Investments in unconsolidated financial companies whose main activities are money and capital markets, insurance and that operate with licenses provided in accordance with special laws.
The negative difference between the market values and the carrying amounts for unconsolidated investments, subsidiaries, other investments and fixed assets
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Subordinated loans given to other banks which operate in Turkey
Credit risk is the risk that the counterparts may be unable to meet the terms of the agreements. This risk is monitored by reference to credit risk ratings and managed by limiting the aggregate risk to any individual counterparty, group of companies and industry. While determining credit risks, criteria such as the customers’ financial strength, commercial capacities, sectors, geographic areas and capital structures are evaluated. Analysis of the financial position of the customers are based on the statements of account and other information. Previously determined credit limits are constantly revised according to changing conditions. Collaterals, corporate and personal guarantees are determined on a customer basis.
During crediting procedures, limits determined on customer and product basis are essentially followed up; information on risk and limits information is closely monitored.
There are risk control limits set for the market risks and credit risks arise from forward and option agreements and other similar agreements.
When necessary, derivative instruments are exercised to control and to offset credit risks that can especially originate from foreign exchange and interest rate fluctuations.
Non-cash loans turned to cash loans are included in the same risk group as cash loans which are not collected on maturity. Credit risk management is applied for all positions involving counter party risk.
Rescheduled or restructured loans are followed in their relevant groups until all receivable from the loans is collected. Monitoring continues until receivable from loan is completely collected.
The Bank considers that long term commitments are more exposed to credit risk than short term commitments, and points such as defining risk limits for long term risks and obtaining collaterals are treated in a wider extent than short term risks.
The Bank’s banking activities in foreign countries and crediting transactions do not constitute an important risk in terms of the related countries’ economic conditions and activities of customers and companies.
When considered within the financial activities of other financial institutions, the Bank as an active participant in the national and international banking market, is not exposed to a significant credit risk. As seen in the balance sheet, the ratio of loans under follow-up to total loans is 1.3% (31 December 2003: 1.3%) and 100% provision has been provided.
The Bank provided a general provision amounting to TL51,916 (31 December 2003: TL55,434).
