PASHA BANK ANNUAL REPOT 2024

INFORMATION RELATED TO FINANCIAL POSITION AND RISK MANAGEMENT (Continued) VI. EXPLANATIONS ON LIQUIDTY RISK and LIQUIDITY COVERAGE RATIO a. Information on risk capacity, responsibilities and structure of liquidity risk management, reporting of liquidity risk at bank, liquidity risk management including how liquidity risk strategy, policy and implementations communicates with board of directors and business units Liquidity risk is the risk occurring as a result of non-availability of sufficient cash on hand or cash inflow to meet cash outflows in a timely manner completely as a result of imbalance in cash flows. Treasury department manages the liquidity of the Bank daily and informs ALCO about the liquidity position of the Bank weekly. It is the Treasury Department’s responsibility to plan the liquidity management for weekly, monthly and annual periods and to take the necessary precautions, in coordination with the Financial Planning & Control Department and Risk Management. It is the Risk Management’s responsibility to inform the senior management. The Bank forms its assets and liabilities in balance not to create a negative gap on cumulative basis in maturity segments. In accordance with the “Regulation on Measurement and Evaluation of Liquidity Adequacy of Banks” entered into force after published on Official Gazette dated 1 November 2006 and numbered 26333 by BRSA, starting from 1 June 2007, weekly simple average of total liquidity adequacy rates related to primary maturity segment and total liquidity adequacy rate related to secondary maturity segment cannot be less than 100% while weekly simple average of foreign currency liquidity ratio related to primary maturity segment and foreign currency adequacy rate related to secondary maturity segment cannot be less than 80%. The Reporting Department is responsible for calculating the first maturity and second maturity liquidity ratios and reporting to the legal authorities. The stress tests to be applied on the liquidity position and the liquidity coverage ratio are calculated by the Risk Management Unit. Risk Management Department monitors related unit’s activities and reports to the Senior Management monthly. b. Information on centralization grade of liquidity management and funding strategy and its functionality among Bank and its affiliates There is no structured liquidity management requiring centralization between bank and its affiliates. c. Information on funding strategy of the Bank including policies related to diversity of funding sources and periods The main funding sources of the Bank are provided by domestic and foreign banks, repo transactions, subordinated loans, money market transactions and issued marketable securities and diversification of aforementioned sources are made in order to minimize liquidity risk. Financial Institutions and Investor Relations Department carries out studies which are required to relate supplying of long term foreign source. 181 Financial Information and Risk Management Review PASHA Yatırım Bankası A.Ş. Notes to the Unconsolidated Financial Statements As of and for the Year Ended 31 December 2024 (Continued) (Convenience translation of publicly announced financial statements originally issued in Turkish) (Amounts are expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)