VKF_FRAE_2018_uyg11

VakıfBank Annual Report 2018 237 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.) Market Risk- Standardized approach Current Period - December 31, 2018 RWA Outright products 1 Interest rate risk (general and specific) 771,963 2 Stock risk (general and specific) - 3 Foreign exchange risk 221,324 4 Commodity risk - Options 5 Simplified approach - 6 Delta-plus method 3,539 7 Scenario approach - 8 Securitisation - 9 Total 996,826 Prior Period - December 31, 2017 RWA Outright products 1 Interest rate risk (general and specific) 233,425 2 Stock risk (general and specific) - 3 Foreign exchange risk 385,122 4 Commodity risk - Options 5 Simplified approach - 6 Delta-plus method 33,828 7 Scenario approach - 8 Securitisation - 9 Total 652,375 5. Explanations on Operational Risk The “Basic Indicator Method” that is mentioned in “Regulation on Measurement and Assessment of Capital Adequacy of Banks” Communiqué published in the Official Gazette no. 29511 on 23 October 2015 is used in the operational risk calculation of the Bank. Under the scope of the calculation, the value found by multiplying the average of the fifteen percent of the year-end gross income amounts realized by the Bank over the last three years by twelve and half is considered as the operational risk. Annual gross revenue is calculated by deducting profit/loss derived from the sale of available-for-sale assets and held-to-maturity securities, extraordinary income and indemnity insurance gains from the total of net interest income and non-interest income. All staff of the Bank is responsible within the scope of their own roles and work processes of controlling and decreasing operational risks. All units of the Bank are responsible of taking risk-reducing measures through insurance or other risk transfer mechanisms to reduce operational risks that may arise in their own business activities.