114 46,085 - 44,687 44,687
1.2.1. Import letter of acceptance - 45,114 45,114 - 44,687 44,687
1.2.2. Other bank acceptances 971 - 971 - - -
1.3. Letters of credit 72 434,663 434,735 79 356,423 356,502
1.3.1. Documentary letters of credit 72 400,225 400,297 79 314,110 314,189
1.3.2. Other letters of credit - 34,438 34,438 - 42,313 42,313
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 - 6,884 6,884 47 1,544 1,591
1.8. Other collaterals - 7,580 7,580 - 8,447 8,447
II. COMMITMENTS IV-2 309,006 346,112 655,118 200,665 364,525 565,190
2.1. Irrevocable commitments 306,714 346,112 652,826 200,665 364,525 565,190
2.1.1. Asset purchase commitments - - - 1,107 - 1,107
2.1.2. Deposit purchase and sales 7,000 346,095 353,095 - 364,525 364,525
commitments
2.1.3. Share capital commitment to - - - - - -
associates and subsidiaries
2.1.4. Loan granting commitments 109,001 - 109,001 125,004 - 125,004
2.1.5. Securities issue brokerage - - - - - -
commitments
2.1.6. Commitments for reserve deposit 400 - 400 - - -
requirements
2.1.7. Commitments for credit card 98,981 - 98,981 74,554 - 74,554
limits
2.1.8. Other irrevocable commitments 91,332 17 91,349 - - -
2.2. Revocable commitments 2,292 - 2,292 - - -
2.2.1. Revocable loan granting - - - - - -
commitments
2.2.2. Other revocable commitments 2,292 - 2,292 - - -
III. DERIVATIVE FINANCIAL 108,881 683,657 792,538 91,382 533,124 624,506
INSTRUMENTS
3.1. Forward foreign currency buy/ 108,881 513,332 622,213 91,382 195,394 286,776
sell transactions
3.1.1. Forward foreign currency 32,059 274,206 306,265 23,256 118,420 141,676
transactions-buy
3.1.2. Forward foreign currency 76,822 239,126 315,948 68,126 76,974 145,100
transactions-sell
3.2. Swap transactions related to - 165,955 165,955 - - -
f.c. and interest rates
3.2.1. Foreign currency swap-buy - 81,963 81,963 - - -
3.2.2. Foreign currency swap-sell - 83,070 83,070 - - -
3.2.3. Interest rate swaps-buy - 461 461 - - -
3.2.4. Interest rate swaps-sell - 461 461 - - -
3.3. Foreign currency and interest - - - - 337,730 337,730
rate options
3.3.1. Foreign currency options-buy - - - - 168,121 168,121
3.3.2. Foreign currency options-sell - - - - 169,609 169,609
3.3.3. Interest rate options-buy - - - - - -
3.3.4. Interest rate options-sell - - - - - -
3.4. Foreign currency futures - 4,370 4,370 - - -
3.4.1. Foreign currency futures-buy - 2,185 2,185 - - -
3.4.2. Foreign currency futures-sell - 2,185 2,185 - - -
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 554,106 425,428 1,709,992
(IV+V) 1,662,451 2,216,557 1,284,564
IV. ITEMS HELD IN CUSTODY 289,336 897,566 284,487 1,182,053
1,216,213 1,505,549
4.1. Assets under management - - - - - -
4.2. Investment securities held in 506,228 156,711 662,939 311,863 160,376 472,239
custody
4.3. Checks received for collection 678,609 65,593 744,202 570,415 48,933 619,348
4.4. Commercial notes received for 27,746 19,943 47,689 13,947 23,215 37,162
collection
4.5. Other assets received for - 47,089 47,089 482 51,963 52,445
collection
4.6. Assets received for public - - - - - -
offering
4.7. Other items under custody 3,630 - 3,630 859 - 859
4.8. Custodians - - - - - -
V. PLEDGED ITEMS 446,238 264,770 711,008 386,998 140,941 527,939
5.1. Marketable securities 13,758 12,200 25,958 13,013 9,266 22,279
5.2. Guarantee notes 6,128 1,190 7,318 6,873 1,460 8,333
5.3. Commodity 217,142 - 217,142 208,812 - 208,812
5.4. Warranty - - - - - -
5.5. Immovables 127,622 164,128 291,750 123,725 41,020 164,745
5.6. Other pledged items 81,588 87,252 168,840 34,575 89,195 123,770
5.7. Pledged items-depository - - - - - -
TOTAL COMMITMENTS (A+B) 2,430,946 2,384,812 4,815,758 1,869,939 2,083,852 3,953,791
The accompanying notes are an integral part of these statements.
SECTION THREE
ACCOUNTING PRINCIPLES
I. Basis of Presentation
The Parent 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.
Presentation of the financial statements in accordance with the current
purchasing power of money
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 parent company 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 VI, "Footnotes and Explanations
on Inflation Accounting" of the following footnotes.
Other valuation methods
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 parent company 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- Presentation of the Information Regarding the Parent Bank and the
Group Companies Included in the Consolidation:
Turk Ekonomi Bankasi Anonim Sirketi and its financial institutions, The Economy
Bank N.V. (Economy Bank), Petek International Holdings B.V. (Petek
International), TEB Yatirim Menkul Degerler A.S. (TEB Yatirim), TEB Portfoy
Yonetimi A.S. (TEB Portfoy), TEB Finansal Kiralama A.S. (TEB Leasing), TEB
Factoring A.S. (TEB Factoring) and TEB Sigorta A.S. (TEB Sigorta) are included
in the accompanying consolidated financial statements by full consolidation
method. The provisions of the Communique 15 "The Standard of Preparation of
Consolidated Financial Statements and Accounting for the Subsidiaries,
Participations and the Entities and Participations Jointly Controlled" of the
AAR were considered while determining the institutions to be consolidated. The
Parent Bank and the institutions included in the consolidation will be named as
"the Group".
Certain changes were made on the financial statements of the subsidiaries, which
were prepared in accordance with the principles and rules regarding financial
statement and report presentation stated in the Turkish Commercial Code and/or
Financial Leasing Law and/or XI/1 and XI/11 numbered communiques of the Capital
Board Market and any other communiques which adds and changes statements at the
formal communiques, in order to present their financial statements in accordance
with to AAR.
Explanations on Consolidation Method and Scope
The commercial names of the institutions included in consolidation and the
locations of the head offices of these institutions:
Commercial Name: Head Office
---------------------- --------------
Economy Bank Netherlands
Petek International Netherlands
TEB Yatirim Istanbul
TEB Portfoy Istanbul
TEB Leasing Istanbul
TEB Factoring Istanbul
TEB Sigorta Istanbul
Full consolidation method is used for all the financial institutions included in
the consolidation.
The unconsolidated subsidiary TEB Kiymetli Madenler Anonim Sirketi (TEB Kiymetli
Madenler) is valued at cost. The financial statements of TEB Kiymetli Madenler
Anonim Sirketi is not included in the consolidation as of September 30, 2003 in
accordance with the AAR's materiality principle.
When there are differences between the accounting policies of the subsidiaries
and the Parent Bank, the financial statements are adjusted in accordance with
the ARR principles considering the materiality. The financial statements of the
subsidiaries are prepared as of September 30, 2003 and December 31, 2002 and
restated in accordance with the inflation accounting principles.
The transactions and balances between the Parent Bank and the subsidiaries are
netted off.
No subsidiaries were acquired during the current period. The Group does not have
any goodwill related to the subsidiaries. No difference occured while applying
the fair values at the foreign entities' assets and liabilities. There are no
subsidiaries disposed in at the current or previous periods.
Explanations on Foreign Currency Transactions
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 Parent Bank and the
resulting foreign exchange gains or losses are recorded in the statement of
income as foreign exchange gain or loss. The USD exchange rate used for
translating foreign currency transactions into Turkish Lira and reflecting these
to consolidated financial statements as of September 30, 2003 is TL 1,384,378
(December 31, 2002 - TL 1,639,745 (in full TL)).
The Group's total net foreign exchange loss included in the net income of the
period is TL (1,535) (September 30, 2002 - TL (6,166)). The foreign exchange
loss results from recording of the foreign exchange gain amounting to TL 2,083
related to the foreign currency indexed loans under the "Interest Income" in
accordance with the Uniform Chart of Accounts. There are no capitalized foreign
exchange losses.
The information regarding the principles of foreign currency risk management are
stated in Section Four, Note III.
The net investment in foreign entities of the Group as of the related year-ends
were translated into Turkish lira by applying the Parent Bank's exchange rates
prevailing at respective dates. The resulting foreign exchange gains or losses
are recorded in the statement of income.
There are no debt securities issued. Foreign exchange gains and losses arising
from translating monetary financial assets are reflected to foreign exchange
gains / (losses) in the statement of income.
III- Explanations on Forward, Option Contracts and Derivative Instruments
The Parent Company 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.
As of September 30, 2003, foreign currency forward and swap transactions were
evaluated by comparing year- end foreign exchange rates of the Parent Bank 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.
IV- 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 September 30, 2003.
V- 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.
VI- 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.
VII- 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 in 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."
VIII- Sales and Repurchase Agreements and Lending of Securities
The Parent 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 September 30, 2003, the Parent Bank does not have any reverse repo
transactions (December 31, 2002 - None).
As of September 30, 2003, the Parent Bank does not have any lent marketable
securities (December 31, 2002 - None).
IX- 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) are 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 profit shares.
There are no financial assets that cannot be classified as securities held to
maturity for two years because of tainting rules.
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.
X- Unconsolidated Participations and Subsidiaries
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 in
included under shareholders' equity 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. The difference between the fair value and cost
value of the participations valued at fair value is recorded to " Marketable
Security Increase in Value Fund " under the Shareholders' Equity.
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.
There are no foreign currency unconsolidated participations or subsidiaries.
XI- Originated Loans and Receivables and Provisions for Loan Impairment
The Parent 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 for group III, group IV, group V loans 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 June 30, 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 January 31,2002 in the
current period financial statements 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. Foreign
currency denominated loans are recorded at the Turkish Lira equivalent values at
the recording dates and the foreign currency exchange gains generated from these
loans are recorded under the interest income accounts.
XII- Goodwill and Other Intangible Fixed Assets
The negative difference amounting to TL 629 ( 2002 - TL 629 ), between the cost
of TEB Leasing and the Parent Bank's share in its equity, generating from the
changes at the Parent Bank's participation structure in the year 2000 has been
reflected in that related period's income statement in accordance with effective
application date of AAR. The positive difference amounting to TL 409 ( 2002 - TL
409 ), between the cost of TEB Factoring and the Parent Bank's share in its
equity is reflected under the intangible fixed assets as goodwill in the
accompanying consolidated financial statements after deducting the accumulated
amortization amounting to TL 307 ( 2002 - TL 245 ).
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 Parent Bank are
the softwares. While determining the depreciation periods of these, the
essentials of General Tax Regulations are taken in to consideration and no
special criteria is used. The useful lives of these assets are determined as 5
years. Soft wares mainly used are developed within the Parent 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 close to the restated costs at September 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 prorata 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 Parent Bank records depreciation expense in
each period for the leased assets. The depreciation rate is determined in
accordance with the Communique No:2 "Accounting Standard of Tangible Fixed
Assets" and the depreciation rate is 20%.
The gross lease receivables including interest and principal amounts regarding
the Group's financial leasing activities conducted by TEB Leasing as "Lessor"
are stated under the receivables from the financial leasing activities. The
difference between the total of rent payments and the cost of the related fixed
assets are reflected to the" unearned income" account. The interest income is
calculated and recorded as prevailing a stable periodic income ratio over the
lessor's investment on the leased item.
The Group expenses the rent payments made regarding the rent agreements made
under operational activities throughout the rent period in equal amounts.
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 Group immediately at the estimated amounts. The Parent Bank did
not provide an additional provision for contingent liabilities as of September
30, 2003 apart from the doubtful receivable provision and general provision set
in accordance with the released regulations.
XVI- Liabilities Regarding Employee Benefits
In accordance with the existing social legislation, the Group 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 Group 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
Group. In accordance with AAR, Communique No:10, the Group sets provision for
retirement and notice pay liabilities by taking the actual payment rates for the
previous 5 years into consideration.
The Group has no employees contracted for determined periods.
As of September 30, 2003 the arithmetical average of the actual payments
realized for the previous five years is 8.35% (December 31, 2003 - %8.44 ). The
Parent Bank's consolidated participations and subsidiaries provided full reserve
for retirement pay for the eligible personnel as of September 30, 2003 and 2002.
The Group employees are members of Tebliler Foundation. The Parent 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.
The corporate tax rate for incomes of year 2002 is 30% and after adding the 10%
of fund share, the effective corporate tax rate ia applied as 33%. 19.8%
withholding tax is calculated over the income excepted from corporate tax and
investment incentives ( except investment incomes ). Additionally, if profit is
distributed over the accumulated income including income of year 2002, the
distributed part of income over which corporate tax is calculated is subject to
5.5% and 16.5% withholding tax in accordance with the fact that the Bank is
quoted to stock exchange or not respectively.
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 % .
As long as the Group does not distribute the yearly income for 2003, there will
not be any withholding taxes with regards to this income. The Parent Bank's
distribution of profit to "Fully-liable" institutions will also be exempt from
any withholding taxes. The Parent 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 of 10%.
The investment incentives taken into consideration while calculating the income
subject to corporate tax, do not have to be related to any investment incentive
documents after April 24, 2003, and the minimum deduction rate will be 40%, and
additionally this amount will not be subject to witholding tax. It is possible
to state the incentive rate as 40% for the investment incentives taken before
April 24, 2003, and to except these from 19,8% of witholding tax by a written
application made to the related tax office.
In accordance with the Tax Procedural Code, in every three-month period the
temporary corporate tax is calculated at a rate of 30% ( 25% before April 24,
2003 ) and paid in cash. The paid temporary taxes are deducted from the tax
liability calculated over the yearly income. The corporate tax will be paid at
once during the yearly tax return period ( 2002- in 3 installments ).
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.
The Tax Procedural Code does not allow the corporate and income taxes to be
calculated on consolidated basis. Accordingly, the current and deffered taxes
reflected to the accompanying financial statements are calculated over company
basis, separately.
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 Group does not compute deferred tax on the effects of
inflation accounting.
As of September 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 Parent Company Bank has not issued any debt securities.
The Group has not issued convertible bonds during the current period or the
previous period.
XIX- Paid-in Capital and Share Certificates
The Parent Bank does not have any costs related to share issue. In the General
Assembly meeting of the Parent Bank, dated March 27, 2003, it was decided that
the profit for the year 2002, will be distributed to the shareholders, 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 September 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 Group.
XXII- Securities at Custody
Securities at custody held by the Parent Bank on behalf of clients are not
reflected to the financial statements since they are not the 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
consolidated financial statements differ from International Financial Reporting
Standards (IFRS) and so far as such differences apply to the consolidated
financial statements of the Bank they relate mainly, but not limited, to the
format of consolidated 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 gprinciples 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 consolidated financial statements are not intended to present the
consolidated financial position and results of its consolidated operations in
accordance with accounting principles generally accepted in the countries of
users of the financial statements and IFRS.
There are other matters that are required to be disclosed.
SECTION FOUR
INFORMATION ON FINANCIAL STRUCTURE OF THE GROUP
I- Consolidated 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. The consolidated capital adequacy ratio of the
Parent Company Bank, calculated in accordance with the Communique on
"Measurement and Assessment of Banks Capital Adequacies " is %15.57 ( December
31, 2002 - 16.75% ).
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 Bank" 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:
Consolidated Parent Bank
Risk Weight Risk Weight
0% 20% 50% 100% 0% 20% 50% 100%
Risk Weighted Assets, Liabilities
and Non Cash Loans
Balance Sheet items (Net) 1,224,647 860,557 201,020 1,409,006 1,009,349 215,146 75,559 1,004,431
Cash 73,332 13 - - 73,324 - - -
Due from banks 355,536 860,544 - 36,501 355,536 215,142 - 687
Interbank money market placements 383,063 - - - 383,063 - - -
Receivables from reverse repo 81 - - - - - - -
transactions
Reserve deposits 137,260 - - - 137,260 - - -
Special finance houses - - - - - - - -
Loans 241,070 - 63,587 1,290,415 42,634 - 63,587 961,556
Loans under follow-up (Net) - - - 7,871 - - - 7,871
Subsidiaries, associates and - - - - - - - -
investments held to maturity
Miscellaneous receivables - - - 2,179 - - - 1,537
Marketable securities held to - - - - - - - -
maturity (Net)
Advances for assets acquired by - - - - - - - -
financial leasing
Financial lease receivables - - 124,793 - - - - -
Leased assets (Net) - - 12,640 - - - 11,972 -
Fixed assets (Net) - - - 27,435 - - - 20,705
Other assets 34,305 - - 44,605 17,532 4 - 12,075
Off balance sheet items 374,002 504,960 238,519 46,744 363,925 446,661 311,785 43,600
Guarantees and pledges 19,869 493,527 73,749 30,275 15,494 439,476 73,750 25,722
Commitments 348,387 - 164,770 - 346,095 - 238,035 -
Other off balance sheet items - - - - - - - -
Transactions related with derivative - - - 4,039 - - - 4,175
Financial instruments
Interest and income accruals 5,746 11,433 - 12,430 2,336 7,185 - 13,703
Non risk weighted accounts - - - - - - - -
Total Assets Subject to Risk 1,598,649 1,365,517 439,539 1,455,750 1,373,274 661,807 387,344 1,048,031
Total Risk Weighted Assets - 273,103 219,770 1,455,750 - 132,361 193,672 1,048,031
Summary information related to the capital adequacy ratio:
Consolidated Parent Bank
Current Prior Current Prior
Period Period Period Period
Total Risk Weighted Assets (*) 1,999,023 1,812,599 1,408,650 1,221,004
Shareholders' Equity 311,324 303,667 205,223 188,018
Shareholders' Equity / Total risk weighted assets (CAR (%)) 15.57 16.75 14.57 15.40
(*) The above mentioned amounts consist of base amounts of the market risk
which are TL 50,400 and TL 34,586 as consolidated and as for the Parent Bank
basis, respectively, for the current period and TL 55,635 and TL 21,784 for the
previous period.
Information related to the shareholders' equity components :
Parent Bank
Consolidated
Current Prior Current Prior
Period Period Period Period
MAIN CAPITAL
Paid-in Capital 55,125 55,125 55,125 55,125
Nominal capital 55,125 55,125 55,125 55,125
Capital commitments (-) - - - -
Effect on Inflation Accounting on Share Capital 207,358 207,358 207,358 207,358
Share Premium - - - -
Legal Reserves 9,198 11,361 2,373 -
First legal reserve (Turkish Commercial Code 466/1) 7,370 4,883 2,373 -
Second legal reserve (Turkish Commercial Code 466/2) - - - -
Other legal reserve per special legislation 1,828 6,478 - -
Statute Reserves - - - -
Extraordinary reserves - - - -
Reserves allocated by the General Assembly - - - -
Retained earnings - - - -
Accumulated loss - - - -
Foreign currency share capital exchange difference - - - -
Profit 30,964 28,784 40,873 20,498
Current period profit 30,964 28,784 38,614 20,498
Prior period profit - - 2,259 -
Loss (-) (8,692) (19,151) - -
Current period loss - - - -
Prior period loss (8,692) (19,151) - -
Total Main Capital 293,953 283,477 305,729 282,981
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 7,571 6,746 7,571 6,746
Provisions for Possible Losses - - - -
Subordinated Loans 20,766 27,232 20,766 27,232
Marketable Securities and Investment Securities Value Increase 78 222 (38) 222
Fund
Associates and subsidiaries 78 222 (38) 222
Available for sale securities - - - -
Structured positions - - - -
Total Supplementary Capital 28,415 34,200 28,299 34,200
TIER III CAPITAL - - - -
CAPITAL 322,368 317,677 334,028 317,181
DEDUCTIONS FROM THE CAPITAL 11,044 14,010 128,805 129,163
Investments in unconsolidated financial companies whose main 713 865
activities are money and capital markets, insurance and that
operate with licenses provided in accordance with special laws
121,064 118,266
Leasehold improvements 7,751 8,355 6,155 7,065
Start-up costs - -
Prepaid expenses 2,478 4,625 1,586 3,832
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) 102 165 - -
Capitalized expenses - - - -
Total Shareholder's Equity 311,324 303,667 205,223 188,018
II- Consolidated Market Risk
The Group 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 Groups" announced in the 24312 numbered and February
8, 2001 dated Official Gazette.
The interest rate and exchange rate risks of the financial positions taken by
the Group 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 Parent 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.
Consolidated Parent Bank
Capital to be employed for interest rate risk - standard method 2,181 2,165
Capital to be employed for general market risk 2,179 2,165
Capital to be employed for specific risk 2 -
Capital to be employed for options subject to interest rate risk - -
Capital to be employed for common stock position risk - Standard method 9 -
Capital to be employed for general market risk 6 -
Capital to be employed for specific risk 3 -
Capital to be employed for options subject to common stock position risk - -
Capital to be employed for currency risk - Standard method 1,842 602
Capital liability 1,842 602
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 4,032 2,767
Amount subject to market risk 50,400 34,586
III- Consolidated 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 Parent 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 Group's risk management strategies, foreign currency
liabilities are hedged against exchange rate risk by derivative instruments.
The Board of Directors of the Parent 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 September 30, 2003, the Group's net long position is TL 23,213 (December
31, 2002 - TL 23,929 net short) resulting from short position amounting to TL
16,234 (December 31, 2002- TL 63,887) on the balance sheet and long position
amounting to TL 33,973 (December 31, 2002 - 39,958 ) from off-balance sheet
position.
The announced current foreign exchange buying rates of the Parent Bank at the
balance sheet date and the previous five working days are as follows:
23/9/03 24/9/03 25/9/03 26/9/03 29/9/03 30/9/03
USD 1,348,023 1,349,013 1,366,040 1,365,178 1,376,707 1,384,378
CHF 995,456 994,568 1,010,555 1,013,747 1,017,541 1,048,196
GBP 2,227,117 2,231,179 2,262,756 2,264,465 2,268,864 2,313,057
JPY 12,088 12,062 12,191 12,163 12,318 12,509
EUR 1,548,070 1,547,183 1,569,171 1,567,497 1,571,236 1,615,154
The simple arithmetical average of the major current foreign exchange buying
rates of the Bank for the thirty days before September 30, 2003 is as follows:
Monthly Average
FX rates
USD 1,371,963
CHF 993,589
GBP 2,208,843
JPY 11,913
EUR 1,539,809
Information on the foreign currency risk of the Group:
Current Period EUR USD YEN OTHER FC TOTAL
Assets
Cash (cash in vault, foreign currency cash, money 28,063 379,740 20 1,840 409,663
in transit, cheques purchased) and balances with
the Central Bank of Turkey
Due from other Banks and financial institutions 91,191 767,770 705 42,463 902,129
Trading securities (**) 1,243 6,218 358 7,819
-
Investment securities available-for-sale 59,018 59,018
- - -
Loans (**) 264,077 810,053 16,105 1,090,235
-
Investments in subsidiaries and participations
- - - - -
Investment securities held-to-maturity 1,342 1,144 2,486
- -
Property and equipment 5,111 5,111
- - -
Goodwill
- - - - -
Other assets 126,575 162,697 15,715 304,987
-
Total Assets 516,260 2,186,838 725 77,625 2,781,448
Liabilities
Bank deposits 3,132 9,512 6 39,626 52,276
Foreign currency deposits (*) 280,706 1,805,065 873 42,775 2,129,419
Funds provided from other financial institutions 71,599 415,956 14,596 502,151
-
Marketable securities issued
- - - - -
Miscellaneous payables 18,005 7,294 129 25,428
-
Other liabilities 70,380 19,595 5,412 95,387
-
Total liabilities 443,822 2,257,422 879 102,538 2,804,661
Net Balance Sheet Position 72,438 (70,584) (154) (24,913) (23,213)
Net Off-Balance Sheet Position (88,654) 100,462 22,165 33,973
-
Financial derivative assets 114,712 211,561 32,542 358,815
-
Financial derivative liabilities 203,366 111,099 10,377 324,842
-
Non-cash loans (***) 202,919 555,822 9,301 32,895 800,937
Prior Period
Total Assets 518,338 2,547,184 21,167 112,504 3,199,193
Total Liabilities 457,279 2,693,343 894 111,564 3,263,080
Net Balance Sheet Position 61,059 (146,159) 20,273 940 (63,887)
Net Off-Balance Sheet Position (114,971) 187,235 (20,021) (12,285) 39,958
Non-cash loans (****) 196,061 531,881 4,695 28,138 760,775
(*) Gold account deposits amounting to TL 14,262 (December 31, 2002 - TL
24,867) are included in the foreign currency deposits.
(**) FX-indexed loans amounting to TL 86,480 (December 31, 2002 - TL 89,025)
are included in loans, FX-indexed factoring receivables amounting to TL8,419 are
included in other assets and FX-indexed factoring payables amounting to TL 1,441
are included in other liabilities in the currency risk table of the Group.
(***) In the prior period, foreign currency indexed government bonds and
treasury bills amounting to TL 242 are included in the trading portfolio.
(****) There are no effects on the net off-balance sheet position.
IV- Consolidated Interest Rate Risk
Interest rate risk shows the loss probability related to the changes in the
interest rates depending on the Parent 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 Group'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 Group'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 Group does not permit or imposes limits on maturity mismatches, it is
not expected that the Group will face a significant interest rate risk.
Information related to the interest rate sensitivity of assets, liabilities and
off-balance sheet items based on reprising 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 492,806 73,335 566,141
currency cash, money in - - - -
transit, cheques purchased) and
balances with the Central Bank
of Turkey
Due from Banks and other 1,236,218 18,962 16,000 8,321 688 1,280,189
financial institutions -
Trading securities 1,074 1,983 6,791 5,449 6,338 363 21,998
Securities available-for-sale 6,462 52,556 9 59,027
- - -
Loans 522,907 329,050 331,048 221,014 109,644 - 1,513,663
Securities held-to-maturity 3,169 36,624 1,342 3,528 44,663
- -
Other assets 70,132 88,078 42,253 45,731 66,191 74,690 387,075
Total Assets 2,326,306 474,697 403,896 284,043 234,729 149,085 3,872,756
Liabilities
Bank deposits 93,557 11,206 3,600 108,363
- - -
Other deposits 2,229,861 175,214 67,363 106,110 33,221 -
2,611,769
Miscellaneous payables 1,183 - 47,716
- - - 46,533
Marketable securities issued
- - - - - - -
Funds provided from other 269,892 113,551 93,814 75,761 12,583 565,601
financial institutions -
Other liabilities 28,217 54,079 9,995 4,958 14,093 427,965 539,307
Total Liabilities 2,622,710 354,050 174,772 186,829 59,897 474,498 3,872,756
Balance Sheet Interest (296,404) 120,647 229,124 97,214 174,832 (325,413) -
Sensitivity Gap
Off Balance Sheet Interest - - - - - - -
Sensitivity Gap
Total Interest Sensitivity Gap (296,404) 120,647 229,124 97,214 174,832 (325,413) -
The other asset line at the without interest column consists of TL 47,826 amount
tangible fixed assets, TL 3,982 of intangible fixed assets, TL 371 of
participations and TL 342 of subsidiaries and the other liability line consists
of equity with a total amount of TL 294,031 and TL 21,366 amount minority
interest.
Up to 1 1-3 3-6 6-12 1 Year and
Months Months Months Months Over Demand Total
Prior Period
Assets
Cash (cash in vault, foreign 525,587 96,335 621,922
currency cash, money in - - - -
transit, cheques purchased) and
balances with the Central Bank
of Turkey
Due from Banks and other 1,498,136 16,536 12,270 2,956 73,849 1,603,747
financial institutions -
Trading securities 2,798 31,725 12,315 7,504 785 301 55,428
Securities available-for-sale 18,663 10 18,673
- - - -
Loans 444,278 279,867 332,920 171,239 220,473 5,494 1,454,271
Securities held-to-maturity 230 40,247 1,707 1,437 248 43,869
-
Other assets 6,035 89,668 16,386 25,376 34,843 131,448 303,756
Total Assets 2,477,064 476,706 375,598 208,512 256,349 307,437 4,101,666
Liabilities
Bank deposits 112,724 2,913 1,107 116,744
- - -
Other deposits 2,479,013 179,637 58,677 90,838 181,618 2,989,783
-
Miscellaneous payables 66,226 66,226
- - - - -
Marketable securities issued
- - - - - - -
Funds provided from other 37,153 219,413 82,773 111,959 10,929 - 462,227
financial institutions
Other liabilities 2,978 37,919 1,198 258 - 424,333 466,686
Total Liabilities 2,631,868 439,882 143,755 203,055 192,547 490,559 4,101,666
Balance Sheet Interest (154,804) 36,824 231,843 5,457 63,802 (183,122)
Sensitivity Gap -
Off Balance Sheet Interest - - - - - - -
Sensitivity Gap
Total Interest Sensitivity Gap (154,804) 36,824 231,843 5,457 63,802 (183,122)
-
The other asset line at the without interest column consists of TL 46,889 amount
tangible fixed assets, TL 4,306 of intangible fixed assets, TL 374 of
participations and TL 491 of subsidiaries and the other liability line consists
of equity with a total amount of TL 283,699 and TL 21,309 amount minority
interest.
Average interest rates applied to monetary financial instruments:
EURO % USD % YEN % TL %
Current Period
Assets
Cash (cash in vault, foreign currency cash, money in 1.49 0.40 - 21.00
transit, cheques purchased) and balances with the Central
Bank of Turkey
Due from Banks and other financial institutions 1.41 1.07 3.61 29.47
Trading securities 8.37 11.22 - 51.27
Securities available-for-sale 8.59 9.00 -
-
Loans 5.95 5.34 7.07 37.93
Securities held-to-maturity - - - 40.72
Liabilities
Bank deposits 3.25 2.99 4.00 30.28
Other deposits 3.68 2.58 3.37 27.61
Miscellaneous payables - - -
-
Marketable securities issued - - -
-
Funds provided from other financial institutions 4.13 2.72 5.93 30.42
V- Consolidated 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 Group'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 Boards of
Directors of the Group 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 Group, 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 Group 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 Parent 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 :
3-6 6-12 1 Year and
Months Months Over
Current Period Demand (*) 1-3 Months Total
Assets
Cash (cash in vault, foreign currency 566,141 566,141
cash, money in transit, cheques - - - -
purchased) and Balances with the Central
Bank of Turkey
Due from Banks and other financial 1,233,088 22,780 16,000 8,321 1,280,189
institutions -
Trading securities 2,131 976 6,659 6,028 6,204 21,998
Securities available-for-sale 9 6,462 52,556 59,027
- -
Loans 522,907 325,232 331,048 221,014 113,462 1,513,663
Securities held-to-maturity 1,144 557 39,434 3,528 44,663
-
Other assets(***) 87,752 98,656 43,926 41,414 59,734 387,075
Total Assets 2,413,172 448,201 443,529 280,305 231,956 3,872,756
Liabilities
Bank deposits 93,557 11,206 3,600 108,363
- -
Other deposits 2,229,861 175,214 67,363 106,110 33,221 2,611,769
Funds provided from other financial 203,757 90,166 77,965 116,781 76,932 565,601
institutions
Marketable securities issued
- - - - - -
Miscellaneous payables 42,023 1,297 4,323 73 47,716
-
Other liabilities(**) 139,239 52,936 10,037 15,629 321,466 539,307
Total Liabilities 2,708,437 330,819 158,965 242,843 431,692 3,872,756
Net Liquidity Gap (295,265) 117,382 284,564 37,462 (199,736)
-
Prior Period
Total Assets 2,729,741 422,582 375,169 208,398 313,707 4,101,666
Total Liabilities 3,045,296 328,071 151,940 302,145 274,214 4,101,666
Net Liquidity Gap (315,555) 94,511 223,229 (93,747) 39,493
-
(*) The maturity of up to 1 month of interbank funds sold amounting to TL
383,063, loans amounting to TL 511,094, and domestic and foreign Banks
placements amounting to TL 801,205 are shown in the demand column. Furthermore,
deposits with maturities up to one month amounting to TL 1,629,377 is included
in the other deposits and shown at the demand columns.
(**)The 1 year and over column of the other liabilities consist of shareholders'
equity amounting to TL 294,031 and minority interest amounting to TL 21,366.
(***) An amount of TL 55,593 of the total column consists of subsidiaries and
participations amounting to TL 713, prepaid expenses amounting to TL 2,478,
tangible fixed assets amounting to TL 47,826, intangible fixed assets amounting
to TL 3,982 and office supply inventory amounting to TL 594 and those are not
taken in to consideration at the maturity distribution.
MORE TO FOLLOW
This information is provided by RNS
The company news service from the London Stock Exchange
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