Investor Presentaiton
Example 3
A financial institution holds financial assets to meet its
everyday liquidity needs. The entity seeks to minimize the
costs of managing those liquidity needs and therefore
actively manages the return on the portfolio. That return
consists of collecting contractual payments as well as gains.
and losses from the sale of financial assets.
As a result, the entity holds financial assets to collect
contractual cash flows and sells financial assets to reinvest
in higher yielding financial assets or to better match the
duration of its liabilities. In the past, this strategy has resulted
in frequent sales activity and such sales have been
significant in value. This activity is expected to continue in
the future.
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