Investor Presentaiton
MORGAN STANLEY BANK ASIA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 December 2020
24.
FINANCIAL RISK MANAGEMENT (CONTINUED)
Market Risk (continued)
Currency risk
The Company has foreign currency exposure arising from its assets and liabilities in currencies other
than US dollars, which it actively manages by hedging with other Morgan Stanley Group undertakings.
The analysis below details the material foreign currency exposure for the Company, by foreign currency.
The analysis calculates the impact on total comprehensive income of a reasonably possible parallel shift
of the foreign currency in relation to the US dollar, with all other variables held constant.
2019
Sensitivity to applied
percentage change in
currency (+/-)
2020
Sensitivity to applied
percentage change in
currency (+/-)
Foreign Percentage
Other
currency
exposure
applied
change Profit or
loss
US$'000
% US$'000
comprehensive
income
US$'000
Foreign Percentage
currency change
exposure
Other
Profit
comprehensive
applied
or loss
income
US$'000
% US$'000
US$'000
Hong Kong
Dollar
(16,134)
1
161
Singapore Dollar
(4,254)
2
85
Yuan Renminbi
19
7
1
(20,369)
(9,786)
1
98
(3,115)
2
62
(412)
5
21
(13,313)
The reasonably possible percentage change in the currency rate in relation to US dollars has been
calculated based on the greatest annual percentage change over the 2-year period from 1 January 2019
to 31 December 2020 (2019: from 1 January 2018 to 31 December 2019). Thus, the percentage change
applied may not be the same percentage as the actual change in the currency rate for the year ended 31
December 2020, or for the year ended 31 December 2019.
25. FINANCIAL ASSETS ACCEPTED AS COLLATERAL
The Company's policy is generally to take possession of securities purchased under agreements to resell.
The Company monitors the fair value of the underlying securities as compared with the related receivable
or payable, including accrued interest, and, as necessary, requests additional collateral to ensure such
transactions are adequately collateralised. Where deemed appropriate, the Company's agreements with
third parties specify its rights to request additional collateral. These transactions are mostly conducted
under standard documentation used by financial market participants.
The fair value of collateral accepted under these arrangements as at 31 December 2020 was
US$578,129,000 (2019: US$359,010,000). None of this amount has been sold or repledged to third
parties in connection with financing activities, or to comply with commitments under short sale
transactions (2019: US$Nil).
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