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NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2017
42. OFFSETTING FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The Group enters into master netting arrangements with counterparties. The credit risk associated with favourable contracts is
reduced by the master netting arrangement to the extent that if an event of default occurs, all amounts with the counterparty are
settled on a net basis. These arrangements do not qualify for net presentation on the balance sheet as the right to offset is enforceable
only on the occurrence of future events such as default or other credit events.
The disclosures set out in the tables below pertain to financial assets and financial liabilities that are not presented net in the
Group’s balance sheet but are subject to enforceable master netting agreement or similar arrangement that covers similar financial
instruments. The disclosures enable the evaluation on the potential effect of netting arrangements as well as provide additional
information on how such credit risk is mitigated.
Related amounts not offset
on balance sheet
Types of financial assets/liabilities
GROUP ($ million)
Carrying
amounts on
balance sheet
(A)
2017
Financial assets
Derivative receivables
Reverse repurchase agreements
Securities borrowings
Total
Financial liabilities
Derivative payables
Repurchase agreements
Securities lendings
Total
2016
Financial assets
Derivative receivables
Reverse repurchase agreements
Securities borrowings
Total
Financial liabilities
Derivative payables
Repurchase agreements
Securities lendings
Total
Financial
instruments
not in scope
of offsetting
disclosures
(B) (1)
Gross
recognised
financial
instruments
in scope
(A – B = C + D + E + F) (2)
Financial
instruments
(C) (3)
Cash
collateral
(D) Non-cash
collateral
(E) Net
amounts
in scope
(F)
6,386
4,508 (4)
28 (5)
10,922 3,041
1,147
–
4,188 3,345
3,361
28
6,734 2,101
3,351
25
5,477 307
–
–
307 5
–
–
5 932
10
3
945
6,454
476 (6)
9 (7)
6,939 2,596
297
9
2,902 3,858
179
–
4,037 2,101
179
–
2,280 814
–
–
814 –
–
–
– 943
–
–
943
7,838
4,974 (4)
19 (5)
12,831 2,899
451
–
3,350 4,939
4,523
19
9,481 3,228
4,483
17
7,728 633
–
–
633 33
–
–
33 1,045
40
2
1,087
7,474
1,194 (6)
11 (7)
8,679 2,076
357
11
2,444 5,398
837
–
6,235 3,228
837
–
4,065 1,044
–
–
1,044 –
–
–
– 1,126
–
–
1,126
Represents financial instruments not subject to master netting agreements.
Represents financial instruments subject to master netting agreements.
(3)
Represents financial instruments that do not meet offsetting criteria.
(4)
Reverse repurchase agreements shown above are the aggregate of transactions recorded in separate line items on the balance sheet, namely
placements with central banks, loans to banks and non-bank customers and other assets. These transactions are measured either at fair value or
amortised cost.
(5)
Cash collateral placed under securities borrowings are presented under placements with and loans to banks and other assets on the balance sheet,
and are measured at amortised cost.
(6)
Repurchase agreements shown above are the aggregate of transactions recorded in separate line items on the balance sheet, namely deposits of
banks and non-bank customers and other liabilities, and are measured at amortised cost.
(7)
Cash collateral placed under securities lendings are presented under other liabilities, and are measured at amortised cost.
(1)
(2)
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OCBC ANNUAL REPORT 2017