Annual report 2009-OK.qxp - Canadia Bank Plc.

Canadia Bank Plc.31. FINANCIAL RISK MANAGEMENTThe Bank's activities expose it to a variety of financial risks: credit risk, market risk (including currency risk,interest rate risk and price risk), and liquidity risk.Taking risk is core to the financial business, and the operationalrisks are the inevitable consequence of being in business.The Bank does not use derivative financial instruments such as foreign exchange contract and interest rateswaps to manage its risk exposure.The Bank holds the following financial assets and liabilities:2009 2009 2008 2008US$ Million Riel US$ Million Rielequivalentequivalent(Note 2.1) (Note 2.1)Annual Report 200960Financial assetsCash on hand 35,945,109 149,855 42,825,814 174,772Balances with the NBC 198,667,290 828,244 72,046,256 294,021Balances with other banks 81,939,255 341,605 28,785,020 117,472Loans and advances tocustomers - net 360,587,399 1,503,289 390,602,198 1,594,047Other assets 12,766,493 53,223 2,595,645 10,593Total financial assets 689,905,546 2,876,216 536,854,933 2,190,905Financial liabilitiesDeposits from banks 33,307,122 138,857 25,777,981 105,200Due to customers 555,042,999 2,313,974 436,362,009 1,780,793Borrowings 3,234,615 13,485 7,057,279 28,801Subordinated debt 7,080,000 29,517 7,080,000 28,894Other liabilities 8,213,090 34,240 5,739,735 23,424Total financial liabilities 606,877,826 2,530,073 482,017,004 1,967,112Net financial assets 83,027,720 346,143 54,837,929 223,79331.1 Credit riskThe Bank takes exposure to credit risk, which is the risk that counterparty will cause a financial loss to the Bank byfailing to discharge an obligation. Credit risk is the most important risk for the Bank's business. Credit exposurearises principally in lending activities.There is also credit risk in off-balance sheet financial instruments, such as loancommitments.The credit risk management is carried out by the Bank's credit committee.