2022 Annual Report

UNITY BANK LIMITED 2022 Financial Report

ABN 11 087 650 315 UNITY BANK LIMITED 2022 Financial Report

ABN 11 087 650 315

41. TRANSFER OF FINANCIAL ASSETS The Bank has established arrangements for the transfer of loan contractual benefits of interest and repayments to support ongoing liquidity facilities. These arrangements include i. The Waterside Trust No.1 - Repurchase obligation (REPO) trust for securing the ability to obtain liquid funds from the Reserve Bank – these loans are not de-recognised as the Bank retains the benefits of the trust until such time as a drawing is required. Only residential mortgage-backed securities (RMBS) that meet specified criteria, are eligible to be transferred in the above situation. (a) Securitised loans retained on the balance sheet i. The Waterside Trust No.1 - Repurchase obligation (REPO) trust for securing the ability to obtain liquid funds from the Reserve Bank – these loans are not de-recognised as the Bank retains the benefits of the trust until such time as a drawing is required. Only residential mortgage-backed securities (RMBS) that meet specified criteria, are eligible to be transferred in the above situation. (a) Securitised loans retained on the balance sheet i. The Waterside Trust No.1 - Repurchase obligation (REPO) trust for securing the ability to obtain liquid funds from the Reserve Bank – these loans are not de-recognised as the Bank retains the benefits of the trust until such time as a drawing is required. Only residential mortgage-backed securities (RMBS) that meet specified criteria, are eligible to be transferred in the above situation. (a) Securitised loans retained on the balance sheet The values of securitised loans which are not qualifying for de-recognition as the conditions do not meet the criteria in the accounting standards are set out below. In each case the loans are variable interest rate loans, hence the book value of the loans transferred equates to the fair value of those loans. The associated liabilities are equivalent to the book value of the loans reported. Waterside Trust No.1 - Repurchase Obligations REPO Trust The Waterside Trust No.1 is a trust established by the Bank to facilitate the liquidity requirements under the prudential standards. The trust has an independent trustee. In the case of the REPO Trust the Bank receives a Note certificate to sell to the Reserve Bank should the liquidity needs not be satisfied by normal operational liquidity. The Note is secured over residential mortgage-backed securities (RMBS). The Waterside Trust No.1 is a trust established by the Bank to facilitate the liquidity requirements under the prudential standards. The trust has an independent trustee. In the case of the REPO Trust the Bank receives a Note certificate to sell to the Reserve Bank should the liquidity needs not be satisfied by normal operational liquidity. The Note is secured over residential mortgage-backed securities (RMBS). The Waterside Trust No.1 is a trust established by the Bank to facilitate the liquidity requirements under the prudential standards. The trust has an independent trustee. In the case of the REPO Trust the Bank receives a Note certificate to sell to the Reserve Bank should the liquidity needs not be satisfied by normal operational liquidity. The Note is secured over residential mortgage-backed securities (RMBS). The Bank has financed the loans and received the net gains or losses from the trust after trustee expenses. The Bank has an obligation to manage the portfolio of the loans in the trust and to maintain the pool of eligible secured loans at the value equivalent to the value of the Notes received. The Bank retains the credit risk of losses arising from loan default or security decline, and the interest rate risk from movements in market interest rates. (a) Securitised Loans on the Balance Sheet 2022 2021 $'000 $'000 Balance sheet values - Loans and receivables Waterside Trust No.1 272,434 272,256 Carrying amount of loans at time of transfer Waterside Trust No.1 97,158 97,158 The Bank has financed the loans and received the net gains or losses from the trust after trustee expenses. The Bank has an obligation to manage the portfolio of the loans in the trust and to maintain the pool of eligible secured loans at the value equivalent to the value of the Notes received. The Bank retains the credit risk of losses arising from loan default or security decline, and the interest rate risk from movements in market interest rates. (a) Securitised Loans on the Balance Sheet 2022 2021 $'000 $'000 Balance sheet values - Loans and receivables Waterside Trust No.1 272,434 272,256 Carrying amount of loans at time of transfer Waterside Trust No.1 97,158 97,158 The Bank has financed the loans and received the net gains or losses from the trust after trustee expenses. The Bank has an obligation to manage the portfolio of the loans in the trust and to maintain the pool of eligible secured loans at the value equivalent to the value of the Notes received. The Bank retains the credit risk of losses arising from loan default or security decline, and the interest rate risk from movements in market interest rates. (a) Securitised Loans on the Balance Sheet 2022 2021 $'000 $'000 Balance sheet values - Loans and receivables Waterside Trust No.1 272,434 272,256 Carrying amount of loans at time of transfer Waterside Trust No.1 97,158 97,158 41. TRANSFER OF FINANCIAL ASSETS The Bank has established arrangements for the transfer of loan contractual benefits of interest and repayments to support ongoing liquidity facilities. These arrangements include The Bank has established arrangements for the transfer of loan contractual benefits of interest and repayments to support ongoing liquidity facilities. These arrangements include The values of securitised loans which are not qualifying for de-recognition as the conditions do not meet the criteria in the accounting standards are set out below. In each case the loans are variable interest rate loans, hence the book value of the loans transferred equates to the fair value of those loans. The associated liabilities are equivalent to the book value of the loans reported. Waterside Trust No.1 - Repurchase Obligations REPO Trust The values of securitised loans which are not qualifying for de-recognition as the conditions do not meet the criteria in the accounting standards are set out below. In each case the loans are variable interest rate loans, hence the book value of the loans transferred equates to the fair value of those loans. The associated liabilities are equivalent to the book value of the loans reported. Waterside Trust No.1 - Repurchase Obligations REPO Trust

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