VKF_FRAE_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.) PART III: FINANCIAL HIGHLIGHTS AND RISK MANAGEMENT 372 VakıfBank Annual Report 2017 Vakıf Yatırım Menkul Değerler AŞ, which is one of the consolidated subsidiaries of the Parent Bank, calculates capital adequacy in accordance with “Communiqué on Capital and Capital Adequacy of Intermediary Firms” serial V, No:34 of Capital Markets Board as six months periods. Güneş Sigorta AŞ and Vakıf Emeklilik ve Hayat AŞ, which are the consolidated subsidiaries of the Parent Bank operating in insurance sector, calculate capital adequacy in accordance with “Communiqué on Capital Adequacy Measurement and Assessment for Insurance, Reinsurance and Pension Firms” published by Republic of Turkey Undersecretariat of Treasury as six months periods. According to the calculations at December 31, 2017, there is no capital requirement for the subsidiaries mentioned. Unconsolidated investments in subsidiaries Title Address (City / Country) Bank’s Share – If Different, Voting Rights (%) Bank’s Risk Group Share (%) 1 Vakıf Enerji ve Madencilik AŞ (**) Ankara/Turkey 65.50 85.52 2 Taksim Otelcilik AŞ (*) İstanbul/Turkey 51.00 51.69 3 Vakıf Pazarlama Sanayi ve Ticaret AŞ (***) İstanbul/Turkey 69.33 76.18 4 Vakıf Gayrimenkul Değerleme AŞ (*) Ankara/Turkey 54.29 58.73 Total Assets Equity Tangible Assets Interest Income Income on Securities Portfolio Current Year’s Profit/(Loss) Prior Years’ Profit/(Loss) Fair Value 1 25,851 12,062 1,043 530 - 404 280 14,494 2 371,463 356,839 221,749 8,132 - 5,653 504 403,062 3 59,791 49,796 1,710 3,948 - 6,422 3,587 49,458 4 31,550 25,967 280 2,811 - (178) 1,269 26,479 (*) The financial statement information provided for these subsidiaries is taken from the financial statements dated September 30, 2017. (**) The financial statement information provided for these subsidiaries is taken from the financial statements dated June 30, 2017. (***) The financial statement information provided for these subsidiaries is taken from the financial statements dated December 31, 2016. Unconsolidated subsidiaries, reasons for not consolidating such investments and accounting treatments applied for such investments: Vakıf Enerji ve Madencilik AŞ, Taksim Otelcilik AŞ, Vakıf Pazarlama Sanayi ve Ticaret AŞ and Vakıf Gayrimenkul Değerleme AŞ have not been consolidated since they are not among the financial subsidiaries of the Bank. Therefore, the subsidiaries whose fair value can be reliably measured are reflected in the consolidated financial statements at their fair values. Investments in consolidated subsidiaries Title Address (City / Country) Bank’s Share – If Different Voting Rights (%) Bank’s Risk Group Share (%) 1 Güneş Sigorta AŞ İstanbul/Turkey 48.02 48.02 2 Vakıf Emeklilik AŞ (*) İstanbul/Turkey 53.90 79.67 3 Vakıf Faktoring AŞ İstanbul/Turkey 78.39 88.68 4 Vakıf Finansal Kiralama AŞ İstanbul/Turkey 58.71 66.23 5 Vakıf Yatırım Menkul Değerler AŞ (*) İstanbul/Turkey 99.00 99.48 6 Vakıfbank International AG (*) Vienna/Austria 90.00 90.00 7 Vakıf Portföy Yönetimi AŞ İstanbul/Turkey 100.00 100.00 8 Vakıf Menkul Kıymet Yatırım Ortaklığı AŞ İstanbul/Turkey 22.89 34.55 9 Vakıf Gayrimenkul Yatırım Ortaklığı AŞ İstanbul/Turkey 38.70 40.86 Total Assets Equity Tangible Assets Interest Income Income on Securities Portfolio Current Year’s Profit / (Loss) Prior Period’s Profit / (Loss) Fair Value 1 2,167,689 677,599 718,869 83,947 1,419 26,493 (48,066) 449,781 2 6,618,429 308,951 127,457 36,713 196 73,260 38,512 1,149,195 3 2,246,286 145,045 3,156 189,406 - 23,194 16,098 157,611 4 2,095,369 205,138 21,591 139,151 - 33,847 23,281 232,724 5 493,702 164,268 2,491 35,659 28 19,623 8,568 186,870 6 4,005,275 579,208 1,988 61,159 23,491 16,637 17,711 402,497 7 29,555 28,280 446 3,294 42 7,809 6,855 81,031 8 18,021 17,450 24 330 1,488 1 (237) 27,963 9 1,152,183 940,321 749,372 12,671 - 75,357 42,425 568,147 (*) Financial information as at September 30, 2017 has been presented for these subsidiaries.