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Investor Presentaiton

MORGAN STANLEY BANK ASIA LIMITED NOTES TO THE FINANCIAL STATEMENTS Year ended 31 December 2020 24. FINANCIAL RISK MANAGEMENT (CONTINUED) Liquidity risk (continued) Liquidity Resources (continued) The Company holds its own Liquidity Resources which is composed of diversified cash and cash equivalents and unencumbered highly liquid securities. Eligible unencumbered highly liquid securities include primarily non-US government securities in addition to US government securities. 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 include the Company's equity capital, borrowings and deposits. 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. The liquid nature of the marketable securities and short-term receivables arising principally from sales and trading activities in the Institutional Securities business provides the Morgan Stanley Group and the Company with flexibility in managing the composition and size of its balance sheet. Maturity analysis In the following maturity analysis of financial liabilities, derivatives not held as part of the Company's trading activities are disclosed according to their earliest contractual maturity; all such amounts are presented at their fair value, consistent with how these financial liabilities are managed. All other amounts represent undiscounted cash flows payable by the Company arising from its financial liabilities to earliest contractual maturities as at 31 December 2020 and 31 December 2019. Repayments of financial liabilities that are subject to immediate notice are treated as if notice were given immediately and are classified as on demand. This presentation is considered by the Company to appropriately reflect the liquidity risk arising from those financial liabilities, presented in a way that is consistent with how the liquidity risk on these financial liabilities is managed by the Company. 31 December 2020 Financial liabilities Deposits of banks Deposits of non-bank customers Deposits of other Morgan Stanley Group undertakings Trading financial liabilities: Derivatives Trade and other payables Total financial liabilities Unrecognised financial instruments Unsettled securities purchased under agreements to resell On demand US$'000 Less than 1 month 3 months - 1 month 3 months 1 year US$'000 US$'000 US$'000 1 year - 5 years US$'000 Total US$'000 2,053 5,648,210 320,201 439,782 399,180 2,053 6,807,373 9,400 5,659,663 6,299 29,323 355,823 2,842 53,878 496,502 2,131 3,616 404,927 34,399 11,272 130,616 34,399 6,951,314 44
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