2021 Integrated
Annual Report
for an
Inclusive and
Robust Economy
for Climate
Action
for Our
Employees
for
Transparent
Management
for Next-
Generation
Banking
for Efficient
Operations
for Future
Generations
We take responsibility...
#ourworldourfuture
Contents
06
50
109
133
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Contents page
INTELLECTUAL
CAPITAL
NATURAL
CAPITAL
04
Introduction
05 About the Report
06 AN OVERVIEW OF İŞBANK
08
10
Corporate Profile
İşbank's Vision, Goals,
Values and Strategy
İşbank in Figures in 2021
10
12
İşbank from 1924 to Today
14 Messages from the Executives
22
LOOKING INTO THE FUTURE
22 Operating Environment: General Evaluations
26 Global Tendencies, Risks, Opportunities and Forecasts
29 HOW DO WE CREATE VALUE?
29 Our Business Model: İşbank Banking
İşbank's Sustainability Journey
32
Sustainability Priorities
33
Sustainability Management
38
Stakeholder Expectations and İşbank's Response
39
Initiatives Supported in the Field of Sustainability
44
Contribution to Sustainable Development Goals
46
50 RELIABLE FINANCIAL ACTOR
52 We Take Responsibility for an Inclusive
and Robust Economy
Financial Performance
56
İşbank and its Activities in 2021
57
İşbank's Subsidiaries
63
71
Flawless Customer Experience
74 Responsible Products and Services
Financial Inclusion
76
81
Financial Literacy
82 Responsible Marketing
84 We Take Responsibility for Climate Action
Climate Change Risk Management
Environmental and Social Risk Management in Loans
87
89
92 Products and Services Contributing to a Green Economy
98 We Take Responsibility for Next-Generation Banking
100 Digital Banking
104
106
Innovation and Entrepreneurship
Information Safety
109 RESPONSIBLE OPERATIONS
110 We Take Responsibility to Mitigate Negative
Impacts of Our Operations
110 Supply Chain Management
114 Environmental Impact
118 Operational Efficiency
120 We Take Responsibility for Our Employees
123 Employee Engagement and Satisfaction
124 Employee Rights
125 Family Friendly Employer
126 Employer of Choice
126 Preferred Employer
127 Equal Opportunity and Diversity
129 Talent Management
133 GOOD CORPORATE CITIZEN
134 We Take Responsibility for Transparent and Ethical Management
137 Management Structure
138 Board of Directors
142 Executive Board
144 Organization Chart
146
146
150
Information on Board of Directors meetings
İşbank Committees
Information on Risk Management
Policies Applied per Risk Types
153 Managers of Internal Systems
154 Audit Committee's Assessment on the Operation of Internal
Audit, Internal Control, Compliance and Risk Management
Systems, and Information on its Activities in the Reported Period
159 Business Ethics
159 Anti-Bribery and Anti-Corruption
160 Stakeholder Dialogue
161 Transparency and Reporting
162 Corporate Governance Principles Compliance Statement
163 Corporate Governance Compliance Report
170 Corporate Governance Information Form
181 Sustainability Principles Compliance Framework
188 Dividend Distribution Policy
189 Summary Report of the Board of Directors
190 Agenda of the Annual Meeting
191 Dividend Distribution Proposal
Annual Meeting Documents
192 We Take Responsibility for Future Generations
194 Projects in the Field of Education
196 Projects in the Field of Environment
196 Projects in the Field of Culture and Art
200 Special Section: Combating the COVID-19 Pandemic
202 FINANCIAL REPORTS AND ANNEXES
207 Non-Consolidated Financial Report
310 Consolidated Financial Report
428 ANNEXES
428 Projects to Improve Customer Experience
432 Activities for which Support Services are Received in Accordance
with the Regulation on Procurement of Support Services for Banks
434 Additional Information Provided Within the Scope of Relevant Legislation
436
Information on Transactions Carried out
with the Bank's Risk Group
436 Corporate Memberships
437 Fundings Received from International Financial Institutions
by İşbank as of 31.12.2021
İşbank's Credit Ratings
438 Financial Highlights and Key Ratios for the Five-Year Period
442
443 Awards Received in 2021
446 Changes in Sustainability Priorities of İşbank
447 Direct and Indirect Subsidiaries
451 Changes in Percentage of Participation in Subsidiaries
452 Human Resources Data
457 UN Women's Empowerment Principles Progress Statement
458 Amendments to the Articles of Incorporation in 2021
460
Independent Auditor's Report on the Board
of Directors’ Annual Report
462 Non-Financial Data Reporting Guidance and
Independent Assurance Report
471 GRI Content Index
480 Company Information
Introduction
"We Take Responsibility..."
İşbank has set out the theme of its first integrated annual
report as "We Take Responsibility". Preparing to celebrate its
100th anniversary in 2024 and continuing to work with the
vision of "The Bank of the Future", İşbank has always provided
permanent support to the country's economy since the day it
was founded.
The economic and social difficulties caused by the COVID-19
pandemic, the increasing adverse effects of climate change,
and income inequality have affected Turkey as well as the rest
of the world. Many organizations, families and individuals
have had to face both financial and moral difficulties in this
period. An inclusive, low-carbon and innovative economy
has become more urgent than ever. During this process of
change, the banking sector plays an important role. İşbank is
aware of its duties and responsibilities in this regard. In line
with its historical mission, the Bank operates with the aim of
becoming a reliable partner that focuses on the welfare of all
segments of society with innovative and creative economic
growth target which is respectful of natural life balance.
2021 Integrated Annual Report aims to shed light on the
vision of how the value creation model, which is called İşbank
Banking, will be managed in this transition period. 2021 report
summarizes the Bank’s approach to taking responsibility and
the value creation for its stakeholders in four main sections.
The "How Do We Create Value?" section explains the value
creation process through İşbank Banking, which reflects
İşbank’s integrated sustainability approach. This section
includes the sustainability priorities revised in 2021,
sustainability initiatives supported, communication with
stakeholders and contribution to United Nations Sustainable
Development Goals.
The "Reliable Financial Actor" section presents the role that
İşbank plays as a financial organization for an inclusive and
robust economy. This section includes the changes anticipated
by the financial sector and İşbank's goals for a sustainable
financial performance, the customer experience that İşbank
considers while presenting its products and services, and its
performance in inclusion, financial literacy, raising savings
awareness, as well as İşbank's roles and targets in climate
action. The final part of the Reliable Financial Actor section
includes İşbank's digitalization journey and the performance in
this field.
The "Responsible Operations" section sets out the projects
and practices developed by İşbank to minimize the negative
environmental impacts of its operations and extend the
working standards of the Bank throughout the supply chain.
This section also reports the responsibilities İşbank takes for
its employees, how İşbank employees are getting prepared for
the banking competencies of the future, and the Bank's gender
equality approach.
The "Good Corporate Citizen" section summarizes the Bank's
corporate governance structure, ethical and responsible
banking approach, management principles, and performance.
The "We Take Responsibility for Future Generations" section
presents a summary of İşbank's vision of corporate social
responsibility and projects realized in line with this vision.
Effects of the COVID-19 pandemic continued all over the world
in 2021. The measures taken by İşbank for its employees and
customers within the scope of the pandemic are also reported
in a separate section in the report.
İşbank has positioned sustainability, which is the basis of
its business model, as one of the main focal points of its
corporate strategy with a holistic approach. As an indicator
of this approach, the Bank has prepared its first Integrated
Annual Report, which includes a comprehensive evaluation
of its financial and non-financial performance in 2021.
İşbank, which completed 2021 with success despite all the
global turmoil, shall continue to take into consideration
economic, social and environmental effects of its activities
and take responsibility for the country's economy as a reliable
institution.
About the Report
İşbank prepared its first Integrated Annual Report in 2021.
This report aims to shed light on the responsibilities İşbank
has taken in the rapidly changing new economic system.
Structure and content of the report
İşbank’s first integrated annual report provides up-to-date
information about the Bank's activities carried out with its
approach focusing on creating sustainable and shareable
value by taking into consideration financial and non-financial
capital elements together. The 2021 Integrated Annual Report
includes İşbank's 2021 performance, the value created for
all of its stakeholders with this performance, the risks and
opportunities it has faced in the value creation process, and
the integration of the Bank's sustainability priorities into
business model.
A separate section has been created in the report in order to
explain the measures taken in the fields of employee health,
customer service, and business continuity with regards to the
Coronavirus (COVID-19) pandemic that continued to impact
the whole world in 2021.
See Fight Against COVID-19
Period and scope of the report
The İşbank 2021 Integrated Annual Report presents the Bank's
performance for the period between January 1st, 2021 and
December 31st, 2021. The Integrated Annual Report includes
consolidated and unconsolidated financial statements and
independent audit report. The scope of the report covers İşbank's
activities in Turkey and operations abroad. The activities of the
Bank's subsidiaries are not included in the scope of reporting.
Compliance and legislation
İşbank, which is publicly traded on Istanbul Stock Exchange,
ensures that the Bank's 2021 Integrated Annual Report is in
compliance with the minimum requirements of the Banking
Regulation and Supervision Agency (BRSA) and the Capital
Markets Board (CMB) on annual reporting.
The İşbank Integrated Annual Report is compatible with the
Integrated Reporting Framework ( Framework) of the
International Integrated Reporting Council (IIRC). The 2021
Integrated Annual Report has been prepared in accordance with
the GRI Standards-Comprehensive practice published by the
Global Reporting Initiative (GRI).
See GRI Standards Content Index
In organizing the content of report, the Provisional Standard
for Commercial Banks guide released by the Sustainability
Accounting Standards Board - SASB, United Nations
Environment Program Finance Initiative's (UNEP-FI) Principles
for Responsible Banking, and Carbon Disclosure Project's
(CDP) Climate Change Program Guidance were utilized.
The report also includes İşbank's contribution to the United
Nations Sustainable Development Goals.
See Contribution to Sustainable Development Goals. İşbank,
a signatory of the United Nations Women's Empowerment
Principles (UN WEPs), has prepared detailed performance
summary on gender equality. The Bank's performance in this
area can be found in the Women's Empowerment Principles
Progress Statement.
Principles Progress Statement
See Women's Empowerment
Audit
The financial statements included in İşbank's 2021 Integrated
Annual Report have been audited by Güney Bağımsız
Denetim ve SMMM A.Ş.
See Compliance Opinion KPMG
Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik
A.Ş. has provided limited assurance on selected non-financial
information.
Environmental Management System has been audited
within the scope of ISO 14001: 2015 standard under DAkkS
accreditation by TÜV SÜD.
See Independent Assurance Report İşbank's
Senior management statement
In the opinion of İşbank's senior management, this report
includes all the topics in terms of value creation for the Bank's
stakeholders while presenting a holistic evaluation of the Bank's
financial and non-financial performance for the period between
January 1st, 2021 and December 31st, 2021 and its plans for
the future. The statement of responsibility regarding this report
has been prepared as per the relevant legislation and presented
on the KAP platform. The statement can be found on the Bank's
corporate website.
Contact
The report is accessible via the Public Disclosure Platform
(KAP) and on
www.isbank.com.tr
Please send your opinions and suggestions on the report to
sustainability@isbank.com.tr.
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An Overview
of İşbank
Widespread Shareholding Structure
Deep-Rooted Banking Tradition
Having a widespread shareholder base, İşbank has
approximately 175 thousand shareholders, consisting of
institutional and individual investors. 37.26% of the Bank’s
capital is owned by İşbank Members' Supplementary Fund, the
members of which are around 49 thousand employees and
retirees.
İşbank's Shareholding Structure**
Atatürk Shares*
28.09%
Free Float
34.65%
İşbank, the first national bank of the Turkish Republic, was
founded on August 26, 1924 in line with the decisions taken at
the İzmir First Economics Congress by directives of Atatürk.
Since the day it was founded, İşbank has been a brand
synonymous with trust, dignity and reputation in the eyes of its
stakeholders in national and international markets.
Having undertaken pioneering roles and critical duties in
economic life based on its founding mission, the Bank has not
hesitated to take responsibility in difficult times. İşbank creates
permanent value for its stakeholders in the medium and long
term, as it does in the short term, with its deep-rooted and
powerful business model.
Innovative Banking for 97 Years
İşbank has been operating in Turkey for 97 years with its
sustainable and robust financial structure.
Celebrating its 97th year in 2021, the Bank carries out its
activities in line with the vision of developing innovative
products, services and applications that meet the banking
expectations of the future through pioneering practices within
the sector.
There are many innovations that İşbank has introduced to the
banking sector. Introducing the first ATMs to Turkey, İşbank's
ATM named "Bankamatik" has become a brand. İşbank was
the first bank in Turkey to offer the Internet branch and
mobile banking application to its customers. Increasing its
investments in technology every year, İşbank has also made
a difference in the sector in next-generation digital banking
applications.
For detailed information, please see
Subsidiaries on page 63 and Direct and Indirect
Subsidiaries on page 64.
İşbank Members'
Supplementary
Pension Fund
37.26%
*These shares belong to Atatürk and are represented by the Republican
People's Party in accordance with Atatürk's will. Since the dividend
income of these shares was left to the Turkish Linguistic Society and
Turkish Historical Society in accordance with Atatürk's will, dividend
payments are made to the aforementioned institutions within the
framework of the will and legal framework.
**The shareholding structure is provided as of 31.12.2021. (31.12.2020:
Pension Fund 37.08%, Atatürk Shares 28.09%, Free float 34.83%).
Corporate Profile
As one of the most reliable financial institutions in Turkey, İşbank plays a role in building the
financial futures of millions of customers through its digital service channels and service
network throughout the entire country.
İşCep (the mobile app), Call Center, 6,476 ATMs in Turkey and
the Turkish Republic of Northern Cyprus (TRNC), and 570,212
POS devices (including online POS).
İşbank carries out cross border banking activities with 2
branches in Iraq, 2 branches in Kosovo, 2 branches in the UK,
1 branch in Bahrain and 14 branches in the TRNC as of the
end of 2021. The Bank has 2 representative offices, one in
Shanghai (China) and the other one in Cairo (Egypt). In addition
to aforementioned, İşbank carries out banking activities via its
subsidiaries in Germany, Russia and Georgia.
İşbank Group is an integrated organization with domestic and
international subsidiaries operating in many fields. As of the
end of 2021, İşbank holds direct and indirect shares in 132
companies. The number of companies controlled directly or
indirectly by the Bank is 109.
İşbank, an organization synonymous with trust, consistency
and dignity, works for an inclusive and environment-friendly
economy with its sense of responsibility stemming from its
history.
As of the end of 2021, with 22,802 employees providing
service to 20.7 million customers, İşbank is the largest private
bank in Turkey with its total asset size of TL 926.6 billion.
İşbank is amongst the most highly respected institutions of
the banking sector with its products and services in corporate,
commercial, SME, retail and private banking.
İşbank provides services to its customers with 62 Regional
Directorates and 1,174 branches in Turkey in addition to the
Head Office in Istanbul, Tuzla Technology and Operations
Center (TUTOM), Tuzla Atlas Data Center, and Ankara
Operations Center (ATOM).
Providing service through its branches and digital channels
developed as a result of huge investments, İşbank continues
to create value for its customers through its Internet Branch,
20.7
million Customers
Strong and Sustainable Financial Structure
22,802
Employees
İşbank has a strong, resilient and agile financial structure. As
of the year-end 2021, İşbank's shareholder equity amounts
to TL 86.8 billion and its capital adequacy ratio is 20.4%, well
above the legal limit. The Bank reinforces its support to its
customers by taking advantage of the opportunities created
by its sustainable and strong financial structure.
The biggest private bank in Turkey with total
assets of
TL 926.6 billion
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GOALS, VALUES AND STRATEGY
İşbank in Figures in 2021
Our Vision
Becoming the bank of the future,
creating sustainable value with an
inclusive and participatory approach
Our Strategic Goals
Commitment to our country
Strong and sustainable financial
performance
Efficient risk management
Flawless customer experience
Value creating technology and
innovation leadership
Happy and productive human resource
Ethical and responsible banking
compassionate towards people,
society and the environment
Our Values
Innovation, Solidarity, Common
Sense, Reliability, Sincerity,
Transparency guided by the principles
of "Intelligence, diligence, integrity,
technical and methodical work"
Our Strategy
Managing our balance sheet to ensure
sustainable and value-added growth
while using our internal and external
resources in accordance with the
priorities of the country's economy
and getting prepared for the future by
continuously improving our business
model along with our group companies
and all our business partners in the
period of technological transformation.
TL 926.6 billion
Asset Size
TL 493.4 billion
Cash Loans
TL 595.6 billion
Deposits
TL 86.8 billion
Shareholders’ Equity
the leader among
private banks
20.7
million
customers
10.2
million
number of total
digital banking
customers
1,174
domestic
branches
21
overseas
branches
97%
local
procurement
rate
90%
customer
satisfaction
score
30 thousand
number of chess
classes opened in
schools
57 awards
number of national and
international awards
20.2 million
number of users served
by Bankamatik ATMs,
including customers of
other banks
36.6% share of
Bankamatiks among
total monetary
transactions
85 thousand
number of Geleceğe
Orman (Forest for the
Future) users
2.1 million
number of Maximum
Mobile users
2.6 million
Social media
followers
95.6%
ratio of transactions
out of total
transactions made
through non-branch
channels in İşbank
439 thousand
number of İŞ'TE
KOBİ views (İşbank’s
website for SMEs)
5.4 million
number of credit card
customers receiving
digital credit card
statements
79.1 million MWh
the amount of clean
energy generated
through the projects
financed by İşbank in
the last 3 years
1,008 MW
total installed
capacity of
renewable energy
projects financed in
2021
Number of investments
subjected to
environmental and
social risks assessment.
Low Risk
Sustainalytics
ESG Risk Rating
person*hours of
total sustainability
training hours
CDP Climate
Change Report
Rating
55%
Rate of women
employees
44%
Rate of women
managers
2.01%
Employee turnover rate
29.3 hours
Average training
time per employee
98%
Unionization rate
Infrastructure -
Public Private Partnership /
Highway Projects
Infrastructure
Projects financed
by Isbank.
Infrastructure -
Public Private Partnership /
Public Health Campus Projects
Investment
amount:
Remaining
Commitment:
USD 23.3
billion
USD 0.4
billion
Reached
Infrastructure Capacity
Toplam
1,266 km
the total
length of roads
Total Risk:
USD 1.6
billion
Investment
Amount:
Remaining
Commitment:
USD 3.4
USD 0.06
billion
billion
Reached
Infrastructure Capacity:
Total
9,217
Beds in Total
Total Risk:
USD 0.7
billion
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İşbank from 1924 to Today
1990s
İşbank further solidified its
position as the sector's pioneer
in alternative distribution
channels when it launched
"Mavi Hat (Blue Line)" in 1991
and the first online banking
branch in 1997.
2000s
Maintaining strong and stable
growth, İşbank relocated the
Bank's headquarters from
Ankara to İstanbul in 2000.
In 2006, İşbank initiated the
Transformation Project that
aimed at restructuring a
customer-focused approach in
line with its strategic goals. As
a result, the Bank successfully
completed many projects,
which was referred to as a
structural revolution.
In the light of rapid advances in
technology, İşbank continued
to improve the innovative
multichannel banking network,
allowing customers to utilize
the most suitable channel to
perform all banking transactions
conveniently, quickly and reliably
on a 24/7 basis.
1920s and 1930s
İşbank, the first national bank of the
Turkish Republic was established
on August 26, 1924 in line with the
decisions taken at the İzmir First
Economics Congress with Atatürk's
directives.
Expanding to a country-wide branch
network throughout Turkey upon
its foundation, İşbank was the first
Turkish bank to establish branches
abroad, with the first international
branches opened in Hamburg,
Germany, and in Alexandria, Egypt
in 1932.
1950s
The Bank extended its portfolio
of subsidiaries. As the Bank's
subsidiaries became the drivers of
Turkish industry, the Bank invested
in and financed numerous industries,
with a focus on manufacturing.
1980s
In the 1980s, İşbank increased
the number of its overseas
branches. For İşbank, the 1980s
were characterized by the growing
importance of multichannel banking,
and the Bank started offering an
even broader range of products to
its customers.
In 1982, İşbank introduced the first
ATMs to Turkey, and its ATMs named
"Bankamatik" became a brand.
1960-1970s
In the 1960s and 1970s, İşbank
focused on extending its branch
network.
2010s
Initiating the customer-centered
Digital Transformation Program
with the vision of becoming
"Turkey's Best Digital Bank",
İşbank founded MaxiTech, its
subsidiary, in Silicon Valley,
USA in 2016 to support digital
transformation.
The "Workup by İşbank"
Entrepreneurship Program was
initiated in order to support high
potential and technology-focused
initiatives (Startups). In addition,
the "Innovation Committee" was
established at İşbank in order to
spread the innovation culture and
continue innovation processes
without interruption.
In 2018, İşbank continued to
consolidate its leadership in
digital banking by integrating the
personal assistant application
Maxi into the service platform,
which rapidly achieved a record
number of customer contacts.
2020s
Under the extraordinary conditions
of COVID-19 pandemic, İşbank
demonstrated its support to
households and companies through
products and services provided.
The Bank also maintained its success
in providing long-term funds from
international markets under favorable
conditions and extended its support to
the Turkish economy.
İşbank went one step further
in the world of innovation with
the opening of the Shanghai
Innovation Center.
With TekCep service, Turkey's
first open banking app, the Bank
made it possible to track account
movements at different banks via
İşCep.
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Getting ready to celebrate its 100th anniversary
in 2024, İşbank is strongly prepared for the
future with its innovative and technological
practices in line with its mission, while fulfilling
its responsibilities as a financial institution.
Esteemed Stakeholders,
İşbank and its subsidiaries are a large group that supports
the sustainable growth and development of Turkey with the
products and services they offer for export and manufacturing,
as well as the employment they create.
Parallel to the mission of ensuring the economic independence
it has assumed since the early years of Turkish Republic
the Bank has always offered its resources for the primary
economic needs of the country.
İşbank has acted with a long-term perspective and inclusive,
participative approach for all the actors of the economy
throughout its history.
Getting ready to celebrate its 100th anniversary in 2024,
İşbank is strongly prepared for the future with its innovative
and technological practices in line with its mission, while
fulfilling its responsibilities as a financial institution.
İşbank Banking
As we have seen more frequently in recent years, climate
change which can lead to natural disasters and migration,
has begun to gain more importance as a real and financial risk
factor within the framework of increasing sensitivity to global
problems along with the pandemic. The financial sector stands
out due to its transformative power in terms of the measures
to be taken against climate change and its effects.
As an institution that is aware of its responsibilities in this
field, we plan our activities in a way that will increase both
the current product range and the financing we provide with
the approach of “creating shared and sustainable value". We
embody this approach in our business model that we name
"İşbank Banking", and accordingly use all capital elements
efficiently and effectively.
We cooperate with our customers in order to create more
value added and ensure that the digital transformation in
the economy spreads to all sectors. We maintain our strong
financial support to SMEs, the most important components of
our economy. Each year we enlarge the extent of our products
and services that will enhance the participation of women
and young people in the economy. We take initiatives in order
to eliminate the destructive impacts of climate change and
introduce the opportunities of the transition economy to our
customers.
Sustainability is one of the main focal points of our
corporate strategy
In our credit processes, we have been analyzing environmental
and social risks since 2012. We continue to focus on
expanding this process in a way that will not be limited to
investment projects over a certain amount. By identifying
the environmental and social risks of our customers, we aim
to contribute to their green transformation and encourage
them. We contribute to the mitigation of the risks and impacts
of climate change by financing renewable energy projects.
After 2015, we allocated all of the new project financing for
electricity generation to renewable energy projects.
We believe that increasing the participation of women
enterprises in the economy and increasing the number of
women in the workforce are the key elements to sustainable
development, and we work in this direction. As a signatory of
the United Nations Women's Empowerment Principles (WEPs),
we have reinforced our stance in many areas, from providing
finance and training activities for female entrepreneurs to the
egalitarian attitude that we have displayed in our workplace.
We believe that conducting our activities by taking these
internationally approved principles into consideration will
create significant added value.
We adopt an approach that combines digitalization and
sustainability in agriculture and thus bringing agriculture,
technology and finance together. We aim to create an effect
on food safety and resource productivity with our activities in
this field.
Considering the social benefit, as well as the needs and
expectations of all its stakeholders, İşbank relates the outputs
from its value creation process with the United Nations
Sustainable Development Goals that it has contributed to,
and demonstrates its support for global goals. We position
sustainability, which we have internalized with the corporate
culture, as one of the main focal points of our corporate
strategy. The Bank carries out all of its activities to this end
with the involvement of all İşbank employees and under the
leadership of its Board of Directors.
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segments of society into account.
While designing our products and services as well as our
social responsibility projects, we adopt an understanding that
takes the needs of all segments of society into accout. Since
our establishment, we have acted with an understanding
to create inclusive, sustainable and shareable social and
economic value.
We undertake social responsibility projects in various fields,
such as education, culture, art and the environment. In our
projects that are designed to create long-term benefits, we
prioritize activities that support the education and life quality
of our children whom we will entrust our future.
We have been the main sponsor of the Turkish Chess
Federation since 2005. With the support we provide, we
aim to help raising generations who are able to think and
approach problems analytically, and develop strategies,
while making chess an easily accessible sport to our children
and youth all over the country. Our decision to extend this
support for another 5 years indicates the importance that
we attach to education and social development. Within the
framework of sponsorship, the total number of chess classes
opened throughout the country has reached 30,000, and the
number of licensed sportspersons has reached 1 million.
We have given away 14 million printed books to primary
students so far within the scope of the “One Million Books,
One Million Children” Campaign, now in its 15th year. During
the pandemic, we uploaded books to the digital platform
in 2020 and 2021. In addition, the books were also printed
in the Braille alphabet and sent to the schools providing
education for the visually impaired.
In cooperation with Darüşşafaka since 2008, we have
continued to support "81 Students in 81 Cities" project,
which is one of the most comprehensive and long-term
projects in the field of education in the country. Within the
scope of the project, nearly 750 students, including 296
students in 2021, have graduated so far. The students,
whose education expenses in Darüşşafaka are covered
by İşbank starting from the 5th grade, continue to receive
support during their university years, as well.
With the revenue obtained from the İş Portföy TEMA
Variable Fund, the first environmental fund to adopt the
principle of investing in environmental-friendly companies,
we support the Environmental Education Programs of the
TEMA Foundation. With the programs designed specifically
for preschool and elementary school children, we create
opportunities for them to spend time in nature, to observe
and discover nature to find out more about the earth
they live on and increase their environmental awareness.
In the 2021-2022 academic year, within the scope of
environmental education programs, about 200 thousand
children were reached in 81 cities.
Recently, we have also initiated the Impact Entrepreneurship
Program along with the Koç University Entrepreneurship
Research Center KWORKS. The program aims to support
the scaling of technology-based initiatives that create an
environmental and social impact on areas such as quality
education, healthy and quality life, climate, accessible and
clean energy, sustainable cities and communities. In this
way, we will contribute to the sustainable solution-making
process for environmental and social problems.
order to carry our Bank and our country into the future with
this sense of responsibility and create value by combining our
experience from the past with strong human and financial
capital and taking advantage of the opportunities provided
through technology and digitalization. For a brighter future,
we will maintain our multifaceted contribution and support
to all our stakeholders, particularly our children.
I would like to take this opportunity on behalf of our Board
of Directors to thank all our stakeholders, especially İşbank
members, who have contributed to the success of our Bank
so far by adhering to the principles set forth by our Founder,
Mustafa Kemal Atatürk.
We Take Responsibility for a Brighter Future
Yours sincerely,
The negative impacts of the pandemic and climate change
serve as a kind of warning for the future for every country
and institution. Reassessment of the distribution of scarce
resources and transition into inclusive and sustainable
economic growth models planned with a long-term
perspective have become an agenda that is more urgent
than ever before. Strong institutions and qualified human
resources are needed for this economic transformation.
As old as our Republic, our Bank successfully managed crises
and fluctuations throughout history and took on essential
responsibilities in hard times. We will continue to work in
Adnan Bali
Chairperson
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We fulfill our responsibility in building an
inclusive economy that takes care of the welfare
of all segments of society.
Therefore, we have set out the theme of our
first Integrated Annual Report in 2021 as "We
Take Responsibility".
Esteemed Stakeholders,
The economic, social and cultural impacts of the pandemic
still continue in the world. The global economy has made a
rapid recovery in 2021 thanks to the widespread vaccination
and the economic measures taken. However, despite the
recovery in economic activity, disruptions in the supply chain
and increased energy and commodity costs led to a rise in
the inflation indicators on a global scale. As of the second
half of 2021, normalization in monetary policies began in
many countries depending on the deterioration in inflation
expectations. The global economy is expected to maintain its
growth in 2022 with a slight deceleration.
Economic activity in Turkey gained momentum as a result of
the positive impact of domestic and international demands
in 2021. On the other hand, a significant increase in
inflation was recorded due to both domestic dynamics and
inflationary pressures in the world. In this period, in spite
of the strong growth and the positive picture drawn by the
export performance, both global and domestic conditions
for the Turkish economy have become more challenging in
terms of price stability.
The banking sector, on the other hand, managed the
risks successfully with its strong financial structure while
maintaining its continuous financial support to the national
economy in an environment where instability has increased
in financial markets.
We take responsibility
İşbank continues to work in line with the mission of
"reinforcing the political independence of the Republic of
Turkey with economic independence" spelled out by Mustafa
Kemal Atatürk.
The economic challenges stemming from the pandemic and
the negative effects of climate change are felt deeply in our
country and around the world, and this makes an inclusive, fair
and green transition necessary.
In this difficult period that we are experiencing these days, as
an institution aware of its responsibilities, we make our short,
medium, and long term plans to include the actions that will
create an effect and contribute to our livable common future.
Accordingly, we fulfill our responsibility to build an inclusive
economy that looks out for the well-being of all segments of
society.
Therefore, we have set out the theme of our first Integrated
Annual Report in 2021 as "We Take Responsibility".
We continued to create value with our strong financial
performance
In 2021, the 97th year of our Bank, we continued to support
the national economy with the products and services we
provided to the real sector and households. We successfully
completed a year which was challenging all over the world.
With our total assets reaching TL 926.6 billion as of year-end,
we have maintained our position as "the biggest private bank
in Turkey".
In 2021, we also maintained our leadership among private
banks in terms of credits, deposits and shareholder equity, as
well as total assets. With our cash loans reaching TL 493.4
billion as of year-end 2021, the total equity we provided for
the economy through non-cash loans increased to TL 193.4
billion.
The total financing provided to SMEs, one of the most
important components of our economy, in the form of cash
and non-cash loans reached TL 135.7 billion as of 2021.
In 2021, we also took important steps to diversify the
products and services we offer to households while expanding
the presentation channels. We increased our business volume
in private banking by using all channels effectively, especially
digital ones. Our total retail loans reached TL 109.7 billion with
an increase of 27.2% compared to the previous year.
Our Bank, which is known as an institution synonymous with
trust, prestige and dignity by all its stakeholders, has become
the first choice of account owners this year once again. The
total deposit volume reached TL 595.6 billion at year-end
2021. We maintained our market share leadership amongst
private banks in terms of total deposits, commercial deposits
and demand deposits.
We build the bank of the future
Approaching our 100th anniversary, our target is to build the
bank of the future with its business model, organization
structure, service concept, competencies of employees, and
technological infrastructure. While standing out as a leader in
utilizing technology and digitalization in the most convenient
way, we focus on establishing a young, dynamic, modern
banking concept that is ahead of its time with the help of our
powerful balance sheet performance and the contribution of
our sustainability activities.
While establishing an innovation center across a wide
geography from Silicon Valley to China by adapting
digitalization to all our processes, we have determined it as
our main priority to provide quality and customized banking
services to meet the expectations of our customers with a
flawless digital experience with our investments in technology.
We broke ground in fields such as "Open banking", "platform
banking", "invisible banking", and "personalized banking with
artificial intelligence" that have the potential to change the
conventional banking concept.
Within this framework, the number of digital banking
customers, which was 9.2 million at year-end 2020, surpassed
10 million in 2021. In the same period, the number of our
mobile banking customers reached over 10 million. The ratio
of comparable transactions made through our non-branch
channels to total transactions reached 96% in 2021.
We continue to support next-generation
entrepreneurship
We act with an inclusive and holistic approach in the field of
entrepreneurship, one of our areas of focus. When we consider
that entrepreneurship positively affects economic growth,
we believe that a story of growth can be written through
entrepreneurship in Turkey. Our Bank, which has supported
entrepreneurs since the first years of its establishment,
maintains its effectiveness in the entrepreneur ecosystem
with a broad perspective.
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generation entrepreneurship in the last 5 years also
continued to increase in 2021. The 8th term of our Workup
Entrepreneurship Program was completed successfully, and
the 9th term was initiated with 12 startups. Thus, the number
of startups accepted to the program reached 119 while the
number of graduates in 8 terms was 81.
We launched WorkupAgri, a vertically oriented entrepreneurship
program for the first time in 2021. With this program, we aim
to increase the value proposition offered by our Bank to its
customers and contribute to the country's agriculture in the
field of digitalization with sustainable solutions.
With the ARYA Women’s Investment Program, we continue to
support female entrepreneurs to help them access investment
and put technological business models into practice. In this
context, we reached 270 female entrepreneurs.
Maxis Innovative Venture Capital Fund, in which our Bank
invested by undertaking funds transfers up to TL 100 million,
has invested in another 2 Workup graduates this year. The
number of ventures the Fund invested in reached 5.
We opened our İstanbul Entrepreneurship Branch in November
2021, which will serve our focus as the bank of the future by
bringing the impact and footprint created by our Bank in the
entrepreneurship ecosystem to our main focus of activity. We
offer a broad value proposition that includes non-financial
products and services, as well as a team who is able to speak
a common language with startups at our branch, meet their
needs and expectations that distinguish them from other
customers, and offer products and services that fit into their
life stages.
We support green transformation in economy
We encourage green transformation in economy to take
advantage of the opportunities while considering the risks and
opportunities caused by climate crisis, not only in terms of our
own operations, but also in terms of our customers with our
transformative power.
We carry out important studies for transition to renewable
energy resources that play a significant role in eliminating
the negative impacts of climate change on people and the
environment. In 2021, the share of renewable energy projects
in our total energy generation projects portfolio was 71%. The
total installed power size of the number of renewable energy
projects financed reached to 10,886 MW. We mediate our
customers' green transition with our loans such as "Green
Mortgage", "Solar Loan by İşbank", "Energy Efficiency Loan",
"Marine Conservation Loan".
We aim to encourage our customers to make more
environmental-friendly choices with the "Geleceğe Orman
(Forest for the Future)" project, which was launched in
September 2021 and integrated into İşCep, our mobile banking
app. Within the scope of this application which reached
100 thousand participants in a short period of six months,
participants donated 1,250 saplings to the TEMA Foundation.
I interpret this as a good indicator of behavioral change in our
customers.
We finance transformation where agriculture meets
technology
During the pandemic, we have witnessed how risky it may
become to meet agricultural and food needs when disruptions
occur in the supply chain. Agriculture is one of the most critical
sectors of countries.
We believe that the agriculture sector, in which we have a
competitive advantage thanks to our country's geographical
and natural conditions, should be developed. Given its added
value in terms of the economy, we place agricultural banking
among our strategic priorities. Our activities in this field are
based on financing the transition of producers by combining
finance and technology efficiently.
Within this framework, we offer innovative products and
services, such as ImeceMobil, to support this transition,
and build it on structures that are specially designed with
narratives where producers and consumers meet.
With our intensified efforts in recent years, the number of
agricultural banking customers increased by 18% to 357
thousand in 2021, and the cash loans provided increased by
54% to approximately TL 10.5 billion. Moreover, the number of
stations within the scope of the "Digital Agriculture Solution",
which was 134 at the end of 2020, increased to 224 in 2021.
We provided a total of TL 57 million in economic benefits with
the early warning and irrigation, fertilization and spraying
recommendations made to 13,200 farmers. The farmers,
who benefited from the irrigation, fertilization and satellite-
supported special services of the ImeceMobil application,
saved 2,100 tons of water per 10 decares.
We are on our way to "Leadership in Payment
Systems"
One of our strategic priorities is "Leadership in Payment
Systems". Within this framework, in 2021, we implemented
the organizational change bringing together all marketing
functions of payment systems. In line with our strategy
to create a payment system ecosystem, we launched the
Pazarama brand. By increasing the number of credit card
customers above the sector, we became the bank with the
biggest share gain among our competitors. We held the
top position among private banks in commercial credit card
shopping turnover market share by continuing the pace we
achieved in 2021 through the end of the year.
Our employees are an integral part of our vision for
the bank of the future
Our employees constitute an integral part of our vision for
the bank of the future. We continue to invest in cutting-edge
learning technologies in order to provide our employees with
the competencies of the future.
In 2021, we launched the Data Analytics Development
Program, which is available to all our employees and aims
to promote the competencies in data analytics and artificial
intelligence. A total of 8,350 employees participated in
this program, designed to support talent transformation in
analytical and digital roles, and they received over 70,000
hours of training. Our "New Digital Learning Infrastructure"
project is also ongoing. With the new infrastructure,
personalized trainings will be presented based on an artificial
intelligence-based suggestion system, and our employees will
have easier access to the contents.
Esteemed stakeholders,
The effects of the coronavirus outbreak and climate change
on health, social life, the environment, and the economy
reminded us once again of the fragile balance our civilization
was built on, and how important it is to work together to make
it more resilient. The need for all institutions and organizations
to take responsibility to build a sustainable future became
clearer as we should take lessons from our experience in this
process.
İşbank, an institution synonymous with a sense of trust, which
will celebrate its 100th year in 2024, will continue to support
the country's economy and stakeholders as it always has. We
shall fulfill our responsibility for our country, our society, and a
more livable world today, as we did yesterday.
I would like to take this opportunity to thank all of our business
partners and stakeholders for their invaluable support and
trust, as well as all of the İşbank employees who always work
with great dedication and integrity.
Yours sincerely,
Hakan Aran
Chief Executive Officer
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Operating Environment: General Evaluations
Global Economy
In the second year of the pandemic, the world economy
recovered rapidly, thanks to a lower impact from the pandemic
and the ongoing support of the economic measures taken.
According to IMF data, the global economy, which contracted
by 3.1% in 2020, is predicted to have completed 2021 with
a growth of 5.9% and expected to continue growing in 2022,
though at a slower pace. On the other hand, supply shortages,
which became a serious problem as a result of this rapid
recovery while the pandemic conditions persist, as well as
rapidly increasing food and energy prices due to the problems
caused by climate change, have exacerbated inflationary
pressures on a global scale. The annual rate of increase in
producer prices has reached double-digit levels in many
countries, and annual consumer price inflation has reached the
highest levels since the 90s in leading economies such as the
USA and Germany.
The inflationary world outlook strengthened the expectations
that the leading central banks could begin earlier to the
normalization process in their monetary policies . In fact,
during its November meeting, the US Federal Reserve (FED)
opted to reduce its asset purchase program by USD 15 billion
on a monthly basis, and increased the amount of cuts to
USD 30 billion in December. In this environment, developing
countries have adopted a more cautious stance in their
monetary policies. The novel coronavirus variant omicron,
which emerged in the last weeks of November and raised
concerns, also has a negative impact on global economic
activity expectations, causing fluctuations in global risk
perception. In 2022, along with the pandemic, the course of
supply-side constraints, inflation trends, and central bank
policies in developed countries will be the main factors that
shape the economic outlook.
Turkish Economy
In 2021, the Turkish economy grew by 11% annually with the
substantial contribution of consumption expenditures and
exports. In the first half of the year, investment expenditures
also contributed significantly to growth. The amount of
monthly exports, which surpassed USD 20 billion for the first
time in September, were above this level in the final quarter of
the year. Turkey's total export volume, which was USD 169.6
billion in 2020, reached USD 225.3 billion in 2021.
The budget displayed a positive outlook throughout 2021. The
significant increase in tax revenues supported by the recovery
in economic activity was behind this development. The budget
deficit of TL 192.2 billion in 2021 was lower than the TL 230
billion forecast in the Medium Term Program announced in
early September. However, the rapid monthly rise in budget
deficit drew attention in December, when financial market
volatility increased significantly. The external balance outlook
improved in 2021 when compared to 2020. The current
account balance had deteriorated due to the negative effects
of the pandemic in 2020 and the current account deficit to
GDP ratio was realized as 5%, the highest level since 2013.
With a decrease in the foreign trade deficit and the recovery in
tourism revenues in 2021, the current account deficit tended
to decline. In 2021, the current account deficit decreased
by USD 20.7 billion as compared to the previous year, and
became USD 14.9 billion.
In spite of the strong growth and the positive picture drawn
by the export performance, the fact that both global and
domestic conditions for the Turkish economy have become
more challenging in terms of price stability in 2021 brought
along a deterioration in risk perception, particularly in the last
months of the year. Expectations that the FED would raise
interest rates sooner than expected, rising global commodity
prices, strong domestic demand and increased volatility in
financial markets, particularly the depreciation of the Turkish
Lira, caused inflationary pressures to increase throughout
the year. The Central Bank of the Republic of Turkey (CBRT),
on the other hand, reduced the policy rate by a total of 500
basis points to 14% at its meetings in September, October,
November and December.
Under such conditions, annual CPI inflation reached 36.08%
in December 2021. In this period, annual D-PPI inflation was
realized as 79.89%.
The Turkish economy, which recorded rapid growth in 2021 as
a result of the low base caused by the pandemic, is expected to
normalize in 2022, while rising inflation is expected to remain a
significant factor.
Banking Sector*
In the second year of the pandemic, the banking sector
contributed significantly to the recovery in economic activity.
The volume of Turkish Lira loans, including loans to the financial
sector, increased by 20.7% in 2021, reaching TL 2,675 billion
by the end of 2021. In the same period, the volume of FX loans
fell to USD 149.4 billion with a decrease of 7.1%. Accordingly,
the total loan volume expanded at a rate of 36.5% in 2021 and
reached TL 4,648 billion. According to the FX rate adjusted
figures, the total loan volume expanded by 11.0% in this period.
In 2021, according to the Monthly Bulletin data published by
the Banking Regulation and Supervision Agency, the volume of
TL deposits including bank deposits reached TL 1,819 billion,
increasing annually by 20.0%. The volume of FX deposits in USD
terms decreased by 0.7% in this period and was realized as USD
238.2 billion. As a result, total deposit volume increased by
51.0% compared to 2020 and reached TL 4,964 billion in 2021.
According to FX rate adjusted figures, the annual increase in
total deposit volume was 8.8%.
* Calculated using monthly sector data published by the Banking
Regulation and Supervision Agency, with participation banks excluded
from sector figures.
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İşbank
The course of the pandemic, geopolitical developments,
and the monetary policies pursued by developed
countries are projected to be the primary factors to
influence global growth in 2022. In this direction, in the
face of rising global inflation, central banks in developed
countries are expected to tend to tighten their monetary
policies, and new and effective variants of the COVID-19
pandemic continue to pose risks to global economic
activity. The risks associated with maintaining capital
adequacy against rising domestic inflation and exchange
rate volatility, as well as managing asset-liability
composition in terms of maturity, foreign currency type,
and profitability dimensions, are projected to come to
the forefront. These evaluations are included in the
footnotes of the financial statements.
In addition to the additional measures taken by public
authorities to combat the negative impacts of the
COVID-19 pandemic on the economy and financial
stability, new regulations that have recently become
effective have a growing impact on behavior and
compliance risks throughout the banking sector. With
the impacts of the increasing variety and number of
transactions with ongoing digitalization, widespread
remote working models, and customers' orientation
to interactive channels during the pandemic period, it
is observed that the risks of information technologies,
cyber security and data protection are on the rise on a
global scale. In addition, the risks that may arise from
organizational changes caused by remote and hybrid
working models, which have become widespread
throughout the sector, should be closely monitored.
Natural disasters pose a significant risk in terms
of their impacts on human life and the amount of
physical damage they can cause on monetary assets.
Furthermore, climate change has become one of the
major global risks threatening human life as well as
financial stability due to its negative impact on the
economy, markets, and ecosystems, the natural
disasters that it may cause, water and food crises, and
migration waves. Measures to be taken within the scope
of combating climate change are expected to rise both
globally and in our country.
Fundamental factors such as the sector's balance sheet
entering a cautious and balanced growth period as well
as the narrowing of the net interest margin compared to
2020 shaped the operating environment for 2021. In order
to achieve sustainable profitable growth, İşbank continued
to manage its balance sheet in 2021 with a risk-oriented
and dynamic approach, while maintaining its balance sheet
composition shaped by itsproactive approach taking into
account market developments.
Aİşbank continued to support the real sector and
households with all its means in 2021, a year in which the
conditions evolved differently compared to expectations.
With
10.9%
market share in total assets
With
10.6%
market share in total loans
With
12.0%
market share in total deposits
1. *
1. *
1. *
*Market share calculations are based on BRSA weekly data;
participation banks are excluded. Market share of total
assets is calculated in accordance with BRSA monthly data.
Ranking among private banks.
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Risks, Opportunities
and Forecasts
We left behind 2021, when the impact of the
COVID-19 pandemic continued, extreme natural
events and disasters caused by climate change
were in the news every day, global economic
fluctuations occurred, and the most economically
fragile/vulnerable segments of society felt the
effects of this process deeply.
All these developments have led businesses to revise their
working approaches, strategies and values. It became
evident that all institutions should redefine their risks and
opportunities for ensuring sustainable development.
İşbank, which has a deep-rooted corporate structure, has
witnessed many critical periods throughout its history and
gone through these periods successfully thanks to its risk
management approach and visionary management. İşbank
closely monitors all global developments that have a potential
to affect its activities. Managing its financial and non-financial
risks with a holistic perspective, the Bank evaluates its risks
and opportunities through a variety of formal and informal
processes.
1- Green Transformation: It is expected that 2022 will be a
year in which more serious environmental measures will be
taken, and expectations from banking sector will increase
throughout the World.
With the transformation in the financial sector, it is an
increasingly common practice for investors toevaluate
banks not only on their financial performance, but also on
the carbon impact of their balance sheets. National and
international regulatory agencies direct banks to identify and
report the environmental, social and economic impacts of
their customers. It is encouraged to shift loans from polluting
sectors to companies and sectors that support the transition
economy and provide social benefits.
Many banks, including İşbank, make net zero carbon emission
commitments regarding the emissions caused by their own
operations. However, the most important step that banks can
take to stop the impacts of climate change is to provide the
resources needed to finance the transformation.
Considering the comprehensive ESG (Environmental Social
Governance) performance indicators in lending activities,
compliance with the new regulations created for the
transition to a green economy, purification of loan portfolios
from polluting sectors, creation of human resources can
manage these processes, and new reporting obligations
are all important risks that banks will face in the green
transformation process.
However, the green transformation also offers important
opportunities for the global economy and banks. The amount
of investment required to reach the net zero target globally in
the next 30 years is estimated to be USD1 150 trillion. In order
to finance the transformation, a number of institutions and
organizations collaborate to develop innovative methods and
technologies. The number of new employment opportunities
and creative business lines in this field are growing on a daily
basis.
İşbank supports green transition in line with its sustainability
approach. In line with its long-standing responsible portfolio
management approach, the Bank monitors ESG indicators
in its lending activities, diversifies the financing resources it
has generated in this area as a result of its cooperation with
international organizations, and takes into account climate
risks in its business processes and credit evaluations.
2- Innovation: Changing customer expectations and needs
make a radical transformation inevitable in the banking
sector. Digitalization, which has become a necessity in the
sector, does not generate revenue growth and differentiation
on its own. For this reason, banks identify the areas where
innovation is most needed in their operations and products
and seek out partnerships in those areas. Supporting common
platforms, strengthening cooperation with fintechs, and
reaching out to groups that have not been served before are
prominent trends in the field of innovation.
Factors such as not establishing the correct cost-return
balance, being late in catching up with the developments,
and the institutional culture that does not support innovation
constitute the risks in innovation.
İşbank is a crucial actor in next-generation banking activities
with its vision of being "the Bank of the Future". Innovation
is among the main business strategies for İşbank, which
launched many pioneering applications in the field of
innovation, such as ATMs named "Bankamatik", the first
internet branch, etc.
While increasing its corporate innovation capacity with its
agile transformation projects, İşbank closely monitors global
developments with the centers it has established in different
parts of the world. The Bank also implements many projects
to support entrepreneurship.
3- Customer-Oriented Banking: A study2 by Accenture3
conducted in 2021 reveals that customers' trust levels in
their banks to secure their long-term financial well-being fell
from 43% to 29% between 2018 and 2020. Although there are
numerous causes for this issue, the decrease in the frequency
of one-to-one meetings with customers due to increased
digitalization also plays an important role.
Digitalization allows for fast, reliable, user-friendly services
that are accessible 24/7. However, as a result of increased
digitalization, customers' communication with their banks
decreases, and they cannot access appropriate guidance and
advices on financial services. This development negatively
affects customers' financial well-being, reduces the
differentiation between banks and customer loyalty.
İşbank evaluates the opportunities that digitalization provides
regarding accessing financial services along with the risks it
creates. The Bank develops practices to maintain its trust-
based and warm relationships with its customers through its
customer-oriented banking approach. İşbank's digitalization
approach bases on the motto "technology next to people, not
instead of people." İşbank employees, who are specialized
in their fields, also offer the guidance and advice that their
customers need through digital solutions.
For more information on İşbank's detailed
performance and goals on innovation, please
visit the "We Take Responsibility for Next-
Generation Banking" section.
In order to learn about İşbank's practices on
customer-oriented banking, please visit the "We
Take Responsibility for Inclusive and Solid
Economy" section.
4- Risk Management and Compliance: Every day, banks are
confronted with a more complex, interconnected, and dynamic
risk environment. Cloud technologies, artificial intelligence,
climate change, blockchain technology advancements, cyber
security, and digital assets all require a new risk approach.
Difficulties in obtaining the data needed for risk measurement,
as well as situations such as a lack of qualified human resources
may cause consequences such as non-compliance with the
legislation and inability to manage risks efficiently in banks.
Many developments, such as the EU Green Deal and the
process of adapting to the outcomes of the Paris Climate
Agreement, pose significant compliance risks for both banks
and their customers. Bank risk matrices need to evaluate
these new risks as comprehensively as mature risks and
cooperate with customers in this regard.
İşbank has a deep-rooted corporate risk management and
compliance culture. The Bank manages financial and non-
financial risks together and ensures the compliance with laws,
regulations and voluntary standards.
For more information on İşbank's
detailed performance and goals on green
transformation, please visit the "We Take
Responsibility for Climate Action" section.
For more information on İşbank's performance
on risk management and compliance,
please visit "We Take Responsibility for a
Transparent Management" section.
26 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 27
1Fighting climate change is a $150 trillion battle: Bank of America report Banking Consumer Study: Making digital more human
2Accenture Banking Top 10 Trends for 2022
3 Accenture PLC is a global management consulting and professional services company offering strategy, consulting, digital, technology and operations services.
In this section, İşbank’s stance towards the 7 most important global trends affecting the banking sector is discussed.Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen How Do We Create Value?
Following the War of Independence, the Republic of Turkey
experienced economic and social hardships. In this period,
the need for a national institution that could finance the
branches of economic activity, contribute to the start of the
industrialization movement, and establish a national banking
system was felt deeply.
Carrying out banking transactions, initiating industrial
development, mobilizing national savings, financing basic
economic breakthroughs and meeting credit needs were all
crucial activities for a newly established country. Adapting
to the rapid changes in the world following World War I,
accomodatingto new technologies and criteria, and training
the workforce to keep up with these changes were among
the challenges İşbank experienced.
Since the day it was established, İşbank has continuously
grown stronger without deviating from its goals and has
become a trustworthy brand of ethical and deep-rooted
banking on a national and international scale.
Today, İşbank continues its activities by adhering to modern
banking principles, providing financing for solutions to
Turkey's and the world's problems, and supporting an
economy that will generate shareable and long-term value
for all. The Bank has taken responsibility for inclusive and
sustainable economic growth since its establishment. This
responsibility approach is embodied in the business model
that we call İşbank Banking, which focuses on "creating
shareable and sustainable value".
Our Business Model: İşbank Banking
İşbank Banking is a business model that combines financial
and non-financial capital elements with the goal of "producing
shareable and sustainable value". With this model, the Bank
aims to create value for all its stakeholders both in the short
and long term. The value creation model, called "İşbank
Banking”, which allows integration of the Bank's sustainability
priorities into all decision-making processes, reveals the
Bank's understanding of sustainability and the integration of
sustainability into business processes.
İşbank has positioned sustainability, which is the basis of
its business model, as one of the main focal points of its
corporate strategy and carries out all its activities in this
direction with the participation of all its employees under the
ownership of senior management.
Looking out for social benefit, as well as the needs and
expectations of all its stakeholders, İşbank relates the outputs
from its value creation process with the United Nations
Sustainable Development Goals that it has contributed to, and
demonstrates its support of global goals with the approach of
shareable and sustainable value creation.
5- "0" Operation: The fact that artificial intelligence and
machine learning have begun to outperform human
capabilities in some specific and restricted tasks causes a
paradigm shift in the banking sector. In terms of operational
activities, these technologies are expected to be applied to a
broader area in 2022 and beyond.
Banks can now continue their operations with less waste,
cost, delay, and error thanks to this process, which is defined
as "0" operation. This restructuring, also known as resilient by
design, contributes significantly to operational sustainability.
Banks define new workflows with these developments, which
will result in changes in organizational structure. In these
processes, which are carried out in parallel with digitalization,
the problems that may occur in cyber security and information
technology infrastructure constitute the most important risk.
İşbank, in all its operations, adopts targets based on efficiency.
Paperless office practices have an important place in the
digitalization journey. The Bank integrates artificial intelligence
and machine learning into its operations. The resources
allocated for information security are being increased every
year.
6- Access to Talent: The changing expectations of the new
generation employees and the trends of remote working, which
have become widespread with the COVID-19 pandemic, have
redefined the working life in all sectors. According to the studies,
young employees prefer work environments that are goal-
oriented, provide social and environmental benefits, and allow
employees to express themselves and make a difference.
The banking and finance sector, which historically has
attracted young talents, struggle to maintain its competitive
advantage in this field. Many industries are seeking out
experts in fields such as cyber security and machine learning.
Furthermore, the "great resignation" wave, which had a
particularly strong effect in the USA in 2021, impacted the
banking and finance sector, as employees from all levels quit
their jobs. In this sector, where qualified employees create a
competitive advantage, the inability of banks to access and
protect talent poses a significant risk.
İşbank has had a different corporate culture since its
establishment. The Bank has been positioned as a highly
preferred employer thanks to its internal promotion system,
long-term employment policy, deep-rooted banking culture,
and ethical understanding. İşbank's competent and highly
company-dedicated human resources play a significant role
in the Bank's corporate success. The Bank provides a variety
of development programs to prepare its employees for the
competencies of the future, develops agile working systems
to meet changing employee expectations, and continues its
communication efforts with universities by increasing.
7- Purpose Driven Brands: Developments such as changing
consumer and employee expectations, as well as fintechs'
competition with established banks due to the fact that it is
getting easier to operate in the banking and finance sectors
thanks to digitalization, increase the demand for purpose-
driven institutions.
Stakeholders today assess businesses not only on the services
they provide, but also on the global problems they are trying
to solve, the values they advocate, and their missions. This
change carries both risks and opportunities for banks that
interact with many different stakeholder groups.
İşbank is an institution of the Republic of Turkey with its main
mission being to support the country's growth since 1924,
and delivers social benefits through its social responsibility
projects, as well as the financing it provides for the economy.
In today's marketing and service approach, where value
communication is at the forefront, İşbank's clear vision and
purpose gives it a significant competitive advantage.
28 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 29
For more information on İşbank's performance on "0" operation, please visit the "We Take Responsibility for Next-Generation Banking" section. For more information on İşbank's detailed performance and goals on access to talents, please visit the "We Take Responsibility for Our Employees" section.For more information on İşbank's detailed performance and goals on purpose-driven brands, please visit the "We Take Responsibility for Future Generations" section.Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Our Business Model: İşbank Banking
CAPITAL
FIELDS OF
ACTIVITY
OUTCOMES
FINANCIAL
CAPITAL
HUMAN
CAPITAL
DOĞAL
NATURAL
SERMAYE
CAPITAL
INTELLECTUAL
CAPITAL
SOCIAL-RELATIONAL
CAPITAL
PRODUCED
CAPITAL
I
S
E
I
T
I
R
O
R
P
R
E
D
L
O
H
E
K
A
T
S
|
S
R
O
T
C
A
F
L
A
N
R
E
T
X
E
|
S
D
N
E
R
T
L
A
B
O
L
G
I
G
N
K
N
A
B
E
T
A
V
R
P
I
ETHICAL AND
TRANSPARENT
BANKING
RESPONSIBLE
FINANCING
FLAWLESS
CUSTOMER
EXPERIENCE
PERMANENT
COMMITMENT
TO TURKEY
İŞBANK BANKING
CREATING SHAREABLE AND
SUSTAINABLE VALUE
HAPPY AND
PRODUCTIVE
HUMAN
RESOURCES
SOLID
FINANCIAL
PERFORMANCE
EFFICIENT RISK
MANAGEMENT
TECHNOLOGY
AND INNOVATION
LEADERSHIP
|
I
G
N
K
N
A
B
E
T
A
R
O
P
R
O
C
|
I
G
N
K
N
A
B
L
A
I
C
R
E
M
M
O
C
|
I
G
N
K
N
A
B
L
A
N
O
S
R
E
P
Total loans
(cash and non-cash)
TL 707.6 billion
Return on Average
Tangible Equity (%)
20
Capital adequacy
ratio 20.4%
Rate of women
employees 55%
Rate of women
managers 44%
Employee turnover
rate 2.01%
Unionization rate
98%
Share of renewable
energy projects
in total energy
generation projects
portfolio 71%
Share of
renewable energy
projects in total
financing
6.2%
VALUE CREATED
For investors and shareholders
• Solid financial performance
• Reliable investment with an ethical, transparent
and responsible banking approach
For customers
• Financial support with responsible products and
services
• Access to financial services for all segments of
society with inclusive products
• Lifelong support with personalized products and
services
For employees
• Reputable and reliable employment
• Equal opportunities in human resources
management
• Decent, modern, healthy workplace environment for
employees both physically and psychologically
• Professional and personal development opportunity
Number of digital
banking customers
10.2 million
Share of non-
branch channels
95.6%
For society
• Contribution to social well-being with taxes paid
• Contribution to the country's economy with the
finance provided
• Products, services and activities that contribute to
combating climate change
• Support for education and culture with long-term
social investments
• Support for increasing financial literacy
Number of customers
20.7 million
Customer
satisfaction score
90%
Total number of
branches
1,195
Number of
Bankamatik
(ATMs)
6,476
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
2020
A Sustainability Committee
was established, which
operates under the Board of
Directors.
Sustainable Bonds
Framework was formed.
In line with "Science-Based
Goals" (SBT), the goal of being
carbon neutral was set.
International ESG risk
rating was obtained from
Sustainalytics.
The UN Women's
Empowerment Principles
(WEPs) were signed.
United Nations Environment
Program Finance Initiative
(UNEP FI) Responsible
Banking Principles were
signed.
2016
İşbank was included in
FTSE4Good Emerging
Markets Indices.
İŞBANK'S SUSTAINABILITY JOURNEY
2021
The first sustainability-linked syndicated loan agreement was signed.
Sustainable Finance Framework was established.
Renewable energy has started to be consumed in all of the Bank's operational areas
where renewable energy is able to be supplied for electricity consumption.
Environmental and Social Impact Evaluation Model "ÇESMOD" was developed.
Gender Equality Policy came into effect.
Climate Change Risk Policy was formed.
CDP Water Safety Report was initiated.
2018
Tuzla Data Center was
certificated with LEED v4
Gold for Data Centers.
The first Green Project
Financing Loan was
provided.
2014
The Sustainability
Policy, which includes
Environmental and Social
Impacts, Human Rights and
Human Resources, Anti-
Bribery and Anti-Corruption,
Gifts and Hospitality Policies,
was approved by the Board
of Directors and put into
action.
2017
The Declaration on
Sustainable Finance was
signed by Global Compact
Turkey.
Tuzla Technology and
Operation Center was
awarded the LEED Gold
green building certificate.
2012
The first Sustainability
Report was published.
The UN Global Compact
(UNGC) was signed.
The "Environmental and
Social Risk Evaluation Tool
(ERET)" was developed to
determine environmental
and social risks in loan
processes.
2019
The first 100% Green
Eurobond transaction was
issued by Turkish banks.
The first Integrated Report
was published.
An Environmental
Management System (ISO
14001) was formed with
international standards.
CDP Climate Change
Report was initiated.
2015
Sustainable Management
System was established.
İşbank was included in the
BIST Sustainable Index.
İşbank Head Office building
was awarded BREEAM In-
Use Excellent certificate.
Sustainability Priorities
İşbank closely keeps track of sectoral and global trends in
the fields of sustainability, regularly measures stakeholder
expectations in this area, and also conducts risk and
opportunity analyzes, as well as business processes.
In 2021, the Bank updated its sustainability priorities in
accordance with the AA1000 Stakeholder Engagement
Standard in such a way that it reflected the opinions of İşbank
employees and external stakeholder expectations with a large
sample size.
The 24 topics included in the Bank's materiality
matrix were grouped under the headers of
"Reliable Financial Actor", "Responsible
Operations" and "Good Corporate Citizen".
1,326
Number of stakeholders participated
in the prioritization study
Prioritization Process
1. Creation of a prioritized issue universe:
4. Review of the issues:
A broad issue universe was formed by considering
corporate strategies, changing legislation
and standards, sectoral practices, corporate
engagements, global trends, and stakeholder
expectations. The issue universe was reviewed under
consideration of the Bank's current practices and
priorities. Then, 25 sustainability priorities that affect
İşbank's fields of activity were determined.
2. Determining the priority values of the issues:
2.1. Evaluation of stakeholder expectations: The
expectations of key stakeholders in the field of
sustainability from İşbank were determined as a
result of comprehensive online surveys, evaluation
of the results of expectation and satisfaction surveys
organized for various stakeholder groups, and media
research.
2.2. Influence on business strategies: The
significance level of the influence of the topics
included in the long list of topics on the Bank's
business strategies was evaluated through
comprehensive employee and manager surveys,
corporate strategy and engagement requirements,
and global trends.
3. Determining material issues:
The 10 issues with the highest potential to affect
İşbank's activities and stakeholder expectations were
determined.
• The identified prioritized issues were reviewed
by the Investor Relations and Sustainability
Division and senior management.
• Key Performance Indicators were reviewed
in order to report the performance in the
identified focus areas.
• The İşbank value creation model was
assessed in terms of new focus areas.
Reporting and business plans were created
by reassessing the expectations of relevant
stakeholder groups in focus areas, and target
updates were madein necessary cases.
5. Evaluation of global trends:
Within the scope of the prioritization work
carried out, the risks and opportunities
created for the Bank by the sustainability
developments affecting the entire world were
evaluated. Of the trends with a high potential
to affect the global economy, 16 trends
declared by the World Economic Forum, which
may have an impact on the Bank's activities,
were also evaluated in the scope of the surveys
and researches carried out. Current practices
were reviewed in terms of the trends with high
risk and opportunity potential.
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 33
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen MATERIAL ISSUES MATRIX
PRIMARY ESG ISSUES ACCORDING to STAKEHOLDER GROUPS
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PRIMARY
HIGH PRIORITY
TOP PRIORITY
s
r
e
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k
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S
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21
7
2
1
4
5
8
9
3
6
11
10
13
12
14
15
18
19
22
23
25
20
16
17
24
1
2
3
4
5
6
7
8
Financial Performance and Profitability
Cyber Security and Customer Privacy
Employee Rights, Commitment
and Satisfaction
Combating Climate Change
Digital Transformation
Employee Health and Safety
Responsible financing and investment
decisions integrating ESG criteria
Risk Management
9
10
11
12
13
14
15
16
Compliance with Changing Legal
Regulations
Equal Opportunity and Diversity
Business Ethics, Transparency and
Reporting
The Bank's Environmental Footprint
Financial Inclusion
Customer Centricity
Emergency Action Preparation and
Business Continuity
Preferred Employer
Importance for İşbank
17
Corporate Social Responsibility
Responsible Product and Service
Portfolio
National and International
Cooperation for Sustainability
Responsible Procurement
Financial Literacy
Communication with Stakeholders
Responsible Marketing
Supporting Employee Volunteering
Open Banking
18
19
20
21
22
23
24
25
Stakeholder groups expressing their opinions
Analysts
Personal Customers
Rating Agencies
Financial Institutions
Group companies/Subsidiaries
Shareholders and Investors
Business Partners
Public Institutions and Regulatory
International Organizations and Initiatives
Authorities
SMEs and Business Segment Customers
Corporate Customers
Union
Non-Governmental Organizations
Suppliers
Commercial Customers
Universities and Interns at İşbank
İşbank Board of Directors
İşbank Executive Committee
İşbank Managers
İşbank Employees
f
o
d
r
a
o
B
s
r
o
t
c
e
r
i
D
Emergency action
preparation and
business continuity
The Bank's
environmental footprint
Supporting employee
volunteering
Employee rights,
commitment and
satisfaction
Employee health and
safety
Responsible financing
and investment
decisions integrating
ESG criteria
Compliance with
changing regulations
Digital transformation
Financial inclusion
Financial literacy
Financial performance
and profitability
Equal opportunity and
diversity
Combating climate
change
Business ethics,
transparency and
reporting
Corporate social
responsibility
Customer centricity
Risk management
Cyber security and
customer privacy
Responsible marketing
National and
international
cooperation for
sustainability
Preferred employer
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
MATERIAL ISSUES and REPORTING STANDARDS
Issue
Reporting
Framework GRI
SASB
TCFD
SDG
UN
WEPs
Impact on
Business Strategy
Stakeholder
Expectations
Issue
Reporting
Framework GRI
SASB
TCFD
SDG
UN
WEPs
Impact on
Business Strategy
Stakeholder
Expectations
Emergency action
preparation and
business continuity
Open banking
The Bank's
environmental
footprint
Supporting
employee
volunteering
302-1, 302-2,
302-3, 302-4,
302-5, 303-3,
303-5, 305-1,
305-2, 305-3,
305-4, 305-5,
306-2, 306-3,
306-5
Employee rights,
commitment and
satisfaction
202-1, 401-1,
401-2, 401-3,
402-1
403-1 ,403-2,
403-3, 403-4,
403-5, 403-6,
403-8, 403-9,
403-10, 407-1
304-2, 412-3,
413-2
206-1, 307-1,
419-1
Employee health
and safety
Responsible
financing and
investment
decisions
integrating ESG
criteria
Compliance
with changing
regulations
Digital
transformation
Equal opportunity
and diversity
201-3, 405-1,
405-2, 406-1
Financial inclusion
Financial literacy
Financial
performance and
profitability
201-1, 201-4
Combating climate
change
Business ethics,
transparency and
reporting
205-1, 205-2,
205-3, 408-1,
409-1, 410-1,
412-2, 415-1
Corporate social
responsibility
203-1, 203-2,
413-1
Customer
centricity
417-1, 417-2,
417-3
Communication
with Stakeholders
Risk management
201-2
Cyber security and
customer privacy
418-1
Responsible
marketing
Responsible
procurement
204-1, 308-1,
308-2 414-1,
414-2
Responsible
product and
service portfolio
National and
international
cooperation for
sustainability
Preferred employer
404-1, 404-2,
404-3
36 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 37
Düşük
Orta
Yüksek
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Sustainability Management
The Board of Directors of the Bank is the highest management
authority in İşbank's sustainability management. The
"Sustainability Committee" is the management body
responsible for the Bank's sustainability activities. It is
managed by the Chairperson of the Board of Directors,
consists of two members of the Board of Directors and
the Executive Committee, where all business units are
represented, and enables a holistic follow-up of sustainability
issues. The Deputy Chief Executive responsible for the Investor
Relations and Sustainability function assumed the role of
Sustainability Leader.
Sustainability
Committee
Sustainability
Coordinator
Sustainability
Leader
Investor
Relations and
Sustainability
Division
Sustainability Working Group
Loans Portfolio Management
Risk Management
Loan Allocation
Financial Institutions
Product Development
and Marketing
Strategy and Corporate
Performance Management
Purchasing
Construction and Property
Management
Talent Management
Human Resources
The "Sustainability Committee", which enables
tracking of sustainability issues in an integrated
manner, is the management body responsible for
the Bank's sustainability activities.
The Investor Relations and Sustainability Division is
responsible for monitoring developments in the field of
sustainability, analyzing global trends and ensuring the
coordination of these issues within the Bank.
The risks related to climate change have been classified in the
Bank's Risk Catalogue under strategic risks with the approval
of the Board of Directors. The risk of climate change is also
monitored by the Risk Committee, the Audit Committee, and
the Sustainability Committee due to its importance. Financial
and non-financial risks are reported monthly to the Risk
Committee and the Board of Directors through the Audit
Committee.
İşbank reviews its activities, approaches and strategy in line
with developing methodologies and global dynamics on a
regular basis. The Bank has structured its perspective on
sustainability and its activities in the fields of environment,
social and governance under the "Sustainability Management
System" it established in 2015, and has been developing this
structure both in an organizational sense and with innovations
in the end-to-end business model.
İşbank's Sustainability Policy and other complementary
policies form the basis for the functioning of the Sustainability
Management System.
You can find the policies that set forth
İşbank's sustainability approach here.
Continuous
STAKEHOLDER EXPECTATIONS and İŞBANK'S RESPONSE
Communication
Frequency
Communication
Type
Requests During the
Reporting Period
İşbank's Response
Customers
Branches,
Bankamatik
ATMs, Internet
Branch,
Telephone Branch
and mobile
banking channels,
customer
relations
representatives,
meetings,
customer
satisfaction
surveys, social
media
Less waiting time
and fast service
Easy access
Providing useful
information and
guidance
Increasing
functionality of
digital contact points
The current queue management application has been
renewed so customers can follow the estimated waiting
times in the branch where they will make transactions. In
addition, since 2021, customers are able to receive a queue
number through İşCep without going to the branch for their
transactions. In order to provide customers with faster service
through İşCep, they are now able to make money transfers
with other details apart from IBAN. With the "transfer money
with FAST system" feature, it is now possible to transfer
money quickly.
Customer experience is continuously monitored in all
channels and customer expectations are considered. In
2021, customers were able to communicate with a customer
representative to receive service through the İşCep App.
Easy access to services is ensured with an extensive network
of branches and Bankamatik ATMs. Branch representatives
also provide services through a remote working model. With
the İşCep "I Want to Become a Customer (MOI)" feature, those
who want to become İşbank customers can now do so via
video calls without going to a branch.
İşbank maintains its position as the private bank with the most
extensive Bankamatik ATM network. Bankamatik ATM devices
are positioned to serve the highest number of customers.
İşbank has initiated many practices within the scope of
financial literacy.
İşbank develops systems in order to deliver accurate
information to its customers in all platforms.
See Financial Literacy
See Informing Customers
Within the framework of the strategic cooperation with İş
Portföy Yönetimi A.Ş. and İş Yatırım Menkul Değerler A.Ş.,
online Privia Economy Talks were held in the first 2 quarters of
the year in order to inform private banking customers about
current economic developments and expectations, as well as
investment alternatives that may arise in volatile markets.
İşCep is the banking app in Turkey with the largest variety of
transactions. İşCep's variety of transactions has been increased
and it now covers nearly all of the services provided at a branch
or via the Call Center. As of 2021, temporary address changes
can be made on card deliveries through İşCep, instant password
(İşCep) can be received via video calls, and the receipt is
displayed in a more practical way at the end of the transaction.
For the changes made on İşCep in 2021
See Projects to Improve Customer Experience
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Communication
Frequency
Communication
Type
Requests During the
Reporting Period
İşbank's Response
Communication
Frequency
Communication
Type
Requests During the
Reporting Period
İşbank's Response
Customers
Analysts
Continuous
Branches,
Bankamatik
ATMs, Internet
Branch, Telephone
Branch and mobile
banking channels,
customer relations
representatives,
meetings, customer
satisfaction surveys,
social media
To receive
personalized services
İşbank's customers can personalize services such as İşCep and
Robofon based on their preferences. Staff at İşbank's branches
receive regular training to ensure that customers are offered
products and services aligned with their financial needs.
To be able to examine
and monitor their
financial status
in-depth
İşbank's branches provide their customers with detailed
information about their financial status. Customers can
also obtain information via İşCep and the Call Center. İşCep
introduces personal finance management features to allow
customers to examine their financial status in-depth and
monitor it conveniently.
On a
yearly
and
quarterly
basis
Analyst days, investor
meetings, investor
presentations,
teleconferences,
communications of
the Investor Relations
and Sustainability
Division, Integrated
Report, Reputation
Research
More transparent
reporting on non-
financial performance
İşbank Integrated Annual Report, integrating the Bank's financial
performance with the ESG (Environmental-Social-Governance)
performance, was published.
Reporting was done for the Climate Change and Water Security
Programs of the Carbon Disclosure Project (CDP).
Subjects related to climate risks are based on the UNEP FI
Scenarios.
The Bank was included in the rating program of Sustainalytics
and achieved an ESG risk score of 18.6, i.e. "low risk".
Shareholders and Investors
General Assembly
and investor
meetings, investor
presentations,
analyst and investor
days, promotional
meetings,
teleconferences, daily
communications from
the Investor Relations
and Sustainability
Division, İşbank
Investor Relations
web page, Public
Disclosure Platform
(KAP), the Information
Society Services
Platform established
as per the Turkish
Commercial Code,
Integrated Report,
CDP Reports
To directly and
quickly get accurate
and up-to-date
information about
İşbank and exercise
their shareholder
rights
More detailed
information about
the bank's ESG
performance
To improve the
Bank's risk culture
by employing
comprehensive
and innovative
approaches in the risk
management domain
The Investor Relations and Sustainability Division answers all
information requests from shareholders as soon as possible
via multiple communication platforms, including especially the
KAP platform and the corporate website, actively providing
information as necessary.
The Ordinary General Assembly meeting was held on 31 March
2021.
The Investor Relations and Sustainability Team met with
investors via conferences, roadshows and teleconferences to
convey the Bank's attitude towards rapidly changing market
dynamics. The Bank also provides regular updates on its ESG
performance via the sustainability page of the corporate
website.
İşbank published its first-ever Integrated Annual Report in 2021.
The Bank achieved a score of "B" in the Climate Change Program
reporting and a score of "C" in the Water Security reporting
under the Carbon Disclosure Project.
Impact analyses were conducted in accordance with the
Principles of Responsible Banking of the United Nations
Environment Program Finance Initiative (UNEP FI).
The Climate Change Risk Policy addressing the climate change
risks that the Bank could be exposed to in connection with its
operations was approved by the Board of Directors.
Continuous
Continuous
Working Life
Evaluation Survey,
training programs,
performance
evaluation, internal
communication
platforms, regular
executive meetings,
practices aimed at
improving risk culture
Employees
Achieving a balance
between flexibility
and commitment
in the hybrid work
model
Offering training
programs to develop
digital competencies
İşbank established a functional and safe remote working
system for its employees. Employees have access to numerous
trainings and social content on digital platforms.
The Bank organizes a number of training programs to improve
the digital competencies of its employees.
See Talent Management
In 2021, the digital training program "Risk Culture at Our Bank"
was offered.
A more dynamic work
environment with
project-based studies
Studies on the Agile Working Model, which the Bank defined as
the "organizational equivalent of digitalization", were expanded
and Agile Transformation Training programs were held.
See Agile Workshop
Being a leading
organization in
promoting gender
equality
The Gender Equality Policy came into effect. The subjects of
unconscious bias and gender equality were included in career
training programs. The duration of paternity leave was extended
beyond the length of time defined in the regulations.
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STAKEHOLDER EXPECTATIONS and İŞBANK'S RESPONSE
Communication
Frequency
Communication
Type
Requests During the
Reporting Period
İşbank's Response
Communication
Frequency
Communication
Type
Requests During the
Reporting Period
İşbank's Response
Subsidiaries
International Organizations and Initiatives
Continuous
Joint projects,
Reputation Research
Partnerships
in digital
transformation
Joint projects
and information
exchange
We achieved integration between the products and services
of our subsidiaries through numerous digital applications
developed in 2021.
Data security checks also cover our subsidiaries.
Regular meetings are held and results of research projects
are evaluated as part of joint projects led in cooperation with
Anadolu Hayat Emeklilik A.Ş., Erişim A.Ş. and ATOS A.Ş., an
external research firm.
Within the framework of the strategic cooperation with İş Portföy
Yönetimi A.Ş. (İş Asset Management) and İş Yatırım Menkul
Değerler A.Ş., online Privia Economy Talks were held in the first 2
quarters of the year in order to inform private banking customers
about current economic developments and expectations, as well
as investment alternatives that may arise in volatile markets.
Very
frequently
Conferences, seminars,
congresses, workshops,
replying to written
queries
Increasing
sustainability
partnerships with
stakeholders
The Bank conducted impact analyses in accordance with
the Principles of Responsible Banking of the United Nations
Environment Program Finance Initiative (UNEP FI) as a
signatory.
Reporting was done as per the UN WEPs Declaration.
Reporting was done as per the Climate Change and Water
Security Programs of the Carbon Disclosure Project (CDP).
The Bank supports the Science-Based Targets Initiative (SBTi).
The Bank participated in the Global Compact Turkey
Sustainable Banking and Finance Working Group, and
contributed to the studies on updating the Global Compact
Turkey's Declaration on Sustainable Finance.
Public Institutions and Regulatory Agencies
Media
At least
four
times a
year
Reporting processes,
consultation meetings
Full legal compliance
İşbank works in close collaboration with public institutions
and organizations such as İşbank, SPK and Borsa İstanbul
regarding non-financial matters which need to be incorporated
in the legislation.
Exchange of opinions
on new regulations
We support and provide our opinions on the efforts of the
Banks Association of Turkey (BAT).
Continuous
Information
communication, release
of press bulletins,
press meetings, private
meetings, replying to
written queries
Quick response
to queries and
demands
İşbank engages in regular and on-demand communication for
target group via written, visual and digital media channels to
inform the general public about the Bank's activities.
Non-Governmental Organizations and Sector Unions
Very
frequently
Information and press
meetings, private
meetings, replying to
written queries, online
training, mentorship
activities and other joint
projects
Joint projects
and information
exchange
İşbank's Economic Research Division monitors and reports on
developments in both the national and global economy. The web
page ekonomi.isbank.com.tr offers a free-of-charge subscription
service and had 15,500 subscribers at the end of 2021.
İşbank led inclusive financing projects by partnering with many
non-governmental organizations, such as Türk Eximbank, TİM,
EBRD, Arya and TÜRKONFED, during the reporting period.
Financial Institutions and Rating Agencies
At least
once a
year
Evaluation and
information meetings,
Corporate Reports,
replying to written
queries
Transparent
reporting on financial
and non-financial
performance
İşbank published its first-ever Integrated Annual Report.
İşbank reported to the Water Security Program of the Carbon
Disclosure Project (CDP) for the first time in 2021. The Bank has
been included in the Sustainalytics ESG risk ratings. It received
an ESG score from Refinitiv as part of the BIST Sustainable
Index. The Bank was included in the FTSE4Good Emerging
Markets Index and the BIST Sustainability Index in 2021 as well.
Suppliers
Continuous
Daily communication
with product and service
suppliers, projects
aimed at increasing
sustainability awareness
among suppliers
Quick and convenient
communication,
corporate capacity
expansion
İşbank strives to choose environmentally-friendly products
and services during procurement operations. The Bank
works in close collaboration with its suppliers to raise their
awareness on the importance of sustainability and enhance
their corporate capabilities
See Supply Chain Management
In 2021, İşbank conducted a survey designed to evaluate the
performance and current status of its suppliers, determined
the suppliers’ awareness under specific categories such as
Environment, Labor and Human Rights, Ethics and Sustainable
Procurement in order to actively manage the environmental
and social impact of its supply chain.
The Bank became the first organization in the Turkish banking
and finance sector to receive the CIPS certificate.
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in the Field of Sustainability
The UN Women's Empowerment
Principles (WEPs)
The UN Women's
Empowerment
Principles consists of
guiding principles for
empowering women's
place in the business
world and society.
Communication on Progress for the UN Women's
Empowerment Principles
United Nations Environment Program
Finance Initiative (UNEP FI) Principles
of Responsible Banking (PRB)
PRINCIPLES FOR
RESPONSIBLE
BANKING
The Principles of
Responsible Banking
introduced by the UNEP
FI are intended to ensure
alignment of the signatory
banks with the vision set
forth by the society in the United Nations Sustainable
Development Goals (SDGs) and the Paris Climate
Agreement. These principles, which define the role
that the banking sector can play to achieve a green
and inclusive economy, are designed to maximize the
influence of the banking sector on the efforts toward
sustainable economic growth. Being a signatory of
the UNEP FI Principles of Responsible Banking and
a member of the UNEP FI, İşbank has conducted
a portfolio impact analysis and maintained its
collaborative efforts in the UNEP FI working groups.
The UN Global Compact and the Declaration
on Sustainable Finance
The UN Global Compact is the world's
largest corporate sustainability initiative
focusing on human rights and ethics.
İşbank is committed to complying
with the 10 principles of the UN Global
Compact in all of its operations.
The Bank is a member of the Global
Compact Turkey Sustainable Finance
Working Group. The group aims to raise awareness on the
concept of sustainability across the real sector, especially in
the Turkish finance sector, and mobilize the private sector
for creating the financial resources needed to achieve the
Sustainable Development Goals.
İşbank is a signatory of Global Compact Turkey's Declaration
on Sustainable Finance, which was prepared by the Global
Compact Turkey Sustainable Banking and Finance Working
Group. With this declaration, the signatory banks pledged
to take environmental and social risks into consideration
during loan assessment processes for investments of USD 10
million and above. With the update made in 2021, the scope
of the Declaration was further expanded by including the
phrase "innovative sustainable finance principles" in addition
to "take environmental and social risks into consideration
during loan assessment processes". The updated Declaration
on Sustainable Finance means that the signatory banks,
including İşbank, are committed to not only taking social and
environmental risks into consideration during loan assessment
processes, but also to playing a leading role in embracing an
inclusive, sustainable finance approach that supports the
development of sustainability-driven banking products as well
as the growth of this market.
United Nations Sustainable
Development Goals (SDGs)
The Sustainable
Development Goals are a call
for action that includes the
goals to be achieved by the
end of 2030 by the United
Nations member states. It
focuses on solving social,
cultural and ecological issues grouped under 17 main
topics such as ending hunger and poverty, combating
climate change, gender equality, quality education,
responsible production and consumption worldwide.
İşbank is aware of the transformative power and
responsibility of the banking and finance sector in
sustainable development. Therefore, the Bank supports
the United Nations Sustainable Development Goals and
reports its direct and indirect contributions to the goals.
Contribution to Sustainable Development Goals
CDP- Carbon Disclosure Project
CDP is an independent
global organization that
allows publicly -traded
companies to disclose
information to their
investors about how they use natural resources
and manage the risks in this area. İşbank has been
transparently sharing its environmental goals and
performance with its stakeholders within the scope
of the CDP Climate Change Program since 2019. The
Bank was awarded a score of "B" in the CDP Climate
Change Program in 2021. İşbank also began to make
disclosures as part of the CDP Water Security Program
to report on its water usage as well as the actions
taken to manage its impact on water resources in
2021. The Bank was awarded a score of "C" in the CDP
Climate Change Program in 2021.
Integrated Reporting Turkey Network (ERTA)
Founded to raise
awareness on
integrated reporting
and integrated thinking
throughout Turkey,
ERTA strives to enhance the capacity of businesses and
ensure that good practices are shared. It is an association that
aims to contribute to the spread of integrated thinking in all
institutions and organizations by collaborating with public,
private sector, non-governmental and academic institutions
at national and international level. The Bank is a member of
ERTA.
The Banks Association of Turkey (BAT)
Sustainability Working Group
İşbank is an active participant of the
Sustainability Working Group of the
Banks Association of Turkey (BAT). The
working group shares information on
local and global developments in the field
of sustainability, exchanges views on
sustainability by holding meetings with regulatory institutions
and boards, and develops training programs to support the
sustainability efforts in the sector.
Science-Based Targets Initiative (SBTi)
The Science-Based Targets Initiative
directs the private sector's climate
action by enabling companies to set
science-based emission reduction
targets in order to keep the global
temperature increase below 1.5⁰C and to meet the targets
set in the Paris Agreement. In 2021, the Science-Based
Targets Initiative developed a scientific roadmap to help
decarbonization of the real sector by publishing its first-ever
"Net-Zero Standard" Methodology for the finance sector and
other sectors as well.
İşbank has pledged to use Science-Based Targets as a
reference when setting its Scope 1 and 2 emission targets as
part of its CDP disclosures.
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İŞBANK'S ESG RATING AND INDICES IN
WHICH IT IS LISTED
Sustainalytics
Sustainalytics is an
internationally recognized
research and rating
organization that focuses on sustainability and
evaluates the environmental, social and governance
performance of organizations.
İşbank received a rating of "18.6" in the ESG
assessment for 2021, achieving a "low risk" level. The
Bank's objective is to strengthen its funding structure
and become a key player that promotes sustainable
and inclusive economic growth by gaining access to
green/sustainable funds from international markets
by making use of this and other similar ratings from
organizations that conduct an in-depth assessment of
the Bank's sustainability performance.
SÜRDÜRÜLEBİLİRLİK
ENDEKSİ
BIST
BIST
SÜRDÜRÜLEBİLİRLİK
ENDEKSİ ŞİRKETİ
FTSE4Good Emerging Markets Index
and BIST Sustainability Index
BIST
SUSTAINABILITY
INDEX
The "FTSE4Good
Emerging Markets
Index", launched by the
global index and data
provider FTSE Russell under the guardianship of the
London Stock Exchange, is viewed as one of the key
global indices that organizations take into account as
they seek to invest in companies that demonstrate
good sustainability practices.
BIST
SUSTAINABILITY INDEX
CONSTITUENT COMPANY
Contribution to Sustainable
Development Goals
The Sustainable Development Goals (SDGs) represent a call
for action by the UN to develop solutions to global issues. It
is essential that governments, the private sector, academic
institutions and non-governmental organizations work
collaboratively to make progress toward these goals, which
are intended to be achieved by 2030.
The banking and finance sector has the necessary expertise
and resources to be able to offer solutions, both direct and
indirect, to today's global and regional issues. The sector's
transformative power and leverage effect on the economy
mean that it is well-equipped to make significant contributions
to the Sustainable Development Goals.
İşbank supports the UN Sustainable Development Goals. The
Bank views its contribution to these goals as a key component
of its value-creation processes. İşbank indirectly contributes
to these goals by providing the necessary funding for solutions
that have the potential to help solve the issues associated
with the 17 development goals.
İşbank also directly contributes to 6 goals that fall into its field
of activity. This section provides a summary of the Bank's
contribution to these goals.
SUSTAINABLE DEVELOPMENT GOAL 4:
QUALITY EDUCATION
SUSTAINABLE DEVELOPMENT GOAL 7:
AFFORDABLE AND CLEAN ENERGY
Achieving inclusive and quality education for all
should be the top priority to increase economic
well-being.
The growing global population and increased
production mean that the world's need for
affordable and clean energy increases each day.
İşbank supports the transition to a low-carbon
economy and offers finance solutions for renewable
energy investments to help energy transformation.
See We Take Responsibility for an Inclusive and
Solid Economy
The Bank also creates resources for the renewable
energy sector by committing itself to utilizing
renewable resources in its operations.
See We Take Responsibility for Climate Action
Targets to which the Bank contributes:
7.2: Increasing investments in renewable energy
7.3: Increasing energy efficiency
İşbank believes that easily accessible and
quality education is essential for sustainable
development. Therefore, the Bank not only invests
in the development of its employees
See Talent
Management but also contributes to the education
quality of the country through programs led as part of
its long-term social responsibility projects.
We Take
Responsibility for Future Generations
Targets to which the Bank contributes:
4.1: Ensuring that all girls and boys complete primary
and secondary education
4.2: Ensuring that all girls and boys have access to
quality pre-school education
4.3: Increasing access to technical and vocational
education
4.4: Improving technical and vocational skills and
entrepreneurship
4.5: Eliminating gender equality in education
4.7: Achieving literacy and numeracy in the field of
sustainable development
4.a: Providing inclusive learning environments for all
The index, which was launched to encourage
financial institutions to take environmental,
social and governance criteria into consideration
when making investment decisions, assesses the
performance of organizations against such criteria.
The BIST Sustainable Index was created to help the
companies listed in Borsa İstanbul gain a better
understanding of sustainability and embrace best
sustainability practices, and includes only those
companies that are publicly traded in Borsa İstanbul
and have a top-level corporate sustainability
performance.
İşbank has been included in the "BIST Sustainability
Index" since 2015 and in the "FTSE4Good Emerging
Markets Index" since 2016. The Bank also aims to be
listed in the Dow Jones Sustainability Index in the future.
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SUSTAINABLE DEVELOPMENT GOAL 8:
DECENT WORK AND ECONOMIC GROWTH
SUSTAINABLE DEVELOPMENT GOAL 9:
INDUSTRY, INNOVATION AND INFRASTRUCTURE
SUSTAINABLE DEVELOPMENT GOAL 10:
REDUCED INEQUALITIES
SUSTAINABLE DEVELOPMENT GOAL 13:
CLIMATE ACTION
Technological developments and innovations are the
key to creating new jobs and promoting a low-carbon
economy.
Supporting sustainable industries, investing in
scientific research and innovation are essential to make
sustainable development possible.
İşbank supports the transition to the new economy
by focusing on digital banking solutions
See We
Take Responsibility for Next-Generation Banking
financing infrastructure investments,
Responsibility for an Inclusive and Solid Economy
performing innovative development projects,
See We Take
See "Innovation and Entrepreneurship" and
supporting start-ups.
Targets to which the Bank contributes:
9.2: Promoting inclusive and sustainable
industrialization
9.4: Supporting clean and environmentally-friendly
technologies
9.5: Increasing the budget for Research & Development
activities
İşbank supports the inclusive business models
of the banking and finance sector, believing that
it has a critical role to play in ensuring economic
well-being for all.
Besides its widespread network of branches and digital
banking applications
See We Take Responsibility
for Next Generation Banking the Bank also supports
access to financial services and contributes to social
welfare through products and services developed for
disadvantaged customer groups.
See We Take Responsibility for an Inclusive and Solid
Economy
By making its unbiased and comprehensive economic
reports electronically accessible to all, the Bank wishes
to allow stakeholders from different backgrounds to
benefit from its intellectual knowledge. İşbank also
creates value by offering its employees a fair and decent
work environment.
Our Employees
See We Take Responsibility for
Targets to which the Bank contributes:
8.2: Increasing the economic added value created
8.3: Creating more decent jobs
8.4: Decoupling economic growth from environmental
degradation
8.5: Achieving full employment and decent work for all
women and men
8.6: Increasing youth employment
8.7: Eradicating forced labor and ending modern slavery
8.8: Protecting labor rights
Policies that empower low-income segments and
promote inclusive participation of everyone in
economic spheres, regardless of their gender, race or
ethnicity, must be embraced to eradicate increased
economic and social inequalities.
The banking sector has an important role and
responsibility to provide financial resources so that
such inequalities can be eliminated.
İşbank is against all kinds of discrimination. The Bank
strives to create sustainable value for all stakeholders
by providing a fair work environment
Opportunity and Diversity increasing access of
disadvantaged groups to financial services
Financial Inclusion and supporting long-term social
responsibility programs.
for Future Generations
See Equal
See We Take Responsibility
See
Targets to which the Bank contributes:
10.2: Promoting inclusive economic growth for all
10.3: Eliminating discrimination
10.4: Adopting policies that can prevent inequality
The scientific world states that the increase in
average temperatures should be limited to a
maximum of 2°C in order to minimize the devastating
effects of climate change.
To achieve this goal, it is necessary to finance
alternative production and consumption models with
low environmental impact.
Supporting the transition to a low-carbon economy,
İşbank takes the environmental impacts into
consideration when offering products and services.
The environmental and social impacts of the projects
financed are rigorously reviewed to ensure that
appropriate actions are taken to minimize/eliminate
potential risks that may arise from the projects.
Environmental and Social Risk Management in Loans
The Bank also contributes to the combat against
climate change by reducing its environmental footprint.
See
See Environmental Impact
Targets to which the Bank contributes:
13.1: Strengthening resilience to climate-related
hazards and natural disasters
13.3: Improving awareness on climate change and
adaptation
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Financial Actor
An Inclusive and Solid Economy
Climate Action
Next-Generation Banking
We Take Responsibility for
an Inclusive and Solid Economy
An inclusive and solid economy represents an economic growth model which allows everyone to
benefit from economic well-being and creates opportunities for all.
With the COVID-19 pandemic, economic and social
inequalities reached the highest levels seen during the last
30 years in many OECD countries.
times less likely to attend2 university if their parents did not
complete secondary school than those children with a parent
who has a bachelor's degree.
The top 10% of income earners take1 home over ten times
more pay than the bottom 10%. Economic inequalities
also restrict social mobility, creating a cycle of poverty
that persists across generations. Children are at least four
Thanks to its financing power, the banking and finance sector
has a significant leverage effect in eliminating economic
inequalities and achieving inclusive growth.
1 “Inequality puts our world at risk” 2 “Investing in people and places”
Material Issues
Related Capital Elements
Combating Climate Change · Financial Performance and Profitability
· Financial Literacy · Financial Inclusion · Customer Centricity ·
Responsible Products and Services · Responsible Marketing
Financial
Capital
Intellectual
Capital
Social-Relational
Capital
Risks
Opportunities
• Loss of customers due to not understanding customer
• Increasing customer satisfaction by developing
needs correctly
• Losing touch with developments such as platform
business models and sharing economy, which are
essential components of the new economy
• Global economic shrinkage caused by the COVID-19
pandemic
• Global uncertainties making long-term planning difficult
• Penalties and sanctions that may be incurred due to
rapidly changing regulations and non-compliance
• Inequalities due to large sub-populations being unable to
access financial resources
• Reputational risks to the sector due to complex and non-
transparent financial transactions and processes
• Risks associated with global climate change
products and services according to their expectations
and needs via regular customer communication
• İşbank's ability to quickly make use of emerging
opportunities thanks to its robust financial structure
• The Bank's dynamic and proactive business strategy
that prioritizes sustainable growth
• Increasing the Bank's penetration through products
specifically developed for disadvantaged segments
• Expanding customer base by developing products
and services that address the needs of all segments
of society
• Increasing customer satisfaction by providing
customers with accurate and timely information
about products and services
Contributed SDGs
At İşbank, we work hard to help create an inclusive economic
model that benefits all segments of society by driving growth
and sharing this growth equally.
We take responsibility for creating an economic model that is built
on sound core principles such as innovation, entrepreneurship,
environmental responsibility and equal opportunity and
strengthens the next-generation's hopes for our country.
KEY PERFORMANCE INDICATORS
Total Loan Growth (%)
Non-performing Loan Ratio (%)
Net Interest Marjin (Swap Adj.) (%)
Net Fees and Commissions Growth (%)
OPEX Growth (%)
Cost / Income Ratio (%)**
Return on Average Tangible Equity (%)
Return on Average Assets (%)
Capital Adequacy Ratio (%)
Tier 1 Ratio (%)
Leverage (%)
Number of Customers (million)
Individual Net Promoter Score
Individual Net Promoter Score Ranking
(among private banks)
Commercial Net Promoter Score
Commercial Net Promoter Score Ranking
(among private banks)
2019
4.7
6.5
3.71
26.4
21.8
38.8
12.1
1.39
17.87
14.97
9.07
19.5
33
1
43
1
Customer satisfaction score (%)
81.2
Number of people reached through Farmer Meetings
4,485
Number of disabled-friendly Bankamatik ATMs
4,410
Number of female entrepreneurs who participated
in events to support female entrepreneurs
425
Number of events organized in support of SMEs
34
2020
27.7
5.6 (6.5)*
4.37
0.9
20.5
32.9
11.8
1.25
2021
42.9
4.1
3.14
35.6
34.9
30.8
20.0
1.92
18.68 (18.02)*
20.36 (16.53)*
14.73 (14.17)*
15.78 (12.49)*
7.88
20
59.3
1
45.9
2
86.2
1,500
4,598
448
40
6.75
20.7
72.4
1
79.1
1
90
1,861
5,113
267
29
Number of İŞ'TE KOBİ SME website views
1.1 million
550,000
439,000
Improving financial literacy and savings awareness
More than 21 thousand
students participated in the
workshops held at İşbank
Museum.
Museum workshops
could not be held from
March 2020 onwards
due to the COVID-19
measures put in place.
Museum workshops
could not be held
due to the COVID-19
measures put in place.
Number of feedback responses communicated to the
Customer Relationship Program
467,000
824,000
656,000
* Excluding the impact of BRSA forebearance measures. ** Adjusted rates included in 2019, 2020 and 2021 investor presentations.
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TARGETS
Targets for 2021
Realization in 2021
Realization
Achieving a Net
Promoter Score of at
least 40 in individual and
commercial segments and
maintaining leadership
among private banks in
this area
The Bank aims to increase
the ratio of disabled-
friendly Bankamatik ATMs
to more than 80% in 2022.
The Bank achieved a Net Promoter Score of
72.4 and 79.1 in individual and commercial
segments, respectively, and maintained
leadership among banks of similar size.
The ratio of disabled-friendly Bankamatik
ATMs to the total number of Bankamatik
ATMs was 78.9% as of the end 2021.
The Bank aims to keep
the number of female
entrepreneurs supported
through activities for
female entrepreneurs
above 500 every year.
As the cooperation protocol between İşbank
and Arya Women Investment Platform was
executed on 02.07.2021, the planned event
dates were rescheduled, with the last three
series of Arya Workshops, the Entrepreneur
Academy, and the Investor Academy being
postponed to 2022.
The Bank aims to organize
more than 40 events to
support SMEs between
2021-2023.
It is estimated that the
number of views received
by the İŞ'TE KOBİ website
will reach 1 million 250
thousand in 2023 with an
annual increase of 250
thousand.
Due to the pandemic, only 29 events could
be organized.
The İŞ'TE KOBİ website had a total of
439,197 views in 2021. As the software
development firm which created the website
ceased its operations in June 2021, planned
developments could not be done and the
Bank began to look for a new software
development & hosting firm for the İŞ'TE
KOBİ website, focusing on a seamless
transition to the new firm to maintain the
website in the best possible way.
Targets for 2022 and
Beyond
Achieving a Net
Promoter Score of at
least 70 in individual and
commercial segments
and maintaining
leadership among banks
of similar size
>%80
The Bank aims to keep
the number of female
entrepreneurs supported
through activities for
female entrepreneurs
above 500 every year.
30 events are planned
to be organized every
year until 2024.
The target was revised
in 2021. This revision
estimates that the
number of views received
by the İŞ'TE KOBİ website
will reach 500 thousand
in 2023 with an annual
increase of 50 thousand.
Targets
for 2021
Revised Targets
for 2021
Realization
in 2021
Realization
Targets for
2022
~ 15%
~ 25%
~ 12%
27%
25%
20%
3.6 - 3.8%
~ 50 bps decrease
3.14%
~ 15%
~ Mid-twenties
36%
TL Loan Growth
TL Deposit Growth
Return on Average
Tangible Equity
Net Interest Margin
(Swap adj.)
Net Fees and
Commisions Growth
OPEX Growth
In line
with CPI
Cost to Income Ratio
41 - 43%
Non-performing Loan
Ratio
<6.5%
35%
34.7%
4.1%
>25%
>35%
>20%
~ 3.8%
>30%
In line with CPI
35-36%
<5%
Net Cost of Risk
<250 bps
<150 bps*
75 bps**
<150 bps**
Capital Adequacy Ratio
(excluding the impact
of BRSA forebearance
measures)
>15%
16.53%
>15%
* Including currency impact. ** Excluding currency impact.
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Financial Performance
İŞBANK and ITS ACTIVITIES in 2021
İşbank's long-standing strong capital structure
together with its profitable and healthy growth strategy
are the pillars on which its financial success is built.
currecny deposits, İşbank also maintained its leadership
among private banks in terms of the size of Turkish Lira saving
deposits and demand deposits in 2021.
Broad Customer and Shareholder Base
Diversified Funding Base
İşbank boasts a widespread shareholder base which consists
of nearly 175 thousand individual and corporate investors. As
of the end of 2021, 37.26% of the Bank's capital was held by
İşbank Members' Supplementary Pension Fund, the members
of which are around 49 thousand employees and retirees.
İşbank serves 20.7 million customers as of the end of 2021.
The Largest Private Bank in Turkey
İşbank increased its total asset size to TL 926.6 billion in
2021 and continued to be “the largest private bank of Turkey”.
Achieving its targets to a great extent, İşbank also maintained
its leadership among private banks in terms of total loans,
deposits and shareholder equity in the same period.
Being the private bank that makes the most significant
contribution to the national economy, İşbank’s total cash loans
reached TL 493.4 billion as of the end of 2021. Turkish Lira
loans i grew by 26.6%, while foreign currency loans decreased
by 4.7% adjusted for the exchange rate compared to the end of
the previous year. The resources provided by the Bank to the
economy through non-cash loans reached TL 193.4 billion as
of the end of 2021.
At the end of 2021, 53.2% of the Bank's total assets consisted
of loans, while the share of the securities portfolio in total
assets was realized at 15.4%.
Thanks to its healthy growth strategy and effective risk
management through the loan underwriting processes,
İşbank’s NPL ratio stood at 4.1% at the end of 2021.
Widespread Deposit Base
With its widespread network of services and diversified digital
contact points, İşbank offers its customers a wide range of
products through various channels and continues to be the
bank of choice among savers. İşbank’s total deposits increased
by 61.5% in 2021 and reached TL 595.6 billion. Turkish Lira
deposits increased by 24.6% compared to the end of the
previous year, while foreign currency deposits increased by
3.1%, excluding the currency impact. The share of demand
deposits in total deposits was 47.9% at the end of 2021. Being
the largest private bank in terms of total deposits and foreign
Deposits, which accounted for 64.3% of the total liabilities at
the end of 2021, continued to be the primary funding source
of İşbank. At the same time, with a cost-sensiteve approach,
İşbank continued to utilize non-deposit funding sources in
domestic and foreign markets in order to diversify its funding
and extend the maturity structure of its liabilities. The non-
deposit funding sources, which consists of repo transactions,
funds borrowed, securities issued in domestic and foreign
markets and subordinated debts, accounted for 19.6% of the
total liabilities at the end of 2021.
Strong and Resilient Financial Structure
The size of the Bank's shareholder equity reached TL 86.8
billion at the end of 2021 with a 28.1% increase compared to
the end of the previous year. Maintaining its strong capital
structure, İşbank's capital adequacy ratio was realized as
20.4% at the end of the year.
The Bank posteda net profit of TL 13.5 billion with a return on
average equity of 18.4% and a return on average assets of 1.9%
in 2021.
The Bank's share in deposit markets calculated based on the
monthly sector data dated December 2021 as published by
BRSA:
» A total market share of 14.2% in savings deposits, with 11.3%
and 15.7% respectively in Turkish Lira and foreign currencies
» A total market share of 12.5% in the total deposits market
(excluding Banks deposits), with 9.5% and 14.1% respectively
in Turkish Lira and foreign currencies.
As part of its mission to increase savings awareness across all
segments of society, the Bank focused on developing artificial
intelligence-supported pricing mechanisms and improving
the diversity of products and services in 2021 in order to
maintain its leadership in deposits, one of its primary sources
of funding.
The Bank also continued to work on improving sales and
marketing of personal banking products across all channels,
especially digital contact points, in 2021, a year which was
marked by the pandemic. In Q4 of 2021, consumer loans
grew by 9.3% with an increase of TL 7.3 billion, while credit
cards and total personal loans increased by 9.5% and 9.3%,
respectively, compared to Q3.
Composition of Assets (%)
2021
2020
Composition of Liabilities (%)
2021
2020
Cash and Banks
Securities
Loans
Subsidiaries and
Participations
Other
Total
22.2
15.4
53.2
4.3
4.9
100
14.6
18.4
58.1
4.4
4.4
100
Deposits
Funds Borrowed and
Money Markets (1)
Other Liabilities
Shareholders' Equity
Total
Key Financial Highlights (TL Million)
2021
2020
Change (%)
64.3
19.6
6.7
9.4
100
62.1
19.6
6.9
11.4
100
Ranking Among
Private Banks
Total Assets
Loans
Deposits
Shareholders' Equity
926,569
593,902
493,378
345,150
595,628
368,876
86,839
67,781
56.0
42.9
61.5
28.1
1
1
1
1
Key Financial Ratios (%)
Interest Earning Assets (2) / Total Assets
Loans / Total Assets
Loans / Deposits
Non-performing Loan Ratio
NPL Coverage Ratio
Demand Deposits / Total Deposits
Shareholders’ Equity / Total Liabilities
Capital Adequacy Ratio
Return on Average Equity (3)
2021
89,3
53,2
82,8
4,1
66,2
47,9
9,4
20,4
18,4
2020
89,8
58,1
93,6
5,6
63,7
41,7
11,4
18,7
10,9
(1) Includes securities issued and subordinated debts in TL and FC.
(2) Interest earning assets include TL and FC required reserves at Central Bank.
(3) Average figures are calculated based on quarterly balances.
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Our Main Fields of Activity
CORPORATE BANKING
PERSONAL BANKING
With corporate banking services, İşbank provides
local corporations and international companies with
services and financing solutions tailored to their needs.
PRODUCTS and SERVICES:
Project Financing, Risk Management Solutions
(Hedging), Digital Solutions
HIGHLIGHTS of 2021:
Kalyon Güneş Enerjisi Üretim A.Ş. was granted a loan
of USD 812 million by a consortium joined by İşbank
for financing the Karapınar YEKA Solar Energy Power
Plant project with a total installed capacity of 1000
MW.
Adnan Polat Enerji Yatırımı A.Ş., a company owning
renewable energy power plants portfolio with an
installed capacity of 695 MW, was granted a loan by
a consortium led by İşbank re-purchasing its own
remaining shares.
A consortium, leaded by İşbank as Sustainability
Representative, provided USD 100 million in total
loan to Dowaksa İleri Kompozit Malzemeler San. Ltd.
Şti. For its capacity expansion projects, including the
Additional Carbon Fiber Production Line investment.
"A Sustainability-Linked Loan Mechanism", which
involved the company's green and social targets
including energy efficiency, employment and social
responsibility indicators, was established in order to
improve the sustainability practices in relation to this
investment.
İşbank's activities in the field of personal banking
are shaped around the principal target of "becoming
the customers' financial solution partner of choice
in every stage of their lives”. The Bank's operations
are built on a single strategy: to obtain a timely and
accurate understanding of the customers' needs in
order to offer them the best possible solution and
experience.
PRODUCTS and SERVICES:
Remote Customer Acquisition, Private Pension for My
Child, Exchange Rate-Protected Deposits, Artificial
Intelligence- and RPA-assisted applications, real-time
analytic application development, Remote Customer
Management, Forest for the Future
HIGHLIGHTS of 2021:
22% of our new customers were acquired through the
remote customer acquisition method.
With 55,579 participants under the age of 18, İşbank
became the sector leader in the Private Pension
System in this category.
After the Exchange Rate-Protected TL Time Deposit
Account products began to be offered at İşbank
branches on 23 December 2021, more than 10
thousand FX-protected accounts were opened by the
end of 2021 with TL 6.1 billion in savings deposited in
these accounts.
The share of the sales opportunities generated via
real-time analytic applications within total loans
lent was 33% in consumer loans and 8% in Overdraft
Accounts.AI-assisted analytical models have begun to
be used at every step of the customer journey.
COMMERCIAL BANKING
In line with its mission, İşbank stands by industrial
organizations, tradespeople, SMEs and other
miscellaneous businesses. Being present at all points
of commerce, İşbank offers products and services that
create value for its customers throughout Turkey with its
widespread branch network.
PRODUCTS and SERVICES:
Business Credit Card, Daily Deposit Account, Workplace
Loan, Maximum İşyerim, POS, TekCep, ÇekCepte, Tradesmen
Support Loan, Instant POS, Instant Commercial Loan, Instant
Commercial Products, Digital Overdraft Current Account,
Maximiles TIM Exporter Card, Instant Agricultural Loan,
SME Loans, İmece Card, İşim Card, Tarsim, İmeceMobil,
DijiKolay, Denizleri Koruyalım (Let's Protect the Seas) Loan,
Digital Supplier Finance System, Project Financing, Risk
Management Solutions (Hedging), Digital Solutions
HIGHLIGHTS of 2021:
İşbank maintained its leadership in installment
commercial loans among private banks with a market
share of 10,7%|1)|2), and reached a portfolio size of TL 72.1
billion at the end of 2021.
In addition to the existing Geothermal Power Plant loans,
a loan was provided to Greeneco Enerji Elektrik Üretim A.Ş.
by İşbank within the scope of financing the 40 MW Hybrid
Solar Power Plant. The Bank generated a fund of USD 40
million with the Loan Agreement entered into with the
International Bank for Reconstruction and Development
(IBRD) as part of the Access to Inclusive Finance Project.
The number of İşim Card holders reached 15,951 at the
end of the year.
WorkupAgri Agricultural Entrepreneurship Program was
launched. The Bank met with nearly 2,000 producers in 16
regions. İşbank is the sector leader in commercial vehicle
loans with a market share of 21.33%(1) and a loan volume
of TL 11.4 billion at the end of 2021. Workplace loans
reached a volume of TL 2.7 billion, which corresponds to a
market share of 22.35%(1).
Based on its mission to become an integrated solution
partner for its customers, İşbank added the "Digital
Supplier Finance System" to its portfolio of products
designed to simplify and facilitate commerce with the quick
and effective way of doing business made possible by
digitalization. The Digital Supplier Finance System enables
the collection of invoiced debts associated with goods and
services sold on credit by paying a discount commission
without having to wait for the payment terms. The volume
of loans borrowed via this system reached TL 950 million.
DijiKolay - a suite of digitalization products designed to
help İşbank's customers digitalize business processes and
enhance their competitiveness - has been launched and
offered to the Bank's customers with nearly 20 digital
business process solutions. In response to increased marine
pollution, İşbank introduced the Denizleri Koruyalım (Let's
Protect the Seas) Loan - the first of its kind in the sector -
to address the specific requirements of the marine sector.
(1) Calculated using monthly sector data published by the Banking Regulation and Supervision Agency without taking accrued interest and re-discounts into
consideration, and participation banks are excluded from sector figures.
|2) Overdraft accounts are included.
PRIVATE BANKING
With its Private Banking operations, İşbank continued to
offer tailored alternative products based on the needs and
investment preferences of its customers.
PRODUCTS and SERVICES:
Asset Management, Privia Credit Card, Privia Investment
Fund, Privia Consumer Loans, Privia Pension Plan,
Financial Status Report, Privia Line
HIGHLIGHTS of 2021:
In 2021, İşbank continued to offer high-level financial
solutions tailored according to the needs and requirements
of customers with its professional staff at 13 specialized
Private Banking branches, including 7 in Istanbul, 3 in
Ankara and 1 in İzmir, Adana and Antalya each. In private
banking service areas, the Bank was managing the assets
of 10,967 customers worth TL 50.2 billion at the end of
2021. The total customer assets managed by İş Portföy
Yönetimi A.Ş. (İş Asset Management) reached TL 5.5 billion
with a 145.6% increase compared to the previous year, while
the size of private family funds reached TL 4.8 billion with
a 157.5% increase. İş Asset Management private family
fund setups also continued in 2021, and the number of
operational private family funds reached 23 at the end of
2021 with a 91.7% increase compared to the previous year.
The size of total funds of private banking customers in
Anadolu Hayat Emeklilik products reached TL 1.3 billion at
the end of 2021, with an 89.9% increase.
Private banking customers are provided with information
and updates about İşbank's environmentally friendly/
sustainable investment funds on a regular basis
throughout the year. The size of the above-mentioned
funds reached TL 272.1 million with a 773% increase
compared to the same period of the previous year.
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CAPITAL MARKET TRANSACTIONS
INTERNATIONAL BANKING
The activities of İşbank in the field of payment systems are
carried out with the aim of empathizing with the customer
with an average level of financial literacy and standing by all
customers with a perfect customer experience and designed
products and services that can be used easily in daily life
whenever they need it.
PRODUCTS and SERVICES:
Personal and Business Credit Cards, Personal and Business
Debit Cards, MaxiPara Cards, İmece Cards, Dealer Cards,
Instant Card Applications, Applications for Money Transfers
Between Cards, Virtual and HCE Cards, Interest and
Fee Applications, Deferred Payment with Interest and
Installment Transactions, Installment Limitations, Account
Statement, Repayment and Duration of Delay, Points
and Miles Applications, Co-branded Card Applications,
Contactless Payment
HIGHLIGHTS of 2021:
As part of its vision of developing sustainable and
responsible products and services, İşbank digitalized
cards to reduce the use of plastics, expanded the use of
contactless payment methods at stores for seamless
and quick payment, and used digital copies of credit card
contracts for paperless banking in 2021.
While business credit card allocation processes used to be
managed by the Payment Systems Operations Division, this
responsibility has been transferred to the Branches, and
card allocations have begun to be executed via the Kripton
program.
Payment Transactions have begun to be accepted via İşCep
and Maximum Mobile, via Kart Karekod from POS devices
with credit cards, debit cards and MaxiPara cards, and
via FAST Karekod from İşCep Commercial Customers can
now quickly apply for a POS device through İşCep, Internet
Banking and Maximum İşyerim applications. This way,
POS applications for İşim POS, Sanal POS and İmece POS
can also be submitted via digital touchpoints. Additionally,
the Bank has also begun to digitally store the contracts
without requiring a wet signature, which previously needed
to be signed by member businesses during the application
process.
İşbank has begun accepting payments via the UnionPay, QR
method on Ingenico POS devices, added TL to the payment
currencies available in Alipay, and added Euro to the
payment currencies available in the WeChatPay payment
method. Furthermore, İstanbul Cards can now be used as a
payment method on Ingenico POS devices.
With the Maximum İşyerim app, it is now possible to turn
an NFC-enabled Android mobile phone into a POS terminal
for accepting contactless payments to help protect public
health and facilitate payments with more economic tools.
This new POS solution also enables PIN code entry via the
on-screen keyboard of the phones or tablets used as a POS
terminal for payment transactions above the contactless
payment limit. Besides allowing small businesses and
SMEs to benefit from an affordable solution for payment
collection with credit or debit cards, this app is also expected
to positively impact on sales thanks to the secure, quick and
convenient payment experience that it offers to customers.
This app was made available for use by customers in 2021.
DIGITAL BANKING
HIGHLIGHTS of 2021:
In 2021, the diversity of transactions available in İşCep was
increased with enriched sales and application capabilities
in line with customers' expectations. The number of
transactions available in İşCep was increased from 393 to
491 as of November 2021.
In 2021, the Instant and Continuous Transfer of Funds (FAST,
Fonların Anlık ve Sürekli Transferi) system, the Easy Address
(Kolay Adres) designation/money transfer, and payment
and money transfer services with TR QR Code began to be
offered via the Bank's transaction channels.
Services that are expected to create value for customers
have been added to İşcep Market, which is part of the İşCep
platform, the mobile banking platform with the highest
diversity of transactions in the sector. New features have
been introduced, such as the ability to view account details
in İşCep without logging in, Geleceğe Orman (Forest for the
Future), the ability to receive a queue number in İşCep for
transactions at the Bank's branches, and secure vehicle
buying-selling transactions.
In 2021, the Bank began to work to ensure that the personal
finance management functions available in İşCep could
be operated in accordance with open banking standards.
Furthermore, the function set has been expanded with new
features such as spending notification for transactions above
an average amount, notification of increased invoice amount
and re-direction of insights into detail screens. The personal
assistant application Maxi supports on-demand resolution
of issues, and when unable to resolve an issue, re-directs
the customer to the Live Support service so they can get in
touch with customer representatives through written, verbal
and visual communication. Hybrid digital experience enables
instant resolution of issues, offering customers a seamless
banking experience.
As part of its international banking operations, İşbank
cooperates with correspondent banks in terms
of payments and foreign trade transactions of its
customers, while correspondent banking relations
are being managed in the most effective way on
the basis of reciprocity. İşbank aims to increase
its foreing trade market share and obtain funding
from international markets. In addition to foreign
trade transactions, miscellaneous services such as
issuance of letters of guarantee, wire transfer and
TL account services are being provided upon demand
of customers of İşbank’s correspondents, within
the framework of the current legislation. In order
to ensure that its customers can complete their
supply processes without interruption by facilitating
their access to appropriate financing solutions and
products according to their needs, İşbank maintains
its efficient and sustainable collaborations with
export insurance, credit agencies, and other financial
organizations.
HIGHLIGHTS of 2021:
As of 2021 year-end, İşbank maintains correspondent
banking relationship with approximately 1,050 banks
in 121 countries.
İşbank obtained two sustainability-linked syndication
loans in May and November 2021 and determined
several environmental and social performance
indicators in the related loan agreements.
On 25 February 2021, the Bank issued its second
green bond, with a maturity of 5-years and an
amount of USD 13 million.
The İşbank Sustainability Bond Framework, which
allows issuing Eurobonds as green bonds, social
bonds or sustainability bonds, was updated in 2021
expanding its scope to also cover loan transactions
and was renamed as "Sustainable Finance
Framework".
With its subsidiaries in capital markets, İşbank
continues its brokerage services in capital market
instruments such as equity markets, precious metals,
derivatives and investment funds and offers custody
and fund valuation services. As a customer-oriented
bank, it also continues its product development and
infrastructure projects to meet customer needs in the
best way possible.
HIGHLIGHTS of 2021:
İşbank maintained its leadership in the brokerage
sector with a trade volume of TL 1.2 trillion in the
Borsa İstanbul Debt Securities Market as of year-end
2021.
To obtain long-term funding and diversify funding
sources, issuance of debt securities was used as an
alternative funding source in 2021, too. Having issued
debt securities since 2011, İşbank also continued to
issue domestic TL-denominated debt securities in
2021, reaching TL 8.2 billion in issued debt securities.
Based on data available as of year-end 2021, İşbank
maintained its active position among private deposit
banks with a market share higher than 9% in domestic
TL-denominated debt securities.
İşbank customer holdings in gold deposit accounts
reached 70.8 tons at the end of 2021, representing a
market share of 16.5% in gold deposit accounts among
deposit banks.
Generating 8.5% of the trading volume on Borsa
İstanbul Equity Market with its subsidiary İş
Investment as of year-end 2020, İşbank is one of the
leading institutions in the market.
İşbank intermediated 8% of the mutual funds
distribution in the sector as of year-end 2021.
The number of investors who opened an international
markets account exceeded 60 thousand in 2021.
İşbank plays an active role in the area of custody
services with TL 134 billion worth of assets under
custody as part of individual and collective custody
services as of year-end 2021. With 50 real estate
investment funds and venture capital investment
funds covered among the mutual funds provided
with asset custody services, İşbank has assumed a
pioneering role in the sector with respect to custody
of alternative mutual funds. Currently, 280 investment
funds are receiving custody services from İşbank.
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TREASURY MANAGEMENT
İşbank’s Subsidiaries
Within the scope of Treasury operations, liquidity,
interest rate and exchange rate risks were managed
in parallel to the Bank’s risk appetite, according to
the principles of the Asset/Liability Management Risk
Policy and the principles of sustainable profitability.
Potential risks that may arise from the interest rate
structure and İşbank’s FC position, which is managed
as an important element of the liquidity composition,
were followed up ad-hoc and on a scenario basis,
alongside other interrelated positions. Effective risk
management was exercised by utilizing derivative
products, along with money and capital markets
products depending on market conditions.
İşbank's main goal is to optimize the risk-return
balance and reinforce its balance sheet structure
through a sustainable and profitable growth strategy
by focusing on loan and investment portfolios,
effective use of capital, dynamic management of
FC and liquidity positions as well as cost control.
Accordingly, the Bank created a flexible balance sheet
composition by taking into consideration all elements,
including expansion of the deposit base, i.e. the main
source of funding, and diversification of non-deposit
sources, optimization of risk-return balance, and
fulfillment of customer needs.
In line with its mission to support the industrial
and economic development of Turkey, İşbank as an
integrated group, has acquired many subsidiaries
since its incorporation.
İşbank's Subsidiary Policy involves:
• Enriching the strategic perspective on the activities of
existing subsidiaries on a corporate level by taking risk/
return balance and market conditions into consideration,
• Pursuing growth on a wide range of companies,, from those
newly incorporated to the mature ones, through organic and
inorganic methods, and
• Ensuring that Group companies are among the pioneering
and leading companies in their respective sectors and raising
their market value.
As of year-end 2021, the Bank directly and indirectly holds
shares in 132 companies, 109 of which are controlled by the
Bank. As of the same period, 29 companies in which İsbank has
direct shares amounted to TL 41.2 billion in the Bank's assets.
73.3% of this amount comes from publicly traded subsidiaries
traded in Borsa Istanbul; named Türkiye Sınai Kalkınma Bankası
A.Ş., Anadolu Hayat Emeklilik A.Ş., İş Finansal Kiralama A.Ş., İş
Gayrimenkul Yatırım Ortaklığı A.Ş., İş Yatırım Menkul Değerler
A.Ş. and Türkiye Şişe ve Cam Fabrikaları A.Ş.
Additionally, Anadolu Anonim Türk Sigorta Şirketi, İş Girişim
Sermayesi Yatırım Ortaklığı A.Ş., TSKB Gayrimenkul Yatırım
Ortaklığı A.Ş. and İş Yatırım Ortaklığı A.Ş. are also publicly-
held Group companies controlled by İşbank through indirect
shareholding.
As of year-end 2021, the subsidiaries portfolio accounts for
4.4% of İşbank's assets.
İşbank's subsidiaries operate in USA, Germany, United Arab
Emirates, Bosnia and Herzegovina, Bulgaria, China, Georgia,
India, Netherlands, England, Spain, Italy, Hungary, Egypt,
Romania, Russia, Slovakia, Ukraine, Singapore and TRNC.
132
The number of companies in which the
Bank directly or indirectly holds shares
İşbank Group carries out its cross-border banking
operations through its overseas branches, subsidiary
banks and representative offices in abroad. İşbank
has presence in 11 different foreign countries. 10 of
the total of 34 branches belong to Frankfurt-based
(Germany) İşbank AG, whereas Moscow-based (Russia)
JSC İşbank has 1 branch and Tbilisi-based (Georgia) JSC
İşbank Georgia has 2 branches. In addition, there are
2 representative offices in Kazan and St. Petersburg,
which are affiliated with JSC İşbank. In addition to the
aforementioned, İşbank has 2 branches in Iraq, 2 in
Kosovo, 2 in the UK, 1 in Bahrain and 14 in the Turkish
Republic of Northern Cyprus (TRNC). The Bank has 2
representative offices, one in Shanghai (China) and the
other one in Cairo (Egypt).
PRODUCTS and SERVICES:
İşbank offers basic banking services to its customers
in abroad such as loans, deposit accounts, domestic
and international money transfers and foreign trade
transactions. In additon, tailor-made products have
also been designed in different countries. In recent
years, digital channels have gained importance in our
services abroad. Therefore, the delivery of products
and services is dynamically revised.
HIGHLIGHTS of 2021:
Technical studies to develop a modern mobile banking
product for İşbank's customers in the UK, Kosovo and
Iraq have been completed. The mobile app is planned
to be launched in early 2022.
With the mobile app "ParaGönder" developed by
Maxi Digital GMBH, a subsidiary of Softtech (an
İşbank Group company), it is possible to send money
transactions in Euro from banks in Germany and
Austria to İşbank Kosovo branches and to any bank
in Kosovo with the assurance of İşbank AG subsidiary
bank based in Germany.
As of the end of 2021, the total assets of İşbank's
overseas organizationamounted to USD 7.5 billion.
The share of overseas subsidiaries in this total is 33%,
while that of overseas branches is 67%.
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İşbank has financial subsidiaries that are active in
banking, insurance, private pension, capital market
brokerage, portfolio management, venture capital,
factoring, reinsurance, financial leasing, asset
management, securities investment trust, investment
banking, payment services and real estate investment
trust.
TSKB
Turkey’s first privately-owned development and
investment bank
TSKB, as a leader among the privately-owned
development and investment banks, has undertaken a
significant role in Turkey’s economic development since its
incorporation in 1950.
The Bank continues to add sustainable value for
stakeholders and the national economy with the value
it generates in economic, environmental and social
areas. Offering its customers a wide range of innovative
services with its in-depth knowledge in corporate banking,
investment banking and advisory services, TSKB has
adopted it as its mission to continously contribute and
support to the inclusive and sustainable development of
the country.
Within the framework of the loan agreements executed
with development finance institutions, TSKB provides
loans in the areas of environment, energy and resource
efficiency, as well as social loans supporting women
employment, employment in underdeveloped areas,
occupational safety and health and allocates funds to
investments in diverse sectors in the form of SME loans.
Environmental, social, and governance (ESG) matters
continue to take an increasingly greater share within the
Bank’s activities. In October 2020, TSKB established the
"TSKB Green Swan Platform" aimed at taking joint action
to tackle the climate emergency that the Bank regards
as the biggest obstacle to sustainable and inclusive
development. Accordingly, the Bank continues to work
towards raising awareness of climate-related risks and
enriching its collaborations in this respect.
Financial services subsidiaries enrich the range of
products and services offered by İşbank to individual and
corporate customers in different business lines while
also creating complementary and cross-product delivery
and sales opportunities.
The Bank obtained funds worth USD 192 million by
signing a second syndication loan agreement indexed to
sustainability criteria on 8 July 2021.
Undertaking a key role in the development and sustainable
growth of the Turkish economy, TSKB was given a low-risk
rating with a score of 13.6 in the Environmental, Social
and Governance (ESG) risk rating assessment conducted
in September 2021 by Sustainalytics, an independent
specialized organization. This low-risk classification
affirms that TSKB continues to be one of the best in its
category among other Turkish and global banks. TSKB is
also one of the leading organizations when it comes to
corporate governance. The Bank's corporate governance
rating score improved even further from 9.56 to 9.59 out
of 10 in October 2021. In December, the Bank also entered
into the "Geothermal Development Project - Additional
Finance" loan agreement, worth USD 150 million which
would be provided by the World Bank under the guarantee
of the Central Bank of the Republic of Turkey to be lent
to private sector companies for financing geothermal
investments.
On a consolidated basis, TSKB had TL 7 billion in
shareholder equity and TL 86.1 billion in total assets as
of year-end 2021. In its review dated 10 December 2021,
Fitch Ratings affirmed TSKB’s long-term local currency
IDR rating as "BB-", and foreign currency IDR as "B+", and
the outlook for the Bank’s long-term local currency rating
was confirmed as negative. Finally, TSKB was assigned
a national long-term rating of AA (tur), Viability Rating of
(b+) and a "stable" outlook.
www.tskb.com.tr
İşbank Germany
İşbank Russia
A leading financial institution backed by Turkish capital
Serving customers at 3 locations in Russia
in Europe
Founded in 1992, İşbank Germany grew and thrived within
the financial system in Europe over the course of 28 years,
since then it helped customers in Turkey to access the
European financial system.
Having successfully adapted to the changing dynamics
throughout its operations for more than a quarter of a
century, İşbank Germany operates in Germany with 9
branches and in the Netherlands with one branch. As of
December 2021, the Bank had 156 employees and EUR
1.9 billion in total assets and EUR 229 million in total
shareholder equity. İşbank Germany provides finance
solutions for foreign trade transactions between Turkey
and EU member states with a focus on corporate banking.
www.isbank.de
İşbank Georgia
İşbank’s organization in Georgia
The presence of İşbank in Georgia, Turkey’s border neighbor
which is the gateway to the Caucasus, started with the
branch opened in Batumi in 2012. The Tbilisi branch became
operational in 2014, and from 2015 onwards, the existing
branches were transformed into a subsidiary bank under JSC
İşbank Georgia.
Mainly offereing corporate banking services and having
63 employees, İşbank Georgia had total assets worth
USD 125 million (GEL 387 million) and its shareholder
equity amounted to USD 34 million (GEL 105 million) as of
December 2021.
www.isbank.ge
İşbank has been cultivating its presence and operations
in Russia, one of Turkey’s important trade partners, since
2011.
With 94 employees on its payroll, İşbank Russia has 1
branch in Moscow, one representative office in Saint-
Petersburg and one in Kazan. Concentrated mostly on
corporate banking services, İşbank Russia’s total assets
were worth USD 216 million (RUB 16,141 million) and
its shareholder equity was registered as USD 60 million
(RUB 4,496 million) as of year-end 2021.
www.isbank.com.ru
Anadolu Hayat Emeklilik
The first publicly-traded private pension
and life insurance company
Turkey’s first life insurer, Anadolu Hayat Emeklilik A.Ş., is
also the first publicly-traded company operating in the
private pension and life insurance sector.
As of year-end 2021, the Company had total assets of TL
51.5 billion and a shareholder equity of TL 1.9 billion on a
consolidated basis. As of the same date, total customer
funds managed by the Company in private pension and
life insurance was about TL 48.4 billion.
In 2021, in order to provide future assurance to those
under the age of 18, the “Pension Plan for Children”
product has started to be sold and achieved the highest
sales numbers in this new field of activity.
As the pandemic highlighted the importance of
sustainability, Anadolu Hayat Emeklilik published its
first Sustainability Report that described the Company's
activities on the sustainability front.
www.anadoluhayat.com.tr
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FINANCE
Anadolu Sigorta
İş Leasing
Leading establishment of the Turkish insurance sector
Turkey’s pioneering financial leasing company
Anadolu Anonim Türk Sigorta Şirketi - one of the leading
non-life insurance companies in Turkey - generated TL
10.7 billion worth of premiums as of year-end 2021.
The company had total assets of TL 16.1 billion and
shareholder equity of TL 2.5 billion on a consolidated basis
as of year-end 2021.
The Company was assigned a score of 9.55 in the
Corporate Governance Rating Report issued in November
2021.
Anadolu Sigorta has been included in the BIST
Sustainability Index since 1 October 2021 and is aiming to
publish the Integrated Sustainability Report and issue a
CDP Declaration in 2022.
Supporting sustainability through its products, Anadolu
Sigorta introduced, the "Electrical Vehicle Insurance"
product, providing coverage against all risks that vehicle
insurance typically covers, in 2021 in line with the
increasing number of electric and hybrid vehicles in Turkey.
In 2021, Anadolu Sigorta received many awards that
demonstrate its brand value, innovative and pioneering
approach to business, capabilities in digital transformation
and the top-level customer experience. The company
received the first place award in the "Future of Artificial
Intelligence" category at the "IDC Turkey Digital
Transformation Awards 2021" with its project titled
"Calculation of Outstanding Claims Through Machine
Learning" and also received the Golden Sardis Award in
the "Best Mobile App" category at the Sardis Awards with
its digital insurance service "Juno".
www.anadolusigorta.com.tr
As one of the pioneers of the leasing sector in Turkey
since its foundation in 1988, İş Finansal Kiralama A.Ş. (İş
Leasing) operates with the mission of prioritizing SMEs
in its funding activities, developing and maintaining a
large and high-quality portfolio, and meeting customer
demands with effective, quick and high quality solutions.
İş Leasing had TL 20.3 billion in total assets and TL 2.1
billion in shareholder equity on a consolidated basis, while
its leasing receivables amounted to TL 11.3 billion as of
December 2021.
With the statement issued on 26 February 2021, the
international credit rating agency Fitch Ratings assigned İş
Leasing a long-term foreign currency rating of B+, a long-
term local currency rating of B+, and a long-term national
credit rating of A+(tur). The above-mentioned ratings were
confirmed on 10 December 2021.
İş Leasing aims to be a part of the solution in the combat
against all environmental and social problems facing the
world today, including climate change. Accordingly, the
company introduced the Environmental and Social Risk
Governance System (ESRG) Project. Displaying İş Leasing's
approach to sustainability, this project also defines the
governance mechanisms and all necessary processes
put in place to manage the company's environmental
and social impact. İş Leasing is committed to continue its
sustainability-driven activities at full pace as a pioneering
company in the sector.
İş Leasing's corporate governance rating score has
increased from 9.21 out of 10 in December 2020 to 9.29 in
December 2021.
www.isleasing.com.tr
Moka
All shares of Moka Ödeme Kuruluşu Anonim Şirketi, a
payment services company, were purchased in January
2021, and the company's name was later changed
to Moka Ödeme ve Elektronik Para Kuruluşu A.Ş. in
November 2021.
www.moka.com
Millî Reasürans
İş GYO
Uninterrupted reinsurance services since 1929
One of Turkey’s largest real estate investment trusts
Established in 1929 and having undertaken an important
role in the formation and development of the Turkish
insurance sector, Millî Reasürans T.A.Ş. (Millî Reasürans)
has total assets worth TL 21.8 billion and shareholder
equity worth TL 4 billion on a consolidated basis as of
year-end 2021.
Millî Reasürans has a branch operating in Singapore in line
with the Company’s strategy to export its know-how and
reinsurance experience acquired in the national market to
global markets. As of year-end 2021, premiums generated
internationally accounted for 26% of the Company’s total
premiums.
The financial strength rating of Millî Reasürans was
revised as "B" in July 2021 by A.M. Best, the world’s most
prestigious rating institution in the insurance sector. The
Company’s national credit rating assigned by Standard &
Poor’s was affirmed as "tr A+" in December 2021.
www.millire.com
İş Faktoring
An innovative approach to the accounts
receivable factoring sector
Being one of the pioneering companies in the sector
since its incorporation in 1993 with its robust financial
structure and customer-oriented approach to business, İş
Faktoring A.Ş. (İş Faktoring) has been offering quick and
competitive services in the areas of finance, guarantees
and collections.
As of year-end 2021, İş Faktoring has TL 6.9 billion in total
assets and TL 634 million in shareholder equity.
www.isfaktoring.com.tr
Being one of the sector’s leading actors with its solid
portfolio and financial structure, İş Gayrimenkul Yatırım
Ortaklığı A.Ş. (İş GYO) focuses on maintaining and
developing a diversified and well-balanced portfolio.
As of year-end 2021, the Company’s total assets
amounted to TL 6.7 billion, and its shareholder equity
totaled TL 5.5 billion.
Based on the review conducted by Saha Kurumsal
Yönetim ve Kredi Derecelendirme Hizmetleri A.Ş. in
August 2021, the Company’s Long-Term National (TR)
and Short-Term National (TR) ratings were affirmed as
AA and A1+, respectively, with a stable outlook assigned
to both, and thus the Company was assessed within the
investment category.
İş GYO decided to develop a residential and office project
in Üsküdar Altunizade and began the construction work
in November 2021. Meanwhile, sales of the Topkapı
İnİstanbul project was completed in 2021. All of the 16
villas offered for sale in the Ömerli Kasaba project in early
2021 were sold.
www.isgyo.com.tr
İş Yatırım
A leading and pioneering investment
house in capital markets
İş Yatırım Menkul Değerler A.Ş. (İş Yatırım) offers
brokerage services in domestic and international capital
markets, investment advisory, and corporate finance
services. Being one of the 6 publicly-traded brokerage
houses in the sector, the Company is the only brokerage
house in Turkey traded on BIST 100.
Having long-term and short-term national credit ratings
of "AAA" and "A1+", respectively, as affirmed by SAHA
Kurumsal Yönetim ve Kredi Derecelendirme A.Ş. on 24
September 2021 with a stable outlook, İş Yatırım had TL
14.2 billion in total assets and TL 2.8 billion in shareholder
equity on a consolidated basis as of December 2021.
İş Yatırım stands out in the sector with its outstanding
return on equity and the remarkable increase in its
market value.
www.isyatirim.com.tr
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FINANCE
İş Portföy
The customer portfolio of İş Portföy Yönetimi A.Ş. (İş Asset
Management) mainly consists of corporate customers such
as investment funds, pension funds, venture capital funds,
real estate funds, insurance companies and foundations.
Pension funds managed by İş Asset Management include
Anadolu Hayat and Axa Hayat funds.
The size of the managed portfolio amounted to TL 94 billion
as of year-end 2021, with the real estate investment fund
and venture capital investment fund reaching TL 2.8 billion
and TL 1.3 billion in size, respectively.
Being one of the first portfolio management companies
to set up a venture capital fund in the sector, it offers its
participants a successful return performance.
There is an exponential increase in global interest
in thematic funds with a portfolio that consists of
investment instruments based on specific themes such
as environmental, social and corporate governance,
sustainability, clean energy and digitalization. Defining
2021 as the "Year of Transformation", İş Asset
Management has gone beyond classical approaches
when developing its investment strategies, focusing on
"Thematic Investment Funds" that display rapid growth and
have an investment strategy based on the transformations
in business models, industries, economies or social norms.
İş Asset Management divided its Thematic Funds into two
main groups: "Technology" and "Environmental, Social and
Corporate Governance". The Company offers the ability to
invest in rapidly growing global sectors such as Block Chain
Technologies, Cyber Security Technologies, Digital Gaming,
and Semi-Conductor Technologies. When it comes to the
environmental, social and corporate governance theme,
the İş Asset Management Tema Variable Fund, the İş Asset
Management Electric Vehicles Mixed Fund, and the İş Asset
Managment Women’s Equity Fund, which promotes gender
equality in business life and offers the opportunity to invest
in companies that give importance to the employment of
women, are the first of their kinds. İş Asset Management
is one of the pioneering companies in the portfolio
management sector in the thematic and renewable energy
area with the İş Asset Management Electric Vehicles Mixed
Fund, İş Asset Management Renewable Energy Mixed
Fund, İş Asset Management Renewable Energy Venture
Capital Investment Fund and İş Asset Management
Infrastructure Venture Capital Investment Fund, all set up
and managed by the Company.
www.isportfoy.com.tr
SOFTWARE
Softtech
Experienced solution partner
in information technologies
Established in İstanbul in 2006, Softtech is the largest
software company in Turkey, with more than 1,600
employees and total assets close to TL 310 million.
Besides its experience in the banking and finance sector,
Softtech develops customer-oriented solutions in the
domestic and international markets with products in
diverse fields and takes initiatives aimed at creating
new opportunities and collaborations with a focus on
technology. Aside from its offices in Ankara and Cyprus
the Company has subsidiaries at the heart of the startup
ecosystem, in İstanbul, San Francisco, Shanghai and
Frankfurt to monitor, develop and invest in innovation
on-site.
www.softtech.com.tr
HEALTH
Bayek
Bayındır Healthcare Group (Bayek), a group of companies
operating in the healthcare sector with 3 hospitals,
1 medical center and 6 dental clinics, offers quality
healthcare services in İstanbul, Ankara and İzmir with its
expert staff and robust technological infrastructure.
Bayek is the first organization in Turkey to be issued
accreditation certificates regarding quality management
for its two hospitals simultaneously by the Joint
Commission International (JCI), and was re-accredited by
JCI for the sixth time in November 2021.
www.bayindirhastanesi.com.tr
GLASS
Şişecam
The founder and the unchanging leader
of the Turkish glass industry
Founded in 1935, Türkiye Şişe ve Cam Fabrikaları A.Ş.
(Şişecam) has a broad portfolio of products, especially flat
glass, glassware, glass packaging and chemicals, mainly
soda ash and chromium chemicals.
The Şişecam Group carries out production in facilities
and plants located in Turkey as well as in the USA, Egypt,
Russia, Georgia, Bulgaria, Bosnia-Herzegovina, Italy,
Ukraine, Romania, Germany, Hungary, Slovakia and India.
Having produced 45% of the total glass output outside
Turkey (as measured on a tonnage basis) and generated
66% of total sales revenues from facilities based abroad
and exports from Turkey as of year-end 2021, the Şişecam
Group’s exports to more than 150 countries amounted to
USD 814 million as of year-end 2021.
Positioned as one of the world’s and Europe’s leading
companies in the industry, the Şişecam Group was
ranked between second and fifth in the world and first to
fifth in Europe, in terms of production capacity in glass
manufacturing as of December 2021.
Ranking fourth in Europe and second in the world in terms
of soda production capacity, the Group is the world leader
in the production of basic chromium sulphate and ranks
second in the production of sodium bichromate.
As of year-end 2021, Şişecam had TL 88.7 billion in total
consolidated assets and TL 49.4 billion in shareholder
equity.
In its review dated 3 December 2021, Fitch assigned
Şişecam a long-term foreign currency credit rating of
"BB-" and revised its outlook from "stable" to "negative”.
Moody’s, on the other hand, maintained the Company's
long-term foreign currency rating of "B2" and its
"negative" outlook on 24 November 2021. The Company’s
Corporate Governance Rating Score was 9.55 in December
2021.
Türkiye Şişe ve Cam Fabrikaları A.Ş. ranked 18th in the ISO
Turkey's Top 500 Industrial Enterprises list for 2020.
In addition to the natural soda investment in the U.S.
in partnership with Ciner Group as announced in 2019,
Şişecam Group also decided to acquire 60% of Ciner
Group's soda operations in the U.S. in 2021. Accordingly,
the approval processes for the acquisition of 60% of
the shares of Ciner Resources Corporation - a Ciner
Group company - 60% of the shares of Atlantic Soda LLC
and 10% of the shares of Pacific Soda LLC by Sisecam
Chemicals USA Inc. were completed, and transfer of the
shares took place on 21.12.2021. Upon completion of the
natural soda plant investments, Şişecam is expected to
become one of the world's largest soda ash producers.
Şişecam has decided to invest in two new flat glass
product lines in Turkey to address the demand for
architectural glass and automotive glass products, and
the Company will also establish a new glass packaging
factory in Hungary to capitalize on opportunities in the
European glass packaging market.
Şişecam Group has combined its superior R&D capacity
with its production strength to develop a special coating
technology that neutralizes viruses and bacteria on
glass surfaces. Paşabahçe's V-Block product range,
manufactured using the Antimicrobial V-Block Technology
that prevents harmful organisms from remaining on glass
surfaces, were introduced into the Turkish market in early
February before it was subsequently released for sales in
international markets.
Şişecam has decided to invest in Basalia Technology,
a groundbreaking solution in the green and circular
economy space developed to turn any kind of waste
into value-added products and to support research &
development projects in this area.
www.sisecam.com.tr
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FACILITY MANAGEMENT
İşmer
With the "ISO Integrated Management System Project",
for which the procedural work began in 2021 and the
certification work will be completed in early 2022, İş
Merkezleri Yönetim ve İşletim A.Ş. aims to monitor the
ISO 45001 Occupational Health and Safety Standard, ISO
41001 Facility Management Standard, ISO 9001 Quality
Management Standard and ISO 14001 Environmental
Management Standard under single framework.
As a result of this project; by analyzing the customer
demands in accordance with the predefined processes
in the facilities managed and operated, the production
and the periodically revision of the right services based
on customer needs will be provided and the processes
having potential for improvement will be evaluated.
www.ismer.com.tr
PLATFORM
Topkapı
With its marketplace model bringing together firms of any
size operating in Turkey, Topkapı Danışmanlık Elektronik
Hizmetler Pazarlama ve Ticaret A.Ş. aims to contribute to
the development of the online shopping sector in Turkey,
offer an improved customer experience supported with
next-generation, secure payment solutions by processing
customer data, and develop business models that can
create maximum stakeholder value.
In addition to its payment system solutions, the company
also owns the Pazarama platform, which is designed
to introduce a unique and innovative approach to the
e-commerce sector for all stakeholders.
www.topkapidanismanlik.com.tr
TELECOMUNICATION
İşNet
As a result of its strategy for growth in Cloud, Cyber
Security and Managed Services, İşNet began to offer
Private Cloud, Managed Cloud and Managed Cyber
Security services to the leading enterprises in the finance
sector in 2021. İşNet closely monitors global technologies
and local regulations and is currently continuing its
business and product development activities that will
drive growth by addressing the industry needs.
NETTECAP, a member of İşNet's e-Document family
of products, allows users to scan e-Document / 5000-
30000 Invoices and End-of-Day Reports, transfer such
documents into computer systems by uploading their
photographs or XML files and read the information
contained in such documents with the OCR (Optical
Character Recognition) technology in order to convert
them into meaningful accounting data. As a result of
this process cash register receipts and paper invoices
are digitized, accounting processes were accelerated
by approximately 40%, and environmental benefit was
achieved by reducing paper copies.
www.isnet.net.tr
Flawless Customer Experience
İşbank endeavors to become a reliable partner that
all customers can access when required and find easy
to work with. In line with its strategy of being "the
closest bank to customers", the Bank reviews all its
systems and processes by looking at them from a
customer-experience point of view.
Customer Experience
İşbank continuously improves its business processes and
customer journey experience for more than 20 million
customers. The Bank's goal is to create a world in which
customer journeys are simplified, all transactions are rendered
user-friendly, and personalized experiences are offered, and to
provide guidance to the customers in this world.
In 2021, customer experience across all branches and digital
channels was measured. Feedback from these measurements
was utilized by İşbank to offer its customers even better
services. Next-generation analytical capabilities were acquired
to improve the service experience on digital channels that have
become customers’ primary touch point and to offer real-time
contextual suggestions and guidance to customers on all
digital channels, especially İşCep - İşbank’s mobile app.
For this purpose, analyses based on behavioral data on
customers were conducted, and more than 45 million
interactions were created in 2021. While correct suggestions
and guidance were offered to customers in times of need
through these interactions, solutions were created for
smooth completion of transactions in challenging situations.
Customers submitted 1 million product applications, and 502
thousand accounts were successfully opened. Customers
were provided with guidance to ensure that more than 3
million transactions could be seamlessly performed via digital
channels.
The number of error messages encountered by customers
while carrying out transactions via digital channels is
periodically monitored. Improvement actions are planned
to eliminate common errors and simplify the content of
error messages. Additionally, action is taken to clarify what
customers need to avoid a given error, depending on the type
of transaction in question.
In the field of Private Banking, the number of customers that
the Bank contacted increased compared to previous years, due
to meetings held on digital platforms under ongoing pandemic
conditions in 2021.
İşbank Private Banking offered its customers various arts and
sports events throughout 2021, depending on their taste and
preferences.
In the current year, it was even more important to correctly
identify and address customer expectations and needs, retain
managed wealth of customers during a period of volatile
market conditions, and increase assets by introducing the right
investment instruments. In the present conjuncture, effective
management of their portfolio with different investment
alternatives and a tailored service model positively impacted
the customer experience.
Customer Feedback
İşbank collects customer feedback from multiple channels.
Applications transmitted to the Bank by customers via
channels such as the corporate website (www.isbank.com.tr),
Internet Branch, İşCep, call center, branches, e-mail, fax, letter,
official institutions and organizations, and social media are
recorded and evaluated as part of the Customer Relationship
Program, and efforts are made to meet the related customer
demands or find solutions as quickly as possible.
Customers' demands and complaints on social media and
other online platforms are also closely monitored.
In 2021, İşbank received 656 thousand feedback
responses from various channels, and 88.7% of this
feedback, i.e. feedback remaining after excluding
duplicate and non-response applications, was
addressed through the Customer Relationship Program.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Furthermore, as per legislation, the number of applications
as submitted by financial consumers in the form of written/
verbal objections or complaints that involve issues, damages
or dissatisfaction with the individual products and services as
well as the breakdown of such applications on a per subject
basis and the associated resolution times are reported to
the BRSA every 3 months; this data is also submitted to the
Banks Association of Turkey (BAT) at the same time. The
data submitted by banks is then consolidated by the BAT and
communicated to the member banks every 3 months. The
cumulative number of complaints received by İşbank during the
first three quarters of 2021 is 208,574, and the Bank ranks 3rd
among member banks of the BAT.
In 2021, İşbank Call Center received 20 million calls and has
held the EN ISO 15838 "Call Communication Centers Standard"
Certificate since 2011.
Customer Satisfaction
Working with the aim of unconditional customer satisfaction,
İşbank monitors customer satisfaction levels throughout the
year via numerous channels and different methods.
İşbank's customer satisfaction and Net Promoter Score (NPS)
are compared with peer banks through independent research
companies.
In 2021, İşbank ranked first in terms of Retail and
Commercial NPS among the private banks that were
taken as a reference.
The Bank's Net Promoter Score (NPS) in Personal Banking
was 37, 33, 59 and 72 and the Bank's NPS in Commercial
Banking was 56, 43, 46 and 79 in 2018, 2019, 2020 and 2021
respectively.
In order to increase customer satisfaction, tailor-made
researches are carried out by using the internet branch exit
survey, telephone survey and kiosk survey in addition to
receiving services from a research company, and actions
are taken to improve the customer experience based on the
answers received from the surveys. Satisfaction measurement
surveys are conducted not only via digital channels and
e-mail/SMS, but also physically via kiosks and photoblocks
in branches. Measurement surveys are designed to collect
feedback by displaying questionnaires to customers at the
end of their transactions, including customer journeys, single
transactions and workflows which result in an error.
Over 3 million customer feedback responses have been
obtained so far in digital measurement studies. In 2021,
İşCep Net Promoter Score was 62.1, the Retail Internet
Branch Satisfaction Score was 84%, the Commercial Internet
Branch Satisfaction Score was 82%, and the Bankamatik ATM
Satisfaction Score was 86.6%. As a result of the measurement
studies carried out via branch kiosks over the past 4 years, it
has been determined that branch satisfaction has increased.
The satisfaction score based on this feedback was measured
as 73% in 2018, 74% in 2019, 78% in 2020 and 82% in 2021.
SME and Enterprise Banking conducted multiple surveys
in 2021 in order to analyze customer needs and offer
them better services to improve the customer experience
and journey. The Bank conducts a series of systematically
organized surveys and researches covering all life stages of
customers, including the Analysis of the Needs of Tradesmen
and SMEs and Jargon Research conducted with the KONDA
research company, Lapsed/Lost Customer Survey and
Potential Customer Researches conducted with the Nielsen
Research Company as well as the New Customer Surveys and
Loyal Customer Surveys conducted in-house without using
external service providers. A "Welcome" survey is conducted
with the newly acquired real person tradespeople/businesses
and SME customers to monitor their level of satisfaction with
the Bank's services.
82%
Branch Satisfaction Score
84%
Personal Internet Branch
Satisfaction Score
82%
Commercial Internet Branch
Satisfaction Score
Customers' expectations regarding private banking services
are monitored through frequent analysis of competitors.
Additionally, at private banking service outlets where
customer expectations of high-quality services are met at
the highest level, product feedback is collected from target
customer groups about our products and services via the Bank
personnel who know the customers personally. These types of
feedback are utilized during the development and delivery of
new products/services.
Applications sent to the Customer Demands Solution Division
via the CRP (Customer Relations Platform) and can be resolved
by the Division using the screens and applications available
to them, are replied to without requiring any additional
information or evaluation, while applications related to areas
of activity of other Divisions are re-directed to the Head
Office Divisions. Frequent applications are answered by the
Customer Demands Solution Division using the workflows and
pre-defined texts created by related divisions.
Every 3 months, the Bank draws up a report about the
breakdown and trend of the customer demands and
complaints received by the Bank and submits the report to
the Board of Directors. During the preparation of this report,
information is requested from various Head Office Divisions
about the actions that they took to reduce complaints and
improve customer experience during the 3-month period in
question.
Between June and December 2021, 8,737 surveys
were conducted via e-mail through Pisano, while 753
questionnaires were completed by customers via phone.
Based on survey results, the issues encountered by customers
while using channels are remotely detected, customers are
provided with proactive support, and action is taken to quickly
resolve issues in order to increase customer satisfaction.
Conversations are monitored for quality evaluation purposes
and feedback is given to customer representatives about the
areas for improvement, if any.
Customer satisfaction surveys conducted during the Bank's
incoming and outgoing calls yielded a score of 4.79 and 4.74
out of 5 for 2020 and 2021, respectively.
Informing Customers
As per its responsible banking policies, İşbank offers its
customers accurate and up-to-date information via different
channels and platforms.
Customer information channels
» New products and services to be made available to
customers via digital channels are shared with the İşbank
Phone Banking teams to be announced to customer
representatives to prepare them for potential customer
inquiries before such products and services are delivered.
» New products and features to be added to İşCep are explained
in the description field for the related version in the app store.
» Guidance messages are displayed to customers in digital
channels.
» Videos are posted about the Bank's products, campaigns and
services in the Stories section of İşCep.
» The Bank's corporate website provides detailed information
about the digital channels, transaction sets and security
practices.
» Communication campaigns such as mailing, advertisement
and announcement are carried out to inform customers
about digital channels.
» Regarding the potential errors or problems encountered
in digital channels, the customer relations service and the
call center are immediately notified to ensure that proper
guidance is provided and that the errors and problems are
re-directed to the related divisions.
» Private banking customers are given information by the bank
employees in person about products, services and investment
alternatives. The customers can also get detailed information
about products and services by visiting privia.com.tr.
» SME and Enterprise Banking customers are provided
with up-to-date information about products and services
through various channels including İşCep, the corporate
website, corporate social media accounts, Maximum İşyerim
application, İŞ'TE KOBİ website, ATMs, e-mail and SMS
» QR Codes are included in printed brochures, posters, gazette
and magazine adverts to ensure that customers can access
detailed information about the product in question by visiting
the corporate website.
» In addition to the application instructions used for providing
information to customers at branches, İşbank also publishes
all the details needed about its products via its corporate
website isbank.com.tr.
In 2021, the Bank did not incur any penalty due
to noncompliance with regulations on customer
information requirements.
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As part of its responsible banking practices, İşbank
develops products and services that encompass all
segments of society, support savings awareness and
promote financial literacy.
Developing products that not only take into account the
different life stages, economic needs and sectoral requirements
of customers, but that are also easy to understand and support
savings awareness is the basis of İşbank's understanding
of delivering responsible products and services. To this end,
İşbank's regulations set out the steps to be taken in order to
identify, monitor, control, report and manage the risks that
could arise in connection with the Bank's products, services
or activities. Any product, service or activity is evaluated to
determine if it affects the Bank's risk profile and submitted to
the Internal Systems Divisions for a risk-control-compliance
analysis. If there are changes that could affect a product, service
or activity's risk profile, related divisions may, when necessary,
request the risk-control-compliance analysis to be re-conducted
before the product, service or activity is made available for use.
During the master plan studies for 2022, in order to ensure
any product, service or activity to be developed is evaluated
from a sustainability point of view, an article has been added
to the development request document that allows the Bank
to question a product's environmental and social benefits
or whether the product is in line with or supports the Bank's
sustainability activities.
Products and Services for
Increasing Awareness on Savings
As per its incorporation mission, İşbank aims to spread an
awareness of savings to every segment of society. İşbank
maintained its position as the bank with the largest deposit
base among private banks in 2021 as well. Total deposits grew
by 61.5% in 2021, reaching a total size of TL 595.6 billion at
the end of the year.
Total deposits grew by
61.5%
in 2021, reaching
TL 595.6
billion at the end of the year.
Üstü Kalsın (Keep the Change)
The Üstü Kalsın (Keep the Change) application transfers
the difference created by the customers rounding their
credit card debt to a higher amount of their choice to
be deposited into an investment savings account. As
of year-end 2021, the number of investors using the
application reached 121 thousand, with a total fund size
of TL 79 million.
Digital Moneybox
The Classic İşbank moneybox was developed as a
Digital Moneybox that allows those under the age of
18 to save money through digital channels and was
introduced to new generations. Money transfers can
be easily made to the Digital Moneybox via İşCep,
and these amounts are saved in the Moneybox Time
Deposit Account. The number of Digital Moneybox users
approached 17 thousand as of the end of December
2021, and the total balance of the Moneybox Time
Deposit Accounts has exceeded TL 18 million.
Moneybox Hybrid Fund
The Moneybox Hybrid Fund is a fund with a “saving”
purpose that enables making investment in the future
of children today. Being the first investment fund
developed for children, the Moneybox Hybrid Fund
ranks first among similar funds in the sector in terms
of number of investors. The number of investors of the
Moneybox Hybrid Fund reached 155 thousand as of the
end of 2021.
Gold Banking
The Gold Account, which is a demand deposit account
that allows the accumulation of gold in centigrams,
makes it easier to buy and sell gold from digital contact
points 24 hours a day, 7 days a week. İşbank customers
can also earn interest income in grams of gold by opening
a Time Deposit Gold Account for their savings in gold.
Gold Meetings are held at the branches aimed at
transferring the so-called “under the mattress savings”
to the banking sector. Gold or jewelry items brought by
customers are assessed by gold experts and deposited
into the Demand Gold Account in grams of gold. Thus,
customers secure their valuable jewelry against the risk
of loss and theft.
Investment Insurance for My Child
Investment Insurance for My Child is a product that
you can use to cover the education expenses of your
children or to support them better while starting life.
The product allows you to save in TL, USD or Euro, while
offering benefits such as discounts in contracted health
institutions and tax advantages. The total balance of
the Investment Insurance for My Child savings accounts
was TL 24 million as of the end of 2021.
Robofon
With İşbank Robofon Consultancy service,
everyone who wants to save money is provided
with fund consultancy, making it easier to make
investment decisions in line with their risk
preferences. The Investor Profiling Module of the
Robofon Consultant, made available by İşbank
at İşCep and the Internet Branch, analyzes the
investor's financial situation and needs and
determines their risk perception. Thanks to this
service, offered to everyone who wants to save
even with small amounts, it is easier for investors
to make savings and investment decisions by
finding the most suitable fund from the Robofon
Family managed with İş Asset Management's
expertise. Fund consultancy services were
successfully provided in 2021, as well, and
the total number of customers completing the
investor profile questionnaire and receiving fund
advice exceeded 180 thousand.
İşCep Personal Finance Management
The İşCep Personal Finance Management service,
which allows customers to view their assets in
Anadolu Hayat Emeklilik and İş Yatırım as well
as their assets in the Bank and to conveniently
control their financial transactions by accessing
details of the transactions performed with their
cards and accounts, makes it easier for customers
to direct their savings while keeping their
payments and spending under control.
Maximum Time Deposit Account
With İşbank's Maximum Time Deposit Account,
individual customers who want to invest their
savings in the short term can secure their
automatic payments and earn overnight interest
on their deposits. The total assets held in
Maximum Time Deposit Accounts reached TL 1
billion as of year-end 2021.
Accumulating Young Account
The Accumulating Young Account product, which
encourages customers aged between 18 and
26 years to save and provides an additional
contribution to their savings with an award interest
rate if they reach their target amount of savings,
has also been integrated with the Anadolu Hayat
Emeklilik Young Pension Plan to register them in
the private pension system. The total size of assets
held in Accumulating Young Accounts reached TL
1.5 million as of year-end 2021.
Daily Earning Account
The Daily Earning Account product, which can be opened
via İşCep or the Internet Branch, offers customers the
opportunity to increase their savings on a daily basis at any
time without having to wait for long periods or having to
deposit large amounts of money. The total balance of Daily
Earning Accounts was TL 8.6 billion at the end of 2021.
Exchange Rate-Protected Deposit Account
The "Exchange Rate-Protected Deposit Account", which was
announced to the general public on 21.12.2021 via a Press
Release published by the Ministry of Treasury and Finance
and via the "Communique on Encouraging Conversion
of FX Deposits to TL Time Deposit and Participation
Accounts" published in the Official Gazette dated
21.12.2021 by the Central Bank of the Republic of Turkey
(CBRT), was made available to customers on 23.12.2021
in the form of 2 different products: "FX-Protected TL Time
Deposit Account for Customers Converting from FX" and
"FX-Protected TL Time Deposit Account". Another type
of account, i.e. FX-Protected TL Time Deposit Account
for Customers Converting from Gold, has also been
introduced in accordance with the additional regulation
issued on 07.01.2022 by the CBRT. Legal persons domiciled
in Turkey began to be able to open an "FX-Protected TL
Time Deposit Account for Customers Converting from FX"
and "FX-Protected TL Time Deposit Account for Customers
Converting from Gold" on 12.01.2022 at İşbank branches.
İşbank also made the "FX-Protected TL Time Deposit
Account" and the "FX-Protected TL Time Deposit Account
for Customers Converting from FX" available via the mobile
banking app İşCep starting on 21.01.2022 and 29.01.2022,
respectively. Total Balance of FX-Protected Time Deposit
Accounts was TL 6.1 billion at the end of 2021İşbank
also made the "FX-Protected TL Time Deposit Account"
and the "FX-Protected TL Time Deposit Account for
Customers Converting from FX" available via the personal
İşCep channel starting on 21.01.2022 and 29.01.2022,
respectively.
Total Balance of FX-Protected Time Deposit Accounts was
TL 6.1 billion at the end of 2021.
Tailor Made "Private Funds"
In 2021, to increase the size of assets managed under
Private Banking as part of the agency-based strategic
collaboration established between İşbank and its subsidiary
İş Portföy Yönetimi A.Ş. (İş Asset Management), "Private
Funds" which are created and tailored according to the
customer's needs have became more important.
The investor profile for these funds includes investors with
a high level of financial literacy, who request professional
management of their assets and want to make the right
risk/return choices with the help of expert staff. The Bank
aims to monitor savings under a corporate framework and
manage the portfolio as part of a Private Banking loyalty
program for many years by transferring the investments to
future generations.
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INCLUSIVE SUPPORT LOANS
İşbank aims to increase and ensure fair distribution of social welfare by developing products and services for
all segments of society.
SME BANKING
İŞ’TE KOBİ
The İŞ'TE KOBİ website, which has provided SMEs
with quick access to the sectoral information and
news they need since 2009, is available at www.
istekobi.com.tr.
The website includes content for visitors from the
tradespeople, entrepreneur, farmer and women
entrepreneur segments in addition to SMEs.
The İŞ'TE KOBİ website ensures that companies have
digital access to training programs on many different
subjects such as e-commerce, entrepreneurship,
and technology and directly contributes to their
digitalization by offering applications and solutions to
improve their business.
Digital Anatolia
The Digital Anatolia meetings, which began to be co-
held by İşbank and TÜRKONFED in 2018, continued
in 2021 as well after the meetings were moved to
online platforms in 2021 due to the pandemic. With
the online events attended by experts and senior
managers from leading companies in the sector,
valuable broadcasts were made that focused on
digitalization and sustainability for SMEs.
A total of 10 broadcasts in 2021 reached
approximately 10,000 individual viewers. After
the live broadcasts, recordings of the events were
uploaded to Youtube to ensure that they can reach
even more people as a comprehensive archive to help
SMEs with their digitalization.
DijiKolay
DijiKolay was launched in 2021 to address the
expectations and needs of SME and Business
segment customers regarding "digitalization"
with a holistic approach, bringing together
solutions that include the products, services
and applications of digital service providers,
and the Bank's existing digital transformation
campaigns and services in a single location. In
2022, the Bank will work towards enriching
the products and services included in DijiKolay,
making DijiKolay a "live service" that addresses
customer expectations and thus contributes to the
digitalization efforts of the Bank's customers and
firms in the sector, managing customer experience
in a positive manner and acquiring new customers.
Collaboration with KOSGEB
İşbank contributes to SMEs' access to financing
and supports tradespeople in areas affected
by natural disasters via support programs co-
executed with the General Directorate of KOSGEB
(Small and Medium Enterprises Development
Organization of Turkey). As part of its natural
disaster relief programs, the Bank signed İstanbul
İkitelli Organized Industrial Zone Emergency
Support Loan Protocols that covered İzmir,
Trabzon's Yomra distric, Edirne, Artvin, Düzce
and Rize provinces, the West and Mid-Black Sea
Region provinces, and Van's districts affected by
floods and forest fires in 2021. As part of these
support packages, a total of TL 32.1 million was
lent in 216 individual loans. Additionally, in 2021,
the Bank continued to offer loans under the
"KOSGEB SME Finance Support Program Protocol"
signed in 2019, lending TL 91.4 million through
1,509 individual loans.
Access to Inclusive Finance Project
Under the Loan Agreement for the Inclusive Access
to Finance Project signed by and between Türkiye
Sınai Kalkınma Bankası A.Ş. (TSKB) (Industrial
Development Bank of Turkey) and the International
Bank for Reconstruction and Development (IBRD),
USD 40 million was provided to the regions
adversely affected by the refugee influx and to the
SMEs that support women's employment in 2021
through the funds received by İşbank from TSKB.
Exporter Card & Maximiles
TİM Exporter Card
İşbank launched the "Exporter Card" in 2016, a first
in the industry for exporting SMEs. With this card,
export companies both benefit from all the features
of company credit cards and earn MaxiPoints from
the export transactions that they carry out through
İşbank. Owners of "Maximiles TİM Exporters
Card" - a business credit card developed in 2020 in
collaboration with the Turkish Exporters Assembly
(TİM) - will be able to use their MaxiPoints, earned
via their export transactions through İşbank, as
MaxiMiles in flight ticket purchases and benefit
from many other special advantages.
The number of Exporter Cards and Maximiles TİM
Exporter Cards increased from 6,720 at the end of
2020 to 8,648 at the end of 2021.
As of year-end 2021, the total amount of
financing provided to SMEs in cash and
non-cash loans reached TL 135.7 billion.
Protocol with the Turkish Exporters
Assembly (TİM)
With the Exporter Support Loan signed by and
between İşbank and the Turkish Exporters Assembly
(TİM), attractive loan rates were offered to
exporters through various types of loans such as the
"Women Entrepreneur Export Support Loan" and the
"Fair Participation Export Loan". The Bank provided
USD 73.4 million worth of funds to exporters under
this protocol from the effective date of this protocol
to the end of 2021.
EBRD - COVID-19 Solidarity Loan
As part of a loan agreement signed by and between
İşbank and the European Bank for Reconstruction
and Development (EBRD), İşbank was granted
resources worth USD 54 million to lend to its
customers in order to help alleviate some of the
economic hardships caused by the COVID-19
pandemic. Each firm that met the loan package
criteria could benefit from the COVID-19 Solidarity
Loan to borrow a maximum of USD 100 thousand or
equivalent amount in Euro or TL.
Treasury-backed CGF-guaranteed
"Breath" Loan
The Union of Chambers and Commodity Exchanges
of Turkey, Kredi Garanti Fonu A.Ş. (Credit Guarantee
Fund, CGF) and the Bank signed a protocol for the
"2021 Breath Loan". Under this protocol, real persons
and legal entities that met the SME criteria and were
members of the chambers and exchanges (e.g. any
of the Commerce and Industry Chambers or any
Commerce, Industry or Maritime Commerce chamber
or any Commerce Exchange) affiliated with TOBB
were given the opportunity to borrow loans with a
18-month term, including a 6-month grace period
and the subsequent 12-month repayment period.
Depending on the size of the borrowers, loans up to
TL 200 thousand per customer were granted with a
guarantee rate of 90% provided by KGF A.Ş. Approx. TL
500 million was lent under the protocol.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen SUPPORT TO AGRICULTURE
SECTOR AND FARMERS
GENDER EQUALITY IN THE ECONOMY:
SUPPORTING WOMEN ENTREPRENEURS
The agriculture industry is one of the vital industries for
sustainable development. İşbank supports the efforts
toward increasing agricultural productivity through
projects that reflect its digitalization strategy for the
agricultural industry. Thanks to the recommendations
given to farmers as well as the data obtained from
30 agricultural monitoring and forecast tools granted
to them under the Digital Agriculture project led in
collaboration with Vodafone Business, use of input
materials including agricultural fertilizers, pesticides
and water was reduced, productivity was increased, and
environmental waste was reduced. According to the
initial results obtained from the agricultural monitoring
and forecast tools which began to be used under the
project, farmers gained an additional economic benefit
of TL 57 million from 27 tools through reduction in use
of input materials and increased productivity thanks to
the early warnings as well as recommendations sent
to 13,200 farmers on irrigation, fertilization and use of
pesticides. The Digital Agricultural Loan, launched to
ensure widespread use of the agricultural monitoring
and forecast devices, continued to be offered.
Thanks to the "ImeceMobil" application, which can
be downloaded free of charge, financial literacy and
income-expense tracking support is provided to farmers,
and farmers can make İmece Card and agricultural loan
applications without going to a branch. In addition,
satellite services and expert-assisted special services
available for use in the ImeceMobil application enable
farmers to monitor the condition of their lands and
the health of their crops. The application also prevents
excessive fertilization that pollutes the environment
by offering fertilization suggestions and helps farmers
avoid incorrect irrigation practices by making irrigation
suggestions to reduce use of water, which allows them to
keep costs under control and achieve better crop yields.
During the pandemic, support loan campaigns with
eased collateral requirements were organized.
In October 2021, end-to-end agriculture loans (Instant
Agricultural Loan) were lent via digital channels, which
is a first in the industry, and 1,264 farmers borrowed
this loan within 3 months.
The documentary "Tarım İçin Su" (Water for
Agriculture), which was created to increase awareness
of water management and sustainability in agriculture,
was broadcast on various TV channels and social media
platforms.
The total number of farmer customers of İşbank was
356 thousand as of year-end 2021, and 169 thousand
customers borrowed agricultural loans.
İşbank believes that sustainable development is to be
achieved by increasing women's participation in the
economy and women’s employment rate. To this end, the
Bank increasingly uses both its own resources and foreign
funds to support female enterprises.
Women Entrepreneur Loan
İşbank offers financing support up to TL 500 thousand
to tradeswomen who want to grow their business,
companies 51% of the shares of which are held by a
female partner, companies that have at least one female
senior executive and companies 20% of the shares of
which are held by female shareholders. As of year-end
2021, the Bank provided TL 6.5 billion in financial
support to more than 42 women entrepreneurs.
Women's Power in Entrepreneurship
with TÜRKONFED
İşbank launched WeLead Project in collaboration with
TÜRKONFED to identify the current status and needs of
women entrepreneurs throughout Turkey, regardless of
their sector, and then to develop business for women
producers and support their efforts to keep up with
the rapid digitalization of the world. Through WeLead
Project initiated as part of a contract entered into with
TÜRKONFED in 2021, the Bank will carry out various
activities in 2022 and 2023 as well to help them keep
up with digitalization and develop networks with active
organizations in the market, and support them with
mentorship and training programs.
Women’s Banking
In order to increase the number of women in its
customer portfolio and improve women's business
relations with İşbank, the Bank carries out activities
according to a roadmap that the Bank created based on
the expectations and needs of its women customers,
monitored by the Bank's personal business division,
regarding the financial products and services. The
Women Banking program, which is still in development,
will review the existing processes, products and
services of the Bank and align them with women
customers, deliver various value propositions and make
our services more accessible.
Women Entrepreneurs and Young
Entrepreneurs Export Support Loan
with Turk Eximbank
İşbank provided financial support to women
and young entrepreneurs through the "Women
Entrepreneurs Export Support Loan" and "Young
Entrepreneurs Export Support Loan" products under
the protocol entered into with Turk Eximbank in
order to increase participation of women and young
entrepreneurs in export activities.
Arya Women Investment Platform
With the Arya Investment Preparation Acceleration
Program, organized in May 2021 as part of the
collaboration between İşbank and the Arya Women
Investment Platform, 19 women entrepreneurs
went through a 5-week training and mentorship
program to get ready to meet investors.
At the semi-final event with 51 women participating,
entrepreneurs delivered their investor presentations
and graduated from the program. In October, a 3-day
Arya Retreat event was held in Bodrum with the
participation of 81 women investors and investor
candidates who had the opportunity to meet the
finalist entrepreneurs. After completion of the
presentations delivered to the jury and investors, 3
entrepreneurship projects received awards.
Besides meeting with the investors, entrepreneurs
also benefited from eye-opening workshops, had
the opportunity to network and collaborate with
each other and listen to the inspiring stories from
successful business people from Turkey and other
countries.
The first of the Arya Workshops training program
series designed to contribute to the management
skills of women entrepreneurs was held both as a
physical and virtual event in December 2021 with 77
female participants.
39 women entrepreneurs also benefited from the
Arya Challenge Club Membership which offers them
the chance to learn from each other as well as other
networking possibilities, the Arya Membership
which provides members with various advantages
such as free participation in events, and the
Arya Shopping Festival which allows the women
entrepreneurs to increase their awareness.
"İş Asset Management Women
Equity Fund"
The "İş Asset Management Women Equity Fund",
focused on the theme of equal inclusion of women in
business life, was offered to investors on International
Women's Day 8 March 2021 in collaboration between
the Bank's subsidiary İş Asset Management and the
Koç University Center for Gender Studies (KOÇ-KAM).
The Fund will invest in equity shares of domestic
companies that employ women on an equal basis
and attaches importance to ensuring women hold
management positions. Half of the revenue generated
by the Fund will be allocated to the studies with KOÇ-
KAM and scholars in order to improve women studies
and empower female leadership.
When selecting companies to be included in the
fund, various criteria are taken into consideration
such as having at least one female board member,
having women in decision-making positions, and
providing other public information content generated
under the KOÇ-KAM consultancy. Domestic equity
shares of companies that meet at least two of the
above criteria can be included in the pool of equities
that the Fund can invest in. The criteria defined by
KOÇ-KAM include having a female employment rate
above the mean female employment rate in Turkey,
caring for a balanced private-business life, embracing
gender equality and equal pay policies, adopting a fair
approach in recruitment processes and supporting
social gender equality projects. The Bank will
donate 50% of the fund management income from
the Fund to the "KOÇ KAM UNESCO Chair - İşbank
Women Studies and Women Leadership" Scholarship
Program.
LIFE STAGE BANKING
İşbank desires to maintain a lifelong service
relationship with its customers. Therefore, the Bank
develops banking service packages that include the
products needed for every stage of life, taking into
account the expectations in different stages of life
such as childhood, youth, working life and retirement.
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İşbank endeavors to ensure that all of its service areas
are suited to disabled users.
Verbal and visual directional aids, tactile paving,
wheelchair ramps (where physical circumstances
permit) and Bankamatik ATMs suited for use by
disabled customers are available at our branches.
471
Number of branches
suitable for use by
visually impaired
customers
823
Number of branches
suitable for use by
the orthopedically
impaired
Continuous physical and software improvements,
such as headphones, tactile surfaces, and use
of SMS messages, are made to all of İşbank's
Bankamatik ATMs to make sure that they are suited
for use by disabled people.
İşbank ensures that there is at least one Bankamatik
ATM that is suited for use by orthopedically impaired
people in each province where it has orthopedically
impaired customers, while the number of ATMs
with a headphone jack is being gradually increased.
Additionally, customers' suggestions and requests
regarding the installation of new Bankamatik ATMs
or upgrading existing ones so they are accessible
by disabled people are carefully evaluated, and the
necessary action is taken. The Bank is working to
make sure there is at least one Bankamatik ATM in
every province that is accessible by orthopedically
impaired customers.
Special staff members are employed at İşbank's Call
Center to allow hearing-impaired customers to receive
services at the Bank's branches by communicating
via video call. The Bank aims to increase the number
of branches and Bankamatik ATMs that are suited for
use by disabled customers in 2022.
In addition to these, İşbank also develops digital
solutions for its disabled customers. The İşCep IOS
application supports Voice Over, while the Android
application supports TalkBack features. With the
Dynamic type feature, text sizes in İşCep can be
adjusted according to personal preferences. İşbank's
corporate website is compatible with Jaws.
The "Enabled Banking" page has been added to
our corporate website isbank.com.tr to provide the
necessary directions for our disabled customers
to easily carry out their transactions. For hearing-
impaired customers, a translation plugin has been
added to the "Enabled Banking" and "Help" pages
which translates content into sign language.
In 2021, customers were able to communicate
with a customer representative to receive service
through the İşCep App. Customers who, while
messaging or talking with Maxi, state that they
would like to speak to a customer representative
are transferred to a Call Center customer
representative so they can complete their
transactions by messaging with them via the live
messaging application.
Eye Brand Certification
BlindLook is a firm that, with its voice-focused
technology, allows any product or service to be freely
accessible by visually-impaired people, and cares
for them and creates blind-friendly brands. The
firm's Eye Brand certification is a global certificate
that documents inclusive services offered by blind-
friendly brands. The BlindLook's voice-focused
accessibility technology that makes products and
services accessible by the visually-impaired works
in parallel to screen reader programs for them and
acts as a narrator on our website by reading out the
text content of the images. Before İşbank began
collaborating with Blindlook, blind users tested the
Bank's different websites. Then they gave feedback
about the problems they encountered when using
the Bank's tested websites and re-tested the
websites after the problems were fixed within 3
weeks. The websites that passed the 2nd test are
eligible to receive the "Eye Brand" badge. This
badge shows that the website is blind friendly. The
websites maximiles.com.tr and maximumgenc.com.tr
have passed these tests and received the "Eye
Brand" badge. The "Eye Brand" badge is displayed in
the footer section of the websites. The certification
process for the Bank's corporate website isbank.com.
tr is underway, and the badge will be displayed on
the home page after it is received.
FINANCIAL LITERACY
Increased financial literacy within society enables customers to make the right decisions regarding
their financial assets and increases trust in the financial sector.
İşbank aims to increase the level of financial literacy of every
segment of society and every customer from each segment.
Economic Research
Therefore;
Blog posts and training content are published on the İŞ'TE
KOBİ website, www.istekobi.com.tr, in order to improve the
financial literacy of tradespeople, women entrepreneurs,
SMEs, entrepreneurs and farmers. Additionally, the İŞ’TE KOBİ
website also includes a specific area where visitors can ask
questions and receive answers from experts about various
topics such as taxation processes, how to incorporate a new
company, and benefits for women entrepreneurs.
Under the Women’s Banking program, which is still under
development, campaigns and collaborations have been
planned to help improve financial literacy among women.
With WeLeadDProject initiated as part of a contract entered
into with TÜRKONFED in 2021, the Bank will carry out various
activities in 2022 and 2023 as well to help them keep up with
digitalization and develop networks with active organizations
in the market, and support them with programs such as
mentorship and training.
İşbank and the Arya Women Investment Platform have
been jointly organizing a series of training modules, i.e. Arya
Workshops, since 2018. This series of training modules offers
women financial literacy training free of charge.
Local farmer meetings were held to help them with
digitalization and improve their financial literacy. In 2021, a
total of 1,861 farmers attended 16 meetings. Additionally,
with the "ImeceMobil" application, which can be downloaded
free of charge, financial literacy support is provided to farmers.
İşbank's Economic Research Division monitors and reports
on cyclical and structural developments in both the national
and global economy. In addition to daily, weekly and monthly
periodicals in which the domestic and global economic
developments are evaluated, essential data related to
Turkey's economy is analyzed and published on the website
ekonomi.isbank.com.tr. The website, which provides free
subscription services, has approximately 15,500 subscribers
as of the end of 2021.
The Division shared a total of 17 publications in 2021,
including six "Bulletin of Current Developments in Sectors",
seven sector reports and four research notes. During the
year, the Division drew up the "Sectoral Expectations
for 2021" and published the weekly-updated "Course of
Consumption Expentidures Per Sector".
The Economic Research Division also prepares periodic
reports on macroeconomic developments on a daily,
weekly and monthly basis. These include "Daily Market
Bulletin", "Weekly Bulletin" and "Monthly Economic Review".
Additionally, "Data Analyses" reports, including Economic
Growth, Inflation Developments, Budget Balance and Balance
of Payments, are published on the website on a monthly
basis.
A total of
farmers attended
1,861
16 meetings.
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One of the key expectations of customers in the
finance sector, which has complex transactions and
processes, is to get accurate and easy-to-understand
information from organizations about their products
and services.
İşbank takes it as a responsibility to provide its customers
with consistently accurate, reliable, open and transparent
information about its products and services. With a customer-
oriented approach, the Bank offers its customers information
that facilitates their decision-making process, meets their
requirements and does not mislead them.
The Bank makes investments to develop the skills of those
employees who, directly or indirectly, offer customers such
information in this area.
As per its Ethical Principles and Code of Conduct, İşbank
carries out all of its activities in accordance with the legislation
and the Bank's regulations.
İşbank endeavors to understand all needs and demands of its
customers and provide them with information about possible
risks and benefits in an accurate and complete manner. İşbank
does not share misleading information with its customers,
carries out its activities in a safe manner, complies with
legal regulations, and offers innovative products that meet
customers' needs to ensure continuity of customer relations.
The Bank handles all complaints and suggestions from
its customers with utmost care and sensitivity to achieve
customer satisfaction by coming up with appropriate and
pertinent solutions.
İşbank communicates with its customers in an open, simple
and complete manner, avoiding misleading, complex,
contradictory or repetitive expressions. The Bank provides its
customers with information about their next transactions as
well as the fee and commission rates and amounts applicable
to each transaction in accordance with the Banking legislation.
Human Rights and Social Impact
Evaluations in Investment and Loan
Activities
Besides environmental impact, İşbank also considers
social impact in its investment and loan appraisals,
and demands implementation of certain practices to
mitigate affirmative social impacts, if any.
The environmental and social risk assessment model
which is used by İşbank during environmental and
social risk evaluation processes includes a wide range
of variables associated with human rights and social
impact, such as child and forced labor, public health,
occupational health and safety, working conditions,
OHS management systems, forced displacement, loss
of livelihoods, stakeholder communication, gender
equality, sexual harassment, and discrimination.
"Public Participation Meetings" are held in all projects
as a minimum within the scope of local EIA. Additional
stakeholder communication meetings and corporate
social responsibility activities are carried out in all
investment loans that is subject to environmental
and social risk evaluation within the framework of
international standards.
Investments that are to be financed by the Bank
and evaluated the risk score A (high risk) based on
the Environmental and Social Risk Evaluation model
are subject to an social impact evaluation, including a
human rights impact evaluation, in accordance with the
requirements of international standards.
For major infrastructure investments to be financed by
İşbank, the necessary actions are taken to account the
social benefit of the society and manage the possible
negative impact of such investments through social
impact evaluations. Social responsibility budgets are set
aside in projects to improve their positive impact to the
benefit of the stakeholders affected by the projects.
The most common impacts of financed investments
include loss of livelihood and forced displacement due
to the acquisition of land. For a project that is subject
to financing at international standards, individuals
and groups affected by the project are identified and
classified through the " Resettlement Action Plan" and
"Livelihood Restoration Plan", and appropriate actions
are determined and commited to eliminate impacts.
Within the scope of highway projects studies, social
responsibility projects such as renovation and
reconstruction of the roads, schools and water lines of
the villages on the highway routes, as well as donating
agricultural machinery to be offered to the common
use of the villages whose incomes are based on
agricultural activities, providing seed support, providing
art development trainings for female stakeholders,
supporting education with certain budgets annually,
have been established.
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for Climate Action
"While news" of floods - caused by extreme temperatures and forest fires, and cloudbursts -
come from worldwide, new records regarding weather events are breaking every day.
The city of Zhengzhou in China was devastated by a record-
breaking downpour on a single day in July which was equal
to the total amount of annual rainfall. Forest fires starting
in many regions around the world, from Siberia to the
coastlines in the Mediterranean, affected a larger area this
year compared to previous years. Many forest fires and flood
events occured in Turkey during the summer season.. With the
marine mucilage surfacing in the Marmara Sea, the effects of
the climate crisis became more evident.
Global warming of 1.5°C means increased heat waves, longer
warm seasons and shorter cold seasons. Furthermore, global
warming of 2°C means that we will reach critical tolerance
thresholds for agriculture and health. Since increased
temperatures will affect the water cycle, we will see more
intense rainfall, floods and droughts in many regions around
the world. As the sea level continues to rise, coastlines will be
exposed to more frequent and severe flooding and erosion.
Increased number of extreme weather events causes concern
as they reduce the predictability.
The Intergovernmental Panel on Climate Change (IPCC) report
published in 2021 shows that some effects of the climate crisis
have now become irreversible. General Secretary of the United
Nations (UN) describes the report as "code red for humanity".
However, many global developments also suggest that the
negative effects of climate change are still at a manageable
level. Following the UN Climate Conference "COP26" in
2021, the "Glasgow Climate Pact" agreed by 197 countries,
has officially recognized the goal of reducing global carbon
emissions by 45% by 2030. The decision was taken to double
the amount of funds provided by developed countries to
developing countries to ensure the adaptation to climate
change. Developed countries have reiterated their goal to
provide USD 100 billion of climate finance per year by 2025 to
achieve climate resiliency.
Material Issues
Related Capital Elements
Responsible Finance and Investment Integrating ESG Criteria
· Combating Climate Change
Financial
Capital
Intellectual
Capital
Social-Relational
Capital
Natural
Capital
Risks
Opportunities
• Existing financial solutions proving to be ineffective
as a result of changes in the way of doing business
and risk matrix across many sectors due to global
warming
• Compliance challenges encountered by customers
during the transition to a green economy
• Contribution to a green and sustainable economy
and combating climate change through effective
ESG risk management
• Possibility to reach new customers as a reliable
partner in the transition to a green economy
• Ability to access new global fund sources that
• Infrastructure deficiencies of organizations for a
promote a transition economy
transition economy
Contributed SDGs
KEY PERFORMANCE INDICATORS
2019
2020
2021
Field visits made as part of environmental and social risk
evaluation
Number of financed projects subjected to environmental and
social risk evaluation
Sum of financing provided for projects subjected to
environmental and social risk evaluation (million USD)
Amount of clean energy (million MWh) generated by financed
renewable energy projects
Total installed power (MW) of renewable energy projects
financed by İşbank
Share of renewable energy projects in the total energy
projects portfolio (%)
Carbon Disclosure Project (CDP) Climate Change Report
Carbon Disclosure Project (CDP) Water Safety Report
22
13
395
21,9
262
67.3
C
-
1
7
365
24,9
5
9
331
32.3
1,950
1,008
69.5
A-
-
71
B
C
TARGETS
Targets for 2021
The Bank will continue working to increase the share of
renewable energy projects in the total energy generation
projects portfolio. In 2021, it is anticipated that 100% of the
loans to be allocated for new energy plant investments will
be used for renewable energy projects.
Realization
in 2021
Realization
Targets for 2022
and Beyond
100%
100%
In 2021, the Bank will create its report as per the Task
Force on Climate-related Financial Disclosures (TCFD).
İşbank aims to improve reporting on climate change-
linked risks and opportunities in order to achieve a better
approach to corporate governance and risks.
The Bank is still
continuing its
activities on this
front.
The target is
planned to be
preserved.
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Paris Agreement were defined. A decision has been made to
terminate using inefficient fossil fuels gradually.
The first step is to achieve a significant, quick and continuous
reduction in greenhouse gas emissions and to reach to
net zero emissions of CO2. Such action will provide a
quick restoration in the air quality and a balanced global
temperatures in 20 to 30 years. Experts recommend investing
in early warning systems, a climate-resistant economy and
infrastructure as a robust way of adapting to climate change.
For this purpose,public and private sector collaboration and
green innovation are required. A large portion of global CO2
emissions originates from the energy sector. Therefore, it’s
important to move toward sources of renewable energy in
order to limit the impact of climate change. It appears that
private sector investments in renewable energy sources have
significantly increased, and the share of electricity generated
from renewable energy sources is rising with the help of the
support given in recent years. Renewable energy sources
account for 53% of the total installed power in Turkey as of
year-end 2021.
İşbank supports the transition to a low-carbon economy.
The Bank analyzes the risks and opportunities associated with
the transition economy and gradually increases the number
of products and services that support a green economy. As
of year-end 2021, renewable energy projects make up 71%
of the total number of energy generation projects. İşbank has
not participated in financing any new coal-fired thermal power
plant investment since 2015.The fact that the Bank will not
lend "Loans for financing greenfield investments of coal- and
natural gas-fired thermal power plants" has been announced
in 2020 by adding these types of loans to the Exclusion List
included in the annex to the İşbank's Environmental and Social
Impacts Policy.
İşbank discloses how it manages its emissions and its
exposure to climate risks to all stakeholders through its
Climate Change Disclosure Report under the Carbon Disclosure
Project (CDP).
İşbank works to achieve inclusive and environmentally
friendly growth and will continue to closely monitor the
risks and opportunities associated with climate change in
the years ahead and maintain and improve its activities and
commitment in this area.
MANAGEMENT of CLIMATE CHANGE RISKS
İşbank meticulously evaluates the risks and opportunities
associated with climate change. The Bank worked together
with an independent consultancy firm to measure and assess
the risks and to establish a risk governance structure across
the Bank. Based on this joint work, climate change risks have
been added to the risk catalogue, which is the Bank's guiding
document for risk management activities, as a risk group, with
descriptions and examples of the related risk sub-groups.
Additionally, the Bank's governance organization has been
created with the description of roles and responsibilities
regarding management of climate change risks, and the
documents "Climate Change Risk Policy" and "Methodology
and Implementation Principles Regarding Measurement of
Climate Change Risk" have been drawn up and approved by
the Board of Directors.
İşbank follows a 4-stage path to manage climate risks:
1- IDENTIFYING SUSTAINABILITY PRIORITIES:
Sustainability focus areas are identified, and the risks and
opportunities in these areas are evaluated on the basis of
business unitsthrough comprehensive assessments and
stakeholder conversations.
For detailed information about how
Sustainability Priorities are identified,
see page 33
3- PROCESS of IDENTIFYING CLIMATE RISKS:
As a finance organization focused on lending loans, İşbank's
greatest climate-related risks are associated with its loan
portfolio. İşbank prepares a long list of potential risks and
opportunities by conducting a detailed review of literature and
trend analyses. This evaluation comprises reliable data sources
such as publications of international rating organizations
(traditional and ESG-driven), the Sustainability Accounting
Standards Board (SASB) and think tank publications as well as
reports published by industry forums and development banks.
Key risks and opportunities on sectoral basis are identified
based on the findings. This sectoral perspective is then merged
with the inputs of İşbank's experts. Besides additional data
points, expert inputs (e.g. official GHG emission data under the
UNFCC) are also used to check the results.
2- ENVIRONMENTAL and SOCIAL RISK ASSESSMENT
MODEL:
All new investment projects to be financed by İşbank with
an investment amount of more than USD 10 million are
evaluated using the Environmental and Social Risk Evaluation
Tool (ÇESMOD ). Projects within this scope are subject to
environmental and social risk assessment, and a risk score
is determined as a result of this assessment. If the risk of a
project is determined to be high, an environmental and social
action plan is established in cooperation with the customer to
eliminate or mitigate the identified effects, and the follow-up of
these actions is provided under the supervision of independent
consultants, when necessary.
For details, see Environmental and Social Risk
Management in Loans
4- PROCESS of IDENTIFYING OPPORTUNITIES
RELATED to CLIMATE CHANGE:
During this process, İşbank employs a similar methodology
as with the process of identifying risks. Opportunities related
to climate change are associated with the loan portfolio of
the Bank rather than its operations. İşbank conducts regular
reviews of the national and international climate agenda,
investment plans and sector activities. İşbank views green
bonds, green infrastructure finance, green loans/mortgages,
green insurance products and resilient products and services
as the areas with the biggest potential opportunities.
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Climate Change Risk Within Total Commercial Portfolio" to
the solo risk appetite framework to prevent the concentration
increases of the sectors that are highly exposed to climate
change risks within the portfolio and to provide guidance for
composition of the portfolio in subsequent periods.
İşbank closely monitors developments in global carbon markets.
The Bank held meetings with foreign correspondent banks to
discuss the applicability of carbon contracts in international
markets to its customers. Accordingly, the Bank plans to
develop studies on over-the-counter (OTC) derivative products.
İşbank evaluates and analyzes the effects of its commercial
loan portfolio under Scope 3, Category 15 "Investment" by also
estimating its total absolute emissions. İşbank's commercial
loan portfolio accounted for 76.4% of its total loan portfolio and
represented the majority of the loan allocation activities as of
2021.
The Bank also closely monitors the opportunities associated
with a green economy and continuously improves its product
portfolio in this area. The weight of products that support the
green economy, such as İşbank Green Bond, Solar Loan by
İşbank and TEMA Environmental Variable Fund in the Bank's
product portfolio is increasing day by day.
See Products and Services Contributing
to a Green Economy
İşbank has been reporting since 2019 within the scope of the
Carbon Disclosure Project (CDP) Climate Change Program
which allows companies to report to investors how they
manage their carbon emission processes, their activities to
reduce carbon emissions, and how they manage their risks
in this area. İşbank continues to expand the scope of the ISO
14001 Environmental Management System..
İşbank contributes to the efforts for increasing environmental
awareness and the forestation activities in our country with
many projects and activities in the field of environment.
We Take Responsibility for Future Generations
Within the scope of the Climate Change Risk Management
Project, the actions foreseen to be implemented by the end
of 2022 for the opportunities arising from climate change
have been defined. Efforts are underway to determine
the responsibilities and roadmaps for these initiatives,
including enhancing product and financing opportunities that
will support the transition to a low-carbon economy, and
increasing access to sustainable fund resources.
İşbank takes into account all risks (including transition risks
and physical risks and the subcategories thereof) arising
from climate change at the corporate level. These risks
are prioritized and evaluated based on a qualitative and
quantitative assessment. As part of the prioritization process,
the Bank defines significant financial impact at the transaction
and portfolio level by taking three criteria into consideration:
1. CUSTOMER-RELATED RISKS
QUALITATIVE EVALUATION THRESHOLD:
İşbank evaluates each customer sub-sector
with a scale of 1 to 5 in order to identify their
exposure to climate risks. Sub-sectors with
a risk score of 4 (medium high) or 5 (high) are
considered to pose a significant risk to our
business. The results are summarized with a
heat map that shows high-risk sectors and the
loan risk balance in these sectors.
2. CUSTOMER-RELATED RISKS
QUANTITATIVE EVALUATION THRESHOLD:
İşbank adopts the scenario analysis approach
of UNEP-FI in quantitative evaluation. With
the scenario analysis, the potential impact of
climate risk events such as the implementation
of possible carbon taxes or emissions trading
systems are evaluated by applying stress
testing for the financial operations of companies
in selected sectors. An increase in expected
credit loss (ECL) above a certain threshold,
as calculated based on stressed financials, is
accepted as a significant impact.
3. RISKS DIRECTLY ASSOCIATED
WITH OPERATIONS
İşbank may be exposed to climate-related losses
and downtimes in direct connection with its
operations. The Bank evaluates and manages
its operations accordingly. Climate risks which
may result in costs above a certain threshold are
accepted as risks that have a significant impact.
ENVIRONMENTAL and SOCIAL RISK MANAGEMENT in LOANS
The banking sector's main responsibility for climate action
is to take environmental and social impact factors into
consideration during loan allocation processes. İşbank
meticulously monitors the environmental, social and
governance risks caused by its lending activities. The Bank
supports multi-partner initiatives in the sector to increase
knowledge in this area.
İşbank is one of the early signatories of Global Compact
Turkey's Declaration on Sustainable Finance, which guarantees
the inclusion of environmental and social risks as factors to be
considered during loan allocation processes. İşbank is also a
signatory of the United Nations Environment Program Finance
Initiative (UNEP FI) Principles of Responsible Banking. As per
this commitment, the Bank has begun conducting an impact
analysis for its portfolio to review its environmental, social and
governance impact.
By using the Environmental and Social Risk Evaluation Tool
(ÇESMOD) which was developed within the framework
of Bank’s practices, İşbank evaluates all new investment
projects with a total investment amount of more than USD
10 million that are under the authority of the Bank's Project
Finance, Corporate Loans Underwriting and Commercial
Loans Underwriting Divisions and the financing of which is
participated in by the Bank. By identifying the categories of
environmental and social risks associated with these type of
loans, a road map is established to mitigate or eliminate the
possible environmental and social impact of the investments.
The ERET model, which is used by İşbank since 2013
to evaluate the Environmental and Social Risk Score
of investments, was replaced in 2021 with ÇESMOD
(Environmental and Social Model), which is more in line with
the international standards of risk measurement and can be
tailored according to the type of investment, İsbank has begun
to use this new model in 2022.
With the new ÇESMOD Model, E&S risk scores of the
investments financed by the Bank are calculated with initial
evaluations conducted with specific sets of questions based
on the type of investment, e.g. new facility development,
capacity expansion and/or additional facilities or refinancing/
procurement, followed by evaluations conducted with specific
sets of questions based on the sector in question, e.g.
mining, manufacturing, infrastructure, chemistry, energy and
renewable energy.
Sets of questions based on type of investment and sector:
• EIA decisions, environmental permits, environmental and/or
social impact evaluation,
• Natural preservatione, critical habitat and ecosystem
assessments,
• Seismicrisk, use of natural resources,
• Waste management,
• Air, soil and water quality,
• Noise and dust
• Occupational health and safety, public health and safety,
• Management of chemicals,
• Involuntary displacement and stakeholder engagement
Factors such as those listed above, the scope of which is
set out in the applicable laws and regulations, are evaluated
and scored with the answers of the questions specifically
developed based on the activities of the company being
evaluated. Based on the answers given, the risk category of
the project is determined, e.g. high (A), medium high (B+),
medium low (B-) and low (C). Thus, a "Project Environmental
and Social Evaluation Document" is prepared based on
national and international legislation and good practices
(e.g. IFC Performance Standards, EBRD Performance
Requirements, Equator Principles), and the document is
attached to the loan proposal documents which is submitted
to the higher management for approval.
For all projects deemed eligible based on the evaluations
conducted by the Sustainable Finance (SF) team, including but
not limited to those projects which are classified by İşbank
as high-risk (risk category A), an independent environmental
consultant is assigned to act on behalf of the Bank. The
independent environmental consultant conducts site visits
and literature research to determine the current status of the
project and its possible environmental and social impact. As a
result of this work, an Environmental and Social Due Diligence
(ESDD), which describes the current status and applicability of
any permission / approval process regarding environmental
obligations as well as the consultant's comments, and an
Environmental and Social Action Plan (ESAP), which describes
how to mitigate and eliminate these impacts and manage the
process, are drawn up and submitted to the Bank.
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(EIA) Report, which includes additional and more detailed
baseline studies, may be requested separately from the EIA
application form prepared during the EIA process. Project
companies are also demanded to prepare an Environmental
and Social Management Plan (ESMP) for management of the
risks and impact of their project and submit it to the Bank.
Additionally, both during construction phase and operation
phase, environmental and social monitoring activities are
carried out at agreed intervals regarding the factors (e.g.
compliance with environmental legislation, waste management,
emission measurements, soil and water analyses, impact
on socio-economy, eco-system and habitat, compensation
mechanisms, occupational health and safety practices) set out
in the ESAP. Our Sustainable Finance (SF) team also participates
in the monitoring activities conducted by the environmental
consultant as part of field visits in person.
While risk categories are identified as part of the
Environmental and Social Impact Evaluations conducted by
İşbank, biodiversityrisks are evaluated on a per-project basis.
For projects which are determined as high risk category and
present a number of biodiversity risks, consultants are also
requested to prepare a Biodiversity Action Plan (BAP).
Due to the COVID-19 pandemic, investment monitoring of
the investments mainly conducted in the form of a desktop
assessments and the Bank's Sustainable Finance team
participate monitoring activities via teleconference meetings
joined by consultants and companies.
In all projects, "Public Participation Meetings" are held as
a minimum within the scope of local EIA, and additional
stakeholder communication meetings and corporate social
responsibility activities are carried out in all financing in line
with international standards.
In 2021, the SF team conducted field visits for 5 projects as part
of environmental and social risk management. The number of
investment projects subject to Environmental and Social Risk
Evaluation is 15, 9 of which were financed by İşbank.
9
Number of projects financed
under ERET
9 Number of projects financed under ÇESMOD Of these
projects with a total amount of USD 331 million, 15.1% were
classified in A, 75.4% in B+ and 9.5% in B- risk category on the
basis of theloan amount.
USD 50.2 million within the scope of 2 projects with
"A" risk category
USD 249.5 million within the scope of 5 projects with
"B+" risk category
USD 31.3 million within the scope of 2 projects with
"B-" risk category
As of year-end 2021, a total of 153 investments were subject
to Environmental and Social Risk Evaluation, and 104 of
them consist of investments that have been financed and
are currently in open status. In 2021, no project was rejected
due to the results of the Environmental and Social Risk
Assessment (due to environmental and/or social reasons).
In the following period, İşbank is planning to conduct a
seperate evaluation for measuring the impact of climate
change on a company's activities when evaluating
environmental and social impact dimensions of investments
and their climate impact.
Management of Water Risks
İşbank evaluates its commercial loan portfolio's exposure to
water-related risks and opportunities. While evaluating loan
applications, İşbank expects all of its customers to comply
with the national regulations applicable to their commercial
activities. These include regulations concerning water.
Furthermore, İşbank also evaluates potential environmental
and social (E&S) impacts of the investment projects
financed by the Bank. All projects are evaluated according to
national laws and regulations, including the Regulation on
Water Pollution Control, Regulation on Urban Waste Water
Treatment, Regulation on Surface Water Quality and In all
projects financed by İşbank, customers are required to comply
with all applicable regulations. At İşbank, the potential ESG
risks of all new investments are evaluated according to the
ÇESMOD system. ÇESMOD consists of sets of questions
which are sorted according to the type of financed investment,
such as new facility development, capacity increase and/or
additional facility or refinancing/procurement, and specifically
prepared for 5 separate sectors (mining, production,
infrastructure, chemistry, energy and renewable energy).
Water-related risks examined through this model can be
grouped under 3 main categories:
WATER RESOURCES
Negative effects on surface water and
groundwater such as change in water
temperatures, riverbed variation, important river
crossings, maintaining environmental flow in
hydroelectric power plants, use of groundwater,
use of surface water or sea water as cooling water,
WASTEWATER
Generation of excessive amounts of wastewater
by the project, the degree of pollution of the
wastewater, the necessity to build a separate
treatment plant to process wastewater from
the plant, discharge to the sea (e.g. domestic
wastewater, industrial wastewater)
CONSUMPTION OF RESOURCES
Dependency of the project on natural sources,
the amount of water used (intensive use of
water) are questioned.
In order to reduce the effects of water-related risks, İşbank
expects project companies to measure water quality at
intervals set out in applicable regulations before and after
the project and to report on the use of water and resource
efficiency.
Management of Forest Risks
İşbank evaluates its commercial loan portfolio's exposure to
forest-related risks and opportunities;
Companies that use forest products as raw materials in their
processes must comply with the provisions of national forest
laws. In all projects financed by İşbank, customers are required
to comply with national laws and regulations on forestry.
İşbank evaluates potential E&S risks of projects according to
the ÇESMOD methodology.
With the ÇESMOD methodology, critical habitat and sensitive
areas (EIA Regulation, Annex-5) evaluation and balancing
strategy studies are taken into consideration in order to
conduct an assessment of forest-related risks. Based on these
factors, İşbank considers the project's environmental impact
in terms of deforestation and use of forests. For example,
large scale highway projects are classified as high-risk (A)
projects as they deforrest a significant amount of land. İşbank
requires project companies to take certain measures, such
as re-locating trees around the project area to appropriate
areas and/or planting trees in place of any treedeforrestation
, in order to mitigate negative impacts of the investment in
sensitive areas.
İşbank created the Sustainable Bond Framework in 2020.
Funds to be derived from this type of bond will be used
for initiatives that can create a positive social impact and
to finance green projects. Loans in this category which are
associated with SDG 15 (Life on Land) will be allocated
to finance certified organic farming activities as well as
technologies that improve quality and productivity and allow
effective use of natural resources.
Activities not financed
İşbank rejects any loan applications for activities on the
İşbank Exclusion List, which the Bank names in the annex
to its Environmental and Social Impacts Policy, without
even taking them into consideration. Among activities not
financed by the Bank are investments involving forced labor
and child employment, the production of weapons of mass
destruction and landmines, and the production and trading of
internationally prohibited chemicals and drugs or substances
that are harmful to the ozone layer. In 2020, loans for
financing new greenfield investments of coal- and natural
gas-fired thermal power plants to be established for electricity
generation were added to the İşbank Exclusion List.
The Exclusion List is in the annex of the
Environmental and Social Impacts Policy
which is available on the website.
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İŞBANK and ITS ACTIVITIES in 2021
Financing Renewable Energy
Transition to renewable energy sources plays a key role in
minimizing the negative effects of climate change on humans
and the environment. Renewable energy investments, a
key tool in the transition to a green economy, also provide
significant economic benefits with the new employment
areas that they create. It is essential that renewable energy
investments and technologies must be supported to ensure an
increase of using renewable sources in energy generation.
İşbank is one of the pioneering institutions in financing
renewable energy projects in our country.
All of the new investment project loans provided by the Bank
for electricity generation investments after 2015 has been
allocated to renewable energy projects.
All of the new project financing provided by İşbank for the
energy generation sector in 2021 consists of renewable energy
projects, and the Bank will continue to finance renewable
energy investments, including especially WPP and SPP projects,
in 2022 and beyond. In line with its commitment to allocate
100% of its new investment loans for the energy generation
sector to renewable energy investments, the Bank aims to
increase the ratio of renewable energy loans to total electricity
generation loans even more from its current level of 71%.
71%
6.2%
Share of renewable energy
projects in İşbank's total energy
generation projects portfolio
Share of renewable energy
projects in İşbank's total loan
book.
32.2 million
(MWh)
Amount of clean energy
generated in 2021 through the
projects financed by İşbank
114
Number of renewable energy
projects financed by İşbank in
2021
1,008 MWh
Total installed capacity of the
renewable energy projects
financed by İşbank in 2021
10,914 MW
Total installed capacity of the
renewable energy projects
financed by İşbank
It is anticipated that 100% of the loans to be allocated by İşbank for new energy plant and electricity
generation investments will be allocated to the renewable energy projects in 2022.
Distribution of Renewable Energy Financing Provided in 2021
Type
Quantity
Total
Installed
Capacity
(MW)
Total Installed
Capacity (MW)
(Financing Share
Ratio Provided)
Cash Risk
(USD million)
Non-Cash Risk
(USD million)
Total Risk
(Cash + Non-Cash)
(USD million)
BES
GES
HES
RES
JES
3
103
3
3
2
9
591
192
118
98
TOTAL
114
1,008
9
200
49
118
63
439
8.3
111.7
7.8
25
29.9
182.7
0.1
3.4
4.7
41.6
0
49.8
8.4
115.1
12.5
66.6
29.9
232.5
Renewable Energy Investments Financed by İşbank
Type
Quantity
Total Installed
Capacity (MW)
Cash Risk
(USD million)
Non-Cash Risk
(USD million)
BES
GES
HES
RES
JES
24
598
90
52
36
210
782
6,480
2,443
999
98.7
366.4
1,164.8
264.4
809.9
TOTAL
800
10.914
2.704,2
8
27.9
18.4
389.4
71.3
515
Total Risk
(Cash + Non-Cash)
(USD)
106.7
394.3
1,183.2
653.8
881.2
3,219,2
Amount of Energy Generated through the Renewable Energy Investments Financed by İşbank
Type (MWh)
Total Electricity Generated as of 2021
Total Electricity Generated as of 2021
(Financing Share Ratio Provided)
BES
GES
HES
RES
JES
1,441,829
2,199,270
15,395,182
6,676,713
6,539,237
TOTAL
32,252,231
1,359,506
1,407,911
6,326,220
3,598,717
3,205,229
15,897,583
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Green Mortgage
Cooperation with International Financial
Institutions for a Green Economy
İşbank has been obtaining medium-long-term, special-
purpose financing from international financial institutions
such as the European Investment Bank (EIB), European Bank
for Reconstruction and Development (EBRD), Proparco,
U.S. International Development Finance Corporation (DFC
(formerly known as OPIC)) and the International Finance
Corporation (IFC) in order to finance the sectors and activities
that contribute to sustainability since 2008. Besides energy
efficiency and renewable energy projects, these resources
are also used to finance female entrepreneurs, SMEs,
agricultural enterprises and businesses located in priority
development regions.
The Bank also supports the economy by increasing awareness
and efficiency in the use of resources through technical
consultancy and training received from financial institutions.
Closely following developments in the field of sustainable
finance, İşbank evaluates the new financing needs of its
customers and continues to provide resources for projects
that are feasible and comply with lending principles and
environmental and social standards.
You can find the list of funds obtained by
İşbank from international financial institutions
and that were outstanding as of year-end
2021 in the "Annexes" section of the report.
İşbank has expanded the scope of the Sustainability Bond
Framework in 2021 by including loan transactions and
turned it into the Sustainable Finance Framework which will
also cover green, social or sustainable loans transactions
in addition to eurobond issuances. Funds obtained under
the framework will be allocated to projects with a positive
environmental impact in the areas of renewable energy,
energy efficiency, recycling, organic agriculture, clean
transportation, green buildings and circular economy, and to
finance loans with a positive social impact, such as financing
SMEs in underdeveloped regions and women entrepreneurs.
The second party opinion was obtained for the Framework
prepared in accordance with the Green Bond Principles, Social
Bond Principles and Sustainability Bond Guidelines published
by the International Capital Markets Association (ICMA) and
the Green Loan Principles published by the Loan Market
Association.
Geleceğe Orman (Forest for the Future)
Geleceğe Orman (Forest for the Future), which represents
a new milestone in the collaboration between İşbank and
the TEMA Foundation that has been in place since 2008,
was made available for use by the Bank's customers in
September 2021.
Geleceğe Orman (Forest for the Future) is a gamification
application which rewards environmentally friendly
banking activities such as opting to not receive printed
bank statements or daily life activities such as using public
transportation with carbon points, which, upon reaching a
certain total target value, automatically results in the donation
of a saplings to the TEMA foundation. With 85,200 users as
of year-end 2021, Geleceğe Orman (Forest for the Future) is
expected to reach 500 thousand people in 3 years, thereby
aiming to gain nearly 1 million saplings to nature. According
to the information from the TEMA Foundation, 30 thousand
newly planted young trees are anticipated to absorb 36
thousand kg of CO2 when they reach 10 years of age.
With the Green Loan product, which can be used forfinance
various environmentally friendly activities, such as post-
insulation (thermal and water insulation) of existing buildings,
installation of energy-efficient heating and cooling systems or
replacement of old inefficient ones with more energy-efficient
systems, replacement of durable goods for individual use
with more energy-efficient ones and purchase of solar energy
panels, it’s aimed to increase energy savings and to finance
the purchase of immovables with energy class "A" and "B".
Whereas, a 0.5% loan allocation fee is charged to customers
for standard consumer loans and mortgages, only half of that
amount is charged to those customers who use Green Loan
products for incentive purposes.
Solar Loan by İşbank
In line with its mission to be the pioneering and leading
bank in the renewable energy sector, İşbank developed and
introduced a new commercial loan to finance unlicensed
rooftop solar power plants (SPPs) to be set up for self-
consumption by industrial facilities in 2019. Solar Loan by
İşbank is aimed at contributing to the development and
widespread use of the "distributed generation" model, which
involves efficient, flexible and on-site generation of energy,
and the efforts in transforming the generation of energy. In
2021, TL 25.6 million worth of Solar Loan by İşbank was lent.
Since the amended version of the Regulation on Unlicensed
Electricity Generation which was adopted during the last
quarter of 2021 has expanded the scope of roof- and facade-
type SPPs by also permitting establishment of on-field
SPPs whose production can be settled with its consumption,
provided that it remains connected to the limited power of
the consumption facility, field-type SPPs have also been
included in the scope of Solar Loans by İşbank.
Energy Efficiency Loan
In 2021, the Bank organized a campaign specific to the Energy
Efficiency Loan and discussed collaboration possibilities with
specialized firms in this field. Any investment that is designed
to reduce costs by increasing energy efficiency can apply for
the loan, and the investment amount is determined based
on a feasibility report that is drawn up by the authorized EEC
(Energy Efficiency Consultancy) firm or 3rd party experts
in cases where an EEC firm is not available. Loans can be
extended in TL, USD or Euro with grace periods up to 1 year
and maturities up to 10 years.
TL 25.6
million
Amount disbursed
under Solar Loan by
İşbank
TL 179
million
Amount disbursed
under Green
Vehicle Loan
TL 172.8
million
Amount disbursed under
Green Office Premises
Loan
TL 4
million
Amount disbursed
under Denizleri
Koruyalım (Let's
Protect the Seas)
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Green Agriculture Support
İşbank created Marine Conservation Loan, the first of its
kind in the sector in terms of its environmental impact, to
provide financial support to customers that want to invest in
or improve their existing wastewater treatment, wastewater
recovery or ballast water treatment systems to prevent or
reduce sea pollution incidents and preserve the seas. After its
launch in the second half of 2021, TL 4 million has been lent
under this loan product.
Green Vehicle Loan and Green Office
Premises Loan
İşbank continues to offer the Green Commercial Vehicle Loan
for environmentally friendly electric and hybrid vehicles with
low energy costs which are becoming more mainstream each
day all around the world as well as the Green Office Premises
Loan for those customers that would like to purchase "green
buildings" with Energy Performance Certificate (category A or
B), LEED (category Gold or higher) or BREEAM (category Very
Good and higher) certificates.
TL 179 million in green vehicle loans and TL 172.8 million in
green office premises loans were lent in 2021.
Electric Vehicle Charging Station Installation Loan
İşbank has introduced the Electric Vehicle Charging
Station Installation Loan to support widespread use of
environmentally friendly electric and hybrid vehicles with low
energy costs, contribute to the development of the electric
vehicle sector, and help EV owners to easily access charging
units.
With the irrigation campaign and Digital Agriculture Loan,
İşbank offers attractive interest rates for customers that
would like to invest in next-gen irrigation systems and digital
agriculture stations.
Pressurized Irrigation Systems Loan
İşbank has signed a partnership and financing protocol with
the Pressurized Irrigation Industrialists Association (BASUSAD)
to ensure widespread use of modern irrigation systems and
thus reduce water consumption. In order to support farmers
and help them obtain water and energy savings, the Bank
has developed the "Irrigation Calculation Tool", which allows
farmers to calculate the required amount of investment based
on their specific land, and also offers loans for pressurized
irrigation systems to improve quality and productivity.
Maximum TEMA Card and Environmentally
Friendly MaxiPara Card
A first in the industry, the Maximum TEMA Card enables the
Bank to contribute to the Turkish Foundation for Combating
Soil Erosion, for Reforestation and the Protection of Natural
Habitats (TEMA) via a participation share as calculated by the
amount of shopping done by customers with this card.
For customers who would like to help preserve nature while
shopping, the Bank offers the Maximum Tema Credit Card with
gold card status, eligible for all the benefits and campaigns
of a Maximum Card, and the Maximum Tema Company Credit
Card for use in commercial purchases of goods and services as
well as the Doğasever MaxiPara Card, which is a prepaid card.
Maximum TEMA Card is manufactured from environmentally
friendly biodegradable card plastic. Raw materials obtained
from FSC (Forest Stewardship Council)-certified producers
are used in the printed materials of the card, without
harming the ecological life. It is possible to apply for a TEMA
Card via digital channels.
As of year-end 2021, there are >100 thousand Maximum
Tema Credit Cards, >7,800 Maximum Tema Business Credit
Cards and >1,500 prepaid Doğasever MaxiPara Cards.
TEMA Environmental Variable Fund
The TEMA Environmental Variable Fund is a pioneering
product in the sector, developed to allow environmentally
friendly investors to use their savings to promote
environmental efforts. With the resources allocated from
the Fund to the TEMA Foundation, financial support is
provided for environmental projects. The fund, allocating part
of its portfolio to invest in businesses which have effective
environmental management systems in place, emphasizes
that businesses which consider environmental impacts will
achieve better financial results in the long term.
The environment is one of the key elements of the concept
of sustainability, within the scope of its sensitivity to the
environment, İşbank has supported the TEMA Foundation's
Nature Education Programs with the funds that it gained
from İş Asset Management Tema Variable Fund, the first-ever
environmental fund in Turkey. Education activities under
the program continued in 81 provinces of Turkey during the
2020-2021 education year, reaching more than 400 thousand
children at pre-school and primary school age.
İş Asset Management Electric
Vehicles Mixed Fund
Launched in 2018, this fund invests in shares and debt
instruments of companies that manufacture electric vehicles
and/or operate in a field that supports manufacturing of
electric vehicles (e.g. replacement part manufacturing, vehicle
technologies development, battery manufacturing, mining).
The number of investors purchasing this fund reached 47
thousand as of year-end 2021.
İş Asset Management Renewable
Energy Mixed Fund
Launched in March 2021, this fund invests in shares and debt
instruments of companies that operate in the renewable
energy field, and the number of investors exceeded 10
thousand by the end of the year.
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for Next-Generation Banking
One of the significant effects of the COVID-19 pandemic on the banking sector is that digitalization,
which was already a hot trend for a long time, has gained even more speed. Reduced face-to-face
communication and closing down of the branches during the pandemic meant that customers
who did not previously prefer digital channels have begun to use digital banking applications.
Another key development in next-gen banking, digitalization
has allowed fintechs, i.e. start-ups in the finance sector,
to emerge and develop products and services in parallel to
traditional banks. The banking ecosystem is expanding with
the vision of these new players. Traditional banks which
support entrepreneurship in the field of fintechs can get
significant competitive advantages.
With its strong digital banking competencies, İşbank aims to
fully address its customers' needs for next-gen digital banking.
The Bank creates a perfect and secure customer experience at
all touchpoints employing digital technologies and analytical
methods with an innovative approach. İşbank, which has been
operating as an innovative bank for 97 years, supports the
entrepreneurship ecosystem both in Turkey and abroad.
Material Issues
Dijital Digital Transformation · Cyber Security and
Customer Privacy · Open Banking
Related Capital Elements
Intellectual
Capital
Social-Relational
Capital
KEY PERFORMANCE INDICATORS
Number of Bankamatik ATMs
Number of digital banking customers (million)
Number of mobile banking customers (million)
Share of digital channels in non-cash financial transactions (%)
Share of digital channels in sales (%)
Number of cardless transactions made from Bankamatik ATMs (million)
Amount of cardless transactions performed through Bankamatik ATMs
(billion TL)
2019
6,506
8.1
7.8
84.6
40.1
33.8
24.8
2020
6,521
9.2
9
92.1
57.5
35.3
32.4
2021
6,476
10.2
10
94.6
62.7
39.3
40.6
Paper consumption savings achieved by digitalization (pages)
40.4 million
71,2 million
64 milyon
Increase in the number of digital banking customers compared
to the previous year (%)
Share of non-branch channels (%)
Number of users reached by Maxi (million)
Number of questions answered by Maxi (million)
Volume of end-to-end digital commercial loan disbursement through
Instant Commercial Loan (million TL)
Successful Transactions Index for IT Critical Services (6-Sigma)
Number of technological entrepreneurs who were supported
to enter the banking system
Number of campaigns aimed at promoting the products of technological
entrepreneurs
Fines incurred due to data security breaches (TL)
12.5
92.2
4.8
18.9
144
4,83
117
7
0
13.6
95.7
5.7
33.3
506
4.81
80
4
11
95.6
6.7
49.1
1,191
4.85
97
16
350,000
150,000
Risks
Opportunities
TARGETS
• Cyber security risks increased with digitalization
• Management of reduced need for labor as a result of
digitalization
• Failure to keep up with rapid economic and
technological changes due to large corporate
structure
• Losing touch with developments such as platform
business models and sharing economy, which are
essential components of the new economy
• Providing personalized products to customers with
digital products and services and 24/7 accessibility
• Opportunity to establish more effective communication
with customers thanks to digitalization of procedures
• Becoming a preferred institution in the eyes of
stakeholders with data security investments
• Becoming an important actor of the new economy with
the support provided to entrepreneurs
• Strengthening business strategies with partnerships in
the field of fintech
• Fast decision making and implementation with agile
business models
Contributed SDGs
Targets for 2021
Realization in 2021
Realization
Targets for 2022 and Beyond
It is aimed to increase the share of
digital channels in total sales to above
63% and 76% by 2023.
The share of digital
channels in total sales
reached 62.7% in 2021.
The Bank aims to increase the number
of customers using digital banking
channels to above 10 million by 2021
and 11.5 million by 2023.
The number of customers
using digital banking
channels reached 10.2
million in 2021.
The number of technological
entrepreneurs who will enter the
banking system by 2023 is aimed to
be over 100 every year.
97
The Bank aims to increase this
ratio to 66% in 2022 and 70% in
2023.
The Bank aims to increase this
number to 11.5 million by 2023.
The target is planned to be
preserved until 2023.
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At İşbank, the primary goals of digital banking are to engage
in contextual interaction with customers, offer personalized
and innovative services and provide an end-to-end seamless
experience.
In 2021, İşbank focused on the following in the field
of digital banking:
• using digital technologies and analytics with an innovative
approach to create a flawless and secure customer
experience at all touchpoints,
• co-developing services with non-Bank stakeholders to
ensure an end-to-end seamless experience within its vision
to offer banking service anywhere, and deploying existing
services outside İşbank’s channels,
• supporting the entrepreneurship ecosystem through the
Workup Entrepreneurship Program and collaborating with
startups that will create value for the Bank, Group companies
and customers, and realizing innovative business models
through an open innovation approach,
• developing solutions and value propositions that will assist
consumers and organizations in making healthy financial
decisions,
• becoming companies’ integrated business partner in
commercial banking and the gateway for all personal
customers to the digital world in retail banking,
• achieving a broad-based customer portfolio with the
inclusion of unbanked customers and commercial
establishments with limited access to financial services,
while also expanding the customer portfolio,
• contributing to nature and the future by adopting new
sustainability-driven practices across digital channels.
With Maximum Mobile, new developments occurred in the
fields of digitalization and contactless payment in 2021. For
example, credit card agreements began to be accepted via
digital approval and the contactless payment function usage
was rolled out. The total number of customers that activated
the Maximum Mobile application was up by 22.2% year-over-
year to 3.9 million at year-end 2021, whereas the number of
12-month active users increased by 10.7% to 2.1 million.
The number of downloads for the Maximum İşyerim
application increased from 161,146 in 2020 to 230,131 at
year-end 2021. Approximately 72 thousand İşbank customers
logged into Maximum İşyerim and began to use the services of
the app within the last 12 months.
Maxi, İşbank's personal banking assistant working with
artificial intelligence and natural language processing
technologies and offering one-to-one dialogue experience
at digital contact locations, allows customers to carry out
their transactions by talking or texting. Maxi interacted with
6.8 million customers and engaged in more than 51 million
dialogues in 2021.
64 million pages
saved in paper consumption
230 thousand
downloads for Maximum İşyerim
2,1 million
Maximum Mobile app users
Paperless Banking
With the possibility to digitally approve credit card
and debit card agreements, the ability to use the
function to send Registered Electronic Mail (KEP)
throughout the Bank, and the implementation of
digital signature, the Bank achieved a total paper
savings of 64 million pages, reduced the need for
labor by 85 FTE (full-time equivalent) and obtained
a TL 7.6 million reduction in paper costs in 2021.
As of year-end 2021, 5.4 million out of 6.9 million
İşbank credit card holders receive only electronic
copies of their credit card statements.
Based on an agreement entered into with the Tema
Foundation, the Tema Foundation has undertaken
to plant one young tree for every 100 kg of paper
donated by İşbank. The Bank donated 129,017 kg of
paper during March 2021 and February 2022, which
means that 1,290 young trees will be planted for
this period.
As part of the Call Center artificial intelligence integrations,
Maxi instantly addresses refund claims of customers whose
money is stuck in a Bankamatik ATM and has also begun to
perform appropriate transactions for customers who would
like to report lost or stolen cards. In line with the Bank's
mission to serve its customers on a 24/7 basis with proactive
solutions, customers whose money is stuck in a Bankamatik
ATM are contacted by Maxi within seconds to instantly refund
the amount in question. These developments have improved
customer experience by helping them to get the services that
they need much more quickly.
In 2021, the Bank began API development activities according
to the standards published in preparation for compliance
with the CBRT's open banking legislation. Even before
this legislation was enacted, İşbank had already created a
collaborative ecosystem by sharing its APIs with third parties
that needed them in line with its vision of "Invisible Banking"
and became a pioneering bank in the field of open banking. In
2021, 9 new APIs were developed, including functions such as
credit card statements, invoice refunds and money transfers/
EFT refund, and the total number of APIs reached 49. The total
number of integrations via APIs reached 51 with the addition
of 20 new integrations.
Developments in Payment Systems
In line with our sustainable and profitable growth strategy,
we have continued to develop payment system products and
services via collaborations in different sectors as part of our
vision to offer banking services anywhere and deployed them
across digital and/or physical channels in order to address
the daily needs of our customers in 2021 as well. We have
deployed the following projects and applications in the field
acquiring (member merchants):
Delivery of Instant POS Service to Corporate Customers
via Digital Channels and Digital Storage of Contracts: As
part of our efforts to maximize digitalization of member
merchant processes, we began to accept applications for POS
terminals from corporate customers, in addition to real person
tradespeople, in March 2021. Therefore, member merchant
application and allocation processes for corporate customers
can now be completed without requiring them to visit the
Bank's branches.
Content arrangements have been put in place so that
customers will not be required to wet sign documents for
member merchant applications that are received via İşCep,
Internet Banking and Maximum İşyerim apps. Thus, contracts
electronically signed by customers will be accessible in the
"My Contracts" menu under the "My Accounts" section of
the İşCep and Internet Banking apps or in the "My Contracts"
menu of the Maximum İşyerim app.
Instant İmece POS Application: Thanks to the
developments carried out in May 2021 to digitalize member
merchant applications, customers are now able to apply
for and instantly get their İmece POS via İşCep and Internet
Banking.
Acceptance of İstanbulkart on İşbank's Physical POS
Terminals and Maximum Mobil and Maximum İşyerim apps:
In March 2021, the Bank entered into a new collaboration
with Belbim A.Ş. to introduce a new service which allows
member merchants in different sectors to accept and collect
payments from İstanbulkart on physical İşbank POS terminals
and the Maximum İşyerim app. With the widest payment
acceptance set in Turkey, İşbank has created a new area of use
for İstanbulkart holders for their daily shopping and payment
activities and has begun to offer card payment acceptance
services to those people who do not have any Bank card but
use İstanbulkart.
Acceptance of UnionPay QR Method on İşbank Physical
POS Terminals: As part of the agreement between İşbank
and UnionPay International, the Maximum İşyerim app can
accept QR payments via UnionPay's mobile app since 2020.
Thanks to the developments in the payment acceptance
methods introduced in 2021, Ingenico POS devices can accept
payments in Euro, USD and TL via UnionPay QR code method.
POS’um Cepte App: Contactless payment, which offers a
quick and convenient payment method, has proved to be an
important means to protect people from infectious diseases
during pandemics. With the Maximum İşyerim app, it is now
possible to turn an NFC-enabled Android mobile phone into
a POS terminal for accepting contactless payments to help
protect public health and facilitate payments with more
economic tools. This new POS solution also enables PIN code
entry via the on-screen keyboard of the phones or tablets
used as a POS terminal for payment transactions above the
contactless payment limit. Besides allowing small businesses
and SMEs to benefit from an affordable solution for payment
collection with credit or debit cards, this app, introduced
in August 2021, is also expected to positively impact
sales thanks to the secure, quick and convenient payment
experience that it offers to customers.
Payment Collection with TR QR Code: With İşbank's
development projects regarding POS applications, it will be
possible to create QR Codes in the "TR QR Code" format on
physical POS terminals and Maximum İşyerim applications
and all domestic customers of the Bank will be able to
shop by using QR codes at İşbank POS terminals. With the
FAST system, payments can be made by using a QR Code.
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to do shopping and collect payments via FAST with TR QR
Codes on İşbank physical POS terminals and the Maximum
İşyerim application.
New Functions in Payment Collection via AliPay Wallet
and WeChatPay Method: Thanks to the collaboration dating
back to 2019 between İşbank and Alipay, a payment platform
with more than one billion wallet users operated by Ant
Financial Services Group, an affiliate of China's e-commerce
giant Alibaba, payments in USD and Euro via Alipay wallet
can be accepted on the Bank's physical POS terminals and
Maximum İşyerim application. On 09.03.2021, TL was
also added to the list of currencies in which payments are
accepted via Alipay wallets. This will allow Chinese tourists
to experience shopping in Turkey with their local payment
method.
Additionally, the WeChatPay payment method, which used to
be accepted only on Ingenico model physical POS terminals,
is now accepted on all Ingenico brand physical POS terminals
and in all cash registry protocols, except for ÖKC and GMP3
protocols, and the Euro has been added as a payment
currency.
• There are now separate agreement processes for credit card
and debit card products, and these agreements can now be
accepted with digital approval,
• Maximiles Black Card, which allows customers to earn and
use MaxiMiles from their shopping transactions at a higher
rate based on their total assets at İşbank, is offered to upper
segment customers within the customer portfolio,
• Development work to include pending debit card and
MaxiPara card receivables in the instant collection system
has been completed,
• Chip Expert and HCE Expert applications have been
introduced within the Bank,
• Prepaid card infrastructure has been moved to a new system
under Petra, and API development work has been completed,
• Payment via TR QR Code with credit cards, debit cards and
prepaid cards is now available,
• Branches have started end-to-end allocation of business
credit cards,
• İşbank card holders can now use İşCep and Internet Banking, in
addition to Maximum Mobile, to communicate their spending
chargebacks related to transactions done with their cards,
• Customers can now use their MaxiPoints more valuable at
POAŞ Dealer cards have begun to be produced digitally.
Pazarama.
The ability to use Miles while shopping at certain stores has
been expanded.
Digital Loan Developments
Digitalization and contactless payment projects and
applications in the field of card issuing in 2021:
• Bankamatik cards began to be produced as cards with chips
and contactless payment feature,
• With İşCep, credit cards can be used for payments on POS
terminals with a QR Code,
• Newly printed credit cards which have not yet been delivered
to the card holder can now be used for e-commerce
transactions
• Credit card applications are now accepted via the "I Want to
Become a Customer (MOI)" feature,
• Digital card statements are created for Bankamatik cards,
• Document control and digital approval practices are now
more commonly used as part of credit card applications,
The Bank has collaborated with vehicle listing websites, real
estate listing websites and loan comparison websites in order
to gain potential customers while they are looking for a house or
vehicle at such digital platforms. Accordingly, the Bank's branches
have begun to evaluate digital loan applications received from
such websites. These initiatives contributed to diversification
of our sales channels, reinforcing our competitiveness and
increasing conversion rates on loan applications.
As of year-end 2021, 80% of consumer loans, including TL 24.2
billion worth of Instant Loans and TL 13.8 billion worth of Credit
Ready, were lent as a result of applications via digital channels.
İş’te Limit practice, which is a credit limit that can be defined
for personal customers without requiring them to visit the
Bank's branches and covers all consumer loans, credit card
and overdraft account products, and enables limit transfer
between these products, was launched on 31 May 2021.
İş'te Limit customers can raise their allocated credit limit by
reducing their credit card and overdraft account limits or by
paying down their consumer loan debts in order to use such
limit in other products. With İş'te Limit, a customer can use all
of their allocated credit limit in the form of a consumer loan or
a credit card within legal limits or an overdraft account up to
25% of the İş'te Limit credit limit, provided that the overdraft
account limit does not exceed TL 50,000.
Digitalization in Branch Operations
In 2021, thanks to the panels developed under the Branch
Workdesk project, it is now possible to monitor sales data on
a per employee basis and to monitor employee targets and
realization of targets and list Branch, Region and Bank sales
performance rankings.
In order to digitalize and improve customer acquisition
processes, in 2021, Real Person Merchants were also included
in the scope of the digital approval process to allow them
to digitally approve their Banking Services Contract (BSC).
Additionally, as part of the I Want to Become a Customer (MOI)
process, software developments have been completed to
offer transportation of contracts via a Courier service so that
people who do not have an NFC-enabled phone or have an
NFC-enabled phone but receive an error during the process
can complete the process. In order to improve the quality
of customer data and reduce the workload of branches, the
Farmer Registration System query has been integrated into
the Bank's system and can now be run via the NAR-Loan
Query Portal across all branches.
Launched in 2020, the 1900-Dialogue Center Branch began to
offer portfolio services to real person merchant customers in
2021 without requiring them to physically visit our branches
and provide suggestions on products and services that could
create value for them.
As of year-end 2021, TL 44.2 million was spent for the
projects under the Personal, Commercial and Branch Digital
Transformation programs. The number of branches renovated
as part of digital transformation reached 510 as of year-end
2021. We will continue to renovate the remaining branches
with designs suited to digital transformation according to the
renovation schedule and requirements.
Artificial Intelligence
At İşbank, artificial intelligence is managed within the
framework of its corporate vision and strategies, in an
integrated manner with the corporate culture. İşbank aims
to maximize customer experience with artificial intelligence
applications; and directs employees to areas where they can
create higher value with the automation of low value-added
works.
The "Agile working model" is applied in artificial intelligence,
which is one of the priority areas of work in the Bank. The
Artificial Intelligence Agile Tribe has been established.
As of year-end 2021, AI investments amounted to TL 15.79
million.
TL 15.8 million
Amount of AI investments
Robotic Process Automation
İşbank strives to fully utilize new technologies to make life
easier for its employees, and has increased the number of
robots to 83 in 2021 as part of its digitalization efforts. With
250 new robotic process designs beginning to work on robots,
the Bank achieved a time saving of approx. 600 thousand
hours during the year. In addition to operational divisions with
high transaction volume, robotic process automations have
also been introduced in the head office divisions. As routine
tasks of employees have been automated, employees are now
able to allocate more time to focus on higher value-added
tasks. Robots have also begun to affect the lives of customers,
increasing customer satisfaction as a result of much quicker
service times with automated tasks.
Online training was given to 435 employees to allow İşbank
employees to develop robotic processes and come up with
new automation ideas. The number of robotic processes has
rapidly increased as employees have developed their skills and
applications are recognized by robots.
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In order to correctly predict the strategic moves capable of changing competition in the digital world where
technology is progressing rapidly and take action, İşbank continues its initiatives for developing the technology
and business models aligned with the new competitive conditions. Adopting the open innovation approach, the
Bank utilizes ideas and technologies which are developed by organizations such as technology companies and
universities for various initiatives including development of new products and services.
Through innovation centers in the USA, China and Turkey,
İşbank follows new technologies and continues its proof-
of-concept studies to ensure use of digital technologies and
analytical methods with an innovative approach and to create
new products.
Thanks to the innovation activities and collaboration with
different stakeholders in 2021, the Bank has developed the
Geleceğe Orman (Forest for the Future) application, which
allows customers to convert their points earned from their
daily tasks, spending and banking transactions into young tree
donations, and introduced the Superapp Developer Platform,
which allows external developers to create mini apps within
mobile applications with a minimum level of coding and
gives super application capabilities to mobile applications.
Additionally, 4 proof of concept projects are being undertaken
to ensure personalized service delivery to customers in digital
channels and to develop gamification competencies. In 2021,
two separate projects were completed to set the Bank's
innovation and invisible banking strategies. The Social Account
feature was redesigned. The Bank is currently working on
setting strategies to create new initiatives with a focus on NFT
and Metaverse in 2022.
As part of our efforts to spread the culture of innovation, we
are organizing many workshops and events internally and
externally and carrying out processes that create innovative
value proposals within the scope of "İş’te Yeni Bir Lider
Programı".
As per its founding mission, İşbank is an organization
that supports all economic activities and especially
entrepreneurship and aims to provide this support in a
sustainable and accessible manner. In this context, the Bank
provides multi-dimensional support to startups, also known
as technology-based initiatives, and this ecosystem in order
to help them flourish and grow. İşbank is also working on
creating its own ecosystem. With its vision of becoming the
"Bank of Entrepreneurs and Entrepreneurship" and open
innovation approach, İşbank supports the projects developed
by initiatives, technology companies and universities. In 2021,
the Bank collaborated with 22 initiatives and carried out
campaigns and proof-of-concept work.
Internal Entrepreneurship Program
Thanks to the "Internal Entrepreneurship
Program", which was launched to introduce
innovative business ideas and develop our
employees' teamwork and continuous learning
skills, our employees have gained the skills
"to think and act like an entrepreneur" and
improved their innovation, creativity, risk taking
and competitive thinking skills and also get
the opportunity to generate their ideas, detect
problems, create solutions and launch their
products.
Entrepreneurship teams, which consist of
our employees, improve their knowledge and
awareness about innovative business models,
entrepreneurship and the basics of internal
entrepreneurship, and are given training and
mentorship support from their program partners
that have experience in entrepreneurship.
The program was announced in October 2020,
and 181 employees applied to the program with a
total of 261 different ideas. The program started
with 6 ideas and 25 employees, and following an
8-week "idea validation" stage and a 12-week
"incubation" period, 5 entrepreneurship teams
reached the finals. During this process, our teams
developed their products and conducted field tests
with customers by receiving software support
in addition to mentorship support. The Bank
continues to provide the necessary resources,
including software and mentorship support,
to the teams that successfully completed the
program so that they can become a technology-
oriented entrepreneurship and commercialize
their products. In 2022, the Innovation and Digital
Strategy Division will continue to work on scaling
up the 4 entrepreneurship teams that completed
the first program.
Agile Workshop
As part of Agile Transformation, the Agile Management
Division was established in September 2020,
representing a significant step towards deploying
agility across the organization.
As of December 2021, 15 Agile Tribes and 14
Chapters / Centers of Excellence were established
at İşbank. 725 employees from different disciplines
are employed in the 15 Agile Tribes, and the teams
concentrate on Retail and Commercial Banking
Segment Management, Product Development,
Automation, Artificial Intelligence, Technology Platform
Management and Next-Gen Work Model. The teams
possess a mixed combination of competencies,
including business product knowledge, digital,
customer experience, data analytics and software
development competencies, that are necessary for
realizing the targets related to their main focus areas.
As of year-end 2022, the Bank aims to establish
approx. 25 Agile Areas and reach 1,500 people. 20
internal Agile Coaches have been trained to ensure
successful progression of the Agile Transformation.
In 2021, more than 12,000 hours of training were
organized for our employees with agile roles. Based on
the agility measurements at year-end 2021, the Bank
achieved a score of 4.23, 4.27 and 4.23 out of 5 in the
fields of Employee Satisfaction, Agile Maturity and
Team Autonomy, respectively. All scores are above the
minimum target score of 4.
Workup Entrepreneurship Program
The Workup Entrepreneurship Program, which was
created to support and accelerate early-stage startups
with a technology-oriented, sustainable and scalable
business model, has continued since 2017 without
interruption. More than 13 thousand applications have
been received so far, and a total of 119 entrepreneurs
were accepted into the Program, including the
ongoing 9th period with 12 entrepreneurs. A total of
81 entrepreneurs completed the program during the
first 8 periods, and 32 of the entrepreneurs joining the
program received funds totaling USD 9.6 million, each
with different investment amounts.
Workup Agri, an agricultural acceleration program,
was also introduced in 2021. Launched in October,
the program continues with 6 entrepreneurs. The
İstanbul Entrepreneurship Branch, a specialized branch
with services exclusively for entrepreneurs, angel
investors and investment funds, began its operations
in November. Maxis YGSYF continued its investments
in 2021 as well, and invested a total of USD 490
thousand in 2 different entrepreneurs.
Softtech Ventures
Softtech Ventures was established in order to
implement and commercialize early-stage venture
ideas internally and externally. With this structure, a
strong ecosystem has been realized with an integrated
strategy aimed at supporting initiatives that have the
potential to scale in the global arena, especially in the
Bank’s strategic focus areas.
İşbank Future Hub Programı
The İşbank Future Hub Program is a long-term
development program organized in collaboration
with the Yenibirlider Association and İşbank to offer
university students the opportunity to be a part of
the digital-oriented leadership school of the future, to
discover themselves and to build their careers with the
perspective of digitalization and get to know the culture
of innovation and entrepreneurship closely. In 2021,
the Program was organized with the participation of
2 teams consisting of 12 students. Participants are
supported in many ways from implementing a digital
and innovative idea with the help of mentors from the
Digital Banking Division Innovation Unit and Yenibirlider
Association ecosystem to educational, cultural and
artistic activities. They have the chance to experience
next-generation project management approaches and
agile working methods.
Turkish Entrepreneurship Foundation and
Arya Women Investment Platform
In addition to the activities carried out within İşbank,
extensive cooperation is also carried out with
stakeholders who make significant contributions to
the ecosystem. The Bank became the main sponsor
of the Turkish Entrepreneurship Foundation which
plays a key role in introducing university students
into the entrepreneurship ecosystem and influences
their educational life through scholarships and other
support; and also became the main sponsor of the
Arya Women Investment Platform, which works to
increase both investment and business development
opportunities for women entrepreneurs. For detailed
information about the project, see the "Financial
Inclusion" section of this report.
Technological Entrepreneur Tariff
İşbank continues to support entrepreneurs with the
Technological Entrepreneurship Tariff, which was
created to support technology-based initiatives in their
establishment period. The Technological Entrepreneur
Package offers advantageous financing and service
support for technology-oriented, innovative
entrepreneurs that have a start-up incorporated within
the last 3 years and create added value. With an additional
97 entrepreneurs in 2021, this tariff was designated
for a total of 294 entrepreneurs as of year-end 2021.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen INFORMATION SECURITY
In order to accurately predict the strategic moves capable of changing competition in the digital world where
technology is progressing rapidly and to take action, İşbank continues its initiatives for developing the technology
and business models aligned with the new competitive conditions. Adopting the open innovation approach, the
Bank utilizes ideas and technologies which are developed by organizations such as technology companies and
universities for various initiatives including development of new products and services.
İşbank attaches special importance to all processes that
are designed to secure its information assets. With regular
investments, technological developments in the field of
security are closely monitored and various training and
awareness raising activities are carried out to continuously
improve the security culture.
The Board of Directors has the ultimate responsibility to
ensure information security within İşbank. To this end,
the Board of Directors develops the required strategy
and oversees its implementation via the committee. The
Information Security Committee is responsible for developing
and implementing information security and personal data
protection policies. All organizational units of the Bank
are responsible, within the boundaries of their areas of
responsibility, for carrying out their activities in accordance
with these policies and related standards.
Policies and related standards regarding information security
and personal data form the basis of any actions to be taken.
Additionally, through continuous awareness raising activities,
the Bank strives to increase the knowledge of its employees
and raise information security awareness among end users.
In 2021, 19,583 employees from the Head Office and branches
received a total of 21,903 hours of training in the fields of cyber
security, social engineering and information security.
İşbank's banking processes and information systems are
annually audited by the Board of Inspectors in a risk-based
manner to provide basis to the Management's Decleration
to be submitted to an external auditor in accordance with
the "Regulation over External Audit Institutions’ Information
Systems and Banking Processes Audits" published by the
Turkish Banking Regulation and Supervision Agency (BRSA).
Processes for ensuring information security are absolutely
covered during the audits of information systems. Accordingly,
İşbank's compliance with the Law on Protection of Personal
Data no. 6698 and the Banking Law no. 5411 as well as
the regulations associated with the said Laws, including
especially the Regulation on Banks' Information Systems and
Electronic Banking Services (BSEB) which became effective on
01.01.2021, is examined.
With priority given to the control targets regarding the
provisions included in section 3 "Information Security
Management" of the BSEB regulation, and within the
framework of the mentioned regulations, the existence,
adequacy and effectiveness of a process that includes
activities such as risk assessment, approval of the corporate
information security policy by the Board of Directors and
supervision of its implementation by the Senior Management,
conducting studies to increase the awareness of the Bank
personnel on information security, classifying all data
according to the degree of security sensitivity and conducting
security controls at the appropriate level for each class,
implementation of information security tests, prevention of
data loss, and updates of existing controls and structures
created according to technological developments are
evaluated.
Within the scope of audit studies for information technologies
(IT), examinations are carried out to contribute to the
achievement of basic goals for the healthy management of
IT risks and the effective and efficient use of IT resources.
The scope of the said audit work is determined by a risk
assessment prepared by taking into account the criticality of
the applications and systems for the Bank and their sensitivity
in terms of data security. These system-oriented technical
reviews are carried out on the basis of local legislation and
international best practices, including especially the articles
of the BSEB regulation which are directly related to ensuring
information security.
Similar to the audit activities carried out within the Bank, the
internal control environments regarding information security
of the Bank's subsidiaries and affiliates and the organizations
from which the Bank receives support services are also
evaluated within the framework of audit activities.
As per the communiqué "Penetration Tests for Information
Systems" (Penetration Test Communiqué) published by BRSA
on 24.7.2012, banks are required to carry out penetration
testing at least once a year. The purpose of penetration
testing is to identify and fix vulnerabilities that may result in
unauthorized access to the Bank's information systems or
sensitive data before such vulnerabilities are exploited.
External firms have been carrying out penetration tests
at İşbank since 2012 in accordance with the communiqué.
Penetration test action plans evaluated regularly by
Information Security regarding the findings of the penetration
tests are reviewed by the audit team, and the "Penetration
Test Finding Follow-up Report" for the current year is reported
in the following year.
In the ordinary audit activities and investigations carried out
by the members of the Board of Inspectors, the effectiveness
of the measures taken for confidentiality of customer
information is reviewed. In case of a customer complaint
submitted to the Bank in relation to an alleged breach
of confidentiality due to loss or disclosure of customer
information to third parties, the issue is meticulously handled
in all aspects and the audit results are reported. Within
the scope of the investigations, the data and audit trails in
the Bank's systems are analyzed in a holistic and detailed
manner, and any situations that indicate reasonable doubt
are examined from an analytical perspective. In the event of
a reasonable suspicion that such information is disclosed to
third parties, investigations on the subject are expanded and
if these doubts reflect the truth, the necessary measures
and decisions within the scope of both internal regulations
and legal legislation are taken without delay. In addition,
the processes described in the Bank legislation regarding
provision of information to customers about the outcome
of such complaints are executed in order to ensure that
the complaint owners are notified about the outcome of
examinations.
Reporting all examination results to the Board of Directors
through the Audit Committee and monitoring the measures
taken by the relevant unit managements within the framework
of audit reports are also within the scope of internal audit
activities.
Internal Control Division information systems internal control
activities team regularly monitors the Bank's various control
points in the field of information security at daily, weekly
and monthly intervals as part of level two controls, and the
identified operation issues are shared with the relevant IT
units to fix them. The Internal Control Division's activities
include access, privilege and security parameter controls,
privileged common user accounts on servers and databases,
activity controls for high-privilege users in critical servers and
applications for information security, server antivirus software
controls, and controls for security of server audit trails.
Additionally, regular access and authorization controls are
done to ensure that end user privileges in basic applications
used for the main banking processes are up to date.
Within the framework of the security architecture, there are
multiple layers in the communication network infrastructure
of İşbank. Anti-DDoS solutions are positioned to prevent
suspicious external DDoS (distributed denial of service) traffic
targeting the Bank. In the outermost network, incoming and
outgoing traffic is controlled by IPS (Intrusion Prevention
Systems) and WAF (Web Application Firewall) systems. In order
to increase security on the communication network, different
zones have been created on the network. Within each zone,
there are different firewalls and access control lists (ACLs),
and zones are protected by customized rules and security
defense mechanisms. In addition, different switches and
VLANs (virtual local area networks) have been established in
different zones. Outgoing internet traffic is analyzed by secure
socket layer (SSL) monitoring tools and protected by sandbox
APT (Advanced persistent threat) systems. All server and
endpoint devices are protected by endpoint security solutions.
Authorizations in the systems are made based on role and
in accordance with the principle of separation of duties, and
authorizations are regularly reviewed. The trace records
created on the systems are transferred to SIEM products, and
security warnings are followed by the Security Operations
Center within the framework of predetermined rules on a 24/7
basis, and actions are taken regarding security incidents.
At İşbank, regular penetration tests are conducted to detect
possible system vulnerabilities. Systems are patched to fix
any detected vulnerabilities. Information security awareness
training is provided and phishing simulations are used to
increase awareness among Bank employees.
In 2021, to achieve compliance with the Regulation on
Information Systems and Electronic Banking Services of
Banks, consultancy services were received, and the actions
planned to be taken based on the findings are being closely
monitored. The K2 - IT New Regulation Compliance Project is
being undertaken which includes Information Assets Inventory
Management, Implementing and Monitoring Central Audit
Management System, Secure Transmission and Encryption of
Sensitive Data and Whitelist Management.
Approx. TL 96.2 million was invested in information security,
cyber security and monitoring of fraudulent transactions
during the last 3 years (2019, 2020 and 2021).
TL 96.2 million
Approximate amount of investment in information
security, cyber security and monitoring of
fraudulent transactions during the last 3 years.
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Operations
Mitigate the negative
impacts of our operations
Our Employees
We take responsibility to mitigate the
negative impacts of our operations
As one of the biggest banks in Turkey, İşbank offers services to millions of customers with its
operations throughout the country. When managing its widespread network of operations, the
Bank aims to minimize its environmental impact, ensure that the suppliers embrace the same
working norms as it does, and become a reliable employer for all of its employees.
KEY PERFORMANCE INDICATORS
Total Number of Suppliers
Number of Local Suppliers
Ratio of Local Suppliers* (%)
Ratio of Procurement from Local Suppliers* (%)
2019
2,604
2,554
98.08
81
2020
2,744
2,673
97.41
92
2021
3,486
3,396
97.42
91
* While calculating the ratios, companies registered in the trade registry and operating in Turkey were accepted as local companies.
SUPPLY CHAIN MANAGEMENT
Sustainable development is only possible through
responsible business models. Positive or negative impacts
caused by an organization are not confined to the area of its
operations, but may affect a large area based on the size of
the organization. Aware of its responsibilities, İşbank aims to
propagate its approach to, and standards of, business to its
supplier chain as well.
By collaborating with its suppliers, it strives to ensure that
best practices and products extend to an even larger area.
İşbank works to achieve sustainable business success with a
financially strong, environmentally friendly supply chain that
is also reliable with high-quality production and continuity.
Material Issues
Responsible Procurement
Related Capital Elements
Social-Relational
Capital
Risks
Opportunities
• Loss of reputation due to adverse events in the
• Developing cooperation that will provide efficiency with
supply chain
effective supply chain management
• Operational risks that may occur due to disruptions
in the supply chain
Contributed SDGs
TARGETS
Targets for 2021
Realization in 2021
Realization
Targets for 2022 and Beyond
Maintaining the local supplier
ratio at 98%
97.42%
Maintaining the current level
In line with İşbank's ethical banking approach, the Supplier
Code of Conduct, based on the UN Global Compact and İşbank
Human Rights and Human Resources Policy, determine the
main principles and essentials in purchases of goods and
services. The Supplier Code of Conduct, which is available on the
Bank's corporate website, is also posted on the "İş'te Marketim"
application, which is the main platform in purchasing processes
and actively used by the suppliers of İşbank. All suppliers are
expected to comply with the principles and policies within
the scope of İşbank's Anti-Bribery and Anti-Corruption Policy,
Gift and Hospitality Policy and Ethical Principles and Code
of Conduct, which are accessible on the same platform, and
expected to refrain from acts that would violate these principles.
You can access Supplier Management
Principles here.
İşbank has adopted the principle of continuously improving its
suppliers, ensuring organizational excellence, and improving
business processes consistently. When selecting suppliers,
the Bank chooses one from its existing pool of suppliers based
on the nature of procurement in question or tries to reach
new alternative suppliers by looking at predefined criteria.
The Bank also takes different parameters into consideration,
such as reference check, sector analysis and financial analysis,
when identifying alternative suppliers.
In accordance with the Sustainability Policy, İşbank endeavors
to minimize the negative environmental and social impacts
caused by suppliers, and to raise the positive effects
to maximum levels. In this context, the Bank respects
environmental and social criteria in its supplier selection.
The requirement to take environmental impacts into
consideration during procurement activities is set out in the
Procurement Policy. Various criteria are evaluated, such as
whether the supplier company has an active environmental
management system in place, whether the legal requirements
for the disposal of waste generated from the activities carried
out for the Bank are met, whether recycled materials are used,
and the frequency of environmental emergencies.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen In procurements with high environmental impact, suppliers
are expected to submit the required documents related to
the subject. No goods or services are purchased from those
suppliers who fail to meet the expectations.
Like environmental criteria, social criteria also play a key role
in the selection of suppliers at İşbank. Suppliers are expected
to adopt work principles similar to those embraced by the
Bank. İşbank respects association and collective bargaining
rights, and sensitivity on this issue is taken into account in the
selection of suppliers. Purchases of goods and services from
suppliers that are found to be involved in practices of bribery
and corruption are suspended, and such suppliers are banned.
Article 2 of the Supplier Management Principles states
"No person under the legal working age may be employed”.
Accordingly, the Bank does online research and looks into the
market sources to gather information about suppliers. The
suppliers are also visited according to a schedule. During the
reporting period, the Bank received no feedback which could
indicate any negative social impact of its suppliers.
İşbank has adopted the principle of continuously improving its
suppliers, ensuring organizational excellence, and improving
business processes consistently. The Bank continued to
contribute to the national economy by selecting local suppliers
in 2021 as well. Therefore, local suppliers accounted for
97% of the total suppliers, while the amount of procurement
from local suppliers accounted for 91% of the total volume of
procurement during the reporting period.
As part of supply chain management, İşbank expects its
suppliers to:
• meet the Bank's expectations of quality-logistics
performance,
• act in accordance with the environmental and ethical rules,
• keep up with the developing and changing industry
conditions,
• make plans in cooperation with the Bank in order to
reduce the negative impact of production processes on the
environment,
• prefer raw materials and materials with minimal impact on
the environment during their procurement activities,
• try to minimize the environmental impact associated with
their production and logistic processes, and
• prefer packaging materials with minimal environmental
impact.
The statement on the opening page of the procurement
platform "As İşbank, it is important for us that our suppliers
embrace the same values as we do so that procurement
processes can be executed in a healthy and sustainable
manner. Here you can view our Supplier Management
Principles, Antibribery and Anticorruption, and Gifts and
Hospitality Policies, which set out the basic principles and
procedures to be followed under the relations between İşbank
and the suppliers from which services will be purchased”,
provides information to all of our suppliers about the above-
listed policies.
These policies are available at İşbank's
corporate website and are accessible by all
stakeholders.
In 2021,
97%
ratio of local suppliers
The boxes are made of recyclable material.
Concerning the electricity procurement
tender for the next period, renewable
energy sources have been preferred for all
electricity consumption.
173 hybrid vehicles were preferred under
the vehicle leasing contract. The Bank has a
fleet of 1,913 rental vehicles in total. Hybrid
vehicles account for 9% of the total number
of vehicles.
CIPS Certification
In 2021, the CIPS (The Chartered
Institute of Procurement & Supply)
certification process was undertaken
to certify conformance of the Bank's
procurement organization and processes
to international standards. CIPS is one of
the leading professional institutes that
sets the best practices and standards in
the field of procurement and supply chain
management.
Corporate CIPS Certificate is a
globally recognized accreditation that
demonstrates the level of maturity of
an organization's supply chain policies,
strategies, procedures and processes. By
obtaining this certificate, firms can display
and prove that they can keep up with the
ever-changing business environment in
the field of procurement and that they
have robust and professional supply
practices and systems in place. The
Procurement Division has successfully
completed all detailed evaluations
conducted by the CIPS Institute and an
external auditor assigned by the institute.
İşbank was awarded the CIPS certificate
on 27.10.2021. The Bank became the first
organization in the Turkish banking and
finance sector to receive this certificate.
Supplier Sustainability Performance Measurement Survey
Suppliers from which the Bank procures a large amount of products/
services via its procurement application were subject to a survey which
included 35 questions in the main fields of environment, labor and
human rights, ethics and sustainable procurement. Suppliers who took
the survey represent 67% of the procurement budget for 2021. This
survey was intended to see the current status of suppliers in terms of
sustainability and to raise awareness of sustainability among suppliers.
Focus areas included in research
Environment
Environmental
Labor and
Human Rights
certificates
Occupational
Environmental
safety
policy
Trainings
Environmental
Harassment/
Discrimination
Child labor
Employment
of women
Human
rights
management
Approach to
climate change
Waste
management
Energy
management
Water
management
Recycling
Emission
management
Ethics
Ethical rules
Information
management
Anti-corruption
Fair competition
Sustainable
Procurement
Social
responsibility
Environmentally
friendly products
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KEY PERFORMANCE INDICATORS
With the current state of the world, one of the main responsibilities of both individuals and corporations is
to use natural resources in a responsible manner and to minimize their environmental impact. İşbank takes
responsibility for climate action in order to maintain its operations with minimal environmental impact. The Bank
sets this responsibility on a firm basis with its targets and commitments. Additionally, İşbank is undertaking many
improvement and energy-efficiency projects to reduce its environmental impact.
Material Issues
The Bank's Environmental Footprint
Related Capital Element
Natural
Capital
Risks
Opportunities
• Increase in operational expenses due to rising
energy costs
• Failure to meet the requirements of corporate
commitments due to noncompliance with
environmental regulations
• Reduced operational expenses through energy
efficiency, reduction of water consumption, and
paperless banking practices
Climate Targets
İşbank added climate change risk to its risk catalogue and
developed the Bank's strategy for climate change, which is
one of the most important components of the environmental
dimension of sustainability. In the combat against climate
change, the Bank set its target for reduction of greenhouse
gas emissions and stated it in its disclosure under the CDP
Climate Change Program:
"To reduce the total Scope-1 and Scope-2 greenhouse gas
emissions calculated in accordance with the International GHG
Protocol by 38% by 2025, 65% by 2030, and to zero by 2035,
and to carry out activities as carbon-neutral as of 2035 (target
baseline year: 2018)"
İşbank has made a commitment to the Science Based Targets
Initiative (SBTi) to validate the emission reduction targets on
a science-based basis. In the following periods, it is aimed to
evaluate Scope-3 emissions from lending activities and the
supply chain with a target-based approach.
In 2021, the amount of energy generated from
renewable energy sources accounted for 84% of the
total energy consumption.
İşbank was awarded a score of "B" in the CDP Climate
Change Program in 2021.
Greenhouse Gas Emissions (tons of CO2e - equivalent) 1
Scope 1
Scope 2
Scope 3
Total (Scope 1 + Scope 2)
Energy Consumption1
Total Electricity Consumption (kWh)
Total Natural Gas Consumption (m3)
Fueloil Consumption (lt)
Coal Consumption (kg)
Diesel Consumption (lt)
Total Energy Consumption (GJ)
Water Consumption (m3)
Total Water Consumption2
City Water (Blue)
Waste Water (Gray)
Spring Water (Green)
Amount of Recovered and Re-used Water
Vehicle Fuel Consumption (lt)
Fuel Consumption of Company Vehicles (Diesel)
Fuel Consumption of Company Vehicles (Gasoline)
Fuel Consumption of Employee Shuttles (Diesel)
Business Trips with Personal Vehicle (Diesel)
Business Trips with Personal Vehicle (Gasoline)
Business Trips with Personal Vehicle (LPG)
Paper Consumption (ton)
Amount of Waste (ton)3
Amount of Electronic Waste
Amount of Domestic Waste
Amount of Paper Waste
Amount of Medical Waste
Recycled Hazardous Waste4
Recycled Non-Hazardous Waste
Total Amount of Waste
Amount of Recycled Paper
Amount of Recycled Electronic Waste
Emission Intensities
Emission per employee (tCO2e/number of employees)
4.4
Emissions according to consolidated asset size (tCO2e/TL million) 0.2
Consolidated emissions by net profit (tCO2e/TL million)
14.9
2018
2019
2020
2021
20,472
68,599
10,563
89,071
21,789
71,781
8,727
93,570
20,629
57,193
7,779
77,822
22,528
8,784
6,458
31,312
127,989,080 132,501,362 119,911,679 121,403,480
4,126,643
8,000
170,586
417,479
756,517
3,879,943
6,400
78,713
351,180
670,254
4,178,163
14,710
77,606
320,068
588,942
5,284,460
11,296
21,869
282,318
630,216
371,244
365,424
0
5,820
5,820
2,718,367
15,335
562,655
-
-
-
808
345,389
335,964
0
9,425
9,425
4,012,798
11,982
541,627
-
-
-
679
282,477
278,890
278,890
3,588
3,588
3,639,660
7,592
535,390
36,685
42,740
22,259
643
270,182
262,235
262,235
7,947
7,947
3,155,927
334,694
550,100
40,352
43,731
27,035
503
9
1,884
200
1
13
29
2,116
200
9
30
1,757
129
2
5
41
1,964
129
30
4.3
0.2
17.0
37
861
94
1
7
25
1,026
94
37
3.4
0.1
10.0
23
1,001
346
2
10
189
1,570
346
23
1.4
0.0
2.0
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1 The emission and consumption data reported in 2018 included the Head Office buildings, all domestic branches and regional directorates, and in 2019,
the Atlas Data Center was also added to this data. The increase in electricity consumption in 2019 was partly due to the inclusion of the data center.
2 Total water consumption = Total amount of discharged water
3 2018-2019-2020 data only includes the Head Office buildings. 2021 data includes the Head Office buildings as well as the service buildings with
ISO 14001 certification.
4 Electronic and medical waste was included in 2018 figures. It was not included in other years.
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen TARGETS
Targets for 2021
Realization in 2021
Realization
Targets for 2022
and Beyond
In line with its goal to reduce greenhouse
gas emissions, İşBank aims to reduce the
total Scope-1 and Scope-2 emissions
calculated in accordance with the
International GHG Protocol by 38% by 2025,
65% by 2030, and to zero by 2035, and
carry out its activities as carbon-neutral as
of 2035 (target baseline year: 2018)
As of 2021, İşBank has
begun to use renewable
energy in all its operation
points where available
and has already achieved
its targets for 2025 and
2030.
Maintaining the current
status
The Bank aims to meet at least 50% of the
eligible consumer electricity consumption
from clean energy sources by 2025 and
100% by 2030, in line with its greenhouse
gas emission reduction targets (target
baseline year: 2021)
Completing the ISO 14001 Environmental
Management System certification process
of approximately 400 locations in 2020,
and obtaining certification to cover all
operation and service locations of the Bank
by the end of 2022
Thanks to the digitalized processes,
the Bank aims to reduce total paper
consumption in 2021 by 34.8 million pages
compared to 2020.
In order to reduce negative environmental
impacts in 2021 and beyond, the following
targets have been set:
• Reducing water consumption by installing
a water-saving aerator in all sink faucets
of branches,
• Saving energy by continuing to change
the lighting fixtures to LEDs,
• Continuing to replace old type air
conditioners with new generation air
conditioners with higher efficiency.
100%
Maintaining the current
status
Our 423 branches and
divisions received ISO
14001 certification in
2021.
The Bank achieved paper
savings of 64 million
pages compared to 2020.
Replacement of aerators
is ongoing, with a
60% completion rate
as of year-end 2021.
Replacement of air
conditioners and lighting
fixtures with LEDs
continues.
Obtaining ISO 14001
certification for all
operation and service
locations of the Bank
(excluding social facilities).
0 paper for 2024
Lighting fixtures of 125
Branches will be replaced
with LED lights in 2022.
Replacement of old type
air conditioners with new
models is ongoing at our
branches which are being
refurbished.
Management of Environmental Impacts
At İşbank, an ISO 14001 Environmental Management
System Project has been in place since 2018 in order to
reduce its environmental impact and build an environmental
management system that complies with international
standards. Accordingly, employees with environmental
responsibilities are given Environmental Management
System Training, while employees at the Internal Control
Division receive Environmental Management System Internal
Auditor Training. Employees who have just started their
career at the Bank are provided with information about the
Environmental Management System as part of the "Starting
My Career" Trainings. The Environmental Management
System is audited by the Internal Control Division on an
annual basis. The Bank has not incurred any fines for non-
compliance with environmental laws and regulations during
the reporting period.
As of 2021, İşbank has ISO 14001 Environmental
Management System Certificates for 847 locations. The Bank
aims to achieve ISO 14001 Environmental Management
System Certification for all of its locations by receiving
certification for 492 locations by year-end 2022. As of year-
end 2021, the ratio of certified locations to the total number
of locations of the Bank is 63%, which is expected to be
increased to 100% by year-end 2022. İşbank aims to maintain
its environmental management system which complies with
international standards in the coming years.
İşbank ensures that the electronic devices used in operations
and whose lifecycle is monitored by the IT Division are
recycled in order to reduce its environmental impact. Aware
of the harmful effects of electronic waste and the associated
economic losses, İşbank sells used electronic items and
returns used toner cartridges. The firms to which the Bank
sells such used items have AEEE certification.
Environmental Impacts
in the Supply Chain
İşbank monitors the environmental impacts of its
supply chain. The criteria specified in the Supplier
Management Principles include environmental
factors. These criteria affect supplier selection. In
procurement activities or operations which have
a high environmental impact, such as disposal of
wastewater or procurement of batteries, suppliers
are evaluated based on their capabilities. No goods
or services are procured from suppliers that fail to
submit the required documentation. For special
procurement activities, suppliers that submit the
required documentation are preferred, regardless
of price.
As of 2021, the Bank has ISO 14001 Environmental
Management System Certificates for 847 locations
(63% of total locations).
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Paperless banking activities are carried out and performance
indicators of waste generation, water and energy consumption
and carbon emission in the Head Office buildings and branches
are monitored. Remote working, a new way of working that
İşbank offers to its employees, supports gains in this field.
Environmentally Friendly Buildings
Environment friendly buildings play a key role in reducing
the environmental impact of İşbank's activities. İşbank's big
buildings such as the Head Office, operations center and data
center were designed to minimize their environmental impact.
İşbank Head Office building in Levent, Istanbul has a BREEAM
In-use Excellent certificate. Tuzla Technology and Operations
Center (TUTOM) received the LEED Gold certificate. The Bank's
Tuzla Data Center (Atlas) building has been certified with LEED
v4 Gold for Data Centers. Atlas is the first data center in Turkey
that meets such high standards.
As a result of the improvements and upgrades
made for higher energy efficiency, emissions
(scope 1+scope 2) were reduced by 46,510
tCO2e, while water consumption was reduced
by 12,295 m3.
From 2020 when remote working
arrangements were put in place to the end of
2021, electricity consumption at the Head
Office locations decreased by 8.4%.
Energy consumption is reduced by using the energy which is
generated during cooling in the ATLAS Data Center building for
the heating of office areas. At the Atlas Data Center, the data
halls which house IT cabinets are air-cooled with packet type
cooling devices in an uninterrupted and redundant manner.
After the cabinets are cooled, the heated air is mixed with
outdoor air and used for heating the air conditioning systems,
thus saving energy. In addition, rainwater is collected and
reused after purification.
Aerators were installed to reduce water pressure in the
TUTOM building in 2021. For the Head Office, ATOM and Atlas
Data Center buildings, efforts have been initiated to save
water in washbasins by procuring and installing aerators. The
process of installing aerators at more than 800 branches and
units with ISO 14001 certification began in 2021. At all service
buildings, conventional flush tanks were replaced with new
models that use less water, and urinals with photocell control
were chosen to replace existing urinals. Faucets in lavatories
were replaced with water-saving faucets. Thanks to these
measures, approximately 15% water savings was achieved.
In 2021, during the renovation work across the Bank, lighting,
heating and cooling systems of branches were modernized.
Existing lights were replaced with LED lighting, while old air
conditioners were replaced with high energy-efficient units,
and natural gas conversion was carried out at branches
that were heated with coal or diesel fuel. At the Head Office
Tower1, the heating system pumps were replaced with more
energy-efficient models.
At the Head Office and TUTOM buildings, all waste is sorted
and recycled according to the ISO 14001 Environmental
Management System Standard.
ENERGY-EFFICIENT BRANCHES
İşbank continues its environmental efficiency
efforts in its service buildings with a perspective of
continuous improvement. The Bank aims to ensure
efficient use of energy and resources in order to
minimize its environmental impact. Therefore;
High-energy class air conditioners are
preferred for the air conditioning requirements
of branches and Bankamatik ATMs. R32
refrigerant-powered models are being used.
One of the most important advantages
of using R32 gas air conditioners is that
the air conditioners operate with a much
smaller amount of gas, thus reducing the
consumption of refrigerant gas.
LED lighting is applied for the branches under
renovation. In this way, the amount of waste
and energy consumption of approximately
50% per lighting savings are achieved.
Natural gas conversion is carried out in
branches heated with diesel fuel.
Visors are being installed on Bankamatik
ATMs that convert solar energy into electric
energy and help reduce energy consumption.
Acting as solar panels, the Bankamatik ATM
visors can meet a significant portion of the
energy need of façade lighting, except for the
advertisement panels. These systems are in
the testing stage and it is planned to expand
their use to all renovated units from 2022
onwards.
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for Our Employees
We take responsibility for our employees who are our most precious assets. At İşbank,
employees enjoy a respectful, peaceful, safe, fair and supportive work environment. At İşbank, it
is a priority to have happy and productive employees who embrace a sound vision of the future.
Material Issues
Related Capital Elements
Employee Rights, Commitment and Satisfaction · Employee
Health and Safety · Equal Opportunity and Diversity ·
Preferred Employer · Supporting Employee Volunteering
Human
Capital
Risks
Opportunities
• Loss of qualified employees
• As per İşbank's general policy on recruitment, only
entry-level positions are recruited, while executives
are trained in-house and promoted from existing
employees of the Bank. All recruitment positions
are for recent graduates or young professionals.
Therefore, losing "talents" for any reason after they
have reached a certain level of maturity in their
career is one of the greatest risks for the Bank.
• Not being preferred by successful recent graduates
who form the Bank's target audience
• Decrease in employee engagement due to the
changing work habits of the new generation
• Loss of workforce and reputation due to lack
of equal opportunity for potential and existing
employees
• Developing products and services suitable for the
digital age by forming a creative team with regular
trainings on digitalization
• To be a preferred employer for recent graduates
thanks to a reliable brand and employer image
• Keeping employee motivation high by prioritizing
work-life balance
• To be a preferred institution for young employees
thanks to practices in various fields such as
agile business models, artificial intelligence, data
analytics and comprehensive training programs
• Offering long-term career opportunities through
İşbank's in-house promotion culture
• Being among the leading institutions of the sector
in terms of equal opportunity and diversity and
being a bank preferred by employees.
Contributed SDGs
KEY PERFORMANCE INDICATORS
Employee turnover rate (%)
Number of practices that support employee satisfaction
Total number of ideas received from employees
Participation rate in employee satisfaction surveys (%)
Unionization rate (%)
Satisfaction with the human resources practices score as
part of the working life evaluation survey
Ratio of female employees to the total number of
employees (%)
Ratio of female employees in senior and middle
management (%) (Assistant Manager and above)
Average training hours per employee per year*
Share of digital trainings within all trainings (%)
Hours of training per person in management and
leadership development programs
Hours of training per person in IT competence
development trainings
Hours of training per newly recruited employee in their
first year
2018
2.00
16
7,168
88
99
69
56
46
23.1
35
15.1
23.1
156
2019
1.86
18
6,292
90
99
67
55
45
25.7
30
14.2
23.4
164
2020
1.6
15
4,260
88
98
71
55
45
25.4
51
11.4
17.6
145
2021
2.01
13
2,950
85
98
68
55
44
29.3
30
16.7
26.3
116
Number of suggestions communicated by employees
7,168
6,292
4,260
2,950
*Training figures exclude participants of refresher trainings, while Private Security Officers and Servant
Staff are not included.
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Targets for 2021
Realization in 2021
Realization
Targets for 2022
and Beyond
Trainings have been prepared in order
to inform our employees about the agile
working model, which allows employees
to feel that they are part of a whole
and enables people from different lines
of business to work in a coordinated
manner. Digital trainings about the basic
principles of the agile working model,
which was introduced into İşbank with the
establishment of the Agile Management
Division and provides highly positive
results, has been made available to
employees in 4 parts under the "Agile
Working Principles" via "Learning World".
Technical trainings and competency
development programs were organized
to address special agile working principles
according to the needs of different roles.
Professional development, digitalization,
personal development and leadership
trainings were held as part of the
"Training Catalogue" throughout the year
in order to support the competencies
of employees based on their needs and
preferences. More than 3,700 individual
employees participated in the trainings
held in a total of 48 different areas.
The "Data Analytics Development
Program" was launched in 2021. The
program was made available for all
interested employees in line with the
principle of equal opportunity, and a total
of 8,350 employees joined the program
and received more than 70,000 hours of
training.
The new digital learning infrastructure
project is still ongoing. Live testing
activities have begun.
Continuing competency development
programs tailored to the needs of
roles based on agile working principles
under the umbrella of the Agile
Academy
Offering the Training Catalogue,
which was created to increase the
professional knowledge of employees,
develop competencies in support of
their changing roles in the digitalized
world and assist them with their
professional development throughout
the year and ensuring that the
employees can benefit from these
trainings based on their needs and
preferences
Launching the "Data Analytics
Development Program", a program
that will be available for use by all
employees and is designed to support
skill transformation in analytics
and digital roles, starting with basic
level trainings and gradually moving
towards trainings for advanced
analytics roles with tailored learning
journeys
Launching the "New Digital Learning
Infrastructure" project designed to
increase digital training hours through
innovative learning practices that offer
continuous development capabilities
with highly tailored content through an
artificial intelligence-based suggestion
system and allow employees to access
trainings much more easily through a
learner-driven approach
As planning of role-based
development journeys of the
new areas to be established
continues as part of the agile
transformation program,
training programs will be
designed that will increase the
level of knowledge and develop
the skills of our employees
according to their competency
needs in the newly established
competency lines.
Professional development,
digitalization, personal
development and leadership
trainings designed to support
the development of employees
will continue to be held
throughout the year as part of
the "Training Catalogue".
The "Data Analytics
Development Program" will be
continued to reach even more
employees in order to support
competency transformation in
the field of data analytics and
artificial intelligence.
We aim to complete the new
digital learning infrastructure
project and offer it to our
employees. Additionally, a
new learning game is being
developed in order to help them
gain the skills of the future
by supporting their personal
development and increasing
their knowledge of technical
banking. The game is planned
to be made available for use by
our employees in 2022.
EMPLOYEE COMMITMENT and SATISFACTION
İşbank assumes responsibility for ensuring that its
employees work in a satisfactory work environment.
The Bank has a deeply-rooted corporate culture
and supports employees with their requirements
according to today's modern world. Thus, employees
remain a part of the İşbank family for many years.
Employee commitment and satisfaction are two intertwined
concepts that represent İşbank's strengths and form the
basis of the Bank's success. Surveys are conducted in the
following areas to increase employee satisfaction: training
activities, performance management, career management,
recruitment process, remuneration and rewards. The results
from the surveys are reviewed by the managers to make the
required improvements. The latest satisfaction survey at
İşbank was conducted in 2020, with the participation of 88%
of the employees. It has been decided to conduct employee
engagement surveys, which used to be conducted every three
years, on an annual basis from 2021 onwards, and to include
foreign and Cyprus branch employees in the surveys. These
surveys also reveal indicators that identify the potential for
improving long-term business outcomes.
Practices that support employee satisfaction at İşbank include
online tours and workshops, special employee discounts
obtained from various organizations, and practices aimed
at increasing employee volunteering support. In 2021, a
volunteer team of runners consisting of employees of the
Bank competed in the Istanbul Marathon and collected
donations for TEGV.
The fact that employees continue to work at İşbank for
many years is a key indicator of employee satisfaction and
commitment. 78% of İşbank employees have been working
for İşbank for more than 10 years. As of year-end 2021, the
employee turnover rate was around 2.01%, and the voluntary
turnover rate was 3.49%.
78%
of employees have been
working for İşbank for more
than 10 years.
Practices
that support
employee
satisfaction
İŞİM
Surveys
E-Sports
Diyetkolik
Manager Kit
İş Ailem
Trips
Use of
Lodges
Education
Survey
Chain of
Morale
Service
Memories
Culture-Art
Activities
Givin
Runs
Contests
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen EMPLOYEE RIGHTS
İşbank guarantees a work environment in which employee
rights are completely protected. The Bank respects freedom of
association. All employees are free to unionize and act according
to their free will. Accordingly, 98% of the Bank's employees are
covered by a collective bargaining agreement. The collective
bargaining agreement signed by the Bank and the Finance and
Insurance Workers Union (BASİSEN) every two years serves
as a guide in determining employee rights. At İşbank, the
working conditions, economic and social rights of employees
are determined within the framework of the provisions of the
Collective Bargaining Agreement and the Bank's legislation.
In this context, the principle of freedom of employment and
contract as expressed in the Constitution is valid at İşbank. In
addition, İşbank is one of the organizations in the sector with the
highest rate of unionized employees. Therefore, İşbank does not
have any operations with the risk of forced/compulsory labor.
Within the scope of the Collective Bargaining Agreement, all
İşbank employees, regardless of title and seniority, are eligible
for healthcare benefits as per the principles of the Healthcare
Benefit Implementation Regulation as well as facilities such as
food service and personnel transportation services, and other
benefits and support packages such as marriage support package,
maternity allowance, child allowance, natural disaster support,
goods transportation allowance and immigration allowance.
The Remuneration Policy covers the employees and managers
of the Bank at all levels and is under the responsibility of the
Remuneration Committee, which directly reports to the Board
of Directors. Remuneration is managed through transparent and
measurable processes and systems, and there is no gender-
based wage differentiation. As an indicator of this approach,
the median wage paid to female employees was 8%* above the
median wage paid to male employees in 2021.
In 2021, İşbank's Board of Inspectors reviewed data pertaining
to 85% of all of the Bank's employees, including male and female
employees working in the Bank's operations in Turkey, except
for middle- and top-level managers. Information was collected
about the wages paid in 2021 to the employees included in
the review. It was concluded that there is no causality relation
between differentiation in wages and the gender of our Bank's
employees across all regular wages. The salaries of senior
executives are determined in accordance with the Bank's
strategies, long-term goals and risk management structure and
are designed to prevent excessive risk taking. The wage package
of the Bank consists of salary, bonus, meals, foreign language
compensation, dividend payment determined by the Articles
of Incorporation, and other fringe payments that may vary
depending on seniority and/or scope of the job.
*In the calculation, monthly regular payments made to employees working
in Turkey as of the end of 2021 regardless of their performance were taken
into account. Payments such as overtime pay, cash compensation, shift
compensation and other social benefits and non-guaranteed payments made
once a year were not taken into account.
124 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
In addition, there are applications where payments such as
high productivity allowance, product-based sales premiums
and manager bonuses are made in line with the individual
performance of the employees.
Manager and manager candidates working in branches and the
Head Office divisions receive premium payments on an annual
basis. Attention is paid to ensure that the manager premium
payments are aligned with the performance of employees,
the Bank's long-term strategy and the risks assumed. The
Bank does not employ variable remuneration practices for key
employees.
İşbank supports its employees with practices that go beyond
their fundamental rights and freedoms:
• The Bank also contributes to the sportive lives of its employees
with the gym located in the İşbank TUTOM building that is
available for all employees.
• The Bank has practices that go beyond the legislation.
Annual leave, maternity leave, disability and unpaid leave
arrangements specified in the Collective Bargaining Agreement
can be expanded to grant rights in favor of employees beyond
the legal regulations.
• In addition, there is also the practice of granting administrative
leave by the direct managers upon request of employees for
their personal matters. The remote work practice put in place in
connection with the pandemic means that the employees now
have more time to deal with their personal matters.
Compliance with
Operating Principles
Within the scope of audits conducted by the Board
of Inspectors, if a suspicion arises that the Bank
employees do not conform to work standards
or the Board of Inspectors receives a claim that
the operating principles are not complied with,
the issue is meticulously reviewed. If tangible
evidence is found that proves such suspicion or
claim, the reports prepared to allow the necessary
administrative decisions to be made in accordance
with the Bank's collective labor agreement and
the legislation are reviewed by the Board of
Inspectors and transferred to the related Head
Office Divisions for action. In this context, 39
investigations were carried out and referred to the
related Head Office Divisions in 2021.
FAMILY-FRIENDLY EMPLOYER
INTERNAL COMMUNICATION
and EMPLOYEE PARTICIPATION
İşbank respects the family life of its employees. The
Bank supports its employees in maintaining a good
work-life balance.
Women may sometimes encounter career disruptions due
to factors in their private life, such as childbirth. In order to
avoid such disruptions, İşbank has put in place practices
that will facilitate the return of female employees to work
after childbirth. Thanks to these practices, 99.9% of female
employees who took maternity leave in 2021 returned to
work.
The positions of female employees on maternity leave are
preserved, and following the end of their leave, they can
continue their duties in the same position and in the same
location. They can request unpaid maternity leave before
starting work or benefit from part-time work arrangements.
For mothers, breastfeeding rooms have been allocated
to create a more comfortable working environment after
maternity leave. Employees using breastfeeding breaks can
also benefit from personnel transportation services. Mother
and child benefit from the comprehensive health benefits
offered by the Bank. In addition, female employees can use
the kindergarten service in the İşbank's TUTOM building. All
employees with children are provided with a maternity and
child allowance. Male employees can take a longer paternity
leave than the length of leave specified in the regulations.
99.9%
of female employees who took
maternity leave in 2021 returned to
work.
At İşbank, the ideas and suggestions of our employees are
valued. The Bank listens to the employees' suggestions,
complaints and feedback through constant communication
channels and reflects them in its management
and decision-making processes. Various platforms
have been created in order to systematically ensure
employee communication and participation in İşbank.
As part of the Employee Communication Platforms
and Programs (ÇİPP), trend surveys are conducted
and they contribute to the planning of new
activities. Innovations such as cultural tours,
competitions and e-sports activities have been
introduced via this platform, and the participation
of employees in social responsibility activities has
been increased.
"I Have a Suggestion" is a system that aims to
benefit from the knowledge and experience of
employees in developing new applications and
solutions and improving customer experience.
In this way, while enhancing the creativity of the
employees, it also increases their job satisfaction.
In 2021, employees submitted 2,950 ideas through
the "I Have a Suggestion" system.
HR Help Desk (Maximo) is a practice where
employee opinions, evaluations, requests and
complaints are received and forwarded to the
relevant units. Submissions coming through the
"Negative News Line" can only be viewed and
directly answered by the CEO. Thus, employee
privacy and confidentiality is protected at the
highest level. In 2021, 314 employees created 344
negative news items, and product and process
improvements were evaluated by the related
business divisions.
Employees can report actual or suspected violations
of İşbank's Ethical Principles and Operational
Rules, the Bank's policies and internal regulations,
as well as national and international legislation
via the Ethics Hotline. It is essential that the
reports are kept confidential; and unless expressly
requested, the name of the reporting person is kept
confidential. Employees are not exposed to any
disciplinary action, direct or indirect retaliation, or
put at any disadvantage compared to their peers for
reporting a violation.
The "About Me" screen was created to support
the Bank's decision processes with accurate and
detailed information. On the screen, employees
can communicate the issues that they believe the
Human Resources Function needs to be aware
of. The registered information can only be viewed
by authorized persons in the Human Resources
Management Division and by the employee
themselves, and the confidentiality of the shared
information is essential.
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 125
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen OCCUPATIONAL HEALTH and SAFETY
PREFERRED EMPLOYER
EQUAL OPPORTUNITY and DIVERSITY
İşbank sees providing a healthy and safe work environment as
one of its fundamental responsibilities. The most authorized
person in charge of OHS at İşbank is the Human Resources
Management Division Manager, two reporting levels lower
than the General Manager. In line with the provisions of the
Occupational Health and Safety Law, OHS Committees where
employees are represented are established in the Bank's
buildings having more than 50 employees.
As of year-end 2021, there are OHS Committees in 38 of İşbank's
buildings. The OHS Committees convened 138 times during the
year, with 346 committee members participating, including 110
employee representatives.
Maintaining a healthy and safe work environment is as important
as providing such an environment. Therefore, employees need to
have OHS awareness. İşbank organizes trainings to increase OHS
awareness among employees. In 2021, 40,146 hours of OHS
training were given to 6,529 employees.
The pandemic necessitated all organizations to expand the scope
of their OHS practices during the last two years.
For information about the actions and measures
taken by İşbank as part of the Fight against
COVID-19, see page 200 of this report.
In 2021,
40.146
person-hours of OHS training
were given to
6,529
employees.
İşbank aims to reach qualified human resources and become
the preferred employer for qualified employees. For this
purpose, the Bank communicates with potential employees
and university students through various channels in order to
reach potential future employees.
Communication with university students takes place via
campus communication, student clubs and career centers.
Employees representing the business divisions of the Bank
share the corporate culture and their personal experiences
with the youth. In-house technologies and innovation studies
are communicated to the students.
Depending on the requirements of the position, online exams
and recruitment processes are monitored. Thanks to online
applications, the Bank offers employment opportunities
throughout the country. Internship opportunities are offered
for students in their last two years of university. This helps
students become more familiar with the Bank, observe
existing employees and benefit from their perspectives.
Besides universities, İşbank also collaborates with non-
governmental organizations. As a result of such collaborations,
various development programs are undertaken. Within
the scope of development programs, university students
are offered mentorship, the right to benefit from in-house
trainings, and the opportunity to participate in art events
organized by the Bank and İş Sanat. This not only helps young
people in their education but also enriches their cultural and
personal development.
İşbank values social diversity and thus puts in place practices
that emphasize equal opportunity in its human resources
processes. The Bank does not, under any circumstances, allow
any discrimination among employees based on factors such
as race, origin, religion, language, sect or any belief, sexual
orientation/preference, gender, mental or physical disability,
age, cultural or social class and opinion.
İşbank expects its suppliers to embrace the same attitude on
equal opportunity and diversity. The provisions of the Supplier
Management Principles expressly prohibit any discrimination
based on race, gender, nationality, age, physical disability,
association membership, pregnancy or marital status.
Gender equality is one of the main elements of İşbank's
approach to equal opportunity. Various instruments have been
created that promote and facilitate women's participation
in business life. İşbank is one of the organizations with the
highest number of female employees in Turkey. 55% of İşbank
employees are women. The high ratio of female employees is
also reflected in the management staff. 44% of the mid-level
and top-level managers of the Bank are women.
In March 2021, İşbank put into force its Gender Equality Policy
pursuant to the decision of the Board of Directors. In line
with its equal opportunity and diversity principles, this Policy
sets out the basic principles and procedures pertaining to the
Bank's practices to preserve gender equality that cover all of
the Bank's employees and activities. Additionally, Pursuant to
the decision made by the Sustainability Committee in 2021,
the Bank has started conducting analyses in order to increase
the ratio of women among the management staff.
The basic principles and rules adopted by İşbank on equal
opportunity and diversity are defined in the Human Rights and
Human Resources Policy, and this Policy has been shared with
the employees on the in-house portal and corporate website.
The relevant Policy is carried out under the responsibility and
supervision of the Deputy Chief Executive with whom the
Human Resources Function is affiliated. For behaviors that are
found to be in violation of the Bank's policies, the necessary
disciplinary action, up to termination of the employment
contract, is taken according to the applicable provisions
of the Collective Labor Agreement. Where circumstances
warrant legal action, the violation is brought to the attention
of legal authorities. Notifications submitted to the Board
of Inspectors regarding violations of the Human Rights
and Human Resources Policy are handled by the Board of
Inspectors in a sensitive manner. Promotion exams organized
by İşbank are conducted according to the principle of equal
opportunity. In the Assistant Manager promotion exam, which
is the transition process to the executive level, male and
female positions are equally announced based on the cultural
and market information of the regions where the position is
located.
The subject of diversity and inclusion is covered in the career
trainings with the "Diversity and Inclusion" class. Within the
scope of this class which helps us ensure the adoption of
these principles, seminars and trainings are organized about
diversity, inclusion and gender equality. Assistant Specialists
who have just begun to work for İşbank receive a "Diversity
and Inclusion" class as part of their Starting My Career
Trainings, and employees who have been promoted to Senior
and Assistant Manager roles also receive this class as part of
their career training program.
Breakdown of Employees by Gender*
Breakdown of Managers by Gender*
Female
55%
Male
45%
Male
56%
Female
44%
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*Employees with the title of Private Security Officer are excluded.
Rates including Private Security Officers F: 50%, M: 50%.
*Submanager and higher titles
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen During this class, the subjects of unconscious bias and gender
equality are covered for 1 hour. 599 employees received
599 hours of training. The Bank aims to initiate a new
leadership and management development program in 2022
in order to support women's development in their journey
to top management levels and enhance their leadership
competencies.
Various trainings and seminars are held under different
programs to increase awareness among managers and
manager candidates about diversity, equity and inclusion.
In 2021, the seminars "Key to an Equal Future", "Inclusive
Leadership" and “Violence Against Women”, which aimed
to raise awareness on November 25, International Day
for the Elimination of Violence Against Women, were held
under Management Development Conferences. Additionally,
within the Branch Managers Training Catalogue, a 1-day
"Inclusive Leadership" training was held. A total of 1,174
people participated in these trainings. The digital training
"Ethical Principles and Operational Rules" about the Bank's
ethical principles and operational rules was made available
on 14.12.2021. In order to help increase awareness about the
correct attitude to be displayed towards disabled people and
establish a healthy communication with disabled people;
Inclusive Leadership
people
630
1,260
hours
The Bank continued to provide the trainings ''Correct Approach
towards Disability'' and "Sign Language" in 2021 as well.
These trainings were completed by employees 1,488 times in
2021.
"Diversity and Inclusion" training was held for the Head Office
and Branch managers. A total of 313 managers participated in
this training, which aims to raise awareness on unconscious
bias, cover the subject of gender equality, and provide
information about the tools and methods to be used to reduce
discriminatory behaviors.
With the 2-hour training titled "The Richness of Differences:
Diversity and Inclusion" included in the Training Catalogue,
the subjects of gender equality and unconscious bias were
covered, and a total of 90 employees participated in the
training.
Gender equality is a sensitive issue that is carefully
followed up in İşbank's communication activities.
Therefore, in the communication activities,
Care is taken to ensure that a female
narrator is used.
Roles assigned to women are carefully
managed, and images that portray women
as one of the most precious parts of a
society are used.
A female-male balance is sought in
casting.
Texts (script, social media posts, etc.) are
drawn up by taking gender equality into
consideration.
Women's Empowerment
(WEPs-Women's Empowerment Principles)
İşbank has supported women since its foundation.
The motivation behind this support is our belief that
women's participation in economic life provides
enrichment and is also one of the requirements of
sustainable development.
İşbank has reinforced this approach by being a
signatory to the WEPs. WEPs are a set of principles
that represent one of the leading global private sector
initiatives and aim to empower women in order to
ensure their active participation in economic life across
all sectors and at all levels. The WEPs, created in
partnership with the UN Global Compact and the UN
Gender Equality and Women's Empowerment Unit,
calls on the private sector to empower gender equality
efforts and to develop policies and programs in support
of women in business life. As a signatory of WEPs,
İşbank assumes a role in promoting and facilitating
participation of women in employment.
İşbank participates in the "Activism Against Gender-
Based Social Violence" campaign organized by the UN
Women between 25 November - 10 December every
year by illuminating the İş Towers with orange lights.
In 2021, total hours of training:
51% female, 49% male
Job applications
Male:3,419 Female: 3,337;
Ratio of Males: 51% Ratio of Females: 49%
OHS Committees
Male: 205 Female: 141;
Ratio of Males: 59% Ratio of Females: 41%
TALENT MANAGEMENT
İşbank continuously invests in human capital. Accordingly,
the Bank offers its employees opportunities to improve
their skills throughout their career and prioritizes the
development of future skills as a strategy. In order to develop
the competencies of employees, a wide variety of training
programs and learning tools personalized with state-of-
the-art technologies are offered in line with the principle of
equal opportunity. Supporting the continuous development
of employees is also aligned with İşbank's vision of "being the
bank of the future that creates sustainable value".
Newly recruited employees participate in "Starting My Career"
training programs, differentiated according to the specific
title and duties of participants, starting from their first day
on the job. Furthermore, İşbank employees can also benefit
from various trainings included in the "Training Catalogue"
depending on their specific needs and preferences. As
part of the Training Catalogue, more than 3,700 individual
employees participated in the trainings organized in a total of
48 different topics in 2021, such as professional development,
digitalization, personal development and leadership.
In order to support the competencies of the employees
working in the branches; training programs were held on
different subjects by considering the types of branchesand
roles of these employees . For retail banking sales teams
at branches, new training modules were added to the
"Sales Academy" by focusing on the behavior of next-gen
customers and the Bank's digital solutions, and new trainings
were designed for specialized areas such as foreign trade,
derivative products and insurance. In 2021, more than 18,000
employees received over 80,000 hours of training as part of
training programs specially designed for employees at Retail,
Commercial and Corporate branches. Trainings on different
subjects were also designed to support sales competencies
and improve the product and services knowledge of mobile
sales teams, and more than 800 employees in retail,
commercial and agriculture mobile sales teams received over
6,000 hours of training. Within the design– of these training
programs held to support sales competencies and improve
the technical knowledge of the sales teams of the Bank, the
responsibilities of employees, customers' expectations and
needs were taken into account. The training programs were
also enriched with role plays and case studies to ensure sales
teams serve the right product to the right customer. The
design of these programs is based on the responsibilities of
employees, customers' expectations and needs. Additionally
role playes and case studies are designed.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Trainings designed as learning journeys were continued
in order to support the teams starting to work on agile
transformation and technical trainings and competency
development programs were created to address special agile
working principles according to the needs of different roles
such as Team Member and Product Owner. In 2021, more than
12,000 hours of training were organized for employees with
agile roles.
Various digital trainings, such as "Risk Culture in Our Bank"’,
"Social Engineering and Phishing Attacks", "Ethical Principles
and Operational Rules", and "Sustainability Training Series",
were delivered in order to support all employees’ awareness
about the legislation and the Bank's strategic priorities.
Additionally, “Sustainable Finance and E&S Risk Management
in Lending Acitivities” training was delivered for the employees
working in designing and marketing loan products and loan
allocation processes.
The module "Diversity and Inclusion" was added to various
training programs, and trainings and conferences were
organized on environmental and social subjects.
In 2021, 14,392 hours of training were given to 8,637
employees in order to increase awareness about
sustainability-related subjects at İşbank.
The Data Analytics Development Program, which is one
of the reskilling programs designed to support employees
Performance and Learning Culture
İşbank executives are trained from within the Bank. This
means that employees are also potential future executives. All
employees have the opportunity to be promoted to managerial
positions in line with their performance. Therefore, the
Performance Management System plays a key role in İşbank's
human resources practices. Thanks to the performance review
process, necessary actions are taken in relation to employees'
career development. In 2021,
22,050
employees were given
performance feedback.
Assessment Center Practices
The assessment center practices, which have become a part of
our recruitment process, have started to be carried out online.
Additionally, with the assessment practices that we use to
select the system experts to join the information technologies
family, İşbank was awarded the golden medal in the category
of "Best Advance in Assessment Utilization to Guide Decisions"
at the Brandon Hall Human Capital Management Excellence
Awards 2021.
transform and enhance their digital competencies, offers a
development journey from the basic level of data literacy to
advanced analytics trainings. The program is available for all
employees, regardless of title and role. It is intended to help
employees to gain new skills related to understanding and
working with data, develop data literacy and establish a data-
driven, decision-making culture. 8,350 employees enrolled in
the program and received more than 70,000 hours of training
in 2021.
At İşbank, management and leadership development
programs consist of technical and competency-based
trainings that are held for managers from different levels and
designed to support the competencies required for the specific
role. In 2021, 2,506 employees received 36,865 hours of
training in total under the leadership development programs
designed to support the next-gen leadership competencies
of the Bank's managers and establish a continuous learning-
driven leadership culture throughout the Bank, and the
academy programs specially designed for specific business
areas such as marketing, innovation, artificial intelligence and
data engineering.
ll employees will be able to access various on-demand
learning tools such as videos, e-learning courses and games
via the "Learning World" digital learning platform. In 2021,
34 new trainings were delivered via the digital learning
platform "Learning World," including "Foreign Trade in Our
Bank," "Primary Derivative Products," "Paperless Banking,"
"Digital Signature," and "Agile Working Principles," to support
employees' professional and personal development. These
trainings were completed 46,547 times by the employees.
The 3rd season of İşGame, a game offered under the motto
of "A Banking Journey" in order to increase the technical
banking knowledge of employees through different training
tools, began in February 2021. 1,824 employees loggedin to
the 3rd season of İşGame and solved 3,670,115 questions
about technical banking, product details and sales techniques.
In addition, the video platform İşTube contains 244 videos,
including 26 new videos posted under technical and personal
development titles such as "Resilience".
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Corporate
Citizen
Transparent and Ethical Management
Social Investments
We Take Responsibility for
Transparent and Ethical Management
Preparing to celebrate its 100th year, İşbank is a bank associated with trust and dignity in the
banking sector. While carrying its pioneering role to the future, the Bank adopts a transparent,
fair, and accountable management structure without compromising its ethical and principled
banking approach. İşbank has a management structure that complies with international
standards and is intended to create value for all of its stakeholders.
Material Issues
Related Capital Elements
Business Ethics, Transparency, and Reporting · Risk Management
· Complying with Regulations · Communication with Stakeholders
· Emergency Action Preparation and Business Continuity
Financial
Capital
Intellectual
Capital
Social-Relational
Capital
Risks
Opportunities
• Penal sanctions that may be incurred due to
non-compliance with legal regulations
• Losses that may be incurred due to non-financial
risks
• The potential to maintain existing customer
satisfaction and reach new customers with an ethical
banking approach
• Increasing the interest of investors with an excellent
• Operational disruptions which may be caused by
reputation and brand value
inadequate stakeholder dialogue
• Risk of loss of trust with stakeholders and dismissal
from relevant engagements due to failure to meet
reporting and information sharing requirements
• Providing added value by considering stakeholder
expectations in product and service development with
effective stakeholder communication
• Contributing to reputation management with
transparent information sharing, gaining a competitive
advantage in different performance areas
Contributed SDGs
KEY PERFORMANCE INDICATORS
Number of employees
receiving Anti-Bribery and
Anti-Corruption Training
2019
7,577
Total hours of Anti-Bribery and
Anti-Corruption Training
3,115
2020
7,830
857
2021
5,716
627
Risk Management
Number of times the Risk
Committee convened: 12
Conducting loss event data
analysis
Completion of scenario
analysis
Conducting impact-
probability analysis
Conducting Top-Down Risk
Assessment
Number of times the Risk
Committee convened: 12
Number of times
the Operational Risk
Committee convened: 1
Conducting loss event data
analysis
Completion of scenario
analysis
Conducting impact-
probability analysis
Conducting Top-Down Risk
Assessment
Number of times the Risk
Committee convened: 11
Number of times
the Operational Risk
Committee convened: 2
Conducting loss event data
analysis
Completion of scenario
analysis
Conducting impact-
probability analysis
Conducting Top-Down Risk
Assessment
Audits carried out by the Board of Inspectors
Number of domestic branch
audits
245
Number of foreign branch
audits
Number of subsidiary audits
Number of Head Office
division audits
Number of social media
followers (million people)
2
7
14
2.6
Publishing annual integrated report
186
4
10
12
2.7
175
2
10
24*
2.6
Developing cooperation with national and international initiatives
See Initiatives Supported in the Field of Sustainability
Fulfilling UNEP FI Principles of Responsible Banking commitments
See Transparency and Reporting
* Audits repeated every year are not included.
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MANAGEMENT STRUCTURE
The Board of Directors, the highest management body of İşbank, is responsible for steering the strategies and policies of the Bank.
İşbank's Board of Directors consists of 11 members, including 1 woman. Having 3 independent members*, the Board of Directors is
composed of non-executive members, except for the CEO. The CEO and Chairperson of the Board of Directors roles at the Bank are
assumed by different persons.
The Board of Directors has several governance committees in place to support the activities of the Board in various areas.
Responsible for implementing the strategies established by the Board of Directors and led by the CEO, the Executive Committee has
13 members other than the CEO, including 2 women.
*As per the II-17.1 Corporate Governance Communiqué published on 03.01.2014, the members of the board of directors who are assigned as
members of the audit committee, as part of the organization of the board of directors of banks, are considered as independent members of the board
of directors.
Targets for 2021
Realization in 2021
Realization
Targets for 2022
and Beyond
The Bank is planning
to increase the
number of trainings
to develop the risk
management skills
of its employees
and increase their
awareness on
the subject so
that an effective
risk management
approach is widely
embraced across the
organization.
We offered our employees the digital training "Risk Culture in
Our Bank" in 2021 according to the "Guideline on Operational
Risk Management" published by the Banking Regulation
and Supervision Agency (BRSA), which recommends that all
employees receive operational risk training as a minimum.
This training is intended to teach the concept of risk and the
components of risk culture, and to provide information about the
activities undertaken to create a healthy risk culture at İşbank.
The career training programs organized for employees promoted
to Supervisor and Submanager roles at İşbank include the "Risk
Management" class. The "Risk Management" class is included
in My Career as a Specialist Training, which is organized to
support the career development of employees with the title
of Senior Assistant Specialist, and it is aimed to increase the
knowledge and awareness level of the participants on the
subject. Additionally, "Risk Management" training is provided
under the Branch Manager Development Program, designed
for new Branch Managers, in order to refresh the knowledge
of employees and encourage them to display an effective risk
management approach.
The Risk Management and Risk Culture Seminar was organized
in order to increase the level of knowledge of managers and
manager candidates and enrich their vision with global examples.
The Bank has begun to provide theoretical trainings on risk
management and control facility functions to risk competency
line members and product owners - the primary audience of the
trainings - as per the increased needs of our agile areas in order
to ensure widespread use of the Agile Risk Model, which was
designed to be applied in Agile Areas.
With these trainings, 3,584 participants received 3,546 hours of
training.
The Bank aims
to increase
the number of
employees to
have received the
digital training
"Risk Culture in Our
Bank". Theoretical
trainings will
continue to be
planned for
product owners
and agile area
employees who
want to develop
their competency
in this area. This
training will
be followed by
practical trainings,
during which the
product owner,
product features
and risks will be
covered.
İşbank aims to
complete the impact
analysis studies
of its portfolio
in line with the
UNEP FI Principles
on Responsible
Banking by 2024
and contribute
to the studies
towards sustainable
development and
global climate
targets in line with
the targets it has set.
In progress
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Information Systems Strategy
Committee
Audit Committee
Human Resources Committee
TRNC Internal Systems
Committee
Credit Committee
Corporate Social Responsibility
Committee
Corporate Governance
Committee
Operational Risk Committee
Risk Committee
Sustainability Committee
Remuneration Committee
Board of Directors Operating
Principles Committee
1
2
3
4
5
6
7
8
9
10
11
12
Professional
Experience
Educational
Background
Length of Service at
Current Position
Independent Member of the Board
of Directors. Yusuf Ziya Toprak and
Ersin Önder Ciftçioğlu are considered as
Independent Members of the Board of
Directors since they are also members
of the Audit Committee.
BOARD OF DIRECTORS
ADNAN BALİ
Chairperson
YUSUF ZİYA TOPRAK
Vice Chairperson
HAKAN ARAN
Member of the Board and
Chief Executive Officer
FERAY DEMİR
Member of the Board
ERSİN ÖNDER ÇİFTÇİOĞLU
Member of the Board
University
(4-year
college)
33
years
9
months
University
(4-year
college)
44
years
1 year 9
months
Post
Graduate
29
years
9
months
University
(4-year
college)
33
years
5 years 9
months
University
(4-year
college)
36
years
4 years 9
months
5
9
10
11
12
2
4
5
8
9
1
3
5
8
9
5
6
7
10
11 12
2
4
7
8
9
10
Mr. Adnan Bali was born in İslahiye
in 1962 and graduated from Middle
East Technical University, Faculty
of Economics and Administrative
Sciences, Department of Economics.
He joined İşbank as Assistant Inspector
on the Board of Inspectors in 1986.
He became Assistant Manager in the
Treasury Division in 1994 and served
as a Unit Manager in the same division
in 1997. He was appointed as Head
of the Treasury Division in 1998. Mr.
Bali served as the Manager of the
Şişli Branch in 2002 and Manager of
the Galata Branch in 2004; he was
appointed Deputy Chief Executive
on 30 May 2006 and Chief Executive
Officer of İşbank on 01 April 2011.
Elected to İşbank's Board of Directors
on 31 March 2021 and Chairperson
of the Board of Directors on 01 April
2021, Mr. Bali has also been serving as
the Chairperson of the Remuneration
Committee, Risk Committee,
Sustainability Committee and Board
of Directors Operating Principles
Committee and as a member of the
Credit Committee.
Apart from his role in the Bank, Mr.
Bali is also the Chairperson of Türkiye
Sınai Kalkınma Bankası A.Ş., Softtech
Ventures Teknoloji A.Ş., and İşbank
Members’ Supplementary Pension Fund.
Mr. Yusuf Ziya Toprak was born in
Trabzon in 1943, and graduated from
Istanbul Economics and Commercial
Sciences Academy, Department of
Finance. Mr. Toprak started to work as
an Assistant Inspector on the Board
of Inspectors at İşbank in 1967. In
the following years, he served as
Assistant Manager and Group Manager
in the Automation and Organization
Divisions, as Manager in the Securities
Division, and General Manager at
Yatırım Finansman Securities. He was
appointed as Deputy Chief Executive at
İşbank in 1999.
Mr. Toprak, who has retired in
2004, continued serving as the Vice
Chairperson and a Member of the
Board of Directors at Şişecam until
2010.
Mr. Yusuf Ziya Toprak, who was elected
as a member of İşbank’s Board of
Directors on 31 March 2020 and as the
Vice Chairperson of the Board on 1 April
2020, also serves as the Chairperson of
the Audit Committee, T.R.N.C. Internal
Systems Committee and Operational
Risk Committee, a member of the Risk
Committee and an alternate member of
the Credit Committee.
Born in Antakya in 1968, Hakan
Aran graduated from the Faculty of
Engineering, Computer Engineering
Department of Middle East Technical
University. He completed his master's
degree in Business Administration at
Başkent University and he currently
continues his PhD studies in Banking at
Istanbul Commerce University.
Beginning his career at İşbank as a
Software Specialist in 1990, Mr. Aran
was appointed as the Head of the
Software Development Division in
2005. He was promoted to the position
of Deputy Chief Executive responsible
for operations, digital banking and
technology in 2008 and took part in
important transformation programs
of the Bank. Appointed as İşbank's
17th Chief Executive Officer on 01
April 2021, Mr. Aran also serves as the
Chairperson of the Credit Committee,
Human Resources Committee and
Information Technology Strategy
Committee and as a member of the
Risk Committee and Operational Risk
Committee.
Ms. Feray Demir was born in Ağrı in
1968 and graduated from Anadolu
University, Faculty of Economics and
Administrative Sciences, Business
Administration Department. She started
her professional career as an Officer at
the Sefaköy/Istanbul Branch in 1988.
She was appointed as Assistant Section
Head in 1990, Section Head in 1995,
Sub-Manager in 1996 and as Assistant
Manager in 1999 at the same branch.
She then served in the same position
in the Commercial Loans Division and
Corporate Marketing Division at the
Head Office. She was appointed as
Branch Manager to the Çarşı-Güneşli/
Istanbul Branch in 2005, and then served
as Head of Commercial Banking Sales
Division from 2007 to 2011. She served
as Branch Manager of the Istanbul
Corporate Branch from 2011 to 2016.
In addition to her duties at the Bank,
Ms. Demir also serves as a member
of the Board of İşbank Members'
Supplementary Pension Fund.
Ms. Demir, who was elected to İşbank's
Board of Directors on 25 March 2016,
31 March 2017 and 31 March 2020, also
serves as a member of the Corporate
Social Responsibility Committee, Credit
Committee, Remuneration Committee,
Sustainability Committee, Corporate
Governance Committee and Board of
Directors Operating Principles Committee.
Mr. Ersin Önder Çiftçioğlu was born
in Ankara in 1960 and graduated
from Hacettepe University, Faculty
of Social and Administrative
Sciences, Department of English
Linguistics. Mr. Çiftçioğlu began his
career at İşbank as an Officer in the
Yenişehir/Ankara Branch in 1985,
and was appointed as Assistant
Section Head, Section Head, Sub-
Manager and Assistant Manager in
the same branch. In 2007, he was
appointed as Assistant Manager
at the Başkent/Ankara Corporate
Branch and Regional Manager of the
SME Loans Underwriting Division
of the Adana Region in the same
year and subsequently served as
Ankara Center I. Region Manager in
2008. He was appointed as the Ege/
Izmir Corporate Branch Manager in
2011 and Başkent/Ankara Corporate
Branch in 2016.
Mr. Çiftçioğlu, who was elected to
İşbank’s Board of Directors on 31
March 2017 and 31 March 2020,
also serves as the Chairperson of the
Corporate Governance Committee
and a member of the Audit
Committee, TRNC Internal Systems
Committee, Sustainability Committee,
Operational Risk Committee and Risk
Committee.
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Member of the Board
DURMUŞ ÖZTEK
Member of the Board
RECEP HAKAN ÖZYILDIZ
Member of the Board
MUSTAFA RIDVAN SELÇUK
Member of the Board
AHMET GÖKHAN SUNGUR
Member of the Board
SADRETTİN YURTSEVER
Member of the Board
Post
Graduate
36
years
2 years 9
months
Post
Graduate
46
years
1 year 9
months
Post
Graduate
43
years
1 year 9
months
Post
Graduate
43
years
1 year 9
months
Post
Graduate
29
years
1 year 9
months
5
6
6 12
Mr. Durmuş Öztek was born in Sivas,
Şarkışla in 1953 and graduated from
Ankara University Faculty of Political
Sciences, Department of Economics
and Finance. He completed his master’s
degree in Economics at Vanderbilt
University in the USA.
Mr. Öztek served as a Finance Auditor
between 1975-1986 in the Ministry
of Finance. In the following years,
he served as Division Head, Deputy
General Manager and General Manager
in the General Directorate of Budget
and Financial Control; Chief Auditor
and Member of the Financial Advisory
Committee in the Ministry of Finance;
Auditor in Turk Telekom, Member of the
General Committee in the Council of
Higher Education, Financial Counselor
in the Turkish Embassy in Brussels. He
served as a Ministry Counselor in the
Ministry of Finance between 2006-
2011.
Mr. Öztek, who was elected to the
İşbank Board of Directors on 31
March 2020, serves as a member of
the Corporate Social Responsibility
Committee and the Board of Directors
Operating Principles Committee.
Mr. Recep Hakan Özyıldız was born
in Bursa in 1956 and graduated from
Ankara University Faculty of Political
Sciences, Department of Economics
and Finance. He completed his master’s
degree in Economics at Northeastern
University in the USA.
Mr. Özyıldız started to work at the
Ministry of Treasury and Finance as an
Assistant Treasury Specialist in 1978.
In the following years, he served as
Branch Manager at the Undersecretary
of Treasury and Foreign Trade and
the General Directorate of Banking
and Foreign Exchange; Division Head,
Deputy General Manager and General
Manager at the General Directorate of
Public Finance under the Ministry of
Treasury and Finance; Auditor at İşbank,
General Manager of the State Economic
Enterprises in the Treasury, Senior
Advisor of Economics in the Turkish
Embassy in London and Assistant
Undersecretary in the Ministry of
Treasury and Finance.
Mr Özyıldız, who is also a columnist and
commentator, continues to serve as
a part-time academic tutor in Ankara
University, Faculty of Political Sciences.
Mr. Özyıldız was elected to the İşbank
Board of Directors on 31 March 2020.
Mr. Fazlı Bulut was born in Pertek in
1964 and graduated from Ankara
University, Faculty of Political
Science, Department of Economics.
He completed his master’s degree
in Economic Development at New
Hampshire College in the USA.
Mr. Bulut served as Account Expert and
Senior Account Expert at the Ministry
of Finance on the Board of Account
Experts from 1985 to 1997. He taught
General Accounting at the College
of Tourism and College of Computer
Technology at Bilkent University from
1996 to 1998. Mr. Bulut served as Vice
General Manager and Member of the
Board of the Social Insurance Institution
from 1997 to 1999. He served as Vice
General Manager, General Manager
and Member of the Board of Directors
in Tepe Home Mobilya ve Dekorasyon
Ürünleri San. Tic. A.Ş., a subsidiary of
Bilkent Holding, from 1999 to 2011. He
subsequently served as a consultant
for Bilkent Holding on tax and retailing
from 2011 to 2012, as the General
Manager of B. Braun Kalyon Medikal ve
Dış Ticaret A.Ş. from 2013 to 2015, and
as the Coordinator of Financial Affairs in
Terra İnşaat Grubu from 2016 to 2017.
Mr. Bulut has also published books
on various subjects. Mr. Bulut, who
was elected to the İşbank Board of
Directors on 29 March 2019 and 31
March 2020, also serves as a member
of the Corporate Social Responsibility
Committee and as an alternate
member of the Credit Committee.
Mr. Ahmet Gökhan Sungur was born
in Yozgat in 1953. He graduated from
Middle East Technical University,
Department of Chemical Engineering
and received his master’s degree from
the same department. Mr. Sungur,
who started his career in 1975 at the
General Institute of Mineral Research
and Exploration, Department of
Technology, as Chief Specialist Chemical
Engineer, worked in Hisarbank and
Güntekin İnşaat A.Ş. as a System
Analyst between 1981-1982. Later,
between 1982-1999, he served as
Manager of Software Development at
İşbank and Chief Executive Officer at İş
Net A.Ş. between 1999-2003.
Mr. Sungur was elected as an
Independent Member of the İşbank
Board of Directors on 31 March 2020.
Mr. Mustafa Rıdvan Selçuk was born
in Malatya in 1955, and graduated
from Ankara University, Faculty of
Political Sciences, Department of
Economics and Finance. He received
his master’s degree in Economics
from Vanderbilt University in the USA.
Mr. Selçuk started his career in
the Ministry of Finance in 1978
as an Assistant Account Expert. In
the following years, he served as
Account Expert, Senior Account
Expert, Division Head in the General
Directorate of Revenues, General
Manager and Chairperson of Bağkur
in the Ministry of Labor and Social
Security, Labor and Social Security
Advisor in the Turkish Embassy in
Copenhagen and as Ministry Advisor
in the Ministry of Finance.
Mr. Selçuk, who has also served as
a Certified Public Accountant since
2003, is an Independent Auditor
at BDD Bağımsız Denetim ve
Danışmanlık A.Ş., and a partner at
Girişim YMM Limited Şti.
Mr. Selçuk was elected to the İşbank
Board of Directors on 31 March
2020.
University
(4-year
college)
28
years
1 year 9
months
6
7
Mr. Sadrettin Yurtsever was born in
Bingöl in 1964 and graduated from
Gazi University, Faculty of Education,
Department of English Language
Education. Mr. Yurtsever, who started
his career at İşbank as a candidate
officer in the İzmir Branch in 1993,
served in the same branch as Section
Head and Sub-Manager. He served
as Assistant Manager in the SME
Loans Underwriting Division of the
Denizli Region in 2006, İzmir Central
II. Region Sales Division Assistant
Regional Manager in 2007, Regional
Manager in the same division in
2011, Branch Manager of the
Bornova/İzmir Commercial Branch in
2013 and the Mediterranean/Antalya
Corporate Branch in 2018.
Mr. Yurtsever, who was elected to
the İşbank Board of Directors on 31
March 2020, serves as a member
of the Corporate Governance
Committee and the Corporate Social
Responsibility Committee.
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2
3
4
EXECUTIVE COMMITTEE
Born in Antakya in 1968, Hakan Aran
graduated from the Faculty of Engineering,
Computer Engineering Department of
Middle East Technical University. He
completed his master's degree in Business
Administration at Başkent University and
he currently continues his PhD studies in
Banking at Istanbul Commerce University.
Beginning his career at İşbank as a
Software Specialist in 1990, Mr. Aran was
appointed as the Head of the Software
Development Division in 2005. He was
promoted to the position of Deputy Chief
Executive responsible for operations,
digital banking and technology in 2008
and took part in important transformation
programs of the Bank. Appointed as
İşbank's 17th Chief Executive Officer on
01 April 2021, Mr. Aran also serves as
the Chairperson of the Credit Committee,
Human Resources Committee and
Information Technology Strategy
Committee and as a member of the
Risk Committee and Operational Risk
Committee.
Born in Izmir in 1965. Mr. Yalçin
Sezen graduated from the Political
Sciences and Public Administration
Department of Middle East Technical
University, Faculty of Economics and
Administrative Sciences. In 1987, Mr.
Sezen joined İşbank as an Assistant
Inspector on the Board of Inspectors.
He served in different units of İşbank
and was appointed as Deputy Chief
Executive on 13 April 2011.
Born in Ankara in 1968. Mr.
Murat Bilgiç graduated from the
International Relations Department
of Middle East Technical University,
Faculty of Economics and
Administrative Sciences. He also
holds a master’s degree in Money-
Banking-Finance from the University
of Birmingham. He attended the
Advanced Management Program at
Harvard Business School. In 1990, Mr.
Bilgiç joined İşbank as an Assistant
Inspector on the Board of Inspectors.
He served in different units of İşbank
and was appointed as Deputy Chief
Executive on 25 March 2016.
Born in Ankara in 1970. Mr. N.
Burak Seyrek graduated from the
International Relations Department of
Ankara University, Faculty of Political
Sciences. He joined İşbank in 1990
as Assistant Specialist in the Training
Division. He served in different units
and branches of İşbank and also
served as Chief Executive Officer at
İşbank AG, a subsidiary of İşbank
located in Germany. Mr. Seyrek was
appointed as Deputy Chief Executive of
İşbank on 25 March 2016.
1
5
HAKAN ARAN
Member of the Board
and Chief Executive
Officer
ŞAHISMAIL ŞIMŞEK
Deputy Chief Executive
2
6
YALÇIN SEZEN
Deputy Chief Executive
EBRU ÖZŞUCA
Deputy Chief Executive
3
7
MURAT BILGIÇ
Deputy Chief Executive
GAMZE YALÇIN
Deputy Chief Executive
4
8
N. BURAK SEYREK
Deputy Chief Executive
H. CAHIT ÇINAR
Deputy Chief Executive
5
6
7
8
Born in Erzurum in 1968. Mr.
Şahismail Şimşek graduated from
Ankara University, Faculty of Political
Science, Department of Finance. He
joined İşbank as an Officer at the
Yenişehir/Ankara Branch in 1992,
and served in different units and
branches of İşbank. Mr. Şimşek was
appointed as Deputy Chief Executive
on 28 November 2017.
Born in Ankara in 1971. Ms. Ebru
Özşuca graduated from the Economics
Department of Middle East Technical
University, Faculty of Economics
and Administrative Sciences. She
also holds a master’s degree from
the Economics Department of the
Graduate School of Social Sciences
at Middle East Technical University
and completed her master's degree
in International Banking and Finance
from the University of Southampton
in the UK in 1998. She attended the
Advanced Management Program at
Harvard Business School in 2015. She
joined İşbank as an Assistant Specialist
at the Treasury Division in 1993. Ms.
Özşuca served in different units of
İşbank and was appointed as Deputy
Chief Executive on 28 November 2017.
Born in Ankara in 1971. Ms. Gamze
Yalçın graduated from the Economics
Department of Middle East Technical
University, Faculty of Economics
and Administrative Sciences. She
also holds a master’s degree in
International Banking and Finance
from the University of Birmingham in
the UK. She attended the Advanced
Management Program at Harvard
Business School in 2017. She joined
the Organization Division at İşbank as
an Assistant Specialist in 1993 and
served in different units of İşbank. Ms.
Yalçın was appointed as Deputy Chief
Executive on 28 November 2017.
Ms. Yalçın also serves as İşbank’s
Sustainability Leader.
Born in Ankara in 1967. Mr. Cahit Çınar
graduated from the International
Relations Department of Ankara
University, Faculty of Political Science.
He attended Munich Ludwig-
Maximillians University between
1989-1990. He began his career at
İşbank as an Assistant Specialist in the
Economic Research Division in 1991
and joined the Board of Inspectors
as an Assistant Inspector in 1992.
He served in different units of İşbank
and the Güneşli Corporate Branch
and served as Chief Executive Officer
at İşbank AG, a subsidiary of İşbank
located in Germany. Mr. Çınar was
appointed as Deputy Chief Executive of
İşbank on 5 October 2018.
9
12
OZAN GÜRSOY
Deputy Chief Executive
SABRI GÖKMENLER
Deputy Chief Executive
10
13
SEZGIN YILMAZ
Deputy Chief Executive
CAN YÜCEL
Deputy Chief Executive
11
14
SEZGIN LÜLE
Deputy Chief Executive
SEZAI SEVGIN
Deputy Chief Executive
9
10
11
Born in Adana in 1974. Mr. Ozan
Gürsoy graduated from the Public
Administration Department of Middle
East Technical University, Faculty of
Economic and Administrative Sciences.
He also holds a master’s degree in
International Banking and Finance
from the University of Birmingham
in the UK. He joined İşbank as an
Assistant Inspector on the Board
of Inspectors in 1996. Throughout
his career, Mr. Gürsoy served in
various units of İşbank and the Gebze
Corporate Branch of the Bank and was
appointed as Deputy Chief Executive of
İşbank on 26.08.2019.
Born in Kırcaali in 1975. Mr. Sezgin
Yılmaz graduated from Uludağ
University, Faculty of Economics and
Administrative Sciences, Department
of Economics. Mr. Yılmaz started
his career as an Officer at the Bursa
Branch in 1997. Mr. Yılmaz served
in various units and branches of
İşbank and was elected to the İşbank
Board of Directors on 29 March
2019. Mr. Yılmaz was appointed as
Deputy Chief Executive of İşbank on
26.08.2019.
Born in Trabzon in 1976. Mr. Sezgin
Lüle graduated from the Industrial
Engineering Department of Boğaziçi
University's Faculty of Engineering
in 1998. He completed his master's
degree in International Banking
and Finance at the University of
Birmingham in 2004.
Mr. Lüle began his career in the
Organization Division of İşbank as an
Assistant Organization and Method
Specialist in 1998 and became an
Assistant Inspector on the Board
of Inspectors in 1999. He served
as Assistant Manager and Unit
Manager at the Board of Project
and Change Management between
2008 and 2011 and became the
Head of the Enterprise Architecture
Division in April 2017. He attended
the Advanced Management
Program at Harvard Business School
in 2019. Mr. Lüle was appointed
as Deputy Chief Executive on 28
January 2021.
Born in Ankara in 1968. Mr. Sabri
Gökmenler graduated from the
Computer Engineering Department of
Middle East Technical University in 1991
and completed his master's degree in
the same department in 1995.
12
Mr. Gökmenler, who began his career
at İşbank in 1991 as a Software
Specialist, served in Softtech, a
subsidiary of İşbank, from 2004 to
2008. He became the Head of the IT
Architecture & Security Management
Division of İşbank in 2008 and Head of
the Information Technologies Division
in 2012. Mr. Gökmenler attended the
Advanced Management Program at
Harvard Business School in 2018
and was appointed as Deputy Chief
Executive on 28 January 2021.
Born in Ankara in 1978. Mr. Can
Yücel graduated from the Economics
Department of Middle East Technical
University, Faculty of Economics and
Administrative Sciences and began
his career at İşbank as an Assistant
Inspector on the Board of Inspectors in
1999. He served as Assistant Manager
in the SME Loans Underwriting Division
in 2008, as Assistant Manager in the
Corporate Loans Underwriting Division
in 2009. He was appointed as Unit
Manager in the same division in 2011
and as the Head of the Corporate
Loans Underwriting Division in 2016.
Mr. Yücel became Branch Manager of
the Başkent Corporate/Ankara Branch
in 2020 and was appointed as Deputy
Chief Executive on 26 August 2021.
13
Born in Istanbul in 1968. Mr. Sezai
Sevgin graduated from Marmara
University, Faculty of Economics and
Administrative Sciences.
14
On 31 July 1990, he began his career
at İşbank as an Assistant Inspector on
the Board of Inspectors. He became
the Branch Manager at İşbank AG
Succursale de Paris on 28 May 1998.
He was appointed as the Unit Manager
in the Corporate Banking Marketing
Division on 02 July 2004, and Head
of the SME and Commercial Banking
Marketing Division on 28 March 2007.
He became the Branch Manager of the
Gebze Corporate Branch on 13 April
2011 and Maslak Corporate/Istanbul
Branch on 28 February 2013. He was
appointed as the General Manager
of Bayek Healthcare Group, one of
İşbank's domestic subsidiaries, on
29 December 2015. Mr. Sevgin was
appointed as Deputy Chief Executive of
İşbank on 28 December 2021.
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SECRETARIAT TO
THE BOARD OF
DIRECTORS
BOARD OF
INSPECTORS
DEPUTY
Chief Executive
Sezai Sevgin
RISK
MANAGEMENT
DIVISION
INTERNAL
CONTROL
DIVISION
CORPORATE
COMPLIANCE
DIVISION
INFORMATION
SECURITY DIVISON
BOARD OF
DIRECTORS
CHIEF EXECUTIVE
HAKAN ARAN
AUDIT COMMITTEE
YUSUF ZİYA TOPRAK
ERSİN ÖNDER ÇİFTÇİOĞLU
DEPUTY
Chief Executive
Yalçın Sezen
DEPUTY
Chief Executive
Murat Bilgiç
DEPUTY
Chief Executive
N. Burak Seyrek
DEPUTY
Chief Executive
Şahismail Şimşek
DEPUTY
Chief Executive
Ebru Özşuca
DEPUTY
Chief Executive
Gamze Yalçın
DEPUTY
Chief Executive
H. Cahit Çınar
DEPUTY
Chief Executive
Ozan Gürsoy
DEPUTY
Chief Executive
Sezgin Yılmaz
DEPUTY
Chief Executive
Sabri Gökmenler
DEPUTY
Chief Executive
Sezgin Lüle
DEPUTY
Chief Executive
Can Yücel
HEAD OFFICE
COUNSELLORSHIP
CORPORATE
COMMUNICATIONS
COORDINATION
AND GENERAL
SECRETARY
CORPORATE
COMMUNICATIONS
DIVISION
RETAIL BANKING
MARKETING
DIVISION
RETAIL LOANS
UNDERWRITING
DIVISION
CORPORATE AND
COMMERCIAL
BANKING
MARKETING
DIVISION
SME BANKING
SALES DIVISION
TREASURY
DIVISION
FINANCIAL
MANAGEMENT
DIVISION
LEGAL
COUNSELLORSHIP
HR
MANAGEMENT
DIVISION
BANKING
OPERATIONS
& PAYMENT
OPERATIONS
DIVISION
INFORMATION
TECHNOLOGIES
DIVISION
DIGITAL BANKING
DIVISION
LEGAL AFFAIRS
AND FOLLOW UP
DIVISION
RETAIL BANKING
SALES DIVISION
PROJECT
FINANCE
DIVISION
COMMERCIAL
BANKING SALES
DIVISION
SME BANKING
MARKETING
DIVISION
ECONOMIC
RESEARCH
DIVISION
FINANCIAL
INSTITUTIONS
DIVISION
SUBSIDIARIES
DIVISION
STRATEGY &
CORPORATE
PERFORMANCE
MANAGEMENT
DIVISION
AGILE
MANAGEMENT
DIVISION
DATA
MANAGEMENT
DIVISION
CUSTOMER
RELATIONS
DIVISION
CREDIT
MONITORING
DIVISION
RETAIL BANKING
PRODUCT
DIVISION
COMMERCIAL
LOANS
UNDERWRITING
DIVISION
FREE ZONE
BRANCHES
AGRICULTURAL
BANKING
MARKETING
CAPITAL
MARKETS
DIVISION
INVESTOR
RELATIONS AND
SUSTAINIBILITY
DIVISION
TALENT
MANAGEMENT
DIVISION
SUPPORT
SERVICES
DIVISION
PROCUREMENT
DIVISION
CONSUMER
LOANS DIVISION
CORPORATE
LOANS
UNDERWRITING
DIVISION
BRANCHES
ABROAD
AND FOREIGN
REPRESENTATIVES
(OFFICES)
COMMERCIAL
BANKING
PRODUCT
DIVISION
MANAGERIAL
REPORTING
& INTERNAL
ACCOUNTING
DIVISION
PRIVATE
BANKING
MARKETING AND
SALES DIVISION
FOREIGN TRADE
& COMMERCIAL
LOAN
OPERATIONS
DIVISION
CONSTRUCTION
& REAL ESTATE
MANAGEMENT
DIVISION
ENTERPRISE
ARCHITECTURE
DIVISION
PAYMENT
SYSTEMS
ECOSYSTEM
DIVISION
CREDITS
PORTFOLIO
MANAGEMENT
DIVISION
PAYMENT
SYSTEMS
OPERATIONS
DIVISION
RETAIL
LOANS
RECOVERY
DIVISION
PAYMENT
SYSTEMS
PRODUCT
DIVISION
COMMERCIAL
& CORPORATE
LOANS
RECOVERY
DIVISION
Last revised on Jan 27, 2022
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In İşbank, the Board meetings are held at least once a month,
yet interim meetings might be held in case of need. Meeting
agendas are prepared in accordance with the proposals of
Head Office divisions. Moreover, various reports requested
by the Board of Directors from the Bank management and
off the agenda topics put forward by the Board members
are discussed during the meetings. Meeting agenda and
related documents are distributed to the Board members in a
particular time before the meetings.
By the end of 2021, 13 Board meetings were held and 12 of
them were held by full participation. 708 pages of minutes
were recorded for the said meetings, which lasted 60 hours in
total. As of 2021 year-end a total of 337 files were reviewed,
which split as 230 files for loan underwriting and 107 files on
other issues regarding loans; based on the work carried out
by convening meetings or by individual review and signing of
the file by each Board Member, which resulted in 232 loan
decisions. A total of 332 files were reviewed on non-credit
matters and 332 resolutions were taken. Consequently, 775
Board resolutions were made in 2021, including 211 those
that were passed during the meetings.
İŞBANK COMMITTEES
Assessments on İşbank Committees
İşbank committees presented their decisions and reports to
Board of Directors in 2021, and the necessary decisions have
been taken as a result of the assessment of Board of Directors.
The Audit Committee
The Audit Committee, which consist of two members and was
reconstituted by the resolution of the Board of Directors dated
29.5.2020 and Nr. 43822 is chaired by Mr Yusuf Ziya Toprak,
Vice Chairperson of the Board of Directors. The other member
of the Committee is Mr. Ersin Önder Çiftçioğlu, member of
Board of Directors.
Pursuant to its working principles, Audit Committee is
responsible for holding meetings at least twice a year
provided that six- month periods are not exceeded, and it is
obligated to inform the Board of Directors about the results
of the activities it carried out and measures to be taken
based on these results and about necessary practices to be
implemented. Moreover the Audit Committee is obligated
to provide its recommendations regarding other issues that
are deemed significant for the Bank in order to carry out its
activities safely. Audit Committee works in collaboration with
the Remuneration Committee and the Risk Committee.
The Audit Committee is in charge of:
• ensuring that the internal systems of the Bank function
efficiently and sufficiently, that these systems and the
accounting and reporting systems operate within the
framework of the related regulations and the Bank’s policies
and that the information produced has integrity,
• making preliminary assessment necessary to select
independent audit firms, rating, valuation and support
service institutions; regularly monitoring the activities
of these institutions selected by the Board of Directors;
evaluating them periodically within the context of the
provisions of the legislation; providing information to the
Board of Directors,
• reviewing the assessments of the independent audit
firms, evaluating independent audit results, and making
discussions with the independent auditors,
• informing the Board of Directors about findings of the
independent auditors and internal systems divisions, and
about measures taken by the top management and by the
units reporting to the top management,
• ensuring that the internal audit functions of subsidiaries that
are subject to consolidation are coordinated in line with the
related regulations,
• receiving information and reports about internal systems and
functioning of divisions within the scope of internal systems,
their operations including consolidated risks, and about
related policies and regulations,
• ensuring that the financial reports of the Bank are issued
in conformity with relevant legislations, regulations and
standards,
• making assessments in order to ensure whether or not
required procedures and principles have been implemented
for detecting, measuring, monitoring and controlling
potential and existing risks incurred by the Bank; ensuring
that risk framework and risk culture, in line with the Bank’s
structure and operations, are established within the Bank,
• ensuring that internal capital adequacy evaluation process
(ICAAP) includes all risks in a consolidated manner, auditing
and control processes are established to provide required
assurance about its adequacy and accuracy,
• evaluating professional education levels and competency of
managers and personnel assuming duties in divisions within
the scope of internal systems; making suggestions to the
Board of Directors for the selection of managers, as well
as presenting opinion to the Board of Directors during their
dismissal,
• establishing communication channels to make sure that
information will be provided directly to the Audit Committee
or to the internal audit unit or to the Bank inspectors in case
of Bank fraud.
• if required, gathering information, documents or reports
Credit Committee
from all Bank units, support service contractors and
independent auditors and being subject to Board approval,
receiving consultancy from those who are specialists in their
respective fields,
• reporting to and informing the Board about the results of its
own operations, the measures needed to be taken in order
for the Bank’s operations to be within the framework of the
related legislation and Bank policies in a continuous and
secure way and its evaluation, opinion and recommendation
on any other issues that are deemed to be important,
• fulfilling other responsibilities determined by the related
legislations and the duties given by the Board within this
framework.
As of the end of 2021, Audit Committee held 57 meetings with
full participation and adopted 88 resolutions.
Turkish Republic of Northern Cyprus (TRNC)
Internal Systems Committee
TRNC Internal Systems Committee is established within the
framework of TRNC Banking Law and related regulations. The
Committee which was reconstituted, has two members and as
per the resolution of the Board of Directors, dated 29.05.2020,
Nr. 43823 the Committee is chaired by Mr. Yusuf Ziya Toprak,
the Vice Chairperson of the Board of Directors. The other
member of the committee is Mr. Ersin Önder Çiftçioğlu who is
a member of the Board.
The Committee holds meetings at least twice a year provided
that a six month period is not exceeded and informs the Board
of Directors on the results of its own activities, its opinion on
the measures needed to be taken and the necessary practices
to be implemented by the branches, that operate under TRNC
office, and other important issues in order for these branches
to operate in a secure way.
TRNC Internal Systems Committee is responsible for ensuring
the efficiency and sufficiency of the internal systems provided
by the Bank in relation to the operation of the branches, that
operate under TRNC office; ensuring the operation of the
internal systems, accounting and reporting systems in line
with the law and related regulations and ensuring the integrity
of the produced information; carrying out the preliminary
assessment of independent audit firms and other companies
providing services directly related to other banking operations
to be selected by the Board; and monitoring regularly
and coordinating these companies that are selected and
contracted by the Board.
As of 2021 year-end, TRNC Internal Systems Committee held
meetings 9 times with full participation of the members and
took 9 resolutions.
In İşbank, Credit Committee makes resolutions on credit
allocation within its authorization limit, makes decisions on
demands to change the credit allocation conditions within
its authorization limit and carries out other assignments
regarding credits given by the Board.
Credit Committee consists of three members; one of them
is the Chief Executive Officer or Deputy Chief Executive, who
is also the chairperson of the Committee and two members
from the Board of Directors. Two alternate Committee
Members are also designated who will stand if need arises.
As the loan proposal files are presented, the Committee makes
decision on the credit allocation with consensus, after each
Committee Member examines and signs the files. Resolutions
of the Credit Committee which have unanimous backing are
executed directly while resolutions made on a majority basis
are executed following the approval of the Board of Directors.
By the end of 2021, by the evaluation of 105 files under
the authority of the Credit Committee, 83 resolutions were
adopted with full participation of the members.
As per the resolution of the Board of Directors, dated
01.04.2021, Nr. 44435, Chief Executive Officer, Mr. Hakan Aran
is the Chairperson of the Committee and regular member,
Chairperson of the Board of Directors Mr. Adnan Bali and
member of the Board of Directors Ms. Feray Demir are the
Credit Committee members. Mr. Yusuf Ziya Toprak, Vice
Chairperson of the Board of Directors and Mr. Fazlı Bulut,
member of the Board of Directors are alternate members of
the Credit Committee.
Credit Revision Committee
Being one of the committees of the Board of Directors, the
Credit Revision Committee is constituted every year as per
the article of the context of Bank’s Credit Risk Policy put in
effect. The Committee holds meetings at least once a year
within the framework of the principle of reviewing the loan
portfolio, evaluating the relations with credit customers at
the end of the year and revising, when necessary, the credit
limits allocated to the said persons and corporations for the
following year.
Credit Revision Committee, composed of Ms. Füsun Tümsavaş,
the Chairperson of the Board of Directors, and Mr. Yusuf Ziya
Toprak, the Vice Chairperson of the Board of Directors, Ms.
Feray Demir, Mr. Ersin Önder Çiftçioğlu and Mr. Sadrettin
Yurtsever who are members of the Board of Directors as per
the Board of Directors’ resolution dated 21.12.2020, Nr. 44157
for the year 2021; has completed its analyses and evaluations
regarding certain firms and groups under the authorization of
Board of Directors and Credit Committee on 05.03.2021.
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with no. 44974, the Credit Revision Committee has been
re-elected to consist of the following members for 2022: Mr.
Adnan Bali, Chairperson of the Board of Directors; Mr. Yusuf
Ziya Toprak, Deputy Chairperson of the Board of Directors; and
Board Members Ms. Feray Demir, Mr. Ersin Önder Çiftçioğlu
and Mr. Sadrettin Yurtsever.
Corporate Governance Committee
The Corporate Governance Committee was established to
monitor İşbank's compliance with the corporate governance
principles, make improvements in corporate governance
practices and suggestions to the Board, and fulfill the tasks
of the Corporate Governance Committee and Nomination
Committee as set out in the applicable legislation. The
Committee consists of a chairperson and three members.
As per the resolution dated 01 April 2021 with no. 44438,
Board Member Mr. Ersin Önder Çiftçioğlu was elected as the
Committee Chairperson, while Board Members Ms. Feray
Demir and Mr. Sadrettin Yurtsever and the Head of the
Investor Relations and Sustainability Division Ms. Neşe Gülden
Sözdinler were elected as Committee Members.
As of year-end 2021, the Corporate Governance Committee
held 4 meetings with the full attendance of its members and
took 3 decisions.
Sustainability Committee
The Sustainability Committee was established to develop
the Bank's sustainability strategy and policies and submit
them to the Board of Directors for approval, to set out the
sustainability targets and action plans and ensure coordination
within the Bank for their implementation, to ensure that
sustainability issues are incorporated in the Bank's strategic
business plans, to monitor progress of the metrics and
targets, and to perform other similar tasks. The Committee is
the highest authority responsible for sustainability activities
in the Bank. In accordance with the Board's resolution dated
24.12.2020 with no. 44176, the Committee consists of
one chairperson and fourteen members. The Committee
Chairperson is Mr. Adnan Bali, and the Committee Members
are Ms. Feray Demir, Mr. Ersin Önder Çiftçioğlu, Ms. Gamze
Yalçın, Mr. Yalçın Sezen, Mr. Murat Bilgiç, Mr. N. Burak Seyrek,
Mr. Şahismail Şimşek, Mr. Ozan Gürsoy, Mr. Sezgin Yılmaz,
Mr. Sabri Gökmenler, Mr. Sezai Sevgin, Mr. Suat E. Sözen,
Mr. Hürdoğan Irmak and Ms. Neşe Gülden Sözdinler.
As of year-end 2021, the Sustainability Committee held 4
meetings with the full attendance of its members and took 4
decisions.
148 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Remuneration Committee
The Remuneration Committee was established to perform
functions and activities related to monitoring and controlling
the remuneration policies of İşbank on behalf of the Board of
Directors. The Committee has two members, and as per the
resolution of the Board dated 01 April 2021 with no. 44437,
Chairperson of the Board of Directors Mr. Adnan Bali was
elected as Committee Chairperson and Board Member Ms.
Feray Demir was elected as Committee Member.
The Remuneration Committee convenes at least four times a
year, not to exceed three months between two meetings, and
submits to the Board of Directors the results of its activities and
its opinions regarding other issues deemed important.
Within the framework of compliance to Corporate Governance
Principles, the Remuneration Committee is responsible for
monitoring and checking policies related to remuneration
management on behalf of the Board of Directors, and ensuring
that remuneration is in compliance with the Bank's ethical
values, internal balances and strategic goals. The Committee
is also responsible for evaluating remuneration policy and
practices within the framework of risk management; reviewing
the remuneration policy and submitting proposals as required to
the Board of Directors, as well as fulfilling other responsibilities
set out in applicable legislation and the tasks assigned to it by
the Board of Directors within this framework.
As of year-end 2021, the Remuneration Committee held 7
meetings with full attendance of its members and took 10
decisions.
Board of Directors Operating Principles Committee
The Board of Directors Operating Principles Committee was
established as per the Board's resolution dated 30 September
2021 with no. 44745. The Committee is chaired by Mr. Adnan
Bali, Chairperson of the Board of Directors, with the other
members being Board Members Ms. Feray Demir and Mr.
Durmuş Öztek.
The Board of Directors Operating Principles Committee
is responsible for submitting its findings, opinions and
recommendations regarding the interpretation and implementation
of applicable legal provisions, including especially the İşbank
Board of Directors Working Principles and Procedures and the
Directions on İşbank Board of Directors Working Principles.
Risk Committee
The Risk Committee is responsible for articulating the risk
management strategies and policies to be adhered to by İşbank
both on a consolidated and unconsolidated basis, submitting
them to the Board of Directors for approval and monitoring their
implementation. The Committee is the common communication
platform with the Bank's Executive divisions for assessing
the risks the Bank is exposed to, making suggestions about
the actions to be taken and approaches to be followed. The
Committee's principal duties include the following:
• Preparing the risk strategies and policies and submitting
them to the Board for approval.
• Monitoring effective use of the outputs of the internal capital
adequacy assessment process in the planning and decision-
making processes of the Bank.
• Discussing and deciding on the issues raised by the by the
Risk Management Division.
• Recommending the level of risk limits for exposures/possible
exposures to the Board, monitoring violations of these limits
and making recommendations regarding elimination of such
violations to the Board.
• Recommending changes in the risk policies to the Board.
• Monitoring the risk management processes, i.e. risk
identification, definition, measurement, assessment, control
and reporting processes carried out by the Risk Management
Division.
• Monitoring the accuracy and reliability of the risk
measurement methodologies and their results.
• Suggesting proposals regarding articulation and amendment
of the Bank's risk appetite statement to the Board.
• Taking measures to establish a risk culture in the Bank,
creating processes to fulfill the responsibility of supervision,
understanding all of the risks arising from the activities of
the Bank and supervising the integration of these risks to the
risk management system of the Bank.
Committee members: Chairperson of the Board of Directors
and Risk Committee: Adnan Bali
Deputy Chairperson of the Board of Directors and Chairperson
of the Audit Committee: Yusuf Ziya Toprak
Chief Executive Officer and Chairperson of the Credit
Committee: Hakan Aran
Board Member: Ersin Önder Çiftçioğlu
Deputy Chief Executive: Murat Bilgiç
Deputy Chief Executive: Gamze Yalçın
Deputy Chief Executive and Chairperson of the
Asset-Liability Management Committee: Ebru Özşuca
Deputy Chief Executive Responsible for Internal Systems:
Sezai Sevgin
Head of the Corporate Compliance Division: Süleyman H. Özcan
Head of the Internal Control Division: H. Umut Togay
Head of the Risk Management Division: Hürdoğan Irmak
The Risk Committee contributes to the development of group
risk policies also through consolidated group meetings with
the participation of the Bank's financial and non-financial
subsidiaries. The Deputy General Manager responsible for the
Subsidiaries Division and the Head of Subsidiaries Division also
attend the activities that the Risk Committee carries out on a
consolidated basis.
During 11 online meetings held in 2021 by the Risk Committee
with full attendance of its members, the risk management
activities of İşbank and its subsidiaries under the Consolidated
Risk Policies were evaluated, the risk reports presented to
the Committee were reviewed, and 30 decisions were made
regarding the risk management systems and processes.
Operational Risk Committee
The Operational Risk Committee, which was established
by the Board decision dated 30.04.2020 with no. 43790,
operates to determine the strategies and policies for
managing operational risks that the Bank may be exposed to,
improve the operational risk management framework, and
strengthen the governance model regarding operational risks.
The Committee meets at least twice during a calendar year,
and the members are listed below.
Deputy Chairperson of the Board of Directors, Chairperson of
the Audit Committee, and Chairperson of the Operational Risk
Committee: Yusuf Ziya Toprak,
Chief Executive Officer: Hakan Aran
Board Member: Ersin Önder Çiftçioğlu
Deputy Chief Executive: Ozan Gürsoy,
Deputy Chief Executive: Sezgin Yılmaz,
Deputy Chief Executive: Sezgin Lüle,
Deputy Chief Executive: Sabri Gökmenler,
Deputy Chief Executive Responsible for Internal Systems:
Sezai Sevgin
Chairperson of the Board of Inspectors: Gürler Özkök
Head of the Corporate Compliance Division: Süleyman H. Özcan,
Head of the Internal Control Division: H. Umut Togay,
Head of the Risk Management Division: Hürdoğan Irmak,
Head of the Information Security Division: Bülent Akdemir,
Unit Manager of the Risk Management Division: Burcu Nasuhoğlu
The Committee works in collaboration with the Risk
Committee and reports operating results to the Board through
the Audit Committee.
As of year-end 2021, the Operational Risk Committee had 2
online meetings with the attendance of all members and took
6 decisions during the year.
Corporate Social Responsibility Committee
The Corporate Social Responsibility Committee was
established as per the Regulation on Corporate Social
Responsibility Practice which was adopted with the
resolution of the Board. Its members include Board Members
Feray Demir, Fazlı Bulut, Durmuş Öztek (as of 01.04.2020)
and Sadrettin Yurtsever (as of 01.04.2020); Deputy Chief
Executives Yalçın Sezen and Can Yücel (as of 30.09.2021);
Corporate Communications Coordinator and General Secretary
Suat Sözen, and Head of the Corporate Communications
Division Gül Meltem Atılgan.
The Corporate Social Responsibility Committee convenes at
regular intervals depending on the agenda. As of year-end
2021, the Committee held 7 meetings and took 10 positive
advice decisions.
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Besides banking activities, the financial and non-financial risks
which the Group is exposed to as a whole need to be analyzed,
monitored and reported in accordance with banking-specific
risk management principles and the Group's perspective of
risk management. This is more than just a legal reporting
requirement that needs to be addressed; it has become an
industry standard for corporate governance.
The Bank's risk management process, which is organized
around risk management regulations and helps establish
a common risk culture across the organization, has been
designed to prioritize "good corporate governance", ensure
segregation of units responsible for monitoring and controlling
risk from executive functions, identify risks in accordance
with international regulations, and facilitate measurement,
analysis, monitoring, reporting and control functions.
The risk management process and the functions involved in
this process are among the top responsibilities of the Board of
Directors. The Risk Management Division, which acts through
the Risk Committee and forms a functional constituent of
the risk management function in collaboration with the Bank
Credit Committee and the Asset & Liability Management
Committee, not only carries out activities related to regulatory
and internal capital adequacy to ensure compliance with
the Basel framework in line with the international best
practices, but also develops and validates risk measurement
methodologies and optimizes the capital adequacy
management process.
Capital Adequacy Policy
The Capital Adequacy Policy sets out the principles and
procedures that need to be adhered to when defining the level
of capital, on a consolidated and unconsolidated basis, that
the Bank must hold against potential losses which might arise
from financial risks associated with on- and off-balance sheet
items, in addition to non-financial risks caused by the Bank’s
operations; and maintaining and monitoring that level of
capital by taking into consideration the minimum capital levels
determined in accordance with the regulations and the internal
capital adequacy assessment process (İSEDES). This Policy is
an integral part of the Risk Policies.
Credit Risk Policy
Credit risk is defined as the possibility with which the Bank
may incur losses due to inexecution, whether partially or
fully, of the obligations of a counterparty under an agreement
with the Bank by failing to meet the requirements of such
agreement in a timely manner. The Credit Risk Policy sets the
methodology and responsibilities for management, control
and monitoring of credit risk as well as other factors related
to credit risk limits. İşbank identifies, measures and manages
the credit risks associated with all of its products and activities
by taking into consideration the transactions defined as
credit in article 48 of the Banking Law. The Board of Directors
reviews the Bank's credit risk policies and strategies on an
annual basis at a minimum. The General Manager and Deputy
General Managers and the Division Managers involved in loan
processes are responsible for implementing the credit risk
policies approved by the Board of Directors.
İşbank's credit risk profile is regularly monitored. Current
trends of risk indicators and changes in these indicators
are reported to senior management at regular intervals.
It is essential that concentration of credit risks is avoided.
Concentration risk of the credit portfolio is monitored by
maintaining a balanced combination of revenue, risk and
capital cost. For this purpose, the Board of Directors adheres
to credit risk limits which can be set per debtor, sector, type of
loan, collateral, country, maturity, currency etc.
In managing credit risk, İşbank implements internal risk
limits specified by the Board of Directors that restrict the
maximum credit risk to be undertaken by the Bank based on
parameters such as risk groups and sectors, in addition to the
credit risk limits that are mandated by legal regulations. These
internal limits are determined in a way that does not lead to
concentration of credit risks.
The Bank also utilizes credit decision support systems
for credit risk management. The Bank ensures that the
credit decision support systems and artificial intelligence
applications have the capability to enable monitoring of credit
risks on a portfolio basis, calculating expected and unexpected
losses and correctly evaluating credit risk in pricing,
performance management, sales and marketing processes.
The risks that the Bank may be exposed to in connection with
any models in use are assessed and managed according to
the principles and procedures described in the Model Risk
Management Policy.
Asset and Liability Management Risk Policy
Asset-liability management risk is defined as the risk with
which the Bank may incur losses due to failure to effectively
manage all financial risks of the Bank arising from its assets,
liabilities and off-balance sheet transactions. Market risk
of the trading portfolio, structural interest rate risk of the
banking portfolio, and liquidity risk are all addressed within the
scope of asset and liability management risk.
All principles and procedures related to the creation and
management of the Bank's asset-liability structure and the
"Risk Appetite Framework" for the capital to be allocated are
established by the Board of Directors. The top priority is to
maintain the asset-liability management risk within the limits
set out in the legislation as well as the internal risk limits.
Within the Bank's risk appetite framework, risk tolerance
levels which aim to put a cap on the amount of risk undertaken
by the Bank are determined by the Board of Directors for
each risk type on both a unconsolidated and consolidated
basis. In this process, liquidity, target income level, and
general expectations about the risk factors are taken into
consideration.
The Board of Directors and Audit Committee are obliged
to monitor and ensure optimized use of the Bank's capital.
For this purpose, they are responsible for checking the risks
against the limits and taking actions as necessary.
The Asset-Liability Management Committee is responsible
for managing asset-liability risk in accordance with the risk
appetite framework and risk limits established by the Board of
Directors and within the principles and procedures laid out in
the policy.
The Risk Management Division is responsible for measuring
asset-liability management risk, reporting the results, and
monitoring compliance with risk limits. The severity of the
risk taken is reviewed according to different scenarios.
Measurement results are tested to check their reliability and
integrity. Asset-liability management risk is reported to the
Risk Committee as well as to the Board of Directors through
the Audit Committee.
Compliance with risk limits is closely and continuously
monitored by the Risk Management Division, Asset-Liability
Management Committee and related executive units. If the
limits are breached, the Risk Management Division promptly
reports the breach and its reasons to the Board of Directors
through the Audit Committee. The course of action needed to
be taken in order to eliminate the breach is determined by the
Board of Directors.
Asset-liability management processes and compliance with
the policy rules are audited by the internal audit system.
The principles regarding the audit process, audit reports
and fulfillment of action plans to eliminate the errors and
gaps detected during audits are established by the Board of
Directors.
Stress Testing Policy
The purpose of the Stress Testing Policy is to detect significant
risks and vulnerabilities that may arise from both the Bank-
specific adverse developments and from unexpected stress
conditions associated with the general economic and financial
environment.
The stress test program is defined as the collection of stress
test analyses conducted to assess risks associated with
the Bank’s activities and the methodologies, assumptions
and scenarios related to these analyses. In order to ensure
that valid and accurate results are obtained, the stress test
program is regularly monitored and updated by taking into
consideration the Bank’s risk appetite framework, the current
economic environment and market conditions, and the Bank’s
products, strategies and technological capabilities.
The Bank implements a stress test program to conduct an
assessment of the risks both from a holistic view (i.e. bank-
wide stress tests) and on the basis of the important risk types
(i.e. individual stress tests) in accordance with the regulations
and its internal procedures, and the results are reported to the
senior management, the Board of Directors and other related
legal authorities.
The Board of Directors is responsible for executing the stress
test program as a whole. The Board of Directors ensures
that the outcomes of the stress test program are evaluated
and used as input for decision making in relevant fields. The
Risk Management Division is responsible for conducting the
analyses included in the stress test program, reporting the
outcomes of the stress tests and monitoring compliance with
the risk limits. The scope of the stress test program, the risk
factors to be used in the analyses, and the framework of the
stress parameters are determined by the Risk Committee.
Processes related to the stress test program and compliance
with the policy rules are audited by the internal audit system.
The principles regarding the audit process, audit reports
and fulfillment of action plans to eliminate the errors and
gaps detected during audits are established by the Board of
Directors.
Operational Risk Policy
Operational risk is defined as "the risk of loss, including
legal risks, due to inadequate or faulty internal processes,
people and systems or external factors". Operational
risk management activities are carried out by the Risk
Management Division. These activities include detecting,
identifying, measuring, analyzing, monitoring, reporting
and controlling operational risks; following national and
international developments in the field of operational risk
management; improving existing techniques and methods,
and performing the required regulatory reporting, notification
and follow-up activities. The principles and procedures of risk
management are laid out in the Operational Risk Policy.
Operational risks that may be encountered during activities
are classified and monitored under the "Risk Catalogue”. The
Risk Catalogue serves as the main document to be used when
identifying and classifying all possible risks. It is updated
to reflect improvements in risk management practices and
changing regulations.
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within the framework of risk management policies approved
by the Board. Risk appetite and the associated internal limits,
which are determined by the Board for operational risks, are
monitored on a regular basis.
When identifying operational risks, internal and external
factors that may negatively affect the Bank's operations are
taken into consideration. Both qualitative and quantitative
methods are utilized together in measuring and assessing
operational risks. During measurement and assessment, risks
are prioritized based on the financial, legal, reputational and
operational implications of the operational risks that the Bank
is exposed to. Besides the calculations made within the scope
of legal framework, , internal measurement methods, impact-
probability analysis, loss event data analysis, scenario analysis,
stress tests and risk indicators are also utilized when measuring
operational risks. The results are reported to the Board through
the Operational Risk Committee and Risk Committee.
All operational risks that the Bank may be exposed to in
connection with banking and information systems processes;
risk levels of new products, services and activities as well as
the support and valuation services that the Bank receives;
loss events occurring at İşbank which represent operational
risks, and risk indicators are regularly monitored by the Risk
Management Division and reported to the Risk Committee and
the Board.
All employees of the Bank display responsible behavior and
understand that the principles and procedures laid out in the
Bank's legislation, including especially the operational risk
policy, are intended to create a work environment that is sensitive
to the presence of operational risks and reduces the likelihood
of loss by incorporating control mechanisms for theserisks.
Reputational Risk Policy
Reputational risk refers to potential losses which may be
caused by loss of trust in the Bank or damage to the Bank’s
reputation as a result of non-compliance with existing legal
regulations or negative views of parties such as current or
potential customers, partners, competitors and supervisory
authorities. The Reputational Risk Policy sets out the
principles and procedures to be followed when identifying,
assessing, controlling, monitoring, reporting and managing
sources of reputational risk that the Bank may be exposed to
during its operations.
Sources of reputational risk are evaluated both individually and
collectively, and appropriate systems and controls are put in
place to effectively manage risk factors. The Risk Management
Division is responsible for conducting a multi-dimensional
assessment of reputational risks and reporting them to the Risk
Committee, the Audit Committee and the Board of Directors.
All employees carry out their activities in a responsible manner
which protects the reputation of the Bank.
Consolidated Risk Policies
Compliance with risk management principles related to the
Bank's subsidiaries is monitored according to the Bank's
Consolidated Risk Policies. Subsidiaries follow their own
risk management policies which take into account the
Consolidated Risk Policies and their own organizational
structure. Subsidiaries' risk policies which are approved by
their boards of directors form the framework of their risk
management systems and processes.
Information Systems Risk Management Policy
The purpose of the Information Systems Risk Management
Policy is to set out the principles to be adhered to when
identifying, measuring, monitoring, controlling, reporting
and managing the risks associated with the management
of information systems. With this policy, the Bank aims to
effectively manage its information systems, which play a
critical role in sustaining the Bank's activities, by handling the
management of information systems as part of its corporate
risk management practices. The provisions of this policy are
applied in the management of the Bank's information systems
and all elements involving these systems.
The risks associated with information technologies are
basically evaluated as part of the Bank's operational risk
management. Since these risks can be multipliers of the other
risks arising from banking activities, it is essential that they
are measured, closely monitored and controlled by the Bank
within the framework of a holistic risk management approach.
Model Risk Management Policy
The purpose of the Model Risk Management Policy is
to establish the principles and procedures regarding the
principles of model risk management by addressing the end-
to-end lifecycle of the models used by the Bank in performing
its operations. With the policy, the Bank aims to manage,
through a holistic approach, the model risk to which the
models used by the Bank in its activities are exposed due to
errors, failures or deficiencies in the lifecycle of the models.
At the Bank, model risk is managed via a triple defense
line structure whereby the first line of defense is provided
by the model owner, model development team, model
implementation team, and model user, the second line of
defense is provided by the model risk management team,
validation team, and internal control, and the third line
of defense is provided by the internal audit. Model risk
management covers the entire lifecycle of a model. The policy
describes the main activities in each step of the model lifecycle
as well as the responsibilities of different divisions of the Bank
in relation to these activities.
Climate Change Risk Policy
Climate change risk includes the risks associated with
transition to a low-carbon economy and physical risks which
may occur depending on the impact of climate change on
nature. The Climate Change Risk Policy sets out the principles
and procedures to be followed for detecting, identifying,
assessing and/or measuring, monitoring, controlling, reporting
and managing the climate change risks that the Bank may be
exposed to as a result of its activities.
Besides being a type of risk which the Bank may be directly
exposed to, climate change risk may also be caused by other
risks that may arise during the performance of the Bank's
activities. Therefore, the Climate Change Risk Policy is an
integral part of the Bank's other Risk Policies.
The main purpose of climate change risk management
is to ensure that the Bank's activities and practices are
aligned with its climate change strategy. Responsibilities
for management of climate change risk have been defined
in the form of a triple defense line. The role of the first line
of defense is basically to ensure that the loan decisions are
made by considering the climate change risks during the loan
allocation process. The second line of defense determines
the working principles, rules, policies and requirements
in relation to the climate change risk. The third line of
defense, within its existing roles and responsibilities, offers
reassurance to the Board of Directors that the structure
described here functions properly.
Managers of Internal Systems
Chairman of the Board
of Inspectors
Head of Risk Management
Head of Corporate Compliance
Division (Compliance Officer)
Head of Internal Control
Muzaffer Okay
Hürdoğan Irmak
Süleyman H. Özcan
Hamit Umut Togay
4 years
7 months
30
years
Licence
4 years
1 month
21
years
Licence
1 year
6 months
28
years
Licence
7 years
10 months
24
years
Licence
Departments Worked Previously
Departments Worked Previously
Departments Worked Previously
Departments Worked Previously
Nonperforming Loans
Division,
Commercial and Corporate
Loans Monitoring &
Recovery Division,
Corporate Compliance
Division,
Board of Inspectors
Corporate Loans
Underwriting Division,
Board of Inspectors,
Risk Management Division
Board of Inspectors
Accounting Division,
Change Management Board,
Strategy and Corporate
Performance Management
Division,
Investor Relations Division
Board of Inspectors
Retail Banking
Product Division,
Galata Branch
Length of Service at
Current Position
Professional
Experience
Educational
Background
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COMPLIANCE and RISK MANAGEMENT SYSTEMS and ITS ACTIVITIES in the REPORTED PERIOD
Internal Audit
İşbank Board of Inspectors operates under the control of
the Board of Directors. By adopting the ethical principles set
out in the banking and internal audit regulations and taking
international standards on internal audits into consideration,
the Board of Inspectors audits the activities of all the
Bank’s Head Office divisions, including Internal Control, Risk
Management and Corporate Compliance Divisions, as well
as banking and IT processes, domestic and foreign branches
and subsidiaries in accordance with applicable laws and
regulations and the Bank’s internal strategies, policies,
principles and goals. The Board of Inspectors also conducts
preliminary inspections, examinations and investigations when
necessary.
İşbank Board of Inspectors, which is certified to be in
compliance with international quality standards, performs its
duties by combining its long-established audit experience with
advanced technology in a modern, risk-focused approach. The
Board of Inspectors consists of 152 auditors and assistant
auditors and also carries out remote audits with the help
of its IT capabilities in addition to on-site audits. Audit
reports are submitted to the İşbank Audit Committee, senior
management, and related divisions after being classified
according to their severity and priority, and the corrective
measures taken in order to address audit findings are
monitored by the Board of Inspectors. The Board of Directors
closely monitor the activities of the Board of Inspectors
through periodic activity reports submitted via the Audit
Committee. In 2021, the Board of Inspectors conducted audits
of 175 domestic and 2 overseas branches, 24 Head Office
divisions, 10 subsidiaries, 8 Regional Directorates affiliated
with the Retail Loans Underwriting Division and the top 200
companies with the highest risk in the Bank. Additionally,
audits were conducted for the following:
• Banking Processes and Information Systems –
Management's Declaration
• Portfolio (Collective) Custody Service
• Sustainability Management System
• Gender Equality in Remuneration
• Compliance Program on Prevention of Laundering Proceeds
of Crime and the Financing of Terrorism
• London Branch Compliance Program on Prevention of
Laundering Proceeds of Crime
• Valuation Process
• Internal Capital Adequacy Assessment Process (İSEDES)
• Liquidity Risk, Counterparty Credit Risk, Structural Interest
Rate Risk and Market Risk
• Model
• TFRS (Individual Assessment)
• Follow-up of Penetration Test Findings
• BAT Risk Center Processes Information Systems
• Central Counterparty Practices
• Compliance with Treasury-backed Guarantee
System Additionally, PDPL Governance, the Customer
Relations Program and the Agile Working Model were
reviewed in order to examine the effectiveness and adequacy
of operational risk management systems, and audit
reports regarding Compliance with the Guidelines on Credit
Allocation and Monitoring are being prepared for submission.
Furthermore, in accordance with the regulations put into force
in 2021, compliance audit activities are being carried out as
per the Action Plan and the Guidelines on Credit Allocation and
Monitoring.
The audits of 20 domestic branches, which began in 2021,
are still ongoing. İşbank's banking processes and information
systems are audited annually by the Board of Inspectors in
accordance with the "Regulation on External Audit Institutions’
Information Systems and Banking Processes Audits" issued by
the Turkish Banking Regulation and Supervision Agency. On-
site audits were conducted on 28 companies providing support
services or technology-intensive services to İşbank in the
field of information technologies. The process with which the
Bank creates its consolidated and non-consolidated financial
statements is also reviewed. Based on the results of audits
of banking processes and information systems conducted in
2021:
• no material weakness was detected in the processes that
could hinder effective, reliable and uninterrupted execution
of the Bank's activities,
• no issue was detected that could have a significant effect
on the integrity, availability, consistency and reliability of the
data reported in consolidated and non-consolidated financial
statements.
Thanks to risk-focused audit plans, a significant portion of
İşbank’s loan portfolio was audited in 2021. In 2021, the Bank
continued the development and maintenance activities of:
• the Human Resources Risk Matrix, which is used as a
reference source in identifying personnel-related risks,
• the Branch Risk Matrix, which is used to determine the loan
portfolio to be audited in line with the Bank's risk-focused
review goal,
• various practices intended to provide fast and qualified data
for in-house fraud detection and investigation studies.
Internal Control
The main objective of the internal control system is to provide
the maximum contribution to achieve İşbank’s corporate
targets set in accordance with the Bank’s vision, mission and
strategies and stakeholder expectations. To this end, the
performance required to ensure that all components of the
internal control system operate together in an integrated and
effective manner, under the supervision of İşbank’s Board of
Directors, with the contribution and support of all İşbank’s
employees, is being rigorously carried out with professional
care and attention.
The design and operational effectiveness of the internal
control activities carried out by the relevant units in the
process are regularly examined by the Internal Control Division
which is an independent function. For this purpose, “onsite”
and/or “remote” controls have been carried out by the Internal
Control Division with a risk-oriented approach, on the activities
of the Bank’s domestic and foreign branches and Head Office
units, financial reporting and information systems and internal
control structures of the subsidiaries subject to consolidation.
Activities for central and continuous monitoring of the
effectiveness of controls by using advanced data analytics
applications were conducted.
The results of the reviews were analyzed by the Internal
Control Division and developing proposals, monitoring and
follow up activities intended for eliminating the existing
deficiencies and preventing the recurrence of the defects were
continued.
In order to contribute to their professional development,
İşbank’s internal control personnel were provided with
various trainings during the year. Internal Control Division
also supported the Bank’s employees’ trainings in order to
increase the awareness of internal control activities across the
organization.
In accordance with the Bank's Sustainability Policy, control
activities regarding the operations carried out within the scope
of the Sustainability Management System were conducted.
In addition, in terms of assessment and management
of environmental impacts, the Bank complies with the
international ISO 14001 Environmental Management System
standards, and the "internal audit" activities defined within the
scope of ISO 14001 - Environmental Management System are
carried out by the Internal Control Division.
İşbank’s internal control system and internal control activities
are structured and operated to make sure that: i) The Bank’s
assets are protected, ii) The Bank’s activities are carried out in
compliance with the Law and other relevant legislations, the
Bank’s internal policies and guidelines, and banking practices,
iii) accounting and financial reporting systems function
securely and in integrity, and iv) information is provided
promptly.
Compliance
Compliance is the foremost duty and responsibility of all
managers and employees of the Bank at any level. Compliance
functions and activities executed in the Bank's Head
Office divisions, domestic and overseas branches, and its
subsidiaries are monitored through the corporate compliance
activities conducted within the Corporate Compliance Division,
which reports to the Board of Directors. The purpose of the
Corporate Compliance Division is to make the maximum
contribution to the Bank's efforts to effectively manage and
control compliance risk according to a materiality- and risk-
based approach and to ensure the execution and management
of the Bank's activities in accordance with applicable laws,
regulations and standards at all times.
The Bank also oversees the effective execution of the
corporate compliance activities of its subsidiaries. The
necessary researching, analyzing, monitoring, assessing,
informing, conducting, coordinating and reporting activities
regarding compliance issues are conducted within the
Corporate Compliance Division, which consists of three
sub-units, namely Regulatory Compliance, Financial Crimes,
and Sanctions and International Obligations.
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specified in the Law on Prevention of Laundering Proceeds
of Crime and other applicable regulations are fulfilled by the
Head of the Corporate Compliance Division, who is the legal
"Compliance Officer" of the Bank as well. The Head of the
Corporate Compliance Division also serves as the "Compliance
Officer" of the Financial Group, the parent company of which
is İşbank, in accordance with MASAK (Financial Crimes
Investigation Board) regulations.
Information on the activities of the Corporate Compliance
Division is reported/submitted to the Board of Directors
through the Audit Committee on a monthly and yearly basis.
Besides being the "Compliance Officer" of the Bank, the Head
of the Corporate Compliance Division is also a member of
the Risk Committee and Operational Risk Committee and a
consultant member of the IS Steering Committee, Business
and IS Continuity Committee, and Information Security
Committee.
Activities regarding the prevention of financial crimes and
sanctions in the Bank are executed in a purposeful and
effective manner in accordance with applicable regulations
and the Bank’s Policy and Compliance Program, which
were developed for this purpose. İşbank’s Compliance Risk
Management Policy and Policy for Combating Financial Crimes
and Sanctions are available, both in English and Turkish, under
the "Investor Relations / Corporate Governance" page of the
Bank’s website www.isbank.com.tr.
Officers and Assistant Specialists who have just begun to
work for İşbank receive a "Policy for Combating Financial
Crimes and Sanctions and Compliance Program" class as part
of their Starting My Career Trainings, while employees who
have been promoted to Senior and Assistant Manager roles
also receive this class as part of their career training program.
The Corporate Compliance Division shares information on
Financial Crimes, Sanctions, International Obligations and
Legal Compliance activities under the Career as a Specialist
Internship Program designed to support the career growth
of Senior Assistant Specialists at İşbank. Additionally, "Risk
Management and Risk Culture" and "Prevention of Financial
Crimes" seminars are held as part of the Management
Development Conferences to support managers and manager
candidates in these fields.
İşbank’s Compliance Risk Management Policy and Policy for
Combating Financial Crimes and Sanctions are available in
English and Turkish on the Bank’s website.
Risk Management
At İşbank, the risk management process puts "good corporate
governance" to the forefront and ensures segregation of units
responsible for monitoring and controlling risk from executive
functions, identifies risks in accordance with international
regulations, and facilitates measurement, analysis, monitoring,
reporting and control functions.
Besides banking activities, the financial and non-financial risks
which the Group is exposed to need to be analyzed as a whole,
monitored, and reported in accordance with banking-specific
risk management principles and the Group's perspective of
risk management. This is more than just a legal reporting
requirement that needs to be addressed; it has become an
industry standard for corporate governance.
The risk management process and the functions involved in it
are among the top responsibilities of the Board of Directors.
The Risk Management Division, which acts through the Risk
Committee and forms a functional constituent of the risk
management function in collaboration with the Bank Credit
Committee and the Asset & Liability Management Committee,
not only carries out activities related to regulatory and
internal capital adequacy to ensure compliance with the Basel
framework and international best practices, but also develops
and validates risk measurement methodologies and optimizes
the capital adequacy management process.
The risks to which the Bank is exposed are managed with a
three line of approach. The first line of defense is comprised
of the business units and is responsible for identifying and
assessing risks, ensuring continuous implementation of risk
management, designing and putting process controls in place,
and reporting results according to the Bank's risk appetite,
rules, procedures and risk strategies.
The second line of defense is comprised of the Risk
Management Division, Corporate Compliance Division
and Internal Control Division, which report to the Board of
Directors. The Risk Management Division is responsible for
creating the risk policies and risk catalogue and updating
them as necessary; setting and updating control objectives
for the risks; measuring, monitoring and reporting the risks,
and developing a risk management framework. The Internal
Control Division tests the effectiveness of controls, while the
Corporate Compliance Division sets the policy for compliance
risks and establishes the principles regarding the control
targets for compliance risks.
In the third line of defense, the Board of Inspectors is
responsible for conducting an independent audit of the risk
management framework and control systems to ensure their
effectiveness and adequacy.
Financial Risks
NonFinancial
Risks
Credit
Risk
Assets/Liability
Management
Risk
Business
Risk
Other
Risks
Operational
Risk
Reputational
Risk
Strategic
Risk
Counterparty
Risk
Market
Risk
Insurance
Risk
Fraud Risk
Securitization
Risk
Financial
Crime Risk
Credit
Concentration
Risk
Structural
Interest Rate
Risk
Settlement
Risk
Liquidity
Risk
Country
Risk
Investment
Risk
Residual
Risk
Transaction,
Process
and Product
Risk
Human
Resources
Risk
Macro
economic/
Systemic
Risks
Legal and
Regulatory
Change Risk
Business
Strategy Risk
Environmental
Risks
Conduct
Risk
Physical
Damage Risk
Political Risk
Compliance
Risk
Information
Technologies
Risks and
Cyber Risks
Model
Risk
Climate
Change Risk
Competition
Environment
Risk
Talent
Management
Risk
New
Technology/
Digitalization
Risk
The Risk Committee, which was established to share risk
management principles within the Bank in order to reflect
them in decision-making and implementation processes, is
responsible for articulating the risk management strategies and
policies of the Bank on a consolidated and unconsolidated basis,
submitting them to the Board of Directors for approval and
monitoring their implementation. Furthermore, the Operational
Risk Committee, which was established in April 2020, operates
to improve the operational risk management framework and
strengthen the governance model regarding operational risks.
The Bank's risk management practices are intended to
create a common risk culture across the organization. Risk
management activities are based on the regulations and
best practice guidelines published by the Banking Regulation
and Supervision Agency (BRSA). Besides compliance with
regulatory limits, the Bank also ensures capital and liquidity
adequacy against all risks undertaken by the Bank as part of
the Internal Capital Adequacy Assessment Process (ICAAP).
The Bank’s level of risk exposure is systematically monitored
in accordance with the risk policies and implementation
procedures. The Bank runs the risk management process as
per internal regulations approved by the Board of Directors,
including Capital Adequacy, Credit Risk, Asset-Liability
Management Risk, Operational Risk, Model Risk, Climate
Change Risk, Stress Testing, Reputational Risk, Consolidated
Risk and Information Systems Risk Management Policies.
Potential risks which may be encountered during activities
are defined and classified in the "Risk Catalogue" of the Bank.
In the Risk Catalogue, risks are detailed in two main groups:
financial and non-financial risks. Financial and non-financial
risks are reported monthly to the Risk Committee and the
Board of Directors through the Audit Committee.
The Bank uses impact-likelihood analysis, loss event data
analysis, scenario analysis, stress testing and risk indicators
in addition to the top down risk assessment of operational
risks. The risks which are defined in the Risk Catalogue and
for which the management principles are explained in detail in
the risk policies are reviewed annually, as a minimum, and the
related definitions and principles are kept up-to-date.
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prospective assessment of it, the scenario analysis method
is used to assess the impact on conjectural but unexpected
operational risk-type loss events. The scenario analysis allows
assessment of catastrophic events which are also referred to
as tail risks and rarely occur but create a high impact when
they do occur. Scenario analysis results provide inputs to the
operational risk management stress testing and top-down risk
assessment studies in addition to the operational risk internal
capital requirement.
Management of Climate Risks
Besides financial risks, non-financial risks such as climate
change risk, environmental management risk, internal
behavior/culture and ethics risks, employee practice and
employee relations risks are defined in the Bank's risk
catalogue and handled as part of risk management activities.
Introducing best practices in the management of climate
change risks is a priority for İşbank. With the Climate Change
Risk Management Project, which was completed in 2020,
the Bank carried out project activities aimed at measuring
and reporting the climate change risks to which it may
be exposed and developing the principles and procedures
of governance and integrating such risks into the Bank's
strategy and loan processes. The definition of climate
change risk, positioned as a strategic risk in the Bank's risk
catalogue, was updated according to TCFD and international
best practices to include transition risks and physical risks
and was approved by the Board of Directors during the first
quarter of 2021.
The Climate Change Risk Policy, which sets out the principles
and procedures to be followed for detecting, identifying,
assessing and/or measuring, monitoring, controlling,
reporting and managing the climate change risks that the
Bank may be exposed to in connection with its activities,
was approved and put into force by the Board of Directors in
March 2021. As per the decision of the Board of Directors,
the indicator "Share of Sectors With High Climate Change
Risk Within Total Commercial Portfolio", monitored on a
quarterly basis, was added to the Bank's solo risk appetite
framework in September 2021 to prevent the concentration
of sectors with a high exposure to climate change risks
within the portfolio and provide guidance for composition of
the portfolio in subsequent periods.
The Bank utilizes a scenario approach in measuring climate
change risks. For high-risk sectors, which are identified with
the climate change heat map method, an impact analysis
for climate change risk events is conducted by taking into
account the United Nations Environment Program Finance
Initiative (UNEP FI) scenario analysis approach.
Management of Reputational Risks
Reputational risk refers to potential losses which may be
caused by loss of trust in the Bank or damage to the Bank’s
reputation as a result of non-compliance with existing legal
regulations or negative views of parties such as current or
potential customers, partners, competitors and supervisory
authorities. The Bank uses the Reputation Index to monitor
reputational risk. This index was created by the Bank to serve
as an early warning for elements which might potentially
impact the Bank's reputation. Assessments of the level of
reputational risk are reported to senior management on a
quarterly basis as a minimum. It is the senior management's
responsibility to monitor and improve compliance with the
corporate governance concept, which constitutes the basis of
reputational risk.
Ersin Önder Çiftçioğlu
Member of the Board and
the Audit Committee
Yusuf Ziya Toprak
Vice Chairperson of the Board
of Directors and Chairperson of
the Audit Committee
BUSINESS ETHICS
Compliance with business ethics principles has always been
among the uncompromising corporate priorities of İşbank. The
Bank shapes all of its stakeholder relations in line with these
principles.
İşbank immediately adopted the Principles of Banking Ethics
published by the Banks Association of Turkey in 2001 and
began to use these principles as the basis of its operations.
The Bank's "Ethical Principles and Operational Rules" came
into effect with the Board resolution dated 26.10.2021. İşbank
also introduced certain regulations concerning employees and
working life in the Collective Bargaining Agreement and the
Bank's legislation. Additionally, İşbank's "Human Rights and
Human Resources Policy" includes provisions that refer to
ethical principles.
In 2021, an ethics hotline was put into service to allow
employees, customers and other related parties to report any
violation of operational rules to the related units of the Bank in
accordance with the Ethical Principles and Operational Rules.
Reports and notifications regarding bribery, corruption and
other similar actions submitted through the Ethics Hotline are
monitored by the Board of Inspectors.
For behaviors that are found to be in violation of the Bank's
policies, the necessary disciplinary action, up to termination of
the employment contract, is taken according to the applicable
provisions and procedures of the Collective Labor Agreement.
Where circumstances warrant legal action, the violation is
brought to the attention of legal authorities.
Customer complaints can be conveyed via digital channels or
to our Branches, Head Office or the Board of Inspectors via
e-mail, petition or fax. Complaints submitted by customers
to Branches and the Head Office units are transferred to
the Customer Relations Platform and followed up on the
relevant platform. Of the complaints followed up on the
Customer Relations Platform, those complaints which need
to be assessed by the Board of Inspectors are transferred to
the Board of Inspectors by the related Head Office divisions.
Furthermore, employees can contact the Board of Inspectors
via phone or e-mail to provide information. With a special
application specifically designed for all employees, complaints
can be directly submitted to the Head Office, which then
transfers them to the Board of Inspectors for evaluation as
necessary.
During the 1st term training, Junior Assistant Inspectors
receive the 1-hour "Ethical Principles" and “Anti-Bribery and
Anti-Corruption" training. The topic of "Ethical Principles"
is also covered as part of a 1-hour class during the "Branch
Managers Development Program", "My Management Career"
and "As I Rise in My Career" trainings given to managers and
manager candidates.
The digital training "Ethical Principles and Operational Rules",
which was developed to educate related employees about
the basic ethical principles, was made available to employees
on 14.12.2021. These basic ethical principles also form
the foundation of the business model "İşbank Banking" - a
business model focused on creating sharable and sustainable
value which was put into effect on 26.10.2021 by the Board of
Directors and is incorporated in all strategies of the Bank.
In 2021, 1,305 hours of ethical training was given to 2,214
employees.
ANTI-BRIBERY and ANTI-CORRUPTION
Bribery and corruption risk is defined as the risk that the Bank
will incur losses due to an employee of the Bank abusing the
power vested in them as part of their role at the Bank in order
to, directly or indirectly, secure benefits for themselves or
third parties and failing to comply with the anti-bribery and
anti-corruption laws and internal regulations. Measuring and
prioritizing bribery and corruption risk is done through a top-
down risk assessment, impact-probability analysis, loss event
data analysis and scenario analysis activities.
İşbank’s "Anti-Bribery and Anti-Corruption Policy", which is
the reference document for combating bribery and corruption
at the Bank, is publicly available on the corporate website.
The Anti-Bribery and Anti-Corruption Policy is implemented
by the relevant Head Office Division under the supervision of
the Corporate Governance Committee. Compliance with the
provisions of this policy is audited within the scope of internal
audit. The principles regarding fulfillment of the action plans
to resolve audit findings are determined by the Corporate
Governance Committee. Necessary updates and changes are
proposed by the Corporate Governance Committee and put
into effect upon approval by the Board of Directors.
During the "Getting to Know Our Bank" course within the
scope of "Starting My Career" trainings provided to new
employees at İşbank, the requirement to act according to the
discipline regulations and the "Ethical Banking Principles" is
emphasized. This topic is also covered during the "Policy for
Combating Financial Crimes and Sanctions and Compliance
Program" class for Officers and Assistant Specialists which is
included in the same training program.
With the "Banking Law" class included in the Career as a
Specialist training for Senior Assistant Specialists and the
career training programs for employees promoted to Senior
and Assistant Manager roles, information is provided about
the legal regulations concerning corruption and other similar
crimes.
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Crimes and Sanctions Compliance Program", which is assigned
to all employees as a mandatory training, is determined by
the Corporate Governance Division and covers information
about the topic of "Anti-Bribery and Anti-Corruption". Regular
communication is carried out to ensure completion of this
training by the employees.
At the end of audits, the reports prepared to allow necessary
administrative decisions to be made in accordance with the
Bank's collective labor agreement and the legislation are
reviewed by the Board of Inspectors and transferred to the
related Head Office Divisions for action. In 2021, the scale of
activities evaluated in relation to corruption risks was found to
be at a negligible level compared to the total assets of the Bank.
In 2021, 5,716 employees received 627 hours of anti-bribery
and anti-corruption training.
During routine audits conducted by the Board of Inspectors
according to Internal Audit Standards, all risks, including anti-
bribery and anti-corruption, are addressed on a periodic basis,
and the audit results are reported to authorized divisions
of the Bank in accordance with the provisions of applicable
legislation, and the outcomes of the reported findings are
monitored. Besides existing risks, factors that present
potential risks are also identified, appropriate solutions are
proposed, and the entire process is monitored. If any violation
of anti-corruption policies is detected during the audits,
appropriate action is taken according to the internal discipline
regulations and legal regulations.
In 2021, the Board of Inspectors also conducted inspections
concerning the Sustainability Management System and the
Compliance Program on Prevention of Laundering Proceeds of
Crime and the Financing of Terrorism within the scope of the
Head Office audits.
Within the scope of 2021 activities, the Bank carried out
development and maintenance activities on various practices
aiming to provide fast and qualified data for risk assessments,
which are the basis for determining personnel-related risks,
and for in-house fraud detection and investigation studies.
Through examining and reviewing the transactions involving
suspicion of misconduct throughout the Bank by the team
formed within the Board of Inspectors, the Bank aimed to
contribute to both early detection of fraudulent transactions
throughout the Bank, and to increase the efficiency and
productivity of inspection activities.
All findings, reports and customer complaints related to
corruption practices are meticulously handled and thoroughly
investigated.
"Combating Financial Crimes" trainings cover these issues, and
any suspicious transactions detected during inspections are
reported to the Financial Crimes Investigation Board (MASAK)
of the Ministry of Finance.
If a violation of the Anti-bribery and Anti-corruption Policy
is reported to the Board of Inspectors or detected by the
Board of Inspectors during audits, the issue is meticulously
examined. The issue is reported to the Audit Committee either
promptly or as part of routine reporting activities. The Audit
Committee brings the reported issues to the attention of the
Board of Directors in order to ensure elimination of the policy
violation without delay.
The reports which are prepared by the Inspectors carrying
out the audits in order to identify and provide solution
recommendations and to allow necessary administrative
decisions to be made about our employees at fault in
accordance with the Bank's Collective Labor Agreement and
the legislation are reviewed by the Board of Inspectors and
transferred to the related Head Office Divisions for action.
STAKEHOLDER DIALOGUE
For İşbank, establishing regular, timely and two-way
communication with stakeholders is a priority in all activities.
For this purpose, the Bank develops dialogue plans in many
channels by taking into account different information needs.
Aiming to obtain stakeholder opinions by actively using social
media platforms, the Bank has a total of 2,635,172 followers
on 30 corporate, product and project accounts. The Bank
provides comprehensive and up-to-date information through
its Annual Reports, Integrated Reports, regular Investor
Presentations, Analyst and Investor Days, corporate website,
General Assembly and the Material Disclosures published on a
per need basis.
TRANSPARENCY and REPORTING
In line with the principles of transparency and accountability,
İşbank conducts reporting activities throughout the year in
different channels for stakeholder groups.
In 2021, the Bank published its first-ever Integrated Report
to present a summary of its activities carried out during
the year and to provide information on the integration of
its sustainability approach into business processes and
sustainability performance. Since 2019, the Bank has been
reporting within the scope of the Carbon Disclosure Project
(CDP) Climate Change Program. In 2021, the Bank also
reported within the scope of the Carbon Disclosure Project
Water Program.
İşbank is a signatory of the Principles of Responsible Banking
of the United Nations Environment Program Finance Initiative
(UNEP FI) and thus began to conduct impact analyses.
Performance in this area will be regularly reported to all
stakeholders. The Bank also reports within the scope of the
UN Women's Empowerment Principles as a signatory.
İşbank also responds to information requests from numerous
rating agencies and assessment bodies throughout the year.
A significant part of the data contained in İşbank's Integrated
Report is subject to independent external audit.
See Independent Audit Report
İşbank's corporate website provides up-to-date information
to its stakeholders about the latest developments in the
Bank and the Bank's products and services. All stakeholders
of İşbank can also access all reports of the Bank, Material
Disclosures, Investor Presentations and Credit Ratings on the
corporate website.
Can You Tell Me About
Tomorrow?
Our podcast channel “Can You Tell Me About
Tomorrow?" offers weekly podcasts on various
subjects such as science, technology, nature,
agriculture, innovation, personal development,
psychology and entrepreneurship. The channel is
moderated by Güçlü Mete, Executive Editor at Kafa
Radio Station.
Previous podcasts include "Ormanlarımızı
Korumanın Yolları" (How to Protect Our Forests)
with Dr. Hikmet Öztürk, "Denizlerimizi Kurtarmanın
Yolları" (How to Save Our Seas) with hydrobiologist
Levent Artüz, "İklim Değişikliği" (Climate Change)
with Prof. Mikdat Kadıoğlu, "Su Kaynaklarımızın
Geleceği" (The Future of Our Water Resources)
with Vedat Atasoy, "Gelecekte Tarım, Ülkemize ve
Dünyaya Yeter mi?" (Will Agriculture Be Sufficient to
Feed Our Country and the World?) with Prof. Gökhan
Özertan, "Doğa ve Geleceğimiz" (Nature and Our
Future) with Deniz Ataç, and "Bir Umut Marmara"
(Marmara, A Hope) with Savaş Karakaş. We plan to
continue with our podcasts in the future as well.
DigitaITaIks
Sustainability Talks'21
The online event DigitaITaIks Sustainability Talks'21
was held between 1 September and 6 October 2021
with the support of İşbank as the main sponsor.
During the series which consisted of six sessions
in total moderated by Ozan Tatar, the founder of
DigitaITaIks, 12 speakers who are experts in their
fields shared valuable information on the theme
of sustainability in different areas. You can access
all of the sessions from the DigitalTalks' YouTube
channel, and the sessions were watched by more
than 2,000 people in 2021.
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Corporate Governance Compliance Report
İşbank is subject to the provisions stipulated for banks in the Banking legislation and Capital Markets legislation regarding Corporate
Governance Principles. The Bank carries out its activities in accordance with the compulsory principles of the Communiqué on
Corporate Governance (Communiqué) published by the Capital Markets Board.
Bank’s practices regarding the non-compulsory provisions of the principles stipulated in the Communiqué and additional information
within in the framework of Corporate Governance are given in the Corporate Governance Compliance Report and Corporate
Governance Information Form, which are the parts of Annual Report which is published with the approval of our Board of Directors.
There are not any changes foreseen to be performed in the Bank’s managerial practices within the framework of the principles
stipulated in the Communiqué. Within the year, procedures were carried out to develop the structure of the Corporate Governance
Principles that the Bank is subject to.
Under the section of the “Sustainability Principles Compliance Framework” in our Annual Report, the Bank’s practices and
information regarding the principles within the scope of the regulation with the same title published by the Capital Markets Board are
also included.
Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
Corporate Governance Compliance Report
1.1. FACILITATING THE EXERCISE OF
SHAREHOLDER RIGHTS
1.1.2- Up-to-date information and
disclosures which may affect the exercise of
shareholder rights are available to investors
at the corporate website.
1.2. RIGHT TO OBTAIN AND REVIEW
INFORMATION
1.2.1 - Management did not enter into
any transaction that would complicate the
conduct of special audit.
1.3. GENERAL ASSEMBLY
1.3.2 - The company ensures the clarity of the
General Assembly agenda, and that an item on
the agenda does not cover multiple topics.
1.3.7- Insiders with privileged information
have informed the board of directors about
transactions conducted on their behalf within
the scope of the company's activities in order
for these transactions to be presented at the
General Shareholders' Meeting.
1.3.8 - Members of the board of directors who
are concerned with specific agenda items,
auditors, and other related persons, as well
as the officers who are responsible for the
preparation of the financial statements were
present at the General Shareholders' Meeting.
1.3.10 - The agenda of the General
Shareholders' Meeting included a separate
item detailing the amounts and beneficiaries
of all donations and contributions.
1.3.11 - The General Shareholders' Meeting
was held open to the public, including the
stakeholders, without having the right to
speak.
1.4. VOTING RIGHTS
1.4.1 - There is no restriction preventing
shareholders from exercising their shareholder
rights.
1.4.2 - The company does not have shares
that carry privileged voting rights.
1.4.3-The company withholds from exercising
its voting rights at the General Shareholders'
Meeting of any company with which it
has cross-ownership, in case such cross-
ownership provides management control.
X
X
X
X
X
X
X
X
X
X
In addition to the shareholders of İşbank,
the persons mentioned in "İşbank Internal
Directive on Working Principles and
Procedures of General Assembly" may
attend the General Assembly.
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Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
In our Bank, minority rights are
exercised in line with the related
legislation.
X
X
X
1.5. MINORITY RIGHTS
1.5.1 - The company pays maximum
diligence to the exercise of minority rights.
1.5.2 - The Articles of Association extend
the use of minority rights to those who
own less than one twenthieth of the
outstanding shares, and expand the scope
of the minority rights.
1.6. DIVIDEND RIGHT
1.6.1 - The dividend policy approved by the
General Shareholders' Meeting is posted on
the company website.
1.6.2 - The dividend distribution policy
comprises the minimum information to
ensure that the shareholders can have an
opinion on the procedure and principles of
dividend distributions in the future.
1.6.3 - The reasons for retaining earnings,
and their allocations, are stated in the
relevant agenda item.
1.6.4 - The board reviewed whether the
dividend policy balances the benefits of the
shareholders and those of the company.
1.7. TRANSFER OF SHARES
1.7.1 - There are no restrictions preventing
shares from being transferred.
2.1. CORPORATE WEBSITE
2.1.1. - The company website includes all
elements listed in Corporate Governance
Principle 2.1.1.
2.1.2 - The shareholding structure (names,
privileges, number and ratio of shares,
and beneficial owners of more than 5% of
the issued share capital) is updated on the
website at least every 6 months.
2.1.4 - The company website is prepared in
other selected foreign languages, in a way
to present exactly the same information
with the Turkish content.
X
X
X
X
X
X
X
2.2. ANNUAL REPORT
2.2.1 - The board of directors ensures that
the annual report represents a true and
complete view of the company's activities.
2.2.2 - The annual report includes all elements
listed in Corporate Governance Principle
3.1. CORPORATION'S POLICY ON
STAKEHOLDERS
3.1.1- The rights of the stakeholders
are protected pursuant to the relevant
regulations, contracts and within the
framework of bona fides principles.
3.1.3 - Policies or procedures addressing
stakeholders' rights are published on the
company's website.
3.1.4 - A whistleblowing programme is in
place for reporting legal and ethical issues.
3.1.5 - The company addresses conflicts of
interest among stakeholders in a balanced
manner.
3.2. SUPPORTING THE PARTICIPATION
OF THE STAKEHOLDERS IN THE
CORPORATION'S MANAGEMENT
3.2.1 - The Articles of Association, or the
internal regulations (terms of reference/
manuals), regulate the participation of
employees in management.
3.2.2 - Surveys/other research techniques,
consultation, interviews, observation method
etc. were conducted to obtain opinions from
stakeholders on decisions that significantly
affect them.
3.3. HUMAN RESOURCES POLICY
3.3.1 - The company has adopted an
employment policy ensuring equal
opportunities, and a succession plan for all
key managerial positions.
3.3.2 - Recruitment criteria are documented.
3.3.3 - The company has a policy on human
resources development, and organises
trainings for employees.
3.3.4 - Meetings have been organised to
inform employees on the financial status of
the company, remuneration, career planning,
education and health.
X
X
X
X
X
X
X
X
X
X
X
X
İşbank employees participate in the
management of the Bank via their
beneficiary status in İşbank Members'
Supplementary Pension Fund, which holds
37.26% of İşbank shares.
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Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
X
Performance related compensation is
used in certain positions.
3.3.5 - Employees, or their representatives,
were notified of decisions impacting them.
The opinion of the related trade unions was
also taken.
3.3.6 - Job descriptions and performance
criteria have been prepared for all employees,
announced to them and taken into account
to determine employee remuneration.
3.3.7 - Measures (procedures, trainings,
raising awareness, goals, monitoring,
complaint mechanisms) have been taken
to prevent discrimination, and to protect
employees against any physical, mental,
and emotional mistreatment.
3.3.8 - The company ensures freedom
of association and supports the right for
collective bargaining.
3.3.9 - A safe working environment for
employees is maintained.
3.4. RELATIONS WITH CUSTOMERS AND
SUPPLIERS
3.4.1-The company measured its customer
satisfaction, and operated to ensure full
customer satisfaction.
3.4.2 - Customers are notified of any delays
in handling their requests.
3.4.3 - The company complied with the
quality standards with respect to its
products and services.
3.4.4 - The company has in place adequate
controls to protect the confidentiality of
sensitive information and business secrets
of its customers and suppliers.
3.5. ETHICAL RULES AND SOCIAL
RESPONSIBILITY
3.5.1 - The board of the corporation has
adopted a code of ethics, disclosed on the
corporate website.
3.5.2-The company has been mindful of
its social responsibility and has adopted
measures to prevent corruption and
bribery.
X
X
X
X
X
X
X
X
X
X
4.1. ROLE OF THE BOARD OF DIRECTORS
4.1.1 - The board of directors has ensured
strategy and risks do not threaten the
long-term interests of the company, and
that effective risk management is in place.
4.1.2 - The agenda and minutes of board
meetings indicate that the board of
directors discussed and approved strategy,
ensured resources were adequately
allocated, and monitored company and
management performance.
4.2. ACTIVITIES OF THE BOARD OF
DIRECTORS
4.2.1-The board of directors documented
its meetings and reported its activities to
the shareholders.
4.2.2 - Duties and authorities of the
members of the board of directors are
disclosed in the annual report.
4.2.3-The board has ensured the company
has an internal control framework
adequate for its activities, size and
complexity.
4.2.4 - Information on the functioning and
effectiveness of the internal control system
is provided in the annual report.
4.2.5 - The roles of the Chairman and Chief
Executive Officer are separated and defined.
4.2.7-The board of directors ensures that
the Investor Relations department and the
corporate governance committee work
effectively. The board works closely with
them when communicating and settling
disputes with shareholders.
X
X
X
X
X
X
X
X
4.2.8 - The company has subscribed to a
Directors and Officers liability insurance
covering more than 25% of the capital.
X
Our Bank’s Board of Directors and
Executives are insured against the risk
of loss they may cause due to their
faults while performing their duties
within the scope of a liability insurance
policy that names our Bank and our
participations as the insured, however,
the coverage of insurance is below the
mentioned amount.
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Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
Company Compliance Status
Yes Partial No
Exempted Not Applicable Explanation
4.3. STRUCTURE OF THE BOARD OF
DIRECTORS
4.3.9 - The board of directors has approved
the policy on its own composition, setting
a minimal target of 25% for female
directors. The board annually evaluates its
composition and nominates directors so as
to be compliant with the policy.
4.3.10 - At least one member of the audit
committee has 5 years of experience in
audit/accounting and finance.
4.4. BOARD MEETING PROCEDURES
4.4.1-Each board member attended the
majority of the board meetings in person.
4.4.2 - The board has formally approved a
minimum time by which information and
documents relevant to the agenda items
should be supplied to all board members.
4.4.3 - The opinions of board members
that could not attend the meeting, but did
submit their opinion in written format,
were presented to other members.
4.4.4 - Each member of the board has
one vote.
4.4.5 - The board has a charter/written
internal rules defining the meeting
procedures of the board.
4.4.6 - Board minutes document that
all items on the agenda are discussed,
and board resolutions include director's
dissenting opinions if any.
4.4.7-There are limits to external
commitments of board members.
Shareholders are informed of board
members' external commitments at the
General Shareholders' Meeting.
X
X
X
X
X
X
X
No target ratio is set for the number
of female members in the Board of
Directors. As of the end of 2021, there
is one female members in the Board.
Based on the last three terms of İşbank
Board of Directors, percentage of the
female members in the Board was
realized as 17%.
X
X
The duties that İşbank Board members
have outside the Bank are provided in
the Annual Report which is presented in
the General Assembly.
4.5. BOARD COMMITTEES
4.5.5 - Board members serve in only one of
the Board's committees.
X
İlgili mevzuat çerçevesinde bir Yönetim
Kurulu üyesi birden fazla komitede
görev alabilmektedir.
4.5.6 - Committees have invited persons
to the meetings as deemed necessary to
obtain their views.
4.5.7 - If external consultancy services are
used, the independence of the provider is
stated in the annual report.
4.5.8 - Minutes of all committee meetings
are kept and reported to board members.
4.6. FINANCIAL RIGHTS
4.6.1-The board of directors has conducted
a board performance evaluation to
review whether it has discharged all its
responsibilities effectively.
X
X
X
4.6.4-The company did not extend any
loans to its board directors or executives,
nor extended their lending period or
enhanced the amount of those loans, or
improve conditions thereon, and did not
extend loans under a personal credit title
by third parties or provided guarantees
such as surety in favour of them.
4.6.5 - The individual remuneration of
board members and executives is disclosed
in the annual report.
X
X
X
Restrictions related with the loans to
be extended by İşbank to the Board
members and employees are defined
in article 50 of the Banking Law. In this
context, İşbank does not extend loans
to its Board members and employees
other than those allowed by the law.
Total compensation of the Board
members and managers with
administrative responsibilities is
disclosed. On the other hand, the net
allowance amount paid to our Board
members on an individual basis is
determined at our General Assemblies
and disclosed to the public together
with the General Assembly minutes.
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1. SHAREHOLDERS
1.1. Facilitating the Exercise of Shareholders Rights
The number of investor meetings (conference,
seminar/etc.) organised by the company during the
year
In 2021, İşbank participated 16 conferences online for stock and bond investors.
In these events, a total of 143 meetings were conducted. In addition to 4
investor events in teleconference and videoconference format, where investors
participated via remote access, 75 meetings were held via online connection.
1.2. Right to Obtain and Examine Information
The number of special audit request(s)
The number of special audit requests that were
accepted at the General Shareholders' Meeting
-
-
1.3. General Assembly
Link to the PDP announcement that demonstrates the
information requested by Principle 1.3.1. (a-d)
www.kap.org.tr/tr/Bildirim/914649
Whether the company provides materials for the
General Shareholders' Meeting in English and Turkish
at the same time
The links to the PDP announcements associated with
the transactions that are not approved by the majority
of independent directors or by unanimous votes of
present board members in the context of Principle 1.3.9
The links to the PDP announcements associated with
related party transactions in the context of Article 9 of
the Communique on Corporate Governance (II-17.1)
The links to the PDP announcements associated
with common and continuous transactions in the
context of Article 10 of the Communique on Corporate
Governance (II-17.1)
The name of the section on the corporate website that
demonstrates the donation policy of the company
General Assembly documents except the list of participants and the minutes
of the meeting (invitation to the General Assembly, agenda, proxy statement,
information document, dividend distribution proposal, etc.) are presented in
Turkish and English simultaneously.
-
-
-
İşbank Donation and Contribution Principles can be found on İşbank website,
Home Page > About Us > Investor Relations > Corporate Governance > İşbank
Donation and Contribution Principles.
The relevant link to the PDP with minute of the
General Shareholders' Meeting where the donation
policy has been approved
The number of the provisions of the articles of
association that discuss the participation of stakeholders
to the General Shareholders' Meeting
None
Article 47
1.6. Dividend Right
The name of the section on the corporate
website that describes the dividend distribution
policy
Minutes of the relevant agenda item in case
the board of directors proposed to the general
assembly not to distribute dividends, the reason
for such proposal and information as to use of
the dividend.
PDP link to the related general shareholder
meeting minutes in case the board of directors
proposed to the general assembly not to
distribute dividends
Home Page >About Us > Investor Relations > Corporate Governance >
Dividend Distribution Policy
-
-
General Assembly Meetings
General Meeting Date
The number of information requests received by
the company regarding the clarification of the
agenda of the General Shareholders' Meeting
31.03.2021
0
Shareholder participation rate to the General
Shareholders' Meeting
Percentage of shares directly present at the GSM 0,04%
81,72%
Percentage of shares represented by proxy
81,68%
Specify the name of the page of the corporate
website that contains the General Shareholders'
Meeting minutes, and also indicates for each
resolution the voting levels for or against
Home Page > About Us > Investor Relations > Disclosures to BIST
Specify the name of the page of the corporate
website that contains all questions asked in the
general assembly meeting and all responses to
them
The number of the relevant item or paragraph
of General Shareholders' Meeting minutes in
relation to related party transactions
-
The number of declarations by insiders received
by the board of directors
460
Identified stakeholder groups that participated in the
General Shareholders' Meeting, if any
Shareholders and shareholder representatives as well as Board members,
independent auditor representatives and İşbank employees (within the context
of the legislation) participated in the General Assembly held in 2021.
The link to the related PDP general shareholder
meeting notification
www.kap.org.tr/tr/Bildirim/922453-922590
1.4. Voting Rights
Whether the shares of the company have differential
voting rights
In case that there are voting privileges, indicate the
owner and percentage of the voting majority of shares.
The percentage of ownership of the largest
shareholder
1.5. Minority Rights
Whether the scope of minority rights enlarged (in terms
of content or the ratio) in the articles of the association
If yes, specify the relevant provision of the articles of
association.
No
-
37,26%
No
-
2. DISCLOSURE AND TRANSPARENCY
2.1. Corporate Website
Specify the name of the sections of the website
providing the information requested by the
Principle 2.1.1.
If applicable, specify the name of the sections
of the website providing the list of shareholders
(ultimate beneficiaries) who directly or indirectly
own more than 5% of the shares.
List of languages for which the website is
available
Home Page > About Us > Investor Relations
Home > About Us > Investor Relations > Corporate Overview > Corporate
Information > Ownership Structure
Turkish and English
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Corporate Governance Information Form
2.2. Annual Report
The page numbers and/or name of the sections in the Annual
Report that demonstrate the information requested by principle
2.2.2.
a) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on the duties of the
members of the board of directors and executives conducted out of
the company and declarations on independence of board members
b) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on committees formed
within the board structure
c) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on the number of board
meetings in a year and the attendance of the members to these
meetings
ç) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on amendments in
the legislation which may significantly affect the activities of the
corporation
Additional Information Regarding the Related Legislation
İşbank Committees
Information about the Meetings of the Board of Directors
No legislation change that would significantly impact İşbank activities has
occured
d) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on significant lawsuits
filed against the corporation and the possible results thereof
Unconsolidated Financial Statements as at and for the Year Ended 31
December 2021 with Independent Audit's Report Thereon - Information on
Other Provisions
e) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on the conflicts of interest
of the corporation among the institutions that it purchases services
on matters such as investment consulting and rating and the
measures taken by the corporation in order to avoid from these
conflicts of interest
f) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on the cross ownership
subsidiaries that the direct contribution to the capital exceeds 5%
g) The page numbers and/or name of the sections in the Annual
Report that demonstrate the information on social rights and
professional training of the employees and activities of corporate
social responsibility in respect of the corporate activities that arises
social and environmental results
3. STAKEHOLDERS
3.1. Corporation’s Policy on Stakeholders
None
İşbank has no cross ownership subsidiaries.
We are taking responsibility for our employees / We are taking responsibility
for future generations
The name of the section on the corporate website that
demonstrates the employee remedy or severance policy
Compensation principles for Bank employees are determined by the Collective
Bargaining Agreement which is shared with the employees through İşbank's
Corporate Intranet Portal.
The number of definitive convictions the company was subject to
in relation to breach of employee rights
None
The position of the person responsible for the alert mechanism
(i.e. whistleblowing mechanism)
The contact detail of the company alert mechanism
In addition to our employees, all other stakeholders can submit their complaints
to the Board of Inspectors through the channels included in the Ethical Principles
and Code of Conduct approved by the Board of Directors of our Bank. Following
detailed and independent evaluations, complaints are directly examined by the
Board of Inspectors or transferred to the relevant units of the Bank. İşbank also
has an online communication platform through which employees may submit
their requests and complaints to the Senior Management directly. Only a limited
number of managers have access to the said platform.
E-mail: etik@isbank.com.tr Phone: +90 212 316 14 44 Address: Türkiye
İş Bankası A.Ş. Etik Hat İş Kuleleri Kule 1 Kat 34 34330 Levent-Beşiktaş/
İSTANBUL
3.2. Supporting the Participation of the Stakeholders in the Corporation’s Management
Name of the section on the corporate website
that demonstrates the internal regulation
addressing the participation of employees on
management bodies
No information on this matter is available on our website.
Corporate bodies where employees are
actually represented
Isbank employees participate in the management of the Bank via their beneficiary status
in İşbank Members' Supplementary Pension Fund, which holds 37.26% of İşbank shares.
3.3. Human Resources Policy
The role of the board on developing and
ensuring that the company has a succession
plan for the key management positions
The name of the section on the corporate
website that demonstrates the human
resource policy covering equal opportunities
and hiring principles. Also provide a summary
of relevant parts of the human resource
policy.
Whether the company provides an employee
stock ownership programme
The name of the section on the corporate
website that demonstrates the human
resource policy covering discrimination and
mistreatments and the measures to prevent
them. Also provide a summary of relevant
parts of the human resource policy.
Board of Directors create succession plans.
Home Page > About Us > Sustainability > Our Policies
There isn't an employee stock ownership programme
Home Page > About Us > Sustainability > Our Policies
The number of definitive convictions the
company is subject to in relation to health and
safety measures
None
3.5. Ethical Rules and Social Responsibility
The name of the section on the corporate
website that demonstrates the code of ethics
Home Page > About Us > Investor Relations > Corporate Governance > Ethical Principles
and Code of Conduct
The name of the section on the company
website that demonstrates the corporate
social responsibility report. If such a report
does not exist, provide the information about
any measures taken on environmental, social
and corporate governance issues.
Any measures combating any kind of
corruption including embezzlement and
bribery
Home Page > About Us > Sustainability > Our Reports
Home Page > About Us > Sustainability > Our Policies
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4. BOARD OF DIRECTORS-I
4.2. Activity of the Board of Directors
Date of the last board evaluation conducted 10.12.2021
Whether the board evaluation was
externally facilitated
Whether all board members released from
their duties at the GSM
Name(s) of the board member(s) with
specific delegated duties and authorities,
and descriptions of such duties
No
Yes
No delegation of authority in İşbank
Number of reports presented by internal
auditors to the audit committee or any
relevant committee to the board
338
Specify the name of the section or
page number of the annual report that
provides the summary of the review of the
effectiveness of internal controls
Audit Committee's Assessment on the Operation of Internal Audit, Internal Control,
Compliance and Risk Management Sytems and Its Activities in the Reported Period
Name of the Chairman
Name of the CEO
Adnan Bali
Hakan Aran
If the CEO and Chair functions are
combined: provide the link to the relevant
PDP annoucement providing the rationale
for such combined roles
Link to the PDP notification stating that
any damage that may be caused by the
members of the board of directors during
the discharge of their duties is insured for
an amount exceeding 25% of the company's
capital
Chairman and General Manager seats are held by different persons
Our Bank's Board of Directors and Executives are insured against the risk of loss
they may cause due to their faults while performing their duties within the scope
of a liability insurance policy that names our Bank and our participations as the
insured, however, the coverage of insurance is below the mentioned amount. On
the other hand, this issue has not been disclosed on the Public Disclosure Platform.
The name of the section on the corporate
website that demonstrates current
diversity policy targeting women directors
None
The number and ratio of female directors
within the Board of Directors
1 / 9%
Composition of Board of Directors
Name, Surname
of Board Member
Whether
Executive Director
Or Not
Whether
Independent
Director Or Not
ADNAN BALİ
Non-executive
YUSUF ZİYA
TOPRAK
Non-executive
HAKAN ARAN
Executive
FERAY DEMİR
Non-executive
ERSİN ÖNDER
ÇİFTÇİOĞLU
Non-executive
FAZLI BULUT
Non-executive
DURMUŞ ÖZTEK
Non-executive
RECEP HAKAN
ÖZYILDIZ
Non-executive
MUSTAFA RIDVAN
SELÇUK
Non-executive
AHMET GÖKHAN
SUNGUR
Non-executive
SADRETTİN
YURTSEVER
Non-executive
Not
independent
director
Independent
director
Not
independent
director
Not
independent
director
Independent
director
Not
independent
director
Not
independent
director
Not
independent
director
Not
independent
director
Independent
director
Not
independent
director
The First
Election
Date To
Board
Link To PDP
Notification
That
Includes The
Independency
Declaration
Whether the
Independent
Director
Considered By
The Nomination
Committee
Whether
She/He is
the Director
Who Ceased
to Satisfy The
Independence
or Not
Whether The
Director Has At
Least 5 Years’
Experience
On Audit,
Accounting
And/Or Finance
Or Not
-
-
Not considered
No
-
-
-
-
Not considered
No
-
-
-
-
-
-
-
-
www.kap.org.tr/en/
Bildirim/916723
Considered
No
-
-
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
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4. BOARD OF DIRECTORS-II
4.4. Meeting Procedures of the Board of Directors
Number of physical board meetings in the
reporting period (meetings in person)
1 physical, 12 online
Director average attendance rate at board
meetings
99,30%
Whether the board uses an electronic
portal to support its work or not
Yes
Number of minimum days ahead of the
board meeting to provide information to
directors, as per the board charter
In accordance with article II/4/b of the Directive on Working Procedures and
Principles of İşbank Board of Directors, a copy of the agenda and proposals is sent
to the members before the meeting date at a reasonable time which allows them to
make the necessary evaluations.
The name of the section on the corporate
website that demonstrates information
about the board charter
Articles of Association
Number of maximum external
commitments for board members as per
the policy covering the number of external
duties held by directors
None
4.5. Board Committees
Page numbers or section names of the
annual report where information about the
board committees are presented
Link(s) to the PDP announcement(s) with
the board committee charters
İşbank Committees
www.kap.org.tr/tr/Bildirim/262622
Composition of Board Committees-I
Names Of The Board
Committees
Name Of Committees Defined As
"Other" In The First Column
Name-Surname of
Committee Members
Whether
Committee
Chair Or Not
Whether Board
Member Or Not
Corporate Governance
Committee
Corporate Governance
Committee
Corporate Governance
Committee
Corporate Governance
Committee
Audit Committee
Audit Committee
Remuneration
Committee
Remuneration
Committee
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Ersin Önder Çiftçioğlu
Yes
Board member
Feray Demir
Sadrettin Yurtsever
Neşe Gülden Sözdinler
Yusuf Ziya Toprak
Ersin Önder Çiftçioğlu
Adnan Bali
Feray Demir
Hakan Aran
Adnan Bali
Feray Demir
Yusuf Ziya Toprak
(Alternate Member)
Fazlı Bulut
(Alternate Member)
No
No
No
Yes
No
Yes
No
Yes
No
No
No
No
Board member
Board member
Not board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Yusuf Ziya Toprak
Yes
Board member
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Credit Committee
Turkish Republic of Northern Cyprus
Internal Systems Committee
Turkish Republic of Northern Cyprus
Internal Systems Committee
Credit Revision Committee
Credit Revision Committee
Credit Revision Committee
Ersin Önder Çiftçioğlu
Adnan Bali
Yusuf Ziya Toprak
Feray Demir
Credit Revision Committee
Ersin Önder Çiftçioğlu
Credit Revision Committee
Sadrettin Yurtsever
Corporate Social Responsibility Committee
Feray Demir
Corporate Social Responsibility Committee
Sadrettin Yurtsever
Corporate Social Responsibility Committee
Fazlı Bulut
Corporate Social Responsibility Committee
Durmuş Öztek
Corporate Social Responsibility Committee
Yalçın Sezen
Corporate Social Responsibility Committee
Can Yücel
Corporate Social Responsibility Committee
Suat E. Sözen
Corporate Social Responsibility Committee
Gül Meltem Atılgan
Risk Committee
Risk Committee
Risk Committee
Risk Committee
Risk Committee
Adnan Bali
Yusuf Ziya Toprak
Ersin Önder Çiftçioğlu
Hakan Aran
Murat Bilgiç
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
No
No
No
No
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Board member
Not board member
Not board member
Not board member
Not board member
Board member
Board member
Board member
Board member
Not board member
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Composition of Board Committees-I
Names Of
The Board
Committees
Name Of Committees Defined As "Other" In The
First Column
Name-Surname of
Committee Members
Whether
Committee
Chair Or Not
Whether Board
Member Or Not
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Other
Risk Committee
Risk Committee
Risk Committee
Risk Committee
Risk Committee
Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Operational Risk Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Sustainability Committee
Ebru Özşuca
Gamze Yalçın
Sezai Sevgin
Hürdoğan Irmak
Süleyman H. Özcan
H. Umut Togay
Yusuf Ziya Toprak
Hakan Aran
Ersin Önder Çiftçioğlu
Ozan Gürsoy
Sezgin Yılmaz
Sabri Gökmenler
Sezgin Lüle
Sezai Sevgin
Gürler Özkök
Süleyman H. Özcan
H. Umut Togay
Hürdoğan Irmak
Bülent Akdemir
Burcu Nasuhoğlu
Adnan Bali
Ersin Önder Çiftçioğlu
Feray Demir
Gamze Yalçın
Yalçın Sezen
Murat Bilgiç
N. Burak Seyrek
Şahismail Şimşek
Ozan Gürsoy
Sabri Gökmenler
Sezgin Yılmaz
Sezai Sevgin
Suat E. Sözen
Hürdoğan Irmak
Neşe Gülden Sözdinler
Board of Directors Operating Principles Committee
Adnan Bali
Board of Directors Operating Principles Committee
Feray Demir
Board of Directors Operating Principles Committee
Durmuş Öztek
No
No
No
No
No
No
Yes
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
No
No
No
No
No
No
No
No
No
No
No
No
No
No
Yes
No
No
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Board member
Board member
Board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Board member
Board member
Board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Not board member
Board member
Board member
Board member
4. BOARD OF DIRECTORS-III
4.5. Board Committees-II
Specify where the activities of the audit
committee are presented in your annual
report or website (Page number or section
name in the annual report/website)
Specify where the activities of the corporate
governance committee are presented in
your annual report or website (Page number
or section name in the annual report/
website)
Specify where the activities of the
nomination committee are presented in your
annual report or website (Page number or
section name in the annual report/website)
Specify where the activities of the early
detection of risk committee are presented
in your annual report or website (Page
number or section name in the annual
report/website)
Specify where the activities of the
remuneration committee are presented
in your annual report or website (Page
number or section name in the annual
report/website)
4.6. Financial Rights
Specify where the operational and
financial targets and their achievement
are presented in your annual report (Page
number or section name in the annual
report)
Specify the section of website where
remuneration policy for executive and non-
executive directors are presented.
Specify where the individual remuneration
for board members and senior executives
are presented in your annual report (Page
number or section name in the annual
report)
Information about the activities of Audit Committee which was established within
the context of the related legislation is presented in "İşbank Committees" section of
the Annual Report.
İşbank Committees
At İşbank, functions of Nomination Committee are fulfilled by Corporate Governance
Committee.
Information about the activities of Risk Committe is presented in "İşbank
Committees" section of the Annual Report.
Information about the activities of Remuneration Committe which was established
within the context of the related legislation is presented in "İşbank Committees"
section of the Annual Report.
Financial Performance, Reliable Financial Actor, Responsible Operations, Good
Corporate Citizen
Home Page > About Us > Investor Relations > Corporate Governance >
Remuneration Policy
Additional Information Regarding the Related Legislation
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Sustainability Principles Compliance Framework
Composition of Board Committees-II
Names Of The
Board Committees
Name of committees
defined as "Other"
in the first column
The Percentage
Of Non-executive
Directors
The Percentage
Of Independent
Directors In The
Committee
The Number Of
Meetings Held In
Person
The Number
Of Reports On
Its Activities
Submitted To The
Board
Corporate
Governance
Committee
Audit Committee
Remuneration
Committee
Other
Credit Committee
Other
Other
Other
Other
Other
Other
Other
Turkish Republic of
Northern Cyprus
Internal Systems
Committee
Credit Revision
Committee
Corporate Social
Responsibility
Committee
Risk Committee
Operational Risk
Committee
Sustainability
Committee
Board of Directors
Operating Principles
Committee
75%
100%
100%
80%
100%
100%
50%
64%
64%
33%
100%
25%
100%
0%
20%
100%
40%
0%
18%
14%
7%
0%
4 online
57
7
-
9
7
1 physical, 6 online
11 online
2 online
4 online
-
1
12
-
-
2
1
8
13
-
1
-
PRINCIPLES
A. General Principles
A1. Strategy, Policy and Targets
The Board of Directors determines material ESG
issues, risks and opportunities and creates ESG
policies accordingly. In terms of the effective
implementation of these policies; internal directives,
business procedures of Companies etc. can be
prepared. The Board of Directors takes decisions for
these policies and they are publicly disclosed.
Determines the company Strategy in line with the
ESG policies, risks and opportunities. It determines
and publicly discloses its short and long term goals in
line with the Company Strategy and ESG policies.
A2. Implementation/Monitoring
It determines and publicly discloses the committees
/ units responsible for the implementation of ESG
policies. The responsible committee / unit reports the
activities carried out within the scope of the policies
to the Board of Directors at least once a year and in
any case within the maximum periods determined for
the public disclosure of the annual activity reports
in the relevant regulations of the Board.
It forms implementation and action plans in line with
the determined short and long term targets and
publicly discloses them.
It determines the Key ESG Performance Indicators (KPI)
and announces them on a yearly basis. In the presence
of verifiable data, it presents KPIs with local and
international sector comparisons.
Discloses innovation activities that improve
sustainability performance for business processes or
products and services.
COMPLIANCE
DEFINITION
Yes
Home > About Us > Sustainability > Our Policies
Global Tendencies, Risks,
Opportunities and Forecasts, page 26-28
Our Business Model: İşbank Banking, page 30-31
Yes
Reliable Financial Actor, page 52-53, 84-85, 98-99
Responsible Operations, page 110, 111,114, 116, 120, 122
Good Corporate Citizen page 134, 136, 192, 193
2021 CDP Climate Change Report, page 23- 30
Yes
İşbank Committees,
Sustainability Committee, page 148
Home > About Us > Sustainability > Our Organization
Global Tendencies, Risks,
Opportunities and Forecasts, page 26-28
Our Business Model: İşbank Banking, page 30-31
Yes
Reliable Financial Actor, page 54, 85, 99
Responsible Operations, page 111, 116, 122
Good Corporate Citizen page 136
2021 CDP Climate Change Report, page 23- 30
Yes
Yes
Key Performance Indicators,
page 53, 85, 99, 111, 115, 135, 193
Responsible Products and Services, page 74-75
Products and Services Contributing to a Green Economy,
page 92-97
Projects to Improve Customer Experience, page 428-431
Home > About Us > Sustainability > Responsible
Products and Services
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PRINCIPLES
A3. Reporting
It reports its sustainability performance, goals and
actions at least once a year and makes it public.
Discloses the information on sustainability activities
within the scope of the annual report.
It is essential to share information that is important
for takeholders in understanding the position,
performance and development of the company in
a direct and concise manner. It can also discloses
detailed information and data on the corporate
website, and prepare separate reports that directly
meet the needs of different stakeholders.
It exercises maximum care in terms of transparency
and reliability. It objectively explains all kinds of
developments about material issues in disclosures
and reporting within the scope of the balanced
approach.
It gives information about which of the United
Nations (UN) 2030 Sustainable Development Goals
its activities are related to.
Makes disclosure regarding the lawsuits filed and / or
concluded against environmental, social and corporate
governance issues
A4. Verification
If verified by independent third parties (independent
sustainability assurance providers), it discloses its
sustainability performance measurements to the
public and endeavors to increase such verification
processes.
COMPLIANCE
DEFINITION
Home > About Us > Sustainability > Our Reports
Yes
İşbank 2021 Integrated Annual Report
2021 CDP Climate Change Report
Yes
Home > About Us > Sustainability
Home > About Us > Investor Relations
Sustainability Priorities, page 33-36
Yes
Changes in Material Issues of İşbank, page 465
Sustainability Management, page 38
Yes
Yes
Yes
Contribution to Sustainable Development Goals,
page 46-49
www.kap.org.tr/tr/Bildirim/977504-973221-952353
-947832-945276-928647
Non-Financial Data Reporting Guide and Independent
Assurance Report, page 462-470
PRINCIPLES
B. Environmental Principles
Discloses its policies and practices, action plans,
environmental management systems (known by the
ISO 14001 standard) and programs in the field of
environmental management.
Complies with environmental laws and other relevant
regulations and discloses them.
Explains the limitations of the environmental report to be
included in the report to be prepared within the scope of
the Sustainability Principles, reporting period, reporting
date, data collection process and reporting conditions.
Describes the highest level responsible, relevant
committees and duties in the company on the issue
of environment and climate change.
COMPLIANCE DEFINITION
Yes
We Take Responsibility to Mitigate Negative Impacts of
Our Operations, page 110 - 119
Yes
Management of Environmental Impacts, page 117
Yes
Yes
About the Report, page 5
Non-Financial Data Reporting Guide and Independent
Assurance Report, page 462-470
Sustainability Management, page 38
İşbank Committees, Sustainability Committee, page 148
Home > About Us > Sustainability > Our Organization
2021 CDP Climate Change Report, page 2- 6
Describes the incentives it offers for the management of
environmental issues, including the achievement of goals.
Yes
2021 CDP Climate Change Report, page 6- 7
Explain how environmental matters are integrated into
business goals and strategies
Yes
Discloses the sustainability performances fora business
processes or products and services and the activities to
improve this performance.
Explains how it manages environmental issues not just in
terms of direct operations but throughout the company’s
value chain and integrates suppliers and customers into
its strategies.
It explains whether it is involved in policy making
processes on environmental issues (sectoral, regional,
national and international), its cooperation with
the associations, related organizations and non-
governmental organizations it is a member of, and the
tasks it has taken, if any, and the activities it supports.
Reports information on its impacts in a periodically
comparable manner within the scope of environmental
indicators (Greenhouse gas emissions (Scope-1 (Direct),
Scope-2 (Energy indirect), Scope-3 (Other indirect)), air
quality, energy management, water and wastewater
management, waste management, biodiversity impacts)
Yes
Yes
Yes
Yes
Our Business Model: İşbank Banking, page 30
Global Tendencies, Risks, Opportunities and Forecasts,
page 26-28
Reliable Financial Actor, page 84, 97-91
Responsible Operations, page 114
Good Corporate Citizen, page 132
2021 CDP Climate Change Report, page 20-21
Home > About Us > Sustainability > Responsible
Products and Services
Responsible Products and Services, page 74-75
Products and Services Contributing to a Green
Economy, page 92-97
Responsible Operations, page 108
Stakeholder Expectations and İşbank's Response,
page 39-40
Supply Chain Management, page 110-113
Home > About Us > Sustainability > Our Policies >
Supplier Code Of Conduct
Contribution to Sustainable Development Goals,
page 44-45
Corporate Memberships, page 436
Home > About Us > Sustainability > Memberships and
Initiatives
Environmental Impact, page 114-117
Home > About Us > Sustainability > Responsible
Banking > Our Environmental Impact
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PRINCIPLES
COMPLIANCE DEFINITION
PRINCIPLES
COMPLIANCE DEFINITION
Environmental Impact, page 114-117
Non-Financial Data Reporting Guide and Independent
Assurance Report, page 462-470
Environmental Impact, page 114-117
2021 CDP Climate Change Report, page 30-40
Home > About Us > Sustainability > Responsible
Banking > Our Environmental Impact
Discloses whether its operations or activities are included in
any carbon pricing system (Emission Trading System, Cap &
Trade or Carbon Tax).
Irrelevant
Environmental Impact, page 114-117
2021 CDP Climate Change Report, page 24
Discloses the carbon credit information accumulated or
purchased during the reporting period.
No
Yes
Yes
Yes
Yes
Yes
Describes the standard, protocol, methodology and base
year details used to collect and calculate its data.
Discloses the status of environmental indicators for the
reporting year (increase or decrease) in comparison with
previous years.
Sets short and long term goals and discloses these goals
to reduce its environmental impact. It is recommended
that these goals be determined based on Science as
suggested by the United Nations Conference of the
Parties on Climate Change. If there is progress in the
reporting year with respect to the targets set before, it
provides information on the subject.
Discloses its strategy and actions for combating the
climate crisis.
Describes the program or procedures for preventing or
minimizing the potential negative impact of the products
and / or services it offers; explains the actions to reduce
greenhouse gas emissions of third parties.
Discloses the actions taken to mitigate its environmental
impacts, the total number of projects and initiatives
carried out along with the environmental benefits /
benefits cost savings they provide.
It reports the total energy consumption data (excluding
raw materials) and explains the energy consumption as
Scope-1 and Scope-2.
Provides information on electricity, heat, steam and
cooling generated and consumed in the reporting year.
Carries out studies on increasing the use of renewable
energy, transition to zero or low carbon electricity and
explains these studies.
Discloses data on its renewable energy production and
consumption.
Develops energy efficiency projects and explains the amount
of energy consumption and emission reduction enabled by
these studies.
Reports the amount of water withdrawn, used, recycled
and discharged from underground or aboveground, its
sources and procedures (Total water withdrawal by source,
water sources affected by water withdrawal; percentage
and total volume of recycled and reused water, etc.).
We Take Responsibility for Climate Action, page 84-88
2021 CDP Climate Change Report, page 20-30
Home > About Us > Sustainability > Responsible
Banking > Combating Climate Change
Environmental and Social Risk Management in Loans,
page 89-91
Financing Renewable Energy, page 92
Products and Services Contributing to a Green
Economy, page 92-97
Home > About Us > Sustainability > Responsible
Products and Services > Products Contributing to the
Green Economy
Yes
Environmental Impact, page 114-117
Yes
Yes
Environmental Impact, page 114-117
Home > About Us > Sustainability > Responsible Banking
> Our Environmental Impact
Environmental Impact, page 114-117
Home > About Us > Sustainability > Responsible Banking
> Our Environmental Impact
Yes
Environmental Impact, page 114-117
Yes
Environmental Impact, page 114-117
Yes
Yes
2021 CDP Climate Change Report, page 27-30, 35-36
Responsible Operations, page 108
Environmental Impact, page 114-117
Home > About Us > Sustainability > Responsible Banking
> Our Environmental Impact
Non-Financial Data Reporting Guide and Independent
Assurance Report, page 462-470
İşbank’s operations or activities are not included in the
carbon pricing system. It is known that legal authorities
are working on establishing a local carbon trading
system. All national and international developments
are followed closely and development opportunities are
evaluated in this area.
İşbank aims to reduce the total Scope-1 and Scope-2
greenhouse gas emissions calculated in accordance with
the International GHG Protocol by 38% by 2025, 65% by
2030, and to zero by 2035, and to carry out activities as
carbon-neutral as of 2035. As of 2021, İşbank has started
to use renewable energy in all of its operational points
that can be supplied, and has already reached its targets
for 2025 and 2030. İşbank primarily carries out focused
efforts to reduce its direct and indirect emissions, and in
the following periods, it will also be able to consider the
purchase of carbon credits in order to zero the emissions
it has reduced to a minimum.
At this stage, there is no carbon pricing practice in our
bank. On the other hand, all activities of our Bank are in
a continuous development with the ESG focus, and the
implementation of the carbon pricing practice will be
evaluated in the following period.
Initiatives Supported in the Field of Sustainability,
page 44-45
2021 CDP Climate Change Report
2021 CDP Water Security Report
Home > About Us > Sustainability > Responsible Banking
> Our Environmental Impact
No
Yes
Yes
Home > About Us > Sustainability > Our Policies >
Human Rights And Human Resources Policy
Home > About Us > Sustainability > Our Policies > Human
Rights And Human Resources Policy
Home > About Us > Sustainability > Our Policies > Gender
Equality Polıcy
Home > About Us > Sustainability > Our Policies > Supplier
Code Of Conduct
Home > About Us > Sustainability > Our Policies >
Supplier Code Of Conduct
Supply Chain Management, page 39-40
Equal Opportunity and Diversity, page 127-129
Financial Inclusion, page 76-80
Equal Opportunity and Diversity, page 127-129
GRI Content Index, page 474
Yes
Yes
Yes
Explains the details if carbon pricing is applied within the
company.
Discloses all compulsory and voluntary platforms where
reports its environmental information.
C. Social Principles
C1. Human Rights and Employee Rights
Forms a Human Rights and Employee Rights Policy with a
commitment to fully comply with the Universal Declaration
of Human Rights, ILO Conventions which Turkey has confirmed
and the legal framework and regulations governing the operation
of corporate life in Turkey. Discloses the policy in question and the
roles and responsibilities associated with its implementation.
Provides equal opportunity in recruitment processes.
Considering the supply and value chain effects, it includes
fair labor, improvement of labor standards, women's
employment and inclusion issues (such as women, men,
religious belief, language, race, ethnic origin, age, disability,
refugee, etc.) in its policies.
Describes the measures taken throughout the value chain
for the protection of groups sensitive to certain economic,
environmental, social factors (low-income groups, women,
etc.) or securing minority rights / equal opportunities.
Reports developments regarding discrimination, inequality,
human rights violations, forced labor and corrective
practices. Explain the regulations to prevent child labor.
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PRINCIPLES
COMPLIANCE DEFINITION
PRINCIPLES
COMPLIANCE DEFINITION
Explains policies regarding investment in employees
(training, development policies), compensation, vested
benefits, right to unionize, work / life balance solutions
and talent management. Determines dispute resolution
processes by creating mechanisms for employee
complaints and dispute resolution. It regularly explains
the activities carried out to ensure employee satisfaction.
Creates occupational health and safety policies and
makes them public. Explain the precautions and accident
statistics taken to prevent work accidents and to protect
health.
Creates and publicly discloses personal data protection
and data security policies.
Creates an ethical policy (including work, work ethics,
compliance processes, advertising and marketing ethics,
open information, etc.) and discloses it to the public.
Explains the work within the scope of social investment,
social responsibility, financial inclusion and access to
finance.
Organizes information meetings and training programs
for employees on ESG policies and practices.
C2. Stakeholders, International Standards and Initiatives
Carries out its activities in the field of sustainability
by taking into account the needs and priorities of all
stakeholders (employees, customers, suppliers and
service providers, public institutions, shareholders,
society and non-governmental organizations, etc.).
Regulates and publicly discloses a customer satisfaction
policy regarding the management and resolution of
customer complaints.
Conducts stakeholder communication continuously and
transparently; It explains which stakeholders, for what
purpose, on what issue and how often it communicated,
and the developments in sustainability activities.
Publicly discloses the international reporting standards
it has adopted (Carbon Disclosure Project (CDP), Global
Reporting Initiative (GRI), International Integrated
Reporting Council (IIRC), Sustainability Accounting
Standards Board (SASB), ClimateRelated Financial
Disclosures Task Force (TCFD) etc.).
We Take Responsibility for Our Employees, page 120-131
Yes
Home > About Us > Investor Relations > Corporate
Governance > Remuneration Policy
Home > About Us > Investor Relations > Corporate
Governance > Ethical Principles and Code of Conduct
Yes
Yes
Yes
Yes
Home > About Us > Sustainability > Our Policies >
Occupational Health and Safety Policy
Occupational Health and Safety, page 126
Occupational Health and Safety Data, page 456
Home > Privacy Policy
Home > About Us > Investor Relations > Corporate
Governance > Personal Data Protection Policy
Home > About Us > Investor Relations > Corporate
Governance > Ethical Principles and Code of Conduct
We Take Responsibility for Future Generations, page
192-198
Financial Inclusion, page 76-80
Talent Management, page 129-131
Yes
Equal Opportunity and Diversity, page 127-129
Human Resources Data, page 455
Yes
Yes
Yes
Yes
Sustainability Priorities, page 33-35
Stakeholder Expectations and İşbank's Response,
page 39-40
https://www.isbank.com.tr/en/contact-us
https://www.isbank.com.tr/en/contact-form
https://www.isbank.com.tr/iletisim-formu-takip
Flawless Customer Experience, page 71
Stakeholder Expectations and İşbank's Response,
page 39-40
About the Report, page 5
Initiatives Supported in the Field of Sustainability,
page 44-45
2021 CDP Climate Change Report
Publicly discloses the international organizations
or principles (Equator Principles, United Nations
Environment Program Finance Initiative (UNEP-FI),
United Nations Global Principles (UNGC), United Nations
Principles for Responsible Investment (UNPRI) etc.)
which it is a signatory or member of, and international
principles adopted (International Capital Market
Association (ICMA) Green / Sustainable Bond Principles).
Makes concrete efforts to be included in Borsa Istanbul
Sustainability Index and international sustainability
indices (Dow Jones Sustainability Index, FTSE4Good,
MSCI ESG Indices, etc.).
D. Corporate Governance Principles
Makes maximum effort to comply with all Corporate
Governance principles as well as the mandatory
Corporate Governance principles within the scope
of the Capital Markets Board Corporate Governance
Communiqué numbered II-17.1.
Takes into account the sustainability issue, the
environmental impacts of its activities and the
principles in this regard while determining its corporate
management strategy.
Takes the necessary measures to comply with the
principles regarding the stakeholders and to strengthen
the communication with the stakeholders and applies
to the opinions of stakeholders in determining the
measures and strategies in the field of sustainability as
stated in the Corporate Governance Principles.
Works on raising awareness on the issue of
sustainability and its importance through social
responsibility projects, awareness activities and
trainings.
Strives to become a member of international standards
and initiatives on sustainability and to contribute to
studies.
Explains policies and programs for the fight against
bribery and corruption and the principle of tax integrity
Yes
İşbank's Sustainability Journey, page 32
Yes
Initiatives Supported in the Field of Sustainability,
page 44-45
Yes
Initiatives Supported in the Field of Sustainability,
page 44-45
Yes
Yes
Yes
Yes
Yes
Corporate Governance Compliance Report, page 163-169
Corporate Governance Information Form, page 170-180
Sustainability Priorities, page 33
Sustainability Management, page 38
We Take Responsibility for a Transparent
Management, page 134
2021 CDP Climate Change Report, page 2
Sustainability Priorities, page 33
Sustainability Management, page 38
We Take Responsibility for Future Generations,
page 192-198
İşbank's Sustainability Journey, page 32
Initiatives Supported in the Field of Sustainability, page
44-45
Corporate Memberships, page 436
Home > About Us > Sustainability > Memberships and
Initiatives
Home > About Us > Sustainability > Our Policy > Anti-
Bribery And Anti-Corruption Policy
Our bank's tax obligations are fulfilled within the
framework of the relevant legislation. Detailed
information about its tax liability can be found under
the heading “Explanations on Tax Applications”
https://www.isbank.com.tr/en/about-us/financial-
statements
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İşbank’s Dividend Distribution Policy
The principles regarding the profit distribution of the Bank are regulated in Article 58 of the Articles of Incorporation. According to this:
"İşbank's principles of dividend distribution are set by article 58 of the Articles of Incorporation. According to this article, after
deducting all general expenses from the income arising from the operations of the Bank within a year, including premiums and
bonuses and similar payments to the personnel of the Bank, and funds for all kinds of depreciations, as well as necessary provisions,
the net profit obtained shall partly be set aside as contingency reserves and partly distributed in the order, manner and at the rates
indicated below:
a) 1- 5% to statutory reserve fund,
2- 5% as provision for probable future losses,
3- 10% as first contingency reserve
If the cause for setting aside of a provision and fund for a probable future loss and/or risk doesn’t exist anymore, the remaining fund
will be added to first contingency reserve (a/3) after distribution of net profit referred to in paragraph (a).
b) From the balance of the net profit after the reserve fund referred to in paragraph (a) above have been set aside, an amount equal
to 6% of the paid up capital represented by Group A, B and C share certificates, shall be distributed to shareholders as the “first
dividend”. Should the profit realized in any year be insufficient to provide for the first dividend of 6% referred to above, the balance
shall be made up and distributed out of the contingency reserve fund. Provided, however, that any amount thus taken out of the
reserve fund shall constitute a charge to be made up out of the profits to be realized in the subsequent years.
c) After the reserved fund and the first dividend referred to in paragraphs (a) and (b) above have been provided for, the balance of the
net profit shall be set aside and distributed as follows:
• 10% for founder shares (limited to the portion of TL 250 thousand – two hundred and fifty thousand –of paid capital)
• 20% to the employees of the Bank, and
• 10% as second contingency reserve.
d) After the amounts set forth in paragraphs (a), (b) and (c) have been set aside and distributed, the balance shall be distributed to the
shareholders as “second dividend” in the manner stated below and taking into consideration paragraph (e).
1- The net total of the dividends to be distributed to the holders of Group (A) shares as first and second dividends under paragraphs
(b) and (d) may be not exceed 60% of the capital paid up by them, the net total of the dividends to be distributed to holders of Group
(B) shares may not exceed 30% of the capital paid up by them, and the net total of the dividends to be distributed to holders of Group
(C) shares may not exceed 25% of the capital paid up by them.
2- After the amounts set forth in paragraphs (a), (b) and (c) have been set aside and distributed, should the balance be insufficient
to distribute the second dividend in the manner specified by the paragraph (1) above, twice the amount of the paid up capital
represented by Group (A) shares the actual amount of the capital represented by Group (B) shares, and the 5/6 (five sixth) amount of
the capital represented by Group (C) shares shall be taken as the basis, and, total dividends to be paid to the three Groups of shares
shall be calculated separately in the distribution of the second dividend.
e) The amount that needs to be added to the statutory reserve under paragraph 2/c of Article 519 of the Turkish Commercial Code,
shall be set aside.
f) The General Assembly shall, upon proposal of the Board of Directors, decide whether the balance remaining after the distribution
and allocation of the net profit as specified above shall be transferred to the extraordinary reserve funds, or carried over to the
following year, or up to 80% of such amount be distributed to the shareholders by dividing of the same by the number of shares and
the remaining balance be transferred to the extraordinary reserve funds or carried over to the following year. In the calculation of the
dividends to be paid to all three Groups of shares; group A shares will be considered as 40 times the share quantity, due to the reason
that 20 Group (A) shares each with a nominal value of TL 500 (this amount is related to the period prior to the Law regarding the
Monetary Unit of the Turkish Republic (No:5083) on which the rate of change has not been applied) have been changed with 1 Group
(A) share with a nominal value of 1 Kurus, Group B shares will be considered as 1.5 times of the share quantity, and Group C shares
will be considered as the same quantity."
The dividends are distributed within the scope of the related legislation in a manner and at a time determined by General Assembly.
Summary Report of the Board of Directors
Esteemed Shareholders, welcome to our Bank's 98th Annual General Meeting. As we present the Board of Directors' Report, the
Balance Sheet and the Income Statement covering the results of our activities in fiscal year 2021 for your review and approval, we
respectfully greet all of you here today.
In 2021, the global economy displayed a rapid recovery thanks to the continued support of economic measures and vaccinations
which lessened the impact of the pandemic despite new variants of the Covid-19 virus. Supply shortages and disrupted supply
chains, which emerged as a result of this rapid recovery while the pandemic conditions persisted, as well as rapidly increasing
commodity prices due to the problems caused by climate change, caused inflationary pressures to reach alarming levels on a global
scale.
With the support of strong domestic demand, export growth and investments, the Turkish economy is estimated to have reached
double-digit growth in 2021, exceeding the expectations from the beginning of the year by a large margin. We also observed
improvements in budget indicators and the external balance outlook throughout the year. On the other hand, the inflation levels
rapidly deteriorated with the impact of global inflationist pressures, fluctuations in financial markets and the strong trend of
economic activity.
The CBRT maintained its tight monetary policies until September but started a cycle of interest rate cuts as the tight monetary
stance had caused commercial loans to shrink even more than anticipated. Therefore, loan growth showed signs of recovery during
the last quarter of the year. As of year-end 2021, TL loans in the banking sector, excluding participation banks, grew by 20.6%
compared to year-end 2020. The volume of FX loans in USD terms, which had also performed poorly during recent years, decreased
by 7.2% in parallel with the continued trend of reducing FX debts. The total loan volume increased by 36.1% in 2021 with the impact
of rising exchange rates.
The volume of FX deposits increased by 78.4% compared to year-end 2020 with rising exchange rates, while the volume of TL
deposits grew by 19.9% during the same period. Thus, the total volume of deposits increased by 51.5% during the year.
As of 31.12.2021, compared to the end of the previous year,
• The amount of our loans reached TL 493.4 billion with a 42.9% increase,
•The amount of our deposits reached TL 595.6 billion with a 61.5% increase,
•Our total assets reached TL 926.6 billion with a 56.0% increase, and
•The amount of our shareholders' equity reached TL 86.8 billion with a 28.1% increase.
Thanks to its stable growth policy and effective risk management practices in loan allocation processes, our Bank achieved an
NPL ratio of 4.1% at the end of 2021. At the same time, İşbank maintained its leadership among private banks in terms of the total
amount of deposits in 2021 and continued to make use of non-deposit funding sources in domestic and foreign markets in order to
diversify funding sources and extend the maturity structure of its liabilities by taking funding costs into consideration.
The Bank preserved its strong capital structure throughout the year, with a capital adequacy ratio of 20.4%, well above the regulatory
limit, as of year-end 2021. The Bank achieved a net profit of TL 13.5 billion in 2021 with a return on equity and return on asset ratio
of 18.4% and 1.9%, respectively.
Our Esteemed Shareholders,
We hereby submit our Annual Report, Balance Sheet and Income Statement pertaining to our activities during 2021 for your review
and approval. We would like to take this opportunity to express our gratitude to our stakeholders for their steadfast trust in our
Bank, to the institutions of the Republic of Turkey for their support, and to our employees for their dedicated efforts. We extend our
respects to you, our valued shareholders, for having honored this General Meeting with your attendance.
İŞBANK BOARD OF DIRECTORS
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As per the resolution of the Board of Directors of İşbank, the Annual General Meeting of the Bank will
be held at 14:00 on 25 March 2022, Friday in the İş Kuleleri Headquarters Auditorium, 34330 Levent-
İstanbul.
Agenda of the Annual Meeting
1. Opening Ceremony, establishment of the Council of Chairmanship
2. Discussion of 2021 Annual Report of the Board of Directors, Financial Statements, the Independent
Auditors' Reports and ratification of the Annual Report of the Board of Directors and Financial
Statements
3. Discharge of the Board of Directors from their responsibilities for the transactions and accounts of the
year 2021
4. Determination of the method and date of allotment of dividends to be distributed, which is permitted by
the BRSA based on our Bank's application.
5. Determination of the allowance for the members of the Board of Directors
6. Selection of the Independent Audit Company
7. Permitting the Members of the Board of Directors as per articles 395 and 396 of the
Turkish Commercial Code
8. Presenting information to the shareholders on the subjects held in Capital Markets Board Corporate
Governance Communique principle no. 1.3.6
9. Presenting information to the shareholders about the donations
Profit Distribution Offer
As a result of our activities in 2021, our Bank's net profit for the period was TL 13,467,894,852.06. On the other hand, the Bank
has prior years’ profit in the total amount of TL 5,414,585,931.21 which results from the application of the TFRS 9 – Financial
Instruments reporting standard and stems from the equity method specified in the TAS 27 – Separate Financial Statements
accounting standard and emerged due to sales of some of our fixed assets which were monitored in accordance with the TAS 16.
As a portion of the net profit for the reporting year is distributed to the Bank's employees pursuant to article 58 of the Bank's Articles
of Association, we have an amount of TL 360,000,000.00 set aside in 2021 for dividends to be distributed to the Bank's employees
within the framework of the TMS 19 - Employee Benefits accounting standard by taking into consideration our dividend distribution
policy, prior practices and the applicable legislation.
Accordingly, it is proposed as follows:
• the accounting profit making the basis of the distribution be determined as TL 18,882,480,783.27 by adding prior years' profit of
TL 5,414,585,931.21 to the net profit for the period,
• out of the accounting profit, the portion in the amount of TL 35,131,743.00 arising from the earnings on disposal of real estates
be transferred to relevant reserves to be maintained in a specific fund account and for conversion into capital when needed by the
Board of Directors in order to benefit from the exclusion provisions set out in article 5 of the Corporate Tax Law no. 5520; and the
portion of TL 108,473,520.00 be set aside as a venture capital fund to be allocated to venture capital investment trusts and funds,
• the portion in the amount of TL 360,000,000.00, which was set aside for dividends to be distributed to the Bank's employees, be
added to the distributable amount,
• based on the distributable amount so formed, 10% thereof that needs to be set aside as first extraordinary reserves be increased
within the frame of the provisions of the Banking Law and the Turkish Commercial Code and a total of TL 10,056,519,454.58
be set aside as first extraordinary reserves, and the distributable amount of TL 19,098,875,520.27, which includes the first
extraordinary reserves mentioned above, be distributed as follows and the remaining amount of TL 33,266,732.16 after
distribution be set aside as extraordinary reserves pursuant to the provisions of applicable legislation and Article 58 of the
Articles of Association of İşbank.
PROFIT FOR THE PERIOD
PRIOR YEARS' PROFIT
NET ACCOUNTING PROFIT
UNDISTRIBUTED PROFIT
ADDED TO DISTRIBUTION
DISTRIBUTABLE PROFIT
I. FIRST DISTRIBUTION
(Articles of Incorporation Art. 58/a-b)
- 5% Legal Reserves
- First Extraordinary Reserves
- First Dividends
To Group A Shares
To Group B Shares
To Group C Shares
II. SECOND DISTRIBUTION
(Articles of Incorporation Art. 58/c-d-e)
- To Founder Shares
- 20% to the Bank Employees
- 10% Legal Reserves
- 10% Second Extraordinary Reserves
- Second Dividends
To Group A Shares
To Group B Shares
To Group C Shares
III. THIRD DISTRIBUTION
(Articles of Incorporation Art. 58/f)
- Third Dividends
To Group A Shares
To Group B Shares
To Group C Shares
- 10% Legal Reserves
TL
13,467,894,852.06
5,414,585,931.21
18,882,480,783.27
- 143,605,263.00
360,000,000.00
19,098.875,520.27
17,301,470.031.80
1,797,405,488.47
1,520,182,720.46
277,222,768.01
243,956,035.85
33,266,732.16
954,943,776.01
16,076,526,255.79
60.00
1,740.00
269,998,200.00
9,985.59
359,481,097.69
125,949,288.33
179,740,548.85
540.00
6,960.00
854,994,300.00
7,884.91
8,574.85
221,761,754.65
22,177,821.44
Provided that the above proposal is accepted by the General Assembly, dividend payout to the Bank's shareholders will commence
on 29.03.2022, and gross profit shares shown in the table below will be distributed to each share group with a nominal value of TL 1
and to each founder share:
Type of Share
To Group A shares with a nominal value of TL 1
To Group B shares with a nominal value of TL 1
To Group C shares with a nominal value of TL 1
To each Founder Share
Gross TL
8.4849100
0.5956845
0.2992807
4.0624858
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We Take Responsibility
for Future Generations
As one of the leading banks in Turkey, İşbank plays a pioneering role in building a better society.
We take responsibility for future generations by contributing to the national economy and
undertaking long-term social responsibility projects.
İşbank undertakes various projects in the fields of education, the
environment and culture-art in order to share the added value
it creates through its main field of activity with society as much
as possible. Social investment programs, including the Bank's
corporate social responsibility projects, are executed under the
supervision of the Corporate Social Responsibility.
Committee, which directly reports to the Board of Directors.
İşbank ensures effective stakeholder engagement in its social
responsibility projects by bringing together different groups
of stakeholders, including especially non-governmental
organizations. Such projects are designed to contribute to the
Sustainable Development Goals and address the needs of society.
Material Issues
Corporate Social Responsibility
Risks
• Loss of reputation
• Reduced brand awareness among younger
generations
Related Capital Element
Social-Relational
Capital
Opportunities
• Being a trusted bank in the eyes of stakeholders
and society with projects developed in line with
society's needs
• Projects aligned with the UN Sustainable
Development Goals
• Direct communication with customers thanks to
increased financial literacy
• Contribution to corporate reputation
Contributed SDGs
KEY PERFORMANCE INDICATORS
2018
2019
2020
2021
Contribution to equal
opportunities in education
81 Students from 81 Cities
Including graduates,
the number of
students is close to
700.
With the 54 students
who graduated in
2019, the number of
students is nearly 750.
In 2020, the
total number of
graduates reached
231.
Supporting the upbringing
of generations who
read and question, and
supporting the cognitive
and cultural development
of children: "Show Your
Report Card, Get Your
Book" Campaign - the
number of books donated
Supporting the upbringing
of generations who
read and question, and
supporting the cognitive
and cultural development
of children - Book
donations to schools - the
number of books sent to
schools and libraries
With the 11th
campaign, a total
of 13 million books
have been donated
to primary school
students to date.
With the 12th
campaign, a total
of 14 million books
have been donated
to primary school
students to date.
More than 52
thousand books
were sent to 2,844
schools and libraries.
More than 58
thousand books were
sent to 3,116 schools
and libraries.
The 13th campaign
was transferred
to digital format
within the
framework
of COVID-19
measures, and 4
electronic books
were donated.
As a result of the
pandemic, more
than 22 thousand
books were sent
to more than
1,200 schools and
libraries.
In 2021, the number
of graduates reached
296.
The 14th campaign
was held as a hybrid
campaign within
the framework of
COVID-19 measures.
In addition to the
3 electronic books
donated, 1 book was
also printed in a limited
number.
The number of books
sent to schools
reached 31,615 books
which were distributed
to 1,734 schools as of
year-end 2021.
TARGETS
Realization in 2021
Realization
Targets for 2022 and Beyond
Continuing the
"Show Your Report
Card, Get Your Book"
campaign on digital
platforms as well
due to the Covid-19
pandemic in 2021
Due to COVID-19, it was deemed
risky for students to go to our
branches, and the project was
moved to the digital platform. In
addition to the 3 electronic books
donated, 1 book was also printed
in a limited number.
Continuing the
"81 students
from 81 cities"
campaign with the
students attending
Darüşşafaka and
bachelor's degree
scholarship holders
The total number of our graduates
reached 296.
The Bank plans to continue the campaign in
a hybrid model in 2022 as well, within the
framework of COVID-19 measures.
The project is still ongoing.
İşbank aims to contribute to social development
through its social responsibility projects planned
to be carried out in a sustainable manner for
long-term and widespread access. İşbank makes
strong investments in today and in the future and
creates permanent value through projects in the
fields of training, the environment and culture-
art. The Bank will continue its social investment
programs where it can create a positive impact in
the following periods.
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Being aware of the effective role of education in
ensuring the permanence of social development
İşbank carries out inclusive long-term projects in the
field of education. The Bank's purpose is to contribute
to the education of new generations who embrace
the principles of Atatürk and will move our nation up
among the ranks of modern societies.
Chess
İşbank contributes to chess education to make it a popular and
easily accessible sport. The Bank became the main sponsor of
the Turkish Chess Federation (TSF) in 2005 to help transform
chess into a popular sport across the country.
İşbank Chess Classes
Chess classes are set up in primary and secondary schools to
encourage children to play chess, draw the attention of teachers
and parents to this sport and eliminate the lack of equipment in
schools with limited resources. As of 2021, the total number of
chess classes opened in schools reached 30,000..
Main Sponsorship of the Northern Cyprus Chess Federation
In addition to being the main sponsor of TSF, İşbank has also
been a sponsor of the Northern Cyprus Chess Federation (KKSF)
since 2013. After the sponsorship, chess started to take place
as a club activity once a week in primary schools in the Turkish
Republic of Northern Cyprus (TRNC). All schools in the TRNC
have chess classes.
Turkish Juniors, Youth and Veterans Chess Championship
The "Turkish Juniors and Youth Chess Championship", which
is normally held in Antalya in January every year, was held in
the Konya - Selçuklu Congress Center between 27 August -
3 September 2021. A total of 1,371 players, including 420
players in the youth category and 951 players in the juniors
category, competed at the 2021 Turkish Juniors and Youth Chess
Championship. 220 players joined the talent pool of the national
chess team as a result of their success at the championship. Players
from each age category who ranked high at the championship
have earned the right to join the Turkish national teams.
Within the framework of the preventive measures implemented
due to the coronavirus pandemic, the School Sports Chess
Championships were held as a hybrid competition.
Turkish Chess Federation Main Sponsorship
Following İşbank's main sponsorship of the Turkish Chess Federation, the numbers below have increased:
Licensed players from
30,000 to
1,040,216
Chess trainers from
2,000 to
87,054
Chess tournaments from
400 to
12,000
Chess clubs from
600 to
2,205
Title-holders from
6 to
209
Arbiters from
1.738 to
11.726
Total number
of medals won
527
In chess tournaments, a total of 27 world championships, 32 second place awards, 39 third place
awards, 73 European championships, 69 European second place awards, and 61 European third
place awards have been won so far.
81 Students from 81 Cities
With the mission of "equal opportunity in education",
Darüşşafaka offers children who have lost their mother and/
or father and who have insufficient financial means a quality
education under modern conditions from fifth grade to the last
year of high school with full scholarship and boarding.
With the "81 Students from 81 Cities" project initiated in the
2008-2009 academic year in cooperation with Darüşşafaka,
İşbank implemented one of the most comprehensive and
long-term projects in the field of education in the country.
The education expenses of all students included in the
program within the scope of the project are covered by İşbank.
Within the scope of the project, at the end of the 2020-2021
academic year, 65 students graduated from the school in this
13th term, and the total number of graduates reached 296.
İşbank continues to support students who graduated from
Darüşşafaka and passed the university entrance exam under
the 81 Students from 81 Cities Project. In addition, within
the scope of Koç University's "Anadolu Scholarship Holders"
program, the education expenses of a certain number of
students who graduate from Darüşşafaka each year are
covered by İşbank. The total number of students, including the
graduates, is approximately 750.
One Million Books, One Million Children
One Million Books, One Million Children is "Show Your Report
Card, Get Your Book", one of the biggest book campaigns in
Turkey carried out to date, was launched by İşbank at the end
of the 2007-2008 academic year.
The campaign was intended to support the development of
children's cognitive and cultural abilities, support the bringing
up of a generation who reads and, and contribute to cordial
communication between İşbank and children at an early age.
The campaign, which was held for the 14th time at the end of
the 2020-2021 academic year, was transferred to the digital
platform within the scope of coronavirus measures. 3 books
were presented to children through the Kumbara Magazine:
Bambi, Kayıp Dünya, and İklim Hakkında Konuşalım.
In addition, a limited number of books were printed in the
Braille alphabet and sent to schools providing education
for the visually impaired. For children in regional boarding
schools, affection houses, closed youth prisons and juvenile
reformatories, a selection of the works published by İşbank’s
Cultural Publications and other children's books were provided
within the scope of the campaign.
Book donations to schools and libraries
As part of our social responsibility activities in contribution to
education, books published by İş Bankası Kültür Yayınları are
sent to schools and public libraries throughout Turkey. In 2021,
nearly 32 thousand books were delivered to approximately 2
thousand schools and libraries.
Kumbara Magazine (Kumbara Dergisi)
The magazines "Kumbara" and "Mini Kumbara", which are prepared
with two different contents for 3-6 and 7-14 age groups to provide
high-quality, instructional and entertaining content to children,
are published digitally. In Kumbara Magazine, which is the main
channel of the One Million Books, One Million Children campaign,
entertaining content prepared in cooperation with İş Sanat and
additional content such as a game called “Piggy Bank Adventure",
"Science Heroes Series", "Fun Experiments" and "Arduino" have
been published in order to teach financial literacy to children.
Golden Youth Award
Every year since 1971, students who are successful in the
university entrance exam are rewarded with the "Golden Youth"
award by İşbank. The number of students, who have received
awards to date, exceeded 3,700. The number of students who
have been awarded so far has exceeded 3,700.
Artificial Intelligence Application
and Research Center
The "Artificial Intelligence Application and Research Center" was
established in cooperation with İşbank and Koç University in
order to contribute to the scientific and academic activities of
our country and to carry out advanced studies in the field of
artificial intelligence, which is of great importance worldwide.
In the Artificial Intelligence Center established under the roof
of Koç University Faculty of Engineering, Koç University faculty
members train experts for industry and academia, as well as
work to solve the problems of the business world.
Infectious Diseases Application
and Research Center
During the COVID-19 pandemic, which affected the world and
our country, İşbank and Koç University entered into an important
cooperation and pioneered the establishment of the "Infectious
Diseases Application and Research Center" in order to contribute
to the scientific and academic activities of our country in the
field of public health.
Established within Koç University with the support of İşbank,
the center is intended to contribute to the scientific activities
of our country in the field of public health, conduct research on
infectious diseases, provide diagnosis and treatment solutions
for diseases and develop prevention methods. The center, which
undertakes coordinated projects among the Faculty of Medicine,
Engineering, Science, Economics and Administrative Sciences
and Humanities Faculties within Koç University, carries out its
activities at the Koç University Hospital in Topkapı.
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PROJECTS in the CULTURE and ART FIELD
İş Bankası contributes to the enrichment of culture
and art in Turkey. İşbank Cultural Publications offers
books and other publications with rich content
and high-quality print. On the other hand, art and
museum activities have been continued within İş
Sanat since 2017. İş Sanat is one of the leading arts
organizations of Turkey with its on-stage and music
events, activities in the field of plastic arts and
historical studies. The Bank also supports projects
that are aimed to unearth the archaeological heritage
of Turkey, introduce it to the youth and preserve it for
the future.
Kültür Yayınları
Türkiye İş Bankası Kültür YayınlarQuality publishing, contribution
to the development of Turkish language and helping children
develop the habit of reading at an early age are the main
principles of Türkiye İş Bankası Kültür Yayınlar. Within this context,
more than 18 million books were presented to readers in 2021.
İş Sanat
In its 21st season, İş Sanat prepared an online program
consisting of artists from our country, taking into account the
importance of solidarity in combating the difficulties of the
period. Many activities ranging from classical music concerts
to local projects, story and poetry recitals, fairy tale theaters,
from theater readings to virtual exhibitions were performed.
The events recorded in İş Towers Hall are available on İş Sanat's
social media accounts.
During this season, which started with the İstanbul Ensemble
concert on 5 November 2020 and consisted of online events
only, 49 music events received 17,831,910 views, 80 literature
events attracted 12,120,213 views, and 123 regular contents
received 2,524,164 views.
Whilst the pandemic conditons eased, people met face-to-face
in the open air in front of the İş Towers Kibele Statue as part
of the "Happy Hour Friday " activities in autumn. Whereas the
22nd season was prepared with a hybrid approach, and both
stage and online events were planned as part of the program.
Kibele Art Gallery and Ankara Art Gallery
Kibele Art Gallery and Ankara Art Gallery host exhibitions of
master artists in the field of plastic arts.
No gallery exhibition was planned to be hosted during the
2020-2021 season as per the pandemic measures. At the end
of 2021, Kibele Art Gallery and Ankara Art Gallery opened the
new season with Beril Anılanmert's exhibition "Logbook" and
Soner Genç's exhibition "Treasure of Time", respectively.
Mimar Sinan Fine Arts University, Fine Art
Conservation and Restoration Laboratory
In the "Fine Art Conservation and Restoration Laboratory",
which was established in cooperation with Mimar Sinan
Fine Arts University to support academic studies on the
restoration and conservation of artworks and to contribute
to the training of a qualified workforce, maintenance and
repair works are carried out on the works in the İşbank Art
Collection. In addition, within the scope of the cooperation,
an undergraduate program of Fine Art Conservation and
Restoration was established within the university in the
2013-2014 academic year and the department continues its
educational activities.
Contributions in the Field of Archaeology
İşbank provides support for archaeological excavations in
order to unearth the rich archaeological heritage of Turkey and
preserve and reintroduce it to world cultural heritage. In this
context, the contribution provided to the "House of Muses"
excavations in Zeugma Ancient City in Nizip, Gaziantep started
in 2012 and the works were completed in October 2019. In
2021, the Bank made the decision to provide financial support
for the roof project planned for the House of Muses. İşbank
has been contributing to the "Patara Ancient City" excavations
in Kaş, Antalya, together with its subsidiaries Şişecam and
Turkish Industrial Development Bank since 2016. As the Year
of Patara was extended into 2021, we have extended the
duration of our support to this ancient city for 2 more years.
We have been supporting the excavations in the Dionysos
Temple in "Teos Ancient City" in Seferihisar, Izmir, since 2018
and the excavations of Sütunlu Cadde (column-lined street) in
"Nysa Ancient City" in Sultanhisar, Aydın since 2019. For the
New Year 2022, the book titled Teos: Inscriptions, Cults and
Urban Fabric was authored with Prof. Musa Kadıoğlu as editor.
As of 2021, the Bank has decided to support the Stratonikeia
Ancient City and Yesemek Hittite Statue Workshop and
Islahiye-Nurdağı Region Surface Research.
We believe that the archaeological assets to be discovered
with the financial support of the bank will not only shed light
on the history of civilization in Anatolia, but will also be a great
contribution to world heritage. The Bank is also carrying out
various communication activities.
Within the scope of music events, dance events were held
in Patara and Tragedia events were held in Teos, which were
made available for online viewers.
The Bank has provided financial support to the Istanbul
Archaeology Museums for the 18th Istanbul Archaeology
Museums Yearbook.
İşbank develops various projects in cooperation with
non-governmental organizations to create a better
world to live in, draw attention to environmental
problems associated with deforestation, and ensure
the development of environmental awareness in
society, especially among children.
Nature Education Programs
TEMA Foundation's Nature Education Programs are supported
with the revenues obtained from the İş Asset Management
TEMA Variable Fund -Turkey’s first environmental fund offered
by İşbank and its subsidiary İş Portföy.
"Nature Education Programs", which are defined as "Mini
TEMA" for preschool children and "Junior TEMA" for
elementary school-age children, are ecological literacy
trainings prepared by the TEMA Foundation for children to
spend time in nature, and observe and discover nature by
feeling, touching, smelling and hearing.
In the 2021-2022 academic year, within the scope of nature
education programs, approximately 200 thousand children
were reached in 81 cities. Within the scope of the Mini TEMA
Nature Education Program, 75,134 children from 2,475 schools
benefited from environmental education with the support of
5,405 volunteer teachers. Within the scope of the Junior TEMA
Nature Education Program, 100,235 children from 1,787
schools benefited from environmental education with the
support of 3,979 volunteer teachers. Additionally, nearly 88,940
children were reached through the education portal.
Within the scope of Mini TEMA and Junior
TEMA Education Programs,
children from
175,369
4,262
Schools benefitted from environmental
education with the support of
9,384
volunteer teachers.
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İşbank Museum (Yenicami, Istanbul)
Since opening its doors in November 2007, İşbank Museum
has been telling and presenting the long-established corporate
history of the Bank as well as the economic development
of Turkey through banking equipment, documents,
communication tools, photographs, advertising-promotional
materials and films.
The Museum, which had been closed for visits on 20
November 2020 as part of pandemic measures, opened its
doors again on 8 June 2021.
On 28 October 2021, the exhibition titled “After a Century /
Fronts, People and Great Victory” was opened for visitors.
Nearly 20 thousand people have visited the exhibition since
its launch. Inspired by the 2 medals previously donated to
our museum, we invited the general public to lend their
memorabilia from the time of the National Struggle and war
medals of their family elders to be displayed in the İstiklal
(Independence) exhibition. A special area was prepared within
the exhibition for 285 medals that were borrowed.
The total number of visitors in 2021 reached 31,653, while
the total number of visitors since the opening of the Museum
reached 1,855,733.
İstiklal Exhibition Towards the 100th
Anniversary of the Great Victory
The İstiklal Exhibition, which was originally opened within
İşbank Museum in 2019, was expanded with İzmir-specific
additions and re-opened for visitors at İzmir Kültürpark Atlas
Pavilion on 30 August 2021. The exhibition will be open
until 9 September 2022, which commemorates the 100th
anniversary of the liberation of İzmir.
İşbank Museum of Economic Independence
(Ulus, Ankara)
İşbank transformed its historical building in Ulus, Ankara,
which had served for many years as the bank's third Head
Office building, into a museum in order to share with the
public its experience, which is of great importance in terms of
national economic history. The historical Ulus building, one of
the capital's landmarks, was opened in 2019 as the "İşbank
Museum of Economic Independence" to host documents
and memories of the country's economic independence and
development process.
While there are permanent exhibitions on the ground, 1st and
2nd floors of the museum, the İş Sanat Ankara Gallery is on the
3rd floor, temporary exhibition halls are on the 4st floor and an
event hall is on the 5st floor. Temporary exhibition halls host
the exhibition titled "Independence in the 100th Anniversary
of the War of Independence", a part of which was opened in
Istanbul.
The Museum was closed to visitors three times during the
year as per the pandemic measures. The number of visitors
reached 19,818 in 2021, while the total number of visitors
reached 103,830. A documentary about the building's history
and opening of the Museum was filmed on 26 August.
Preparations for the Art Museum
The restoration of the Art Museum building, which started
in 2020, continued in 2021 as well. Prof. Gül İrepoğlu, Prof.
Rahmi Aksungur and Burçak Madran were assigned as
founding curator, plastic arts consultant and museological
consultant, respectively, during this period.
The exhibition hosted more than 50 thousand visitors from its
opening date to the end of the year.
Istanbul Foundation for Culture and Arts -
International Istanbul Music Festival
The Bank sponsored the Festival Orchestra & Hande
Küden concert which was performed in the courtyard
of St. Benoit high school on 31 August 2021 as part
of the 49th International Istanbul Music Festival.
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v
The year 2021 was an extraordinary year in terms of Business
Continuity Management activities all around the world due
to the impact of the coronavirus pandemic. Thanks to its
technological investments and digitalization projects, İşbank
was able to take quick action during the pandemic and
allowed its employees to work remotely in a secure manner.
During this challenging period, including especially the full
lockdowns in 2021, business continuity measures were taken
which covered the Head Office, Regional Directorates and
Branches, and the remote working practices which began in
2020 continued in 2021.
Business continuity practices
• As part of the pandemic measures, computers prepared in
advance to allow information systems to function properly
were quickly delivered to related branches and employees
by our field and planning teams.
• 2,875 notebooks and 161 SIM cards were supplied to the
Head Office Divisions.
• For our branches, a total of 3,639 notebooks were allocated,
with an additional 641 notebooks being supplied in
2021, to meet their requirements as per remote working
arrangements. Thus, the percentage of employees who
were provided with a notebook for use when working
remotely reached 52%. Additionally, 86% of the Head Office
employees were provided with the necessary hardware and
equipment for remote working.
• 55” LCD screens were installed in 50 branches, and main
queue screens were installed on branch displays at
• 200 branches so that customers could wait outside the
buildings without needing to go inside to check the queue.
• Software and ultrasonic sensor equipment were developed
which allowed customers to take their tickets without
touching the queue management kiosks.
• The notebooks owned by the Bank were prevented from
accessing the internet when used outside the bank's
network without a VPN service, and development activities
started to ensure that the traffic would go through the
bank's security devices after a VPN connection was
established.
• This prevented notebooks from connecting to unsecure
networks.
• As part of YNÇM, the Bank invested in VDI licenses and
infrastructure in order to ensure that the divisions working
remotely could work with virtual clients in a more secure
and sustainable environment, instead of establishing remote
desktop connections to physical computers.
• Teleconferencing software was enhanced with Jabber
Softphone, virtual conference rooms and Zoom app
solutions so that collaborative meetings with a large number
of participants could be seamlessly held.
Work life practices
• As the Coronavirus pandemic began to impact the entire
world in early 2020, the Bank focused on pandemic
measures and follow-up activities by prioritizing the health
of employees and their families as part of its Occupational
Health and Safety practices.
• The Bank put a comprehensive set of measures in place
by reviewing and taking into consideration the practices
and recommendations of the World Health Organization,
the Ministry of Health of the Republic of Turkey, and
Infectious Diseases Associations as well as other countries,
organizations and institutions.
• Employees were constantly informed about the pandemic
and measures through videos and announcements, and
thousands of questions and notifications conveyed by
employees through the Bank's internal communication
channels such as e-mail, phone, Maximo, Corona Pandemic
Line and "I Have a Suggestion" were answered.
• All employees who tested positive for COVID-19 were
closely monitored, and the necessary measures and actions
were taken to ensure that other employees working at the
same Branch/Region/Head Office buildings as the infected
employees were not negatively affected, and the course of
the pandemic was reported on a regular basis.
• A digital system was soon put in place that allowed reporting
and monitoring of the current status of our employees in
terms of COVID-19 infection via the system.
• Emergency action plans of all branches and buildings were
renewed, and pandemic risk assessment reports and
pandemic plans were prepared.
• In 2021, the "New Practices in the Banking Sector Introduced
During the COVID-19 and Post-COVID-19 Period", "Everyone
Is Their Own Hero" and "Resilience" trainings were provided.
• Under the pandemic, all training activities have been rapidly
adapted to the new conditions. As of early March 2020, all
classroom trainings began to be offered as live digital trainings
(via platforms such as Zoom and Webex). (However, some
trainings such as Basic First -aid, First Aid Refresher, and
Private Security Refresher trainings continued to be provided
in a classroom environment due to legal requirements).
• In addition to the digital trainings "Cyber Security Measures
at Home" and "Remote Working Guide" provided to assist
our employees as they worked outside the office in 2020,
the digital training "Remote Connection Methods" providing
the directions and workflow steps to ensure our employees
could securely connect to the Bank's systems was also made
available to our employees as remote working practices were
widely adopted in 2021.
• The digital training "Basics of JIRA" was also made available
to our employees to provide them with information about
the use of the "JIRA" application which helped teams to carry
out business processes and meet project schedules in a
collaborative way regardless of their location.
• During the pandemic, “Increasing Our Psychological
Resilience", "Managing Our Anxiety", “Being a Parent While
Working Remotely", "Managing Time Quality", “Managing
Emotions”, "Tips for Effective Communication and Motivation"
and "Emotional Resilience" video trainings were presented to
the employees through the Learning World/İşTube.
• "Remote Team Management" training, which provides
information about communication, contact, motivation,
delegation and task follow-up with a team when working
remotely, will continue to be given to Head Office managers
in order to ensure efficient use of İşbank's remote working
model.
• The Bank is working with related stakeholders to evaluate
and review remote access privileges and the systems
accessed, and to minimize the information security risks
associated with remote working by developing alternative
solutions. The trace records created by endpoint protection
solutions installed in corporate computers and the operating
system security warnings are sent to the central trace record
tracking system. This data is then reviewed by the Security
Defense and Intelligence Center (GİSM) to detect possible
security issues. To ensure continuity of this data flow, IT
teams are working on changing/improving the design of
remote access.
Measures taken since the onset of the pandemic:
• Our employees began to work remotely in rotation.
• Remote and hybrid work models and flexible working hours
were put in place as a pilot program as per the business
requirements of the Head Office Divisions.
• Remote and hybrid work models were put in place at some
branches as a pilot program.
• An unlimited supply of masks, gloves and hand sanitizers
were provided to protect the health of our employees.
• Acrylic panels were installed in dining halls and branches to
protect our employees and customers against transmission.
• Home internet services were provided for our call center
employees.
• Proper nutrition training was given to our employees as a
preventive health measure.
Support Provided to Customers
• In the field of personal banking, to support the economy
and households during the pandemic, customers with an
overdraft account were given the ability to defer interest
charges until September 2021.
• In the field of agricultural banking, a special POS provision
was created to support the beekeepers affected by forest
fires by allowing the beekeepers in Muğla and Aydın to
purchase materials with zero interest applied. For farmers
affected by the drought, debt deferral arrangements were
provided.
• As part of a loan agreement signed by and between İşbank
and the European Bank for Reconstruction and Development
(EBRD), the Bank was granted resources worth USD 54 million
to lend to its customers in order to help alleviate some of the
economic hardships caused by the COVID-19 pandemic. Each
firm that met the loan package criteria could benefit from
the COVID-19 Solidarity Loan to borrow a maximum of USD
100,000 or equivalent amount in Euro or TL.
• Deferral/restructuring requests for commercial loan
payments were evaluated with due care in order to limit the
negative effects of the pandemic on customers, and such
requests were accepted to the maximum extent possible to
achieve customer satisfaction.
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Maslak İş Merkezi No:27 K:2-3-4
34485 Sarıyer/İstanbul TÜRKİYE
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Türkiye İş Bankası Anonim Şirketi:
Audit of Unconsolidated Financial Statements
Qualified Opinion
We have audited the accompanying unconsolidated financial statements of Türkiye İş Bankası A.Ş (the Bank), which comprise the statement of balance sheet as at
December 31, 2021, and the unconsolidated statement of income, unconsolidated statement of profit or loss and other comprehensive income, unconsolidated statement
of changes in shareholders’ equity and unconsolidated statement of cash flows for the year then ended and notes to the unconsolidated financial statements, and a
summary of significant accounting policies and other explanatory information.
In our opinion, except for the effects of the matter on the unconsolidated financial statements described in the Basis for Qualified Opinion paragraph, the accompanying
unconsolidated financial statements present fairly, in all material respects, the unconsolidated financial position of Türkiye İş Bankası A.Ş. as at December 31, 2021
and financial performance and unconsolidated its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as in
accordance with “Regulation on Accounting Applications for Banks and Safeguarding of Documents” published in the Official Gazette no.26333 dated November 1, 2006
and other regulations on accounting records of Banks published by Banking Regulation and Supervision Agency (BRSA), circulars, interpretations published by BRSA and
“BRSA Accounting and Financial Reporting Legislation” which includes the provisions of “Turkish Financial Reporting Standards” (TFRS) for the matters which are not
regulated by these regulations.
Basis for Qualified Opinion
As explained in Section Five Part II-i.4.5 and IV.f, the accompanying unconsolidated financial statements as at December 31, 2021 include a free provision at an amount
of TL 4,075,000 thousands of which TL 2,875,000 thousands was provided in prior years and TL 1,200,000 thousands provided in the current period by the Bank
management for the possible effects of the negative circumstances which may arise from the possible changes in the economy and market conditions which does not
meet the recognition criteria of “Turkish Accounting Standard” (TAS) 37 “Provisions, Contingent Liabilities and Contingent Assets”.
Our audit was conducted in accordance with “Regulation on independent audit of the Banks” published in the Official Gazette no.29314 dated April 2, 2015 by BRSA (BRSA
Independent Audit Regulation) and Independent Auditing Standards (“ISA”) which are the part of Turkish Auditing Standards issued by the Public Oversight Accounting
and Auditing Standards Authority (“POA”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Bank in accordance with of Code of Ethics for Independent Auditors (Code of Ethics) published by POA and
have fulfilled our other responsibilities in accordance with the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our qualified opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the unconsolidated financial statements of the current
period. Key audit matters were addressed in the context of our audit of the unconsolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified Opinion section we have determined the matters described
below to be the key audit matters to be communicated in our report.
Türkiye İş Bankası Anonim Şirketi
Unconsolidated Financial Statements
As at and For the Year Ended
December 31, 2021
With Independent Auditor’s Report Thereon
This report includes “Independent Auditor’s Report” comprising 6 pages and; "Unconsolidated
Financial Statements and Related Disclosures and Footnotes” comprising 119 pages.
Convenience Translation of the Independent Auditors’ Report Originally Issued in Turkish (See Note I in Section Three)
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INDEPENDENT AUDITOR’S REPORT
Key Audit Matter
How the Key Audit Matter is addressed in our audit
Pension Fund Obligations
TFRS 9 “Financial Instruments” Standard and recognition of impairment
on financial assets and related significant disclosures
As presented in Section III disclosure VIII, the Bank recognizes expected
credit losses of financial assets in accordance with TFRS 9 Financial
Instruments standard. We considered impairment of financial assets as a
key audit matter since:
• Amount of on and off-balance sheet items that are subject to expected
credit loss calculation is material to the financial statements.
• There are complex and comprehensive requirements of TFRS 9.
• The classification of the financial assets is based on the Bank’s
business model and characteristics of the contractual cash flows in
accordance with TFRS 9 and the Bank uses significant judgment on the
assessment of the business model and identification of the complex
contractual cash flow characteristics of financial instruments.
• The Bank's determines fair value of its financial assets, reflected at
fair value in accordance with the relevant business model category,
according to Level 3 if there are financial inputs that are not observable
in the fair value measurement and that contain significant estimates
and assumptions.
• Policies implemented by the Bank management include compliance risk
to the regulations and other practices.
• Processes of TFRS 9 are advanced and complex.
•
Judgements and estimates used in expected credit loss, complex and
comprehensive.
•
Disclosure requirements of TFRS 9 are comprehensive and complex.
Our audit procedures included among others include:
• Evaluating the appropriateness of accounting policies as to the
requirements of TFRS 9, Bank’s past experience, local and global
practices.
•
Reviewing and testing of processes which are used to calculate expected
credit losses by involving our Information technology and process audit
specialists.
• Evaluating the reasonableness and appropriateness of the key
judgments and estimates determined by the management and the
methods, judgments, and data sources used in calculating expected
losses, taking into account the standard requirements, including the
actions taken against the COVID-19 impacts, and the industry and global
practices.
• Reviewing the appropriateness of criteria in order to identify the
financial assets having solely payments of principal and interest and
checking the compliance to the Bank’s Business model.
• Reviewing the Bank’s classification and measurement models of
the financial instruments (financial instruments determined as
Level 3 according to fair value hierarchy) and comparing with TFRS 9
requirements
• Evaluating the alignment of the significant increase in credit risk
determined during the calculation of expected credit losses, default
definition, restructuring definition, probability of default, loss given
default, exposure at default and macro-economic variables that are
determined by the financial risk management experts with the Bank’s
past performance, regulations, and other processes that has forward
looking estimations.
• Evaluating the impact of the COVID-19 outbreak on macroeconomic
variables used in credit staging and expected credit loss calculations,
together with important forward-looking estimates and assumptions.
• Assessing the completeness and the accuracy of the data used for
expected credit loss calculation.
• Testing the mathematical accuracy of expected credit loss calculation on
sample basis.
• Evaluating the judgments and estimates used for the individually
assessed financial assets.
• Evaluating the accuracy and the necessity of post-model adjustments.
• Auditing of TFRS 9 disclosures.
It has been addressed whether there have been any significant changes in
regulations governing pension liabilities, employee benefits plans during
the period, that could lead to adjust the valuation of employee benefits.
Support from actuarial auditor of our firm, has been taken to assess the
appropriateness of the actuarial assumptions and calculations performed
by the external actuary. We further focused on the accuracy and adequacy
of the Bank’s provision provided for the deficit and also disclosures on key
assumptions related to pension fund deficit.
Employees of the Bank are members of “Türkiye İş Bankası A.Ş.
Mensupları Emekli Sandığı Vakfı”, (“the Fund”), which is established in
accordance with the temporary Article 20 of the Social Security Act
No. 506 and related regulations. The Fund is a separate legal entity
and foundation recognized by an official decree, providing all qualified
employees with pension and post-retirement benefits. As disclosed in the
“Section Three Note XVII” to the financial statements, Banks will transfer
their pension fund to the Social Security Institution and the authority of
the “Council of Ministers” on the determination of the mentioned transfer
date is changed as “President” in the Decree Law No. 703 published in
the Official Gazette numbered 30473 and dated July 9, 2018. According
to the technical balance sheet report as at 31 December 2021 prepared
considering the related articles of the Law regarding the transferrable
benefit obligations for the non- transferrable social benefits and
payments which are included in the articles of association, the Fund has
an actuarial and technical deficit which is fully provisioned for.
The valuation of the Pension Fund liabilities requires judgment in
determining appropriate assumptions such as defining the transferrable
social benefits, discount rates, salary increases, demographic
assumptions, inflation rate estimates and the impact of any changes in
individual pension plans. The Bank Management uses Fund actuaries to
assist in assessing these assumptions.
Considering the subjectivity of key assumptions and estimate used in the
calculations of transferrable liabilities and the effects of the potential
changes in the estimates used together with the uncertainty around the
transfer date and given the fact that technical interest rate is prescribed
under the law ,we considered this to be a key audit matter.
Derivative Financial Instruments
Derivative financial instruments including foreign exchange contracts,
currency and interest rate swaps, currency and interest rate options,
futures and other derivative financial instruments which are held for
trading are initially recognized on the statement of financial position at
fair value and subsequently are re-measured at their fair value. Details
of related amounts are explained in “Section Five Note I.c.” and “Section
Five Note II.b”.
Our audit procedures included among others involve reviewing policies
regarding fair value measurement accepted by the bank management fair
value calculations of the selected derivative financial instruments which
is carried out by valuation experts of another entity who are in the same
audit network within our firm and the assessment of used estimations
and the judgements and testing the assement of operating effectiveness
of the key controls in the process of fair value determination.
Fair value of the derivative financial instruments is determined
by selecting most convenient market data and applying valuation
techniques to those particular derivative products. Derivative Financial
Instruments are considered by us as a key audit matter because of the
subjectivity in the estimates, assumptions and judgements used.
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Responsibilities of Management and Directors for the Unconsolidated Financial Statements
Bank management is responsible for the preparation and fair presentation of the unconsolidated financial statements in accordance with the BRSA Accounting and
Reporting Legislation and for such internal control as management determines is necessary to enable the preparation of the financial statement that is free from material
misstatement, whether due to fraud or error.
In preparing the unconsolidated financial statements, management is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Unconsolidated Financial Statements
In an independent audit, the responsibilities of us as independent auditors are:
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with BRSA
Independent Audit Regulation and ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with BRSA Independent Audit Regulation and ISAs, we exercise professional judgement and maintain professional scepticism throughout
the audit. We also:
•
Identify and assess the risks of material misstatement of the unconsolidated financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. (The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.)
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Bank’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the unconsolidated financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Bank to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the unconsolidated financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with government with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the unconsolidated
financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) In accordance with Article 402 paragraph 4 of the Turkish Commercial Code (“TCC”) no 6102; no significant matter has come to our attention that causes us to believe
that the Bank’s bookkeeping activities and financial statements for the period January 1 – December 31, 2021 are not in compliance with the TCC and provisions of the
Bank’s articles of association in relation to financial reporting.
2) In accordance with Article 402 paragraph 4 of the TCC; the Board of Directors submitted to us the necessary explanations and provided required documents within the
context of audit.
The engagement partner who supervised and concluded this independent auditor’s report is Fatma Ebru Yücel.
Additional paragraph for convenience translation to English
As explained in detail in Note I of Section Three, the effects of differences between accounting principles and standards set out by regulations in conformity with BRSA
Accounting and Financial Reporting Legislation, accounting principles generally accepted in countries in which the accompanying unconsolidated financial statements are to
be distributed and International Financial Reporting Standards (“IFRS”) have not been quantified in the accompanying unconsolidated financial statements. Accordingly, the
accompanying unconsolidated financial statements are not intended to present the financial position, results of operations and changes in financial position and cash flows
in accordance with the accounting principles generally accepted in such countries and IFRS.
Güney Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi
A member firm of Ernst & Young Global Limited
Türkiye İş Bankası A.Ş.
The Unconsolidated Financial Report As At And For The Year Ended December 31, 2021
Headquarters Address: İş Kuleleri, 34330, Levent/İstanbul
Telephone: 0212 316 00 00
Fax: 0212 316 09 00
Web site: www.isbank.com.tr
E-mail: musteri.iliskileri@isbank.com.tr
The unconsolidated financial report as at and for the year ended prepared in accordance with the communiqué of “Financial Statements and Related Disclosures and
Footnotes to be announced to Public by Banks” as regulated by Banking Regulation and Supervision Agency, comprises the following sections:
GENERAL INFORMATION ABOUT THE BANK
UNCONSOLIDATED FINANCIAL STATEMENTS
EXPLANATIONS ON THE ACCOUNTING POLICIES
INFORMATION ON FINANCIAL STRUCTURE AND RISK MANAGEMENT
DISCLOSURES AND FOOTNOTES ON THE UNCONSOLIDATED FINANCIAL STATEMENTS
OTHER EXPLANATIONS
INDEPENDENT AUDITOR’S REPORT
The unconsolidated financial statements for the year ended and related disclosures and footnotes in this report are prepared in accordance with the Regulation on the
Procedures and Principles for Accounting Practices and Retention of Documents by Banks, “Banking Regulation and Supervision Agency” (BRSA) regulations, “Turkish
Accounting Standards”, “Turkish Financial Reporting Standards” and the related statements and guidance and in compliance with the financial records of our Bank. Unless
otherwise stated, the accompanying unconsolidated financial report is presented in thousands of Turkish Lira (TL) and has been subjected to independent audit and
presented as the attached.
Ersin Önder Çiftçioğlu
Member of the Board and
the Audit Committee
Yusuf Ziya Toprak
Deputy Chairperson of the Board
of Directors and Chairperson of
the Audit Committee
Adnan Bali
Chairperson of the Board of Directors
Ali Tolga Ünal
Head of Financial
Management Division
Gamze Yalçın
Deputy Chief Executive
In Charge of Financial Reporting
Hakan Aran
Chief Executive Officer
The authorized contact person for questions on this financial report:
Name – Surname/Title: Neşe Gülden Sözdinler/Head of Investor Relations and Sustainability Division
Phone No : +90 212 316 16 02
Fax No
: +90 212 316 08 40
E-mail : nese.sozdinler@isbank.com.tr
investorrelations@isbank.com.tr
Website
: www.isbank.com.tr
8 Şubat 2022
İstanbul, Türkiye
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CONTENT
SECTION I
General Information about the Bank
I.
II.
III.
IV.
V.
VI.
Explanations on the Establishment Date and Initial Status of the Bank, History Including the Changes in the Former Status
Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and
Control of the Bank, any Changes in the Period, and Information on the Bank’s Risk Group
Explanations on the Chairperson’s, Directors’, Auditors’, Chief Executive Officer’s and Deputy Chief Executives’ Shares, if any,
and the Areas of their Responsibility at the Bank
Information on the Bank’s Qualified Shareholders
Summary Information on the Bank’s Functions and Business Lines
Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholder’s Equity Between the Bank and its Subsidiaries
or the Reimbursement of Liabilities
210
210
210
211
211
VII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of Related Disclosures 211
SECTION II
Unconsolidated Audit Financial Statements
I.
II.
III.
IV.
V.
VI.
Balance Sheet (Statement of Financial Position) – Assets
Balance Sheet (Statement of Financial Position) – Liabilities
Statement of Off-Balance Sheet Items
Statement of Profit or Loss
Statement of Profit or Loss and Other Comprehensive Income
Statement of Changes in the Shareholders’ Equity
VII.
Statement of Cash Flows
VIII. Statement of Profit Distribution
SECTION III
Explanations on Accounting Policies
I.
II.
III.
IV.
V.
VI.
Basis of Presentation
Strategy for Use of Financial Instruments and Foreign Currency Transactions
Associates and Subsidiaries
Forward, Option Contracts and Derivative Instruments
Interest Income and Expenses
Fees and Commission Income and Expenses
VII.
Financial Assets
VIII.
Impairment of Financial Assets
IX.
X.
XI.
Offsetting Financial Instruments
Sale and Repurchase Agreements and Securities Lending Transactions
Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities
XII.
Goodwill and Other Intangible Assets
XIII.
Tangible Assets
XIV.
Leasing Transactions
XV.
Provisions and Contingent Liabilities
XVI. Contingent Assets
XVII. Liabilities Regarding Employee Benefits
XVIII. Taxation
XIX. Borrowings
XX.
Equity Shares and Issuance of Equity Securities
XXI. Bank Acceptances and Bills of Guarantee
XXII. Government Incentives
XXIII. Segment Reporting
XXIV. Other Disclosures
212
213
214
216
217
218
220
221
222
222
223
223
223
223
223
224
225
225
226
226
226
226
227
227
227
228
229
229
229
229
229
229
SECTION IV
Information on the Financial Position and Risk Management of the Bank
I.
II.
III.
IV.
V.
VI.
Explanations on Shareholders’ Equity
Explanations on Credit Risk
Explanations on Currency Risk
Explanations on Interest Rate Risk
Explanations on Equity Shares Risk Arising from Banking Book
Explanations on Liquidity Risk Management and Liquidity Coverage Ratio
VII.
Explanations on Leverage Ratio
VIII. Explanations on Other Price Risks
IX.
X.
XI.
Explanations on Presentation of Financial Assets and Liabilities at Fair Value
Explanations on Transactions Carried Out on Behalf of Third Parties and Fiduciary Transactions
Explanations on Risk Management Objectives and Policies
XII.
Explanations on Segment Reporting
SECTION V
Disclosures and Footnotes on the Unconsolidated Financial Statements
I.
II.
III.
IV.
V.
VI.
Disclosures and Footnotes on Assets
Disclosures and Footnotes on Liabilities
Disclosures and Footnotes on Off-Balance Sheet Items
Disclosures and Footnotes on Statement of Income
Disclosures and Footnotes on the Statement of Changes in Shareholders’ Equity
Disclosures and Footnotes on Statement of Cash Flows
VII.
Disclosures and Footnotes on the Bank’s Risk Group
VIII. Disclosures on the Bank’s Domestic, Foreign, Off-Shore Branches or Subsidiaries and Foreign Representative Offices
IX.
Subsequent Events
SECTION VI
Other Explanations
I.
Explanations on the Bank’s Credit Ratings
SECTION VII
Explanations on the Independent Audit Report
I.
II.
Explanations on the Independent Auditors’ Report
Explanations and Footnotes of the Independent Auditors Report
230
237
246
248
252
253
258
259
259
261
261
277
279
293
300
302
306
307
308
309
309
309
309
309
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I. Explanations on the Establishment Date and Initial Status of the Bank, History Including the Changes in the Former Status
The Parent Bank’s shares attributable to the Directors and members of the Audit Committee, to the CEO and the Deputy Chief Executives are of minor importance.
TÜRKİYE İŞ BANKASI A.Ş. (“the Bank”) was established on August 26, 1924 to operate in all kinds of banking activities and to initiate and/or participate in all kinds of
financial and industrial sector undertakings when necessary. There is no change in the Bank’s status since its establishment.
IV. Information on the Bank’s Qualified Shareholders
II. Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and Control of the Bank, any Changes in
the Period, and Information on the Bank’s Risk Group
As of December 31, 2021, 37.26% of the Bank’s shares are owned by T. İş Bankası A.Ş. Supplementary Pension Fund (Fund), 28.09% are owned by the Republican People’s
Party- CHP (Atatürk’s shares) and 34.65% are on free float (December 31, 2020: Fund 37.08%, CHP 28.09%, Free float 34.83%).
III. Explanations on the Chairperson’s, Directors’, Auditors’, Chief Executive Officer’s and Deputy Chief Executives’ Shares, if any, and the Areas of their Responsibility
at the Bank
Name Surname/Company
Shares
Ownership
Paid-in Capital
Unpaid Capital
T. İş Bankası A.Ş. Mensupları Munzam Sosyal
Güvenlik ve Yardımlaşma Sandığı Vakfı (İşbank
Members’ Supplementary Pension Fund)
Cumhuriyet Halk Partisi – Republican People’s
Party - (Atatürk’s Shares)
1,676,813
1,264,142
%37.26
%28.09
1,676,813
1,264,142
V. Summary Information on the Bank’s Functions and Business Lines
In line with the relevant legislation and principles stated in the Articles of Incorporation of the Bank, the Bank’s activities include operating in retail, commercial,
corporate and private banking, foreign currency and money market operations, marketable securities operations, international banking services and other banking
operations, as well as initiating or participating in all kinds of financial and industrial sector corporations as may be required.
VI. Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders’ Equity between the Bank and its Subsidiaries or the Reimbursement of
Liabilities
None.
VII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of the Related Disclosures
The Bank has written policies on assessment of ensuring compliance on market discipline, disclosure obligations, frequency and accuracy of related disclosures. The
mentioned policies which are agreed by Board of Directors’ can be obtained from the Bank’s website.
Chairperson and Members of the Board of Directors:
Name and Surname
Areas of Responsibility
Adnan Bali
Yusuf Ziya Toprak
Hakan Aran
Feray Demir
Ersin Önder Çiftçioğlu
Fazlı Bulut
Durmuş Öztek
Recep Hakan Özyıldız
Mustafa Rıdvan Selçuk
Ahmet Gökhan Sungur
Sadrettin Yurtsever
Chairperson of the Board of Directors, Remuneration Committee, Chairperson of the Risk Committee, Sustainability Committee
and Chairperson of the Board of Directors Operating Principles Committee and the Member of the Credit Committee
Deputy Chairperson of the Board of Directors, Chairperson of the Audit Committee, TRNC Internal Systems Committee and
Operational Risk Committee, Member of the Risk Committee and Substitute Member of the Credit Committee
Chief Executive Officer and Board Member, Chairperson of the Credit Committee, Human Resources Committee and Information
Systems Strategy Committee, Natural Member of the Risk Committee, Chairperson of the Executive Committee
Director, Member of the Credit Committee, Corporate Governance Committee, Remuneration Committee, Corporate Social
Responsibility Committee, Sustainability Committee, and the Member of the Board of Directors Operating Principles Committee
Director, Chairperson of the Sustainability Committee, Member of the Audit Committee and TRNC Internal Systems Committee
Director, Member of Corporate Social Responsibility Committee and Substitute Member of the Credit Committee
Director, Member of Corporate Social Responsibility Committee, and the Member of the Board of Directors Operating Principles
Committee
Director
Director
Director
Director, Member of Corporate Governance Committee and Corporate Social Responsibility Committee
Chief Executive Officer and Deputy Chief Executives:
Name and Surname
Areas of Responsibility
Hakan Aran
Yalçın Sezen
Murat Bilgiç
Nevzat Burak Seyrek
Şahismail Şimşek
Ebru Özşuca
Gamze Yalçın
H. Cahit Çınar
Ozan Gürsoy
Sezgin Yılmaz
Sabri Gökmenler
Sezgin Lüle
Can Yücel
Sezai Sevgin
Chief Executive Officer and Member of the Board of Directors, Credit Committee, Chairperson of Human Resources Committee
and Information Technologies Strategic Committee Natural Member of Risk Committee, Member of Opertional Risk Committee
and Chairperson of the Executive Committee
Retail Banking Marketing, Sales and Products, Retail Loans, Digital Banking, Member of the Corporate Social Responsibility
Committee and Sustainability Committee
Corporate Loans, Commercial Loans and Retail Loans Allocation, Project Finance, Member of the Risk Committee and
Sustainability Committee
Corporate and Commercial Banking Marketing, Commercial Banking Sales, Transboundary Banking, Free Zone Branches,
Member of the Sustainability Committee
SME and Enterprise Banking Product and Sales, Agricultural Banking Marketing, Commercial Banking Product, Member of
Sustainability Committee
Treasury, Economic Research, Capital Markets, Member of the Risk Committee
Financial Management, Financial Institutions, Investor Relations and Sustainability, Managerial Reporting and Internal
Accounting, Information Technologies Strategic Committee, Member of Risk Committee and Sustainability Committee
Legal Consultancy, Associates, Member of the Operational Risk Committee
Human Resources Management, Strategic and Corporate Performance Management, Member of Operational Risk Committee
and Sustainability Committee
Banking Base Operations, Agile Management , Support Services, External Operations and Commercial Loan Operations,
Construction and Real Estate Management, Corporate Architecture, Member of Operational Risk Committee, Sustainability
Committee and Information Technologies Strategic Committee
Information Technologies, Data Management, Acquisition, Member of Operational Risk Committee and Information
Technologies Strategic Committee
Customer Relations Coordination Responsible, Digital Banking, Customer Relations, Card Payment Ecosystems,Card Payment
Operations, Card Payment Products and Member of Operational Risk Committee
Legal Affairs and Legal Proceedings, Commercial and Corporate Loans and Retail Loans Proceedings, Loans Monitoring, Credits
Portfolio Management, and the Member of the Corporate Social Responsibility Committee
Information Security, Internal Control, Corporate Compliance, Natural Member of the Risk Committee, Information Technologies
Strategic Committee, Member of the Operational Risk Committee and Sustainability Committee
Mr. Serkan Uğraş Kaygalak retired from his position at the Bank At the meeting of the Bank’s Board of Directors dated 28.12.2021, it was decided that Mr. Sezai Sevgin
would be appointed as Deputy Chief Executive of the Bank following the necessary notifications and permissions to the Banking Regulation and Supervision Agency. Mr. H.
Cahit Çınar participates in the sessions organized on a consolidated basis within the scope of his Membership in the Risk Committee.
210 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 211
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Türkiye İş Bankası A.Ş.
Unconsolidated Balance Sheet (Statement of Financial Position)
Türkiye İş Bankası A.Ş.
Unconsolidated Balance Sheet (Statement of Financial Position)
ASSETS
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
LIABILITIES
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
THOUSAND TL
THOUSAND TL
V-I-c-i
580,390
21,343,776
21,924,166
195,480
4,864,637
5,060,117
VIII.
FACTORING PAYABLES
I.
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.2
1.2.1
1.2.2
1.2.3
1.3
1.3.1
1.3.2
1.3.3
1.4
II.
2.1
2.2
2.3
2.4
2.4.1
2.4.2
2.5
III.
3.1
3.2
IV.
4.1
4.1.1
4.1.2
4.2
4.2.1
4.2.2
4.3
4.3.1
4.3.2
V.
VI.
6.1
6.2
VII.
FINANCILA ASSETS (Net)
Cash and Cash Equivalents
Cash and Balances with Central Bank
Banks
Money Market Placements
Expected Credit Loss (-)
TL
FC
Total
TL
FC
Total
77,063,730
248,977,452
326,041,182
50,998,250
110,703,730
161,701,980
17,445,369
188,544,363
205,989,732
5,987,913
80,941,630
86,929,543
17,280,450
164,642,771
181,923,221
5,563,679
65,342,682
70,906,361
168,221
23,961,080
24,129,301
427,313
15,622,248
16,049,561
V-I-a
V-I-ç
0
3,302
0
0
59,488
62,790
0
3,079
0
0
23,300
26,379
Financial Assets at Fair Value Through Profit or Loss
V-I-b
2,220,989
8,351,219
10,572,208
1,466,421
2,714,953
4,181,374
Government Debt Securities
Equity Securities
Other Financial Assets
477,614
207,094
6,006,316
6,483,930
458,187
665,281
167,674
147,257
566,315
261,922
733,989
409,179
1,536,281
1,886,716
3,422,997
1,151,490
1,886,716
3,038,206
Financial Assets at Fair Value Through Other Comprehensive
Income
V-I-d
56,816,982
30,738,094
87,555,076
43,348,436
22,182,510
65,530,946
56,387,087
28,618,627
85,005,714
42,920,765
20,327,275
63,248,040
80,176
472,152
552,328
76,843
269,119
345,962
349,719
1,647,315
1,997,034
350,828
1,586,116
1,936,944
Government Debt Securities
Equity Securities
Other Financial Assets
Derivative Financial Assets
1.4.1
Derivative Financial Assets at Fair Value Thorugh Profit or Loss
580,390
21,343,776
21,924,166
195,480
4,864,637
5,060,117
1.4.2
Derivative Financial Assets at Fair Value Thorugh Other
Comprehensive Income
0
0
0
0
0
0
Financial Assets Measured at Amortised Cost (Net)
310,048,682
222,249,550
532,298,232
249,597,920
134,219,237
383,817,157
Loans
Lease Receivables
Factoring Receivables
V-I-e
V-I-ı
287,305,913
226,902,837
514,208,750
231,136,428
134,385,174
365,521,602
0
0
0
0
0
0
0
0
0
0
0
0
Other Financial Assets Measured at Amortised Cost (Net)
V-I-f
41,733,414
4,679,320
46,412,734
35,451,053
6,208,384
41,659,437
Government Debt Securities
Other Financial Assets
Expected Credit Loss (-)
41,550,971
2,111,385
43,662,356
35,395,702
5,029,387
40,425,089
182,443
2,567,935
2,750,378
55,351
1,178,997
1,234,348
18,990,645
9,332,607
28,323,252
16,989,561
6,374,321
23,363,882
ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net)
V-I-n
818,101
Investments in Associates (Net)
V-I-g
311,081
Unconsolidated Financial Subsidiaries
13,073,619
4,539,438
17,613,057
10,389,989
2,614,932
13,004,921
V-I-ğ
34,610,826
4,539,438
39,150.264
23,121,146
2,614,932
25,736,078
Unconsolidated Non-Financial Subsidiaries
21,537,207
818,101
0
0
311.081
0
0
0
9,532
9.532
0
827,633
1,214,294
5,800
1,220,094
827,633
1,214,294
5,800
1,220,094
0
0
0
0
34,921,907
4,539,.438
39,461,345
23,387,451
2,614,932
26,002,383
0
0
0
311,081
266,305
0
0
311,081
266,305
0
0
0
266,305
0
266,305
0
0
0
0
21,537,207
12,731,157
0
0
0
0
0
0
0
0
0
0
8,659,882
39,978
8,699,860
6,576,739
33,540
1,747,103
3,006
1,750,109
1,329,996
0
0
0
0
1,747,103
3.006
1,750,109
1,329,996
0
0
0
0
0
0
0
0
845
0
845
0
0
12,731,157
0
0
0
6,610,279
1,330,841
0
1,330,841
0
0
87,529
2,470,081
2,557,610
2,093,900
1,326,594
3,420,494
7,774,473
7,158,580
14,933,053
5,046,647
4,752,557
9,799,204
V-I-h
V-I-j
V-I-k
V-I-l
V-I-m
V-I-o
Held For Sale
Discontinued Operations
EQUITY INVESTMENTS
Associates Accounted by using Equity Method
Unconsolidated Associates
Subsidiaries (Net)
Joint Ventures (Net)
Joint Ventures Accounted by using Equity Method
Unconsolidated Joint Ventures
TANGIBLE ASSETS (Net)
INTANGIBLE ASSETS (Net)
Goodwill
Other
INVESTMENT PROPERTY (Net)
VIII.
CURRENT TAX ASSET
IX.
X.
DEFERRED TAX ASSET
OTHER ASSETS (Net)
I.
II.
III.
IV.
4.1
4.2
4.3
V.
5.1
5.2
VI.
VII.
7.1
7.2
DEPOSITS
FUNDS BORROWED
MONEY MARKETS
SECURITIES ISSUED (Net)
Bills
Asset Backed Securities
Bonds
FUNDS
Borrower Funds
Other
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
TL
FC
Total
TL
FC
Total
V-II-a
V-II-c
167.618.387
428.009.989
595.628.376
134.513.823
234.362.668
368.876.491
2.505.052
63.146.374
65.651.426
2.113.127
38.318.218
40.431.345
39.121.801
9.113.694
48.235.495
17.958.135
5.038.402
22.996.537
V-II-ç
5.194.456
25.441.356
30.635.812
5.436.832
25.403.816
30.840.648
3.133.754
0
0
0
3.133.754
3.960.641
0
0
0
0
3.960.641
0
2.060.702
25.441.356
27.502.058
1.476.191
25.403.816
26.880.007
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
DERIVATIVE FINANCIAL LIABILITIES
V-II-b-g
6.163.475
6.423.058
12.586.533
1.336.155
6.598.330
7.934.485
Derivative Financial Liabilities at Fair Value Thorugh Profit or Loss
6.163.475
6.423.058
12.586.533
1.336.155
6.598.330
7.934.485
Derivative Financial Liabilities at Fair Value Thorugh Other
Comprehensive Income
IX.
X.
10.1
10.2
10.3
10.4
XI.
XII.
XIII.
13.1
13.2
XIV.
14.1
14.2
XV.
XVI.
16.1
16.2
LEASE PAYABLES
PROVISIONS
Restructuring Provisions
Reserve for Employee Benefits
Insurance Technical Provisions (Net)
Other Provisions
CURRENT TAX LIABILITIES
DEFERRED TAX LIABILITIES
LIABILITIES RELATED TO ASSETS HELD FOR SALE AND
DISCONTINUED OPERATIONS
Held For Sale
Discontinued Operations
SUBORDINATED DEBT
Loans
Other Debt Instruments
OTHER LIABILITIES
SHAREHOLDERS' EQUITY
Paid-in capital
Capital Reserves
16.2.1
Share Premium
16.2.2
Share Cancellation Profits
16.2.3
Other Capital Reserves
16.3
16.4
Accumulated Other Compherensive Income or Loss Not Reclassified
Through Profit or Loss
Accumulated Other Compherensive Income or Loss Reclassified
Through Profit or Loss
16.5
Profit Reserves
16.5.1
Legal Reserves
16.5.2
Status Reserves
16.5.3
Extraordinary Reserves
16.5.4
Other Profit Reserves
16.6
Profit or Loss
16.6.1
Prior Periods' Profit or Loss
16.6.2
Current Period Profit or Loss
16.7
Minority Shareholder
V-II-f
V-II-ğ
V-II-h
V-II-h
V-II-ı
0
0
0
0
0
0
0
0
0
0
0
0
1.614.884
85.555
1.700.439
1.330.308
58.909
1.389.217
14.400.399
1.086.919
15.487.318
9.644.891
579.699
10.224.590
0
2.392.832
0
0
0
0
0
0
2.392.832
1.481.897
0
0
0
0
0
0
1.481.897
0
12.007.567
1.086.919
13.094.486
8.162.994
579.699
8.742.693
1.816.875
14.344
1.831.219
2.415.583
4.524
2.420.107
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
V-II-i
2.296.445
35.174.552
37.470.997
2.286.510
19.852.049
22.138.559
0
0
0
0
0
0
2.296.445
35.174.552
37.470.997
2.286.510
19.852.049
22.138.559
V-II-e
V-II-j
24.978.068
5.524.050
30.502.118
15.321.692
3.547.309
18.869.001
89.923.933
-3.084.642
86.839.291
67.900.540
-119.088
67.781.452
4.500.000
1.113.235
108.944
0
1.004.291
0
204
204
0
0
4.500.000
4.500.000
1.113.439
1.125.985
109.148
90.520
0
0
1.004.291
1.035.465
0
204
204
0
0
4.500.000
1.126.189
90.724
0
1.035.465
7.840.024
-617
7.839.407
4.233.464
-617
4.232.847
11.507.178
-3.084.229
8.422.949
4.880.015
-118.675
4.761.340
46.081.015
5.065.786
0
41.015.229
0
18.882.481
5.414.586
13.467.895
0
0
0
0
0
0
0
0
46.081.015
40.079.251
5.065.786
4.673.489
0
0
41.015.229
35.405.762
0
0
18.882.481
13.081.825
5.414.586
6.270.908
13.467.895
6.810.917
0
0
0
0
0
0
0
0
40.079.251
4.673.489
0
35.405.762
0
13.081.825
6.270.908
6.810.917
TOTAL ASSETS
441,121,407
485,447,617
926,569,024
340,245,197
253,657,235
593,902,432
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
355.633.775
570.935.249
926.569.024
260.257.596
333.644.836
593.902.432
212 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 213
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Türkiye İş Bankası A.Ş.
Unconsolidated statement of off-balance sheet items
Türkiye İş Bankası A.Ş.
Unconsolidated statement of off-balance sheet items
OFF BALANCE SHEET ITEMS
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
OFF BALANCE SHEET ITEMS
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
TL
FC
Total
TL
FC
Total
TL
FC
Total
TL
FC
Total
THOUSAND TL
THOUSAND TL
A. OFF-BALANCE SHEET CONTINGENCIES and
COMMTMENTS (I+II+III)
V-III
284.514.410
709.267.988
993.782.398
216.016.443
398.524.226
614.540.669
GUARANTEES AND SURETYSHIPS
46.066.357
147.369.066
193.435.423
39.746.728
79.828.486
119.575.214
Letters of Guarantee
45.796.275
85.701.218
131.497.493
39.206.983
48.225.907
87.432.890
Guarantees Subject to State Tender Law
865.540
764.138
1.629.678
687.709
535.767
1.223.476
Guarantees Given for Foreign Trade Operations
4.204.824
46.666.437
50.871.261
4.416.349
24.422.710
28.839.059
Other Letters of Guarantee
Banks Acceptanees
Import Letter of Acceptance
Other Bank Acceptances
Letters of Credit
Documentary Letters of Credit
Other Letters of Credit
Prefinancing Given as Guarantee
Endorsements
Endorsements to the Central Bank of Tureky
Other Endorsements
Purchase Guarantees for Securities Issued
Factoring Guarantees
Other Guarantees
Other Suretyships
COMMITMENTS
40.725.911
38.270.643
78.996.554
34.102.925
23.267.430
57.370.355
111.350
14.670.501
14.781.851
84.800
9.374.903
9.459.703
0
111.350
158.732
105.367
53.365
498.510
498.510
0
216.670
216.670
14.171.991
14.283.341
84.800
9.158.233
9.243.033
42.736.471
42.895.203
454.945
19.082.336
19.537.281
29.051.381
29.156.748
435.024
13.372.331
13.807.355
13.685.090
13.738.455
19.921
5.710.005
5.729.926
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
4.260.876
4.260.876
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3.145.340
3.145.340
0
0
97.612.185
45.290.289
142.902.474
70.648.692
20.505.458
91.154.150
Irrevocable Commitments
96.073.979
35.197.535
131.271.514
69.830.795
14.234.226
84.065.021
Forward Asset Purchase Commitments
9.291.941
17.794.260
27.086.201
2.240.523
4.198.612
6.439.135
Forward Asset Purchase Commitments
Capital Commitments to Associates and Subsidiaries
0
0
0
0
0
0
0
0
0
0
0
0
Loan Granting Commitments
Securities Underwriting Commitments
Commitments for Reserve Deposit Requirements
Commitments for Cheque Payments
Tax and Fund Liabilities from Export Commitments
Commitments for Credit Card Expenditure Limits
Commitments for Credit Card and Banking Services
Promotions
Receivables from Short Sale Commitments
Payables from Short Sale Commitments
Other Irrevocable Commitments
Revocable Commitments
34.174.955
1.702.741
35.877.696
24.688.380
1.009.054
25.697.434
0
0
3.291.900
41.377
46.524.830
208.406
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3.291.900
2.641.068
41.377
26.068
46.524.830
37.915.127
208.406
179.370
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2.641.068
26.068
37.915.127
179.370
0
0
2.540.570
15.700.534
18.241.104
2.140.259
9.026.560
11.166.819
1.538.206
10.092.754
11.630.960
817.897
6.271.232
7.089.129
Revocable Loan Granting Commitments
1.488.206
10.092.754
11.580.960
752.897
6.271.232
7.024.129
Other Revocable Commitments
50.000
0
50.000
65.000
0
65.000
DERIVATIVE FINANCIAL INSTRUMENTS
140.835.868
516.608.633
657.444.501
105.621.023
298.190.282
403.811.305
Derivative Financial Instruments Held for Risk
Management
Fair Value Hedges
Cash Flow Hedges
Net Foreign Investment Hedges
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
I.
1.1
1.1.1
1.1.2
1.1.3
1.2
1.2.1
1.2.2
1.3
1.3.1
1.3.2
1.4
1.5
1.5.1
1.5.2
1.6
1.7
1.8
1.9
II.
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
2.1.7
2.1.8
2.1.9
2.1.10
2.1.11
2.1.12
2.1.13
2.2
2.2.1
2.2.2
III.
3.1
3.1.1
3.1.2
3.1.3
3.2
3.2.1
Derivative Financial Instruments Held for Trading
140.835.868
516.608.633
657.444.501
105.621.023
298.190.282
403.811.305
Forward Foreign Currency Buy/Sell Transactions
13.885.441
46.330.649
60.216.090
6.312.076
28.172.122
34.484.198
3.2.1.1
Forward Foreign Currency Buy Transactions
9.851.253
20.305.444
30.156.697
4.782.648
12.591.821
17.374.469
3.2.1.2
Forward Foreign Currency Sell Transactions
4.034.188
26.025.205
30.059.393
1.529.428
15.580.301
17.109.729
3.2.2
Currency and Interest Rate Swaps
117.694.703
424.446.452
542.141.155
95.665.431
237.078.233
332.743.664
3.2.2.1
Currency Swap Buy Transactions
3.2.2.2
Currency Swap Sell Transactions
3.2.2.3
Interest Rate Swap Buy Transactions
3.2.2.4
Interest Rate Swap Sell Transactions
6.016.040
158.921.467
164.937.507
4.334.346
87.338.121
91.672.467
111.278.663
66.277.089
177.555.752
89.556.285
22.896.516
112.452.801
200.000
200.000
99.623.948
99.823.948
887.400
63.421.798
64.309.198
99.623.948
99.823.948
887.400
63.421.798
64.309.198
3.2.3
Currency, Interest Rate and Seurity Options
8.573.317
21.264.309
29.837.626
1.523.960
14.050.208
15.574.168
3.2.3.1
Currency Call Options
3.2.3.2
Currency Put Options
3.2.3.3
Interest Rate Call Options
3.2.3.4
Interest Rate Put Options
3.2.3.5
Securities Call Options
3.2.3.6
Securities Put Options
3.2.4
Currency Futures
3.2.4.1
Currency Buy Futures
3.2.4.2
Currency Sell Futures
3.2.5
Interest Rate Futures
3.2.5.1
Interest Rate Buy Futures
3.2.5.2
Interest Rate Sell Futures
3.2.6
Other
4.553.586
6.303.322
10.856.908
951.985
2.936.454
3.888.439
4.019.731
6.549.875
10.569.606
571.975
3.273.722
3.845.697
0
0
0
0
682.407
0
682.407
0
0
0
0
4.205.556
4.205.556
4.205.556
4.205.556
0
0
687.983
687.983
0
0
0
0
0
0
0
0
0
23.879.240
23.879.240
0
0
0
0
3.920.016
3.920.016
3.920.016
3.920.016
0
0
0
0
1.370.390
2.119.556
1.949.448
4.069.004
687.983
682.407
1.521
1.948.141
1.949.662
2.118.035
1.307
2.119.342
0
0
0
0
0
0
0
0
0
0
16.940.271
16.940.271
B. CUSTODY AND PLEDGES RECEIVED (IV+V+VI)
796.887.897
993.775.709
1.790.663.606
616.280.990
563.097.495
1.179.378.485
ITEMS HELD IN CUSTODY
Customers' Securities Held
60.617.295
121.635.447
182.252.742
43.881.000
70.901.615
114.782.615
0
0
0
0
0
0
Investment Securities Held in Custody
33.813.447
4.930.182
38.743.629
25.350.314
4.451.310
29.801.624
Cheques Received for Collection
23.306.991
68.668.580
91.975.571
15.218.680
37.822.146
53.040.826
Commercial Notes Received For Collection
2.980.895
26.788.763
29.769.658
2.858.449
17.207.412
20.065.861
Other Assets Received For Collection
Assets Received for Public Offering
Other Items Under Custody
Custodiands
PLEDGED ITEM
Marketable Securities
Guarantee Notes
Commodity
Warranty
Real Estates
Other Pledged Items
Pledged Items-Depository
ACCEPTED BILL, GUARANTEES AND SURETIES
0
0
0
0
0
0
0
0
0
0
0
0
515.962
21.247.922
21.763.884
453.557
11.420.747
11.874.304
0
0
0
0
0
0
736.270.602
872.140.262
1.608.410.864
572.399.990
492.195.880
1.064.595.870
53.604.619
352.719
53.957.338
45.877.542
156.869
46.034.411
2.516.138
33.012.695
35.528.833
2.669.349
19.101.121
21.770.470
144.690.167
75.209.001
219.899.168
109.623.146
31.574.919
141.198.065
0
0
0
0
0
0
398.843.430
580.623.489
979.466.919
344.351.988
340.246.167
684.598.155
136.616.248
182.942.358
319.558.606
69.877.965
101.116.804
170.994.769
0
0
0
0
0
0
0
0
0
0
0
0
IV.
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
V.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
VI.
TOTAL OFF-BALANCE SHEE COMMITMENTS (A+B)
1.081.402.307
1.703.043.697
2.784.446.004
832.297.433
961.621.721
1.793.919.154
214 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Unconsolidated Income Statement
INCOME STATEMENT
I.
1.1
1.2
1.3
1.4
1.5
1.5.1
1.5.2
1.5.3
1.6
1.7
II.
2.1
2.2
2.3
2.4
2.5
2.6
III.
IV.
4.1
4.1.1
4.1.2
4.2
4.2.1
4.2.2
V.
VI.
6.1
6.2
6.3
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.
XV.
XVI.
XVII.
XVIII.
18.1
18.2
18.3
XIX.
XX.
20.1
20.2
20.3
XXI.
21.1
21.2
21.3
XXII.
XXIII.
23.1
23.2
23.3
XXIV.
XXV.
INTEREST INCOME
Interest Income on Loans
Interest Income on Reserve Deposits
Interest Income on Banks
Interest Income on Money Market Placements
Interest Income on Marketable Market Placements
Financial Assets at Fair Value Through Profit or Loss
Financial Assets at Fair Value Through Other Compherensive Income
Financial Assets at Measured at Amortised Cost
Financial Lease Income
Other Interest Income
INTEREST EXPENSE (-)
Interest on Deposits
Interest on Funds Borrowed
Interest on Money Market Funds
Interest on Securities Issued
Financial Lease Expense
Other Interest Expenses
NET INTEREST INCOME (I - II)
NET FEES AND COMMISSIONS INCOME
Fees and Commissions Received
Non-cash Loans
Other
Fees and Commissions Paid (-)
Non-cash Loans
Other
DIVIDEND INCOME
TRADIG INCOME/(LOSS) (Net)
Gains/(Losses) on Securities Trading
Derivative Financial Transactions Gains/Losses
Foreign Exchange Gains/(Losses)
OTHER OPERATING INCOME
GROSS OPERATING INCOME (III+IV+V+VI+VII)
EXPECTED CREDIT LOSS (-)
OTHER PROVISION EXPENSES (-)
PERSONNEL EXPENSE (-)
OTHER OPERATING EXPENSES (-)
NET OPERATING INCOME/(LOSS) (VIII-IX-X-XI-XII)
AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER
PROFIT/LOSS FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
NET MONETARY POSITION GAIN/LOSS
PROFIT/LOSS ON CONTUNUING OPERATIONS BEFORE K/Z (XIII+...+XVI)
TAX PROVISION FOR CONTINUING OPERATIONS (±)
Current Tax Provision
Deferred Tax Income Effect (+)
Deferred Tax Expense Effect (-)
NET PERIOD PROFIT/LOSS FROM CONTUNUING OPERATIONS (XVII±XVIII)
INCOME ON DISCONTINUED OPERATIONS
Income on Assets Held for Sale
Gain on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Other expense on Discontinued Operations
EXPENSE ON DISCONTINUED OPERATIONS (-)
Expense on Assets Held For Sale
Loss on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Other expense on Discontinued Operations
PROFIT/LOSS ON DISCONTINUED OPERATIONS BEFORE TAX (XX-XXI)
TAX PROVISION FOR DISCONTINUED OPERATIONS (±)
Current Tax Provision
Deferred Tax Expense Effect (+)
Deferred Tax Income Effect (-)
NET PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XXII±XXIII)
NET PERIOD PROFIT/LOSS (XIX+XXIV)
Earnings per Share (*)
(*) Expressed in exact TL.
216 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Footnotes
V-IV-a
V-IV-b
V-IV-c
V-IV-ç
V-IV-d
V-IV-e
V-IV-e
V-IV-f
V-IV-g
V-IV-ğ
V-IV-h
Türkiye İş Bankası A.Ş.
Unconsolidated Statement of Profit or Loss and Other Comprehensive Income
THOUSAND TL
CURRENT PERIOD
(01/01-31/12/2021)
PRIOR PERIOD
(01/01-31/12/2020)
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
THOUSAND TL
CURRENT PERIOD
(01/01-31/12/2021)
PRIOR PERIOD
(01/01-31/12/2020)
I.
II.
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.2.6
PROFIT/LOSS FOR THE PERIOD
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not be reclassified to profit or loss
Revaluation Surplus on Tangible Assets
Revaluation Surplus on Intangible Assets
Gains/(Losses) on remeasurements of Defined Benefit Plans
Other Income/Expense Items of Other Comprehensive Income not to be Reclassified
to Profit or Loss
Taxes Relating to Components of Other Comprehensive Income not to be
Reclassified to Profit or Loss
Other Income/Expense Items not be reclassified to profit or loss
Exchange Differences on Translation
Valuation and/or Reclassification Profit or Loss from Financial Assets at Fair Value
through Other Comprehensive Income
Income/(Loss) Related with Cash Flow Hedges
Income/(Loss) Related with Hedges of Net Investments in Foreign Operations
13,467,895
7,268,169
3,606,560
1,606,325
0
-713,198
2,731,426
-17,993
3,661,609
1,702,150
-532,979
0
0
Other Income/Expense Items of Other Comprehensive Income to be Reclassified to
Other Profit or Loss
2,433,200
Taxes Relating to Components of Other Comprehensive Income to be Reclassified to
Profit or Loss
59,238
III.
TOTAL COMPREHENSIVE INCOME (I+II)
20,736,064
6,810,917
1,647,924
-137,457
-17,036
0
-72,288
-64,294
16,161
1,785,381
587,725
930,213
0
0
459,584
-192,141
8,458,841
60,904,343
44,448,255
849,109
133,704
890
15,434,222
128,118
9,421,203
5,884,901
0
38,163
29,963,074
18,085,126
1,530,274
5,081,676
4,761,496
255,389
249,113
30,941,269
7,619,945
9,742,778
1,291,970
8,450,808
2,122,833
1,521
2,121,312
20,735
-5,149,127
357,107
-1,046,262
-4,459,972
4,401,570
37,834,392
10,837,246
3,612,921
6,366,681
9,545,008
7,472,536
0
8,003,345
0
15,475,881
2,007,986
1,103,778
2,855,911
1,951,703
13,467,895
0
0
0
0
0
0
0
0
0
0
0
0
0
42,516,332
31,987,586
84,888
134,033
666
10,276,024
27,489
6,161,252
4,087,283
0
33,135
17,274,293
9,521,065
1,448,001
1,496,380
3,972,083
235,210
601,554
25,242,039
5,617,613
6,790,418
1,111,518
5,678,900
1,172,805
1,518
1,171,287
21,487
-3,341,357
335,938
-10,390,437
6,713,142
2,436,205
29,975,987
10,213,836
2,516,084
5,191,989
6,604,997
5,449,081
0
3,406,471
0
8,855,552
2,044,635
3,823,786
434,581
2,213,732
6,810,917
0
0
0
0
0
0
0
0
0
0
0
0
0
V-IV-ı
0
13,467,895
0.119712228
0
6,810.917
0.060540274
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 217
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Unconsolidated Statement of Changes in Shareholders' Equity
Türkiye İş Bankası A.Ş.
Unconsolidated Statement of Changes in Shareholders' Equity
CHANGES IN SHAREHOLDERS' EQUITY
Footnotes
Paid-in Capial
Share Premium
Share
Certificate
Cancellation
Profits
Other Capital
Reserves
Accumulated Other Comprehensive Income that will
not be reclassified in Profit/(Loss)
Tangable
assets
accumulated
revaluation
reserve
increase/
(Decrease)
Accumulated
gains/(losses) on
remeasurements
of defined benefit
plans
Other (1)
Accumulated Other Comprehensive Income that will be reclassified in Profit/(Loss)
Exchange differences
on translation
reserve
Accumulated gains/(losses) due to
revaluation and/or reclassification of
financial assets measured at fair value
through other comprehensive income
Other (2)
Profit Reserves
Prior Period Profit / (Loss)
Net Current Period Profit
/ (Loss)
Total Shareholder's Equity
I
II
2.1
2.2
III
IV
V
VI
VII
VIII
IX
X
XI
11.1
11.2
11.3
I
II
2.1
2.2
III
IV
V
VI
VII
VIII
IX
X
XI
11.1
11.2
11.3
V-V
PRIOR PERIOD ( 31/12/2020 )
Beginning Balance
Adjustment in accordance with TAS 8
The Effect on Adjustments
The Effect of Changes in Accounting Policies
New Balance (I+II)
Total Comprehensive Income
Capital Increase in Cash
Capital Increase Through Internal Reserves
Paid-in Capital Inflation adjustment difference
Convertible Bonds
Subordinated Debt
4,500,000
5,814
1,038,013
2,734,864
-226,266
1,861,706
930,843
395,484
1,649,632
34,007,790
11,975,585
58,873,465
4,500,000
5,814
1,038,013
2,734,864
-226,266
1,861,706
-15,332
-57,831
-64,294
930,843
587,725
395,484
738,072
1,649,632
459,584
34,007,790
11,975,585
6,810,917
58,873,465
8,458,841
Increase/(Decrease) Through Other Changes
84,910
-2,548
Profit Distribution
Dividend Paid
Transfer to Reserves
Other
6,071,461
366,784
-6,071,461
6,071,461
-6,071,461
449,146
Ending Balance (III+IV+…...+X+XI)
4,500,000
90,724
1,035,465
2,719,532
-284,097
1,797,412
1,518,568
1,133,556
2,109,216
40,079,251
6,270,908
6,810,917
67,781,452
CURRENT PERIOD ( 31/12/2021 )
Beginning Balance
Adjustment in accordance with TAS 8
The Effect on Adjustments
The Effect of Changes in Accounting Policies
New Balance (I+II)
Total Comprehensive Income
Capital Increase in Cash
Capital Increase Through Internal Reserves
Paid-in Capital Inflation adjustment difference
Convertible Bonds
Subordinated Debt
4,500,000
90,724
1,035,465
2,719,532
-284,097
1,797,412
1,518,568
1,133,556
2,109,216
40,079,251
13,081,825
67,781,452
4,500,000
90,724
1,035,465
2,719,532
-284,097
1,445,692
-570,558
1,797,412
2,731,426
1,518,568
1,702,150
1,133,556
-473,741
2,109,216
2,433,200
40,079,251
13,081,825
13,467,895
67,781,452
20,736,064
Increase/(Decrease) Through Other Changes
18,424
-31,174
Profit Distribution
Dividend Paid
Transfer to Reserves
Other
6,001,764
6,001,764
Ending Balance (III+IV+…...+X+XI)
4,500,000
109,148
1,004,291
4,165,224
-854,655
4,528,838
3,220,718
659,815
4,542,416
46,081,015
-869,736
-6,797,503
-661,415
-6,001,764
-134,324
5,414,586
-882,486
-795,739
-661,415
-134,324
86,839,291
13,467,895
(1) Accumulated amounts of other comprehensive income of investments accounted by the equity method, which will not be reclassified to profit or loss, and other
comprehensive income items that will not reclassified as other profit or loss.
(2) Gain/losses on cash flow hedges, share of other comprehensive income from equity method investments to be reclassified to profit/loss and accumulated amounts of
other comprehensive income items to be reclassified as other profit or loss.
(*) Prior Periods' Profit or Loss includes classifications made within the scope of "TAS-27-Individual Financial Statements".
(**) According to the articles of Association of the Bank, it is the dividend amount distributed to the Bank personnel.
218 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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13,467,895
6,817,179
PRIOR YEARS LOSSES (-)
FIRST LEGAL RESERVES (-)
OTHER STATUTORY RESERVES (-)
0
0
0
0
392,297
152,066
NET PROFIT ATTRIBUTABLE TO [(A-(1.3+1.4+1.5)]
13,467,895
6,272,816
Türkiye İş Bankası A.Ş.
Unconsolidated Statement of Cash Flows
Türkiye İş Bankası A.Ş.
Unconsolidated Statement of Profit Distribution Table
CASH FLOWS FROM BANKING OPERATIONS
I.
DISTRIBUTION OF CURRENT YEAR PROFIT (1)
Footnotes
CURRENT PERIOD
(01/01-31/12/2021)
PRIOR PERIOD
(01/01-31/12/2020)
THOUSAND TL
A.
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
Operating Profit Before Changes in Operating Assets and Liabilities
14,064,345
28,104,080
Interest Received
Interest Paid
Dividend Received
Fees and Commissions Received
Other Income
Collections from Previously Written off Loans and Other Receivables
Cash Payments to Personnel and Service Suppliers
Taxes Paid
Other
54,774,522
-28,575,621
837,502
9,740,804
999,236
2,802,041
-10,730,457
-2,688,207
-13,095,475
V-VI
38,484,202
-16,404,956
543,139
6,801,535
787,561
1,597,389
-9,077,374
-3,077,002
8,449,586
1.2
Changes in Operating Assets and Liabilities
79,007,898
-2,891,050
1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
1.2.6
1.2.7
1.2.8
1.2.9
1.2.10
Net (Increase) / Decrease in Financial Assets at Fair Value Through Profit or Loss
Net (Increase) / Decrease in Due From Banks
Net (Increase) / Decrease in Loans
Net (Increase) / Decrease in Other Assets
Net (Increase) / Decrease in Bank Deposits
Net (Increase) / Decrease in Other Deposits
Net (Increase) / Decrease in Financial Liabilities at Fair Value Through Profit or Loss
Net (Increase) / Decrease in Funds Borrowed
Net (Increase) / Decrease in Matured Payables
Net (Increase) / Decrease in Other Liabilities
-3,878,212
-16,411,725
-56,752,805
-2,370,308
-1,077,510
127,280,892
0
600,469
0
31,617,097
V-VI
-634,886
-5,493,793
-43,633,155
-3,189,215
-1,055,791
35,499,546
0
-8,474,053
0
24,090,297
I.
B.
II.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
C.
III.
3.1
3.2
3.3
3.4
3.5
3.6
IV.
V.
VI.
Net Cash Provided From Banking Operations
93,072,243
25,213,030
CASH FLOWS FROM INVESTING ACTIVITIES
Net Cash Provided from Investing Activities
-7,296.356
-17,791,592
Cash Paid for the Purchase of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Cash Obtained from sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Cash Paid for the Purchase of Tangible Asset
Cash Obtained from sale of Tangible Asset
Cash Paid for the Purchase of Financial Assests at Fair Value Through Other Comprehensive Income
Cash Obtained from sale of Financial Assests at Fair Value Through Other Comprehensive Income
Cash Paid for Purchase of Financial Assests Measured at Amortised Cost
Cash Obtained from sale of Financial Assests Measured at Amortised Cost (*)
Other
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided from financing activities
Cash Obtained from funds borrowed and securities issued
Cash used for repayment of funds borrowrd and securities issued
Equity Instrumens
Dividends Paid
Payments for Finance Leases
Other
Effect of Change in foreign exchange rare on cash and cash equivalents
-135,636
0
-500,697
223,992
-24,036,024
17,782,022
-15,700,230
15,819,175
-748,958
-635,402
0
-530,639
214,005
-20,625,367
12,958,458
-15,274,452
6.752,597
-650,792
-15,071,710
-2,831,398
7,897,669
-21,609,192
0
-795,739
-564,448
0
20,922,579
-23,253,700
0
0
-500,277
0
-1,171,636
-1,105,433
V-VI
V-VI
V-VI
Net increase in cash and cash equivalents
69,532,541
3,484,607
Cash and cash equivalents at beginning of the period
45,361,908
41,877,301
VII.
Cash and cash equivalents at end of the period
114,894,449
45,361,908
(*) Includes Redeemed Financial Assets measured at amortized cost.
CURRENT PERIOD PROFIT (2)
TAXES AND DUES PAYABLE (-)
Corporate Tax (Income Tax)
Income Tax Withholding
Other Taxes and Dues Payable (3)
1.1
1.2
1.2.1
1.2.2
1.2.3
A.
1.3
1.4
1.5
B.
1.6
1.6.1
1.6.2
1.6.3
1.6.4
1.6.5
1.7
1.8
1.9
1.9.1
1.9.2
1.9.3
1.9.4
1.9.5
1.10
1.11
1.12
1.13
First Dividend to Shareholders (-)
To Owners of Ordinary Shares
To Owners of Preffered Shares
To Preffered Shares (Preemptive Rights)
To Profit Sharing Bonds
To Holders of Profit / Loss Share Certificates
DIVIDENDS TO PERSONNEL (-)
DIVIDENDS TO THE BOARD OF THE DIRECTORS (-)
SECOND DIVIDEND TO SHAREHOLDERS (-)
To Owners of Ordinary Shares
To Owners of Privileged Shares
To Owners of Preffered Shares
To Profit Sharing Bonds
To Holders of Profit / Loss Share Certificates
STATUTORY RESERVES (-)
EXTRAORDINARY RESERVES
OTHER RESERVES
SPECIAL FUNDS
II.
DISTRIBUTION FROM RESERVES
2.1
2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.3
2.4
III.
3.1
3.2
3.3
3.4
IV.
4.1
4.2
4.3
4.4
DISTRIBUTED RESERVES
DIVIDENDS TO SHAREHOLDERS (-)
To Owners of Ordinary Shares
To Owners of Privileged Shares
To Owners of Preffered Shares
To Profit Sharing Bonds
To Holders of Profit / Loss Share Certificates
DIVIDENDS TO PERSONNEL (-)
DIVIDENDS TO THE BOARD OF DIRECTORS (-)
EARNINGS PER SHARE
TO OWNERS OF ORDINARY SHARES (4)
TO OWNERS OF ORDINARY SHARES ( % )
TO OWNERS OF PREFERRED SHARES (4)
TO OWNERS OF PREFERRED SHARES ( % )
DIVIDEND PER SHARE
TO OWNERS OF ORDINARY SHARES (4)
TO OWNERS OF ORDINARY SHARES ( % )
TO OWNERS OF PREFERRED SHARES (4)
TO OWNERS OF PREFERRED SHARES ( % )
THOUSAND TL
CURRENT PERIOD
(31/12/2021)
PRIOR PERIOD
(31/12/2020)
15,475.881
2,007,986
1,057,464
46,314
904,208
8,861,814
2,044,635
3,788,280
35,506
-1,779,151
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.1197
299
0
0
0
0
0
0
270,000
269,998
2
0
0
0
134,324
0
411,092
411,085
3
4
0
0
0
5,457,400
0
0
0
0
0
0
0
0
0
0
0
0.0605
151
0
0
0.0061
15.14
0.0018
17.55
220 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 221
(1) The decision for dividend payment is made at the Annual General Meeting. Annual General Meeting has not been held as of the reporting dat.
(2) Prior Perods' Profit amounting to TL 6,262 which is included to the base of profit distribution, is diclosed in the prior period's net profit amount in the statement.
(3) Deferred Tax Expense/Income
(4) Expresed in Exact TL.
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Section Three: Explanations On Accounting Policies
I. Basis of Presentation:
The unconsolidated financial statements, related notes, and explanations in this report are prepared in accordance with the “Regulation on Accounting Applications for
Banks and Safeguarding of Documents” and other regulations on accounting records of Banks published by Banking Regulation and Supervision Agency and circulars and
interpretations published by Banking Regulation and Supervision Authority, (together referred as “BRSA Accounting and Financial Reporting Legislation”) and requirements
of Turkish Financial Reporting Standards (TFRS) published the Public Oversight Accounting and Auditing Standards Authority for the matters not regulated by the
aforementioned legislations.
COVID-19 outbreak, which started in China and spread globally in the first half of 2020, caused serious effects on both economic and social life. In addition to the social life
effects of the cautions taken to ensure the control of outbreak in many countries, there are also consequences observed which is negatively affecting economic activity
both on regional and global scale. As in other countries where the pandemic is effective, various cautions also have been taken in our country in social and economic terms.
The Bank sustains its activities for the period precisely by closely monitoring the processes related to outbreak, postponing retail and non-retail customers' due debts,
restructuring with grace period and existing or additional limit allocations in respect with customers’ needs. Assessments regarding to possible effects of the COVID-19
outbreak through the measurement of expected credit losses are explained in the Section Three “VIII. “Explanations on Impairment of Financial Assets”.
“Interest Rate Benchmark Reform- Stage 2”, brought changes in various TAS / TFRSs effective from January 1, 2021, was released in December 2020 within the scope
of the project of transition of the benchmark interest rates carried out by the International Accounting Standards Board (IASB). It was concluded that as of December 31,
2021, the changes have not occurred significantly on the Bank's financial statements.
According to the statement made by the POA on 20.01.2022, it was stated that the enterprises applying TFRS do not need to make any adjustments in the financial
statements for 2021 in accordance with the TAS 29 Financial Reporting Standard for High-Inflation Economies. In this context, no inflation adjustment was made in
accordance with TAS 29 when preparing the financial statements dated December 31, 2021.
Additional paragraph for convenience translation to English
The differences between accounting principles, as described in these preceding paragraphs and accounting principles generally accepted in countries in which
unconsolidated financial statements are to be distributed and International Financial Reporting Standards (“IFRS”) have not been quantified in these unconsolidated
financial statements. Accordingly, these unconsolidated financial statements are not intended to present the financial position, results of operations and changes in
financial position and cash flows in accordance with the accounting principles generally accepted in such countries and IFRS.
The accounting policies applied in the current period are in line with the prior period financial statements. The accounting policies and valuation principles used in the
preparation of financial statements are presented below in detail.
II. Strategy for Use of Financial Instruments and Foreign Currency Transactions
1. The Bank’s Strategy on Financial Instruments
The Bank’s main activities comprise private, retail, commercial and corporate banking, money market and securities market operations, as well as activities related to
international banking services.
In conformity with the general liability structure of the banking system, the Bank’s liabilities are mainly composed of short-term deposits and other medium and long-
term liabilities. The liquidity risk that may arise from this liability structure can be easily controlled through deposit continuity, as well as widespread network of the
correspondent banks, market maker status (The Bank is one of the market makers banks) and by the use of liquidity facilities of the Central Bank of Republic of Turkey
(“CBRT”). As a result, the liquidity of the Bank and the banking system can be easily monitored. On the other hand, foreign currency liquidity requirements are met by the
money market operations and currency swaps.
Most of the funds collected bear fixed interest, and by closely monitoring the developments in the sector, both fixed and floating rate placements are made based on the
yields of alternative investment instruments.
Safety principle has always been the top priority in placements and the placements are focused on high yielding and low risk assets by considering their maturity structure.
Accordingly, a pricing policy aiming at high return is implemented in the long-term placements and attention is paid to the maximum use of non-interest income generation
opportunities. The Bank determines its lending strategy by taking into consideration the international and national economic data and expectations, market conditions,
current and potential credit customers’ expectations and tendencies, and risks such as; interest rate, liquidity, currency and credit risks. Furthermore, in conformity with
this strategy, the Bank acts within the legal limits in terms of asset-liability management.
The primary objectives related to balance sheet components are set by the long-term plans shaped along with budgeting; and the Bank takes the required positions
against the short-term currency, interest rates and price fluctuations in accordance with these plans and the course of the market conditions.
Foreign currency, interest rate and price fluctuations in the markets are monitored instantaneously. While taking positions, in addition to the legal limits, the Bank’s own
transaction and control limits are also effectively monitored in order to avoid limit overrides.
The Bank’s asset-liability management is executed by the Asset-Liability Management Committee, within the risk limits determined by the Board of Directors, in order to
keep the liquidity risk, interest rate risk, currency risk and credit risk within certain limits depending on the equity adequacy and to maximize profitability.
2. Foreign Currency Transactions
Foreign currency monetary assets and liabilities on the balance sheet are converted into Turkish Lira by using the prevailing exchange rates at the balance sheet date.
Non-monetary items in foreign currencies carried at fair value are converted into Turkish Lira by the rates at the date of which the fair value is determined. Exchange rate
differences arising from the conversions of monetary foreign currency items and the collections of and payments in foreign currency transactions are reflected to the
income statement.
The Bank started to apply equity method for the foreign associates and subsidiaries which were followed with historical rates in accordance with the TAS 27 “Separate
Financial Statements” In this context, foreign subsidiaries are accounted at current rates in the financial statement and the resulting exchange differences are accounted
under equity.
The financial statements of the foreign branches of the Bank are prepared in the currency of the primary economic environment in which the entity operates (functional
currency). The financial statements of foreign branches are expressed in TL which is the functional currency of the Bank and the presentation currency of the financial
statements. Assets and liabilities of the foreign branches of the Bank are converted into TL by using the prevailing exchange rates at the balance sheet date. Income and
expenses are converted by at exchange rates at the dates of the transactions. The exchange rate differences arising from the conversion are recorded in the shareholders’
equity.
III. Associates and Subsidiaries
The Bank accounts, its associates, and subsidiaries in accordance with equity method which described in TAS 28.
Under the equity method, Bank’s share of net assets of the associates and subsidiaries is recognized in the Bank’s financial statements. The profit or loss of the Bank
includes the Bank’s share of the profit or loss of the associates and subsidiaries and Bank’s other comprehensive income or expenses include the Bank’s share of other
comprehensive income or expenses of the associates and subsidiaries. Mergers / acquisitions and change in share ratios of related associates and subsidiaries during the
period are shown under the item "Increase / Decrease through Other Changes" in the statement of changes in shareholders’ equity.
IV. Forward, Option Contracts and Derivatives Instruments
Derivative transactions of the Bank consist of foreign currency and interest rate swaps, forwards, foreign currency options and interest rate options. The Bank has no
derivative instruments decomposed from the main contract.
The Bank classifies derivative transactions, which act as a hedge but does not meet qualification criteria for hedge accounting, as "Derivative Financial Assets at Fair Value
through Profit or Loss" in accordance with the “TFRS 9 Financial Instruments” requirements.
Derivative transactions are recorded at their fair value at the date of contract, receivables and payables arising from these transactions are recorded in off-balance sheet
accounts. Derivative transactions are measured at fair value at subsequent reporting dates and if the valuation difference is positive, they are classified as "Derivative
Financial Assets at Fair Value through Profit or Loss", if it is negative they are classified as "Derivative Financial Liabilities at Fair Value through Profit or Loss". The
differences arising from the valuation of derivative transactions are associated with the income statement.
On off-balance sheet items table, options which generated assets for the Bank are presented under “call options” line and which generated liabilities are presented under
“put options” line.
V. Interest Income and Expenses
Interest income is calculated by using the effective interest rate method (the rate that equal the future cash flows of a financial asset or liability to its present net book
value) to gross carrying amount of financial asset in conformity with “TFRS 9 Financial Instruments” except financial asset that is not a purchased or originated credit-
impaired financial asset but subsequently has become credit-impaired.
Under the scope of TFRS 9 application, the Bank does not reverse the interest accruals and rediscounts of non-performing loans and other receivables and monitors the
related amounts under interest income and calculates expected credit loss on these amounts according to the related methodology.
VI. Fees and Commission Income and Expenses
Wages and commissions those that are not an integral part of the effective interest rate of the financial instruments measured at amortized cost are accounted for in
accordance with "TFRS 15 - Revenue from Customer Contracts". Fees and commission income and expenses are recognized either on accrual basis or by using the effective
interest method. Income earned in return for services rendered contractually or due to operations like sale or purchase of assets on behalf of a third party real person or
corporate body are recognized in income accounts in the period of collection.
VII. Financial Assets
The Bank within the scope of “TFRS 9 Financial Instruments”, classifies and accounts its financial assets as “Financial Assets at Fair Value Through Profit or Loss”,
“Financial Assets at Fair Value Through Other Comprehensive Income” or “Financial Assets at Measured at Amortized Cost” by taking into account their business model
and contractual cash flow characteristics. Financial assets are recognized or derecognized according to TFRS 9 “Recognition and Derecognition in Statement of Financial
Position” requirements. The Bank recognizes a financial asset in its statement of financial position when it becomes a party to the contractual provisions of the financial
instrument. Financial assets are measured at their fair value on initial recognition in the financial statements.
The Bank has three different business models for classification of financial assets:
• Business model aimed at holding financial assets in order to collect contractual cash flows: Financial assets held under the mentioned business model are managed to
collect contractual cash flows over the life of these assets. The Bank manages its assets held under this portfolio in order to collect certain contractual cash flows
• Business model aimed at collecting contracted cash flows of financial assets and selling: In this business model, the Bank intends both to collect contractual cash flows
of financial assets and to sell these assets.
• Other business models: A business model in which financial assets; are not held within the scope of a business model aimed at collection of contractual cash flows and
within the scope of a business model aimed at collecting and selling contracted cash flows, are measured by reflecting fair value in profit or loss.
The Bank is able to reclassify all affected financial assets in case it changes the business model that is used for the management of financial asset.
In the event of the termination of the rights related to the cash flows from a financial asset, the transfer of all risks and rewards of the financial asset to a significant extent
or has no longer control of the financial assets, the Bank derecognizes the financial asset.
1. Financial Assets at Fair Value Through Profit or Loss
Financial assets except financial assets measured at amortized cost or at fair value through other comprehensive income, are measured at fair value through profit or loss.
Financial assets at fair value through profit or loss are financial assets held for the purpose of generating profit from short-term fluctuations in price or similar factors in
the market or being part of a portfolio for profitability in the short term, regardless of the acquisition reason or financial assets that are not held in a business model that
aims at collecting and/or selling contractual cash flows of financial assets.
Financial assets at fair value through profit or loss are initially measured at fair value on the balance sheet and are subsequently re-measured at fair value. Gains or losses
arising from the valuation are related to profit and loss accounts.
In some cases, restructuring, alteration or counterparty changes of contractual cash flows of loans may lead to derecognition of related loans in accordance with TFRS 9.
When the change in the financial asset results from derecognizing the existing financial asset from the financial statements and the revised financial asset is recognized
in the financial statements, the revised financial asset is considered as a new financial asset in accordance with TFRS 9. When it is determined that there are significant
changes between the new conditions of the revised financial asset and the first conditions in related agreements, the Bank evaluates the new financial asset according to
the current business models. When it is determined that the contractual conditions do not only result in cash flows that include principal and interest payments at certain
dates, the financial asset is recognized at fair value and is subject to valuation. The differences arising from the valuation are reflected in the nominal accounts.
The Bank recognizes loans at fair value through profit or loss, if the contractual terms of the loan, do not result in cash flow including the principal payments and interest
payments generated from principal amounts at certain dates. These loans are valued at their fair values after their recognition and the losses or gains arising from the
valuation are included in the profit and loss accounts.
222 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 223
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen 2. Financial Assets at Fair Value Through Other Comprehensive Income
Stage 3:
Financial assets at fair value through other comprehensive income are financial assets that are held under a business model that aims both to collect contractual cash
flows and to sell financial assets, and financial assets with contractual terms that lead to cash flows that are solely payments of principal and interest on the principle
amount outstanding at specific dates.
Financial assets at fair value through other comprehensive income are initially recognized at their fair value including their transaction costs on the financial statements.
The initial recognition and subsequent valuation of such financial assets, including the transaction costs, are carried out on a fair value basis and the difference between
amortized cost and the cost of borrowing instruments is recognized in profit or loss by using the effective interest method. Dividend income arising from investments in
equity instruments that are classified as at fair value through other comprehensive income is also recognized in income statements.
Gains and losses, except impairment gain or loss and foreign exchange gain or loss, arising from changes in the fair value of financial assets at fair value through other
comprehensive income are reflected to other comprehensive income until derecognized or reclassified. When the value of the financial asset is collected or financial asset
is disposed, the related fair value differences accumulated in the shareholders’ equity are transferred to the profit or loss statement.
During the initial introduction to financial statements, amendments to the fair value of an investment in an equity instrument within the framework of TFRS 9 that are not
held for trading or that are not valued in a financial statement of an entity that acquires business combinations under the “TFRS 3 Business Combinations” may be subject
to an irreversible preference regarding these amendments being accounted in other comprehensive income. In such case dividends taken from mentioned investment will
be accounted in financial statement as profit or loss.
3. Financial Assets Measured at Amortized Cost
Financial assets measured at amortized cost are those financial assets that are held within the framework of a business model aimed at collecting contractual cash flows
over the life of the asset and which result in cash flows that include principal and interest on the principal amount outstanding at specific dates. Financial assets measured
at amortized cost with the initial recognition at fair value including transaction costs are subject to valuation with their discounted cost value by using the effective interest
rate method, after eliminating any provision for impairment if there is any. Interest income measured by using the effective interest rate method are recognized in the
income statement as an “interest income”.
The Bank evaluates its loans within the framework of current business models and can be classified as Financial Assets measured at Amortized Cost.
VIII. Impairment of Financial Assets
In accordance with the “TFRS 9-Financial Instruments” and the regulation “Procedures and Principals regarding Classification of Loans and Allowances Allocated for
Such Loans” issued by BRSA, the Bank recognizes expected credit loss allowance on financial assets at fair value through other comprehensive income, financial assets
measured at amortized cost, impaired credit commitments and financial guarantee contracts.
Within the scope of TFRS 9, the expected credit loss is calculated according to the “three-stage” impairment model based on the change in the loan quality of financial
assets after initial recognition and detailed in the following headings:
Stage 1:
An important determinant for calculating the expected credit loss in accordance with TFRS 9 is to assess whether there is a significant increase in the credit risk of the
financial asset. Financial assets that have not experienced a significant increase in credit risk since the initial recognition are monitored in the stage one. Impairment for
credit risk for the Stage 1 financial assets is equal to the 12-month expected credit losses.
Based on the BRSA's decision dated 17.06.2021 and numbered 9624, until 30.09.2021, the 30-days past due period foreseen for loans, in order to be classified as Stage
2, has been to be applied as 90 days past due for Stage 1 loans. In addition, the Bank provides provisions for customers in this group with a delay of more than 30 days, in
accordance with its own risk policies and models, which also evaluate the borrower’s conditions.
Based on the BRSA's decision dated 16.09.2021 and numbered 9795, as of 30.09.2021 the 30-days past due period foreseen for loans, in order to be classified as Stage 2
and the 90-days past due for Stage 1 has come to an end.
Stage 2:
Financial assets that experienced a significant increase in the credit risk since initial recognition, are transferred to Stage 2. The expected credit loss of these financial
assets are measured at an amount equal to the instrument’s lifetime expected credit loss. In order to classify a financial asset in the stage 2, the following criteria is
considered:
Overdue between 30-90 days
Restructuring of the loan
Significant deterioration in the probability of default
In other respect, the 30-days past due period foreseen for loans to be classified as Stage 2, to be applied as 90 days for Stage 1 loans until the date of 30.09.2021 in
accordance with the BRSA's decision dated 17.06.2021 and numbered 9624. For the abovementioned group with a past due date more than 90 days, the Bank allocates
provisions in accordance with its risk policies and applies grouping approach and models in which also evaluate the borrower's conditions.
Based on the BRSA's decision dated 16.09.2021 and numbered 9795, as of 30.09.2021 the 30-days past due period foreseen for loans, in order to be classified as Stage 2
and the 90-days past due for Stage 1 has come to an end.
In case of a significant deterioration in the probability of default, the credit risk is considered to be increased significantly and the financial asset is classified as stage 2. The
absolute and gradual thresholds used to increase the probability of default are differentiated on the basis of portfolio and product group. In this manner, for the commercial
portfolio, definition of increase in the probability of default is the comparison between the probability of default on loan’s opening date, obtained from the integrated
rating/score based on internal rating and probability of default of the same loan on reporting date, obtained from the integrated rating/score based on internal rating. For
the individual portfolio, it is accepted that the probability of default is worsened in cases where the behavioral score falls below the thresholds determined on the basis of
the product and the probability of default exceeds the thresholds determined on the basis of the product.
Financial assets with sufficient and fair information for impairment at the reporting date, are classified in the third stage. Expected credit loss of these financial assets is
measured at an amount equal to the lifetime expected credit loss. The following basic factors are considered for the classification of a financial asset in the third stage:
• More than 90 days past due
• Whether the credit rating is weakened, has suffered a significant weakness or cannot be collected or there is a certain opinion on this matter
In other respect, based on the BRSA's decision dated 17.06.2021 and numbered 9624, the 90-days past due period for classifying loans as non-performing loans is applied
as 180 days until 30.09.2021.
Based on the BRSA's decision dated 16.09.2021 and numbered 9795, the implementation of the 90-days past due period for the classification of loans as non-performing
loans as 180 days was terminated as of the end of 30.09.2021.
While estimating the expected credit loss, statistical models, methods and tools are used in accordance with the relevant legislation and accounting standards. Expected
credit loss is measured using reasonable and supportable information by taking current and forecasts of future economic information into consideration, including
macroeconomic factors. Three scenarios, base scenario, optimistic scenario and the worst scenario, are used in forecasting studies made by macroeconomic models.
The variables used in these macroeconomic estimates Industrial Production Index, Employment Ratio and Credit Default Swap indicators. The validity of the risk
parameter estimates used in the calculation of expected credit losses is reviewed and evaluated at least annually within the framework of model validation processes.
Macroeconomic forecasts and risk delinquency data used in risk parameter models are re-evaluated every quarter to reflect the changes in economic conjuncture
and are updated if needed. In this context, as a result of the review activities carried out in June 2021, the models of the probability of default in the relevant period
and the macroeconomic models relating the probability of default to macroeconomic variables and the forward-looking forecasts were updated. In December 2021,
macroeconomic forecasts which are approved by the Board of Directors began to be used. Except for demand or revolving loans, the maximum period for which expected
credit losses are to be determined is the contractual life of the financial asset. For demand or revolving loans, maturity is determined by taking the future risk mitigation
processes into account such as behavioral maturity analyses performed by the Bank and cancellation/revision of the Bank’s credit limit.
While calculating the expected credit loss, aside from assessment of whether there is a significant increase in credit risk or not, basic parameters expressed as probability
of default, loss given default and exposure at default are used.
Probability of Default: Represents the probability of default on the loan over a specified time period. In this context, the Bank has developed models to calculate 12-month
and life-time default probabilities by using internal rating based credit rating models. As for the Group Companies historical probability of default data has also been
observed.
Loss Given Default (LGD): Defined as the damage caused by the default of borrower to the total balance of the exposure at the time of default. The LGD estimates are
determined in terms of credit risk groups that are detailed in the Bank’s data resources and system facilities. The model used for the estimation of the LGD was established
by taking into account the direct cost items during the collection process, based on the historical data of the Bank’s collection, cash flows are discounted at effective
interest rates.
Exposure at Default: For cash loans, the cash balance at the date of report, for non-cash loans the balance calculated using the Credit Conversion Factor (CCF) is
represented by Exposure at Default.
Credit Conversion Factor: Calculated for non-cash loans (undrawn limit for revolving loans, commitments, non-cash loans etc.) The historical limit usage data of the Bank
for revolving loans are analyzed and the limit amount that can be used until the moment of default is estimated. For non-cash loans, the cash conversion ratio of the loan
amount is estimated by analyzing the product type and the past compensation amount of the bank.
Credit risks, which require qualitative assessments due to their characteristics and differ by grouping in this manner, are considered as individual within the internal
policies. Calculations are made by the method of discounted cash flows with the effective interest rate expected from the relevant financial instrument. Discounted cash
flows are estimated for 3 different scenarios in which parameters are differentiated, and individual expected credit loss is calculated by taking into consideration the cash
deficit amounts weighted according to probabilities.
Developments recorded in the Bank, the world and the Turkish economy, and besides that, as mentioned above, the Bank allocated expected credit losses by reflecting
additional provisions through individual assessments performed for the customers that operates in sectors where the impact might be high in accordance with the Bank’s
risk policies.
Expected credit loss is reflected in the income statement. Released provisions in the current year are accounted under “Expected Credit Loss Expenses” and released
provision which is carried from the prior year are accounted under “Other Operating Income”.
Receivables evidenced through the Legal Process that collection is not possible can be written-off by fulfilling the requirements of the Tax Procedure Law. Besides, the
loans for which specific provision is allocated and for which there is no reasonable expectation of recovery might be written-off.
IX. Offsetting Financial Instruments
Financial assets and financial liabilities shall be offset, and the net amount shall be presented in the balance sheet only when a party currently has a legally enforceable
right to set off the recognized amounts or intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
X. Sale and Repurchase Agreements and Securities Lending Transactions
Marketable securities subject to repurchase agreements are classified under “Financial Assets at Fair Value through Profit and Loss”, “Financial Assets at Fair Value through
Other Comprehensive Income” or “Financial Assets Measured at Amortised Cost” in the Bank’s portfolio and they are valued according to the valuation principles of the
related portfolios.
Funds obtained from the repurchase agreements are recognized under “Funds from Repurchase Transactions” account in liabilities. For the difference between the sale
and repurchase prices determined by the repo agreements for the period; expense accrual is calculated using the effective interest rate method.
Reverse repo transactions are recognized under the “Receivables from Reverse Repo Transactions” account. For the difference between the purchase and resale prices
determined by the reverse repo agreements for the period; income accrual is calculated using the effective interest rate method.
224 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities
Assets that meet the criteria to be classified as held for sale within the scope of “IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations” are measured
at the lower one of their fair value and their carrying amount which from the costs to sell are deducted and presented separately within the financial statements. In order
to classify a tangible fixed asset as held for sale, the asset (or the disposal group) should be available for an immediate sale in its present condition subject to the terms of
any regular sales of such assets (or such disposal groups) and the sale should be highly probable. For a highly probable sale, the appropriate level of management must be
committed to a plan to sell the asset (or the disposal group), and an active programme to complete the plan should be initiated to locate a customer. Also, the asset (or the
disposal group) should have an active market sale value, which is a reasonable value in relation to its current fair value. Events or circumstances may extend the completion
of the sale more than one year. Such assets are still classified as held for sale if there is sufficient evidence that the delay in the sale process is due to the events and
circumstances occurred beyond the control of the entity or the entity remains committed to its plan to sell the asset (or disposal group).
A discontinued operation is a component of a bank that either has been disposed of or is classified as held for sale. Gains or losses relating to discontinued operations are
presented separately in the income statement.
XII. Goodwill and Other Intangible Assets
As at the balance sheet date, there is no goodwill recorded in the unconsolidated balance sheet of the Bank.
The Bank’s intangible assets consist of software programs. The purchased items are presented with their acquisition costs less the accumulated amortization and
impairment provisions. In case there is an indication of impairment, the recoverable amount of the related intangible asset is estimated within the framework of “TAS 36
–Impairment of Assets” and impairment provision is set aside in case the recoverable amount is below its acquisition cost.
The related assets are amortized by the straight-line method considering the estimated useful life. The amortization method and period are periodically reviewed at the
end of each year.
XIII. Tangible Assets
The Bank follows its real estates in use, which are recorded under tangible fixed assets, according to the revaluation model within the framework of "TAS 16 – Property,
Plant and Equipment" since 2015. The positive difference between the net book value of real estate property values and the renewed expertise values which are
determined by the licensed valuation in 2021, companies are recorded under the shareholders’ equity.
In case there is an indication of impairment, the recoverable amount of the related intangible asset is estimated within the framework of “TAS 36 – Impairment of Assets”
and impairment provision is set aside in case the recoverable amount is below its acquisition cost.
Tangible assets other than the land and construction in progress are amortized at the straight-line method, according to their estimated useful lives. The estimated useful
life, residual amount and the method of amortization are reviewed every year for the possible effects of the changes that occur in the estimates and if there is any change
in the estimates, they are recognized prospectively.
Assets held under finance lease are depreciated over the expected useful life of the related assets.
Assets subject to leasing are depreciated according to relevant contract periods.
Leasehold improvements are amortized in equal amounts considering their useful life. However, in any case the useful life cannot exceed leasing term. When the lease
period is not certain or longer than 5 years, the amortization period is recognized as 5 years.
The difference between the sales proceeds arising from the disposal of tangible assets or the inactivation of a tangible asset and the book value of the tangible assets are
recognized in the income statement.
Regular maintenance and repair costs incurred for tangible assets are recognized as expense.
There are no pledges, mortgages and similar encumbrances on tangible assets.
The “Regulation on Procedures and Principles for the Trading of Precious Metals by Banks and the Disposal of Commodities and Real Properties acquired by Banks due
to their Receivables” has been abolished by BRSA effective from January 1, 2017. Real properties acquired by Group due to their receivables and not treated in the scope
of “TFRS 5 - Non-current Assets Held for Sale and Discontinued Operations" has been started to follow under “Other Assets” in accordance with the related accounting
standard from the current period.
The depreciation rates used in amortization of tangible assets and their estimated useful lives are as follows:
Buildings
Safe Boxes
Other Movables
XIV. Leasing Transactions
Estimated Economic Life (Year)
Depreciation Rate
50
2-50
2-25
2%
2% – 50%
4% - 50%
Assets acquired through financial leases are carried at the lower of their fair values or amortized value of the lease payments. Leasing payables are recognized as liabilities
in the balance sheet while the interest payable portion of the payables is recognized as a deferred amount of interest. Finance lease payments are separated as financial
expense and principal amount payment, which provides a decrease in finance lease liability, thus helps a fixed rate interest on the remaining principal amount of the debt to
be calculated. Within the context of the Bank’s general borrowing policy, financial expenses are recognized in the income statement. Assets held under financial leases are
recognized under the “Property, Plant and Equipment” account and are depreciated by using the straight-line method.
The Bank does not participate in the financial leasing transactions as a “lessor”.
The Bank accounts its operating leases in accordance with the TFRS 16 "leases" standard. Operating leases within the framework of the aforementioned standard are
monitored in a similar manner to financial leases. For the agreements within the scope of TFRS 16, the right of use asset and the lease payments are reflected to the
financial statements and they are presented under "Tangible Assets" and "Liabilities from Financial Leases", respectively. The lease liability is calculated by discounting the
future lease payments by the use of the Bank or alternative borrowing interest rates at the date of initial application or contract date. Fixed assets, which are accounted as
right of use assets, are subject to depreciation considering the period of the contract. Interest expenses and foreign exchange differences related to the lease liabilities are
associated with profit and loss statement.
XV. Provisions and Contingent Liabilities
As of the end of the reporting period, a past event is deemed to give rise to a present obligation if, taking account of all available evidence, it is more likely than not that
a present obligation exists, the entity recognizes a provision in the financial statements. As of the end of the reporting period where it is more likely that no present
obligation exists at the end of the reporting period, the entity discloses a contingent liability on footnotes unless the possibility of an outflow of resources embodying
economic benefits is remote.
In the financial statements, a provision is made for an existing commitment resulted from past events if it is probable that the commitment will be settled, and a reliable
estimate can be made of the amount of the obligation.
Provisions are calculated based on the reliable estimates of management on the expenses to incur as of the balance sheet date to fulfill the liability by considering the risks
and uncertainties related to the liability. In case the provision is measured by using the estimated cash flows required to fulfill the existing liability, the book value of the
related liability is equal to the present value of the related cash flows.
If the amount is not reliably estimated and there is no probability of cash outflow from the Bank to settle the liability, the related liability is considered as “contingent” and
disclosed in the notes to the financial statements.
XVI. Contingent Assets
The contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the Bank. Since
showing the contingent assets in the financial statements may result in the accounting of an income, which will never be generated, the related assets are not included
in the financial statements, but if there is a possibility that an inflow of economic benefits of these assets may occur then it is explained in the footnotes of the financial
statements. Nevertheless, the developments related to the contingent assets are constantly evaluated and if it has become virtually certain that an inflow of economic
benefits will arise, the asset and the related income are recognized in the financial statements of the period in which the change occurs.
XVII. Liabilities Regarding Employee Benefits
1. Severance Indemnities and Short-Term Employee Benefits
According to the related regulation and the collective bargaining agreements, the Bank is obliged to pay termination benefits for employees who retire, die, quit for their
military service obligations, who have been dismissed as defined in the related regulation or (for the female employees) who have voluntarily quit within one year after
the date of their marriage. Within the scope of “TAS 19-Employee Benefits”, the Bank allocates severance indemnity provisions for employee benefits by estimating
the present value of the probable future liabilities. According to TAS 19, all actuarial gains and losses occurred are recognized under shareholder’s equity. The Bank also
allocates provision for the unused paid vacation.
2. Retirement Benefit Obligations
Türkiye İş Bankası A.Ş. Emekli Sandığı Vakfı (“İşbank Pension Fund”), of which each Bank employee is a member, has been established according to the provisional Article 20
of the Social Security Act No. 506. As per provisional article numbered 23 of the Banking Law numbered 5411, it is ruled that Bank pension funds, which were established
within the framework of Social Security Act, will be transferred to the Social Security Institution, within 3 years after the publication of such law. Methods and principles
related to transfer have been determined as per the Cabinet decision dated 30 November 2006 numbered 2006/11345. However, the related article of the act has been
cancelled upon the President’s application dated November 2, 2005, by the Supreme Court’s decision dated March 22, 2007, numbered E.2005/39, K.2007/33, which was
published on the Official Gazette dated March 31, 2007 and numbered 26479 and the execution decision was ceased as of the issuance date of the related decision.
After the justified decree related to cancelling the provisional Article 23 of the Banking Law was announced by the Constitutional Court on the Official Gazette dated
December 15, 2007 and numbered 26731, Turkish Grand National Assembly started to work on establishing new legal regulations, and after it was approved at the
General Assembly of the TGNA, the Law numbered 5754 “Emendating Social Security and General Health Insurance Act and Certain Laws and Decree Laws”, which was
published on the Official Gazette dated 8 May 2008 and numbered 26870, came into effect. The new law decrees that the contributors of the Bank pension funds, the
ones who receive salaries or income from these funds and their rightful beneficiaries will be transferred to the Social Security Institution and will be subject to this Law
within 3 years after the release date of the related article, without any need for further operation. The three-year transfer period can be prolonged for maximum 2 years
by the Cabinet decision. However related transfer period has been prolonged for 2 years by the Cabinet decision dated March 14, 2011, which was published on the Official
Gazette dated April 9, 2011 and numbered 27900. In addition, by the Law “Emendating Social Security and General Health Insurance Act”, which was published on the
Official Gazette dated March 8, 2012 and numbered 28227, this period of 2 years has been raised to 4 years after that related transfer period has been prolonged for one
more year by the Cabinet decision dated April 8, 2013, which was published on the Official Gazette dated 3 May 2013 and numbered 28636 also this period has revalidated
one more year by the Cabinet decision dated February 24, 2014, which was published on the Official Gazette dated April 30, 2014 and numbered 28987. The Council of
Ministers has been lastly authorized to determine the transfer date in accordance with the last amendment in the first paragraph of the 20th provisional article of Law
No.5510 implemented by the Law No. 6645 on Amendment of the “Occupational Health and Safety Law and Other Laws and Decree Laws” published in the Official Gazette
dated April 23, 2015 and numbered 29335. This authority was transferred to the President with the delegated legislation No.703 which was published in the repetitive
Official Gazette No. 30473 dated July 9, 2018.
On the other hand, the application made on 19 June 2008 by the Republican People’s Party to the Constitutional Court for the annulment and motion for stay of some
articles, including the first paragraph of the provisional article 20 of the Law, which covers provisions on transfers, was rejected in accordance with the decision taken at
the meeting of the afore-mentioned court on 30 March 2011.
The aforementioned Law also states that;
• Through a commission constituted by the attendance of one representative separately from the Social Security Institution, Ministry of Finance, Turkish Treasury, State
Planning Organization, Banking Regulation and Supervision Agency, Savings Deposit Insurance Fund, one from each pension fund, and one representative from the
organization employing pension fund contributors, related to the transferred persons, the cash value of the liabilities of the pension fund as of the transfer date will be
calculated by considering their income and expenses in terms of the lines of insurance within the context of the related Law, and technical interest rate of 9.8% will be
used in the actuarial calculation of the value in cash,
• And that after the transfer of the pension fund contributors, the ones who receive salaries or income from these funds and their rightful beneficiaries to the Social
Security Institution, these persons’ uncovered social rights and payments,
• despite being included in the trust indenture that they are subject to, will be continued to be covered by the pension funds and the employers of pension fund contributors.
In line with the new law, the Bank obtained a technical actuarial valuation report from the licensed actuary for the year ended December 31, 2021. In related period’s
financial statements, Bank provided full provision for the total amount of technical and actual deficit stated in the actuarial report of the aforementioned period.
The actuarial assumptions used in the related actuarial report are given in Section Five Note II-i-4.1.
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 227
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen İşbank Members’ Supplementary Pension Fund has been founded to provide beneficiaries with additional social security and solidarity rights to compulsory social security
benefits as per the provisions of the Turkish Commercial Code and Turkish Civil Code.
XVIII. Taxation
1. Corporate Tax:
In accordance with the Provisional Article 13 added to the Corporate Tax Law Numbered 5520 with the Law Numbered 7316, the 20% rate foreseen in the calculation of the
corporate tax for the corporate earnings of the 2021 taxation period is determined as 25% (starting from the declarations to be submitted as of July 1, 2021 and to be valid
for the corporate earnings for the taxation period starting from January 1, 2021), and as 23% for the corporate earnings for the 2022 taxation period. In this context, the
Corporate Tax rate as of December 31, 2021 is 25%.
As per the Corporate Tax law, temporary tax is calculated and paid quarterly in line with the principles of the Income Tax Law and at the corporate tax rate. The temporary
tax payments are deducted from the current period’s corporate tax. The 4th provisional tax for the year 2021 will be paid in February 2022 for to be deducted from the
corporate tax of the current taxation period.
Tax expense consists of current tax and deferred tax. The current tax liability is calculated over the portion of the period subject to taxation. The taxable profit differs from
the profit stated in the income statement, as the income and expense items that can be taxable or deductible at other periods, and items that are not taxable or deductible
are excluded. The current tax amounts payable are netted off with prepaid tax amounts and presented on the financial statements.
Within the framework of the Corporate Tax Law numbered 5520, 75% of the gains on the sale of the participation shares, which were held in the assets for a minimum of 2
whole years and 75% of the gains on the sale of immovable are exempt from tax provided that they are added to the capital as set forth by the Law or that they are kept in
a special fund under liabilities for a period of 5 years. However, in accordance with Article 89 / a of the Law No. 7061 and Article 5.1.e and Article 5.1.f of the Corporate Tax
Law, which were published in the Official Gazette dated December 5, 2017 and numbered 30261, the 75% applied in terms of immovable sales mentioned above has been
reduced to 50% which is effective from the date of publication of the Law.
In accordance with the provision of Article 298 / A of the Tax Procedure Law, the necessary conditions for inflation adjustment in the calculation of corporate tax as
of the end of the 2021 calendar year have been met. However, the application of inflation adjustment in the calculation of corporate tax was postponed to 2023 with
the regulation made with the "Law on the Amendment of the Tax Procedure Law and the Corporate Tax Law" numbered 7352 published in the Official Gazette dated
29.01.2022 and numbered 31734. Accordingly, VUK (Tax Procedure Law) financial statements for the 2021 and 2022 accounting periods, including the provisional tax
periods, will not be subject to inflation adjustment, and the 2023 accounting period will not be subject to inflation adjustment as of the temporary tax periods. will be
subject to inflation adjustment regardless.
2. Deferred Tax:
Deferred tax asset or liability is determined by calculating the tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the amounts considered in the legal tax base account, by taking the legal tax rates into account. Deferred tax liabilities are generally recognized for
all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilized. Free provisions that are allocated for possible future
risks are are not subject to deferred tax calculation. No tax assets or liabilities are recognized for the temporary timing difference that affects neither the taxable profit nor
the accounting profit and that arises from the initial recognition in the balance sheet, of assets and liabilities, other than the goodwill and mergers. The Bank calculates
deferred tax for the provisions allocated for Stage 1 and Stage 2 expected credit loss.
The carrying values of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Deferred tax is measured at enacted tax rates prevailing in the period or about to be enacted when the assets are realized or liabilities are settled, and the tax is recognized
as income or expense in the income statement. Nonetheless, if the deferred tax is related to assets directly associated with the equity in the same or different period, it is
directly recognized in the equity accounts.
In accordance with the Provisional Article 13 added to the Corporate Tax Law Numbered 5520 with the Law Numbered 7316, the 20% rate foreseen in the calculation of
the corporate tax for the corporate earnings of the 2021 taxation period is determined as 25% (starting from the declarations to be submitted as of July 1, 2021 and to be
valid for the corporate earnings for the taxation period starting from January 1, 2021), and as 23% for the corporate earnings for the 2022 taxation period. The Bank has
calculated deferred tax by using 20%, 23%, 25% rates considering the periods when deferred tax assets and liabilities are realized.
Deferred tax assets and liabilities are shown in financial tables by way of offsetting.
3. Tax Practices in the Countries that Foreign Branches Operate:
Turkish Republic of Northern Cyprus (TRNC)
In accordance with TRNC tax legislation, 15% income tax is accrued on the remaining tax base after 10% corporate tax is deducted from corporate income. The tax bases
for companies are determined by adding the expenses that cannot be deducted according to TRNC regulations, to commercial gains and by subtracting exemptions and
deductions from commercial gains. Income tax is paid in June, and corporate tax payment is made in two equal installments, in May and in October. On the other hand,
withholding tax is paid in TRNC over interest income and similar gains of the companies. The related withholding tax payments and provisional tax paid every quarter
during the year are deducted from corporate tax payable and the difference between withholding and provisional tax amounts and corporate tax payable is discounted from
income tax provided that the withholding tax and paid provisional tax amounts are higher than corporate tax amount.
England
Corporate earnings are subject to 19% corporate tax in England. The relevant rate is applied to the tax base that is determined by adding the expenses that cannot be
deducted due to the regulations, to commercial gains and by subtracting exemptions and deductions from commercial gains. In other respect, if the tax base calculated
in accordance with the country legislation is within a certain range, the temporary corporate tax is paid in July, October of the relevant year and in January and April of the
following year; If it is over a certain amount, it is paid in 4 installments in March, June, September and December of the relevant year. The corporate tax amount must be
finalized and paid by the end of September of the year following the year of profit. In case the corporate tax payable as a result of the calculation is below the temporary
taxes paid, the difference amount is deducted later or paid back to the Branch by the authority.
Bahrain
Banks in Bahrain are not subject to tax according to the regulations of the country.
The Republic of Iraq (Iraq)
The corporate tax rate in Iraq is 15%, and the corporate tax is paid on a consolidated basis to the tax office of the foreign bank's central branch. The first branch established
in Iraq is considered as the central branch. Foreign bank branches whose central branch is within the boundaries of the Central Government must submit their consolidated
financial statements to the relevant tax office by the end of May of the following year, and branches of foreign banks whose central branch is within the boundaries of the
Northern Iraq Regional Government by the end of June of the following year at the latest and must pay the tax. Northern Iraq Regional Government tax offices can accrue
fixed taxes other than the specified rate and can postpone the last payment period.
Kosovo
Corporate earnings are subject to income tax rate of 10% according to the Kosovo legislation. This ratio is applied to the tax base that will be calculated as a result of the
implementation of exemptions, deductions, addition of disallowable expenses, to the corporate income and that are calculated in accordance with the tax laws. Tax has to
be paid in advance until April, July, October and the 15th day of January of the following year by four installments. If those prepaid taxes are lower than the final corporate
tax, the difference is paid until the end of March of the following year, in case of a claim made by the company, if it is higher, then the difference is returned to the institution
by the tax authorities after the inspection conducted by those institutions.
4. Transfer Pricing:
Transfer pricing is regulated through Article 13 of Corporate Tax Law titled “Transfer Pricing through Camouflage of Earnings”. Detailed information for the practice
regarding the subject is found in the “General Communiqué Regarding Camouflage of Earnings through Transfer Pricing”.
According to the aforementioned regulations, in the case of making purchase or sales of goods or services with relevant persons/corporations at a price that is determined
against “arm’s length principle”, the gain is considered to be distributed implicitly through transfer pricing and such distribution of gains is not subject to deductions
according to article 11 of Corporate Tax Law in means of corporate tax.
XIX. Borrowings
The Bank, whenever required, generates funds from individuals and institutions residing domestically and abroad by approaching the borrowing instruments in the form of
syndication, securitization, collateralized borrowing and issue of bonds/bills. Such transactions are at first carried at acquisition cost, and in the following periods they are
valued at amortized cost measured by using the effective interest rate method.
XX. Equity Shares and Their Issuance
Share issuance related to costs is recognized as expenses.
Dividend income related with the equity shares are determined by the General Assembly of the Shareholders.
Weighted average number of shares outstanding is taken into account in the calculation of earnings per share. In case the number of shares increases by way of bonus
issues as a result of the capital increases made by using the internal sources, the calculation of earnings per share is made by adjusting the weighted average number of
shares, which were previously calculated as at the comparable periods. The adjustment means that the number of shares used in calculation is taken into consideration
as if the bonus issue occurred at the beginning of the comparable period. In case such changes in the number of shares occur after the balance sheet date, but before
the ratification of the financial statements to be published, the calculation of earnings per share are based on the number of new shares. The Bank’s earnings per share
calculations taking place in the income statement are as follows:
Profit distributable to shareholders
Weighted average number of share certificates (Thousand figure)
Earnings per share – (in full TL)
Current Period
13,467,895
112,502,250
0.119712228
Prior Period
6,810,917
112,502,250
0.060540274
XXI. Bank Acceptances and Bills of Guarantee
Bill guarantees and acceptances are realized simultaneously with the customer payments and they are presented as possible liabilities and commitments in the off-
balance sheet accounts.
XXII. Government Incentives
There are no government incentives utilized by the Bank, during the current or prior accounting periods.
XXIII. Segment Reporting
Business segment is the part of an enterprise,
• which conducts business operations where it can gain revenues and make expenditures (including the revenues and expenses related to the transactions made with the
other parts of the enterprise),
• whose operating results are regularly monitored by the authorities with the power to make decisions related to the operations of the enterprise in order to make
decisions related to the funds to be allocated to the segment and to evaluate the performance of the segment, and
• which has its separate financial information.
Information on the Bank’s business segmentation and related information is explained in Section IV, Note XII.
XXIV. Other Disclosures
According to the Uniform Chart of Accounts published on January 1, 2021, the collateral amounts for the derivative transactions made with foreign banks which was
accounted under “Other Assets” in the prior period has been reclassified to “Cash and Cash Equivalents-Banks”. In order to comply with the statement of financial position
of the current period, a reclassification of TL 2,517,503 was made between the mentioned lines in the statement of financial position dated December 31, 2020. The
effects of this reclassification on the cash flow have also been updated. The aforementioned reclassification did not have a significant effect on the size and performance of
the Bank's statement of financial position.
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Section Four: Information On The Financial Position And Risk Management Of The Bank
I. Explanations on Shareholders’ Equity
The capital adequacy standard ratio of the bank is 20.36%. (31.12.2020: 18.68%). The capital adequacy standard ratio for the current period was calculated based on the
Regulation on Measurement and Assessment of Capital Adequacy of Banks and other legal regulations and the BRSA regulation dated 21.12.2021 and numbered 9996.
Within the scope of this regulation, the equity amount calculated without reflecting the negative net valuation differences of the securities included in the "Fair Value
Through Other Comprehensive Income" portfolio was taken into consideration; in the calculation of the amount subject to credit risk, the simple arithmetic average of the
last 252 business days in the foreign exchange buying rates of the Central Bank of the Republic of Turkey was used.
COMMON EQUITY TIER I CAPITAL
Paid-in Capital to be Entitled for Compensation after All Creditors
Share Premium
Legal Reserves
Other Comprehensive Income according to TAS
Profit
Net Current Period Profit
Prior Period Profit
Bonus Shares from Associates, Subsidiaries and Joint-Ventures not Accounted in Current Period’s Profit
Common Equity Tier I Capital Before Deductions
Deductions From Common Equity Tier I Capital
Valuation adjustments calculated as per the article 9, (i) of the Regulation on Bank Capital
Current and prior periods' losses not covered by reserves, and losses accounted under equity according to TAS
Leasehold improvements on operational leases
Goodwill Netted with Deferred Tax Liabilities
Current Period
Prior Period
6,115,938
109,148
45,454,002
23,175,203
18,882,481
13,467,895
5,414,586
6,115,938
90,724
39,469,305
10,088,593
13,081,825
6,810,917
6,270,908
93,736,772
68,846,385
1,434,150
48,823
393,890
48,658
Current Period
Prior Period
3,574,883
90,161,889
2,180,193
66,666,192
Total Deductions from Common Equity Tier I Capital
Total Common Equity Tier I Capital
ADDITIONAL TIER I CAPITAL
Preferred Stock not Included in Common Equity Tier I Capital and the Related Share Premiums
Debt Instruments and the Related Issuance Premiums Defined by the BRSA
Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Covered by Temporary Article 4)
Additional Tier I Capital before Deductions
Deductions from Additional Tier I Capital
Direct and Indirect Investments of the Bank on its own Additional Tier I Capital (-)
Investments in Equity Instruments Issued by Banks or Financial Institutions Invested in Bank’s Additional Tier I Capital
and Having Conditions Stated in the Article 7 of the Regulation
Total of Net Long Positions of the Investments in Equity Items of Consolidated Banks and Financial Institutions where
the Bank does not own 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital
The Total of Net Long Position of the Direct or Indirect Investments in Additional Tier I Capital of Consolidated Banks and
Financial Institutions where the Bank owns more than 10% of the Issued Share Capital
Other items to be Defined by the regulator
Items to be Deducted from Tier I Capital during the Transition Period
Goodwill and Other Intangible Assets and Related Deferred Taxes not deducted from Tier I Capital as per the Temporary
Article 2, Clause 1 of the Regulation on Measurement and Evaluation of Capital Adequacy of Banks (-)
Net Deferred Tax Asset/Liability not deducted from Tier 1 Capital as per the Temporary Article 2, Clause 1 of the
Regulation on Measurement and Evaluation of Capital Adequacy of Banks (-)
Deduction from Additional Tier I Capital when there is not enough Tier II Capital (-)
Total Deductions from Additional Tier I Capital
Total Additional Tier I Capital
Other Intangible Assets Netted with Deferred Tax Liabilities Except Mortgage Servicing Rights
1,561,603
1,207,338
Total Tier I Capital (Tier I Capital= Common Equity Tier I Capital + Additional Tier I Capital)
90,161,889
66,666,192
Remaining after deducting from the related deferred tax liability with the deferred tax asset based on future taxable
income, except for deferred tax assets based on temporary differences
Differences arise when assets and liabilities not held at fair value, are subjected to cash flow hedge accounting
Total credit losses that exceed total expected loss calculated according to the Regulation on Calculation of Credit Risk by
Internal Ratings Based Approach
Securitization gains
Unrealized gains and losses from changes in bank’s liabilities’ fair values due to changes in creditworthiness
Net amount of defined benefit plans
Direct and Indirect Investments of the Bank on its own Tier 1 Capital
Shares Obtained against Article 56, Paragraph 4 of the Banking Law
Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where
the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital
Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where
the Bank Owns 10% or more of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital
Mortgage servicing rights (amount above 10% threshold)
Net Deferred Tax Assets arising from Temporary Differences Exceeding the Threshold of Tier I Capital
Amount Exceeding the 15% Threshold of Tier 1 Capital as per the Article 2, Clause 2 of the Regulation on Measurement
and Evaluation of Capital Adequacy of Banks
The Portion of Net Long Position of the Investments in Equity Items of Consolidated Banks and Financial Institutions
where the Bank owns 10% or more of the Issued Share Capital not deducted from Tier 1 Capital
Excess Amount arising from Mortgage servicing rights
Excess Amount arising from Deferred Tax Assets from Temporary Differences
Other items to be defined by the regulator
Deductions from Tier I Capital in cases where there are no adequate Additional Tier I or Tier II Capitals
530,307
530,307
TIER II CAPITAL
Debt Instruments and the Related Issuance Premiums Defined by the BRSA
Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Covered by Temporary Article 4)
Provisions (Amounts explained in the first paragraph of the article 8 of the Regulation on Bank Capital)
Tier II Capital Before Total Deductions
Deductions from Tier II Capital
Direct and Indirect Investments of the Bank on its own Tier II Capital (-)
Investments in Equity Instruments Issued by Banks and Financial Institutions Invested in Bank’s Tier II Capital and
Having Conditions Stated in the Article 8 of the Regulation
The Total of Net Long Position of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions
where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of Tier I Capital (-)
The Total of Net Long Position of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions
where the Bank Owns 10% or more of the Issued Share Capital Exceeding the 10% Threshold of Tier I Capital (-)
Other items to be Defined by the regulator (-)
Total Deductions from Tier II Capital
Total Tier II Capital
Total Equity (Total Tier I and Tier II Capital)
Deductions from Total Equity (Tier I Capital and Tier II Capital)
Loans Granted against the Articles 50 and 51 of the Banking Law
18,606,250
11,481,250
1,046,800
6,512,019
1,253,000
5,141,120
26,165,069
17,875,370
26,165,069
116,326,958
1,274
1,194
17,875,370
84,541,562
1,102
721
Net Book Values of Movables and Immovable’s Exceeding the Limit Defined in the Article 57, Clause 1 of the Banking
Law and the Assets Acquired against Overdue Receivables and Held for Sale but Retained more than Five Years
Other items to be Defined by the regulator
80
381
Items to be Deducted from the Sum of Tier I and Tier II Capital (Capital) During the Transition Period
The Portion of Total of Net Long Positions of the Investments in Equity Items of Consoli-dated Banks and Financial
Institutions where the Bank does not own 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above
Tier I Capital not deducted from Tier I Capital, Additional Core Capital or Tier II Capital as per the Temporary Article 2,
Clause 1 of the Regulation
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 231
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Current Period
Prior Period
Information on Subordinated Liabilities:
The Portion of Total of Net Long Positions of the Investments in Equity Items of Consoli-dated Banks and Financial
Institutions where the Bank owns more than 10% of the Issued Share Capital Exceeding the 10% Threshold of above
Tier I Capital not deducted from Addi-tional Tier I Capital or Tier II Capital as per the Temporary Article 2, Clause 1 of the
Regula-tion
The Portion of Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions
where the Bank owns 10% of the Issued Share Capital, Deferred tax assets based on temporary differences and the right
to offer mortgage as per the Temporary Article 2, Clause 1, Sub Clause 1 and 2 of the Regulation
CAPITAL
Total Capital (Total of Tier I Capital and Tier II Capital)
Total Risk Weighted Assets
CAPITAL ADEQUACY RATIOS
Common Equity Tier I Capital Ratio (%)
Tier I Capital Ratio (%)
Capital Adequacy Ratio (%)
BUFFERS
Total Additional Common Equity Requirement Ratio (a+b+c)
a) Capital Conservation Buffer Ratio (%)
b) Bank-specific Counter-Cyclical Capital Buffer Ratio (%)
c) Systematic Important Bank Buffer Ratio (%)
Additional Common Equity Tier I Capital Over Total Risk Weighted Assets Ratio Calculated According to the Article 4 of
Capital Conservation and Counter-Cyclical Capital Buffers Regulation (%)
Amounts Lower Than Excesses as per Deduction Rules
Remaining Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial
Institutions where the Bank Owns 10% or less of the Issued Share Capital
Remaining Total of Net Long Positions of the Investments in Tier I Capital of Unconsolidated Banks and Financial
Institutions where the Bank Owns more than 10% or less of the Issued Share Capital
Remaining Mortgage Servicing Rights
Net Deferred Tax Assets arising from Temporary Differences
Limits for Provisions Used in Tier II Capital Calculation
116,325,684
571,357,082
84,540,460
452,476,866
15.78
15.78
20.36
2.560
2.500
0.060
0.000
9.78
14.73
14.73
18.68
2.560
2.500
0.060
0.000
8.73
280,196
242,174
2,557,610
3,420,494
General Loan Provisions for Exposures in Standard Approach (before limit of one hundred and twenty five per ten
thousand)
15,233,222
10,923,729
General Loan Provisions for Exposures in Standard Approach Limited by 1,25% of Risk Weighted Assets
6,512,019
5,141,120
Total Loan Provision that Exceeds Total Expected Loss Calculated According to the Communiqué on Calculation of Credit
Risk by Internal Ratings Based Approach
Total Loan Provision that Exceeds Total Expected Loss Calculated According to the Communiqué on Calculation of Credit
Risk by Internal Ratings Based Approach, Limited by 0,6% Risk Weighted Assets
Debt Instruments Covered by Temporary Article 4 (effective between 1 January 2018-1 January 2022)
Upper Limit for Additional Tier I Capital Items subject to Temporary Article 4
Amount of Additional Tier I Capital Items Subject to Temporary Article 4 that Exceeds Upper Limit
Upper Limit for Additional Tier II Capital Items subject to Temporary Article 4
Amount of Additional Tier II Capital Items Subject to Temporary Article 4 that Exceeds Upper Limit
1,046,800
17,272,200
1,253,000
9,086,000
Issuer
Türkiye İş Bankası A.Ş.
Türkiye İş Bankası A.Ş.
Türkiye İş Bankası A.Ş.
Türkiye İş Bankası A.Ş.
Unique identifier (CUSIP, ISIN etc.)
US900151AB70 -
XS0847042024
US900151AF84 -
XS1003016018
US90016BAF58 –
XS1623796072
XS2106022754
Governing law(s) of the instrument
It is subject to English
Law except for certain
articles that will be
subject to Turkish Law.
Issued within the scope
of BRSA Regulation on
Banks’ Equity.
It is subject to English
Law except for certain
articles that will be subject
to Turkish Law. Issued
within the scope of BRSA
Regulation on Banks’
Equity.
It is subject to English Law
except for certain articles that
will be subject to Turkish Law.
Issued within the scope of BRSA
Regulation on Banks’ Equity.
It is subject to English Law
except for certain articles that
will be subject to Turkish Law.
Issued within the scope of BRSA
Regulation on Banks’ Equity.
Taking into account in equity calculation
Subject to 10% deduction as of
1/1/2015
Yes
Eligible at unconsolidated/
consolidated
Instrument type
Amount recognized in regulatory
capital (Currency in million, as of
most recent reporting date)
Unconsolidated
-Consolidated
Bond
Par value of instrument
13,085
No
No
No
Unconsolidated
-Consolidated
Bond
1,047
5,234
Unconsolidated -Consolidated
Unconsolidated -Consolidated
Bond
6,543
6,543
Bond
9,814
9,814
Accounting classification
Subordinated Liabilities
Subordinated Liabilities
Subordinated Liabilities
Subordinated Liabilities
Original date of issuance
24.10.2012
Perpetual or dated
Original maturity date
Issuer call subject to prior
supervisory (BRSA) approval
Dated
10 Years
Yes
10.12.2013
Dated
10 Years
Yes
29.06.2017
Dated
11 Years
Yes
22.01.2020
Dated
10 Years
Yes
Optional call date, contingent call
dates and redemption amount
The Bank: (1) provided
that subject to having
obtained the prior
approval of the BRSA
and the date which may
not be earlier than fifth
anniversary of the Issue
Date a) can purchase b)
can redeem all bonds if
any taxes imposed or
levied (2) can redeem
all bonds in case of the
deduction from equity.
The Bank: (1) provided that
subject to having obtained
the prior approval of the
related legislation, can
purchase or otherwise
acquire treasury stock (2)
provided that subject to
having obtained the prior
approval of the BRSA, (a)
can redeem all bonds if any
taxes imposed or levied (b)
can redeem all bonds in
case of the deduction from
equity.
The Bank has the option to
repay all of the related bonds
on June 29, 2023 provided that
subject to having obtained the
prior approval of the BRSA.
The Bank: (1) provided that
subject to having obtained the
prior approval of the related
legislation, can purchase or
otherwise acquire treasury
stock (2) provided that subject
to having obtained the prior
approval of the BRSA, (a) can
redeem all bonds if any taxes
imposed or levied (b) can redeem
all bonds in case of the deduction
from equity.
The Bank has the option to
repay all of the related bonds
on January 22, 2025 provided
that subject to having obtained
the prior approval of the BRSA.
The Bank: (1) provided that
subject to having obtained the
prior approval of the related
legislation, can purchase or
otherwise acquire treasury
stock (2) provided that subject
to having obtained the prior
approval of the BRSA, (a) can
redeem all bonds if any taxes
imposed or levied (b) can
redeem all bonds in case of the
deduction from equity.
Subsequent call dates, if applicable
None.
Coupons / dividends
Fixed or floating dividend/coupon
Coupon rate and any related index
Existence of a dividend stopper
Fully discretionary, partially
discretionary or mandatory
Existence of step up or other
incentive to redeem
Fixed
6 %
None.
None.
None.
None.
Fixed
7.85 %
None.
None.
None.
None.
Fixed
7 %
None.
None.
None.
None.
Fixed
7.75 %
None.
None.
None.
Noncumulative or cumulative
Noncumulative
Noncumulative
Noncumulative
Noncumulative
232 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 233
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Convertible or non-convertible
None.
None.
None.
None.
If convertible, conversion trigger (s)
If convertible, fully or partially
If convertible, conversion rate
If convertible, mandatory or optional
conversion
If convertible, specify instrument
type convertible into
If convertible, specify issuer of
instrument it converts into
Write-down feature
None
If write-down, write-down trigger(s)
If write-down, full or partial
If write-down, permanent or
temporary
If temporary write-down,
description of write-up mechanism
Position in subordination hierarchy
in liquidation (specify instrument
type immediately senior to
instrument)
In accordance with
Regulations on Equities of
Banks.Article 8.2.ğ.
bonds have deleted option
from records.
Due to the losses incurred,
where the Bank is at the
point at which the BRSA
may determine pursuant
to Article 71 of the
Banking Law that: (i) its
operating license is to be
revoked and the Bank is
liquidated or (ii) the rights
of all of its shareholders
(except to dividends), and
the management and
supervision of the Bank,
are to be transferred to
the SDIF on the condition
that losses are deducted
from the capital of existing
shareholders (occurrence
of either condition means
the issuer has become
non-viable).
In accordance with Regulations
on Equities of Banks.Article 8.2.ğ
bonds have deleted option from
records.
In accordance with Regulations
on Equities of Banks.Article
8.2.ğ. bonds have deleted option
from records.
Due to the losses incurred,
where the Bank is at the point at
which the BRSA may determine
pursuant to Article 71 of the
Banking Law that: (i) its operating
license is to be revoked and
the Bank is liquidated or (ii) the
rights of all of its shareholders
(except to dividends), and the
management and supervision of
the Bank, are to be transferred
to the SDIF on the condition that
losses are deducted from the
capital of existing shareholders
(occurrence of either condition
means the issuer has become
non-viable)
Due to the losses incurred,
where the Bank is at the
point at which the BRSA may
determine pursuant to Article
71 of the Banking Law that:
(i) its operating license is to
be revoked and the Bank is
liquidated or (ii) the rights of all
of its shareholders (except to
dividends), and the management
and supervision of the Bank,
are to be transferred to the
SDIF on the condition that
losses are deducted from the
capital of existing shareholders
(occurrence of either condition
means the issuer has become
non-viable)
Partially or completely
Partially or completely
Partially or completely
Permanent
Permanent
Permanent
Paid before shares
and the primary of
subordinated debt and
after all the other debts.
Paid before shares and the
primary of subordinated
debt and after all the other
debts.
Paid before shares and the
primary of subordinated debt and
after all the other debts.
Paid before shares and the
primary of subordinated debt
and after all the other debts.
In compliance with article number 7
and 8 of “Own fund regulation”
Yes
Yes
Yes
Yes
Details of incompliances with article
number 7 and 8 of “Own fund
regulation”
Don't vest with the
conditions stated in
clause of the Article 7 and
the clause of 8.2. (ğ)
To vest conditions stated in
clause of the Article 8 and
Don't vest the conditions
stated in clause of the
Article 7.
To vest conditions stated in
clause of the Article 8 and Don't
vest the conditions stated in
clause of the Article 7.
To vest conditions stated in
clause of the Article 8 and Don't
vest the conditions stated in
clause of the Article 7.
Issuer
Türkiye İş Bankası A.Ş.
Unique identifier (CUSIP, ISIN etc.)
TRSTISB72712
Türkiye İş Bankası A.Ş.
TRSTISB62911
Türkiye İş Bankası A.Ş.
TRSTISB92918
Governing law(s) of the instrument
Is subject to Turkish Law. Has been
issued in accordance with the BRSA
Communiqué regarding the Equity of
Banks.
Is subject to Turkish Law. Has been
issued in accordance with the BRSA
Communiqué regarding the Equity of
Banks.
Is subject to Turkish Law. Has been
issued in accordance with the BRSA
Communiqué regarding the Equity of
Banks.
Taking into account in equity calculation
Subject to 10% deduction as of
1/1/2015
No
No
No
Eligible at unconsolidated /
consolidated
Instrument type (types to be
specified by each jurisdiction)
Amount recognized in regulatory
capital (Currency ın TL million, as of
most recent reporting data)
Nominal value of instrument
(TL Million)
Accounting classification
Original date of issuance
Perpetual or dated
Original maturity date
Issuer call subject to prior supervisory
approval
Yes
08.08.2017
Dated
10 Years
Unconsolidated – Consolidated
Unconsolidated - Consolidated
Unconsolidated – Consolidated
Bond
1,100
1,100
Bond
800
800
Bond
350
350
Subordinated Liabilities
Subordinated Liabilities
Subordinated Liabilities
19.06.2019
Dated
10 Years
Yes
26.09.2019
Dated
10 Years
Yes
Optional call date, contingent call
dates and redemption amount
The Bank; (1) can purchase bills
that subject to having obtained the
prior approval of the BRSA and the
date which may not be earlier than fifth
anniversary of the Issue Date (2) (a) can
redeem all bonds if any taxes imposed
or levied (b) can redeem all bonds in
case of the deduction from equity
The Bank; (1) can purchase bills
that subject to having obtained the
prior approval of the BRSA and the
date which may not be earlier than fifth
anniversary of the Issue Date (2) (a) can
redeem all bonds if any taxes imposed
or levied (b) can redeem all bonds in
case of the deduction from equity
The Bank; (1) can purchase bills
that subject to having obtained the
prior approval of the BRSA and the
date which may not be earlier than fifth
anniversary of the Issue Date (2) (a) can
redeem all bonds if any taxes imposed
or levied (b) can redeem all bonds in
case of the deduction from equity
Subsequent call dates, if applicable
None.
Interest/Dividend Payment
Fixed or floating coupon/dividend
payments
Floating
None.
Floating
None.
Floating
Coupon rate and any related index
Government Debt Security for 5 years +
350 base points
TRLIBOR with 3 months maturity + 100
base points
Government Debt Security for 5 years +
350 base points
Existence of a dividend stopper
Fully discretionary, partially
discretionary or mandatory
Existence of step up or other
incentive to redeem
Noncumulative or cumulative
None.
None.
Convertible into equity shares
None.
If convertible, conversion trigger (s)
Non-cumulative
If convertible, fully or partially
None.
If convertible, conversion rate
If convertible, mandatory or optional
conversion
If convertible, specify instrument
type convertible into
If convertible, specify issuer of
instrument it converts into
None.
None.
None.
None.
None.
None.
None.
None.
None.
None.
Non-cumulative
None.
Non-cumulative
None.
234 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 235
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Write-down feature
If write-down, write-down trigger(s)
If bond can be written-down, full or
partially
If bond can be written-down,
permanent, or temporary
If temporary write-down, description
of write-up mechanism
Position in subordination hierarchy
in case of liquidation (instrument
type immediately senior to the
instrument)
In accordance with Regulations on
Equities of Banks, Article 8 (2) (ğ), bonds
have deleted option from records.
In accordance with Regulations on
Equities of Banks, Article 8 (2) (ğ), bonds
have deleted option from records.
In accordance with Regulations on
Equities of Banks, Article 8 (2) (ğ), bonds
have deleted option from records.
Due to the losses incurred, within the
framework of Article 71 of the Banking
Law, (1) the Bank’s operating license is
to be revoked and liquidated or (2) the
rights of all of its shareholders (except
to dividends) and the management
and supervision of the Bank are to
be transferred to the SDIF on the
condition that losses are deducted from
the capital of existing shareholders
(occurrence of either condition means
the issuer has become non-viable)
based on the decision of the BRSA.
Due to the losses incurred, within the
framework of Article 71 of the Banking
Law, (1) the Bank’s operating license is
to be revoked and liquidated or (2) the
rights of all of its shareholders (except
to dividends) and the management
and supervision of the Bank are to
be transferred to the SDIF on the
condition that losses are deducted from
the capital of existing shareholders
(occurrence of either condition means
the issuer has become non-viable)
based on the decision of the BRSA.
Due to the losses incurred, within the
framework of Article 71 of the Banking
Law, (1) the Bank’s operating license is
to be revoked and liquidated or (2) the
rights of all of its shareholders (except
to dividends) and the management
and supervision of the Bank are to
be transferred to the SDIF on the
condition that losses are deducted from
the capital of existing shareholders
(occurrence of either condition means
the issuer has become non-viable)
based on the decision of the BRSA.
Partially or Completely
Partially or Completely
Partially or Completely
Permanent
Permanent
Permanent
Paid before shares and the primary of
subordinated debt and after all the other
debts.
Paid before shares and the primary of
subordinated debt and after all the other
debts.
Paid before shares and the primary of
subordinated debt and after all the other
debts.
In compliance with article number 7
and 8 of Regulation on Bank Capital
Yes.
Yes.
Yes.
Details of incompliances with article
number 7 and 8 of Regulation on
Bank Capital
To vest conditions stated in clause of the
Article 8 and Don't vest the conditions
stated in clause of the Article 7.
To vest conditions stated in clause of the
Article 8 and Don't vest the conditions
stated in clause of the Article 7.
To vest conditions stated in clause of the
Article 8 and Don't vest the conditions
stated in clause of the Article 7.
Explanations on the reconciliation of amounts on the equity items statement and amounts on the balance sheet:
Current Period
Shareholders’ equity
Carrying Amount
86,839,291
Leasehold improvements on operational leases
48,823
Goodwill and intangible assets
Provision
Subordinated debt
Deductions from shareholders’ equity
Capital
1,750,109
15,233,222
37,470,997
1,274
Amounts in Equity
91,772,315
(48,823)
(1,561,603)
6,512,019
19,653,050
(1,274)
116,325,684
(*) The related amounts are calculated in accordance with “Regulation on Equities of Banks”. In this context, part of the expected credit loss of stage 1 and stage 2 up to 1.25 % of
amount subject to credit risk, part; subordinated loans according to fourth article of the regulation, have been taken into consideration in equity calculation. On the other hand, in the
calculation, the equity amount calculated in accordance with the HIN
II. Explanations on Credit Risk
1. Credit risk is defined as the possibility of incurring loss where the counterparty in a transaction, partially or completely fails to meet its contractual obligations in due
time in an agreement with the Bank.
The Bank’s position against the credit risk limits defined by the current legislation is monitored by the Board. Within this framework, loans extended to Risk Groups and
the Bank’s Risk Group, including the Bank; loans in high amounts and limitations regarding the shares in participations are monitored according to the limits determined
in connection with the size of the shareholders’ equity.
Credit risk limits of customers are determined depending on the financial situation and loan requirements of the borrowers, in strict compliance with the relevant
banking legislation, within the framework of loan authorization limits of Branches, Regional Offices, Loan Divisions, the Deputy Chief Executives responsible for loans,
the CEO, the Credit Committee and Board of Directors. These limits may be changed as may be deemed necessary by the Bank. Moreover, all commercial credit limits
are revised periodically, provided that each period does not exceed a year. Furthermore, the borrowers and borrower groups forming a large proportion of the overall
placement are subject to risk limits in order to provide further minimization of potential risk.
The geographical distribution of borrowers is consistent with the concentration of industrial and commercial activities in Turkey.
The distribution of borrowers by sector is monitored closely for each period and sectoral risk limits have been determined to prevent concentration of risk in sectoral
sense.
The credit-worthiness of customers is monitored on a consistent basis by using company rating and scoring models specially developed for this purpose, and the audit
of statements of account received is assured to have been made in accordance with the provisions as stipulated by the relevant legislation.
Utmost importance is given to ensure that loans are furnished with collaterals. Allocation decision, by the definition of credit risk, is not based on the assumption of
collaterals can be liquidized. Most of the loans extended are collateralized by taking real estate, movable or commercial enterprise under pledge, promissory notes and
other liquid assets as collateral, or by acceptance of bank letters of guarantee and individual or corporate guarantees. Jurisdictional applicability of collaterals in default,
time required to convert to money and ability to maintain expected values are taken into consideration from the beginning of the credit allocation process. Most of the
loans are collateralized by the receipt of real estate and securities pledge, commercial enterprise pledge, exchange notes and other liquid securities receivables, bank
letters of guarantees and surety of other persons and institutions. It is an important element of the credit policy that disinclude concentration on collaterals.
Non-performing and impaired loans has been classified in accordance with the “TFRS 9-Financial Instruments” and BRSA’s “Regulation on Procedures and Principles
for Classification of Loans and Provisions to be set aside”. The detailed descriptions of these methods correspond with accounting practices, are included in Section
Three Note VIII.
Credit risk is the risk reduction effects without taking into consideration the total amount of exposures after offsetting transactions with different risk classes
according to the types and amounts of disaggregated risks are listed below the average for the period.
236 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Amount subject to credit risk (*)
Risk Classifications
Exposures to central governments or central banks
Exposures to regional governments or local authorities
Exposures to administrative bodies and non-commercial undertakings
Exposures to multilateral development banks
Exposures to international organizations
Exposures to banks and brokerage houses
Corporates exposures
Retail exposures
Exposures secured by residential real estate property
Exposures secured by commercial real estate property
Past due items
Items in regulatory high-risk categories
Exposures in the form of bonds by mortgages
Short term exposures to banks, brokerage houses and corporates
Exposures in the form of collective investment undertakings
Other items
Share Certificate Investment
Current Period
Risk Amount
Average
Risk Amount (**)
264,713,872
214,008,092
342,308
587,608
299,645
37,110,005
306,274,932
126,174,590
24,777,988
27,717,894
6,791,059
23,644,249
1,586,280
27,148,061
38,685,526
395,467
537,899
262,665
36,845,064
290,212,366
123,261,858
13,046,179
24,579,458
7,119,226
9,365,333
1,702,165
24,916,443
31,487,099
(*) Risk amounts after the credit conversions and the effects of credit risk mitigation
(**) Average risk amounts are the arithmetical average of the amounts in quarterly reports prepared.
2. There are certain control limits on forward transactions in terms of counter parties, and the risks taken for derivative instruments are evaluated along with other
potential risks resulting from the market fluctuations.
3. As a result of the current level of customers’ needs and the progress in the domestic market in this particular area, the Bank uses derivative transactions either for
hedging or for commercial purposes. Derivative instruments with a remarkable volume are monitored with consideration that they can always be liquidated in case of need.
4. Indemnified non-cash loans are considered as having the same risk weights as unpaid cash loans.
The rating and scoring systems applied by the Bank, includes detailed company analysis and enables rating of all companies and loans without any restrictions regarding
credibility. Loans and companies, which have been renewed, restructured or rescheduled, are rated within the scope of this system. Specialized loans are evaluated by
a special rating system, which is based on the credibility of the counterparty as well as the feasibility and risk analysis of the cash flows created mainly by the projects
undertaken or the asset financed.
5. Lending transactions abroad are conducted by determining the country risks of related countries within the context of the current rating system and by taking the
market conditions, country risks, and the relevant legal limitations into account. Furthermore, the credibility of banks and other financial institutions established abroad is
examined within the framework of the ratings that are determined by rating agencies and backed with CDS-IR (based on credit default swap) ratings and credit limits are
assigned to the related banks and financial institutions accordingly.
6.
i. The share of the Bank’s receivables from the top 100 and 200 cash loan customers in the overall cash loan portfolio stands at 31%, 39%, respectively (December 31, 2020:
27%, 36%).
9. The net values of the collaterals of the closely monitored loans are given below in terms of collateral types and risk matches.
Type of Collateral
Personal
Current Period
Commercial and
Corporate
Credit Cards
Personal
Credit Cards
Prior Period
Commercial and
Corporate
8,318,497
291,707
204,747
586
681,452
37,128
1,469,688
Real Estate Mortgage (*)
1,085,464
8,038,098
Cash Collateral (Cash, securities
pledge, etc.)
48,643
Pledge on Wages and Vehicles
2,344,742
248,190
331,996
499
Cheques & Notes
Other (Suretyship, commercial
enterprise under pledge,
commercial papers, etc.)
Non-collateralized
Total
450,396
33,902,536
236,678
23,694,264
3,411,382
7,340,627
7,588,212
50,109,531
2,206,344
2,206,344
1,432,206
3,857,152
5,398,670
37,908,471
1,067,462
1,067,462
(*) The mortgage and/or pledge amounts on which third parties have priorities are deducted from the fair values of collaterals in expertise reports; and after comparing the results to
the mortgage/pledge amounts and loan balances, the smallest figures are considered to be the net value of collaterals.
10. The net values of the collaterals of non-performing loans are given below in terms of collateral types and risk matches.
Type of Collateral
Real Estate Mortgage (*)
Cash Collateral
Vehicle Pledge
Other (Suretyship, commercial enterprise under
pledge, commercial papers, etc.)
Current Period
Prior Period
Net Value of the Collateral
Loan Balance
Net Value of the Collateral
Loan Balance
5,444,533
657
263,607
6,716,113
5,444,533
657
263,607
6,716,113
5,580,741
366
286,435
7,262,883
5,580,741
366
286,435
7,262,883
(*) The mortgage and/or pledge amounts on which third parties have priorities are deducted from the fair values of collaterals in expertise reports, and after comparing the results to
the mortgage/pledge amounts and loan balances the smallest figures are considered to be the net value of collaterals.
11. The aging analysis of the receivables past due but not impaired in terms of financial asset classes, is as follows:
Current Period (*)
Loans
Corporate / Commercial Loans
Consumer Loans
Credit Cards
31-60 Days (**)
61-90 Days (**) (***)
Total
79,196
155,537
393,119
627,852
689,714
70,167
204,307
964,188
768,910
225,704
597,426
1,592,040
ii. The share of the Bank’s receivables from the top 100 and 200 non-cash loan customers in the overall non-cash portfolio stands at 44%, 57% respectively (December 31,
Total
2020: 45%, 58%).
iii. The share of the Bank’s cash and non-cash receivables from the top 100 and 200 loan customers in the overall cash and non-cash loans stands at 17%, 23%, respectively
(December 31, 2020: 17%, 23%).
Companies that are among the top loan customers ranked according to cash, non-cash and total risks are leaders in their own sectors, the loans advanced to them are in
line with their volume of industrial and commercial activity. A significant part of such loans is extended on a project basis, with their repayment sources being analyzed in
accordance with the banking principles to be considered as satisfactory and associated risks are determined and duly covered by obtaining appropriate guarantees when
deemed necessary.
7. The total value of the stage 1 and stage 2 expected credit loss allocated for credit risk stands at TL 14,511,914 (December 31, 2020: TL 10,375,920).
8. The Bank measures the quality of its loan portfolio by applying different rating/scoring models on cash commercial/corporate loans, retail loans and credit cards. The
breakdown of the rating/scoring results, which are classified as “Strong”, “Standard” and “Below Standard” by considering their default features, is shown below.
The loans whose borrowers’ capacity to fulfill their obligations is very good, are defined as “Strong”, whose borrowers’ capacity to fulfill its obligations in due time is
reasonable, are defined as “Standard” and whose borrowers’ capacity to fulfill their obligations is poor, are defined as “Below Standard”.
(*) The loans classified as closely monitored that are not past due or past due for less than 31 days is TL 55,682,522.
(**) Related figures show only overdue amounts of installment based commercial loans and installment-based consumer loans; the principal amounts of the loans which are not due
as of the balance sheet date are equal to TL 1,185,836 and TL 1,196,104 respectively.
Prior Period (*)
Loans
Corporate / Commercial Loans
Consumer Loans
Credit Cards
Total
31-60 Days (**)
61-90 Days (**)
Total
120,921
28,118
60,020
209,059
1,564,999
147,779
184,618
1,897,396
1,685,920
175,897
244,638
2,106,455
Strong
Standard
Below Standard
The table data comprises behavior rating/scoring results.
238 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Current Period
Prior Period
%45.06
%49.68
%5.26
48.71 %
43.51 %
7.78 %
(*) The loans classified as closely monitored that are not past due or past due for less than 31 days is TL 37,329,789.
(**) Related figures show only overdue amounts of installment based commercial loans and installment-based consumer loans; the principal amounts of the loans which are not due
as of the balance sheet date are equal to TL 2,660,732 and TL 736,109 respectively.
(***) Based on the decisions taken by the BRSA within the scope of the COVID-19 outbreak, only the overdue amounts (1,369,804 TL) of the loans that have delayed more than 90
days as of 17.03.2020 and continue to be classified under close monitoring are included and the payment of these loans its outstanding balance is 2,097,786 TL.
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 239
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
12. Profile of significant exposures in major regions
Current Period
Domestic
European
Union
OECD
Countries
(**)
Off-Shore
Banking
Regions
USA,
Canada
Other
Countries
Investments
in Associates,
Subsidiaries
and Jointly
Controlled
Entities
Undistributed
Assets/
Liabilities (***)
Total
Risk Groups (*)
Contingent and Non-
Contingent Receivables from
Central Governments or
Central Banks (****)
Contingent and Non-
Contingent Receivables from
Regional Government or
Domestic Government
Contingent and Non-
Contingent Receivables from
Administrative Units and Non-
Commercial Enterprises
Contingent and Non-
Contingent Receivables from
Multilateral Development
Banks
Contingent and Non-
Contingent Receivables from
International Organizations
Contingent and Non-
Contingent Receivables from
Banks and Intermediaries
Contingent and Non-
Contingent Corporate
Receivables
Contingent and Non-
Contingent Retail Receivables
Contingent and Non-
Contingent Receivables
Secured by Residential
Property
260,247,872
393
1,136,972
3,328,635
264,713,872
342,280
587,534
299,645
28
74
342,308
587,608
299,645
5,913,906
16,832,796
8,512,787
1,405
4,209,839
1,639,272
37,110,005
294,656,816
982,718
2,629,437
652,920
3,369
7,349,672
124,213,264
245,659
143,404
1,545
37,789
1,532,929
51,549,305
212,708
45,683
85
34,547
653,554
Non-Performing Receivables
6,653,184
127,476
4,330
1,349
4,720
23,255,664
92,613
12,713
1,377
13,994
267,888
Receivables are identified as
high risk by the Board
Secured Marketable Securities
Securitization Positions
Short-term Receivables
and Short-term Corporate
Receivables from Banks and
Intermediaries
Investments as Collective
Investment Institutions
1,586,280
Other Receivables
26,581,561
110,895
455,605
Share Certificate Investments
38,685,526
Total
795,587,666
18,605,258
12,103,604 657,332
5,437,859
14,776,772
38,685,526
(*) Risk amounts after the credit conversions and the effects of credit risk mitigation
(**) OECD countries other than EU countries, USA and Canada
(***) Assets and liabilities that are not consistently allocated.
(****) Credits guaranteed by the Undersecretariat of Treasury are included in the class of receivables from central government.
306,274,932
126,174,590
52,495,882
6,791,059
23,644,249
1,586,280
27,148,061
38,685,526
885,854,017
Prior Period
Domestic
European
Union
OECD
Countries
(**)
Off-Shore
Banking
Regions
USA,
Canada
Other
Countries
Investments
in Associates,
Subsidiaries
and Jointly
Controlled
Entities
Undistributed
Assets/
Liabilities (***)
Total
Risk Groups (*)
Contingent and Non-Contingent
Receivables from Central
Governments or Central Banks
(****)
171,550,123
554
1,381,513
2,167,530
175,099,720
Contingent and Non-Contingent
Receivables from Regional
Government or Domestic
Government
454,664
Contingent and Non-
Contingent Receivables from
Administrative Units and Non-
Commercial Enterprises
Contingent and Non-Contingent
Receivables from Multilateral
Development Banks
Contingent and Non-Contingent
Receivables from International
Organizations
Contingent and Non-Contingent
Receivables from Banks and
Intermediaries
Contingent and Non-Contingent
Corporate Receivables
Contingent and Non-Contingent
Retail Receivables
Contingent and Non-Contingent
Receivables Secured by
Residential Property
1
93
546,941
36,797
192,154
5,040,922
16,705,749
5,463,934
11,772
3,678,389
1,222,927
245,186,583
878,894
760,374
592,449
902,905
5,674,901
107,085,755
341,011
127,212
1,358
48,685
1,469,511
454,665
547,034
228,951
32,123,693
253,996,106
109,073,532
33,285,077
110,679
29,606
126
9,658
25,586
33,460,732
Non-Performing Receivables
7,321,663
12,428
208
2,231
6,450
Receivables are identified as
high risk by the Board
165,740
1
15
Secured Marketable Securities
Securitization Positions
Short-term Receivables
and Short-term Corporate
Receivables from Banks and
Intermediaries
Investments as Collective
Investment Institutions
1,581,841
Other Receivables
21,287,537
9.340
Equity Investments
26,315,903
Total
593,506,846
18,086,113
6,582,828
605,705
6,023,381
10,567,014
26,315,903
(*) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
(**) OECD countries other than EU countries, USA and Canada
(***) Assets and liabilities that are not consistently allocated
(****) Credit Guarantee Fund guaranteed by the Undersecreteriat of Treasury are included in the receivables from central governments.
7,342,980
165,756
1,581,841
21,296,877
26,315,903
661,687,790
240 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 241
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen 13. Risk profile by sectors or counterparties:
(1) (**)
(2)
Sectors/Counterparty (*)
Agricultural
Farming and Raising
Livestock
Forestry
Fishing
Industry
Mining
Production
42,012
39,609
917
1,486
1,031,211
20,385
993,819
Electricity, gas, and water
17,007
Construction
Services
1,102,436
138,609,511
Wholesale and Retail Trade
1,174,187
Hotel, Food and Beverage
Services
Transportation and
Telecommunication
300,534
4,202,103
Current Period
Bank
(4)
(3)
532
461
71
33,475
33,475
4,563
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
TP
YP
Toplam
Current Period
Bank
2,583,125
4,622,076
691,707
40,417
154,192
6,591,972
1,542,089
8,134,061
1,723,853
4,569,094
642,897
37,023
152,972
6,480,754
685,155
7,165,909
26,603
832,669
22,705
30,277
143,084,433
11,363,740
6,032,300
273,603
90,997,114
10,826,832
46,055,019
263,305
33,502,377
5,057,865
3,233
45,577
293
3,101
699
521
54,272
56,946
249
54,521
856,685
913,631
7,947,901
2,161,578
165,739
18,753,156
61,386,522
123,154,711
184,541,233
77,901
48,323
3,399
1,473,045
4,982,866
6,455,911
7,564,090
521,967
154,369
18,753,156
50,992,615
78,818,732
129,811,347
305,910
1,591,288
7,971
4,278,608
2,409,240
185,827
8,920,862
39,353,113
48,273,975
19,237,987
27,302,929
46,540,916
464,598
299,645
36,385,396
105,497,726
42,063,968
21,982,511
1,618,485
1,028,028
1,586,280
608,731
19,297,443
141,234,472
228,207,850
369,442,322
42,161,235
24,699,996
10,108,863
558,929
423,011
114,020
52,522,849
26,717,392
79,240,241
7,169,755
2,431,754
3,025,167
170,082
118,540
4,754,981
8,460,851
13,215,832
9
26,376,167
10,127,024
2,224,748
751,418
251,552
114,785
17,601,362
26,446,444
44,047,806
Financial Institutions
132,735,419
339,710
299,645
36,385,396
17,714,786
555,874
792,378
1,405
Real Estate and Renting
Services
45,040
Self-Employment Services
32,835
Education Services
46,419
Health and Social Services
72,974
84,181
35,793
4,716
189
4,888,884
1,720,446
3,932,915
96,169
741,510
1,046,842
859,042
405,189
5,586,347
1,076,843
406,469
908,184
583,787
14,924
10,969
14,589
7,127
60,451
90,843
15,710
60,794
1,586,280
608,731
16,291,596
52,650,982
154,667,365
207,318,347
2,777,042
8,155,555
5,449,573
13,605,128
1,974,991
394,225
2,369,216
1,154,503
1,095,726
2,250,229
2,419,249
4,976,274
7,395,523
Other
Total
123,928,702
342,308
84,440
724,609
21,607,271
63,066,941
17,595,155
561,339
22,110,463
26,539,330
634,927
225,830,636
51,364,849
277,195,485
264,713,872
342,308
587,608
299,645
37,110,005
306,274,932
126,174,590
52,495,882
6,791,059
23,644,249
1,586,280
27,148,061
38,685,526
454,281,589
431,572,428
885,854,017
(1) Contingent and non-contingent exposures to central governments or central banks (2) Contingent and non-contingent exposures to regional governments or local authorities
(3) Contingent and non-contingent exposures to administrative bodies and non-commercial undertakings (4) Contingent and non-contingent exposures to multilateral development
banks (5) Contingent and non-contingent exposures to international organizations
(6) Contingent and non-contingent exposures to banks and brokerage houses (7) Contingent and non-contingent corporate receivables (8) Contingent and non-contingent retail
receivables (9) Contingent and non-contingent exposures secured by real estate property
(10) Past due receivables (11) Receivables in regulatory high-risk categories (12) Other receivables (13) Share Certificate Investments (14) Stock Investments
(*) Risk amounts after the credit conversions and the effects of credit risk mitigation (**) Credit Guarantee Fund guaranteed by the undersecreteriat of treasury are included in the
receivables from central governments.
242 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 243
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
14. Analysis of maturity-bearing exposures according to remaining maturities:
Risk Amounts according to Risk Weights
Risk Groups (*)
Contingent and Non-Contingent
Receivables from Central Governments or
Central Banks
Contingent and Non-Contingent
Receivables from Regional Governments or
Domestic Governments
Contingent and Non-Contingent
Receivables from Administrative Units and
Non-Commercial Enterprises
The multilateral development banks and
non-contingent receivables
Contingent and Non-Contingent
Receivables from Banks and Intermediaries
Contingent and Non-Contingent Corporate
Receivables
Contingent and Non-Contingent Retail
Receivables
Contingent and Non-Contingent
Collateralized Receivables with Real Estate
Mortgages
Receivables are identified as High Risk by
the Board
1 Month
1-3 Months
3-6 Months
6-12 Months
Over 1 Year
Total
Current Period
Time to Maturity
7,088,091
9,386,431
5,241,139
5,242,241
113,429,233
140,387,135
2,065
808
489
7,580
331,366
342,308
2,806
360,630
28,617
97,238
74,311
563,602
246,181
53,464
299,645
7,755,227
2,377,936
2,259,325
6,956,019
4,699,161
24,047,668
14,635,901
29,613,634
38,161,033
45,048,877
175,814,410
303,273,855
35,852,634
2,693,801
3,973,279
11,691,157
67,303,761
121,514,632
1,016,275
1,268,066
2,586,977
4,306,161
40,288,565
49,466,044
252,100
2,883
3,973
10,339
20,943,185
21,212,480
Total
66,605,099
45,950,370
52,254,832
73,359,612
422,937,456
661,107,369
(*) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
15. Information on Risk Classes
In the calculation of the amount subject to credit risk, determining the risk weights related to risk classes stated on the sixth article of “Regulation on Measurement and
Evaluation of Capital Adequacy of Banks”, is based on the Fitch Ratings’ and JCR Avrasya Derecelendirme A.Ş. international rating.
“Contingent and Non-Contingent Receivables from Banks and Intermediaries” are receivables from related parties residing in foreign countries against the risk evaluated
in class with “Contingent and Non-Contingent Receivables from Central Governments or Central Banks” are receivables that are evaluated in the class will be the subject of
risk weights determined in accordance with Fitch Ratings issued by the rating of the risk. “Contingent and Non-Contingent Receivables from Banks and Intermediaries” in
the class with resident banks and brokerage firms in the dorm evaluated risk “Contingent and Non-Contingent Corporate Receivables” in the class evaluated dorm resident
companies and financial institutions in the TL-denominated receivables, the risk weights that will be the subject of JCR Avrasya Derecelendirme A.Ş. international rating
grades assigned by it are used. The aforementioned application is made in accordance with BRSA decision No. 8875 dated 21.02.2020, which allows the national grades
assigned by the relevant organization to be taken into account in the calculations of amounts based on credit risk.
If a receivable-specific rating is performed, risk weights to be applied on the receivable are determined by the relevant credit rating.
Risk Weight
0%
20%
35%
50%
75%
100%
150%
250%
Other (**)
Mitigation in
Shareholders’
Equity (**)
Amount Before Credit
Risk Mitigation (*)
Amount After Credit
Risk Mitigation
264,770,367
41,602,941
24,836,316
61,674,314
124,395,008 351,258,369 23,930,490
280,196
389,140
1,607,847
272,939,387
40,846,869
24,777,988
61,587,520
121,117,602 340,312,566 23,602,749
280,196
389,140
1,607,847
(*) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
(**) Related balance includes receivables from central counterparties subject to 2% risk weight.
16. Miscellaneous Information According to Type of Counterparty or Major Sectors
Significant Sectors/Counterparty
Current Period
Agricultural
Farming and Raising Livestock
Forestry
Fishing
Industry
Mining
Production
Electricity, gas, and water
Construction
Services
Wholesale and Retail Trade
Hotel, Food and Beverage Services
Transportation and Telecommunication
Financial Institutions
Real Estate and Renting Services
Self-Employment Services
Education Services
Health and Social Services
Other
Total
1
1.1
1.2
1.3
2
2.1
2.2
2.3
3
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
5
6
Loans
Depreciated (TFRS 9)
Significant Increase
in Credit Risk (Stage 2)
Non-Performing
(Stage 3)
Provisions
Expected Credit Loss
(TFRS 9)
713,865
518,333
1,385
194,147
22,460,675
45,758
6,792,887
15,622,030
4,127,515
22,748,411
5,093,651
5,214,520
4,167,140
17,521
5,491,812
407,349
127,685
2,228,733
9,606,036
59,656,502
166,146
149,766
1,829
14,551
7,001,146
117,916
2,501,111
4,382,119
6,047,460
5,448,195
2,587,088
540,374
1,636,348
9,620
496,020
59,845
57,421
61,479
2,167,612
20,830,559
252,676
194,930
1,693
56,053
10,580,731
78,323
3,511,668
6,990,740
4,281,706
7,073,436
2,877,911
1,007,291
1,562,674
10,333
1,134,225
70,970
64,914
345,118
2,696,901
24,885,450
17. Information on Value Adjustments and Change in Credit Provisions:
Stage 3 provisions
Stage 1 and Stage 2 Provisions
12,975,961
10,375,920
4,295,960
9,357,641
(3,480,926)
(5,221,647)
13,790,995
14,511,914
Beginning Balance
Additional Provisions
Reversal of Provisions
Other Value Adjustment Ending Balance
The table related to mapping the ratings used in the calculations and credit quality grades, which is stated in the Annex of Regulation on Measurement and Evaluation of
Capital Adequacy of Banks, is given below:
18. Exposures Subject to Counter-cyclical Capital Buffer
Credit Quality Grades
1
2
3
4
5
6
Risk Rating
AAA via AA-
A+ via A-
BBB+ via BBB-
BB+ via BB-
B+ via B-
CCC+ and lower
Country
Turkey
Germany
TRNC
England
Albania
Malta
Kosova
Marshall Island
Iraq
Cayman Island
Other
RWA Calculations for Private Sector
Loans in Banking Book
RWA calculations for Trading Book
Total
375,441,490
4,259,853
3,536,709
2,299,964
1,501,401
1,085,701
1,084,821
743,226
677,942
652,744
883,977
207,095
49,931
375,648,585
4,259,853
3,536,709
2,299,964
1,501,401
1,085,701
1,084,821
743,226
677,942
652,744
933,908
244 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 245
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
III. Explanations on Currency Risk
The exposed currency risk of the Bank is result of the difference between the assets denominated in and indexed to foreign currencies and liabilities denominated in foreign
currencies. Furthermore, parity fluctuations of different foreign currencies are another element of the currency risk.
The currency risk is managed by the internal currency risk limits which are established as a part of the Bank’s risk policies. The Assets and Liabilities Committee and the
Assets and Liabilities Management Unit meet regularly to take the necessary decisions for hedging exchange rate and parity risks within the framework of the limits
determined by the “Net Foreign Currency Overall Position/Shareholders’ Equity” ratio which is a part of the legal requirement and the internal currency risk limits specified
by the Board of Directors. Foreign exchange risk management decisions are strictly applied.
In measuring currency risk, both the Standard Method and the Value at Risk Model (VAR) and Expected Shortfall are used as applied in the statutory reporting.
Measurements made within the scope of the Standard Method are carried out on a monthly basis and form the basis of determining the capital requirement for hedging
currency risk.
Risk measurements made within the context of the VAR are practiced on a daily basis using the historical and Monte Carlo simulation methods. Scenario analyses are
conducted to support the calculations made within the VAR context. Expected loss calculations are also carried out daily.
The results of the measurements made on currency risk are reported to the Key Management and the risks are closely monitored by taking into account the market and the
economic conditions.
The Bank’s foreign currency purchase rates at the date of balance sheet and for the last five working days of the period announced by the Bank in TL are as follows:
Date
December 31, 2021
December 30, 2020
December 29, 2020
December 28, 2020
December 27, 2020
December 24, 2020
USD
13,0850
12,9097
12,4600
11,6965
11,3492
11,5260
EUR
14,8390
14,6396
14,1297
13,2381
12,8552
13,0359
The Bank’s last 30-days arithmetical average foreign currency purchase rates:
USD: 13,2847 TL
EURO: 15,0164 TL
Sensitivity to currency risk:
The Bank’s sensitivity to any potential change in foreign currency rates has been analyzed. In the analysis presented below, 10% change, which is also the amount used for
the internal reporting purposes, is anticipated in USD, EUR, GEL and CHF.
USD
EURO
GEL
CHF
(*) Indicates the values before tax
% Change in Foreign Currency
10 % increase
10 % decrease
10 % increase
10 % decrease
10 % increase
10 % decrease
10 % increase
10 % decrease
Current Period
(31,038)
31,038
284,955
(284,955)
44,033
(44,033)
44,448
(44,448)
Effects on Profit/Loss (*)
Prior Period
36,357
(36,357)
355,066
(355,066)
21,256
(21,256)
30,076
(30,076)
Information on currency risk:
Current Period
Assets
Cash (Cash in Vault, Foreign Currency Cash, Money in Transit, Cheques
Purchased) and Balances with the Central Bank of Turkey (1)
Banks
Financial Assets at Fair Value through Profit/Loss (2)
Money Market Placements
Financial Assets at Fair Value Through Other Comprehensive Income
Loans (3)
Investments in Associates, Subsidiaries and Jointly Controlled Entities
(Joint Ventures)
Financial Assets Measured at Amortised Cost
Derivative Financial Assets Held for Risk Management
Tangible Assets (2)
Intangible Assets (2)
Other Assets (2)
Total Assets
Liabilities
Banks Deposits
Foreign Currency Deposits (4)
Money Market Funds
EUR
USD
Other FC
Total
79,164,133
64,172,172
21,306,466
164,642,771
6,123,593
2,442,160
8,142,099
6,926,516
2,379,006
109,284,998
28,352,062
113,456,248
3,340,030
891,290
2,814,609
973,421
9,695,388
5,560,441
7,026
4,157,234
1,199,408
23,961,080
14,929,117
30,738,094
226,898,480
4,539,438
4,679,320
24,110
2,041
8,109
34,260
1,160,926
204,810,246
5,639,176
229,504,923
212,450
43,119,943
7,012,552
477,435,112
1,397,361
141,588,919
473,547
209,595,715
9,113,694
248,254
74,706,193
2,119,162
425,890,827
9,113,694
63,146,374
60,615,908
2,700,732
Funds Provided from Other Financial Institutions
20,665,269
42,481,105
Marketable Securities Issued (5)
Miscellaneous Payables
Derivative Financial Liabilities Held for Risk Management
347,566
60,470,981
2,198,166
144,927
155,000
Other Liabilities (2)
Total Liabilities
Net Balance Sheet Position
Net Off Balance Sheet Position
Derivative Financial Assets (6)
Derivative Financial Liabilities (6)
Non-Cash Loans
Prior Period
Total Assets
Total Liabilities
Net Balance Sheet Position
Net Off Balance Sheet Position
Derivative Financial Assets
Derivative Financial Liabilities
Non-Cash Loans
2,287,752
166,286,867
3,965,134
328,298,342
215,956
75,470,330
6,468,842
570,055,539
38,523,379
(34,917,922)
23,722,933
58,640,855
63,144,010
102,183,304
93,727,659
8,455,645
(4,939,836)
14,700,689
19,640,525
37,579,765
(98,793,419)
102,207,134
151,052,076
48,844,942
75,747,621
129,902,511
189,170,266
(59,267,755)
60,694,619
83,998,250
23,303,631
37,803,128
(32,350,387)
33,934,554
37,319,331
3,384,777
8,477,435
25,579,089
47,021,181
(21,442,092)
22,680,380
23,965,091
1,284,711
4,445,593
(92,620,427)
101,223,766
212,094,340
110,870,574
147,369,066
257,664,904
329,919,106
(72,254,202)
78,435,163
122,664,030
44,228,867
79,828,486
(1) Precious metals accounts amounting TL 20,081,293 are included.
(2) In accordance with the Communiqué regarding the principles of the “Regulation on Measurement and Practices of Banks’ Net Overall FC Position/Shareholders’ Equity Ratio on
a Consolidated and Unconsolidated Basis”, Foreign Currency Income Accruals of Derivative Financial Instruments (TL 14,765,878), Operating Lease Development Costs (TL 5,718),
Intangible assets (TL 3.006), Deferred Tax Asset (TL 2,470,081), Prepaid Expenses (TL 183,722), Stage 1 and Stage 2 expected credit loss (TL (8,727,116)), Assets Held for Sale
and Related to Discontinued Operations (TL 9,532), in liabilities; Foreign Currency Expense Accruals of Derivative Financial Instruments (TL 3,740,958) and Shareholders’ Equity (TL
(3,084,642)) in Stage 1 and Stage 2 expected credit loss for non-cash loans (TL 223,394) in liabilities are not included in currency risk calculations.
(3) Foreign currency indexed loans amounting TL 698,316 presented in TL loans in the balance sheet are included in the table above. TL 444,604 is USD indexed, TL 246,881 is EUR
indexed, TL 1,189 is CHF indexed, TL 5,642 is GBP indexed.
(4) Precious metals deposit accounts amounting TL 54,040,023 are included.
(5) Includes Tier 2 subordinated bonds which are classified on the balance sheet as subordinated loans.
(6) The derivative transactions within the context of forward foreign currency options and foreign currency forwards definitions included in the Communiqué above are taken into
consideration.
246 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 247
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
IV. Explanations on Interest Rate Risk
a. Interest rate sensitivity of assets, liabilities and off balance sheet items (Based on time remaining to repricing date):
Interest rate risk is defined as the impairment in the value of the Bank’s interest sensitive Asset, liabilities and off-balance sheet items due to interest rate fluctuations. A
method which takes into consideration the effect of standard interest shocks on the economic values of the Bank’s on and off-balance sheet interest sensitive accounts is
used for measuring the interest rate risk arising from the banking accounts, whereas the interest rate risk related to interest sensitive financial instruments followed under
trading accounts is assessed within the scope of market risk.
Potential effects of interest rate risk on the Bank’s assets and liabilities, market developments, the general economic environment and expectations are regularly followed
in meetings of the Asset-Liability Committee, where further measures to reduce risk are taken when necessary.
The Bank’s on and off-balance sheet interest sensitive accounts other than the assets and liabilities exposed to market risk are monitored and controlled by the limits on
the ratio of structural interest rate risk to equity and tier 1 capital determined by the Board within the scope of asset-liability management risk policy. Moreover, scenario
analyses formed in line with the average maturity gaps and the historical data and expectations are also used in the management of the related risk.
In addition, the impact of changes in interest rates on the Bank’s net interest income is regularly analyzed. Within this framework, the limit on the ratio of change in net
interest income to the capital is expected to occur under various scenarios are monitored and regularly reported to senior management.
Interest rate sensitivity
In this part, the sensitivity of the Bank’s assets and liabilities to the interest rates has been analyzed assuming that the year-end balance figures were the same
throughout the year. Mentioned analysis shows how the FC and TL changes in interest rates by one point during the one-year period affect the Bank's income accounts and
shareholders' equity under the assumption maturity structure and balances are remain the same all year round at the end of the year.
During the measurement of the Bank’s interest rate sensitivity, the profit/loss on the asset and liability items that are evaluated with market value are determined by
adding to/deducting from the difference between the expectancy value of the portfolio after one year in case there is no change in interest rates and the value of the
portfolio one year later, which is measured after the interest shock, the interest income to be additionally earned/to be deprived of during the one year period due to the
renewal or repricing of the related portfolio at the interest rates formed after the interest shock.
On the other hand, in the profit/loss calculation of assets and liabilities that are not evaluated by the current market prices, it is assumed that assets and liabilities with
fixed interest rates will be renewed at maturity date and the assets and liabilities having variable interest rates will be renewed at the end of repricing period with the
market interest rates generated after the interest shock.
Within this context, ceteris paribus, the possible changes that may occur in the Bank’s profit and shareholders’ equity in case of 100 basis point increase/decrease in TL
and FC interest rates on the reporting day are given below:
% Change in the Interest Rate (*)
Effect On Profit/Loss
Effect on Equity (**)
TL
FC (***)
Current Period
100 bps increase
100 bps decrease
100 bps increase
100 bps decrease
987,676
(1,762,490)
Prior Period
674,620
(1,226,541)
Current Period
(1,809,125)
1,993,226
Prior Period
(1,124,477)
1,247,244
(*) Changes in interest rates is calculated assuming that the expectations reflected in inflation. The effects on the profit/loss and shareholders’ equity are
stated with their before tax values.
(**) The effect on the profit/loss is mainly arising from the fact that the average maturity of the Bank’s fixed rate liabilities is shorter than the average
maturity of its fixed rate assets.
(***) The effect on the shareholders’ equity is arising from the change of the fair value of securities followed under Financial Assets Available for Sale.
Current Period
Assets
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and
Over
Non-interest
Bearing
Total
Cash (Cash in Vault, Foreign
Currency Cash, Money in Transit, Cheques
Purchased) and Balances with the Central
Bank of Turkey
14,620,305
167,302,916
181,923,221
Banks
3,736,353
208,939
20,184,009
24,129,301
Financial Assets at Fair Value through
Profit/Loss (*)
Money Market Placements
Financial Assets at Fair Value Through
Other Comprehensive Income
Loans
Financial Assets Measured
at Amortised Cost
Other Assets (**)
Total Assets
Liabilities
Banks Deposits
Other Deposits
Money Market Funds
Miscellaneous Payables
Marketable Securities Issued (***)
Funds Provided from Other Financial
Institutions
8,199,318
9,326,626
7,138,279
5,623,571
3,530
2,205,050
32,496,374
19,965,684
16,404,869
13,928,740
19,161,533
17,516,956
577,294
87,555,076
96,042,600
44,023,134
144,511,067
181,377,115
48,139,857
114,977
514,208,750
8,277,298
12,224,444
15,562,809
8,408,689
1,939,494
46,412,734
2,883,389
36,960,179
39,843,568
153,724,947
82,188,012
181,140,895
214,570,908
67,599,837
227,344,425
926,569,024
1,599,410
1,084,200
1,261
254,580,741
33,534,194
18,275,640
1,244,478
42,595,997
2,299,805
3,339,693
1,584,249
1,249,305
4,923,360
22,221,079
22,368,163
17,344,902
3,628,174
37,755,079
22,277,040
1,684,916
306,217
1,062,316
3,747,187
284,246,136
591,881,189
48,235,495
22,947,587
24,531,836
68,106,809
65,651,426
Other Liabilities (****)
Total Liabilities
3,998,152
3,949,203
3,646,271
1,453,969
1,286,172
110,081,315
124,415,082
309,236,028
83,545,841
69,760,984
26,751,526
18,937,291
418,337,354
926,569,024
Balance Sheet Long Position
Balance Sheet Short Position
(155,511,081)
(1,357,829)
(190,992,929)
(347,861,839)
111,379,911
187,819,382
48,662,546
347,861,839
Off Balance Sheet Long Position
6,817,975
17,021,725
Off Balance Sheet Short Position
(2,289,875)
(12,871,498)
(6,587,375)
23,839,700
(21,748,748)
Total Position
(148,693,106) 15,663,896
109,090,036
174,947,884
42,075,171
(190,992,929) 2,090,952
(*) The balance includes derivative financial assets
(**) The expected loss provisions are shown in Non-Interest column.
(***) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
(****) Equity is included in ‘’non-interest bearing’’ column.
248 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 249
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Prior Period
Assests
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years
and Over
Non-interest
Bearing
Total
Cash (Cash in Vault, Foreign Currency Cash,
Money in Transit, Cheques Purchased) and
Balances with the Central Bank of Turkey
3,076,982
67,829,379
70,906,361
Banks
4,522,726
136,518
45,738
8,827,076
16,049,561
Financial Assets at Fair Value through
Profit/Loss (*)
Money Market Placements
Financial Assets at Fair Value Through
Other Comprehensive Income
1,381,494
1,290,113
4,005,775
997,989
7,470
1,558,650
9,241,491
18,325,551
8,933,436
12,984,006
11,561,103
13,291,720
435,130
65,530,946
Loans
71,342,009
32,663,401
96,030,000
133,492,165
31,861,030
132,997
365,521,602
Financial Assets Measured at Amortised Cost
8,288,856
7,600,549
16,871,549
7,319,256
1,579,227
41,659,437
Other Assets (**)
Total Assets
Liabilities
Banks Deposits
Other Deposits
5,071,030
22,439,507
24,993,034
112,008,648
50,624,017
129,937,068
153,370,513
46,739,447
101,222,739
593,902,432
2,584,686
409,869
768
1,080,222
4,075,545
160,014,577
37,603,795
13,737,662
526,688
152,918,224
364,800,946
Money Market Funds
22,996,534
3
Miscellaneous Payables
425,062
Marketable Securities Issued (***)
1,080,972
5,104,639
12,275,296
24,729,251
9,789,049
Funds Provided from Other Financial
Institutions
Other Liabilities (****)
Total Liabilities
1,059,824
23,448,656
13,126,348
2,303,162
493,355
2,586,492
2,756,982
1,755,976
1,154,150
1,090,336
84,322,597
93,666,533
190,748,147
69,323,944
40,896,050
28,713,251
11,372,740
252,848,300
593,902,432
22,996,537
14,527,257
14,952,319
52,979,207
40,431,345
Balance Sheet Long Position
89,041,018
124,657,262
35,366,707
249,064,987
Balance Sheet Short Position
(78,739,499)
(18,699,927)
(151,625,561)
(249,064,987)
Off Balance Sheet Long Position
3,665,121
9,971,763
649,650
Off Balance Sheet Short Position
(5,576,573)
(8,123,500)
14,286,534
(13,700,073)
b. Average interest rates applied to monetary financial instruments:
Current Period
Assets
Cash (Cash in Vault. Foreign Currency Cash. Money in Transit.
Cheques Purchased) and Balances with the Central Bank of Turkey
Banks
Financial Assets at Fair Value through Profit/Loss
Money Market Placements
Financial Assets at Fair Value Through Other Comprehensive
Income
Loans
Financial Assets Measured at Amortised Cost
Liabilities
Banks Deposits
Other Deposits
Money Market Funds
Miscellaneous Payables
Debt Securities Issued (*)
EUR
%
0.15
1.92
3.29
4.42
2.92
0.11
0.03
Funds Provided from Other Financial Institutions
1.86
(*) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
Prior Period
Assets
Cash (Cash in Vault. Foreign Currency Cash. Money in Transit.
Cheques Purchased) and Balances with the Central Bank of Turkey
Banks
Financial Assets at Fair Value through Profit/Loss
EUR
%
0.33
2.09
Total Position
(75,074,378)
(8,728,164)
89,690,668
119,080,689
27,243,207
(151,625,561) 586,461
Money Market Placements
(*) The balance includes derivative financial assets
(**) The expected loss provisions are shown in Non-Interest column.
(***) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
(****) Equity is included in ‘’non-interest bearing’’ column.
Financial Assets at Fair Value Through Other Comprehensive Income 2.18
Loans
Financial Assets Measured at Amortised Cost
Liabilities
Banks Deposits
Other Deposits
Money Market Funds
Miscellaneous Payables
Debt Securities Issued (*)
4.74
1.80
0.11
0.05
Funds Provided from Other Financial Institutions
1.86
(*) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
JPY
%
JPY
%
USD
%
0.20
2.59
4.82
5.26
3.37
0.38
0.13
1.49
6.50
2.44
USD
%
0.13
2.12
4.66
5.83
3.88
1.01
0.15
1.75
6.22
2.58
TL
%
8.50
11.39
14.41
22.06
18.15
18.84
15.50
11.57
13.98
18.22
13.75
TL
%
12.00
15.27
13.90
14.66
14.17
12.81
16.50
10.65
16.93
13.81
11.02
250 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 251
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
V. Explanations on Equity Shares Risk Arising from Banking Book
a. Accounting policies related to equity investments in associates and subsidiaries can be seen in the Section Three Note III.2.
b. Balance Sheet Value of Equity Investment, fair value, and for publicly traded, if the market value is different from the fair value comparison to the market price:
Investments in Shares
Quoted
Investments in Shares Group A
Subsidiaries
Financial Subsidiaries
Non-Financial Subsidiaries
Non-Quoted
Subsidiaries
Financial Subsidiaries
Non-Financial Subsidiaries
Associates
Financial Associates
Non-Financial Associates
Book Value
Fair Value
Market Value (*)
Comparison
22,482,626
41,580,067
10,063,540
20,110,336
280,196
30,885
7,549,517
1,426,871
(*) Represents the sum of the market values of the related companies.
c. Information on revaluation surpluses and unrealized gains/losses on equity securities and results included in Common Equity and Tier II Capital
Portfolio
Private Equity Investments
Shares Traded on a Stock Exchange
Other Stocks
Total
Realized Gains/
losses During the
period
Revaluation Increases
Unrealized Gains and Losses
Total
Including into
Tier I Capital (*)
Total
Including into
Common Equity
Including into
Tier II Capital
25,681,724
6,362,179
32,043,903
25,681,724
6,362,179
32,043,903
(*) Represents the amounts reflected to equity according to the equity method.
d. Capital requirement as per equity shares:
Portfolio
Carrying Value
Total RWA
Private Equity Investments
Share Traded on a Stock Exchange
Other Stocks
Total
30,173,876
9,287,469
39,461,345
30,173,876
8,221,084
38,394,960
Minimum Capital
Requirement
2,413,910
657,687
3,071,597
VI. Explanations on Liquidity Risk Management and Liquidity Coverage Ratio
Liquidity risk may occur as a result of funding long-term assets with short-term liabilities; The Bank’s liquidity is managed by the Asset-Liability Management Committee in
accordance with the business strategies, legal requirements, current market conditions and expectations regarding the economic and financial conjuncture.
The Bank’s principal source of funding is deposits. Although the average maturity of deposits is shorter than that assets as a result of the market conditions, the Bank’s
wide network of branches and stable core deposit base are its most important safeguards of funding. Additionally, the Bank borrows medium and long-term funds from
institutions abroad. Concentration limits are generally used in deposit and non-deposit borrowings in order to prevent adverse effects of concentrations in the liquidity risk
profile of the Bank.
In order to meet the liquidity requirements that may arise from market fluctuations, considerable attention is paid to the need to preserve liquidity and efforts in this
respect are supported by projections of Turkish Lira and Foreign Currency (FC) cash flows. The term structure of TL and FC deposits, their costs and amounts are monitored
on a daily basis. During these studies historical events and future expectations are taken into account as well. Based upon cash flow projections, prices are differentiated
for different maturities and measures are taken accordingly to meet liquidity requirements. Moreover, potential alternative sources of liquidity are determined to be used in
case of extraordinary circumstances.
The liquidity risk exposure of the Bank has to be within the risk capacity limits which are prescribed by the legislation and the Bank’s risk appetite defined in its business
strategy. It is essential for the Bank to have an adequate level of unencumbered liquid asset stock which can be sold or pledged, in case a large amount of reduction in
liquidity sources occurs. The level of liquid asset buffer is determined in accordance with the liquidity risk tolerance which is set by the Board of Directors. Asset-Liability
Management Committee is responsible for monitoring the liquidity position, determining appropriate sources of funds and deciding the maturity structure in accordance
with the limits which are set by the Board of Directors.
The Treasury Division is responsible for monitoring the liquidity risk, in accordance with the Asset and Liability Management Risk Policy limits, objectives set out in the
business plan and the decisions taken at the meetings of Asset-Liability Management Committee. The Treasury Division is also responsible for making liquidity projections
and taking necessary precautions to reduce liquidity risk, by using the results of stress testing and scenario analysis. Within this scope, Treasury Division is monitoring
the Turkish Lira (TL) and foreign currency (FC) liquidity position instantly and prospectively based on the information provided from the branches, business units and IT
infrastructure of the Bank. The assessment of long-term borrowing opportunities is carried out regularly in order to balance the cash inflows and outflows and to mitigate
the liquidity risk. The Bank creates liquidity through repurchase agreements and secured borrowings based on the high quality liquid asset portfolio, through securitization
and other structured finance products which are created from the asset pools like credit card receivables and retail loans.
The Bank applies liquidity stress tests to measure liquidity risk. In this approach, in liquidity stress scenarios in which parameters are determined by the Board of Directors,
the ability of the Bank’s liquid assets’ in covering cash outflows within a one-month horizon has been described. Liquidity adequacy limits for TL and FC are determined
by Board of Directors, based on the liquidity requirements and risk tolerance of the Bank. The liquidity risk is measured by the Risk Management Division and results are
reported to the related executive functions, senior management and Board of Directors. The reflections of conveniences provided for loan customers on repayments due to
the COVID-19 outbreak and pressure in financial markets on the Bank’s liquidity adequacy are analyzed under various scenarios.
It is essential for the Bank to monitor the liquidity position and funding strategy continuously. In case of a liquidity crisis that may arise from unfavorable market
conditions, extraordinary macroeconomic situations and other reasons which are beyond the control of the Bank, “Emergency Action and Funding Plan” is expected to be
commissioned. In that case, related committees have to report the precautions taken and their results to the Board of Directors through Audit Committee.
The Bank’s Foreign Currency (FC) and total (TL+FC) liquidity coverage ratio averages for the last three months, the highest value and the lowest value occurred in this period
are given below.
The lowest value
Applicable week
The highest value
Applicable week
Current Period
Prior Period
TL+FC
156.10
29.10.2021
221.43
17.12.2021
FC
424.93
05.11.2021
563.53
31.12.2021
TL+FC
156.34
23.10.2020
175.72
01.01.2021
FC
278.05
16.10.2020
509.90
11.12.2020
252 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 253
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Liquidity Coverage Ratio:
Current Period
HIGH QUALITY LIQUID ASSETS
High Quality Liquid Assets
Cash Outflows
Total Unweighted Value (*)
Total Weighted Value (*)
TL+FC
FC
TL+FC
FC
Prior Period
High Quality Liquid Assets
High Quality Liquid Assets
Cash Outflows
Total Unweighted Value (*)
Total Weighted Value (*)
TL+FC
FC
TL+FC
FC
130,597,014
79,075,224
186,865,178
132,130,558
Retail and Small Business Customers, of which;
277,386,679
181,076,534
25,425,186
18,107,653
Retail and Small Business Customers, of which;
378,422,583
251,550,732
35,109,104
25,155,073
Stable deposits
Less stable deposits
Unsecured wholesale funding, of which;
Operational deposits
Non-operational deposits
Other unsecured funding
Secured funding
54,663,092
323,759,491
156,530,467
1,298,868
124,839,220
30,392,379
251,550,732
99,600,447
16,358
87,623,801
11,960,288
2,733,155
32,375,949
78,040,627
324,717
55,995,721
21,720,189
25,155,073
49,738,926
4,089
37,964,858
11,769,979
Other cash outflows, of which;
6,925,853
9,574,477
6,925,853
9,574,477
Derivatives cash outflow and liquidity needs related to market
valuation changes on derivatives or other transactions
Obligations related to structured financial products
Commitments related to debts to financial markets and other off-
balance sheet obligations
Other revocable off-balance sheet commitments and contractual
obligations
Other irrevocable or conditionally revocable off-balance sheet
obligations
TOTAL CASH OUTFLOWS
CASH INFLOWS
Secured lending
Unsecured lending
Other cash inflows
TOTAL CASH INFLOWS
TOTAL HQLA STOCK
TOTAL NET CASH OUTFLOWS
LIQUIDITY COVERAGE RATIO (%)
3,012,776
5,661,400
3,012,776
5,661,400
3,913,077
3,913,077
3,913,077
3,913,077
9,471,060
7,896,326
473,553
394,816
276,500,278
147,811,844
29,290,876
17,217,122
149,840,013
102,080,414
50,870,034
5,579,482
56,449,516
33,497,689
58,582,613
92,080,302
40,653,842
5,579,482
46,233,324
30,367,269
58,582,613
88,949,882
Upper Limit Applied Value
186,865,178
103,606,689
179.94
132,130,558
26,084,775
506.44
(*) The simple arithmetic average calculated for the last three months of the weekly simple arithmetic average.
Stable deposits
Less stable deposits
Unsecured funding, of which;
Operational deposits
Non-operational deposits
Other unsecured funding
Secured funding
Other cash outflows, of which;
Derivatives cash outflow and liquidity needs related to market
valuation changes on derivative or other transactions
Obligations related to structured financial products
Commitments related to debts to financial markets and other off-
balance sheet obligations
Other revocable off-balance sheet commitments and contractual
obligations
Other irrevocable or conditionally revocable off-balance sheet
obligations
Total Cash Outflows
Cash Inflows
Secured lending
Unsecured lending
Other cash inflows
Total Cash Inflows
Total Hqla Stock
Total Net Cash Outflows
Liquidity Coverage Ratio (%)
46,269,638
231,117,041
105,988,053
1,349,088
86,784,021
17,854,944
5,539,673
1,794,273
181,076,534
60,698,942
67,444
54,115,267
6,516,231
8,108,203
4,362,803
2,313,482
23,111,704
51,951,497
337,272
39,686,643
11,927,582
5,506
5,539,673
18,107,653
29,970,499
16,861
23,622,939
6,330,699
5,506
8,108,203
1,794,273
4,362,803
3,745,400
3,745,400
3,745,400
3,745,400
7,028,663
6,284,510
351,433
314,226
196,973,518
92,425,535
21,527,379
11,455,358
104,800,674
67,961,445
1,484
33,794,601
1,596,986
35,393,071
21,391,709
44,734,361
66,126,070
25,760,071
1,596,986
27,357,057
18,943,694
44,734,361
63,678,055
Upper Limit Applied Value
130,597,014
77,443,617
169.04
79,075,224
18,754,820
435,80
(*) The simple arithmetic average calculated for the last three months of the weekly simple arithmetic average.
Compared to prior period, a decrease in the total liquidity coverage ratio and a slight increase in the foreign currency liquidity coverage ratio has been observed for the
fourth quarter of 2021. The foreign currency liquidity coverage ratio fell due to an increase in net cash outflows, while the total liquidity coverage ratio increased due to an
increase in the stock of high-quality liquid assets. Total and Foreign Currency liquidity coverage ratios are continuing to hover far above the minimum level (respectively
100% and 80%) pursuant to legal legislations.
The Liquidity Coverage Ratio which has been introduced to ensure banks to preserve sufficient stock of high quality assets to meet their net cash outflows that may occur
in the short term is calculated as per the Communiqué on “Measurement and Assessment of the Liquidity Coverage Ratio of Banks’ published by BRSA. The ratio is directly
affected by the level of unencumbered high quality assets which can be liquidated at any time and net cash inflows and outflows arising from the Bank’s assets, liabilities
and off-balance sheet transactions.
The Bank’s high quality liquid asset stock primarily consists of cash, the accounts held at CBRT and unencumbered government bonds which are issued by Turkish Treasury.
The Bank’s principal source of funding is deposits. In terms of non-deposit borrowing, funds received from repurchase agreements, marketable securities issued, and funds
borrowed from financial institutions are among the most significant funding sources of the Bank.
In order to manage liquidity effectively, concentration of liquidity sources and usages should be avoided. Due to the strong and stable core deposit base of the Bank,
deposits are received from a diversified customer portfolio. In addition, in order to provide diversification in liquidity sources and usages, liquidity concentration limits are
used effectively. Total amount of funds borrowed from a single counterparty or a risk group is closely and instantaneously monitored, taking liquidity concentration limits
into account. In addition to these, the cumulative liquidity deficits that the Bank is exposed to in various maturity tranches are periodically monitored and reported to the
senior management.
Cash flows of derivatives that will take place within 30 days are taken into account in calculation of liquidity coverage ratio. Cash outflows of derivatives that arise from
margin obligations, are reflected to the results in accordance with the methodology articulated in the related legislation.
Liquidity risk of the Bank, its foreign branches and subsidiaries that are to be consolidated are managed within the regulatory limits and in accordance with the group
strategies. For the purposes of effectiveness and sustainability of liquidity management, funding sources of group companies and funding diversification opportunities in
terms of markets, instruments and tenor are evaluated and liquidity position of the group companies are monitored continuously by the Bank.
254 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 255
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Presentation of assets and liabilities according to their remaining maturities:
Demand
Up to 1 Month
1-3
Months
3-12
Months
1-5
Years
5 Years and
Over
Unallocated (*)
Total
Current Period
Assets
Cash (Cash in Vault, Foreign
Currency Cash, Money in
Transit, Cheques Purchased)
and Balances with the
Central Bank of Turkey
96,225,661
85,697,560
Banks
22,341,126
1,579,236
208,939
Financial Assets at Fair
Value through Profit/Loss
(**)
Money Market Placements
Financial Assets at Fair
Value Through Other
Comprehensive Income
2,201,562
8,196,887
9,277,458
7,110,583
5,703,099
6,785
181,923,221
24,129,301
32,496,374
In compliance with the “IFRS 7”, the following table indicates the maturities of the Bank’s major financial assets and liabilities which are not qualified as derivatives. The
following tables have been prepared by referencing the earliest dates of collections and payments without discounting the liabilities. The interest to be collected from and
paid to the related liabilities is included in the following table. Adjustments column shows the items that may cause possible cash flows in the following periods. The values
of the related liabilities registered in balance sheet do not include these amounts.
Current Period
Demand
Up to 1
Month
1-3 Months 3-12 Months 1-5 Years
5 Years and
Over
Total
Adjustments (-)
Balance Sheet
Value
Liabilities
Deposits
Funds Provided
from Other Financial
Institutions
Money Market Funds
Marketable
Securities Issued (*)
Leasing Liabilities
285,308,452 256,676,019
35,076,238
18,499,054
1,293,714
596,853,477 1,225,101
595,628,376
1,659,611
8,456,296
36,706,015
19,613,123
1,416,626
67,851,671
2,200,245
65,651,426
42,654,340
2,304,287
3,370,651
48,329,278
93,783
48,235,495
1,635,592
2,834,652
25,742,077
31,141,372
23,533,539
84,887,232
16,780,423
68,106,809
47,228
105,530
333,691
1,301,918
2,043,284
3,831,651
2,131,212
1,700,439
577,294
948,712
5,126,339
5,025,034
46,197,045
29,680,652
87,555,076
(*) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
Loans (***)
21,726,820
49,205,281
49,537,602 144,667,746
182,605,659
45,635,083
20,830,559
514,208,750
Financial Assets Measured
at Amortised Cost
Other Assets
Total Assets
Liabilities
Bank Deposits
Other Deposits
Funds Provided from Other
Financial Institutions
Money Market Funds
Marketable Securities
Issued (****)
Miscellaneous Payables
Other Liabilities
Total Liabilities
Liquidity Gap
Net Off Balance Sheet
Position
1,457,319
1,392,098
4,453,101
27,536,507
11,573,709
6,150,670
102,251
1,159,356
32,431,291
143,072,463
153,235,665
65,644,687 161,256,464
263,201,666
86,896,229
53,261,850
1,062,316
1,599,410
1,084,200
1,261
284,246,136
254,580,400
33,533,081 18,271,625
1,249,947
1,651,668
8,308,327
35,759,011
18,565,099
1,367,321
42,595,997
2,299,805
3,339,693
1,249,305
2,626,916
22,221,079
22,368,163
19,641,346
24,167,058
288,196
286
76,296
9,209,310
5,395,168
3,904,172
1,870,447
406,135
103,629,850
285,308,452
335,053,148
53,535,693 83,497,127
44,129,952
21,414,802
103,629,850
(142,235,989)
(181,817,483)
12,108,994 77,759,337
219,071,714
65,481,427
(50,368,000)
3,200,930
2,669,768
(75,036)
1,505,529
446,812
Derivative Financial Assets
133,805,197
54,101,623 37,634,533
45,771,066
61,283,833
Derivative Financial
Liabilities
130,604,267
51,431,855 37,709,569
44,265,537
60,837,021
Non-cash Loans
116,766,721
2,615,908
9,773,054
44,500,563
14,566,743
5,212,434
Prior Period
Total Assets
Total Liabilities
Liquidity Gap
57,715,009
95,196,846
40,303,774 114,198,380
182,017,491
64,872,902
39,598,030
153,998,446
207,552,170
48,350,387 48,184,016
42,899,254
13,939,492
78,978,667
(96,283,437)
(112,355,324)
(8,046,613) 66,014,364
139,118,237
50,933,410
(39,380,637)
Net Off Balance Sheet Position
(1,843,165)
(3,082,458)
(232,208)
653,246
Derivative Financial Assets
60,975,648
44,234,852 23,095,200
26,504,775
44,842,885
Derivative Financial
Liabilities
62,818,813
47,317,310 23,327,408
25,851,529
44,842,885
Non-cash Loans
67,592,573
2,568,566
5,824,087
23,768,593
15,584,033
4,237,362
46,412,734
39,843,568
926,569,024
3,747,187
591,881,189
65,651,426
48,235,495
68,106,809
24,531,836
124,415,082
926,569,024
7,748,003
332,596,252
324,848,249
193,435,423
593,902,432
593,902,432
(4,504,585)
199,653,360
204,157,945
119,575,214
(*) Asset items, such as Tangible Assets, Subsidiaries and Associates, Office Supply Inventory, Prepaid Expenses and Non-Performing Loans, which are required for banking operations and which
cannot be converted into cash in short-term, other liabilities such as Provisions which are not considered as payables and Shareholders’ Equity, are shown in the “Unallocated” column.
(**) Includes Derivative financial assets.
(***) Non performing loans are included in “Unallocated” column.
(****) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
Prior Period
Demand
Up to 1
Month
1-3 Months 3-12 Months 1-5 Years
5 Years and
Over
Total
Adjustments (-)
Balance Sheet
Value
Liabilities
Deposits
Funds Provided
from Other Financial
Institutions
Money Market Funds
Marketable
Securities Issued (*)
Leasing Liabilities
153,998,446 163,018,733
38,316,955
13,925,240
555,303
369,814,677 938,186
368,876,491
475,361
3,724,126
20,846,201
15,834,477
1,565,678
42,445,843
2,014,498
40,431,345
23,044,216
3
23,044,219
47,682
22,996,537
1,298,508
1,925,408
15,144,504
32,577,652
15,571,435
66,517,507
13,538,300
52,979,207
36,530
76,918
262,719
1,053,002
1,914,942
3,344,111
1,954,894
1,389,217
(*)Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
The following table shows the remaining maturities of non-cash loans of the Bank.
Current Period
Demand
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Letters of Credit
39,975,559
299,733
Letters of Guarantee
75,331,583
1,272,415
Acceptances
Other
Total
583,828
875,751
1,028,920
14,840
853,893
6,663,085
2,256,076
1,753,195
12,823
42,895,203
32,272,226
12,915,460
3,042,724
131,497,493
10,359,840
553,187
14,781,851
115,302
1,085,273
2,169,710
4,260,876
116,766,721
2,615,908
9,773,054
44,500,563
14,566,743
5,212,434
193,435,423
Prior Period
Demand
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Letters of Credit
14,423,731
980,613
941,460
3,190,944
533
Letters of Guarantee
52,527,771
1,261,618
4,065,504
16,134,892
10,858,891
2,584,214
Acceptances
Other
Total
66,504
574,567
326,335
817,123
4,348,430
3,901,311
67,592,573
2,568,566
5,824,087
23,768,593
15,584,033
4,237,362
119,575,214
94,327
823,298
1,653,148
3,145,340
19,537,281
87,432,890
9,459,703
256 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 257
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
The following table shows the remaining maturities of derivative financial assets and liabilities of the Bank.
b. Explanations on leverage ratio:
Current Period
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Current Period (*)
Prior Period (*)
Forwards Contracts-Buy
Forwards Contracts-Sell
Swaps Contracts-Buy
Swaps Contracts-Sell
Futures Transactions-Buy
Futures Transactions-Sell
Options-Call
Options-Put
Other
Total
4,585,527
4,427,855
107,655,756
121,096,795
5,079,666
4,945,190
16,618,675
6,561,281
6,546,390
40,811,617
41,894,966
96,253
86,971
2,944,784
2,842,085
3,749,131
14,439,205
14,527,936
17,078,760
17,111,486
591,730
595,436
4,012,940
3,962,813
3,023,796
4,570,684
4,557,212
40,956,563
39,464,506
487,638
58,258,759
57,811,947
3,025,074
3,025,074
30,156,697
30,059,393
264,761,455
277,379,700
687,983
682,407
15,062,464
14,775,162
23,879,240
264,409,464
105,533,478
75,344,102
90,036,603
122,120,854
657,444,501
On-Balance sheet items
On-balance sheet items (excluding derivatives and SFTs, but including collateral)
Assets amounts deducted from Tier 1 capital
Total on balance sheet exposures
Derivative exposures and credit derivatives
Replacement cost associated with derivative financial instruments and credit derivatives
The potential amount of credit risk with derivative financial instruments and credit derivatives
The total amount of risk on derivative financial instruments and credit derivatives
Investment securities or commodity collateral financing transactions
843,622,223
(1,492,485)
842,129,738
21,043,586
3,570,324
24,613,910
607,154,346
(1,185,021)
605,969,325
8,811,454
2,608,300
11,419,754
The amount of risk investment securities or commodity collateral financing transactions (Excluding on
balance sheet items)
4,020,316
4,969,503
Risk amount of exchange brokerage operations
Prior Period
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Total risks related with securities or commodity financing transactions
4,020,316
4,969,503
Forwards Contracts- Buy
Forwards Contracts- Sell
Swaps Contracts-Buy
Swaps Contracts-Sell
Futures Transactions-Buy
Futures Transactions-Sell
Options-Call
Options-Put
Other
Total
2,597,630
2,567,063
46,285,705
57,206,194
272,674
297,024
2,691,230
2,654,710
9,222,231
123,794,461
3,671,735
3,615,646
32,186,709
42,385,680
720,385
765,850
495,343
492,814
7,218,000
91,552,162
8,622,850
8,451,373
11,231,842
11,539,355
956,603
1,056,468
2,033,885
2,030,192
500,040
2,482,254
2,475,647
23,275,336
22,628,697
43,002,073
43,002,073
747,185
747,185
1,840,812
1,840,812
46,422,608
52,356,304
89,685,770
17,374,469
17,109,729
155,981,665
176,761,999
1,949,662
2,119,342
7,808,455
7,765,713
16,940,271
403,811,305
VII. Explanations on Leverage Ratio
a. Explanations on Differences Between Current and Prior Years’ Leverage Ratios
Off -Balance Sheet Items
Gross notional amount of off-balance sheet items
Adjustments for conversion to credit equivalent amounts
The total risk of off-balance sheet items
Capital and Total Exposures
Tier 1 Capital
Total Exposures
Leverage Ratio
Leverage Ratio
(*) Three-month average of the amounts in Leverage Ratio table.
VIII. Explanations on Other Price Risks
317,341,135
(9,508,394)
307,832,741
79,582,511
1,178,596,705
215,539,119
(6,838,414)
208,700,705
65,479,340
831,059,287
6.75
7.88
The Bank is exposed to stock price risk due to its investments in companies being traded on the Borsa İstanbul A.Ş. (BIST).
The Bank’s unconsolidated leverage ratio is calculated in accordance with the principles of the “Regulation on Measurement and Evaluation of Banks’ Leverage Level”. The
Bank’s consolidated Leverage ratio is 6.75% (December 31, 2020: 7.88%). According to Regulation the minimum leverage ratio is 3%. The changes in the leverage ratio are
mostly due to the increase in total risk amounts.
The Bank's sensitivity to stock price risk at the reporting date was measured with an analysis. In the analysis, with the assumption of all other variables were held constant
and the data (stock prices) used in the valuation method are 10% higher or lower. According to this assumption, in shares traded in Borsa Istanbul and followed under
Financial Assets at Fair Value through Profit or Loss account, expected to have an effect amounting to TL 20,710 increase/decrease.
IX. Explanations on Presentation of Assets and Liabilities at Fair Value
1. Information on fair values of financial assets and liabilities
Financial Assets
Money Market Placements
Banks
Financial Assets at Fair Value through Other Comprehensive Income
Investments Financial Assets Measured Amortized Cost
Loans
Financial Liabilities
Banks Deposits
Other Deposits
Funds Provided from Other Financial Institutions
Marketable Securities Issued (*)
Miscellaneous Payables
Book Value
Fair value
Current Period
Prior Period
Current Period
Prior Period
24,129,301
87,555,076
46,412,734
16,049,561
65,530,946
41,659,437
24,129,488
87,555,076
47,220,154
16,048,801
65,530,946
41,641,633
493,378,191
345,150,130
473,839,057
328,268,442
3,747,187
4,075,545
3,720,360
4,068,196
591,881,189
364,800,946
591,066,944
363,992,492
65,651,426
68,106,809
24,531,836
40,431,345
52,979,207
14,952,319
64,104,888
65,538,148
24,531,836
39,928,073
53,708,214
14,952,319
(*) Includes subordinated bonds which are classified on the balance sheet as subordinated loans.
258 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 259
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Strike prices, quotations, market prices determined by the CBRT and published in the Official Gazette and the values calculated by using alternative models, are taken as
the basis in the fair value determination of Financial Assets at fair value through other comprehensive income.
X. Explanations on Transactions Carried Out on Behalf of Third Parties and Fiduciary Transactions
The Bank gives trading and custody services in the name and on the account of its customers. The Bank has no fiduciary transactions.
When the prices of the financial assets measured at amortized cost cannot be measured in an active market, fair values are not deemed to be reliably determined and
amortized cost, calculated by the internal rate of return method, are taken into account as the fair values.
XI. Explanations on Risk Management Objectives and Policies
Fair values of banks, loans granted, deposits and funds borrowed from other financial institutions and marketable securities are calculated by discounting the amounts
in each maturity bracket formed according to repricing periods, using the rate corresponding to relevant maturity bracket in the discount curves based on current market
conditions.
Explanations according to “Communiqué on Public Disclosures about Risk Management” published on the Official Gazette No.29511 dated October 23, 2015 are included
below. The Bank uses the standardised approach for calculation of capital charge for credit risk, therefore explanations about internal ratings-based approach are not
included.
2. Information on fair value measurements recognized in the financial statements
“IFRS 13 - Fair Value Measurement” standard requires the items, which are recognized in the balance sheet at their fair values to be shown in the notes by being classified
within a range. According to this, the related financial instruments are classified into three levels in such a way that they will express the significance of the data used in fair
value measurements. At the first level, there are financial instruments, whose fair values are determined according to quoted prices in active markets for identical assets or
liabilities, at the second level, there are financial instruments, whose fair values are determined by directly or indirectly observable market data, and at the third level, there
are financial instruments, whose fair values are determined by the data, which are not based on observable market data. The financial assets, which are recognized in the
balance sheet at their values, are shown below as classified according to the aforementioned principles of ranking.
Current Period
Financial Assets at Fair Value Through Profit and Loss
Debt Securities
Equity Securities
Derivative Financial Assets at Fair Value through Profit and Loss
Other
Financial Assets at Fair Value Thtough Profit or Loss (*)
Debt Securities
Equity Securities
Other
Derivative Financial Liabilities
Level 1
477,614
207,096
45,397,989
Level 2
Level 3
6,006,316
458,185
21,924,166
1,536,281
41,329,574
518,082
24,966
12,586,533
1,886,716
250,219
(*) Since they are not traded in an active market, the equity securities TL 34,246 under the financial assets at fair value through other comprehensive income are shown in the
financial statements at acquisition cost and the related securities are not shown in this table.
Prior Period
Financial Assets at Fair Value Through Profit and Loss
Debt Securities
Equity Securities
Derivative Financial Assets Held for Trading
Other
Financial Assets Available-for-Sale (*)
Debt Securities
Equity Securities
Other
Derivative Financial Liabilities
Level 1
167,674
147,257
42,667,184
Level 3
5,852
1,886,716
350,829
Level 2
566,315
261,922
5,060,117
1,145,638
22,077,803
320,025
89,168
7,934,485
(*) Since they are not traded in an active market, the equity securities TL 25,937 under the financial assets available-for-sale are shown in the financial statements at acquisition cost
and the related securities are not shown in this table.
The movement table of financial assets at level 3 is given below:
Balance at the Beginning of the Period
Purchases
Redemption or Sales
Valuation Difference
Transfers
Balance at the end of the Period
Current Period
2,243,397
(5,852)
(100,610)
2,136,935
Prior Period
2,249,059
(5,662)
(2,243,397)
Real estates which are presented in the financial statements at fair value are classified at level 3.
The loans measured at fair value through profit and loss under Level 3 consists of loan granted to the special purpose entity which is disclosed in the Section V footnote
I-f.2 and footnote I.r. The mentioned loan’s fair value is determined by the various valuation methods. The potential changes in the fundamental estimations and
assumptions in the valuation work may affect the carrying fair value of the loan.
The reflections of developments related to the COVID-19 outbreak on the Bank's risk profile and risk appetite framework are closely monitored. The levels at which
the capital adequacy ratio of the Bank will reach are estimated and monitored with stress tests. In addition, reverse stress tests are regularly carried out by the Bank
considering the increase in deteriorated loan portfolio and exchange rate shocks which might cause the capital adequacy to fall within the legal limits.
a. General Information on Risk Management Approach and Risk Weighted Amounts
a.1. The Bank's risk management approach
Bank is exposed to financial and non-financial risks which are required to be analyzed, monitored and reported within specific risk management principles of the Bank and
with the perspective of risk management. The risk management process is organized within the framework of risk management and serves the creation of a common
risk culture in corporate level; which brings “corporate governance” to forefront, the independence of the internal audit and monitoring units from the business units that
undertake risks is established risk is defined in accordance with international regulations and in this context measurement, analysis, monitoring, reporting and control
functions are carried.
Risk management process and the functions involved in the process is one of the primary responsibilities of the Board of Directors. The Risk Committee operates to
prepare the Bank's risk management strategies and policies, submit them to the Board of Directors for approval and monitor the implementations. Evaluating the capital
adequacy and observing the active use of results in Bank’s planning and decision making processes, establishing and monitoring limits related to main risks, monitoring the
activities of risk management (determining, defining, measuring, evaluating and managing risk) and monitoring results and methods in measuring risk are also under their
authority and responsibility of the Committee. Committee reports activity results to the Board of Directors through Audit Committee.
The Operational Risk Committee is engaged in determining strategies and policies for the management of operational risks that the Bank may be exposed to, developing
an operational risk management framework, and strengthening the governance model for operational risks. The Committee reports the results of its activities to the Board
of Directors through the Audit Committee.
The Bank’s risk management process is carried out within the framework of risk policies which are issued by the Board of the Directors via Internal Systems Manager by
taking the recommendations of the Risk Management Department into account and which include the written standards that are implemented by the business units.
These policies which are entered into force in line with the international practices are general standards which contain organization and scope of the risk management
function, risk measurement policies, duties and responsibilities of the risk management group, procedures for determining risk limits, ways to eliminate limit violations,
compulsory approvals and confirmations to be given in a variety of events and situations.
In the aforementioned risk policies, the Bank’s risk appetite framework is defined as a set of approaches that determine the risk capacity, the risk appetite, the risk
tolerance and that include the policies, procedures, controls and systems for reporting and monitoring of the limits set for the Bank’s risk profile and the indicators in
the framework. The Bank's risk appetite framework, which is formed in accordance with the above-mentioned factors and entered into force with the Board of Directors
approval, includes indicators that are aligned with the business plan, the strategic programme, capital and remuneration planning and comparable on a business unit level
to the extent possible. The compliance to the limits within the framework is periodically monitored and the realization of the risk appetite indicators are reported to the
Risk Committee and the Boards on a monthly basis.
In order to build a strong corporate culture that has a risk management perspective, the Bank has policies, processes, systems and a control system that is integrated with
the Bank’s risk management system to effectively control the bank's risk management system is available. All employees of the Bank essentially perform their duties in
a responsible manner that aims to develop controls to reduce or eliminate the probability of the Bank to incur losses related to the operational risks. In the process risk
analysis studies, risks and the related controls are evaluated together with employees performing the relevant process in a holistic approach. Procedures to be followed in
case of a risk threshold breach and risk definitions are given in the risk politics. Code of conducts, operation manuals, the sharing of duties between business units and risk
units are announced to the Bank’s staff.
The risk reports that analyse the results reached by the Bank and the comprehensive risk assessment and comparison of these results with a risk management
perspective are periodically submitted to the Risk Committee and to the Board through the Audit Committee. The content of the above mentioned reports could be
summarised as follows:
• Capital adequacy ratio, the progression of the components of this ratio and the issues that affect the aforementioned ratio,
• Monitoring the compliance status of the limits set by the Board of Directors as a part of the risk appetite framework and based on the components of the main risk types,
• In addition to the assessment of the loan portfolio on the basis of counterparties and loan types, monitoring of the portfolio as a whole according to parameters such as
maturity, sector, geography, risk ratings, arrears, defaults,
• Measuring the assets and liabilities management risk, and reporting of measurement results,
• Monitoring of all risks assessed in the context of operational risk within the scope of non-financial risks, including operational risk, loss events that occurred in the Bank
and risk indicators,
• Testing the measurement results in terms of completeness and reliability,
• Analysing the level of risk indicators under various stress scenarios,
• Examining various concentration indicators and the course followed by these indicators
260 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 261
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
As per the communique on “Bank’s Internal Systems and Internal Capital Adequacy and Assessment Process” and “Guidelines for Stress Testing of Banks to Use in Capital
and Liquidity Planning”, stress tests are conducted for the entire risks that the Bank is exposed to and on the basis of significant risk categories. As a part of the holistic
stress tests, risk appetite, capital planning, strategic plan and budget, action plans for emergencies and unexpected situations related to miscellaneous risks and other
issues considered as significant are taken into consideration. In the holistic and individual stress test processes carried out by the Bank, the most advanced approaches
used in risk measurement in the Bank are used as much as possible, together with the methods that are the basis of legal reporting (standard approaches for credit and
market risk, basic indicator approach for operational risk).
In the stress tests, both the first pillar risks (credit risk, market risk, operational risk) in scope of the regulatory framework and all the other risks that the Bank is exposed
to independent of the regulatory framework are taken into account in a holistic perspective. In determining the course of capital adequacy under various scenarios during
the planning horizon, the actions that the Bank will take in case of stress conditions and the impact of the diversified growth strategies of business units on the capital
adequacy and the balance sheet are considered.
The reflections of developments related to the COVID-19 outbreak on the Bank's risk profile and risk appetite framework are closely monitored. The negative effects of the
COVID-19 outbreak are also taken into account in the calculation of expected credit loss. The levels at which the capital adequacy ratio of the Bank will reach are estimated
and monitored with stress tests. In addition, reverse stress tests are carried out regularly, by determining the problematic loan growth rate and increase in exchange rates,
which will cause the Bank's capital adequacy to fall within the legal limits.
The scope and content of the Bank's risk management system in terms of the main risk types are listed below. Bank's risk mitigation strategies and processes for the
assessment of their effectiveness are given in Fourth Section II No. "Explanations on Credit Risk" under the Section IV, XI-f.1 notes. No. "The Public Disclosure of Qualitative
Information Related to the Market Risk" mentioned in the section.
Credit risk
Credit risk is defined as the risk of the failure to comply with the requirements or failing to fulfill its obligations partially or totally of the counter side of the transaction
contract with the Bank. The methodology and responsibilities of the credit risk management, controlling and monitoring and the framework of credit risk limitations
specified with the credit risk policy.
The Bank defines measures and manages credit risk of the all products and activities. Board of Directors review the Bank’s credit risk policies and credit risk strategy on an
annual basis as a minimum. Top Management is responsible for the implementation of credit risk policies which are approved by Board of Directors.
As a result of loans and credit risks analysis all findings are reported to Board of Directors and Top Management on a regular basis. In addition to transaction and company-
based credit risk assessment process, monitoring of credit risk also refers to an approach with monitoring and managing the credit as a whole maturity, sector, security,
geography, currency, credit type and credit rating.
In the Bank’s credit risk management, along the limits as required by legal regulations, the Bank utilizes the risk limits to undertake the maximum credit risk within
risk groups or sectors that the Board of Directors determines. These limits are determined such a way that prevents risk concentration on particular sectors. In case of
exceeding the limits, the excess and its reasons are immediately reported to the Risk Committee and Board of Directors. The actions to be taken to remedy the excess
and the time to eliminate the excess are concluded under the authority of the Board of Directors. The results of the controls regarding the excess of the risk limits and the
evaluations of these limits are presented by Internal Audit and Risk Management Group to Top Management and Board of Directors.
The Bank uses credit decision support systems which are created for the purpose of credit risk management, lending decisions, controlling the credit process and credit
provisioning. The consistency of the credit decision support systems with the structure of the Bank’s activities, size and complexity is examined continuously by internal
systems. Credit decision support systems contain the Risk Committee assessment and approval of Board of Directors.
Asset and Liability Management Risk
Asset-liability management risk defined as the risk of Bank’s incurring loss due to managing all financial risks that are inflicted from the Bank's assets, liabilities and off-
balance sheet transactions, ineffectively. Trading book portfolio’s market risk, structural interest rate risk and liquidity risk of the banking portfolio; are considered within
the scope of the asset liability management.
Complying the established risk limits and being at the limits that stipulated by the legislation are the primary priority of Asset-liability management risk. Risk limits are
determined by the Board of Directors by taking into consideration of the Group's liquidity, target income level and general expectations about changes in risk factors.
Board of Directors and the Audit Committee are responsible for following the Bank's capital is used optimally; for this purpose, checking the status against risk limits and
providing the necessary actions are taken.
Asset and Liability Management Committee is responsible for managing the Asset and Liability risk within the framework of operating principles that are involved in the
risk appetite and risk limits are set by the Board of Directors in accordance with the policy statement.
Asset and liability management processes and compliance with the provisions of the policy are controlled and audited by the internal audit system. The execution of the
audit, reporting the audit results, action plans for the elimination of errors and gaps identified as a result of inspections regarding the fulfillment of the principles, are
determined by the Board of Directors.
Operational Risk
Operational risk is defined as “the possibility of loss resulting from inadequate or failed internal processes, people and systems, or from external events, including legal
risk”. Studies consisted and are formed of occur by execution of identification, definition, measurement, analysis, monitoring of operational risk, providing and reporting the
necessary control related to monitoring the progress of our country and the world, the development of techniques and methods, necessary legal reporting, notification and
conduct of follow-up transactions. Studies on the subject are conducted by the Department of Risk Management.
Operational risks that arise due to the activities are defined in "Bank Risk Catalogue" and classified in respect of species. Bank Risk Catalogue is kind of the fundamental
document that used for identification and classification of all at the risk that may be encountered. It is updated in line with the changes in the nature of the processes and
activities.
Qualitative and quantitative methods are used in a combination for measurement and evaluation of the operational risks. In this process, information use that obtained
from "Impact-Probability Analysis", "Missing Event Data Analysis", "Risk Indicators", “Scenario Analysis”, “Top-Down Risk Assessment”, “Internal Model” methods. Methods
prescribed by legal regulations are applied as minimum in determining the capital requirement level for the operating risk.
The Operational Risk Committee acts to determine the strategies and policies for the management of the operational risks that the Bank may be exposed to, to develop
the operational risk management framework and to strengthen the governance model regarding operational risks. The Committee works in cooperation with the Risk
Committee and reports its operating results to the Board of Directors through the Audit Committee.
All risks are assessed in the context of operational risk, loss events and the risk indicators same as operational risks that occurred in the Bank, are monitored on a regular
basis by the Department of Risk Management and reported periodically to the Risk Committee, Operational Risk Committee and the Board of Directors.
Model Risk Management and Validation Operations
Model risk is the risk of financial losses and/or loss of reputation that the Bank may be exposed to due to errors and/or malfunctions that occur during the creation,
implementation or use of models used in its activities. In order to address the model risk in a holistic manner, the model definition, model life cycle and triple line of defense
structure and the duties and responsibilities of all functions of the Bank in this structure are defined in the model risk management policy.
Model risk management and validation activities in the second line of defense of the triple line of defense structure; creating the model inventory, determining and
approving the model class, validating the models, preparing periodic reports on the Bank's model risk and presenting those reports to the Risk Committee, Audit
Committee and Board of Directors.
Risk measurement models are validated at least once a year according to international standards. Within the scope of validation, activities are carried out to test the
performance and validity of models with statistical methods, to examine the quality of the data used in the model development phase and the conceptual soundness of the
selected methods, and to evaluate the health of the processes created for the use of the models. The results of the validation activities are reported to the Risk Committee,
Audit Committee and the Board of Directors.
a.2. Overview of risk weighted amounts:
Credit risk (excluding counterparty credit risk) (CCR)
Of which standardized approach (SA)
Of which internal rating-based (IRB) approach
Counterparty credit risk
Of which standardised approach for counterparty credit risk (CCR)
Of which internal model method (IMM)
Equity positions in banking book under basic risk weighting or internal rating-based
approach
Equity investments in funds – look-through approach
Equity investments in funds – mandate-based approach
Equity investments in funds – 1250% weighted risk approach
Settlement risk
Securitization positions in banking accounts
Of which IRB ratings-based approach (RBA)
Of which IRB Supervisory formula approach (SFA)
SA/simplified supervisory formula approach (SSFA)
Market risk
Of which standardised approach (SA)
Of which internal model approaches (IMM)
Operational Risk
Of which Basic Indicator Approach
Of which Standardised approach (SA)
Of which Advanced measurement approach
Risk Weighted Amounts
Minimum Capital
Requirements
Current Period
Prior Period
Current Period
504,344,844
504,344,844
14,329,919
14,329,919
400,826,453
400,826,453
8,461,391
8,461,391
40,347,588
40,347,588
1,146,394
1,146,394
1,586,280
1,396,354
126,902
10,104,488
10,104,488
40,291,061
40,291,061
8,532,063
8,532,063
32,655,169
32,655,169
808,359
808,359
3,223,285
3,223,285
The amounts below the thresholds for deduction from capital (subject to a 250% risk
weight)
700,490
605,435
56,039
Floor adjustment
Total
571,357,082
452,476,866
45,708,567
262 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 263
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Prior Period
Assets
Cash and CBRT
Current Period
Assets
Cash and CBRT
b. Linkages between Financial Statements and Risk Amounts
b.1. Differences and matching between asset and liabilities’ carrying values in financial statements and risk amounts in capital
adequacy calculation
Carrying values of items in accordance with Turkish Accounting Standards
Carrying values of items in accordance with Turkish Accounting Standards
Carrying values in
financial statements
prepared as per TAS
Subject to credit
risk
Subject to
counterparty
credit risk
Securitization
Positions
Subject to
market risk
Not subject
to capital
requirements
or subject to
deduction from
capital
Carrying values in
financial statements
prepared as per TAS
Subject to credit
risk
Subject to
counterparty
credit risk
Securitization
Positions
Subject to
market risk
Not subject
to capital
requirements
or subject to
deduction from
capital
Banks and Money Market Placements
24,129,301
181,923,221
181,923,221
24,129,301
Banks and Money Market Placements
13,532,058
70,906,361
70,906,361
16,049,561
Financial Assets at Fair Value Through
Profit/Loss
Financial Assets at Fair Value Through
Other Comprehensive Income
Derivative Financial Assets at Fair Value
Through Profit/Loss
Derivative Financial Assets at Fair Value
Through Other Comprehensive Income
Financial Assets at Amortised Cost-
Credit
Financial Assets at Amortised Cost-
Other Financial Assets
Financial Assets at Amortised Cost-
Expected Loss Provisions (-)
Assets Held for Sale and Discontinued
Operations
Investment in Associates, Subsidiaries
and Joint-Ventures
Tangible Assets
Intangible Assets
Investment Properties
Current Tax Asset
Deferred Tax Asset
Other Assets
Total Assets
Liabilities
Deposits
Funds Borrowed
Money Market Funds
Marketable Securities Issued
Derivative Financial Liabilities at Fair
Value Through Profit/Loss
Derivative Financial Liabilities at Fair
Value Through Other Comprehensive
Income
Leasing Transaction Liabilities
Provisions
Current Tax Liability
Deferred Tax Liability
Subortinated Debts
Other Liabilities
Shareholders' Equity
Total Liabilities
10,572,208
9,441,624
87,555,076
87,555,076
21,924,166
21,924,166
21,924,166
1,130,584
1,474,079
9,381,439
514,208,750
514,208,750
46,412,734
46,412,734
28,323,252
28,323,252
827,633
827,633
39,461,345
39,461,345
8,699,860
1,750,109
8,651,037
1,750,109
48,823
1,561,603
2,557,610
14,870,263
926,569,024
595,628,376
65,651,426
48,235,495
30,635,812
12,586,533
1,700,439
15,487,318
1,831,219
37,470,997
30,502,118
86,839,291
926,569,024
2,557,610
14,870,263
925,389,617
21,924,166
11,986,102
1,610,426
5,111,969
48,235,495
12,586,533
53,347,464
12,586,533
Financial Assets at Fair Value Through
Profit/Loss
Financial Assets at Fair Value Through
Other Comprehensive Income
Derivative Financial Assets at Fair Value
Through Profit/Loss
Derivative Financial Assets at Fair Value
Through Other Comprehensive Income
4,181,374
3,294,280
65,530,946
65,530,946
5,060,117
5,060,117
5,060,117
887,094
684,680
3,876,906
Financial Assets at Amortised Cost-Credit 365,521,602
365,521,602
Financial Assets at Amortised Cost-
Other Financial Assets
Financial Assets at Amortised Cost-
Expected Loss Provisions(-)
Assets Held for Sale and Discontinued
Operations
Investment in Associates, Subsidiaries
and Joint-Ventures
Tangible Assets
Intangible Assets
Investment Properties
Current Tax Asset
Deferred Tax Asset
Other Assets
Total Assets
Liabilities
Deposits
Funds Borrowed
Money Market Funds
Marketable Securities Issued
Derivative Financial Liabilities at Fair
Value Through Profit/Loss
Derivative Financial Liabilities at Fair Value
Through Other Comprehensive Income
41,659,437
41,659,437
23,363,882
23,363,882
1,220,094
1,220,094
26,002,383
26,002,383
6,610,279
1,330,841
6,561,621
1,330,841
48,658
1,207,338
3,420,494
12,290,328
593,902,432
368,876,491
40,431,345
22,996,537
30,840,648
7,934,485
3,420,494
12,290,328
592,966,680
5,060,117
5,448,680
1,255,996
7,056,940
22,996,537
7,934,485
Leasing Transaction Liabilities
1,389,217
Provisions
Current Tax Liability
Deferred Tax Liability
Subortinated Debts
Other Liabilities
Shareholders' Equity
Total Liabilities
10,224,590
2,420,107
22,138,559
18,869,001
67,781,452
593,902,432
30,053,477
7,934,485
264 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 265
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
1
2
3
4
5
6
7
8
9
10
11
1
2
3
4
5
6
7
8
9
10
11
b.2. The main sources of the differences between the risk amounts and the amounts assessed in accordance with TAS in the financial statements
Current Period
Total
Credit Risk
Asset carrying value amount under scope of TAS
926,569,024
925,389,617
926,569,024
670,197,753
925,389,617
139,078,854
Liabilities carrying value amount under scope of TAS
Total net amount scope of financial statement
Off-balance sheet amounts
Repo style transactions (*)
Differences in valuations
Differences due to different netting rules
Differences due to consideration of provisions
Differences due to prudential filters
Differences due to risk mitigation (**)
Risk Amounts
(*) According to the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks", it is the counterparty credit risk amount calculated for repo style transactions.
(**) The source of the difference is collaterals of exposures to which credit risk mitigation is applied in the calculation of capital adequacy.
(134,964,810)
(65,293,708)
864,209,953
30,545,431
600,431
Securitization
Positions
Counterparty
credit risk
Market risk
11,986,102
12,586,533
600,431
21,924,166
(53,347,464)
75,271,630
26,056,873
4,488,558
Prior Period
Total
Credit Risk
Asset carrying value amount under scope of TAS
593,902,432
592,966,680
593,902,432
408,834,224
592,966,680
85,236,037
Liabilities carrying value amount under scope of TAS
Total net amount scope of financial statement
Off-balance sheet amounts
Repo style transactions (*)
Differences in valuations
Differences due to different netting rules
Differences due to consideration of provisions
Differences due to prudential filters
Differences due to risk mitigation (**)
Risk Amounts
Securitization
Positions
Counterparty
credit risk
Market risk
5,448,680
7,934,485
2,485,805
5,060,117
(30,053,476)
35,113,593
7,523,188
4,717,151
(21,923,476)
(5,657,406)
650,621,835
12,240,339
2,485,805
(*) According to the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks", it is the counterparty credit risk amount calculated for repo style transactions.
(**) The source of the difference is collaterals of exposures to which credit risk mitigation is applied in the calculation of capital adequacy.
The Bank intends to use fair value measurement methods in accordance with IFRS 13 using valuation methodologies based primarily on observable data. In this context,
market prices, quoted prices, prices set by CBRT and published in official gazette and internal pricing models are also utilized in the fair value measurement of the financial
assets in the form of securities. Valuation models that use market data such as interest rates, efficiency curves, currency, and volatility curves are used as the basis for
derivative transactions while third party valuation services are also available.
The accuracy of the market prices, data and / or model inputs used in valuation under the independent price validation process is regularly checked and the suitability of the
results provided by the third-party pricing service is tested at regular intervals.
c. Explanation on Credit Risk
c.1. General Information on Credit Risk
c.1.1. General qualitative information on credit risk
This information is included in footnotes under Section Four, Note II "Explanations on Credit Risk," and Section Four, Note XI-a.1.
c.1.2. Credit quality of assets:
Current Period
Loans (*)
Debt Securities
Off-balance sheet
exposures
Total
Gross Carrying Calue in Financial Statements Prepared in
Accordance with Turkish Accounting Standards (TAS)
Defaulted
20,830,559
1,606,025
22,436,584
Non-defaulted
493,378,191
138,938,624
323,100,912
955,417,727
Allowances/ amortization
and impairments
Net Values
13,790,995
1,214,355
15,005,350
500,417,755
138,938,624
323,492,582
962,848,961
(*) The credit balance, which is measured at fair value through profit and loss, as detailed in section five 1-B-3, is not included in the above tables.
Prior Period
Loans (*)
Debt Securities
Off-balance sheet
exposures
Total
Gross Carrying Calue in Financial Statements Prepared in
Accordance with Turkish Accounting Standards (TAS)
Defaulted
20,371,472
909,307
21,280,779
Non-defaulted
345,150,130
107,252,064
202,730,928
655,133,122
Allowances/ amortization
and impairments
Net Values
12,975,961
694,245
13,670,206
352,545,641
107,252,064
202,945,990
662,743,695
(*) The credit balance, which is measured at fair value through profit and loss, as detailed in section five 1-B-3, is not included in the above table.
c.1.3. Changes in stock of default loans and debt securities (*):
Defaulted loans and debt securities at end of the previous reporting period
Loans and debt securities that have defaulted since the last reporting period
Receivables back to non-defaulted status
Amounts written off
Other changes
Defaulted loans and debt securities at end of the reporting period
20,371,472
6,350,286
(1,017,053)
(2,006,458)
(2,867,688)
20,830,559
18,883,474
5,120,175
(145,197)
(37,283)
(3,449,697)
20,371,472
Current Period
Prior Period
(*) Indemnified non-cash loans or non-cash loans not converted into cash, of the firms which are followed under “Non-performing Loans” accounts are not included in the table.
c.1.4. Additional Explanation About the Credit Quality of Assets
Bank’s methods for determining provision amounts and classification of its loans are mentioned in the Section Three Note VIII.
The bank is restructuring its loans classified as first and second group as well as non-performing loans. Restructuring in performing loans are made by granting a new loan
or extending the term date of credit given to customer by Bank. Restructuring of a contract is made on customer’s demand or with the purpose of enhancing the solvency
of customer. Restructuring in non-performing loans are generally made by establishing a new redemption plan within the context of a protocol aiming the collection of
those receivables whose redemption plan are not valid because of delinquency previously.
The breakdown of receivables in terms of geographic regions, sectors and remaining maturities are represented in “Explanations on Credit Risk” in the Section Four Notes II.
On the basis of sector-based provisions for receivables are presented in the footnote numbered Section Four II-16. The amounts of the receivables that are set aside for
the geographical regions are as follows. The amount of non-performing loans which are written off in 2020 is TL 2,006,458.
266 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 267
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Current Period
Prior Period
Non-Performing Loans
Specific Provision
Non-Performing Loans
Specific Provision
Domestic
EU Countries
OECD Countries (*)
Off-shore Banking Regions
USA, Canada
Other Countries
Total
20,397,941
247,369
35,901
7,731
141,617
20,830,559
13,498,359
119,892
30,765
6,382
135,597
13,790,995
20,176,357
39,197
1,275
8,560
146,083
20,371,472
12,802,981
26,484
1,067
6,329
139,100
12,975,961
(*) OECD countries other than the EU countries, USA and Canada
The aging analysis of past-due receivables is included in Section Four Note II-11.
c.2. Credit risk mitigation
c.2.1. Qualitative Requirements to be Disclosed to The Public Regarding Credit Risk Mitigation Techniques
In the calculation of the Bank’s Credit Risk Mitigation in accordance with the “Communiqué on Credit Risk Mitigation Techniques” published in the Official Gazette
numbered 29111 on 6 September 2014, the financial collaterals are taken into consideration. The Bank takes local currency and foreign currency deposit pledges into
consideration as financial collaterals in calculating regulatory capital adequacy.
Information on key characteristics of the policies and processes related to the assessment and management of collateral are included in footnotes under Section IV No. II,
"Credit Risk Explanations".
c.2.2. Credit risk mitigation techniques:
Current Period
Exposures
unsecured
Exposures secured
by collateral
Exposures secured
by collateral, of
which: secured
amount
Exposures secured
by financial
guarantees (*)
Exposures Secured
by Financial
Guarantees, of
which: Secured
Amount
Exposures
secured by credit
derivatives
Exposures
secured by credit
derivatives, of
which: secured
amount
Loans (**)
577,741,977
10,355,755
8,618,981
10,746,384
9,724,012
Debt securities
153,871,817
Total
731,613,794
10,355,755
8,618,981
10,746,384
9,724,012
Of which defaulted
23,623,595
(*) Consists loans of Credit Guarantee Fund guaranteed by the Undersecretariat of Treasury.
(**) The credit balance, which is measured at fair value through profit and loss, as detailed in section five 1-B-3, is not included in the above table.
Prior Period
Exposures
unsecured
Exposures secured
by collateral
Exposures secured
by collateral, of
which: secured
amount
Exposures secured
by financial
guarantees (*)
Exposures Secured
by Financial
Guarantees, of
which: Secured
Amount
Exposures
secured by credit
derivatives
Exposures
secured by credit
derivatives, of
which: secured
amount
Loans (**)
336,672,229
4,761,729
3,987,435
11,111,682
9,097,809
Debt securities
107,252,064
Total
443,924,293
4,761,729
3,987,435
11,111,682
9,097,809
Of which defaulted
7,395,512
(*) Consists loans of Credit Guarantee Fund guaranteed by the Undersecretariat of Treasury.
(**) The credit balance, which is measured at fair value through profit and loss, as detailed in section five 1-B-3, is not included in the above table.
c.3. Credit risk if standard approach is used
c.3.1. Qualitative disclosures about the ratings notes used by banks to calculate credit risk by standard approach
The mentioned disclosure is presented in Section Four Note XI-a.1.
c.3.2. Standard approach - Exposure credit risk and credit risk mitigation effects
Current Period
Exposures before CCF
and CRM
Exposures post-CCF
and CRM
RWA and RWA density
On-balance
sheet amount
Off-balance
sheet amount
On-balance
sheet amount
Off-balance
sheet amount
Risk- weighted
amount
Risk-weighted
amount density
Exposures to sovereigns and their central banks
247,509,946
Exposures to regional and local governments
342,151
950
870
Exposures to administrative bodies and non-
commercial entities
508,139
208,921
Exposures to multilateral development banks
299,645
Exposures to international organizations
342,041
503,509
299,645
255,525,435
9,188,437
3,328,651
171,168
1.26%
50.00%
587,608
100.00%
267
84,099
16,023,828
88,814,213
Exposures to banks and securities firms
21,099,626
21,072,853
21,086,177
Exposures to corporates
Retail exposures
227,307,338
152,695,779
217,460,719
123,310,683
74,788,316
120,335,451
5,839,139
Exposures secured by residential property
Exposures secured by commercial property
Past-due loans
24,218,274
25,111,231
6,791,059
1,364,158
3,708,957
Exposures in higher-risk categories by the Board 23,813,122
1,246,361
24,171,142
25,111,231
6,791,059
23,493,603
606,846
2,606,663
150,646
12,328,560
279,530,445
95,895,190
8,672,296
17,226,269
5,208,451
35,364,332
Exposures in the form of bonds secured by
mortgages
Short term exposures to banks, brokerage
houses and corporates
Equity investments in the form of collective
investment undertakings
Equity investments
Other exposures
Total
1,536,280
50,000
1,536,280
50,000
1,586,280
27,016,787
38,685,526
21,509,499
27,016,787
38,685,526
131,274
15,893,526
39,105,820
767,549,807
276,646,664
762,358,605
123,495,412
514,898,596
0.00%
33.22%
91.27%
76.00%
35.00%
62.15%
76.70%
149.57%
100.00%
58.54%
101.09%
58.12%
Prior Period
Exposures before CCF
and CRM
Exposures post-CCF
and CRM
RWA and RWA density
On-balance
sheet amount
Off-balance
sheet amount
On-balance
sheet amount
Off-balance
sheet amount
Risk- weighted
amount
Risk-weighted
amount density
Exposures to sovereigns and their central banks
164,764,668
Exposures to regional and local governments
454,543
1,231
490
Exposures to administrative bodies and non-
commercial entities
505,480
103,885
Exposures to multilateral development banks
228,549
803
Exposures to international organizations
454,435
504,767
228,549
173,863,011
1,236,709
Exposures to banks and securities firms
18,683,494
16,676,675
18,683,494
Exposures to corporates
Retail exposures
193,661,164
123,382,253
185,880,826
110,514,185
51,613,908
105,736,196
3,337,336
Exposures secured by residential property
Exposures secured by commercial property
Past-due loans
10,323,829
20,410,195
7,342,980
312,988
3,555,456
Exposures in higher-risk categories by the Board 63,926
869,651
10,306,924
20,410,195
7,342,980
63,926
143,168
2,600,445
101,830
230
42,267
402
13,440,199
68,115,280
Exposures in the form of bonds secured by
mortgages
Short term exposures to banks, brokerage
houses and corporates
Equity investments in the form of collective
investment undertakings
Equity investments
Other exposures
Total
1,516,841
65,000
1,516,841
21,278,047
26,315,903
6,112,340
21,278,047
26,315,903
65,000
18,830
576,063,804
202,694,680
572,586,094
89,101,696
409,127,921
2,163,946
227,333
1.24%
50.00%
547,034
100.00%
0.00%
32.52%
98.37%
75.00%
35.00%
61.77%
76.50%
100.21%
10,446,986
249,859,909
81,805,149
3,657,532
14,214,647
5,617,703
166,103
1,396,354
88.27%
12,346,061
26,679,164
57.97%
101.38%
61.83%
268 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 269
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen 0%
10%
20%
25%
35%
50%
75%
100%
150%
250%
Other (*) Total
10%
20%
25%
35%
50%
75%
100%
150%
250%
% 250
Total
Risk Weights
Bank
Prior Period
Risk Weights
Bank
172,935,757
35
2,163,928
175,099,720
c.3.3. Standardised Approach-Exposures by Risk Classes and Risk Weights:
Current Period
Risk Groups
Exposures to sovereigns
and their central banks
261,385,207
Exposures to regional
and local governments
Exposures to
administrative bodies
and non-commercial
entities
Exposures to multilateral
development banks
299,645
Exposures to
international
organizations
Exposures to banks and
securities firms
Exposures to corporates
Retail exposures
Exposures secured by
residential property
Exposures secured by
commercial property
Past-due loans (*)
Exposures in higher-risk
categories by the Board
Exposures in the form
of bonds secured by
mortgages
Short term exposures to
banks, brokerage houses
and corporates
Equity investments in
the form of collective
investment undertakings
Equity investments
Other exposures
Total
11,254,535
272,939,387
29
3,328,636
264,713,872
342,280
28
587,608
342,308
587,608
299,645
22,305,274
18,541,595
13,781,596
958,860
11,190
53,085
37,110,005
23,259,559
264,041,919 95,804
336,055
306,274,932
121,117,602 5,056,988
24,777,988
20,983,251
6,734,643
3,166,861
3,622,553
1,645
53,944
96,195
23,494,110
126,174,590
24,777,988
27,717,894
6,791,059
23,644,249
40,846,869
24,777,988
61,587,520
121,117,602 340,312,566 23,602,749
280,196
389,140
885,854,017
1,586,280
38,405,330
15,893,526
280,196
1,586,280
38,685,526
27,148,061
(*) Related balance includes receivables from central counterparties subject to 2% risk weight..
Risk Groups
Exposures to sovereigns
and their central banks
Exposures to regional and
local governments
Exposures to
administrative bodies and
non-commercial entities
Exposures to multilateral
development banks
228.951
Exposures to
international
organizations
Exposures to banks and
securities firms
Exposures to corporates
Retail exposures
Exposures secured by
residential property
Exposures secured by
commercial property
Past-due loans
Exposures in higher-risk
categories by the Board
Exposures in the form
of bonds secured by
mortgages
Short term exposures to
banks, brokerage houses
and corporates
Equity investments in
the form of collective
investment undertakings
Equity investments
Other exposures
Total
454,664
1
547,034
454,665
547,034
228,951
19,714,488
11,826,138
567,163
15,904
32,123,693
1,503,520
5,866,767
246,625,814 5
109,073,532
10,450,092
17,591,986
5,418,654
3,726,033
3,341,469
275,478
75,865
13,332
76,559
253,996,106
109,073,532
10,450,092
23,010,640
7,342,980
165,756
370,975
1,210,866
1,581,841
8,950,816
182,115,524
21,218,008
10,450,092
39,912,463
109,073,532 298,308,051 367,946
242,174
661,687,790
26,073,729
12,346,061
242,174
26,315,903
21,296,877
270 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 271
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen d. Explanations on Counterparty credit risk
d.1. Qualitative Explanations on Counterparty credit risk
The counterparty credit risk that the Bank is exposed to be managed within the framework of general limit allocation and credit risk mitigation that are outlined in the
credit risk policy. In setting general credit limits, the counterparty credit risks of customers as well as their cash and noncash risks are taken into account with a holistic
view. Moreover, the total position of the transactions which create counterparty credit risk is also monitored under a separate risk limit.
The counterparty credit risk, which stems from derivatives and repo style transactions including transactions with qualified central counterparties that result in liabilities
for both sides, is measured according to the Appendix-2 and Appendix-4 of the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks". Counterparty
credit risk valuation method based on the calculation of fair values of the derivative transactions is implemented. In calculating the potential credit risk, the amount of the
contract is multiplied by the rates given in the regulation. The replacement costs of derivative instruments are calculated based on the valuation of the related contracts
according to the fair value method.
Most of the credit risk related to the derivative transactions with other banks is subject to daily collateral clearing agreements mutually signed with related parties and the
counterparty credit risk is hence reduced. On the other hand, the risk-reducing effect of such agreements is not considered in the calculation of the counterparty credit risk
under the capital adequacy legislation. There are no guarantees received or sold by credit derivatives by the Bank in the context of trading or banking accounts.
d.2. Counterparty credit risk (CCR) approach analysis:
Current Period
Replacement Cost
Potential Future
Exposure
Exposure after Credit
Risk Mitigation
Risk Weighted
Amounts
Standardised Approach -CCR (for derivatives) (*)
15,126,470
2,525,157
17,651,627
7,438,966
Comprehensive Approach for credit risk mitigation (for repo
transactions, securities or commodity lending or borrowing
transactions, long settlement transactions and securities
financing transactions)
3,603,297
820,234
Total
15,126,470
2,525,157
21,254,924
8,259,200
(*) Transactions with central counterparties are not included.
Prior Period
Replacement Cost
Potential Future
Exposure
Exposure after Credit
Risk Mitigation
Risk Weighted
Amounts
Standardised Approach -CCR (for derivatives) (*)
4,675,225
1,871,467
6,546,692
4,640,300
Comprehensive Approach for credit risk mitigation (for repo
transactions, securities or commodity lending or borrowing
transactions, long settlement transactions and securities
financing transactions)
4,510,615
1,650,727
Total
4,675,225
1,871,467
11,057,307
6,291,027
(*) Transactions with central counterparties are not included.
d.3. Capital obligation for credit valuation adjustment (CVA):
Total portfolio value with standardized approach CVA capital
charge
17,651,627
6,061,815
Total subject to the CVA capital charge
17,651,627
6,061,815
6,546,692
6,546,692
2,160,332
2,160,332
Current Period
Prior Period
Risk Amounts
Risk Weighted Amounts
Risk Amounts
Risk Weighted Amounts
d.4. CCR exposures by risk class and risk weights:
Current Period
0%
10%
20%
50%
75%
100%
150%
Other (*)
Risk Weights
Total Credit
Exposure
9,034,901
9,034,901
Risk Groups
Conditional and
unconditional exposures to
sovereigns and their central
banks
Conditional and
unconditional exposures
to regional and local
governments
Conditional and
unconditional exposures to
administrative bodies and
non-commercial entities
Conditional and
unconditional exposures to
multilateral development
banks
Conditional and
unconditional exposures to
international organizations
Conditional and
unconditional exposures to
banks and securities firms
Exposures to corporates
Retail exposures
Other Exposures
Total
130
130
2,199,970
3,723,422
1
247,813
269,495
5,754,644
24,547
5,923,393
6,271,952
24,547
389,140
389,140
9,034,901
2,447,783
3,992,917
24,547
5,754,775
389,140
21,644,063
(*) Related balance includes receivables from central counterparties subject to 2% risk weight.
272 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 273
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Prior Period
0%
10%
20%
50%
75%
100%
150%
Total Credit Exposure
Risk Weights
Risk Groups
Conditional and unconditional exposures to
sovereigns and their central banks
Conditional and unconditional exposures to
regional and local governments
Conditional and unconditional exposures to
administrative bodies and non-commercial
entities
Conditional and unconditional exposures to
multilateral development banks
Conditional and unconditional exposures to
international organizations
Conditional and unconditional exposures to
banks and securities firms
Exposures to corporates
Retail exposures
Exposures secured by residential property
Exposures secured by commercial property
Exposures in high-risk categories
Exposures in the form of bonds secured by
mortgages
Short term exposures to banks, brokerage
houses and corporates
Equity investments in the form of collective
investment undertakings
Equity investments
Other Exposures
Other Assets
Total
d.5. Collateral for CCR:
1,066,957
1,066,957
146
146
2,201,826
3,867,157
3
976
3,906,228
14,014
6,068,986
3,907,204
14,014
1,066,957
2,202,802
3,867,157
14,014
3,906,377
11,057,307
d.6. Credit derivatives exposures:
None.
d.7. Exposures to central counterparties (CCP):
Current Period
Prior Period
Post CRM risk exposure
RWA
Post CRM risk exposure
RWA
8,904
7,782
7,742
40
478,874
432,350
428,010
4,340
10,031
8,647
8,560
87
1,122
46,524
1,384
576,066
389,140
387,118
2,022
146,312
40,614
Exposure to Qualified Central Counterparties (QCCPs) (total)
Exposures for trades at WCCPs (excluding initial margin and
default fund contributions); of which
(i) OTC Derivatives
(i) Exchange-traded Derivatives
(i) Repo-reverse repo transactions, credit securities transactions
and securities or commodities lending or borrowing
(i) Netting sets where cross-product has been approved
Segregated initial margin
Non-segregated initial margin
Paid guarantee fund amount
Unpaid guarantee fund commitment
Exposures to non-QCCPs (total)
Exposures for trades at non-QCCPs (excluding initial margin and
default fund contributions); of which
(i) OTC Derivatives
(ii) Exchange-traded Derivatives
(iii) Securities financing transactions
(iv) Nettinf sets where cross-product has been approved
Segregated initial margin
Non-segregated initial margin
Pre-funded default fund contributions
Unfunded default fund contributions
Explanations on securitizations:
None.
f. Market Risk Explanations
Collateral used in derivative transactions
Collateral used in other transactions
f.1. Qualitative information to be disclosed to the public regarding market risk
Current Period
Received Collateral
Given Collateral
Segregated
Unsegregated
Segregated
Unsegregated
Cash- Domestic Currency
Cash- Other Currencies
Total
Given Collateral
Received
Collateral
40,360,089
8,394,718
48,754,807
Collateral used in derivative transactions
Collateral used in other transactions
Prior Period
Received Collateral
Given Collateral
Segregated
Unsegregated
Segregated
Unsegregated
Cash- Domestic Currency
Cash- Other Currencies
Total
Given Collateral
Received
Collateral
19,280,623
10,055,863
29,336,486
Market risk is defined as the risk that may reduce the market value of the trading portfolio due to the changes in the risk factors named interest rate, exchange rates,
equities and the price of commodities and options.
The procedures for the management of market risk are discussed in the Bank's "Asset and Liability Management Risk Policy" and those procedures are in line with the
risk/return expectations of the Bank and with the limits that are defined in the risk appetite framework. Limits related to market risk; are established by the Board and
are revised periodically in order to reflect market conditions and best practices in the industry. Compliance to those limits is closely monitored by the Risk Management
Department, Asset and Liability Management Committee and by the executive departments. Additionally, compliance with the provisions relating to the procedures and
policies of market risk management is audited by the internal audit system.
Trading activities of the securities that are included in the calculation of market risk is carried out by taking the Asset-Liability Committee decisions, risk policies and
established limits into consideration and risks arising due to these activities are hedged using derivatives transactions where necessary.
Measurement of market risk, reporting of results, and monitoring compliance with the risk limits are among the key responsibilities of the Risk Management Department.
Analyses related to market risk are reported to the Risk Committee and to the Board via the Audit Committee by the Risk Management Department.
The trading book of the Bank included in market risk calculations consists of on balance-sheet financial assets that are held for trading intent, derivatives that provide
hedge to those instruments and foreign currency positions. The market risk carried by the Bank is measured and monitored using two methods known respectively as
the Standard Method and the Value at Risk Model (VAR) and Expected Shortfall in accordance with the local regulations which are established in compliance with the
international legislations. In this context, the exchange rate risk emerges as the most important component of the market risk.
The market risk calculations using the Standard Method are performed at the end of each month and the measurement results are included in the statutory reports as well
as being reported to the Bank’s top management.
The Value at Risk Model and Expected Shortfall are another alternative for the Standard Method used for measuring and monitoring market risk. This model is used
to measure the market risk on a daily basis in terms of interest rate risk, currency risk and equity share risk and is a part of the Bank’s daily internal reporting. Further
retrospective testing (back-testing) is carried out on a daily basis to determine the reliability of the daily risk calculation by the VAR model, which is used to estimate the
maximum possible loss for the following day.
Scenario analyses which support the VAR model used to measure the losses that may occur in the ordinary market conditions are practiced, and the possible impacts of
scenarios that are developed based on the future predictions and the past crises, on the value of the Bank’s portfolio are determined and the results are reported to the
Bank’s top management.
274 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 275
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen f.2. Standardised Approach:
Current Period
Outright Products
Interest rate risk (general and specific)
Equity risk (general and specific)
Foreign exchange risk
Commodity risk
Options
Simplified approach
Delta-plus method
Scenario approach
Securitisations
Total
g. Explanations on Operational Risk
Current Period
Prior Period
i. Remuneration policy
RWA
9,118,589
3,798,288
464,125
4,265,063
591,113
985,899
985,899
RWA
8,428,564
3,109,788
521,550
4,714,538
82,688
103,499
103,499
10,104,488
8,532,063
The operational risk capital requirement is calculated according to Regulation on Measurement and Evaluation of Capital Adequacy of Banks' article number 24, is
measured using the Basic Indicator Approach once a year in parallel with domestic regulations. As of December 31, 2021, the operational risk amount is TL 40,291,061
(December 31, 2020: TL 32,655,169) and information about the calculation is given below.
Current Period
Gross Income
Value at operational risk (Total*12.5)
Prior Period
Gross Income
Value at operational risk (Total*12.5)
2 PP Amount
1 PP Amount
CP Amount
Total/No. of Years of
Positive Gross
Rate (%)
Total
17,545,195
19,200,037
27,720,464
3
15
3,223,285
40,291,061
2 PP Amount
1 PP Amount
CP Amount
Total/No. of Years of
Positive Gross
Rate (%)
Total
15,503,039
17,545,195
19,200,037
3
15
2,612,414
32,655,169
h. The interest rate risk of the banking book items:
Interest rate risk arising from the banking accounts is defined as negative effect risk on capital of the changes in market interest rates due to differences in interest
settlement and re-pricing on, differences in interest-earning assets taking part in the banking book; interest-bearing liabilities; interest-bearing derivative transactions
inclusive of the policies established by the Board of Directors, is managed within the framework of the strategies set by the Bank Asset-Liability Committee.
Compliance with internal risk limits for banking portfolio is closely and continuously monitored by the Risk Management Department and Asset-Liability Committee
and the measurement results are reported to the Board of Directors on a monthly basis.
Duration and sensitivity analysis are conducted on a monthly basis by the Bank in the scope of monitoring of interest rate risk arising from the banking books about
Interest Rate Risk in the Banking Accounts from the Regulation on Measurement and Assessment of Standard Shock Method which is published in the Official Gazette
No. 28034 dated 23 August 2011. In the duration analysis, the maturity gap between assets and liabilities of the balance sheet are determined by the calculation of the
weighted average maturities based on the asset that sensitive to interest rate and liabilities and off-balance sheet transactions re-pricing period. In the interest rate
risk sensitivity analysis, the influence of the various interest rate change scenarios to the economic value of the Bank's capital is examined.
In the calculations made within the framework of the said regulation, behavioral maturity modeling is performed for demand deposits with low sensitivity to interest
changes and whose original maturity is longer than the contractual maturity. In these studies, which are defined as core deposit analysis, based on historical data,
calculations are made for what amount of demand deposits will remain within the bank for what maturity, and these analyzes are used as an input in quantifying the
interest rate risk arising from banking accounts in a way that does not contradict legal provisions.
Currency
Applied Shock (+/- x basis point)
Revenue/ Loss
Revenue/Shareholders’
Equity – Loss/ Shareholders’ Equity
TL
TL
EUR
EUR
USD
USD
Total (for Negative Shocks)
Total (for Positive Shocks)
(+) 500
(-) 400
(+) 200
(-) 200
(+) 200
(-) 200
276 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
(7,658,934)
7,003,704
709,875
48,870
(1,201,907)
2,876,981
9,929,555
(8,150,966)
(6.79) %
6.21%
0.63%
0.04%
(1.07) %
2.55%
8.80%
(7.23) %
The Remuneration Committee, which is established to carry out the duties and activities related to the monitoring and supervision of the Bank's remuneration
applications on behalf of the Board of Directors, consists of two members. The Remuneration Committee meets at least twice a year, not exceeding six months, and
reports to the Board of Directors on the results of the activities carried out and important matters considered to have an impact on the Bank’s position. As of the end of
2021, the Remuneration Committee met 7 times and made a total of 10 decisions.
Regarding compliance with the Corporate Governance Principles, the Remuneration Committee monitors and supervises the practices related to wage management
on behalf of the Board of Directors; the fees are in line with the Bank's ethical values, internal balances and strategic objectives; the evaluation of the remuneration
policy and its practices in the context of risk management; it is responsible for the presentation of the proposals determined in line with the requirements of the salary
policy and the other responsibilities determined by the provisions of the applicable legislation and the fulfillment of the duties given by the Board of Directors in this
framework.
As of the end of 2021, the number of qualified employees working at the Bank is 27.
The monetary and social rights of employees are determined in accordance with the Chartering Policy in the framework of the legislation related to the Collective Labor
Agreement. The Bank carries out its practices with regard to remuneration policies within the framework of relevant banking and capital market legislation. This policy
includes all managers and employees.
Premium payments are made once a year to managers and managers who work in branches and headquarters units. It is considered that managerial premium
payments are in line with the Bank's long-term strategy and the risks assumed, as well as the performance of its employees. There are no variable fees for qualified
employees in the Bank.
The compliance of the wage levels in the bank with the sector wage levels is monitored by participating in independent and anonymous wage surveys, which are held
twice a year.
Within the scope of the remuneration policy, the Bank's pricing practices are planned and executed on the basis of effective risk management, prevention of excessive
risk taking, compliance with relevant legislation and scope and structure of the bank's activities, strategies, long-term objectives and risk management structures.
The fees to be paid to the managers and employees of the Bank at every stage; It is essential that the Bank is in line with its ethical values, internal balances and
strategic objectives, and that it is not only associated with its short-term performance.
Payments made to employees are determined in a manner that will positively impact the Bank's corporate values and on the basis of objective conditions.
Payments to be made to the managers of the units within the internal systems and to their staff are determined by taking into account the performance of the relevant
personnel in relation to their functions, as they are in the audit or oversight, or are independent of the performance of the activity unit they control.
XII. Explanations on Segment Reporting
The Bank’s operations are classified as corporate, commercial, retail and private banking, and treasury/investment banking.
Services to the large corporations, SMEs and other trading companies are provided through various financial instruments within the scope of the corporate and
commercial operations. Services such as project financing, operating and investment loans, deposit and cash management, credit cards, cheques and bills, foreign trade
transactions and financing, letter of guarantees, letter of credits, forfeiting, foreign currency trading, bill collections, payrolls, investment accounts, tax collections and
other banking services are provided for the aforementioned customer segments.
Retail banking services are comprised of individuals needs such as deposits, consumer loans, overdraft accounts, credit cards, bill collections, remittances, foreign
currency trading, safe-deposit boxes, insurance, tax collections, and investment accounts and by other banking services. All kinds of financing and cash management
services provided to individuals in the high-income level are recognized as Private Banking activities.
Treasury transactions are comprised of medium- and long-term funding tools such as securities trading, money market transactions, spot and forward TL and
foreign currency trading, and derivative transactions such as forwards, swaps, futures and options, as well as syndications and securitizations. The details about the
aforementioned investments are stated in Note I.h-I.i of Section Five.
Statement of information related to business segmentation is given below. Below mentioned information has been prepared with the data obtained from the Bank's
management reporting system.
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 277
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Current Period
Interest Income
Interest Expense
Fees and Commissions Income
Fees and Commissions Expense
Dividend Income
Trading Income/Loss (Net)
Other Income
Expected Credit Loss and Other Provision
Expenses
Other Operating Expense
Income/Loss from Investments in Subsidiaries
Accounted by Equity Method
Income Before Tax
Tax Provision
Net Period Profit
Total Assets
Total Liabilities
Prior Period
Interest Income
Interest Expense
Commission İncome
Commission Expense
Dividend Income
Trading Income/Loss (Net)
Other Income
Provision Expense
Other Expense
Income/Loss from Investments in Subsidiaries
Accounted by Equity Method
Income Before Tax
Tax Provision
Net Period Profit
Total Assets
Total Liabilities
Corporate/Commercial
Banking
Individual/Private
Banking
Treasury Transaction/
Investment Activities
Unallocated
Total
31,950,917
6,733,700
6,695,135
12,339,254
10,607,910
2,675,474
2,643,970
7,091,015
2,560,293
307,201
688,195
6,078,683
16,417,925
11,373,446
20,735
(5,149,127)
7,414
16,416
8,003,345
196,247
1,248,018
372,169
2,122,833
1,442,985
60,904,343
29,963,074
9,742,778
2,122,833
20,735
(5,149,127)
4,401,570
6,654,541
14,450,167
7,272,713
15,911,689
8,003,345
15,475,881
2,007,986
13,467,895
394,696,667
241,815,534
99,234,839
330,076,297
228,168,114
194,580,263
204,469,404
926,569,024
160,096,930
926,569,024
Corporate/Commercial
Banking
Individual/Private
Banking
Treasury Transaction/
Investment Activities
Unallocated
Total
23,136,025
3,665,548
4,521,230
8,577,446
5,362,953
2,251,040
1,525,979
7,515,789
2,087,678
245,951
534,157
4,914,808
10,495,611
6,916,464
21,487
(3,341,357)
122
20,047
3,406,471
307,250
1,329,328
18,148
42,516,332
17,274,293
6,790,418
1,172,805
1,172,805
664,153
4,659,927
4,794,500
21,487
(3,341,357)
2,436,205
12,729,920
11,796,986
3,406,471
8,855,552
2,044,635
6,810,917
270,351,279
139,082,382
78,230,289
216,936,068
154,079,599
124,341,574
88,723,762
593,902,432
113,542,408
593,902,432
Section Five: Disclosures and Footnotes On The Unconsolidated Financial Statements
I. Disclosures And Footnotes On Assets
A. Cash and Central Bank of Turkey:
a.1. Cash and balances with the Central Bank of Turkey:
Current Period
Prior Period
Cash in TL/Foreign Currency
Central Bank of Turkey
Other
Total
TL
2,627,481
14,652,969
17,280,450
FC
12,182,962
152,099,358
360,451
164,642,771
a.2. Information on balances with the Central Bank of Turkey:
TL
14,652,969
Current Period
FC
66,674,939
85,424,419
152,099,358
Unrestricted Demand Deposit
Unrestricted Time Deposit
Restricted Time Deposit
Other (*)
Total
14,652,969
(*) The amount of reserve deposits held at the Central Bank of Turkey.
a.3. Information on reserve requirements:
TL
2,486,601
3,077,078
5,563,679
TL
3,077,078
3,077,078
FC
6,615,956
58,365,617
361,109
65,342,682
Prior Period
FC
19,977,563
38,388,054
58,365,617
As per the Communiqué no. 2013/15 “Reserve Deposits” of the Central Bank of the Republic of Turkey (“CBRT”), banks keep reserve deposits at the CBRT for their TL and
FC liabilities mentioned in the communiqué. The reserve deposit rates vary according to their maturity compositions; the reserve deposit rates are realized between 3% - 8%
for TL deposits and other liabilities, between 19% - 26% for FC deposits and between 5% - 21% for other FC liabilities. Reserves are calculated and set aside every two weeks
on Friday for 14-day periods. Interest is paid for required reserves which are in TL in accordance with the procedures and principles determined by the CBRT.
According to the Communique on Required Reserves published in the Official Gazette dated 01.07.2021 and numbered 31528, the possibility of establishing Turkish lira
required reserves in foreign currency was terminated as of 01.10.2021.
Within the scope of the "Communique on Supporting the Conversion of Turkish Lira Deposit and Participation Accounts" numbered 2021/14, the conversion rate from USD,
EUR and GBP denominated foreign currency deposit accounts and foreign exchange denominated participation fund accounts to time TL deposit and participation accounts
was 10% as of the obligation date of 15.04.2022. and banks that reached 20% as of 08.07.2022 liability date, it has been decided not to apply an annual commission of 1.5%
over the portion up to the amount to be kept for their liabilities until the end of 2022.
b. Information on Financial Assets at Fair Value through Profit and Loss:
b.1. Financial Assets at fair value through profit and loss, which are given as collateral or blocked:
As of 31.12.2021, the amount of financial assets given as collateral/blocked at fair value through profit or loss is TL 4.010,802 (31 December 2020: None).
b.2.Financial assets at fair value through profit and loss, which are subject to repurchase agreements:
Financial assets at fair value through profit and loss, which are subject to repurchase agreements as at December 31, 2021 are amounting to TL 115,057 (December 31,
2020: TL 44,192).
b.3. All creditors including the Bank reached an agreement on restructuring the loans granted to the company. As stated in the year 2019, loans of the company had been
planning to be restructured based on required permits and necessary approvals within a new special purpose entity which was already incorporated or will be incorporated
in the Republic of Turkey and owned by the creditors either directly or indirectly through takeover of the shares, that have been pledged by the company as a guarantee for
the credit risk. Above mentioned process was completed in 2018 and, in this context the Bank owns 11.5972% of the newly formed special purpose entity.
At the Ordinary Meeting of General Assembly of 2018 held in 2019, it has been decided to increase the share capital of the mentioned company by TL 3,982,230, all to be
covered by common receivables. Whereas the Bank’s ownership ratio in the company has not changed, the nominal value of the shares owned increased from TL 6 to TL
461,833. Amount in question is recognized under Assets Held for Sale and Discontinued Operations account.
The remaining loan amount after the capital increase amounting to TL 1,886,716 (31.12.2020: TL 1,886,716), is accounted under financial assets at fair value through
profit or loss. The amount of impairment recognized for the total asset converted into loan and capital is TL 3,393,933 and is classified under the specified item.
Assets, which are converted into loan and capital, amounted TL 2,348,549 are measured at fair value under TFRS 9 “Financial Instruments” standard and TFRS 5 “Assets
Held For Sale and Discontinued Operations” Standard. Balance of related asset is followed in financial statements as Stage 3 within the scope of “TFRS 13 – Fair Value
Measurement” standard.
The Bank re-evaluated the fair value of the relevant financial asset as of the end of the period and did not make any change in the current value monitored during the
period. If the growth rate and risk-free return rate on investment used in the discounted cash flow method used in valuation are increased or decreased by 0.25%, provided
that all other variables are constant, the total value of assets recognized in the financial statements and profit before tax will increase by about TL 55 million (full TL
amount) or will decrease by TL 49 million (full TL amount).
Although the process continues as of the report date, as announced on the Public Disclosure Platform on 17 December 2021, negotiations have started for the sale of the
said shares to the Turkey Wealth Fund.
b.4. TL 1,302,654 of other financial assets consists of the mutual funds; Quasar İstanbul Konut Gayrimenkul and Quasar İstanbul Ticari Gayrimenkul which were founded
by İş Portföy Yönetimi A.Ş.
278 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 279
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
c. Positive differences on derivative financial assets held for trading:
e.3. Information on financial assets at Fair Value through Other Comprehensive Income:
Derivative Financial Assets at Fair
Value Through Profit or Loss
Forward Transactions
Swap Transactions
Futures
Options
Other
Total
d. Information on Banks:
d.1. Information on Banks:
Banks
Domestic Banks
Foreign Banks
Foreign Head Office and Branches
Total
d.2. Information on foreign banks:
TL
307,790
31,882
240,718
580,390
TL
118
168,103
168,221
Current Period
Prior Period
FC
1,697,249
18,159,836
456,221
1,030,470
21,343,776
Current Period
FC
628,822
23,332,258
23,961,080
TL
150,545
41,156
3,779
195,480
TL
230,204
197,109
427,313
FC
369,782
4,323,287
81,008
90,560
4,864,637
Prior Period
FC
318,280
15,303,968
15,622,248
EU Countries
USA, Canada
OECD Countries (*)
Off-shore Banking Regions
Other
Total
Restricted Amount
Unrestricted Amount
Current Period
6,992,733
4,798,843
3,164,571
3,083,978
18,040,125
Prior Period
5,672,853
3,185,966
2,007,029
1,593,433
12,459,281
Current Period
2,504,313
1,732,111
1,223,812
5,460,236
Prior Period
1,411,758
73,252
1,032,493
524,293
3,041,796
Debt Securities
Quoted on a Stock Exchange
Not- Quoted (*)
Share Certificates
Quoted on a Stock Exchange
Not-Quoted
Impairment Losses (-)
Other
Total
Current Period
92,072,307
47,467,263
44,605,044
552,328
552,328
5,094,482
24,923
87,555,076
Prior Period
65,691,796
42,827,077
22,864,719
345,962
345,962
643,691
136,879
65,530,946
(*) Refers to the debt securities, which are not quoted on the Stock Exchange or which are not traded, although quoted, on the Stock Exchange at the end of the related period.
f. Information related to loans:
f.1. Information on all types of loans and advances given to shareholders and employees of the Bank:
Current Period
Prior Period
Cash
Non-Cash
Cash
Non-Cash
Direct Lending to Shareholders
Corporate Shareholders
Individual Shareholders
Indirect Lending to Shareholders
Loans and Other Receivables to Employees
Total
353,655
353,655
861
861
297,475
297,475
864
864
f.2. Information about the Standard loans and loans under close monitoring and loans under close monitoring that have been restructured:
(*) OECD countries other than the EU countries, USA and Canada.Expected credit loss for cash and cash equivalents:
Cash Loans
Standard Loans
Nakit ve nakit benzerleri için ayrılan beklenen zarar karşılıkları
Beginning of period provisions
Additional provisions within the period
Transfers within the period
Write-offs from Assets
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Currency Exchange Difference
Current Period Ending Provisions
Stage 1
26,379
44,434
(18,484)
10,461
62,790
Current Period
Stage 2
Stage 3
Prior Period
Stage 1
Stage 3
Stage 2
27,806
33,144
(27,234)
(7,337)
26,379
Non-specialized loans
Corporation Loans
Export Loans
Import Loans
Loans Extended to Financial Sector
Consumer Loans
Credit Cards
Other
Specialized Loans
Other Receivables
Total
Loans Not Subject to
Restructuring
27,337,872
16,297,556
1,106,168
1,788
5,880,626
1,390,622
2,661,112
Loans Under Close Monitoring
Restructured Loans
Loans with Revised
Contract Terms
12,528,763
8,720,426
8,145
815,722
2,984,470
Refinance
19,789,867
11,672,321
310,623
1,460,001
6,346,922
433,721,689
184,569,325
45,488,638
16,361,315
77,897,519
34,575,102
74,829,790
433,721,689
27,337,872
12,528,763
19,789,867
e. Information on Financial Assets at Fair Value through Other Comprehensive Income:
e.1. Information on financial assets at Fair Value through Other Comprehensive Income, which are given as collateral or blocked:
Financial assets at fair value through other comprehensive income, which are given as collateral or blocked, amount to TL 21,372,033 as at December 31, 2021 (December
31, 2020: TL 17,730,908).
e.2. Information on financial assets at Fair Value Through Other Comprehensive Income, which are subject to repurchase agreements:
Financial assets at fair value through other comprehensive income, which are subject to repurchase agreements amount to TL 32,267,910 as at December 31, 2021
(December 31, 2020: TL 18,376,335).
Current Period
Prior Period
12 Month Expected Credit Losses (Stage I)
3,417,459
Standard Loans
Loans Under Close
Monitoring
Standard Loans
2,566,751
Loans Under Close
Monitoring
Significant Increase in Credit Risk (Stage II)
11,094,455
7,809,169
According to TFRS 9, the expected loss provisions calculated for the stage 1 and stage 2 loans have generally changed in parallel with the related loan balances.
280 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 281
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
f.3. Information on Maturity analysis of cash loans
f.5. Information on commercial installments loans and corporate credit cards:
Cash Loans
Standard Loans
Short-term Loans and Other Receivables
127,579,147
Medium and Long-term Loans and Other Receivables
306,142,542
Loans under close monitoring
Loans Not Subject to
Restructuring
4,131,219
23,206,653
Restructured Loans
1,455,561
30,863,069
f.4. Information on consumer loans, retail credit cards, personnel loans and personnel credit cards:
Short-Term
Medium and Long Term
Interest and Income Accruals
Total
Consumer Loans – TL
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Consumer Loans – FC Indexed
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Consumer Loans – FC
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Retail Credit Cards – TL
With Installments
Without Installments
Retail Credit Cards – FC
With Installments
Without Installments
Personnel Loans-TL
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Personnel Loans- FC Indexed
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Personnel Loans – FC
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Personnel Credit Cards – TL
With Installments
Without Installments
Personnel Credit Cards-FC
With Installments
Without Installments
Overdraft Accounts – TL (real persons)
Overdraft Accounts – FC (real persons)
2,898,136
30,822
25,242
2,842,072
23,016,151
8,244,933
14,771,218
28,094
28,094
28,523
28,523
153,787
58,894
94,893
282
282
2,726,338
77,925,583
23,971,198
1,188,360
52,766,025
2,821
2,821
1,106,106
1,106,106
147,142
3,929
573
142,640
2,833
2,833
1,437,351
278,409
14,555
1,144,387
27,147
27,147
141,196
141,196
2,553
29
5
2,519
277
277
42,552
82,261,070
24,280,429
1,228,157
56,752,484
29,968
29,968
24,263,453
9,351,039
14,912,414
28,094
28,094
178,218
3,958
578
173,682
156,897
61,727
95,170
282
282
2,768,890
Total
28,851,311
79,184,485
1,651,076
109,686,872
Short-Term
3,960,174
16,413
375,936
3,567,825
Medium and Long Term
60,662,469
2,723,188
11,025,339
46,913,942
Interest and Income Accruals
1,042,381
21,132
82,943
938,306
163,505
5,504
3,012
154,989
80,999
5,668,158
193,250
193,242
8
12,097,914
5,573,496
6,524,418
6,710
6,710
1,565,680
446,975
13,843
6,511
426,621
37,222
37,222
34,846
34,846
29,242
17,711,477
66,687,382
1,590,666
Total
65,665,024
2,760,733
11,484,218
51,420,073
610,480
19,347
9,523
581,610
5,786,379
5,786,379
12,326,010
5,766,738
6,559,272
6,710
6,710
1,594,922
85,989,525
Commercial Loans With Installments-FC
80,999
5,668,158
Commercial Loans With Installments-TL
Real Estate Loans
Vehicle Loans
General Purpose Commercial Loans
Other
Commercial Loans With Installments-FC Indexed
Real Estate Loans
Vehicle Loans
General Purpose Commercial Loans
Other
Real Estate Loans
Vehicle Loans
General Purpose Commercial Loans
Other
Corporate Credit Cards-TL
With Installments
Without Installments
Corporate Credit Cards-FC
With Installments
Without Installments
Overdraft Accounts – TL (corporate)
Overdraft Accounts – FC (corporate)
Total
f.6. Allocation of loan by borrowers:
Public
Private
Total
f.7. Domestic and foreign loans:
Domestic Loans
Foreign Loans
Total
f.8. Loans granted to subsidiaries and associates:
Direct Loans Granted to Subsidiaries and Associates
Indirect Loans Granted to Subsidiaries and Associates
Total
f.9. Information on impairment provisions of Loans (Stage 3):
Loans with Limited Collectability
Loans with Doubtful Collectability
Uncollectible Loans
Total
Current Period
6,082,101
487,296,090
493,378,191
Current Period
474,816,677
18,561,514
493,378,191
Current Period
6,287,638
6,287,638
Current Period
848,210
1,160,409
11,782,376
13,790,995
Prior Period
4,665,025
340,485,105
345,150,130
Prior Period
334,033,334
11,116,796
345,150,130
Prior Period
5,368,800
5,368,800
Prior Period
12,659
1,325,036
11,638,266
12,975,961
f.10. Information on non-performing loans (Net):
f.10.1. Information on non-performing loans, which are restructured or rescheduled:
Group III
Group IV
Group V
Loans with Limited Collectability
Loans with Doubtful Collectability
Uncollectible Loans
Current Period
(Gross amounts before the provisions)
Restructured Loans
Prior Period
(Gross amounts before the provisions)
Restructured Loans
118,515
118,515
323
323
54,316
54,316
109,749
109,749
3,333,401
3,333,401
1,641,053
1,641,053
282 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 283
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen f.10.2. Information on the movement of total non-performing loans
f.10.3. Information on foreign currency non-performing loans:
Group III
Group IV
Group V
Loans with Limited Collectability
Loans with Doubtful Collectability
Non Performing Loans
Prior Period Ending Balance
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Additions (+)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Transfers from Other NPL Categories (+)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Transfers to Other NPL Categories (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Collections (-) (*)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Write-Offs (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Debt Sale (-) (**)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Currency Change Effect
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Current Period Ending Balance
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Provisions (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Net Balance on Balance Sheet
12,659
11,601
1,003
55
2,338,714
1,450,855
573,488
312,422
1,949
485,668
304,300
136,456
42,963
1,949
196,204
54,117
82,580
59,507
2,631
24
2,603
4
277
250
27
1,667,147
1,104,265
352,879
210,003
848,210
531,412
193,200
123,598
818,937
2,916,512
2,616,562
206,205
93,745
3,696,606
3,028,397
411,728
256,418
63
485,668
304,300
136,456
42,963
1,949
4,375,118
3,934,391
306,661
132,054
2,012
535,999
266,397
169,805
99,797
1,120
908
179
33
12
12
1,340
1,332
8
2,187,877
1,748,895
277,752
161,230
1,160,409
897,158
163,170
100,081
1,027,468
17,442,301
15,495,879
1,001,958
815,995
128,469
314,966
291,433
3,710
9,543
10,280
4,375,118
3,934,391
306,661
132,054
2,012
3,822,317
3,382,384
287,695
139,232
13,006
905,808
903,887
752
1,159
10
1,096,887
356,687
356,762
381,081
2,357
668,162
666,693
1,377
92
16,975,535
15,745,438
668,497
436,120
125,480
11,782,376
10,715,590
560,154
391,777
114,855
5,193,159
(*) As of 31 December 2021, the amount of 867,724 TL has been deducted within the framework of the amendment made in the "Regulation on the Procedures and Principles Regarding the Classification of Loans
and Provisions for These" published in the Official Gazette dated 27 November 2019 and numbered 30961.
(**) In the current period, our receivables, which make up TL 745,486 of the portfolio consisting of non-performing loans, have been collected from the sales price of TL 71,850 in cash, to Emir Varlık Yönetim A.Ş.,
İstanbul Varlık Yönetim A.Ş., Future Varlık Yönetim A.Ş. , Hedef Varlık Yönetim A.Ş. and Arsan Varlık Yönetim A.Ş.; Our receivables, constituting a portion of TL 351,413, were transferred to İstanbul Varlık Yönetim A.Ş.
After the sale of portfolio consisting of write-offs and non-performing loans, the Bank's non-performing loan ratio decreased from 4.42% to 4.05% as of 31.12.2021.
Current Period
Balance at the End of the Period
Provisions (-)
Net Balance on Balance Sheet (*)
Prior Period
Balance at the End of the Period
Provisions (-)
Net Balance on Balance Sheet (*)
Group III
Group IV
Group V
Loans with Limited
Collectability
Loans with Doubtful
Collectability
Uncollectible Loans
602,138
291,909
310,229
11,050
11,050
1,070,131
545,376
524,755
1,652,612
665,110
987,502
10,547,942
6,459,390
4,088,552
9,050,836
5,001,086
4,049,750
(*) In addition to the loans extended in foreign currency, loans which are monitored in Turkish Lira are included.
f.10.4. Information on gross and net non-performing loans as per customer categories:
Group III
Group IV
Group V
Loans with Limited
Collectability
Loans with Doubtful
Collectability
Uncollectible Loans
Current Period (Net)
Loans to Individuals and Corporate (Gross)
Provisions (-)
Loans to Individuals and Corporate (Net)
Banks (Gross)
Provisions (-)
Banks (Net)
Other Loans (Gross)
Provisions (-)
Other Loans (Net)
Prior Period (Net)
Loans to Individuals and Corporate (Gross)
Provisions (-)
Loans to Individuals and Corporate (Net)
Banks (Gross)
Provisions (-)
Banks (Net)
Other Loans (Gross)
Provisions (-)
Other Loans (Net)
818,937
1,667,147
848,210
818,937
12,659
12,659
1,027,468
2,187,877
1,160,409
1,027,468
1,591,476
2,916,512
1,325,036
1,591,476
5,193,159
16,850,055
11,667,521
5,182,534
125,480
114,855
10,625
5,804,035
17,313,832
11,526,544
5,787,288
128,469
111,722
16,747
f.10.5. Information on interest accruals, valuation differences and related provisions calculated for non-performing loans:
Current Period (Net)
Interest accruals and valuation differences
Provisions (-)
Prior Period (Net)
Interest accruals and valuation differences
Provisions (-)
Group III
Group IV
Group V
Loans with Limited
Collectability
Loans with Doubtful
Collectability
Uncollectible Loans
103,070
205,266
102,196
136,063
282,220
146,157
147,364
297,299
149,935
379,597
1,460,295
1,080,698
522,279
1,511,827
989,548
284 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 285
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
f.10.6. Outline of the liquidation policy for uncollectible loans and other receivables
g.5. Movement of financial assets measured at amortised cost within the year:
In order to ensure the liquidation of non-performing loans, all possibilities evaluated to ensure maximum collection according to the legislation. Primarily, administrative
initiatives are taken to deal with the borrower. Collection through legal proceedings is applied if there is no possibility of collection, liquidation or structuring for receivables
through negotiations.
Our receivables that cannot be collected through administrative and legal initiatives can be written off from the assets within the framework of portfolio-based receivables
sales or write-offs, by fulfilling the requirements of the Tax Procedure Law.
f.10.7. Information on write-off policy
Receivables classified as non-performing loans are collected primarily within the framework of administrative contacts with the debtors, and if no result is obtained, legal
proceedings are applied. In case of deletion of NPLs from assets, one of the methods of destruction, receivable sale and write-off can be applied.
In the Bank's write-off policy within the framework following the amendment made in Article 53 of the Banking Law with the Law on Income Tax and amending Certain
Laws No. 19.07.2019/7186, along with the "Classification of Loans and the Procedures and Principles for the Reserves to be Allocated" published in the Official Gazette
No. 27.11.2019 / 30961, the following statements are issued:
- The portion of the receivables, which are monitored under the Fifth Group-Uncollectible Loans and allocated for lifetime expected credit loss due to the default of the
debtor, can be write-off to the extent of the maximum provision amount,
- write-off is an accounting practice and does not result in the remission of the receivable,
- the receivables to be write-off must be monitored as non-performing loans for at least 1 year.
Receivables that are proven to be uncollectible in legal follow-up process can be write-off within the instructions of Tax Procedure Law.
Expected Credit Loss:
Current Period
Prior Period
Stage 1
Stage 2
Stage 3
Provisions beginning of the period
2,566,751
Additional provisions within the period
2,018,263
Transfers within the period
(1,359,941)
Write-offs from Assets
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Currency Exchange Difference
473,529
(361,801)
(21,047)
101,705
Provisions at the end of the period
3,417,459
7,809,169
6,148,847
(1,799,663)
(466,441)
368,343
(1,212,754)
246,954
11,094,455
g. Financial Assets Measured at Amortised Cost:
g.1. Financial Assets Measured at Amortised Cost given as collateral or blocked:
12,975,961
3,049,611
(1,468,889)
(1,998,407)
(7,088)
(6,542)
1,233,801
12,548
Stage 1
1,457,857
1,765,113
(737,231)
79,332
(69,133)
(4,384)
75,197
13,790,995
2,566,751
Stage 2
Stage 3
3,696,174
5,463,265
(1,010,378)
(71,309)
73,848
(415,661)
73,230
7,809,169
10,326,031
3,500,177
(1,235,396)
(28,363)
(8,023)
(4,715)
420,045
6,205
12,975,961
Financial assets measured at amortised cost given as collateral or blocked amount to TL 9,520,594 as at December 31, 2021 (December 31, 2020: TL 8,880,626).
g.2. Financial Assets Measured at Amortised Cost subject to repurchase agreements:
Financial assets measured at amortised cost, which are subject to repurchase agreements amount to TL 17,843,004 as at December 31, 2021 (December 31, 2020: TL
6,421,414).
g.3. Information on government securities measured at amortised cost:
Government Bonds
Treasury Bills
Other Public Debt Securities
Total
g.4. Information on financial assets measured at amortised cost:
Debt Securities
Quoted on a Stock Exchange
Not Quoted (*)
Impairment Losses (-)
Total
Current Period
43,662,356
Prior Period
40,425,089
43,662,356
40,425,089
Current Period
46,412,734
44,951,778
1,460,956
46,412,734
Prior Period
41,659,437
40,626,988
1,032,449
41,659,437
Beginning Balance
Foreign Exchange Differences Arising on Monetary Assets
Purchases During the Year
Disposals through Sales and Redemption
Impairment Losses (-)
Valuation effect
Balance at the End of the Period
Expected credit loss for financial assets measured at amortised cost
Current Period
41,659,437
2,747,218
15,700,230
(15,819,174)
2,125,023
46,412,734
Prior Period
30,888,355
1,247,679
15,274,452
(6,752,597)
1,001,548
41,659,437
Prior Period
Stage 2
Stage 3
Beginning Term Provision
Additional Provisions During the Period
Disposal During the Period
Stage 1
12,001
18,508
(10,266)
Write-off
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Exchange Rate Differences
Period-end Provisions
100
20,343
h. Information on associates (Net):
h.1. General information on associates:
Current Period
Stage 2
Stage 3
Stage 1
7,768
10,031
(5,869)
71
12,001
No.
1-
2-
Title
Address (City/ Country)
Bank’s Share Percentage-If
Different, Voting Percentage (%)
Bank’s Risk Group Share
Percentage (%)
Arap Türk Bankası A.Ş.
Kredi Kayıt Bürosu A.Ş.
İstanbul/TURKEY
İstanbul/TURKEY
20.58
9.09
20.58
9.09
h.2. Information on financial statements of associates in the above order (*):
No.
1-
2-
Total Assets
Shareholders’
Equity
Total Tangible
Assets
Interest
Income (**)
Securities
Income
Current Period
Profit/Loss
Prior Period
Profit/Loss
Fair Value
10,205,582
1,361,769
544,660
339,776
223,069
297,247
432,044
13,036
41
163,288
47,719
100,781
48,549
(*) Shows September 30, 2021 amounts for Kredi Kayıt Bürosu A.Ş. and December 31, 2021 amounts for Arap Türk Bankası A.Ş
(**) Includes interest income on securities.
h.3. Movement of investments in associates:
Beginning Balance
Movements During the Period
Purchases
Bonus Shares Acquired
Dividends Received from Current Year Profit
Sales
Revaluation Increase (*)
Impairment
Other(**)
Balance at the end of the period
Capital commitments
Contribution in equity at the end of the period (%)
Current Period
266,305
Prior Period
250,459
44,776
311,081
25,199
-9,353
266,305
(*) Indicates unlisted debt securities, and debt securities that have not been traded at the end of the related periods while they are listed
(*) The differences arising from accounting by equity method is included.
(**) Due to the change in the ownership structure of Bankalararası Kart Merkezi A.Ş. and the loss of significant influence within the scope of "TAS 28-Investments in Subsidiaries and
Joint Ventures" in the previous period, the company is classified to Financial Assets at Fair Value through Other Comprehensive Income.
286 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 287
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
h.4. Sectoral information on financial associates and the related carrying amounts:
i.2. General information on subsidiaries (*):
Current Period
280,196
Prior Period
242,174
No
Title
Address (City/ Country)
Bank’s Share Percentage-if
Different, Voting Rights (%)
Bank’s Risk Group Share
Percentage (%)
Associates
Banks
Insurance Companies
Factoring Companies
Leasing Companies
Finance Companies
Other Financial Participations
Total
h.5. Associates quoted on a stock exchange: None.
h.6. Associates disposed of in the current period: None.
h.7. Associates acquired in the current period: None.
i.Information on subsidiaries (Net):
i.1. Information on the equity of major subsidiaries:
280,196
242,174
Türkiye Sınai
Kalkınma Bankası A.Ş.
İş Gayrimenkul
Yatırım Ortaklığı A.Ş.
Insurance /
Reinsurance Companies
İş Finansal
Kiralama A.Ş.
İş Yatırım Menkul
Değerler A.Ş.
COMMON EQUITY TIER I CAPITAL
Common Equity Tier I Capital
Before Deductions
Deductions from Common Equity
Tier I Capital (-)
7,354,514
5,476,126
4,867,316
1,999,205
2,768,792
173,692
1,713
93,029
9,294
102,178
1-
2-
3-
4-
5-
6-
7-
8-
9-
10-
11-
12-
13-
14-
15-
Anadolu Hayat Emeklilik A.Ş.
Joint Stock Company İsbank
Join Stock Company Isbank Georgia
İş Finansal Kiralama A.Ş.
İş Gayrimenkul Yatırım Ortaklığı A.Ş.
İş Merkezleri Yönetim ve İşletim A.Ş.
İş Net Elektronik Bilgi Üretim Dağıtım Ticaret ve
İletişim Hizmetleri A.Ş.
İş Yatırım Menkul Değerler A.Ş.
İşbank AG
Kültür Yayınları İş Türk A.Ş.
Milli Reasürans T.A.Ş.
Trakya Yatırım Holding A.Ş.
Türkiye Sınai Kalkınma Bankası A.Ş.
Türkiye Şişe ve Cam Fabrikaları A.Ş.(*)
İstanbul/TURKEY
Moscow/RUSSIA
Tbilisi/GEORGIA
İstanbul/ TURKEY
İstanbul/ TURKEY
İstanbul/ TURKEY
İstanbul TURKEY
İstanbul TURKEY
Frankfurt-Main/GERMANY
İstanbul/ TURKEY
İstanbul/ TURKEY
İstanbul/ TURKEY
İstanbul/ TURKEY
İstanbul/ TURKEY
MOKA Ödeme ve Elektronik Para Kuruluşu A.Ş.
İstanbul/ TURKEY
62.00
100.00
100.0
27.79
52.06
86.33
100.00
65.74
100.00
99.17
87.60
100.00
47.68
50.93
100.00
83.00
100.00
100.00
58.24
65.44
100
100.00
70.78
100.00
100.00
87.60
10.00
51.37
57.02
100.00
(*) The purchased free float shares of listed subsidiaries in Borsa Istanbul (BIST) namely, Anadolu Hayat Emeklilik A.Ş., İş Finansal Kiralama A.Ş, and İş Yatırım Menkul Değerler A.Ş.,
which are booked under "Financial Assets at Fair Value Through Profit or Loss" account are not included. (Board of Directors Decision dated December 25, 2015)
Total Common Equity Tier I Capital
7,180,822
5,474,413
4,774,287
1,989,911
2,666,614
i.3. Financial statement information related to subsidiaries in the above order (*):
ADDITIONAL TIER I CAPITAL
Additional Tier I Capital before
Deductions
Deductions from Additional Tier I
Capital (-)
Total Tier I Capital
TIER II CAPITAL
7,180,822
5,474,413
4,774,287
1,989,911
2,666,614
Tier II Capital Before Deductions
4,585,272
Deduction from Tier II Capital (-)
Total Tier II Capital
4,585,272
Total Tier I Capital and Tier II Capital
11,766,094
5,474,413
4,774,287
1,989,911
2,666,614
Deductions from Total Tier I
Capital and Tier II Capital (-)
EQUITY
11,766,094
5,474,413
4,774,287
1,989,911
2,666,614
No
Total Assets
Shareholders’
Equity
Total Tangible
Assets
Interest
Income
Securities
Income
1-
2-
3-
4-
5-
6-
7-
8-
9-
10-
11-
12-
13-
14-
15-
51,499,993
1,884,515
398,843
2,732,941
1,623,847
758,858
440,328
20,376,915
2,139,443
72,137
40,440
31,147
6,676,321
5,475,663
5,510,853
137,788
188,691
71,245
89,961
14,213,244
3,072,116
28,062,570
3,395,122
106,002
7,183,128
1,412,735
82,019
3,000,423
1,033,350
86,092,535
7,021,766
7,744
35,690
151,535
294,252
9,266
829,788
632,467
884,455
553,910
111,221
61,347
1,509,893
6,283
2,564
7,327
569,927
551,693
960
406,668
2,708
4,675,202
52,241,686
27,447,137
19,422,078
513,042
119,578
45,024
2,550
5,526
Additional
Shareholders’
Equity Required
Current
Period Profit/
Loss
Prior Period
Profit/Loss
699,988
12,739
28,165
310,063
1,329,920
15,618
15,532
526,939
2,644
20,760
197,586
266,502
8,971
16,203
Fair Value (**)
5,184,510
2,174,211
2,914,600
61,909
14,031
17,439
41,537
3,496
2
1,119,554
1,233,477
977,305
8,168,905
160,475
44,781
10,380
833,782
143,158
26,174
548,966
29,067
1,097,309
4,152,078
2,143
59,514
18,061
348,599
40,598
709,473
4,040,400
2,147,817
25,145,924
(4,164)
(*) Trakya Yatırım Holding A.Ş., İş Merkezleri Yönetim ve İşletim A.Ş., İş Net Elektronik Bilgi Üretim Dağıtım Ticaret ve İletişim Hizmetleri A.Ş., Kültür Yayınları İş Türk A.Ş. are December 31,
2020, and Türkiye Şişe ve Cam Fabrikaları A.Ş. as of September 30, 2021, and others are September 30, 2021.
(**) Fair value represents the market value of the company.
288 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 289
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
i.4. Movement of investments in subsidiaries:
m. Information on tangible assets (net):
Balance at the Beginning of the Period
Movements in the Period
Purchases (*)
Bonus Shares Acquired
Dividends Received from Current Year Profit
Sales
Revaluation Surplus/Deficit (**)
Impairment
Balance at the End of the Period
Capital Commitments
Contribution in equity at the end of the period (%)
Current Period
25,736,078
135,635
13,278,551
39,150,264
Prior Period
20,820,095
831,528
4,084,455
25,736,078
(*) The amount in the current period is due to the purchase and capital increase of Moka Ödeme Kuruluşu A.Ş. and the amount in the prior period is due to the purchasing shares of
Türkiye Sınai Kalkınma Bankası A.Ş., İş Gayrimenkul Yatırım Ortaklığı A.Ş., Milli Reasürans T.A.Ş., İş Net Elektronik Bilgi Üretim Dağıtım Ticaret and İletişim Hizmetleri A.Ş. by cash, Türkiye
Şişe ve Cam Fabrikaları A.Ş and İş Gayrimenkul Yatırım Ortaklığı A.Ş.'s shares followed in the Financial Assets at Fair Value Through Profit or Loss account is classified under subsidiaries
and due to the capital increase of Trakya Yatırım Holding A.Ş.
(**) The differences arising from accounting by equity method is included.
Real Estates
Leased Tangible Assets
Buildings Under
Construction
Vehicles
Other Tangible
Assets
Total
Prior Period
Cost
4,413,556
2,227,147
40,908
Accumulated Depreciation
(45,560)
(943,998)
Net Book Value
Current Period End:
4,367,996
1,283,149
40,908
Net Book Value at the Beginning of the Period
4,367,996
1,283,149
Change During the Period (Net) (*)
1,796,081
590,814
40,908
43,924
Depreciation
Impairment
(21,375)
24,506
(364,155)
Net Currency Translation Differences (*)
12,852
Cost at the Period End
6,180,660
2,867,073
84,832
Accumulated Depreciation at the Period End
(13,452)
(1,344,413)
Closing Net Book Value
6,167,208
1,522,660
84,832
(*) Maliyet bedeli ile birikmiş amortisman kalemlerindeki hareketleri içermektedir.
26,403
(17,077)
9,326
9,326
5,268
(3,892)
270
31,315
(20,343)
10,972
3,060,702
9,768,716
(2,151,802)
(3,158,437)
908,900
6,610,279
908,900
298,294
(297,090)
4,084
6,610,279
2,734,381
(686,512)
24,506
17,206
3,342,423
12,506,303
(2,428,235)
(3,806,443)
914,188
8,699,860
i.5. Sectoral information on financial subsidiaries and the related carrying amounts:
n. Information on Intangible Assets:
Related Companies
Banks
Insurance Companies
Factoring Companies
Leasing Companies
Finance Companies
Other Financial Subsidiaries
Total
i.6. Subsidiaries quoted on stock exchange:
Traded on domestic stock exchanges
Traded on foreign stock exchanges
Total
Current Period
8,036,340
4,353,568
Prior Period
5,580,606
3,659,077
544,978
442,361
4,678,171
17,613,057
Current Period
30,173,876
3,322,877
13,004,921
Prior Period
19,420,364
30,173,876
19,420,364
i.7. Subsidiaries disposed of in the current period: None.
i.8. Subsidiaries acquired in the current period: Subsidiaries acquired in the current period: With the authorization given to the Head Office by the Board of Directors
decision dated July 27, 2020, with the completion of necessary procedures, 100% share of MOKA Ödeme Kuruluşu A.Ş. was transferred to the Bank.
j. Information on jointly controlled entities:
There are no jointly controlled entities of the Bank.
k. Information regarding finance lease receivables of the Bank (Net):
The Bank has no finance lease receivables.
l. Explanations on derivative financial assets held for risk management:
The Bank has no derivative financial assets held for risk management.
Net Book Value at the Beginning of the Period
Change During the Period (Net) (*)
Depreciation
Impairment
Net Currency Translation Differences (*)
Cost at the Period End
Accumulated Depreciation at Period End
Closing Net Book Value
(*) The balance includes the movements in cost and accumulated depreciation items.
o. Explanations on investment property:
The Bank has no investment property.
Current Period
1,330,841
748,959
(334,798)
5,107
4,183,060
(2,432,951)
1,750,109
Prior Period
913,509
650,812
(233,969)
489
3,428,397
(2,097,556)
1,330,841
290 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 291
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
p. Information on deferred tax asset:
As of December 31, 2021, the Bank has deferred tax asset amounting to TL 2,557,610. Such deferred tax asset is calculated based on the temporary differences between
the book value of the Bank’s assets and liabilities and their tax basis measured as per the prevailing tax regulation. When the items comprising, the temporary differences
are followed under equity, the related tax asset/liability is directly recognized under equity items.
II. Disclosures And Footnotes On Liabilities
a. Information on Deposits:
a.1. The maturity structure of deposits (current period):
Deferred Tax (Asset)/Liability:
Tangible and Intangible Assets
Provisions (*)
Valuation of Financial Assets
Other
Net Deferred Tax (Asset)/Liability:
Current Period
Prior Period
715,369
(5,339,164)
1,799,736
266,449
(2,557,610)
482,628
(3,187,481)
(670,706)
(44,935)
(3,420,494)
(*) Comprised of employee termination benefits, actual and technical deficits of the pension fund, the provisions for credit card bonus points, expected credit loss for Stage 1 and Stage
2 loans and other provisions.
Opening Balance
Deferred Tax Income / (Expense) (Net)
Deferred Taxes Recognised Under Shareholders’ Equity
Deferred Taxes Recognised Under Previous Years’ Profits and Losses
Exchange Rate Differences
Deferred Tax Asset
q. Information on assets held for sale and discontinued operations:
Balance at the Beginning of the Period
Transfers (Net)
Depreciation (Net)
Impairment Losses (-)
Current Period
3,420,494
(904,208)
41,245
79
2,557,610
Current Period
1,220,094
-392,461
Prior Period
1,831,108
1,779,152
(175,980)
(13,786)
3,420,494
Prior Period
1,102,181
117,920
-7
Balance at the End of the Period
827,633
1,220,094
Investment in a special purpose company whose details be given in section five footnote I.b.3 is classified within the scope of “TFRS-5 Assets Held for Sale and
Discontinued Operations”. As stated in the same footnote, share of the Bank in the company's capital nominal values increase from TL 6 to TL 461,833 and this amount
is disclosed under the line of Transfers (Net). On the other hands an international investment bank is authorized as a sales advisor in 2019 for the sale of the relevant
company or the shares owned by the company and in this context, necessary works related to the sale and negotiations with potential investors have been initiated.
Although the process continues as of the report date, as announced on the Public Disclosure Platform on 17 December 2021, negotiations have started for the sale of
the said shares to the Turkey Wealth Fund.
The other assets classified as “Assets Held for Sale” consist of securities and real estates. Those real estates subject to sale are announced on the Bank’s web site.
Announcements about the real estates subject to sale are also made by means of newspaper advertisements and similar media.
The Bank has no discontinued operations.
r. Information on Other Assets:
Current Period
Demand
7 Days Notice
Up to 1
Month
1-3 Months
3-6 Months
6 Months
to 1 Year
1 Year and
Over
Accumulated
Deposits
Total
Savings Deposits
29,129,615
10,101,438
62,338,966
8,091,893
879,420
1,026,512
Foreign Currency Deposits 189,169,045
34,629,765
127,216,568 6,360,203
2,627,763
11,845,167
Residents in Turkey
170,392,877
32,260,729
110,981,890 4,853,136
1,507,234
4,219,586
6,422
2,293
1,517
Residents Abroad
18,776,168
2,369,036
16,234,678
1,507,067
1,120,529
7,625,581
776
Public Sector Deposits
1,205,680
11,796
139,914
1,073
374
200
Commercial Deposits
18,126,103
17,701,731
12,082,163
173,276
515,975
28,850
Other Institutions
Deposits
602,088
571,697
3,160,538
40,352
2,411
51,875
Precious Metals Deposits 46,013,605
1,055,562
150,880
6,508,325
311,651
Interbank Deposits
1,062,316
555,375
1,133,496
59
149,738
846,203
The Central Bank of the
Republic of Turkey
480
Domestic Banks
Foreign Banks
198,421
863,350
Participations Banks
65
450,260
105,115
538,289
595,207
59
148,477
1,261
846,203
111,574,266
371,850,804
324,216,969
47,633,835
1,359,037
48,628,098
4,428,961
54,040,023
3,747,187
480
1,335,447
2,411,195
65
Other
Total
285,308,452
63,571,802
207,127,207 14,817,736 10,684,006 14,110,458
8,715
595,628,376
Within the scope of the “Communique on Supporting the Conversion of Turkish Lira Deposit and Participation Accounts” published by the CBRT in the Official Gazette dated
21.12.2021 and numbered 31696 and the press release of the Ministry of Treasury and Finance dated 21.12.2021, the Bank offers its customers a currency protected TL deposit
product in the current period has begun. As of 31.12.2021, the amount of the currency protected deposit product opened in this context is TL 6,116,412.
Prior Period
Demand
7 Days Notice
Up to 1
Month
1-3 Months
3-6 Months
6 Months
to 1 Year
1 Year and
Over
Accumulated
Deposits
Total
Savings Deposits
21,210,302
6,277,095
59,511,073
2,134,712
449,790
751,497
Foreign Currency Deposits 85,173,313
13,672,849
82,906,004
4,267,728
1,600,498
8,243,988
Residents in Turkey
76,779,624
12,445,636
71,922,330
3,136,509
932,741
Residents Abroad
8,393,689
1,227,213
10,983,674
1,131,219
667,757
3,170,672
5,073,316
8,557
1,263
878
385
Public Sector Deposits
941,849
1,272
70,444
7,829
329
195
Commercial Deposits
12,898,520
7,822,448
14,259,436
191,959
1,924,058
9,691
Other Institutions Deposits 541,979
565,554
2,396,713
123,706
2,265
26,155
Precious Metals Deposits 32,152,261
390,882
Interbank Deposits
1,080,222
1,671,325
1,002,743
87,716
65,260
4,013,730
163,286
255,227
768
The Central Bank of the
Republic of Turkey
510
Domestic Banks
Foreign Banks
113,549
957,065
Participations Banks
9,098
754,461
916,864
192,488
810,255
65,260
180,729
74,498
768
90,343,026
195,865,643
168,388,390
27,477,253
1,021,918
37,106,112
3,656,372
36,807,875
4,075,545
510
1,241,227
2,824,710
9,098
Other
Total
153,998,446
30,010,543
160,537,295 6,878,910
8,245,897
9,195,580
9,820
368,876,491
The “other assets” item of the balance sheet does not exceed 10% of total assets.
a.2. Savings deposits which are under the guarantee of Savings Deposits Insurance Fund exceeding the insurance limit:
Savings Deposits
Savings Deposits
Foreign Currency Savings Deposits
Other Deposits in the Form of Savings Deposits
Foreign Branches’ Deposits Under Foreign
Authorities’ Insurance
Off-shore Banking Regions’ Deposits Under Foreign
Authorities Insurance
Under the Guarantee of Savings Deposits Insurance Fund
Exceeding the Limit of Deposit Insurance Fund
Current Period
54,291,725
58,931,256
19,430,372
6,751,204
Prior Period
47,354,070
42,668,430
17,580,279
4,157,656
Current Period
56,062,849
175,476,819
31,613,866
3,869,864
Prior Period
41,824,890
88,281,588
17,357,298
1,683,372
292 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 293
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
a.3. Savings deposits which are not under the guarantee of deposit insurance fund:
Securitization deals:
Foreign Branches’ Saving Deposits and Other Accounts
Deposits and Other Accounts held by Main Shareholders and their Relatives
Current Period
3,869,864
Deposits and Other Accounts of the Chairperson and Members of Board of Directors, Chief
Executive Officer, Senior Executive Officers and their Relatives
29,224
Deposits and Other Accounts Covered by Assets Generated Through the Offenses Mentioned
in Article 282 of the Turkish Criminal Code No,5237 and Dated 26 September 2004
Deposits in the Banks to be Engaged Exclusively in Off-shore Banking in Turkey
Prior Period
1,683,372
28,274
b. Information on Derivative Financial Liabilities Held for Trading:
Derivative Financial Liabilities at Fair
Value Through Profit or Loss
Forward Transactions
Swap Transactions
Futures
Options
Other
Total
TL
2,021,990
4,010,202
131,283
6,163,475
c. Banks and other financial institutions:
c.1. Information on banks and other financial institutions:
Current Period
Prior Period
FC
237,698
5,597,391
461,724
126,245
6,423,058
TL
150,410
1,185,745
1,336,155
FC
234,473
5,879,693
33,164
451,000
6,598,330
Current Period
Prior Period
TL
FC
TL
Funds borrowed from the Central Bank
of Turkey
Domestic banks and Institutions
667,413
Foreign banks, institutions and funds
1,837,639
Total
2,505,052
c.2. Maturity analysis of funds borrowed:
7,245,047
55,901,327
63,146,374
613,999
1,499,128
2,113,127
FC
12,010
3,573,917
34,732,291
38,318,218
Current Period
Prior Period
TL
653,857
1,851,195
2,505,052
FC
6,295,676
56,850,698
63,146,374
TL
613,482
1,499,645
2,113,127
FC
1,259,942
37,058,276
38,318,218
Short-term
Medium and Long-term
Total
c.3. Information on funds borrowed:
Information on funds received through syndicated loans and securitization deals, which take a significant place among funds borrowed, are given below.
Syndication loans:
Date of Use
May, 2021
November, 2021
Funds Borrowed
300,000,000 USD + 544,650,000 EUR
328,000,000 USD + 434,000,000 EUR
Maturity
1 year
1 year
The Bank obtained funds by way of putting on securitization deals all its claims and receivables based on diversified payment rights in USD, EUR and GBP through TIB
Diversified Payment Rights Finance Company.
Information on funds received through securitization is given below.
Date
Structured Entity
June 2012
December 2013
December 2014
March 2015
October 2015
October 2016
December 2016
December 2017
December 2017
December 2017
Other Transactions:
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
TIB Diversified Payment Rights Finance Company
Amount
EUR 125,000,000
EUR 50,000,000
USD 220,000,000
USD 75,000,000
USD 221,200,000
USD 55,000,000
USD 158,800,000
USD 265,000,000
EUR 125,000,000
USD 125,000,000
Final
Maturity
12 years
12 years
14 years
7-15 years
10 years
12 years
10-13 years
5-7 years
5 years
9 years
Remaining Debt Amount as at December
31, 2021
EUR 34,375,000
EUR 20,000,000
USD 140,000,000
USD 18,000,000
USD 103,687,500
USD 37,560,964
USD 91,290,954
USD 103,000,000
EUR 41,666,667
USD 125,000,000
As of August 2014, in connection with the future cash flows securitization program amounting to USD 500 million on 10 years maturity, the bank has increased the total
amount of the financial instrument USD 600 million by obtaining the same structured USD 100 million in September 2017.
d. Information on Debt Securities Issued (Net):
TL
3,133,754
2,060,702
5,194,456
Current Period
FC
25,441,356
25,441,356
TL
3,960,641
1,476,191
5,436,832
Prior Period
FC
25,403,816
25,403,816
Bills
Bonds
Total
e. Concentration on the Bank's liabilities:
64% of the Bank's liabilities consists of deposits, 7% of loans borrowed, 7% of securities issued and Tier II subordinated loans. Deposits have spread to a wide customer base
with different characteristics. Borrowings are composed of funds obtained from various financial institutions through syndication, securitization, post-financing and money
markets.
f. Information on Other Liabilities:
Other liabilities do not exceed 10% of the balance sheet total.
g. Information on Lease Payables (net):
1 Yıldan Az
1-4 Yıl Arası
4 Yıldan Fazla
Toplam
Gross
17.713
171.033
3.642.905
3.831.651
Current Period
Prior Period
Net
17.177
143.594
1.539.668
1.700.439
Gross
20.892
79.957
3.243.262
3.344.111
Net
19.984
72.306
1.296.927
1.389.217
h. Explanations on Hedging Derivative Financial Liabilities:
The bank has no financial liabilities held for hedging derivatives.
i. Information on Provisions:
i.1. Reserves for employee benefits:
According to the related regulation and the collective bargaining agreements, the Bank is obliged to pay employee termination benefits to employees who retire, die, quit
for their military service obligations, who have been dismissed as defined in the related regulation or to the female employees who have voluntarily quit within one year
after the date of their marriage. In accordance with the related regulations, the amount of employee termination benefits is TL 8,284.51 (exact TL amount as at December
31, 2021), which is one month salary for each service year and cannot exceed the base wage ceiling for employee termination benefits. A provision for severance pay to
allocate that employees need to be paid upon retirement is calculated by estimating the present value of probable amount. The liability of the Bank arising from severance
payment is determined in accordance with the actuarial report prepared by an independent valuation company. As of December 31, 2021, provision amounting to TL
2,278,323 is reflected in the financial statements (December 31, 2020: TL 1,393,897).
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Main actuarial assumptions used in calculation of severance pay liability are as follows:
The assets of the pension fund are as follows.
• In the calculation, the discount rate is 19.10%, the inflation rate is 15.07%, and the real wage increase rate is 2%.
• In the calculation, the ceiling of 8,284.51 TL (full TL amount) valid as of 31.12.2021 was taken as basis.
• Retirement age is taken into account as the earliest age at which individuals can retire.
• CSO 1980 mortality table is used for probability of death for women and men.
The movements related to provision for employee termination benefits are given below:
Present value of defined benefit obligation at the beginning of the period
Service Cost
Interest Cost
Benefits paid
Loss/(Gain) due to Settlements / Reductions / Terminations
Past Service Cost
Actuarial loss/(gain)
Defined benefit obligation at the end of the period
Current Period
1,393,897
94,375
166,952
(101,163)
11,064
713,198
2,278,323
Prior Period
1,168,051
81,633
133,694
(67,817)
6,045
3
72,288
1,393,897
In addition to the employee termination benefits the Bank allocates provisions for the unused vacation pay liability. As of December 31, 2021, provision for unused vacation
pay is amounting to TL 114,509 (December 31, 2020: TL 88,000).
i.2. Provisions for exchange losses in the principal amount of foreign currency indexed loans: Since foreign currency indexed loans are followed based on the rates on the
lending date, the Bank incurs a loss if the exchange rates decrease and makes profit if the exchange rate increases. As of December 31, 2021, and December 31, 2020,
provision amount for the currency evaluation losses in the principal amount of foreign currency indexed loans is not available.
i.3. As of December 31, 2021, the Bank’s specific provisions for indemnified non-cash loans balance is TL 1,214,355 (December 31, 2020: TL 694,245) which is allocated
for the non-cash loans of companies whose loans are followed under “Non-performing Loans” accounts.
i.4. Information on other provisions:
i.4.1. Liabilities arising from retirement benefits:
Liabilities of pension funds founded as per the Social Security Act:
Within the scope of the explanations given in Section Three Note XVII, in the actuarial report which was prepared as of December 31, 2021 for Türkiye İş Bankası A.Ş.
Emekli Sandığı Vakfı (İşbank Pension Fund) by a licensed actuary, of which each Bank employee is a member, and which has been established according to the provisional
Article 20 of the Social Security Act No. 506, the amount of actuarial and technical deficit stands at TL 6,095,055. As of the same date, a provision was reserved for this
amount in the financial statements.
The above-mentioned actuarial audit, which was made in accordance with the principles of the related law, measures the cash value of the liability as of December 31,
2021, in other words; it measures the amount to be paid to the Social Security Institution by the Bank. Actuarial assumptions used in the calculation are given below.
• 9.8% technical deficit interest rate is used.
• 34.5% total premium rate is used.
• CSO 1980 woman/man mortality tables are used.
Below table shows the cash values of premium and salary payments of the Bank as of December 31, 2021, taking the health expenses within the Social Security Institution
limits into account.
Net Present Value of Total Liabilities Other Than Health
Net Present Value of Long Term Insurance Line Premiums
Net Present Value of Total Liabilities Other Than Health
Net Present Value of Health Liabilities
Net Present Value of Health Premiums
Net Present Value of Health Liabilities
Pension Fund Assets
Amount of Actuarial and Technical Deficit
Current Period
(15,810,869)
5,858,707
(9,952,162)
(1,873,541)
4,247,562
2,374,021
1,483,086
(6,095,055)
Prior Period
(12,863,517)
5,185,068
(7,678,449)
(1,564,560)
3,759,175
2,194,615
1,247,723
(4,236,111)
Cash and Cash Equivalents
Securities Portfolio
Other
Total
Current Period
984,609
439,018
59,459
1,483,086
Prior Period
752,948
439,787
54,988
1,247,723
Health benefits that are still being paid will be determined within the framework of the Social Security Institution legislation and related regulations with the transfer.
i.4.2. Provision of credit cards and promotion of banking services applications: As of December 31, 2021, the Bank has recognized provisions amounting to TL 108,873
for the amount which is recognized within the framework of credit card expenses of credit card customers or promotions for banking services. (December 31, 2020: TL
72,709).
i.4.3. As mentioned public disclosures of the Bank on December 31, 2012 and December 19, 2013; an inspection has been made by the inspectors of Tax Inspection
Board to "Türkiye İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı" ("İşbank Supplementary Pension Fund"), which was founded as per
the provisions of the Turkish Commercial and Civil Codes, regarding the payments that fulfill İşbank's liabilities within the framework of the Articles of Foundation of the
Pension Fund and the relevant legislation. As a result of this investigation, tax audit reports were prepared for the years 2007, 2008, 2009, 2010, 2011 claiming that the
aforementioned liabilities should be taxed in terms of wage base, thus, they should be subject to withholding tax and stamp duty. According to this report, the total amount
of tax and penalties notified to Bank was TL 74,353 for 2007 and 2008; and as of reporting date TL 151,899 for 2009, 2010 and 2011 and it was stated that the Bank
applied to tax courts to cancel these tax notifications and some of the court decisions were determined in favor of the Bank and some others were determined against the
Bank.
In this context, for the finalized decisions of Regional Administrative Courts related to the years 2007 and 2008 against the Bank, the Bank applied to the Constitutional
Court. According to decisions made by Constitutional Court up to reporting date, there is no predictability in legal conformity for taxing the Bank's contributions to the
Pension Fund in terms of wage base and for this reason it was accepted that property right of the Bank has been violated according to the 35th article of Constitution. The
Court decided that the amount of tax, penalties and default interest which was paid by the Bank should be paid back to the Bank as for compensation with its legal interest.
According to the decision of the Constitutional Court, it is expected that the cases related to the periods 2007, 2008, 2009, 2010 and 2011 will conclude in favor of the
Bank. In this context, the provisions amounting to TL 207,402 which had been allocated for the mentioned periods, reversed at 2015.
In the last decision of the constitutional court numbered 2016/2400 regarding the legal proceedings initiated upon the conclusion of the lawsuits amounting to TL 61,060
for the 20 periods in 2012 and 2013 against the bank; it was accepted that the predictability criterion was realized after the 2012 tax review, and it was concluded that
the Bank’s ownership rights were not violated for December 2012 and beyond periods. However, since the aforementioned periods were filed by making a reservation and
paying taxes, the mentioned decision had no additional effect on the financial statements. In addition, at a case file, which was one of the lawsuits regarding the repayment
of income tax stoppage and stamp tax which has been paid by reservation statement beginning from December 2013, of which its court decision was rendered in favor of
the Bank, has been reversed by the majority of the votes of the Assembly after it was submitted to the General Assembly of Tax Courts. Regarding the mentioned periods,
the legal process is ongoing.
Within the scope of these developments, the Bank recognized provisions amounting to TL 162,960 (December 31, 2020: TL 128,837).
i.4.4. In 1993, Dışbank A.Ş. shares which were owned by the Bank were sold to Lapis Holding A.Ş. In 2008, it was claimed that USD 52.6 million of the amount, which
was paid upfront within the context of the sale agreement, had been provided from the funds of the insolvent TYT Bank A.Ş. by the buyer and payment of the mentioned
amount as well as the interest to be calculated to the Savings Deposit Insurance Fund (SDIF) was demanded.
The administrative actions initiated by the SDIF in 2008 were revoked by Council of State Administrative Law Chambers 13th upon the application of the Bank. The
decisions which were in favour of the Bank were reversed by Plenary Session of the Law Chamber upon the appeal of the SDIF. Council of State Administrative Law
Chambers 13th decided to reject the applications of the Bank in January 2016 due to their obligation to obey the decisions of reversal.
After the aforementioned court decisions, although the legal process was still in progress, the collection procedures were carried out within the context of Law No. 6183
and TL 298,466 including the default interest, was collected from the Bank by the SDIF at prior periods and made provision for the whole amount.
As a part of the legal process, individual application to the Constitutional Court of Republic of Turkey has been made by the Bank was not concluded positively. On the other
hand, the legal process is still ongoing within the framework of the ongoing lawsuits and other available legal options.
i.4.5. Except the other provisions indicated above, the Bank Management allocated free provision within conservatism principle, for negative circumstances which may
arise from the possible changes that may arise in the economy and market conditions, amounting to TL 4,075,000 of which TL 2,875,000 provided in prior years and TL
1,200,000 was provided in the current period.
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
j. Information on Tax Liability:
j.1. Information on current tax liability:
j.1.1. Information on tax provision:
Explanations in relation to taxation and tax calculations were stated in section three notes XVIII. As of 31.12.2021, the remaining corporate tax debt as a result of netting of
temporary taxes paid with corporate tax liability is TL 1,051,363.
j.1.2. Information on taxes payable:
Corporate Tax Payable
Tax on Securities Income
Tax on Real Estate Income
Banking Insurance Transaction Tax
Foreign Exchange Transaction Tax
Value Added Tax Payable
Other
Total
j.1.3. Information on premiums:
Social Security Premiums – Employees
Social Security Premiums – Employer
Bank Pension Fund Premiums – Employees
Bank Pension Fund Premiums – Employer
Pension Fund Membership Fees and Provisions-Employees
Pension Fund Membership Fees and Provisions-Employer
Unemployment Insurance – Employees
Unemployment Insurance – Employer
Others
Total
Current Period
1,051,363
234,685
5,590
324,422
117,926
23,653
65,785
1,823,424
Prior Period
1,938,446
198,896
2,174
191,585
18,192
9,624
54,557
2,413,474
Current Period
Prior Period
267
329
2,397
4,796
6
7,795
218
262
2,049
4,100
4
6,633
j.2. Information on deferred tax liabilities: None.
k. Information on Payables for Assets Held for Sale and Discontinued Operations
The Bank does not have any payables for assets held for sale and discontinued operations.
l. Information on subordinated loans
Bank has issued subordinated debt securities, to be included in the contribution capital calculation, with the following nominal values;
• 10 year-term in the amount of USD 1,000,000 with interest rate of 6% on October 24, 2012, 10 year-term in the amount of USD 400,000,000 with interest rate of 7.85%
on December 10, 2013, 11 year-term having a call option on 6th year in the amount of USD 500,000,000 with interest rate of 7% on June 29, 2017 and 10 year-term
having a call option on 5th year in the amount of USD 750,000,000 with interest rate of 7.75% on January 22, 2020 for the purpose of making available to the individuals
and legal persons who are resident abroad,
• TL 1,100,000,000 on August 8, 2017, TL 800,000,000 June 19, 2019 and TL 350,000,000 September 26, 2019 (Full TL amount) each with a 10-year maturity and
floating interest rates for qualified investors without being offered to the public in Turkey.
The total of the aforementioned debt securities is TL 37,470,997 as of December 31, 2021 (December 31, 2020: TL 22,138,559).
Current Period
Prior Period
m. Information on shareholders’ equity:
m.1. Presentation of paid-in capital:
Common shares
Preferred shares
Total
Current Period
4,499,970
30
4,500,000
Prior Period
4,499,970
30
4,500,000
m.2. Explanation as to whether the registered share capital system ceiling is applicable at the Bank, if so, the amount of registered share capital:
Capital System
Registered Capital System
Paid-in Capital
4,500,000
Ceiling
10,000,000
m.3. The capital increase made in current period: None.
m.4. Information on capital increase through transfer from capital reserves during the current period: None.
m.5. Significant commitments of the Bank related to capital expenditures within the last year and the following quarter, the general purpose thereof, and the estimation of
funds required for them: There is no capital commitment.
m.6. Information regarding the shares of the company acquired: The Bank has repurchased shares amounting to TL 530,307 in accordance with the Board of Directors
Decision dated August 17, 2018.
m.7. Previous periods’ indicators related to income, profitability and liquidity, and the estimated effects of forecasts, which are to be made by taking into consideration the
uncertainties of these indicators, on the Bank’s equity: The Bank’s balance sheet is managed in a prudent way to ensure that the effect of risks arising from interest rates,
exchange rates and loans is at the lowest level.
m.8. Privileges Granted to Shares:
Turkish Commercial Law and related registration are kept conditionally;
Group (A) shares each with a nominal value of 1 Kurus have the privileges of;
• Receiving 20 times the number of shares in the distribution of bonus shares issued from conversion of extraordinary and revaluation reserves generated in accordance
with the relevant laws (Article 18 of the Articles of Incorporation)
• Exercising the preference rights as 20 times (Article 19 of the Articles of Incorporation), and
Despite having a lower nominal value, Group (B) shares, each with a nominal value of 1 Kurus, have the same rights with the Group (C) shares having a nominal value of
4 Kurus each. Furthermore, Group (A) and (B) shares, each with a nominal value of 1 Kurus, are granted privileges in distribution of profits pursuant to Article 58 of the
Articles of Incorporation.
m.9. Information on marketable securities value increase fund:
Financial Assets At Fair Value Through Other Comprehensive Income
3,390,517
TL
Valuation Difference
Deferred Tax Effect
Foreign Exchange Differences
4,232,605
(842,088)
Current Period
Prior Period
FC
(2,730,702)
(3,353,951)
623,249
TL
1,309,647
1,631,517
(321,870)
FC
(176,091)
(219,884)
43,793
Total
3,390,517
(2,730,702)
1,309,647
(176,091)
n. Information on Dividend Distribution:
At the Bank’s Ordinary General Assembly, held on March 31, 2021, it was decided to allocate net profit from operating activities of 2020, amounting to TL 6,810,917 as
follows;
• Adding the sales profit amounting to TL 6,262 from the disposed real estates in the accounting period; recorded under retained earnings within the framework of the
TP
FC
TP
FC
relevant accounting standard.
Debt Instruments To Be Included In Additional Capital Calculation
Subordinated Loans
Subordinated Debt Instrument
Debt Instruments To Be Included In Contribution Capital Calculation
2,296,445
35,174,552
2,286,510
19,852,049
Subordinated Loans
Subordinated Debt Instrument
Total
2,296,445
2,296,445
35,174,552
35,174,552
2,286,510
2,286,510
19,852,049
19,852,049
• The total amount of TL 152,066, which includes TL 17,066 from real estate sales profits to be added to the capital and TL 135,000 from the amount allocated as venture
capital fund, of the balance sheet profit to be distributed amounting to TL 6,817,179 allocation as special reserve fund,
• of the amount as a basis for distribution of TL 6,665,113;
• TL 681,088 to A, B and C group shares as cash,
• TL 4 to the founding shares as cash,
• TL 134,324 as cash dividend to employees to be distributed,
• TL 5,849,697 as legal and extraordinary reserves to be reserved,
has been decided. As at March 31, 2021; TL 6,001,763 was transferred to reserves account, cash dividends were distributed to the shares other than the shares acquired by
the Bank, as of April 2, 2021.
Since the Bank's Ordinary General Assembly Meeting for 2021 has not been held as of the report date, the profit from the activities of the aforementioned period has not been
distributed.
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
III. Disclosures And Footnotes On Off Balance Sheet Items
a. Explanations to Liabilities Related to Off-Balance Sheet Items:
a.1. Types and amounts of irrevocable loan commitments:
Commitment for customer credit card limits amounts to TL 46,524,830 and commitment to pay for cheque leaves amounts to TL 3,291,900. The amount of commitment
for the forward purchase of assets is TL 13,624,944 and for the forward sale of assets is TL 13,461,257.
a.2. The structure and amount of probable losses and commitments resulting from off-balance sheet items, including those below:
As of December 31, 2021, the Bank’s provisions for indemnified non-cash loans balance is TL 1,214,255 (December 31, 2020: TL 694,245) which is allocated for the non-
cash loans of companies whose loans are followed under “Non-performing Loans” accounts. Commitments are shown in the table of “off-balance sheet items”.
a.3. Guarantees, bank acceptances, collaterals that qualify as financial guarantees, and non-cash loans including other letters of credit:
Bank Acceptances
Letters of Credit
Other Guarantees
Total
a.4. Certain guarantees, provisional guarantees, suretyships and similar transactions:
Letters of Tentative Guarantees
Letters of Certain Guarantees
Letters of Advance Guarantees
Letters of guarantee given to customs offices
Other Letters of Guarantee
Total
a.5. Total Non-cash Loans:
Non-cash Loans against Cash Risks
With Original Maturity of 1 Year or Less
With Original Maturity More Than 1 Year
Other Non-cash Loans
Total
Current Period
14,781,851
42,895,203
4,260,876
61,937,930
Current Period
1,708,305
71,821,482
12,802,694
6,090,285
39,074,727
131,497,493
Current Period
39,074,716
9,466,630
29,608,086
154,360,707
193,435,423
Prior Period
9,459,703
19,537,281
3,145,340
32,142,324
Prior Period
1,546,664
48,468,139
7,724,665
6,556,617
23,136,805
87,432,890
Prior Period
23,136,802
3,374,827
19,761,975
96,438,412
119,575,214
a.6. Sectoral risk concentration of non-cash loans:
Agriculture
Farming and Livestock
Forestry
Fishery
Industry
Mining and Quarrying
Manufacturing Industry
Electricity, Gas, Water
Construction
Services
Wholesale and Retail Trade
Current Period
TL
296,207
199,806
82,391
14,010
12,116,069
320,342
8,066,185
3,729,542
7,521,162
25,865,094
15,532,556
Hotel and Restaurant Services
450,043
Transport and Communications
Financial Institutions
3,081,863
4,543,921
Real Estate and Rental Services.
1,418,515
Self-Employment Services
Education Services
Health and Social Services
Other
Total
502,777
73,900
261,519
267,825
46,066,357
a.7. Non-cash Loans classified under Group I and Group II:
Non-cash Loans
Letters of Guarantee
Bank Acceptances
Letters of Credit
Endorsements
Underwriting Commitments of the Securities Issued
Factoring Related Guarantees
Other Guaranties and Warranties
b. Explanation on Derivative Financial Instruments:
(%)
0.64
0.43
0.18
0.03
26.30
0.70
17.50
8.10
16.33
56.15
33.72
0.98
6.69
9.86
3.08
1.09
0.16
0.57
0.58
100
FC
574,535
229,323
1,734
343,478
88,813,291
928,731
79,892,456
7,992,104
20,920,930
36,245,354
17,777,209
1,711,937
7,815,025
6,974,597
1,340,206
303,205
5,300
317,875
814,956
147,369,066
(%)
0.39
0.16
0.00
0.23
60.27
0.63
54.21
5.43
14.20
24.59
12.06
1.16
5.30
4.73
0.91
0.21
0.00
0.22
0.55
100
Prior Period
TL
189,630
155,107
27,935
6,588
11,217,718
182,761
7,049,096
3,985,861
4,443,454
23,704,537
15,091,119
329,800
2,388,311
3,984,452
1,286,263
383,396
57,331
183,865
191,389
39,746,728
(%)
0.48
0.39
0.07
0.02
28.22
0.46
17.73
10.03
11.18
59.64
37.97
0.83
6.01
10.02
3.24
0.96
0.15
0.46
0.48
100
FC
331,934
68,163
9
263,762
46,398,363
638,665
40,451,308
5,308,390
11,402,539
21,231,780
10,445,618
814,125
4,323,220
3,569,322
1,538,899
89,705
1,426
449,465
463,870
79,828,486
(%)
0.42
0.09
0.00
0.33
58.12
0.80
50.67
6.65
14.28
26.60
13.09
1.02
5.42
4.47
1.93
0.11
0.00
0.56
0.58
100
TL
44,473,483
44,209,792
111,350
152,341
Group I
FC
143,129,984
81,677,052
14,656,595
42,600,166
TL
1,341,644
1,335,253
6,391
Group II
FC
3,079,264
2,928,004
13,906
134,859
4,196,171
2,495
Majority of the Bank’s derivative transactions comprise foreign currency and interest rate swaps, forward foreign exchange trading, and currency and interest rate options.
Even though some derivative transactions economically provide risk hedging, since all necessary conditions to be defined as items suitable for financial risk hedging
accounting are not met, they are recognized as “fair value through profit or loss” within the framework of IFRS 9 “Financial Instruments”.
c. Explanations Related to Contingencies and Commitments:
Balance of the “Other Irrevocable Commitments” account, which comprised the letters of guarantees, guarantees and commitments submitted by the Bank pursuant to its
own internal affairs, and guarantees given to third parties by other institutions in favor of the Bank and the commitments due to housing loans extended within the scope
of unfinished house projects followed amounts to TL 18,241,104.
The cheques given to customers is presented under off balance sheet commitments, as per the related regulations is amounting to TL 3,291,900. In case the cheques
presented for payment to beneficiaries are not covered, the Bank will be obliged to pay the uncovered amount up to TL 1,680 (in exact TL amount) for the cheques that are
subject to the Law numbered 3167 on “the Regulation of Payments by Cheque and Protection of Cheque Holders”, and up to TL 2,670 (in exact TL amount) for the cheques
that are subject to the “Cheque Law” numbered 5941. The uncollected amount will be followed under “Indemnified Non-Cash Loans”.
d. Explanations related to transactions made on behalf of or on the account of others:
It is explained in Note X under Section Four.
300 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 301
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen IV. Disclosures And Footnotes On Statement Of Income
a. Interest Income
a.1. Information on interest income on loans:
Interest Income on Loans (*)
Short-term Loans
Medium and Long-term Loans
Interest on Non-performing Loans
Premiums Received from State Resource Utilization Support Fund
Current Period
TL
FC
TL
Prior Period
FC
9,588,271
24,105,926
944,278
1,260,182
8,549,468
130
5,386,490
17,841,576
611,055
782,646
7,310,803
55,016
b.2. Information on interest paid to associates and subsidiaries:
Interest Paid to Associates and Subsidiaries
b.3. Information on interest paid on marketable securities issued:
Current Period
409,674
Prior Period
325,684
Interest on Securities Issued
1,260,390
3,501,106
1,110,714
2,861,369
Current Period
TL
FC
TL
Prior Period
FC
Total
34,638,475
9,809,780
23,839,121
8,148,465
b.4. Information on Interest Expense on Deposits According to Maturity Structure:
(*) Includes fee and commission income on cash loans.
a.2. Information on interest income on banks:
The Central Bank of Turkey
Domestic Banks
Foreign Banks
Foreign Head Offices and Branches
Total
a.3. Information on interest income from securities:
Financial Assets at Fair Value Through Profit or Loss
Financial Assets at Fair Value Through Other Comprehensive
Income
Financial Assets Measured at Amortised Cost
Total
TL
71,739
31,889
103,628
TL
52,159
8,216,820
5,757,657
14,026,636
Current Period
Prior Period
FC
528
29,548
30,076
TL
55,354
10,886
66,240
FC
3,006
2,277
62,510
67,793
Current Period
Prior Period
FC
75,959
1,204,383
127,244
1,407,586
TL
23,168
5,244,238
3,962,685
9,230,091
FC
4,321
917,014
124,598
1,045,933
a.4. Information on interest income received from associates and subsidiaries:
Interest Income from Associates and Subsidiaries
b. Interest Expense
b.1. Information on interest expense from funds borrowed:
Banks
Central Bank of Turkey
Domestic Banks
Foreign Banks
Foreign Head Offices and Branches
Other Institutions
Total (*)
(*) Includes fee and commission expenses from cash loans.
302 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Current Period
613,651
Prior Period
439,591
TL
315,064
88,398
226,666
315,064
Current Period
Prior Period
FC
991,290
138,803
852,487
223,920
1,215,210
TL
211,590
59,876
151,714
211,590
FC
950,388
1,667
79,944
868,777
286,023
1,236,411
Demand
Deposits
Up to One
Month
Up to Three
Months
Up to Six
Months
Up to One
Year
Over One
Year
Accumulated
Deposits
Time Deposits
236,834
109,341
1,089,360
10,622,231
622,976
1,257
11,337
1,811,687
2,203,211
44,565
438,198
328
59,735
51,297
87,086
47
285,246
446
115,091
645
9
3,697
4,064
3,183,703
13,384,318
734,336
372,825
122,861
645
17,798,756
18,582
327
18,909
177,776
457
3,363
181,596
6,848
307
411
7,566
3,202,612
13,565,914
741,902
3,396
495
10,611
14,502
387,327
62,602
380
637
63,619
186,480
1
1
646
Current Period
TL
Bank Deposits
Savings Deposits
Public Sector Deposits
Commercial Deposits
Other Institutions Deposits
Deposits with 7 Days Notice
Total
FC
Foreign Currency Deposits
Bank Deposits
Deposits with 7 Days Notice
Precious Metals Deposits
Total
Grand Total
Prior Period
TL
10
58
68
89
88
177
245
Demand
Deposits
Up to One
Month
Up to Three
Months
Up to Six
Months
Up to One
Year
Over One
Year
Accumulated
Deposits
Time Deposits
Bank Deposits
Savings Deposits
Public Sector Deposits
Commercial Deposits
Other Institutions Deposits
Deposits with 7 Days’ Notice
74
1
24
1
114,908
516,129
571
887,694
33,334
67,871
4,170
5,217,171
212,256
4,704
1,340,325
239,748
363
45,680
31,626
772
50,900
9
145,999
7,996
95,003
11
6,125
385
817
Total
FC
100
1,552,636
6,869,819
294,095
205,676
101,524
817
9,024,667
Foreign Currency Deposits
Bank Deposits
Deposits with 7 Days’ Notice
Precious Metals Deposits
Total
Grand Total
95
63
158
258
34,528
1,537
36,065
302,570
1,764
2,332
306,666
1,588,701
7,176,485
17,640
987
453
19,080
313,175
11,750
1,468
12,719
25,937
231,613
105,814
1,561
1,105
108,480
210,004
12
12
829
472,409
7,380
16,609
496,398
9,521,065
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 303
Total
346,175
12,537,399
12,978
4,363,634
538,570
269,294
2,054
15,022
286,370
18,085,126
Total
187,795
6,092,277
5,658
2,425,847
313,090
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
c. Information on dividend income:
f. Other operating expenses:
Financial Assets at Fair Value Through Profit and Loss
Financial Assets at Fair Value Through Other Comprehensive Income
Other
Total
Current Period
Prior Period
9,176
11,559
20,735
6,670
14,817
21,487
d. Information on trading income/losses (Net):
Income
Securities Trading Gains
Gains on Derivative Financial Instruments (*)
Foreign Exchange Gains
Losses (-)
Securities Trading Losses
Losses on Derivative Financial Instruments (*)
Foreign Exchange Losses
Trading Income /Losses (Net)
Current Period
Prior Period
381,403
33,122,723
1,931,276,362
24,296
34,168,985
1,935,736,334
(5,149,127)
344,909
10,221,141
608,874,079
8,971
20,611,578
602,160,937
(3,341,357)
Current Period
Prior Period
Reserve for Employee Termination Benefits
Bank Pension Fund Deficit Provisions
Impairment Losses on Tangible Assets
Depreciation Expenses of Tangible Assets
Impairment Losses on Intangible Assets
Impairment Losses on Goodwill
Amortization Expenses of Intangible Assets
Impairment Losses on Equity Accounted Investments
Impairment Losses on Assets to be Disposed
Depreciation Expenses of Assets to be Disposed
Impairment Losses on Assets Held for Sale and Subject to Discontinued Operations
Other Operating Expenses
Leasing Expenses Related to Exceptions to IFRS 16
Repair and Maintenance Expenses
Advertisement Expenses (*)
Other Expenses (*)
Loss on Sale of Assets
Other (**)
Total
171,229
1,858,944
5,795
686,512
334,798
4,279,084
116,435
237,531
286,996
3,638,122
1,799
2,206,847
9,545,008
153,557
742,085
607,672
233,969
5,320
3,219,275
99,885
194,017
207,975
2,717,398
1,836
1,641,283
6,604,997
(*) Income arising from foreign currency changes related to derivative transactions amounts to TL 28,826,011 and the losses amount to TL 30,043,929 and the amount of net losses
TL 1,217,918 (December 31, 2020 profit: TL 5,574,364, loss: TL 15,102,319).
(*)) The amount of expenditure made by the Bank within the scope of donation, aid and social responsibility projects in the current period is TL 78,991 (December 31, 2020:TL 101,099).
(**)In the current period the part of the related item amounting to TL 466,924 is comprised of expenses of fees, taxes, pictures and funds.
e. Information on other operating income:
Other operating income mainly consists of expected credit loss reversals or collections from Stage 3 loans, and income from fees received from customers in return for
various banking services and sales of fixed assets.
f. Information on expected credit loss and other provision expense:
Expected Credit Loss
12 Month Expected Credit Loss (Stage I)
Significant Increase in Credit Risk (Stage II)
Non-performing Loans (Stage III)
Impairment Losses on Marketable Securities
Financial Assets at Fair Value Through Profit or Loss
Financial Assets at Fair Value Through Other Comprehensive Income
Impairment Losses on Associates, Subsidiaries and Joint-Ventures
Associates
Subsidiaries
Jointly Controlled Entities
Other (*)
Total
Current Period
10,837,246
1,247,511
3,781,961
5,807,774
16,416
14,145
2,271
Prior Period
10,213,836
1,323,697
4,307,187
4,582,952
20,047
2,129
17,918
i. Information on provision for taxes from continuing and discontinued operations
The Bank's profit before tax arises from continuing activities. As of 31 December 2021, TL 30,941,269 of the profit before tax consists of net interest income, TL 7,619,945
of net fee and commission income, and the total of personnel expenses and other operating expenses is TL 15,911,689.
j. Information on provision for taxes from continuing and discontinued operations
As of December 31, 2021, the amount of the Bank’s tax provision is TL 2,007,986 and the amount consists of current tax expense that is amounting to TL 1,103,778 and
consists of deferred tax expense amounting TL 904,208.
k. Information on Net Operating Profit/Loss after Net Profit/Loss from Continuing and Discontinued Operations:
The Bank’s net profit made from its continuing operations as of December 31, 2021 amounts to TL 13,467,895.
l. Information on net period profit/loss:
l.1. Income and expenses resulting from ordinary banking activities: There is no specific issue required to be disclosed for the Bank’s performance for the nine-month
period between January 1, 2021 – December 31, 2021.
l.2. Effects of changes in accounting estimates on the current and future periods’ profit/loss: There is no issue to be disclosed.
l.3. ‘‘The other’’ item which is located at the bottom of “Fees and Commissions Received” in the income statement consist of various fees and commissions received from
transactions such as credit card transactions, capital market transactions.
m. Explanation on other items on the income statement:
Other items do not exceed 10% of the total amount of the income statement.
n. Fees for services received from an independent audit firm:
3,596,505
14,450,167
2,496,037
12,729,920
In accordance with the decision of public oversight, accounting and auditing standards authority dated 26.03.2021, the fees for the reporting period regarding the
services received from the independent auditor or independent audit firm are given in the table below. In addition to the Bank, the fees for services rendered to the Bank's
domestic/foreign subsidiaries and jointly controlled partnerships are included in the aforementioned fees, which are stated as VAT excluded.
(*) The amount of current period consists of provision for impairment loss for financial assets at fair value through profit or loss and the free provision expense of TL 1,200,000.
Independent audit fee for the reporting period
Other Assurance Services and Other Non-Audit Fees
Total
Current Period
Prior Period
22,282
5,709
27,991
18,148
2,898
21,046
304 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 305
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen V. Disclosures And Footnotes On Statement Of Changes In Shareholders’ Equity
VII. Dısclosures And Footnotes On The Bank’s Rısk Group
The paid-in capital is TL 4,500,000 in legal records. As of balance sheet date, the balance of legal reserves is TL 5,065,786 and the balance of extraordinary reserves is TL
41,015,229.
Detail of the securities increase fund is explained in Section Five Note II-m.9 and TL 218,839 of this amount is the deferred tax effect on financial assets at fair value
through other comprehensive income (31 December 2020: TL (278,077)).
Revaluation value increase of TL 500.773 in total for the real estates classified under tangible fixed assets but not within the scope of TAS 40-Investment Property, due
to the fact that the Bank is in its own use in its consolidated financial statements, is reflected in the unconsolidated financial statements prepared as of 31 December
2021, in TAS 27-Individual Financial Within the scope of the tables, it is classified under the item “increase/decrease due to other changes” in the statement of changes in
shareholders' equity.
VI. Disclosures And Footnotes On Statement Of Cash Flows
The operating profit to TL 14,064,345 before the changes in operating assets and liabilities mostly comprised of TL 54,774,522 of interest received from loans and
securities, and TL 28,575,621 of interest paid on deposits, loans, money market transactions and marketable securities borrowed by the Bank. The account ‘’Other’’
classified under operating profit other than fees and commissions paid, cash payments to personnel and service suppliers and taxes paid consists of other operating
expenses, exchange and derivative gains/losses accounts is TL 13,095,475 (December 31, 2020: TL (8,449,586)).
Net Increase (Decrease) in Other Liabilities account classified in changes of assets and liabilities resulting from the changes in Funds Provided Under Repurchase
Agreements, miscellaneous payables, other liabilities and taxes, duties, charges, and premiums increase as TL 31,617,097 (December 31, 2020: TL 24,090,297 increase).
Net Cash Provided from Other Investing Activities account includes net cash flows from sale of intangible assets and declined by TL 748,958 (December 31, 2020: TL
650,792 decrease).
The effect of changes in foreign exchange rates on cash and cash equivalents is TL (1,171,636) as of December 31, 2021 (December 31, 2020: TL (1,105,433)). Due to the
high rate of turnover of related foreign currency assets, the difference between the last 30 days’ arithmetic average of currency exchange rates and the year-end currency
exchange rate is used to calculate the effect of change in foreign exchange rate.
Cash, cash in foreign currency, unrestricted deposits in Central Bank of Turkey, money in transit, cheques purchased, precious metals, money market operations as well as
demand and timed up to 3 months are defined as cash and cash equivalents.
Cash and cash equivalents at beginning of the period:
Cash
Cash in TL and Foreign Currency
Central Bank of Turkey and Other
Cash Equivalents
Banks’ Demand Deposits and Time Deposits Up to 3 Months
Money Market Receivables
Total Cash and Cash Equivalents
Current Period
Prior Period
December 31, 2020
December 31, 2019
32,467,082
9,102,557
23,364,525
12,894,826
12,894,826
29,616,634
5,489,353
24,127,281
12,260,667
12,260,667
45,361,908
41,877,301
The total amount resulting from the transactions made in the previous period shows the total cash and cash equivalents as of the beginning of the current period.
Cash and cash equivalents at end of the period:
Cash
Cash in TL and Foreign Currency
Central Bank of Turkey and Other
Cash Equivalents
Banks’ Demand Deposits and Time Deposits Up to 3 Months
Money Market Receivables
Total Cash and Cash Equivalents
Current Period
Prior Period
December 31, 2020
December 31, 2019
96,225,661
14,810,443
81,415,218
18,668,788
18,668,788
32,467,082
9,102,557
23,364,525
12,894,826
12,894,826
114,894,449
45,361,908
a. Information on the volume of transactions relating to the Bank’s risk group, incomplete loan and deposit transactions and period’s profit and loss:
a.1. Information on loans held by the Bank’s risk Group
Current Period:
Bank’s Risk Group
Loans
Investments in Associates,
Subsidiaries and Jointly Controlled
Entities (Joint Ventures)
Direct and Indirect Shareholders of
the Bank
Other Real Persons and Corporate
Bodies that have been Included in
the Risk Group
Cash
Non-Cash
Cash
Non-Cash
Cash
Non-Cash
Balance at the beginning of the period
Balance at the end of the period
Interest and commission income received
5,368,800
6,287,638
612,064
9,877,227
16,814,945
6,879
2,585,068
4,452,442
232,067
494,875
608,277
8,628
Prior Period:
Bank’s Risk Group
Loans
Investments in Associates,
Subsidiaries and Jointly Controlled
Entities (Joint Ventures)
Direct and Indirect Shareholders of
the Bank
Other Real Persons and Corporate
Bodies that have been Included in
the Risk Group
Cash
Non-Cash
Cash
Non-Cash
Cash
Non-Cash
Balance at the beginning of the period
Balance at the end of the period
Interest and commission income received
1,735,386
5,368,800
438,338
5,971,958
9,877,227
4,916
3,855,442
2,585,068
157,039
658,330
494,875
7,028
a.2. Information on deposits held by the Bank’s risk group:
Bank’s Risk Group
Deposits
Investments in Associates,
Subsidiaries and Jointly Controlled
Entities (Joint Ventures)
Direct and Indirect Shareholders of
the Bank
Other Real Persons and Corporate
Bodies that have been Included in
the Risk Group
Cash
Non-Cash
Cash
Non-Cash
Cash
Non-Cash
Balance at the beginning of the period
8,875,726
Balance at the end of the period
Interest expense on deposits
12,421,537
248,189
4,354,282
8,875,726
160,986
157,226
302,826
25,060
8,896
157,226
4,833
1,409,177
2,053,129
52,100
7,768,540
1,409,177
89,244
a.3. Information on forward and option agreements and other similar agreements made with the Bank’s risk group:
İştirak, Bağlı Ortaklık ve Birlikte
Kontrol Edilen Ortaklıklar (İş
Ortaklıkları)
Bankanın Doğrudan ve Dolaylı
Ortakları
Risk Grubuna Dahil Olan Diğer
Gerçek
ve Tüzel Kişiler
Cari Dönem
Önceki Dönem
Cari Dönem
Önceki Dönem
Cari Dönem
Önceki Dönem
1,574,671
1,966,285
(62,997)
1,192,862
1,574,671
(70,139)
4,033
(2,179)
399,392
(12,541)
Banka’nın Dahil Olduğu
Risk Grubu
Transactions at Fair Value Through Profit and
Loss
Beginning of the period
End of the period
Total Profit/Loss
Transactions for hedging purposes
Beginning of the period
End of the period
Total Profit/Loss
306 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 307
Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
b. Disclosures for Bank’s risk group:
IX. Subsequent Events
In accordance with the relevant decision of the Banking Regulation and Supervision Agency, the special purpose entity and the mentioned company’s subsidiary Türk
Telekom A.Ş, are not included in the Bank’s risk group, where details are disclosed in Section V, footnote I.b.3 and I.r.
Within the scope of the decision of the Board of Directors regarding the issue of debt instrument on September 6, 2021, the Bank issued a financial bond with a nominal
value of TL 2,562,362 after December 31, 2021.
b.1. The relation of the Bank with corporations in its risk group and under its control regardless of whether there are any transactions between the parties:
All types of corporate and retail banking services are provided to these corporations in line with the articles of Banking Law.
b.2. The type and amount of transaction carried out, and its ratio to the overall transaction volume, values of principal items and their ratios to overall items, pricing policy
and other items in addition to the structure of the relationship:
The transactions carried out are mainly loan and deposit transactions. The ratio of loans extended to the risk group to the overall cash loans is 2.18%, while the ratio
(excluding NPL) to the overall assets is 1.16%; the ratio of deposits of the risk group corporations to the overall deposits is 2.48%, while the ratio to overall liabilities is 1.59%,
the comparable pricing method is used for the transactions.
b.3. Purchase and sale of real estates, other assets and services, agency agreements, finance lease contracts, transfer of information obtained through research and
development, license agreements, funding (including loans and provision of support as cash capital or capital-in-kind), guarantees and collaterals, and management
agreements:
Security purchases are made by İş Finansal Kiralama A.Ş., a subsidiary of the Bank, through leasing activities when required. The Parent Bank’s branches act as agents of
Anadolu Anonim Türk Sigorta Şirketi and Anadolu Hayat Emeklilik A.Ş. Furthermore, through its branches, the Bank mediates the order transmission for İş Yatırım Menkul
Değerler A.Ş. and carries out agency activities of İş Portföy Yönetimi A.Ş.
If requested, cash and non-cash loan requirements of corporations within the risk group are met in accordance with the limits imposed by the Banking Law and the
prevailing market conditions.
b.4. As of December 31, 2021, total worth of the shares, which the Bank purchased from its subsidiaries that are traded on Istanbul Stock Exchange, and accounted under
the Financial Assets at Fair Value Through Profit or Loss in accordance with the Board of Directors decision dated December 25, 2015 and relevant following decisions is TL
207,050 (December 31, 2020: TL 147,183).
c. Total salaries and similar benefits paid to the (executive members and senior executives)
In the current period, the net payment provided to the key management amounts is TL 46,975 (December 31, 2020: TL 36,814).
VIII. Disclosures On The Bank’s Domestic, Foreign, Off-Shore Branches Or Associates And Foreign Representative Offices
Domestic Branches (*)
1.174
22.470
Number
Employees
Foreign Representative Offices
Foreign Branches
Off-Shore Branches
1
1
2
14
2
2
1
3
2
45
205
39
32
6
(*) The Branches located in Free Trade Zones in Turkey are included among domestic branches.
Country of
Incorporation
China
Egypt
England
T.R.N.C.
Iraq
Kosovo
Bahrain
Total Assets
41,179,719
15,362,143
4,401,749
2,322,319
10,609,478
Legal Capital
1,765
80,000
588,024
148,390
Section Six: Other Explanations
i. Explanations On The Bank’s Credit Ratings:
MOODY’S
Long-term Foreign Currency Deposit
Long-term Local Currency Deposit
Long-term Foreign Currency Senior Debt
Short-term Foreign Currency Deposit
Short-term Local Currency Deposit
FITCH RATINGS
Long-term Foreign Currency Issuer Default Rating
Long-term Local Currency Issuer Default Rating
Short-term Foreign Currency Issuer Default Rating
Short-term Local Currency Issuer Default Rating
National Long-term Rating
Viability Rating
Government Support Rating
STANDARD & POOR'S
Long-term Counterparty Credit Rating
Short-term Counterparty Credit Rating
Long-term National Scale Rating
Long-term Local Currency Issuer Default Rating
Rating
Outlook (*)
B3
B3
B3
NP
NP
B+
B+
B
B
A+ (tur)
b+
b-
B+
B
trA+
trA-1
Negative
Negative
Negative
-
-
Negative
Negative
-
-
Stable
-
-
Negative
-
-
-
The dates when the Bank's credit ratings/outlooks were last updated are given below:
Moody's: 10.12.2020, Fitch Ratings: 10.12.2021, Standard & Poor's: 15.12.2021
(*) Outlook:
“Stable” indicates that the current rating will not be changed in the short term; “positive” indicates that the current rating is very likely to be upgraded and “negative”
indicates that the current rating is very likely to be downgraded.
Section Seven: Explanations On The Auditors’ Independent Audit Report
I. Explanations On The Auditors’ Independent Audit Report:
The unconsolidated financial statements and disclosures for the period ended December 31, 2021 have been audited by Güney Bağımsız Denetim ve Serbest Muhasebeci
Mali Müşavirlik Anonim Şirketi (A member firm of Ernst&Young Global Limited) and the independent auditors’ report dated February 8, 2020 is presented preceding the
unconsolidated financial statements.
II. Explanations And Footnotes Of The Independent Auditors Report
There are no significant issues or necessary disclosures or notes in relation to the Bank’s operations other than those mentioned above.
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Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Unconsolidated Financial Statements For The Year Ended December 31, 2021(Convenience Translation of Unconsolidated Audit Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Maslak Mah. Eski Büyükdere Cad. Orjin
Maslak İş Merkezi No:27 K:2-3-4
34485 Sarıyer/İstanbul TÜRKİYE
INDEPENDENT AUDITOR’S REPORT
Audit of Consolidated Financial Statements
To the Board of Directors of Türkiye İş Bankası Anonim Şirketi;
Qualified Opinion
We have audited the accompanying consolidated financial statements of Türkiye İş Bankası A.Ş (the Bank) and its subsidiaries (collectively referred as “The Group”), which
comprise the consolidated statement of balance sheet as at December 31, 2021, and the consolidated statement of income, consolidated statement of profit or loss and
other comprehensive income, consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows for the year then ended and notes to
the consolidated financial statements, and a summary of significant accounting policies and other explanatory information.
In our opinion, except for the effects of the matter on the consolidated financial statements described in the Basis for Qualified Opinion paragraph, the accompanying con-
solidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2021 and consolidated financial
performance and consolidated its cash flows for the year then ended in accordance with the prevailing accounting principles and standards set out as in accordance with
“Regulation on Accounting Applications for Banks and Safeguarding of Documents” published in the Official Gazette no.26333 dated November 1, 2006 and other regula-
tions on accounting records of Banks published by Banking Regulation and Supervision Agency (BRSA), circulars, interpretations published by BRSA and “BRSA Accounting
and Financial Reporting Legislation” which includes the provisions of “Turkish Financial Reporting Standards” (TFRS) for the matters which are not regulated by these
regulations.
Basis of Qualified Opinion
As explained in Section Five Part II-i.4.6 and IV.e, the accompanying consolidated financial statements as at December 31, 2021 include a free provision at an amount of TL
4,075,000 thousands of which TL 2,875,000 thousands was provided in prior years and TL 1,200,000 thousands provided in the current period by the Group management
for the possible effects of the negative circumstances which may arise from the possible changes in the economy and market conditions which does not meet the recogni-
tion criteria of “Turkish Accounting Standard” (TAS) 37 “Provisions, Contingent Liabilities and Contingent Assets”.
Our audit was conducted in accordance with “Regulation on independent audit of the Banks” published in the Official Gazette no.29314 dated April 2, 2015 by BRSA (BRSA
Independent Audit Regulation) and Independent Auditing Standards (“ISA”) which are the part of Turkish Auditing Standards issued by the Public Oversight Accounting
and Auditing Standards Authority (“POA”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Group in accordance with of Code of Ethics for Independent Auditors (Code of Ethics) published by POA and
have fulfilled our other responsibilities in accordance with the code of ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our qualified opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current
period. Key audit matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. In addition to the matter described in the Basis for Qualified section we have determined the matters described below to
be the key audit matters to be communicated in our report.
Türkiye İş Bankası Anonim Şirketi
Consolidated Financial Statements
As at and For the Year Ended
December 31, 2021
This report includes “Independent Auditor’s Report” comprising
6 pages and; "Consolidated Financial Statements and Related
Disclosures and Footnotes” comprising 142 pages.
(Convenience Translation of Consolidated Financial Statements and Related Disclosures
and Footnotes Originally Issued in Turkish)
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INDEPENDENT AUDITOR’S REPORT
Key Audit Matter
How the Key Audit Matter is addressed in our audit
Pension Fund Obligations
TFRS 9 “Financial Instruments” Standard and recognition of impairment
on financial assets and related significant disclosures
As presented in Section III disclosure VIII, the Group recognizes expected
credit losses of financial assets in accordance with TFRS 9 Financial
Instruments standard. We considered impairment of financial assets as a
key audit matter since:
• Amount of on and off-balance sheet items that are subject to expected
credit loss calculation is material to the financial statements.
• There are complex and comprehensive requirements of TFRS 9.
• The classification of the financial assets is based on the Group’s
business model and characteristics of the contractual cash flows in
accordance with TFRS 9 and the Group uses significant judgment on the
assessment of the business model and identification of the complex
contractual cash flow characteristics of financial instruments.
• The Group's determines fair value of its financial assets, reflected at
fair value in accordance with the relevant business model category,
according to Level 3 if there are financial inputs that are not observable
in the fair value measurement and that contain significant estimates
and assumptions.
• Policies implemented by the Group management include compliance
risk to the regulations and other practices.
• Processes of TFRS 9 are advanced and complex.
• Judgements and estimates used in expected credit loss, complex and
comprehensive.
• Disclosure requirements of TFRS 9 are comprehensive and complex.
Our audit procedures included among others include:
• Evaluating the appropriateness of accounting policies as to the
requirements of TFRS 9, Group’s past experience, local and global practices.
• Reviewing and testing of processes which are used to calculate expected
credit losses by involving our Information technology and process audit
specialists.
• Evaluating the reasonableness and appropriateness of management’s key
estimates and judgements in expected credit loss calculations including
the responses to COVID-19, through selection of methods, models,
assumptions and data sources.
• Reviewing the appropriateness of criteria in order to identify the financial
assets having solely payments of principal and interest and checking the
compliance to the Group’s Business model.
• Reviewing the Group’s classification and measurement models of the
financial instruments (financial instruments determined as Level 3 according
to fair value hierarchy) and comparing with TFRS 9 requirements
• Evaluating the alignment of the significant increase in credit risk determined
during the calculation of expected credit losses, default definition,
restructuring definition, probability of default, loss given default, exposure at
default and macro-economic variables that are determined by the financial
risk management experts with the Group’s past performance, regulations,
and other processes that has forward looking estimations.
• Evaluating the impact of the COVID-19 outbreak on staging of loans and
macroeconomic parameters used in expected credit lossess together with
forward-looking estimates and significant assumptions.
• Assessing the completeness and the accuracy of the data used for expected
credit loss calculation.
• Testing the mathematical accuracy of expected credit loss calculation on
sample basis.
• Evaluating the judgments and estimates used for the individually assessed
financial assets.
• Evaluating the accuracy and the necessity of post-model adjustments.
• Auditing of TFRS 9 disclosures.
Employees of the Group are members of “Türkiye İş Bankası A.Ş.
Mensupları Emekli Sandığı Vakfı”, (“the Fund”), which is established in
accordance with the temporary Article 20 of the Social Security Act
No. 506 and related regulations. The Fund is a separate legal entity
and foundation recognized by an official decree, providing all qualified
employees with pension and post-retirement benefits. As disclosed in the
“Section Three Note XX.2” to the financial statements, Banks will transfer
their pension fund to the Social Security Institution and the authority of
the “Council of Ministers” on the determination of the mentioned transfer
date is changed as “President” in the Decree Law No. 703 published in
the Official Gazette numbered 30473 and dated July 9, 2018. According
to the technical balance sheet report as at December 31, 2021 prepared
considering the related articles of the Law regarding the transferrable
benefit obligations for the non- transferrable social benefits and
payments which are included in the articles of association, the Fund has
an actuarial and technical deficit which is fully provisioned for.
The valuation of the Pension Fund liabilities requires judgment in
determining appropriate assumptions such as defining the transferrable
social benefits, discount rates, salary increases, demographic
assumptions, inflation rate estimates and the impact of any changes in
individual pension plans. The Group Management uses Fund actuaries to
assist in assessing these assumptions.
Considering the subjectivity of key assumptions and estimate used in the
calculations of transferrable liabilities and the effects of the potential
changes in the estimates used together with the uncertainty around the
transfer date and given the fact that technical interest rate is prescribed
under the law, we considered this to be a key audit matter.
Derivative Financial Instruments
Derivative financial instruments including foreign exchange contracts,
currency and interest rate swaps, currency and interest rate options,
futures and other derivative financial instruments which are held for
trading are initially recognized on the statement of financial position at
fair value and subsequently are re-measured at their fair value. Details of
related amounts are explained in “Section Five Note I.c.” and “Section Five
Note II.b”.
Fair value of the derivative financial instruments is determined by
selecting most convenient market data and applying valuation techniques
to those particular derivative products. Derivative Financial Instruments
are considered by us as a key audit matter because of the subjectivity in
the estimates, assumptions and judgements used.
It has been addressed whether there have been any significant changes
in regulations governing pension liabilities, employee benefit plans during
the period, that could lead to adjust the valuation of employee benefits.
Support from actuarial auditor of our firm, has been taken to assess the
appropriateness of the actuarial assumptions and calculations performed
by the external actuary.
We further focused on the accuracy and adequacy of the Bank’s provision
provided for the deficit and also disclosures on key assumptions related to
pension fund deficit.
Our audit procedures included among others involve reviewing policies
regarding fair value measurement accepted by the Group management
fair value calculations of the selected derivative financial instruments
which is carried out by valuation experts of another entity who are
in the same audit network within our firm and the assessment of
used estimations and the judgements and testing the assessment of
operating effectiveness of the key controls in the process of fair value
determination.
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Responsibilities of Management and Directors for the Consolidated Financial Statements
Group management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the BRSA Accounting and Reporting Legislation
and for such internal control as management determines is necessary to enable the preparation of the financial statement that is free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
In an independent audit, the responsibilities of us as independent auditors are:
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with BRSA Independ-
ent Audit Regulation and ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with BRSA Independent Audit Regulation and ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. (The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.)
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Bank and its subsidiaries’ internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Bank and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Bank and its
subsidiaries to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with government with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of
the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) In accordance with Article 402 paragraph 4 of the Turkish Commercial Code (“TCC”) no 6102; no significant matter has come to our attention that causes us to believe that the Bank’s
bookkeeping activities and financial statements for the period January 1 – December 31, 2020 are not in compliance with the TCC and provisions of the Bank’s articles of association in
relation to financial reporting.
2) In accordance with Article 402 paragraph 4 of the TCC; the Board of Directors submitted to us the necessary explanations and provided required documents within the context of audit.
The engagement partner who supervised and concluded this independent auditor’s report is Fatma Ebru Yücel.
Additional paragraph for convenience translation to English
As explained in detail in Note I of Section Three, the effects of differences between accounting principles and standards set out by regulations in conformity with BRSA Accounting and
Financial Reporting Legislation, accounting principles generally accepted in countries in which the accompanying consolidated financial statements are to be distributed and International
Financial Reporting Standards (“IFRS”) have not been quantified in the accompanying consolidated financial statements. Accordingly, the accompanying consolidated financial statements
are not intended to present the financial position, results of operations and changes in financial position and cash flows in accordance with the accounting principles generally accepted in
such countries and IFRS.
February 8, 2022
İstanbul, Türkiye
314 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Türkiye İş Bankası A.Ş.
The Consolidated Financial Report As At And For The Year Ended December 31, 2021
Headquarters Address: İş Kuleleri, 34330, Levent/İstanbul
Telephone: 0212 316 00 00
Fax: 0212 316 09 00
Web Site: www.isbank.com,tr
E-mail: musteri.iliskileri@isbank.com.tr
The consolidated financial report as at and for the year ended prepared in accordance with the communiqué of “Financial Statements and Related Disclosures and
Footnotes to be announced to Public by Banks” as regulated by Banking Regulation and Supervision Agency, comprises the following sections:
GENERAL INFORMATION ABOUT THE PARENT BANK
CONSOLIDATED FINANCIAL STATEMENTS OF THE PARENT BANK
EXPLANATIONS ON THE ACCOUNTING POLICIES
INFORMATION ON FINANCIAL STRUCTURE AND RISK MANAGEMENT OF THE GROUP
DISCLOSURES AND FOOTNOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
OTHER EXPLANATIONS
INDEPENDENT AUDITOR’S REPORT
Associates, subsidiaries and structured entities whose financial statements have been consolidated in the consolidated financial report are as follows:
Associates
ARAP-TÜRK BANKASI A.Ş.
Subsidiaries
ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ
ANADOLU HAYAT EMEKLİLİK A.Ş.
EFES VARLIK YÖNETİM A.Ş.
İŞ FAKTORİNG A.Ş.
İŞ FİNANSAL KİRALAMA A.Ş.
İŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
İŞ GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş.
İŞ PORTFÖY YÖNETİMİ A.Ş.
İŞ YATIRIM MENKUL DEĞERLER A.Ş.
İŞ YATIRIM ORTAKLIĞI A.Ş.
İŞBANK AG
JOINT STOCK COMPANY İŞBANK (JSC İŞBANK)
JOINT STOCK COMPANY ISBANK GEORGIA (JSC ISBANK GEORGIA)
MAXİS GİRİŞİM SERMAYESİ PORTFÖY YÖNETİMİ A.Ş.
MAXIS INVESTMENTS LTD.
MİLLİ REASÜRANS T.A.Ş.
MOKA ÖDEME VE ELEKTRONİK PARA KURULUŞU A.Ş.
TSKB GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
TÜRKİYE SINAİ KALKINMA BANKASI A.Ş.
YATIRIM FİNANSMAN MENKUL DEĞERLER A.Ş.
YATIRIM VARLIK KİRALAMA A.Ş.
Structured Entities
TIB DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY
The consolidated yearended financial statements and related disclosures and footnotes in this report are prepared, in accordance with the Regulation on the Procedures and
Principles for Accounting Practices and Retention of Documents by Banks. Banking Regulation and Supervision Agency (BRSA) regulations, Turkish Accounting Standards,
Turkish Financial Reporting Standards and the related statements and guidance and in compliance with the financial records of our Bank. Unless otherwise stated the
accompanying consolidated financial report is presented in thousands of Turkish Lira (TL) and has been subjected to independent auditand presented as the attached.
Ersin Önder Çiftçioğlu
Member of the Board and
the Audit Committee
Yusuf Ziya Toprak
Deputy Chairperson of the Board
of Directors and Chairperson of
the Audit Committee
Adnan Bali
Chairperson of the Board of Directors
Ali Tolga Ünal
Head of Financial
Management Division
Gamze Yalçın
Deputy Chief Executive
In Charge of Financial Reporting
Hakan Aran
Chief Executive Officer
The authorized contact person for questions on this consolidated financial report:
Name – Surname / Title: Neşe Gülden Sözdinler / Head of Investor Relations and Contunity Division
Phone No : +90 212 316 16 02
Fax No :+90 212 316 08 40
E-mail : Nese.Sozdinler@isbank.com.tr
investorrelations@isbank.com.tr
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SECTION IV
Information on the Financial Position and Risk Management of the Group
I.
II.
III.
IV.
V.
VI.
Explanations on Shareholders’ Equity
Explanations on Credit Risk
Explanations on Currency Risk
Explanations on Interest Rate Risk
Explanations on Equity Shares Risk Arising from Banking Book
Explanations on Liquidity Risk Management and Consolidated Liquidity Coverage Ratio
VII.
Explanations on Leverage Ratio
VIII. Explanations on Other Price Risks
IX.
X.
XI.
Explanations on The Presentation of Financial Assets and Liabilities at Fair Value
Explanations on Transactions Made on Behalf of Others and Transactions Based on Fiduciary
Explanations on Risk Management
XII.
Explanations on Segment Reporting
SECTION V
Disclosures and Footnotes on the Consolidated Financial Statements
I.
II.
III.
IV.
V.
VI.
Disclosures and Footnotes on Consolidated Assets
Disclosures and Footnotes on Consolidated Liabilities
Disclosures and Footnotes on Consolidated Off-Balance Sheet Items
Disclosures and Footnotes on Consolidated Income Statement
Disclosures and Footnotes on the Statement of Changes in Equity
Disclosures and Footnotes on The Cash Flow Statement
VII.
Disclosures and Footnotes on the Bank’s Risk Group
VIII. Disclosures on the Bank’s Domestic, Foreign, Off-Shore Branches or Subsidiaries and Foreign Representative Offices
IX.
Subsequent Events
SECTION VI
Other Explanations
I.
Explanation on the Group’s Credit Ratings
SECTION VII
Explanations on the Independent Audit Report
I.
II.
Explanations on the Independent Auditors’ Report
Explanations and Footnotes of the Independent Auditors Report
342
350
360
362
366
367
372
373
373
375
375
391
393
408
415
417
421
421
422
423
425
425
427
427
CONTENT
SECTION I
General Information about the Parent Bank
I.
II.
III.
IV.
V.
VI.
Explanations on the Establishment Date and Initial Status of the Parent Bank, and History Including the Changes in the Former Status
Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and Control of the
Parent Bank any Changes in the Period, and Information on the Parent Bank’s Risk Group
Explanations on the Chairperson’s, Directors’, Auditors’, Chief Executive Officer’s and Deputy Chief Executives’ Shares, if any,
and the Areas of their Responsibility at the Bank
Information on the Parent Bank’s Qualified Shareholders
Summary Information on the Parent Bank’s Functions and Business Lines
Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards
and Explanation about the Institutions Subject to Line-By-Line Method or Proportional Consolidation and Institutions which are Deducted from
Equity or not Included in These Three Methods
VII.
Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders’ Equity Between the Parent Bank and its Subsidiaries
or the Reimbursement of Liabilities
VIII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy
of the Related Disclosures
SECTION II
Consolidated Financial Statements
I.
II.
III.
IV.
V.
VI.
Consolidated Balance Sheet – Assets
Consolidated Balance Sheet – Liabilities
Consolidated Statement of Off-Balance Sheet Items
Consolidated Statement of Profit or Loss
Profit or Loss and Other Comprehensive Income
Consolidated Statement of Changes in the Shareholders’ Equity
VII.
Consolidated Statement of Cash Flows
VIII. Consolidated Statement of Profit Appropriation
SECTION III
Explanations on Accounting Policies
I.
II.
III.
IV.
V.
VI.
Basis of Presentation
Strategy for Use of Financial Instruments and on Foreign Currency Transactions
Information on the Consolidated Companies
Forward, Option Contracts and Derivative Instruments
Interest Income and Expenses
Fees and Commission Income and Expenses
VII.
Financial Assets
VIII.
Impairment of Financial Assets
IX.
X.
XI.
Offsetting Financial Instruments
Sale and Repurchase Agreements and Securities Lending Transactions
Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities
XII.
Goodwill and Other Intangible Assets
XIII.
Tangible Assets
XIV.
Investment Property
XV.
Leasing Transactions
XVI.
Insurance Technical Income and Expense
XVII.
Insurance Technical Provisions
XVIII. Provisions and Contingent Liabilities
XIX. Contingent Assets
XX.
Liabilities Regarding Employee Benefits
XXI. Taxation
XXII. Additional Information on Borrowings
XXIII.
Information on Equity Shares and Their Issuance
XXIV. Bank Acceptances and Bills of Guarantee
XXV. Government Incentives
XXVI. Segment Reporting
XXVII. Other Disclosures
318
318
318
319
319
319
321
321
322
323
324
326
327
328
330
331
332
332
333
333
334
334
334
335
336
336
336
337
337
338
338
338
338
338
339
339
341
341
341
341
341
341
341
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The Parent Bank’s shares attributable to the Directors and members of the Audit Committee, to the CEO and the Deputy Chief Executives are of minor importance.
I. Explanations on the Establishment Date and Initial Status of the Parent Bank, and History Including the Changes in the Former Status
IV. Information on the Parent Bank’s Qualified Shareholders
TÜRKİYE İŞ BANKASI A.Ş. (“the Bank” or “the Parent Bank”) was established on August 26, 1924 to operate in all kinds of banking activities and to initiate and/or
participate in all kinds of financial and industrial sector undertakings when necessary. There is no change in the Bank’s status since its establishment.
II. Explanations on the Capital Structure, Shareholders who Directly or Indirectly, Solely or Jointly Undertake the Management and Control of the Parent Bank, any
Changes in the Period, and Information on the Parent Bank’s Risk Group
As of December 31, 2021, 37.26% of the Bank’s shares are owned by T. İş Bankası A.Ş. Supplementary Pension Fund (Fund), 28.09% are owned by the Republican People’s
Party- CHP (Atatürk’s shares) and 34.65% are on free float (December 31, 2020: Fund 37.08%, CHP 28.09%, Free float 34.83%).
III. Explanations on the Chairperson’s, Directors’, Auditors’, Chief Executive Officer’s and Deputy Chief Executives’ Shares, if any, and the Areas of their Responsibility
at the Bank
Chairperson and Members of the Board of Directors:
Name and Surname
Areas of Responsibility
Adnan Bali
Yusuf Ziya Toprak
Hakan Aran
Feray Demir
Ersin Önder Çiftçioğlu
Fazlı Bulut
Durmuş Öztek
Recep Hakan Özyıldız
Mustafa Rıdvan Selçuk
Ahmet Gökhan Sungur
Sadrettin Yurtsever
Chairperson of the Board of Directors, Remuneration Committee, Chairperson of the Risk Committee, Sustainability Committee
and Chairperson of the Board of Directors Operating Principles Committee and the Member of the Credit Committee
Deputy Chairperson of the Board of Directors, Chairperson of the Audit Committee, TRNC Internal Systems Committee and
Operational Risk Committee, Member of the Risk Committee and Substitute Member of the Credit Committee
Chief Executive Officer and Board Member, Chairperson of the Credit Committee, Human Resources Committee and Information
Systems Strategy Committee, Natural Member of the Risk Committee, Chairperson of the Executive Committee
Director, Member of the Credit Committee, Corporate Governance Committee, Remuneration Committee, Corporate Social
Responsibility Committee, Sustainability Committee, and the Member of the Board of Directors Operating Principles Committee
Director, Chairperson of the Sustainability Committee, Member of the Audit Committee and TRNC Internal Systems Committee
Director, Member of Corporate Social Responsibility Committee and Substitute Member of the Credit Committee
Director, Member of Corporate Social Responsibility Committee, and the Member of the Board of Directors Operating Principles
Committee
Director
Director
Director
Director, Member of Corporate Governance Committee and Corporate Social Responsibility Committee
Chief Executive Officer and Deputy Chief Executives:
Name and Surname
Areas of Responsibility
Hakan Aran
Yalçın Sezen
Murat Bilgiç
Nevzat Burak Seyrek
Şahismail Şimşek
Ebru Özşuca
Gamze Yalçın
H. Cahit Çınar
Ozan Gürsoy
Sezgin Yılmaz
Sabri Gökmenler
Sezgin Lüle
Can Yücel
Sezai Sevgin
Chief Executive Officer and Member of the Board of Directors, Credit Committee, Chairperson of Human Resources Committee
and Information Technologies Strategic Committee Natural Member of Risk Committee, Member of Opertional Risk Committee
and Chairperson of the Executive Committee
Retail Banking Marketing, Sales and Products, Retail Loans, Digital Banking, Member of the Corporate Social Responsibility
Committee and Sustainability Committee
Corporate Loans, Commercial Loans and Retail Loans Allocation, Project Finance, Member of the Risk Committee and
Sustainability Committee
Corporate and Commercial Banking Marketing, Commercial Banking Sales, Transboundary Banking, Free Zone Branches,
Member of the Sustainability Committee
SME and Enterprise Banking Product and Sales, Agricultural Banking Marketing, Commercial Banking Product, Member of
Sustainability Committee
Treasury, Economic Research, Capital Markets, Member of the Risk Committee
Financial Management, Financial Institutions, Investor Relations and Sustainability, Managerial Reporting and Internal
Accounting, Information Technologies Strategic Committee, Member of Risk Committee and Sustainability Committee
Legal Consultancy, Associates, Member of the Operational Risk Committee
Human Resources Management, Strategic and Corporate Performance Management, Member of Operational Risk Committee
and Sustainability Committee
Banking Base Operations, Agile Management , Support Services, External Operations and Commercial Loan Operations,
Construction and Real Estate Management, Corporate Architecture, Member of Operational Risk Committee, Sustainability
Committee and Information Technologies Strategic Committee
Information Technologies, Data Management, Acquisition, Member of Operational Risk Committee and Information
Technologies Strategic Committee
Customer Relations Coordination Responsible, Digital Banking, Customer Relations, Card Payment Ecosystems,Card Payment
Operations, Card Payment Products and Member of Operational Risk Committee
Legal Affairs and Legal Proceedings, Commercial and Corporate Loans and Retail Loans Proceedings, Loans Monitoring, Credits
Portfolio Management, and the Member of the Corporate Social Responsibility Committee
Information Security, Internal Control, Corporate Compliance, Natural Member of the Risk Committee, Information Technologies
Strategic Committee, Member of the Operational Risk Committee and Sustainability Committee
Mr. Serkan Uğraş Kaygalak retired from his position at the Bank At the meeting of the Bank’s Board of Directors dated 28.12.2021, it was decided that Mr. Sezai Sevgin
would be appointed as Deputy Chief Executive of the Bank following the necessary notifications and permissions to the Banking Regulation and Supervision Agency. Mr. H.
Cahit Çınar participates in the sessions organized on a consolidated basis within the scope of his Membership in the Risk Committee.
Name Surname/Company
Shares
Ownership
Paid-in Capital
Unpaid Capital
T, İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik
ve Yardımlaşma Sandığı Vakfı (“İşbank Members’
Supplementary Pension Fund”)
Cumhuriyet Halk Partisi – Republican People’s Party
(Atatürk’s Shares)
1,676,813
1,264,142
%37.26
%28.09
1,676,813
1,264,142
V. Summary Information on the Parent Bank’s Functions and Business Lines
In line with the relevant legislation and principles stated in the Articles of Incorporation of the Bank, the Bank’s activities include operating in retail, commercial,
corporate and private banking, foreign currency and money market operations, marketable securities operations, international banking services and other banking
operations, as well as initiating or participating in all kinds of financial and industrial sector corporations as may be required.
VI. Differences between the Communiqué on Preparation of Consolidated Financial Statements of Banks and Turkish Accounting Standards and Explanation
about the Institutions Subject to Full Consolidation Method or Proportional Consolidation and Institutions which are deducted from Equity or not included in
these Three Methods
Banks are obligated to prepare consolidated financial statements for credit institutions and financial subsidiaries for creating legal restrictions on a consolidated
basis based on the “Communiqué on Preparation of Consolidated Financial Statements of Banks” by applying Turkish Accounting Standards. There is not any
difference between the related Communiqué and the consolidation operations that is based on Turkish Accounting Standards and Turkish Financial Reporting
Standards.
The consolidated financial statements in this report includes the subsidiaries of the Bank, which are credit or financial institutions, in accordance with the BRSA
regulations. As of current period, there is no credit or financial institution subsidiaries which are excluded in the scope of the consolidation.
The Parent Bank and its subsidiaries;
- ANADOLU ANONİM TÜRK SİGORTA ŞİRKETİ
- ANADOLU HAYAT EMEKLİLİK A.Ş.
- EFES VARLIK YÖNETİM A.Ş.
- İŞ FAKTORING A.Ş.
- İŞ FİNANSAL KİRALAMA A.Ş.
- İŞ GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
- İŞ GİRİŞİM SERMAYESİ YATIRIM ORTAKLIĞI A.Ş.
- İŞ PORTFÖY YÖNETIMI A.Ş.
- İŞ YATIRIM MENKUL DEĞERLER A.Ş.
- İŞ YATIRIM ORTAKLIĞI A.Ş.
- İŞBANK AG
- JSC İŞBANK
- JSC İŞBANK GEORGIA
- MAXİS GİRİŞİM SERMAYESİ PORTFÖY YÖNETİMİ A.Ş.
- MAXİS INVESTMENTS LTD.
- MİLLİ REASÜRANS T.A.Ş.
- MOKA ÖDEME VE ELEKTRONİK PARA KURULUŞU A.Ş.
- TSKB GAYRİMENKUL YATIRIM ORTAKLIĞI A.Ş.
- TÜRKİYE SINAİ KALKINMA BANKASI A.Ş.
- YATIRIM FİNANSMAN MENKUL DEĞERLER A.Ş.
- YATIRIM VARLIK KİRALAMA A.Ş.
and Structured Entity;
- TIB Diversified Payment Rights Finance Company
is included in the consolidated financial statements with “full consolidation method”.
The Parent Bank’s associate acting as a credit institution;
- ARAP-TÜRK BANKASI A.Ş.
is accounted under equity accounting method in the consolidated financial statements.
318 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 319
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Consolidated companies are active in the areas of banking, insurance and reinsurance, private pensions, finance leasing, factoring, real estate investment, venture
capital investment, brokerage, investment consulting, portfolio and asset management. Those companies are explained below.
Anadolu Anonim Türk Sigorta Şirketi
Moka Ödeme ve Elektronik Para Kuruluşu A.Ş.
The company was acquired in 2021. The company established of 2014 and it operates in the field of payment services. The title of the company which is called
"Moka Ödeme Kuruluşu A.Ş." has been changed to "Moka Ödeme ve Elektronik Para Kuruluşu A.Ş." as of 01.11.2021.
The Company was established in 1925 and operates in almost all non-life insurance service. The Company’s shares are traded in the Borsa İstanbul A.Ş.
TSKB Gayrimenkul Yatırım Ortaklığı A.Ş.
Anadolu Hayat Emeklilik A.Ş.
The Company was founded in 1990 and its’ headquarter is located in Istanbul. The company’s main activities are private or group pension and life/death insurance
and all kinds of insurance services related to these branches. There are 34 private pension funds offered by the company to the subscribers. The company’s shares
are traded in the Borsa Istanbul A.Ş.
Efes Varlık Yönetim A.Ş.
The field of activity of the company, which was founded in February 2011, is to purchase and sell the receivables with other assets of deposit banks, participation
banks and other financial institutions.
İş Faktoring A.Ş.
The field of operation of the Company, which operates in the factoring sector since 1993, is domestic and foreign factoring operations.
İş Finansal Kiralama A.Ş.
The core business activity of the Company, which was founded in 2006, is to create and develop an investment property portfolio and to invest in capital market
instruments that are based on investment properties. The Company’s shares are traded in the Borsa İstanbul A.Ş. since April 2010.
Türkiye Sınai Kalkınma Bankası A.Ş.
Türkiye Sınai Kalkınma Bankası A.Ş. (TSKB) which is an industrial development and an investment bank is founded specially to support private sector investments in
industry and to provide domestic and foreign capital to Turkish companies. The Bank’s shares are traded in the Borsa İstanbul A.Ş.
Yatırım Finansman Menkul Değerler A.Ş.
The Company was founded in 1976. The purpose of the Company is to engage in capital market operations stated in its articles of association.
Yatırım Varlık Kiralama A.Ş.
The purpose of the Company, which is founded in September 20, 2019, is to issue lease certificates exclusively within the framework of the Capital Market Law and
related legislation provisions.
The Company, whose field of activity is financial leasing within the country and abroad started its business in 1988. The Company’s shares are traded in the Borsa
İstanbul A.Ş.
VII. Existing or Potential, Actual or Legal Obstacles on the Transfer of Shareholders’ Equity between the Parent Bank and its Subsidiaries or the Reimbursement
of Liabilities
İş Gayrimenkul Yatırım Ortaklığı A.Ş.
None.
The Company, whose main field of activity is investing in real estate, capital market instruments backed by real estate, real estate projects and capital market
instruments, is conducting its business in the sector as a real estate investment trust since 1999. The Company’s shares are traded in the Borsa İstanbul A.Ş. since
its establishment.
VIII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of the Related Disclosures
The Parent Bank has written policies on assessment of ensuring compliance on market discipline, disclosure obligations, frequency and accuracy of related
disclosures. The mentioned policies which are agreed by Board of Directors can be obtained from the Parent Bank’s website.
İş Girişim Sermayesi Yatırım Ortaklığı A.Ş.
The Company, which started its venture capital business in the year 2000, aims to make long term investments in venture capital firms which established or to be
founded in Turkey, have potential development and need resources. The Company’s shares are traded in the Borsa İstanbul A.Ş. since the year 2004.
İş Portföy Yönetimi A.Ş.
The purpose of the Company, which was founded in 2000, is to engage in capital market operations stated in its articles of association. Among the capital market
operations, the company offers portfolio management and investment consulting services only to corporate investors.
İş Yatırım Menkul Değerler A.Ş.
The Company’s main field of activity is composed of intermediary, corporate finance, investment consulting and private portfolio management services. The
Company’s shares are traded in the Borsa İstanbul A.Ş. since May 2007.
İş Yatırım Ortaklığı A.Ş.
The aim of the Company, which was founded in İstanbul in the year 1995, is to operate in capital market activities which is stated in the principal agreement, and
Company’s main field of activities is portfolio management. The Company’s shares are traded in the Borsa İstanbul A.Ş. since April 1996.
İşbank AG
İşbank AG was founded to carry out the banking transactions in Europe. İşbank AG has 11 branches in total, 10 branches in Germany and 1 branch in Netherlands.
JSC İşbank
The Bank, which was acquired in 2011 and based in Moscow, is operating banking services as; corporate banking, project finance and foreign trade financing
operations with its Moscow Branch and representative offices in St. Petersburg and Kazan.
JSC İşbank Georgia
The Bank which was established in Georgia in the third quarter of 2015, is operating banking services mainly deposit, loan and exchange transactions. As part of the
organizational structure of Parent Bank in abroad, Batumi and Tbilisi branches which were established in 2012 and 2014 respectively proceed its operations as JSC
Isbank Georgia.
Maxis Girişim Sermayesi Porföy Yönetimi A.Ş.
The purpose of the Company, which was founded in November 2017, is to establish and manage capital investment funds in accordance with the Capital Markets
Law and related legislations.
Maxis Investments Ltd.
The purpose of the Company, which was founded in England in the year 2005, is to operate in activities in foreign capital markets.
Milli Reasürans T.A.Ş.
The Company, which was founded in 1929, aims to provide reinsurance and retrocession services in foreign and domestic branches. It has 1 branch in Singapore.
320 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 321
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Türkiye İş Bankası A.Ş.
Consolidated Balance Sheet (Statement of Financial Position)
Türkiye İş Bankası A.Ş.
Consolidated Balance Sheet (Statement of Financial Position)
264,898
668,883
933,781
203,583
346,271
549,854
VIII.
FACTORING PAYABLES
SECTION TWO: CONSOLIDATED FINANCIAL STATEMENTS
ASSETS
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
THOUSAND TL
FINANCIAL ASSETS (Net)
Cash and Cash Equivalents
Cash and Balances with Central Bank
Banks
Money Market Placements
Expected Credit Loss (-)
TL
FC
Total
TL
FC
Total
92,697,746
278,601,171
371,298,917
62,727,896
125,080,583
187,808,479
23,200,606
198,923,187
222,123,793
10,540,314
85,930,760
96,471,074
17,295,382
166,725,843
184,021,225
5,566,057
66,404,333
71,970,390
2,974,478
32,220,764
35,195,242
2,815,653
19,533,980
22,349,633
V-I-a
V-I-ç
2,948,099
17,353
44,965
68,385
2,993,064
2,174,268
85,738
15,664
27,259
34,812
2,201,527
50,476
Financial Assets at Fair Value Through Profit or Loss
V-I-b
5,768,364
8,712,674
14,481,038
3,745,650
3,054,356
6,800,006
Government Debt Securities
Equity Securities
Other Financial Assets
Financial Assets at Fair Value Through Other Comprehensive
Income
Government Debt Securities
Equity Securities
Other Financial Assets
Derivative Financial Assets
519,471
6,017,710
6,537,181
168,133
573,788
741,921
2,365,686
460,774
2,826,460
1,345,669
261,922
1,607,591
2,883,207
2,234,190
5,117,397
2,231,848
2,218,646
4,450,494
V-I-d
62,974,176
46,969,483
109,943,659
48,079,020
29,748,250
77,827,270
61,246,085
39,819,974
101,066,059
46,408,231
25,355,465
71,763,696
1,463,193
6,480,626
7,943,819
1,467,206
4,046,514
5,513,720
V-I-c-i
754,600
23,995,827
24,750,427
362,912
6,347,217
6,710,129
1.4.1
Derivative Financial Assets at Fair Value Thorugh Profit or Loss
754,600
23,995,827
24,750,427
362,912
6,347,217
6,710,129
1.4.2
Derivative Financial Assets at Fair Value Thorugh Other
Comprehensive Income
0
0
0
0
0
0
Financial Assets Measured at Amortised Cost (Net)
326,322,483
307,111,279
633,433,762
263,081,358
183,553,540
446,634,898
Loans
Lease Receivables
Factoring Receivables
Other Financial Assets Measured at Amortised Cost (Net)
Government Debt Securities
Other Financial Assets
Expected Credit Loss (-)
V-I-e
292,585,111
302,937,054
595,522,165
236,661,521
178,069,783
414,731,304
V-I-e-ı
3,642,540
8,682,657
12,325,197
2,710,419
4,993,807
7,704,226
V-I-e
V-I-f
5,097,842
1,797,516
6,895,358
3,485,758
1,158,428
4,644,186
45,055,046
6,490,282
51,545,328
38,170,955
7,433,648
45,604,603
44,872,603
3,103,354
47,975,957
38,115,604
5,738,600
43,854,204
182,443
3,386,928
3,569,371
55,351
1,695,048
1,750,399
20,058,056
12,796,230
32,854,286
17,947,295
8,102,126
26,049,421
ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net)
V-I-n
888,883
Held For Sale
Discontinued Operations
EQUITY INVESTMENTS
888,883
0
21,918,409
Investments in Associates (Net)
V-I-g
316,851
Associates Accounted by using Equity Method
Unconsolidated Associates
Subsidiaries (Net)
Unconsolidated Financial Subsidiaries
Unconsolidated Non-Financial Subsidiaries
280,196
36,655
V-I-ğ
21,593,954
0
21,593,954
Joint Ventures (Net)
V-I-h
7,604
0
7,604
21,988
21,988
0
0
0
0
0
0
0
0
0
0
0
910,871
910,871
0
1,287,465
15,143
1,287,465
15,143
0
21,918,409
13,052,096
316,851
280,196
36,655
271,231
242,174
29,057
21,593,954
12,775,982
0
0
21,593,954
12,775,982
7,604
0
7,604
4,883
0
4,883
0
0
0
0
0
0
0
0
0
0
0
1,302,608
1,302,608
0
13,052,096
271,231
242,174
29,057
12,775,982
0
12,775,982
4,883
0
4,883
Joint Ventures Accounted by using Equity Method
Unconsolidated Joint Ventures
TANGIBLE ASSETS (Net)
INTANGIBLE ASSETS (Net)
Goodwill
Other
V-I-j
V-I-k
11,131,311
275,713
11,407,024
7,928,442
171,512
8,099,954
2,014,282
167,743
2,182,025
1,540,236
113,752
1,653,988
27,994
0
27,994
35,974
0
35,974
1,986,288
167,743
2,154,031
1,504,262
113,752
1,618,014
I.
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.2
1.2.1
1.2.2
1.2.3
1.3
1.3.1
1.3.2
1.3.3
1.4
II.
2.1
2.2
2.3
2.4
2.4.1
2.4.2
2.5
III.
3.1
3.2
IV.
4.1
4.1.1
4.1.2
4.2
4.2.1
4.2.2
4.3
4.3.1
4.3.2
V.
VI.
6.1
6.2
VII.
INVESTMENT PROPERTY (Net)
V-I-l
4,601,916
0
4,601,916
3,649,631
0
3,649,631
VIII.
CURRENT TAX ASSET
IX.
X.
DEFERRED TAX ASSET
OTHER ASSETS (Net)
60,343
14,476
74,819
46,085
2,838
48,923
V-I-m
V-I-o
580,561
2,538,415
3,118,976
2,324,870
1,347,866
3,672,736
62,506,945
12,950,409
75,457,354
43,766,791
8,462,159
52,228,950
I.
II.
III.
IV.
4.1
4.2
4.3
V.
5.1
5.2
VI.
VII.
7.1
7.2
LIABILITIES
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
THOUSAND TL
DEPOSITS
FUNDS BORROWED
MONEY MARKETS
SECURITIES ISSUED (Net)
Bills
Asset Backed Securities
Bonds
FUNDS
Borrower Funds
Other
FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS
TL
FC
Total
TL
FC
Total
V-II-a
V-II-c
165,520,943
452,158,260
617,679,203
133,332,439
248,360,954
381,693,393
6,019,498
122,904,185
128,923,683
4,434,966
73,167,922
77,602,888
42,829,398
10,908,455
53,737,853
19,985,947
5,998,700
25,984,647
V-II-ç
8,784,977
39,292,335
48,077,312
7,134,909
32,364,397
39,499,306
5,999,193
757,078
0
0
5,999,193
5,095,133
757,078
377,032
0
0
5,095,133
377,032
2,028,706
39,292,335
41,321,041
1,662,744
32,364,397
34,027,141
11,191
11,191
0
0
680,513
680,513
691,704
691,704
0
0
0
0
6,275
6,275
0
0
115,830
115,830
122,105
122,105
0
0
0
0
DERIVATIVE FINANCIAL LIABILITIES
V-II-b-g
7,097,196
6,981,331
14,078,527
1,514,236
7,340,198
8,854,434
Derivative Financial Liabilities at Fair Value Thorugh Profit or Loss
7,097,196
6,981,331
14,078,527
1,514,236
7,340,198
8,854,434
Derivative Financial Liabilities at Fair Value Thorugh Other
Comprehensive Income
IX.
X.
10.1
10.2
10.3
10.4
XI.
XII.
XIII.
13.1
13.2
XIV.
14.1
14.2
XV.
XVI.
16.1
16.2
LEASE PAYABLES
PROVISIONS
Restructuring Provisions
Reserve for Employee Benefits
Insurance Technical Provisions (Net)
Other Provisions
CURRENT TAX LIABILITIES
DEFERRED TAX LIABILITIES
LIABILITIES RELATED TO ASSETS HELD FOR SALE AND
DISCONTINUED OPERATIONS
Held For Sale
Discontinued Operations
SUBORDINATED DEBT
Loans
Other Debt Instruments
OTHER LIABILITIES
SHAREHOLDERS' EQUITY
Paid-in capital
Capital Reserves
16.2.1
Share Premium
16.2.2
Share Cancellation Profits
16.2.3
Other Capital Reserves
16.3
16.4
Accumulated Other Compherensive Income or Loss Not Reclassified
Through Profit or Loss
Accumulated Other Compherensive Income or Loss Reclassified
Through Profit or Loss
16.5
Profit Reserves
16.5.1
Legal Reserves
16.5.2
Status Reserves
16.5.3
Extraordinary Reserves
16.5.4
Other Profit Reserves
16.6
Profit or Loss
16.6.1
Prior Periods' Profit or Loss
16.6.2
Current Period Profit or Loss
16.7
Minority Shareholder
V-II-f
V-II-ğ
V-II-h
V-II-h
V-II-ı
0
0
0
0
0
0
0
0
0
0
0
0
983,934
255,780
1,239,714
756,372
162,368
918,740
27,864,420
7,744,897
35,609,317
20,036,922
3,990,144
24,027,066
0
0
0
0
0
0
2,572,040
4,391
2,576,431
1,618,739
2,192
1,620,931
12,951,315
6,572,513
19,523,828
9,987,925
3,382,651
13,370,576
12,341,065
1,167,993
13,509,058
8,430,258
605,301
9,035,559
2,537,054
24,082
2,561,136
2,836,995
14,987
2,851,982
120,438
4,511
124,949
138,027
6,404
144,431
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
V-II-i
2,296,445
39,182,832
41,479,277
2,286,510
22,139,611
24,426,121
0
0
0
0
0
0
2,296,445
39,182,832
41,479,277
2,286,510
22,139,611
24.426.121
V-II-e
V-II-j
74,142,355
9,890,864
84,033,219
50,970,159
6,195,271
57,165,430
98,923,927
-2,755,748
96,168,179
74,597,926
263,794
74,861,720
4,500,000
1,203,468
143,633
0
1,059,835
0
0
0
0
0
4,500,000
4,500,000
1,203,468
1,216,307
143,633
124,549
0
0
1,059,835
1,091,758
0
0
0
0
0
4,500,000
1,216,307
124,549
0
1,091,758
8,054,093
100
8,054,193
4,649,809
100
4,649,909
11,320,953
-3,031,910
8,289,043
4,698,746
-60,675
4,638,071
51,379,015
4,619
51,383,634
44,060,209
4,619
44,064,828
5,832,370
1,930
5,834,300
5,335,033
1,930
5,336,963
225,558
0
225,558
178,599
0
178,599
45,321,087
2,689
45,323,776
38,546,577
2,689
38,549,266
0
0
0
0
0
0
13,085,039
417,874
13,502,913
8,153,556
225,331
8.378.887
-263,478
225,331
-38,147
1,586,175
137,270
1,723,445
13,348,517
192,543
13,541,060
6,567,381
88,061
V-II-k
9,381,359
-146,431
9,234,928
7,319,299
94,419
6,655,442
7,413,718
TOTAL ASSETS
522,722,879
601,681,194
1.124.404.073
399,404,870
318,747,393
718,152,263
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
437,131,776
687,272,297
1,124,404,073
318,031,683
400,120,580
718.152.263
322 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 323
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Türkiye İş Bankası A.Ş.
Consolidated statement of off-balance sheet items
Türkiye İş Bankası A.Ş.
Consolidated statement of off-balance sheet items
OFF BALANCE SHEET ITEMS
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
OFF BALANCE SHEET ITEMS
Footnotes
CURRENT PERIOD (31/12/2021)
PRIOR PERIOD (31/12/2020)
TL
FC
Total
TL
FC
Total
TL
FC
Total
TL
FC
Total
THOUSAND TL
THOUSAND TL
A. OFF-BALANCE SHEET CONTINGENCIES and
COMMTMENTS (I+II+III)
302.695.310
836.880.350
1.139.575.660
229.466.822
482.447.565
711.914.387
GUARANTEES AND SURETYSHIPS
V-III
46.412.927
153.202.866
199.615.793
40.128.375
82.758.032
122.886.407
Letters of Guarantee
46.048.608
86.618.355
132.666.963
39.563.027
48.508.183
88.071.210
Guarantees Subject to State Tender Law
865.540
764.138
1.629.678
687.709
535.767
1.223.476
Guarantees Given for Foreign Trade Operations
4.204.824
46.612.126
50.816.950
4.416.349
24.324.692
28.741.041
Other Letters of Guarantee
Banks Acceptanees
Import Letter of Acceptance
Other Bank Acceptances
Letters of Credit
Documentary Letters of Credit
Other Letters of Credit
Prefinancing Given as Guarantee
Endorsements
Endorsements to the Central Bank of Tureky
Other Endorsements
Purchase Guarantees for Securities Issued
Factoring Guarantees
Other Guarantees
Other Suretyships
COMMITMENTS
Irrevocable Commitments
Forward Asset Purchase Commitments
Forward Asset Purchase Commitments
Capital Commitments to Associates and Subsidiaries
Loan Granting Commitments
Securities Underwriting Commitments
Commitments for Reserve Deposit Requirements
Commitments for Cheque Payments
Tax and Fund Liabilities from Export Commitments
Commitments for Credit Card Expenditure Limits
Commitments for Credit Card and Banking Services
Promotions
Receivables from Short Sale Commitments
Payables from Short Sale Commitments
Other Irrevocable Commitments
Revocable Commitments
0
111.350
244.637
191.272
53.365
0
0
0
0
0
0
40.978.244
39.242.091
80.220.335
34.458.969
23.647.724
58.106.693
111.350
13.694.523
13.805.873
84.800
8.965.543
9.050.343
582.983
582.983
0
387.585
387.585
13.111.540
13.222.890
84.800
8.577.958
8.662.758
48.629.112
48.873.749
454.945
22.138.966
22.593.911
34.944.022
35.135.294
435.024
16.428.961
16.863.985
13.685.090
13.738.455
19.921
5.710.005
5.729.926
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
9.355
16.248
0
0
0
0
0
0
0
0
0
0
0
0
9.355
3.145.340
3.161.588
0
0
8.332
0
4.260.876
4.269.208
0
0
101.316.731
55.685.820
157.002.551
72.767.824
26.364.767
99.132.591
99.221.331
36.748.294
135.969.625
71.400.021
14.882.602
86.282.623
9.373.110
18.354.232
27.727.342
2.250.035
4.322.672
6.572.707
0
0
0
0
157.380
157.380
0
0
0
0
127.172
127.172
34.174.955
1.702.867
35.877.822
24.688.380
1.009.173
25.697.553
0
0
3.291.900
41.377
46.524.830
208.406
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3.291.900
2.641.068
41.377
26.068
46.524.830
37.915.127
208.406
179.370
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2.641.068
26.068
37.915.127
179.370
0
0
5.606.753
16.533.815
22.140.568
3.699.973
9.423.585
13.123.558
2.095.400
18.937.526
21.032.926
1.367.803
11.482.165
12.849.968
Revocable Loan Granting Commitments
2.045.400
18.937.526
20.982.926
1.302.803
11.482.165
12.784.968
Other Revocable Commitments
50.000
0
50.000
65.000
0
65.000
DERIVATIVE FINANCIAL INSTRUMENTS
154.965.652
627.991.664
782.957.316
116.570.623
373.324.766
489.895.389
Derivative Financial Instruments Held for Risk Management
Fair Value Hedges
Cash Flow Hedges
Net Foreign Investment Hedges
0
0
0
0
27.012.103
27.012.103
27.012.103
27.012.103
0
0
0
0
0
0
0
0
19.840.766
19.840.766
19.840.766
19.840.766
0
0
0
0
I.
1.1
1.1.1
1.1.2
1.1.3
1.2
1.2.1
1.2.2
1.3
1.3.1
1.3.2
1.4
1.5
1.5.1
1.5.2
1.6
1.7
1.8
1.9
II.
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.1.6
2.1.7
2.1.8
2.1.9
2.1.10
2.1.11
2.1.12
2.1.13
2.2
2.2.1
2.2.2
III.
3.1
3.1.1
3.1.2
3.1.3
3.2
3.2.1
Derivative Financial Instruments Held for Trading
154.965.652
600.979.561
755.945.213
116.570.623
353.484.000
470.054.623
Forward Foreign Currency Buy/Sell Transactions
15.504.070
58.953.279
74.457.349
8.922.687
41.994.015
50.916.702
3.2.1.1
Forward Foreign Currency Buy Transactions
11.384.803
25.669.590
37.054.393
6.936.738
18.551.563
25.488.301
3.2.1.2
Forward Foreign Currency Sell Transactions
4.119.267
33.283.689
37.402.956
1.985.949
23.442.452
25.428.401
3.2.2
Currency and Interest Rate Swaps
127.095.137
489.865.606
616.960.743
101.415.909
273.410.206
374.826.115
3.2.2.1
Currency Swap Buy Transactions
3.2.2.2
Currency Swap Sell Transactions
3.2.2.3
Interest Rate Swap Buy Transactions
3.2.2.4
Interest Rate Swap Sell Transactions
9.433.744
177.256.130
186.689.874
6.088.408
96.398.304
102.486.712
116.999.171
81.523.710
198.522.881
93.752.701
29.719.050
123.471.751
331.111
331.111
115.542.883
115.873.994
787.400
73.646.426
74.433.826
115.542.883
115.873.994
787.400
73.646.426
74.433.826
3.2.3
Currency, Interest Rate and Seurity Options
8.943.556
21.274.918
30.218.474
2.003.720
14.257.333
16.261.053
3.2.3.1
Currency Call Options
3.2.3.2
Currency Put Options
3.2.3.3
Interest Rate Call Options
3.2.3.4
Interest Rate Put Options
3.2.3.5
Securities Call Options
3.2.3.6
Securities Put Options
3.2.4
Currency Futures
3.2.4.1
Currency Buy Futures
3.2.4.2
Currency Sell Futures
3.2.5
Interest Rate Futures
3.2.5.1
Interest Rate Buy Futures
3.2.5.2
Interest Rate Sell Futures
3.2.6
Other
4.557.856
6.309.858
10.867.714
1.023.470
3.069.627
4.093.097
4.026.900
6.553.948
10.580.848
707.100
3.346.049
4.053.149
0
0
36.407
322.393
760.477
40.052
720.425
0
0
0
4.205.556
4.205.556
4.205.556
4.205.556
0
0
3.920.016
3.920.016
3.920.016
3.920.016
0
0
36.407
322.393
121.010
152.140
0
1.625
121.010
153.765
1.540.698
2.301.175
3.156.514
2.794.386
5.950.900
1.481.995
1.522.047
507.826
2.647.387
3.155.213
58.703
779.128
2.648.688
146.999
2.795.687
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2.662.412
29.345.060
32.007.472
1.071.793
21.028.060
22.099.853
B. CUSTODY AND PLEDGES RECEIVED (IV+V+VI)
920.628.913
1.629.649.597
2.550.278.510
728.033.002
906.245.389
1.634.278.391
ITEMS HELD IN CUSTODY
Customers' Securities Held
101.820.670
125.221.499
227.042.169
86.312.364
73.210.438
159.522.802
0
0
0
0
0
0
Investment Securities Held in Custody
73.423.758
8.234.913
81.658.671
67.013.035
6.643.025
73.656.060
Cheques Received for Collection
24.886.014
68.776.278
93.662.292
15.972.224
37.840.329
53.812.553
Commercial Notes Received For Collection
2.994.936
26.962.386
29.957.322
2.873.548
17.306.337
20.179.885
Other Assets Received For Collection
Assets Received for Public Offering
Other Items Under Custody
Custodiands
PLEDGED ITEM
Marketable Securities
Guarantee Notes
Commodity
Warranty
Real Estates
Other Pledged Items
Pledged Items-Depository
ACCEPTED BILL, GUARANTEES AND SURETIES
0
0
0
0
0
0
0
0
0
0
0
0
515.962
21.247.922
21.763.884
453.557
11.420.747
11.874.304
0
0
0
0
0
0
818.808.243
1.504.428.098
2.323.236.341
641.720.638
833.034.951
1.474.755.589
55.405.889
148.526.695
203.932.584
47.823.113
78.780.877
126.603.990
15.393.327
58.309.803
73.703.130
11.883.928
28.867.329
40.751.257
167.725.673
118.466.297
286.191.970
131.913.263
53.111.124
185.024.387
0
0
0
0
0
0
407.968.742
739.657.751
1.147.626.493
352.717.245
432.859.911
785.577.156
172.314.612
439.467.552
611.782.164
97.383.089
239.415.710
336.798.799
0
0
0
0
0
0
0
0
0
0
0
0
IV.
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
V.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
VI.
TOTAL OFF-BALANCE SHEE COMMITMENTS (A+B)
1.223.324.223
2.466.529.947
3.689.854.170
957.499.824
1.388.692.954
2.346.192.778
324 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 325
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Türkiye İş Bankası A.Ş.
Consolidated Statement of Profit or Loss
INCOME STATEMENT
I.
1.1
1.2
1.3
1.4
1.5
1.5.1
1.5.2
1.5.3
1.6
1.7
II.
2.1
2.2
2.3
2.4
2.5
2.6
III.
IV.
4.1
4.1.1
4.1.2
4.2
4.2.1
4.2.2
V.
VI.
6.1
6.2
6.3
VII.
VIII.
IX.
X.
XI.
XII.
XIII.
XIV.
XV.
XVI.
XVII.
XVIII.
18.1
18.2
18.3
XIX.
XX.
20.1
20.2
20.3
XXI.
21.1
21.2
21.3
XXII.
XXIII.
23.1
23.2
23.3
XXIV.
XXV.
25.1
25.2
INTEREST INCOME
Interest Income on Loans
Interest Income on Reserve Deposits
Interest Income on Banks
Interest Income on Money Market Placements
Interest Income on Marketable Market Placements
Financial Assets at Fair Value Through Profit or Loss
Financial Assets at Fair Value Through Other Compherensive Income
Financial Assets at Measured at Amortised Cost
Financial Lease Income
Other Interest Income
INTEREST EXPENSE (-)
Interest on Deposits
Interest on Funds Borrowed
Interest on Money Market Funds
Interest on Securities Issued
Financial Lease Expense
Other Interest Expenses
NET INTEREST INCOME (I - II)
NET FEES AND COMMISSIONS INCOME
Fees and Commissions Received
Non-cash Loans
Other
Fees and Commissions Paid (-)
Non-cash Loans
Other
DIVIDEND INCOME
TRADIG INCOME/(LOSS) (Net)
Gains/(Losses) on Securities Trading
Derivative Financial Transactions Gains/Losses
Foreign Exchange Gains/(Losses)
OTHER OPERATING INCOME
GROSS OPERATING INCOME (III+IV+V+VI+VII)
EXPECTED CREDIT LOSS (-)
OTHER PROVISION EXPENSES (-)
PERSONNEL EXPENSE (-)
OTHER OPERATING EXPENSES (-)
NET OPERATING INCOME/(LOSS) (VIII-IX-X-XI-XII)
AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER
PROFIT/LOSS FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD
NET MONETARY POSITION GAIN/LOSS
PROFIT/LOSS ON CONTUNUING OPERATIONS BEFORE K/Z (XIII+...+XVI)
TAX PROVISION FOR CONTINUING OPERATIONS (±)
Current Tax Provision
Deferred Tax Income Effect (+)
Deferred Tax Expense Effect (-)
NET PERIOD PROFIT/LOSS FROM CONTUNUING OPERATIONS (XVII±XVIII)
INCOME ON DISCONTINUED OPERATIONS
Income on Assets Held for Sale
Gain on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Other expense on Discontinued Operations
EXPENSE ON DISCONTINUED OPERATIONS (-)
Expense on Assets Held For Sale
Loss on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Other expense on Discontinued Operations
PROFIT/LOSS ON DISCONTINUED OPERATIONS BEFORE TAX (XX-XXI)
TAX PROVISION FOR DISCONTINUED OPERATIONS (±)
Current Tax Provision
Deferred Tax Expense Effect (+)
Deferred Tax Income Effect (-)
NET PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XXII±XXIII)
NET PERIOD PROFIT/LOSS (XIX+XXIV)
Group's Profit/Loss
Non-controlling Interest Profit / Loss (-)
Earnings per Share (*)
(*) Expressed in Exact TL.
326 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Footnotes
V-IV-a
V-IV-b
V-IV-c
V-IV-ç
V-IV-d
V-IV-e
V-IV-e
V-IV-f
V-IV-g
V-IV-ğ
V-IV-h
V-IV-g
V-IV-ğ
V-IV-h
V-IV-ı
Türkiye İş Bankası A.Ş.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
THOUSAND TL
CURRENT PERIOD
(01/01-31/12/2021)
PRIOR PERIOD
(01/01-31/12/2020)
PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
THOUSAND TL
CURRENT PERIOD
(01/01-31/12/2021)
PRIOR PERIOD
(01/01-31/12/2020)
69,449,187
48,414,707
850,107
686,021
401,957
17,499,167
168,216
10,801,345
6,529,606
887,340
709,888
32,530,364
18,048,238
2,612,115
5,396,609
6,048,417
163,612
261,373
36,918,823
6,691,855
10,490,764
1,327,072
9,163,692
3,798,909
12,754
3,786,155
68,548
703,452
1,882,678
-179,759
-999,467
16,883,690
61,266,368
12,667,759
4,142,731
7,715,533
22,665,876
14,074,469
0
4,874,850
0
18,949,319
3,389,061
2,621,921
3,774,382
3,007,242
15,560,258
0
0
0
0
0
0
0
0
0
0
0
0
0
47,960,977
34,768,023
84,960
488,822
116,834
11,565,656
58,357
7,008,929
4,498,370
543,503
393,179
18,898,262
9,483,464
2,344,979
1,584,227
4,733,389
146,707
605,496
29,062,715
4,919,413
7,381,481
1,150,770
6,230,711
2,462,068
6,232
2,455,836
31,057
-1,206,769
1,228,185
-10,138,921
7,703,967
11,733,929
44,540,345
11,379,112
2,770,928
6,301,193
14,877,965
9,211,147
0
1,455,956
0
10,667,103
2,915,351
4,778,594
1,206,397
3,069,640
7,751,752
0
0
0
0
0
0
0
0
0
0
0
0
0
0
15,560,258
13,541,060
2,019,198
0.120362571
0
7,751,752
6,655,442
1,096,310
0.059158301
I.
II.
2.1
2.1.1
2.1.2
2.1.3
2.1.4
2.1.5
2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.2.6
PROFIT/LOSS FOR THE PERIOD
OTHER COMPREHENSIVE INCOME
Other comprehensive income that will not be reclassified to profit or loss
Revaluation Surplus on Tangible Assets
Revaluation Surplus on Intangible Assets
Gains/(Losses) on remeasurements of Defined Benefit Plans
Other Income/Expense Items of Other Comprehensive Income not to be Reclassified
to Profit or Loss
Taxes Relating to Components of Other Comprehensive Income not to be
Reclassified to Profit or Loss
Other Income/Expense Items not be reclassified to profit or loss
Exchange Differences on Translation
Valuation and/or Reclassification Profit or Loss from Financial Assets at Fair Value
through Other Comprehensive Income
Income/(Loss) Related with Cash Flow Hedges
Income/(Loss) Related with Hedges of Net Investments in Foreign Operations
15,560,258
7,207,376
3,824,663
2,692,577
-732,441
1,888,340
-23,813
3,382,713
1,796,559
-1,414,575
Other Income/Expense Items of Other Comprehensive Income to be Reclassified to
Other Profit or Loss
2,760,779
Taxes Relating to Components of Other Comprehensive Income to be Reclassified to
Profit or Loss
239,950
III.
TOTAL COMPREHENSIVE INCOME (I+II)
22,767,634
7,751,752
1,540,414
-195,473
-17,267
-73,754
-121,372
16,920
1,735,887
607,580
1,079,211
262,834
-213,738
9,292,166
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 327
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II
2.1
2.2
III
IV
V
VI
VII
VIII
IX
X
XI
11.1
11.2
11.3
I
II
2.1
2.2
III
IV
V
VI
VII
VIII
IX
X
XI
11.1
11.2
11.3
Türkiye İş Bankası A.Ş.
Consolidated Statement of Changes in Shareholders' Equity
Türkiye İş Bankası A.Ş.
Consolidated Statement of Changes in Shareholders' Equity
CHANGES IN SHAREHOLDERS' EQUITY
Footnotes
Paid-in Capial
Share Premium
PRIOR PERIOD ( 31/12/2020 )
V-V
Accumulated Other Comprehensive Income that will
not be reclassified in Profit/(Loss)
Accumulated Other Comprehensive Income that will be reclassified in
Profit/(Loss)
Share
Certificate
Cancellation
Profits
Other Capital
Reserves
Tangable
assets
accumulated
revaluation
reserve
increase/
(Decrease)
Accumulated
gains/(losses) on
remeasurements
of defined benefit
plans
Other (1)
Exchange differences
on translation
reserve
Accumulated gains/
(losses) due to
revaluation and/
or reclassification
of financial assets
measured at fair
value through other
comprehensive income
Other (2)
Profit Reserves
Prior Period Profit
/ (Loss)
Net Current Period
Profit / (Loss)
Total Shareholder's
Equity Except
Non-controlling
Interest
Non-controlling
Interest
Total Shareholder's
Equity
Beginning Balance
4,500,000
39,250
1,087,620
3,466,783
-243,042
1,566,614
1,461,737
477,022
1,021,753
36,844,887
8,413,254
58,635,878
7.065,589
65,701,467
Adjustment in accordance with TAS 8
The Effect on Adjustments
The Effect of Changes in Accounting Policies
New Balance (I+II)
Total Comprehensive Income
Capital Increase in Cash
Capital Increase Through Internal Reserves
Paid-in Capital Inflation adjustment difference
Convertible Bonds
Subordinated Debt
4,500,000
39,250
1,087,620
3,466,783
-243,042
1,566,614
1,461,737
477,022
1,021,753
36,844,887
8,413,254
58,635,878
7.065,589
65,701,467
-15,212
-59,386
-121,621
608,621
799,041
263,864
6,655,442
8,130,749
1.161,417
9,292,166
Increase/(Decrease) Through Other Changes (*)
85,299
4,138
56,622
-852
3
-3,446
9,708
-229
200,680
315,510
Profit Distribution
Dividend Paid
Transfer to Reserves
Other (**)
7,019,261
-7,005,319
7,005,319
13,942
-7,005,319
667,433
13,942
-630,494
-182,794
-190,292
36,939
-168,852
-190,292
13,942
7,498
21,440
Ending Balance (III+IV+…...+X+XI)
4,500,000
124,549
0
1,091,758
3,508,193
-303,280
1,444,996
2,066,912
1,285,771
1,285,388
44,064,828
1,723,445
6,655,442
67,448,002
7,413,718
74,861,720
CURRENT PERIOD ( 31/12/2021 )
Beginning Balance
Adjustment in accordance with TAS 8
The Effect on Adjustments
The Effect of Changes in Accounting Policies
New Balance (I+II)
Total Comprehensive Income
Capital Increase in Cash
Capital Increase Through Internal Reserves
Paid-in Capital Inflation adjustment difference
Convertible Bonds
Subordinated Debt
4,500,000
124,549
1,091,758
3,508,193
-303,280
1,444,996
2,066,912
1,285,771
1,285,388
44,064,828
8,378,887
67,448,002
7,413,718
74,861,720
4,500,000
124,549
1,091,758
3,508,193
-303,280
2,085,048
-579,952
1,444,996
1,888,340
2,066,912
1,794,485
1,285,771
-902,173
1,285,388
2,757,991
44,064,828
8,378,887
13,541,060
67,448,002
20,584,799
7,413,718
2,182,835
74,861,720
22,767,634
Increase/(Decrease) Through Other Changes (*)
19,084
-31,923
10,816
32
18
651
Profit Distribution
Dividend Paid
Transfer to Reserves
Other (**)
22,664
7,296,142
7,281,290
14,852
Ending Balance (III+IV+…...+X+XI)
4,500,000
143,633
0
1,059,835
5,604,057
-883,232
3,333,368
3,861,415
384,249
4,043,379
51,383,634
-340,005
-8,077,029
-661,415
-7,281,290
-134,324
-38,147
-318,663
-780,887
-661,415
-70,178
-291,447
-299,226
-388,841
-1,072,334
-960,641
-119,472
7,779
-111,693
13,541,060
86,933,251
9,,234,928
96,168,179
(1) Other Comprehensive Income of Associates and Joint Ventures Accounted for Using Equity Method that will not be Reclassified to Profit or Loss and Other Accumulated
Amounts of Other Comprehensive Income that will not be Reclassified to Profit or Loss.
(2) Accumulated gains/(losses) on cash flow hedges, Other Comprehensive Income of Associates and Joint Ventures Accounted for using equity method that will be
classified to Profit/(Loss), Other Accumulated Amounts of Other Comprehensive Income that will be reclassified to Profit or Loss.
(*) Includes changes in the Group Shares.
(**) In Accordance with TMS 19 "Benefits to Employees", the provisions allocated in the relevant period for the dividend to be distributed to the personnel were added to the
distributable profit figure. In the current period, the amount of dividends distributed to bank personnel according to the main contract of the parent Bank is also included.
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Unconsolidated Statement of Cash Flows
Türkiye İş Bankası A.Ş.
Consolidated Statement of Profit Distribution Table
CASH FLOWS FROM BANKING OPERATIONS
I.
DISTRIBUTION OF CURRENT YEAR PROFIT (1)
Footnotes
CURRENT PERIOD
(01/01-31/12/2021)
PRIOR PERIOD
(01/01-31/12/2020)
THOUSAND TL
THOUSAND TL
CURRENT PERIOD
(31/12/2021)
PRIOR PERIOD
(31/12/2020)
Net Cash Provided from Investing Activities
-10,310,109
-19,012,653
II.
DISTRIBUTION FROM RESERVES
A.
1.1
1.1.1
1.1.2
1.1.3
1.1.4
1.1.5
1.1.6
1.1.7
1.1.8
1.1.9
I.
B.
II.
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
C.
III.
3.1
3.2
3.3
3.4
3.5
3.6
IV.
V.
VI.
Operating Profit Before Changes in Operating Assets and Liabilities
24,798,475
34,258,222
Interest Received
Interest Paid
Dividend Received
Fees and Commissions Received
Other Income
Collections from Previously Written off Loans and Other Receivables
Cash Payments to Personnel and Service Suppliers
Taxes Paid
Other
61,253,858
-31,171,346
356,764
10,490,764
8,259,735
3,082,969
-12,745,696
-4,041,939
-10,686,634
V-VI
41,826,344
-18,786,386
252,256
7,381,481
8,424,385
1,689,749
-10,687,883
-4,107,184
8,265,460
1.2
Changes in Operating Assets and Liabilities
79,558,425
-6,144,854
1.2.1
1.2.2
1.2.3
1.2.4
1.2.5
1.2.6
1.2.7
1.2.8
1.2.9
1.2.10
Net (Increase) / Decrease in Financial Assets at Fair Value Through Profit or Loss
Net (Increase) / Decrease in Due From Banks
Net (Increase) / Decrease in Loans
Net (Increase) / Decrease in Other Assets
Net (Increase) / Decrease in Bank Deposits
Net (Increase) / Decrease in Other Deposits
Net (Increase) / Decrease in Financial Liabilities at Fair Value Through Profit or Loss
Net (Increase) / Decrease in Funds Borrowed
Net (Increase) / Decrease in Matured Payables
Net (Increase) / Decrease in Other Liabilities
-5,146,832
-12,513,917
-63,596,525
-17,844,555
-1,053,465
127,371,908
0
3,054,383
0
49,287,428
V-VI
-1,588,087
-4,283,288
-49,982,247
-13,220,708
-620,878
40,951,637
0
-10,764,225
0
33,362,942
Net Cash Provided From Banking Operations
104,356,900
28,113,368
CASH FLOWS FROM INVESTING ACTIVITIES
Cash Paid for the Purchase of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Cash Obtained from sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures)
Cash Paid for the Purchase of Tangible Asset
Cash Obtained from sale of Tangible Asset
Cash Paid for the Purchase of Financial Assests at Fair Value Through Other Comprehensive Income
Cash Obtained from sale of Financial Assests at Fair Value Through Other Comprehensive Income
Cash Paid for Purchase of Financial Assests Measured at Amortised Cost
Cash Obtained from sale of Financial Assests Measured at Amortised Cost (*)
Other
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided from financing activities
Cash Obtained from funds borrowed and securities issued
Cash used for repayment of funds borrowrd and securities issued
Equity Instrumens
Dividends Paid
Payments for Finance Leases
Other
Effect of Change in foreign exchange rare on cash and cash equivalents
-5,113
0
-830,154
423,335
-44,706,318
35,474,175
-16,224,952
16,481,168
-922,250
-33,500
-24,025
-813,821
322,076
-32,201,013
23,640,507
-16,459,781
7,309,408
-752,504
-12,728,598
-3,278,734
20,594,682
-31,720,839
0
-1,094,965
-507,476
0
28,363,295
-31,014,962
0
-190,292
-436,775
0
-1,317,136
-1,239,044
V-VI
V-VI
V-VI
Net increase in cash and cash equivalents
80,001,057
4,582,937
Cash and cash equivalents at beginning of the period
52,321,545
47,738,608
VII.
Cash and cash equivalents at end of the period
132,322,602
52,321,545
(*) Includes Redeemed Financial Assets measured at amortized cost.
1.1
1.2
1.2.1
1.2.2
1.2.3
A.
1.3
1.4
1.5
B.
1.6
1.6.1
1.6.2
1.6.3
1.6.4
1.6.5
1.7
1.8
1.9
1.9.1
1.9.2
1.9.3
1.9.4
1.9.5
1.10
1.11
1.12
1.13
CURRENT PERIOD PROFIT (2)
TAXES AND DUES PAYABLE (-)
Corporate Tax (Income Tax)
Income Tax Withholding
Other Taxes and Dues Payable (3)
NET PROFIT FOR THE PERIOD (1.1-1.2)
PRIOR YEARS LOSSES (-)
FIRST LEGAL RESERVES (-)
OTHER STATUTORY RESERVES (-)
NET PROFIT ATTRIBUTABLE TO [(A-(1.3+1.4+1.5)]
First Dividend to Shareholders (-)
To Owners of Ordinary Shares
To Owners of Preffered Shares
To Preffered Shares (Preemptive Rights)
To Profit Sharing Bonds
To Holders of Profit / Loss Share Certificates
DIVIDENDS TO PERSONNEL (-)
DIVIDENDS TO THE BOARD OF THE DIRECTORS (-)
SECOND DIVIDEND TO SHAREHOLDERS (-)
To Owners of Ordinary Shares
To Owners of Privileged Shares
To Owners of Preffered Shares
To Profit Sharing Bonds
To Holders of Profit / Loss Share Certificates
STATUTORY RESERVES (-)
EXTRAORDINARY RESERVES
OTHER RESERVES
SPECIAL FUNDS
2.1
2.2
2.2.1
2.2.2
2.2.3
2.2.4
2.2.5
2.3
2.4
III.
3.1
3.2
3.3
3.4
IV.
4.1
4.2
4.3
4.4
DISTRIBUTED RESERVES
DIVIDENDS TO SHAREHOLDERS (-)
To Owners of Ordinary Shares
To Owners of Privileged Shares
To Owners of Preffered Shares
To Profit Sharing Bonds
To Holders of Profit / Loss Share Certificates
DIVIDENDS TO PERSONNEL (-)
DIVIDENDS TO THE BOARD OF DIRECTORS (-)
EARNINGS PER SHARE
TO OWNERS OF ORDINARY SHARES (4)
TO OWNERS OF ORDINARY SHARES ( % )
TO OWNERS OF PREFERRED SHARES (4)
TO OWNERS OF PREFERRED SHARES ( % )
DIVIDEND PER SHARE
TO OWNERS OF ORDINARY SHARES (4)
TO OWNERS OF ORDINARY SHARES ( % )
TO OWNERS OF PREFERRED SHARES (4)
TO OWNERS OF PREFERRED SHARES ( % )
15,475,881
2,007,986
1,057,464
46,314
904,208
13,467,895
0
0
0
13,467,895
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.1197
299
0
0
0
0
0
0
8,861,814
2,044,635
3,788,280
35,506
-1,779,151
6,817,179
0
392,297
152,066
6,272,816
270,000
269,998
2
0
0
0
134,324
0
411,092
411,085
3
4
0
0
0
5,457,400
0
0
0
0
0
0
0
0
0
0
0
0.0605
151
0
0
0.0061
15
0.0018
18
(1) The decision for divdend payment is made at the Annual General Meeting. Annual General Meeting has not been held as of the reporting.
(2) Prior Periods' Profit amounting to TL 6,262 which is included to the base of profit distribution, is disclosed in the prior period's net profit amount in the statement.
(³) Deferred Tax Expense/Income.
(⁴) Expressed in exact TL.
Ersin Önder Çiftçioğlu
Member of the Board and
the Audit Committee
Yusuf Ziya Toprak
Deputy Chairperson of the Board of Directors
and Chairperson of the Audit Committee
Adnan Bali
Chairperson of the Board of Directors
Ali Tolga Ünal
Head of Financial
Management Division
Gamze Yalçın
Deputy Chief Executive
In Charge of Financial Reporting
Hakan Aran
Chief Executive Officer
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SECTION THREE: EXPLANATION ON ACCOUNTING POLICIES
I. Basis of Presentation
The consolidated financial statements, related notes and explanations in this report are prepared in accordance with the “Regulation on Accounting Applications for Banks and
Safeguarding of Documents” and other regulations on accounting records of Banks published by Banking Regulation and Supervision Agency and circulars and interpretations
published by Banking Regulation and Supervision Authority, (together referred as “BRSA Accounting and Financial Reporting Legislation”) and requirements of Turkish Financial
Reporting Standards (TFRS) published the Public Oversight Accounting and Auditing Standards Authority for the matters not regulated by the aforementioned legislations.
COVID-19 outbreak, which started in China and spread globally in the first half of 2020, caused serious effects on both economic and social life. In addition to the social life
effects of the cautions taken to ensure the control of outbreak in many countries, there are also consequences observed which is negatively affecting economic activity both
on regional and global scale. As in other countries where the pandemic is effective, various cautions also have been taken in our country in social and economic terms. The
Bank sustains its activities with the consolidated companies for the period precisely by closely monitoring the processes related to outbreak, postponing retail and non-retail
customers' due debts, restructuring with grace period and existing or additional limit allocations in respect with customers’ needs. Assessments regarding to possible effects
of the COVID-19 outbreak through the measurement of expected credit losses are explained in the Section Three “VIII. “Explanations on Impairment of Financial Assets”.
“Interest Rate Benchmark Reform- Stage 2”, brought changes in various TAS / TFRSs effective from January 1, 2021, was released in December 2020 within the scope
of the project of transition of the benchmark interest rates carried out by the International Accounting Standards Board (IASB). The effect of these changes on the Bank's
financial statements as of September 30, 2021 has been evaluated and there is no situation that requires early application by the Bank continues to perform required
studies to comply with the Interest Rate Benchmark Reform in the current year.
According to the statement made by POA on 20.01.2022, it has been stated that there is no need to make any adjustments within the scope of TAS 29 Financial Reporting
Standard in Hyperinflationary Economies in the financial statements of 2021, of enterprises that apply TFRS. In this context, while preparing the financial statements
dated 31.12.2021, no inflation adjustment was made according to TAS 29.
Additional paragraph for convenience translation to English
The differences between accounting principles, as described in these preceding paragraphs and accounting principles generally accepted in countries in which consolidated
financial statements are to be distributed and International Financial Reporting Standards (“IFRS”) have not been quantified in these consolidated financial statements.
Accordingly, these consolidated financial statements are not intended to present the financial position, results of operations and changes in financial position and cash
flows in accordance with the accounting principles generally accepted in such countries and IFRS.
The accounting policies applied in the current period are in line with the prior period financial statements. The accounting policies and the valuation principles used in the
preparation of the consolidated financial statements are presented below in detail.
II. Strategy for Use of Financial Instruments and Foreign Currency Transactions
1. The Group’s Strategy on Financial Instruments
The Group’s main financial activities comprise a wide range of activities such as banking, insurance and reinsurance services, brokerage services, investment consulting,
real estate portfolio and asset management, financial lease, factoring services, portfolio and asset management. The liabilities on the Group’s balance sheet are mainly
composed of relatively short-term deposits, parallel to general liability structure of the banking system, which is its main field of activity. As for the non-deposit liabilities,
funds are collected through medium and long-term instruments. The liquidity risk that may arise from this liability structure can be easily controlled through deposit
continuity, as well as widespread network of the correspondent banks, market maker status (The Parent Bank is one of the market maker banks) and by the use of liquidity
facilities of the Central Bank of the Republic of Turkey (CBRT). As a result, the liquidity of the Group and the banking system can be easily monitored. On the other hand,
foreign currency liquidity requirements are met by the money market operations and currency swaps.
Most of the funds collected bear fixed-interest, and by closely monitoring the developments in the sector, both fixed and floating rate placements are made based on the
yields of alternative investment instruments.
III. Information on the Consolidated Companies
1. Basis of Consolidation:
The consolidated financial statements have been prepared in accordance with the procedures and principles listed in the “Communiqué Related to Regulation on the
Preparation of the Consolidated Financial Statements of Banks” published in the Official Gazette numbered 26340 dated November 8, 2006.
a. Subsidiaries:
A subsidiary is an entity that is controlled by the Parent.
Control; is the power of the Parent Bank to appoint or remove from office the decision-taking majority of members of board of directors through direct or indirect
possession of the majority of a legal person’s capital irrespective of the requirement of owning minimum fifty-one per cent of its capital; or by having control over the
majority of the voting right as a consequence of holding privileged shares or of agreements with other shareholders although not owning the majority of capital.
As per the “Communiqué Related to the Preparation of Consolidated Financial Statements of Banks” published in the Official Gazette numbered 26340 dated November 8,
there is no subsidiary or financial institution that is not included in the scope of consolidation as of the current period. Detailed information about the Bank’s subsidiaries
related to credit and financial institution is given in Section Five Note I.i.3
Under full consolidation method, the assets, liabilities, income and expenses, and off-balance sheet items of subsidiaries are combined with the equivalent items of the
Parent Bank. The book value of the Parent Bank's investment in each of the subsidiaries and the Group’s portion of equity of each subsidiary are eliminated. All significant
transactions and balances between consolidated subsidiaries are eliminated reciprocally. Non-controlling interests in the net period profit/loss and in the equity of
consolidated subsidiaries are calculated separately from the Group’s net period profit/loss and the Group’s shareholders' equity. Non-controlling interests are presented
separately in the balance sheet and in the period profit/loss statement.
In preparing its consolidated financial statements, the Bank performed necessary corrections to ensure consistency of accounting policies used by consolidated
subsidiaries. On the other hand, insurance companies under consolidation are obliged to carry their activities in accordance with the regulations and other legislations
issued by Republic of Turkey Ministry t of Treasury and Finance and in the accompanying consolidated financial statements, financial reporting presentations of these
companies are maintained in accordance with the insurance legislation.
TFRS 3 “Business Combinations” standard prescribes no depreciation to be recognized for goodwill arising on the acquisitions on or after March 31, 2004, realizing positive
goodwill as an asset and application of impairment analysis as of balance sheet dates. In the same standard, it is also required from that date onwards that the negative
goodwill, which occurs in the case of the Group’s interest in the fair value of acquired identifiable assets and liabilities exceeds the acquisition cost to be recognized in profit
or loss.
In the current period, positive consolidation goodwill amounting to TL 27,994 resulting from the acquisition of Moka Payment and Electronic Para Organization Inc. is
included in the consolidated financial statements. Positive consolidation goodwill amounting to TL 35.974 in the previous period is associated with the results accounts in
the current period.
The structured entity that is established within the Bank’s securitization loan transactions are included in the consolidated financial statement although the bank does not
have any subsidiaries.
b. Associates:
An associate is a domestic or foreign entity which the Parent Bank participates in its capital and over which it has a significant influence but no control.
Significant influence is the power to participate in the financial and operating policy of the investee. If the Parent Bank holds qualified shares in the associate, it is presumed
that the Parent Bank has significant influence unless otherwise demonstrated. A substantial or majority ownership by another investor does not necessarily preclude the
Parent Bank from having significant influence.
Some of the fixed interest liabilities that are issued/used by the Group companies are subject to fair value hedge accounting. The fair value risk of the related fixed interest
financial liabilities is protected by interest rate swaps. Explanations on hedge accounting are explained in Section Three, footnote IV.2.
Qualified share is the share that directly or indirectly constitutes ten or more than ten percent of an entity’s capital or voting rights and irrespective of this requirement,
possession of privileged shares giving right to appoint members of board of directors.
The principle of safety is prioritized in placement works, placements are directed to high yield and low risk assets by considering their maturity structures, while taking
global and national economic expectations, market conditions, expectations and tendencies of current and potential loan customers, interest rate, liquidity, currency risks
and etc, into consideration. In long term placements, a pricing policy aiming at high return is applied in general and attention is paid to maximizing non-interest income
generation opportunities. In addition, the Bank and its subsidiaries within the scope of consolidation act in parallel with these strategies and within the legal limits in
management of Financial Statements.
The primary objectives related to balance sheet components are set by the long-term plans shaped along with budgeting; and the Parent Bank takes the required positions
against the short-term currency, interest rates and price fluctuations in accordance with these plans and the course of the market conditions.
Foreign currency, interest rate and price fluctuations in the markets are monitored instantaneously. While taking positions, in addition to the legal limits, the Parent Bank’s
own transaction and control limits are also effectively monitored in order to avoid limit overrides.
The Parent Bank’s asset-liability management is executed by the Asset-Liability Management Committee, within the risk limits determined by the Board of Directors, in
order to keep the liquidity risk, interest rate risk, currency risk and credit risk within certain limits depending on the equity adequacy and to maximize profitability.
2. Foreign Currency Transactions
The financial statements of the Parent Bank’s branches and financial institutions that have been established abroad are prepared in functional currency prevailing in the
economic environment that they operate in; and when they are consolidated, they are presented in TL, which are the functional currency of the Parent Bank and also the
currency used in presentation of the financial statements.
Foreign currency monetary assets and liabilities on the balance sheet are converted into Turkish Lira by using the prevailing exchange rates at the balance sheet date.
Non-monetary items in foreign currencies carried at fair value are converted into Turkish Lira by the rates at the date of which the fair value is determined. Exchange rate
differences arising from the conversions of monetary foreign currency items and the collections of and payments in foreign currency transactions are reflected to the
income statement.
While the Parent Bank and Türkiye Sınai Kalkınma Bankası A.Ş. one of the consolidated subsidiaries, use their own foreign currency exchange rates for their foreign
currency transactions, other consolidated institutions residing domestically use the CBRT rates for their foreign currency transactions.
Assets and liabilities of the foreign branches of the Parent Bank and financial institutions that have been established abroad are converted into TL by using the prevailing
exchange rates at the balance sheet date. Income and expenses of foreign branches are converted by at exchange rates at the dates of the transactions. Incomes and
expenses of foreign financial institutions are converted into TL at average foreign currency rates of the balance sheet date as long as there is not a significant fluctuation in
currency rates during the period. The exchange rate differences arising from the conversion to TL are recognized in the shareholders’ equity.
Equity method is a method of accounting whereby the book value of the investor’s share capital in the subsidiary or the joint venture is either added to or subtracted in
proportion with investor’s share from the change in the subsidiary’s or joint venture’s equity within the period. The method also foresees that profit will be deducted from
the subsidiaries’ or joint venture’s accordingly recalculated value.
Arap-Türk Bankası A.Ş. is a subsidiary of the Bank acting as a credit institution or financial institution, is accounted under the equity method in the consolidated financial
statements according to the "Communiqué on the Preparation of Consolidated Financial Statements”. Accounting policies of Arap Türk Bankası A.Ş. are not different than
the Parent Bank’s accounting policies. Detailed information about Arap Türk Bankası A.Ş. is given in Section Five Note I.h.2.
c. Jointly controlled entities:
A joint venture is an agreement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and
obligations for its liabilities.
The Bank does not have any jointly controlled entities which are credit or financial institutions in nature and to be consolidated in the financial statements by the equity
method according to the “Regulation on Preparation of Consolidated Financial Statements of Banks”.
d. Principles applied during share transfer, merger and acquisition:
None.
2. Presentation of subsidiaries, associates and jointly controlled entities which are not credit or financial institutions in consolidated financial statements:
The subsidiaries, associates and jointly controlled entities which are not credit or financial institutions owned by the Bank and its subsidiaries are accounted accordingly to
the equity method described in TAS 28 “Investments in Associates and Joint Ventures”.
IV. Forward, Option Contracts and Derivative Instruments
Derivative transactions of the Group consist of foreign currency and interest rate swaps, forwards, foreign currency options and interest rate options. The Group has no
derivative instruments decomposed from the main contract.
The Group classifies derivative products “Derivative Financial Instruments at Fair Value through Profit or Loss” or ‘’Derivative Financial Instruments through Other
Comprehensive Income’’ according to the “TFRS 9-Financial Instruments” principles.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen 1. Derivative Financial Instruments
Derivative transactions are recorded at their fair values as of the date of the contract and receivables and payables arising from these transactions are recorded in off-
balance sheet accounts. Derivative transactions are measured at their fair values in the reporting periods after their recognition and if the valuation difference is positive,
difference is presented under the “Derivative Financial Assets at Fair Value through Profit or Loss” and if the valuation difference is negative, then it is presented under the
“Derivative Financial Liabilities at Fair Value through Profit and Loss”. The differences arising from the valuation of derivative transactions are associated with the income
statement.
On off-balance sheet items table, options which generated assets for the Group are presented under “call options” line and which generated liabilities are presented under
“put options” line.
2. Hedging Derivative Financial Instruments
TFRS 9 “Financial Instruments” rules that TAS 39 “Financial Instruments: Recognition and Measurement” value hedge accounting may continue to be implemented to
hedge the fair value changes against interest rate risk. In this context, the principles of TAS 39 regarding hedge accounting for fair value hedge accounting continue to be
applied in the accompanying financial statements.
Interest rate swaps are performed in order to hedge the changes in fair value of fixed interest rate financial instruments.
In this context, if the valuation differences of the derivative transactions are positive, they are included in “Derivative financial assets at Fair Value through Profit or Loss”
and if the valuation differences are negative, they are included in “Derivative Financial Liabilities at Fair Value through Profit or Loss”. Changes in the fair value of the fixed
rate financial liabilities subject to hedge accounting and changes in the fair value of interest rate swaps as hedging instruments are recorded under “Trading Profit/Loss” in
the income statement.
At the beginning of the hedging transaction and in each reporting period, it is expected that the hedging transaction will offset the changes in the hedged risk arising from
the hedged transaction (related to the hedged risk) and effectiveness tests are performed in this context. Efficiency tests are carried out with the “Dollar off-set method”
and the hedging accounting is continued if the efficiency is between 80% and 125%.
The hedge accounting is terminated if the hedging instrument is terminated, realized, sold or the effectiveness test is ineffective. In the case of termination of fair value
hedge accounting, the valuation effects of the fair value hedge accounting applied on the hedged financial instruments is reflected to the statement of profit or loss on a
straight-line basis over the life of the hedged financial instrument.
In some cases, restructuring, alteration or counterparty changes of contractual cash flows of loans may lead to derecognition of related loans in accordance with TFRS 9.
When the change in the financial asset results from derecognizing the existing financial asset from the financial statements and the revised financial asset is recognized
in the financial statements, the revised financial asset is considered as a new financial asset in accordance with TFRS 9. When it is determined that there are significant
changes between the new conditions of the revised financial asset and the first conditions in related agreements, the Group evaluates the new financial asset according to
the current business models. When it is determined that the contractual conditions do not only result in cash flows that include principal and interest payments at certain
dates, the financial asset is recognized at fair value and is subject to valuation. The differences arising from the valuation are reflected in the nominal accounts.
The Group recognizes loans at fair value through profit or loss, if the contractual terms of the loan, do not result in cash flows including the principal payments and interest
payments generated from principal amounts at certain dates. These loans are valued at their fair values after their recognition and the losses or gains arising from the
valuation are included in the profit and loss accounts.
2. Financial Assets at Fair Value Through Other Comprehensive Income
Financial assets at fair value through other comprehensive income are financial assets that are held under a business model that aims both to collect contractual cash
flows and to sell financial assets, and financial assets with contractual terms that lead to cash flows that are solely payments of principal and interest on the principle
amount outstanding at specific dates.
Financial assets at fair value through other comprehensive income are initially recognized at their fair value including their transaction costs on the financial statements.
The initial recognition and subsequent valuation of such financial assets, including the transaction costs, are carried out on a fair value basis and the difference between
amortized cost and the cost of borrowing instruments is recognized in profit or loss by using the effective interest method. Dividend income arising from investments in
equity instruments that are classified as at fair value through other comprehensive income is also recognized in income statements.
Gains and losses, except impairment gain or loss and foreign exchange gain or loss, arising from changes in the fair value of financial assets at fair value through other
comprehensive income are reflected to other comprehensive income until derecognized or reclassified. When the value of the financial asset is collected or financial asset
is disposed, the related fair value differences accumulated in the shareholders’ equity are transferred to the profit/loss statement.
During the initial introduction to financial statements, amendments to the fair value of an investment in an equity instrument within the framework of TFRS 9 that are not
held for trading or that are not valued in a financial statement of an entity that acquires business combinations under the “TFRS 3 Business Combinations” may be subject
to an irreversible preference regarding these amendments being accounted in other comprehensive income. In such case, dividends taken from mentioned investment will
be accounted in financial statement as profit or loss.
V. Interest Income and Expenses
3. Financial Assets Measured at Amortized Cost
Interest income is calculated by using the effective interest rate method (the rate that equals the future cash flows of a financial asset or liability to its present net book
value) to gross carrying amount of financial asset in conformity with “TFRS 9 Financial Instruments” except financial asset that is not a purchased or originated credit-
impaired financial asset but subsequently has become credit-impaired.
Under the scope of TFRS 9 application, the Group does not reverse the interest accruals and rediscounts of non-performing loans and other receivables and monitors the
related amounts under interest income and calculates expected credit loss on these amounts according to the related methodology.
VI. Fees and Commission Income and Expenses
Wages and commissions those that are not an integral part of the effective interest rate of the financial instruments measured at amortized cost are accounted for in
accordance with "TFRS 15 - Revenue from Customer Contracts". Fees and commission income and expenses are recognized either on accrual basis or by using the effective
interest method. Income earned in return for services rendered contractually or due to operations like sale or purchase of assets on behalf of a third party real person or
corporate body are recognized in income accounts in the period of collection.
VII. Financial Assets
The Bank and its companies within the scope of “TFRS 9 Financial Instruments”, classifies and accounts its financial assets as “Financial Assets at Fair Value Through Profit
or Loss”, “Financial Assets at Fair Value Through Other Comprehensive Income” or “Financial Assets at Measured at Amortized Cost” by taking into account their business
model and contractual cash flow characteristics. Financial assets are recognized or derecognized according to TFRS 9 “Recognition and Derecognition in Statement of
Financial Position” requirements. Financial asset is recognized in the statement of financial position when it becomes party to the contractual provisions of the financial
instrument. Financial assets are measured at their fair value on initial recognition in the financial statements.
The Group has three different business models for classification of financial assets;
• Business model aimed at holding financial assets in order to collect contractual cash flows: Financial assets held under the mentioned business model are managed to
collect contractual cash flows over the life of these assets. The Group manages its assets held under this portfolio in order to collect certain contractual cash flows.
• Business model aimed at collecting contracted cash flows of financial assets and selling; in this business model, the Group intends both to collect contractual cash flows
of financial assets and to sell these assets.
• Other business models; A business model in which financial assets; are not held within the scope of a business model aimed at collection of contractual cash flows and
within the scope of a business model aimed at collecting and selling contracted cash flows, are measured by reflecting fair value in profit or loss.
• The Group is able to reclassify all affected financial assets in case it changes the business model that is used for the management of financial asset.
• In the event of the termination of the rights related to the cash flows from a financial asset, the transfer of all risks and rewards of the financial asset to a significant
extent or has no longer control of the financial assets, the financial asset is derecognized.
1. Financial Assets at Fair Value Through Profit or Loss
Financial assets except financial assets measured at amortized cost or at fair value through other comprehensive income, are measured at fair value through profit or loss.
Financial assets at fair value through profit or loss are financial assets held for the purpose of generating profit from short-term fluctuations in price or similar factors in
the market or being part of a portfolio for profitability in the short term, regardless of the acquisition reason or financial assets that are not held in a business model that
aims at collecting and/or selling contractual cash flows of financial assets.
Financial assets at fair value through profit or loss are initially measured at fair value on the balance sheet and are subsequently re-measured at fair value. Gains or losses
arising from the valuation are related to profit and loss accounts.
Financial assets measured at amortized cost are those financial assets that are held within the framework of a business model aimed at collecting contractual cash flows
over the life of the asset and which result in cash flows that include principal and interest on the principal amount outstanding at specific dates. Financial assets measured
at amortized cost with the initial recognition at fair value including transaction costs are subject to valuation with their discounted cost value by using the effective interest
rate method, after eliminating any provision for impairment if there is any. Interest income measured by using the effective interest rate method are recognized in the
income statement as an “interest income”.
The Bank and subsidiaries evaluate their loans within the framework of current business models and depending on these evaluations, they can be classified as Financial
Assets measured at Amortized Cost.
VIII. Impairment of Financial Assets
In accordance with the “TFRS 9- Financial Instruments” and the regulation “Procedures and Principals regarding Classification of Loans and Allowances Allocated for
Such Loans” issued by BRSA, the Bank recognizes expected credit loss allowance on financial assets at fair value through other comprehensive income, financial assets
measured at amortized cost, impaired credit commitments and financial guarantee contracts.
Within the scope of TFRS 9, the expected credit loss is calculated according to the “three-stage” impairment model based on the change in the loan quality of financial
assets after the initial recognition and detailed in the following headings:
Stage 1:
An important determinant for calculating the expected credit loss in accordance with TFRS 9 is to assess whether there is a significant increase in the credit risk of the
financial asset. Financial assets that have not experienced a significant increase in credit risk since the initial recognition are monitored in the stage 1. Impairment for credit
risk for the Stage 1 financial assets is equal to the 12-month expected credit losses.
Based on the BRSA's decision dated 17.06.2021 and numbered 9624, until 30.09.2021, the 30-days past due period foreseen for loans, in order to be classified as Stage
2, has been to be applied as 90 days past due for Stage 1 loans. In addition, the Bank provides provisions for customers in this group with a delay of more than 30 days, in
accordance with its own risk policies and models, which also evaluate the borrower’s conditions.
The 30-days past due period foreseen for loans to be classified as Stage 2, to be applied as 90 days for Stage 1 loans until the date of 30.09.2021 in accordance with the
BRSA's decision dated 16.09.2021 and numbered 9795.
Stage 2:
Financial assets that experienced a significant increase in the credit risk since initial recognition, are transferred to Stage 2. The expected credit loss of these financial
assets are measured at an amount equal to the instrument’s lifetime expected credit loss.
In order to classify a financial asset in the Stage 2, the following criteria is considered:
• Overdue between 30-90 days
• Restructuring of the loan
• Significant deterioration in the probability of default
In other respect, the 30-days past due period foreseen for loans to be classified as Stage 2, to be applied as 90 days for Stage 1 loans until the date of 30.09.2021 in
accordance with the BRSA's decision dated 17.06.2021 and numbered 9624. For the abovementioned group with a past due date more than 90 days, the Bank allocates
provisions in accordance with its risk policies and applies grouping approach and models in which also evaluate the borrower's conditions.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen The 30-days past due period foreseen for loans to be classified as Stage 2, to be applied as 90 days for Stage 1 loans until the date of 30.09.2021 in accordance with the
BRSA's decision dated 16.09.2021 and numbered 9795.
Funds obtained from the repurchase agreements are recognized under “Funds from Repurchase Transactions” account in liabilities. For the difference between the sale and
repurchase prices determined by the repo agreements for the period; expense accrual is calculated using the effective interest rate method.
In case of a significant deterioration in the probability of default, the credit risk is considered to be increased significantly and the financial asset is classified as stage 2. The
absolute and gradual thresholds used to increase the probability of default are differentiated on the basis of portfolio and product group. In this manner, for the commercial
portfolio, definition of increase in the probability of default is the comparison between the probability of default on loan’s opening date, obtained from the integrated
rating/score based on internal rating and probability of default of the same loan on reporting date, obtained from the integrated rating/score based on internal rating. For
the individual portfolio, it is accepted that the probability of default is worsened in cases where the behavioral score falls below the thresholds determined on the basis of
the product and the probability of default exceeds the thresholds determined on the basis of the product.
Stage 3:
Financial assets with sufficient and fair information for impairment at the reporting date, are classified in the third stage. Expected credit loss of these financial assets is
measured at an amount equal to the lifetime expected credit loss. The following basic factors are considered for the classification of a financial asset in the stage 3.
• More than 90 days past due
• Whether the credit rating is weakened, has suffered a significant weakness or cannot be collected or there is a certain opinion on this matter
In other respect, based on the BRSA's decision dated 17.06.2021 and numbered 9624, the 90-days past due period for classifying loans as non-performing loans is applied
as 180 days until 30.09.2021.
Based on the BRSA's decision dated 16.09.2021 and numbered 9795, the implementation of the 90-day past due period for the classifying loans as non-performing loans
as 180 days has been terminated by the end of 30.09.2021.
While estimating the expected credit loss, statistical models, methods and tools are used in accordance with the relevant legislation and accounting standards. Expected
credit loss is measured using reasonable and supportable information by taking current and forecasts of future economic information into consideration, including
macroeconomic factors. Three scenarios, base scenario, optimistic scenario and the worst scenario, are used in forecasting studies made by macroeconomic models.
The variables used in these macroeconomic estimates include Industrial Production Index, Employment Ratio and Credit Default Swap indicators. The validity of the risk
parameter estimates used in the calculation of expected credit losses is reviewed and evaluated at least annually within the framework of model validation processes.
Macroeconomic forecasts and risk delinquency data used in risk parameter models are re-evaluated every quarter to reflect the changes in economic conjuncture and are
updated if needed. In the expected credit loss calculations, macroeconomic information is taken into account under multiple scenarios. In this framework, as a result of the
review activities carried out in June 2021, the probability of default models and macroeconomic models that associate default probabilities with macroeconomic variables
have been updated; Future estimates have also been updated. In December 2021, the macroeconomic forecasts in our Bank's Business Program for 2022, which were
approved by the Board of Directors, started to be used.
Except for demand or revolving loans, the maximum period for which expected credit losses are to be determined is the contractual life of the financial asset. For demand
or revolving loans, maturity is determined by taking the future risk mitigation processes into account such as behavioral maturity analyses performed by the Bank and
cancellation/revision of the Bank’s credit limit.
While calculating the expected credit loss, aside from assessment of whether there is a significant increase in credit risk or not, basic parameters expressed as probability
of default, loss given default and exposure at default are used.
Probability of Default: Represents the probability of default on the loan over a specified time period. In this context, the Bank has developed models to calculate 12-month
and life-time default probabilities by using internal rating based credit rating models. As for the Group Companies historical probability of default data has also been
observed.
Loss Given Default (LGD): Defined as the damage caused by the default of borrower to the total balance of the exposure at the time of default. The LGD estimates are
determined in terms of credit risk groups that are detailed in the Bank’s data resources and system facilities. The model used for the estimation of the LGD was established
by taking into account the direct cost items during the collection process based on the historical data of the Bank’s collection, and cash flows are discounted at effective
interest rates.
Exposure at Default: For cash loans, the cash balance at the date of report, for non-cash loans the balance calculated using the Credit Conversion Factor (CCF) is
represented by Exposure at Default.
Credit Conversion Factor: It is calculated for non-cash loans (undrawn limit for revolving loans, commitments, non-cash loans etc.) The historical limit usage data of the
Bank for revolving loans are analyzed and the limit amount that can be used until the moment of default is estimated. For non-cash loans, the cash conversion ratio of the
loan amount is estimated by analyzing the product type and the past compensation amount of the Group.
Credit risks, which require qualitative assessments due to their characteristics and differ followed by grouping in this manner, are considered as individual within the
internal policies. Calculations are made by the method of discounted cash flows with the effective interest rate expected from the relevant financial instrument. Discounted
cash flows are estimated for 3 different scenarios in which parameters are differentiated, and individual expected credit loss is calculated by taking into consideration the
cash deficit amounts weighted according to probabilities.
Developments recorded in the Bank, the world and the Turkish economy, and besides that, as mentioned above, the Bank allocated expected credit losses by reflecting
additional provisions through individual assessments performed for the customers that operates in sectors where the impact might be high in accordance with the Bank’s
risk policies.
Expected credit loss is reflected in the income statement. Released provisions in the current year are accounted under “Expected Credit Loss Expenses” and released
provision which is carried from the prior year are accounted under “Other Operating Income”.
Receivables evidenced through the Legal Process that collection is not possible can be written-off by fulfilling the requirements of the Tax Procedure Law. Besides, loans
for which specific provision is allocated and for which there is no reasonable expectation of recovery might be written-off.
IX. Offsetting Financial Instruments
Financial assets and financial liabilities shall be offset and the net amount shall be presented in the balance sheet only when a party currently has a legally enforceable
right to set off the recognized amounts or intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
X. Sale and Repurchase Agreements and Securities Lending Transactions
Marketable securities subject to repurchase agreements are classified under “Financial Assets at Fair Value through Profit and Loss”, “Financial Assets at Fair Value through
Other Compre hensive Income” or “Financial Assets Measured at Amortized Cost” in the portfolio and they are valued according to the valuation principles of the related
portfolios.
Reverse repo transactions are recognized under the “Receivables from Reverse Repo Transactions” account. For the difference between the purchase and resale prices
determined by the reverse repo agreements for the period, income accrual is calculated using the effective interest rate method.
XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities
Assets that meet the criteria to be classified as held for sale within the scope of “IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations” are measured
at the lower one of their fair value and their carrying amount which from the costs to sell are deducted and presented separately within the financial statements. In order
to classify a tangible fixed asset as held for sale, the asset (or the disposal group) should be available for an immediate sale in its present condition subject to the terms of
any regular sales of such assets (or such disposal groups) and the sale should be highly probable. For a highly probable sale, the appropriate level of management must be
committed to a plan to sell the asset (or the disposal group), and an active programme to complete the plan should be initiated to locate a customer. Also, the asset (or the
disposal group) should have an active market sale value, which is a reasonable value in relation to its current fair value. Events or circumstances may extend the completion
of the sale more than one year. Such assets are still classified as held for sale if there is sufficient evidence that the delay in the sale process is due to the events and
circumstances occurred beyond the control of the entity or the entity remains committed to its plan to sell the asset (or disposal group).
A discontinued operation is a component of a group that either has been disposed of or is classified as held for sale. Gains or losses relating to discontinued operations are
presented separately in the income statement.
XII. Goodwill and Other Intangible Assets
The Group’s intangible assets consist of consolidation goodwill, software programs and rights.
Goodwill arising from the acquisition of a subsidiary represents the excess of cost of acquisition over the fair value of Group’s share of the identifiable assets, liabilities, or
contingent liabilities of the acquired subsidiary at the date of acquisition of the control. Goodwill is recognized as an asset at cost and then carried at cost less accumulated
impairment losses. In impairment-loss test, goodwill is allocated between the Group’s every cash-generating unit that is expected to benefit from the synergies of the
business combination. To control whether there is an impairment loss in the cash-generating units that goodwill is allocated, impairment- loss test is applied every year
or more often if there are indications of impairment loss. In the cases, recoverable amount of cash-generating unit is smaller than its book value; impairment loss is firstly
used in reduction of book value of the cash-generating unit, and then the other assets proportionally. Goodwill which is allocated for the impairment losses could not be
reversed. When a subsidiary is to be sold, related goodwill amount is combined with the profit/loss relating to this disposal. Positive goodwill arising from the Group’s
investments in its subsidiaries is recognized in “Intangible Assets”. Explanations on consolidation goodwill are given in Section Three, Note III.1.a.As for other intangible
assets, the purchased items are presented with their acquisition costs less the accumulated amortization and impairment provisions. In case there is an indication of
impairment, the recoverable amount of the related intangible asset is estimated within the framework of TAS 36 “Impairment of Assets” and impairment provision is set
aside in case the recoverable amount is below its acquisition cost. The related assets are amortized by the straight-line method considering their estimated useful life. The
amortization method and period are periodically reviewed at the end of each year.
XIII. Tangible Assets
The Bank and Group companies follow their real estates in use, which are recorded under tangible fixed assets, according to the revaluation model within the framework of
"TAS 16 – Property, Plant and Equipment" since 2015. The positive difference between the net book value of real estate property values and the renewed expertise values
which are determined by the licensed valuation in 2021companies are recorded under the shareholders’ equity.
In case there is an indication of impairment, the recoverable amount of the related intangible asset is estimated within the framework of “TAS 36 – Impairment of Assets”
and impairment provision is set aside in case the recoverable amount is below its acquisition cost.
Tangible assets other than the land and construction in progress are amortized by the straight-line method, according to their estimated useful lives. The estimated useful
life, residual amount and the method of amortization are reviewed every year for the possible effects of the changes that occur in the estimates and if there is any change
in the estimates, they are recognized prospectively.
Assets held under finance lease are depreciated over the expected useful life of the related assets.
Assets subject to leasing are depreciated according to relevant contract periods.
Leasehold improvements are amortized in equal amounts considering their useful life. However, in any case the useful life cannot exceed leasing term. When the lease
period is not certain or longer than 5 years, the amortization period is recognized as 5 years.
The difference between the sales proceeds arising from the disposal of tangible assets or the inactivation of tangible asset and the book value of the tangible assets are
recognized in the profit and loss accounts.
Regular maintenance and repair cost incurred for tangible assets are recognized as expense.
There are no pledges, mortgages and similar encumbrances on tangible assets.
The “Regulation on Procedures and Principles for the Trading of Precious Metals by Banks and the Disposal of Commodities and Real Properties acquired by Banks due
to their Receivables” has been abolished by BRSA effective from January 1, 2017. Real properties acquired by Group due to their receivables and not treated in the scope
of “TFRS 5 - Non-current Assets Held for Sale and Discontinued Operations" has been started to follow under “Other Assets” in accordance with the related accounting
standard from the current period.
The depreciation rates used in amortization of tangible assets and their estimated useful lives are as follows:
Buildings
Safe Boxes
Other Movables
50
2-50
2-25
2%
2% - 50%
4% - 50%
Estimated Economic Life (Year)
Depreciation Rate
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen XIV. Investment Property
Investment properties are kind of properties held by the Group to earn rent income or benefit from valuation surplus. The investment properties of the Group are measured
at their fair values in the consolidated financial statements in accordance with “TAS 40 Investment Property”. Any gains or losses arising from changes in fair values of
investment properties are recognised in “Other Operating Incomes” and “Other Operating Expenses” for the related period.
XV. Leasing Transactions
Assets acquired through financial leases are carried at the lower of their fair values or amortized value of the lease payments. Leasing payables are recognized as liabilities
in the balance sheet while the interest payable portion of the payables is recognized as a deferred amount of interest. Finance lease payments are separated as financial
expense and principal amount payment, which provides a decrease in finance lease liability, thus helps a fixed rate interest on the remaining principal amount of the debt to
be calculated.
Within the context of the consolidation general borrowing policy, financial expenses are recognized in the income statement. Assets held under financial leases are
recognized under the tangible assets account and are depreciated by using the straight line method. There is one company which exclusively does finance leases (İş
Finansal Kiralama A.Ş.) and one bank (Türkiye Sınai Kalkınma Bankası A.Ş.) which operates finance lease activities as per provisional article No 4 of the Banking Law No
5411. Finance lease activities are operated according to the “Law on Financial Leasing. Factoring and Financing” No 6361.
The Bank and the Companies in scope of consolidation have accounted for recognized operating leases in accordance with the TFRS 16 "leases" standard. Operating
leases within the framework of the aforementioned standard are monitored in a similar manner to financial leases. For the agreements within the scope of TFRS 16, the
right-of-use-asset and the lease payments are reflected to the financial statements and they are presented under "Tangible Assets" and "Liabilities from Financial Leases",
respectively. The lease liability is calculated by discounting the future lease payments by the use of the Banks or alternative borrowing interest rates at the date of initial
application or contract date. Fixed assets, which are accounted as right-of-use assets, are subject to depreciation considering the period of the contract. Interest expenses
and foreign exchange differences related to the lease liabilities are associated with profit and loss statement.
XVI. Insurance Technical Income and Expense
In insurance companies, premium income is obtained after diminishing the shares transferred from arranged policy income to reassurer.
Claims are recorded in expense on accrual basis. Outstanding loss provisions are recognized for the claims reported but not paid yet and for the claims that incurred but not
reported. Reassurer’ shares of outstanding and paid claims are offset in these provisions.
XVII. Insurance Technical Provisions
TFRS 4 “Insurance Standards” requires that all contracts issued by insurance companies be classified as either insurance contracts or investment contracts. Contracts
with significant insurance risk are considered insurance contracts. Insurance risk is defined as risk, other than financial risk, transferred from the holder of a contract to
the issuer. Contracts issued by insurance companies without significant insurance risk are considered investment contracts. Investment contracts are accounted for in
accordance with TAS 39 “Turkish Accounting Standard for Financial Instruments: Recognition and Measurement”.
Within the framework of the current insurance regulation, insurance technical provisions accounted by insurance companies for unearned premium claims, unexpired risk
reserves, outstanding claims and life-mathematical reserves are presented in the consolidated financial statements.
Unearned premium reserve is recognized on accrued premiums without discount or commission which extends to the next period or periods on a daily basis for the current
insurance contracts.
In case the expected loss premium ratio is over 95%, the unexpired risk reserves are recognized for the main branches specified by the Undersecretariat of Treasury. For
each main branch, the amount found by multiplying the ratio exceeding 95% by the net unearned premium provision, is added to the unearned premium provision of that
main branch.
If the outstanding claim reserve is established and confirmed by approximation and if there are unpaid or unidentified compensation amounts in both prior and current
accounting periods; it is separated for estimated yet unreported compensation amounts.
XIX. Contingent Assets
The contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the Parent Bank and
the Group. Since showing the contingent assets in the financial statements may result in the accounting of an income, which will never be generated, the related assets are
not included in the financial statements, but if there is a possibility that an inflow of economic benefits of these assets may occur then it is explained in the footnotes of
the financial statements. Nevertheless, the developments related to the contingent assets are constantly evaluated and if it has become virtually certain that an inflow of
economic benefits will arise, the asset and the related income are recognized in the financial statements of the period in which the change occurs.
XX. Liabilities Regarding Employee Benefits
1. Severance Indemnities and Short-Term Employee Benefits
According to the related regulation and the collective bargaining agreements, the Parent Bank and consolidated Group companies (excluding the subsidiaries residing
outside Turkey) are obliged to pay termination benefits for employees who retire, die, quit for their military service obligations, who have been dismissed as defined in the
related regulation or (for the female employees) who have voluntarily quit within one year after the date of their marriage. Within the scope of TAS 19 “Employee Benefits”,
the Parent Bank allocates severence indemnity provisions for employee benefits by estimating the present value of the probable future liabilities. According to TAS 19, all
actuarial gains and losses occurred are recognized under shareholders’ equity. As the legislations of the countries in which the Parent Bank’s non-resident subsidiaries
operate do not require retirement pay provision, no provision liability has been recognized for the related companies. In addition, provision is also allocated for the unused
paid vacation.
2. Retirement Benefit Obligations
İşbank Pension Fund (Türkiye İş Bankası A.Ş. Emekli Sandığı Vakfı), of which each employee of the Parent Bank is a member, has been established according to the provisional
Article 20 of the Social Security Act No 506. As per provisional article numbered 23 of the Banking Law numbered 5411, it is ruled that Bank pension funds, which were
established within the framework of Social Security Act, will be transferred to the Social Security Institution, within 3 years after the publication of such law. Methods and
principles related to transfer have been determined as per the Cabinet decision dated 30 November 2006 numbered 2006/11345. However, the related article of the act
has been cancelled upon the President’s application dated November 2, 2005, by the Supreme Court’s decision dated March 22, 2007. Nr.E.2005/39. K.2007/33, which
was published on the Official Gazette dated March 31, 2007 and numbered 26479 and the execution decision was ceased as of the issuance date of the related decision.
After the justified decree related to cancelling the provisional Article 23 of the Banking Law was announced by the Constitutional Court on the Official Gazette dated December
15, 2007 and numbered 26731. Turkish Grand National Assembly started to work on establishing new legal regulations, and after it was approved at the General Assembly
of the TGNA, the Law numbered 5754 “Emendating Social Security and General Health Insurance Act and Certain Laws and Decree Laws”, which was published on the Official
Gazette dated May 8, 2008 and numbered 26870, came into effect. The new law decrees that the contributors of the Bank pension funds, the ones who receive salaries or
income from these funds and their rightful beneficiaries will be transferred to the Social Security Institution and will be subject to this Law within 3 years after the release date
of the related article, without any need for further operation. The three-year transfer period can be prolonged for maximum 2 years by the Cabinet decision.
However related transfer period has been prolonged for 2 years by the Cabinet decision dated, March 14, 2011. which was published on the Official Gazette dated April
9, 2011 and numbered 27900, In addition, by the Law “Emendating Social Security and General Health Insurance Act”, which was published on the Official Gazette dated
March 8, 2012 and numbered 28227, this period of 2 years has been raised to 4 years after that related transfer period has been prolonged for one more year by the
Cabinet decision dated April 8, 2013, which was published on the Official Gazette dated May 3, 2013 and numbered 28636 also this period has revalidated one more year
by the Cabinet decision dated February 24, 2014, which was published on the Official Gazette dated April 30, 2014 and numbered 28987.
The Council of Ministers has been lastly authorized to determine the transfer date in accordance with the last amendment in the first paragraph of the 20th provisional
article of Law No.5510 implemented by the Law No. 6645 on Amendment of the “Occupational Health and Safety Law and Other Laws and Decree Laws” published in the
Official Gazette dated April 23, 2015 and numbered 29335. This authority was transferred to the President with the delegated legislation No.703 which published in the
repetitive Official Gazette No. 30473 dated July 9, 2018.
On the other hand, the application made on June 19, 2008 by the Republican People’s Party to the Constitutional Court for the annulment and motion for stay of some
articles, including the first paragraph of the provisional article 20 of the Law, which covers provisions on transfers, was rejected in accordance with the decision taken at the
meeting of the afore-mentioned court on March 30, 2011.
Mathematical reserve is recognized on actuarial bases in order to meet the requirements of policyholders and beneficiaries for life, health and personal accident insurance
contracts for a period longer than a year.
The above mentioned Law also states that;
On the other hand, actuarial chain ladder method is used to estimate the reserve amount to be set aside in the current period by looking at the data of the past
materialized losses. If the reserve amount found as a result of this method exceeds the amount of reserve for the amount of uncertain indemnity, additional reserve must
be set aside for the difference.
Reinsurance companies recognize for the outstanding claims that is declared by the companies, accrued and determined on account.
Insurance companies of the Group cede premium and risks in the normal course of business in order to limit the potential for losses arising from risks accepted. Insurance
premiums ceded to reinsurers on contracts that are deemed to transfer significant insurance risk are recognized as an expense in a manner that is consistent with the
recognition of insurance premium revenue arising from the underlying risks being protected.
Costs which vary and are directly associated with the acquisition of insurance and reinsurance contracts including brokerage, commissions, underwriting expenses and
other acquisition costs are deferred and amortized over the period of contract, consistent with the earning of premium.
XVIII. Provisions and Contingent Liabilities
As of the end of the reporting period, a past event is deemed to give rise to a present obligation if, taking account of all available evidence, it is more likely than not that
a present obligation exists, the entity recognizes a provision in the financial statements. As of the end of the reporting period where it is more likely that no present
obligation exists at the end of the reporting period, the entity discloses a contingent liability on footnotes unless the possibility of an outflow of resources embodying
economic benefits is remote.
In the financial statements, a provision is made for an existing commitment resulted from past events if it is probable that the commitment will be settled and a reliable
estimate can be made of the amount of the obligation.
Provisions are calculated based on the reliable estimates of management of the Parent Bank and subsidiaries on the expenses to incur as of the balance sheet date to
fulfill the liability by considering the risks and uncertainties related to the liability. In case the provision is measured by using the estimated cash flows required to fulfill the
existing liability, the book value of the related liability is equal to the present value of the related cash flows.
If the amount is not reliably estimated and there is no probability of cash outflow from the Group to settle the liability, the related liability is considered as “contingent” and
disclosed in the notes to the financial statements.
• Through a commission constituted by the attendance of one representative separately from the Social Security Institution, Ministry of Finance, Turkish Treasury, State
Planning Organization. Banking Regulation and Supervision Agency. Savings Deposit Insurance Fund, one from each pension fund, and one representative from the
organization employing pension fund contributors, related to the transferred persons, the cash value of the liabilities of the pension fund as of the transfer date will be
calculated by considering their income and expenses in terms of the lines of insurance within the context of the related Law, and technical interest rate of 9.8% will be
used in the actuarial calculation of the value in cash
• And that after the transfer of the pension fund contributors, the ones who receive salaries or income from these funds and their rightful beneficiaries to the Social
Security Institution, these persons’ uncovered social rights and payments, despite being included in the trust indenture that they are subject to, will be continued to be
covered by the pension funds and the employers of pension fund contributors.
In line with the new law, the Bank obtained a technical actuarial valuation report from a licensed actuary for the year ended December 31, 2021. In related period’s
financial statements, Bank provided full provision for the total amount of technical and actual deficit stated in the actuarial report of the aforementioned period The
actuarial assumptions used in the related actuarial report are given in Section Five Note II-h-4-1. Besides the Parent Bank; Anadolu Anonim Türk Sigorta Şirketi, Milli
Reasürans T.A.Ş. and Türkiye Sınai Kalkınma Bankası A.Ş. also had actuarial valuations as of December 31, 2021 for their pension funds. The provision amount of actuarial
and technical deficit, which was measured according to actuarial report of Milli Reasürans T.A.Ş., is added in the financial statements for the current period. According to
actuarial report of Anadolu Anonim Türk Sigorta Şirketi and Türkiye Sınai Kalkınma Bankası, there is not any additional operational or actuarial liability.
İşbank Members’ Supplementary Pension Fund has been founded by the Parent Bank to provide beneficiaries with additional social security and solidarity rights to compulsory
social security benefits as per the provisions of the Turkish Commercial Code and Turkish Civil Code. Those are also valid for the supplementary pension funds of the employees
of Anadolu Anonim Türk Sigorta Şirketi, Milli Reasürans T.A.Ş. and Türkiye Sınai Kalkınma Bankası A.Ş. which are among the other financial institutions of the Group.
XXI. Taxation
1. Corporate Tax:
Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes, as reflected in the
accompanying consolidated financial statements, have been calculated on a separate-entity basis.
In accordance with the Provisional Article 13 added to the Corporate Tax Law Numbered 5520 with the Law Numbered 7316, the 20% rate foreseen in the calculation of the
corporate tax for the corporate earnings of the 2021 taxation period is determined as 25% (starting from the declarations to be submitted as of July 1, 2021 and to be valid
for the corporate earnings for the taxation period starting from January 1, 2021), and as 23% for the corporate earnings for the 2022 taxation period. In this context, the
Corporate Tax rate as of September 30, 2021 is 25%.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen As per the Corporate Tax law, temporary tax is calculated and paid quarterly in line with the principles of the Income Tax Law and at the corporate tax rate. The temporary
tax payments are deducted from the current period’s corporate tax. The 3rd provisional tax for the year 2021 will be paid in November 2021 for to be deducted from the
corporate tax of the current taxation period.
Tax provision consists of current tax provision and deferred tax income/expense. The current tax liability is calculated over the portion of the period subject to taxation. The
taxable profit differs from the profit involved in the statement of profit and loss, as the income and expense items that can be taxable or deductible at other periods, and
items that are not taxable or deductible are excluded. The current tax amounts payable are netted off with prepaid tax amounts and presented on the financial statements.
Within the framework of the Corporate Tax Law numbered 5520, 75% of the gains on the sale of the participation shares, which were held in the assets for a minimum of 2
whole years and 75% of the gains on the sale of immovable are exempt from tax provided that they are added to the capital as set forth by the Law or that they are kept in
a special fund under liabilities for a period of 5 years. However, in accordance with Article 89 / a of the Law No. 7061 and Article 5.1.e and Article 5.1.f of the Corporate Tax
Law, which were published in the Official Gazette dated December 5, 2017 and numbered 30261, the 75% applied in terms of immovable sales mentioned above has been
reduced to 50% which is effective from the date of publication of the Law.
In accordance with the provision of Article 298 / A of the Tax Procedure Law, the necessary conditions for inflation adjustment in the calculation of corporate tax as
of the end of the 2021 calendar year have been met. However, the application of inflation adjustment in the calculation of corporate tax was postponed to 2023 with
the regulation made with the "Law on the Amendment of the Tax Procedure Law and the Corporate Tax Law" numbered 7352 published in the Official Gazette dated
29.01.2022 and numbered 31734. Accordingly, VUK (Tax Procedure Law) financial statements for the 2021 and 2022 accounting periods, including the provisional tax
periods, will not be subject to inflation adjustment, and the 2023 accounting period will not be subject to inflation adjustment as of the temporary tax periods. will be
subject to inflation adjustment regardless.
2. Deferred Tax:
Deferred tax asset or liability is determined by calculating the tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the amounts considered in the legal tax base account, by taking the legal tax rates into account. Deferred tax debts are generally recognized for all taxable
temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilized. Free provisions that are allocated for possible future risks and they are not subject to deferred tax calculation. No tax assets or liabilities are
recognized for the temporary timing difference that affects neither the taxable profit nor the accounting profit and that arises from the initial recognition in the balance
sheet, of assets and liabilities, other than the goodwill and mergers. The Bank calculates deferred tax for the provisions allocated for Stage 1 and Stage 2 expected credit
loss.
The carrying values of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Deferred tax is measured at enacted tax rates prevailing in the period or about to be enacted when the assets are realized or liabilities are settled, and the tax is recognized
as income or expense in the income statement. Nonetheless, if the deferred tax is related to assets directly associated with the equity in the same or different period, it is
directly recognized in the equity accounts. In accordance with the Provisional Article 13 added to the Corporate Tax Law Numbered 5520 with the Law Numbered 7316, the
20% rate foreseen in the calculation of the corporate tax for the corporate earnings of the 2021 taxation period is determined as 25% (starting from the declarations to be
submitted as of July 1, 2021 and to be valid for the corporate earnings for the taxation period starting from January 1, 2021), and as 23% for the corporate earnings for the
2022 taxation period. The Bank has calculated deferred tax by using 20%, 23%, 25% rates considering the periods when deferred tax assets and liabilities are realized.
Deferred tax assets and liability of the Bank and consolidated companies are shown by way of offsetting in separate financial statements of each entities. In the
consolidated financial statements, on the other hand, the deferred tax assets and liabilities that come from the companies as offset are separately involved in the assets
and liabilities.
3. Tax Practices in the Countries that Foreign Branches Operate:
Turkish Republic of Northern Cyprus (TRNC)
In accordance with TRNC tax legislation, 15% income tax is accrued on the remaining tax base after 10% corporate tax is deducted from corporate income. The tax bases
for companies are determined by adding the expenses that cannot be deducted according to TRNC regulations, to commercial gains and by subtracting exemptions and
deductions from commercial gains. Income tax is paid in June, and corporate tax payment is made in two equal installments, in May and in October. On the other hand,
withholding tax is paid in TRNC over interest income and similar gains of the companies. The related withholding tax payments and provisional tax paid every quarter
during the year are deducted from corporate tax payable and the difference between withholding and provisional tax amounts and corporate tax payable is discounted from
income tax provided that the withholding tax and paid provisional tax amounts are higher than corporate tax amount.
England
Corporate earnings are subject to 19% corporate tax in England. The relevant rate is applied to the tax base that is determined by adding the expenses that cannot be
deducted due to the regulations, to commercial gains and by subtracting exemptions and deductions from commercial gains. In other respect, if the tax base calculated
in accordance with the country legislation is within a certain range, the temporary corporate tax is paid in July, October of the relevant year and in January and April of the
following year; If it is over a certain amount, it is paid in 4 installments in March, June, September and December of the relevant year. The corporate tax amount must be
finalized and paid by the end of September of the year following the year of profit. In case the corporate tax payable as a result of the calculation is below the temporary
taxes paid, the difference amount is deducted later or paid back to the Branch by the authority.
Bahrain
Banks in Bahrain are not subject to tax according to the regulations of the country.
The Republic of Iraq (Iraq)
The corporate tax rate in Iraq is 15%, and the corporate tax is paid on a consolidated basis to the tax office of the foreign bank's central branch. The first branch
established in Iraq is considered as the central branch. Foreign bank branches whose central branch is within the boundaries of the Central Government must present
their consolidated financial statements and pay accrued tax to the relevant tax office by the end of May of the following year, and branches of foreign banks whose central
branch is within the boundaries of the Northern Iraq Regional Government must present their financial statements and pay accrued tax by the end of June of the following
year at the latest. Northern Iraq Regional Government tax offices can accrue fixed taxes other than the specified rate and can postpone the due date.
Kosovo
Corporate earnings are subject to income tax rate of 10% according to the Kosovo legislation. This ratio is applied to the tax base that will be calculated as a result of the
implementation of exemptions, deductions, addition of disallowable expenses, to the corporate income and that are calculated in accordance with the tax laws. Tax has to
be paid in advance until April, July, October and the 15th day of January of the following year by four installments. If those prepaid taxes are lower than the final corporate
tax, the difference is paid until the end of March of the following year, in case of a claim made by company, if it is higher, then the difference is returned to the institution by
the tax authorities after the inspection conducted by those institution.
Georgia
Corporate earnings are subject to income tax rate of 15% according to the Georgian legislation. This ratio is applied to the tax base that will be calculated as a result of the
implementation of exemptions, deductions, addition of disallowable expenses, to the income of corporations and that are calculated in accordance with the tax laws. In
addition, in accordance with the legislation of Georgia, each year during May, July, September and December the amount of tax, that calculated according to the previous year
income tax, is paid to the tax office by four equal installments of the probable income that is likely to be obtained the current year. If those prepaid taxes are lower than the final
corporate tax, the difference is paid until the beginning of April of the following year, if it is higher, then the difference is returned to the institution by the tax authorities.
Germany
According to the tax regulations in Germany, corporate gains are subject to 15% corporate tax, 16.7% income and industrial tax. In addition to this, a solidarity tax of 5.5% is
calculated over this corporate tax. The tax bases for corporate, income and industrial services are determined by adding the expenses that cannot be deducted according to
Germany regulations, to interest, commissions and other operating gains and by subtracting exemptions and deductions from these. The corporate tax payments are made
as temporary tax payments in four installments and are deducted from the corporate tax that is finalized at the end of the current year.
Russia
According to the Russian regulations, corporate gains are subject to 20% corporate tax. The corporate tax base is determined on accrual basis and it is measured by adding
the non-deductible expenses to the corporate income gained during the period. Companies in Russia make quarterly tax returns and make provisional tax payment by
offsetting the advance taxes paid during the period. Final taxation period for corporate tax is one year and the corporate tax is paid until the end of March of the following
year, by considering the provisional taxes paid during the year. Coupon income from government bonds of the Russian Federation and Belarus, as well as the Ruble and
some other private bonds issued by Russian companies after January 1, 2017 and traded on the stock exchange are subject to a corporate tax of 15%. The securities in the
question income is paid within 10 business days from the end of the month following the bond sale or coupon payment and tax on remaining securities is paid on the day
of payment of corporate tax.
4. Transfer Pricing:
Transfer pricing is regulated through Article 13 of Corporate Tax Law titled “Transfer Pricing through Camouflage of Earnings”. Detailed information for the practice
regarding the subject is found in the “General Communiqué Regarding Camouflage of Earnings through Transfer Pricing”.
According to the aforementioned regulations, in the case of making purchase or sales of goods or services with relevant persons/corporations at a price that is determined
against “arm’s length principle”, the gain is considered to be distributed implicitly through transfer pricing and such distribution of gains is not subject to deductions
according to article 11 of Corporate Tax Law in means of corporate tax.
XXII. Additional Information on Borrowings
The Parent Bank and its consolidated companies, whenever required, generates funds from individuals and institutions residing domestically and abroad by approaching
the borrowing instruments in the form of syndication, securitization, collateralized borrowing and issue of bonds/bills. Such transactions are at first carried at acquisition
cost, and in the following periods they are valued at amortized cost measured by using the effective interest rate method.
Part of the bills issued by the Group with fixed interest and a part of its liabilities with fixed interest are subject to fair value hedge accounting. While the rediscounted credit
risk and accumulated interest amount subject to hedging liability are recognized in “Interest Expenses” under profit/loss statement; net amount resulted of the hedge
accounting other than the credit risk and accumulated interest amount are recognized in “Derivative Financial Transactions Gains/Losses” under profit/loss statement by
using fair value model. In the balance sheet, these valuations are presented with the related liabilities.
XXIII. Information on Equity Shares and Their Issuance
Share issuance related to costs is recognized as expenses.
Dividend income related with the equity shares are determined by the General Assembly of the Shareholders.
Weighted average number of shares outstanding is taken into account in the calculation of earnings per share. In case the number of shares increases by way of bonus
issues as a result of the capital increases made by using the internal sources, the calculation of earnings per share is made by adjusting the weighted average number of
shares, which were previously calculated as at the comparable periods.
The adjustment means that the number of shares used in calculation is taken into consideration as if the bonus issue occurred at the beginning of the comparable period. In
case such changes in the number of shares occur after the balance sheet date, but before the ratification of the financial statements to be published, the calculation of earnings
per share are based on the number of new shares. The Parent Bank’s earnings per share calculations taking place in the consolidated profit/loss statement are as follows.
Group’s net profit
Weighted average number of shares (thousands)
Earnings per share – (in exact TL)
Current Period
13,541,060
112,502,250
0.120362571
Prior Period
6,655,442
112,502,250
0.059158301
XXIV. Bank Acceptances and Bills of Guarantee
Bill guarantees and acceptances are realized simultaneously with the customer payments and they are presented as possible liabilities and commitments in the off-
balance sheet accounts.
XXV. Government Incentives
There are no government incentives utilized by the Bank or the companies included in consolidation, during the current or prior accounting periods.
XXVI. Segment Reporting
Business segment is the part of an enterprise.
• which conducts business operations where it can gain revenues and make expenditures (including the revenues and expenses related to the transactions made with the
other parts of the enterprise).
• whose operating results are regularly monitored by the authorities with the power to make decisions related to the operations of the enterprise in order to make
decisions related to the funds to be allocated to the segment and to evaluate the performance of the segment and
• which has its separate financial information.
Information on business segmentation and related information is explained in Section IV Footnote VIII.
XXVII. Other Disclosures
According to the Uniform Chart of Accounts that entered into force on 01.01.2021, the amount of guarantees given for derivative transactions with foreign banks, which
were followed in "Other Assets" in previous periods, started to be followed under "Cash and Cash Equivalents-Banks". In order to ensure compliance with the current period
consolidated statement of financial position, a reclassification of TL 2,637,289 has been carried out among the mentioned items in the consolidated statement of financial
position dated 31.12.2020. The effects of this classification on the consolidated statement of cash flows have also been updated. The said reclassification did not have a
significant impact on the size and performance of the Bank's consolidated statement of financial position.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen SECTION FOUR: INFORMATION ON THE FINANCIAL POSITION AND RISK MANAGEMENT OF THE GROUP
I. Explanations on Shareholders’ Equity:
1. Explanations on Consolidated Shareholders’ Equity
The Bank’s consolidated capital adequacy ratio is 18.69%. (December 31, 2020: 16.99%). The capital adequacy standard ratio for the current period was calculated based
on the Regulation on Measurement and Assessment of Capital Adequacy of Banks and other legal regulations and the BRSA regulation dated 21.12.2021 and numbered
9996. Within the scope of this regulation, the equity amount calculated without reflecting the negative net valuation differences of the securities included in the "Fair
Value Through Other Comprehensive Income" portfolio acquired before 21.12.2021 was taken into consideration. In the calculation of the amount subject to credit risk in
accordance with the same regulation, the simple arithmetic average of the last 252 business days in the foreign exchange buying rates of the Central Bank of the Republic
of Turkey was used.
COMMON EQUITY TIER I CAPITAL
Paid-in Capital to be Entitled for Compensation after All Creditors
Share Premium
Legal Reserves
Other Comprehensive Income According to TAS
Profit
Net Current Period Profit
Prior Period Profit
Bonus Shares from Associates, Subsidiaries and Joint-Ventures not Accounted in Current Period’s Profit
Minority Shares
Common Equity Tier I Capital Before Deductions
Deductions From Common Equity Tier I Capital
Valuation adjustments calculated as per the article 9, (i) of the Regulation on Bank Capital
Current and prior periods' losses not covered by reserves, and losses accounted under equity according to TAS
Leasehold improvements on operational leases
Goodwill Netted with Deferred Tax Liabilities
Current Period
Prior Period
6,115,938
143,633
50,721,897
23,224,481
13,502,913
13,541,060
(38,147)
(1,117)
2,286,331
95,994,076
6,115,938
124,549
43,421,096
10,401,612
8,378,887
6,655,442
1,723,445
(1,120)
1,850,295
70,291,257
1,144,288
89,996
27,994
343,449
79,888
35,974
Deductions from Tier I Capital in Cases where there are no Adequate Additional Tier I or Tier II Capitals
Total Deductions from Common Equity Tier 1
Total Common Equity Tier I capital
ADDITIONAL TIER I CAPITAL
Privileged stocks not included in common equity and share premiums
Debt Instruments and the Related Issuance Premiums Defined by the BRSA
Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Covered by Temporary Article 4)
Shares of Third Parties in Additional Tier I Capital
Shares of Third Parties in Additional Tier I Capital (Covered by Temporary Article 3)
Additional Tier I Capital before Deductions
Deductions from Additional Tier 1 Capital
Direct and Indirect Investments of the Bank on its own Additional Core Capital
Investments in Equity Instruments Issued by Banks or Financial Institutions Invested in Bank’s Additional Tier I Capital
and Having Conditions Stated in the Article 7 of the Regulation
Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where
the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital
The Total of Net Long Position of the Direct or Indirect Investments in Additional Tier I Capital of
Unconsolidated Banks and Financial Institutions where the Bank Owns more than 10% of the Issued Share Capital
Other items to be defined by the BRSA
Items to be Deducted from Tier 1 Capital during the Transition Period
Goodwill and Other Intangible Assets and Related Deferred Taxes not deducted from Tier 1 Capital as per the Temporary
Article 2, Clause 1 of the Regulation on Measurement and Evaluation of Capital Adequacy of Banks (-)
Net Deferred Tax Asset/Liability not deducted from Tier 1 Capital as per the Temporary Article 2, Clause 1 of the
Regulation on Measurement and Evaluation of Capital Adequacy of Banks (-)
Deduction from Additional Tier 1 Capital when there is not enough Tier II Capital (-)
Total Deductions from Additional Tier I Capital
Total Additional Tier I Capital
Other Intangible Assets Netted with Deferred Tax Liabilities Except Mortgage Servicing Rights
1,965,525
1,494,511
Total Tier I Capital (Tier I Capital= Common Equity Tier I Capital + Additional Tier I Capital)
Remaining after deducting from the related deferred tax liability with the deferred tax asset based on future taxable
income, except for deferred tax assets based on temporary differences
Differences Arise When Assets and Liabilities Not Held at Fair Value, are Subjected to Cash Flow Hedge Accounting
Total Credit Losses That Exceed Total Expected Loss Calculated According to the Regulation on Calculation of Credit Risk
by Internal Ratings Based Approach
Securitization Gains
Unrealized Gains and Losses from Changes in Bank’s Liabilities’ Fair Values due to Changes in Creditworthiness
Net Amount of Defined Benefit Plans
Direct and Indirect Investments of the Bank on its own Tier 1 Capital
Shares Obtained against Article 56, Paragraph 4 of the Banking Law
Total of Net Long Positions of the Investments in Equity Items of Consolidated Banks and Financial Institutions where
the Bank owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital
Total of Net Long Positions of the Investments in Equity Items of Consolidated Banks and Financial Institutions where
the Bank owns more than %10 % of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital
Mortgage Servicing Rights (amount above 10% threshold of above Tier I capital)
Deferred Tax Assets Arising from Temporary Differences (amount above 10% threshold of above Tier I Capital)
Amount Exceeding the 15% Threshold of Tier 1 Capital as per the Article 2, Clause 2 of the Regulation on Measurement
and Evaluation of Capital Adequacy of Banks
The Portion of Net Long Position of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions
where the Bank Owns 10% or more of the Issued Share Capital not deducted from Tier I Capital
Excess Amount arising from Mortgage Servicing Rights
Excess Amount arising from Deferred Tax Assets from Temporary Differences
Other Items to be Defined by the BRSA
551,575
542,681
TIER II CAPITAL
Debt Instruments and the Related Issuance Premiums Defined by the BRSA
Debt Instruments and the Related Issuance Premiums Defined by the BRSA (Covered by Temporary Article 4)
Shares of Third Parties in Additional Tier I Capital
Shares of Third Parties in Additional Tier I Capital (Covered by Temporary Article 3)
Provisions (Amounts explained in the first paragraph of the article 8 of the Regulation on Bank Capital)
Tier II Capital before Regulatory Adjustments
Deductions from Tier II Capital
Direct and Indirect Investments of the Bank on its own Tier II Capital (-)
Investments in Equity Instruments Issued by Banks and Financial Institutions Invested in Bank’s Tier II Capital and
Having Conditions Stated in the Article 8 of the Regulation
Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions where the
Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I Capital (-)
The Total of Net Long Position of the Direct or Indirect Investments in Additional Tier I Capital and Tier II Capital of
Unconsolidated Banks and Financial Institutions where the Bank Owns 10% or more of the Issued Share Capital
Exceeding the 10% Threshold of Tier I Capital
Other items to be Defined by the BRSA (-)
Total Deductions from Tier II Capital
Total Tier II Capital
Total Equity (Total Tier I and Tier II Capital)
Deductions from Total Equity
Loans Granted against the Articles 50 and 51 of the Banking Law
Net Book Values of Movables and Immovables Exceeding the Limit Defined in the Article 57, Clause 1 of the Banking Law
and the Assets Acquired against Overdue Receivables and Held for Sale but Retained more than Five Years
Current Period
Prior Period
3,779,378
92,214,698
2,496,503
67,794,754
1,586,764
1,243,007
1,586,764
1,243,007
1,586,764
93,801,462
1,243,007
69,037,761
22,518,677
13,670,323
1,046,800
884,387
1,253,000
686,756
7,483,983
31,933,847
5,930,962
21,541,041
31,933,847
125,735,309
1,274
1,194
21,541,041
90,578,802
1,102
721
Other items to be Defined by the BRSA
80
381
342 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 343
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Current Period
Prior Period
2. Information on instruments to be included in the consolidated capital calculation:
Items to be Deducted from the Sum of Tier I and Tier II Capital (Capital) during the Transition Period
The Portion of Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial
Institutions where the Bank Owns 10% or less of the Issued Share Capital Exceeding the 10% Threshold of above Tier I
Capital not deducted from Tier I Capital, Additional Tier I Capital or Tier II Capital as per the Temporary Article 2, Clause 1
of the Regulation
The Portion of Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial
Institutions where the Bank Owns more than 10% of the Issued Share Capital Exceeding the 10% Threshold of above
Tier I Capital not deducted from Additional Tier I Capital or Tier II Capital as per the Temporary Article 2, Clause 1 of the
Regulation
The Portion of Net Long Position of the Investments in Equity Items of Unconsolidated Banks and Financial Institutions
where the Bank Owns 10% or more of the Issued Share Capital, of the Net Deferred Tax Assets arising from Temporary
Differences and of the Mortgage Servicing Rights not deducted from Tier I Capital as per the Temporary Article 2, Clause
2, Paragraph (1) and (2) and Temporary Article 2, Clause 1 of the Regulation
CAPITAL
Total Capital (Total of Tier I Capital and Tier II Capital)
Total Risk Weighted Assets
CAPITAL ADEQUACY RATIOS
Consolidated CET1 Capital Ratio (%)
Consolidated Tier I Capital Ratio (%)
Consolidated Capital Adequacy Ratio (%)
BUFFERS
Total Additional Common Equity Requirement Ratio (a+b+c)
a) Capital Conservation Buffer Ratio (%)
b) Bank-specific Counter-Cyclical Capital Buffer Ratio (%)
c) Systemic Bank Buffer Ratio (%)
Additional CET1 Capital Over Total Risk Weighted Assets Ratio Calculated According to the Article 4 of Capital
Conservation and Counter-Cyclical Capital Buffers Regulation (%)
Amounts Lower Than Excesses as per Deduction Rules
Remaining Total of Net Long Positions of the Investments in Equity Items of Unconsolidated Banks and Financial
Institutions where the Bank Owns 10% or less of the Issued Share Capital
Remaining Total of Net Long Positions of the Investments in Tier I Capital of Unconsolidated Banks and
Financial Institutions where the Bank Owns more than 10% or less of the Issued Share Capital
Remaining Mortgage Servicing Rights
Net Deferred Tax Assets arising from Temporary Differences
Limits for Provisions Used in Tier II Capital Calculation
125,734,035
672,862,034
90,577,700
533,067,742
13.71
13.94
18.69
4.060
2.500
0.060
1.500
7.94
12.72
12.95
16.99
4.560
2.500
0.060
2.000
6.95
280,196
242,174
3,118,976
3,672,736
General Loan Provisions for Exposures in Standard Approach (before limit of one hundred and twenty-five per ten
thousand)
17,706,672
12,251,260
General Loan Provisions for Exposures in Standard Approach Limited by 1,25% of Risk Weighted Assets
7,483,983
5,930,962
Total Loan Provision that Exceeds Total Expected Loss Calculated According to Communiqué on Calculation of Credit Risk
by Internal Ratings Based Approach
Total Loan Provision that Exceeds Total Expected Loss Calculated According to Communiqué on Calculation of Credit Risk
by Internal Ratings Based Approach, Limited by 0,6% Risk Weighted Assets
Debt Instruments Covered by Temporary Article 4 (effective between January 1, 2018 - January 1, 2022)
Upper Limit for Additional Tier I Capital Items subject to Temporary Article 4
Amount of Additional Tier I Capital Items Subject to Temporary Article 4 that Exceeds Upper Limit
Upper Limit for Additional Tier II Capital Items subject to Temporary Article 4
Amount of Additional Tier II Capital Items Subject to Temporary Article 4 that Exceeds Upper Limit
1,046,800
17,272,200
1,253,000
9,086,000
Issuer
Türkiye İş Bankası A.Ş.
Unique identifier (CUSIP, ISIN etc.)
US900151AB70-
XS0847042024
US900151AF84-
XS1003016018
US90016BAF58-
XS1623796072
XS2106022754
Governing law(s) of the instrument
It is subject to English
Law except for certain
articles that will be
subject to Turkish Law.
Issued within the scope
of BRSA Regulation on
Banks’ Equity.
It is subject to English
Law except for certain
articles that will be subject
to Turkish Law. Issued
within the scope of BRSA
Regulation on Banks’
Equity.
It is subject to English Law
except for certain articles that
will be subject to Turkish Law.
Issued within the scope of BRSA
Regulation on Banks’ Equity.
It is subject to English Law
except for certain articles that
will be subject to Turkish Law.
Issued within the scope of BRSA
Regulation on Banks’ Equity.
Taking into account in equity calculation
Subject to 10% deduction as of
01.01.2015
Yes
No
No
No
Unconsolidated
-Consolidated
Unconsolidated
-Consolidated
Unconsolidated -Consolidated
Unconsolidated -Consolidated
Eligible at unconsolidated /
consolidated
Instrument type (types to be
specified by each jurisdiction)
Amount recognized in regulatory
capital (Currency in mil. as of most
recent reporting date)
Bond
Par value of instrument (Expressed
in million TL)
13,085
Bond
1,047
5,234
Bond
6,543
6,543
Bond
9,814
9,814
Accounting classification
Subordinated Liabilities
Subordinated Liabilities
Subordinated Liabilities
Subordinated Liabilities
Original date of issuance
24.10.2012
Perpetual or dated
Original maturity date
Issuer call subject to prior
supervisory approval
Dated
10 Years
Yes
10.12.2013
Dated
10 Years
Yes
29.06.2017
Dated
11 Years
Yes
22.01.2020
Dated
10 Years
Yes
Optional call date. contingent call
dates and redemption amount
The Bank; (1) provided
that subject to having
obtained the prior
approval of the BRSA
and the date which may
not be earlier than fifth
anniversary of the Issue
Date a) can purchase b)
can redeem all bonds if
any taxes imposed or
levied (2) can redeem
all bonds in case of the
deduction from equity.
The Bank; (1) provided that
subject to having obtained
the prior approval of the
related legislation, can
purchase or otherwise
acquire treasury stock (2)
provided that subject to
having obtained the prior
approval of the BRSA, (a)
can redeem all bonds if any
taxes imposed or levied (b)
can redeem all bonds in
case of the deduction from
equity.
The Bank has the option to
repay all of the related bonds
on June 29, 2023 provided that
subject to having obtained the
prior approval of the BRSA.
The Bank; (1) provided that
subject to having obtained the
prior approval of the related
legislation, can purchase or
otherwise acquire treasury
stock (2) provided that subject
to having obtained the prior
approval of the BRSA, (a) can
redeem all bonds if any taxes
imposed or levied (b) can redeem
all bonds in case of the deduction
from equity.
The Bank has the option to
repay all of the related bonds
on January 22, 2025 provided
that subject to having obtained
the prior approval of the BRSA.
The Bank; (1) provided that
subject to having obtained the
prior approval of the related
legislation, can purchase or
otherwise acquire treasury
stock (2) provided that subject
to having obtained the prior
approval of the BRSA, (a) can
redeem all bonds if any taxes
imposed or levied (b) can
redeem all bonds in case of the
deduction from equity.
Subsequent call dates. if applicable
None
Coupons / dividends
Fixed or floating dividend/coupon
Coupon rate and any related index
Existence of a dividend stopper
Fully discretionary. partially
discretionary or mandatory
Existence of step up or other
incentive to redeem
Fixed
6 %
None
None
None
None
Fixed
7.85 %
None
None
None
None
Fixed
7 %
None
None
None
None
Fixed
7.75 %
None
None
None
Noncumulative or cumulative
Noncumulative
Noncumulative
Noncumulative
Convertible or non-convertible
None
None
None
Noncumulative
None
344 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 345
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Coupons / dividends
If convertible. conversion trigger (s)
If convertible. fully or partially
If convertible. conversion rate
If convertible. mandatory or optional
conversion
If convertible. specify instrument
type convertible into
If convertible. specify issuer of
instrument it converts into
Write-down feature
None
If write-down. write-down trigger(s)
If write-down. full or partial
If write-down. permanent or
temporary
If temporary write-down.
description of write-up mechanism
Position in subordination hierarchy
in liquidation (specify instrument
type immediately senior to
instrument)
In accordance with
Regulations on Equities of
Banks.Article 8.2.ğ. bonds
have deleted option from
records.
Due to the losses incurred,
where the Bank is at the
point at which the BRSA
may determine pursuant
to Article 71 of the
Banking Law that: (i) its
operating license is to be
revoked and the Bank is
liquidated or (ii) the rights
of all of its shareholders
(except to dividends), and
the management and
supervision of the Bank,
are to be transferred to
the SDIF on the condition
that losses are deducted
from the capital of existing
shareholders (occurrence
of either condition means
the issuer has become
non-viable).
In accordance with Regulations
on Equities of Banks.Article 8.2.ğ
bonds have deleted option from
records.
In accordance with Regulations
on Equities of Banks.Article
8.2.ğ. bonds have deleted option
from records.
Due to the losses incurred,
where the Bank is at the point at
which the BRSA may determine
pursuant to Article 71 of the
Banking Law that: (i) its operating
license is to be revoked and
the Bank is liquidated or (ii) the
rights of all of its shareholders
(except to dividends), and the
management and supervision of
the Bank, are to be transferred
to the SDIF on the condition that
losses are deducted from the
capital of existing shareholders
(occurrence of either condition
means the issuer has become
non-viable)
Due to the losses incurred,
where the Bank is at the
point at which the BRSA may
determine pursuant to Article
71 of the Banking Law that:
(i) its operating license is to
be revoked and the Bank is
liquidated or (ii) the rights of all
of its shareholders (except to
dividends), and the management
and supervision of the Bank,
are to be transferred to the
SDIF on the condition that
losses are deducted from the
capital of existing shareholders
(occurrence of either condition
means the issuer has become
non-viable)
Partially or completely
Partially or completely
Partially or completely
Permanent
Permanent
Permanent
Paid before shares
and the primary of
subordinated debt and
after all the other debts.
Paid before shares and the
primary of subordinated
debt and after all the other
debts.
Paid before shares and the
primary of subordinated debt and
after all the other debts.
Paid before shares and the
primary of subordinated debt
and after all the other debts.
In compliance with article number 7
and 8 of “Own fund regulation”
Yes.
Yes.
Yes.
Yes.
Details of incompliances with article
number 7 and 8 of “Own fund
regulation”
Don't vest with the
conditions stated in
clause of the Article 7 and
the clause of 8.2. ğ
To vest conditions stated in
clause of the Article 8 and
Don't vest the conditions
stated in clause of the
Article 7.
To vest conditions stated in
clause of the Article 8 and Don't
vest the conditions stated in
clause of the Article 7.
To vest conditions stated in
clause of the Article 8 and Don't
vest the conditions stated in
clause of the Article 7.
Issuer
Türkiye İş Bankası A.Ş.
Unique identifier (CUSIP, ISIN etc.)
TRSTISB72712
TRSTISB62911
TRSTISB92918
Governing law(s) of the instrument
Is subject to Turkish Law. Has been
issued in accordance with the BRSA
Communiqué regarding the Equity of
Banks.
Is subject to Turkish Law. Has been
issued in accordance with the BRSA
Communiqué regarding the Equity of
Banks.
Is subject to Turkish Law. Has been
issued in accordance with the BRSA
Communiqué regarding the Equity of
Banks.
Taking into account in equity calculation
Subject to 10% deduction as of
01.01.2015
No
No.
No.
Eligible at unconsolidated /
consolidated
Instrument type (types to be
specified by each jurisdiction)
Amount recognized in regulatory
capital (Currency ın TL million, as of
most recent reporting data)
Nominal value of instrument (TL
Million)
Accounting classification
Original date of issuance
Perpetual or dated
Original maturity date
Issuer call subject to prior supervisory
approval
Yes
08.08.2017
Dated
10 Years
Unconsolidated – Consolidated
Unconsolidated - Consolidated
Unconsolidated - Consolidated
Bond
1,100
1,100
Bond
800
800
Bond
350
350
Subordinated Liabilities
Subordinated Liabilities
Subordinated Liabilities
19.06.2019
Dated
10 Years
Yes
26.09.2019
Dated
10 Years
Yes
Optional call date, contingent call
dates and redemption amount
The Bank; (1) can purchase bills that
subject to having obtained the prior
approval of the BRSA and the date
which may not be earlier than fifth
anniversary of the Issue Date (2) (a) can
redeem all bonds if any taxes imposed
or levied (b) can redeem all bonds in
case of the deduction from equity
The Bank; (1) can purchase bills that
subject to having obtained the prior
approval of the BRSA and the date
which may not be earlier than fifth
anniversary of the Issue Date (2) (a) can
redeem all bonds if any taxes imposed
or levied (b) can redeem all bonds in
case of the deduction from equity
The Bank; (1) can purchase bills that
subject to having obtained the prior
approval of the BRSA and the date
which may not be earlier than fifth
anniversary of the Issue Date (2) (a) can
redeem all bonds if any taxes imposed
or levied (b) can redeem all bonds in
case of the deduction from equity
Subsequent call dates, if applicable
None.
Interest/Dividend Payment
Fixed or floating coupon/dividend
payments
Floating
None.
Floating
None.
Floating
Coupon rate and any related index
Government Debt Security for 5
years+350 base points
TRLIBOR with 3 months maturity + 100
base points
Government Debt Security for 5 years +
350 base points
Existence of a dividend stopper
Fully discretionary, partially
discretionary or mandatory
Existence of step up or other
incentive to redeem
None.
None.
None.
None.
None.
None.
None.
None.
None.
Noncumulative or cumulative
Non-cumulative
Convertible into equity shares
None.
Non-cumulative
None.
Non-cumulative
None.
If convertible, conversion trigger (s)
If convertible, fully or partially
If convertible, conversion rate
If convertible, mandatory or optional
conversion
If convertible, specify instrument
type convertible into
If convertible, specify issuer of
instrument it converts into
Write-down feature
In accordance with Regulations on
Equities of Banks, Article 8.2.ğ, bonds
have deleted option from records.
In accordance with Regulations on
Equities of Banks, Article 8.2.ğ, bonds
have deleted option from records.
In accordance with Regulations on
Equities of Banks, Article 8.2.ğ, bonds
have deleted option from records.
346 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 347
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Due to the losses incurred, within the
framework of Article 71 of the Banking
Law, (1) the Bank’s operating license is
to be revoked and liquidated or (2) the
rights of all of its shareholders (except
to dividends) and the management
and supervision of the Bank are to
be transferred to the SDIF on the
condition that losses are deducted from
the capital of existing shareholders
(occurrence of either condition means
the issuer has become non-viable)
based on the decision of the BRSA.
Due to the losses incurred, within the
framework of Article 71 of the Banking
Law, (1) the Bank’s operating license is
to be revoked and liquidated or (2) the
rights of all of its shareholders (except
to dividends) and the management
and supervision of the Bank are to
be transferred to the SDIF on the
condition that losses are deducted from
the capital of existing shareholders
(occurrence of either condition means
the issuer has become non-viable)
based on the decision of the BRSA.
Due to the losses incurred, within the
framework of Article 71 of the Banking
Law, (1) the Bank’s operating license is
to be revoked and liquidated or (2) the
rights of all of its shareholders (except
to dividends) and the management
and supervision of the Bank are to
be transferred to the SDIF on the
condition that losses are deducted from
the capital of existing shareholders
(occurrence of either condition means
the issuer has become non-viable)
based on the decision of the BRSA.
Partially or Completely
Partially or Completely
Partially or Completely
Permanent
Permanent
Permanent
Paid before shares and the primary of
subordinated debt and after all the other
debts.
Paid before shares and the primary of
subordinated debt and after all the other
debts.
Paid before shares and the primary of
subordinated debt and after all the other
debts.
If write-down, write-down trigger(s)
If bond can be written-down, full or
partially
If bond can be written-down,
permanent or temporary
If temporary write-down, description
of write-up mechanism
Posıtıon in subordination hierarchy
in case of liquidation (instrument
type immediately senior to the
instrument)
In compliance with article number 7
and 8 of Regulation on Bank Capital
Yes.
Yes.
Yes.
Details of incompliances with article
number 7 and 8 of Regulation on
Bank Capital
To vest conditions stated in clause of the
Article 8 and Don't vest the conditions
stated in clause of the Article 7.
To vest conditions stated in clause of the
Article 8 and Don't vest the conditions
stated in clause of the Article 7.
To vest conditions stated in clause of the
Article 8 and Don't vest the conditions
stated in clause of the Article 7.
Issuer
Türkiye Sınai Kalkınma Bankası A.Ş.
Unique identifier (ex CUSIP. ISIN or Bloomberg identifier for private placement)
XS1584113184
Governing law(s) of the instrument
Taking into account in equity calculation
Subject to 10% deduction as of 1/1/2015
Eligible at unconsolidated / consolidated
Instrument type (types to be specified by each jurisdiction)
Amount recognized in regulatory capital (Currency in mil. as of most recent reporting date)
Par value of instrument
Accounting classification
Original date of issuance
Perpetual or dated
Original maturity date
Issuer call subject to prior supervisory approval
Communiqué on SPK-II-31.1 Borrowing Instruments
Regulation on Equity of BRSA Banking Sector
No
Unconsolidated - Consolidated
Bond
300
300
Subordinated Debts
28.03.2017
Dated
10 Years
Yes
Optional call date. contingent call dates and redemption amount
29.03.2022 (After 5th year) There is an early payment option.
Subsequent call dates. if applicable
Coupons / dividends
Fixed or floating dividend/coupon
Coupon rate and any related index
Existence of a dividend stopper
Fully discretionary. partially discretionary or mandatory
Existence of step up or other incentive to redeem
Noncumulative or cumulative
Convertible or non-convertible
If convertible. conversion trigger (s)
If convertible. fully or partially
If convertible. conversion rate
If convertible. mandatory or optional conversion
If convertible. specify instrument type convertible into
If convertible. specify issuer of instrument it converts into
Write-down feature
If write-down. write-down trigger(s)
After 5th year, there is a refund option only once.
Fixed / interest payment semiannually, principle payment at the
maturity date.
7.625 %
None
None
None
Noncumulative
None
None
None
None
None
None
In accordance with Banking Law No. 5411 and the Turkish
Commercial Code No. 6102, if the possibility of the removal and
liquidation of the Bank's operation permission is determined within
the framework of the Article 71 of the Banking Law, the BRSA will be
able to delete it from the records.
If write-down. full or partial
If write-down. permanent or temporary
If temporary write-down. description of write-up mechanism
Partially or completely
Permanent
None
Position in subordination hierarchy in liquidation (specify instrument type immediately
senior to instrument)
After the debts, before the additional main capital, same as the tier
II capital
In compliance with article number 7 and 8 of “Own fund regulation”
To vest conditions stated in clause of the Article 8.
Details of incompliances with article number 7 and 8 of “Own fund regulation”
Don't vest the conditions stated in clause of the Article 7.
348 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 349
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
3. Explanations on Reconciliations of Amounts in the Consolidated Capital Items Table and Carrying Amounts in the Consolidated Financial Statements
Shareholders’ Equity
Group Share
Minority Interest
Carrying Amount
96,168,179
86,933,251
9,234,928
Leasehold improvements on operational leases
89,996
Goodwill and intangible assets
Provisions
Subordinated debt
Deductions from shareholders’ equity
Capital
2,182,025
17,706,672
41,479,277
22,542
Amounts in Equity
Calculation (*)
96,790,632
92,033,150
4,757,482
(89,996)
(1,993,519)
7,483,983
23,565,477
(22,542)
125,734,035
(*) The related amounts are calculated in accordance with “Regulation on Equities of Banks”. In this context, part of the expected credit loss of stage 1 and stage 2 up to 1.25 % of
amount subject to credit risk, part; subordinated loans according to fourth article of the regulation, have been taken into consideration in equity calculation. On the other hand, in the
calculation, the equity amount calculated in accordance with the BRSA's 21.12.2021 dated and 9996 numbered regulation and the credit risk amount calculated in accordance with
same regulation and with the BRSA regulation dated 21.12.2021 and numbered 9996.
II. Explanations on Credit Risk
1. Credit risk is defined as the possibility of incurring loss where the counterparty in a transaction, partially or completely fails to meet its contractual obligations in due time
in an agreement with the Bank and its consolidated financial subsidiaries.
Banks and financial institutions subject to consolidation, carry out their placement activities in accordance with the credit limitations stipulated by legal regulations of the
countries in which they operate.
The Parent Bank’s position against the credit risk limits defined by the current legislation is monitored by the Board. Within this framework, loans extended to Risk Groups
and the Parent Bank’s Risk Group, including the Parent Bank; loans in high amounts and limitations regarding the shares in participations are monitored according to the
limits determined in connection with the size of the shareholders’ equity calculated on a bank-only and consolidated basis.
Credit risk limits of customers are determined depending on the financial situation and loan requirements of the borrowers, in strict compliance with the relevant banking
legislation, within the framework of loan authorization limits of Branches, Regional Offices, Loan Divisions, and the Deputy Chief Executives responsible for loans, the CEO,
the Credit Committee and the Board of Directors. These limits may be changed as may be deemed necessary by the Bank. Moreover, all commercial credit limits are revised
periodically, provided that each period does not exceed a year. Furthermore, the borrowers and borrower groups forming a large proportion of the overall placement are
subject to risk limits in order to provide further minimization of potential risk.
The geographical distribution of borrowers is consistent with the concentration of industrial and commercial activities in Turkey.
The distribution of borrowers by sector is monitored closely for each period and sectoral risk limits have been determined to prevent concentration of risk in sectoral sense.
The credit-worthiness of customers is monitored on a consistent basis by using company rating and scoring models specially developed for this purpose, and the audit of
statements of account received is assured to have been made in accordance with the provisions as stipulated by the relevant legislation
The Parent Bank and its financial affiliates give utmost importance to ensure that loans are furnished with collaterals. Most of the loans extended are collateralized by
taking real estate, movable or commercial enterprise under pledge, promissory notes and other liquid assets as collateral, or by acceptance of bank letters of guarantee and
individual or corporate guarantees.
Non-performing and impaired loans have been classified in accordance with the “TFRS 9-Financial Instruments” and BRSA’s “Regulation on Procedures and Principles for
Classification of Loans and Provisions to be set aside”. The detailed descriptions of these methods correspond with accounting practices, are included in Section Three Note
VIII.
Credit risk is the risk reduction effects without taking into consideration the total amount of exposures after offsetting transactions with different risk classes according to
the types and amounts of disaggregated risks are listed below the average for the period.
Amount subject to credit risk (1)
Risk Classifications
Current Period Risk Amount
Average Risk Amount (2)
Conditional and unconditional exposures to central governments or central banks
287,894,662
232,223,090
Conditional and unconditional exposures to regional governments or local authorities
Conditional and unconditional exposures to administrative bodies and non-commercial undertakings
Conditional and unconditional exposures to multilateral development banks
Conditional and unconditional exposures to international organizations
Conditional and unconditional exposures to banks and brokerage houses
Conditional and unconditional exposures to corporate
Conditional and unconditional retail exposures
Exposures secured by residential real estate property
Exposures secured by commercial real estate property
Past due loans
Items in regulatory high-risk categories
Exposures in the form of bonds secured by mortgages
Short term exposures to banks, brokerage houses and corporates
Exposures in the form of collective investment undertakings
Stock investments
Other items
343,351
604,154
363,923
60,660,289
379,514,464
171,261,069
24,776,358
28,499,946
7,773,698
23,877,608
2,683,178
38,364,284
23,010,720
396,295
555,212
347,793
57,132,945
359,162,341
159,457,265
13,045,772
25,353,237
8,149,479
9,529,467
3,001,275
34,124,177
17,505,044
(1) The figures represent total risk amounts after credit risk mitigation and after credit conversion factor.
(2) Average risk amount is identified by using arithmetical averages of risk amounts calculated quarterly in the current period reports.
2. There are certain control limits on forward transactions in terms of counter parties, and the risks taken for derivative instruments are evaluated along with other
potential risks resulting from the market fluctuations.
3. As a result of the current level of customers’ needs and the progress in the domestic derivatives market in this particular area, the Parent Bank uses derivative
transactions either for hedging or for commercial purposes.
Derivative instruments with a remarkable volume are monitored with consideration that they can always be liquidated in case of need.
4. Indemnified non-cash loans are considered as having the same risk weights as unpaid cash loans.
The rating and scoring systems applied by the Parent Bank, includes detailed company analysis and enables rating of all companies and loans without any restrictions
regarding credibility. Loans and companies, which have been renewed, restructured or rescheduled, are rated within the scope of this system. Specialized loans are
evaluated by a special rating system, which is based on the credibility of the counterparty as well as the feasibility and risk analysis of the cash flows created mainly by the
projects undertaken or the asset financed.
5. Determining the country risks of the countries concerned in the context of the current rating system credit transactions carried out abroad, market conditions, legal
constraints and risks related to the country on this issue into account. In addition, banks and other financial institutions credit worthiness abroad, foreign rating agencies by
based on credit ratings that are determined and CDS-IR (based on credit default swaps) a supported developed degree approach is allocated and monitored.
6.
i. The share of the Group’s receivables from the top 100 and 200 cash loan customers in the overall cash loan portfolio stands at 30 % and 39 % respectively (December
31, 2020: 27 %, 36 %).
ii. The share of the Group’s receivables from the top 100 and 200 non-cash loan customers in the overall non-cash portfolio stands at 46 % and 58 % respectively
(December 31, 2020: 46 %, 59 %).
iii. The share of the Group’s cash and non-cash receivables from the top 100 and 200 credit customers in the overall assets and non-cash loans stands at 16 % and 22 %
(December 31, 2020: 16 %, 22 %).
Companies that are among the top loan customers ranked according to cash, non-cash and total risks are leaders in their own sectors, the loans advanced to them are in
line with their volume of industrial and commercial activity. A significant part of such loans is extended on a project basis, with their repayment sources being analyzed in
accordance with the banking principles to be considered as satisfactory, and associated risks are determined and duly covered by obtaining appropriate guarantees when
deemed necessary.
7. Total value of the Stage 1 and Stage 2 expected credit loss allocated for the credit risk carried by Parent Bank and consodilated companies is TL 16,926,688 (December
31, 2020: TL 11,659,777).
8. The Parent Bank measures the quality of its loan portfolio by applying different rating/scoring models on cash commercial/corporate loans, retail loans and credit cards.
The breakdown of the rating/scoring results, which are classified as “Strong”, “Standard” and “Below Standard” by considering their default features, is shown below.
The loans whose borrowers’ capacity to fulfill their obligations is very good, are defined as “Strong”, whose borrowers’ capacity to fulfill its obligations in due time is
reasonable, are defined as “Standard” and whose borrowers’ capacity to fulfill their obligations is poor, are defined as “Below Standard”.
Strong
Standard
Below Standard
Table shows rating/scoring results.
Current Period
Prior Period
%45.06
%49.68
%5.26
48.71 %
43.51 %
7.78 %
350 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 351
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
9. The net values of the collaterals of the Group’s closely monitored loans are given below in terms of collateral types and risk matches.
12. Profile of Significant Risk Exposures in Major Regions
Type of Collateral
Personal
Current Period
Commercial and
Corporate
Credit Cards
Personal
Credit Cards
Current Period
Domestic
European
Union
OECD
Countries (2)
Off-Shore
Banking
Regions
USA, Canada
Other
Countries
Investments
in Associates,
Subsidiaries and
Jointly Controlled
Entities
Unallocated
Assets/
Liabilities (3)
Total
Prior Period
Commercial and
Corporate
11,237,404
381,335
219,531
586
690,237
37,128
1,469,688
Real Estate Mortgage (1)
1,091,254
12,261,832
Cash Collateral (Cash, securities pledge, etc.)
50,628
Pledge on Wages and Vehicles
2,344,742
544,608
345,122
13,667
Cheques & Notes
Other (Suretyship, commercial enterprise
under pledge, commercial papers, etc.)
450,396
36,912,380
236,678
25,738,738
Non-collateralized
Total
3,411,799
7,348,819
9,047,472
59,125,081
2,206,344
2,206,344
1,433,351
3,867,082
6,138,224
43,715,818
1,067,462
1,067,462
(1) The mortgage and/or pledge amounts on which third parties have priorities are deducted from the fair values of collaterals in expertise reports; and after comparing the results to
the mortgage/pledge amounts and loan balances, the smallest figures are considered to be the net value of collaterals.
10. The net values of the collaterals of the Group’s non-performing loans are given below in terms of collateral types and risk matches.
Type of Collateral
Real Estate Mortgage (1)
Cash Collateral
Vehicle Pledge
Other (Suretyship, commercial enterprise under
pledge, commercial papers, etc.)
Current Period
Prior Period
Net Value of the Collateral
Loan Balance
Net Value of the Collateral
Loan Balance
6,516,872
1,523
274,128
8,598,774
6,516,872
1,523
274,128
8,598,774
6,976,076
1,141
291,010
8,153,418
6,976,076
1,141
291,010
8,153,418
(1) The mortgage and/or pledge amounts on which third parties have priorities are deducted from the fair values of collaterals in expertise reports; and after comparing the results to
the mortgage/pledge amounts and loan balances, the smallest figures are considered to be the net value of collaterals.
11. The aging analysis of the recievables past due but not impaired in terms of financial asset classes, is as follows:
Current Period
Loans (1)
Corporate / Commercial Loans (3)
Consumer Loans
Credit Cards
Lease Receivables (1)
Insurance Receivables
Total
31-60 Days (2)
61-90 Days (2)
669,979
120,934
155,926
393,119
2,996
35,737
708,712
964,455
689,981
70,167
204,307
92,609
18,038
1,075,102
Total
1,634,434
810,915
226,093
597,426
95,605
53,775
1,783,814
( 1) The loans classified under close monitoring that are not past due or past due for less than 31 days is TL 63,984,188.
( 2) Related figures show only overdue amounts of installment based commercial loans and installment based consumer loans; the principal amounts of the loans which are not due as
of the balance sheet date are equal to TL 1,572,925 and TL 1,393,092 respectively.
( 3) Includes factoring receivables..
Prior Period
Loans (1)
Corporate / Commercial Loans (4)
Consumer Loans
Credit Cards
Lease Receivables (1)
Insurance Receivables
Total
31-60 Days (2)
61-90 Days (2) (3)
209,825
121,649
28,156
60,020
3
16,476
1,897,417
1,564,999
147,800
184,618
14,423
28,439
Total
2,107,242
1,686,648
175,956
244,638
14,426
44,915
226,304
1,940,279
2,166,583
( 1) The loans classified under close monitoring that are not past due or past due for less than 31 days is TL 42,327,768.
( 2) Related figures show only overdue amounts of installment based commercial loans and installment based consumer loans; the principal amounts of the loans which are not due as
of the balance sheet date are equal to TL 2,884,661 and TL 1,316,265 respectively.
( 3) Based on the decisions taken by the BRSA within the scope of the COVID-19 outbreak, only the overdue amounts (TL 1,369,804) of the loans that have been delayed more than 90
days continue to be classified under close monitoring are included, and the payment of these loans is not due. the balance is TL 2,097,786.
( 4) Includes factoring receivables.
Risk Groups (1)
Contingent and Non-
Contingent Receivables from
Central Governments or
Central Banks (4)
Contingent and Non-
Contingent Receivables from
Regional Government or
Domestic Government
Contingent and Non-
Contingent Receivables from
Administrative Units and
Non-Commercial Enterprises
Contingent and Non-
Contingent Receivables from
Multilateral Development
Banks
Contingent and Non-
Contingent Receivables from
International Organizations
Contingent and Non-
Contingent Receivables from
Banks and Intermediaries
Contingent and Non-
Contingent Corporate
Receivables
Contingent and Non-
Contingent Retail
Receivables
Contingent and Non-
Contingent Receivables
Secured by Residential
Property
279,429,592
3,418,735
1,136,972
3,909,363
287,894,662
343,323
593,628
10,452
28
74
341,632
22,291
343,351
604,154
363,923
24,705,086
19,110,911
10,029,676
1,405
5,045,838
1,767,373
60,660,289
359,817,099
4,240,863
4,547,213
678,401
577,216
9,653,672
379,514,464
169,270,774
260,917
143,745
1,545
37,789
1,546,299
171,261,069
52,329,727
212,708
45,683
85
34,547
653,554
Non-Performing Receivables 7,577,907
157,363
4,358
1,349
32,721
23,489,023
92,613
12,713
1,377
13,994
267,888
Receivables are identified as
high risk by the Board
Secured Marketable
Securities
Securitization Positions
Short-term Receivables
and Short-term Corporate
Receivables from Banks and
Intermediaries
Investments as Collective
Investment Institutions
2,683,178
Other Receivables
37,697,899
124,282
456,265
603
85,235
Stock Investments
23,010,720
53,276,304
7,773,698
23,877,608
2,683,178
38,364,284
23,010,720
Total
957,937,236
27,628,844
15,581,285 682,813
6,848,308
17,938,498
23,010,720
1,049,627,704
(1) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
(2) OECD Countries other than EU countries, USA and Canada.
(3) Assets and liabilities that are not consistently allocated.
(4) Credits guaranteed by the Undersecretariat of Treasury are included in the class of receivables from central government.
352 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 353
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Prior Period
Domestic
European
Union
OECD
Countries
(2)
Off-Shore
Banking
Regions
USA, Canada
Other
Countries
Investments
in Associates,
Subsidiaries and
Jointly Controlled
Entities
Unallocated
Assets/
Liabilities (3)
Total
Risk Groups (1)
Contingent and Non-
Contingent Receivables from
Central Governments or
Central Banks(4)
Contingent and Non-
Contingent Receivables from
Regional Government or
Domestic Government
Contingent and Non-
Contingent Receivables from
Administrative Units and
Non-Commercial Enterprises
Contingent and Non-
Contingent Receivables from
Multilateral Development
Banks
Contingent and Non-
Contingent Receivables from
International Organizations
Contingent and Non-
Contingent Receivables from
Banks and Intermediaries
Contingent and Non-
Contingent Corporate
Receivables
Contingent and Non-
Contingent Retail Receivables
Contingent and Non-
Contingent Receivables
Secured by Residential
Property
184,734,393 1,877,495
1,381,513
2,386,225
190,379,626
454,664
547,207
8,028
36,797
319,900
1
93
454,665
555,328
356,697
19,189,061
18,643,498
6,382,545
11,772
4,132,030
1,065,402
49,424,308
297,070,143 4,095,405
2,323,298
617,727
1,212,606
7,160,420
138,709,707 350,862
128,151
1,358
49,537
1,486,312
34,238,655
110,679
29,606
126
9,658
25,586
Non-Performing Receivables
8,423,824
19,968
11,252
2,231
18,015
Receivables are identified as
high risk by the Board
319,531
31,018
135
Secured Marketable
Securities
Securitization Positions
Short-term Receivables
and Short-term Corporate
Receivables from Banks and
Intermediaries
Investments as Collective
Investment Institutions
2,745,702
Other Receivables
28,673,493
15,708
9,340
484
60,481
Stock Investments
13,790,256
Total
715,106,380 25,189,458 9,204,092
630,983
6,788,059
12,202,670 13,790,256
( 1) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
( 2) OECD Countries other than EU countries, USA and Canada.
( 3) Assets and liabilities that are not consistently allocated.
( 4) Credits guaranteed by the Undersecretariat of Treasury are included in the class of receivables from central government.
312,479,599
140,725,927
34,414,310
8,475,290
350,684
2,745,702
28,759,506
13,790,256
782,911,898
354 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 355
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen 13. Risk Profile by Sectors or Counterparties:
Sectors/Counterparty (*)
(1) (**)
(2)
42,010
39,607
917
1,486
Agriculture
Farming and
Stockbreeding
Forestry
Fishing
Industry
Mining
Production
Electricity, gas, and water
17,007
7,612
Construction
Services
1,106,864
145,304,100
Wholesale and Retail Trade
1,187,614
Hotel, Food and Beverage
Services
Transportation and
Telecommunication
300,533
4,202,103
1,055,118
7,612
33,475
20,385
1,017,726
Current Period
Consolidated
Prior Period
Consolidated
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
TP
YP
Toplam
2,721,242
4,637,370
691,707
40,512
154,192
6,623,687
1,663,878
8,287,565
1,856,397
4,583,263
642,897
37,053
152,972
6,506,687
805,963
7,312,650
32,176
832,669
23,338
30,769
183,295,910
12,483,480
7,200,394
361,524
111,345,756
11,443,123
64,749,760
678,833
39,287,965
5,244,040
3,233
45,577
358
3,101
699
521
8,367,514
2,863,837
240,407
144,783
48,357
3,471
7,821,741
263,229
228,918
400,990
2,552,251
8,018
4,408,450
2,409,917
265,717
59,562
57,438
1,230
60,792
856,685
914,123
193
65
128
18,006,798
67,164,615
159,189,729
226,354,344
1,616,345
6,162,569
7,778,914
18,005,632
54,858,571
95,267,619
150,126,190
1,166
10,689,699
57,759,541
68,449,240
20,344,925
32,382,591
52,727,516
(3)
532
461
71
33,475
4,563
470,693
363,923
58,359,771
124,751,215
43,312,849
22,215,108
1,707,128
1,078,810
1,770,289
1,400,725
4,179,910
123,355,936
281,558,585
404,914,521
48,878,064
25,393,852
10,145,345
592,949
441,974
114,032
54,622,413
32,131,417
86,753,830
8,436,397
2,453,115
3,450,898
190,809
118,590
4,851,504
10,098,838
14,950,342
9
30,211,683
10,279,018
2,232,866
784,793
283,027
463
127,602
18,067,338
30,054,226
48,121,564
Financial Institutions
139,416,572
339,710
363,923
58,359,771
20,668,379
643,390
379,295
1,405
Real Estate and Renting
Services
45,040
Self-Employment Services
32,845
Education Services
46,419
Health and Social Services
72,974
84,181
41,888
4,716
189
6,739,295
1,740,621
4,027,514
96,168
1,174,263
1,082,083
938,854
406,743
7,704,280
1,314,027
406,469
922,079
650,642
15,420
10,969
14,615
7,150
60,451
90,849
15,938
60,831
1,770,289
1,400,262
1,635,138
31,998,962
192,986,322
224,985,284
2,303,138
8,013,584
7,082,824
15,096,408
1,865,647
978,170
2,843,817
1,222,589
1,123,129
2,345,718
2,713,899
7,103,659
9,817,558
Other
Total
140,386,570
335,739
94,891
2,300,518
29,458,132
105,583,330
17,593,525
752,304
22,138,482
912,889
36,963,366
824,012
304,454,410
52,889,348
357,343,758
287,894,662
343,351
604,154
363,923
60,660,289
379,514,464
171,261,069
53,276,304
7,773,698
23,877,608
2,683,178
38,364,284
23,010,720
521,943,573
527,684,131
1,049,627,704
( 1) Contingent and non-contingent exposures to central governments or central banks
( 2) Contingent and non-contingent exposures to regional governments or local authorities
( 3) Contingent and non-contingent exposures to administrative bodies and non-commercial undertakings
( 4) Contingent and non-contingent exposures to multilateral development banks
( 5) Contingent and non-contingent exposures to international organizations
( 6) Contingent and non-contingent exposures to banks and brokerage houses
( 7) Contingent and non-contingent corporate receivables
( 8) Contingent and non-contingent retail receivables
( 9) Contingent and non-contingent exposures secured by real estate property
( 10) Past due receivables
( 11) Receivables in regulatory high-risk categories
( 12) Investments in the nature of collective investment enterprise
( 13) Other Receivables.
( 14) Stock Investments.
(*) Risk amounts after the credit conversions and the effects of credit risk mitigation
(**) Credit Guarantee Fund guaranteed by the undersecreteriat of treasury are included in the receivables from central governments.
356 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
14. Analysis of maturity-bearing exposures according to remaining maturities:
Risk Amounts according to Risk Weights:
Current Period
Remaining Maturities
Risk Groups (1)
Contingent and Non-Contingent Receivables
from Central Governments or Central Banks
Contingent and Non-Contingent Receivables
from Regional Governments or Domestic
Governments
Contingent and Non-Contingent Receivables
from Administrative Units and Non-
Commercial Enterprises
The multilateral development banks and
non-contingent receivables
Contingent and Non-Contingent Receivables
from Banks and Intermediaries
Contingent and Non-Contingent Corporate
Receivables
Contingent and Non-Contingent Retail
Receivables
Contingent and Non-Contingent
Collateralized Receivables with Real Estate
Mortgages
Receivables are identified as High Risk by
the Board
1 Month
1-3 Months
3-6 Months
6-12 Months
Over 1 Year
Total
11,642,512
11,002,248
5,886,846
6,423,329
126,554,298
161,509,233
2,065
808
489
7,580
332,407
343,349
19,353
360,630
28,617
97,238
74,311
580,149
16,165
284,608
63,150
363,923
20,416,477
5,155,607
4,472,115
9,019,235
8,630,438
47,693,872
24,435,716
33,518,996
41,499,539
51,500,491
227,499,280
378,454,022
37,861,881
2,910,360
4,089,202
11,789,154
68,112,940
124,763,537
1,016,275
1,268,066
2,586,977
4,306,161
41,157,282
50,334,761
343,828
4,408
4,264
62,578
21,023,277
21,438,355
Total
95,754,272
54,505,731
58,568,049
83,205,766
493,447,383
785,481,201
( 1) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
15. Information on Risk Classes:
In the calculation of the amount subject to credit risk, determining the risk weights related to risk classes stated on the sixth article of “Regulation on Measurement and
Evaluation of Capital Adequacy of Banks”, is based on the Fitch Ratings’ and JCR Avrasya Derecelendirme A.Ş. international rating.
“Contingent and Non-Contingent Receivables from Banks and Intermediaries” are receivables from related parties residing in foreign countries against the risk evaluated
in class with “Contingent and Non-Contingent Receivables from Central Governments or Central Banks” are receivables that are evaluated in the class will be the subject of
risk weights determined in accordance with Fitch Ratings issued by the rating of the risk. “Contingent and Non-Contingent Receivables from Banks and Intermediaries” in
the class with resident banks and brokerage firms in the dorm evaluated risk “Contingent and Non-Contingent Corporate Receivables” in the class evaluated dorm resident
companies and financial institutions in the TL-denominated receivables, the risk weights that will be the subject of JCR Avrasya Derecelendirme A.Ş. international rating
grades assigned by it are used. The aforementioned application is made in accordance with BRSA decision No. 8875 dated 21.02.2020, which allows the national grades
assigned by the relevant organization to be taken into account in the calculations of amounts based on credit risk.
If a receivable-specific rating is performed, risk weights to be applied on the receivable are determined by the relevant credit rating.
The table related to mapping the ratings used in the calculations and credit quality grades, which is stated in the Annex of Regulation on Measurement and Evaluation of
Capital Adequacy of Banks, is given below:
Credit Quality Grades
1
2
3
4
5
6
Risk Rating
AAA via AA-
A+ via A-
BBB+ via BBB-
BB+ via BB-
B+ via B-
CCC+ and lower
Risk Weight
0%
20%
35%
50%
75%
100%
150%
250%
Other (2)
Mitigation in
Shareholders’
Equity
Amount Before Credit
Risk Mitigation (1)
Amount After Credit
Risk Mitigation
330,566,059 57,404,351
24,834,688
75,697,248
126,854,636
418,118,571
24,283,127
280,196
507,740
2,083,515
339,553,784 56,648,279
24,776,358
75,610,451
123,094,596
405,200,913
23,955,387
280,196
507,740
2,083,515
( 1) The figures represent total risk amounts before credit risk mitigation and after credit conversion factor.
( 2) The related balance includes receivables from central counterparties subject to a risk weight of 2%.
16. Miscellaneous Information According to Type of Counterparty of Major Sectors
Significant Sectors/Counterparty
Current Period
Agricultural
Farming and Raising Livestock
Forestry
Fishing
Industry
Mining
Production
Electricity, gas, and water
Construction
Services
Wholesale and Retail Trade
Hotel, Food and Beverage Services
Transportation and Telecommunication
Financial Institutions
Real Estate and Renting Services
Self-Employment Services
Education Services
Health and Social Services
Other
Total
1
1.1
1.2
1.3
2
2.1
2.2
2.3
3
4
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
5
6
Loans
Depreciated (TFRS 9)
Significant Increase in Credit
Risk (Stage 2)
Non-Performing (Stage 3)
Provisions
Expected Credit Loss
(TFRS 9)
732,509
524,015
1,385
207,109
25,687,762
93,900
7,935,822
17,658,040
4,929,113
27,407,544
5,825,368
5,220,223
6,873,554
17,521
5,492,554
431,046
132,812
3,414,466
9,923,316
68,680,244
200,328
183,716
2,061
14,551
8,947,649
177,040
2,766,327
6,004,282
6,474,504
6,340,030
2,895,929
605,324
2,044,374
10,131
537,706
119,648
58,164
68,754
2,482,581
24,445,092
289,189
226,410
1,824
60,955
12,329,298
163,657
3,835,543
8,330,098
4,808,109
8,345,713
3,265,978
1,030,051
2,150,234
10,830
1,172,535
132,122
66,977
516,986
2,861,634
28,633,943
17. Information on Value Adjustments and Change in Credit Provisions
Beginning Balance
Provisions
Reversal of Provisions
Other Value
Adjustments
Stage 3 Provisions
Stage 1 and Stage 2 Provisions
14,371,889
11,659,777
5,924,495
13,024,189
(4,397,780)
(7,757,278)
Ending Balance
15,898,604
16,926,688
18. Exposures Subject To Countercyclical Capital Buffer
Explanations about exposures subject to consolidated private sector receivables:
Country
Turkey
Germany
TRNC
England
Albania
Malta
Kosovo
Russia
Marshall Island
Switzerland
Other
RWA Calculations for Private Sector
Loans in Banking Book
443,362,416
6,242,705
3,543,077
3,445,511
1,501,401
1,139,770
1,084,821
1,043,174
821,335
790,878
1,812,210
RWA calculations for Trading Book
Total
820,806
1,043
8,095
49,931
444,183,222
6,242,705
3,543,077
3,446,554
1,509,496
1,139,770
1,084,821
1,043,174
821,335
790,878
1,862,141
358 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 359
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
III. Explanations on Currency Risk
The exposed currency risk of the Group is result of the difference between the assets denominated in and indexed to foreign currencies and liabilities denominated in
foreign currencies. Furthermore, parity fluctuations of different foreign currencies are another element of the currency risk.
The currency risk of the Parent Bank is managed by the internal currency risk limits which are established as a part of the Parent Bank’s risk policies. The Assets and
Liabilities Committee and the Assets and Liabilities Management Unit meet regularly to take the necessary decisions for hedging exchange rate and parity risks, within
the framework of the determined by the “Net Foreign Currency Overall Position/ Shareholders’ Equity” ratio, which is a part of the legal limits requirement and the internal
currency risk limits specified by the Board of Directors. Foreign exchange risk management decisions are strictly applied.
In measuring the exposed currency risk of the Group, the Standard Method, the Value at Risk Model (VAR) and Expected Shortfall Model are used as applied in the statutory
reporting.
Measurements made for the Parent Bank within the scope of the Standard Method are carried out on a monthly basis and form the basis of determining the capital
requirement for hedging currency risk.
Risk measurements made within the context of the VAR are practiced on a daily basis using the historical and Monte Carlo simulation methods. Scenario analyses are
conducted to support the calculations made within the VAR context. Expected loss calculations are also carried out daily.
The results of the measurements made on currency risk are reported to the Key Management and the risks are closely monitored by taking into account the market and the
economic conditions..
The Parent Bank’s foreign currency purchase rates at the date of balance sheet and for the last five working
days of the period announced by the Parent Bank in TL are as follows:
Date
December 31, 2021
December 30, 2021
December 29, 2021
December 28, 2021
December 27, 2021
December 24, 2021
USD
13.0850
12.9097
12.4600
11.6965
11.3492
11.5260
EUR
14.8390
14.6396
14.1297
13.2381
12.8552
13.0359
The Parent Bank’s last 30-days arithmetical average foreign currency purchase rates:
USD: 13.2847 TL
EURO: 15.0164 TL
Sensitivity to currency risk:
The Group’s sensitivity to any potential change in foreign currency rates has been analyzed. Within this framework, 10% change is anticipated in USD, EUR, RUB and GEL
currencies and the possible impact of the related change is presented below. 10% is the ratio that is used in the internal reporting of the Parent Bank.
USD
EURO
RUB
GEL
( 1) Indicates the values before tax.
% Change in Foreign Currency
10 % increase
10 % decrease
10 % increase
10 % decrease
10 % increase
10 % decrease
10 % increase
10 % decrease
Current Period
416,075
(416,075)
471,624
(471,624)
155,517
(155,517)
84,092
(84,092)
Effects on Profit/Loss (1)
Priod Period
255,991
(255,991)
447,405
(447,405)
74,306
(74,306)
42,425
(42,425)
Information on currency risk:
Current Period
Assets
Cash (Cash in Vault, Foreign Currency Cash, Money in Transit, Cheques
Purchased) and Balances with the Central Bank of Turkey (1)
Banks
Financial Assets at Fair Value through Profit/Loss (2)
Money Market Placements
Financial Assets at Fair Value through Other Comprehensive Income
Loans (2) (3)
Investments in Associates, Subsidiaries and Jointly Controlled Entities
(Joint Ventures)
Financial Assets measured at Amortized Cost
Derivative Financial Assets Held for Risk Management (2)
Tangible Assets (2)
Intangible Assets (2)
Other Assets (2)
Total Assets
Liabilities
Bank Deposits
Foreign Currency Deposits (4)
Money Market Funds
Funds Provided from Other Financial Inst,
Marketable Securities Issued (5)
Miscellaneous Payables
Derivative Financial Liabilities Held for Risk Management
Other Liabilities (2) (6)
Total Liabilities
Net Balance Sheet Position
Net Off Balance Sheet Position
Derivative Financial Assets (7)
Derivative Financial Liabilities (7)
Non-Cash Loans
Prior Period
Total Assets
Total Liabilities
Net Balance Sheet Position
Net Off Balance Sheet Position
Derivative Financial Assets
Derivative Financial Liabilities
Non-Cash Loans
EUR
USD
Other FC
Total
80,075,530
65,333,764
21,316,549
166,725,843
11,808,608
2,654,049
44,965
5,045,869
154,996,889
10,092,216
7,631,806
10,319,940
5,560,441
41,916,588
153,118,519
7,026
5,704,566
32,220,764
15,846,296
44,965
46,969,483
313,819,974
1,030,718
171,824
4,364,918
317,691
2,041
1,094,646
95,345
6,490,282
317,691
269,210
2,463,729
258,292,181
9,307,483
292,085,026
959,371
45,057,884
12,730,583
595,435,091
3,464,936
158,949,135
1,409,347
44,829,483
885,469
693,455
212,905,642
9,499,108
78,036,629
78,330,240
5,026,132
640,881
75,504,211
38,073
144,927
408,666
4,799,272
447,358,988
10,908,455
122,904,185
78,475,167
6,320,267
5,055,761
214,594,131
9,115,724
393,606,930
806,376
77,543,134
14,977,861
685,744,195
43,698,050
(38,937,607)
30,518,476
69,456,083
63,318,833
136,114,708
123,781,189
12,333,519
(8,137,589)
18,521,848
26,659,437
37,692,915
(101,521,904)
107,856,716
170,928,671
63,071,955
81,181,608
(32,485,250)
34,162,909
39,148,208
4,985,299
8,702,425
161,959,197
223,069,097
(61,109,900)
63,964,318
95,161,394
31,197,076
40,551,047
26,508,062
48,563,717
(22,055,655)
23,340,880
27,083,201
3,742,321
4,514,070
(90,309,104)
103,082,018
240,595,355
137,513,337
153,202,866
324,581,967
395,414,003
(70,832,036)
79,167,609
140,766,443
61,598,834
82,758,032
( 1) Precious metals accounts amounting TL 20,081,293 are included.
( 2) In accordance with the principles of the “Regulation on the Calculation and Implementation of Foreign Currency Net General Position/Equity Standard Ratio by Banks on
Consolidated and Non-Consolidated Basis”, Derivative Financial Instruments Foreign Currency Income Accruals (TL 16,544,514) Operating Lease Development Costs (TL 6,503),
Deferred Tax Asset (TL 2,538,415), Prepaid Expenses and Taxes (TL 274,189), expected credit loss for stage 1 and stage 2 (TL (10,986,135) Intangible Assets (TL 167,743) Assets
Held for Sale and Related to Discontinued Operations(Net)(TL 21,988) in assets and Derivative Financial Instruments Foreign Currency Expense Accruals (TL 4,035,130), Shareholders’
Equity (TL (2,755,748)) and expected credit loss for stage 1 and stage 2 for non-cash loans (TL 244,209) are not taken into consideration in the currency risk measurement.
( 3) Includes leasing and factoring receivables and foreign currency indexed loans which are recognized under TL account. Of the total amount of TL 2,321,114 of the aforementioned
loans; TL 1,051,332 is USD indexed, TL 1,262,951 is EUR indexed, TL 1,189 is CHF indexed and TL 5,642 is GBP indexed.
( 4)The item includes TL 54,040,023 precious metals deposit accounts.
( 5) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
( 6) The borrower funds are presented in the “Other Liabilities” according to their type of currency.
( 7) The derivative transactions in the context of forward foreign currency options and foreign currency forwards definitions included in the Communiqué above are taken into
consideration.
360 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
IV. Explanations on Interest Rate Risk
a. Interest sensitivity of assets, liabilities and off-balance sheet items (Based on time remaining to repricing date):
Interest rate risk is defined as the impairment in the value of the interest sensitive assets, liabilities and off-balance sheet items due to interest rate fluctuations. A method
which takes into consideration the effect of standard interest shocks on the economic values of the Parent Bank’s on and off-balance sheet interest sensitive accounts is
used for measuring the interest rate risk arising from the banking accounts, whereas the interest rate risk related to interest sensitive financial instruments followed under
trading accounts is assessed within the scope of market risk.
Current Period
Assets
Up to 1
Month
1-3 Months
3-12 Months
1-5 Years
5 Years and
Over
Non-interest
Bearing
Total
Potential effects of interest rate risk on the Parent Bank’s assets and liabilities, market developments, the general economic environment and expectations are regularly
followed in meetings of the Asset-Liability Committee, where further measures to reduce risk are taken when necessary.
The Parent Bank’s on and off-balance sheet interest sensitive accounts other than the assets and liabilities exposed to market risk are monitored and controlled by the
limits on the ratio of structural interest rate risk to equity and tier 1 capital determined by the Board within the scope of asset-liability management risk policy. Moreover,
scenario analyses formed in line with the average maturity gaps and the historical data and expectations are also used in the management of the related risk.
In addition, the effect of the change in interest rates on the Parent Bank's net interest income is analyzed regularly. Within this scope, the ratio of the change expected to
occur in net interest income under carious scenarios to the limit on Tier I capital is monitored and regularly reported to the top management.
Interest rate sensitivity:
In this part, the sensitivity of the Bank’s assets and liabilities to the interest rates has been analyzed assuming that the yearend balance figures were the same throughout
the year. Mentioned analysis shows how the FC and TL changes in interest rates by one point during the one-year period affect the Group's income accounts and
shareholders' equity under the assumption maturity structure and balances are remain the same all year round at the end of the year.
During the measurement of the Group’s interest rate sensitivity, the profit/loss on the asset and liability items that are evaluated with market value are determined by
adding to/deducting from the difference between the expectancy value of the portfolio after one year in case there is no change in interest rates and the value of the
portfolio one year later, which is measured after the interest shock, the interest income to be additionally earned/to be deprived of during the one year period due to the
renewal or repricing of the related portfolio at the interest rates formed after the interest shock.
On the other hand, in the profit/loss calculation of assets and liabilities that are not evaluated by the current market prices, it is assumed that assets and liabilities with
fixed interest rates will be renewed at maturity date and the assets and liabilities having variable interest rates will be renewed at the end of repricing period with the
market interest rates generated after the interest shock.
Within this context, ceteris paribus, the possible changes that may occur in the Bank’s profit and shareholders’ equity in case of 100 base point increase/decrease in TL and
FC interest rates on the reporting day are given below:
% Change in the Interest Rate (1)
Effect On Profit/Loss
Effect on Equity (2)
TL
100 bps increase
100 bps decrease
FC (3)
100 bps increase
100 bps decrease
Current Period
977,167
(1,068,195)
Prior Period
541,645
(1,048,424)
Current Period
(2,608,623)
2,871,166
Prior Period
(1,624,307)
1,804,250
(1) Changes in interest rates is calculated assuming that the expectations reflected in inflation. The effects on the profit/loss and shareholders’
equity are stated with their before tax values.
(2) The effect on the shareholders’ equity is arising from the change of the fair value of securities followed under Financial Assets at Fair Value
through other comprehensive income.
(3) The negative shock imposed on FC interest rates remained below the aforementioned rates in some maturity segments due to LIBOR rates
being in low levels.
Cash (Cash in Vault, Foreign Currency Cash,
Money in Transit, Cheques Purchased) and
Balances with the Central Bank of Turkey
14,634,682
169,386,543
184,021,225
Banks
7,522,586
1,446,001
159,067
26,067,588
35,195,242
Financial Assets at Fair Value through
Profit/Loss (1)
9,268,937
10,152,530
7,785,436
6,127,712
300,260
5,596,590
39,231,465
Money Market Placements
2,061,138
775,354
156,572
2,993,064
Financial Assets at Fair Value Through Other
Comprehensive Income
21,648,338
19,425,001
17,779,889
26,013,946
23,874,084
1,202,401
109,943,659
Loans (2)
115,872,992
60,061,057
177,179,502
206,721,651
53,925,304
982,214
614,742,720
Financial Assets Measured at Cost
8,800,527
13,843,894
17,813,725
8,513,617
2,573,565
51,545,328
Other Assets (3)
Total Assets
Liabilities
Bank Deposits
Other Deposits
5,055,341
76,608
236,851
149,824
81,212,746
86,731,370
184,864,541
105,780,445
221,111,042
247,526,750
80,673,213
284,448,082
1,124,404,073
1,639,400
1,720,923
713,064
1,050,890
1,302,757
6,427,034
255,680,706
36,249,663
24,356,836
3,437,720
962,851
290,564,393
611,252,169
Money Market Funds
46,847,607
2,541,576
4,322,725
25,945
53,737,853
Miscellaneous Payables
2,230,493
60,121
46,585
26,822
73,969,740
76,333,761
Marketable Securities Issued (4)
2,104,244
11,647,841
22,621,436
35,838,166
17,344,902
Funds Provided from Other Financial
Institutions
Other Liabilities (5)(6)
Total Liabilities
12,455,710
53,579,724
50,954,407
9,616,624
2,317,218
5,230,548
4,443,819
3,981,506
1,373,120
1,376,106
141,767,885
158,172,984
326,188,708
110,243,667
106,996,559
51,369,287
22,001,077
507,604,775
1,124,404,073
89,556,589
128,923,683
Balance Sheet Long Position
Balance Sheet Short Position
(141,324,167)
(4,463,222)
(223,156,693)
(368,944,082)
114,114,483
196,157,463
58,672,136
368,944,082
Off Balance Sheet Long Position
3,422,542
16,148,347
Off Balance Sheet Short Position
(1,052,722)
(9,325,566)
(6,159,597)
19,570,889
(16,537,885)
Total Position
(137,901,625) 11,685,125
113,061,761
186,831,897
52,512,539
(223,156,693) 3,033,004
(1) Includes Derivative financial assets
(2) Includes leasing and factoring receivables.
(3) The expected loss provisions are shown in Non-Interest column.
(4) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
(5) Shareholders’ equity is included in “non-interest bearing” column.
(6) The borrower funds are presented in “Up to 1 month” column in other liabilities.
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 363
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Interest rate sensitivity of assets, liabilities and off-balance sheet items (Based on time remaining to repricing date):
b. Average interest rates applied to monetary financial instruments:
Prior Period
Assets
Up to 1
Month
1-3 Months
3-12 Months
1-5 Years
5 Years and
Over
Non-interest
Bearing
Total
Current Period
Assets
Cash (Cash in Vault, Foreign Currency Cash,
Money in Transit, Cheques Purchased) and
Balances with the Central Bank of Turkey
3,079,150
68,891,240
71,970,390
Cash (Cash in Vault. Foreign Currency Cash. Money in Transit.
Cheques Purchased) and Balances with the Central Bank of Turkey
Banks
9,914,573
831,263
422,451
11,181,346
22,349,633
Financial Assets at Fair Value through
Profit/Loss (1)
1,632,396
1,826,743
4,458,677
1,431,863
424,882
3,735,574
13,510,135
Money Market Placements
1,131,261
628,745
441,521
2,201,527
Financial Assets at Fair Value Through Other
Comprehensive Income
18,682,163
10,695,046
15,703,290
14,935,126
16,511,941
1,299,704
77,827,270
Loans (2)
80,443,869
42,331,891
114,173,682
149,466,509
40,014,410
649,355
Financial Assets Measured at Cost
Other Assets (3)
Total Assets
Liabilities
Bank Deposits
Other Deposits
Money Market Funds
Miscellaneous Payables
Marketable Securities Issued (4)
Funds Provided from Other Financial
Institutions
427,079,716
45,604,603
8,740,222
5,348,759
9,320,990
18,221,372
7,379,635
1,942,384
33,233
114,513
151,549
51,960,935
57,608,989
128,972,393
65,667,911
153,535,506
173,364,682
58,893,617
137,718,154
718,152,263
2,739,231
677,800
170,153
993,278
1,123,810
5,704,272
160,355,911
39,927,713
16,434,900
2,437,702
617,266
156,215,629
375,989,121
25,547,229
3,240,601
1,887,417
11,642
2,709
425,776
6,231
11,076
49,035,045
52,295,662
25,984,647
5,604,915
14,328,261
32,315,785
9,789,049
6,369,907
32,386,022
27,882,004
6,388,015
4,576,940
63,925,427
77,602,888
Other Liabilities (5)(6)
3,091,277
2,904,132
1,807,737
1,284,754
1,196,611
106,365,735
116,650,246
Total Liabilities
203,231,573
81,514,933
61,055,062
43,430,610
16,179,866
312,740,219
718,152,263
Balance Sheet Long Position
Balance Sheet Short Position
(74,259,180)
(15,847,022)
(175,022,065)
(265,128,267)
92,480,444
129,934,072
42,713,751
265,128,267
Off Balance Sheet Long Position
1,403,506
7,809,464
1,050,344
Off Balance Sheet Short Position
(2,449,955)
(7,196,233)
10,263,314
(9,646,188)
Total Position
(72,855,674)
(8,037,558)
93,530,788
127,484,117
35,517,518
(175,022,065) 617,126
(1) Includes Derivative financial assets.
(2) Includes leasing receivablesand factoring receivables.
(3) The expected loss provisions are shown in Non-Interest column.
(4) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
(5) Shareholders’ equity is included in “non-interest bearing” column.
(6) The borrower funds are presented in “Up to 1 month” column in other liabilities.
Banks
Financial Assets at Fair Value through Profit/Loss
Money Market Placements
Financial Assets at Fair Value Through Other
Comprehensive Income
Loans (1)
Financial Assets Measured at Cost
Liabilities
Bank Deposits
Other Deposits
Money Market Funds
Miscellaneous Payables
Debt Securities Issued (2)
Funds
Funds Provided from Other Financial Institutions
EUR
%
0.35
1.92
(2.60)
3.86
4.29
3.11
0.35
0.06
0.65
0.10
1.57
(1) Includes leasing receivables and factoring receivables.
(2) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
Prior Period
Assets
Cash (Cash in Vault. Foreign Currency Cash. Money in Transit.
Cheques Purchased) and Balances with the Central Bank of Turkey
Banks
Financial Assets at Fair Value through Profit/Loss
Money Market Placements
EUR
%
1.37
2.09
Financial Assets at Fair Value Through Other Comprehensive Income 2.29
Loans (1)
Financial Assets Measured at Amortized Cost
Liabilities
Bank Deposits
Other Deposits
Money Market Funds
Miscellaneous Payables
Debt Securities Issued (2)
Funds
Funds Provided from Other Financial Institutions
4.45
1.94
0.26
0.09
0.61
14.04
1.62
(1) Includes leasing receivablesand factoring receivables.
(2) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
JPY
%
JPY
%
USD
%
0.22
2.70
5.21
5.30
5.03
1.09
0.14
1.45
6.43
0.20
2.01
USD
%
0.28
4.05
5.07
5.73
5.05
1.22
0.17
1.72
5.87
0.20
2.18
TL
%
8.50
18.39
15.78
16.63
21.47
18.30
19.21
15.50
11.57
14.19
18.37
11.00
16.69
TL
%
12.00
16.80
15.09
17.11
14.11
14.36
12.85
16.50
10.65
16.98
14.04
12.50
13.98
364 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
V. Explanations on Equity Shares Risk Arising from Banking Book
a. Accounting policies related to equity investments in associates and subsidiaries can be seen in the Section Three Note III.2.
b. Balance sheet value of equity investment, fair value and for publicly traded, if the market value is different from the fair value comparison to the market price:
Investment in Shares
Quoted
Investment in Shares Group A
Subsidiaries
Financial Subsidiaries
Non-Financial Subsidiaries (1)
Non-Quoted
Associate and Subsidiaries
Financial Subsidiaries (2)
Non-Financial Subsidiaries
Subsidiaries
Financial Subsidiaries
Non-Financial Subsidiaries
Book Value
Fair Value
Market Value (3)
Comparison
41,580,067
20,127,409
280,196
36,655
1,466,545
(1) Türkiye Şişe ve Cam Fabrikaları A.Ş.
(2) Accounted under the equity method in the consolidated financial statements according to TAS 28 and 1st clause of Article 5 of the
“Communiqué on the Preparation of Consolidated Financial Statements”.
(3) Refers to the total market value of the company.
c. Information on revaluation surpluses and unrealised gains/losses on equity securities and results included in Common Equity and Tier II Capital:
Portfolio
Private Equity Investments
Shares Traded on a Stock Exchange
Other Stocks
Total
Realised Gains/
losses During the
period
Revaluation Increases
Unrealized Gains and Losses
Total
Including into
Tier I Capital (1)
Total
Including into
Tier I Capital
Total
18,580,963
18,580,963
236,327
236,327
18,817,290
18,817,290
(1) Represents the amounts reflected to equity according to the equity method
d. Capital requirement as per equity shares:
Portfolio
Private Equity Investments
Share Traded on a Stock Exchange
Other Stocks
Total
Carrying Value
Total RWA
Minimum Capital Requirement
20,127,409
1,783,396
21,910,805
20,127,409
2,203,690
22,331,099
1,610,193
176,295
1,786,488
VI. Explanations on Liquidity Risk Management and Consolidated Liquidity Coverage Ratio
Liquidity risk may occur as a result of funding long-term assets with short-term liabilities. The Groups’ liquidity is managed by the Asset-Liability Management Committee
in accordance with the business strategies, legal requirements, current market conditions and expectations regarding the economic and financial conjuncture.
The Parent Bank’s principal source of funding is deposits. Although the average maturity of deposits is shorter than that of assets as a result of the market conditions,
the Bank’s wide network of branches and stable core deposit base are its most important safeguards of funding. Additionally, the Bank borrows medium and long-term
funds from institutions abroad. Concentration limits are generally used in deposit and non-deposit borrowings in order to prevent adverse effects of concentrations in the
liquidity risk profile of the Bank.
In order to meet the liquidity requirements that may arise from market fluctuations, considerable attention is paid to the need to preserve liquidity and efforts in this
respect are supported by projections of Turkish Lira and Foreign Currency (FC) cash flows. The term structure of TL and FC deposits, their costs and amounts are monitored
on a daily basis. During these studies historical events and future expectations are taken into account as well, based upon cash flow projections, prices are differentiated
for different maturities and measures are taken accordingly to meet liquidity requirements. Moreover, potential alternative sources of liquidity are determined to be used in
case of extraordinary circumstances.
The liquidity risk exposure of the Group has to be within the risk capacity limits which are prescribed by the legislation and the Group’s risk appetite defined in its business
strategy. It is essential for the Group to have an adequate level of unencumbered liquid asset stock which can be sold or pledged, in case a large amount of reduction in
liquidity sources occurs. The level of liquid asset buffer is determined in accordance with the liquidity risk tolerance which is set by the Board of Directors. Asset-Liability
Management Committee is responsible for monitoring the liquidity position, determining appropriate sources of funds and deciding the maturity structure in accordance
with the limits which are set by the Board of Directors.
The Treasury Division is responsible for monitoring the liquidity risk, in accordance with the Asset-Liability Management Risk Policy limits, objectives set out in the
business plan and the decisions taken at the meetings of Asset-Liability Management Committee. The Treasury Division is also responsible for making liquidity projections
and taking necessary precautions to reduce liquidity risk, by using the results of stress testing and scenario analysis. Within this scope, Treasury Division is monitoring
the Turkish Lira (TL) and foreign currency (FC) liquidity position instantly and prospectively based on the information provided from the branches, business units and IT
infrastructure of the Bank. The assessment of long-term borrowing opportunities is carried out regularly in order to balance the cash inflows and outflows and to mitigate
the liquidity risk. The Bank creates liquidity through repurchase agreements and secured borrowings based on the high quality liquid asset portfolio, through securitization
and other structured finance products which are created from the asset pools like credit card receivables and retail loans.
The Bank applies liquidity stress tests to measure liquidity risk. In this approach, in liquidity stress scenarios in which parameters are determined by the Board of Directors,
the ability of the Bank’s liquid assets’ in covering cash outflows within a one-month horizon has been described. Liquidity adequacy limits for TL and FC are determined
by Board of Directors, based on the liquidity requirements and risk tolerance of the Bank. The liquidity risk is measured by the Risk Management Division and results are
reported to the related executive functions, senior management and Board of Directors. The reflections of conveniences provided for loan customers on repayments due to
the COVID-19 outbreak and pressure in financial markets on the Bank’s liquidity adequacy are analyzed under various scenarios.
It is essential for the Bank to monitor the liquidity position and funding strategy continuously. In case of a liquidity crisis that may arise from unfavorable market
conditions, extraordinary macroeconomic situations and other reasons which are beyond the control of the Bank. “Emergency Action and Funding Plan” is expected to be
commissioned. In that case, related committees have to report the precautions taken and their results to the Board of Directors through Audit Committee.
The Group’s Foreign Currency (FC) and total (TL+FC) liquidity coverage ratio (LCR) averaged for the last three months are given below.
October 31, 2021
November 30, 2021
December 31, 2021
October 31, 2020
November 30, 2020
December 31, 2020
TL+FC
156.66
172.64
199.25
TL+FC
162.85
172.12
172.53
Current Period
FC
434.83
468.88
507.82
Prior Period
FC
300.96
418.24
475.82
366 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
The Bank’s Foreign Currency (FC) and total (TL+FC) liquidity coverage ratio (LCR) averaged for the last three months are given below.
Total Unweighted Value (1)
Total Weighted Value (1)
TL+FC
FC
TL+FC
FC
Liquidity Coverage Ratio:
Current Period
High Quality Liquid Assets
High Quality Liquid Assets
Cash Outflows
Retail and Small Business Customers, of which;
385,342,542
255,632,298
35,792,010
25,563,230
Stable deposits
Less stable deposits
54,844,879
2,742,244
330,497,663
255,632,298
33,049,766
25,563,230
Unsecured wholesale funding, of which;
187,046,797
112,910,239
95,886,913
56,879,781
Operational deposits
Non-operational deposits
Other unsecured funding
Secured funding
1,255,644
16,359
313,911
4,090
134,597,977
98,576,273
60,491,359
43,239,644
51,193,176
14,317,607
35,081,643
13,636,047
65,495
53,327
Other cash outflows, of which;
8,505,992
12,874,684
8,505,992
12,874,684
Derivatives cash outflow and liquidity needs related to market
valuation changes on derivatives or other transactions
Obligations related to structured financial products
Commitments related to debts to financial markets and other off-
balance sheet obligations
Other revocable off-balance sheet commitments and contractual
obligations
Other irrevocable or conditionally revocable off-balance sheet
obligations
Total Cash Outflows
Cash Inflows
Secured lending
Unsecured lending
Other cash inflows
Total Cash Inflows
Total HQLA Stock
Total Net Cash Outflows
Liquidity Coverage Ratio (%)
4,375,826
8,744,518
4,375,826
8,744,518
4,130,166
4,130,166
4,130,166
4,130,166
53,066,816
46,671,687
2,653,341
2,333,584
287,990,929
156,050,151
29,290,631
17,577,368
172,194,382
115,281,974
112,194
36,588
1,571
1,356
63,377,888
46,531,386
52,758,960
40,975,721
7,972,830
61,206,589
7,972,830
61,206,589
71,462,912
107,774,563
60,733,361
102,183,666
Upper Limit Applied Values
196,731,749
137,922,605
111,461,021
29,261,943
176.18
470.51
(1) The simple arithmetic average calculated for the last three months of weekly simple arithmetic average.
196,731,749
137,922,605
Retail and Small Business Customers, of which;
284,278,935
184,412,860
26,054,861
18,441,286
Prior Period
High Quality Liquid Assets
High Quality Liquid Assets
Cash Outflows
Total Unweighted Value (1)
Total Weighted Value (1)
TL+FC
FC
TL+FC
FC
137,652,570
82,706,283
Stable deposits
Less stable deposits
Unsecured funding, of which;
Operational deposits
Non-operational deposits
Other unsecured funding
Secured funding
Other cash outflows, of which;
Derivatives cash outflow and liquidity needs related to market
valuation changes on derivative or other transactions
Obligations related to structured financial products
Commitments related to debts to financial markets and other off-
balance sheet obligations
Other revocable off-balance sheet commitments and contractual
obligations
Other irrevocable or conditionally revocable off-balance sheet
obligations
47,460,641
236,818,294
127,724,546
1,312,536
92,179,706
34,232,304
6,752,800
2,885,234
184,412,860
69,111,661
77,180
61,209,683
7,824,798
9,938,661
6,071,095
2,373,032
23,681,829
67,880,137
328,134
43,827,669
23,724,334
49,796
6,752,800
-
18,441,286
36,572,634
19,295
29,078,250
7,475,089
43,392
9,938,661
2,885,234
6,071,095
3,867,566
3,867,566
3,867,566
3,867,566
38,073,361
32,472,635
1,903,668
1,623,632
186,692,719
86,537,556
19,605,398
10,786,378
Total Cash Outflows
Cash Inflows
Secured lending
Unsecured lending
Other cash inflows
Total Cash Inflows
Total HQLA Stock
Total Net Cash Outflows
Liquidity Coverage Ratio (%)
270,305
46,427,450
5,169,196
51,866,951
203,045
26,630,710
46,416,513
73,250,268
122,246,660
77,405,983
12,887
35,145,249
5,169,196
40,327,332
12,887
22,537,576
46,416,513
68,966,976
Upper Limit Applied Values
137,652,570
81,919,328
169.17
82,706,283
21,893,173
398.34
( 1) The simple arithmetic average calculated for the last three months of the monthly simple arithmetic average..
Compared to prior period, an increase in the total liquidity coverage ratio and a decrease in the foreign currency liquidity coverage ratio has been observed for the fourth
quarter of 2021. Foreign currency liquidity coverage rate decreased due to the increase in net cash outflows, while the total liquidity coverage rate increased due to the
increase in the stock of high quality liquid assets. Total and Foreign Currency liquidity coverage ratios are continuing to hover far above the minimum level (respectively
100% and 80%) pursuant to legal legislations.
The Liquidity Coverage Ratio which has been introduced to ensure banks to preserve sufficient stock of high quality assets to meet their net cash outflows that may occur
in the short term is calculated as per the Communiqué on “Measurement and Assessment of the Liquidity Coverage Ratio of Banks’ published by BRSA. The ratio is directly
affected by the level of unencumbered high quality assets which can be liquidated at any time and net cash inflows and outflows arising from the Group’s assets, liabilities
and off-balance sheet transactions.
The Group’s high quality liquid asset stock primarily consists of cash and the accounts held at CBRT and unencumbered government bonds which are issued by Turkish
Treasury.
The Bank’s principal source of funding is deposits. In term of non-deposit borrowing, funds received from repurchase agreements, marketable securities issued and funds
borrowed from financial institutions are among the most significant funding sources.
In order to manage liquidity effectively, concentration of liquidity sources and usages should be avoided. Due to the strong and stable core deposit base of the Bank,
deposits are received from a diversified customer portfolio. In addition, in order to provide diversification in liquidity sources and usages, liquidity concentration limits are
used effectively. Total amount of funds borrowed from a single counterparty or a risk group is closely and instantaneously monitored, taking liquidity concentration limits
into account. In addition to these, the cumulative liquidity deficits that the Parent Bank is exposed to in various maturity tranches are periodically monitored and reported
to the senior management.
Cash flows of derivatives that will take place within 30 days are taken into account in calculation of liquidity coverage ratio. Cash outflows of derivatives that arise from
margin obligations, are reflected to the results in accordance with the methodology articulated in the related legislation.
Liquidity risk of the Bank, its foreign branches and subsidiaries that are to be included in consolidation are managed within the regulatory limits and in accordance with
the Group strategies. For the purposes of effectiveness and sustainability of liquidity management, funding sources of Group compaiesy and funding diversification
opportunities in terms of markets, instruments and tenor are evaluated and liquidity position of the group companies are monitored continuously by the Parent Bank.
368 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 369
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Presentation of assets and liabilities according to their remaining maturities:
Demand
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Unallocated (1)
Total
Current Period
Assets
Cash (Cash in Vault, Foreign
Currency Cash, Money in
Transit, Cheques Purchased)
and Balances with the
Central Bank of Turkey
96,285,554
87,735,671
Banks
28,224,705
5,365,469
1,446,001
159,067
Financial Assets at Fair
Value through Profit/
Loss (2)
5,593,103
9,672,393
10,262,081
7,834,631
5,835,502
33,755
Money Market Placements
2,061,138
775,354
156,572
184,021,225
35,195,242
39,231,465
2,993,064
Financial Assets at Fair
Value Through Other
Comprehensive Income
1,202,401
1,198,675
6,206,617
7,535,637
56,875,189
36,925,140
109,943,659
In compliance with the “TFRS 7”, the following table indicates the maturities of the Group’s major financial liabilities which are not qualified as derivatives. The following
tables have been prepared by referencing the earliest dates of payments without discounting the liabilities. The interest to be paid to the related liabilities is included in the
following table. Adjustments column shows the items that may cause possible cash flows in the following periods. The values of the related liabilities registered in balance
sheet do not include these amounts.
Current Period
Demand
Up to 1 Month 1-3 Months 3-12 Months 1-5 Years
5 Years
and Over
Total
Adjustments (-)
Balance
Sheet Value
Liabilities
Deposits
Funds Provided
from Other Financial
Institutions
291,867,150 257,817,496
38,441,570
25,318,327
4,584,375
1,145,789
619,174,707 1,495,504
617,679,203
5,179,465
10,843,245
48,493,365
46,585,229
23,859,359
134,960,663 6,036,980
128,923,683
Money Market Funds
46,912,274
2,550,211
4,360,066
26,546
53,849,097
111,244
53,737,853
Marketable
Securities Issued
(Net) (1)
Leasing Liabilities
2,348,478
9,678,950
26,563,296
46,508,859
23,533,539
108,633,122 19,076,533
89,556,589
35,971
82,418
272,940
922,507
506,016
1,819,852
580,138
1,239,714
Loans (3)(4)
22,094,908
58,753,675
57,445,306
167,476,665
225,670,531 58,856,543
24,445,092
614,742,720
( 1) Includes bonds that have the nature of issued secondary subordinated loans, which are classified as subordinated loans on the balance sheet.
Financial Assets Measured
at Amortized Cost
Other Assets
Total Assets
Liabilities
Bank Deposits
Other Deposits
Funds Provided from Other
Financial Institutions
Money Market Funds
Marketable Securities
Issued (5)
1,463,602
2,231,316
5,193,950
29,888,248
12,768,212
51,545,328
16,173,297
8,361,915
178,859
301,254
1,244,777
60,471,268
86,731,370
169,573,968
174,612,538
78,545,534
188,657,776
319,514,247 108,583,650
84,916,360
1,124,404,073
1,302,757
1,639,400
1,720,923
713,064
1,050,890
290,564,393
255,680,365
36,248,550
24,352,821
3,443,189
962,851
5,237,609
10,472,605
46,836,875
43,778,644
22,597,950
46,847,607
2,541,576
4,322,725
25,945
2,104,244
9,351,397
22,621,436
35,838,166
19,641,346
6,427,034
611,252,169
128,923,683
53,737,853
89,556,589
76,333,761
Miscellaneous Payables
51,022,153
24,813,302
348,317
46,871
103,118
Other Liabilities (6)
18,999
10,753,057
6,009,848
4,314,889
1,593,751
300,029
135,182,411
158,172,984
Total Liabilities
342,908,302
347,075,584
66,693,216
103,208,681
85,833,703
43,502,176
135,182,411
1,124,404,073
Liquidity Gap
-173,334,334 -172,463,046
11,852,318
85,449,095
233,680,544 65,081,474
-50,266,051
Net Off Balance Sheet
Position
1,303,544
2,537,428
314,978
1,850,956
494,422
Derivative Financial Assets
154,345,598
63,995,026
43,416,267
67,227,055
65,745,376
Derivative Financial
Liabilities
153,042,054
61,457,598
43,101,289
65,376,099
65,250,954
Non-cash Loans
117,111,116
3,824,077
10,279,933
47,548,648
14,381,524
6,470,495
6,501,328
394,729,322
388,227,994
199,615,793
Prior Period
Total Assets
Total Liabilities
Liquidity Gap
Net Off Balance Sheet
Position
70,882,432
108,306,733
47,740,826
129,951,527
218,540,351 78,162,987
64,567,407
718,152,263
191,905,025
217,784,796
52,971,043
60,643,545
67,140,284
26,790,441
100,917,129
718,152,263
(121,022,593)
(109,478,063)
(5,230,217)
69,307,982
151,400,067 51,372,546
(36,349,722)
(2,889)
(2,546,299)
(3,056,205)
(152,308)
699,240
7,774
Derivative Financial Assets 1,253,008
73,124,894
48,885,862
29,307,917
41,828,035
48,022,635
Derivative Financial
Liabilities
1,255,897
75,671,193
51,942,067
29,460,225
41,128,795
48,014,861
Non-cash Loans
67,981,107
2,833,862
6,189,109
25,982,187
14,953,815
4,946,327
(5,050,687)
242,422,351
247,473,038
122,886,407
Prior Period
Demand
Up to 1 Month 1-3 Months 3-12 Months 1-5 Years
5 Years and
Over
Total
Adjustments (-)
Balance Sheet
Value
Liabilities
Deposits
Funds Provided
from Other Financial
Institutions
Money Market Funds
Marketable
Securities Issued
(Net) (1)
Leasing Liabilities
157,339,437 163,515,468
40,912,349
16,801,854
3,500,350
735,236
382,804,694 1,111,301
381,693,393
3,136,352
5,045,193
27,715,328
32,071,745
14,548,478
82,517,096
4,914,208
77,602,888
25,611,420
11,687
428,338
26,051,445
66,798
25,984,647
2,274,376
2,511,577
17,477,662
40,245,888
16,003,969
78,513,472
14,588,045
63,925,427
26,713
56,965
205,568
675,895
417,762
1,382,903
464,163
918,740
( 1) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
The following table shows the remaining maturities of non-cash loans of the Group.
Current Period
Demand
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Letters of Credit
Letters of Guarantee
Acceptances
Other
Total
39,975,559
75,667,646
583,828
884,083
1,442,386
1,355,867
1,010,984
14,840
1,343,837
4,648,587
1,266,738
196,642
6,702,245
32,852,294
11,984,768
4,104,143
2,233,851
9,932,465
44,745
48,873,749
132,666,963
13,805,873
115,302
1,085,273
2,169,710
4,269,208
117,111,116
3,824,077
10,279,933
47,548,648
14,381,524
6,470,495
199,615,793
Prior Period
Demand
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Letters of Credit
Letters of Guarantee
Acceptances
Other
Total
14,423,731
52,890,702
66,504
600,170
1,183,876
1,282,444
367,542
1,206,403
5,581,173
198,728
4,150,104
16,223,311
10,231,470
3,293,179
832,602
4,083,376
600,170
3,700,319
823,298
67,981,107
2,833,862
6,189,109
25,982,187
14,953,815
1,653,148
4,946,327
22,593,911
88,071,210
9,050,343
3,170,943
122,886,407
( 1) Assets, such as Tangible Assets, Subsidiaries and Associates, Office Supply Inventory, Prepaid Expenses and Non-Performing Loans, which are required for banking operations and which cannot
be converted into cash in short-term, other liabilities such as Provisions which are not considered as payables and Shareholders’ Equity, are shown in ‘Unallocated” column.
( 2) The balances include financial derivative assets.
( 3) Includes leasing and factoring receivables.
( 4) Stage 3 Non performing loans are included in “Unallocated” column.
( 5) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
( 6) The borrower funds are presented in “Up to 1 month” column in other liabilities.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
The following table shows the remaining maturities of derivative financial assets and liabilities of the Group.
c. Explanations on consolidated leverage ratio
Current Period
Demand
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
Forwards Contracts- Buy
Forwards Contracts- Sell
Swaps Contracts -Buy
Swaps Contracts -Sell
Futures Transactions-Buy
Futures Transactions-Sell
Options-Call
Options-Put
Other
Total
Prior Period
Forwards Contracts - Buy
Forwards Contracts - Sell
Swaps Contracts - Buy
Swaps Contracts - Sell
Futures Transactions - Buy
Futures Transactions - Sell
Options - Call
Options – Put
Other
Total
9,789,528
10,177,720
7,650,678
7,694,897
120,101,356
48,549,092
133,617,738
49,670,442
7,696
7,967
5,122,288
5,201,143
23,362,216
922,465
175,595
2,949,375
2,919,767
4,920,313
14,817,597
14,931,354
22,481,946
22,068,513
591,886
595,566
4,012,940
3,962,813
3,054,941
4,796,590
4,598,985
62,186,646
60,350,931
670,002
62,720,302
62,225,880
3,025,074
3,025,074
37,054,393
37,402,956
316,039,342
327,933,504
1,522,047
779,128
15,109,677
15,108,797
32,007,472
307,387,652
125,452,624
86,517,556
132,603,154
130,996,330
782,957,316
Demand
816,023
914,210
778,672
2,508,905
Up to 1 Month
1-3 Months
3-12 Months
1-5 Years
5 Years and Over
Total
8,645,929
8,521,913
50,595,003
62,209,114
306,435
330,779
2,883,278
2,882,495
4,322,816
4,484,575
34,514,507
44,558,222
1,888,709
1,408,440
628,963
626,246
12,421,141
8,395,451
9,149,971
8,961,042
16,909,423
17,162,503
960,069
1,056,468
2,033,885
2,030,192
504,589
2,553,562
2,546,661
38,527,288
37,834,949
46,181,823
46,174,049
747,185
747,185
1,840,812
1,840,812
25,488,301
25,428,401
186,728,044
207,938,837
3,155,213
2,795,687
8,134,123
8,126,930
22,099,853
148,796,087
100,827,929
58,768,142
82,956,830
96,037,496
489,895,389
VII. Explanations on Leverage Ratio
a. Explanations on Differences Between Current and Prior Years’ Leverage Ratios
The Bank’s consolidated leverage ratio is calculated in accordance with the principles of the “Regulation on Measurement and Evaluation of Banks’ Leverage Level”. The
Bank’s consolidated Leverage ratio is 6.12 % (December 31, 2020: 7.12 %). According to Regulation the minimum leverage ratio is 3%. The changes in the leverage ratio are
mostly due to the increase in the risk amounts.
b. Summary Comparison Table Related to Total Amount of Asset and Risk Situated in The Consolidated Financial Statements Prepared in Accordance with TAS:
Summary Comparison Table Related to Total Amount of Asset and Risk Situated in The Consolidated Financial
Statements Prepared in Accordance with TAS
The difference between Total Amount of Asset in the Consolidated Financial Statements Prepared in
Accordance with TAS and the Communiqué on Preparation of Consolidated Financial Statements of Banks
The difference between total amount and total risk amount of derivative financial instruments with credit
derivative in the Communiqué on Preparation of Consolidated Financial Statements of Banks (2)
The difference between total amount and total risk amount of risk investment securities or commodity
collateral financing transactions in the Communiqué on Preparation of Consolidated Financial Statements of
Banks (2)
The difference between total amount and total risk amount of off-balance sheet transactions in the
Communiqué on Preparation of Consolidated Financial Statements of Banks (2)
The other differences between amount of assets and risk in the Communiqué on Preparation of Consolidated
Financial Statements of Banks (2)
Total Exposures (2)
Current Period
Prior Period
796,665,165 (1)
709,207,993
(7,123,860) (1)
(8,944,270)
(4,521,050)
(3,351,515)
41,010,346
18,116,176
19,341,737
12,865,465
7,102,851
(806,281)
1,376,092,005
963,934,710
( 1) As the consolidated financial statements dated 31.12.2021 prepared per paragraph 6 of article 5 of the "Communiqué on the Preparation of Consolidated Financial Statements of
Banks" have not yet been published as of the report date pursuant the legal regulations, the consolidated financial statement balances of 30.06.2021 are included.
( 2) The amounts in the table represents the average of three months.
On-Balance Sheet Items
On-balance sheet items (excluding derivatives and SFTs. but including collateral)
Asset amounts deducted in determining Basel III Tier 1 capital
The total amount of risk on-balance sheet exposures
Derivative exposures and credit derivatives
Replacement cost associated with derivative financial instruments and credit derivatives
The potential amount of credit risk with derivative financial instruments and credit derivatives
The total amount of risk on derivative financial instruments with credit derivatives
Investment securities or commodity collateral financing transactions
The amount of risk investment securities or commodity collateral financing transactions
(Excluding on balance sheet items)
Risk amount of exchange brokerage operations
Current Period (1)
Prior Period (1)
1,025,401,026
(1,968,196)
1,023,432,830
23,322,566
4,521,050
27,843,616
730,977,764
(1,548,881)
729,428,883
10,703,858
3,351,515
14,055,373
5,751,181
5,669,548
The total amount of risk investment securities or commodity collateral financial transactions
5,751,181
5,669,548
Off -Balance Sheet Items
Gross notional amount for off-balance sheet items
Adjustments for conversion to credit equivalent amounts
The total amount of risk for off-balance sheet items
Capital and Total Exposures
Tier 1 Capital
Total Exposures
Leverage Ratio
Leverage Ratio
( 1) Three-month average of the amounts in Leverage Ratio table.
VIII. Explanations on Other Price Risk
337,285,014
(18,220,636)
319,064,378
83,746,667
1,376,092,005
226,931,774
(12,150,868)
214,780,906
68,560,575
963,934,710
6.12
7.12
The Group is exposed to stock price risk due to its investments in companies being traded on the BIST.
The Group's sensitivity to stock price risk at the reporting date was measured with an analysis. In the analysis, with the assumption of all other variables were held
constant and the data (stock prices) used in the valuation method are 10 % higher or lower. According to this assumption in shares traded in Borsa Istanbul and followed
under Financial Assets at Fair Value through Profit or Loss account, expected to have an effect amounting to TL 236,569 increase/decrease.
IX. Explanations on Presentation of Assets and Liabilities at Fair Value
1. Information on fair values of financial assets and liabilities
Financial Assets
Money Market Placements
Banks
Financial Assets at Fair Value Through Other Comprehensive Income
Financial Assets Measured at Amortized Cost
Loans (1)
Financial Liabilities
Banks Deposits
Other Deposits
Funds Provided from Other Financial Institutions
Marketable Securities Issued (2)
Miscellaneous Payables and funds borrowed
Book Value
Fair Value
Current Period
Prior Period
Current Period
Prior Period
2,993,064
35,195,242
109,943,659
51,545,328
590,297,628
6,427,034
611,252,169
128,923,683
89,556,589
77,025,465
2,201,527
19,712,344
77,827,270
45,604,603
403,934,870
5,704,272
375,989,121
77,602,888
63,925,427
52,417,767
2,993,064
35,181,094
109,943,659
50,990,529
569,711,027
6,185,928
610,797,007
123,962,706
85,380,759
77,025,465
2,201,527
22,324,218
77,827,270
45,702,301
384,847,541
5,586,995
375,097,507
75,876,780
64,293,176
52,417,767
( 1) Factoring and Leasing Receivables are included.
( 2) Includes Tier 2 subordinated bond which is classified on the balance sheet as subordinated loan.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Strike prices, quotations, market prices determined by the CBRT and published in the Official Gazette and the values calculated by using alternative models, are taken as
the basis in the fair value determination of financial assets at fair value through other comprehensive income.
X. Explanations on Transactions Carried Out on Behalf of Third Parties and Fiduciary Transactions
The Group gives trading, custody, fund management services in the name and on the account of its customers. The Group has no fiduciary transactions.
When the prices of the financial assets measured at amortized cost cannot be measured in an active market, fair values are not deemed to be reliably determined and
amortized cost, calculated by the internal rate of return method, are taken into account as the fair values.
XI. Explanations on Risk Management Objectives and Policies
Fair values of banks, loans granted, deposits and funds borrowed from other financial institutions are calculated by discounting the amounts in each maturity bracket
formed according to repricing periods, using the rate corresponding to relevant maturity bracket in the discount curves based on current market conditions.
Explanations according to “Communiqué on Public Disclosures about Risk Management” published on the Official Gazette No.29511 dated October 23, 2015 are included
below. The Bank uses standardised approach for calculation of capital charge for credit risk, therefore explanations about internal ratings-based approach are not included.
2. Information on fair value measurements recognized in the financial statements
TFRS 13 – “Fair Value Measurement” standard requires the items, which are recognized in the balance sheet at their fair values to be shown in the notes by being classified
within a range. According to this, the related financial instruments are classified into three levels in such a way that they will express the significance of the data used in fair
value measurements. At the first level, there are financial instruments, whose fair values are determined according to quoted prices in active markets for identical assets or
liabilities, at the second level, there are financial instruments, whose fair values are determined by directly or indirectly observable market data, and at the third level, there
are financial instruments, whose fair values are determined by the data, which are not based on observable market data. The financial assets, which are recognized in the
balance sheet at their values, are shown below as classified according to the aforementioned principles of ranking.
Current Period
Financial Assets at Fair Value Through Profit and Loss
Debt Securities
Equity Securities
Derivative Financial Assets at Fair Value through Profit and Loss
Other
Financial Assets at Fair Value Through Other Comprehensive Income(1)
Debt Securities
Equity Securities
Other
Derivative Financial Liabilities
Level 1
Level 2
Level 3
710,080
2,368,275
700,327
65,501,109
140,975
243,653
6,028,045
458,185
24,750,427
2,066,313
41,450,375
745,821
24,966
14,078,527
2,149,813
1,789,775
(1) Since they are not traded in an active market, the equity securities (TL 46,985) under the financial assets at fair value through other comprehensive income are shown in the
financial statements at acquisition cost and the related securities are not shown in this table.
Prior Period
Financial Assets at Fair Value Through Profit and Loss
Debt Securities
Equity Securities
Derivative Financial Assets Held for Trading
Other
Financial Assets Available-for-Sale(1)
Debt Securities
Equity Securities
Other
Derivative Financial Liabilities
Level 1
Level 2
290,342
1,345,669
360,628
51,030,195
82,962
657,092
624,882
261,922
6,710,129
1,763,563
24,638,435
428,254
89,168
8,854,434
Level 3
3,187
2,149,813
862,526
(1) Since they are not traded in an active market, the equity securities (TL 38,638) under the financial assets available-for-sale are shown in the financial statements at acquisition cost
and the related securities are not shown in this table.
The movement table of financial assets at level 3 is given below:
Balance at the Beginning of the Period
Purchases
Redemption or Sales
Valuation Difference
Transfers
Balance at the end of the Period
Current Period
3,015,526
1,018,018
(300,848)
307,502
(100,610)
3,939,588
Prior Period
2,771,586
264,274
(74,558)
54,224
3,015,526
Properties that are recorded under tangible assets at fair value by the Bank and consolidated companies are classified in the 3rd level, whereas investment properties are
clasiffied both in the 2nd and 3rd level.
The loans measured at fair value through profit and loss under Level 3 consists of other financial assets to the special purpose entity which is disclosed in the Section V
footnote I-f.2 and footnote I.r. The mentioned loan’s fair value is determined by the various valuation methods. The potential changes in the fundamental estimations and
assumptions in the valuation work can affect the carrying fair value of the loan.
The implications of developments related to the COVID-19 pandemic on the Group's risk profile and risk appetite framework are closely monitored. With stress tests, the
levels of the Group's capital adequacy ratio are estimated and monitored. In addition, reverse stress tests are carried out regularly by determining the problematic loan
increase rate and interest and exchange rate increase rates, which will cause the Group's capital adequacy to fall to legal limits.
a. General Information on Risk Management and Risk Weighted Amounts
a.1 Risk Management Approach of the Group
The Group is exposed to financial and non-financial risks which are required to be analyzed, monitored and reported within specific risk management principles and with
the perspective of Group risk management. The risk management process is organized within the framework of risk management and serves the creation of a common
risk culture in corporate level; which brings “corporate governance” to forefront, the independence of the internal audit and monitoring units from the business units that
undertake risks is established risk is defined in accordance with international regulations and in this context measurement, analysis, monitoring, reporting and control
functions are carried.
Risk management process and the functions involved in the process is one of the primary responsibilities of the Board of Directors. The Risk Committee operates to
prepare the Group's risk management strategies and policies, submit them to the Board of Directors for approval and monitor the implementations. Evaluating the capital
adequacy and observing the active use of results in planning and decision making processes, establishing and monitoring limits related to main risks, monitoring the
activities of risk management (determining, defining, measuring, evaluating and managing risk) and monitoring results and methods in measuring risk are also under their
authority and responsibility of the Committee. Committee reports activity results to the Board of Directors through Audit Committee.
The Operational Risk Committee operates to determine strategies and policies for managing operational risks that the Bank may be exposed to, to develop an operational
risk management framework and to strengthen the governance model for operational risks. The Committee reports the results of the activity to the Board of Directors
through the Audit Committee.
The Group’s risk management process is carried out within the framework of risk policies which are issued by the Board of the Directors by taking the recommendations
of the Risk Management Department into account and which include the written standards that are implemented by the business units. These policies which are entered
into force in line with the international practices are general standards which contain organization and scope of the risk management function, risk measurement
policies, duties and responsibilities of the risk management group, procedures for determining risk limits, ways to eliminate limit violations, compulsory approvals and
confirmations to be given in a variety of events and situations.
In the aforementioned risk policies, the Group’s risk appetite framework is defined as a set of approaches that determine the risk capacity, the risk appetite, the risk
tolerance and that include the policies, procedures, controls and systems for reporting and monitoring of the limits set for the Group’s risk profile and the indicators in
the framework. The Group's risk appetite framework, which is formed in accordance with the above-mentioned factors and entered into force with the Board of Directors
approval, includes indicators that are aligned with the business plan, the strategic programme, capital and remuneration planning and comparable on a business unit level
to the extent possible. The compliance to the limits within the framework is periodically monitored and the realization of the risk appetite indicators are reported to the
Risk Committee and the Boards on a monthly basis.
In order to build a strong corporate culture that has a risk management perspective, the Group has policies, processes, systems and a control system that is integrated
with the risk management system. All employees of the Group essentially perform their duties in a responsible manner that aims to develop controls to reduce or eliminate
the probability of the Group to incur losses related to the operational risks. In the process risk analysis studies, risks and the related controls are evaluated together with
employees performing the relevant process in a holistic approach. Procedures to be followed in case of a risk threshold breach and risk definitions are given in the risk
politics. Code of conducts, operation manuals, the sharing of duties between business units and risk units are announced to staff.
The risk reports that analyse the results reached by the Parent Bank and the comprehensive risk assessment and comparison of these results with a risk management
perspective are periodically submitted to the Risk Committee and to the Board through the Audit Committee. The content of the above mentioned reports could be
summarised as follows:
• Capital adequacy ratio, the progression of the components of this ratio and the issues that affect the aforementioned ratio,
• Monitoring the compliance status of the limits set by the Board of Directors as a part of therisk appetite framework and based on the components of the main risk types,
• In addition to the assesment of the loan portfolio on the basis of counterparties and loan types, monitoring of the portfolio as a whole according to parameters such as
maturity, sector, geography, risk ratings, arrears, defaults,
• Measuring the assets and liabilities management risk, and reporting of measurement results,
• Monitoring all risks assessed within the scope of non-financial risks, including operational risk, reputational risk and climate change risk, and operational risk qualified
loss events and risk indicators occurring at the Bank,
• Testing measurement results for their integrity and reliability,
• Analysing the level of risk indicators under various stress scenarios,
• Examining various concentration indicators and the course followed by these indicators.
In addition, analyzes and evaluations regarding the risk level of the companies included in the consolidated risk policies are also included in the mentioned report.
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 375
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
As per the communique on “Bank’s Internal Systems and Internal Capital Adequacy and Assessment Process” and “Guidelines for Stress Testing of Banks to Use in Capital
and Liquidity Planning”, stress tests are conducted for the entire risks that the Group is exposed to and on the basis of significant risk categories. As a part of the holistic
stress tests, risk appetite, capital planning, strategic plan and budget, action plans for emergencies and unexpected situations related to miscellaneous risks and other
issues considered as significant are taken into consideration. In the above-mentioned stress tests, the methods that form the basis of regulatory reporting (standard
method for credit and market risk, basic indicator method for operational risk) are used. On the other hand, in the stres tests for individual risk types the most advanced
approaches used for risk measurement in the Parent Bank are leveraged.
In the stress tests, both the first pillar risks (credit risk, market risk, operational risk) in scope of the regulatory framework and all the other risks that the Group is exposed
to independent of the regulatory framework are taken into account in a holistic perspective. In determining the course of capital adequacy under various scenarios during
the planning horizon, the actions that the Group will take in case of stress conditions and the impact of the diversified growth strategies of business units on the capital
adequacy and the balance sheet are considered.
The repercussions of developments related to the COVID-19 outbreak on the Bank's risk profile and risk appetite framework are closely monitored. The negative effects
of the COVID-19 outbreak are also taken into account in the calculation of loan loss provisions. The levels at which the capital adequacy ratio of the Bank will reach are
estimated and monitored with stress tests. In addition, reverse stress tests are carried out regularly, by determining the problematic loan growth rate and exchange rate
increase rates, which will cause the Bank's capital adequacy to decrease to legal limits.
The scope and content of the Parent Bank's risk management system in terms of the main risk types are listed below. Risk mitigation strategies and processes for the
assessment of their effectiveness are given in Fourth Section II No. "Explanations on Credit Risk" under the Fourth Chapter XI-c.2 notes. No. "The Public Disclosure of
Qualitative Information Related to the Market Risk " mentioned in the section.
Credit Risk
Credit risk is defined as the risk of the failure to comply with the requirements or failing to fulfill its obligations partially or totally of the counter side of the transaction
contract with the Parent Bank. The methodology and responsibilities of the credit risk management, controlling and monitoring and the framework of credit risk limitations
specified with the credit risk policy.
The Bank defines measures and manages credit risk of the all products and activities. Board of Directors review the Parent Bank’s credit risk policies and credit risk strategy
on an annual basis as a minimum. Key Management is responsible for the implementation of credit risk policies which are approved by Board of Directors.
As a result of loans and credit risks analysis all findings are reported to Board of Directors and Key Management on a regular basis. In addition to transaction and company
based credit risk assessment process, monitoring of credit risk also refers to an approach with monitoring and managing the credit as a whole maturity, sector, security,
geography, currency, credit type and credit rating.
In the Parent Bank’s credit risk management, along the limits as required by legal regulations, the Parent Bank utilizes the risk limits to undertake the maximum credit risk
within risk groups or sectors that the Board of Directors determines. These limits are determined such a way that prevents risk concentration on particular sectors. Excess
risk limits up to legal requirements and boundaries limits are considered as an exception. The Board of Directors has the authority in exception process. The results of the
control of risk limits and the evaluations of these limits are presented by Internal Audit and Risk Management Group to Key Management and Board of Directors.
The Bank uses credit decision support systems which are created for the purpose of credit risk management, lending decisions, controlling the credit process and credit
provisioning. The consistency of the credit decision support systems with the structure of the Parent Bank’s activities, size and complexity is examined continuously by
internal systems. Credit decision support systems contain the Risk Committee assessment and approval of Board of Directors.
Asset and Liability Management Risk
Asset-liability management risk defined as the risk of Group’s incurring loss due to managing all financial risks that are inflicted from the assets, liabilities and off-balance
sheet transactions, ineffectively. Trading book portfolio’s market risk, structural interest rate risk and liquidity risk of the banking portfolio; are considered within the scope
of the asset liability management.
Complying the established risk limits and being at the limits that stipulated by the legislation are the primary priority of Asset-liability management risk. Risk limits are
determined by the Board of Directors by taking into consideration of the Group's liquidity, target income level and general expectations about changes in risk factors
Board of Directors and the Audit Committee are responsible for following the Group's capital is used optimally; for this purpose, checking the status against risk limits and
providing the necessary actions are taken.
Asset and Liability Management Committee is responsible for managing the Asset and Liability risk within the framework of operating principles that are involved in the risk
appetite and risk limits are set by the Board of Directors in accordance with the policy statement.
Asset and liability management processes and compliance with the provisions of the policy are controlled and audited by the internal audit system. The execution of the
audit, reporting the audit results, action plans for the elimination of errors and gaps identified as a result of inspections regarding the fulfillment of the principles, are
determined by the Board of Directors.
Operational Risk
Operational risk is defined as “insufficient or unsuccessful internal processes, people and systems, or external events resulting from and legal it is defined as ”the
possibility of causing harm", which also includes the risk that may arise. Studies consisted and are formed of occur by execution of identification, definition, measurement,
analysis, monitoring of operational risk, providing and reporting the necessary control related to monitoring the progress of our country and the world, the development
of techniques and methods, necessary legal reporting, notification and conduct of follow-up transactions. Studies on the subject are conducted by the Department of Risk
Management.
Operational risks that arise due to the activities are defined in "Bank Risk Catalogue" and classified in respect of species. Bank Risk Catalogue is kind of the fundamental
document that used for identification and classification of all at the risk that may be encountered. It is updated in line with the changes in the nature of the processes and
activities.
Qualitative and quantitative methods are used in a combination for measurement and evaluation of the operational risks. In this process, information use that obtained
from "Impact-Probability Analysis", "Missing Event Data Analysis", "Risk Indicators", “Scenario Analysis”, “Top-Down Risk Assessment”, “Internal Model” methods. Methods
prescribed by legal regulations are applied as minimum in determining the capital requirement level for the operating risk.
Operational Risk Committee that established by a decision of the board of directors on 30.04.2020, the management of operational risks that the bank may be exposed
for the determination of policies and strategies, the development of an operational risk management framework and operational risks include activities with the aim
of strengthening the governance model. The Committee works in cooperation with the Risk Committee and reports the results of its activities to the Board of Directors
through the Audit Committee.
All risks are assessed in the context of operational risk, loss events and the risk indicators same as operational risks that occurred in the Parent Bank, are monitored on a
regular basis by the Department of Risk Management and reported periodically to the Risk Committee, Operational Risk Committee and the Board of Directors.
Model Risk Management and Validation Operations
Model risk is the risk of financial losses and / or loss of reputation that the Bank may be exposed to due to errors and / or malfunctions that occur during the creation,
implementation or use of models used in its activities. In order to address the model risk in a holistic manner, the model definition, model life cycle and triple line of defense
structure and the duties and responsibilities of all functions of the Bank in this structure are defined in the model risk management policy.
Model risk management and validation activities in the second line of defense of the triple line of defense structure; creating the model inventory, determining and
approving the model class, validating the models, preparing periodic reports on the Bank's model risk and reporting to the Risk Committee, Audit Committee. and
submission to the Board of Directors.
Risk measurement models are validated at least once a year under international standardsWithin the scope of validation, activities are carried out to test the performance
and validity of models with statistical methods, to examine the quality of the data used in the model development phase and the conceptual soundness of the selected
methods, and to evaluate the health of the processes created for the use of the models.The results of the validation activities are reported to the Risk Committee and the
Board of Directors.
Subsidiaries Risk Operations
Corporations within the Bank’s consolidated risk policy, in terms of their own business lines, measure, evaluate and monitor risks, establish risk limits. Risk limits are
approved by their own Board of Directors. Risk levels are reported to the Bank’s Risk Committee within the periods set by the Bank, to monitor risk levels on consolidated
basis. The Bank’s Risk Committee, assesses the risk levels and report the results to the Board of the Directors of the Bank.
a.2. General Information on Risk Weighted Amounts
Credit risk (excluding counterparty credit risk) (CCR)
Of which standardised approach (SA)
Of which internal rating-based (IRB) approach
Counterparty credit risk
Of which standardised approach for counterparty credit risk (CCR)
Of which internal model method (IMM)
Equity positions in banking book under basic risk weighting or internal rating-based
approach
Equity investments in funds – look-through approach
Equity investments in funds – mandate-based approach
Equity investments in funds - 1250% weighted risk approach
Settlement risk
Securitization positions in banking accounts
Of which IRB ratings-based approach (RBA)
Of which IRB Supervisory formula approach (SFA)
Of which SA/simplified supervisory formula approach (SSFA)
Market risk
Of which standardised approach (SA)
Of which internal model approaches (IMM)
Operational Risk
Of which Basic Indicator Approach
Of which Standardised approach (SA)
Of which Advanced measurement approach
Risk Weighted Amount
Current Period
578,238,623
578,238,623
Prior Period
460,542,007
460,542,007
Minimum Capital
Requirements
Current Period
46,259,090
46,259,090
17,096,324
17,096,324
10,583,780
10,583,780
1,367,706
1,367,706
2,683,178
2,745,702
214,654
22,674,325
22,674,325
51,469,094
51,469,094
17,495,725
17,495,725
41,095,093
41,095,093
1,813,946
1,813,946
4,117,528
4,117,528
The amounts below the thresholds for deduction from capital (subject to a 250% risk weight)
700,490
605,435
56,039
Floor adjustment
Total
672,862,034
533,067,742
53,828,963
376 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 377
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
b. Linkages Between Financial Statements and Risk Amounts
b.1 Differences and linkage between scopes of accounting consolidation and regulated consolidation
Differences and Linkage Between Accounting Consolidation and Legal Consolidation Scope:
Current Period
Assets
Cash and CBRT
Banks and Money Market Placements
Financial Assets at Fair Value Through
Profit/Loss
Financial Assets at Fair Value Through
Other Comprehensive Income
Derivative Financial Assets at Fair Value
Through Profit/Loss
Derivative Financial Assets at Fair Value
Through Other Comprehensive Income
Financial Assets at Measured at
Amortised Cost – Loans (3)
Financial Assets at Measured at
Amortised Cost – Other Financial Assets
Financial Assets at Measured at
Amortised Cost – Expected Credit Loss (-)
Assets Held for Sale and Discontinued
Operations
Investment in Associates, Subsidiaries
and Joint-Ventures
Tangible Assets
Intangible Assets
Investment Properties
Current Tax Asset
Deferred Tax Asset
Other Assets
Total Assets
Liabilities
Deposits
Funds Borrowed
Money Market Funds
Marketable Securities Issued
Derivative Financial Liabilities at Fair
Value Through Profit/Loss
Derivative Financial Liabilities at Fair
Value Through Other Comprehensive
Income
Leasing Liability
Provisions
Current Tax Liability
Deferred Tax Liability
Subortinated Debts
Other Liabilities
Shareholders' Equity
Total Liabilities
Carrying values
in financial
statements
prepared as per
TAS (1)
Carrying values
in consolidated
financial
statements
prepared as per
TAS
Carrying values of items in accordance with Turkish Accounting Standards(TAS)(2)
Subject to
credit risk
Subject to
counterparty
credit risk
Securitization
Positions
Subject to
market risk
Not subject to
capital
requirements
or subject to
deduction from
capital
93,205,447
33,145,720
184,021,225
184,021,225
38,188,306
38,188,306
8,409,700
14,481,038
9,704,721
84,199,663
109,943,659
109,943,659
7,584,971
24,750,427
24,750,427
24,750,427
4,776,317
1,474,079
11,111,264
240,346
468,246,586
614,742,720
614,742,720
46,660,825
51,545,328
51,545,328
27,796,267
32,854,286
(32,854,286)
1,249,819
910,871
910,871
1,535,268
21,918,409
21,918,409
26,244,829
11,407,024
11,407,024
3,036,161
4,592,726
52,882
2,182,025
4,601,916
74,819
2,182,025
4,601,916
74,819
5,694,387
3,118,976
3,118,976
40,362,102
75,371,616
75,371,616
89,996
1,993,519
796,665,165
1,124,404,073
1,185,336,328 24,750,427
17,361,660
2,083,515
53,235,157
14,078,527
421,864,993
617,679,203
100,167,706
128,923,683
36,262,848
46,005,292
53,737,853
48,077,312
5,692,646
14,078,527
77,640
1,331,727
1,239,714
31,668,377
35,609,317
1,947,981
311,729
28,169,115
32,808,618
90,356,493
2,561,136
124,949
41,479,277
84,724,923
96,168,179
796,665,165
1,124,404,073
53,235,157
14,078,527
(1) June 30, 2020 amounts are represented, as consolidated financial statements dated December 31, 2020 prepared in accordance with Article No 5 of Clause No 6 in the
Communiqué on Preparation of Consolidated Financial Statements of Banks are not published as of reporting date.
(2) Leasing and Factoring Receivables are included.
378 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Prior Period
Assets
Cash and CBRT
Carrying values
in financial
statements
prepared as per
TAS
Carrying values
in consolidated
financial
statements
prepared as per
TAS
Carrying values of items in accordance with Turkish Accounting Standards (TAS)
Subject to
credit risk
Subject to
counterparty
credit risk
Securitization
Positions
Subject to
market risk
Not subject to
capital
requirements
or subject to
deduction from
capital
Banks and Money Market Placements
23.385.918
71.614.469
71,970,390
21,913,871
71,970,390
21,913,871
Financial Assets at Fair Value Through
Profit/Loss
Financial Assets at Fair Value Through
Other Comprehensive Income
Derivative Financial Assets at Fair Value
Through Profit/Loss
4.802.506
6,800,006
3,557,377
77.979.907
77,827,270
77,827,270
6.881.206
6,710,129
6,710,129
6,710,129
Derivative Financial Assets at Fair Value
Through Other Comprehensive Income
95.278
3,242,629
684,680
4,763,020
Financial Assets at Measured at
Amortised Cost – Loans (1)
Financial Assets at Measured at
Amortised Cost – Other Financial Assets
Financial Assets at Measured at
Amortised Cost – Expected Credit Loss
(-)
Assets Held for Sale and Discontinued
Operations
Investment in Associates, Subsidiaries
and Joint-Ventures
Tangible Assets
Intangible Assets
Investment Properties
Current Tax Asset
Deferred Tax Asset
Other Assets
Total Assets
Liabilities
Deposits
Funds Borrowed
Money Market Funds
Marketable Securities Issued
Derivative Financial Liabilities at Fair
Value Through Profit/Loss
Derivative Financial Liabilities at Fair
Value Through Other Comprehensive
Income
Leasing Liability
Provisions
Current Tax Liability
Deferred Tax Liability
Subortinated Debts
Other Liabilities
Shareholders' Equity
Total Liabilities
424.500.069
427,079,716
427,079,716
48.413.493
45,604,603
45,604,603
26.088.000
26,049,421
26,049,421
1.302.606
1,302,608
1,302,608
1.280.688
13,052,096
13,052,096
24.807.871
2.749.347
4.653.743
76.009
8,099,954
1,653,988
3,649,631
48,923
8,099,954
1,653,988
3,649,631
48,923
4.807.716
3,672,736
3,672,736
37.945.167
54,815,763
54,815,763
79,888
1,530,485
709.207.993
718,152,263
714,909,634
6,710,129
8,690,329
1,610,373
8,046,256
24,558,771
8,854,434
373.586.853
381,693,393
85.780.548
25.984.647
43.574.557
77,602,888
25,984,647
39,499,306
9.025.512
8,854,434
152.307
1.161.995
918,740
27.955.124
24,027,066
3.190.345
366.318
24.414.842
28.596.962
85.417.983
2,851,982
144,431
24,426,121
57,287,535
74,861,720
709.207.993
718,152,263
32,605,027
8,854,434
(1) Leasing and Factoring Receivables are included.
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 379
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
1
2
3
4
5
6
7
8
9
10
11
1
2
3
4
5
6
7
8
9
10
11
b.2 The main sources of the differences between the risk amounts and the amounts assessed in accordance with TAS in the financial statements
Current Period
Total
Credit Risk
Counterparty
credit risk
Securitization
Position
Market risk
c. Explanations on Credit Risk
c.1. General Information on Credit Risk
c.1.1. General Qualitative Information on Credit risk
Asset carrying value amount under scope of TAS
1,124,404,073
1,185,336,328
24,750,427
Liabilities carrying value amount under scope of TAS
Total net amount under regulatory scope of
consolidation
Off-balance sheet amounts
Repurchase Transactions Valuation Adjustments(1)
Differences in valuations
Differences due to different netting rules
Differences due to consideration of provisions
Differences due to prudential filters
Differences due to risk mitigation(2)
Risk Amounts
(53,235,157)
1,124,404,073
1,185,336,328
77,985,584
771,887,904
147,301,592
29,890,333
6,394,736
(242,943,096)
(65,728,440)
17,361,660
14,078,527
3,283,133
Relevant information is given in the footnotes below Section Four footnote II “Explanations on Credit Risk” and Section Four footnote numbered XI-a.1.
c.1.2. Credit Quality of Assets:
Current Period
Loans (1)
Debt Securities
Off-balance sheet exposures
Total
Gross carrying value in financial statements prepared
in accordance with Turkish Accounting Standards (TAS)
Defaulted
24.445.092
1,613,512
26,058,604
Non-defaulted
590.297.628
153,871,817
333,971,906
1,078,141,351
Allowances/ Amortization and
Impairments
Net Values
15.898.604
1,215,814
17,114,418
598.844.116
153,871,817
334,369,604
1,087,085,537
1,023,966,384
36,285,069
3,283,133
(1) Credit balance which is monitored as Financial Assets at Fair Value Through Profit or Loss is not included in the above table. It is shown in detail in Section 5 footnote 1.b.3
( 1) According to the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks", it is the counterparty credit risk amount calculated for repo style transactions.
( 2) The source of the difference is the collateral for receivables under credit risk mitigation in the calculation of capital adequacy.
Prior Period
Total
Credit Risk
Counterparty
credit risk
Securitization
Position
Market risk
Asset carrying value amount under scope of TAS
718,152,263
714,909,634
6,710,129
(32,605,027)
718,152,263
714,909,634
39,315,156
477,657,792
90,428,221
9,869,395
5,494,929
8,690,329
8,854,434
164,105
Liabilities carrying value amount under scope of TAS
Total net amount under regulatory scope of
consolidation
Off-balance sheet amounts
Repurchase Transactions Valuation Adjustments(1)
Differences in valuations
Differences due to different netting rules
Differences due to consideration of provisions
Differences due to prudential filters
Differences due to risk mitigation(2)
Risk Amounts
(30,300,466)
(5,859,247)
769,178,142
15,364,324
164,105
(1) According to the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks", it is the counterparty credit risk amount calculated for repo style transactions.
(2)The source of the difference is the collateral for receivables under credit risk mitigation in the calculation of capital adequacy.
The differences between financial statements resulting from legal consolidation and the ones resulting from accounting consolidation are mainly due to the differences
in the scope of companies included in consolidation. Legal consolidation only includes partnerships that are in the form of credit institutions or financial institutions in
accordance with Article No 5 of Clause No 1 in the “Communiqué on Preparation of Consolidated Financial Statements of Banks” while accounting consolidation includes all
partnerships regardless of them being in the form of credit institutions or financial institutions in accordance with Article No 5 of Clause No 6 in the same communiqué.
Bank using the valuation methodology are mainly based on data observed may in accordance with TFRS 13 aims to use methods that measure the fair value. In this
context, securities qualification reality in the fair value measurement of financial assets in the transaction prices, quotes, set by the CBRT and as the price published in
the Official Gazette as are used also necessary from internal pricing models. As for the derivative transactions interest rates, yield curves, foreign exchange, the basis of
valuation models using market data such as volatility curves, valuation service is also available from third parties.
The market prices used to value the scope of the independent price verification process, data and / or model inputs for accuracy is regularly subjected to control, as well as
compliance of the results provided by the pricing services obtained from third parties with respect to certain ranges tested.
Prior Period
Loans (1)
Debt Securities
Off-balance sheet exposures
Total
Gross carrying value in financial statements prepared
in accordance with Turkish Accounting Standards (TAS)
Defaulted
23,144,846
913,737
24,058,583
Non-defaulted
403,934,870
119,172,863
208,255,293
731,363,026
Allowances/ Amortization and
Impairments
Net Values
14,371,889
695,465
15,067,354
412,707,827
119,172,863
208,473,565
740,354,255
(1) Credit balance which is monitored as Financial Assets at Fair Value Through Profit or Loss is not included in the above table. It is shown in detail in Section 5 footnote 1.b.3.
c.1.3. Changes in Stock of Default Loans and Debt Securities (1)
Defaulted loans and debt securities at end of the previous reporting period
Loans and debt securities that have defaulted since the last reporting period
Receivables back to non-defaulted status
Amounts written off
Other Changes
Defaulted loans and debt securities at end of the reporting period
23,144,846
6,799,033
(1,017,053)
(2,021,889)
(2,459,845)
24,445,092
21,102,730
5,667,879
(145,197)
(98,452)
(3,382,114)
23,144,846
Current Period
Prior Period
(1) Indemnified non-cash loans or non-cash loans not converted into cash, of the firms which are followed under “Non-performing Loans” accounts are not included in the table.
c.1.4. Additional Information on Credit Quality of Assets
Bank’s methods for determining provision amounts and classification of its loans are mentioned in the Section Three Note VIII.
The bank is restructuring its loans classified as first and second group as well as non-performing loans and receivables. Restructuring in performing loans are made by
granting a new loan or extending the term date of credit given to customer by Bank with changing conditions of contract aiming the enhancing of solvency of customer
or customer’s demand. Restructuring in non-performing loans are generally made by establishing a new redemption plan within the context of a protocol aiming the
collection of those receivables whose redemption plan are not valid because of delinquency previously.
The breakdown of receivables in terms of geographic regions, sectors and remaining maturities are represented in “Explanations on Credit Risk” in the Fourth Section note
II.
On the basis of sector-based provisions for receivables are presented in the footnote numbered Section Four II-16. The amounts of the receivables that are set aside for
the geographical regions are as follows. The amount of non-performing loans which are written off in 2021 is TL 2,021,889
380 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 381
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Current Period
Prior Period
Non-Performing Loans
Specific Provisions
Non-Performing Loans
Specific Provisions
Domestic
EU Countries
OECD Countries (1)
23,474,995
641,517
39,671
Off-Shore Banking Regions 44,950
USA, Canada
Other Countries
Total
7,731
236,228
24,445,092
15,178,041
471,609
34,495
20,185
6,382
187,892
15,898,604
22,625,959
277,753
3,552
8,756
228,826
23,144,846
13,938,685
244,154
3,326
6,405
179,319
14,371,889
(1) OECD Countries other than EU countries, USA and Canada.
The aging analysis of past-due receivables are disclosed under Section Four note II-11.
c.2. Credit Risk Mitigation
c.2.1. Qualitative Public Disclosures On Credit Risk Mitigation Techniques
In the calculation of the Group’s Credit Risk Mitigation in accordance with the “Communiqué on Credit Risk Mitigation Techniques” published in the Official Gazette
numbered 29111 on September 6, 2014, the financial collaterals are taken into consideration. The Group takes local currency and foreign currency deposit pledges into
consideration as financial collaterals in calculating regulatory capital adequacy.
Colleteral valuation and its management policy and primary features processes are givin are given at Section Four note.II under “Information on Credit Risk” disclosure.
c.2.2. Credit Risk Mitigation Techniques – Standard Approach
Current Period
Exposures
unsecured
Exposures secured
by collateral
Collateralized
amount of
exposures secured
by collateral
Exposures secured
by financial
guarantees
Collateralized
amount of
exposures secured
by financial
guarantees
Exposures
secured by credit
derivatives
Collateralized
amount of
exposures
secured by credit
derivatives
Loans (1)
577,741,977
10,355,755
8,618,981
10,746,384
9,724,012
Debt securities
153,871,817
Total
Of which defaulted (2)
731,613,794
10,355,755
8,618,981
10,746,384
9,724,012
23,623,595
(1) D(1) Credit balance which is monitored as Financial Assets at Fair Value Through Profit or Loss is not included in the above table. It is shown in detail in Section 5 footnote 1.b.3.
(2) The gross amount valued in accordance with the TAS contained in the financial statements is included.
Prior Period
Exposures
unsecured
Exposures secured
by collateral
Collateralized
amount of
exposures secured
by collateral
Exposures secured
by financial
guarantees (1)
Collateralized
amount of
exposures secured
by financial
guarantees
Exposures
secured by credit
derivatives
Collateralized
amount of
exposures
secured by credit
derivatives
Loans (2)
396.514.406
4.963.570
4.189.276
11.229.851
9.194.462
Borçlanma araçları
119.172.863
Toplam
Of which defaulted (3)
515.687.269
4.963.570
4.189.276
11.229.851
9.194.462
22.564.714
(1) Consists loans of Credit Guarantee Fund guaranteed by the Undersecretariat of Treasury.
(2) Credit balance which is monitored as Financial Assets at Fair Value Through Profit or Loss is not included in the above table. It is shown in detail in Section 5 footnote 1.b.3.
(3) The gross amount valued in accordance with the TAS contained in the financial statements is included.
c.3. Credit Risk Under Standardised Approach
c.3.1. Qualitative Disclosures on Banks’ Use of External Credit Ratings Under the Standardised Approach for Credit Risk
Aformentioned explanations are disclosed under Section Four note XI-a.1.
c.3.2. Standard Approach: Credit risk exposure and credit risk mitigation effects:
Current Period
Exposures before CCF and CRM
Exposures post-CCF and CRM
RWA and RWA density
On-balance sheet
amount
Off-balance sheet
amount
On-balance sheet
amount
Off-balance sheet
amount
Risk- Weighted
Amount
Risk-Weighted
Amount Density
Exposures to sovereigns and their central banks
270,036,409
329,185
278,093,661
9,801,001
Exposures to regional and local governments
343,195
870
Exposures to administrative bodies and non-
commercial entities
508,227
231,567
Exposures to multilateral development banks
363,923
Exposures to international organizations
343,084
503,596
363,923
Exposures to banks and securities firms
42,040,070
21,847,240
42,026,622
267
3,736,206
171,690
1.30%
50.00%
100,558
604,154
100.00%
0.00%
32.50%
92.01%
76.00%
35.00%
61.65%
79.49%
149.01%
19,713,260
349,203,244
97,377,938
8,671,725
17,569,776
6,179,114
35,579,530
18,633,667
92,890,256
297,665,741
163,392,828
286,624,208
168,884,127
74,776,645
165,426,261
5,834,808
24,218,278
25,979,947
7,773,698
24,046,483
1,362,521
3,621,770
1,246,361
24,171,145
25,979,947
7,773,698
23,726,962
605,213
2,519,999
150,646
Exposures to corporates
Retail exposures
Exposures secured by residential property
Exposures secured by commercial property
Past-due Receivables
Exposures in higher-risk categories
Exposures in the form of bonds secured by
mortgages
Short term exposures to banks, brokerage
houses and corporates
Equity investments in the form of collective
investment
Undertakings
Other exposures
Equity investments
Total
Prior Period
Exposures to corporates
Retail exposures
Exposures secured by residential property
Exposures secured by commercial property
Past-due loans
Exposures in higher-risk categories
Exposures in the form of bonds secured by
mortgages
Short term exposures to banks, brokerage
houses and corporates
Equity investments in the form of collective
investment Undertakings
Equity investments
Other exposures
Total
2,633,178
38,233,010
23,010,720
50,000
21,864,123
2,633,178
38,233,010
23,010,720
50,000
131,274
2,683,178
27,051,365
23,431,014
925,737,006
288,723,110
918,910,015
130,717,689
591,972,194
100.00%
70.47%
101.83%
56.39%
Exposures before CCF and CRM
Exposures post-CCF and CRM
RWA and RWA density
On-balance sheet
amount
Off-balance sheet
amount
On-balance sheet
amount
Off-balance sheet
amount
Risk- Weighted
Amount
Risk-Weighted
Amount Density
Exposures to sovereigns and their central banks
179,670,497
268,080
188,865,493
1,514,133
Exposures to regional and local governments
454,543
490
Exposures to administrative bodies and non-
commercial entities
505,570
119,941
Exposures to multilateral development banks
356,295
803
454,435
504,858
356,295
Exposures to international organizations
Exposures to banks and securities firms
34,063,694
17,032,661
34,063,694
230
50,470
402
15,360,614
71,312,787
249,246,045
131,982,901
241,166,812
142,148,843
51,614,095
137,370,841
3,355,086
10,323,829
21,573,337
8,475,290
248,854
312,988
3,345,490
869,651
10,306,924
21,573,337
8,475,290
248,854
143,168
2,390,881
101,830
2,344,669
227,333
1.23%
50.00%
555,328
100.00%
15,967,375
308,113,161
82,718,375
3,657,532
14,648,062
6,686,802
367,574
0.00%
0.00%
32.31%
98.60%
75.00%
35.00%
61.12%
78.90%
104.82%
0.00%
0.00%
2,680,702
65,000
2,680,702
28,740,676
6,112,340
13,790,256
28,740,676
13,790,256
65,000
18,830
2,545,498
92.71%
19,770,890
14,153,517
68.75%
102.63%
692,278,431
211,724,440
688,598,467
94,313,431
471,756,116
60.26%
382 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 383
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen c.3.3 Standardised Approach: Receivables according to risk classes and risk weights:
Current Period
Risk Groups
0% (1)
10%
20%
35%
50%
75%
100%
150%
250%
Other (2)
Total
Risk Weights
Consolidated
Prior Period
Risk Groups
0% (1)
10%
20%
35%
50%
75%
100%
150%
200%
250%
Total
Risk Weights
Consolidated
346,370
3,563,021
287,894,662
Exposures to sovereigns
and their central banks
187,997,008
75,899
2,306,719
190,379,626
Exposures to corporates
782,189
19,999,364
26,602,963
331,589,700 203,638
336,610
379,514,464
Retail exposures
43,109,482
123,094,596 5,056,991
Exposures to sovereigns
and their central banks
283,985,271
Exposures to regional and
local governments
Exposures to
administrative bodies and
non-commercial entities
Exposures to multilateral
development banks
363,923
Exposures to
international
organizations
Exposures to banks and
securities firms
Exposures secured by
residential property
Exposures secured by
commercial property
Past-due loans
Exposures in higher-risk
categories
Exposures in the form
of bonds secured by
mortgages
Short term exposures to
banks, brokerage houses
and corporates
Equity investments in
the form of collective
investment Undertakings
Equity investments
343,323
28
604,154
343,351
604,154
363,923
36,648,915
22,931,570
897,484
11,190
171,130
60,660,289
24,776,358
21,860,341
6,639,605
3,400,695
4,161,476
211,527
171,261,069
24,776,358
28,499,946
7,773,698
125,189
223,387
23,529,032
23,877,608
2,683,178
2,683,178
22,730,524
280,196
23,010,720
Exposures to regional and
local governments
Exposures to
administrative bodies and
non-commercial entities
Exposures to multilateral
development banks
356,697
Exposures to
international
organizations
Exposures to banks and
securities firms
454,664
1
555,328
454,665
555,328
356,697
29,950,134
19,009,555
448,715
15904
49,424,308
Exposures to corporates
Retail exposures
30,434,760
566,755
7,826,073
304,086,766 5
110,291,167
10,450,092
18,632,312
5,331,906
4,063,230
3,925,807
486,253
117,080
82,745
150,859
312,479,599
140,725,927
10,450,092
23,964,218
8,475,290
350,684
Exposures secured by
residential property
Exposures secured by
commercial property
Past-due loans
Exposures in higher-risk
categories
Exposures in the form
of bonds secured by
mortgages
Short term exposures to
banks, brokerage houses
and corporates
Equity investments in
the form of collective
investment Undertakings
Equity investments
Other exposures
Total
Other exposures
11,312,919
27,051,365
38,364,284
Total
339,553,784
56,648,279
24,776,358
75,610,451
123,094,596 405,200,913 23,955,387
280,196
507,740
1,049,627,704
( 1) Yatırım Varlık Kiralama A.Ş. with transactions of one of the group companies that are not subject to credit risk of Anadolu Hayat Emeklilik
A.Ş..It also includes securities that the company blocks on behalf of its insured persons, as well as individual pension receivables.
(2) The related balance includes receivables from central counterparties subject to a risk weight of 2%.
400,408
2,345,294
2,745,702
8,988,616
227,777,081
30,516,889
10,450,092
50,579,221
110,291,167 352,402,253 653,021
242,174
782,911,898
13,548,082
19,770,890
242,174
13,790,256
28,759,506
( 1) Anadolu Hayat Emeklilik A.Ş. of the group companies.it also includes securities that the company blocks on behalf of its insured persons, as well as individual pension receivables.
384 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 385
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
d. Explanations on Counterparty credit risk
d.1. Qualitative Disclosures on Counterparty Credit Risk Approach
The counterparty credit risk that the Parent Bank exposed to is managed within the framework of general limit allocation and credit risk mitigaiton that are outlined the
credit risk policy. In setting general credit limits, the counterparty credit risks of customers as well as their cash and noncash risks are taken into account with a holistic
view. Moreover, the total position of the transactions which create counterparty credit risk is also monitored under a separate risk limit.
The counterparty credit risk, which stems from derivatives and repo like transactions including transactions with qualified central counterparties that result in liabilities
for both sides, is measured according to the Appendix-2 and Appendix-4 of the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks" Counterparty
credit risk valuation method based on the calculation of fair values of the derivative transactions is implemented. In calculating the potential credit risk, the amount of the
contract is multiplied by the rates given in the regulation. The replacement costs of derivative instruments are calculated based on the valuation of the related contracts
according to the fair value method.
Most of the credit risk related to the derivative transactions with other banks is subject to daily collateral clearing agreements mutually signed with related parties and the
counterparty credit risk is hence reduced. On the other hand, the risk-reducing effect of such agreements is not considered in the calculation of the counterparty credit risk
under the capital adequacy legislation. There are no guarantees received or sold by credit derivatives by the Bank in the context of trading or banking accounts.
d.2. Counterparty Credit Risk (CCR) Approach Analysis:
Current Period
Replacement Cost
Potential Future
Exposure
Exposure after Credit
Risk Mitigation
Risk Weighted
Amounts
Standardised Approach - CCR (for derivatives) (1)
17,111,025
3,145,731
20,256,756
8,723,392
Comprehensive Approach for credit risk mitigation (for repo
transactions, securities or commodity lending or borrowing
transactions, long settlement transactions and securities
financing transactions)
4,896,829
1,616,356
Total
17,111,025
3,145,731
25,153,585
10,339,748
(1) Transactions with central counterparties are not included.
Prior Period
Replacement Cost
Potential Future
Exposure
Exposure after Credit
Risk Mitigation
Risk Weighted
Amounts
Standardised Approach - CCR (for derivatives)
6,235,166
2,178,487
8,413,653
8,413,653
Comprehensive Approach for Credit Risk Mitigation (for repo
transactions, securities or commodity lending or borrowing
transactions, long settlement transactions and securities
financing transactions)
5,304,371
2,097,232
Total
6,235,166
2,178,487
13,718,024
7,847,241
d.3. Capital obligation for credit valuation adjustment (CVA):
Total portfolio value with standardized approach CVA capital
change
20,256,756
6,743,838
8,413,653
2,718,719
Total subject to the CVA capital change
20,256,756
6,743,838
8,413,653
2,718,719
Current Period
Prior Period
Risk Amounts
Risk Weighted Amounts
Risk Amounts
Risk Weighted Amounts
d.4 CCR Exposures by risk class and risk weights:
Current Period
Risk Groups
Conditional and
unconditional exposures to
sovereigns and their central
banks
Conditional and
unconditional exposures
to regional and local
governments
Conditional and
unconditional exposures to
administrative bodies and
non-commercial entities
Conditional and
unconditional exposures to
multilateral development
banks
Conditional and
unconditional exposures to
international organizations
Conditional and
unconditional exposures to
banks and securities firms
Exposures to corporates
Retail exposures
Exposures secured by
residential property
Past-due items
Exposures in high-risk
categories
Exposures in the form of
bonds secured by mortgages
Short term exposures to
banks, brokerage houses
and corporates
Equity investments in
the form of collective
investment undertakings
Other exposures
Equity investments
Total
0%
10%
20%
50%
75 %
100%
150%
Other (1)
Total Credit
Risk Weights
9,501,019
9,501,019
5,788
5,788
2,822,386
5,339,074
256,646
343,990
6,852,442
32,240
8,161,460
7,453,078
32,240
9,501,019
3,079,032
5,683,064
32,240
6,858,230
507,740
25,661,325
507,740
507,740
(1) Related balance includes receivables from central counterparties subject to 2% risk weight.
386 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 387
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Prior Period
0%
10%
20%
50%
75 %
100%
150%
Other (1)
Total Credit Exposure
Risk Weights
d.6. Credit derivatives exposures:
None.
d.7. Exposures to central counterparties (CCP):
1,080,938
1,080,938
Current Period
Prior Period
Post CRM risk exposure
RWA
Post CRM risk exposure
RWA
321
321
Exposure to Qualified Central Counterparties (QCCPs) (total)
Exposures for trades at WCCPs (excluding initial margin and
default fund contributions); of which
(i) OTC Derivatives
803,529
507,740
505,714
12,738
10,155
10,114
Risk Groups
Conditional and unconditional
exposures to sovereigns and their
central banks
Conditional and unconditional
exposures to regional and local
governments
Conditional and unconditional
exposures to administrative bodies
and non-commercial entities
Conditional and unconditional
exposures to multilateral
development banks
Conditional and unconditional
exposures to international
organizations
Conditional and unconditional
exposures to banks and securities
firms
Exposures to corporates
Retail exposures
Exposures secured by residential
property
Past-due items
Exposures in high-risk categories
Exposures in the form of bonds
secured by mortgages
Short term exposures to banks,
brokerage houses and corporates
Equity investments in the form of
collective investment undertakings
Other exposures
Equity investments
Total
2,785,215
5,086,222
3
976
19,613
4,712,837
31,899
7,871,440
4,733,426
31,899
1,080,938
2,786,191
5,105,835
31,899
4,173,161
786,600
14,504,624
786,600
786,600
( 1) Related balance includes receivables from central counterparties subject to 2% risk weight.
d.5. Collateral for CCR:
Collateral used in derivative transactions
Collateral used in other transactions
Current Period
Received Collateral
Given Collateral
Segregated
Not Segregated
Segregated
Not Segregated
Cash- Domestic Currency
Cash- Other Currencies
Government bills/bonds-Domestic
Government bills/bonds-FC
Corporate bills/bonds
Total
Given Collateral
Received
Collateral
40,504,926
10,535,283
297,843
51,338,052
Collateral used in derivative transactions
Collateral used in other transactions
862,425
786,600
782,259
4,341
28,350
47,475
17,820
15,732
15,645
87
2,088
2,026
41
194,244
101,545
2,583
(ii) Exchange-traded Derivatives
(iii) Repo-reverse transactions, credit securities transactions and
securities or commodities lending or borrowing
(iv) Netting sets where cross-product has been
Segregated initial margin
Non-segregated initial margin
Paid guarantee fund amount
Unpaid guarantee fund commitment
Exposures to non-QCCPs (total)
Exposures for trades at non-QCCPs (excluding initial margin and
default fund contributions); of which
(i) OTC Derivatives
(ii) Exchange-traded Derivatives
(iii) Repo-reverse transactions, credit securities transactions and
securities or commodities lending or borrowing
(iv) Netting sets where cross-product has been approved
Segregated initial margin
Non-segregated initial margin
Pre-funded default fund contributions
Unfunded default fund contributions
e. Explanations on securitisations:
None.
f. Explanations on Market Risk:
f.1. Qualitative information disclosed to the public regarding Market Risk
Market risk is defined as the risk that may reduce the market value of the trading portfolio due to the changes in the risk factors named interest rate, exchange rates,
equities and the price of commodities and options.
The procedures for the management of market risk are discussed in the Parent Bank's "Asset and Liability Management Risk Policy" and those procedures are in line with
the risk/return expectations and with the limits that are defined in the risk appetite framework. Limits related to market risk; are established by the Board and are revised
periodically in order to reflect market conditions and best practices in the industry. Compliance to those limits is closely monitored by the Risk Management Department,
Asset and Liability Management Committee and by the executive departments. Additionally, compliance with the provisions relating to the procedures and policies of
market risk management is audited by the internal audit system.
Trading activities of the securities that are included in the calculation of market risk is carried out by taking the Asset-Liability Committee decisions, risk policies and
established limits into consideration and risks arising due to these activities are hedged using derivatives transactions where necessary.
Measurement of market risk, reporting of results, and monitoring compliance with the risk limits are among the key responsibilities of the Risk Management Department.
Analyses related to market risk are reported to the Risk Comittee and to the Board via the Audit Committee by the Risk Management Deparment.
The trading book of the Parent Bank included in market risk calculations consists of on balance-sheet financial assets that are held for trading intent, derivatives that
provide hedge to those instruments and foreign currency positions. The market risk carried by the Group is measured and monitored using methods known respectively
as the Standard Method and the Value at Risk Model (VAR) and Expected Shortfall in accordance with the local regulations which are established in compliance with the
international legislations. In this context, the exchange rate risk emerges as the most important component of the market risk.
Prior Period
Received Collateral
Given Collateral
Segregated
Not Segregated
Segregated
Not Segregated
Received
Collateral
Given Collateral
The market risk calculations using the Standard Method are performed at the end of each month and the measurement results are included in the statutory reports as well
as being reported to the Bank’s top management.
Cash- Domestic Currency
Cash- Other Currencies
Government bills/bonds-Domestic
Government bills/bonds-FC
Corporate bills/bonds-FC
Total
19,973,100
11,632,214
137,736
28,713
31,771,763
The Value at Risk Model and Expected Shortfall is another alternative for the Standard Method used for measuring and monitoring market risk. This model is used to
measure the market risk on a daily basis in terms of interest rate risk, currency risk and equity share risk and is a part of the Bank’s daily internal reporting. Further
retrospective testing (back-testing) is carried out on a daily basis to determine the reliability of the daily risk calculation by the VAR model, which is used to estimate the
maximum possible loss for the following day.
Scenario analyses which support the VAR model used to measure the losses that may occur in the ordinary market conditions are practiced, and the possible impacts of
scenarios that are developed based on the future predictions and the past crises, on the value of the Bank’s portfolio are determined and the results are reported to the
Bank’s top management.
388 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 389
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen f.2. Standardised Approach
i. Remuneration policy
Outright Products
Interest rate risk (general and specific)
Equity risk (general and specific)
Foreign exchange risk
Commodity risk
Options
Simplified approach
Delta-plus method
Scenario approach
Securitisations
Total
g. Explanations on Operational Risk
Current Period
21,625,301
4,991,613
1,222,400
12,624,138
2,787,150
1,049,024
RWA
Prior Period
17,364,027
3,902,163
3,844,363
9,416,413
201,088
131,698
1,049,024
131,698
22,674,325
17,495,725
The operational risk capital requirement is calculated according to “Regulation on Measurement and Evaluation of Capital Adequacy of Banks” article number 24, is
measured using the Basic Indicator Approach once a year in parallel with domestic regulations. As of December 31, 2021 the consolidated operational risk amount is TL
51,469,094 information about the calculation is given below (December 31, 2020: TL 41,095,093).
Current Period
Gross Income
Value at operational risk (Total*12.5)
Current Period
Gross Income
Value at operational risk (Total*12.5)
2PP Amount
1PP Amount
CP Amount
Total/Positive Years of
Gross Income Amount
Rate (%)
Total
22,312,078
24,912,326
35,126,147
3
15
4,117,528
51,469,094
2PP Amount
1PP Amount
CP Amount
Total/Positive Years of
Gross Income Amount
Rate (%)
Total
18,527,745
22,312,078
24,912,326
3
15
3,287,607
41,095,093
h. The interest rate risk of the banking book items:
Interest rate risk arising from the banking accounts is defined as negative effect risk on capital of the changes in market interest rates due to differences in interest
settlement and re-pricing on, differences in interest-earning assets taking part in the banking book; interest-bearing liabilities; interest-bearing derivative transactions
inclusive of the policies established by the Board of Directors, is managed within the framework of the strategies set by the Parent Bank Asset-Liability Committee.
Compliance with internal risk limits for banking portfolio is closely and continuously monitored by the Risk Management Department and Asset-Liability Committee
and the measurement results are reported to the Board of Directors on a monthly basis.
Duration and sensitivity analysis are conducted on a monthly basis by the Bank in the scope of monitoring of interest rate risk arising from the banking books about
Interest Rate Risk in the Banking Accounts from the Regulation on Measurement and Assessment of Standard Shock Method which is published in the Official Gazette
No. 28034 dated August 23, 2011. In the duration analysis, the maturity gap between assets and liabilities of the balance sheet are determined by the calculation of
the weighted average maturities based on the asset that sensitive to interest rate and liabilities and off-balance sheet transactions re-pricing period. In the interest
rate risk sensitivity analysis, the influence of the various interest rate change scenarios to the economic value of the Bank's capital is examined.
In the calculations made within the framework of the said regulation, behavioral maturity modeling is performed for demand deposits with low sensitivity to interest
changes and whose original maturity is longer than the contractual maturity. In these studies, which are defined as core deposit analysis, based on historical data,
calculations are made for what amount of demand deposits will remain within the bank for what maturity, and these analyzes are used as an input in quantifying the
interest rate risk arising from banking accounts in a way that does not contradict legal provisions.
Currency
Applied Shock (+/- x basis point)
Gains Loss
Revenue/Shareholders’ Equity –
Loss/ Shareholders’ Equity
TL
TL
EUR
EUR
USD
USD
Total (for Negative Shocks)
Total (for Positive Shocks)
(+) 500
(-) 400
(+) 200
(-) 200
(+) 200
(-) 200
390 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
(7,658,934)
7,003,704
709,875
48,870
(1,201,907)
2,876,981
9,929,555
(8,150,966)
(6.79)%
6.21%
0.63%
0.04%
(1.07)%
2.55%
8.80%
(7.23)%
The Remuneration Committee, which is established to carry out the duties and activities related to the monitoring and supervision of the Bank's remuneration
applications on behalf of the Board of Directors, consists of two members. The Remuneration Committee meets at least twice a year, not exceeding six months, and
reports to the Board of Directors on the results of the activities carried out and important matters considered to have an impact on the Bank’s position. As of the end of
2021, the Remuneration Committee met 7 times and made a total of 10 decisions.
Regarding compliance with the Corporate Governance Principles, the Remuneration Committee monitors and supervises the practices related to wage management
on behalf of the Board of Directors; the fees are in line with the Bank's ethical values, internal balances and strategic objectives; the evaluation of the remuneration
policy and its practices in the context of risk management; it is responsible for the presentation of the proposals determined in line with the requirements of the salary
policy and the other responsibilities determined by the provisions of the applicable legislation and the fulfillment of the duties given by the Board of Directors in this
framework.
As of the end of 2021, the number of qualified employees working at the Bank is 27.
The monetary and social rights of employees are determined in accordance with the Chartering Policy in the framework of the legislation related to the Collective Labor
Agreement. The Bank carries out its practices with regard to remuneration policies within the framework of relevant banking and capital market legislation. This policy
includes all managers and employees.
Premium payments are made once a year to managers and managers who work in branches and headquarters units. It is considered that managerial premium
payments are in line with the Bank's long-term strategy and the risks assumed, as well as the performance of its employees. There are no variable fees for qualified
employees in the Bank.
The compliance of the wage levels in the bank with the sector wage levels is monitored by participating in independent and anonymous wage surveys, which are held
twice a year.
Within the scope of the remuneration policy, the Bank's pricing practices are planned and executed on the basis of effective risk management, prevention of excessive
risk taking, compliance with relevant legislation and scope and structure of the bank's activities, strategies, long-term objectives and risk management structures.
The fees to be paid to the managers and employees of the Bank at every stage; It is essential that the Bank is in line with its ethical values, internal balances and
strategic objectives, and that it is not only associated with its short-term performance.
Payments made to employees are determined in a manner that will positively impact the Bank's corporate values and on the basis of objective conditions.
Payments to be made to the managers of the units within the internal systems and to their staff are determined by taking into account the performance of the relevant
personnel in relation to their functions, as they are in the audit or oversight, or are independent of the performance of the activity unit they control.
XII. Explanations on Segment Reporting
The Group's activities are classified under corporate/commercial banking, retail/private banking, treasury operations and investment activities, insurance and
reinsurance activities and others.
Services to the large corporations, SMEs and other trading companies are provided through various financial instruments within the scope of the corporate and
commercial operations. Services such as project financing, operating and investment loans, deposit and cash management, credit cards, cheques and bills, foreign trade
transactions and financing, letter of guarantee, letter of credit, forfeiting, foreign currency trading, bill collections, payrolls, investment accounts, tax collections and
other banking services are provided to the aforementioned customer segments.
Retail banking services include deposits, consumer loans, overdraft accounts, credit cards, bill collections, remittances, foreign currency trading, safe-deposit boxes,
insurance, tax collections, and investment accounts and other banking services for individuals. All kinds of financing and cash management services provided to
individuals in the high-income level are recognized as Private Banking activities.
Treasury transactions are comprised of medium and long-term funding tools such as securities trading, money market transactions, spot and forward TL and foreign
currency trading, and derivative transactions such as forwards, swaps, futures and options, as well as syndications and securitizations. Investment activities of
intermediary institutions and venture capital and real estate investment partnerships are also classified in this area. Investments of subsidiaries who operate in the
real sector, investments of associates who operate both in financial and real sector and investments of jointly controlled entities that are presented in the consolidated
financial statements are evaluated within the scope of investment activities.
Insurance and reinsurance activities include individual pension, life/non-life insurance transactions and reinsurance transactions.
The Group's financial leasing, factoring, asset management, portfolio management and payment service activities are classified under the ‘Other’ heading.
Information about The Group’s segments are presented below.
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 391
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Current Period
Interest Income
Interest Expense
Fees and Commissions Income
Fees and Commissions Expense
Dividend Income
Trading Income/Loss (Net)
Other Income
Expected Credit Loss and Other Provision
Expenses
Corporate /
Commercial
Banking
35,382,354
6,667,695
6,236,181
13,499
Individual /
Private Banking
Treasury Transaction/
Investment Activities
Insurance and
Reinsurance
Activities
Other/
Unallocated
Total
12,353,944
10,642,224
2,709,306
19,913,033
13,683,018
837,356
103,959
68,548
703,452
21
95,798
1,514,562
1,799,856
1,537,406
612,123
2,166,889
69,449,187
32,530,364
10,490,764
3,798,909
68,548
703,452
2,633,690
307,201
1,121,310
11,010,299
1,811,190
16,883,690
7,091,015
688,195
73,446
137,851
8,819,983
16,810,490
Other Operating Expense
2,543,719
6,078,683
677,308
12,703,259
8,378,440
30,381,409
Income/Loss from Investments in
Subsidiaries Accounted by Equity Method
Income Before Tax
Tax Provision
Net Period Profit
Group Profit/Loss
Minority Interest Profit/Loss
4,874,850
4,874,850
18,949,319
3,389,061
15,560,258
13,541,060
2,019,198
Total Assets
Total Liabilities
469,775,712
99,696,826
305,769,418
338,253,903
276,497,395
247,862,699
50,825,252
72,750,401
227,608,888
1,124,404,073
159,767,652
1,124,404,073
Prior Period
Interest Income
Interest Expense
Fees and Commissions Income
Fees and Commissions Expense
Dividend Income
Trading Income/Loss (Net)
Other Income
Expected Credit Loss and Other Provision
Expenses
Corporate /
Commercial
Banking
25,677,637
4,178,058
4,156,208
10,612
8,592,126
5,402,127
2,281,149
85
1,517,338
245,951
Individual /
Private Banking
Treasury Transaction/
Investment Activities
Insurance and
Reinsurance
Activities
Other/
Unallocated
Total
12,424,000
7,836,465
716,455
71,502
31,057
(1,206,769)
350,854
385
71,833
1,208,916
1,267,214
1,481,227
155,836
1,208,916
9,014,735
605,051
47,960,977
18,898,262
7,381,481
2,462,068
31,057
(1,206,769)
11,733,929
7,515,789
534,157
74,924
105,839
5,919,331
14,150,040
Other Operating Expense
2,058,802
4,914,808
564,288
8,059,214
5,582,046
21,179,158
Income/Loss from Investments in
Subsidiaries Accounted by Equity Method
Income Before Tax
Tax Provision
Net Period Profit
Group Profit/Loss
Minority Interest Profit/Loss
1,455,956
1,455,956
10,667,103
2,915,351
7,751,752
6,655,442
1,096,310
Total Assets
Total Liabilities
315,988,780
78,552,996
176,196,685
221,704,133
185,117,467
156,650,726
35,704,002
51,755,859
105,426,307
718,152,263
111,844,860
718,152,263
Section Five: Disclosures and Footnotes on the Consolidated Financial Statements
I. Disclosures and Footnotes on Consolidated Assets
a. Cash and Central Bank of the Republic of Turkey:
a.1. Information on Cash and Balances with the Central Bank of the Republic of Turkey:
Current Period
Prior Period
Cash in TL / Foreign Currency
Central Bank of the Republic of Turkey
Other
Total
a.2. Information on Balances with the CBRT:
Unrestricted Demand Deposit
Unrestricted Time Deposit
Restricted Time Deposit
Other (1)
TL
2,627,722
14,667,660
17,295,382
TL
14,667,660
Total
14,667,660
FC
12,234,865
154,122,778
368,200
166,725,843
Current Period
FC
66,691,645
87,431,133
154,122,778
( 1) The amount of reserve deposits held at the Central Bank of the Republic of Turkey.
a.3. Explanations on reserve requirement application:
TL
2,486,752
3,079,305
5,566,057
TL
3,079,305
3,079,305
FC
6,650,065
59,386,999
367,269
66,404,333
Prior Period
FC
19,987,701
39,399,298
59,386,999
As per the Communiqué no. 2013/15 “Reserve Deposits” of the Central Bank of the Republic of Turkey (“CBRT”), banks keep reserve deposits at the CBRT for their TL and
FC liabilities mentioned in the communiqué. The reserve deposit rates vary according to their maturity compositions; the reserve deposit rates are realized between 1% - 6%
for TL deposits and other liabilities, between 13% - 22% for FC deposits and between 5% - 21% for other FC liabilities. Reserves are calculated and set aside every two weeks
on Friday for 14-day periods. Interest is paid for required reserves which are in TL in accordance with the procedures and principles determined by the CBRT.
According to the Communique on Required Reserves published in the Official Gazette dated 01.07.2021 and numbered 31528, the possibility of establishing Turkish lira
required reserves in foreign currency was terminated as of 01.10.2021.
Within the scope of the "Communique on Supporting the Conversion of Turkish Lira Deposit and Participation Accounts" numbered 2021/14, the conversion rate from USD,
EUR and GBP denominated foreign currency deposit accounts and foreign exchange denominated participation fund accounts to time TL deposit and participation accounts
was 10% as of the obligation date of 15.04.2022. and banks that reached 20% as of 08.07.2022 liability date, it has been decided not to apply an annual commission of 1.5%
over the portion up to the amount to be kept for their liabilities until the end of 2022.
b. Information on Financial Assets at Fair Value through Profit and Loss:
b.1. Financial assets at fair value through profit and loss, which are given as collateral or blocked: Financial assets at fair value through profit and loss, which are given as
collateral or blocked as of 31 December 2021, amount to TL 5,872,223 (December 31, 2020: 772,176 TL).
b.2. Financial assets at fair value through profit and loss, which are subject to repurchase agreements: Financial assets at fair value through profit and loss, which are
subject to repurchase agreements as of 31 December 2021, amount to TL 164,956 (December 31, 2020: TL 61,909).
b.3. All creditors including the Group reached an agreement on restructuring the loans granted to a company. As previously stated, loans of the company had been planning
to be restructured based on required permits and necessary approvals within a new special purpose entity which was already incorporated or will be incorporated in the
Republic of Turkey and owned by the creditors either directly or indirectly through takeover of the shares, that have been pledged by the company as a guarantee for the
credit risk. Above mentioned process was completed in 2018 and, in this context the Bank owns 11.5972% and Türkiye Sınai Kalkınma Bankası A.Ş, a group company, owns
1.6172% of the newly formed special purpose entity.
At the Ordinary Meeting of the General Assembly of 2018 held in the year of 2019, it has been decided to increase the share capital of the mentioned company by TL
3,982,230, all to be covered by common receivables. Whereas the Bank’s and Türkiye Sınai Kalkınma Bankası A.Ş.’ ownership ratio in company share have not changed, the
nominal value of the shares owned increased from TL 6 to TL 461,833 and from TL 1 to TL 64,403 respectively. Related amount is recognized under Assets Held for Sale
and Discontinued Operations account.
This remaining loan amount after the capital increase of the mentioned company amounting to TL 2,149,813 (31.12.2020: TL 2,149,813) is accounted under financial
assets at fair value through profit or loss. The amount of impairment recognized for the total asset converted into loan and capital is TL 3,868,608 and is classified under
the specified item.
Assets, which are converted into loan and capital, amounted TL 2,676,049 are measured at fair value under TFRS 9 “Financial Instruments” standard and TFRS 5 “Assets
Held For Sale and Discontinued Operations” Standard. Balance of related asset is followed in financial statements as Stage 3 within the scope of “TFRS 13 – Fair Value
Measurement” standard.
The Bank re-evaluated the fair value of the relevant financial asset as of the end of the period, and did not make any changes to the current value monitored during the
period.If the growth rate and risk-free return rate on investment used in the discounted cash flow method used in valuation are increased or decreased by 0.25%, provided
that all other variables are constant, the total value of assets recognized in the financial statements and profit before tax will increase by about TL 63 million (full TL
amount) or will decrease by TL 56 million (full TL amount).
Although the process is ongoing as of the date of the report, as announced on the Public Disclosure Platform on 17.12.2021, negotiations have been started for the sale of
these shares to the Turkish Wealth Fund.
b.4. TL 1,302,654 of other financial assets consists of the mutual funds; Quasar İstanbul Konut Gayrimenkul and Quasar İstanbul Ticari Gayrimenkul which were founded
by İş Portföy Yönetimi A.Ş.
392 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 393
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
c. Positive differences on derivative financial assets held for trading:
e.3. Information on financial assets at fair value through other comprehensive income:
Derivative Financial Assets at Fair Value
through Profit or Loss (1)
Forward Transactions
Swap Transactions
Futures
Options
Other
Total
TL
329,876
168,837
255,887
754,600
Current Period
Prior Period
FC
1,746,980
20,505,483
456,389
1,030,470
23,739,322
TL
233,145
123,089
6,678
362,912
FC
463,125
5,445,588
85,245
90,560
6,084,518
( 1) Includes informationrelated to derivative financial assets held for trading in derivative financial assets. Information on derivative financial assets for hedging purposes is disclosed
in Section Five footnote I.1.
Debt Securities
Quoted on a Stock Exchange
Not-Quoted (1)
Share Certificates
Quoted on a Stock Exchange
Not-Quoted
Provision for Impairment Losses (-)
Other
Total
Current Period
113,649,539
59,680,425
53,969,114
940,712
114,336
826,376
5,382,509
735,917
109,943,659
Prior Period
76,939,749
49,959,610
26,980,139
562,074
56,322
505,752
682,184
1,007,631
77,827,270
d. Banks Account
d.1. Information on Banks:
Banks
Domestic Banks
Foreign Banks
Foreign Head Office and Branches
Total
d.2. Information on foreign banks:
TL
2,806,065
168,413
2,974,478
Current Period
FC
1,476,997
30,743,767
TL
2,618,265
197,388
Prior Period
FC
1,613,288
17,920,692
32,220,764
2,815,653
19,533,980
Current Period
Prior Period
Unrestricted Amount
Resticted Amount
Unrestricted Amount
Resticted Amount
EU Countries
USA, Canada
OECD Countries (1)
Off-shore Banking Regions
Other
Total
11,894,315
4,947,320
4,458,406
3,914,543
25,214,584
( 1) OECD countries other than the EU countries, USA and Canada.
Expected credit loss for cash and cash equivalents:
Provisions beginning of the period
Additional provisions within the period
Transfers within the period
Write-offs from Assets
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Currency Exchange Difference
Provisions at the end of the period
Stage 1
50,476
52,272
(29,196)
12,186
85,738
2,569,797
10,603
1,732,114
1,385,082
5,697,596
7,902,000
3,272,983
2,011,931
1,688,333
14,875,247
1,435,709
73,252
1,128,328
605,544
3,242,833
Current Period
Stage 2
Stage 3
Prior Period
Stage 2
Stage 3
Stage 1
51,910
42,828
(37,179)
(7,083)
50,476
( 1) Refers to the debt securities, which are not quoted on the Stock Exchange or which are not traded, while quoted, on the Stock Exchange at the end of the related period.
f. Information related to loans:
Leasing and factoring receivables are considered as loans in the footnotes of this section.
f.1. Information on all types of loans and advances given to shareholders and employees of the group:
Current Period
Prior Period
Cash
Non-Cash
Cash
Non-Cash
Direct Lending to Shareholders
Corporate Shareholders
Individual Shareholders
Indirect Lending to Shareholders
Loans and Other Receivables to Employees
Total
359,600
359,600
1,404
1,404
301,478
301,478
1,142
1,142
f.2. Information about the Standard Loans and Loans Under Close Monitoring and Loans Under Close Monitoring that have been restructured:
Cash Loans
Standard Loans
Non-specialized loans
Corporation Loans
Export Loans
Import Loans
Loans Extended to Financial Sector
Consumer Loans
Credit Cards
Other
Specialized Loans
Other Receivables
Total
Loans Under Close Monitoring
Restructured Loans
Loans Not Subject to
Restructuring
Loans with Revised
Contract Terms
521,617,384
195,087,770
47,039,026
22,251,994
78,342,143
34,575,102
144,321,349
30,625,515
16,690,833
1,106,168
1,788
5,885,995
1,390,622
5,550,109
18,196,059
10,637,086
8,145
2,823
815,722
6,732,283
Refinanced
19,858,670
11,741,124
310,623
1,460,001
6,346,922
521,617,384
30,625,515
18,196,059
19,858,670
e. Information on Financial Assets at Fair Value through Other Comprehensive Income:
e.1. Information on financial assets at fair value through other comprehensive income, which are given as collateral or blocked:
Financial assets at fair value through other comprehensive income, which are given as collateral or blocked, amount to TL 30,366,014 as of 31 December 2021 (December
31, 2020: TL 22,460,070).
e.2. Information on financial assets at fair value through other comprehensive income, which are subject to repurchase agreements:
Financial assets at fair value through other comprehensive income which are subject to repurchase agreements amount to TL 34,943,986 as of 31 December 2021
(December 31, 2020: TL 19,425,159).
12 Month Expected Credit Losses
Significant Increase in Credit Risk
Current Period
Prior Period
Standard Loans
4,191,349
Loans Under Close
Monitoring
Standard Loans
3,094,850
Loans Under Close
Monitoring
12,735,339
8,564,927
According to TFRS 9, the expected loss provisions calculated for the stage 1 and stage 2 loans have generally changed in parallel with the related loan balances.
394 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 395
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
f.3. Information on Maturity analysis of cash loans:
f.5. Information on commercial installments loans and corporate credit cards:
Cash Credit
Standard Loans
Short-term Loans
Medium and Long-term Loans
149,780,498
371,836,886
Loans Under Close Monitoring
Loans Not Subject to
Restructuring
4,419,459
26,206,056
Refinanced
1,686,946
36,367,783
f.4. Information on consumer loans, retail credit cards, personnel loans and personnel credit cards:
Short-Term
Medium and Long-Term
Interest and Income
Accruals
Consumer Loans-TL
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Consumer Loans – FC Indexed
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Consumer Loans – FC
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Retail Credit Cards-TL
With Installments
Without Installments
Retail Credit Cards-FC
With Installments
Without Installments
Personnel Loans-TL
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Personnel Loans- FC Indexed
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Personnel Loans-FC
Real Estate Loans
Vehicle Loans
General Purpose Consumer Loans
Other
Personnel Credit Cards-TL
With Installments
Without Installments
Personnel Credit Cards-FC
With Installments
Without Installments
Overdraft Accounts – TL (real persons)
Overdraft Accounts – FC (real persons)
Total
2,898,136
30,822
25,242
2,842,072
1,620
269
1,351
23,016,151
8,244,933
14,771,218
28,094
28,094
28,718
28,718
646
646
153,787
58,894
94,893
282
282
2,726,338
119,860
28,973,632
77,925,583
23,971,198
1,188,360
52,766,025
2,821
2,821
324,852
11,410
313,442
1,106,106
1,106,106
148,266
3,929
573
143,764
3,806
28
3,778
2,833
2,833
1,437,351
278,409
14,555
1,144,387
27,147
27,147
539
78
461
141,196
141,196
2,692
29
5
2,658
35
35
277
277
42,552
79,514,267
1,651,789
Total
82,261,070
24,280,429
1,228,157
56,752,484
29,968
29,968
327,011
11,757
315,254
24,263,453
9,351,039
14,912,414
28,094
28,094
179,676
3,958
578
175,140
4,487
28
4,459
156,897
61,727
95,170
282
282
2,768,890
119,860
110,139,688
Commercial Loans with Installments-FC
478,320
10,461,253
Short-Term
3,960,174
16,413
375,936
3,567,825
Medium and Long Term
60,662,469
2,723,188
11,025,339
46,913,942
Interest and Income Accruals
1,042,381
21,132
82,943
938,306
163,505
5,504
3,012
154,989
9,865,891
595,362
193,250
193,242
8
102,899
375,421
12,097,914
5,573,496
6,524,418
6,710
6,710
1,565,680
446,975
13,843
6,511
426,621
66,091
59,993
6,098
34,846
34,846
29,242
18,108,798
71,480,477
1,619,535
Total
65,665,024
2,760,733
11,484,218
51,420,073
610,480
19,347
9,523
581,610
11,005,664
10,028,783
976,881
12,326,010
5,766,738
6,559,272
6,710
6,710
1,594,922
91,208,810
Commercial Loans with Installments-TL
Real Estate Loans
Vehicle Loans
General Purpose Commercial Loans
Other
Commercial Loans with Installments-FC Indexed
Real Estate Loans
Vehicle Loans
General Purpose Commercial Loans
Other
Real Estate Loans
Vehicle Loans
General Purpose Commercial Loans
Other
Corporate Credit Cards-TL
With Installments
Without Installments
Corporate Credit Cards-FC
With Installments
Without Installments
Overdraft Accounts – TL (corporate)
Overdraft Accounts – FC (corporate)
Total
f.6. Distribution of credits according to users:
Public
Private
Total
f.7. Domestic and foreign loans:
Domestic Loans
Foreign Loans
Total
f.8. Loans granted to subsidiaries and associates:
Direct Loans Granted to Subsidiaries and Associates
Indirect Loans Granted to Subsidiaries and Associates
Total
f.9. Information on impairment provisions of Loans (Stage 3):
Loans with Limited Collectability
Loans with Doubtful Collectability
Uncollectible Loans
Total
Current Period
7,291,579
583,006,049
590,297,628
Current Period
563,177,007
27,120,621
590,297,628
Current Period
2,402,860
2,402,860
Current Period
1,231,704
1,762,150
12,904,750
15,898,604
Prior Period
5,495,644
398,439,226
403,934,870
Prior Period
388,029,854
15,905,016
403,934,870
Prior Period
2,857,404
2,857,404
Prior Period
436,240
1,609,932
12,325,717
14,371,889
f.10. Information on non-performing loans (Net):
f.10.1. Information on non-performing loans, which are restructured by the Group:
Group III
Group IV
Group V
Loans with Limited Collectability
Loans with Doubtful Collectability
Uncollectible Loans
Current Period
(Gross amounts before the provisions)
Restructured Loans
Prior Period
(Gross amounts before the provisions)
Restructured Loans
456,906
456,906
132,313
132,313
1,319,183
1,319,183
878,142
878,142
3,847,880
3,847,880
1,698,715
1,698,715
396 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 397
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
f.10.2. Information on the movement of total non-performing loans:
f.10.3. Information on foreign currency non-performing loans:
Group III
Group IV
Group V
Loans with Limited Collectability
Loans with Doubtful Collectability Uncollectible Loans
Prior Period Ending Balance
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Additions (+)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Transfers from Other NPL Categories (+)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Transfers to Other NPL Categories (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Collections (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Write-Offs (-) (1)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Debt Sale (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Currency Exchange Effect
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Current Period Ending Balance
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Specific Provisions (-)
Corporate and Commercial Loans
Retail Loans
Credit Cards
Other
Net Balance on Balance Sheet
823,375
816,356
6,964
55
2,692,791
1,803,921
574,499
312,422
1,949
861,272
677,145
139,215
42,963
1,949
311,251
164,571
87,173
59,507
2,631
24
2,603
4
13,549
9,677
3,872
2,354,561
1,788,214
356,344
210,003
1,231,704
912,447
195,659
123,598
1,122,857
3,775,159
3,473,881
207,533
93,745
3,751,690
3,070,330
424,879
256,418
63
548,739
364,612
139,215
42,963
1,949
4,506,462
4,063,865
308,531
132,054
2,012
615,494
343,529
172,168
99,797
1,120
908
179
33
12
12
564,644
563,599
1,045
3,517,144
3,064,120
291,794
161,230
1,762,150
1,492,825
169,244
100,081
1,754,994
18,546,312
16,554,959
1,046,889
815,995
128,469
354,552
314,960
19,769
9,543
10,280
4,818,995
4,376,398
308,531
132,054
2,012
3,988,597
3,546,078
290,281
139,232
13,006
921,239
919,318
752
1,159
10
1,096,887
356,687
356,762
381,081
2,357
860,251
838,983
21,176
92
18,573,387
17,263,217
748,570
436,120
125,480
12,904,750
11,771,588
626,530
391,777
114,855
5,668,637
(1) As part of the amendment to the “Regulation on Procedures and Principles on the Classification of Loans and Provisions to be Set Aside for Them” published in the Official Gazette No. 30961, receivables
amounting to TL 867,724 were deducted from the register
(2) In the current period, the part of the receivables constitute non-performing loans amounting to TL 745,486 are transferred to Emir Varlık Yönetim A.Ş., İstanbul Varlık Yönetim A.Ş., Gelecek Varlık Yönetim A.Ş.,
Hedef Varlık Yönetim A.Ş. and Arsan Varlık Yönetim A.Ş. by collecting TL 71,850 of sales amount in cash.The part of the receivables constitute non-performing loans amounting to TL 315,413 are transferred to
İstanbul Varlık Yönetim A.Ş. and Gelecek Varlık Yönetim A.Ş. by collecting TL 53,300 of sales amount in cash
(3) After the sale of non-performing loans and the write-off, the consolidated non-performing loan ratio decreased from 4.28% to 3.98% as of 31.12.2021.
Current Period
Balance at the End of the Period
Provisions (-)
Net Balance on Balance Sheet (1)
Prior Period
Balance at the End of the Period
Provisions (-)
Net Balance on Balance Sheet (1)
Group III
Group IV
Group V
Loans with Limited
Collectability
Loans with Doubtful
Collectability
Uncollectible Loans
931,130
447,079
484,051
137,815
71,759
66,056
2,390,456
1,141,904
1,248,552
2,438,551
912,785
1,525,766
11,033,205
6,923,386
4,109,819
9,363,546
5,286,740
4,076,806
( 1) In addition to the loans extended in foreign currency, loans which are monitored in Turkish Lira are included.
f.10.4. Information on gross and net non-performing loans as per customer categories:
Group III
Group IV
Group V
Loans with Limited
Collectability
Loans with Doubtful
Collectability
Uncollectible Loans
Current Period (Net)
Loans to Individuals and Corporate (Gross)
Provisions (-)
Loans to Individuals and Corporate (Net)
Banks (Gross)
Provisions (-)
Banks (Net)
Other Loans (Gross)
Provisions (-)
Other Loans (Net)
Prior Period (Net)
Loans to Individuals and Corporate (Gross)
Provisions (-)
Loans to Individuals and Corporate (Net)
Banks (Gross)
Provisions (-)
Banks (Net)
Other Loans (Gross)
Provisions (-)
Other Loans (Net)
1,122,857
2,354,561
1,231,704
1,122,857
387,135
823,375
436,240
387,135
1,754,994
3,517,144
1,762,150
1,754,994
2,165,227
3,775,159
1,609,932
2,165,227
5,668,637
18,447,907
12,789,895
5,658,012
6,220,595
18,417,843
12,213,995
6,203,848
128,469
111,722
16,747
f.10.5. Information on interest accruals, valuation differences and related provisions calculated for non-performing loans:
Current Period (Net)
Interest accruals and valuation differences
Provisions (-)
Prior Period (Net)
Interest accruals and valuation differences
Provisions (-)
Group III
Group IV
Group V
Loans with Limited
Collectability
Loans with Doubtful
Collectability
Uncollectible Loans
107,756
210,639
102,883
(877)
(4,336)
(3,459)
424,694
841,748
417,054
268,363
474,869
206,506
392,732
1,473,886
1,081,154
522,878
1,512,493
989,615
398 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 399
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
f.10.6. Outline of the liquidation policy for uncollectible loans and other receivables
g.5. Movement of financial assets measured at amortized cost within the year:
In order to ensure the liquidation of non-performing loans, all possibilities evaluated to ensure maximum collection according to the legislation. First of all, administrative
initiatives are taken to deal with the borrower. Collection through legal proceedings used if there is no possibility of collection and configuration with the interviews for
other receivables.
Our receivables that cannot be collected through administrative and legal initiatives can be written off from the assets within the framework of portfolio-based receivables
sales or write-offs, by fulfilling the requirements of the Tax Procedure Law.
f.10.7. Explanations on write-off policy:
Receivables classified as non-performing loans are collected primarily within the framework of administrative contacts with the debtors, and if no result is obtained,
through legal means. In this context, if our uncollected receivables are deleted from assets, one of the methods of destruction, receivable sale and deregistration can be
applied.
In the Bank's write-off policy within the framework following the amendment made in Article 53 of the Banking Law with the Law on Income Tax and amending Certain
Laws No. 19.07.2019/7186, along with the "Classification of Loans and the Procedures and Principles for the Reserves to be Allocated for Them" published in the Official
Gazette No. 27.11.2019 / 30961,the following statements are issued:
• The portion of the receivables, which are monitored under the Fifth Group-Loss Loans and allocated for lifetime expected loan loss due to the default of the debtor, can
be deducted from the record, to the extent of the maximum provision amount,
• Write-off is an accounting practice and does not result in the waiver of the receivable,
• the receivables to be deducted from the record must be monitored as non-performing loans for at least 1 year.
The Bank’s general policy for write-offs of receivables under follow-up is to write of such receivables that are proven to be uncollectible in legal follow-up process within
the instructions of Tax Procedure Law.
Expected Credit Loss:
Provisions beginning of the period
Additional provisions within the period
Transfers within the period
Write-offs from Assets
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Currency Exchange Difference
Current Period
Stage 1
Stage 2
Stage 3
3,094,850
3,744,299
(2,855,083)
506,839
(647,781)
(26,272)
374,497
8,564,927
6,839,036
-2,394,649
(498,512)
774,317
(1,334,981)
785,201
14,371,889
4,134,573
(2,249,174)
(2,013,743)
(8,327)
(126,536)
1,361,253
428,669
Stage 1
1,710,047
3,206,632
Prior Period
Stage 2
4,103,792
6,435,669
(1,910,463)
(1,586,260)
85,965
(141,136)
(8,658)
152,463
(77,813)
151,472
(623,623)
161,690
8,564,927
Stage 3
11,291,709
4,017,116
(1,570,849)
(89,532)
(8,152)
(10,336)
632,281
109,652
14,371,889
Provisions at the end of the period
4,191,349
12,735,339
15,898,604
3,094,850
g. Financial Assets Measured at Amortized Cost:
g.1. Financial Assets Measured at Amortized Cost given as collateral or blocked:
Financial assets measured at Amortized cost given as collateral or blocked amount to TL 11,735,769 as at December 31, 2021 (December 31, 2020: TL 9,741,594).
g.2. Financial Assets Measured at Amortized Cost subject to repurchase agreements:
Financial assets measured at Amortized cost, which are subject to repurchase agreements amount to TL 17,843,004 at December 31, 2021 (December 31, 2020: TL
7,024,998).
g.3. Information on government securities measured at Amortized cost:
Government Bonds
Treasury Bills
Other Public Debt Securities
Total
g.4. Information on financial assets measured at amortized cost:
Debt Securities
Quoted on a Stock Exchange
Not Quoted (1)
Impairment Losses (-)
Total
Current Period
47,975,957
Prior Period
43,854,204
47,975,957
43,854,204
Current Period
51,545,328
48,798,039
2,747,289
51,545,328
Prior Period
45,604,603
43,828,009
1,776,594
45,604,603
Beginning Balance
Foreign Exchange Differences Arising on Monetary Assets
Purchases During the Year
Disposals through Sales and Redemption
Impairment Losses (-)
Valuation Effect
Balance at the End of the Period
Expected credit loss for financial assets measured at amortized cost:
Current Period
45,604,603
3,677,166
16,224,952
(16,481,168)
2,519,775
51,545,328
Prior Period
33,639,301
1,477,592
16,459,781
(7,309,408)
1,337,337
45,604,603
Current Period
Stage 2
Stage 3
Stage 1
17,755
21,565
(11,283)
Provisions beginning of the period
Additional provisions within the period
Transfers within the period
Write-offs from Assets
Transfer to Stage 1
Transfer to Stage 2
Transfer to Stage 3
Currency Exchange Difference
Provisions at the end of the period
957
28,994
h. Information on Associates (Net):
Stage 1
11,748
12,654
(6,822)
175
17,755
Prior Period
Stage 2
Stage 3
As per the “Communiqué on Preparation of Consolidated Financial Statements of Banks”, credit institutions or financial institutions associates are included in the scope of
consolidated financial statements. Within this context, credit institutions and financial associates are accounted in the consolidated financial statements according to TAS
28 - Investments in Associates and Joint Ventures”.
h.1. Information on credit institution or financial institution associates that are not accounted by the equity method: None.
h.2. Information on credit institution or financial institution associates that are accounted by the equity method:
Title
Address (City/ Country)
Bank’s Share Percentage-If
Different. Voting Percentage (%)
Bank’s Risk Group Share
Percentage (%)
Arap Türk Bankası A.Ş.
İstanbul/Turkey
20.58
79.42
Information on financial statements of associates in the above order:
Total Assets
Shareholders’
Equity
Total Tangible
Assets
10,205,582
1,361,769
223,069
Interest
Income (1)
432,044
Securities Income
Current Period
Profit/Loss
Prior Period
Profit/Loss
Fair Value
41
163,288
100,781
(1) Includes interest income on securities.
g.3. Movement of investments in consolidated associates (1):
Beginning Balance
Movements during the period
Purchases
Bonus shares acquired
Dividends received from the current year profit
Sales
Revaluation Increase (2)
Impairment
Balance at the end of the period
Capital commitments
Contribution in equity at the end of the period (%)
Current Period
242,174
Prior Period
220,768
38,022
280,196
21,406
242,174
(1) Indicates unlisted debt securities, and debt securities that have not been traded at the end of the related periods while they are listed.
(1) Includes the information related to associate which is a credit institution in which the Bank has direct shares.
(2) Includes the equity method accounting differences.
400 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 401
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
h.4. Sectoral information on consolidated associates and the related carrying amounts (1):
i.3. Information on consolidated subsidiaries:
Current Period
280,196
Prior Period
242,174
Title
Address (City/ Country)
Bank’s Share Percentage-If
Different. Voting Rights (%) (1)
Bank’s Risk Group Share
Percentage (%)
Banks
Insurance Companies
Factoring Companies
Leasing Companies
Finance Companies
Other Financial Participations
Total
280,196
242,174
(1) Includes the information related to associate which is a credit institution in which the Bank has direct shares.
h.5. Consolidated associates traded on a stock exchange: None.
h.6. Consolidated associates disposed of in the current period: None.
h.7. Consolidated associates acquired in the current period: None.
h.8. Other issues related to associates:
The accounting method for non-financial subsidiaries, associates and jointly controlled associates is changed in accordance with TAS 27 “Individual Financial Statements”
to the equity method introduced in TAS 28. The effects of these changes are given in Section Three III.2 numbered footnotes in detail.
i. Information on subsidiaries (Net):
As per the “Communiqué on Preparation of Consolidated Financial Statements of Banks”, the Bank includes credit institutions or financial institutions subsidiaries in the
scope of consolidated financial statements.
i.1. Information on the equity of major subsidiaries:
Türkiye Sınai
Kalkınma Bankası A.Ş.
Insurance /
Reinsurance
Companies
İş Gayrimenkul
Yatırım Ortaklığı A.Ş.
İş Finansal
Kiralama A.Ş.
İş Yatırım Menkul
Değerler A.Ş.
COMMON EQUITY TIER I CAPITAL
Common Equity Tier I Capital Before
Deductions
7,354,514
8,074,495
5,476,126
1,999,205
2,768,792
Deductions from Common Equity
Tier I Capital (-)
173,692
Total Common Equity Tier I Capital
7,180,822
275,067
7,799,428
1,713
9,294
5,474,413
1,989,911
102,178
2,666,614
ADDITIONAL TIER I CAPITAL
Additional Tier I Capital before
Deductions
Deductions from Additional Tier I
Capital (-)
Total Capital
TIER II CAPITAL
7,180,822
7,799,428
5,474,413
1,989,911
2,666,614
Tier II Capital Before Deductions
4,585,272
Deduction from Tier II Capital (-)
Total Additional Tier II Capital
Total Capital and Tier II Capital
Deductions from Total Capital and
Additional Tier I Capital (-)
4,585,272
11,766,094
7,799,428
5,474,413
1,989,911
2,666,614
CAPITAL
11,766,094
7,799,428
5,474,413
1,989,911
2,666,614
i.2. Information on unconsolidated subsidiaries: None.
1-
2-
3-
4-
5-
6-
7-
8-
9-
10-
11-
12-
13-
14-
15-
16-
17-
18-
19-
20-
21-
Anadolu Anonim Türk Sigorta Şirketi
Anadolu Hayat Emeklilik A.Ş.
Efes Varlık Yönetim A.Ş.
İş Faktoring A.Ş.
İş Finansal Kiralama A.Ş.
İş Gayrimenkul Yatırım Ortaklığı A.Ş.
İş Girişim Sermayesi Yatırım Ortaklığı A.Ş.
İş Portföy Yönetimi A.Ş.
İş Yatırım Menkul Değerler A.Ş.
İş Yatırım Ortaklığı A.Ş.
İşbank AG
JSC İşbank
JSC Isbank Georgia
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
Frankfurt/Almanya
Moskova/Rusya
Tiflis/Gürcistan
Maxis Girişim Sermayesi Portföy Yönetimi A.Ş.
İstanbul/Türkiye
Maxis Investments Ltd.
Milli Reasürans T.A.Ş.
Londra/İngiltere
İstanbul/Türkiye
Moka Ödeme ve Elektronik Para Kuruluşu A.Ş.
İstanbul/Türkiye
TSKB Gayrimenkul Yatırım Ortaklığı A.Ş.
Türkiye Sınai Kalkınma Bankası A.Ş.
Yatırım Finansman Menkul Değerler A.Ş.
Yatırım Varlık Kiralama A.Ş.
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
İstanbul/Türkiye
(1) Indirect share of the Group is considered as the Parent Bank’s share percentage.
Financial statement information related to consolidated subsidiaries in the above order:
50.21
74.81
66.28
46.43
45.33
60.79
35.37
67.47
67.98
24.97
100.00
100.00
100.00
67.98
67.98
87.60
100.00
45.04
50.46
48.90
48.90
49.79
25.19
33.72
53.57
54.67
39.21
64.63
32.53
32.02
75.03
0.00
0.00
0.00
32.02
32.02
12.40
0.00
54.96
49.54
51.10
51.10
Total Assets
Shareholders’
Equity
Total Tangible
Assets
Interest
Income (1)
Securities
Income
Current
Period Profit/
Loss
Prior Period
Profit/Loss
Fair Value (2)
Additional
Shareholders’
Equity Required
1-
2-
3-
4-
5-
6-
7-
8-
9-
10-
11-
12-
13-
14-
15-
16-
17-
18-
19-
20-
21-
16.120.481
51.499.993
205.370
6.949.706
20.376.915
6.676.321
279.025
274.024
2.548.455
1.884.515
126.294
634.486
2.139.443
5.475.663
275.530
240.517
379.898
398.843
7.853
6.296
31.147
5.510.853
922
8.570
14.213.244
3.072.116
151.535
275.586
273.854
431
28.062.570
3.395.122
294.252
2.732.941
1.623.847
14.827
320.779
758.858
440.328
9.917
77.671
72.137
40.440
2.518
1.253
732.630
553.910
95.503
627.973
1.509.893
6.283
8.555
29.198
569.927
35.515
551.693
111.221
61.347
790
7.941
7.183.128
3.000.423
829.788
406.668
160.475
119.578
743.565
45.024
739.912
86.092.535
7.021.766
2.557.415
233.809
802.052
239
2.550
729.591
884.455
12.135
3
5.526
2.276
4.675.202
141.316
10.380
6.155
420.369
61.909
8.804
17.439
41.537
2.871
18.342
589.835
699.988
23.631
121.372
310.063
1.329.920
11.976
97.016
510.026
526.939
10.431
55.292
197.586
266.502
2.050
59.256
1.119.554
1.233.477
977.305
42.941
14.031
50.811
143.158
12.739
28.165
4.691
12.484
548.966
2.143
124.879
1.097.309
66.201
49
27.975
59.514
2.644
20.760
(326)
7.585
348.599
(4.164)
(45.781)
709.473
44.209
17
3.200.000
5.184.510
2.174.211
2.914.600
611.553
8.168.905
498.018
1.869.400
4.040.400
402 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 403
(1) Includes interest income on securities.
(2) Fair value is the companies’ market value.
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
i.4. Movement of investments in subsidiaries (1):
Balance at the Beginning of the Period
Movements in the Period
Purchases (2)
Bonus Shares Acquired
Dividends Received from the Current Year Profit
Sales
Revaluation Surplus/Deficit (3)
Impairment
Balance at the End of the Period
Capital Commitments
Contribution in equity at the end of the period (%)
Current Period
13,004,921
135,635
Prior Period
9,915,702
482,999
4,472,501
2,606,220
17,613,057
13,004,921
(1) Reveals the information related to companies subject to consolidation in which Bank directly owns share.
(2) (*) The amount in the current period is due to the purchase and capital increase of Moka Ödeme Kuruluşu A.Ş. and the amount in the prior period is due to the purchasing shares of Türkiye Sınai
Kalkınma Bankası A.Ş., İş Gayrimenkul Yatırım Ortaklığı A.Ş., Milli Reasürans T.A.Ş., İş Net Elektronik Bilgi Üretim Dağıtım Ticaret and İletişim Hizmetleri A.Ş. by cash, Türkiye Şişe ve Cam Fabrikaları A.Ş
and İş Gayrimenkul Yatırım Ortaklığı A.Ş.'s shares followed in the Financial Assets at Fair Value Through Profit or Loss account is classified under subsidiaries and due to the capital increase of Trakya
Yatırım Holding A.Ş.
(3) Includes accounting differences by equity method.
k. Information regarding finance lease receivables (Net):
k.1. Presentation of finance lease receivables according to their remaining maturities:
Less than 1 Year
1-4 Years
More than 4 Years
Total
Current Period
Prior Period
Gross
5,518,419
7,264,644
701,434
13,484,497
Net
4,652,503
6,428,916
622,103
11,703,522
Gross
3,477,055
4,512,253
481,846
8,471,154
Net
2,916,349
3,984,049
437,920
7,338,318
k.2. Information regarding net investments made on finance lease:
Gross Finance Lease Investment
Unearned Finance Revenue from Finance Lease (-)
Net Finance Lease Investment
Current Period
13,484,497
1,780,975
11,703,522
Prior Period
8,471,154
1,132,836
7,338,318
k.3. Presentation of operating lease receivables according to their remaining maturities:
As at December 31, 2021 the remaining maturities of the Group's operating lease receivable is less than 1 year the total amount is TL 23,537 (December 31, 2020; TL
12,824).
i.5. Sectoral information on consolidated subsidiaries and the related carrying amounts (1):
l. Positive differences table for hedging derivative financial assets:
Banks
Insurance Companies
Factoring Companies
Leasing Companies
Finance Companies
Other Financial Subsidiaries
Total
Current Period
8,036,340
4,353,568
544,978
4,678,171
17,613,057
Prior Period
5,580,606
3,659,077
442,361
3,322,877
13,004,921
Part of Derivative Financial Assets at Fair Value
Through Profit Loss (1)
Net
Hedging Derivative Financial Assets
Hedging Cash Flow
Protection from Net Investment Risk Abroad
Total
Current Period
Prior Period
Net
Gross
256,505
256,505
Gross
262,699
262,699
(1) Includes information on derivative financial assets for hedging purposes classified under derivative financial assets.
(1) Reveals the information related to companies subject to consolidation in which Bank directly owns share.
Explanations on hedging derivative financial assets:
i.6. Consolidated subsidiaries traded on stock exchange (1):
Traded on domestic stock exchanges
Traded on foreign stock exchanges
Current Period
10,063,540
Prior Period
7,867,084
(1) Reveals the information related to companies subject to consolidation in which Bank directly owns share.
i.7. Consolidated subsidiaries disposed of in the current period: None
i.8. Subsidiaries acquired in the current period:
After the authorization granted to the General Directorate by the decision of the Bank's Board of Directors dated 27.07.2020, the necessary transactions were completed
and the 100% share of Moka Ödeme ve Elektronik Para Kuruluşu A.Ş. was transferred to the Bank.
i.9. Other issues on subsidiaries:
TSKB also acquired the shares owned by Yatırım Finansman Menkul Değerler A.Ş., TSKB Gayrimenkul Değerleme A.Ş. and TSKB Munzam Sosyal Güvenlik ve Yardımlaşma
Vakfı in TSKB Sürdürülebilirlik Danışmanlığı A.Ş. and increased his share in the subsidiary to 100%.
As explained in Note III.2 of Section Three, non-financial subsidiaries, associates and jointly controlled associates are accounted by using the equity method defined in TAS
28 “Investments in Subsidiaries and Associates” within the scope of TAS 27 “Individual Financial Statements”.
j. Information on jointly controlled entities (Net):
As per the “Communiqué on Preparation of Consolidated Financial Statements of Banks”, jointly controlled entities as credit institutions or financial institutions are included
in the scope of consolidated financial statements. There are no jointly controlled entities which are excluded in the scope of the consolidation.
On the other hand, as explained in Note III.2 of Section Three, non-financial subsidiaries, associates and jointly controlled associates are accounted by using the equity
method defined in TAS 28 “Investments in Subsidiaries and Associates” within the scope of TAS 27 “Individual Financial Statements”.
Derivative Financial Liabilities at
Fair Value through Profit/Loss
Current Period
Prior Period
Contract Sum
Assets
Liability
Contract Sum
Assets
Liabilty
Interest Rate Swap Transactions
19,085,248
FC
TL
Currency Swap Transactions
FC
TL
19,085,248
7,926,855
7,926,855
208,148
208,148
48,357
48,357
15,214,012
15,214,012
262,699
262,699
4,626,754
4,626,754
154,049
154,049
404 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 405
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Information on fair value hedge accounting is given below.
Current Period:
Hedging Instrument
Hedging Item
Risk
Exposure
Fair Value Difference
of Hedging Assets (1)
Net fair value of hedging
instrument (1)
Income statement effect (profit / loss
from derivative financial transactions)
Interest Rate Swap
Transactions
Interest Rate Swap
Transactions
Fixed Interest rate
Eurobond and Greenbond
Fixed Rate
Loans Used
Cross Currency Swap
Transactions
Fixed Interest Rate
Eurobond
Interest
Risk
Interest
Risk
Interest
Risk
(111,338)
117,468
(24,900)
(72,869)
24,016
73,489
6,130
(884)
620
Assets
Liabilities
(1) The fair value of the protected assets and the hedged assets subject to hedge accounting is shown as the net market value excluding the credit risk and the accumulated interest.
Prior Period:
Hedging Instrument
Hedging Item
Risk
Exposure
Fair Value Difference
of Hedging Assets (1)
Net fair value of
hedging instrument (1)
Income statement effect (profit / loss
from derivative financial transactions)
Interest Rate Swap
Transactions
Interest Rate Swap
Transactions
Fixed Rate Loans Used
Cross Currency Swap
Transactions
Fixed Interest rate
Eurobonds
Fixed Interest rate
Eurobonds and Greenbonds
Interest rate
risk
(184,285)
181,026
(3,259)
Assets
Liabilities
Interest rate
risk
Interest rate
risk
(41,043)
(54,959)
40,450
54,947
(593)
(12)
l. Information on investment property:
Investment properties are properties that the Group holds to earn rentals. Explanations on these subjects are given in Section Three Note XIV. Total rental income obtained
from investment properties during the period is TL 150,519 (December 31, 2020: TL 124,724).
Net Book Value at the Beginning of the Period
Change During the Period (Net) (1)
Revaluations Surplus/Deficit
Net Book Value at the End of the Period
Current Period
3,649,631
51,414
900,871
4,601,916
Prior Period
3,444,979
17,297
187,355
3,649,631
n. Information on deferred tax asset:
As of December 31, 2021, the Parent Bank and the other consolidated Group companies has deferred tax asset amounting to TL 3,118,976. Such deferred tax asset is
calculated based on the temporary differences between the book value of assets and liabilities and their tax basis measured as per the prevailing tax regulation. When the
items comprising the temporary differences are followed under equity, the related tax asset/liability is directly recognized under equity items.
Tangible Assets Base Differences
Provisions (1)
Finance Lease Income Accruals
Valuation of Financial Assets
Other
Net Deferred Tax Asset
Current Period
743,080
(6,041,695)
32,401
1,946,829
200,409
(3,118,976)
Prior Period
478,240
(3,489,533)
16,384
(598,113)
(79,714)
(3,672,736)
(1) Comprised of employee termination benefits, actual and technical deficits of the pension fund, insurance technical provisions, the provisions for credit card bonus points, expected
credit loss for Stage 1 and Stage 2 loans and other provisions.
(1) The fair value of the protected assets and the hedged assets subject to hedge accounting is shown as the net market value excluding the credit risk and the accumulated interest.
Movement of the deferred tax asset is as follows:
Real Estate
Right-to-Use Assets
Buildings Under Construction
Vehicles
Other MDV
Total
Beginning Value
m. Information on Tangible Assets:
Current Period
Previous Period
Cost
Accumulated Depreciation
Net Book Value
Current Period
Net Book Value at the Beginning of Period
Current Period Changes (Net) (1)
Depreciation Fee
Provision for Impairment (Net)
Foreign Exchane Differences (Net) (1)
End of Term Cost
Accumulated Depreciaton at the
End of the Period
6,070,841
(114,817)
5,956,024
5,956,024
2,952,267
(74,526)
24,997
18,311
8,903,796
1,804,042
(956,465)
847,577
847,577
576,863
(371,005)
67,782
2,520,198
248,229
248,229
248,229
43,924
292,153
42,938
(23,900)
19,038
3,483,315
(2,454,229)
1,029,086
11,649,365
(3,549,411)
8,099,954
19,038
5,087
(6,795)
1,325
49,778
1,029,086
409,785
(350,648)
9,703
3,915,335
8,099,954
3,987,926
(802,974)
24,997
97,121
15,681,260
(26,723)
(1,398,981)
(31,123)
(2,817,409)
(4,274,236)
Deferred Tax Income / (Expense) (Net)
Deferred Tax Accounted Under Equity
Deferred Tax Accounted Under Previous Year K / Z
Exchange rate differences
Other
Deferred Tax Asset (1)
Net Book Value at the End of the Period
8,877,073
1,121,217
292,153
18,655
1,097,926
11,407,024
(1) Includes the movements in cost value and accumulated depreciation items.
k. Information on Intangible Assets:
Explanation regarding consolidation goodwill that is included in intangible assets is given in Section Three under the caption of “XII. Explanations on Goodwill and Other
Intangible Assets.” The table consisting movements of other intangible assets are presented below.
Net Balance at the Beginning of the Period
Change during the periods (Net)
Amortized Cost
Foreign Currency Difference
Net Book Value at the End of the Period
Current Period
Prior Period
3,528,305
(767,140)
216,138
16,360
364
2,994,027
1,874,705
1,863,243
(196,818)
(13,786)
961
3,528,305
Current Period
1,302,608
(399,379)
7,642
910,871
Prior Period
1,190,220
111,914
(7)
481
1,302,608
(1) In the consolidated financial statements, there are deferred tax assets of TL 3,118.976 and deferred tax liabilities of TL 124.949 in the current period. Explanations on deferred tax
liability are given in Section Five, Note II.h.2.
n. Information on assets held for sale and discontinued operations:
Net Book Value at the Beginning of the Period
Change During the Period (Net)(1)
Depreciation
Impairment
Currency Translation Differences (1)
Cost at Period End
Accumulated Depreciation at Period End
Net Book Value at the End of the Period
(1) The balance includes the movements in cost and accumulated depreciation items.
406 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Current Period
1,618,014
921,544
(453,413)
67,886
5,284,771
(3,130,740)
2,154,031
Prior Period
1,160,750
752,848
(324,296)
28,712
4,183,145
(2,565,131)
1,618,014
Investment in a special purpose company whose details be given in Section Five footnote I.b.3 is classified within the scope of “TFRS-5 Assets Held for Sale and
Discontinued Operations”. As stated in the same footnote, in 2019 the Bank’s and Türkiye Sınai Kalkınma Bankası A.Ş.’s shares’ nominal values in company’s capital
increased from TL 6 to TL 461,833 and TL 1 to TL 64,403 respectively and this amount is located in the line “Change during the periods (Net)”. On the other hand, an
international investment bank is authorized as a sales advisor in 2019 for the sale of the relevant company or the shares owned by the company and in this context,
necessary works related to the sale and negotiations with potential investors has been initiated. Although the process is ongoing as of the date of the report, as
announced on the Kamu Aydınlatma Platformu on 17.12.2021, negotiations have been started for the sale of these shares to the Türkiye Varlık Fonu.
The other assets classified as “Fixed Assets Held for Sale” mostly consist of real estates. Announcements about the real estates subject to sale are made by using
newspaper advertisements and similar media. Additionally, the Parent Bank’s real estates subject to sale are announced on the Bank’s web site.
The Group has no discontinued operations.
o. Information on other assets of the group:
Other assets item does not exceed 10% of the balance sheet total.
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 407
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
II. Disclosures And Footnotes on Consolidated Liabilities
a. Information on Deposits:
a.1. The maturity structure of deposits:
Current Period
Demand
7 Days
Notice
Up to 1
Month
1-3 Months
3-6 Months
6 Months
to 1 Year
1 Year
and Over
Accumulated
Deposits
Total
Savings Deposits
29,130,181
10,101,438
62,338,966
8,091,893
879,420
1,026,512
Foreign Currency Deposits
195,521,622
34,766,109
129,130,825
8,364,528
6,984,141
18,549,447
Residents in Turkey
171,143,280
32,092,855
111,457,042
5,338,216
1,907,736
4,904,765
6,422
2,293
1,517
Residents Abroad
Public Sector Deposits
Commercial Deposits
24,378,342
1,205,680
18,091,217
Other Institutions Deposits
602,088
Precious Metals Deposits
46,013,605
Interbank Deposits
1,302,757
The Central Bank of Turkey
480
Domestic Banks
Foreign Banks
288,796
1,013,416
Participation Banks
65
2,673,254
17,673,783
3,026,312
5,076,405
13,644,682
776
11,796
139,914
1,073
374
16,649,887
11,071,146
173,276
515,975
571,697
555,375
3,160,538
1,055,562
1,133,496
450,260
105,115
538,289
595,207
40,352
2,411
150,880
6,508,325
311,651
59
59
848,077
2,587,270
148,477
699,600
2,587,270
200
28,850
51,875
111,574,832
393,318,965
326,845,411
66,473,554
1,359,037
46,530,351
4,428,961
54,040,023
6,427,034
480
1,425,822
5,000,667
65
Other
Total
291,867,150
62,656,302
208,030,447
16,822,061 15,738,723 22,555,805
8,715
617,679,203
The Main Partnership Bank has started to offer its customers exchange rate-protected TL deposit products in the current period within the scope of the "Communiqué on Supporting
the Transformation into Turkish Lira Deposits and Participation Accounts" published by the CBRT on 21.12.2021 and numbered 31696, and the Turkish Ministry of Treasury and
Finance's press release dated 21.12.2021. As of 31.12.2021, the amount of the exchange rate protected deposit product opened in this context is TL 6,116,412.
Current Period
Demand
7 Days
Notice
Up to 1
Month
1-3 Months
3-6 Months
6 Months
to 1 Year
1 Year
and Over
Accumulated
Deposits
Total
Savings Deposits
21,210,745
6,277,095
59,511,073
2,134,712
449,790
751,497
Foreign Currency Deposits
88,486,220
14,003,962
84,111,032
5,525,404
3,250,065
12,856,336
Residents in Turkey
Residents Abroad
77,521,647
10,964,573
12,178,923
72,291,088
3,506,840
1,114,563
3,613,468
1,825,039
11,819,944
2,018,564
2,135,502
9,242,868
8,557
1,263
878
385
Public Sector Deposits
941,849
1,272
70,444
7,829
329
195
Commercial Deposits
12,882,574
7,734,268
13,182,655
191,959
1,924,058
9,691
Other Institutions Deposits
541,979
565,554
2,396,713
123,706
2,265
26,155
Precious Metals Deposits
32,152,261
390,882
Interbank Deposits
1,123,809
1,803,160
1,002,743
87,716
65,260
4,013,730
163,286
255,227
1,454,073
The Central Bank of Turkey
510
Domestic Banks
Foreign Banks
Participation Banks
115,744
998,457
9,098
754,461
1,048,699
192,488
810,255
65,260
180,729
74,498
1,454,073
90,343,469
208,234,282
170,227,407
38,006,875
1,021,918
35,925,205
3,656,372
36,807,875
5,704,272
510
1,243,422
4,451,242
9,098
Other
Total
157,339,437
30,385,311
160,665,542
8,136,586
9,895,464
15,261,233
9,820
381,693,393
a.2. Savings deposits which are under the guarantee of Savings Deposits Insurance Fund exceeding the insurance limit:
a.3. Savings deposits which are not under the guarantee of deposit insurance fund:
Foreign Branches’ Saving Deposits and Other Accounts
Deposits and Other Accounts held by Main Shareholders and their Relatives
Current Period
4,059,511
Deposits and Other Accounts of the Chairperson and Members of Board of Directors, Chief
Executive Officer, Senior Executive Officers and their Relatives
29,224
Deposits and Other Accounts Covered by Assets Generated Through the Offenses
Mentioned in Article 282 of the Turkish Criminal Code Numbered 5237 and Dated 26
September 2004
Deposits in the Banks to be Engaged Exclusively in Off-shore Banking in Turkey
b. Negative Differences on Derivative Financial Liabilities Held for Trading:
Prior Period
800,626
28,274
Derivative Financial Liabilities at Fair
Value through Profit/Loss (1)
Forward Transactions
Swap Transactions
Futures
Options
Other
Total
TL
2,282,720
4,682,562
131,914
7,097,196
Current Period
Prior Period
FC
265,681
6,127,648
461,757
126,245
6,981,331
TL
212,130
1,301,626
480
1,514,236
FC
265,801
6,432,114
37,234
451,000
7,186,149
(1) Includes information related to derivative financial liabilities held for trading and clsassified under derivative financial liabilities. Information on derivative financial liabilities for
hedging purposes is disclosed in Note II.g of Section Five.
c. Banks and Other Financial Institutions:
c.1. Information on banks and other financial institutions:
Current Period
Prior Period
TL
FC
TL
Funds borrowed from the CBRT
Domestic banks and institutions
Foreign banks, institutions and funds
Total
3,736,112
2,283,386
6,019,498
c.2. Maturity analysis of funds borrowed:
9,586,758
113,317,427
122,904,185
2,594,453
1,840,513
4,434,966
FC
12,010
4,927,294
68,228,618
73,167,922
Current Period
Prior Period
TL
4,072,916
1,946,582
6,019,498
FC
8,797,761
114,106,424
122,904,185
TL
2,8 44,336
1,590,630
4,434,966
FC
2,622,591
70,545,331
73,167,922
Short-term
Medium and Long-term
Total
c.3. Information on funds borrowed:
Under the Guarantee of Savings Deposits Insurance Fund
Exceeding the Limit of Deposit Insurance Fund
Information on funds received through syndicated loans and securitization deals, which take a significant place among funds borrowed, are given below.
Savings Deposits
Savings Deposits
Foreign Currency Savings Deposits
Prior Period
54,291,725
58,931,256
Other Deposits in the Form of Savings Deposits
19,430,372
Foreign Branches’ Deposits Under Foreign
Authorities’ Insurance
Off-shore Banking Regions’ Deposits Under
Foreign Authorities Insurance
14,734,281
408 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Current Period
47,354,070
42,668,430
17,580,279
16,641,572
Prior Period
56,062,849
175,476,819
31,613,866
4,059,511
Önceki Dönem
41,824,890
88,281,588
17,357,298
1,800,626
Syndication loans:
Date of Use
May 2021
July 2021
Funds Borrowed
USD 300,000,000 + EUR 544,650,000
USD 55,000,000 + EUR 116,000,000
November 2021
USD 328,000,000 + EUR 434,000,000
Maturity
1 Year
1 Year
1 Year
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 409
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Securitization deals:
The Parent Bank obtained funds by putting on securitization deals all its claims and receivables based on diversified payment rights in USD, EUR and GBP through its
consolidated structured entity TIB Diversified Payment Rights Finance Company (TIB) which was established in abroad. The Parent Bank monitors securitization credits
under the “Borrowings” on its financial statements as per its nature.
Information on funds received through securitization is given below.
Date
June 2012
December 2013
December 2014
March 2015
October 2015
October 2016
December 2016
December 2017
December 2017
December 2017
Other Transactions:
Amount
EUR 125,000,000
EUR 50,000,000
USD 220,000,000
USD 75,000,000
USD 221,200,000
USD 55,000,000
USD 158,800,000
USD 265,000,000
EUR 125,000,000
USD 125,000,000
Final Maturity
Remaining Debt Amount as at December 31, 2021
12 year
12 year
14 year
7-15 year
10 year
12 year
10-13 year
5-7 year
5 year
9 year
EUR 34,375,000
EUR 20,000,000
USD 140,000,000
USD 18,000,000
USD 103,687,500
USD 37,560,964
USD 91,290,954
USD 103,000,000
EUR41,666,667
USD 125,000,000
The financing transaction amounting to USD 500 million, with a maturity of 10 years, obtained within the scope of the Diversified Payment Rights (DPR) securitization
programme, which had been disclosed on August 2014, has been increased to USD 600 million by an additional funding of USD 100 million with the identical maturity
profile on September 2017.
d. Information on Debt Securities Issued (Net):
Bills
Asset backed security
Bonds
Total
TL
5,999,193
757,078
2,028,706
8,784,977
Current Period
FC
39,292,335
39,292,335
TL
5,095,133
377,032
1,662,744
7,134,909
Prior Period
FC
32,364,397
32,364,397
e. Concentration of the liabilities of the Group:
Group’s liabilities 55% are comprised of deposits, 11% are comprised of funds borrowed, 8% are comprised subordinated debt and marketable securities issued and 5% are
comprised of debt from money markets. Deposits are distributed among a large variety of customers with different characteristics. The borrowings, on the other hand, are
comprised of various funds obtained from financial institutions through syndication, securitization, post-financing and money market operations.
f. Information on Other Liabilities:
Other liabilities do not exceed 10% of the balance sheet total.
g. Information on Lease Payables (Net):
Less than 1 year
1-4 years
More than 4 years
Total
Gross
54,978
263,475
1,501,399
1,819,852
Current Period
Prior Period
Net
38,505
188,386
1,012,823
1,239,714
Gross
47,802
153,914
1,181,187
1,382,903
Net
29,110
110,680
778,950
918,740
h. Negative differences related to derivative financial instruments for hedging purposes:
Part of Derivative Financial Liabilities at Fair Value
Through Profit Loss (1)
Fair Value Hedge Purpose
Cash Flow Hedges
Net Investment Hedge Abroad
Total
Current Period
Prior Period
Gross
Net
Gross
Net
154,049
154,049
(1) Includes the negative differences related to derivative financial assets for hedging purposes classified under derivative financial assets.
The transactional details for the hedging derivative financial instruments are disclosed in Note I.l of Section Five.
i. Information on Provisions:
i.1. Reserves for employee benefits:
According to the related regulation and the collective bargaining agreements, the Parent Bank is obliged to pay employee termination benefits to employees who retire,
die, quit for their military service obligations, who have been dismissed as defined in the related regulation or to the female employees who have voluntarily quit within
one year after the date of their marriage. In accordance with the related regulations, the amount of employee termination benefits is TL 8,284.17 (exact TL amount as
of December 31, 2021), which is one-month salary for each service year and cannot exceed the base salary ceiling for employee termination benefits. A provision for
severance pay to allocate that employees need to be paid upon retirement is calculated by estimating the present value of probable amount. A provision for severance pay
to allocate that employees need to be paid upon retirement is TL 2,424,212 as of December 31, 2021 (December 31, 2020; TL 1,501,616).
Main actuarial assumptions used in calculation of severance pay liability are as follows:
• In the calculation, the discount rate is 19.10%, the inflation rate is 15.07%, and the real wage increase rate is 2%.
• In the calculation, the ceiling of 8,284.51 TL (full TL amount) valid as of 31.12.2021 was taken as basis.
• Retirement age is taken into account as the earliest age at which individuals can retire.
• CSO 1980 mortality table is used for probability of death for women and men.
The movements related to provision for employee termination benefits are given below:
Present value of defined benefit obligation at the beginning of the period
Current Service Cost
Interest Cost
Benefits paid
Loss/(Gain) due to Settlements / Reductions / Terminations
Prior Year Service Cost
Actuarial loss/(gain)
Defined benefit obligation at the end of the period
1,501,616
110,009
185,885
(116,836)
11,097
732,441
2,424,212
1,260,666
96,112
144,591
(79,882)
6,372
3
73,754
1,501,616
Current Period
Prior Period
In addition to the retirement pay liability, the Bank and the Group companies included in the consolidation reserve provisions for unused vacation. As of December 31, 2020
the unused vacation provision amount is TL 152,219 (December 31, 2020: TL 119,315).
In addition to the benefit obligation, the Bank and the consolidated Group companies make provisions for unused vacations. As of December 31, 2020, the unused vacation
provision amount is TL 116,919 (December 31, 2019: TL 95,365).
i.2. Provisions for exchange losses in the principal amount of foreign currency indexed loans:
Since foreign currency indexed loans are followed based on the rates on the lending date, the Parent Bank incurs a loss if the exchange rates decrease and makes profit if
the exchange rate increases. As of December 31, 2021, and December 31, 2020 there is no provision amount for the currency evaluation losses in the principal amount of
foreign currency indexed loans.
i.3. Specific provisions for non-cash loans, which are not indemnified and not converted into cash:
As of December 31, 2021, TL 1,215,914 provision (December 31, 2019: TL 695,465) is allocated for the non-cash loans of companies whose loans are followed under non-
performing loans accounts.
i.4. Information on other provisions:
i.4.1. Liabilities arising from retirement benefits:
Liabilities of pension funds founded as per the Social Security Act:
Within the scope of the explanations given in. Section Three Note XX.2, in the actuarial report which was prepared as of December 31, 2021 for Türkiye İş Bankası A.Ş. Emekli
Sandığı Vakfı (İşbank Pension Fund) by a licensed actuary, of which each Bank employee is a member, and which has been established according to the provisional Article 20
of the Social Security Act numbered 506, the amount of actuarial and technical deficit stands at TL 6,095,055 .According to the actuarial report as at December 31, 2021 of
Milli Reasürans T.A.Ş. besides the Parent Bank, the amount of actuarial and technical deficit was determined to be TL 102,999. There is a provision on financial statements to
compensate the deficit in mentioned period, the mentioned provision is preserved on current year financial statements as well. In the financial statements for the said period,
there are as many provisions as the said deficit amounts, and the said provision amount has been retained in the financial statements for the current period.
The above mentioned actuarial audit, which was made in accordance with the principles of the related law, measures the cash value of the liability as of December 31,
2021, in other words, it measures the amount to be paid to the Social Security Institution by the Parent Bank. Actuarial assumptions used in the calculation are given below.
• 9.8 % technical deficit interest rate is used.
• 34.5 % total premium rate is used.
• CSO 1980 woman/man mortality tables are used.
Below table shows the cash values of premium and salary payments of the Parent Bank as of December 31, 2021, taking the health expenses within the Social Security
Institution limits into account.
Net Present Value of Total Liabilities Other Than Health
Net Present Value of Long Term Insurance Line Premiums
Net Present Value of Total Liabilities Other Than Health
Net Present Value of Health Liabilities
Net Present Value of Health Premiums
Net Present Value of Health Liabilities
Pension Fund Assets
Amount of Actuarial and Technical Deficit
December 31, 2021
December 31, 2020
(15.810.869)
5.858.707
(9.952.162)
(1.873.541)
4.247.562
2.374.021
1.483.086
(6.095.055)
(12.863.517)
5.185.068
(7.678.449)
(1.564.560)
3.759.175
2.194.615
1.247.723
(4.236.111)
410 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 411
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
The assets of the pension fund are as follows:
Cash and Cash Equivalents
Securities Portfolio
Other
Total
December 31, 2021
December 31, 2020
984,609
439,018
59,459
1,483,086
752,948
439,787
54,988
1,247,723
Health benefits that are still being paid will be determined within the framework of the Social Security Institution legislation and related regulations with the transfer.
i.4.2. Provision of credit cards and promotion of banking services applications: The Bank has recognized provisions amounting to TL 108,873 for the amount which is
recognized within the framework of credit card expenses of credit card customers or promotions for banking services as of December 31, 2021. (December 31, 2020: TL
72,709)
i.4.3. As mentioned public disclosures of the Bank on December 31, 2012 and December 19, 2013; an inspection has been made by the inspectors of Tax Inspection Board to
"Türkiye İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı" ("İşbank Supplementary Pension Fund"), which was founded as per the provisions
of the Turkish Commercial and Civil Codes, regarding the payments that fulfill İşbank's liabilities within the framework of the Articles of Foundation of the Pension Fund and the
relevant legislation. As a result of this investigation, tax audit reports were prepared for the years 2007, 2008, 2009, 2010, 2011 claiming that the aforementioned liabilities
should be taxed in terms of wage base, thus, they should be subject to withholding tax and stamp duty. According to this report, the total amount of tax and penalties notified
to Bank was TL 74,353 for 2007 and 2008; and as of reporting date TL 151,899 for 2009, 2010 and 2011 and it was stated that the Bank applied to tax courts to cancel these
tax notifications and some of the court decisions were determined in favor of the Bank and some others were determined against the Bank.
In this context, for the finalized decisions of Regional Administrative Courts related to the years 2007 and 2008 against the Bank, the Bank applied to the Constitutional
Court. According to decisions made by Constitutional Court up to reporting date, there is no predictability in legal conformity for taxing the Bank's contributions to the
Pension Fund in terms of wage base and for this reason it was accepted that property right of the Bank has been violated according to the 35th article of Constitution. The
Court decided that the amount of tax, penalties and default interest which was paid by the Bank should be paid back to the Bank as for compensation with its legal interest.
Besides of the Bank, an inspection was conducted by Tax Audit Committee Inspectors regarding to the contribution obligations mentioned above for the period 2007-
2011 on Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı Mensupları which is founded according to Turkish Commercial Law and Civil Law, owned by “Türkiye Sınai
Kalkınma Bankası A.Ş”. “Milli Reasürans T.A.Ş”, and Anadolu Anonim Türk Sigorta Şirketi. As a result of the issued report that companies a total of TL 33 million (exact
amount) tax penalty notices were notified. Assessments made on the subject by the company’s application in accordance with the legislation, which was suspended for Tax
Administration concluded that the lack of legal basis of assessment and said assessment were filed in court against the various tax. A number of cases concluded in favor
of the Bank, another part of lawsuits concluded against the Bank.
According to the decision of the Constitutional Court, it is expected that the cases related to the periods 2007, 2008, 2009, 2010 and 2011 will conclude in favor of the
Bank and the litigant Group companies. In this context, the provisions amounting to TL 217,265 which had been allocated for the mentioned periods, reversed at 2015.
In the last decision of the constitutional court numbered 2016/2400 regarding the legal proceedings initiated upon the conclusion of the lawsuits amounting to TL 61,060
for the 20 periods in 2012 and 2013 against the bank; it was accepted that the predictability criterion was realized after the 2012 tax review, and it was concluded that
the Bank’s ownership rights were not violated for December 2012 and beyond periods. However, since the aforementioned periods were filed by making a reservation and
paying taxes, the mentioned decision had no additional effect on the financial statements.
In addition, at a case file, which was one of the lawsuits regarding the repayment of income tax stoppage and stamp tax which has been paid by reservation statement
beginning from December 2013, of which its court decision was rendered in favour of the Bank, has been reversed by the majority of the votes of the Assembly after it was
submitted to the General Assembly of Tax Courts. Regarding the mentioned issue, the legal process is ongoing.
In this process, the Group companies are acting together with the Parent Bank and in this regard TL 162,960 (December 31, 2020: TL 128,837) have been transferred to
the provision expense accounts in the current period.
i.4.4. In 1993, Dışbank A.Ş. shares which were owned by the Bank were sold to Lapis Holding A.Ş. In 2008, it was claimed that USD 52.6 million of the amount, which
was paid upfront within the context of the sale agreement, had been provided from the funds of the insolvent TYT Bank A.Ş. by the buyer and payment of the mentioned
amount as well as the interest to be calculated to the Savings Deposit Insurance Fund (SDIF) was demanded.
The administrative actions initiated by the SDIF in 2008 were revoked by Council of State Administrative Law Chambers 13th upon the application of the Bank. The
decisions which were in favour of the Bank were reversed by Plenary Session of the Law Chamber upon the appeal of the SDIF, Council of State Administrative Law
Chambers 13th decided to reject the applications of the Bank in January 2016 due to their obligation to obey the decisions of reversal.
After the aforementioned court decisions, although the legal process was still in progress, the collection procedures were carried out within the context of Law No. 6183
and TL 298,466 including the default interest, was collected from the Bank by the SDIF at prior periods and made provision for the whole amount.
As a part of the legal process, individual application to the Constitutional Court of Republic of Turkey has been made by the Bank was not concluded positively. On the other
hand, the legal process is still ongoing within the framework of the ongoing lawsuits and other available legal options.
i.4.5. Except the other provisions indicated above, free provision within conservatism principle, for negative circumstances which may arise from the possible changes that may
arise in the economy and market conditions, amounting to TL 4,075,000 of which TL 2,875,000 provided in prior years and TL 1,200,000 was provided in the current period.
j. Information on Tax Liability:
j.1. Information on current tax liability:
j.1.1. Information on tax provision:
Explanations on taxation and calculations are explained in Note XXI of Section Three. As of December 31, 2021, as a result of the clarification of the Group's corporate tax
liability and temporary taxes paid, the remaining corporate tax liability amounts to TL 1,496,283 and as a result of the separate clarification process of each partnership
and tax authority, current tax asset amounting to TL 74,819 occurs.
j.1.2. Information on taxes payable:
Corporate Tax Payable
Tax on Securities Income
Tax on Real Estate Income
Banking Insurance Transaction Tax
Foreign Exchange Transaction Tax
Value Added Tax Payable
Other
Total
i.1.3. Information on premiums:
Social Security Premiums – Employees
Social Security Premiums – Employer
Bank Pension Fund Premiums – Employees
Bank Pension Fund Premiums – Employer
Pension Fund Membership Fees and Provisions-Employees
Pension Fund Membership Fees and Provisions-Employer
Unemployment Insurance – Employees
Unemployment Insurance – Employer
Other
Total
Current Period
1,496,283
304,755
6,180
442,711
117,926
46,696
120,263
2,534,814
Prior Period
2,184,343
233,897
2,448
261,320
18,192
16,091
114,029
2,830,320
Current Period
Prior Period
4,149
5,100
8,250
5
2,999
5,811
8
26,322
3,520
4,172
6,473
7
2,490
4,987
13
21,662
j.2. Information on deferred tax liabilities:
The Parent Bank and the consolidated Group companies have TL 124,949 deferred tax liability as of December 31, 2021. The related deferred tax debt is calculated over
the temporary differences between the book values of assets and liabilities in the records and their tax base values calculated according to tax.
Tangible Assets Base Differences
Provisions
Valuation of Financial Assets
Other
Deferred Tax Liability
Current Period
Prior Period
107,919
(1,754)
14,098
4,686
124,949
105,528
(9,776)
47,757
922
144,431
k. Information on Payables for Assets Held for Sale and Discontinued Operations
The Bank does not have any payables for assets held for sale and discontinued operations.
l. Information on subordinated loans
The Bank;
• As of October 24, 2012, issued 10 year-term bills with a nominal value of USD 1,000,000,000; as of December 10, 2013 issued 10 year-term bills with a nominal value
USD 400,000,000; as of June 29, 2017 issued 11 year-term bills with recall option on 6th year and a nominal value USD 500,000,000 and as of January 22, 2020 issued
5 year-term with nominal value of USD 750,000,000 which all have the characteristic of subordinated loans for the purpose of making available to the individuals and
legal persons who are resident abroad. Interest rates of aforementioned bonds are 6.00%, 7.85%, 7.00% and 7.75% respectively.
• As of August 8, 2017, June 19, 2019 and September 26, 2019; the Bank has issued 10 year-term bills with a nominal value of TL 1,100,000,000, 800,000,000 and
350,000,000 (full TL amount) respectively, with floating interest rates for qualified investors without being offered to the public in Turkey,
Nominal value contribution capital has issued borrowing instruments that will be included in the calculation of bonds.The bills mentioned are amounting to TL 37,470,997
as of December 31, 2021 (December 31, 2020 TL 22,138,559).
As of March 28, 2017, TSKB, the subsidiary of the Parent Bank, included in the consolidation, issued a bond with a maturity of 10 years and a nominal value of USD
300 million with an interest rate of 7.625% with an interest payment of six months and a quasi-subordinated loan. The balance sheet value of the mentioned borrowing
instrument at the end of the period is TL 4,008,280. (December 31, 2020: 2,287,562)
Debt Instruments To Be Included In Additional Capital Calculation
5.999.193
Subordinated Loans
Subordinated Debt Instrument
Current Period
TL
FC
Prior Period
FC
TL
5.095.133
Debt Instruments To Be Included In Contribution Capital Calculation
2,296,445
39,182,832
2,286,510
22,139,611
Subordinated Loans
Subordinated Debt Instrument
Total
2,296,445
2,296,445
39,182,832
39,182,832
2,286,510
2,286,510
22,139,611
22,139,611
412 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 413
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
m. Information on consolidated shareholders’ equity:
j.1. Presentation of paid-in capital:
Common shares
Preferred shares
Total
Current Period
4,499,970
30
4,500,000
Prior Period
4,499,970
30
4,500,000
m.2. Explanation as to whether the registered share capital system ceiling is applicable at bank, if so, the amount of registered share capital:
Capital System
Registered Capital System
Paid-in Capital
4,500,000
Ceiling
10,000,000
m.3. The capital increase made in current period: None.
m.4. Capital increase through transfer from capital reserves during the current period: None.
m.5. Significant commitments of the Parent Bank related to capital expenditures within the last year and the following quarter, the general purpose thereof, and the
estimation of funds required for them: None
m.6. Information on shares acquired by the Company: The Parent Bank has repurchased shares amounting to TL 530,307 in accordance with the Board of Directors
Decision dated August 17, 2018.
m.7. Previous periods’ indicators related to income, profitability and liquidity, and the estimated effects of forecasts, which are to be made by taking into consideration
the uncertainties of these indicators, on the Group’s equity: The Parent Bank’s and the Group companies’ balance sheets are managed in a prudent way to ensure that the
effect of risks arising from interest rates, exchange rates and loans is at the lowest level.
m.8. Privileges Granted to Shares:
Turkish Commercial Law and related registration are kept conditionally;
Group (A) shares each with a nominal value of 1 Kurus have the privileges of;
m. Information on Dividend Distribution
At the Bank’s Ordinary General Assembly, held on March 31, 2021, it was decided to allocate net profit from operating acitivities of 2020, amounting to TL 6,810,917
thousand as follows;
• Adding the sales profit amounting to TL 6,262 from the disposed real estates in the accounting period; recorded under retained earnings within the framework of the
relevant accounting standard.
• The total amount of TL 152,066, which includes TL 17,066 from real estate sales profits to be added to the capital and TL 135,000 from the amount allocated as venture
capital fund, of the balance sheet profit to be distributed amounting to TL 6,817,179 allocation as special reserve fund,
• of the amount as a basis for distribution of TL 6,665,113;
• TL 681,088 to A, B and C group shares as cash,
• TL 4 to the founding shares as cash,
• TL 134,324 as cash dividend to employees to be distributed,
• TL 5.849.697 as legal and extraordinary reserves to be reserved,
has been decided. As at March 31, 2021; TL 6,001,763 was transferred to reserves account, cash dividends were distributed to the shares other than the shares acquired
by the Bank, as of April 2, 2021.
III. Disclosures and Footnotes On Consolidated Off-Balance Sheet Items
a. Explanations to Liabilities Related to Off-Balance Sheet Items:
a.1. Types and amounts of irrevocable loan commitments:
Commitment for customer credit card limits amounts to TL 46,524,830 and commitment to pay for cheque leaves amounts to TL 3,291,900. The amount of commitment
for the forward purchase of assets is TL 14,003,202 and for the forward sale of assets is TL 13,724,140.
a.2. The structure and amount of probable losses and commitments resulting from off-balance sheet items, including those below:
The Group’s provisions for indemnified non-cash loans balance is TL 1,215,814 as of December 31, 2021 (December 31, 2020: TL 695,465) which is allocated for the non-
cash loans of companies whose loans are followed under “Non-performing Loans” accounts, Commitments are shown in the table of “Off-balance sheet items”.
a.3. Guarantees, bank acceptances, collaterals that qualify as financial guarantees, and non-cash loans including other letters of credit:
• receiving 20 times the number of shares in the distribution of bonus shares issued from conversion of extraordinary and revaluation reserves generated in accordance
with the relevant laws (Article 18 of the Articles of Incorporation),
• exercising the preference rights as 20 times (Article 19 of the Articles of Incorporation) and
despite having a lower nominal value, Group (B) shares, each with a nominal value of 1 Kurus, have the same rights with the Group (C) shares having a nominal value of 4
Kurus each. Furthermore, Group (A) and (B) shares, each with a nominal value of 1 Kurus are granted privileges in distribution of profits pursuant to Article 58 of the Articles
of Incorporation.
m.9. Information on marketable securities value increase fund:
Bank Acceptances
Letters of Credit
Other Guarantees
Total
Current Period
Prior Period
a.4. Certain guarantee, provisional guarantees, suretyships and similar transactions:
Financial Assets At Fair Value Through Other Comprehensive
Income
Valuation Difference
Deferred Tax Effect on Valuation
Foreign Exchange Differences
Total
n. Information on minority interest
TL
3,409,376
4,134,003
(777,305)
52,678
3,409,376
Balance at the beginning of the period
Distributed Dividend
Subsidiaries Profit/Loss on minority interest
Effect of change in subsidiaries equity
Effect of change in Group’s minority interest
Period Ending Balance
FC
(3,025,127)
(3,656,824)
631,697
(3,025,127)
Current Period
7,413,718
(299,226)
2,019,198
184,536
(83,298)
9,234,928
TL
1,348,303
1,664,000
(335,623)
19,926
1,348,303
FC
(62,532)
(93,702)
31,170
(62,532)
Prior Period
7,065,589
(190,292)
1,096,310
57,354
(615,243)
7,413,718
Letters of Tentative Guarantees
Letters of Certain Guarantees
Letters of Advance Guarantees
Letters of Guarantee Given to Customs Offices
Other Letters of Guarantee
Total
a.5. Total Non-cash Loans:
Non-cash Loans against Cash Risks
With Original Maturity of 1 Year or Less
With Original Maturity More Than 1 Year
Other Non-cash Loans
Total
Current Period
13,805,873
48,873,749
4,269,208
66,948,830
Current Period
1,708,305
72,902,038
15,463,646
6,090,285
36,502,689
132,666,963
Current Period
38,252,155
9,601,819
28,650,336
161,363,638
199,615,793
Prior Period
9,050,343
22,593,911
3,170,943
34,815,197
Prior Period
1,546,664
49,123,966
9,454,770
6,556,617
21,389,193
88,071,210
Prior Period
22,889,316
3,590,697
19,298,619
99,997,091
122,886,407
414 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 415
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
a.6. Sectoral risk concentration of non-cash loans:
Agriculture
Farming and Livestock
Forestry
Fishery
Industry
Mining and Quarrying
Manufacturing Industry
Electricity, Gas, Water
Construction
Services
Wholesale and Retail Trade
Hotel and Restaurant Services
Transport and Communications
Financial Institutions
Real Estate and Rental Services.
Self-Employment Services
Education Services
Health and Social Services
Other
Total
Current Period
TL
296,207
199,806
82,391
14,010
12,430,773
320,570
8,203,756
3,906,447
7,523,221
25,875,351
15,532,556
450,043
3,083,759
4,552,217
1,418,580
502,777
73,900
261,519
287,375
(%)
0.64
0.43
0.18
0.03
26.78
0.69
17.68
8.41
16.21
55.75
33.47
0.97
6.64
9.81
3.06
1.08
0.16
0.56
0.62
FC
499,227
154,015
1,734
343,478
93,956,535
928,731
83,044,828
9,982,976
21,058,983
36,774,135
18,241,371
1,876,235
7,462,048
7,488,074
1,145,172
239,200
5,300
316,735
913,986
(%)
0.33
0.10
0.00
0.23
61.33
0.61
54.21
6.51
13.75
24.00
11.91
1.22
4.87
4.89
0.75
0.16
0.00
0.20
0.59
Prior Period
TL
189,630
155,107
27,935
6,588
11,570,309
182,761
7,177,334
4,210,214
4,445,354
23,731,693
15,100,474
329,800
2,391,187
3,999,311
1,286,329
383,396
57,331
183,865
191,389
(%)
0.47
0.39
0.07
0.01
28.83
0.46
17.89
10.48
11.08
59.14
37.63
0.82
5.96
9.97
3.21
0.96
0.14
0.45
0.48
FC
331,934
68,163
9
263,762
49,646,367
638,665
42,317,411
6,690,291
11,176,868
21,466,661
10,399,723
1,025,193
4,047,046
3,902,525
1,539,488
102,698
1,426
448,562
136,202
(%)
0.40
0.08
0.00
0.32
59.99
0.77
51.13
8.09
13.51
25.94
12.57
1.24
4.89
4.72
1.86
0.12
0.00
0.54
0.16
46,412,927
100.00
153,202,866
100.00
40,128,375
100.00
82,758,032
100.00
a.7. Non-cash Loans classified under Group I and Group II:
Non-cash Loans
Letters of Guarantee
Bank Acceptances
Letters of Credit
Endorsements
Underwriting Commitments of the Securities Issued
Factoring Related Guarantees
Other Guaranties and Warranties
b. Information on derivative financial instruments:
TL
44,808,126
44,450,198
111,350
238,246
Group I
FC
149,073,900
82,704,571
13,680,617
48,492,541
TL
1,348,485
1,342,094
6,391
Group II
FC
2,966,747
2,815,220
13,906
135,126
IV. Disclosures and Footnotes on the Consolidated Income Statement
a. Interest Income
a.1. Information on interest income on loans:
Interest Income on Loans (1)
Short-term Loans
Medium and Long-term Loans
Interest on Non-performing Loans
Current Period
TL
FC
TL
Prior Period
FC
10,115,449
24,465,421
1,052,273
1,588,844
11,164,912
27,808
5,585,757
18,118,672
718,313
1,010,925
9,229,416
104,940
Premiums Received from State Resource Utilization Support Fund
Total
35,633,143
12,781,564
24,422,742
10,345,281
(1) Includes fee and commission income on cash loans.
a.2. Information on interest income on banks:
The Central Bank of Turkey
Domestic Banks
Foreign Banks
Foreign Head Offices and Branches
Total
a.3. Information on interest income from securities:
Financial Assets at Fair Value through Profit and Loss
TL
576,388
31,929
608,317
TL
88,439
Financial Assets at Fair Value through Other Comprehensive Income
8,946,071
Financial Assets Measured at Amortized Cost
Total
6,317,828
15,352,338
a.4. Information on interest income received from associates and subsidiaries:
Current Period
Prior Period
FC
42,304
35,400
77,704
TL
372,578
12,265
FC
3,006
31,273
69,700
384,843
103,979
Current Period
Current Period
FC
79,777
1,855,274
211,778
2,146,829
TP
41,768
5,731,532
4,314,904
10,088,204
YP
16,589
1,277,397
183,466
1,477,452
8,332
4,196,171
2,495
Interest Received From Affiliates and Subsidiaries
Current Period
409,963
Priod Period
292,070
The derivative transactions of the Group mainly consist of money and interest swaps and forward foreign exchange purchase and sale transactions. In addition to these,
money, interest and security options and futures transactions are also performed. Although the Group's derivative transactions accounted for trading purposes, there are
derivative transactions that are accounted for trading purposes, as all the conditions required to be defined as an item suitable for financial risk hedge accounting are not
fulfilled, although they provide economic hedging. On the other hand, derivative transactions, which are carried out to protect against changes in the fair values of financial
instruments and have all the necessary conditions for their evaluation within the scope of hedge accounting, are classified as hedging purposes.
c. Explanations Related to Contingencies and Commitments:
The balance of the “Other Irrevocable Commitments” account, which comprised the letters of guarantees, guarantees and commitments submitted by the Group pursuant
to its own internal affairs, and guarantees given to third parties by other institutions in favor of the Parent Bank and the commitments due to housing loans extended
within the scope of unfinished house projects followed, amounts to TL 22,140,568.
The cheques given to customers is presented under off balance sheet commitments, as per the related regulations is amounting to TL 3,291,900 in case the cheques
presented for payment to beneficiaries are not covered, the Parent Bank will be obliged to pay the uncovered amount up to TL 1,680 (in exact TL amount) for the cheques
that are subject to the Law numbered 3167 on “the Regulation of Payments by Cheque and Protection of Cheque Holders”, and up to TL 2,670 (in exact TL amount) for the
cheques that are subject to the “Cheque Law” numbered 5941, The uncollected amount will be followed under “Indemnified Non-Cash Loans.
d. Explanations related to transactions made on behalf of or on the account of others:
It is explained in Note X under Section Four.
b. Interest Expense
b.1. Information on interest expense from funds borrowed:
Banks
Central Bank of Turkey
Domestic Banks
Foreign Banks
Foreign Head Offices and Branches
Other Institutions
Total (1)
(1) Includes fee and commission expenses from cash loans.
TL
689,455
426,628
262,827
1,088
690,543
Current Period
Prior Period
FC
1,279,070
184,463
1,094,607
642,502
1,921,572
TL
459,129
263,899
195,230
1,757
460,886
FC
1,163,241
1,667
126,911
1,034,663
720,852
1,884,093
416 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 417
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
b.2. Information on interest paid to associates and subsidiaries:
c. Explanations on dividend income:
Current Period
TL
Demand
Deposits
Bank Deposits
Savings Deposits
Public Sector Deposits
Commercial Deposits
Other Institutions Deposits
Deposits with 7 Days Notice
Total
FC
10
58
68
Deposits with 7 Days Notice
Precious Metals Deposits
Total
TOTAL
Prior Period
TL
9,436
9,504
Demand
Deposits
Interest Paid to Associates and Subsidiaries
b.3. Information on interest paid on marketable securities issued:
Current Period
108,487
Prior Period
36,112
Interest on Securities Issued
1,611,372
4,437,045
1,284,341
3,449,048
Current Period
TL
FC
TL
Prior Period
FC
b.4. Information on Interest Expense on Deposits According to Maturity Structure:
Time Deposits
Up to One
Month
Up to Three
Months
Up to Six
Months
Up to One
Year
Over One
Year
Accumulated
Deposits
236,834
109,341
1,089,360
10,622,231
622,976
1,257
11,337
1,799,009
2,068,714
44,565
438,198
328
58,396
51,297
87,086
47
283,679
446
115,091
645
9
3,184
4,064
Total
346,175
12,537,399
12,978
4,213,040
538,570
Financial Assets with Fair Value Differences Recognized in Profit/Loss
Financial Assets with Fair Value Differences Recognized in Comprehensive Income
Other
Total
d. Information on trading profit/losses (Net):
Profit
Securities Trading Gains
Gains on Derivative Financial Instruments (1)
Foreign Exchange Gains
Losses (-)
Securities Trading Losses
Losses on Derivative Financial Instruments (1)
Foreign Exchange Losses
Trading Income/Losses (Net)
Current Period
Prior Period
47,533
20,057
958
68,548
Current Period
2,033,732,717
42,406,767
47,875,675
1,943,450,275
2,033,029,265
40,524,089
48,055,434
1,944,449,742
703,452
7,507
23,381
169
31,057
Prior Period
694,246,386
42,701,725
29,789,564
621,755,097
695,453,155
41,473,540
39,928,485
614,051,130
(1,206,769)
(1) Income arising from foreign currency changes related to derivative transactions amounting TL 39,998,909 and the losses amounting TL 40,803,221 and the amount of net loss is
TL 804,312 (December 31, 2020: profit TL 10,143,156 loss TL 19,824,032 and net loss amount TL 9,680,876)
3,171,025
13,249,821
732,997
371,258
122,348
645
17,648,162
e. Information on other operating income:
Foreign Currency Deposits
Bank Deposits
1,091
8,345
31,584
389
192,184
566
3,363
196,113
9,973
1,289
411
11,673
31,973
3,202,998
13,445,934
744,670
8,551
7,785
10,611
26,947
398,205
116,522
6,774
637
123,933
246,281
1
1
646
Time Deposits
Up to
One Month
Up to Three
Months
Up to Six
Months
Up to One
Year
Over One
Year
Accumulated
Deposits
Bank Deposits
Savings Deposits
Public Sector Deposits
Commercial Deposits
Other Institutions Deposits
Deposits with 7 Days Notice
74
1
24
1
114,903
516,129
571
875,858
33,334
67,871
4,170
5,217,171
212,256
4,704
1,224,253
239,748
363
35,415
31,626
772
50,900
9
138,972
7,996
95,003
11
5,388
385
817
359,906
25,148
15,022
400,076
18,048,238
Total
187,790
6,092,277
5,658
2,279,910
313,090
As at reporting period, TL 10,723,838 of other operating income sources from inclusion and classification of operations of insurance and reinsurance companies; 88% of
which is from insurance premiums. (December 31, 2020: TL 8,835,512 , 91%). The remaining amount mainly consists of expected credit loss reversals or collections from
Stage 3 loans, and income from fees received from customers in return for various banking services and sales of fixed assets.
f. Information on expected credit loss and other provision expense:
Expected Credit Loss
Expected Credit Loss for 12 Months (Stage 1)
Significant Increase in Credit Risk (Stage 2)
Non-Performing Loans (Stage 3)
Impairment Losses on Marketable Securities
Financial Assets at Fair Value through Profit and Loss
Financial Assets at Fair Value Through Other Comprehensive Income
Impairment Losses on Associates, Subsidiaries and Joint-Ventures
Associates
Subsidiaries
Jointly Controlled Entities
Other (1)
Total
Current Period
12,667,759
1,683,950
4,533,215
6,450,594
21,627
14,145
7,482
Prior Period
11,379,112
1,631,142
4,648,360
5,099,610
20,047
2,129
17,918
4,121,104
16,810,490
2,750,881
14,150,040
Total
FC
100
1,540,795
6,753,747
283,830
198,649
100,787
817
8,878,725
(1) Includes provision expense for impairment of financial assets at fair value through profit or loss and free provision expense amounting to TL 1,200,000.
Foreign Currency Deposits
Bank Deposits
838
5,902
38,181
1,743
Deposits with 7 Days Notice
Precious Metals Deposits
Total
TOTAL
6,740
6,840
318,262
2,065
2,332
322,659
25,402
1,940
453
27,795
311,625
15,603
2,553
12,719
30,875
229,524
160,392
15,237
1,105
176,734
277,521
12
12
829
558,690
29,440
16,609
604,739
9,483,464
39,924
1,580,719
7,076,406
418 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 419
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
g. Other operating expenses:
V. Disclosures and Footnotes on Consolidated Statement of Changes in Shareholders’ Equity
Current Period
Prior Period
Reserve for Employee Termination Benefits
Bank Pension Fund Deficit Provisions
Impairment Losses on Tangible Assets
Depreciation Expenses of Tangible Assets
Impairment Losses on Intangible Assets
Impairment Losses on Goodwill
Amortization Expenses of Intangible Assets
Impairment Losses on Investments Accounted Under Equity Method
Impairment Losses on Assets to be Disposed
Depreciation Expenses of Assets to be Disposed
Impairment Losses on Assets Held for Sale and Subject to Discontinued Operations
Other Operating Expenses
Leasing Expenses Related to Exceptions to IFRS 16
Repair and Maintenance Expenses
Advertisement Expenses
Other Expenses
Loss on Sale of Assets
Other
Total
190,474
1,892,381
5,795
802,974
35,974
453,413
70
4,972,087
153,700
331,078
362,939
4,124,370
2,056
14,310,652
22,665,876
168,124
758,429
686,592
324,296
5,320
1,306
3,739,903
132,158
265,704
249,311
3,092,730
1,854
9,192,141
14,877,965
(1) The Group's expenditure within the scope of donation, aid and social responsibility projects in the current period is TL 79,971 (31.12.2020: TL 104,006).
In the table above, TL 11,565,656 of the operating expenses in the “Other” group arises from the insurance and reinsurance companies because of the classification of
their activities in the "Other" group, and significant portion of the related expenses is compensation expenses paid (December 31, 2020: TL 7,247,084). The Group's fees,
taxes, duties and fund expenses amounting to TL 731,958 are other expense items in the current period "Other" group.
h. Information on provision for taxes from continuing and discounted operations
The Group's profit before tax arises from continuing operations. As of 31.12.2021, the profit before tax consists of TL 36,918,823 of net interest income, TL 6,691,855 of
net fees and commission income, and the total of personnel expenses and other operating expenses is TL 30,381,409.
h1. Explanations on net profit / loss of continued and discontinued operations:
As of 31.12.2021, the Group's tax provision amounting to TL 3,389,061 consists of current tax provision of TL 2,621,921 and deferred tax income of TL 767,140. The Group
does not have any discontinued operations.
h2. Explanations on net profit / loss of continued and discontinued operations:
The net profit of the Group from its ongoing operations as of 31.12.2020 is TL 15,560,258.
i. Information on net period profit/loss:
i.1. Income and expenses resulting from ordinary banking activities: There is no specific issue required to be disclosed for the Group’s performance for January 1,
2021-December 31, 2021.
i.2. Effects of changes in accounting estimates on the current and future periods’ profit/loss: There is no issue to be disclosed.
i.3. “The Other’’ item which is located at the bottom “Fees and Commissions Received” in the income statement consist of various fees and commissions received from
transactions such as credit card transactions, capital market transactions and insurance-reinsurance transactions.
i.4. Net profit / loss of Minority Interest:
Net Profit / Loss of Non-controlling Interest
j. Explanation on other items in income statement
Other items do not exceed 10% of the total amount of the income statement.
k. Fees for services received from an independent audit firm
Current Period
2,019,198
Prior Period
1,096,310
In accordance with the decision of KGK dated 26.03.2021, the fees for the reporting period regarding the services received from the independent auditor or independent
audit firm are given in the table below. In addition to the Bank, the fees for services rendered to the Bank's domestic/foreign subsidiaries and jointly controlled partnerships
are included in the aforementioned fees, which are stated as VAT excluded.
Independent Audit Fee for the Reporting Period
Other Assurance Services and Other Non-Audit Fees
Total
420 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
Current Period
Prior Period
22,282
5,709
27,991
18,148
2,898
21,046
The paid-in capital is TL 4,500,000 in legal records. As of balance sheet date, the balance of legal reserves is TL 5,834,300 the balance of extraordinary reserves is TL
225,558 and the balance of statuary reserves is TL 45,323,776.
The effect of a total revaluation increase of TL 2,692,577, which was formed as a result of revaluation of real estate for use in the current period, on the Group's
shareholders' equity is shown in the column “Increase / Decrease in the Accumulated Revaluation of Fixed Assets” by clarifying the deferred tax effect of TL 167,952.
The details of revaluation surplus account of securities are shared in the Note Section V-II-l-9. TL (145,608) of this amount is the deferred tax effect on marketable
securities at fair value through other comprehensive income (December 31, 2020: TL (304,453)).
VI. Disclosures and Footnotes on the Consolidated Statemens of Cash-Flows
The consolidated operating profit of TL 24,798,475 before the changes in operating assets and liabilities mostly comprised of TL 61,253,858 of interest received from
loans and securities, and TL 31,171,346 of interest paid on deposits, money market transactions and funds borrowed by the Bank. An important part of other revenues,
TL 8,259,735 consists of premium collections of insurance companies. The account “Other” classified under operating profit other than fees and commissions paid,
cash payments to personnel and service suppliers and taxes paid consists of other operating expenses and foreign exchange gains/losses accounts is TL (10,686,634)
(December 31, 2020: TL (8,265,460)).
Net Increase (Decrease) in Other Liabilities account classified in changes of assets and liabilities resulting from the changes in Funds Provided Under Repurchase
Agreements, miscellaneous payables, other liabilities and taxes, duties, charges, and premiums is decreased by TL 49,287,428 (December 31, 2020: TL 33,362,942
decrease).
The Net Cash Provided from Other Investing Activities account includes net cash flows from the sale of intangible assets and declined by TL 922,250 (December 31, 2020:
TL 752,504 decrease).
The effect of changes in foreign exchange rates on cash and cash equivalents is on the positive side TL (1,317,136) (31.12.2020: TL 1,239,044) as of December 31, 2021.
Due to the high rate of turnover of related foreign currency assets, the difference between the last 30 days’ arithmetic average of currency exchange rates and the year-
end currency exchange rate is used to calculate the effect of change in foreign exchange rate. Under the same assumption, the effect of change in foreign exchange rate on
cash and cash equivalents is calculated.
Cash, cash in foreign currency, unrestricted deposits in Central Bank of Turkey, money in transit, cheques purchased, money market operations as well as demand deposits
and time deposits up to 3 months are defined as cash and cash equivalents.
Cash and cash equivalents at beginning of period:
Cash
Cash in TL and Foreign Currency
Central Bank of Turkey and Other
Cash Equivalents
Receivables from Money Market Operations
Banks’ Demand Deposits and Time Deposits Up to 3 Months
Total Cash and Cash Equivalents
December 31, 2020
December 31, 2019
32,519,831
9,136,817
23,383,014
19,801,714
2,179,919
17,621,795
52,321,545
29,663,454
5,519,980
24,143,474
18,075,154
1,166,865
16,908,289
47,738,608
The total amount resulting from the transactions made in the previous period shows the total cash and cash equivalents as of the beginning of the current period.
Cash and Cash equivalents as of end of the period:
Cash
Cash in TL and Foreign Currency
Central Bank of Turkey and Other
Cash Equivalents
Receivables from Money Market Operations
Banks’ Demand Deposits and Time Deposits Up to 3 Months
Total Cash and Cash Equivalents
December 31, 2021
December 31, 2020
96,316,663
14,862,587
81,454,076
36,005,939
2,950,824
33,055,115
132,322,602
32,519,831
9,136,817
23,383,014
19,801,714
2,179,919
17,621,795
52,321,545
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 421
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
VII. Disclosures And Footnotes On The Group’s Risk Group
a.3. Information on forward and option and other similar agreements made with the Group’s risk group:
Investments in Associates, Subsidiaries and
Jointly Controlled Entities (Joint Ventures)
Direct and Indirect
Shareholders of the Bank
Other Real Persons and Corporate Bodies
that have been Included in the Risk Group
Cash
Non-Cash
Cash
Non-Cash
Cash
Non-Cash
b.1. The relations of the Group with corporations in its risk group and under its control regardless of whether there are any transactions between the parties:
a. Information on the volume of transactions relating to the Group’s risk group, incomplete loan and deposit transactions and period’s profit and loss:
a.1. Information on loans held by the Group’s risk group:
Current Period:
Group’s Risk Group
Loans
Investments in Associates, Subsidiaries and
Jointly Controlled Entities (Joint Ventures)
Direct and Indirect
Shareholders of the Bank
Other Real Persons and Corporate Bodies
that have been Included in the Risk Group
Cash
Non-Cash
Cash
Non-Cash
Cash
Non-Cash
Balance at the beginning of the period
2,857,404
Balance at the end of the period
2,402,860
Interest and commission income received
409,863
9,877,588
16,824,670
2,468
1,232,269
1,916,562
168,639
495,030
608,306
4,397
Önceki Dönem:
Group’s Risk Group
Loans
Prior Period:
Group’s Risk Group
Balance at the beginning of the period
218
5,999,538
Balance at the end of the period
2,857,404
9,877,588
Interest and commission income received
292,070
1,638
2,963,240
1,232,269
103,258
884,605
495,030
2,309
a.2. Information on deposits held by the Group’s risk group:
Current Period:
Group’s Risk Group
Investments in Associates,
Subsidiaries and Jointly Controlled
Entities (Joint Ventures)
Direct and Indirect
Shareholders of the Bank
Other Real Persons and Corporate
Bodies that have been Included in the
Risk Group
Current Period
Current Period
Current Period
Deposits
Balance at the beginning of the period
7,520,649
Balance at the end of the period
Interest expense on deposits
10,076,451
108,487
157,226
302,826
25,060
1,153,201
1,710,018
62,988
Group’s Risk Group
Investments in Associates, Subsidiaries
and Jointly Controlled Entities (Joint
Ventures)
Direct and Indirect Shareholders
of the Bank
Other Real Persons and Corporate
Bodies that have been Included in
the Risk Group
Current Period
Prior Period
Current Period
Prior Period
Current Period
Prior Period
Transactions in which the Difference in Fair
Value is Reflected in Profit or Loss
Balance at the beginning of the period
Balance at the end of the period
Total Profit/Loss
Transactions for hedging purposes
422.104
7.737
Beginning of the period
End of the period
Total Profit/Loss
b. Disclosures for the Group’s risk group:
(2.052)
In accordance with the relevant decision of the Banking Regulation and Supervision Agency, the special purpose entity and the mentioned company’s subsidiary Türk
Telekom A.Ş, are not included in the Bank’s risk group, where details are disclosed in Section V, footnote I.b.3 and I.o.
All types of corporate and retail banking services are provided to these corporations in line with the articles of Banking Law.
b.2. The type and amount of transaction carried out, and its ratio to the overall transaction volume, values of principal items and their ratios to overall items, pricing policy
and other items in addition to the structure of the relationship:
The transactions carried out are mainly loan and deposit transactions, The ratio of loans extended to the risk group to the overall loans is 0.76%, while the ratio to the
overall assets is 0.38% the ratio of deposits of the risk group corporations to the overall deposits is 1.96%, while the ratio to overall liabilities is 1.08%, The comparable
pricing method is used for the transactions.
b.3. Purchase and sale of real estates, other assets and services, agency agreements, finance lease contracts, transfer of information obtained through research and
development, license agreements, funding (including loans and provision of support as cash capital or capital-in-kind), guarantees and collaterals and management
agreements:
The Parent Bank’s branches act as agents of Anadolu Anonim Türk Sigorta Şirketi and Anadolu Hayat Emeklilik A.Ş. Furthermore, through its branches, the Bank mediates
the order transmission for İş Yatırım Menkul Değerler A.Ş. and carries out agency activities of İş Portföy Yönetimi A.Ş. 32 mutual funds which are founded by the Anadolu
Hayat Emeklilik A.Ş. are managed by İş Portföy Yönetimi A.Ş. Securities purchases, when required, are made by İş Finansal Kiralama A.Ş., a subsidiary of the Bank, through
leasing.
If requested, the cash and non-cash loan needs of the risk group companies are met in accordance with the limits imposed by Banking Law and the prevailing market
conditions.
c. Total salaries and similar benefits paid to the (executive members and senior executives)
In the current period, the net payment provided to the key management of Group amounts TL 167,759 (December 31, 2020: TL 135,024).
VIII. Disclosures on the Group’s Domestic, Foreign, Off-Shore Branches or Participations and Representative Offices
The Parent Bank – Türkiye İş Bankası A.Ş.
Investments in Associates, Subsidiaries
and Jointly Controlled Entities (Joint
Ventures)
Direct and Indirect
Shareholders of the Bank
Other Real Persons and Corporate
Bodies that have been Included in the
Risk Group
Prior Period
Prior Period
Prior Period
Domestic Branches(1)
1,174
22,470
Number
Employees
Deposits
Balance at the beginning of the period
Balance at the end of the period
Interest expense on deposits
932,049
7,520,649
36,073
8,896
157,226
4,833
7,802,825
1,153,201
76,599
Foreign Representative Offices
Foreign Branches
Off-Shore Branches
1
1
2
14
2
2
1
3
2
45
205
39
32
6
(1) The Branches located in Free Trade Zones in Turkey are included among domestic branches.
Country of
Incorporation
China
Egypt
England
TRNC
Iraq
Kosovo
Bahrain
Total Assets
41,179,719
15,362,143
4,401,749
2,322,319
10,609,478
Legal Capital
1,765
80,000
588,024
148,390
422 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 423
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen
Total Assets
Legal Capital
IX. Subsequent Events
(1) The Company, which is headquartered in London, does not have any branch or representative office beside its head office. Yatırım Varlık Kiralama A.Ş.
which is included to scope of consolidation during the current period does not have any employees.
12
Singapore
535,010
400,590
Within the scope of the decision of the Board of Directors regarding the issue of debt instrument on September 6, 2021, the Bank issued a financial bond with a nominal
value of TL 2,562,362 after December 31, 2021.
İşbank AG
Domestic Branches (1)
Foreign Representative Offices
Foreign Branches
Off-Shore Branches
Number
Employees
9
1
149
Country of Incorporation
7
Netherlands
2,529,933
Total Assets
Legal Capital
(1) The branches of the company, which is headquartered in Germany, in Germany are shown as domestic branches.
Number
Employees
201
Country of Incorporation
Milli Reasürans T.A.Ş.
Domestic Branches
Foreign Representative Offices
Foreign Branches
Off-Shore Branches
JSC İşbank
1
1
Domestic Branches (1)
3
94
Number
Employees
Foreign Representative Offices
Foreign Branches
Off-Shore Branches
Country of Incorporation
Total Assets
Legal Capital
(1) The branches of the company, which is headquartered in Moscow, in Russia are shown as domestic branches.
JSC İşbank Georgia
Domestic Branches (1)
2
63
Number
Employees
Foreign Representative Offices
Foreign Branches
Off-Shore Branches
Country of Incorporation
Total Assets
Legal Capital
(1) The branches of the company, which is headquartered in Tiflis, in Georgia are shown as domestic branches.
Number of employees of consolidated companies that does not have agencies and branches abroad:
Anadolu Anonim Türk Sigorta Şirketi
Anadolu Hayat Emeklilik A.Ş.
Efes Varlık Yönetimi A.Ş.
İş Faktoring A.Ş.
İş Finansal Kiralama A.Ş.
İş Gayrimenkul Yatırım Ortaklığı A.Ş.
İş Girişim Sermayesi Yatırım Ortaklığı A.Ş.
İş Portföy Yönetimi A.Ş.
İş Yatırım Menkul Değerler A.Ş.
İş Yatırım Ortaklığı A.Ş.
Maxis Girişim Sermayesi Yatırım Ortaklığı A.Ş
Maxis Investments Ltd (1)
Moka Ödeme ve Elektronik Para Kuruluşu A.Ş.
TSKB Gayrimenkul Yatırım Ortaklığı A.Ş.
Türkiye Sınai Kalkınma Bankası A.Ş.
Yatırım Finansman Menkul Değerler A.Ş.
Employees
1,436
1,029
124
114
141
66
5
69
438
5
13
9
39
11
408
131
Section Six: Other Explanations
I. Explanations On The Group’s Credit Ratings:
Türkiye İş Bankası A.Ş.
Rating
Outlook (*)
MOODY’S
Long-term Foreign Currency Deposit
Long-term Local Currency Deposit
Long-term Foreign Currency Senior Debt
Short-term Foreign Currency Deposit
Short-term Local Currency Deposit
FITCH RATINGS
Long-term Foreign Currency Issuer Default Rating
Long-term Local Currency Issuer Default Rating
Short-term Foreign Currency Issuer Default Rating
Short-term Local Currency Issuer Default Rating
National Long-term Rating
Viability Rating
Support Rating
STANDARD & POOR'S
Long-term Counterparty Credit Rating
Short-term Counterparty Credit Rating
Long-term National Scale Rating
Short-term National Scale Rating
B3
B3
B3
Not-Prime
Not-Prime
B+
B+
B
B
A+ (tur)
b+
b-
B+
B
trA+
trA-1
Negative
Negative
Negative
-
-
Negative
Negative
-
-
Stable
-
-
Negative
-
-
-
The dates when the Bank's credit ratings/outlooks were last updated are given below:
Moody's: December 10, 2020, Fitch Ratings: December 10, 2021, Standard & Poor's: December 15,2021
424 | İŞBANK 2021 INTEGRATED ANNUAL REPORT
İŞBANK 2021 INTEGRATED ANNUAL REPORT | 425
Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Section Seven: Explanations On The Independent Auditors’ Report
I. Explanations on the Independent Auditors’ Report:
The consolidated financial statements and disclosures for the year ended December 31, 2021 have been reviewed by Güney Bağımsız Denetim ve Serbest Muhasebeci
Mali Müşavirlik Anonim Şirketi (A member firm of Ernst&Young Global Limited) and the independent auditor’sreport dated February 8, 2022, is presented preceding the
consolidated financial statements.
II. Explanations and Footnotes of the Independent Auditors Report
There are no significant issues or necessary disclosures or notes in relation to the Group’s operations other than those mentioned above.
İş Finansal Kiralama A.Ş.
FITCH RATINGS
Long-term Foreign Currency Issuer Default Rating
Long-term Local Currency Issuer Default Rating
Short-term Foreign Currency Issuer Default Rating
Short-term Local Currency Issuer Default Rating
National Long-term Rating
Support Rating
Rating
B+
B+
B
B
A+(tur)
4
Outlook (*)
Negative
Negative
-
-
Stable
-
The date when the credit ratings/outlooks of İş Finansal Kiralama A.Ş were last updated are given below:
Fitch Ratings: 10.12.2021
Türkiye Sınai Kalkınma Bankası A.Ş.
Rating
Outlook (*)
MOODY’S
Baseline Credit Assessment
Long-term Foreign Currency Issuer Rating
Short-term Foreign Currency Issuer Rating
Long-term Local Currency Issuer Rating
Short-term Local Currency Issuer Rating
Senior Unsecured Debt Foreign Currency Issuer Rating
Foreign Currency GMTN Program Rating
FITCH RATINGS
Long-term Foreign Currency Issuer Default Rating
Long-term Local Currency Issuer Default Rating
Short-term Foreign Currency Issuer Default Rating
Short-term Local Currency Issuer Default Rating
Long-term National Rating
Support Rating
Subordinated Debt Rating
Financial Capacity Rating
caa1
B3
Not-Prime
B3
Not-Prime
B3
(P)B3
B+
BB-
B
B
AA
4b
B-
b+
-
Negative
-
Negative
-
Negative
-
Negative
Negative
-
-
Stable
-
-
-
The date when the credit ratings/outlooks of TSKB were last updated are given below:
Moody's: September 11, 2020, Fitch Ratings: December 10, 2021
(*) Outlook:
“Stable” indicates that the current rating will not be changed in the short term; “positive” indicates that the current rating is very likely to be upgraded and “negative”
indicates that the current rating is very likely to be downgraded.
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Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Türkiye İş Bankası A.Ş.Notes To The Consolidated Financial Statements For The Year Ended December 31, 2021 (Convenience Translation of Consolidated Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) (Amounts expressed in thousand Turkish Lira (TL) unless otherwise stated.)Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Projects to Improve Customer Experience
Below are some of the products and services developed in 2021 by taking customer suggestions and feedback into consideration:
Personal Banking
Transaction Convenience for Foreign Nationals
It is now possible for natural persons with foreign nationality to pay bills at Bankamatik ATMs using the cardless menu.
Buying a Package with Maximum Mobile
Customers can now top up / buy a package via the Maximum Mobile channel.
Monthly Safe Deposit Box Rental
It is now possible to rent safe deposit boxes for monthly periods as well. Development activities have been completed so that safe
deposit boxes can be rented on a monthly basis and the fees for the safe deposit box can be collected via credit card.
HGS Improvements
Improvements have been made regarding transaction failures/errors during HGS sales, top up transactions without an automatic
payment order, and the digital approval process.
Passport IDs
It is now possible for customers who are registered in the Bank’s systems with a "Passport" type ID and whose "Valid until" field is
populated to send/receive money via Western Union.
Bill Payment at Bank Office
Following the change in legislation regarding fees that can be charged to financial consumers and commercial customers put into
effect in 2020, bill payment services at Branches were temporarily stopped so that transaction fees could be charged in accordance
with the legislation. This service was reactivated on 7 April 2021 upon completion of the required development work.
Personal Loans
COVID-19 Support
As an increased number of businesses were closed due to the impact of both higher interest rates and the pandemic, the Bank decided
to restructure loans and defer loan payments for 3 months, with interest applied at the current rate of the loan, for those customers
applying for a loan restructuring until September 2021 in order to minimize the impact of the COVID-19 pandemic on businesses.
Natural Disaster Support
The Bank has offered customers affected by the floods and fires in Turkey the opportunity to defer their Consumer Loan and
Overdraft account payments interest-free for up to 3 months.
Digital Banking
İşCep View Preferences
Following redesign of the İşCep app, development work continued to offer an even better experience based on the suggestions from
customers. The light-blue mode, theme and text size settings in the "View Preferences" menu item under the "Profile and Settings"
menu of İşCep can now be customized by the user. In addition, you can now quickly access the "Sign out" button under "Profile and
Settings" to securely sign out of your account on İşCep.
Sending Money to Other Banks with FAST-7/24 (İşCep, Internet Branch)
With the new payment system FAST, you can now send TL to accounts in other domestic banks on a 24/7 basis. We have added
functionality to our digital channels so that you can send money to recipients at other banks via your saved list of recipients,
registered easy addresses or IBAN and monitor your transaction. Furthermore, the option to transfer money to a registered easy
address during wire transfer and EFT processes is offered.
Update Information (İşCep, Internet Branch)
With the "Update Information" option added to İşCep, personal customers can now update their e-mail address, phone number and
address details registered at İşbank. The option, which was already available on Internet Branch, has been renewed in parallel with
İşCep to improve the customer experience.
Signing In to the Commercial Internet Branch with the Approve Button
As part of the development work carried out to improve the customer experience, customers can sign in to their Commercial Internet
Branch by pressing the "Approve" button appearing with the instant notification sent to their mobile phone.
Card Contract Approval (İşCep, Internet Branch) The digitalization of the contracts in the credit card application process in İşCep and
Internet Branch has been completed.
Taking a Queue Ticket at a Bank Branch (İşCep)
Customers can now use İşCep to take a queue ticket without going to the branch, see the number of people waiting and track the
estimated wait time.
İstanbulkart Transactions (İşCep)
Personal customers can now top up their İstanbulkart, query current balance on their card and perform update transactions on İşCep.
SWIFT FX Transfer Query/Cancellation/Outcome (İşCep)
You can now view, monitor and cancel your FX transfers via İşCep.
Secure Vehicle Purchase-Sales (İşCep Personal, İşCep Commercial)
Preparations have been completed so that the used car purchase-sales transactions carried out via a notary public can be completed
via İşCep following introduction of this service in Internet Branch.
E-mail Verification (Commercial Internet Branch)
When commercial customers click on Accounts on their Commercial Internet Branch, an additional screen is displayed with directions
to verify their e-mail address. The purpose of this verification was to increase the number of verified e-mail addresses of commercial
customers in İşbank's systems. Since documents containing sensitive data are sent to verified e-mail addresses, customers are
expected to keep their e-mail address up-to-date and verified.
Nearest İşbank Widget (İşCep)
The "Nearest İşbank" widget has been added to the widgets on the home screen in iOS 14 for easy access to frequently used
information. This allows users to quickly find information about the nearest Branch and Bankamatik ATM. Youth Savings Account
(İşCep, Internet Branch) For people aged 18-26 years, a new time deposit account product has been added to the menus.
Chargeback to a Credit Card Transaction and Chargeback Monitoring (İşCep)
Customers can now submit their chargeback to a spending, cash withdrawal or money transfer transaction done with their İşbank
credit cards and Bankamatik cards to the Bank via İşCep. Customers can also monitor the current status of their chargebacks via
İşCep.
Anadolu Sigorta-Policy Cancellation (İşCep-Insurance) With the Policy Cancellation menu, it is now possible to cancel policies. The
menu redirects the customer to Anadolu Sigorta's application so that they can cancel their insurance policy.
Instant POS Application
Fully authorized users of corporate customers (legal entities) can now submit an Instant POS application and quickly complete their
transactions.
Addition of an Automatic Limit Increase Order to Card Use Preferences (İşCep, Internet Branch)
The automatic limit increase order feature has been added to İşCep.
Directions to Issue "Üstü Kalsın" (Keep the Change) Order with Maxi (İşCep- iOS)
Customers can now follow the directions to submit an order for the Üstü Kalsın (Keep the Change) service from Maxi.
Show/Hide Balance (Bankamatik ATM)
The "Show/Hide My Balance" function has been added.
Regular Savings Order on İşCep
The Regular Savings Order application, which was already available in İşbank branches and Internet Branch and allows the regular
transfer of money from demand deposit accounts to time deposit accounts on the maturity date of the time deposit account, is now
also available via İşCep channels as of 30.12.2021.
Redirecting to the My Receipts Page with the My Receipts Button Shown After Transactions (İşCep)
You can use this field to share a receipt at the end of a transaction.
Switch to Supplier Finance Application (Commercial Internet Branch)
Firms and their users with the Supplier Finance authorization can switch to the platform on tf.isbank.com.tr with a single session on
Commercial Internet Branch. This integration makes it possible for firms and their suppliers to create financing based on their invoice
transactions.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Projects to Improve Customer Experience
Payment Collection/Refund/Cancellation with QR Code
Updating Commercial Profile (İşCep)
Customers will be able to complete their shopping payments without using a physical card by scanning a QR Code generated in the
POS terminal during checkout. When the integration is completed, shopping refund - cancellation transactions will be possible using
the İşCep application to scan QR Codes generated by İşbank POS terminals.
E-mail Verification (İşCep Personal)
A function has been added that allows e-mail addresses with Unconfirmed and Branch-Confirmed status to be verified via İşCep.
Improvement of Experience on Instant Commercial Loan Screens
The Instant Commercial Loan Application function has been redesigned to improve the customer experience.
"Contact Us" Improvement
İşCep has been redesigned so that records of customer feedback provided via İşCep will be displayed as a screen from within İşCep.
IBAN Reading from FAST-Camera
On the Commercial İşCep app, commercial customers can update their firm and user e-mail address and mobile phone number and
view the firm's registered head office address.
Cash Flow (Commercial İşCep)
The Cash Flow screen on Commercial Internet Branch has also been added to Commercial İşCep. Thus, commercial customers can
now view their future-dated time deposit accounts, POS receivables, loan and e-invoice payments in daily and weekly views in the
cash flow table on this screen.
Use of HIZIR (İşCep)
The HIZIR feature, which allows customers to restructure their credit card debts, has been added to İşCep.
ÇekCepte (Çekmatik) Transaction (Commercial İşCep)
By scanning the QR code of a cheque, you can instantly learn whether a cheque discount credit can be borrowed in return for the
cheque.
During money transfers with IBAN, upon clicking the camera icon on the screen, the camera opens and allows the IBAN number to be
automatically detected and used from paper.
My Car (İşCep)
Direction to Issue "Üstü Kalsın" (Keep the Change) Order with Maxi from İşCep (Android)
Customers can now follow the directions to issue an order for the Üstü Kalsın (Keep the Change) service from Maxi.
Viewing İş Magazine from İşCep
İş Magazine has been added to İşCep's "Main Menu", viewable only by members of the Bank.
Addition of FX Rates Info Text on the Sign-in Screen
An artificial intelligence-controlled information text has been added to the İşCep sign-in screen which states "You can perform FX
transactions with special rates just for you".
Send Money/Request Money (Personal/Commercial)
The Request Money menu can now be used to create a QR Code for demand accounts by either entering or not entering an amount.
Money transfers up to TL 1,000 to both İşbank and other banks can be performed on a 24/7 basis.
Viewing Account Details on the Sign-in Screen (Personal)
You can set your favorite account details via the "My Account Details/Show" menu and display them on the İşCep sign-in screen
for 90 days without needing to enter your password. In order to ensure customer security, Sign-in Screen preferences can only be
changed via saved devices, and account details are shown only on one registered device.
Viewing Investment Account Statement (Personal)
You can now view your investment account statement via İşCep.
Addition of Search and Time Information in the Description Field of Account Statements (Personal/Commercial)
Time information has been added to the transactions of a selected account in İşCep. You can search for a transaction description by
using the detailed filtering field.
Anadolu Sigorta-Mobile Phone Insurance (Personal)
Mobile Phone Insurance has been added to the Insurance menu of İşCep. Customers who want to buy insurance can connect to the
Anadolu Sigorta application or browser and query transactions for their mobile phone.
Moneybox Fund Transactions
With İşCep, it is now possible for customers to open a Moneybox fund account on behalf of their children and buy/sell Moneybox
funds.
Unblocking MCC on Sign-in Screen (İşCep)
With the Security Operations menu added to the sign-in screen of İşCep, customers can remove mobile confirmation code
blocking, which is imposed following a change of SIM card/network provider, by scanning their ID card with NFC and verifying their
identification via facial recognition.
Transactions such as payments and insurance that customers can perform for their vehicles have been grouped under the My Car
menu.
My Home (İşCep)
Customers can now quickly access all banking services related to their homes from a single menu.
Private Pension AHE SSO (Internet Branch)
Customers can access Anadolu Hayat Emeklilik's website without entering any other details on Internet Branch.
Showing Account Details on the Sign-in Screen (Commercial İşCep)
The function, which was made available for use by personal customers with the previous version of İşCep, has also been introduced
to commercial customers with the new release of İşCep. The account details set as favorites in the İşCep "My Account Details/Show"
box can be displayed for 90 days without entering a password.
Logging into Digital Vault (İşCep)
Customers can quickly log into the Digital Vault from within İşCep without entering their password. Customers without a Digital Vault
account can easily register by simply approving contracts without entering their customer details.
Customers who do not have the Digital Vault app installed on their device will be redirected to the app stores to quickly download the
application.
Objection to Spending (Internet Branch)
Customers can now submit their objections to a spending, cash withdrawal or money transfer transaction done with their İşbank
credit cards and Bankamatik cards to the Bank via Internet Branch.
BTCTürk Payment (İşCep)
Customers can transfer money from İşCep to BTCTürk, a crypto market, on a 24/7 basis.
Private Pension for My Child and Life Insurances (İşCep)
With the "Private Pension for My Child" and "Life Insurances" (Comprehensive Life Insurance, Critical Disease Insurances) menus
added to İşCep, customers can connect to the AHE Mobile app or browser to instantly buy products.
Anadolu Sigorta - My Offers (İşCep)
With the "My Offers" menu added to the Insurance menu in İşCep, customers can connect to the Anadolu Sigorta application or
browser and instantly buy insurance policies.
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with the Regulation on Procurement of Support Services for Banks
- Support services received from Aras Kurye Servisi A.Ş. for delivery of card products to our customers’ addresses,
- Support services received from İnfoteks Bilgisayar Elektronik Telekom San. Tic. LTD. Şti. for maintenance of and running the
- Support services received from Aras Kurye Servisi A.Ş. for sending Banking Services Agreements to the addresses of applicants who
apply for "Anında Müşteri" and delivering the signed contracts to the Bank,
- Support services received from Atos Müşteri Hizmetleri A.Ş. for sales-oriented external calls,
- Support services received from ATP Ticari Bilgisayar Ağı ve Elektrik Güç Kaynakları Üretim ve Pazarlama Ticaret A.Ş. regarding the
transfer of right to use software and documents,
- Support services received from Austriacard Turkey Kart Operasyonları A.Ş. for production and customization of credit cards and
debit cards following purchase of credit card and debit card plastics,
- Support services received from Bilişim Bilgisayar Hizmetleri Ltd. Şti. for use of the payment application on Cash Registers,
- Support services received from Brink's Güvenlik Hizmetleri A.Ş. for international transportation,
- Support services received from CMC İletişim ve Çağrı Merkezi Hizmetleri A.Ş. aimed at calling customers and reminding them about
deferrals regarding retail loans and credit cards payments;
- Support services received from Comdata Teknoloji ve Müşteri Hizmetleri A.Ş. aimed at calling customers and reminding them about
deferrals regarding retail loans and credit cards payments;
- Support services received from Definex Danışmanlık A.Ş. for the development of credit process optimization software,
- Support services received from Definex Danışmanlık A.Ş. for the development of a project loans app, risk center queries and foreign
trade processes,
- Support services received from Edata Elektronik San ve Tic A.Ş. for maintenance of and running the Bank’s application on cash
Bank’s application on cash registers,
- Support services received from İş Net Elektronik Bilgi Üretim Dağıtım Ticaret ve İletişim Hizmetleri A.Ş. regarding provision
of required resources for the operation, management and maintenance of data processing application servers and server
operating systems, and the operation, management and maintenance of communication networks,
- Support services received from Karbil Yazılım ve Bilişim Teknolojileri Tic. A.Ş. for maintenance of and running the Bank’s
application on cash registers,
- Support services received from Key Yazılım Çözümleri A.Ş. regarding expertise software,
- Support services received from Konut Kredisi Com Tr Danışmanlık A.Ş. for marketing of consumer loans,
- Support services received from KKB Kredi Kayıt Bürosu A.Ş. regarding use of Anadolu Data Center hard disk space,
- Support services received from Kurye Net Motorlu Kuryecilik ve Dağıtım Hizmetleri A.Ş. for delivery of credit card products to
customer addresses,
- Support services received from Kurye Net Motorlu Kuryecilik ve Dağıtım Hizmetleri A.Ş. for delivery of OGS devices to our
customers via courier,
- Support services received from Loomis Güvenlik Hizmetleri A.Ş. for transporting cheques, promissory notes, other commercial
papers and documents,
- Support services received from Loomis Güvenlik Hizmetleri A.Ş. for transporting cash,
- Support services received from Loomis Güvenlik Hizmetleri A.Ş. for transporting cash abroad,
registers,
- Support services received from Loomis Güvenlik Hizmetleri A.Ş. for customer collection, transportation, processing and storage,
- Support services received from E-Kart Elektronik Kart Sistemleri San. Tic. A.Ş. for production and customization of credit cards and
- Support services received from Obase Bilgisayar Danışmanlık Hizmetleri Ticaret San. A.Ş. for outsourcing data analytic activities,
debit cards following purchase of credit card and debit card plastics,
- Support services received from Enuygun Com İnternet Bilgi Hizmetleri Teknoloji ve Ticaret A.Ş. for marketing of consumer loans,
- Support services received from Payten Teknoloji A.Ş. regarding secure e-payment infrastructure for electronic commerce,
- Support services received from Plastik Kart Akıllı kart İletişim Sistemleri San. ve Tic. A.Ş. for production and customization of
- Support services received from Erişim Müşteri Hizmetleri A.Ş. to meet the demands of customers using the telephone branch;
credit cards and debit cards following the purchase of credit card and debit card plastics,
- Support services received from Hangisi İnternet ve Bilgi Hizmetleri A.Ş. for marketing of consumer loans,
- Support services received from Postkom Basım ve Posta İletişim Hizmetleri A.Ş. for printing and/or enveloping bank statements
- Support services received from Hobim Digital Elektronik Hizmetler A.Ş. for printing and/or enveloping bank statements of the credit
of credit cards and contracted merchants, and other documents such as letters and notices,
cards and contracted merchants, and other documents such as letters and notices,
- Support services received from Mikrosaray Mikrobilgisayar Paz. ve Tic. A.Ş. for directing customers to the Bank’s branches to
- Support services received from Hugin Yazılım Teknolojileri San. ve Tic. A.Ş. for maintenance of and running the Bank’s application on
cash registers,
- Support services received from IBM Global Services İş ve Teknoloji Hizmetleri ve Ticaret Ltd. Şti. for system backup of the Disaster
upload the Bank's application to cash registers,
- Support services received from Mikrosaray Mikrobilgisayar Paz. ve Tic. A.Ş. for maintenance of and running the Bank’s
application on cash registers,
Recovery Center located in İzmir,
- Support services received from MT Bilgi Teknoloji Dış Ticaret A.Ş for maintenance of and running the Bank’s application on cash
- Support services received from Iron Mountain Arşivleme Hizmetleri A.Ş. regarding physical archive services,
- Support services received from Iron Mountain Arşivleme Hizmetleri A.Ş. for opening archive boxes, scanning of contracts and
uploading them into the Bank's system by firm personnel, in addition to physical archive services,
- Support services received from Ingenico Ödeme Sistem Çözümleri A.Ş. for maintenance of and running the Bank’s application on
cash registers,
- Support services received from Innova Bilişim Çözümleri A.Ş. regarding the use of virtual POS,
- Support services received from Infina Yazılım A.Ş. regarding purchasing, installation, and maintenance of software and support
services to be rendered throughout the term of the contract,
registers,
- Support services received from Panaroma Bilişim Teknolojileri San. ve Tic. A.Ş. for maintenance of and running the Bank’s
application on cash registers,
- Support services received from R2 Servis Elektrik, Elektronik ve Bilgisayar Teknolojileri San. ve Tic. A.Ş. for maintenance of and
running the Bank’s application on cash registers,
- Support services received from Softtech Yazılım Teknolojileri Araştırma Geliştirme ve Pazarlama Tic. A.Ş. for information
systems management, information systems infrastructure support, software development, project development, business
analysis, systems analysis, project and product consulting, and technical support,
- Support services received from Softtech Yazılım Teknolojileri Araştırma Geliştirme ve Pazarlama Tic. A.Ş. for digitalization of
financial analysis processes,
- Support services received from Token Finansal Teknolojiler A.Ş. for maintenance of and running the Bank’s application on cash
registers.
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Duties İşbank Board of Directors’ members perform outside the Bank
• I am capable of dedicating sufficient time to be able to observe the Bank’s activities and to fulfill the requirements of the duties I
Name-Surname
Position in Bank
Duties outside the bank
Adnan Bali
Chairperson
Chairperson of Türkiye Sınai Kalkınma Bankası A.Ş., Chairperson
of Türkiye İş Bankası A.Ş. Members Supplementary Pension Fund,
Chairperson of the Board of Softtech Ventures Teknoloji A.Ş.,
Member of the High Advisory Board of Darüşşafaka Society
Yusuf Ziya Toprak
Vice Chairperson
Hakan Aran
Member of the Board
None
None
Feray Demir
Member of the Board
Member of the Board of Türkiye İş Bankası A.Ş. Members
Supplementary Pension Fund
Ersin Önder Çiftçioğlu
Member of the Board
Fazlı Bulut
Durmuş Öztek
Member of the Board
Member of the Board
None
None
None
Recep Hakan Özyıldız
Member of the Board
Atatürk University Faculty of Political Sciences Part-Time
Instructor
Mustafa Rıdvan Selçuk
Member of the Board
Independent Auditor of BDD Bağımsız Denetim ve Danışmanlık
A.Ş., Partner of Girişim YMM Ltd. Şti.
Ahmet Gökhan Sungur
Member of the Board
Sadrettin Yurtsever
Member of the Board
None
None
Independence declaration of Mr. Ahmet Gökhan Sungur who is an Independent Member of the Board
Mr. Ahmet Gökhan Sungur was nominated as Independent Member of the Board to the Corporate Governance Committee that
performs the tasks of the Nomination Committee and Corporate Governance Committee’s “Evaluation Report of Independent
Member Nominee” dated 29.01.2020 was submitted to the Board on 30.01.2020. Independence declaration of Mr. Ahmet Gökhan
Sungur who was elected as an Independent Member of the Board at the Ordinary General Meeting dated 31.03.2020 is quoted
below:
“As per the requirements of the legislation, Corporate Governance Principles of Capital Markets Board and the Articles of
Incorporation of İşbank, due to my nomination as an “independent member” to the Board of Directors of İşbank, I hereby declare to
the committee, İşbank shareholders and all the related parties that;
• Within the last five years, no executive employment relation that would give important duties and responsibilities has been
established between myself, my spouse, my second degree relatives by blood or by marriage and (i) İşbank and (ii) the subsidiaries
of İşbank, and (iii) shareholders who control the management of İşbank or who have significant influence in İşbank and juridical
persons controlled by these shareholders; and that I neither possess more than 5% of any and all capital or voting rights or
privileged shares nor have significant commercial relations,
• • Within the last five years, I have not worked as an executive manager who would have important duties and responsibilities or
have not been a member of the Board of Directors or been a shareholder (more than 5%) particularly in the companies that provide
auditing, rating and consulting services for the Bank (including tax audit, legal audit, internal audit), and in the companies that the
Bank purchase products and services from or sells products and services to within the framework of the agreements signed during
the timeframe of selling/ purchasing of the products and services,
• I possess the vocational education, knowledge and experience necessary to fulfill the duties I will assume in connection with being
an independent board member,
• I am not working fulltime in public institutions and organizations,
• I am considered as a resident in Turkey according to the Income Tax Law (n.193) dated 31/12/1960,
• I have high ethical standards, goodwill and experience necessary to contribute to İşbank’s activities, Maintaining my objectivity in
conflicts of interest between İşbank and its shareholders and deciding independently by taking into account the rights of stakeholders,
undertake,
• I have not been a member of the Board of Directors of İşbank for more than 6 years in total within the last decade,
• I have not been an independent member of the Board of Directors in more than three of the companies controlled by İşbank or by
the shareholders who control the
• management of İşbank and in more than five of the publicly traded companies in total,
• I have not been registered and announced on behalf of the juridical person elected as member of the Board of Directors,
• I still have all the qualifications as per the Corporate Governance Principles to be an independent member and I will protect all
these conditions during the duty term in case of being appointed as independent member. I will inform Board of Directors of
İşbank and the Capital Markets Board (simultaneously) about the situation in writing including its reasons in case of losing my
independency. And thus, I am independent.”
Remuneration
• In accordance with the General Assembly decision taken on 31.03.2021, a net allocation of TL 41,300 is paid to the members of
the Board of Directors on an individual basis every month. Benefits paid to key management personnel in 2021 amount to TL
43,379 thousands. Moreover, cost of allowance, travel, accommodation, representation, as well as the opportunities in cash and in
kind, insurance and similar guarantees for key management personnel in the same year amount to TL 13,204 thousands.
Dividend Payments:
* İşbank’s dividend payment policy is set out in detail in article 58 of the Bank’s articles of incorporation. Information about the policy
is provided in this annual report. The said information is also available on the Bank’s corporate website under the title of Investor
Relations, in Turkish and English.
Company Share Information:
İşbank’s Group A, Group B shares are listed on the Main Market with the symbols of ISATR and ISBTR; İşbank’s Group C shares
are listed on the Stars Market with the symbol of ISCTR. İşbank’s Group C shares are traded on London Stock Exchange as Global
Depositary Receipts, being subject to “Regulation S”; they are also traded on over-the-counter markets in the USA as American
Depositary Receipts, being subject to “Rule 144A”.
Changes in the Organizational Structure
– As a result of the restructuring of the voice communication organization, the name of the Digital Banking Operations
Division was updated as the Customer Relations Division and its activities were rearranged.
– The name of the Retail Loan and Card Operations Division was updated as the Payment Systems Operations Division and its
activities were rearranged.
– The functions of the Internal Operations Division were transferred to other departments and its activities were terminated.
– As of 27.01.2022, the Information Security Coordinatorship was transformed into the Information Security Division and it
became affiliated to the newly created Deputy Chief Executive position together with the Internal Systems Divisions.
Other Issues
• No custom audits were carried out at İşbank within the scope of Articles 207, 438 and 439 of the Turkish Commercial Code in
2021. Our bank is subject to public auditing, especially public institutions such as BRSA, CMB, Competition Board, Central Bank.
If there is a situation that needs to be disclosed to the public regarding the audits of the aforementioned public institutions in our
Bank, they are disclosed via KAP platform.
• Mr. Adnan Bali, Chairman of the Board of Directors has a duty as the Chairman of the Board of Türkiye Sınai ve Kalkınma Bankası
A.Ş. (TSKB), a subsidiary of İşbank, within the framework of the consent regarding the prohibition to trade with and compete
against the company based on related regulations of Turkish Commercial Code.
• Companies within the İşbank group do not have any shares in the Bank's capital.
• In our Bank's Board Meeting dated 25.02.2022, it has been resolved that our Bank's paid in capital shall be increased from TL
4,500,000,000 to TL 10,000,000,000 within the registered capital ceiling of TL 10,000,000,000, the increase shall be fully funded
from extraordinary reserves and shall be distributed to our shareholders as bonus shares, the Head Office shall be authorized to
apply to the relevant authorities and fulfill necessary processes and take all actions for the capital increase.
• The actions required with respect to the decisions made at Ordinary General Shareholders’ Meeting of 2021 were performed.
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Fundings Obtained from International Financial Institutions (as of 31.12.2021)
All financial services provided to companies within İşbank’s Risk Group are provided on an arm’s length basis, subject to the same
procedures and policies applicable to third parties. Credit lines and other lending transactions allocated to companies within İşbank’s
Risk Group are analyzed and monitored to ensure that such transactions are within regulatory limits. In 2021, the loans extended to
Group companies were all below the regulatory risk limits.
Corporate Memberships
Domestic Memberships
International Memberships
The Research Institute of Banking and Commercial Law
Blockchain Turkey (BCTR)
Turkish Marine Environment Protection Association
(TURMEPA)
European Financial Management & Marketing Association
(EFMA)
EFMA Affluent & Private Banking Council
EFMA Digital Channels Council
Foreign Economic Relations Board of Turkey (DEİK)
EFMA Insurance Council
DEİK Turkey - Iraq Business Council
EFMA Operational Excellence Council
ERTA
Elginkan Community
EFMA Physical Channels Council
EFMA SME Council
Financial Innovation and Technology Association
European Association of Communication Directors (EACD)
Global Relations Forum
İstanbul Foundation for Culture and Arts (İKSV)
Association of Corporate Communicators (KİD)
National Education Foundation
The Advertisers Association
The Banks Association of Turkey (BAT)
Turkish Informatics Foundation
Economic and Social History Foundation of Turkey
(History Foundation)
Vehbi Koç Foundation
Artificial Intelligence and Technology Association
European Association for Banking and Financial History
(EABH)
Institut International d’Etudes Bancaires (IIEB)
International Chamber of Commerce (ICC) Turkey National
Committee - The Commission on Banking Techniques and
Practices
Mobile Marketing Association - MMA Turkey
The Institute of International Finance (IIF)
UN Global Compact Network Turkey
European Bank for
Reconstruction and
Development (EBRD)
United Nations Environment Program Finance Initiative
(UNEP-FI)
PROPARCO
International Financial
Institution
Date of
Signature
Loan Amount
Maturity
(years)
Purpose of Extending Loans
13.04.2009
€ 250,000,000
9.12.2011
€ 150,000,000
28.06.2012(1)
€ 75,000,000
12
10
12
4.12.2013
€ 150,000,000
8
European Investment
Bank (EIB)
9.05.2014
€ 200,000,000
10
Financing SMEs
Financing SMEs
Financing of energy efficiency and renewable energy
projects as part of the MidSEFF Program
Financing of SMEs and enterprises with 250 to 3,000
employees
Financing the loans to be extended to residential
buildings that fall under the scope of Law No. 6306
and conform to the EIB criteria in order to improve
earthquake safety and energy efficiency in residential
buildings
Financing of SMEs and enterprises with 250 to 3,000
employees
Financing of energy efficiency and renewable energy
projects as part of the MidSEFF Program
Financing of SMEs and enterprises with 250 to 3,000
employees
Financing of energy efficiency projects as part of the
TurSEFF Program
Financing of energy efficiency and renewable energy
projects as part of the MidSEFF Program
Financing of energy efficiency and renewable energy
projects as part of the MidSEFF Program
Financing of energy efficiency in residences as part of
the TurEEFF Program
Financing of energy efficiency and renewable energy
projects as part of the MidSEFF Program
Financing of renewable energy and resource efficiency
investments as part of the TurSEFF Program
Financing of renewable energy and energy efficiency
projects
Financing of loans extended to residential buildings
conforming to domestic energy efficiency criteria in Turkey
Financing agriculture and the energy and resource
efficiency activities of small and medium-sized
companies operating in the agricultural sectors
30.10.2015(1)
$221,200,000
10
$111,200,000
13
01.12.2016(1)
$47,600,000
27.10.2011
$6,660,000
10
15
28.06.2012(1)
€ 50,000,000
12
18.12.2013(1)
€ 50,000,000
30.03.2015(1)
$ 60,000,000
$15,000,000
21.10.2016(1)
$55,000,000
12
7
15
12
06.12.2017(1)
$55,000,000
7
9.12.2010
€ 50,000,000
1.03.2013
€ 50,000,000
12
10
30.06.2020
€ 25,000,000
10
OPIC
IFC
10.12.2014(1)
$220,000,000
14
Financing of SMEs, prioritized regions in development
and women entrepreneurs
$105,000,000
Financing of housing loans, especially green mortgages
conforming to IFC energy efficiency criteria
28.12.2017(1)
9
$20,000,000
Provided by the Clean Technology Fund ("CTF") through
IFC for use in financing green mortgage loans ensuring
energy efficiency.
(1) Funding obtained through the transactions made within the scope of the diversified payment rights program.
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Financial Highlights and Key Ratios for the Five-Year Period
CONSOLIDATED
ASSETS (TL thousand)
2017/12*
2018/12
2019/12
2020/12
2021/12
Cash and Equivalents
Banks and Receivables from Interbank Money
Markets (1)
Securities (Net) (2)
3,395,184
4,931,787
5,700,435
9,504,086
15,230,787
44,638,342
51,202,701
70,109,172
87,017,464
206,978,744
66,218,177
77,942,727
97,304,703
128,082,066
173,820,212
Loans,Factoring Receivables and
Lease Receivables (3)
Associates and Subsidiaries (Net)
Fixed Assets (Net)
Other Assets (4)
Total Assets
275,721,584
303,495,889
316,028,505
403,934,870
590,297,628
7,387,455
9,418,560
11,190,991
13,052,096
21,918,409
10,342,126
11,975,301
13,826,688
14,706,181
19,101,836
30,054,547
40,940,392
50,891,344
61,855,500
97,056,457
437,757,415
499,907,357
565,051,838
718,152,263
1,124,404,073
LIABILITIES (TL thousand)
2017/12*
2018/12
2019/12
31.12.2020
2021/12
Deposits
Funds Borrowed and Interbank Money Market
Placements (5)
Provisions (6)
Other Liabilities
Shareholders’ Equity
Total Liabilities
207,880,492
248,981,402
302,791,204
381,693,393
617,679,203
130,496,873
137,945,969
130,065,019
167,635,067
272,909,829
17,044,695
15,161,685
17,860,585
24,027,066
35,609,317
34,210,740
42,203,408
48,633,563
69,935,017
102,037,545
48,124,615
55,614,893
65,701,467
74,861,720
96,168,179
CONSOLIDATED
KEY RATIOS
NPL Ratio
Coverage Ratio
Demand Deposits / Total Deposits
Shareholders’ Equity / Total Liabilities
Capital Adequacy Standard Ratio
Return on Average Assets (12)
Return on Average Equity (12)
Cost / Income (13)
2017/12*
2018/12
2019/12
31.12.2020
2021/12
2.12%
84.1%
26.3%
11.0%
15.2%
1.7%
14.9%
42.2%
4.06%
56.5%
24.8%
11.1%
15.3%
1.6%
14.8%
35.9%
6.4%
53.5%
28.4%
11.6%
16.4%
1.3%
11.8%
39.8%
5.6%
62.1%
41.2%
10.4%
17.0%
1.2%
11.2%
36.0%
4.1%
65.0%
47.3%
8.6%
18.7%
1.8%
19.2%
34.5%
OTHER INFORMATION (TL thousand)
2017/12*
2018/12
2019/12
31.12.2020
2021/12
Regulatory Capital
Core Capital
Free Capital (14)
Demand Deposits
54,979,844
64,189,820
75,055,619
90,577,700
125,734,035
45,054,873
51,413,549
60,581,141
69,037,761
93,801,462
29,638,672
28,971,576
31,093,535
38,572,660
46,881,642
54,724,559
61,655,721
86,043,036
157,339,437
291,867,150
(*) Accounting policy changes made in 2017 and 2018 were applied retrospectively; accordingly, the financial statements of 2017 was
restated.
437,757,415
499,907,357
565,051,838
718,152,263
1,124,404,073
- The financial statements of the year 2017 were restated due to the change in the valuation policy of associates and subsidiaries.
INCOME STATEMENT (TL thousand)
2017/12*
2018/12
2019/12
2020/12
2021/12
(1) Includes balances at the Central Bank and required reserves.
Interest Income (7)
Interest Expenses (7)
Net Interest Income
Net Trading Income
31,108,967
44,078,656
48,453,830
47,960,977
69,449,187
16,277,297
24,492,384
25,654,752
18,898,262
32,530,364
14,831,670
19,586,272
22,799,078
29,062,715
36,918,823
-946,253
-2,293,686
-4,633,920
-1,206,769
703,452
Net Fees and Commissions Income
2,733,423
3,756,035
4,611,770
4,919,413
6,691,855
(2) 2019/12, 2020/12 and 2021/12 balances do not include the loan granted to the special purpose entity, which is classified under Other
Financial Assets at Fair Value Through Profit and Loss.
(3) Excludes Non-performing Loans. 2018/12 period includes the loan granted to the special purpose entity, which is classified under Other
Financial Assets at Fair Value Through Profit and Loss.
(4) Includes general provisions after 2017/12 period, and includes the loan granted to the special purpose entity, which is classified under
Other Financial Assets at Fair Value Through Profit and Loss in 2019/12, 2020/12 and 2021/12 periods.
Dividend Income
Other Operating Income
Total Operating Income
Operating Expenses (8)
18,258
19,655
20,819
31,057
68,548
(5) Includes Turkish Lira and foreign currency securities issued and subordinated debts.
6,765,642
8,120,963
10,942,888
11,733,929
16,883,690
23,402,740
29,189,239
33,740,635
44,540,345
61,266,368
12,862,111
14,656,126
17,512,911
21,179,158
30,381,409
(6) Due to the change in accounting policy, general provisions are not classified in this item after 2017/12 period.
(7) Fees and Commissions Received from Cash Loans are shown in Interest Income, Fees and Commissions Given to Cash Loans are shown in
Interest Expenses.
NET OPERATING PROFIT/LOSS (9)
10,540,629
14,533,113
16,227,724
23,361,187
30,884,959
Provision for Losses on Loans and Other Receivables (10) 3,016,417
7,012,853
9,236,283
14,150,040
16,810,490
Profit/Loss from subsidiaries Based on Equity Method
842,068
1,569,036
1,462,479
1,455,956
4,874,850
PROFIT/(LOSS) BEFORE TAXES
8,366,280
9,089,296
8,453,920
10,667,103
18,949,319
Provision for Taxes
NET PERIOD PROFIT/(LOSS
KEY RATIOS
1,660,614
1,517,912
1,422,289
2,915,351
3,389,061
6,705,666
7,571,384
7,031,631
7,751,752
15,560,258
2017/12*
2018/12
2019/12
31.12.2020
2021/12
Interest Earning Assets (11) / Total Assets
88.2%
Interest Earning Assets (11) / Interest Bearing Liabilities 114.1%
Securities / Total Assets
Loans / Total Assets
Loans / Deposits
Retail Loans / Total Loans
15.1%
61.0%
128.5%
21.4%
86.4%
111.7%
15.6%
59.1%
118.6%
19.8%
85.8%
112.0%
17.2%
54.5%
101.6%
20.8%
86.2%
112.7%
17.8%
54.6%
102.7%
22.1%
86.2%
108.9%
15.5%
50.9%
92.6%
19.3%
(8) Includes Personnel Expenses.
(9) Net Operating Profit / Loss = Total Operating Income - Operating Expenses
(10) Named as “Provision for Losses on Loans and Other Receivables” prior to the 2018/12 period.
(11) Interest Earning Assets include Turkish Lira and foreign currency required reserves.
(12) Averages are calculated by using restated year-end figures for 2017/12 period and by using quarterly balances for the other periods.
(13) Cost and income are netted aganist “Insurance Technical Income / Expense”. Operating Income = Total Operating Income + Profit/Loss
from Subsidiaries Based on Equity Method.
(14) Free Capital = Shareholders’ Equity - (Fixed Assets + Non-Financial Associates and Subsidiaries + Net Non-performing Loans)
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Financial Highlights and Key Ratios for the Five-Year Period
UNCONSOLIDATED
ASSETS (TL thousand)
Cash and Equivalents
Banks and Receivables from Interbank Money
Markets (1)
Securities (Net) (2)
Loans (3)
2017/12*
2018/12
2019/12
2020/12
2021/12
3,363,250
4,888,627
5,661,559
9,463,666
15,170,894
35,060,422
43,630,394
60,525,991
77,492,256
190,881,628
57,351,543
68,133,659
84,246,760
109,485,041
142,653,302
239,408,795
260,316,291
270,360,084
345,150,130
493,378,191
Associates and Subsidiaries (Net)
13,802,243
17,638,720
21,070,554
26,002,383
39,461,345
Fixed Assets (Net)
Other Assets (4)
Total Assets
5,162,561
5,996,958
8,478,257
9,161,214
11,277,602
8,094,719
15,782,955
17,716,266
17,147,742
33,746,062
362,243,533
416,387,604
468,059,471
593,902,432
926,569,024
LIABILITIES (TL thousand)
2017/12*
2018/12
2019/12
2020/12
2021/12
Deposits
Funds Borrowed and Interbank Money Market
Placements (5)
Provisions (6)
Other Liabilities
Shareholders’ Equity
Total Liabilities
203,752,032
245,268,846
295,922,002
368,876,491
595,628,376
92,457,257
94,468,343
86,102,534
116,407,089
181,993,730
8,808,734
6,256,462
7,042,357
10,224,590
15,487,318
14,241,243
20,673,329
20,119,113
30,612,810
46,620,309
42,984,267
49,720,624
58,873,465
67,781,452
86,839,291
UNCONSOLIDATED
KEY RATIOS
Coverage Ratio
Demand Deposits / Total Deposits
Shareholders’ Equity / Total Liabilities
Capital Adequacy Standard Ratio
Return on Average Assets (12)
Return on Average Equity (12)
Cost / Income (13)
2017/12*
2018/12
2019/12
2020/12
2021/12
86.0%
26.3%
11.9%
16.7%
1.8%
15.4%
42.3%
58.7%
24.4%
11.9%
16.5%
1.7%
14.8%
36.4%
54.7%
28.4%
12.6%
17.9%
1.4%
11.4%
39.2%
63.7%
41.7%
11.4%
18.7%
1.3%
10.9%
35.3%
66.2%
47.9%
9.4%
20.4%
1.9%
18.4%
34.7%
OTHER INFORMATION (TL thousand)
2017/12*
2018/12
2019/12
2020/12
2021/12
Regulatory Capital
Core Capital
Free Capital (14)
Demand Deposits
50,559,960
58,950,530
69,198,849
84,540,460
116,325,684
42,474,633
49,052,634
57,971,231
66,666,192
90,161,889
29,874,011
29,896,338
30,903,681
38,469,439
46,673,837
53,501,377
59,961,577
84,040,178
153,998,446
285,308,452
(*) Changes in accounting policy were applied retrospectively; accordingly, the financial statements of the year 2017 were restated due to the
changes in the valuation methodology of associates and subsidiaries.
362,243,533
416,387,604
468,059,471
593,902,432
926,569,024
(1) Includes balances at the Central Bank and required reserves.
INCOME STATEMENT (TL thousand)
2017/12*
2018/12
2019/12
2020/12
2021/12
Interest Income (7)
Interest Expenses (7)
Net Interest Income
Net Trading Income
27,655,465
38,840,381
43,042,350
42,516,332
60,904,343
14,447,809
21,788,130
23,183,222
17,274,293
29,963,074
13,207,656
17,052,251
19,859,128
25,242,039
30,941,269
-1,878,444
-4,071,660
-6,397,400
-3,341,357
-5,149,127
(2) 2019/12, 2020/12 and 2021/12 balances do not include the loan granted to the special purpose entity, which is classified under Other
Financial Assets at Fair Value Through Profit and Loss.
(3) Excludes Non-performing Loans. 2018/12 period includes the loan granted to the special purpose entity, which is classified under Other
Financial Assets at Fair Value Through Profit and Loss.
(4) Includes general provisions after 2017/12 period, and includes the loan granted to the special purpose entity, which is classified under
Other Financial Assets at Fair Value Through Profit and Loss in 2019/12, 2020/12 and 2021/12 periods.
Net Fees and Commissions Income
3,373,715
4,405,201
5.569.128
5,617,613
7,619,945
(5) Includes Turkish Lira and foreign currency securities issued and subordinated debts.
Dividend Income
Other Operating Income
Total Operating Income
Operating Expenses (8)
11,072
6,425
9,098
21,487
20,735
1,146,647
1,912,307
3,146,751
2,436,205
4,401,570
15,860,646
19,304,524
22,186.705
29,975,987
37,834,392
7,395,787
8,039,721
9,792,544
11,796,986
15,911,689
NET OPERATING PROFIT/LOSS (9)
8,464,859
11,264,803
12,394,161
18,179,001
21,922,703
Provision for Losses on Loans and Other Receivables (10)
2,633,246
6,343,674
8,325,906
12,729,920
14,450,167
Profit/Loss from subsidiaries Based on Equity Method
1,610,386
2,808,736
2,806,196
3,406,471
8,003,345
PROFIT/(LOSS) BEFORE TAXES
7,441,999
7,729,865
6,874,451
8,855,552
15,475,881
Provision for Taxes
NET PERIOD PROFIT/(LOSS
KEY RATIOS
Interest Earning Assets (11) / Total Assets
Interest Earning Assets (11) / Interest Bearing Liabilities
Securities / Total Assets
Loans / Total Assets
Loans / Deposits
Retail Loans / Total Loans
NPL Ratio
1,240,720
960,780
806,864
2,044,635
2,007,986
6,201,279
6,769,085
6,067,587
6,810,917
13,467,895
2017/12*
2018/12
2019/12
2020/12
2021/12
91.5%
111.9%
15.8%
66.1%
117.5%
23.8%
2.2%
89.3%
109.4%
16.4%
62.5%
106.1%
22.4%
4.1%
89.0%
109.0%
18.0%
57.8%
91.4%
23.6%
6.5%
89.8%
109.9%
18.4%
58.1%
93.6%
25.0%
5.6%
89.3%
106.4%
15.4%
53.2%
82.8%
22.2%
4.1%
(6) Due to the change in accounting policy, general provisions are not classified in this item after 2017/12 period.
(7) Fees and Commissions Received from Cash Loans are shown in Interest Income, Fees and Commissions Given to Cash Loans are shown in
Interest Expenses.
(8) Includes Personnel Expenses.
(9) Net Operating Profit / Loss = Total Operating Income - Operating Expenses
(10) Named as “Provision for Losses on Loans and Other Receivables” prior to the 2018/12 period.
(11) Interest Earning Assets include Turkish Lira and foreign currency required reserves.
(12) Averages are calculated by using restated year-end figures for 2017/12 period and by using quarterly balances for the other periods.
(13) Operating Income = Total Operating Income + Profit/Loss from Subsidiaries Based on Equity Method
(14) Free Capital = Shareholders’ Equity - (Fixed Assets + Non-Financial Associates and Subsidiaries + Net Non-performing Loans)
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Awards Granted in 2021
Credit Ratings Assigned by Rating Agencies to the Bank and Related Explanations:
Rating
Outlook (*)
MOODY’S
Long-term Foreign Currency Deposit
Long-term Local Currency Deposit
Long-term Foreign Currency Senior Debt
Short-term Foreign Currency Deposit
Short-term Local Currency Deposit
FITCH RATINGS
Long-term Foreign Currency Issuer Default Rating
Long-term Local Currency Issuer Default Rating
Short-term Foreign Currency Issuer Default Rating
Short-term Local Currency Issuer Default Rating
National Long-term Rating
Viability Rating
Government Support Rating
STANDARD & POOR'S
Long-term Counterparty Credit Rating
Short-term Counterparty Credit Rating
Long-term National Scale Rating
Long-term Local Currency Issuer Default Rating
B3
B3
B3
NP
NP
B+
B+
B
B
Negative
Negative
Negative
-
-
Negative
Negative
-
-
A+ (tur)
Stable
b+
b-
B+
B
trA+
trA-1
-
-
Negative
-
-
-
The dates when the Bank's credit ratings/outlooks were last updated are given below:
Moody's 10.12.2020, Fitch Ratings: 10.12.2021, Standard & Poor's: 15.12.2021
(*) Outlook:
“Stable” indicates that the current rating will not be changed in the short term; “positive” indicates that the current rating is very
likely to be upgraded and “negative” indicates that the current rating is very likely to be downgraded.
Latest information about credit ratings of
İşbank from rating agencies can be found
here.
Award Name
MarTech
MarTech
MarTech
Social Media Awards / Banks Category
Social Media Awards / Social CRM
Social Media Awards / Mobile App
Social Media Awards / Credit Cards Category
Social Media Awards / Venue and Event Category
Social Media Awards / Online Banking Category
Altın Örümcek / Mobile App Banking & Finance
Altın Örümcek / Mobile App Banking & Finance
Altın Örümcek / Most Accessible Mobile App
Altın Örümcek / Banking & Finance
Altın Örümcek / Banking & Finance
Altın Pusula
Awarded Project
Award
Maxi Covid-19 Integration
Best chatbot technology
Dataroid Digital Analytics
Platform
Best data usage
İmeceMobil
İşbank
Click to WhatsApp - Maxi
Digital Vault
Maximum
İşCep
İş Sanat
İşCep
İşCep
İşCep
Maximum Youth
Maximum Youth
Digital Anatolia
Best Use of Technology in
Direct Marketing
Silver
Bronze
Bronze
Gold
Gold
Silver
People's Favorite
Jury 1st place
1st place
Jury 3rd place
People's Favorite
Award in Non-Governmental
Organizations Category
Stevie Int. Business Awards / Achievement in Product Innovation
Digital Vault
Stevie Int. Business Awards / Achievement in Product Innovation
İşCep Market
Silver
Silver
Stevie Int. Business Awards / Most Valuable Corporate Response Maxi Covid-19 Integration
Bronze
Stevie Int. Business Awards / Consumer Services
Stevie Int. Business Awards / Financial Services
Stevie Int. Business Awards / Branded Utility of the Year
Stevie Int. Business Awards / AI - Machine Learning Solution
Digital Vault
İşCep PFM
MOI
Maxi
Stevie Int. Business Awards / Marketing Campaign of the Year -
Financial Products & Services
Maximum Youth
Silver
Bronze
Silver
Silver
Bronze
Global Finance World's Best Digital Bank Awards
Best Open Banking API's
Best Open Banking API's
Sardis Awards
Sardis Awards
Sardis Awards
Sardis Awards
İş Asset Management
Women Equity Fund
İşbank
İşbank
İşbank
Sardis Grand Prize
Most Innovative Organization
of the Year
Organization with the Most
Innovative Use of Finance
Technologies of the Year
Most Responsible
Organization of the Year
Sardis Awards / Customer Experience and Engagement
Dataroid Digital Analytics
Platform
Golden Sardis
Sardis Awards / Customer Experience and Engagement
Maxi - Call Center Integration
Silver Sardis
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Awards Granted in 2021
Sardis Awards / Use of Data
Dataroid Digital Analytics Platform
Golden Sardis
MMA Smarties / Gender Equality in Advertising (EMEA)
Award Name
Awarded Project
Award
PSM Awards/Innovation - Innovative Customer Engagement and
Experience
Dataroid Digital Analytics and
Action Platform
Golden PSM
MMA Smarties / Gender Equality in Advertising (Turkey)
İş Asset Management
Women Equity Fund
İş Asset Management
Women Equity Fund
Silver
Bronze
Silver
MMA Smarties / Social Messaging / Chat Apps / Text Messaging
(EMEA)
Maxi-Click to WhatsApp
Reklam Modeli
Brandon Hall 2021 Human Capital Management Excellence
Awards "Best Advance in Competencies and Skill Development"
and "Best Results of a Learning Program"
Foreign Trade Development
Program
Golden Award
Brandon Hall 2021 Human Capital Management Excellence
Awards “Best Most Unique orand Innovative Sales Training
Program"
Commercial Banking Direct
Mobile Sales Development
Program
Golden Award
Award Name
Sardis Awards / Innovative Acceleration and Incubation
Programs
Awarded Project
Workup
Award
Golden Sardis
Sardis Awards / Use of Artificial Intelligence
Instant Loan Allocation Processes
Golden Sardis
Sardis Awards / Use of Artificial Intelligence
Maxi
Silver Sardis
Sardis Awards / Other Uses of Innovative Technology
İmeceMobil
Sardis Awards / Best Mobile App
İşCep
Golden Sardis
Silver Sardis
Sardis Awards / Environmental Social Responsibility
Environmentally Friendly Cards
Silver Sardis
Sardis Awards / Environmental Social Responsibility
Geleceğe Orman (Forest for the Future) Golden Sardis
Sardis Awards / Gender Equality
Sardis Awards / Social Innovation
Sardis Awards / Sponsorship
Smarties X
İş Asset Management Women
Equity Fund
Geleceğe Orman (Forest for the
Future)
Our 15th Year of Support for Chess
Click to WhatsApp - Maxi
Fast Company Startup Friendly Companies
Fast Company Corporate Entrepreneurship
İşbank
İmeceMobil
Fast Company Magazine 2021 Customer Experience Survey
İşbank
World Finance Awards
İşCep
Golden Sardis
Silver Sardis
Golden Sardis
Bronze
1st place
Best Internal Entrepreneurship
Award
Banks Category - 1st place
Digital Banking - Best Mobile
Banking App
Sardis Awards / Environmental Social Responsibility
Felis Awards / Financial Services
Felis Awards / Pandemic-Specific Innovative Ideas
Felis Awards / Financial Services
Effie
Effie
Maximum TEMA Card and
Doğasever (Nature Lover) MaxiPara
Card
Dünyanın Kapıları (Gates of the
World)
Happy ending! Quarantine is over,
Movie theaters are open
Silver
Success Award
Success Award
20th Year İşte Benim Maximum’um
(Here’s My Maximum)
Felis Award
Maximum Youth Cards
Alternative Payment Systems and
Loyalty Programs
Bronze
Bronze
The Banker Magazine Digital Banking Award Program
Tekpos
Award in Open Banking
Category
Efma-Accenture Awards
Pay by Link
Award in Innovation Category
Female Friendly Brands Platform
Women Entrepreneurship Program
Awareness
Payment System Magazine PSM Awards
Payment System Magazine PSM Awards / Influencer
Communication / Best Promotional Marketing Success
Felis / Transformative Marketing Impact / Positive Social Impact
Environmental
Tekpos
Instant POS
Most Innovative Product
Golden Award
Geleceğe Orman (Forest for the Future) Success Award
Boğaziçi Environmental Awards
Geleceğe Orman (Forest for the Future)
Most Environmentally Friendly
Mobile App
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Direct and Indirect Subsidiaries (*)
2020
2021
The Bank's environmental footprint
The Bank's environmental footprint
Change
The issue’s level
of severity changed
Employee rights and satisfaction
Employee rights and satisfaction
Unchanged
Responsible financing integrating ESG criteria
Responsible financing and investment
integrating ESG criteria
Addition made
Compliance with changing regulations
Compliance with changing regulations
Digital transformation
Digital transformation
Equal opportunity and diversity
Equal opportunity and diversity
Financial inclusion
Financial inclusion
Financial performance and profitability
Financial performance and profitability
Combating climate change
Combating climate change
Business ethics
Business ethics, transparency, and reporting
Risk management
Risk management
Information security and customer privacy
Cyber security and customer privacy
The issue’s level of severity
changed
Unchanged
Unchanged
The issue’s level of severity
changed
Unchanged
Unchanged
Business ethics, transparency,
and reporting issues were
merged
Unchanged
The name and severity
of the issue changed
Customer centricity
Customer centricity
Unchanged
Social investment programs
Corporate social responsibility
The name of the issue changed
Responsible procurement
Responsible procurement
The issue’s level
of severity changed
Responsible product and service portfolio
Responsible product and service portfolio
Unchanged
Financial literacy
Financial literacy
Unchanged
Stakeholder dialogue
Communication with stakeholders
Responsible marketing
Responsible marketing
Open banking
Supporting employee volunteering
Emergency action preparation and business
continuity
Preferred employer
National and international cooperation for
sustainability
Employee health and safety
The name and
severity of the issue changed
Unchanged
New addition
New addition
New addition
New addition
New addition
New addition
Changes in the Portfolio of Direct and Indirect Subsidiaries between 31.12.2020-31.12.2021
DIRECT SUBSIDIARIES
Name
Anadolu Hayat Emeklilik A.Ş.
Arap Türk Bankası A.Ş.
İş Finansal Kiralama A.Ş.
İş Gayrimenkul Yatırım Ortaklığı A.Ş.
İş Merkezleri Yönetim ve İşletim A.Ş.
İş Net Elektronik Bilgi Üret. Dağ. Tic. ve İlet. Hizm. A.Ş.
İş Yatırım Menkul Değerler A.Ş.
İşbank AG
JSC Isbank Georgia
JSC İşbank
Kredi Kayıt Bürosu A.Ş.
Kültür Yayınları İş Türk A.Ş.
Milli Reasürans T.A.Ş.
Moka Ödeme ve Elektronik Para Kuruluşu A.Ş.
Trakya Yatırım Holding A.Ş.
Türkiye Sınai Kalkınma Bankası A.Ş.
Türkiye Şişe ve Cam Fabrikaları A.Ş.
31.12.2021
Direct Share
Bank’s Risk
Group Share
Percentage
62.00%
20.58%
27.79%
52.06%
86.33%
100.00%
65.74%
100.00%
100.00%
100.00%
9.09%
99.17%
87.60%
100.00%
100.00%
47.68%
50.93%
83.00%
20.58%
58.24%
65.44%
100.00%
100.00%
70.78%
100.00%
100.00%
100.00%
9.09%
100.00%
87.60%
100.00%
100.00%
51.37%
57.02%
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INDIRECT SUBSIDIARIES
Name
Anadolu Anonim Türk Sigorta Şirketi
Anavarza Otelcilik A.Ş.
Atlantic Soda LLC
Sisecam Automotive Rus JSC
Sisecam Automotive Rus Trading LLC
Batı Karadeniz Elektrik Dağıtım ve Tic. A.Ş.
Bayek Tedavi Sağlık Hizmetleri ve İşletmeciliği A.Ş.
Camiş Ambalaj Sanayii A.Ş.
Camiş Egypt Mining Ltd. Co.
Camiş Elektrik Üretim A.Ş.
Camiş Madencilik A.Ş.
Casaba Yönetim İşl.İmal.İth.İhr.Paz.Sağ.Tem.Güv.Ulş.Tic.ve San.A.Ş.
CJSC Brewery Pivdenna
Convera Uluslararası Yazılım Arge Teknoloji Yatırımları A.Ş.
Covision Medical Technologies Limited
Covision Medical Technologies San. Tic. A.Ş.
Cromital SPA
Efes Varlık Yönetim A.Ş.
Erişim Müşteri Hizmetleri A.Ş.
Sisecam Automotive Romania SA
Gullseye Lojistik Teknolojileri A.Ş.
İş Faktoring A.Ş.
İş Girişim Sermayesi Yatırım Ortaklığı A.Ş.
İş Portföy Yönetimi A.Ş.
İş Yatırım Ortaklığı A.Ş.
JSC Mina
Kanyon Yönetim İşletim ve Pazarlama A.Ş.
Kasaba Gayrimenkul İnşaat Taahhüt ve Ticaret A.Ş.
Koridor Incorporated
Livewell Giyilebilir Sağlık Ürün Hizm. A.Ş.
M4 Otelcilik ve Turizm A.Ş.
Maxi Digital GmbH
Maxis Girişim Sermayesi Portföy Yönetimi AŞ.
Maxis Investments Ltd.
Maxitech Inc.
Merefa Glass Company Ltd.
31.12.2021
INDIRECT SUBSIDIARIES
Direct Share
Bank’s Risk Group
Share Percentage
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
64.31%
50.00%
60.00%
100.00%
100.00%
65.00%
99.80%
100.00%
99.70%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
56.78%
100.00%
38.66%
100.00%
50.00%
100.00%
74.66%
100.00%
40.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Name
Mikla Yiyecek ve İçecek A.Ş.
Miltaş Turizm İnşaat Ticaret A.Ş.
Nevotek Bilişim Ses ve İletişim Sistemleri San. ve Tic. A.Ş.
Nevotek Intercorporation
Nevotek Middle East FZ Limited Liability Company
OOO Energosystems
OOO Posuda
OOO Ruscam Glass Packaging Holding
OOO Ruscam Management Company
Ortopro Tıbbi Aletler San. Tic. A.Ş.
Oxyvit Kimya Sanayii ve Ticaret A.Ş.
Pacific Soda LLC
Pasabahce Bulgaria EAD
Pasabahce Egypt Glass Manufacturing SAE
Paşabahçe (Shanghai) Trading Co. Ltd
Paşabahçe Glass Gmbh
Paşabahçe Mağazaları A.Ş.
Paşabahçe Spain SL
Paşabahçe SRL
Paşabahçe USA Inc
Radore İnternet Hizmetleri A.Ş.
Radore Veri Merkezi Hizmetleri A.Ş.
Sisecam Automotive Germany GmbH
Sisecam Automotive Hungary Kft
Richard Fritz Prototype Spare Parts Gmbh
Sisecam Automotive Slovakia S.R.O.
Rudnik Krecnjaka "Vijenac" D.O.O
SC Glass Trading BV
Sisecam Chemicals Resources LLC
Sisecam Chemicals USA Inc
Softtech (Shanghai) Technology Co. Ltd.
Softtech Ventures Teknoloji A.Ş.
Softtech Yazılım Teknolojileri Araştırma Gel. ve Paz. Tic. A.Ş.
Şişecam Automotive Bulgaria EAD
Şişecam Bulgaria EOOD
Şişecam Çevre Sistemleri A.Ş.
31.12.2021
Direct Share
Bank’s Risk Group
Share Percentage
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
83.57%
88.00%
95.37%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
97.22%
100.00%
60.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
25.50%
25.50%
100.00%
100.00%
100.00%
100.00%
50.00%
100.00%
60.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
90.00%
(*) Includes the direct and indirect subsidiaries in which İşbank’s share is equal to or exceeds five percentage points.
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Direct and Indirect Subsidiaries (*)
Changes in Share Percentages in Subsidiaries
INDIRECT SUBSIDIARIES
Name
Şişecam Dış Ticaret A.Ş.
Şişecam Elyaf Sanayii A.Ş.
Şişecam Enerji A.Ş.
Şişecam Flat Glass India Private Limited
Şişecam Flat Glass Italy S.r.l.
Şişecam Flat Glass South Italy SRL
Şişecam Glass Packaging B.V.
Şişecam Glasspackaging Hungary Kft
Şişecam Otomotiv A.Ş.
Şişecam Sigorta Aracılık Hizmetleri A.Ş.
Şişecam Soda Lukavac DOO
Şişecam Trading co.
Tatilbudur Kurumsal Hizmetler Turizm ve Ticaret A.Ş.
Tatilbudur Seyahat Acenteliği ve Turizm A.Ş.
TBC Seyahat Acenteliği ve Turizm A.Ş.
Toksöz Spor Malzemeleri Tic. A.Ş.
Topkapı Danışmanlık Elektronik Hizmetler Pazarlama ve Ticaret A.Ş.
Trakya Glass Bulgaria Ead
Trakya Glass Rus AO
Trakya Glass Rus Trading OOO
Trakya Investment BV
TRSG Glass Holding BV
TSKB Gayrimenkul Değerleme A.Ş.
TSKB Gayrimenkul Yatırım Ortaklığı A.Ş.
TSKB Sürdürülebilirlik Danışmanlığı A.Ş.
Yatırım Finansman Menkul Değerler A.Ş.
Yatırım Varlık Kiralama A.Ş.
Sisecam Chemicals Wyoming LLC
Ciner Resources LP
Ciner Resources General Partners LLC
Ciner Wyoming LLC
(*) Includes the direct and indirect subsidiaries in which İşbank’s share is equal to or exceeds five percentage points.
31.12.2021
Direct Share
Bank’s Risk Group
Share Percentage
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
40.00%
40.00%
40.00%
90.63%
100.00%
100.00%
100.00%
100.00%
100.00%
70.00%
100.00%
88.85%
100.00%
98.42%
100.00%
60.00%
74.00%
60.00%
51.00%
Direct Share of
İşbank as of
December 2020
Direct Share
of İşbank as of
December 2021
Bank's Risk
Group Share
Percentage as of
December 2020
Bank's Risk
Group Share
Percentage as of
December 2021
Companies Entering the Bank’s Risk Group in 2021
Moka Ödeme ve Elektronik
Para Kuruluşu A.Ş.
Şişecam Chemical
Resources LLC
Atlantic Soda LLC
Şişecam Glasspackaging
Hungary Kft
TBC Seyahat Acenteliği
ve Turizm
Ciner Wyoming Holding Co
Ciner Resources LP
Ciner Resources General
Partners LLC
Ciner Wyoming LLC
-
-
-
-
-
-
-
-
-
100.00%
-
-
-
-
-
-
-
-
Companies Whose Share Ratio Changed in the Bank's Risk Group in 2021
-
-
-
-
-
-
-
-
-
REASON
Acquisition
Acquisition
Acquisition
100.00%
60.00%
60.00%
100.00%
Company establishment
40.00%
60.00%
74.00%
60.00%
51.00%
Acquisition
Acquisition
Acquisition
Acquisition
Acquisition
50.51%
52.06%
63.89%
65.44%
65.65%
65.74%
70.69%
70.78%
47.23%
47.68%
50.92%
51.37%
İş Gayrimenkul Yatırım
Ortaklığı A.Ş.
İş Yatırım Menkul
Değerler A.Ş.
Türkiye Sınai Kalkınma
Bankası A.Ş.
İş Girişim Sermayesi
Yatırım Ortaklığı A.Ş.
Pacific Soda LLC
TSKB Gayrimenkul Yatırım
Ortaklığı A.Ş.
TSKB Sürdürülebilirlik
Danışmanlığı A.Ş.
-
-
-
-
Companies Removed From the Bank's Risk Group in 2021
Cam Elyaf Sanayii A.Ş.
Çayırova Cam Sanayii A.Ş.
Madencilik Sanayii
ve Ticaret A.Ş.
Paşabahçe Investment BV
Şişecam Chem
Investment Bv
Şişecam Flat
Glass Holding B.V.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57.52%
50.00%
56.78%
60.00%
89.53%
88.85%
99.85%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
-
-
-
-
-
Transfer of the shares
bought from Borsa Istanbul
to the subsidiary portfolio
Transfer of the shares
bought from Borsa Istanbul
to the subsidiary portfolio
Transfer of the shares
bought from Borsa Istanbul
to the subsidiary portfolio
Sale of shares of our Bank's
group company
Share purchase from a
partner
Use of preferential rights
not used in the purchase of
shares from Borsa Istanbul
and cash capital increase by
the parent bank
Purchase of shares from
other shareholders
Merger
Merger
Merger
Merger
Merger
Merger
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Human Resources Data
Companies With a Title Change in the Bank's Risk Group in 2021
Former Title
New Title
Automotive Glass Alliance Rus AO
Sisecam Automotive Rus JSC
Change of title
Automotive Glass Alliance Rus Trading OOO
Sisecam Automotive Rus Trading LLC
Change of title
Glasscorp S.A.
Richard Fritz Holding Gmbh
Richard Fritz Kft
Richard Fritz Spol S.R.O.
Ciner Wyoming Holding Co
Sisecam Automotive Romania SA
Change of title
Sisecam Automotive Germany GmbH
Change of title
Sisecam Automotive Hungary Kft
Change of title
Sisecam Automotive Slovakia S.R.O.
Change of title
Sisecam Chemicals Wyoming LLC
Change of title
Human Resources Data
Total Number of Employees
Number of Employees
Number of Employees Covered by Collective Bargaining Agreements
Female
Male
Female
Male
Number of Employees by Employment Type
Full-time
Partial Time
Part-time
Total
Number of Employees by Region and Branch
Head Office
Branch
Region
Total
2020
23,518
11,907
11,611
11,702
11,432
2020
23,381
135
2
2021
22,802
11,506
11,296
11,309
11,126
2021
22,678
123
1
23,518
22,802
2020
7.022
15,733
763
23,518
2021
7.083
14,968
751
22,802
Number of Employees by Gender and Age Upper Management
(Board of Directors and Executive Committee)
50 years of age and older
2020
2021
30-50 years of age
30 years of age and younger
Female
Male
Female
Male
Female
Male
3
15
2
3
0
0
3
16
0
5
0
0
Employees in Management Positions (Division Manager and above)
2020
2021
50 years of age and older
30-50 years of age
30 years of age and younger
Total
Breakdown of Employees by Age
50 years of age and older
30-50 years of age
30 years of age and younger
Total
Number of Employees by Seniority
0-4.99 years
5-9.99 years
10+ years
Total
Female
Male
Female
Male
Female
Male
8
27
7
37
0
0
79
2020
492
21,417
1,609
23,518
2020
1,935
4,146
17,437
23,518
8
29
8
37
0
0
82
2021
686
20,914
1,202
22,802
2021
1,609
3,314
17,879
22,802
Employee Turnover Rate (%)
1.60
2.01
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Human Resources Data
Employee Trainings
Anti-Bribery and Anti-Corruption Training
Number of Trainees
Man*Hours
Ethical Principles Training
Number of Trainees
Man*Hours
Human Rights Training
Number of Trainees
Man*Hours
Sustainability Training**
Number of Trainees
Man*Hours
Sustainability E-Training
Number of Trainees
Man*Hours
**Includes sustainability e-training man*hour data.
2019
2020
2021
7,577
3,115
664
506
260
733
538
4,760
-
-
7,830
857
438
331
128
315
1,552
5,946
-
-
5,716
627
2,214
1,305
272
727
8,637
14,392
775
388
Human Resources Data
Breakdown of Employees by Educational Background
Primary School
High School
College (2 or 3-year Associate Degree)
University (4-year college)
Post-Graduate
PhD Degree
Total
2020
57
3,516
534
18,262
1,127
22
23,518
2021
44
3,299
523
17,815
1,100
21
22,802
Number of Employees Eligible for Parental Leave
2019
2020
2021
Number of Employees Eligible for Parental Leave
Number of female employees
Number of male employees
Numbers of Employees Taking and
Returning From Maternity Leave
Number of Female Employees Eligible for Maternity Leave
Number of Female Employees Returning to Work from Maternity Leave
Rate of Return from Maternity Leave
Retention Rate After Maternity Leave
Number of Male Employees Whose Wife Took Maternity Leave
12,252
11,801
11,907
11,611
11,506
11,296
2019
780
1,072
99.5%
96.2%
734
2020
642
880
99.7%
96.5%
580
2021
592
758
99.9%
98.2%
550
Number of Employees Eligible for Parental Leave
12,252
11,907
11,506
Total Employment Created with Subsidiaries
Number of Subsidiaries Under Our Control
Number of Employees in Subsidiaries
Employee Trainings*
Average Annual Training Hours Per Employee
Average Annual Training Hours Per Female Employee
Average Annual Training Hours Per Male Employee
2019
111
34,207
2019
25,7
22,3
29,9
2020
106
34,390
2020
25,4
23,2
28,1
2021
109
35,973
2021
29,3
26,7
32,7
* Training figures exclude participants of refresher trainings, while Private Security Officers and Servant Staff are not included.
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Human Resources Data
UN Women's Empowerment Principles Progress Statement
Occupational Health and Safety Data
2021
Occupational Health and Safety Data
2021
Injury Rate
Absentee Rate (AR)
Direct Employment
Female
Male
Direct Employment
0.000079
Female
Male
0.00006
0.000019
Contractor Employees
Contractor Employees
Female
Male
Female
Male
Occupational Disease Rate (ODR)
Number of Work-related Fatalities
Direct Employment
Female
Male
Direct Employment
Female
Male
PRINCIPLES
GRI STANDARDS
RELATED SECTION
Principle 1 - Corporate Leadership Supporting Gender
Equality
405-1, 405-2
Message from the General
Manager, Initiatives Supported in
the Field of Sustainability, Equal
Opportunity and Diversity
Principle 2 - Equal Opportunity, Participation and Anti-
discrimination
202-1, 401-1, 401-3, 405-1,
405-2, 406-1
Equal Opportunity and Diversity
Principle 3 - Health, Safety and Freedom from Violence
406-1
Principle 4 - Education and Training
404-1; 404-3
Principle 5 - Business Development, Supply Chain and
Marketing Practices
204-1; 103-1; 103-2; 103-3
Equal Opportunity and Diversity,
Employee Health and Safety
Equal Opportunity and Diversity,
Talent Management
Supply Chain Management,
Business Ethics
Initiatives Supported in the Field
of Sustainability
Contractor Employees
Contractor Employees
Principle 6 - Community Leadership and Participation
413-1
Principle 7 - Measurement and Transparent Reporting
for Gender Equality
405-1; 405-2; 103-1; 103-2;
103-3
Equal Opportunity and Diversity
Female
Male
Female
Male
Number of Occupational Diseases
Number of Fatal Incidents
Direct Employment
Female
Male
Direct Employment
Female
Male
Contractor Employees
Contractor Employees
Female
Male
Female
Male
Lost Day Rate (LDR)
Number of Incidents
Direct Employment
Female
Male
1.98
1.49
0.49
Direct Employment
Female
Male
46
32
14
Contractor Employees
Contractor Employees
Female
Male
Female
Male
Days of Absence Due to Accident
Accident Frequency Rate*
Direct Employment
Female
Male
Contractor Employees
Female
Male
444
335
109
Direct Employment
Female
0.20
0.14
Number of Employees Carrying Out Tasks with a High
Risk of Occupational Diseases
Direct Employment
Contractor Employees
0.20
0.14
* Accident frequency rate: Total number of incidents / (Total working hours - Lost hours)*200,000
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Amendments in the Articles of Incorporation in 2021
ARTICLE
PREVIOUS
NEW
ARTICLE
PREVIOUS
NEW
25 (1)
Elections of Members to the Board of Directors
Elections of Members to the Board of Directors
62 (3)
Consequences of Liquidation
Consequences of Liquidation
After the debts of the dissolved Corporation have been
settled, and one year has elapsed since the third notice
of dissolution, the amount to be paid to each share will
be calculated by way of dividing the balance of assets
into the total number of shares, by considering one
Group (A) share as times 20 due to the reason that 20
Group (A) shares each with a nominal value of TL 500
(this amount is related to the period prior to the Law
Regarding the Monetary Unit of the Turkish Republic
Numbered 5083, on which the rate of change has
not been applied) have been changed with 1 Group
(A) share with a nominal value of 1 Kurus, thus by
considering each Group (A) share as times 20.
After the debts of the dissolved Corporation have been
settled, and at least six months has elapsed since the
third notice of dissolution, the amount to be paid to
each share will be calculated by way of dividing the
balance of assets into the total number of shares, by
considering one Group (A) share as times 20 due to the
reason that 20 Group (A) shares each with a nominal
value of TL 500 (this amount is related to the period
prior to the Law Regarding the Monetary Unit of the
Turkish Republic Numbered 5083, on which the rate of
change has not been applied) have been changed with
1 Group (A) share with a nominal value of 1 Kurus, thus
by considering each Group (A) share as times 20.
In other cases where ownership of shares should, of
necessity, cease to exist, payments to be made to the
shareholders shall be subject to the provisions of the
first paragraph.
In other cases where ownership of shares should, of
necessity, cease to exist, payments to be made to the
shareholders shall be subject to the provisions of the
first paragraph.
(1) In case of request, the election of a member of the Board of Directors is allowed for a period of less than 3 years.
(2) The necessary provision has been added in accordance with the relevant legislation to ensure that the meetings
of the Board of Directors can be held electronically.
In addition, the provisions regarding the recording of the decisions taken at the Board of Directors meetings have
been updated in line with the legislation and the actual practice of our Bank.
(3) The article has been amended within the scope of compliance with the amendment made in article 543 of the
Turkish Commercial Code.
The Board of Directors shall consist of 7 to 11 members, one
being the General Manager. Directors, with the exception of the
General Manager, shall be elected by the General Assembly for a
term of three years, and a new election shall take place at the end
of every three years. Directors shall be eligible for re-election.
The first Board of Directors, with the exception of the General
Manager, consists of the following:
Fuad, Deputy for Rize,
Fikret, M.D. Deputy for Ertuğrul,
Kılıç Ali, Deputy for Gaziantep,
İhsan, Deputy for Cebelibereket,
Mahmud, Deputy for Siirt,
Salih, Deputy for Yozgat,
Rasim, Deputy for Sivas,
Rahmi, Deputy for İzmir,
Kınacı Zade Şakir, Deputy for Ankara.
The Board of Directors shall consist of 7 to 11 members, one
being the General Manager. Directors, with the exception
of the General Manager, shall be elected by the General
Assembly for a maximum term of three years. Directors shall
be eligible for re-election. The first Board of Directors, with the
exception of the General Manager, consists of the following:
Fuad, Deputy for Rize,
Fikret, M.D. Deputy for Ertuğrul,
Kılıç Ali, Deputy for Gaziantep,
İhsan, Deputy for Cebelibereket,
Mahmud, Deputy for Siirt,
Salih, Deputy for Yozgat,
Rasim, Deputy for Sivas,
Rahmi, Deputy for İzmir,
Kınacı Zade Şakir, Deputy for Ankara.
ARTICLE
PREVIOUS
NEW
28 (2)
Meetings of the Board of Directors
The Board of Directors shall hold their meetings at least once
a month at the address where the Head Office is located.
The Board of Directors may also hold meetings in any other
suitable place, provided that more than one-half of the Board
members concur.
The presence of more than one-half of the Board members is
required for the validity of the meetings. Resolution shall be
adopted by the majority of the members present; in the event
of an equality of the votes, the matter shall be postponed until
the subsequent meeting; should the votes again be equal, the
proposal in question shall be considered as rejected.
Minutes recording the proceedings and the names of the
attending members shall be drawn up and transcribed into
the Book of Resolutions of the Board of Directors and it shall
be signed by the members present at the meeting. Dissenting
members are bound to specify the motives of their dissent
and to sign the Book.
Should it be necessary to make full or partial copies of the
minutes, they shall be required to carry the signature of
the Chairman in order to be valid so far as third parties are
concerned. Any member who is absent from the meetings of
the Board for three consecutive months without a leave from
the Board of Directors, shall be deemed to have resigned.
Meetings of the Board of Directors
The Board of Directors shall hold their meetings at least once a
month at the address where the Head Office is located. The Board
of Directors may also hold meetings in any other suitable place,
provided that more than one-half of the Board members concur.
The meetings of Board of Directors may also be held electronically.
Those entitled to attend the meetings of the Board of Directors
may attend these meetings electronically in line with Article
1527 of Turkish Commercial Code. The Bank may set up an
electronic meeting system, which allows those entitled to attend
the meetings and vote electronically under the provisions of
Communiqué on Electronic Meetings of Commercial Companies
other than the General Assembly Meetings of Joint-Stock
Companies by Electronic Means, or buy such systems developed
for this purpose. At the meetings to be held, pursuant to this
provision of the Articles of Incorporation, it shall be ensured that
those entitled will be able to exercise their rights specified in the
relevant legislation via the system established or the system to
be purchased from support service providers as set out in the said
Regulation.
The presence of more than one-half of the Board members is
required for the validity of the meetings. Resolution shall be
adopted by the majority of the members present; in the event of
an equality of the votes, the matter shall be postponed until the
subsequent meeting; should the votes again be equal, the proposal
in question shall be considered as rejected.
Resolutions taken by the Board of Directors are transcribed into the
Book of Resolutions of the Board of Directors in accordance with
the legislation and it shall be signed by the members present at the
meeting. Dissenting members are bound to specify the motives of
their dissent and to sign the Book.
Should it be necessary to make full or partial copies of the
resolutions, they shall be required to carry the signature of the
Chairman in order to be valid so far as third parties are concerned.
Any member who is absent from the meetings of the Board for
three consecutive months without a leave from the Board of
Directors, shall be deemed to have resigned.
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4) The Responsibility of the Board of Directors on the Annual Report
Maslak Mah. Eski Büyükdere Cad. Orjin
Maslak İş Merkezi No:27 K:2-3-4
34485 Sarıyer/İstanbul TÜRKİYE
To the Shareholders of Türkiye İş Bankası Anonim Şirketi
1) Qualified Opinion
We have audited the annual report of Türkiye İş Bankası A.Ş. (“the Bank”) and its subsidiaries (“the Group”) for the period of January 1,
2021 – December 31, 2021.
In our opinion, except for the matter described in the Basis for Qualified Opinion section of our report, the consolidated and
unconsolidated financial information provided in the annual report of the Board of Directors and the discussions made by the Board
of Directors on the situation of the Group are presented fairly and consistent, in all material respects, with the audited full set
consolidated and unconsolidated financial statements and the information we obtained during the audit.
2) Basis for Qualified Opinion
As described in the Basis For Qualified Opinion section of Independent Auditor’s Report on the complete set of audited
unconsolidated and consolidated financial statements of the Bank and the Group for the period between 1 January 2021 and 31
December 2021 dated February 8, 2022, the unconsolidated and consolidated financial statements as at December 31, 2021
include a free provision at an amount of TL 4,075,000 thousands of which TL 2,875,000 thousands was provided in prior years
and TL 1,200,000 thousands provided in the current period by the Bank and the Group management for the possible effects of the
negative circumstances which may arise from the possible changes in the economy and market conditions which does not meet the
recognition criteria of “Turkish Accounting Standard” (TAS) 37 “Provisions, Contingent Liabilities and Contingent Assets”.
We conducted our audit in accordance with “Regulation on independent audit of the Banks” published in the Official Gazette
no.29314 dated 2 April 2015 published by Banking Regulation and Supervision Agency (BRSA Independent Audit Regulation) and
Independent Auditing Standards (InAS) which are part of the Turkish Auditing Standards as issued by the Public Oversight Accounting
and Auditing Standards Authority of Turkey (POA). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Annual Report section of our report. We are independent of the Group in accordance with the
Code of Ethics for Independent Auditors (Code of Ethics) as issued by the POA, and we have fulfilled our other ethical responsibilities
in accordance with the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our qualified opinion.
In accordance with Articles 514 and 516 of the Turkish Commercial Code 6102 (“TCC”) and communique on ‘Principles and
procedures set out by the regulations on preparation and issuance of annual reports of Banks’, the management of the Group is
responsible for the following items:
a) Preparation of the annual report within the first three months following the balance sheet date and submission of the annual
report to the general assembly
b) Preparation and fair presentation of the annual report; reflecting the operations of the Group for the year, along with its financial
position in a correct, complete, straightforward, true and honest manner. In this report, the financial position is assessed according to
the consolidated and unconsolidated financial statements. The development of the Group and the potential risks to be encountered
are also noted in the report. The evaluation of the board of directors is also included in this report
c) The annual report also includes the matters below:
• Subsequent events occurred after the end of the fiscal year which have significance,
• The research and development activities of the Group,
• Financial benefits such as salaries and bonuses paid to the board members and to those charged governance, allowances,
travel, accommodation and representation expenses, financial aids and aids in kind, insurances and similar deposits.
• Other matters prescribed in the communique on ‘Principles and procedures set out by the regulations on preparation and
issuance of annual reports of Banks’ published in official gazette no.26333 dated November 1, 2006.
When preparing the annual report, the board of directors takes into account the secondary legislative arrangements published by the
Ministry of Trade and related institutions
5) Auditor’s Responsibilities for the Audit of the Annual Report
Our aim is to express an opinion, based on the independent audit we have performed on the annual report in accordance with
provisions of the Turkish Commercial Code and the Communique on ‘Principles and procedures set out by the regulations on
preparation and issuance of annual reports of Banks’ published in official gazette no.26333 dated November 1, 2006 , “Regulation
on Accounting Applications for Banks and Safeguarding of Documents” published in the Official Gazette no.26333 dated 1 November
2006 and other regulations on accounting records of Banks published by Banking Regulation and Supervision Agency (BRSA),
circulars, interpretations published by BRSA and “BRSA Accounting and Financial Reporting Legislation” which includes the provisions
of Turkish Financial Reporting Standards (TFRS) for the matters which are not regulated by these regulations, on whether the
consolidated and unconsolidated financial information provided in this annual report and the discussions of the Board of Directors
are presented fairly and consistent with the Group’s audited consolidated and unconsolidated financial statements and to prepare a
report including our opinion
The independent audit we have performed is conducted in accordance with InAS and BRSA Independent Audit Regulation. These standards
require compliance with ethical provisions and the independent audit to be planned and performed to obtain reasonable assurance
on whether the consolidated and unconsolidated financial information provided in the annual report and the discussions of the Board
of Directors are free from material misstatement and consistent with the consolidated and unconsolidated financial statements.
3) Our Auditor’s Opinion on the Full Set Consolidated and Unconsolidated Financial Statements
The name of the engagement partner who supervised and concluded this audit is Fatma Ebru Yücel.
We have expressed qualified opinions in our auditor’s reports dated February 8, 2022 on the full set consolidated and unconsolidated
financial statements of the Group for the period of 1/1/2021-31/12/2021.
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March 3, 2022
İstanbul, Türkiye
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Environmental Indicators
Total Energy
Consumption (GJ)
Greenhouse Gas
Emissions
• Scope 1 (ton CO2e)
• Scope 2 (ton CO2e)
• Scope 3 (ton CO2e)
Reporting Guidance
Total energy consumption calculations include electricity, natural gas, fuel-oil, coal and diesel consumption figures.
Electricity consumption was initially calculated in kWh and then converted to GJ. In this conversion, a conversion factor
of 1 kWh = 0.0036 GJ was used. After calculating monthly natural gas consumption in m3, monthly coal consumption in
kg, monthly fuel-oil and diesel consumption in liters in 2021, these consumption values were converted to kWh by using
the monthly lower heating values on the invoices. The annual total consumption, calculated as a sum of these monthly
consumptions, was then converted to GJ using the conversion factor mentioned above and added to the total energy
consumption. The reporting limits for this KPI covers İşbank's operations in Turkey.
Greenhouse gas emissions refer to the carbon emissions caused by energy consumption and refrigerant gases during the
reporting period.
Greenhouse gas emissions arising from İşbank's operations in Turkey were calculated in accordance with The Greenhouse
Gas Protocol: A Revised Corporate Accounting and Reporting Standard by Demir Enerji, a firm offering consultancy
services in the area of Climate Change and Carbon Management.
Greenhouse gas emissions were calculated in 3 different scopes: Scope 1 (Direct Greenhouse Gas Emissions), Scope 2
(Indirect Greenhouse Gas Emissions) and Scope 3 (Other Indirect Greenhouse Gas Emissions).
IPCC 5th Assessment Report factors were used for emission factors. Network Emission Factor was calculated based on
the data provided by TEİAŞ. Direct greenhouse gas (GHG) emissions (Scope 1) and indirect energy greenhouse gas (GHG)
emissions (Scope 2) were reported according to the GHG Protocol – Market-Based approach. Other indirect greenhouse
gas (GHG) emissions (Scope 3) were reported according to the GHG Protocol. DEFRA emission factors were used for air
travel emissions, and Environmental Paper Network emission factors were used for paper consumption.
When calculating greenhouse gas emissions, the following sources causing carbon emissions were considered:
Scope 1 emissions*:
• Natural gas, diesel, LPG, fuel-oil and coal consumption for heating purposes
• Fuels used in generators (Diesel)
• Fuel Consumption of Company Vehicles (Diesel and Gasoline)
• Refrigerants (leaks reported during installation and maintenance phases were taken into account)
Scope 2 emissions*:
• Electricity consumption
Scope 3 emissions*:
• Fuel consumption of Personnel Service Vehicles
• Domestic Business Travel (Flight, Bus, Taxi)
• International Business Travel (Flight)
• Paper Consumption
• Fuel Consumption of Private Cars
*The reporting limits for this KPI covers İşbank's operations in Turkey.
*The impact of remote working is not included in the resource consumption and emission calculations during the
reporting period.
Personnel service vehicles include the vehicles used for transportation of employees working at the Head Office buildings
(İş Kuleleri Kule 1, ATOM, TUTOM and ATLAS buildings) and branches/regions. Fuel consumption was calculated based on
the distance figures provided by the transportation firm used for transport of personnel.
Use of private vehicles includes use of private vehicles for business travel and business-related purposes by employees
working at the Head Office buildings (İş Kuleleri Kule 1, ATOM, TUTOM and ATLAS buildings) and all branches.
Company vehicles include all vehicles in the Bank's fleet, including transport vehicles. Fuel consumption data provided by
the supplier firm was taken into account.
Fuel Consumption of
Vehicles
• Fuel Consumption
of Personnel Service
Vehicles (lt)
• Fuel Consumption of
• Private Cars (lt)
• Fuel Consumption of
Company Vehicles (lt)
Total Yearly Water
Consumption (m3)
• Total municipal water
(blue) consumption (m3)
• Total wastewater (grey)
consumption (m3)
• Total spring water
(green) consumption
(m3)
Total amount of recycled/
reused water (m3)
Greenhouse Gas Emission
Intensity
• Emission Per Employee
(tCO2e/Number of
Employees)
• Emission According to
Consolidated Total Assets
(tCO2e/million TL)
• Emission According to
Consolidated Net Profit
(tCO2e/million TL)
• Amount (tons) and
Type of Recycled
Hazardous Waste
• Amount (tons) and
Type of Recycled Non-
Hazardous Waste
• Amount of Recycled
Paper (tons)
Renewable Energy Portfolio
The number of renewable
energy projects financed
in 2021, their installed
capacity (MW) and the
loan amount provided to
these projects
Total installed capacity
of the renewable energy
projects financed by
İşbank
İşbank uses locally supplied municipal water and spring water in its operations in Turkey. The reporting scope includes the
total amount of water drawn and used for consumption.
Water consumption was evaluated in 3 different categories: Municipal Water (Blue), Wastewater (Gray) and Spring Water
(Green). Municipal water (Blue) covers the amount of water purchased from municipalities or other authorized suppliers
such as İSKİ.
Consumption figures are monitored via invoices and the amount of water paid for in advance on prepaid meters.
Consumption at all locations is monitored and reported throughout the year.
Consumption figures of some service buildings (28 buildings) cannot be determined in any way. For these buildings,
estimated consumption was calculated based on the number of employees according to the TS1258 standard.
All municipal water consumption is considered as wastewater (gray).
Naturally formed surface water and groundwater are included in the scope of spring water (green). While calculating
consumption of spring water (green), meter readings done by the building management were taken into consideration.
Spring water consumption also reflects the total amount of recycled water.
Rain water is collected, filtered and stored in water tanks at our Head Office Building, Tuzla Technology and Operations
Center and the Atlas Data Center buildings, and the consumption of water from these water storage tanks in these
buildings is measured and monitored via meters.
These are the GHG intensity figures calculated by dividing the Bank's Scope 1 and Scope 2 GHG emissions by the Bank's
consolidated assets, consolidated net profit and the total number of employees in Turkey. Consolidated total assets and
net profit values of the Bank were taken from the financial statements dated 31 December 2021 which were approved by
an independent auditor.
Recycled hazardous waste includes batteries, fluorescent lamps, car batteries and toner cartridges.
Plastic, metal, and glass are considered as recycled non-hazardous waste.
Recycled paper waste includes waste such as paper, cardboard boxes and other similar waste.
The reporting limits for waste include ATOM, TUTOM, Kule-1, ATLAS buildings and the Branch buildings with ISO 14001
environmental management certification.
When calculating the amount of recycled waste, receipts provided by authorized recycling firms were taken into account.
As of 2021, İşbank's portfolio included the following renewable energy projects:
• Hydroelectric Power Plant (HPP)
• Wind Power Plant (WPP)
• Biomass Power Plant (BPP)
• Solar Power Plant (SPP)
• Geothermal Power Plant (GPP)
The loan amount provided for the projects has been determined over the total limit information by taking the sum of
cash and non-cash loans extended by the Corporate Loans Underwriting, Commercial Loans Underwriting, Retail Loans
Underwriting and Project Finance Divisions of the Bank.
In this process, the loan allocation files of the projects were taken as reference in determining the total loan amounts
provided to the projects along with the information on installed capacity. The number of renewable energy projects includes
the number of power plants financed. When calculating installed capacity for projects financed by consortium structures,
bank shares are not taken into consideration, and the total installed capacity of the power plant/plants is reported.
Environmental and Social Risk Indicators
Number of projects
financed after undergoing
environmental and social
risk evaluation, risk
categories
Field visits made as part of
environmental and social
risk evaluation
Projects with an investment amount of 10 million USD and more, for which loans were allocated and/or contracted during
the reporting year, are evaluated according to the Environmental and Social Risk Evaluation Model (ÇESMOD), which is
described in detail under the Responsible Financing section of the Responsible Banking chapter. Projects undergoing the
ÇESMOD evaluation process are evaluated against national and international regulations such as IFC (International Finance
Corporation) Performance Standards, EBRD (European Bank for Reconstruction and Development) Performance Requirements,
and Equator Principles, and a Project Environmental and Social Assessment Document is prepared for each project.
This indicator provides the number of field visits carried out within the scope of environmental and social risk assessment
to monitor the projects financed in 2021 or before. Field visit notes, photographs and travel details were reviewed during
the assurance audit process.
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Talent Management Indicators
• Average annual training
hours per employee
• Average training hours
per female employee
• Average training hours
per male employee
• Number of employees
receiving "Anti-Bribery
and Anti-Corruption"
training and total
training hours
• Number of employees
receiving "Ethical
Principles/Business
Ethics" training and total
training hours
• Number of employees
receiving "Human
Rights" training and total
training hours
• Number of employees
receiving "Sustainability"
training and total
training hours
• Number of participants
of information security
trainings and total
training hours
• Hours of training
per newly recruited
employee in their first
year
• Hours of training
per person in the
management and
leadership development
program
• Hours of training per
person in IT competence
development trainings
• Share of digital trainings
within all trainings (%)
Human Resources Indicators
Total Number of
Employees
Breakdown of employees
by gender and type of
employment
Employee turnover rate (%)
Training hours were calculated by including all trainings, except for private security refresher trainings, given to
employees during the year. In this context, the calculations were made by dividing the total hours of training given to the
employees during the reporting period by the number of employees as of 31 December 2021 (security and servant staff
are not included in these calculations).
"Anti-Bribery and Anti-Corruption", "Ethical Principles/Business Ethics", "Human Rights" and "Sustainability" trainings
covered the respective subjects. When calculating this indicator, the number of employees who participated in the
trainings and the amount of time allocated to those subjects within the trainings were taken into account. There are no
trainings directly devoted to the subjects of "Anti-Bribery and Anti-Corruption" and "Human Rights" within the Bank,
but these subjects are addressed within certain training programs at certain times. Therefore, when calculating the total
hours of training and the number of employees who received these trainings, the time allocated for these subjects within
the current training programs are taken into account. When calculating training hours, the hours of the trainings given in
these areas within the training programs organized by the Board of Inspectors for the Board Members were not included
in the calculation.
The subject of human rights is also covered in the course of "Law on Private Security Services and Individual Rights",
which is provided to private security personnel as part of their refresher trainings at certain intervals. This subject was
not included in the training hour calculations since it is a subject which is covered within the 10-hour refresher trainings
provided by different suppliers in different provinces.
When calculating the total hours of information security trainings, the number of employees who participated in the
trainings covering information security related issues (e.g. cyber security, social engineering and information security) and
the number of hours of these trainings were taken into account.
Hours of training per newly recruited employee in their first year indicates the ratio of the total hours of training received
by new employees during the reporting period to the number of newly recruited employees. When calculating this
indicator, private security personnel, members of the Board of Directors, and servant staff were excluded.
Hours of training per person in management and leadership development programs are calculated by dividing the total
hours of training received by the managers (assistant managers and above) who participated in management and
leadership development programs during the reporting period by the number of managers (assistant managers and
above) as of 31 December 2021.
Hours of training per person in IT competence development trainings is calculated by dividing the total hours of "IT
Business Line Trainings" received by the employees of the Information Technologies Division, Data Management Division
and Information Security Coordination Division by the number of employees of the Information Technologies Division,
Data Management Division and Information Security Coordination Division (excluding private security personnel and
servant staff) as of 31 December 2021.
Digital trainings include trainings on various subjects such as video, e-training and e-games.
The share of digital trainings within all trainings was calculated by dividing the total hours of Digital Trainings completed
during the reporting period by the total number of hours calculated for all trainings.
The total number of employees includes all employees of İşbank in Turkey and abroad as of 31 December 2021. The total
number of employees excludes interns, subcontractors, and the employees of the Bank-Finance and Insurance Workers
Union (BASİSEN) and İşbank Members' Supplementary Pension Fund as well as the employees of the Bank's national and
international subsidiaries as of 31 December 2021.
This indicator represents the breakdown of the total number of employees by gender and employment type (Full Time /
Part Time and Partial Time Status).
Part time employees include those for whom a working day consists of 4 hours. Partial time status employees include
those for whom a working day is 5 hours. Partial time status is provided to contract-based employees as well as
permanent staff upon their return from maternity leave or their partners.
This indicator represents the ratio of the total number of employees who resigned during the year to the average number
of employees. The average number of employees is calculated by dividing the sum of the numbers of Bank employees, as
determined at the end of each month (for 12 months), by 12.
Rate of female managers
(%)
Unionization rate (%)
Number of employees
benefitting from maternity
leave
Number of employees
returning from maternity
leave
Rate of return from
maternity leave (%)
Retention rate after
maternity leave (%)
Number of employees
using paternity leave
This indicator represents the ratio of the total number of female employees in management roles (assistant manager
and above) to the total number of managers (assistant manager and above) as of 31 December 2021 (titles of assistant
manager and above include Assistant Managers, IT Managers, Managers and members of the Board of Directors).
This indicator represents the ratio of employees who are members of BASİSEN to the total number of employees as of 31
December 2021.
This indicator represents the number of female employees who returned from paid or unpaid maternity leave during the
reporting period.
Raporlama dönemi içerisinde ücretli veya ücretsiz doğum izninden dönen kadın çalışan sayısını ifade etmektedir.
This indicator shows the ratio of female employees who returned to work from (paid or unpaid) maternity leave during
the reporting period to the total number of female employees whose date of return from (paid or unpaid) maternity leave
was within the reporting period.
Retention rate after maternity leave is calculated and reported for the year preceding the reporting period, and it is
defined as the percentage of female employees who returned from maternity leave and continued to work at İşbank as
of the end of the reporting period. The rate of retention reported for 2021 reflects the ratio of female employees who
returned from (paid or unpaid) maternity leave in 2020 and continued to work at İşbank for 1 year to the total number of
female employees who returned from (paid or unpaid) maternity leave in 2020.
The number of employees using paternity leave represents the number of male employees who took paternity leave due
to their wife giving birth and whose paternity leave start date was within the reporting period (01.01.2021/31.12.2021).
OHS Data on the Basis of Female and Male Employees
Number of incidents
Injury rate
Number of fatal incidents
and number of work-
related fatalities
Number of occupational
diseases
Absence due to accident
Accident frequency rate
Lost day rate
Occupational disease rate
Absentee rate
Number of Occupational
Health and Safety
Committees (OHS
Committees) and the total
numbers of members and
employee representatives
in the committees
The Occupational Health and Safety data includes those İşbank employees who are employed within the borders of the
Republic of Turkey. This indicator represents the definition of work accident as provided in the laws no. 6331 and 5510. In
this context, calculations were made by considering the statements of the employees who reported work accidents, the
hospital reports, and the reports prepared by the workplace doctor or institution doctor.
This is the ratio of the number of injuries resulting from work accidents to the total number of full-time employees.
It is the number of deaths due to work accidents. This indicator is evaluated according to the result of the fatalities report
submitted by the competent authorities together with judicial authorities after an incident.
This indicator represents the number of acute or chronic disease cases suffered by employees due to the nature of
their work or conditions of the work. These calculations are made by taking into account the reports sent by the Health
Committees authorized by the Turkish Ministry of Health to the related company.
This indicator is calculated by taking into account the days of absence due to work accidents. In this regard, calculations
were made according to the periods of rest specified in the doctor reports submitted by the employees who reported a
work accident to the Human Resources Management Division.
The ratio of accidents during the year to total working time was calculated. In this regard, calculations were made
according to the formula of "Total Number of Accidents* 200,000/ (Total Working Hours - Lost Hours)". The number of
accidents used in this formula is obtained from the accident report forms filled out by employees. While calculating total
working hours, official holidays within the year are subtracted and 1 workday is accepted as 8 hours. The lost hours figure
is reported by calculating the total number of working hours lost based on the number of days lost due to an accident.
This indicator represents the ratio of the number of days lost due to work accidents to the total number of working hours.
This calculation used the following formula: (Total Number of Lost Days * 200,000)/Total Working Hours. The lost days
used in the formula is derived from the data on absence due to accidents.
This indicator represents the ratio of the number of employees who suffer acute or chronic diseases due to the nature of
their work or conditions of the work to the total working hours. This calculation used the following formula: (Number of
Occupational Diseases * 200,000)/Total Working Hours.
This indicator represents the ratio of the number of lost hours to the total number of working hours. This calculation used
the following formula: Number of Lost Hours/Total Working Hours.
This indicator refers to the number of OHS committees established at the Bank's service buildings with an employee
population of 50 or more in accordance with the OHS law no. 6331 and applicable regulations. In this context, the total
number of members in OHS committees set out in the applicable law defines the total number of members in the OHS
committees, and union representatives are naturally considered as employee representatives.
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Independent Assurance Report
Other Indicators
Total amount of loan
agreements signed with
international financial
institutions within the
sustainable framework
during the year
Number of Customers
Number of digital banking
customers
Number of mobile banking
users
Customer satisfaction
score - Net promoter
score
Total paper savings thanks
to digitized processes
Number of saplings
planted during the year
under the project with the
TEMA Foundation
Number of graduates from
the "81 Students from 81
Cities"
Project conducted with
Darüşşafaka
Total amount of cash loans
extended to the agricultural
sector (billion TL)
Total amount of loans
provided to SMEs
(billion TL)
Number of İŞ'TE KOBİ SME
website views
Number of Bankamatik
ATMs
Number of disabled-
friendly Bankamatik ATMs
Total amount of financing
provided to women
entrepreneurs
In 2021, the amount of funds obtained from international financial institutions such as KfW, EIB, EBRD, Proparco, OPIC
and IFC through bilateral agreements or securitization transactions with special loan allocation purposes aimed at
creating environmental and social benefits was checked.
A list of loan agreements in line with the sustainable framework signed with international financial institutions was
obtained from the Financial Institutions Division, and the relevant loan agreements and loan allocation documents were
reviewed. Items such as signature date, signatures, loan allocation date, principal amount, interest amount and principal
currency in these contracts and loan allocation documents were examined. The bank system screenshots for the relevant
loans were examined and compared with the screenshots for the amounts reported to the BRSA and the Central Bank of
the Republic of Turkey.
This indicator includes all İşbank customers, whether real or legal persons, including inactive personal customers who
had an account at İşbank (except for cancelled/inactive customers and customers with non-performing loans) as of
31.12.2021 and potential customers who engaged with the Bank (through a money transfer, loan application, possession
of a supplementary card or attorney-client relationship).
This represents the number of customers who successfully logged into any of the individual İşCep, commercial İşCep,
Maximum Mobile, Maximum İşyerim, individual Internet Branch and Commercial Internet Branch channels with their
customer number and password between 01.01.2021 and 31.12.2021.
This represents the number of customers who successfully logged into any of the individual İşCep, commercial İşCep,
Maximum İşyerim and Maximum Mobile channels with their customer number and password between 01.01.2021 and
31.12.2021.
This indicator covers the scores achieved in individual and commercial customer experience surveys conducted by
independent research companies during the reporting period.
The paper savings data for 2021 was determined based on the number of pages of digitally approved contracts, the
number of letters sent via KEP notifications, and the number of digitally signed receipts. The figures for digitally approved
contracts and KEP notifications were obtained from the reports created to monitor them. Whereas the number of
digitally signed receipts was obtained via a database query.
This indicator represents the number of saplings to be planted in 2022 in return for the paper waste (papers belonging
to outdated files from the archive) donated to TEMA by İşbank between 1 March 2021 and 31 January 2022, and 1
sapling was planted for each 100 kg of waste paper donation. Receipts regarding collection of paper from archives were
reviewed.
This indicator represents the number of students who received a scholarship from İşbank under the "81 Students from
81 Cities" scholarship program conducted by İşbank in collaboration with Darüşşafaka and graduated from Darüşşafaka
in 2021, and the information contained in the official letter from Darüşşafaka was taken into account.
This indicator represents the total amount of retail and commercial cash loans extended to the agriculture and livestock
sector in 2021 and also includes those loans that fall under the NACE A code. The labeling and classification of the loans
in the system were checked and tested.
The way the loans underwriting teams labeled and classified the loans extended to SMEs in the systems was checked
and tested with examples. The total amount of financing was reviewed.
This indicator includes the number of users who logged into İşbank's website www.istekobi.com.tr, which had been active
since 2008, in 2021, and is based on the data from Google Analytics.
This indicator represents the total number of İşbank's Bankamatik ATMs in Turkey and the Turkish Republic of Northern
Cyprus (TRNC). During the reviews, the data provided by the Interbank Card Center for December 2021 was taken into
account.
This indicator represents the total number of İşbank's Bankamatik ATMs located in Turkey and the Turkish Republic of
Northern Cyprus (TRNC) which were wheelchair-accessible and/or had a headphone jack.
The total amount of financing provided in TL to those SMEs which were included in the number of female customers that
matched with the BRSA's definition of SME in 2021 was checked and tested.
KPMG Bağımsız Denetim ve
Serbest Muhasebeci Mali Müşavirlik A.Ş.
İş Kuleleri, Kule 3, Kat:2-9
Levent 34330 İstanbul
+90 212 316 60 00
+90 212 316 60 60
www.kpmg.com.tr
Limited Assurance Report
To the Board of Directors of T. İş Bankası A.Ş.
We were engaged by T. İş Bankası A.Ş. (hereinafter “Bank” or “İş Bankası”), to provide independent limited assurance on the “Selected
Information” contained in the Integrated Annual Report of İş Bankası (hereinafter "the Report") for the year ended 31 December 2021.
The scope of our assurance is limited to the Selected Information listed for İş Bankası below:
•
Number of renewable energy projects financed during the year, their installed capacity (MW) and the loan amount provided to these
projects (million USD)
Number of projects financed after undergoing environmental and social risk evaluation, and risk categories
Number of field visits made as part of environmental and social risk management
Total amount of cash commercial loans extended to the agricultural sector (billion TL)
Total amount of loan agreements signed with international financial institutions within the sustainable framework during the year
Amount of supplied renewable energy
Total amount of loans provided to SMEs (billion TL)
Number of İŞ'TE KOBİ SME website views
Total amount of financing provided to women entrepreneurs
Number of saplings planted during the year under the project with the TEMA Foundation
Number of Customers
Net Promoter Score
Customer satisfaction score
Number of ATMs
Number of disabled-friendly ATMs
Ratio of disabled-friendly ATMs (%)
Number of digital banking customers
Number of mobile banking users
Total paper savings thanks to digitized processes (pages)
Total number of employees
Breakdown of employees by gender and type of employment
Employee turnover rate (%)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
• Women employee ratio in senior management (%)
•
Unionization rate (%)
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•
•
•
Number of employees taking and returning from maternity leave
Rate of return from maternity leave and retention rate after maternity leave (%)
Number of employees using paternity leave
OHS data on the basis of female and male employees
•
o Number of incidents
o Number of fatal incidents
o Number of occupational diseases
o Days of absence due to accident
o Accident frequency rate
o Lost day rate (LDR)
o Occupational disease rate (ODR)
o Absentee rate (AR)
o Injury rate
o Number of work-related fatalities
o Number of employees carrying out tasks with a high risk of occupational diseases
•
•
•
•
•
Amount (tons) and type of waste (electronic, domestic, paper, medical, total)
Amount (tons) and type of recycled hazardous waste (car batteries, batteries, fluorescent lamps, toner cartridges)
Amount (tons) and type of recycled non-hazardous waste (glass, metal, plastic)
Amount of electronic waste recycled
Emission intensities (per employee, per consolidated total assets, and per consolidated net profit)
Management's responsibilities
Management is responsible for the preparation and presentation of the Report for the Selected Information in accordance with the İş
Bankası’s Reporting Guidance as described in the Report, and the information and assertions contained within it; for determining the İş
Bankası’s objectives in respect of sustainable development performance and reporting, including the identification of stakeholders and
material issues; and for establishing and maintaining appropriate performance management and internal control systems from which the
reported performance information is derived.
•
Number of Occupational Health and Safety Committees (OHS Committees) and the total numbers of members and employee
Management is responsible for preventing and detecting fraud and for identifying and ensuring that İş Bankası complies with laws and
representatives in the committees
regulations applicable to its activities.
Average training hours per employee, average training hours per female employee, average training hours per male employee
Management is also responsible for ensuring that staff involved with the preparation and presentation of the description and the Selected
Hours of training per newly recruited employee in their first year
Information are properly trained, information systems are properly updated and that any changes in reporting encompass all significant
•
•
•
•
•
•
•
•
Number of employees receiving "Anti-Bribery and Anti-Corruption", "Ethical Principles / Business Ethics", "Human Rights" and
"Sustainability" training and total training hours
Number of participants of information security trainings and total training hours
Share of digital trainings within all trainings (%)
Hours of training per person in the management and leadership development program
Hours of training per person in Information Technologies (IT) competence development trainings
Number of graduates from the "81 Students from 81 Cities"
Greenhouse Gas Emissions;
•
o Scope 1 (ton CO2e)
o Scope 2 (ton CO2e)
o Scope 3 (ton CO2e)
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Electricity consumption (kWh)
Natural gas consumption (m3)
Fuel-oil consumption (lt)
Coal consumption (kg)
Diesel consumption (lt)
Total energy consumption (GJ)
Fuel consumption of vehicles (lt) (fuel consumption of company vehicles, fuel consumption of personnel service vehicles,
fuel consumption due to business travel with private cars)
Total water consumption (m3)
Total consumption of municipal water - Blue (m3)
Total spring water consumption - Green (m3)
Total wastewater consumption - Gray (m3)
Amount of recovered/re-used water (m3)
Paper consumption (tons)
Amount of recycled paper (tons)
business units.
Our responsibilities
Our responsibility is to carry out an independent limited assurance engagement and to express a conclusion based on the work performed.
We conducted our engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000, Assurance Engagements
other than Audits or Reviews of Historical Financial Information, issued by the International Auditing and Assurance Standards Board. That
Standard requires that we plan and perform the engagement to obtain limited assurance about whether the Selected Information is free
from material misstatement.
We apply the International Standard on Quality Control 1 (ISQC1) and, in conformity with this Standard, maintain a comprehensive system
of quality control including documented policies and procedures regarding the compliance with ethical principles, professional standards
and applicable legal and regulatory requirements.
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the
International Ethics Standards Board for Accountants, which is founded on fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behavior.
Procedures performed
A limited assurance engagement on a Selected Information consists of making inquiries, primarily of persons responsible for the
preparation of information presented in the Selected Information, and applying analytical and other evidence gathering procedures, as
appropriate. These procedures included:
•
•
•
•
•
•
•
Interviews with relevant staff at the corporate and business unit level responsible for providing the information in the Selected
Information,
Using the Reporting Guidance of the Report to measure and evaluate the Selected Information,
Evaluating the design and implementation of key processes and controls over the Selected Information,
Re-performing, on a sample basis, the calculations used to prepare the Selected Information for the reporting period,
Evaluating the disclosure and presentation of the Selected Information in the Report to determine whether it is in line with our overall
knowledge of, and experience with, the sustainability performance of İş Bankası,
Comparing the information presented in the Selected Information to corresponding information in the relevant underlying sources to
determine whether all the relevant information contained in such underlying sources has been included in the Selected Information,
Reading the information presented in the Selected Information to determine whether it is in line with our overall knowledge of, and
experience with, the sustainability performance of İş Bankası.
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Description
GRI 101: Foundation 2016
GRI 102: General Disclosures 2016
Corporate Profile
Assurance Report
The procedures performed in a limited assurance engagement vary in nature and timing from, and are less wide than a reasonable
assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is lower than that of a reasonable
assurance engagement.
Inherent limitations
Due to the inherent limitations of any internal control structure it is possible that errors or irregularities in the information presented in the
Selected Information may occur and not be detected. Our engagement is not designed to detect all weaknesses in the internal controls
over the preparation and presentation of the Selected Information, as the engagement has not been performed continuously throughout
the period and the procedures performed were undertaken on a test basis.
Conclusion
Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusions.
Based on the procedures performed and the evidence obtained, as described above, nothing has come to our attention that causes us to
believe that the Selected Information as defined in the Report of İş Bankası for the year ended 31 December 2021 is not presented, in all
material respects, in accordance with the İş Bankası’s internally developed reporting criteria as explained in the Reporting Guidance.
In accordance with the terms of our engagement, this independent limited assurance report on the Selected Information has been prepared
for İş Bankası in connect with reporting to İş Bankası and for no other purpose or in any other context.
Restriction of use of our report
Our report should not be regarded as suitable to be used or relied on by any party wishing to acquire rights against us other than İş
Bankası, for any purpose or in any other context. Any party other than İş Bankası who obtains access to our report or a copy thereof and
chooses to rely on our report (or any part thereof) will do so at its own risk. To the fullest extent permitted by law, we accept or assume no
responsibility and deny any liability to any party other than İş Bankası for our work, for this independent limited assurance report, or for
the conclusions we have reached.
KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi
Şirin Soysal,
Partner
İstanbul, 3 March 2022
Strategy
Ethics and Integrity
Descriptions and Page Numbers
About the Report, page: 5
An Overview of İşbank, page: 8-13
https://www.isbank.com.tr/en/about-us
https:www.isbank.com.tr/iletisim
An Overview of İşbank, page: 8-13
https://www.isbank.com.tr/en/about-us
An Overview of İşbank, page: 8-13
https://www.isbank.com.tr/en/about-us
https://www.isbank.com.tr/en/about-us/sectoral-breakdown
An Overview of İşbank, page: 8-13
https://www.isbank.com.tr/en/about-us
Equal Opportunity and Diversity, page: 127-128;
Human Resources Data, page: 452-455
Supply Chain Management, page: 110-113;
Supplier Management Principles
https://www.isbank.com.tr/en/about-us/our-policies
GRI Content Index: In 2021, 2 new branches were opened, and 34
branches, 1 of which being located abroad, were merged, bringing the
total number of branches to 1,195, including 1,174 domestic branches
and 21 foreign branches, as of year end.
In line with the changes in the fields of electronic commerce ecosystem
and payments, İşbank acquired all of the shares of Moka Ödeme
Kuruluşu A.Ş. on January 5 2021 in order to benefit from the potential
opportunities in these fields.
The ecosystem functions of Maximum Mobil and Maximum İşyerim
apps were turned into an entrepreneurship, and platform services
began to be offered via Topkapı Danışmanlık Elektronik Hizmetler
Pazarlama ve Ticaret A.Ş.
Risk Management, page: 156-158
Corporate Memberships, page: 436;
Initiatives Supported in the Field of Sustainability, page: 44-45
Corporate Memberships, page: 436
Message from the Chairperson, page: 14-15;
Message from the General Manager, page: 16-17
Risk Management, page: 156-158;
Global Tendencies, Risks, Opportunities and Forecasts, page: 26-28
Business Ethics, page: 159; Ethical Principles,
https://www.isbank.com.tr/en/about-us/corporate-governance
Business Ethics, page: 159; Ethical Principles,
https://www.isbank.com.tr/en/about-us/corporate-governance
102-1
102-2
102-3
102-4
102-5
102-6
102-7
102-8
102-9
102-10
102-11
102-12
102-13
102-14
102-15
102-16
102-17
For the Materiality Disclosures Service, GRI Services assessed that the GRI Content Index is clearly presented and the references for Disclosures
102-40 to 102-49 align with the appropriate sections in the body of the report. This service was performed on the Turkish version of the report.
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Governance
102-18
102-19
102-20
102-21
102-22
102-23
102-24
102-25
102-26
102-27
102-28
102-29
102-30
102-31
102-32
102-33
102-34
102-35
102-36
102-37
102-38
102-39
Organization Chart, page: 144
Sustainability Management, page: 38
Sustainability Management, page: 38
Expectations of Stakeholders and İşBank's Response, page: 39-43;
Stakeholder Groups and Primary ESG Issues, page: 35
Management Structure, page: 137-143
GRI Content Index: The Chairperson of İşbank has no executive duty.
https://www.isbank.com.tr/en/about-us/annual-reports
https://www.isbank.com.tr/en/about-us/annual-reports
Management Structure, page: 137;
https://www.isbank.com.tr/en/about-us/annual-reports
Management Structure, page: 138-139;
https://www.isbank.com.tr/en/about-us/annual-reports
Management Structure, page: 138;
https://www.isbank.com.tr/en/about-us/annual-reports
Sustainability Management, page: 38;
Sustainability Priorities, page: 33
Risk Management, page: 156-158;
https://www.isbank.com.tr/en/about-us/annual-reports
Sustainability Management, page: 38;
Sustainability Priorities, page: 33
Sustainability Management, page: 38
Expectations of Stakeholders and İşBank's Response, page: 39-43
Expectations of Stakeholders and İşBank's Response, page: 39-43
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf;
Employee Rights, page: 124;
Remuneration Committee, page: 148,
https://www.isbank.com.tr/en/about-us/annual-reports
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf;
Employee Rights, page: 124;
Remuneration Committee, page: 148,
https://www.isbank.com.tr/en/about-us/annual-reports
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf;
Employee Rights, page: 124;
Remuneration Committee, page: 148,
https://www.isbank.com.tr/en/about-us/annual-reports
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf;
Employee Rights, page: 124;
Remuneration Committee, page: 148,
https://www.isbank.com.tr/en/about-us/annual-reports
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf;
Employee Rights, page: 124;
Remuneration Committee, page: 148,
https://www.isbank.com.tr/en/about-us/annual-reports
Stakeholder Analysis
Reporting Practices
102-40
102-41
102-42
102-43
Expectations of Stakeholders and İşBank's Response, page: 39-43,
Stakeholder Groups and Primary ESG Issues, page: 35
Employee Rights, page: 124
Stakeholder Dialogue, page: 160;
Expectations of Stakeholders and İşBank's Response, page: 39-43;
Stakeholder Groups and Primary ESG Issues, page: 35
Stakeholder Dialogue, page: 160;
Expectations of Stakeholders and İşBank's Response, page: 39-43
Sustainability Priorities, page: 33;
102-44
Expectations of Stakeholders and İşBank's Response, page: 39-43;
Stakeholder Groups and Primary ESG Issues, page: 35
102-45
102-46
102-47
102-48
102-49
102-50
102-51
102-52
102-53
102-54
102-55
102-56
About the Report, page: 5
https://www.isbank.com.tr/en/about-us/annual-reports
About the Report, Page: 5
Sustainability Priorities, Page: 33
GRI Content Index: There are no restated data.
GRI Content Index: There are no significant changes.
About the Report, page: 5
GRI Content Index: This report is İşbank's first-ever Integrated
Annual Report. The previous report was published as the Integrated
Sustainability Report 2020.
About the Report, page: 5
sustainability@isbank.com.tr
About the Report, page: 5
GRI Content Index, page: 471
Independent Assurance Statement, page: 460-470
Material Issues
Standard
Financial Performance and Profitability
Description
Descriptions and Page Numbers
GRI 103:
MANAGEMENT APPROACH 2016
GRI 201:
ECONOMIC PERFORMANCE 2016
Business Ethics, Transparency and Reporting
GRI 103:
MANAGEMENT APPROACH 2016
103-1 Explanation
of the Material Topic
and its Boundary
103-2 Management
Approach and Its
Components
103-3 Evaluation
of the Management
Approach
201-1
201-4
103-1 Explanation
of the Material Topic
and its Boundary
103-2 Management
Approach and Its
Components
103-3 Evaluation
of the Management
Approach
Sustainability Priorities, page: 33;
Financial Performance, page: 56-57
Sustainability Priorities, page: 33;
Financial Performance, page: 56-57
Sustainability Priorities, page: 33;
Financial Performance, page: 56-57
Value Creation Model, page: 29-30;
Financial Performance, page: 56-57
GRI Content Index: No government support was received.
Sustainability Priorities, page: 33;
Management Approach, page: 134, Transparency and Reporting, page: 161
Sustainability Priorities, page: 33;
Management Approach, page: 134, Transparency and Reporting, page: 161
Sustainability Priorities, page: 33;
Management Approach, page: 134, Transparency and Reporting, page: 161
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Business Ethics, Transparency and Reporting
Communication with Stakeholders
GRI 205:
ANTI-CORRUPTION 2016
GRI 408:
CHILD LABOR 2016
GRI 409:
FORCED OR COMPULSORY LABOR
2016
GRI 410:
SECURITY PRACTICES 2016
GRI 412: HUMAN RIGHTS
ASSESSMENT 2016
GRI 415: PUBLIC POLICY 2016
Risk Management
GRI 103:
MANAGEMENT APPROACH 2016
205-1
205-2
205-3
408-1
409-1
410-1
412-2
415-1
103-1 Explanation of
the Material Topic and its
Boundary
103-2 Management
Approach and Its
Components
103-3 Evaluation
of the Management Approach
GRI 201:
ECONOMIC PERFORMANCE 2016
201-2
Compliance With Changing Regulations
GRI 103:
MANAGEMENT APPROACH 2016
103-1 Explanation of
the Material Topic and its
Boundary
103-2 Management
Approach and Its
Components
103-3 Evaluation
of the Management Approach
GRI 206:
ANTI-COMPETITIVE BEHAVIOR 2016
206-1
GRI 307: ENVIRONMENTAL
COMPLIANCE 2016
GRI 419: COMPLIANCE 2016
307-1
419-1
Business Ethics, page: 159
Business Ethics, page: 159
Business Ethics, page: 159
GRI Content Index: Among the recruitment conditions in our Bank's
Personnel Regulations, there is a regulation that requires employees
"to be over the age of 18".
GRI Content Index: The working conditions of employees at İşbank
are determined within the framework of the provisions of the labor
legislation, the Bank's internal regulations, and the provisions of
the Collective Bargaining Agreement. In this context, the principle of
freedom of employment and contract as expressed in the Constitution
is valid at İşbank. In addition, İşbank is among the organizations with
the highest rate of unionized employees in the sector. Therefore, İşbank
does not have any operations with the risk of forced / compulsory labor.
GRI Content Index: 7.8% of the security personnel attended refresher
training in 2021.
Business Ethics, page: 159
GRI Content Index: İşbank does not make any donations to political parties.
Sustainability Priorities, page 33;
Risk Management, page: 156-158
Sustainability Priorities, page 33;
Risk Management, page: 156-158
Sustainability Priorities, page 33;
Risk Management, page: 156-158
We Take Responsibility for Climate Action, page: 84-86;
Risks, Opportunities & Future Insights, page: 26-28
Sustainability Priorities, page: 33;
Compliance, page: 155
Sustainability Priorities, page: 33;
Compliance, page: 155
Sustainability Priorities, page: 33;
Compliance, page: 155
As per the resolution dated 17.01.2020 with no. 20-05/48-M of
the Turkish Competition Authority ("Authority"), it has been decided
to conduct a preliminary inquiry to determine whether banks and
financial institutions with operations in Turkey, including our Bank,
and the representation offices thereof, have violated the Law no.
4054 on Protection of Competition (Law no. 4054) as part of their
activities regarding deposits, loans, foreign currencies, bonds, stocks
and brokerage services. The preliminary inquiry is ongoing, and no
decision has yet been reported on whether the Authority will initiate an
investigation or not.
Other than the lawsuit filed for cancellation of the Competition
Authority's decision specified above, there is no lawsuit or investigation
associated with anti-competitive behavior in 2021.
GRI Content Index: There are no significant fines or sanctions in the
reporting period.
www.kap.org.tr/tr/Bildirim/974078-971723-959448-897431
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
Digital Transformation
Sustainability Priorities, page: 33;
Stakeholder Dialogue, page: 160
Sustainability Priorities, page: 33;
Stakeholder Dialogue, page: 160
Sustainability Priorities, page: 33;
Stakeholder Dialogue, page: 160
103-1 Explanation of the
Material Topic and its Boundary
Sustainability Priorities, page: 33;
Digital Banking, page: 100-103
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management
Approach and Its
Components
Sustainability Priorities, page: 33;
Digital Banking, page: 100-103
103-3 Evaluation
of the Management Approach
Sustainability Priorities, page: 33;
Digital Banking, page: 100-103
Customer Centricity
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 417:
MARKETING AND LABELING 2016
417-1
417-2
417-3
Cyber Security and Customer Privacy
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 418: CUSTOMER PRIVACY 2016
418-1
Responsible Financing and Investment Integrating ESG Criteria
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 304: BIODIVERSITY 2016
GRI 412: HUMAN RIGHTS
ASSESSMENT 2016
GRI 413: LOCAL COMMUNITIES 2016
304-2
412-3
413-2
Sustainability Priorities, page: 33;
Flawless Customer Experience, page: 71-73
Sustainability Priorities, page: 33;
Flawless Customer Experience, page: 71-73
Sustainability Priorities, page: 33;
Flawless Customer Experience, page: 71-73
İşBank Banking, page: 30;
Responsible Marketing, page: 82;
Financial Literacy, page: 81
GRI Content Index: There are no cases associated with noncompliance
with the regulations and rules on product and service information and
labeling during the reporting period.
GRI Content Index: There are no cases associated with noncompliance
with the regulations and rules on marketing communication during the
reporting period.
Sustainability Priorities, page 33;
Information Security, page: 106-107
Sustainability Priorities, page 33;
Information Security, page: 106-107
Sustainability Priorities, page 33;
Information Security, page: 106-107
GRI Content Index: The number of complaints is not disclosed due to
data privacy.
Sustainability Priorities, page: 33;
Environmental and Social Risk Management in Loans, page: 89-91
Sustainability Priorities, page: 33;
Environmental and Social Risk Management in Loans, page: 89-91
Sustainability Priorities, page: 33;
Environmental and Social Risk Management in Loans, page: 89-91
Environmental and Social Risk Management in Loans, page: 89-91
Environmental and Social Risk Management in Loans, page: 89-91
Environmental and Social Risk Management in Loans, page: 89-91
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Responsible Product and Service Portfolio
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
Responsible Marketing
103-3 Evaluation
of the Management Approach
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
Financial Inclusion
103-3 Evaluation
of the Management Approach
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
Employee Rights and Satisfaction
103-3 Evaluation
of the Management Approach
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 202:
MARKET PRESENCE 2016
GRI 401:
EMPLOYMENT 2016
GRI 402: LABOR/MANAGEMENT
RELATIONS 2016
202-1
401-1
401-2
401-3
402-1
Sustainability Priorities, page: 33;
Responsible Products and Services, page: 74-75
Sustainability Priorities, page: 33;
Responsible Products and Services, page: 74-75
Sustainability Priorities, page: 33;
Responsible Products and Services, page: 74-75
Sustainability Priorities, page: 33;
Responsible Marketing, page: 82
Sustainability Priorities, page: 33;
Responsible Marketing, page: 82
Sustainability Priorities, page: 33;
Responsible Marketing, page: 82
Sustainability Priorities, page: 33;
Financial Inclusion, page: 76-80
Sustainability Priorities, page: 33;
Financial Inclusion, page: 76-80
Sustainability Priorities, page: 33;
Financial Inclusion, page: 76-80
Sustainability Priorities, page: 33;
Employee Rights, page: 124
Sustainability Priorities, page: 33;
Employee Rights, page: 124
Sustainability Priorities, page: 33;
Employee Rights, page: 124
Employee Rights, page: 124
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf
Human Resource Data, page: 452-455
Employee Rights, page: 124
Remuneration Policy,
https://www.isbank.com.tr/en/about-us/Documents/investor-
relations/remunaration-policy.pdf
Human Resources Data, page: 452-455
GRI Content Index: In case of significant operational changes, legal
notice periods are followed.
Employee Health and Safety
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
403-1
403-2
403-3
403-4
403-5
403-6
403-8
403-9
403-10
407-1
GRI 403:
OCCUPATIONAL HEALTH AND
SAFETY 2018
GRI 407: FREEDOM OF ASSOCIATION
OR COLLECTIVE BARGAINING 2016
Equal Opportunity and Diversity
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 201:
ECONOMIC PERFORMANCE 2016
GRI 405:
DIVERSITY AND EQUAL
OPPORTUNITY 2016
GRI 406:
NON-DISCRIMINATION 2016
Preferred Employer
201-3
405-1
405-2
406-1
Sustainability Priorities, page: 33;
Occupational Health and Safety, page: 126
Sustainability Priorities, page: 33;
Occupational Health and Safety, page: 126
Sustainability Priorities, page: 33;
Occupational Health and Safety, page: 126
Occupational Health and Safety, page: 126
Occupational Health and Safety, page: 126
Occupational Health and Safety, page: 126
Occupational Health and Safety, page: 126
Occupational Health and Safety, page: 126
Occupational Health and Safety, page: 126;
Fight Against COVID-19, Measures Taken for Employees, page: 200-201
Occupational Health and Safety, page: 126
Human Resources Data, page: 452-455
Human Resources Data, page: 452-455
Employee Rights, page: 124
Sustainability Priorities, page: 33;
Equal Opportunity and Diversity, page: 127-128
Sustainability Priorities, page: 33;
Equal Opportunity and Diversity, page: 127-128
Sustainability Priorities, page: 33;
Equal Opportunity and Diversity, page: 127-128
2020 Activity Report, page: 162, 225-227,
https://www.isbank.com.tr/en/about-us/annual-reports
Human Resources Data, page: 452-455;
Equal Opportunity and Diversity, page: 127-128
GRI Content Index: Remuneration is managed through transparent
and measurable processes and systems, and there is no gender-based
wage differentiation. This rate is 1 as there is no difference in wages
based on gender. Employee Rights, page: 124
GRI Content Index: İşbank takes all decisions about its employees
independent of race, religion, language, sect or any belief, sexual
orientation/preference, gender, mental or physical disability, age,
cultural or social class and thought/opinion differences; it refuses any
discrimination against or among the employees and managers.
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 404:
TRAINING AND EDUCATION 2016
404-1
404-2
404-3
Sustainability Priorities, page: 33;
Talent Management, page: 129-131; Preferred Employer, page: 126
Sustainability Priorities, page: 33;
Talent Management, page: 129-131; Preferred Employer, page: 126
Sustainability Priorities, page: 33;
Talent Management, page: 129-131; Preferred Employer, page: 126
Talent Management, page: 129-131
Talent Management, page: 129-131
Talent Management, page: 129-131
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Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen GRI Content Index
Responsible Procurement
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 204:
PROCUREMENT PRACTICES 2016
GRI 308: SUPPLIER ENVIRONMENTAL
ASSESSMENT 2016
GRI 414: SUPPLIER SOCIAL
ASSESSMENT 2016
The Bank's Environmental Footprint
204-1
308-1
308-2
414-1
414-2
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 302:
ENERGY 2016
GRI 303:
WATER AND EFFLUENTS 2018
GRI 305:
EMISSIONS 2016
GRI 306:
EFFLUENTS AND WASTE 2016
Corporate Social Responsibility
302-1
302-2
302-3
302-4
302-5
303-3
303-5
305-1
305-2
305-3
305-4
305-5
306-2
306-3
306-5
Sustainability Priorities, page: 33;
Supply Chain Management, page: 110-113
Sustainability Priorities, page: 33;
Supply Chain Management, page: 110-113
Sustainability Priorities, page: 33;
Supply Chain Management, page: 110-113
Supply Chain Management, page: 110-113
Supply Chain Management, page: 110-113
Supply Chain Management, page: 110-113
Supply Chain Management, page: 110-113
GRI Content Index: No negative social impacts were observed in the
supply chain.
Sustainability Priorities, page: 33;
Environmental Impact, page 114-117; Environmental and Social
Impacts Policy
https://www.isbank.com.tr/en/about-us/our-policies
Sustainability Priorities, page: 33;
Environmental Impact, page 114-117; Environmental and Social
Impacts Policy
https://www.isbank.com.tr/en/about-us/our-policies
Sustainability Priorities, page: 33;
Environmental Impact, page 114-117; Environmental and Social
Impacts Policy
https://www.isbank.com.tr/en/about-us/our-policies
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Environmental Impact, page: 114-117
Environmental Impact, page: 114-117
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Key Performance Indicators, page: 115
Environmental Impact, page: 114-117
Key Performance Indicators, page: 115
GRI Content Index: No significant leakage/spillage incident occurred
during the reporting period.
GRI Content Index: There is no water resource that is significantly
affected by İşbank's activities.
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
GRI 203:
INDIRECT ECONOMIC IMPACTS 2016
GRI 413: LOCAL COMMUNITIES 2016
203-1
203-2
413-1
Sustainability Priorities, page: 33;
We Take Responsibility for Future Generations, page: 192-199
Sustainability Priorities, page: 33;
We Take Responsibility for Future Generations, page: 192-199
Sustainability Priorities, page: 33;
We Take Responsibility for Future Generations, page: 192-199
Financial Performance and Profitability, page: 56-57
Financial Performance and Profitability, page: 56-57
Environmental and Social Risk Management in Loans, page: 89-91
Financial Literacy
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
Combating Climate Change
103-3 Evaluation
of the Management Approach
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
Emergency Action Preparation and Business Continuity
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
National and International Cooperation for Sustainability
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
Open Banking
103-3 Evaluation
of the Management Approach
103-1 Explanation of the
Material Topic and its Boundary
GRI 103:
MANAGEMENT APPROACH 2016
103-2 Management Approach
and Its Components
103-3 Evaluation
of the Management Approach
Sustainability Priorities, page: 33;
Financial Literacy, page: 81
Sustainability Priorities, page: 33;
Financial Literacy, page: 81
Sustainability Priorities, page: 33;
Financial Literacy, page: 81
Sustainability Priorities, page: 33;
We Take Responsibility for Climate Action, page: 84-88
Sustainability Priorities, page: 33;
We Take Responsibility for Climate Action, page: 84-88
Sustainability Priorities, page: 33;
We Take Responsibility for Climate Action, page: 84-88
Sustainability Priorities, page: 33;
Combating the COVID-19 Pandemic, page: 200-201
Sustainability Priorities, page: 33;
Combating the COVID-19 Pandemic, page: 200-201
Sustainability Priorities, page: 33;
Combating the COVID-19 Pandemic, page: 200-201
Sustainability Priorities, page: 33;
Initiatives Supported in the Field of Sustainability, page: 44-45
Sustainability Priorities, page: 33;
Initiatives Supported in the Field of Sustainability, page: 44-45
Sustainability Priorities, page: 33;
Initiatives Supported in the Field of Sustainability, page: 44-45
Sustainability Priorities, page 33;
Digital Banking, page: 100-103
Sustainability Priorities, page 33;
Digital Banking, page: 100-103
Sustainability Priorities, page 33;
Digital Banking, page: 100-103
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 479
Reliable Financial ActorResponsible OperationsFinancial Reports and AnnexesAn Overview of İşbankLooking into the FutureHow We Create ValueGood Corporate Citizen Company Information
Corporate Title: Türkiye İş Bankası Anonim Şirketi
Trade Registry Number: 431112
Address: İş Kuleleri 34330 Levent/İstanbul
Website: www.isbank.com.tr
Contact Information of Branches: Please visit www.isbank.com.tr
Company Announcements and Financial Data:
İşbank’s financial statements, independent auditor’s reports, annual reports, press releases and disclosures of material events are
available on the Bank’s corporate website under the title of Investor Relations, in both Turkish and English.
Contact Information
Telephone: +90 (212) 316 00 00
Fax: +90 (212) 316 04 04
Call Center: (0850) 724 0 724
E-posta: musteri.iliskileri@isbank.com.tr
Social Media Accounts
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İŞBANK 2021 INTEGRATED ANNUAL REPORT | 481
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