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FINANCIAL INFORMATION
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
NOTES TO UNCONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2015
(AMOUNTS EXPRESSED IN THOUSANDS OF TURKISH LIRA (“TL”) UNLESS OTHERWISE STATED. )
V. INFORMATION ON FOREIGN CURRENCY EXCHANGE RATE RISK
Whether the Bank 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 Bank 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 Bank 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. Manageable 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 Bank, are as follows:
Date
US Dollars
Euro
24 December 2015
TL 2.9262
TL 3.1969
25 December 2015
TL 2.9187
TL 3.1968
28 December 2015
TL 2.9123
TL 3.1904
29 December 2015
TL 2.9157
TL 3.2006
30 December 2015
TL 2.9084
TL 3.1921
31 December 2015
TL 2.9076
TL 3.1776
The basic arithmetical average of the 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 2015 is TL 2.9154 for USD, TL
3.1658 for EURO.