VKF_FRAE_2018_uyg11

VakıfBank Annual Report 2018 413 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 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) Risks which are subject to stress test applications can be evaluated on portfolio and activities basis, consolidated and non – consolidated basis, at specific and general levels. Specific stress test applications are performed with sensitivity and scenario analysis specific to particular portfolio and activity. General stress test applications are established to ensure that Group’s risks are seen in an integrated perspective. Relations between risks are taken into account by the correlation effect and relations between portfolios are considered with diversification effect. Furthermore in addition to stress tests, reverse stress tests that enable us to evaluate which risk factors and which risk concentrations causes significant loss indicators designed from the outset are conducted. The Risk Management Department uses the methods appropriate to national legislation and international practices to evaluate and monitor the developments in risks, to take necessary measures, to establish risk limits, to stay within the specified limits, and to perform the necessary analysis, measurement and reporting. The development of risk culture in parallel with the changes in the economic conjuncture and risk perception is an important element of the Bank and aims to ensure risk awareness and sensitivity in the actions to be taken. In this respect, training programs, risk measurements and reports provided to the Board of Directors, Senior Management and risk reporting to the committees, the Bank’s risk appetite framework and internal capital adequacy assessment process make a significant contribution to the dissemination of risk culture. Risk weighted amounts Current Period – December 31, 2018 Risk Weighted Amount Minimum Capital Requirements 1 Credit Risk (excluding counterparty credit risk) (*) 228,487,742 18,279,019 2 Standardised approach 228,487,742 18,279,019 3 İnternal rating based approach - - 4 Counterparty Credit Risk 5,091,337 407,307 5 Standardised approach for counterparty credit risk 5,091,337 407,307 6 Internal model method - - 7 Equity position in banking book under basic risk weighting or internal rating based - - 8 Equity investments in funds – look-through approach 1,395 112 9 Equity investments in funds – mandate-based approach - - 10 Equity investments in funds – 1250% weighted risk approach - - 11 Settlement Risk - - 12 Securitization positions in banking accounts - - 13 IRB ratings-based approach - - 14 IRB Supervisory formula approach - - 15 SA/simplified supervisory formula approach - - 16 Market risk 1,409,588 112,767 17 Standardised approach 1,409,588 112,767 18 Internal model approaches - - 19 Operational Risk 17,136,335 1,370,907 20 Basic Indicator Approach 17,136,335 1,370,907 21 Standardised approach - - 22 Advanced measurement approach - - 23 The amounts below the thresholds for deduction from capital (subject to a 250% risk weight) - - 24 Floor adjustment - - 25 Total (1+4+7+8+9+10+11+12+16+19+23+24) 252,126,397 20,170,112 (*) Except for the amount of the discount threshold under the equity