(Thai) Annual Report 2005 - United Overseas Bank

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Accounting Policies Details of significant accounting policies and methods adopted, including criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised in respect of each class of financial assets and financial liabilities, are disclosed in Note 4. Credit Risk Credit risk refers to the risk that a counterparty default on its contractual obligations resulting in a financial loss to the Bank and its subsidiaries. The Bank and its subsidiaries have adopted the policy of only dealing with creditworthy counterparts and obtaining sufficient collateral or other securities, where appropriate, as a means of mitigating the risk of financial losses from defaults. In the case of recognised financial assets, the carrying amount of the assets recorded in the balance sheet, net of allowance for doubtful accounts, represents the Bank’s and its subsidiaries’ maximum exposure to credit risk. Furthermore, the Bank’s exposure to credit loss in the event of nonperformance by the counterparties to the financial instruments for commitments to extend credit, standby letters of credit, and financial guarantees is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as it does for the on-balance sheet instruments. For derivatives, the contract or notional amounts do not represent exposure to credit loss. The Bank controls the credit risk of its derivatives through credit approvals, limits, and monitoring procedures set by its Credit Committee. Credit risk also arises from the possibility that the counterparty to off-balance sheet financial instruments will not adhere to the terms of the contract with the Bank when settlement becomes due. 92 United Overseas Bank (Thai) Public Company Limited
The following table shows the credit equivalent of unmatured off-balance sheet financial instruments in accordance with the BOT’s ruling :- (Unit : Million Baht) CONSOLIDATED AND THE BANK ONLY As at 31 December 2005 2004 Foreign exchange contracts 566 388 Forward rate agreements 4 - Interest rate swap contracts 247 50 Cross currency interest rate swap contracts 151 - Options 21 - Avals to bills 506 754 Guarantees of loans 681 75 Performance guarantees 6,117 4,938 Bid guarantees 369 338 Liability under unmatured import bills 284 273 Import letters of credit 644 645 Others 55 97 Total 9,645 7,558 Interest Rate Risk Interest rate risk arises from the potential for a change in interest rates to have an adverse effect on the net interest earnings of the Bank and its subsidiaries in the current reporting year, and in the future. Interest rate risk arises from the structure and characteristics of the Bank and its subsidiaries’ assets, liabilities, shareholders’ equity and interest rate linked derivative contracts, and in the maturity mismatch in repricing dates of their assets and liabilities. The Bank and its subsidiaries’ exposure to interest rate risk showing the remaining period to the earlier of contractual repricing dates or maturity dates, and average rate of return, where applicable, for classes of financial assets and financial liabilities subject to interest rate risk is set out below : United Overseas Bank (Thai) Public Company Limited 93
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United Overseas Bank (Thai) Public
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Financial Highlights (consolidated
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two banks were realized. Excluding
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The Thai Economy in 2005 and the Ou
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Management Discussion and Analysis
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Report of Independent Auditor To Th
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BALANCE SHEETS (Continued) AS AT DE
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BALANCE SHEETS (Continued) AS AT DE
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STATEMENTS OF EARNINGS (Continued)
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STATEMENTS OF CHANGES IN SHAREHOLDE
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STATEMENTS OF CASH FLOWS (Continued
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Notes to Financial Statements 31 De
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Details of the assets, liabilities
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Condensed Statements of Earnings (P
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4. SIGNIFICANT ACCOUNTING POLICIES
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Fair values of securities are calcu
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Outstanding forward foreign exchang
Page 44 and 45: The Bank has a gratuities scheme wh
Page 46 and 47: (Unit : Million Baht) THE BANK ONLY
Page 48 and 49: (Unit : Million Baht) CONSOLIDATED
Page 50 and 51: 8.2 Classified by the remaining per
Page 52 and 53: 8.3 Revaluation surplus on investme
Page 54 and 55: CONSOLIDATED As at 31 December 2004
Page 56 and 57: Advance CCC Services Co., Ltd. regi
Page 58 and 59: 9. LOANS AND ACCRUED INTEREST RECEI
Page 60 and 61: 9.4 Classified by types of business
Page 62 and 63: In June 2003, the Bank was subjecte
Page 64 and 65: 9.8 Troubled debt restructuring Dur
Page 66 and 67: the first portion of profits, not e
Page 68 and 69: As at 31 December 2005 and 2004, th
Page 74 and 75: 15. CLASSIFIED ASSETS (Unit : Milli
Page 78 and 79: 19. BORROWINGS As at 31 December 20
Page 80 and 81: 20. OTHER LIABILITIES (Unit : Milli
Page 82 and 83: 25. COMMITMENTS AND CONTINGENCIES L
Page 84 and 85: 25.3 Other commitments The Bank has
Page 88 and 89: THE BANK ONLY As at 31 December 200
Page 90 and 91: 32. FINANCIAL POSITIONS AND RESULTS
Page 92 and 93: Results of operations for the years
Page 96 and 97: Remaining periods to earlier of rep
Page 98 and 99: Remaining periods to earlier of rep
Page 100 and 101: Liquidity Risk Liquidity risk is th
Page 104 and 105: Estimated Fair Value of Financial I
Page 106 and 107: (Unit : Million Baht) CONSOLIDATED
Page 108 and 109: Fair value of off-balance sheet fin
Page 110 and 111: Other Information 5. Piyalai Holdin
Page 112 and 113: Other Information Name Period Exper
Page 114 and 115: Other Information Name Education Pe
Page 116 and 117: Other Information 3.2 Management’
Page 118 and 119: Risk Factors and Risk Management to
Page 120 and 121: Report of the Audit Committee The A
Page 122 and 123: Corporate Governance UOB Thai, a su
Page 124 and 125: Corporate Governance 11. Mr. Lee Ts
Page 126 and 127: Management Structure The committee
Page 128 and 129: Management Structure Financial Rest
Page 130 and 131: Management Structure The committee
Page 132 and 133: Branch Networks HEAD OFFICE Sathon
Page 134 and 135: Branch Networks Nong Khaem 77/207 M
Page 136 and 137: Branch Networks Siam Square (Sub Br
Page 138 and 139: Branch Networks Thanon Pracha-U-Thi
Page 140 and 141: Branch Networks Sam Chuk 225/2 Mu 2
Page 142 and 143: Branch Networks Thanon Highway-Chia
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Referred Persons Auditor Miss Ratan
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Company Information Credit Ratings
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(Thai) Annual Report 2005 - United Overseas Bank

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