VAKIFBANK
2015 ANNUAL REPORT
128
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI
UNCONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
Foreign currency (“FC”) granted loans are recognized in original currency and is subject to evaluation with the buying rate of Turkish Lira. Foreign
currency indexed loans, are converted to Turkish Lira (TP) at the rate of the opening date and in the following periods, according to changes in period
exchange rate on the income statement in the foreign exchange gains / losses are recorded in the accounts.
VIII. INFORMATION ON IMPAIRMENT OF FINANCIAL ASSETS
A financial asset or group of financial assets, can be considered as impaired only if one or multiple events (damage/loss event) occur and in the
conclusion of the impact to related financial asset or financial assets estimation in a reliable manner to the estimated future cash flows after its initial
recognition. In such a situation, the financial asset is exposed to impairment and impairment loss occurs. The matters of determination of impairment
and provision must be considered within the scope of TAS 36 - Impairment of Assets.
In circumstances of impairment in financial assets at fair value through profit/loss or in financial assets available for sale, the impairment should be
recognized under “Impairment Losses on Securities” account.
In case of impairment losses on investment securities held-to-maturity occurs related loss amount to be discounted at the original effective interest
rate of the asset's estimated future cash flows are measured as the difference between the present value and the book value of the asset through to
be recognized as loss of the said difference amount book value is reduced.
If there is an objective evidence that certain loans will not be collected, for such loans; the Bank provides specific and general allowances for loan and
other receivables classified in accordance with the Regulation on Identification of and Provision against Non-Performing Loans and Other Receivables
published on the Official Gazette no. 26333 dated 1 November 2006 and the amendments to this regulation.
20% specific provision for non performing loans for Third Group and 100% specific provision for non performing loans for Fourth and Fifth Group used to
be reserved on condition of not being less than the minimum required rates specified within the related Regulation, 50% specific provision is reserved
for the non performing loans that are transferred to Fourth Group according to changes in accounting policy about specific provisions of non performing
loans that are transferred to Fourth Group as of 30 September 2015 accounting period. In this scope, the specific provision of TL 17,864 that was
reserved within the previous periods is transferred to “ Other Operating Income” account and the specific provision of TL 303,807 that was reserved in
current period is transferred to “Provision for Losses on Loans and Other Receivables” account as of 30 September 2015.
IX. INFORMATION ON OFFSETTING OF FINANCIAL INSTRUMENTS
Financial assets and liabilities are reported in the balance sheet as net amount in the cases of the Bank’s right and right to sanction to finalize and have
the intention to receive/pay related financial asset or liability over the recognized amount or have the right to finalize the related asset and liability
simultaneously.
X. INFORMATION ON SALES AND REPURCHASE AGREEMENTS AND SECURITIES LENDING
Securities sold under repurchase agreements (“repo”) are classified under “Held for trading purpose”, “Available for sale” and/or “Held-to-maturity”
portfolios according to their holding purposes in the Bank’s portfolio, and they are valued based on the revaluation principles of the related portfolios.
Funds received through repurchase agreements are classified separately under liability accounts and the related interest expenses are accounted on an
accrual basis of balance sheet date.
Securities purchased under resale agreements (“reverse repo”) are classified in balance sheet under “Money Market Takings” separately. The income
accrual is calculated for the securities purchased under resale agreements via the difference between buying and selling prices on the balance sheet
date.
