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MANAGEMENT AND CORPORATE GOVERNANCE PRACTICES
RISK MANAGEMENT POLICIES
The Bank’s risk strategy, policy, and
procedures, which were approved
by the Board of Directors, have
been set out based on the following
principles:
To be selective in risk-taking,
To define, measure, analyze, and
manage risks effectively,
To secure the balance between
risk and return,
To have sound collateral
covering both existing and
potential risks, closely monitor
the sufficiency of this collateral,
To secure the appropriate level of
risks within defined limits,
To ensure that all operations
are conducted in accordance
with approved policies and
procedures,
To ensure that all operations are
in compliance with applicable
laws and regulations,
To establish an appropriate
corporate culture within the
Bank based on risk-taking,
To create effective reporting
channels and ensure the
timely informing of relevant
management authorities
to eliminate any form of
discrepancy.
A&T Bank focuses on the definition,
measurement, analysis and
management of the risks involved
in its operations and determines
its risk management policies
and application procedures in a
consolidated manner under the
main risk categories as follows:
Market Risk
Interest Rate Risk
Currency Risk
Counterparty Credit Risk
Arising From Purchase and Sale
Accounts
Liquidity Risk
Model Risk
Interest Rate Risk Arising from
Banking Accounts
Credit Risk
Country Risk
Residual Risk within the Scope of
Credit Risk
Operational Risk
Residual Risk within the Scope of
Operational Risk
Information Technologies Risk
Reputation Risk and Strategic
Risk
The Risk Management Department
undertakes daily analysis of the
various risks that the Bank may
be exposed to and calculates the
profitability and costs related to the
management of these risks. The
aim of risk analysis is to determine
the characteristics of these risks and
their possible effects on the Bank.
Market Risk
The Bank defines the market risk as
the possibility of loss that it might
be exposed to due to; general
market risk, currency risk, specific
risk, commodity risk, swap risk,
stock position risk and counterparty
credit risk arising from purchase
and sale accounts. The Bank’s
market risk management evaluates
the risks such as “interest rate risk”,
“currency risk”, “liquidity risk” and
“counterparty credit risk arising
from purchase and sale accounts”
and their relations and interactions
with other potential risks. Due to
the fact that the Bank does not
have a portfolio of commodities
and stocks, it is not subject to
“commodity risk” and stock
position risk.
The Bank aims to maximize its
risk-adjusted return by effectively
managing market risk using suitable
parameters in compliance with the
size of its operations.
The value-at-risk (VAR) model
is also used for daily internal
measurements of market risk.
Within the framework of the
internal risk limits approved by
the Board of Directors, the results
of standard and VAR models
are examined and evaluated
periodically. In addition to these,
the following studies are also
carried out to effectively measure
market risks:
Duration analyses,
GAP analyses,
Sensitivity analyses,
Ratio analyses,
Cost/Return analyses,
Asset/Liability structure analyses,
Income statement analyses.