VKF_FRAE_2018_uyg11

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.) 436 Part III: Financial Highlights and Assessment of Risk Management Risk management of the Parent Bank is important in order to be understood by the all management stages and be able to get an opportunity to manage risk. In addition to that, it is similarly important to handle the loss that might cause when a risk occurs. Therefore measurements must cover the evaluations for the fund needs near the size of the risk and evaluations of the conditions that caused it. By using the methods of scenario and stress test, it is possible to see risk levels and needs of funds that can be generated from different circumstances and risky conditions. In addition to the results of market risk measurements using standard method, which calculated in monthly periods, other daily risk dependencies can be also calculated by using internal model. There are daily back testings occurred in order to examine the trustworthiness and performance of the model results. Besides, there are also scenario analyzes and stress tests are happening in order to backing up the standard method and internal models. In addition to this, in order to limit the market risks, daily limit implementation and limit implementation in accordance with the early warning system can be monitored on daily basis. Market Risk- Standardised approach Current Period - December 31, 2018 RWA Outright products 1 Interest rate risk (general and specific) 827,863 2 Stock risk (general and specific) 13,242 3 Foreign exchange risk 564,944 4 Commodity risk - Options 5 Simplified approach - 6 Delta-plus method 3,539 7 Scenario approach - 8 Securitisation - 9 Total 1,409,588 Prior Period - December 31, 2017 RWA Outright products 1 Interest rate risk (general and specific) 267,113 2 Stock risk (general and specific) 15,206 3 Foreign exchange risk 483,713 4 Commodity risk - Options 5 Simplified approach - 6 Delta-plus method 33,828 7 Scenario approach - 8 Securitisation - 9 Total 799,860