IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

More documents

Recommendations

Info

Notes to the financial statements continued50. Risk management continuedLiquidity and funding risk continuedPoliciesThe Group Liquidity Policy details the Bank’s risk policy relating to all funding and liquidity matters. The policy documentarticulates the Risk Appetite as set and approved by the Board and how ALCO manages this within the agreed parameters.The policy document formally describes the liquidity governance structure and control framework to monitor and controlliquidity risk within the Group.The Group Liquidity Policy is monitored by Group Risk but owned by ALCO which has delegated responsibility for liquiditymanagement from the Board.Strategies and processesALCO is responsible for structural liquidity risk management and provides regular formal updates to the Risk and ComplianceCommittee and the Board.Operational liquidity risk is short term liquidity risk, ranging from intra-day to one month. Execution of the Group's short termoperational liquidity strategy and cash flow management on a daily and real time intra-day basis is the responsibility of theFinancial Markets team, operating within policy set by ALCO.Structural liquidity risk is managed under the guidelines set out in the Group Liquidity Policy. GBSM and Group Risk provideupdates to ALCO on the structural liquidity and funding position both on a current and forward looking basis.The structural liquidity risk has been materially altered by the deposit transfer transaction in February 2011 and the USdollar/euro foreign exchange swap agreements. The deposit transfer has significantly reduced the amount of customer depositliabilities and reduced the amount of NAMA bonds on the Bank's balance sheet. This has led to an increase in the nominalamount of, and the future reliance on, liquidity assistance from the Central Bank of Ireland. The INBS merger on 1 July 2011increased this liquidity assistance by €6bn.Reporting and measurement systemsLiquidity risk is measured using the cash flow mismatch approach where cash inflows and outflows are analysed to produce anet cash flow position over set time periods. Cash outflows are assumed to be paid at the earliest time period and cash inflowsto be received at the latest potential time period.Separate liquidity cash flow limits are in place for the management of liquidity in non-euro currencies ensuring foreign currencycash flow exposure is managed within approved risk tolerance limits.Contractual undiscounted cash flowsThe following tables present the cash flows payable by the Group under financial liabilities, and under contingent liabilities andcommitments which are not recognised in the statement of financial position, by remaining contractual maturities at the end ofthe reporting period. The amounts disclosed in the tables for financial liabilities are contractual undiscounted cash flows andtherefore differ from the carrying amounts of these liabilities in the consolidated statement of financial position.124
Irish Bank Resolution Corporation LimitedAnnual Report & Accounts 2011Contractual undiscounted cash flowsThe Group2011Between Between Between Between Between Overone and nine days one and three months one and fiveDemand eight days and one month three months and one year five years years Total€m €m €m €m €m €m €m €mDeposits from banks 1,701 40,594 - - - - - 42,295Customer accounts 13 131 453 22 46 18 10 693Derivative financial instruments (1) - (37) 20 146 128 587 348 1,192Debt securities in issue - 3 1,216 47 3,131 1,117 13 5,527Other liabilities (2) 52 - - 1 10 6 101 170Subordinated liabilities and other capital instruments - - - 1 3 140 387 5311,766 40,691 1,689 217 3,318 1,868 859 50,408Contingent liabilities (3) - - - 3 107 56 15 181Commitments to lend (3) 19 - - 29 11 178 - 237Total financial liabilities, contingent liabilitiesand commitments 1,785 40,691 1,689 249 3,436 2,102 874 50,8262010Between Between Between Between Between Overone and nine days one and three months one and fiveDemand eight days and one month three months and one year five years years Total€m €m €m €m €m €m €m €mDeposits from banks 1,695 43,743 285 504 55 - - 46,282Customer accounts 3,771 1,433 1,758 1,370 2,537 387 20 11,276Derivative financial instruments (1) - (3) 10 74 2 248 (38) 293Debt securities in issue - 1 808 34 1,420 4,946 18 7,227Other liabilities (2) 50 - - 1 8 5 - 64Subordinated liabilities and other capital instruments - - - 1 3 145 384 5335,516 45,174 2,861 1,984 4,025 5,731 384 65,675Contingent liabilities (3) - 26 1 99 59 37 1 223Commitments to lend (3) 77 - 6 41 140 255 33 552Total financial liabilities, contingent liabilitiesand commitments 5,593 45,200 2,868 2,124 4,224 6,023 418 66,450(1) Derivative cash outflows are stated net of related inflows.(2) Includes obligations under financial guarantees and preference shares only.(3) The Group does not expect all contingent liabilities or commitments to be drawn.125
Page 1 and 2:
Irish Bank Resolution Corporation L
Page 3 and 4:
ContentsIrish Bank Resolution Corpo
Page 5 and 6:
Chairman’s statementIrish Bank Re
Page 7 and 8:
Group Chief Executive’s reviewIri
Page 9 and 10:
Group Chief Executive’s review co
Page 11 and 12:
Business review continuedIrish Bank
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Board of DirectorsIrish Bank Resolu
Page 19 and 20:
Corporate Responsibility continuedI
Page 21 and 22:
Principal risks and uncertainties c
Page 23 and 24:
Principal risks and uncertainties c
Page 25 and 26:
Report of the DirectorsIrish Bank R
Page 27 and 28:
Corporate governance statementIrish
Page 29 and 30:
Corporate governance statement cont
Page 31 and 32:
Corporate governance statement cont
Page 33 and 34:
OpinionIn our opinion:• the Group
Page 35 and 36:
Consolidated statement of comprehen
Page 37 and 38:
Bank statement of financial positio
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76: Irish Bank Resolution Corporation L
Page 125: Irish Bank Resolution Corporation L
Page 171 and 172: Supplementary information (unaudite
Page 177 and 178:
Page 179 and 180:
Irish Bank ResolutionCorporation Li
show all

IBRC annual report for 2011 - Irish Bank Resolution Corporation ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?