VKF_FRAE_2017

CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUEDIN TURKISH, SEE NOTE I. OF SECTION THREE TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI EXPLANATIONS AND NOTES RELATED TO THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT 178 VakıfBank Annual Report 2017 Risk balances according to risk weights Risk Weights Current Period 0% 10% 20% 35% 50% 75% 100% 150% 200% 250% 1250% Deductions from the shareholders’ equity Pre-Amount of Credit Risk Mitigation 85,170,351 - 5,735,499 23,271,806 44,311,654 50,027,447 104,556,544 220,667 - - - 395,302 Amount after Credit Risk Mitigation 88,234,001 - 4,128,073 23,271,806 46,849,682 49,693,331 100,896,408 220,667 - - - 395,302 Risk Weights Prior Period 0% 10% 20% 35% 50% 75% 100% 150% 200% 250% 1250% Deductions from the shareholders’ equity Pre-Amount of Credit Risk Mitigation 32,055,602 - 9,195,120 21,214,639 55,183,682 45,724,723 84,407,911 205,588 - 83,109 - 465,466 Amount after Credit Risk Mitigation 39,236,688 - 3,636,014 21,214,639 57,187,435 45,433,669 81,073,232 205,588 - 83,109 - 465,466 Credit rating of the credit rating agency, related to the Bank's Capital Adequacy Assessment of the Measurement is listed in Appendix 1 which corresponds to the credit quality step that is given in the table below. Ratings Matched Credit Quality Rank Fitch Long Term Credit Ratings 1 Between AAA and AA- 2 Between A+ and A- 3 Between BBB+ and BBB- 4 Between BB+ and BB- 5 Between B+ and B- 6 CCC+ and below Short Term Credit Ratings 1 Between F1+ and F1 2 F2 3 F3 4 F3 and below 5 - 6 -