PASHA_BANK_ANNUAL REPORT 2022

General Information Financial Information and Risk Management Review Information on Management and Corporate Governance Principles INFORMATION RELATED TO UNCONSOLIDATED FINANCIAL POSITION AND RISK MANAGEMENT (Continued) III. EXPLANATIONS ON CURRENCY RISK The Bank’s foreign currency position is managed within the limits set by legislation and the Bank. The basic principle in foreign currency risk management is not to be exposed to currency risk. Accordingly, the exchange-trading risk positions are not allocated to the limit, banking accounts as of the currency by creating a matched asset-liability structure is aimed to provide natural protection. The Bank uses derivative financial instruments such as forward foreign exchange contracts and currency swaps for hedging purposes in foreign currency denominated transactions. Bank’s methodology of digitising the foreign currency position includes the use of standard method when calculating the capital adequacy ratio and application of internal stress tests/sensitivity analysis. The Bank’s publicly announced foreign exchange bid rates as of the date of the financial statements and for the last five business days prior to that date: (Full TL) USD EUR Foreign exchange rates as of 31 December 2022 18.6983 19.9349 1. Bid rate 18.6983 19.9349 2. Bid rate 18.6966 19.8816 3. Bid rate 18.6964 19.8946 4. Bid rate 18.6813 19.9087 5. Bid rate 18.6649 19.8324 Arithmetic average - 31 days 18.6395 19.7374 Foreign exchange rates as of 31 December 2021 13.3290 15.0867 Foreign Exchange Sensitivity Analysis The effects (excluding tax effects) of 10% change of TL against the foreign currencies below on the equity and profit or loss are presented below. This analysis assumes that all other variables, in particular interest rates, remain constant. Change in Currency Rate Effect on Profit and Loss Effect on Equity Current Period Prior Period Current Period Prior Period USD 10% decrease (6,021) (2,431) (6,021) (2,431) USD 10% increase 6,021 2,431 6,021 2,431 EUR 10% decrease (3,450) (5,641) (3,450) (5,641) EUR 10% increase 3,450 5,641 3,450 5,641 165 PASHA Bank 2022 Annual Report Notes to Unconsolidated Financial Statements at 31 December 2022 Pasha Yatırım Bankası A.Ş. (Amounts are expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.) Convenience translation of publicly announced unconsolidated financial statements originally issued in turkish, see note I of section three