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Convenience Translation of Publicly Announced Consolidated Fınancial
Statements Originally Issued in Turkish, See Note I of Section Three
Arap Türk Bankası A.Ş.
Notes to Consolidated Financial
Statements at 31 December 2014
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
General Information
Corporate Management
Financial Information
V. INFORMATION ON CONSOLIDATED FOREIGN CURRENCY EXCHANGE RATE RISK
Whether the Group is exposed to foreign exchange risk, whether the effects of this situation are estimated, and whether the
board of directors of the Bank sets limits for positions that are monitored daily
The Group complies with net general position-shareholder’s equity limits. The Bank has the possibility to borrow a significant amount
of foreign currency.Within the context of the market risk management work of the Risk Management Department, the Bank’s
Exchange rate risk is calculated and analyzed taking different dimensions of the issue in consideration. The Exchange rate risk is
measured according to market risk calculated using the Standard Method and is included in the capital adequacy ratio. For testing
effects of the unexpected exchange rate fluctuations on the Bank monthly basis stress test analysis are done. In addition, by classifying
the changes in risk factors different scenario analysis are done based on different exchange rate expectations. The sensitivity of assets,
liabilities and off-balance sheets against exchange rate are measured by an analysis on a monthly basis.
The magnitude of hedging foreign currency debt instruments and net foreign currency investments by using hedging
derivatives
The Group does not have any financial derivatives used for hedging.
Foreign exchange risk management policy
Transactions are being hedged according to the Central Bank of Turkey’s basket of currencies instantly. Managable and measurable
risks are taken in the scope of the regulatory limits.
Foreign exchange buying rates of the last five business days before the balance sheet date as publicly announced by the
Parent Bank are as follows:
Date
US Dollars
EUR
24 December 2014
TL 2.3165
TL 2.8317
25 December 2014
TL 2.3209
TL 2.8312
26 December 2014
TL 2.3177
TL 2.8368
29 December 2014
TL 2.3182
TL 2.8255
30 December 2014
TL 2.3235
TL 2.8339
31 December 2014
TL 2.3189
TL 2.8207
The basic arithmetical average of the Parent Bank’s foreign exchange bid rate for the last thirty days
The basic arithmetical average of the Bank’s foreign exchange bid rate for December 2014 is TL 2.2868 for USD and TL 2.8202 for
EUR.