Türkiye İş Bankası Anonim Şirketi

Transcription

1 (Convenience Translation of Unconsolidated Interim Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note I in Section Three) Türkiye İş Bankası Anonim Şirketi Unconsolidated Financial Statements As at and For the Nine-Month Period Ended September 30, 2018 With Auditor s Limited Review Report Thereon (Convenience Translation of Unconsolidated Interim Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish) This report includes Auditor s Limited Review Report comprising 2 pages and; "Unconsolidated Financial Statements and Related Disclosures and Footnotes comprising 107 pages.

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4 TÜRKİYE İŞ BANKASI A.Ş THE UNCONSOLIDATED FINANCIAL REPORT AS AT AND FOR THE NINE-MONTH PERIOD ENDED Headquarters Address: İş Kuleleri, 34330, Levent/İstanbul Telephone: Fax: Web site: The unconsolidated interim financial report as at and for the nine-month period 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 INTERIM FINANCIAL STATEMENTS EXPLANATIONS ON THE ACCOUNTING POLICIES INFORMATION ON FINANCIAL STRUCTURE AND RISK MANAGEMENT DISCLOSURES AND FOOTNOTES ON THE UNCONSOLIDATED INTERIM FINANCIAL STATEMENTS OTHER EXPLANATIONS LIMITED REVIEW REPORT INTERIM ACTIVITY REPORT The unconsolidated financial statements for the nine-month period 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 limited review and presented as the attached. Prof. Dr. Turkay Berksoy Füsun Tümsavaş H. Ersin Özince Member of the Board and Deputy Chairman of the Board of Directors Chairman of the Board of Directors the Audit Committee and Chairman of the Audit Committee And Member of the Audit Committee Ali Tolga Ünal Senar Akkuş Adnan Bali Head of Financial Management Division Deputy Chief Executive Chief Executive Officer In Charge of Financial Reporting The authorized contact person for questions on this financial report: Name Surname/Title: Süleyman H. Özcan/Head of Investor Relations Division Phone No : Fax No : Suleyman.Ozcan@isbank.com.tr investorrelations@isbank.com.tr Website :

5 SECTION I General Information about the Bank I. Explanations on the Establishment Date and Initial Status of the Bank, History Including the Changes in the Former Status 1 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 1 III. Explanations on the Chairman s, Directors, Auditors, Chief Executive Officer s and Deputy Chief Executives Shares, if any, and the Areas of their Responsibility at the Bank 1 IV. Information on the Bank s Qualified Shareholders 2 V. Summary Information on the Bank s Functions and Business Lines 2 VI. 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 2 VII. Written Policies on Assessment of Ensuring Compliance on Market Discipline, Disclosure Obligations, Frequency and Accuracy of Related Disclosures 2 SECTION II Unconsolidated Interim Financial Statements I. Balance Sheet (Statement of Financial Position) Assets 3 II. Balance Sheet (Statement of Financial Position) Assets () 4 III. Balance Sheet (Statement of Financial Position) Liabilities 5 IV. Balance Sheet (Statement of Financial Position) Liabilities () 6 V. Statement of Off-Balance Sheet Items 7 VI. Statement of Off-Balance Sheet Items () 8 VII. Statement of Income 9 VIII. Statement of Income () 10 IX. Statement of Profit or Loss and Other Comprehensive Income 11 X. Statement of Income and Expense Items Accounted under Shareholders Equity () 12 XI. Statement of Changes in the Shareholders Equity 13 XII. Statement of Changes in the Shareholders Equity () 14 XIII. Statement of Cash Flows 15 XIV. Statement of Cash Flows () 16 SECTION III Explanations on Accounting Policies I. Basis of Presentation 17 II. Strategy for Use of Financial Instruments and Foreign Currency Transactions 19 III. Associates and Subsidiaries 20 IV. Forward, Option Contracts and Derivative Instruments 20 V. Interest Income and Expenses 20 VI. Fees and Commission Income and Expenses 20 VII. Financial Assets 21 VIII. Explanations on Expected Credit Losses 22 IX. Offsetting Financial Instruments 23 X. Sale and Repurchase Agreements and Securities Lending Transactions 23 XI. Non-current Assets Held for Sale and Discontinued Operations and Related Liabilities 23 XII. Goodwill and Other Intangible Assets 24 XIII. Tangible Assets 24 XIV. Leasing Transactions 25 XV. Provisions and Contingent Liabilities 25 XVI. Contingent Assets 25 XVII. Liabilities Regarding Employee Benefits 25 XVIII. Taxation 26 XIX. Borrowings 28 XX. Equity Shares and Issuance of Equity Securities 28 XXI. Bank Acceptances and Bills of Guarantee 29 XXII. Government Incentives 29 XXIII. Segment Reporting 29 XXIV. Other Disclosures SECTION IV Information on the Financial Position and Risk Management of the Bank I. Explanations on Shareholders Equity 33 II. Explanations on Currency Risk 42 III. Explanations on Interest Rate Risk 44 IV. Explanations on Equity Shares Risk Arising from Banking Book 47 V. Explanations on Liquidity Risk Management and Liquidity Coverage Ratio 48 VI. Explanations on Leverage Ratio 52 VII. Explanations on Risk Management Objectives and Policies 53 VIII. Explanations on Segment Reporting 54 SECTION V Disclosures and Footnotes on the Unconsolidated Financial Statements I. Disclosures and Footnotes on Assets 56 II. Disclosures and Footnotes on Liabilities 75 III. Disclosures and Footnotes on Off-Balance Sheet Items 85 IV. Disclosures and Footnotes on Statement of Income 87 V. Disclosures and Footnotes on the Bank s Risk Group 93 VI: Subsequent Events 95 SECTION VI Other Explanations I. Explanations on the Bank s Credit Ratings 96 II. Explanations on Special Purpose Audit and Public Audit 96 SECTION VII Explanations on the Limited Review Report I. Explanations on the Limited Review Report 97 II. Explanations and Footnotes of the Independent Auditors 97 SECTION VIII Interim Activity Report I. General Information 98 II. Turkish Economy and Banking Sector Outlook 100 III. Financial Information and Assessment on Bank 101 IV. Information About the Meetings of the Board of Directors 105 V. Information on the Activities of the Committee of Internal Systems 105 VI. Information About the Activities of the Credit Committee 106 VII. Corporate Governance Committee 106 VIII. Information on the transactions relating to Banks Risk Group 106 IX. Information on Dividend Distribution 107 X. Additional Information about the period January 1, 2018 September 30,

6 NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SECTION ONE: GENERAL INFORMATION ABOUT THE BANK I. Explanations on the Establishment Date and Initial Status of the Bank, History Including the Changes in the Former Status 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. 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 at September 30, 2018, 40.13% 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 31.78% are on free float (December, : Fund 39.95%, CHP 28.09%, Free float 31.96%). III. Explanations on the Chairman s, Directors, Auditors, Chief Executive Officer s and Deputy Chief Executives Shares, if any, and the Areas of their Responsibility at the Bank Chairman and Members of the Board of Directors: Name and Surname H. Ersin Özince Füsun Tümsavaş Adnan Bali Prof. Dr. Turkay Berksoy Feray Demir Ertuğrul Bozgedik Ersin Önder Çiftçioğlu Murat Karayalçın Özcal Korkmaz Müslim Sarı Rahmi Aşkın Türeli Areas of Responsibility Chairman of the Board and the Remuneration Committee, Member of the Audit Committee, TRNC Internal Systems Committee and Substitute Member of the Credit Committee Deputy Chairman, Audit Committee, TRNC Internal Systems Committee, Chairman of the Risk Committee and the Corporate Governance Committee, Substitute Member of the Credit Committee Chief Executive Officer and Director, Chairman of the Credit Committee, Member of the Risk Committee, Chairman of the Executive Committee, Chairman of the Human Resources Committee Director, Audit Committee, TRNC Internal Systems Committee and Member of the Remuneration Committee Director, Credit Committee,Member of Corporate Social Responsibility Committee Director, Credit Committee Director, Corporate Governance Committee Director Director, Corporate Governance Committee Director, Member of Corporate Social Responsibility Committee Director, Member of Corporate Social Responsibility Committee Chief Executive Officer and Deputy Chief Executives: Name and Surname Areas of Responsibility Adnan Bali Chief Executive Officer and Director, Chairman of the Credit Committee, Member of the Risk Committee, Chairman of the Executive Committee, Chairman of the Human Resources Committee Hakan Aran Information Technologies, Digital Banking Operations, Data Management Consumer Loans, Card Payment Systems, Retail Banking Marketing-Sales and Products, Retail Loan and Card Yalçın Sezen Operations, Digital Banking, Private Banking Marketing and Sales, Member of the Corporate Social Responsibility Committee Senar Akkuş Financial Management, Strategy and Corporate Performance Management,, Managerial Reporting and Internal Accounting, Subsidiaries, Member of the Corporate Social Responsibility Committee and the Risk Committee Yılmaz Ertürk Economic Research, International Financial Institutions Murat Bilgiç Corporate, SME, Commercial, Retail Banking Allocation, Credit Portfolio Management, Financial Analysis and Credit Information, and Member of the Risk Committee Nevzat Burak Seyrek Enterprise Architecture, Human Resources and Talent Management, Consumer Relations Coordination Officer Mehmet Şencan Commercial Banking Marketing, Sales and Product, SME and Business Banking Sales, Corporate Banking Marketing and Sales, Free Zone Branches, Foreign Branches and Representations Ömer Karakuş Banking Basic Operations, Support Services and Purchasing, Foreign and Commercial Credit Operations, Internal Operations, Construction and Property Management, Branch Network Development Şahismail Şimşek SME and Enterprise Banking Sales, Commercial Banking Marketing and Product Ebru Özşuca Treasury, Economic Enquiries, Member of the Risk Comittee Gamze Yalçın International Financial Institutions, Investor Relations H. Cahit Çınar Commercial Banking, Retail Banking and General Deliberation Legal Counsellorship, Commercial and Corporate Loans and Retail Loans Monitoring and Recovery, Credits Portfolio Management Mahmut Magemizoğlu (on September 28, 2018) and Ergün Yorulmaz (on October 31, 2018) have left their duties in the Bank, due to retirement. With the Board of Directors decision dated October 05, 2018, H.Cahit Çınar has been appointed to the position of Senior Deputy Chief Executive. The 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. 1

7 NOTES TO THE UNCONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED IV. Information on the Bank s Qualified Shareholders Name Surname/Company Shares Ownership Paid-in Capital T. İş Bankası A.Ş. Mensupları Munzam Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı (İşbank Members Supplementary Pension Fund) 1,806, % 1,806,014 Unpaid Capital Cumhuriyet Halk Partisi Republican People s Party -(Atatürk s Shares) 1,264, % 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. 2

8 UNCONSOLIDATED BALANCE SHEET AS OF (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) SECTION II: UNCONSOLIDATED FINANCIAL STATEMENTS TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) THOUSAND TL CURRENT PERIOD ASSETS Footnotes (30/09/2018) TL FC Total I. FINANCIAL ASSETS (NET) 59,501,633 62,673, ,175, Cash and Cash Equivalents 7,503,007 38,344,700 45,847, Cash and Balances with Central Bank V-I-a 6,614,930 34,642,625 41,257, Banks V-I-d 888,077 3,702,075 4,590, Money Market Placements Financial Assets at Fair Value Through Profit or Loss V-I-b 458,416 14, , Government Debt Securities 206,485 14, , Equity Securities 230, , Other Financial Assets 20,988-20, Financial Assets at Fair Value Through Other Comprehensive Income V-I-e 27,213,805 13,576,182 40,789, Government Debt Securities 27,160,396 13,194,921 40,355, Equity Securities 53, , , Other Financial Assets - 85,415 85, Financial Assets Measured at Amortised Cost V-I-g 24,043,410 2,447,321 26,490, Government Debt Securities 23,717,387 1,843,687 25,561, Other Financial Assets 326, , , Derivative Financial Assets V-I-c 291,975 8,307,139 8,599, Derivative Financial Assets at Fair Value Through Profit or Loss 291,975 8,307,139 8,599, Derivative Financial Assets at Fair Value Through Other Comprehensive Income Non-Performing Financial Assets Expected Credit Loss (-) 8,980 16,383 25,363 II. LOANS (NET) V-I-f 153,686, ,224, ,911, Loans 152,111, ,163, ,275, Loans Measured at Amortised Cost 152,111, ,163, ,275, Loans Measured at Fair Value Through Profit or Loss Loans Measured at Fair Value Through Other Comprehensive Income Lease Receivables V-I-k Financial Lease Receivables Operating Lease Receivables Unearned Income (-) Factoring Receivables Factoring Receivables Measured at Amortised Cost Factoring Receivables Measured at Fair Value Through Profit or Loss Factoring Receivables Measured at Fair Value Through Other Comprehensive Income Non-Performing Loans V-I-f 9,490, ,538 10,239, Expected Credit Loss (-) 7,915,592 3,688,508 11,604, Month Expected Credit Losses (Stage I) 1,231,271 1,215,338 2,446, Significant Increase in Credit Risk (Stage II) 943,835 2,322,070 3,265, Credit-Impaired Losses (Stage III/Special Provision) 5,740, ,100 5,891,586 III. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) V-I-o 205, , Held for Sale 205, , Discontinued Operations IV. EQUITY INVESTMENTS 15,048,088 1,788,924 16,837, Investments in Associates (Net) V-I-h 195, , Associates Accounted by using Equity Method Unconsolidated Associates 195, , Subsidiaries (Net) V-I-i 14,852,110 1,788,924 16,641, Unconsolidated Financial Subsidiaries 5,510,226 1,788,924 7,299, Unconsolidated Non-Financial Subsidiaries 9,341,884-9,341, Joint Ventures (Net) V-I-j Joint Ventures Accounted by using Equity Method Unconsolidated Joint Ventures V. TANGIBLE ASSETS (Net) 5,097,844 9,634 5,107,478 VI. INTANGIBLE ASSETS (Net) 537, , Goodwill Other 537, ,903 VII. INVESTMENT PROPERTY (Net) V-I-m VIII. CURRENT TAX ASSET 58,973-58,973 IX. DEFERRED TAX ASSET V-I-n 804, ,209 1,163,630 X. OTHER ASSETS V-I-p 3,324,977 5,011,824 8,336,801 TOTAL ASSETS 238,265, ,068, ,334,310 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately The accompanying explanations and notes form an integral part of these financial statements. 3

9 UNCONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2017 (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) THOUSAND TL RESTATED PRIOR PERIOD ASSETS Footnotes (31/12/2017) TL FC Total I. CASH AND BALANCES WITH THE CENTRAL BANK V-I-a 4,991,697 30,958,770 35,950,467 II. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS (Net) V-I-b-c 461,851 1,969,831 2,431, Financial Assets Held for Trading 461,851 1,969,831 2,431, Government Debt Securities 122,039 10, , Equity Securities 221, , Derivative Financial Assets Held for Trading 118,215 1,959,183 2,077, Other Marketable Securities Financial Assets at Fair Value Through Profit and Loss Government Debt Securities Equity Securities Loans Other Marketable Securities III. BANKS V-I-d 192,077 2,281,128 2,473,205 IV. MONEY MARKET PLACEMENTS Interbank Money Market Placements Istanbul Stock Exchange Money Market Placements Receivables from Reverse Repurchase Agreements V. FINANCIAL ASSETS AVAILABLE-FOR-SALE (Net) V-I-e 38,470,070 10,912,374 49,382, Equity Securities 34, , , Government Debt Securities 38,430,607 10,606,923 49,037, Other Marketable Securities 5, , ,712 VI. LOANS AND RECEIVABLES V-I-f 148,199,165 91,966, ,165, Loans and Receivables 147,442,195 91,966, ,408, Loans to the Bank's Risk Group 993, ,871 1,492, Government Debt Securities Other 146,448,326 91,467, ,916, Non-Performing Loans 5,382,865 20,669 5,403, Specific Provisions (-) 4,625,895 20,669 4,646,564 VII. FACTORING RECEIVABLES VIII. HELD TO MATURITY INVESTMENTS (Net) V-I-g 7,255, ,498 7,614, Government Debt Securities 7,111,197-7,111, Other Marketable Securities 144, , ,618 IX. INVESTMENTS IN ASSOCIATES (Net) V-I-h 185, , Associates Accounted for Using the Equity Method Unconsolidated Associates 185, , Financial Investments 163, , Non-Financial Investments 21,578-21,578 X. INVESTMENTS IN SUBSIDIARIES (Net) V-I-i 12,599,949 1,016,895 13,616, Unconsolidated Financial Subsidiaries 5,430,802 1,016,895 6,447, Unconsolidated Non-Financial Subsidiaries 7,169,147-7,169,147 XI. JOINTLY CONTROLLED ENTITIES (JOINT VENTURES) (Net) V-I-j Jointly Controlled Entities Accounted for Using the Equity Method Unconsolidated Jointly Controlled Entities Jointly Controlled Financial Entities Jointly Controlled Non-Financial Entities XII. LEASE RECEIVABLES V-I-k Finance Lease Receivables Operating Lease Receivables Other Unearned Income (-) XIII. DERIVATIVE FINANCIAL ASSETS HELD FOR HEDGING V-I-l Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges XIV. TANGIBLE ASSETS (Net) 4,441,939 7,286 4,449,225 XV. INTANGIBLE ASSETS (Net) 557, , Goodwill Other 557, ,416 XVI. INVESTMENT PROPERTY (Net) V-I-m XVII. TAX ASSETS V-I-n 480,850 28, , Current Tax Assets Deferred Tax Assets 480,850 28, ,969 XVIII. ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS (Net) V-I-o 155, , Held for Sale 155, , Discontinued Operations XIX. OTHER ASSETS V-I-p 3,175,679 1,575,703 4,751,382 TOTAL ASSETS 221,167, ,076, ,243,533 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatements for the prior period is related with TAS 27 policy change where details are disclosed in Footnote I, Section Three. The accompanying explanations and notes form an integral part of these financial statements. 4

10 UNCONSOLIDATED BALANCE SHEET AS OF (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) THOUSAND TL CURRENT PERIOD LIABILITIES Footnotes (30/09/2018) TL FC Total I. DEPOSITS V-II-a 100,298, ,740, ,038,802 II. FUNDS BORROWED V-II-c 1,913,257 48,387,163 50,300,420 III. MONEY MARKETS 19,568,930 5,723,644 25,292,574 IV. SECURITIES ISSUED (Net) V-II-d 5,273,729 32,566,917 37,840, Bills 4,496,853-4,496, Asset Backed Securities Bonds 776,876 32,566,917 33,343,793 V. FUNDS Borrower Funds Other VI. FİNANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS VII. DERIVATIVE FINANCIAL LIABILITIES V-II-b 3,097,569 2,009,718 5,107, Derivative Financial Liabilities at Fair Value Through Profit or Loss 3,097,569 2,009,718 5,107, Derivative Financial Liabilities at Fair Value Through Other Comprehensive Income VIII. FACTORING PAYABLES IX. LEASE PAYABLES (Net) V-II-f Financial Lease Operating Lease Other Deferred Financial Lease Expenses (-) X. PROVISIONS V-II-h 6,415, ,211 6,548, Restructuring Provisions Reserve for Employee Benefits 919, , Insurance Technical Provisions (Net) Other Provisions 5,495, ,211 5,629,064 XI. CURRENT TAX LIABILITY V-II-i 518,486 10, ,989 XII. DEFERRED TAX LIABILITY V-II-i XIII. LIABILITIES RELATED TO ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS Held for Sale Discontinued Operations XIV. SUBORDINATED DEBT 1,137,591 11,568,246 12,705, Loans Other Debt Instruments 1,137,591 11,568,246 12,705,837 XV. OTHER LIABILITIES V-II-e 12,254,371 4,125,462 16,379,833 XVI. SHAREHOLDERS' EQUITY V-II-j 48,225,673 (1,634,613) 46,591, Paid-in capital 4,500,000-4,500, Capital Reserves 1,251, ,251, Share Premium 5, , Share Cancellation Profits Other Capital Reserves 1,245,873-1,245, Accumulated Other Comprehensive Income or Loss Not Reclassified Through Profit or Loss 4,122,840 (447) 4,122, Accumulated Other Comprehensive Income or Loss Reclassified Through Profit or Loss 667,933 (1,634,370) (966,437) 16.5 Profit Reserves 27,238,705-27,238, Legal Reserves 3,821,950-3,821, Status Reserves Extraordinary Reserves 23,416,755-23,416, Other Profit Reserves Profit or Loss 10,445,076-10,445, s' Profit or Loss 5,871,772-5,871, Profit or Loss 4,573,304-4,573,304 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 198,704, ,630, ,334,310 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. The accompanying explanations and notes form an integral part of these financial statements. 5

11 UNCONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2017 (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED BALANCE SHEET (STATEMENT OF FINANCIAL POSITION) THOUSAND TL RESTATED PRIOR PERIOD LIABILITIES Footnotes (31/12/2017) TL FC Total I. DEPOSITS V-II-a 97,050, ,701, ,752, Deposits from the Bank's Risk Group 2,598,162 3,115,774 5,713, Other 94,451, ,586, ,038,096 II. DERIVATIVE FINANCIAL LIABILITIES HELD FOR TRADING V-II-b 274,798 1,018,230 1,293,028 III. FUNDS BORROWED V-II-c 1,966,845 36,457,591 38,424,436 IV. MONEY MARKET FUNDS 17,318,967 2,514,594 19,833, Interbank Money Market Funds 2,502,656-2,502, Istanbul Stock Exchange Money Market Funds 488, , Funds Provided Under Repurchase Agreements 14,328,285 2,514,594 16,842,879 V. MARKETABLE SECURITIES ISSUED (Net) V-II-d 4,396,751 21,514,528 25,911, Bills 3,237,626 71,646 3,309, Asset-backed Securities Bonds 1,159,125 21,442,882 22,602,007 VI. FUNDS Borrower funds Other VII. MISCELLANEOUS PAYABLES 9,262, ,270 10,076,726 VIII. OTHER LIABILITIES V-II-e 960,019 1,124,345 2,084,364 IX. FACTORING PAYABLES X. LEASE PAYABLES (Net) V-II-f Finance Lease Payables Operating Lease Payables Other Deferred Financial Lease Expenses (-) XI. DERIVATIVE FINANCIAL LIABILITIES HELD FOR RISK MANAGEMENT V-II-g Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges XII. PROVISIONS V-II-h 8,713,316 95,418 8,808, General Loan Loss Provisions 2,903,423 7,189 2,910, Provision for Restructuring Reserves for Employee Benefits 807, , Insurance Technical Reserves (Net) Other Provisions 5,002,705 88,229 5,090,934 XIII. TAX LIABILITIES V-II-i 780,876 6, , Current Tax Liabilities 780,876 6, , Deferred Tax Liabilities XIV. LIABILITIES RELATED TO ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS Held for Sale Discontinued Operations XV. SUBORDINATED DEBT 1,124,891 7,163,090 8,287,981 XVI. SHAREHOLDERS' EQUITY V-II-j 43,091,719 (107,452) 42,984, Paid-in Capital 4,500,000-4,500, Capital Reserves 3,905,037 (107,452) 3,797, Share premium 5, , Share Cancellation Profits Marketable Securities Value Increase Fund (1,050,967) (107,209) (1,158,176) Tangible Assets Revaluation Reserve 3,518,771 (447) 3,518, Intangible Assets Revaluation Reserve Investment Property Revaluation Reserve Bonus Shares Obtained from Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) Hedging Reserves (Effective Portion) (73) - (73) Accumulated Revaluation Reserves on Assets Held for Sale and Discontinued Operations Other Capital Reserves 1,432,060-1,432, Profit Reserves 24,088,510-24,088, Legal Reserves 3,076,046-3,076, Statutory Reserves Extraordinary Reserves 20,176,527-20,176, Other Profit Reserves 835, , Profit or Loss 10,598,172-10,598, Prior Years' Profit/(Loss) 4,396,893-4,396, Profit/(Loss) 6,201,279-6,201,279 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 184,940, ,302, ,243,533 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatements for the prior period is related with TAS 27 policy change where details are disclosed in Footnote I, Section Three. The accompanying explanations and notes form an integral part of these financial statements. 6

12 UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS AS OF (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS THOUSAND TL OFF-BALANCE SHEET ITEMS CURRENT PERIOD Footnotes (30/09/2018) TL FC Total A. OFF-BALANCE SHEET CONTINGENCIES and COMMITMENTS (I+II+III V-III 146,203, ,870, ,073,471 I. GUARANTEES AND SURETYSHIPS 32,676,923 78,845, ,522, Letters of Guarantee 32,564,390 47,307,311 79,871, Guarantees Subject to State Tender Law 838,881 3,525,794 4,364, Guarantees Given for Foreign Trade Operations 1,761,444 15,656,466 17,417, Other Letters of Guarantee 29,964,065 28,125,051 58,089, Bank Acceptances - 5,327,832 5,327, Import Letter of Acceptance - 207, , Other Bank Acceptances - 5,120,048 5,120, Letters of Credit 112,533 23,623,744 23,736, Documentary Letters of Credit 68,047 19,558,956 19,627, Other Letters of Credit 44,486 4,064,788 4,109, Prefinancing Given as Guarantee Endorsements Endorsements to the Central Bank of Turkey Other Endorsements Purchase Guarantees for Securities Issued Factoring Guarantees Other Guarantees - 2,586,895 2,586, Other Suretyships II. COMMITMENTS 53,383,339 24,883,373 78,266, Irrevocable Commitments 52,413,209 16,862,778 69,275, Forward Asset Purchase Commitments 4,963,757 9,892,035 14,855, Forward Deposit Purchase and Sales Commitments Capital Commitments to Associates and Subsidiaries Loan Granting Commitments 14,805, ,054 15,422, Securities Underwriting Commitments Commitments for Reserve Deposit Requirements Commitments for Cheque Payments 2,871,429-2,871, Tax and Fund Liabilities from Export Commitments 35,734-35, Commitments for Credit Card Expenditure Limits 26,127,873-26,127, Commitments for Credit Cards and Banking Services Promotions 111, , Receivables from Short Sale Commitments Payables for Short Sale Commitments Other Irrevocable Commitments 3,497,832 6,353,689 9,851, Revocable Commitments 970,130 8,020,595 8,990, Revocable Loan Granting Commitments 970,130 8,020,595 8,990, Other Revocable Commitments III. DERIVATIVE FINANCIAL INSTRUMENTS 60,142, ,141, ,284, Derivative Financial Instruments Held for Risk Management Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges Derivative Financial Instruments Held for Trading 60,142, ,141, ,284, Forward Foreign Currency Buy/Sell Transactions 8,172,526 17,045,594 25,218, Forward Foreign Currency Buy Transactions 4,148,328 8,441,761 12,590, Forward Foreign Currency Sell Transactions 4,024,198 8,603,833 12,628, Currency and Interest Rate Swaps 47,931, ,477, ,409, Currency Swap Buy Transactions 5,461,100 65,403,064 70,864, Currency Swap Sell Transactions 41,665,293 28,163,593 69,828, Interest Rate Swap Buy Transactions 402,404 44,955,667 45,358, Interest Rate Swap Sell Transactions 402,404 44,955,667 45,358, Currency, Interest Rate and Security Options 4,039,248 16,694,686 20,733, Currency Call Options 2,399,624 6,689,572 9,089, Currency Put Options 1,639,624 7,517,880 9,157, Interest Rate Call Options - 1,243,617 1,243, Interest Rate Put Options - 1,243,617 1,243, Securities Call Options Securities Put Options Currency Futures Currency Buy Futures Currency Sell Futures Interest Rate Futures Interest Rate Buy Futures Interest Rate Sell Futures Other - 2,922,808 2,922,808 B. CUSTODY AND PLEDGES RECEIVED (IV+V+VI) 469,232, ,236, ,469,278 IV. ITEMS HELD IN CUSTODY 47,199,889 33,167,717 80,367, Customers' Securities Held Investment Securities Held in Custody 25,349,703 3,229,087 28,578, Cheques Received for Collection 18,423,158 11,988,300 30,411, Commercial Notes Received for Collection 3,048,542 14,410,899 17,459, Other Assets Received for Collection - 2,010 2, Assets Received for Public Offering Other Items Under Custody 378,486 3,537,421 3,915, Custodians V. PLEDGED ITEMS 422,032, ,068, ,101, Marketable Securities 22,848,743-22,848, Guarantee Notes 3,078,486 16,670,269 19,748, Commodity 77,313,399 10,160,214 87,473, Warranty Real Estates 286,439, ,745, ,184, Other Pledged Items 32,352,545 58,493,126 90,845, Pledged Items-Depository VI. ACCEPTED BILL, GUARANTEES AND SURETIES TOTAL OFF-BALANCE SHEET COMMITMENTS (A+B) 615,436, ,106,699 1,308,542,749 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. The accompanying explanations and notes form an integral part of these financial statements. 7

13 UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS AS OF DECEMBER 31, 2017 (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF OFF-BALANCE SHEET ITEMS THOUSAND TL OFF-BALANCE SHEET ITEMS PRIOR PERIOD Footnotes (31/12/2017) TL FC Total A. OFF-BALANCE SHEET CONTINGENCIES AND COMMITMENTS (I+II+III V-III 126,783, ,674, ,457,852 I. GUARANTEES AND SURETYSHIPS 30,304,874 51,112,109 81,416, Letters of Guarantee 30,293,364 29,468,711 59,762, Guarantees Subject to State Tender Law 842,452 2,757,476 3,599, Guarantees Given for Foreign Trade Operations 2,044,694 10,676,161 12,720, Other Letters of Guarantee 27,406,218 16,035,074 43,441, Bank Acceptances - 3,337,813 3,337, Import Letters of Acceptance - 107, , Other Bank Acceptances - 3,230,812 3,230, Letters of Credit 11,510 16,658,466 16,669, Documentary Letters of Credit 9,275 13,422,916 13,432, Other Letters of Credit 2,235 3,235,550 3,237, Prefinancing Given as Guarantee Endorsements Endorsements to the Central Bank of Turkey Other Endorsements Purchase Guarantees for Securities Issued Factoring Guarantees Other Guarantees - 1,647,119 1,647, Other Suretyships II. COMMITMENTS 49,677,449 19,256,693 68,934, Irrevocable Commitments 49,417,141 14,621,881 64,039, Forward Asset Purchase Commitments 1,152,526 10,500,261 11,652, Forward Deposit Purchase and Sale Commitments Capital Commitment for Associates and Subsidiaries - 67,523 67, Loan Granting Commitments 14,479, ,381 14,764, Securities Underwriting Commitments Commitments for Reserve Deposit Requirements Commitments for Cheque Payments 6,056,477-6,056, Tax and Fund Liabilities from Export Commitments 20,805-20, Commitments for Credit Card Expenditure Limits 24,193,467-24,193, Commitments for Credit Cards and Banking Services Promotions 84,622-84, Receivables from Short Sale Commitments Payables for Short Sale Commitments Other Irrevocable Commitments 3,429,587 3,769,716 7,199, Revocable Commitments 260,308 4,634,812 4,895, Revocable Loan Granting Commitments 260,308 4,634,812 4,895, Other Revocable Commitments III. DERIVATIVE FINANCIAL INSTRUMENTS 46,800, ,305, ,106, Derivative Financial Instruments Held for Risk Management Fair Value Hedges Cash Flow Hedges Net Foreign Investment Hedges Derivative Financial Instruments Held for Trading 46,800, ,305, ,106, Forward Foreign Currency Buy/Sell Transactions 5,970,950 10,820,316 16,791, Forward Foreign Currency Buy Transactions 2,910,754 5,483,809 8,394, Forward Foreign Currency Sell Transactions 3,060,196 5,336,507 8,396, Currency and Interest Rate Swaps 35,537, ,073, ,611, Currency Swap Buy Transactions 4,362,485 47,241,756 51,604, Currency Swap Sell Transactions 30,424,625 17,935,996 48,360, Interest Rate Swap Buy Transactions 375,371 22,447,887 22,823, Interest Rate Swap Sell Transactions 375,371 22,447,887 22,823, Currency, Interest Rate and Security Options 5,292,162 9,443,504 14,735, Currency Call Options 2,512,548 4,220,094 6,732, Currency Put Options 2,779,614 3,952,634 6,732, Interest Rate Call Options - 635, , Interest Rate Put Options - 635, , Securities Call Options Securities Put Options Currency Futures Currency Buy Futures Currency Sell Futures Interest Rate Futures Interest Rate Buy Futures Interest Rate Sell Futures Other - 3,968,417 3,968,417 B. CUSTODY AND PLEDGED ITEMS (IV+V+VI) 378,492, ,926, ,418,755 IV. ITEMS HELD IN CUSTODY 41,996,497 17,974,809 59,971, Customers securities held Investment securities held in custody 20,895,685 1,938,155 22,833, Cheques received for collection 17,567,505 5,275,088 22,842, Commercial notes received for collection 3,146,970 8,724,159 11,871, Other assets received for collection 2,638-2, Assets received for public offering 2,527-2, Other items under custody 381,172 2,037,407 2,418, Custodians V. PLEDGED ITEMS 336,496, ,951, ,447, Marketable securities 15,197,589-15,197, Guarantee notes 3,157,401 12,631,989 15,789, Commodity 69,766,556 15,306,869 85,073, Warranty Real Estates 226,621, ,941, ,562, Other pledged items 21,753,177 34,071,251 55,824, Pledged items-depository VI. ACCEPTED BILL GUARANTEES AND SURETIES TOTAL OFF-BALANCE SHEET ITEMS (A+B) 505,275, ,600, ,876,607 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. The accompanying explanations and notes form an integral part of these financial statements. 8

14 UNCONSOLIDATED STATEMENT OF INCOME AS OF (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED INCOME STATEMENT THOUSAND TL INCOME STATEMENT Footnotes CURRENT PERIOD CURRENT PERIOD (01/01-30/09/2018) (01/07-30/09/2018) I. INTEREST INCOME V-IV-a 27,786,027 11,147, Interest Income on Loans 22,315,874 8,878, Interest Income on Reserve Deposits 338, , Interest Income on Banks 71,037 41, Interest Income on Money Market Placements Interest Income on Marketable Securities Portfolio 5,045,869 2,086, Financial Assets At Fair Value Through Profit or Loss 19,692 8, Financial Assets At Fair Value Through Other Comprehensive Income 3,179,056 1,288, Financial Assets At Measured at Amortised Cost 1,847, , Financial Lease Income Other Interest Income 14,286 4,845 II. INTEREST EXPENSE (-) V-IV-b 14,745,590 6,107, Interest on Deposits 8,579,677 3,452, Interest on Funds Borrowed 1,294, , Interest on Money Market Funds 2,614,888 1,135, Interest on Securities Issued 2,223, , Other Interest Expenses 32,883 4,462 III. NET INTEREST INCOME (I - II) 13,040,437 5,040,092 IV. NET FEES AND COMMISSIONS INCOME V-IV-c 3,109,968 1,123, Fees and Commissions Received 3,815,791 1,413, Non-cash Loans 587, , Other 3,228,065 1,186, Fees and Commissions Paid 705, , Non-cash Loans Other 705, ,546 V. PERSONNEL EXPENSE (-) 2,785, ,476 VI DIVIDEND INCOME 9, VII. TRADING INCOME /(LOSS) (Net) (2,676,182) (1,229,694) 7.1 Gains/(Losses) on Securities Trading 32,984 10, Derivative Financial Transactions Gains/Losses 200,939 (334,655) 7.3 Foreign Exchange Gains / (Losses) (2,910,105) (905,219) VIII. OTHER OPERATING INCOME V-IV-d 1,394, ,599 IX. GROSS OPERATING INCOME (III+IV+V+VI+VII+VIII) 12,092,977 4,297,330 X. EXPECTED CREDIT LOSS (-) 5,545,165 2,811,063 XI. OTHER OPERATING EXPENSES (-) V-IV-e 3,405,867 1,181,001 XII. NET OPERATING INCOME/(LOSS) (IX-X-XI) 3,141, ,266 XIII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - XIV. PROFIT/LOSS FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD 2,081, ,490 XV. NET MONETARY POSITION GAIN/LOSS - - XVI. PROFIT/LOSS ON CONTINUING OPERATIONS BEFORE TAX (XII+ +XV) 5,223,123 1,207,756 XVII. TAX PROVISION FOR CONTINUING OPERATIONS (±) V-IV-g 649,819 (30,536) 17.1 Current Tax Provision 134,379 (7,919) 17.2 Deferred Tax Income Effect (+) 1,400, , Deferred Tax Expense Effect (-) 884, ,671 XVIII. NET PERIOD PROFIT/LOSS FROM CONTUNUING OPERATIONS (XVI±XVII) 4,573,304 1,238,292 XIX. INCOME ON DISCONTINUED OPERATIONS Income on Assets Held for Sale Gain on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) Other Income on Discontinued Operations - - XX. 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 - - XXI. PROFIT/LOSS ON DISCONTINUED OPERATIONS BEFORE TAX (XIX-XX) - - XXII. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) Current Tax Provision Deferred Tax Expense Effect (+) Deferred Tax Income Effect (-) - - XXIII. NET PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XXI±XXII) - - XXIV. NET PERIOD PROFIT/LOSS (XVIII+XXIII) V-IV-h 4,573,304 1,238,292 Earnings per Share (*) (*)Expressed in exact TL. Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. The accompanying explanations and notes form an integral part of these financial statements. 9

15 UNCONSOLIDATED STATEMENT OF INCOME AS OF SEPTEMBER 30, 2017 (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED INCOME STATEMENT THOUSAND TL INCOME STATEMENT Footnotes RESTATED PRIOR PERIOD RESTATED PRIOR PERIOD (01/01-30/09/2017) (01/07-30/09/2017) I. INTEREST INCOME V-IV-a 20,070,658 7,106, Interest Income on Loans 16,224,154 5,752, Interest Income on Reserve Deposits 231,082 85, Interest Income on Banks 25,510 12, Interest Income on Money Market Placements Interest Income on Marketable Securities Portfolio 3,573,170 1,252, Financial Assets Held for Trading 26,127 7, Financial Assets at Fair Value Through Profit and Loss Financial Assets Available for Sale 3,041,056 1,041, Held to Maturity Investments 505, , Finance Lease Income Other Interest Income 16,550 3,956 II. INTEREST EXPENSE V-IV-b 10,417,605 3,887, Interest on Deposits 6,665,562 2,478, Interest on Funds Borrowed 656, , Interest on Money Market Funds 1,723, , Interest on Securities Issued 1,349, , Other Interest Expense 23,107 3,519 III. NET INTEREST INCOME / EXPENSE (I - II) 9,653,053 3,219,502 IV. NET FEES AND COMMISSIONS INCOME / EXPENSE 2,439, , Fees and Commissions Received 2,926,411 1,002, Non-cash Loans 420, , Other 2,505, , Fees and Commissions Paid 487, , Non-cash Loans Other 487, ,183 V. DIVIDEND INCOME 10,828 1,895 VI. TRADING INCOME / LOSS (NET) V-IV-c (1,228,351) (451,799) 6.1 Gains/Losses on Securities Trading 110,464 26, Derivative Financial Transactions Gains/Losses (954,717) 190, Foreign Exchange Gains/Losses (384,098) (669,068) VII. OTHER OPERATING INCOME V-IV-d 903, ,040 VIII. TOTAL OPERATING INCOME / EXPENSE (III+IV+V+VI+VII) 11,778,421 3,875,083 IX. PROVISION FOR LOSSES ON LOANS AND OTHER RECEIVABLES (-) V-IV-e 2,041, ,721 X. OTHER OPERATING EXPENSES (-) V-IV-f 5,393,175 1,828,394 XI. NET OPERATING INCOME (VIII-IX-X) 4,344,080 1,434,968 XII. AMOUNT IN EXCESS RECORDED AS GAIN AFTER MERGER - - XIII. PROFIT/LOSS FROM ASSOCIATES ACCOUNTED FOR USING THE EQUITY METHOD 1,161, ,206 XIV. NET MONETARY POSITION GAIN/LOSS - - XV. PROFIT/LOSS ON CONTINUING OPERATIONS BEFORE TAX (XI+ +XIV) 5,505,201 1,812,174 XVI. TAX PROVISION FOR CONTINUING OPERATIONS (±) V-IV-g 947, , Current Tax Provision 1,011, , Deferred Tax Provision (63,135) 199,583 XVII. NET PERIOD PROFIT/LOSS FROM CONTUNUING OPERATIONS (XV±XVI) 4,557,202 1,501,694 XVIII. INCOME ON DISCONTINUED OPERATIONS Income on Assets Held for Sale Gain on Sale of Associates, Subsidiaries and Jointly Controlled Entities (Joint Ventures) Other Income on Discontinued Operations - - XIX. 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 - - XX. PROFIT/LOSS ON DISCONTINUED OPERATIONS BEFORE TAX (XVIII-XIX) - - XXI. TAX PROVISION FOR DISCONTINUED OPERATIONS (±) Current Tax Provision Deferred Tax Provision - - XXII. NET PERIOD PROFIT/LOSS FROM DISCONTINUED OPERATIONS (XX±XXI) - - XXIII. NET PERIOD PROFIT/LOSS (XVII+XXII) V-IV-h 4,557,202 1,501,694 Earnings per Share (*) (*)Expressed in exact TL. Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. Restatements for the prior period is related with TAS 27 policy change where details are disclosed in Footnote I, Section Three. The accompanying explanations and notes form an integral part of these financial statements. 10

16 UNCONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME OF (Unless otherwise stated amounts are expressed in thousands of Turkish Lira ( TL )) TÜRKİYE İŞ BANKASI A.Ş. UNCONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME THOUSAND TL STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME CURRENT PERIOD (01/01-30/09/2018) I. PROFIT/LOSS FOR THE PERIOD 4,573,304 II. OTHER COMPREHENSIVE INCOME (813,019) 2.1 Other comprehensive income that will not be reclassified to profit or loss 735, Revaluation Surplus on Tangible Assets 677, 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 125, Taxes Relating To Components Of Other Comprehensive Income not to be Reclassified To Profit Or Loss (67,735) 2.2 Other Income/Expense Items not be Reclassified to Profit or Loss (1,548,195) Exchange Differences on Translation 685, Valuation and/or Reclassification Profit or Loss from Financial Assets at Fair Value through Other Comprehensive Income (3,542,820) Income/(Loss) Related with Cash Flow Hedges Income/(Loss) Related with Hedges of Net Investments in Foreign Operations Other Income/Expense Items of Other Comprehensive Income to be Reclassified to Other Profit or Loss 586, Taxes Relating To Components Of Other Comprehensive Income to be Reclassified To Profit Or Loss 722,464 XII. TOTAL COMPREHENSIVE INCOME (I+II) 3,760,285 Note: The prior period financial statements and related disclosures are not restated as permitted by TFRS 9 transition rules. Since, 2017 and 2018 financial statements are prepared on different principles, 2017 financial statements are presented separately. The accompanying explanations and notes form an integral part of these financial statements. 11