PASHA BANK ENG 20

PASHA Yatırım Bankası A.Ş. Notes to Unconsolidated Financial Statements at 31 December 2020 (Amounts are expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) (Convenience Translation of Publicly Announced Financial Statements Originally Issued in Turkish, See Note I of Section Three) INFORMATION RELATED TO UNCONSOLIDATED FINANCIAL POSITION AND RISK MANAGEMENT(Continued) f. Issues to be announced to public related to securitisation positions The Bank does not have transactions related with securitizations, the related table has not been prepared. g. Explanations on market risk The risk principles, policies and risk limits related to the management of market risk are approved by the Board of Directors and reviewed on a regular basis. The Bank’s Senior Management performs day to day management of the market risk in accordance with the limits assigned by the Board of Directors. The Bank is exposed to market risk as a result of fluctuations in foreign exchange rates, interest rates, and market prices of stocks. Exchange rate risk and interest rate risk are evaluated as the two most important components of market risk. The Bank engages in derivative transactions for hedge purposes when found necessary. Market risk is calculated by the “standard method”. For legal reporting, standard method is utilised. The following table indicates the details of the market risk calculation, in accordance with the Market Risk Calculation principles pursuant to the Third Section of the “Regulation on Measurement and Assessment of Capital Adequacy of Banks” published in the Official Gazette no. 29511 on 23 October 2015. Current Period Prior Period RWA RWA Outright products 1 Interest rate risk (general and specific) 2,925 588 2 Equity risk (general and specific) - - 3 Foreign exchange risk 34,175 25,688 4 Commodity risk - - Options 5 Simplified approach - - 6 Delta-plus method - - 7 Scenario approach - - 8 Securitisation - - Total 37,100 26,276 h. Explanations on operational risk The “Basic Indicator Method” that is mentioned in “Regulation on Measurement and Assessment of Capital Adequacy of Banks” Communiqué is used in the operational risk calculation of the Bank and calculated on a yearly basis. Current Period 2 Prior Period Amount Period Amount Current Period Amount Total/ Positive GI year number Ratio (%) Total Gross Revenue 45,588 82,185 97,898 75,223.67 15 11,283.55 Amount Subject to Operational Risk (Total*12,5) 141,044 Current Period 2 Prior Period Amount Period Amount Current Period Amount Total/ Positive GI year number Ratio (%) Total Gross Revenue 36,494 45,588 82,185 54,755.6 15 8,213.3 Amount Subject to Operational Risk (Total*12,5) 102,666 186 Annual Report 2020 PASHA Bank Year-End Financial Report