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VAKIFBANK
ANNUAL REPORT 2014
Risk management activities continued also in 2014 in line with the Bank’s risk management policies that were prepared in parallel to legislation and
international practices and then approved by the Board of Directors.
Because of the new developments in the area of risk management and increasing expectations in risk management function; the Head of Risk the
Management organization was expanded in November 2014; and it was restructured as Credit Risk and Operational Risk Management Department and Market
Risk Management Department.
Furthermore; with the aim of informing the Audit Committee about the stages performed by an independent unit to monitor, measure, analyze, control and
report the transactions performed by the units under the Head of Treasury and making sure that appropriate decisions are made for risk management policy
and procedures, Treasury Reporting and Central Office Department that used to function under the Head of Treasury and External Operations was restructured
under the Head of Risk Management.
With the “Regulation on Banks Internal Systems and Internal Capital Adequacy Evaluation Process” issued in July 2014 by the Banking Regulation and
Supervision Agency (BRSA), an updating and improving process of the Bank’s existing risk management policy documents was launched in line with the “Good
Practice Guide” issued as per the mentioned Regulation.
In line with the “Good Practice Guide” and the mentioned Regulation, an “Internal Capital Adequacy Evaluation Process (İSEDES) Report” was prepared and
submitted to BRSA in September, 2014.
Within the scope of Risk Management and Capital Adequacy, other regulations of BRSA and Basel Committee (BIS) were tracked and Quantitative Impact
Studies – requested by BIS and BRSA – continued.
Daily scenario analyses of the impacts of the economic developments and expectations on the Capital Adequacy Ratio and weekly monitoring of the Interest
Rate Risk Arising From Banking Book also continued in, 2014.
Studies in the calculation of the Market Risk over the “Value Exposed to Risk (RMD)” model and studies about improving the model proceeded.
Within the scope of operational risk management, studies in collecting and analyzing the operational loss data were repeated, and moreover the Impact
Analysis made on the business processes was completed.
Efforts to monitor and develop risk management practices have been conducted within the scope of national and international regulatory authorities’
approaches and internationally best practices.
Within the Treasury Reporting and Central Office Department; the Head of Treasury’s technological infrastructure required to create scenarios and reports
for monitoring the Bank Limits was completed and as of December 24, 2014 instant monitoring of the Bank Limits on this infrastructure was launched. In
consequence, the Head of Treasury’s authorized employee can first control the limits before any transaction is made with the banks (limit inquiry) and then
start the transaction. In case the limit is exceeded, there will be a warning signal and reporting will be made if necessary.
Market Risk:
The Bank is exposed to market risk depending on potential changes in foreign exchange rates, interest rates and the market price of stocks
resulting from fluctuations in financial markets. The market risk arising from the Bank’s trading activities is measured and monitored using the standard method
and internal models in line with local and international banking practices. Market risk management is carried out pursuant to the “Market Risk Management
Policy Document.”
The market risk measurement results are calculated monthly on an unconsolidated and a consolidated basis by using the standard method under the
provisions of the “Regulation on the Measurement and Evaluation of the Banks’ Capital Adequacy” and are reported to the Bank’s senior management and to
the Banking Regulation and Supervision Agency. The portfolio, which is used in the calculation, is determined under the Bank’s “Trading Strategy, Policy and
Implementation Procedures Document.”
RISK MANAGEMENT
POLICIES APPLIED
BY RISK TYPE