Financial Statements
balance sheet
noun
Meaning
A financial statement showing what a company owns (assets), what it owes (liabilities) and the owners' share (equity) on a specific date.
Where you use it
Used by analysts, credit officers and auditors. Assets always equal liabilities plus equity. People talk about a strong or weak balance sheet, and about items that are on or off the balance sheet.
Examples
Before we approve the loan, we need the company's last three year-end balance sheets.
The bank has a strong balance sheet with plenty of liquid assets.
Usage note
Do not translate 'bilanço' as 'balance' alone; say 'balance sheet'. Under IFRS its official name is 'statement of financial position'.
Common phrases
strong balance sheet · off-balance-sheet · balance sheet date · clean up the balance sheet
More about this term →income statement
noun
Meaning
A financial statement showing a company's revenue, costs and profit or loss over a period, such as a quarter or a year.
Where you use it
Common in American English and IFRS reports. In the UK people often say profit and loss account, or simply P&L. Analysts read it from the top line (revenue) down to the bottom line (net income).
Examples
The income statement shows that interest expenses doubled this year.
Can you send me the income statement for the first half of the year?
Common phrases
quarterly income statement · prepare an income statement · income statement items
More about this term →asset
noun
Meaning
Something of value that a person or company owns or controls, such as cash, buildings, receivables or investments.
Where you use it
Appears on the assets side of the balance sheet. Accountants divide assets into current and non-current; bankers talk about total assets, asset quality and liquid assets. For a bank, the loans it gives are assets.
Examples
The bank's total assets grew to 2 trillion lira last year.
A rise in bad loans is a sign of weak asset quality.
Usage note
'Asset' is countable: 'an asset', 'assets'. Turkish bankers often say 'aktif': 'aktif büyüklüğü' is 'total assets' in English.
Common phrases
total assets · current assets · fixed assets · asset quality · liquid assets
More about this term →liability
noun
Meaning
Money or another obligation that a company owes to others, such as loans, unpaid bills or, for a bank, its customers' deposits.
Where you use it
Used in accounting and balance sheet analysis, usually in the plural. Liabilities are current (due within a year) or non-current. In law and insurance, 'liability' also means legal responsibility, as in 'limited liability company'.
Examples
Customer deposits are the largest liability on our balance sheet.
The firm's short-term liabilities are higher than its cash.
Usage note
Learners are often surprised that deposits are liabilities for a bank: the bank owes that money back to its customers.
Common phrases
current liabilities · total liabilities · contingent liability · assets and liabilities
More about this term →equity
noun
Meaning
The owners' share of a company: what is left when liabilities are taken away from assets. It includes paid-in capital and retained profits.
Where you use it
A key word in balance sheet analysis and capital discussions: shareholders' equity, return on equity (ROE), raising equity. In markets, 'equities' means shares. 'Home equity' is the part of a home's value that the owner fully owns.
Examples
The bank's equity rose after it kept most of last year's profit.
Return on equity is the first ratio our investors ask about.
Usage note
Do not confuse it with 'equality' (eşitlik). In general English, 'equity' can also mean fairness.
Common phrases
shareholders' equity · return on equity · raise equity · equity ratio · negative equity
More about this term →revenue
noun
Meaning
The total income a company receives from its normal business activities, such as selling goods or services, before any costs are deducted.
Where you use it
Appears at the top of the income statement, so it is also called the top line. Revenue grows, rises, falls or is generated. For banks, revenue mainly means net interest income plus fees and commissions.
Examples
The client's revenue grew 25 percent, but its profit margin shrank.
Fee income now makes up a third of the bank's revenue.
Usage note
In British English 'turnover' often means revenue; in American English it usually means staff leaving a company.
Common phrases
annual revenue · revenue growth · generate revenue · total revenue · revenue stream
More about this term →net income
noun
Meaning
What is left of a company's revenue after all costs, interest, taxes and other expenses are deducted. When it is negative, it is called a net loss.
Where you use it
Mainly American; British reports often say net profit or profit after tax. It is the last line of the income statement, hence 'the bottom line'. Analysts compare net income across quarters and use it in ratios such as ROE.
Examples
Net income fell this quarter because of higher loan loss provisions.
The bank reported net income of 4 billion lira for the first half.
Usage note
For a company, 'net income' is profit. For a person, it means take-home pay after tax.
Common phrases
report net income · net income margin · quarterly net income · net income growth
More about this term →write off
phrasal verb
Meaning
To remove a debt or asset from the accounts because it has no value or will not be recovered, and record the amount as a loss.
Where you use it
Used in credit, accounting and collections. Banks write off bad loans after recovery efforts fail. The noun is 'write-off', with a hyphen. Writing a loan off in the accounts does not cancel the borrower's legal debt.
Examples
The bank has written off 200 million lira of bad loans this year.
We will write off the remaining balance once the legal process is complete.
Usage note
In British insurance language, a car that is 'written off' is too damaged to be worth repairing.
Common phrases
write off a loan · write off bad debt · write-off of loans · partially written off
More about this term →depreciation
noun
Meaning
Spreading the cost of a long-term physical asset, such as a machine or building, over its useful life; also a fall in the value of a currency or asset.
Where you use it
In accounting it is an expense in the income statement and the 'D' in EBITDA; for intangible assets the word is 'amortization'. In markets, 'depreciation of the lira' means the lira losing value against other currencies.
Examples
Depreciation on the new equipment will reduce profit for the next five years.
The depreciation of the currency raised the cost of imported goods.
Usage note
Because of the Turkish word 'amortisman', learners sometimes use 'amortization' for every asset. In English, use 'depreciation' for physical assets and 'amortization' for intangible assets and for paying down a loan.
Common phrases
depreciation expense · accumulated depreciation · straight-line depreciation · currency depreciation
More about this term →EBITDA
abbreviation
Meaning
Short for earnings before interest, taxes, depreciation and amortization: a measure of a company's operating profit before financing costs and non-cash expenses.
Where you use it
Widely used by credit analysts and in loan agreements, for example in the ratio of net debt to EBITDA and in covenants. Usually said as one word: EE-bit-dah. It is not a standard IFRS line, so companies may calculate it differently.
Examples
The loan covenant requires net debt to stay below three times EBITDA.
EBITDA rose 20 percent, but higher interest costs hurt net income.
Common phrases
net debt to EBITDA · EBITDA margin · adjusted EBITDA · EBITDA growth
More about this term →in the red
idiom
Meaning
Losing money or owing money: a company is in the red when it makes a loss, and an account is in the red when its balance is below zero.
Where you use it
Informal but common in meetings, the news and with customers. Firms go into the red or stay in the red, and accounts are in the red. The opposite is 'in the black'. It comes from the old habit of writing losses in red ink.
Examples
The airline was in the red for three years before it returned to profit.
Your account has been in the red since the 10th, so overdraft interest is being charged.
Usage note
Do not confuse it with 'see red', which means to become very angry.
Common phrases
go into the red · stay in the red · deep in the red · out of the red
More about this term →expense
noun
Meaning
Money that a business spends, or a cost it records, in order to run its activities and earn revenue, such as salaries, rent or interest.
Where you use it
Used in accounting, budgeting and everyday office life. Companies cut, control and report expenses; profit is revenue minus expenses. Banks talk about interest expense, operating expenses (opex) and the cost-to-income ratio. Employees submit an expense claim after a business trip.
Examples
Operating expenses rose by 12% because of higher salaries and IT costs.
Please submit your travel expenses by the end of the month.
Usage note
'Expense' is mainly an accounting cost; 'expenditure' is more formal and is often used for government spending or large investments (capital expenditure, capex).
Common phrases
operating expenses · interest expense · cut expenses · expense claim · cost-to-income ratio
More about this term →profit
noun
Meaning
Money a business earns after subtracting its costs from its revenue. When costs are higher than revenue, the result is a loss.
Where you use it
Used in reports, news and meetings. Companies make, report or post a profit, and analysts follow gross profit, operating profit and net profit. Profit before tax and profit margin are key lines. Traders 'take profit' by closing a position at a gain.
Examples
The bank reported a net profit of 18 billion lira for the first half of the year.
Higher funding costs are putting pressure on our profit margin.
Usage note
'Profit' is uncountable in general statements ('profit rose') but countable for specific results ('a profit of 2 million', 'profits fell'). Say 'make a profit', not 'do a profit'.
Common phrases
make a profit · net profit · profit before tax · profit margin · operating profit
More about this term →annual report
noun
Meaning
A document a company publishes each year about its activities, results, strategy, risks and management, usually including the audited financial statements.
Where you use it
Read by investors, analysts, regulators and credit teams. Companies publish or release their annual report, and analysts study the CEO's letter, segment results, risk management and the notes to the accounts. Most large Turkish banks publish it in both Turkish and English.
Examples
According to the annual report, digital channels now handle most of our transactions.
Our team is translating the sustainability section of the annual report into English.
Common phrases
publish the annual report · integrated annual report · annual report and accounts · notes to the financial statements
More about this term →audit
noun
Meaning
An official, independent examination of a company's accounts, records or processes to check that they are correct and follow the rules.
Where you use it
Used in finance, compliance and management. An external audit is done by an independent audit firm, which gives an audit opinion on the financial statements; internal audit checks the bank's own controls. 'Audit' is also a verb: auditors audit the accounts. Audit findings must be followed up and closed.
Examples
The auditors gave an unqualified opinion on this year's financial statements.
Internal audit found weaknesses in the branch's cash controls.
Usage note
An 'unqualified' or 'clean' opinion is the good result; a 'qualified' opinion means the auditor has reservations. The words may feel the opposite of what Turkish speakers expect.
Common phrases
external audit · internal audit · audit opinion · audit findings · audit firm
More about this term →P&L
abbreviation
Meaning
Short for profit and loss: the income statement, or more loosely the profit or loss made by a business, unit, trading desk or project.
Where you use it
Said 'P and L' and very common in meetings, especially in trading and management. A manager 'owns the P&L' of a unit, a trader checks the daily P&L, and costs that reduce profit 'hit the P&L'. Formal reports prefer 'income statement' or 'statement of profit or loss'.
Examples
The new provisions will hit our P&L this quarter.
Each branch manager is responsible for the branch P&L.
Common phrases
P&L impact · hit the P&L · own the P&L · daily P&L · P&L statement
More about this term →fiscal year
noun
Meaning
The twelve-month period a company or government uses for its accounts and budget, which may or may not match the calendar year.
Where you use it
Used in reports, budgets and tax. Often written FY, as in 'FY2025' or 'FY25'; British English also says 'financial year'. Most Turkish companies use the calendar year, while many governments, including those of the UK and the US, use fiscal years that start in another month.
Examples
Our fiscal year ends on 31 March, so annual results come out in May.
Net profit for fiscal year 2025 rose by 15%.
Common phrases
fiscal year end · previous fiscal year · FY results · financial year
More about this term →receivables
noun
Meaning
Money that customers owe a company for goods or services already delivered, shown as an asset on the balance sheet.
Where you use it
Used in credit analysis, accounting and trade finance; also called 'accounts receivable' (AR) or 'trade receivables'. Bankers check how fast receivables are collected (days sales outstanding, DSO) and may finance them through factoring. The opposite is 'payables', money the company owes its suppliers.
Examples
The company's receivables grew faster than its sales, which worries our credit team.
We can finance up to 80% of your export receivables.
Common phrases
accounts receivable · trade receivables · collect receivables · receivables financing · days sales outstanding
More about this term →in the black
idiom
Meaning
Making a profit, or having a positive balance in an account. It is the opposite of 'in the red'.
Where you use it
Informal but widely used in business news and meetings. Companies are in the black, get back into the black or end the year in the black. The idiom comes from old bookkeeping, where profits were written in black ink and losses in red.
Examples
After two years of losses, the airline is finally back in the black.
The new branch should be in the black by the end of its second year.
Common phrases
be in the black · back in the black · move into the black · end the year in the black
More about this term →break even
phrasal verb
Meaning
To earn exactly enough to cover all costs, so that there is neither a profit nor a loss.
Where you use it
Used in business plans, project evaluation and lending to new businesses. A start-up or new branch expects to break even after a certain time; the break-even point is the sales level where this happens. As a noun or adjective it takes a hyphen: break-even analysis. The past tense is 'broke even'.
Examples
The hotel needs an occupancy rate of 60% to break even.
According to the business plan, the factory will reach break-even in its third year.
Common phrases
break even · break-even point · break-even analysis · reach break-even
More about this term →return on equity
noun
Meaning
Net profit divided by shareholders' equity, shown as a percentage. It measures how much profit a company makes with the money its owners have invested.
Where you use it
One of the most quoted ratios in bank results, shortened to ROE. Banks set ROE targets and compare them with their cost of equity; analysts read it together with return on assets (ROA). In high-inflation economies, ROE should be compared with inflation to judge real profitability.
Examples
The bank's return on equity reached 25% in the first quarter.
Our strategic plan targets a sustainable return on equity above our cost of capital.
Common phrases
return on equity · ROE target · return on assets · average equity
More about this term →Corporate Finance
cash flow
noun
Meaning
The movement of money into and out of a business over a period. Positive cash flow means more money is coming in than going out.
Where you use it
One of the first things credit analysts check, because loans are repaid from cash, not from profit. People speak of positive or negative cash flow, cash flow problems and a cash flow forecast; the cash flow statement reports it.
Examples
The company is profitable, but its cash flow is weak because customers pay late.
We asked the client for a 12-month cash flow forecast.
Common phrases
positive cash flow · cash flow forecast · cash flow statement · free cash flow · cash flow problems
More about this term →capital
noun
Meaning
Money and other financial resources used to start and run a business; for banks, the owners' funds that absorb losses and protect depositors.
Where you use it
Used in corporate finance and banking regulation. Companies raise capital; banks must hold enough capital and report capital ratios. Common phrases: share capital, venture capital, capital expenditure (capex) and capital markets.
Examples
The company plans to raise new capital to fund its expansion.
After the loan losses, the regulator asked the bank to strengthen its capital.
Common phrases
raise capital · share capital · capital increase · capital expenditure · capital markets
More about this term →working capital
noun
Meaning
The money a business has available for its daily operations, calculated as current assets minus current liabilities.
Where you use it
Used by credit analysts and company treasurers. Companies need, manage or finance working capital; banks offer working capital loans and credit lines. Changes in stock, receivables and payables drive working capital needs.
Examples
The company needs more working capital because its customers now pay in 90 days.
We offered the client a 12-month working capital loan.
Common phrases
working capital loan · working capital needs · net working capital · manage working capital
More about this term →leverage
noun
Meaning
Using borrowed money to finance assets or investments, or the level of a company's debt compared with its equity or earnings.
Where you use it
Used in credit analysis, corporate finance and bank regulation. A company with a lot of debt is highly leveraged. Analysts measure leverage with ratios such as debt to EBITDA, and banks also report a leverage ratio.
Examples
The company's leverage is too high: its debt is six times its EBITDA.
Banks must keep their leverage below regulatory limits.
Usage note
US pronunciation is LEV-er-ij; UK pronunciation is LEE-ver-ij. British English also uses 'gearing' for the same idea.
Common phrases
high leverage · leverage ratio · highly leveraged · reduce leverage
More about this term →dividend
noun
Meaning
A part of a company's profit that is paid to its shareholders, usually in cash and as an amount per share.
Where you use it
Used in corporate finance, investor relations and bank capital planning. Companies declare, pay, cut or suspend dividends, and investors receive them. Regulators may limit bank dividends to protect capital.
Examples
The board proposed a dividend of 2 lira per share.
To strengthen its capital, the bank kept its profit instead of paying a dividend.
Common phrases
pay a dividend · dividend per share · dividend policy · cut the dividend · dividend yield
More about this term →bond
noun
Meaning
A debt security that a government or company sells to investors to borrow money. It pays regular interest, called a coupon, and returns the full amount at maturity.
Where you use it
Used in corporate finance, treasury and markets. Companies issue bonds; investors buy and hold them. Bond prices and yields move in opposite directions. Banks hold government bonds for liquidity.
Examples
The company issued a five-year bond to refinance its bank loans.
When rates rise, the value of the bank's bond portfolio falls.
Usage note
In Turkish, 'bono' usually means a short-term instrument (up to one year) and 'tahvil' a longer one. In English, short-term government debt is usually called a 'bill', as in Treasury bill.
Common phrases
issue a bond · government bond · corporate bond · bond yield · bond market
More about this term →valuation
noun
Meaning
An estimate of what a company, asset or property is worth, or the process of calculating it.
Where you use it
Used in M&A, lending and investing. Analysts carry out a valuation with methods such as discounted cash flow (DCF) or multiples; for a mortgage, a surveyor values the property. Investors debate whether a valuation is too high.
Examples
The bank ordered a valuation of the property before approving the mortgage.
The startup raised money at a valuation of 50 million dollars.
Common phrases
carry out a valuation · company valuation · property valuation · valuation method
More about this term →M&A
abbreviation
Meaning
Short for mergers and acquisitions: deals in which companies combine with each other or one company buys another.
Where you use it
Said 'M and A'. Used in investment banking, law firms and the business press: M&A deals, M&A advisers, the M&A market. Banks advise on and finance M&A transactions, and buyers carry out due diligence first.
Examples
M&A activity slowed down this year because of high interest rates.
Our team is financing the acquisition, and another bank is the M&A adviser.
Common phrases
M&A deal · M&A adviser · M&A activity · cross-border M&A
More about this term →IPO
abbreviation
Meaning
Short for initial public offering: the first time a private company sells its shares to the public on a stock exchange.
Where you use it
Said letter by letter: I-P-O. Companies go public through an IPO; investment banks underwrite, price and launch it. Common phrases: plan an IPO, the IPO price, an IPO that is oversubscribed.
Examples
The company used the money from its IPO to pay down bank debt.
The IPO was three times oversubscribed.
Common phrases
plan an IPO · IPO price · go public through an IPO · oversubscribed IPO
More about this term →due diligence
noun
Meaning
A careful investigation of a company, deal or customer before an agreement, to check the facts and find any risks or legal and financial problems.
Where you use it
Used in M&A, lending and compliance. Buyers carry out financial and legal due diligence; banks do customer due diligence (CDD) and, for high-risk clients, enhanced due diligence (EDD). Turkish teams often keep the English term.
Examples
The deal will close after the buyer finishes its due diligence.
For high-risk clients we carry out enhanced due diligence every year.
Common phrases
carry out due diligence · legal due diligence · customer due diligence · enhanced due diligence
More about this term →shareholder
noun
Meaning
A person or organisation that owns shares in a company and so owns part of it, with rights such as voting and receiving dividends.
Where you use it
Used in annual reports, corporate banking and M&A. Companies hold a general meeting for shareholders and pay dividends to them. Lenders ask who the majority shareholders are, and a 'shareholder loan' is money the owners lend to their own company. American English also says 'stockholder'.
Examples
The bank's largest shareholder holds 40% of its capital.
Shareholders approved the dividend at the general meeting.
Common phrases
majority shareholder · minority shareholder · shareholder loan · shareholder value · general meeting
More about this term →raise capital
phrase
Meaning
To get money for a business from investors or lenders, for example by selling new shares, issuing bonds or borrowing.
Where you use it
Used in corporate finance, start-ups and banking. Companies raise capital to grow, repay debt or meet regulatory requirements. Selling shares raises equity; bonds and loans raise debt. Banks raise capital to strengthen their capital adequacy ratio. 'Raise funds' and 'raise money' are close synonyms.
Examples
The bank raised capital through a rights issue to support loan growth.
The start-up raised 5 million dollars of capital from venture funds.
Common phrases
raise capital · raise funds · capital raising · rights issue · raise debt
More about this term →issue
verb
Meaning
To create and offer new shares, bonds or other securities to investors; also to produce an official document or card, such as a credit card or a guarantee.
Where you use it
A very flexible banking verb. Companies and governments issue bonds; banks issue cards, letters of credit and guarantees; the party that does this is the 'issuer'. The noun is used too: a bond issue, a rights issue. Do not confuse it with 'issue' meaning a problem.
Examples
The bank issued 500 million dollars of eurobonds last month.
We will issue the letter of guarantee once the collateral is in place.
Common phrases
issue bonds · issue a card · bond issue · card issuer · issue a guarantee
More about this term →leasing
noun
Meaning
A way of financing equipment, vehicles or property in which a leasing company buys the asset and a business uses it in return for regular payments.
Where you use it
Used in corporate and SME finance. In a finance lease the user carries most of the risks and rewards and often becomes the owner at the end; an operating lease is closer to renting. The user is the 'lessee' and the leasing company the 'lessor'. The verb is 'lease'.
Examples
The factory financed its new production line through leasing instead of a bank loan.
Our group's leasing company offers machinery leasing to SMEs.
Common phrases
finance lease · operating lease · leasing company · lease payments · equipment leasing
More about this term →factoring
noun
Meaning
A form of financing in which a company sells its unpaid invoices to a factoring company or bank at a discount and receives cash before its customers pay.
Where you use it
Used in SME and trade finance. With recourse factoring, the seller still carries the risk if the buyer does not pay; without recourse, the factor takes that risk. Factoring often includes collecting the invoices as well. Exporters use export factoring to get paid sooner.
Examples
Factoring lets us get paid within days instead of waiting 90 days for our customers.
The bank offers export factoring without recourse for approved buyers.
Common phrases
factoring company · export factoring · factoring with recourse · non-recourse factoring · invoice factoring
More about this term →bankruptcy
noun
Meaning
A legal process for a person or company that cannot pay its debts, in which a court controls how its assets are used to pay creditors.
Where you use it
Used in credit, collections and legal teams. A company files for bankruptcy, goes bankrupt or is declared bankrupt. In the US, Chapter 11 lets a company reorganise and keep operating, while Chapter 7 means liquidation. For companies, British English often uses 'insolvency', 'administration' and 'liquidation'.
Examples
Two of our largest borrowers in the sector filed for bankruptcy this year.
In bankruptcy, secured creditors are paid before unsecured ones.
Usage note
Say 'go bankrupt' or 'become insolvent'. 'Make bankrupt' is only correct when someone causes another person or company to go bankrupt.
Common phrases
file for bankruptcy · go bankrupt · bankruptcy proceedings · declare bankruptcy · personal bankruptcy
More about this term →project finance
noun
Meaning
Long-term financing for a large project, such as a power plant or motorway, in which the loan is repaid mainly from the project's own future cash flows.
Where you use it
Used in corporate banking, energy and infrastructure. The project is usually placed in a special purpose vehicle (SPV), and lenders rely on contracts, cash flow forecasts and security over the project's assets. Deals have long tenors and grace periods. Public-private partnerships (PPP) are often financed this way.
Examples
The wind farm was built with project finance from a group of local and international banks.
Our project finance team reviews the traffic forecasts before lending to a toll road.
Common phrases
project finance loan · non-recourse project finance · special purpose vehicle · project finance team
More about this term →Risk Management
credit risk
noun
Meaning
The risk that a borrower or another party will not pay back money it owes on time or in full, causing a loss for the lender.
Where you use it
The biggest risk for most banks. Credit risk teams assess, measure and manage it, looking at the probability of default, collateral and exposure. Reports often say credit risk has risen or fallen in a sector.
Examples
Credit risk in the construction sector has increased, so we are tightening our lending criteria.
The credit risk committee meets every Tuesday to review large loans.
Common phrases
assess credit risk · credit risk management · credit risk model · manage credit risk
More about this term →default
noun
Meaning
Failure to make loan or bond payments as agreed. A borrower is usually treated as in default after missing payments for a set period, often 90 days.
Where you use it
Used as a noun and a verb: a borrower defaults on a loan. Risk teams estimate the probability of default (PD) and loss given default (LGD). Countries and companies can also default on their bonds.
Examples
The company defaulted on its bank loans after losing its biggest customer.
Our model estimates the probability of default for every corporate client.
Usage note
In IT and everyday English, 'default' also means a standard setting. In banking it almost always means non-payment.
Common phrases
default on a loan · probability of default · in default · default rate · risk of default
More about this term →liquidity
noun
Meaning
How easily an asset can be turned into cash without losing value, or how much cash and easily sold assets a bank or company has to meet its payments.
Where you use it
A core banking concept. Treasury teams manage liquidity every day, and regulators check liquidity ratios such as the LCR. People say a bank has enough liquidity, faces a liquidity shortage or receives liquidity from the central bank.
Examples
The bank keeps a large buffer of government bonds to protect its liquidity.
The central bank provided extra liquidity to the market during the crisis.
Usage note
Liquidity is different from solvency: a bank can be solvent (its assets are worth more than its liabilities) and still have a liquidity problem if it cannot pay what is due today.
Common phrases
liquidity risk · liquidity ratio · provide liquidity · liquidity buffer · liquidity shortage
More about this term →exposure
noun
Meaning
The amount of money a bank could lose to a particular borrower, sector, country or market if things go wrong.
Where you use it
Used in credit and risk reports: exposure to a client, a sector or a currency. Banks limit, reduce or hedge exposures, and large exposures are subject to special rules. Exposure at default (EAD) is a key risk measure.
Examples
Our total exposure to the tourism sector is about 8 percent of the loan book.
We are reducing our exposure to companies with high foreign currency debt.
Common phrases
exposure to · credit exposure · reduce exposure · large exposures · currency exposure
More about this term →non-performing loan
noun
Meaning
A loan on which the borrower has stopped making payments, usually for 90 days or more, or which is unlikely to be repaid in full.
Where you use it
Often shortened to NPL. Analysts watch the NPL ratio (non-performing loans divided by total loans) as a sign of asset quality. Banks sell, restructure, provision for or write off NPLs.
Examples
The bank's non-performing loan ratio rose to 3 percent.
We sold a portfolio of non-performing loans to an asset management company.
Common phrases
NPL ratio · non-performing loan portfolio · sell non-performing loans · rise in non-performing loans
More about this term →hedge
verb
Meaning
To reduce the risk of losing money from changes in prices, interest rates or exchange rates, usually by taking an opposite position with derivatives.
Where you use it
Used as a verb and a noun: companies hedge their currency risk, and a forward contract is a hedge. Treasury teams hedge with forwards, swaps and options. Hedging limits losses but also limits gains.
Examples
The exporter hedges its euro income with forward contracts.
We used an interest rate swap to hedge the floating-rate loan.
Usage note
A 'hedge fund' is a type of investment fund; despite the name, it does not always hedge.
Common phrases
hedge currency risk · hedge against · hedging strategy · natural hedge · hedge an exposure
More about this term →market risk
noun
Meaning
The risk of losses caused by changes in market prices, such as interest rates, exchange rates, share prices and commodity prices.
Where you use it
One of the main risk types in banking, next to credit risk and operational risk. Market risk teams measure it with tools such as Value at Risk (VaR) and stress scenarios, and regulators require capital for it.
Examples
Market risk increased after the bank bought more long-term bonds.
The market risk team reports daily VaR figures to the treasury.
Common phrases
market risk limit · measure market risk · market risk capital · market risk team
More about this term →operational risk
noun
Meaning
The risk of loss from failed internal processes, human error, system breakdowns or outside events such as fraud, cyberattacks or natural disasters.
Where you use it
Used in risk management, audit and regulation; often shortened to op risk. Banks record operational risk events, run controls and hold capital against it. Examples include a payment sent to the wrong account, an IT outage or a data breach.
Examples
The system outage was logged as an operational risk event.
Manual data entry increases operational risk, so we are automating the process.
Common phrases
operational risk event · operational risk management · operational risk capital · op risk
More about this term →provision
noun
Meaning
An amount a bank sets aside from its profit to cover expected losses on loans that may not be repaid.
Where you use it
Used in accounting, credit risk and results announcements. Banks book, build up or release provisions; under IFRS 9 they are based on expected credit losses (ECL). Higher provisions reduce profit.
Examples
The bank increased its provisions because of rising defaults in the retail sector.
We released part of the provision after the client repaid its overdue loans.
Usage note
In contracts, 'provision' also means a clause or condition: 'a provision of the agreement'.
Common phrases
loan loss provision · set aside provisions · release provisions · provision for bad debts · provisioning
More about this term →stress test
noun
Meaning
An analysis that checks whether a bank would have enough capital and liquidity to survive a severe but possible shock, such as a deep recession.
Where you use it
Used in risk management and supervision. Banks run their own stress tests, and authorities such as the Fed, the EBA and the ECB run them across the sector. A bank passes or fails a stress test, and the results guide its capital plans.
Examples
In our stress test, the lira loses 30 percent of its value and unemployment doubles.
All the large banks passed the regulator's stress test this year.
Common phrases
run a stress test · pass a stress test · stress test scenario · stress test results
More about this term →credit rating
noun
Meaning
An assessment, usually by a rating agency, of how likely a company, bank or country is to repay its debt, shown with letters such as AAA or BB.
Where you use it
Used in treasury, bond markets and the news. The best-known agencies are S&P Global, Moody's and Fitch. Ratings are upgraded, downgraded or affirmed, with a positive, stable or negative outlook. Ratings of BBB- (Baa3 at Moody's) and above are investment grade; lower ones are speculative or high yield.
Examples
The agency upgraded the bank's credit rating and changed the outlook to stable.
A higher credit rating would lower our cost of borrowing abroad.
Common phrases
credit rating agency · sovereign credit rating · rating upgrade · rating downgrade · investment grade
More about this term →risk assessment
noun
Meaning
The process of identifying possible risks, estimating how likely they are and how much harm they could cause, and deciding how to manage them.
Where you use it
Used across credit, compliance, operations and IT. Teams carry out or conduct a risk assessment, for example before launching a product. AML rules require a customer risk assessment that classifies clients as low, medium or high risk. Results are often shown in a risk matrix of likelihood and impact.
Examples
We need a risk assessment before we launch the new payment product.
The customer risk assessment placed the company in the high-risk category.
Common phrases
carry out a risk assessment · customer risk assessment · risk assessment framework · risk matrix
More about this term →mitigate
verb
Meaning
To make a risk, loss or problem less serious or less likely, without removing it completely.
Where you use it
A key verb in risk reports, credit proposals and audit responses. Banks mitigate credit risk with collateral and guarantees, and market risk by hedging. The noun 'mitigation' and the phrase 'mitigating factors' are common in credit memos, where the writer explains why a weakness is acceptable.
Examples
The mortgage on the factory mitigates our credit risk.
What controls do we have to mitigate the risk of internal fraud?
Common phrases
mitigate risk · risk mitigation · mitigating factors · credit risk mitigation
More about this term →risk appetite
noun
Meaning
The amount and type of risk an organisation is willing to accept in pursuit of its goals, usually approved by the board and expressed as limits.
Where you use it
Used in risk management, strategy and market news. Banks write a risk appetite statement and framework with metrics such as capital ratios, NPL levels and concentration limits. In markets, investors' risk appetite rises or falls ('risk-on' and 'risk-off' moods), which moves currencies and bond yields.
Examples
Lending to early-stage start-ups is outside the bank's risk appetite.
Global risk appetite improved, and emerging market currencies gained.
Common phrases
risk appetite statement · risk appetite framework · within risk appetite · global risk appetite
More about this term →counterparty risk
noun
Meaning
The risk that the other party in a financial deal, such as a derivative, repo or FX trade, fails to pay or deliver what it owes before the deal is completed.
Where you use it
Used in treasury, risk management and regulation. Banks set counterparty limits for other banks and clients, and reduce the risk with collateral, netting agreements and central clearing. Basel rules call it counterparty credit risk (CCR). Settlement risk, when one side pays and the other does not, is closely related.
Examples
We cut our counterparty risk limit for that bank after its rating downgrade.
Central clearing reduces counterparty risk in derivatives markets.
Common phrases
counterparty risk limit · counterparty credit risk · netting agreement · central clearing
More about this term →expected credit loss
noun
Meaning
An estimate of the credit losses a lender expects on its loans and other financial assets, weighted by the probability of default and used to set provisions.
Where you use it
The core idea of the IFRS 9 accounting standard, shortened to ECL. Loans are placed in three stages: Stage 1 uses 12-month ECL, while Stage 2 (a significant increase in credit risk) and Stage 3 (credit-impaired loans) use lifetime ECL. Models combine probability of default (PD), loss given default (LGD) and exposure at default (EAD).
Examples
Expected credit losses rose because we moved several hotel loans to Stage 2.
The auditors challenged the economic scenarios in our expected credit loss model.
Common phrases
ECL model · 12-month ECL · lifetime ECL · Stage 2 loans · probability of default
More about this term →Regulation & Compliance
compliance
noun
Meaning
Following the laws, regulations and internal rules that apply to a bank; also the name of the department that checks that this happens.
Where you use it
Used for both the activity and the team: 'Check with Compliance.' Banks have compliance officers, compliance checks and compliance training; a product or process must be in compliance with the rules. Breaches can lead to fines.
Examples
Compliance has to approve the new account opening process before we launch it.
All staff must complete the annual compliance training by March.
Usage note
The verb is 'comply with': 'We must comply with the new rules.' 'Comply to' is a common mistake.
Common phrases
compliance officer · compliance department · in compliance with · compliance check · regulatory compliance
More about this term →KYC
abbreviation
Meaning
Short for know your customer: the checks a bank makes to confirm a customer's identity, address and source of funds before and during the business relationship.
Where you use it
Said letter by letter: K-Y-C. Used in onboarding, compliance and audits: KYC checks, KYC documents, KYC refresh. It is part of anti-money laundering rules; for higher-risk clients banks carry out enhanced due diligence.
Examples
We can't open the account until KYC is complete.
The client's KYC documents had expired, so we asked for a new proof of address.
Common phrases
KYC checks · KYC documents · KYC process · complete KYC · KYC refresh
More about this term →money laundering
noun
Meaning
Hiding the criminal origin of money by moving it through banks, businesses or transactions so that it looks legal.
Where you use it
Central to compliance work. Banks must detect and report suspected money laundering, and staff take anti-money laundering (AML) training. Experts describe three stages: placement, layering and integration.
Examples
The bank was fined for weak controls against money laundering.
Large cash deposits followed by quick transfers abroad can be a sign of money laundering.
Usage note
The verb is 'launder': 'to launder money'. The person who does it is a 'money launderer'.
Common phrases
anti-money laundering · money laundering risk · suspected money laundering · combat money laundering
More about this term →fraud
noun
Meaning
Deceiving someone to get money or another advantage illegally, such as using stolen card details or opening an account with a fake identity.
Where you use it
Used by fraud teams, call centres and customers. Banks detect, prevent and investigate fraud, and customers report it. Common types are card fraud, phishing, identity fraud and authorised push payment (APP) fraud.
Examples
Our fraud team blocked the card after spotting three unusual payments abroad.
Card fraud losses fell after we introduced instant transaction alerts.
Common phrases
card fraud · fraud prevention · report fraud · fraud detection · victim of fraud
More about this term →AML
abbreviation
Meaning
Short for anti-money laundering: the laws, controls and procedures that banks use to prevent, detect and report money laundering.
Where you use it
Said letter by letter: A-M-L. Very common in job titles and policies: AML analyst, AML policy, AML checks, AML training. Often paired with CFT (countering the financing of terrorism) as AML/CFT.
Examples
The AML team flagged the account because of unusual cash deposits.
Our AML policy is updated every year to reflect new regulations.
Common phrases
AML checks · AML policy · AML compliance · AML/CFT · AML analyst
More about this term →regulator
noun
Meaning
A public body that makes and enforces the rules for an industry. Banking regulators license banks, set capital rules and inspect banks.
Where you use it
Used daily in compliance, risk and management. Banks report to, consult with and can be fined by regulators. Examples include the BDDK (BRSA) in Türkiye, the PRA and FCA in the UK and the ECB for large eurozone banks.
Examples
We need to send the new stress test results to the regulator by Friday.
The regulator fined the bank for failing to protect customer data.
Common phrases
banking regulator · report to the regulator · financial regulator · regulator's approval
More about this term →capital adequacy ratio
noun
Meaning
A bank's capital divided by its risk-weighted assets. It shows whether the bank has enough capital to absorb losses; Basel rules require at least 8% before extra buffers.
Where you use it
Often shortened to CAR and closely linked to 'capital ratio' and 'CET1 ratio'. Banks report it every quarter, and regulators set minimum levels and buffers. A falling ratio may force a bank to raise capital or slow its lending.
Examples
The bank's capital adequacy ratio fell to 14 percent after strong loan growth.
Issuing subordinated debt would improve our capital adequacy ratio.
Common phrases
minimum capital adequacy ratio · risk-weighted assets · CET1 ratio · capital buffer
More about this term →suspicious transaction report
noun
Meaning
A confidential report that a bank must send to the national financial intelligence unit when it suspects that a transaction is linked to money laundering or terrorist financing.
Where you use it
Often called an STR; in the US and the UK the usual name is suspicious activity report (SAR). Banks file or submit these reports, and staff must not tell the customer about them, which is called tipping off.
Examples
The compliance officer filed a suspicious transaction report after the client refused to explain the source of the funds.
Staff must never tell a customer that a suspicious transaction report has been made.
Common phrases
file a suspicious transaction report · submit an STR · suspicious activity report · tipping off
More about this term →Basel III
noun
Meaning
A set of international banking rules agreed by the Basel Committee after the 2008 global financial crisis. It requires more and better capital and adds liquidity and leverage limits.
Where you use it
Said 'Basel three'. Used in regulation, risk and capital planning. It introduced the liquidity coverage ratio (LCR), the net stable funding ratio (NSFR) and the leverage ratio. Countries adopt it in stages; the final reforms are sometimes called Basel IV.
Examples
Under Basel III, banks must hold more high-quality capital than before.
The Basel III liquidity rules changed how we manage our bond portfolio.
Common phrases
Basel III rules · Basel III requirements · under Basel III · Basel III implementation
More about this term →sanctions
noun
Meaning
Restrictions imposed by governments or international bodies that ban or limit financial and trade dealings with certain countries, companies or people.
Where you use it
Used in compliance, trade finance and payments. Banks screen customers and payments against sanctions lists, such as those of the UN, the EU and the US Treasury's OFAC, and freeze the assets of listed persons. Breaching sanctions can lead to heavy fines. In this sense the word is usually plural.
Examples
The payment was stopped because the beneficiary's name matched an entry on a sanctions list.
All trade finance transactions go through sanctions screening before approval.
Common phrases
sanctions list · sanctions screening · impose sanctions · breach sanctions · sanctions compliance
More about this term →terrorist financing
noun
Meaning
Providing or collecting money, from legal or illegal sources, knowing that it will be used to support terrorist acts or organisations.
Where you use it
Almost always mentioned together with money laundering: AML/CFT stands for anti-money laundering and countering the financing of terrorism. Unlike laundering, the amounts can be small and the source can be legal, so banks focus on where the money goes. Suspicions are reported to the financial intelligence unit.
Examples
Our AML training also covers the warning signs of terrorist financing.
Small, frequent transfers to high-risk regions can be a sign of terrorist financing.
Common phrases
terrorist financing risk · combating terrorist financing · AML/CFT · counter-terrorist financing
More about this term →PEP
abbreviation
Meaning
Short for politically exposed person: someone with an important public role, such as a senior official or judge, or a close family member or associate of such a person.
Where you use it
Used in AML and KYC, and said as a word, 'pep'. Being a PEP is not wrong in itself, but because the risk of corruption is higher, banks apply enhanced due diligence: senior management approval, checks on the source of wealth and closer monitoring. Customers are screened against PEP databases at onboarding and regularly afterwards.
Examples
The new client is a PEP, so the account needs approval from senior management.
PEP screening flagged the customer's brother, who is a deputy minister.
Common phrases
PEP screening · PEP status · enhanced due diligence · source of wealth · domestic PEP
More about this term →beneficial owner
noun
Meaning
The real person who ultimately owns or controls a company or account, even if it is held in someone else's name or through other companies.
Where you use it
A key KYC and AML term, also called the ultimate beneficial owner (UBO). Banks must identify and verify the beneficial owners of corporate customers, usually anyone above a set share of ownership or anyone with control. Complex chains of companies and nominee shareholders are red flags. Many countries keep beneficial ownership registers.
Examples
We cannot open the account until we identify the company's beneficial owners.
The beneficial owner turned out to be hidden behind three offshore companies.
Common phrases
identify the beneficial owner · beneficial ownership · ultimate beneficial owner · beneficial ownership register
More about this term →banking secrecy
noun
Meaning
The legal duty of banks and their staff to keep customers' account and transaction information confidential, except where the law requires disclosure.
Where you use it
Used in law, compliance and customer service. Staff must not share customer information, even with family members, without consent or a legal basis. Courts, tax authorities and financial intelligence units can request data where the law allows. International exchange of tax information has narrowed traditional banking secrecy.
Examples
I'm sorry, but banking secrecy rules do not allow me to tell you your husband's balance.
Sharing client lists with the marketing agency would breach banking secrecy.
Common phrases
banking secrecy · breach of banking secrecy · customer confidentiality · duty of confidentiality
More about this term →reserve requirement
noun
Meaning
A rule set by a central bank that requires banks to hold a certain share of their deposits and some other liabilities as reserves at the central bank.
Where you use it
Used in central banking, treasury and economic news. The central bank raises or lowers reserve requirement ratios, often differently by currency and maturity, to steer credit growth and liquidity. Higher requirements leave banks less money to lend. Some central banks use them actively; others hardly use them at all.
Examples
The central bank raised the reserve requirement on foreign currency deposits.
Treasury must hold enough lira to meet the reserve requirement in every maintenance period.
Common phrases
reserve requirement ratio · raise reserve requirements · required reserves · maintenance period
More about this term →regulatory reporting
noun
Meaning
The regular submission of financial and risk data by banks to regulators and central banks, in set formats and by set deadlines.
Where you use it
Used in finance, risk and compliance departments. Banks submit reports on capital adequacy, liquidity, large exposures and loans. Wrong or late reports can lead to penalties, so data quality and controls are essential. Teams talk about reporting deadlines, templates and resubmissions.
Examples
The regulatory reporting team is working late to submit the liquidity reports on time.
A new data warehouse has made our regulatory reporting faster and more accurate.
Common phrases
regulatory reporting · reporting deadline · regulatory returns · submit reports to the regulator
More about this term →Fintech & Digital Banking
mobile banking
noun
Meaning
Using a bank's app on a smartphone or tablet to check balances, make payments, transfer money and use other services.
Where you use it
Used in product, IT and marketing teams and with customers. People log in to mobile banking, download the app and approve transactions in it. Banks track the number of active mobile banking users as a key figure.
Examples
More than 90 percent of our retail transactions now happen through mobile banking.
You can open a time deposit in mobile banking in less than a minute.
Common phrases
mobile banking app · log in to mobile banking · mobile banking users · through mobile banking
More about this term →online banking
noun
Meaning
Managing a bank account through the bank's website on a computer, including payments, transfers and statements.
Where you use it
Used with customers and in digital teams. Customers register for, log in to and can be locked out of online banking. It is sometimes a general term that also covers the mobile app; 'internet banking' and 'digital banking' are close synonyms.
Examples
You can download your statements from online banking at any time.
The customer was locked out of online banking after three wrong passwords.
Common phrases
log in to online banking · online banking password · register for online banking · online banking platform
More about this term →fintech
noun
Meaning
Short for financial technology: technology that improves or automates financial services, and the companies that build such products.
Where you use it
Used both for the sector and for single companies: 'a fintech' or 'a fintech company'. It covers payments, lending apps, digital wallets, neobanks and regtech. Banks partner with, invest in or compete with fintechs.
Examples
We are partnering with a fintech to offer instant loans at checkout.
Fintech companies have made international money transfers cheaper.
Common phrases
fintech company · fintech startup · fintech sector · partner with a fintech
More about this term →digital wallet
noun
Meaning
An app or online service that stores payment cards or money so that you can pay with a phone, watch or computer.
Where you use it
Used in payments and product teams. Customers add a card to a digital wallet, top up the wallet and pay in shops or online. Some wallets only store card details; others hold their own balance as e-money.
Examples
You can add your new card to your digital wallet straight from our app.
More of our young customers pay with a digital wallet than with a physical card.
Common phrases
add a card to a digital wallet · digital wallet payment · mobile wallet · e-wallet
More about this term →open banking
noun
Meaning
A system in which banks, with the customer's permission, share account data or let licensed third parties start payments through secure APIs.
Where you use it
Used in fintech, digital banking and regulation. In Europe it grew out of the PSD2 rules. The key services are account information and payment initiation. Customers give and withdraw consent, and providers connect through open banking APIs.
Examples
With open banking, the budgeting app can see the customer's accounts at three different banks.
We are building new open banking APIs for business customers.
Common phrases
open banking API · open banking regulation · open banking provider · account information service
More about this term →buy now, pay later
phrase
Meaning
A form of short-term credit that lets shoppers split a purchase into a few payments, often without interest, usually offered at online checkout.
Where you use it
Usually shortened to BNPL. Used in fintech, retail and regulation. Shoppers choose BNPL at checkout; providers earn mainly from merchant fees and late fees. Regulators in several countries have moved to bring BNPL under consumer credit rules.
Examples
Buy now, pay later options increased the average basket size in our online store.
Many young shoppers use buy now, pay later services instead of a credit card.
Common phrases
buy now, pay later provider · BNPL loan · BNPL at checkout · BNPL regulation
More about this term →neobank
noun
Meaning
A bank that works only through a mobile app and website, without physical branches, and often offers lower fees and fast account opening.
Where you use it
Used in fintech news and strategy discussions; also called a digital bank or, in the UK, a challenger bank. Some neobanks hold a full banking licence, while others work with a partner bank. Traditional banks also launch their own digital brands.
Examples
Many freelancers now keep their business account at a neobank.
The neobank opened a million accounts in its first year without a single branch.
Common phrases
neobank app · challenger bank · digital-only bank · neobank licence
More about this term →instant payment
noun
Meaning
An electronic transfer that reaches the recipient's account within seconds, at any time of day, on every day of the year.
Where you use it
Used in payments and digital banking. Many countries run instant payment systems: FAST in Türkiye, Faster Payments in the UK, SEPA Instant in the euro area and FedNow in the US. Banks talk about 24/7 availability and transaction limits.
Examples
Instant payments let us pay suppliers even on a Sunday night.
Instant payment fraud is harder to stop because the money moves in seconds.
Common phrases
instant payment system · send an instant payment · 24/7 instant payments · instant payment limit
More about this term →top up
phrasal verb
Meaning
To add money to a prepaid card, digital wallet, mobile phone or account so that its balance increases.
Where you use it
Mainly British; Americans more often say 'reload' or 'add money'. You top up a card, a wallet or a travel card, usually by debit card or transfer. The noun is 'top-up'. A top-up loan adds money to an existing loan.
Examples
You can top up your digital wallet instantly with your debit card.
The app tops up the travel card automatically when the balance falls below 100 lira.
Common phrases
top up a card · top up your wallet · automatic top-up · top-up loan
More about this term →OTP
abbreviation
Meaning
Short for one-time password: a code that is valid for a single login or transaction and only for a short time, usually sent by text message or created in an app.
Where you use it
Said letter by letter. Customers receive, enter or request a new OTP when they log in, add a beneficiary or pay online. Fraudsters often try to trick people into sharing their OTP on the phone, so banks keep repeating that staff will never ask for it. Many banks now prefer in-app approval to SMS codes.
Examples
Enter the OTP we sent to your phone to confirm the payment.
The customer shared her OTP with a caller who claimed to be from the bank.
Common phrases
enter the OTP · SMS OTP · OTP expired · resend the OTP
More about this term →phishing
noun
Meaning
A trick in which criminals send fake emails, messages or websites that seem to come from a bank, in order to steal passwords, card details or codes.
Where you use it
Used in fraud prevention, security training and customer warnings. Customers receive phishing emails or fall for phishing scams, and banks report and take down phishing sites. Phishing by text message is called 'smishing' and by phone call 'vishing'. Staff are often tested with simulated phishing emails.
Examples
The email looked real, but it was a phishing attempt with a fake login page.
We warned all customers about a new phishing campaign that uses our logo.
Common phrases
phishing email · phishing attack · phishing site · fall for a phishing scam · report phishing
More about this term →two-factor authentication
noun
Meaning
A way of checking identity that asks for two different kinds of proof, such as a password plus a code sent to your phone, before giving access.
Where you use it
Used in digital banking, IT security and regulation; short form 2FA. The factors are something you know (a password), something you have (a phone or card) and something you are (a fingerprint or face). Banks require it for logins and payments. 'Multi-factor authentication' (MFA) is the wider term.
Examples
Two-factor authentication is required every time you log in from a new device.
Most of these account takeovers could have been prevented with two-factor authentication.
Common phrases
enable two-factor authentication · 2FA code · multi-factor authentication · strong customer authentication
More about this term →virtual card
noun
Meaning
A payment card that exists only in digital form, with its own number, expiry date and security code, used mainly for online and in-app payments.
Where you use it
Used in digital banking and corporate payments. Customers create a virtual card in the app, set its limit and freeze or delete it in seconds, which protects the main card if a website is hacked. Companies give employees virtual cards, or create one card per supplier. Some can be added to a digital wallet for in-store use.
Examples
I only use a virtual card with a small limit for online subscriptions.
The finance team creates a new virtual card for each supplier payment.
Common phrases
create a virtual card · virtual card number · single-use virtual card · virtual card limit
More about this term →onboarding
noun
Meaning
The process of accepting a new customer, including collecting information, verifying identity, running checks and opening the first account or product.
Where you use it
Used in digital banking, compliance and product teams. Banks onboard customers in branches or through digital onboarding with ID scans, selfies and video calls. A smooth onboarding journey means fewer customers give up halfway, while KYC rules decide how strict it must be.
Examples
Digital onboarding now takes less than ten minutes for most new customers.
Corporate onboarding is slower because we must identify every beneficial owner.
Usage note
In HR, 'onboarding' means helping a new employee settle into a job. In banking it usually refers to new customers.
Common phrases
digital onboarding · customer onboarding · onboarding journey · remote onboarding
More about this term →QR code payment
noun
Meaning
A way of paying in which the payer scans a QR code with a banking or wallet app, or shows a code to be scanned, and confirms the payment on the phone.
Where you use it
Used in retail payments, fintech and ATMs. Customers scan to pay in shops, pay bills or take cash from ATMs without a card. Merchants like it because no card terminal is needed. In Türkiye the central bank has set a common standard, TR Karekod, so that codes work across banks and payment institutions.
Examples
More small shops now accept QR code payments at the till.
QR code payments let customers pay straight from their account without sharing card details.
Common phrases
scan to pay · QR code payment · QR code withdrawal · dynamic QR code
More about this term →e-money
noun
Meaning
Monetary value stored electronically, for example in a wallet app or on a prepaid card, issued in exchange for funds received and accepted as payment by others.
Where you use it
Used in fintech and payments regulation. E-money institutions (EMIs) issue e-money and must safeguard customers' funds, but e-money is not a bank deposit, does not earn interest and is usually not covered by deposit insurance. In Türkiye, payment and e-money institutions are licensed and supervised by the central bank.
Examples
The app holds your balance as e-money, not as a bank deposit.
The fintech received an e-money licence, so it can now issue prepaid cards.
Common phrases
e-money institution · e-money licence · issue e-money · e-money account
More about this term →Treasury & Markets
treasury
noun
Meaning
The department of a bank or company that manages its cash, liquidity, funding, foreign exchange and interest rate risk; also the government ministry in charge of public money.
Where you use it
In a bank, treasury runs the money market and FX desks and manages the balance sheet through asset-liability management (ALM). Corporate treasurers handle a company's cash and hedging. With a capital T, the Treasury is a government body, such as HM Treasury in the UK. US government bonds are called 'Treasuries'.
Examples
Treasury has asked branches to focus on longer-term deposits this month.
He started his career on the FX desk in the bank's treasury.
Common phrases
treasury department · treasury desk · corporate treasury · asset-liability management · treasury bills
More about this term →yield
noun
Meaning
The income an investment earns, shown as a percentage of its price or value. For a bond, it is the return an investor gets by buying at the current price.
Where you use it
Used in treasury, bond markets and investment. Bond yields rise when prices fall, and fall when prices rise. Traders follow the benchmark bond yield and the yield curve, which compares yields across maturities. It is also a verb: the bond yields 8%.
Examples
Government bond yields rose after the inflation data.
The yield on our securities portfolio fell as older bonds matured.
Common phrases
bond yield · yield curve · benchmark yield · dividend yield · yields rise
More about this term →securities
noun
Meaning
Financial assets that can be bought and sold, such as shares, bonds and bills, which give the owner rights like part ownership or a claim to repayment.
Where you use it
Used in treasury, capital markets and bank balance sheets. Banks hold a securities portfolio, mostly government bonds, for liquidity and income. Securities are issued, traded, held in custody and settled. A 'securities firm' or 'brokerage' buys and sells them for clients.
Examples
Government securities make up most of the bank's securities portfolio.
The client wants to use his securities as collateral for a loan.
Usage note
The singular 'security' can mean one financial asset, but in daily English it means safety. In finance the plural is far more common. The stress is on the second syllable: se-CUR-ities.
Common phrases
securities portfolio · government securities · marketable securities · securities firm · securities lending
More about this term →derivative
noun
Meaning
A financial contract whose value depends on the price of something else, such as a currency, interest rate, share or commodity.
Where you use it
Used in treasury, risk management and accounting. The main types are forwards, futures, options and swaps. Companies use derivatives to hedge risk, while traders may also use them to speculate. They are traded on exchanges or over the counter (OTC), directly between two parties.
Examples
We use currency derivatives to hedge our export income.
The board limited the use of derivatives to hedging only.
Common phrases
derivatives market · currency derivatives · OTC derivatives · derivative contract · interest rate derivatives
More about this term →forward contract
noun
Meaning
An agreement to buy or sell an amount of currency or another asset on a future date at a price fixed today.
Where you use it
The most common hedge for exporters and importers, often just called a 'forward'. A company books or enters into a forward contract with its bank. The forward rate is not a forecast: it comes from the spot rate and the interest rate difference between the two currencies. Unlike futures, forwards are private OTC deals that can be tailored.
Examples
The importer bought dollars with a three-month forward contract to fix its costs.
Our forward contracts cover about 70% of next year's euro income.
Common phrases
FX forward · forward rate · book a forward contract · outright forward · non-deliverable forward
More about this term →swap
noun
Meaning
A contract in which two parties exchange cash flows or currencies for a period, such as fixed interest payments for floating ones.
Where you use it
Used in treasury, corporate finance and central banking. In an interest rate swap one side pays fixed and the other floating; in a currency swap the parties exchange two currencies and swap them back at maturity. Banks use FX swaps daily to manage liquidity in different currencies.
Examples
We entered into an interest rate swap to turn our floating-rate loan into a fixed-rate one.
The treasury used FX swaps to raise short-term dollar liquidity.
Common phrases
interest rate swap · currency swap · FX swap · swap line · enter into a swap
More about this term →repo
noun
Meaning
Short for repurchase agreement: a deal in which one party sells securities and agrees to buy them back later at a higher price, which works like a short-term secured loan.
Where you use it
Used in treasury and central banking. Banks borrow cash through repo, using government bonds as collateral, and the other side does a reverse repo. Central banks lend to banks through repo auctions, and the repo rate is often the policy rate.
Examples
The bank funded its bond position in the overnight repo market.
The central bank provided liquidity through one-week repo auctions.
Common phrases
repo rate · reverse repo · repo market · overnight repo · repo auction
More about this term →Trade Finance
trade finance
noun
Meaning
Banking products that help importers and exporters pay and get paid safely, and that finance goods while they are produced, shipped or sold.
Where you use it
Used in corporate banking and international trade. It covers letters of credit, documentary collections, guarantees, export loans and supply chain finance. The key question is who carries the risk: cash in advance protects the exporter, open account favours the importer, and bank products sit in between.
Examples
Our trade finance team can structure a letter of credit for your first shipment to Brazil.
Trade finance income rose as exports picked up.
Common phrases
trade finance products · trade finance department · supply chain finance · export finance
More about this term →letter of credit
noun
Meaning
A bank's written promise to pay the seller in an international sale, provided that the seller presents the required documents, such as the bill of lading and invoice.
Where you use it
A core trade finance product, shortened to L/C or LC. The importer (applicant) asks its bank (issuing bank) to open the L/C; the advising bank passes it to the exporter (beneficiary), and a confirming bank may add its own promise. Documents are checked under the ICC's UCP 600 rules, and any discrepancy can delay payment.
Examples
The buyer has opened a letter of credit payable at sight in our favour.
Payment under the letter of credit was delayed because of a discrepancy in the invoice.
Common phrases
open a letter of credit · confirmed letter of credit · L/C at sight · documents under the L/C · UCP 600
More about this term →letter of guarantee
noun
Meaning
A bank's written promise to pay a set amount to a third party if its customer fails to meet an obligation, such as finishing a contract or paying a supplier.
Where you use it
Also called a bank guarantee (LG or BG) and very common in Turkish corporate banking. Main types are bid bonds for tenders, performance bonds and advance payment guarantees. It is a non-cash loan: the bank pays only if the guarantee is called, and charges a commission. In the US a 'standby letter of credit' often plays the same role.
Examples
The contractor must provide a performance letter of guarantee before signing the contract.
The municipality called the letter of guarantee after the work was delayed.
Common phrases
issue a letter of guarantee · performance guarantee · bid bond · call a guarantee · guarantee commission
More about this term →documentary collection
noun
Meaning
A trade payment method in which the exporter's bank sends the shipping documents to the importer's bank, which releases them only when the importer pays or accepts a bill of exchange.
Where you use it
Cheaper and simpler than a letter of credit, but the banks do not guarantee payment. With documents against payment (D/P), also called cash against documents, the buyer pays to get the documents; with documents against acceptance (D/A), the buyer accepts a bill of exchange and pays later. The ICC's URC 522 rules usually apply.
Examples
We ship to long-standing customers on documentary collection terms.
Under the documentary collection, the importer must pay before the bank releases the bill of lading.
Common phrases
documentary collection · documents against payment · documents against acceptance · cash against documents · URC 522
More about this term →bill of exchange
noun
Meaning
A written order from one party to another to pay a fixed amount to a named person, either on demand or on a set future date, used mainly in trade.
Where you use it
Used in trade finance and commercial law. The drawer issues the bill, the drawee is asked to pay, and the payee receives the money. Once accepted by the drawee, the bill can be discounted at a bank for early cash. A bill payable on demand is a sight bill; one payable later is a usance or time bill. Americans often say 'draft'.
Examples
The importer accepted a bill of exchange payable in 90 days.
We discounted the accepted bill of exchange to improve our cash flow.
Usage note
Turkish commercial law has three main negotiable instruments: poliçe (bill of exchange), bono (promissory note) and çek (cheque). The everyday word 'senet' usually means a promissory note, not a bill of exchange.
Common phrases
draw a bill of exchange · accept a bill of exchange · sight bill · usance bill · discount a bill
More about this term →