VKF_FRAE_2018_uyg11

VakıfBank Annual Report 2018 225 CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I. OF SECTION THREE TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND ITS FINANCIAL SUBSIDIARIES NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) Credit risk mitigation techniques Current Period Sonu - December 31, 2018 Exposures unsecured: carrying amount Exposures secured by collaterals Exposures secured by collateral, of which: secured amount Exposures secured by financial guarantees Exposures secured by financial guarantees, of which: secured amount Exposures secured by credit derivatives Exposures secured by credit derivatives, of which: secured amount 1 Loans 150,170,557 71,375,960 53,821,706 27,937,018 25,372,738 - - 2 Debt Securities 49,054,049 - - - - - - 3 Total 199,224,606 71,375,960 53,821,706 27,937,018 25,372,738 - - 4 Of which Defaulted 10,800,157 - - - - - - Prior Period - December 31, 2017 Exposures unsecured: carrying amount Exposures secured by collaterals Exposures secured by collateral, of which: secured amount Exposures secured by financial guarantees Exposures secured by financial guarantees, of which: secured amount Exposures secured by credit derivatives Exposures secured by credit derivatives, of which: secured amount 1 Loans 105,589,475 78,382,140 66,629,280 3,652,598 3,128,437 - - 2 Debt Securities 30,003,880 - - - - - - 3 Total 135,593,355 78,382,140 66,629,280 3,652,598 3,128,437 - - 4 Of which Defaulted 7,638,206 - - - - - - d) Credit risk under standardized approach Qualitative disclosures on banks’ use of external credit ratings under the standardized approach for credit risk The external rating grades of the counterparties of Fitch Ratings international rating agencies are used in determining the risk weights for the risk classes specified in Article 6 of the Regulation on Measurement and Evaluation of Banks’ Capital Adequacy. Fitch Ratings is used as an international rating agency to determine the risk weights of risk classes to be received from central government or central banks and from banks and intermediary institutions. When an international rating is taken into account for the entire risk category of central government or central banks, the centralized and central banks that are not rated by the Fitch Ratings international rating agency are based on the country risk classification issued by the Organization for Economic Co-operation and Development (OECD). The following table shows that the rating scale of the credit rating agency corresponds to the credit quality levels reported in the annex of the Regulation on the Measurement and Evaluation of Banks’ Capital Adequacy. Ratings Matched Credit Quality Rank Fitch Ratings 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 -