2005 - Asianbanks.net

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31.2.2 Foreign exchange risk Foreign exchange risk is the risk that changes in foreign exchange rates may result in changes in the value of financial instruments, and fluctuations in revenues or the values of financial assets and liabilities. The Bank has no policy to speculate and engages in financial derivative transactions in order to manage foreign exchange and interest rate risks that may arise as a result of financial derivative transactions executed in providing service to its customers. In addition to the financial assets and liabilities denominated in foreign currencies already disclosed in the relevant notes to the financial statements, as at 31 December 2005 and 2004, the Bank has the following net foreign currency positions categorized by major foreign currencies :- (Unit : USD Million) The Bank only 31 December 2005 31 December 2004 Other Other USD Euro * currencies* USD Euro * currencies* Spot 561.53 20.09 18.95 301.84 16.54 23.69 Forward (553.50) (20.18) (19.27) (307.06) (15.32) (24.03) Net position 8.03 (0.09) (0.32) (5.22) 1.22 (0.34) * Balances denominated in Euro and other currencies are stated in USD equivalents. 31.2.3 Equity position risk Equity position risk is the risk that changes in the market prices of equity securities may result in changes in the value of investments, and fluctuations in revenue or the value of financial assets. The Bank’s Securities Management Department manages risk in accordance with the guidelines stipulated by the Assets and Liabilities Management Committee, which sets various risk control limits, such as total exposure limits, individual limits and stop loss limits. Value at risk is used by the Assets and Liabilities Management Committee as a tool for estimating and controlling maximum acceptable losses for the Bank. 31.3 Liquidity risk Liquidity risk is the risk that the Bank will be unable to liquidate its financial assets and/or procure sufficient funds to discharge its obligations in a timely manner, resulting in the Bank incurring a financial loss. 152
The Bank’s Liquidity Management Committee is responsible for keeping a close watch on the financial and liquidity management of the Bank in line with the risk management guidelines stipulated by the Assets and Liabilities Management Committee. Daily liquidity is managed based on consideration of daily cash demand, liquidity in excess of the mandatory level of 6% required by the Bank of Thailand, the structure of deposits and withdrawals, depositor behaviour, competitive position, economic conditions within and outside the country and the expected returns of the Bank. Furthermore, the committee takes into consideration the maximum cumulative outflow under normal conditions and during a crisis, based on a comparative analysis of the Bank’s cash position, the credit lines granted but unused at other banks, and the Bank’s reserve levels. The Bank also has contingency plans for cases where it may face liquidity problems. The remaining periods to maturity, counting from 31 December 2005 and 2004, of financial instruments are as follows :- The Bank only Counting from 31 December 2005 (Unit : Million Baht) Descriptions At Within Within More than No call 6 month 1 year 1 year maturity Total Financial Assets Cash 9,143 - - - - 9,143 Interbank and money market items 6,451 6,099 475 1,946 - 14,971 Securities purchased under resale agreements - 8,800 - - - 8,800 Investments - 11,098 12,454 69,063 13,243 105,858 Loans (1) 20,880 118,359 8,676 149,163 - 297,078 Financial Liabilities Deposits 121,044 198,421 22,847 39,853 - 382,165 Interbank and money market items 13,481 5,898 209 53 - 19,641 Securities sold under repurchase agreements - 3,000 - - - 3,000 Liability payable on demand 738 - - - - 738 Borrowings - 100 - 87 - 187 (1) Of the loans which mature all call, within 6 months, within 1 year and more than 1 year, amounts of Baht 1,477 million, Baht 148 million, Baht 1,602 million and Baht 4,364 million, respectively, represent default loans from which the Bank has ceased recognition of income. Therefore, the term of these loans depends upon the results of debt restructuring. 153
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Contents Financial Highlights Messa
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Financial Highlights Operating Resu
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Dear Shareholders, In 2005, the wor
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Report of the Audit Committee The B
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Board of Directors Education • Ba
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Board of Directors Education • Ba
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Annual Report 2005 13
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Shareholders Board of Directors Aud
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Mr. Sutipong Ittipong Senior Execut
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Mrs. Jaree Wuthisanti Executive Vic
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Mr. Pravit Ongwatana Executive Vice
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Mr. Prachak Udomsilp Executive Vice
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Executive of the Departments Medium
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Operating Results Operating results
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Unit: Million Baht Business sectors
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As at 31 December 2005, investments
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Relationship between Sources and Us
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Relationship between Financial Cost
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Characteristics of Business Operati
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Reforestation Project on the Occasi
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Structure of Incomes (Consolidated)
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Place In addition to programs to mo
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Enhance capability of information t
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Structure of the Board of Directors
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2. Tenure 2.1 The term of the direc
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1) Knowledge and Ability (Average s
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11. Shall have the power to conside
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5. Others The Audit Committee shall
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7. Adjust and change organization s
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19. Mr. Rathian Srimongkol First Ex
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No. Name Directors Executive Audit
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The Bank resolved to formulate the
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Type of Activities Good Corporate G
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Type of Activities Good Corporate G
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No. Activity 9 Discussion workshop
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Conflict of Interests The Board of
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2. Ethical conduct toward customers
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meeting room to allow a free discus
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The Board of Directors’ Report Th
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Risk Management and Individual Risk
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Risk from Guarantees Bill of paymen
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General Information 1.1 Siam City B
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14. Siam Tire Cord Co., Ltd. 46/1 M
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The Board of Directorsû Responsibi
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Financial Statement BALANCE SHEETS
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BALANCE SHEETS (Continued) AS AT 31
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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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Significant intercompany balances a
Page 103 and 104: 3.4 Investment in subsidiaries and
Page 105 and 106: 3.11 Premises and equipment Buildin
Page 107 and 108: 4. TRANSFER OF BUSINESS FROM BANGKO
Page 109 and 110: (Unit : Million Baht) The Bank only
Page 111 and 112: (Unit : Million Baht) Consolidated
Page 117 and 118: 7.6 Investments in companies having
Page 119 and 120: 8. LOANS AND ACCRUED INTEREST RECEI
Page 121 and 122: 8.3 Classified by currency and resi
Page 125 and 126: 8.6 Non-performing loans As at 31 D
Page 129 and 130: 9. ALLOWANCE FOR DOUBTFUL DEBTS (Un
Page 131 and 132: 10. REVALUATION ALLOWANCE FOR DEBT
Page 135 and 136: 13. INTANGIBLE ASSETS (Unit : Milli
Page 137 and 138: 15.2 Classified by the remaining pe
Page 139 and 140: 17. SECURITIES SOLD UNDER REPURCHAS
Page 141 and 142: (Unit : Million Baht) The Bank Only
Page 151 and 152: Credit Review Department is respons
Page 153: The remaining periods from 31 Decem
Page 157 and 158: As at 31 December 2005, the differe
Page 159 and 160: (a) (b) Set aside to a statutory re
Page 161 and 162: OFFICE / BRANCH TELEPHONE FAX E-MAI
Page 173 and 174: Major Correspondent Banks EUROPE DE
Page 175 and 176: ASIA MALAYSIA KUALA LUMPUR RHB BANK
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2005 - Asianbanks.net

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