Page 180 - A&T BANK ANNUAL REPORT 2012

GENERAL INFORMATION
CORPORATE MANAGEMENT
FINANCIAL INFORMATION
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
CONSOLIDATED FINANCIAL REPORT
AS OF 31 DECEMBER 2012
(Currency: Thousands of Turkish Lira (“TL”) unless otherwise stated)
Convenience Translation of Consolidated Financial
Report Originally Issued in Turkish
See Note on I. in Section Three
II. Information on Consolidated Credit Risk
1. For Credit Risk Analysis;
Information on risk concentrations by debtors or group of debtors or geographical regions and sectors, basis for risk limits and
the frequency of risk appraisals
For credit risk analysis, cash and non-cash loans granted to a debtor or debtors’ group is subject to a risk classification in
proportion to the Bank’s shareholders’ equity. In addition the geographical regions and sectoral distribution is investigated
periodically and distributions are revised according to the market conditions. The general and other periodical limits of a firm
are renewed every year and the extending of loans throughout the day is made with the mentioned limits.
Information on determination and distribution of risk limits for daily transactions, monitoring of risk concentrations related to
off-balance sheet items per customer and dealer basis
Limit assignments, controls over loan granting process, marketing strategies, matters related to the daily operations and
pay-back process are determined in the Bank’s credit procedures. Issues related to the daily based transactions (especially
extending of cash loans) are managed in coordination with credit and treasury departments.
Information on periodical analysis of creditworthiness of loans and other receivables per legislation, inspection of account
vouchers taken against new loans, if not inspected, the reasons for it, credit limit renewals, collaterals against loans and other
receivables
Loans and other receivables are being followed periodically as per the “Regulation on the Principals and Procedures Related to
the Determination of the Loans and Other Receivables for which Provisions shall be set aside By Banks and to the Provisions
to be set aside”.
Consolidated financial statements of the debtors are examined as per the regulation, loan limits are being updated in parallel
to the economic conditions under the authorization of the Credit Evaluation Committee and the Top Management. The Bank
obtains sufficient guarantees for the loans and the other receivables. Firms that the Bank works with credit is composed of the
top level firms of Turkey, therefore most of the collaterals taken are “firm signature or guarantee”. Beside from this third party
guarantees, furthermore mortgage, other bank guarantees, cash blockage, customer or personal checks are also obtained.
The guarantees obtained are in parallel with the market conditions and other banks collateral conditions.
The Bank Management has generated an internal rating system for the determination of firms’ ratings and credit
assessments. “Credit Rating” process is the analysis of client creditworthiness in accordance with the predetermined various
“qualitative” (such as the position of the firm in its sector, the firms competitiveness, customer and supplier portfolio, the
certificates and documents issued by the independent institutions, organizational structure, relationship with the other financial
institutions) and “quantitative” (such as current ratio, liquidity ratio, profitability and indebtedness) factors. Upon the conclusion
of credit evaluation process the firms and loans are categorized as “Very good firm” (risk rating between 100%-85%), “Good
firm” (risk rating between 84.99%-70%), “Satisfactory firm” (risk rating between 69.99%-60%), “Average firm” (risk rating
between 59.99%-50%), “Weak firm” (risk rating between 49.99%-40%) “Very weak firm” (risk rating between 39.99%-0%).