Bahamas - FirstCaribbean International Bank

FIRSTCARIBBEAN INTERNATIONAL BANK (BAHAMAS) LIMITEDNotes to Consolidated Financial StatementsOctober 31, 2002(expressed in thousands of Bahamian dollars)25 Use of financial instruments…continuedC Currency risk…continuedAs at December 31, 2001BBD$ BAH$ US$ JA$ Other TotalTotal assets 32 561,217 871,485 14,645 127,190 1,574,569Total liabilities 1,142 551,994 835,317 15,316 126,476 1,530,245Net on balance sheetposition (1,110) 9,223 36,168 (671) 714 44,324Off balance sheet netnotional position – 37,921 1,525 – 39,446Credit commitments – 75,253 – – 20,277 95,530D Interest rate riskInterest sensitivity of assets, liabilities and off balance sheet items – repricing analysisThe Bank takes on exposure to the effects of fluctuations in the prevailing levels of market interest rateson its financial position and cash flows. Interest margins may increase as a result of such changes but mayreduce or create losses in the event that unexpected movements arise. The Board of Directors sets limitson the level of mismatch of interest rate repricing that may be undertaken, which is monitored daily.Expected repricing and maturity dates do not differ significantly from the contract dates, except for thematurity of deposits up to 1 month, of which represent balances on current accounts considered by theBank as a relatively stable core source of funding of its operations.E Liquidity riskThe Bank is exposed to daily calls on its available cash resources from overnight deposits, current accounts,maturing deposits, loan draw downs, guarantees and from margin and other calls on cash settled derivatives.The Bank does not maintain cash resources to meet all of these needs as experience shows that a minimumlevel of reinvestment of maturing funds can be predicted with a high level of certainty. The Board sets limitson the minimum proportion of maturing funds available to meet such calls and on the minimum level ofinterbank and other borrowing facilities that should be in place to cover withdrawals at unexpected levels ofdemand.The table below analyses assets and liabilities of the Bank into relevant maturity groupings based on theremaining period at balance sheet date to the contractual maturity date.79