My first Publication ocbc_ar17_fullreport_english | Page 230

NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2017
39. RISK MANAGEMENT (continued)
39.2 CREDIT RISK (continued)
Country risk
The Group’s country risk framework covers the assessment and rating of countries, as well as the maximum cross-border transfer
risk limit granted to any one country based on its risk rating. The risk covers all cross-border transactions including onshore non-local
currency transactions. Limits are allocated into maturity time-bands and vary according to the risk rating of the country and the
political and economic outlook. Cross-border transfer risk exposures of more than 1% of assets were as follows:
Banks Government
and official
institutions Loans to
financial
institutions and
customers Total
exposure As % of
assets
Exposure (1)
31 December 2017
Hong Kong SAR
People’s Republic of China
Malaysia
Indonesia
United States
Japan
United Arab Emirates
United Kingdom 16,538
10,348
5,953
2,761
2,437
2,347
1,495
2,835 136
58
58
1,278
2,601
1,989
–
16 14,401
11,667
9,523
10,613
2,537
1,763
4,022
2,099 31,075
22,073
15,534
14,652
7,575
6,099
5,517
4,950 8.2
5.8
4.1
3.8
2.0
1.6
1.4
1.3
31 December 2016
Hong Kong SAR
Malaysia
People’s Republic of China
Indonesia
British Virgin Islands
Japan
United States
United Kingdom
Australia
Luxembourg 15,141
6,640
5,816
3,408
–
2,716
1,818
3,104
3,627
3,438 104
70
51
545
–
2,331
2,331
16
#
– 12,765
8,824
7,882
9,154
8,615
1,380
1,936
2,759
1,694
176 28,010
15,534
13,749
13,107
8,615
6,427
6,085
5,879
5,321
3,614 8.1
4.5
4.0
3.8
2.5
1.8
1.7
1.7
1.5
1.0
$ million
(1)

(2)
Assets (excluding life assurance fund investment assets) of $381,011 million (2016: $347,911 million).
# represents amounts less than $0.5 million.
39.3 MARKET RISK AND ASSET LIABILITY MANAGEMENT
Disclosures on the Group’s market risk management, and the Value-at-Risk (“VaR”) summary of its trading portfolio, are in the Risk
Management Section.
The Group’s Asset Liability Management framework consists of three components:
• Interest rate risk management;
• Structural foreign exchange risk management; and
• Liquidity management.
The objectives, policies and processes of asset liability management are in the Risk Management Section.
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OCBC ANNUAL REPORT 2017