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84 A&T BANK ANNUAL REPORT 2015
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. )
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
SECTION FOUR
INFORMATION ON THE FINANCIAL POSITION OF THE BANK
I. INFORMATION ON CAPITAL ADEQUACY RATIO
The method used for risk measurement in determining capital adequacy standard ratio; Capital Adequacy Standard
Ratio is calculated in accordance with “Communiqué on Measurement and Assessment of Capital Adequacy of Banks
“, “Communiqué on Credit Risk Mitigation Techniques”, “Communiqué on Calculation of Risk Weighted Amounts for
Securitizations” published on 6 September 2014 and Official Gazette numbered 29111 and “Communiqué on Equities
of Banks” published on 5 September 2013 in the Official Gazette numbered 28756. The Bank’s unconsolidated capital
adequacy ratio is occurred 18.61% (31 December 2014: 15.83%) in accordance with the related Communiqué as of
31 December 2015.
The risk measurement methods used in the determination of the capital adequacy ratio:
In the calculation process of capital adequacy ratio, the data which are compatible with current regulations are used. In
this case, the market and credit risk are also taken into account as “Trading Accounts” and “Banking Accounts”.
The items which are deducted from trading accounts and shareholders’ equity are not considered in the calculation of
the credit risk. Depleted and amortized assets are taken into consideration by net amounts which are calculated by the
deduction of depreciation cost and provisions.
The amount subject to credit risk for non-cash loans and commitments are converted credit by using the conversion
rates which are defined in the 5th article of “Regulation on Measurement and Evaluation of Capital Adequacy of Banks”.
Besides, the provisions which are defined in “Regulation on Procedures and Principles for Determination of Qualifications
of Loans and Other Receivables by Banks and Provisions to Be Set Aside” and taken place at the liability side of the
balance sheet are also taken into consideration. And classified to the relevant risk class by regarding the 6th article of
“Regulation on Credit Risk Mitigation Techniques” and the risk is weighted in accordance with the same regulations
Annex-1.
In the calculation of the the amount subject to credit risk for Derivative Financial Instruments and Credit Derivative
Contracts transactions in the banking accounts, the counterparty receivables are converted into credit by using
conversion rates stated in Annex-2 of the regulation and subjected, be subjected to risk mitigation regarding “Regulation
on Credit Risk Mitigation Techniques”, classified to the relevant risk class by regarding the 6th article of regulation
and the risk is weighted in accordance with Annex-1 of the regulation. In accordance with Article 5 of regulation,
“Counterparty Credit Risk” is calculated for repo transactions, securities, commodities lending transactions. “Fair Value
Valuation Method” is used in counterparty credit risk calculation.
Value at operational risk (VOR) is calculated in accordance with the “Basic Indicator Method “and is included in the
capital adequacy ratio calculation.