Download - African Bank

Notes to the annual financial statements (continued)
for the year ended 30 September 2003
35. FINANCIAL RISK
35.1 Interest rate risk
The subsidiaries are exposed to interest rate risk associated with the effects of fluctuations in the prevailing levels of market rates
on their financial positions and cash flows. The table below summarises the subsidiaries’ exposure to interest rate risk through
grouping assets and liabilities into repricing categories, determined to be the earlier of the contractual repricing date or maturity.
One to Four to Beyond Non-interest
Up to one three twelve twelve sensitive
month months months months items Total
2003 R000 R000 R000 R000 R000 R000
Assets
Fixed assets – – – – 193 719 193 719
Investments in associates – – – – 9 324 9 324
Policyholders’ investments – – – – 53 682 53 682
Goodwill – – – – 20 463 20 463
Deferred tax asset – – – – 58 812 58 812
Net advances 374 444 481 233 1 335 276 2 058 570 150 223 4 399 746
Other assets and taxation 38 32 336 – 242 81 744 114 360
Liquid and trading assets 91 507 139 742 197 469 – 50 756 479 474
Short-term deposits and cash 857 125 283 062 – 4 800 3 575 1 148 562
Total assets 1 323 114 936 373 1 532 745 2 063 612 622 298 6 478 142
Liabilities
Life fund reserve – – 820 – 79 506 80 326
Loans and debentures 46 998 36 498 31 468 2 069 850 66 366 2 251 180
Deferred tax liability – – – – 10 576 10 576
Liabilities to depositors 277 161 190 525 162 944 253 855 – 884 485
Other liabilities and taxation 97 239 129 8 175 – 162 886 268 429
Bank overdraft 150 – – – – 150
Secondary capital
Shareholders’ funds and
– 2 512 – 187 192 – 189 704
minority interests – – – – 2 793 292 2 793 292
Total liabilities 421 548 229 664 203 407 2 510 897 3 112 626 6 478 142
On-balance sheet
interest sensitivity 901 566 706 709 1 329 338 (447 285) (2 490 328) –
Assuming the financial assets and liabilities on hand at 30 September 2003 were to remain on hand until maturity or settlement
without any action by the subsidiaries to alter the resulting interest rate risk exposure, an immediate and sustained 1% parallel decline
in the yield curve would result in the net interest income of the group for the next twelve months declining by R7,6 million.
African Bank Investments Limited 120