157 / 324
157
VAKIFBANK
2014 ANNUAL REPORT
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI
UNCONSOLIDATED FINANCIAL REPORT FOR THE
YEAR ENDED AT 31 DECEMBER 2014
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
Risk management strategies and policies
Risk management strategies are determined so as to support the Bank’s objectives and goals and maintain Bank’s presence by developing the present risk
management strategies and corporate wide risk culture in parallel with the changing business and risk environment and by applying the well accepted national
and international risk management practices.
The mission of Bank is to continuously increase the values added to the customers, employees, shareholders and society by managing the entrusted assets
and values effectively and productively. In this scope, it is fundamental to adopt forward looking risk based approaches through forming high quality assets and
good management of liabilities in all activities aiming high quality gains.
Bank’s risk management strategy is mainly based on avoiding high risks and legal risks with high impacts even if the probability of happening is low, taking
measures for the risks that may occur due to ordinary banking activities, procuring protection, transferring risks to third parties through techniques like
insurance or credit derivatives and accepting risks that have low impact and probability of occurance.
Risks are defined, measured, reported and managed in compliance with the policies and national and international standards. In this respect, not only legal
limits but also in-bank limits are considered. Up-to-dateness and compliance of the limits are monitored regularly. Credit risk mitigation policies are determined
and approved by the Board of Directors. Besides, possible risks are considered by following the changes in the market and economic conditions.
Risk management system and organization have been formed in compliance with the Regulation of Internal Systems.
VIII. FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
Carrying Value
Fair Value
Current Year
Prior Year
Current Year
Prior Year
Financial Assets:
Receivables from Interbank Money Markets
-
-
-
-
Banks
2,570,620
2,639,137
2,570,620
2,639,137
Available-for-Sale Financial Assets
16,323,297
16,288,187
16,323,297
16,288,187
Held-to-Maturity Investments
6,854,593
5,403,815
6,983,593
5,184,485
Loans
104,583,517
86,752,217
105,477,073
86,971,951
Financial Liabilities:
Bank Deposits
4,876,059
4,162,328
4,876,059
4,162,328
Other Deposits
86,880,909
77,370,486
86,925,247
77,370,486
Funds Borrowed
14,927,048
11,404,812
14,926,784
11,404,812
Securities Issued
10,457,757
6,884,826
10,388,073
6,884,826
Subordinated Loans
2,138,030
1,974,142
2,138,030
1,974,142
Miscellaneous Payables
3,160,415
2,696,105
3,160,415
2,696,105
Fair values of available-for-sale financial assets and held-to-maturity investments are derived from market prices or in case of absence of such prices they are
derived from prices of other marketable securities, whose interest rate, maturity date and other conditions are similar to securities held.
Fair value of fixed-interest loans are calculated by discounting cash flows with current market interest rates. For the loans with floating interest rate carrying
value also represents fair value.
Fair value of other assets and liabilities is calculated by adding accumulated acquisition costs and the sum of the interest accrual.
Classification of Fair Value Measurement
TFRS 7 - Financial Instruments requires the classification of fair value measurements into a fair value hierarchy by reference to the observability and significance
of the inputs used in measuring fair value of financial instruments measured at fair value to be disclosed. This classification basicly relies on whether the
relevant inputs are observable or not. Observable inputs refer to the use of market data obtained from independent sources, whereas unobservable inputs
refer to the use of predictions and assumptions about the market made by the Company. This distinction brings about a fair value measurement classification
generally as follows: