Annual Report 2012 - National Savings Bank

125ASSESSING AND MANAGING OUR RISK FACTORSRISK MANAGEMENTfundamentally sound stocks inmitigating associated risks.The investments in equity represent1.6% of the total assets while investmentsin quoted and unquoted equity are1.36% and 0.25% respectively. Hence,the Bank does not have a major exposureto equity risk. However, the adversemovements in the stock market affectedthe yield on equity investments. Theinvestments in non-quoted companiesare made due to policy decisions onmarket and economic development andstrategic reasons.The yield from the equity investmentsof the Bank showed a slight reductiondue to the fact of downturn in the stockmarket. As a result, the total marketvalue of the shares held by the Bankin ASPI and MPI companies havedeclined.Liquidity RiskLiquidity risk is the risk that a givensecurity or asset cannot be tradedquickly enough in the market to preventa loss (or make the required prot).Rs.Mn4500Composition of Investments in Equity2%49%4000350030002500200015001000500Movement of the Market Value of the Shares heldby the Bank in ASPI & MPI Companies-12%37%31/03/2012 30/06/2012 30/09/2012 31/12/2012Milanka Index CompaniesLiquidity risk would occur in a situationwhere the Bank would not be able toMilanka Index CompaniesNon Milanaka Index CompaniesUnit TrustsUnquotedNon Milanaka Index Companiesfulll its obligations promptly due toinadequate cushions maintained.NATIONAL SAVINGS BANK . ANNUAL REPORT 2012