VKF_FRAE_2017

303 VakıfBank Annual Report 2017 CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE IN NOTE I. OF SECTION THREE TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND ITS FINANCIAL SUBSIDIARIES EXPLANATIONS AND NOTES RELATED TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2017 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) Information about the consolidated shareholder equity items Prior Period December 31, 2016 Amount as per the regulation before 1/1/2014 (*) COMMON EQUITY TIER I CAPITAL Paid-in capital to be entitled for compensation after all creditors 2,500,000 - Share Premium 727,780 - Reserves 12,259,333 - Income recognized under equity in accordance with TAS 866,028 - Profit 2,775,944 - Current Period’s Profit 2,789,918 - Prior Period’s Profit (13,974) - Bonus shares from associates, subsidiaries and joint-ventures not accounted in current period’s profit 3,683 - Minority shares 521,476 - Common Equity Tier 1 Capital Before Deductions 19,654,244 - Deductions from Common Equity Tier 1 Capital Valuation adjustments calculated as per the (i) item of first paragraph of Article 9 - - Net loss for the prior year losses and uncovered portion of the total reserves and losses that are recognized under equity in accordance with TAS 52,825 - Leasehold Improvements on Operational Leases 162,121 - Goodwill netted with deferred tax liability - - Other intangible assets netted with deferred tax liabilities except mortgage servicing rights 138,159 230,265 Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) - - Differences are not recognized at the fair value of assets and liabilities subject to hedge of cash flow risk - - Communiqué Related to Principles of the amount credit risk calculated with the Internal Ratings Based Approach, total expected loss amount exceeds the total provision - - Gains arising from securitization transactions - - Unrealized gains and losses due to changes in own credit risk on fair valued liabilities - - Defined-benefit pension fund net assets - - Direct and indirect investments of the Bank in its own Common Equity - - Excess amount expressed in the law (Article 56 4th paragraph) - - Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible long positions, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold) - - Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible long positions (amount above 10% threshold) of Tier 1 Capital - - Mortgage servicing rights (amount above 10% threshold) of Tier 1 Capital - - Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability) - - Amounts exceeding 15% of Tier 1 Capital according to Regulation on Measurement and Assessment of Capital Adequacy Ratios of Banks (2nd article temporary second paragraph) - - Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible long positions, where the bank does not own more than 10% of the issued common share capital of the entity (amount above 10% threshold) - - Amounts related to mortgage servicing rights - - Excess amount of deferred tax assets from temporary differences - - Other Items Determined by BRSA - - The amount to be deducted from common equity tier 1 capital - - Total regulatory adjustments to Common equity Tier 1 353,105 - Common Equity Tier 1 capital (CET1) 19,301,139 - Additional Tier 1 capital: instruments - - Premiums that are not included in Common Equity Tier 1 capital - - Bank’s borrowing instruments and related issuance premium - - Bank’s borrowing instruments and related issuance premium (Temporary Article 4) - - Third parties’ share in the Additional Tier I capital - - - Third parties’ share in the Additional Tier I capital (Temporary Article 3) - - Additional Tier 1 Capital before deductions - - Deductions from Additional Tier 1 Capital - - Bank’s direct or indirect investment in Tier 1 Capital - - Investments of Bank to Banks that invest in Bank’s additional equity and components of equity issued by financial institutions with compatible with Article 7 - - Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% - - Threshold of Common Equity Tier 1 Capital - - Unconsolidated Banks and Financial Institutions where the Bank owns more than 10% of the Issued Share Capital - - Other Items Determined by BRSA -