220 / 272
220
A&T BANK 2014 FAALİYET RAPORU
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.)
ANNU L R PORT 2014
VI. INFORMATION ON CONSOLIDATED INTEREST RATE RISK
Interest rate sensitivity of the assets, liabilities and off-balance sheet items
Within the context of the market risk management of the Risk Management Department, the Parent Bank’s interest rate risk is
calculated and analyzed taking different dimensions of the issue in consideration. The interest rate risk is measured according to
market risk calculated using the standard method and is included in the capital adequacy ratio. To test the effect of the interest rate
fluctuations on the Parent Bank monthly based stress test analysis are done.
In addition, by classifying the changes in risk factors different scenario analysis are done based on different interest rate expectations.
The sensitivity of assets, liabilities and off-balance sheets against interest rate are measured by an analysis on a monthly basis.
The expected effects of the fluctuations of market interest rates on the Parent Bank’s financial position and cash flows, the
expectations for interest income, and the limits the board of directors has established on daily interest rates
The Board of Directors has determined limits for the amount exposed to market risk/shareholder’s equity, to be maximum 45% for the
early warning limit, 50% for limit maximum, and maximum 55% for limit exception in order to follow interest rate risk, exchange rate
risk and equity price risk.
The precautions taken for the interest rate risk the Parent Bank was exposed to during the current year and their expected
effects on net income and shareholders’ equity in the future periods
Although the increase in interest rates has a limited negative effect on the Parent Bank’s financial position, the Parent Bank’s Equity
structure is able to confront the negative effects of possible fluctuations in the interest rates.