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Türkiye Vakıflar Bankası Türk Anonim Ortaklığı
and Its Financial Subsidiaries Consolidated Financial Report as at and
For the Year Ended 31 December 2013
(Currency: Thousands of Turkish Lira (“TL”))
Convenience Translation of the Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Section 3 Note I
Individual pension business
Individual pension system receivables
presented under ‘other assets’ in the accompanying consolidated financial statements consists of ‘receivable from
pension investment funds for investment management fees’, ‘entrance fee receivable from participants’. Pension funds are the mutual funds that the
individual pension companies invest in, by the contributions of the participants. Shares of the participants are kept at the clearing house on behalf of the
participants.
‘Receivable from pension investment funds for investment management fees’
are the fees charged to the pension funds for the administration and
portfolio management services provided. ‘Receivables from the clearing house on behalf of the participants’ is the receivable from the clearing house
on pension fund basis against the contributions of the participants. The same amount is also recorded as payables to participants for the funds acquired
against their contributions under the ‘individual pension system payables’.
In addition to the ‘payables to participants’ account, mentioned in the previous paragraph, individual pension system payables also includes participants’
temporary accounts, and payables to individual pension agencies. The temporary account of participants includes the contributions of participants that
have not yet been invested. Individual pension system payables are presented under other liabilities and provisions in the accompanying consolidated
financial statements.
Fees received from individual pension business consist of investment management fees, fees levied on contributions and entrance fees. Fees received
from individual pension business are recognised in other income in the accompanying consolidated statement of comprehensive income.
SECTION FOUR
Information Related to Financial Position of the Group
I. Consolidated capital adequacy ratio
As at 31 December 2013 The Bank’s consolidated capital adequacy ratio is 13.21% (31 December 2012: 15.56%). The Parent Bank’s unconsolidated
capital adequacy ratio is 13.70% (31 December 2012: 16.14%).
Risk measurement methods in calculation of capital adequacy ratio
Consolidated capital adequacy ratio is calculated within the scope of the “Regulation on the Measurement and Assessment of Capital Adequacy Ratios
of Banks (Regulation)”, “Regulation on Credit Risk Mitigation Techniques” and “Communiqué on Risk Weighted Amounts for Securitization Exposures”
published in Official Gazette no. 28337 dated 28 June 2012 and “Regulation on the Equity of Banks” published in Official Gazette no. 26333 dated 1
November 2006.
The data used in calculation of consolidated capital adequacy ratio is organized in accordance with the accounting records prepared in compliance with
the current legislation. Besides, the Bank classifies these data as “Trading Book” and “Banking Book”; and takes into account in the calculation of market
risk and credit risk accordingly. Operational risks are also included in the calculation of capital adequacy ratio.
In the calculation of risk-based amounts, the Group classifies its receivables into risk groups described in 6th article of the Regulation and considers
the ratings and risk mitigating elements. The amounts are evaluated in the related risk weight group, accordingly. The Bank applies “basic financial
guarantee method” in the consideration of risk mitigating elements for banking book accounts.
Trading Book Accounts and the Items Deducted from the Capital base are not included in the calculation of credit risk. In calculation of risk weighted
assets, impairments, depreciation and amortization, and provisions are considered as deduction items.
In the calculation of their risk-based values, non-cash loans are weighted after netting with specific provisions that are classified under liabilities and
calculated based on the “Regulation on Identification of and Provision against Non-Performing Loans and Other Receivables”. The net amounts are
multiplied by the rates stated in the Article 5 of “Regulation regarding Measurement and Assessment of Capital Adequacy Ratios of Banks”, subjected to
risk mitigation in accordance with the “Communique on Credit Risk Mitigation Techniques”, classified into related risk-weighted group in accordance with
Article 6 of the Regulation, then multiplied with the risk weigth of the group in accordance with the Appendix 1 of the Regulation.
In the calculation of their risk-based values, Derivative Financial Instruments and Credit Derivative Contracts which are accounted in banking book,
the receivable amounts due to counter parties are multiplied by the rates stated in the Appendix 2 of the Regulation, subjected to risk mitigation in
accordance with the “Communique on Credit Risk Mitigation Techniques”, classified into related risk-weighted group in accordance with Article 6 of the
Regulation, then multiplied with the risk weigth of the group in accordance with the Appendix 1 of the same Regulation. In compliance with Article 5
of the Regulation, repo transactions, investment securities and commodity lending transactions are accounted for “Counterparty Credit Risk”. The Bank
applies “Fair Value Measurement” in the calculation of “Counterparty Credit Risk”.
VAKIFBANK ANNUAL REPORT 2013
225