UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 ABN 11 087 650 315
Method of managing risk The Bank manages its interest rate risk by the use of interest rate sensitivity analysis. The detail and assumptions used are set out below. Interest Rate Sensitivity The Bank ’s exposure to market risk is measured and monitored using interest rate sensitivity models. The policy of the Bank to manage the risk is to maintain a balanced ‘on book’ strategy by ensuring the net interest rate gaps between assets and liabilities are not excessive. The Gap is measured monthly to identify large exposures to interest rate movements and to rectify the excess through targeted fixed rate interest products available through investment assets, and term deposits liabilities to rectify the imbalance to within acceptable levels. The policy of the Bank is not to undertake derivatives to match the interest rate risks. The Bank ’ s exposure to interest rate risk is set out in Note 33 which details the contractual interest change profile. Based on the calculations as at 30 June 2022 the net profit impact for a 1% increase in interest rates would be $4,902,327 [2021: $5,299,485]. The Bank performs a sensitivity analysis to measure market risk exposures. The method used in determining the sensitivity was to evaluate the profit based on the timing of the interest repricing on the banking book of the Bank for the next 12 months. In doing the calculation the assumptions applied were that: - the interest rate change would be applied equally over the loan products and term deposits - the rate change would be as at the beginning of the 12-month period and no other rate changes would be effective during the period - the term deposits would all reprice to the new interest rate at the term maturity, or be replaced by deposit with similar terms and rates applicable - savings deposits would not reprice in the event of a rate change - fixed rate loans would all reprice to the new interest rate at the contracted date - mortgage loans would all reprice to the new interest rate after a 1-month delay - personal loans would reprice after a 1-month delay - all loans would be repaid in accordance with the current average repayment rate (or contractual repayment terms) - the value and mix of call savings to term deposits will be unchanged; and - the value and mix of personal loans to mortgage loans will be unchanged. There has been no change to the Bank ’s exposure to market risk or the way the Bank manages and measures market risk in the reporting period. fixed rate loans would all reprice to the new interest rate at the contracted date mortgage loans would all reprice to the new interest rate after a 1-month delay personal loans would reprice after a 1-month delay - all loans would be repaid in accordance with the current average repayment rate (or contractual repayment terms) the value and mix of call savings to term deposits will be unchanged; and - the value and mix of personal loans to mortgage loans will be unchanged. There has been no change to the Bank ’s exposure to market risk or the way the Bank manages and measures market risk in the reporting period. - the value and mix of call savings to - the value and mix of personal loans There has been no change to the Ba market risk in the reporting period. Method of managing risk The Bank manages its interest rate risk by the use of interest rate sensitivity analysis. The detail and assumptions used are set out below. Interest Rate Sensitivity The Bank ’s exposure to market risk is measured and monitored using interest rate sensitivity models. The policy of the Bank to manage the risk is to maintain a balanced ‘on book’ strategy by ensuring the net interest rate gaps between assets and liabilities are not excessive. The Gap is measured monthly to identify large exposures to interest rate movements and to rectify the excess through targeted fixed rate interest products available through investment assets, and term deposits liabilities to rectify the imbalance to within acceptable levels. The policy of the Bank is not to undertake derivatives to match the interest rate risks. The Bank ’ s exposure to interest rate risk is set out in Note 33 which details the contractual interest change profile. Based on the calculations as at 30 June 2022 the net profit impact for a 1% increase in interest rates would be $4,902,327 [2021: $5,299,485]. The Bank performs a sensitivity analysis to measure market risk exposures. The method used in determining the sensitivity was to evaluate the profit based on the timing of the interest repricing on the banking book of the Bank for the next 12 months. In doing the calculation the assumptions applied were that: the interest rate change would be applied equally over the loan products and term deposits - the rate change would be as at the beginning of the 12-month period and no other rate changes would be effective during the period - the term deposits would all reprice to the new interest rate at the term maturity, or be replaced by deposit with similar terms and rates applicable savings deposits would not reprice in the event of a rate change used are set out below. Interest Rate Sensitivity The Bank ’s exposure to market risk is The policy of the Bank to manage the rate gaps between assets and liabilities to interest rate movements and to rect investment assets, and term deposits the Bank is not to undertake derivative set out in Note 33 which details the co Based on the calculations as at 30 Ju $4,902,327 [2021: $5,299,485]. The Bank performs a sensitivity analys The method used in determining the se on the banking book of the Bank for th assumptions applied were that: - the interest rate change would be a - the rate change would be as at th effective during the period - the term deposits would all reprice similar terms and rates applicable - savings deposits would not reprice - fixed rate loans would all reprice to - mortgage loans would all reprice to - personal loans would reprice after a - all loans would be repaid in accor terms) Method of managing risk The Bank manages its interest rate ris
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