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Investor Presentaiton

MORGAN STANLEY BANK ASIA LIMITED UNAUDITED SUPPLEMENTARY FINANCIAL INFORMATION Year ended 31 December 2020 H. PILLAR 3 DISCLOSURE (CONTINUED) Table LIQA: Liquidity risk management (continued) (d) Liquidity risk mitigation techniques (continued) Funding Management The Company manages its funding in a manner that reduces the risk of disruption to the Company's operations. The Company pursues a strategy of diversification of secured and unsecured funding sources (by product, investor and region) and attempts to ensure that the tenor of its liabilities equals or exceeds the expected holding period of the assets being financed. The Company funds itself through diverse sources. These sources may include the Company's equity capital, borrowings and deposits. The table below shows the Company's significant funding sources as at 31 December 2020: As at Significant funding sources (as a percentage of the total liabilities and equity) 31 December 2020 85% 8% Funding from deposits Funding from share capital Balance sheet management In managing both the Morgan Stanley Group's and the Company's liquidity risk the composition and size of the entire balance sheet, not just financial liabilities, is monitored and evaluated. A substantial portion of the Morgan Stanley Group's total assets consists of liquid marketable securities and short-term receivables arising principally from sales and trading activities in the Institutional Securities business. The liquid nature of these assets provides the Morgan Stanley Group and the Company with flexibility in managing the composition and size of its balance sheet. The table below shows the Company's future cash flows, taking into account off-balance sheet risks, as at 31 December 2020, which is disclosed in accordance with the numbers reported in the Return of Liquidity Position for the month of 31 December 2020 submitted to the HKMA. Liquefiable assets (weighted amount) Qualifying liabilities (weighted amount) As at 31 December 2020 USD'000 3,945,510 6,134,155 91 14
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