Annual Report 2012 - National Savings Bank

120ASSESSING AND MANAGING OUR RISK FACTORSRISK MANAGEMENTevaluated risks are reported to the Assetsand Liability Management Committee(ALCO), Executive Risk ManagementCommittee (ERMC) and IntegratedRisk Management (IRMC) periodically.Initial steps were taken to establish anindependent Treasury Middle Ofcein order to improve the effectiveness ofmarket risk management. The marketrisk management framework of theBank is as follows.Interest Rate RiskInterest rate Risk is the risk that aninvestment’s value will change due to achange in the absolute level of interestrates, in the spread between two rates,CommodityRiskLiquidityRiskin the shape of the yield curve or inany other interest rate relationship.The Bank’s major source of fundingInterestRate RiskMarket RiskManagementFrameworkEquityRiskForeignExchange Riskis deposits which represent 94% oftotal on balance sheet liabilities. Ofthis, 24% represents savings depositsComposition of Liabilities5% 1%22%Composition of Total Deposits24%SavingsFDsFDsSavingsRepoOther Liabilities72%76%NATIONAL SAVINGS BANK . ANNUAL REPORT 2012