UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 ABN 11 087 650 315
ABN 11 087 650 315
- the segregation of duties between employee duties and functions, including approval and processing duties - documentation of the policies and procedures, employee job descriptions and responsibilities, to reduce the incidence of errors and inappropriate behavior - implementation of the whistle blowing policies to promote a compliant culture and awareness of the duty to report exceptions by staff - education of members to review their account statements and report exceptions to the Bank promptly - effective dispute resolution procedures to respond to member complaints - effective insurance arrangements to reduce the impact of losses; and - contingency plans for dealing with the loss of functionality of systems or premises or staff. Fraud Fraud can arise from member card pins, and internet passwords being compromised where not protected adequately by the member. It can also arise from other systems failures. The Bank has systems in place which are considered to be robust enough to prevent any material fraud. However, in common with all retail banks, fraud is potentially a real cost to the Bank. Fraud losses can arise from card skimming, internet password theft and false loan applications. IT systems The worst-case scenario would be the failure of the Bank ’s core banking and IT network suppliers, to meet customer obligations and service requirements. The Bank has outsourced the IT systems management to an Independent Data Processing Centre (IDPC) which is owned by a collection of Banks and Credit Unions. This organisation has the experience in-house to manage any short-term problems and has a contingency plan to manage any related power or systems failures. Other network suppliers are engaged on behalf of the Bank by the industry body CUSCAL to service the settlements with other financial institutions for direct entry, ATM & Visa cards, and Bpay etc. A full disaster recovery plan is in place to cover medium to long-term problems which is considered to mitigate the risk to an extent such that there is no need for any further capital to be allocated. E. CAPITAL MANAGEMENT The capital levels are prescribed by the Australian Prudential Regulation Authority (APRA). Under the APRA prudential standards capital is determined in three components: • Credit risk • Market risk (trading book) • Operations risk. The market risk component is not required as the Bank is not engaged in a trading book for financial instruments. - the segregation of duties between employee duties and functions, including approval and processing duties - documentation of the policies and procedures, employee job descriptions and responsibilities, to reduce the incidence of errors and inappropriate behavior - implementation of the whistle blowing policies to promote a compliant culture and awareness of the duty to report exceptions by staff - education of members to review their account statements and report exceptions to the Bank promptly - effective dispute resolution procedures to respond to member complaints - effective insurance arrangements to reduce the impact of losses; and - contingency plans for dealing with the loss of functionality of systems or premises or staff. Fraud Fraud can arise from member card pins, and internet passwords being compromised where not protected adequately by the member. It can also arise from other systems failures. The Bank has systems in place which are considered to be robust enough to prevent any material fraud. However, in common with all retail banks, fraud is potentially a real cost to the Bank. Fraud losses can arise from card skimming, internet password theft and false loan applications. IT systems The worst-case scenario would be the failure of the Bank ’s core banking and IT network suppliers, to meet customer obligations and service requirements. The Bank has outsourced the IT systems management to an Independent Data Processing Centre (IDPC) which is owned by a collection of Banks and Credit Unions. This organisation has the experience in-house to manage any short-term problems and has a contingency plan to manage any related power or systems failures. Other network suppliers are engaged on behalf of the Bank by the industry body CUSCAL to service the settlements with other financial institutions for direct entry, ATM & Visa cards, and Bpay etc. A full disaster recovery plan is in place to cover medium to long-term problems which is considered to mitigate the risk to an extent such that there is no need for any further capital to be allocated. E. CAPITAL MANAGEMENT The capital levels are prescribed by the Australian Prudential Regulation Authority (APRA). Under the APRA prudential standards capital is determined in three components: • Credit risk • Market risk (trading book) • Operations risk. The market risk component is not required as the Bank is not engaged in a trading book for financial instruments.
Capital resources Tier 1 Capital The vast majority of Tier 1 capital comprises: • Retained profits • Realised reserves • Asset Revaluation & FVOCI Reserves. Capital resources Tier 1 Capital The vast majority of Tier 1 capital comprises: • Retained profits • Realised reserves • Asset Revaluation & FVOCI Reserves. Additional Tier 1 Capital This classification of Capital includes Additional Tier 1 Capital This classification of Capital includes UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315
• Preference share capital approved by the APRA that qualifies as Tier 1 capital. Tier 2 Capital
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Tier 2 capital consists of capital instruments that combine the features of debt and equity in that they are structured as debt instruments, but exhibit some of the loss absorption and funding flexibility features of equity. There are a number of criteria that capital instruments must meet for inclusion in Tier 2 capital resources as set down by the APRA.
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