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2014 ANNUAL REPORT
21 Risk management
(continued)
21.3 Liquidity risk
Liquidity risk is defined as the risk that the Group either does not have sufficient financial resources available to meet all its obligations and
commitments as they fall due, or can access these only at excessive cost.
Liquidity management is therefore primarily designed to ensure that funding requirements can be met, including the replacement of
existing funds as they mature or are withdrawn, or to satisfy the demands of customers for additional borrowings. Liquidity management
focuses on ensuring that the Group has sufficient funds to meet all of its obligations.
Three primary sources of funds are used to provide liquidity – retail deposits, wholesale deposits and the capital market. A substantial
portion of the Group is funded with ‘core deposits.’The Group maintains a core base of retail and wholesale funds, which can be drawn
on to meet ongoing liquidity needs. The capital markets are accessed for medium to long-term funds as required, providing diverse
funding sources to the Group. Facilities are also established with correspondent banks, which can provide additional liquidity as conditions
demand.
The Asset/Liability Committee (ALCO) sets targets for daily float, allowable liquid assets and funding diversification in line with system
liquidity trends. While the primary asset used for short-term liquidity management is the Treasury Bill, the Group also holds significant
investments in other Government securities, which can be used for liquidity support. The Group continually balances the need for short-
term assets, which have lower yields, with the need for higher asset returns.
21.3.1 Analysis of financial liabilities by remaining contractual maturities
The following table summarises the maturity profile of the Group’s financial liabilities at September 30, based on contractual
undiscounted repayment obligations, over the remaining life of those liabilities. These balances include interest to be paid over the
remaining life of the liabilities and will therefore be greater than the carrying amounts on the consolidated statement of financial
position. See Note 25 for a maturity analysis of assets and liabilities.
Financial liabilities - on statement of financial position
On demand
Up to
1 to 5
Over 5
Total
one year
years
years
2014
Customers’current, savings
and deposit accounts
36,713,903
7,132,634
12,362
–
43,858,899
Other fund raising
instruments
–
3,046,126
244,073
147,212
3,437,411
Debt securities in issue
–
109,821
1,252,750
55,010
1,417,581
Due to banks
22,190
47,767
–
–
69,957
Other liabilities
447,570
28,888
2,171
–
478,629
Total un- discounted
financial liabilities
37,183,663
10,365,236
1,511,356
202,222
49,262,477
On demand
Up to
1 to 5
Over 5
Total
one year
years
years
