Financial Statements - United Bank Limited

NOTES TO AND FORMING PART OF THE UNCONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2012
44.2.5 Geographical segment analysis
2012
Profit before
taxation
Total assets
employed
Net assets
employed
Contingencies
and commitments
---------------------------------------- (Rupees in '000) ----------------------------------------
Pakistan operations 23,424,408 691,365,103 60,490,817 373,701,299
Middle East 3,401,778 213,579,340 28,462,965 139,676,024
United States of America 184,364 3,782,679 1,850,136 3,832
Karachi Export Processing Zone 18,377 696,218 359,908 127,326
3,604,519 218,058,237 30,673,009 139,807,182
27,028,927 909,423,340 91,163,826 513,508,481
2011
Profit before
taxation
Total assets
employed
Net assets
employed
Contingencies
and commitments
---------------------------------------- (Rupees in '000) ----------------------------------------
Pakistan operations 21,392,145 625,357,250 54,271,871 410,039,278
Middle East 2,618,024 152,250,045 22,976,014 121,309,333
United States of America 183,781 4,042,572 1,596,319 3,705
Karachi Export Processing Zone 28,841 1,518,215 308,704 136,162
2,830,646 157,810,832 24,881,037 121,449,200
24,222,791 783,168,082 79,152,908 531,488,478
24,222,791 778,059,741 79,152,908
Total assets employed include intra group items of Rs.15,024.688 million (2011: Rs.5,108.341 million).
44.3 Market Risk
Market risk is the risk that the Bank may experience due to movements in market prices. It results from changes in
interest rates, exchange rates and equity prices as well as the correlations between them. Each of these
components of market risk include a general market risk and a specific aspect of market risk that originates in the
portfolio structure of a bank.
Measuring and controlling market risk is usually carried out at the portfolio level. However, certain controls are
applied, where necessary, to individual risk types, to particular books and to specific exposures. Controls are also
applied to prevent any undue risk concentrations in trading books, taking into account variations in price, volatility,
market depth and liquidity. These controls also include limits on exposure to individual market risk variables as well
as on concentrations of tenors, issuers etc.
Trading activities are centered in the Treasury and Capital Markets Group to facilitate clients as well as run
proprietary positions. The Bank is active in the cash and derivative markets for equity, interest rate and foreign
exchange.
The Market and Treasury Risk division performs market risk management activities. Within this division, the Market
Risk Management unit is responsible for the development and review of market risk policies and processes, and is
involved in research, financial modeling and testing / implementation of risk management systems, while Treasury
Middle Office is responsible for implementation and monitoring of market risk and other policies, escalation of any
deviation to senior management, and MIS reporting.
The scope of market risk management is as follows:
-
-
To keep the market risk exposure within the Bank’s risk appetite as assigned by the BoD and the BRMC.
To develop, review and upgrade procedures for the effective implementation of market risk management
policies approved by the BoD and BRMC.
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