Annual Financial Statements 2020

38 ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS CONTINUED 2.3 2.3.1 2.3.2 Derivatives held-for-hedging Where all relevant criteria are met, derivatives are classified as derivatives held-for-hedging and hedge accounting is applied to remove the accounting mismatch between the derivative (hedging instrument) and the underlying instruments (hedged item). All qualifying hedging relationships are designated as fair value hedges. The company applies hedge accounting in respect of interest rate risk. Derivatives designated as hedging instruments in fair value hedging relationships 3. Trading assets Fair value Assets Liabilities N$'000 N$'000 Net fair value N$'000 Less than one year N$'000 Maturity Between one to five years N$'000 Contract/ Over five notional years N$'000 amount¹ N$'000 Fair value gain/ (loss) N$'000 4. Government, municipality and utility bonds Treasury bills Reverse repurchase and other collateralised agreements Total Pledged assets STANDARD BANK NAMIBIA LIMITED Annual financial statements 2020 39 2020 N$'000 2019 N$'000 383 240 9 149 248 680 10 348 383 240 268 177 2020 Interest rate risk fair value hedging relationships Interest rate swaps 6 125 6 125 6 125 (79 256) (2008) assets N$'000 The following table presents details of other financial assets which have been sold or otherwise transferred, but which have not been derecognised in their entirety or which were partially derecognised, and their associated liabilities. Carrying amount of transferred Carrying amount of associated Fair value of transferred assets N$'000 Fair value of associated liabilities N$'000 Net liabilities N$'000 fair value N$'000 Total 6 125 6 125 6 125 (79 256) (2 008) 2020 2019 Treasury bills 520 956 (515 153) 520 956 (515 153) 5 803 Interest rate risk fair value hedging relationships Pledged assets (as recognised on the statement of financial position)¹ 520 956 (515 153) 520 956 (515 153) 5 803 2019 Interest rate swaps 4 117 Total 4 117 4 117 538 3 579 4 117 538 3 579 147 693 447 Treasury bills 580 098 (579 837) 580 098 (579 837) 261 147 693 447 Pledged assets (as recognised on the statement of financial position)¹ 580 098 (579 837) 580 098 (579 837) 261 1 The notional amount is the sum of the absolute value for both derivative assets and liabilities. The amount cannot be used to assess the market risk associated with the positions held and should be used only as a means of assessing the company's participation in derivative contracts. The notional amount is directly impacted by the JIBAR interest rate benchmark reform. Hedged items classified as fair value hedges 2020 Interest rate risk fair value hedging relationships Fair value Accumulated fair value gain/(loss) at Assets N$'000 Liabilities N$'000 31 December N$'000 1 Total amount of financial assets that the company has pledged as collateral for liabilities. The assets pledged by the company are strictly for the purpose of providing collateral to the counterparty. To the extent that the counterparty is permitted to sell and/or repledge the assets in the absence of default, they are classified in the statement of financial position as pledged assets. These transactions are conducted under terms that are customary to standard repurchase agreements and securities borrowing activities. Fair value (loss)/gain used to test hedge ineffectiveness N$'000 Accumulated fair value hedge adjustments N$'000 5. Financial investments Deposits and debt funding Total (85 442) 2 135 2 135 2 135 (85 442) 2 135 2 135 2 135 2019 Interest rate risk fair value hedging relationships Deposits and debt funding (151 744) (395) (395) (395) Total (151 744) (395) (395) (395) 2.3.3 Hedge ineffectiveness recognised in profit or loss Fair value hedges Interest rate risk fair value hedging relationships Net interest income 2020 N$'000 2019 N$'000 127 842 Government bonds and treasury bills Mutual funds and unit-linked investments Total IFRS 9 classification: Net debt financial investments measured at amortised cost Gross debt financial investments measured at amortised cost Less: ECL for debt financial investments measured at amortised cost¹ Financial investments measured at FVTPL Debt financial investments measured at fair value through OCI Total 2020 N$'000 2019 N$'000 1 783 053 2 130 278 2 435 781 1 852 559 4 218 834 3 982 837 54 732 54 754 54 732 54 756 (2) 2 435 781 1 852 559 1 728 321 2 075 524 4 218 834 3 982 837 1 Refer to the credit impairment charges note 31 for the current year credit impairment charge of N$1,1 million (2019: N$708 thousand) charg debt financial investments measured at amortised cost.

View entire presentation