Credit exposure including On & Off-Balance Sheet commitments and investment exposure including all financial investments except for investments in equity (ie.ordinary shares).
The specific principles, bases, conventions, rules and practices adopted by an entity in preparing and presenting Financial Statements.
To recognise the effects of transactions and other events as they occur, without waiting for the receipt or payment of related cash or its equivalent.
An entity's unbiased and mutually compatible best estimates of the demographic and financial variables that will determine the ultimate cost of providing post- employment benefits.
Actuarial gains and losses comprise the effects of differences between the previous actuarial assumptions and what has actually occurred and the effects of changes in actuarial assumptions.
The present value of the expected payments by a retirement benefit plan to existing and past employees, attributable to the service already rendered.
Fund value determined by computing its normal cost, actuarial accrued liability, actuarial value of its assets, and other relevant costs and values.
The systematic allocation of the depreciable amount of an asset over its useful life. In the case of an intangible asset or goodwill, the term 'amortisation' is generally used instead of 'depreciation'. Both terms have the same meaning.
The amount at which a financial asset or liability is measured at initial recognition, minus any repayment of principal, minus any reduction for impairment or uncollectibility, and plus or minus the cumulative ammortisation using the effective interest method of the difference between that initial amount and maturity amount.
A set of procedures, laws or regulations designed to prevent money laundering. Money laundering is an activity which aims to disguise the ownership of money that has an illegal origin such as trading of drugs, organised crimes, fraud and terrorism.
A company other than a Subsidiary in which a holding company has a participating interest and exercises a significant influence over its operating and financial policies.
A measure of how many employees leave over a certain period of time.
One-hundredth of one percentage point. Often used in quotations of spreads between interest rates or to change in yield in securities.
A signed, written unconditional order addressed by one person (the drawer) directing another person (the drawee) to pay a specified sum of money to the order of a third person (the payee). The terms bills of exchange and drafts are often used interchangeably.
Interest and other costs incurred by an entity in connection with the borrowing of funds.
The percentage of the risk-adjusted assets supported by capital, as defined under the framework of risk-based capital standards developed by the Bank for International Settlements (BIS) and as modified to suit local requirements by the Central Bank of Sri Lanka.
Capital reserves consist of revaluation reserves arising from revaluation of properties owned by the Bank and permanent reserve fund set aside for specific purposes defined under the Banking Act No. 30 of 1988 and shall not be reduced or impaired without the approval of the Monetary Board.
Investments/assets that are readily convertible to cash, subject only to an insignificant risk of change in their value.
Impairment assessment which carried out on a collective basis for homogeneous groups of loans that are not considered individually significant, in order to cover losses that has been incurred but has not yet been identified at the reporting date.
The year-over-year growth rate over a specified period of time.
The Financial Statements of the Group presented as those of a single entity.
A condition or situation, the ultimate outcome of which, gain or loss, will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events.
Contractual maturity refers to the final payment date of a loan or other financial instrument, at which point all the remaining outstanding principal will be repaid and interest is due to be paid.
The relationship among stakeholders used to determine and control the strategic directions and performance of an organisation.
Operating expenses compared to net income.
The credit risk associated with lending to borrowers within a particular country, sometimes taken to include sovereign risk.
The risk of loss due to non- payment of a loan or other line of credit (either the principal or interest or both), by the borrower or a counter party.
An evaluation of a corporate's ability to repay its obligations or the likelihood of not defaulting, carried out by an independent rating agency.
Securities acquired and held with the intention of reselling them in the short-term.
Long-term borrowings (refinance borrowings + debentures) divided by shareholder's equity.
Sum set aside for tax in the Financial Statements that will become payable/receivable in a financial year other than the current financial year.
Retirement benefit plans under which amounts to be paid as retirement benefits are determined by reference to a formula usually based on employees' remuneration and/or years of service.
The systematic allocation of the depreciable amount of an asset over its useful life.
A financial instrument, the price of which has a strong relationship with an underlying commodity, currency variable or financial instrument.
Dividend per share is calculated by dividing the total profit distributed to shareholders by the weighted average number of ordinary shares in issue during the year.
Written undertakings by a bank on behalf of its customers (typically an importer), authorising a third party (e.g., an exporter) to draw drafts on the bank up to a stipulated amount under specific terms and conditions. Such undertakings are established for the purpose of facilitating international trade.
A method of accounting whereby the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor's share of net assets of the invested. The Income Statement reflects the investor's share of the results of operations of the invested.
Events after the Balance Sheet date are those events, both favourable and unfavourable, that occur between the Balance Sheet date and the date when the Financial Statements are authorised for issue.
Return as a percentage of market value of the investment.
An overseas location where the Bank's representatives provide banking services as a promotional tool.
The amount for which an asset could be exchanged or a liability settled between knowledgeable, willing parties in an arm's length transaction.
Leases which transfer risks and rewards of ownership. Title may or may not eventually be transferred.
Activities that result in changes in the size and composition of the equity capital and borrowings of the entity.
Available for sale financial assets are those non derivative financial assets that are designated as available for sale or are not classified as loans and receivables, held to maturity or financial assets at fair value through profit or loss.
Held to maturity financial investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and ability to hold to maturity.
Properties acquired in full or partial settlement of debts, which will be held with the intention of re-sale at the earliest opportunity.
The gain recorded when assets or liabilities denominated in foreign currencies are translated into Sri Lankan Rupees on the Balance Sheet date at prevailing rates which differ from those rates in force at inception or on the previous Balance Sheet date. Foreign exchange income also arises from trading in foreign currencies.
Agreements between two parties to exchange one currency for another at a future date at a rate agreed upon today.
The value of all goods and services produced domestically in an economy during a specified period, usually a year. Nominal GDP, adjusted for inflation, gives GDP in real terms.
Payments made in full amount, free of any deductions or withholdings and without exercising any right of set-off.
A parent and all its subsidiaries.
Primarily represent irrevocable assurances that a bank will make payments in the event that its customer is unable to perform its financial obligations to third parties. Certain other guarantees represent non-financial undertakings such as bid and performance bonds.
Recording transactions at the actual value received or paid.
This occurs when recoverable amount declines below carrying amount.
Impairment measured individually for loans that are individually significant to the Group.
An identifiable non-monetary asset without physical substance held for use in the production or supply of goods or services, for rental to others, or for administrative purposes.
The interest due on non performing assets.
Net interest income as a percentage of average interest earning assets.
Represents the difference between the average interest rate earned on interest earning assets and the average interest rate incurred on interest bearing liabilities.
Property that is held to earn rentals or for capital appreciation or both and not for sale or use in the ordinary course of business.
Securities acquired and held for yield or capital growth purposes and usually held to maturity.
Those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly.
KPIs are quantifiable measurements, agreed before hand that reflects the critical success factors of a company.
Assets that are held in cash or in a form that can be converted to cash readily, such as deposits with other banks, Bills of Exchange, Treasury Bills.
Liquid assets expressed as a percentage of total liabilities other than shareholders' funds.
LGD is the percentage of an exposure that a lender expects to lose in the event of default.
The practice of periodically revaluing marketable securities to their current market value.
The risk that the value of an investment will change due to changes in market factors.
The relative significance of a transaction or an event the omission or misstatement of which could influence the economic decisions of users of Financial Statements.
That portion of the profit or loss and net assets of a Subsidiary attributable to equity interests that are not owned, directly or indirectly through Subsidiaries, by the Parent.
A measure of the number of deaths in some population, scaled to the size of that population, per unit time.
Shareholders' funds divided by the number of ordinary shares in issue.
The difference between what the Bank earns on assets such as loans and securities and what it pays on liabilities such as deposits, refinance funds and interbank borrowings.
The estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
A loan placed on cash basis (i.e., interest income is only recognised when cash is received) because, in the opinion of the management, there is reasonable doubt regarding the collectability of principal or interest. Loans are automatically placed on cash basis when a payment is 90 days past due. All loans are classified as non- performing when a payment is 90 days in arrears.
Total non-performing advances (net of interest in suspense) divided by total advances portfolio (net of interest in suspense).
A foreign currency current account maintained with another bank, usually but not necessarily a foreign correspondent bank. At the other bank, the deposit is called a nostro account.
Transactions not recognised as assets or liabilities in the Balance Sheet but which give rise to contingencies and commitments.
The principal revenue-producing activities of an entity and other activities that are not investing or financing activities.
The risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.
A parent company is an entity that has one or more Subsidiaries.
Assets held by a long-term employee benefit fund.
Reserve maintained in order to strengthen capital base further with development of capital market.
PD is an internal estimation for each homogeneous groups of loans on the likelihood that loans in a particular homogeneous group being default.
An actuarial valuation method that sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation.
Tangible assets that: (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and (b) are expected to be used during more than one period.
Inclusion of a degree of caution in the exercise of judgment needed in making the estimates required under conditions of uncertainty such that assets or income are not overstated and liabilities or expenses are not understated.
Repayment of principal monies.
Transfer of all or part of the risk assumed by a primary insurer under one or more insurance to another insurer.
Two parties where one controls the other or exercise significant influence in financial and operating decisions, directly or indirectly.
Repurchase agreements relating to securities sold to creditors (who lend money for funding purposes), with the intention of buying them back at a set price.
Profit before tax expressed as a percentage of average total assets. Used along with ROAE, as a measure of profitability and as a basis of intra-industry performance comparison.
Profit after tax less preference share dividends, if any, expressed as a percentage of average ordinary shareholders' equity.
Reserves set aside for future distribution and investment.
The purchase of securities under an agreement to resell at a given price on a specific future date.
Used in the calculation of risk- based capital ratios. The face amount of lower risk assets is discounted using risk-weighting factors in order to reflect a comparable risk per rupee among all types of assets. The risk inherent in Off-Balance Sheet instruments is also recognised, first by adjusting notional values to Balance Sheet (or credit) equivalents and then by applying appropriate risk weighting factors.
On Balance Sheet assets and the credit equivalent of Off-Balance Sheet assets multiplied by the relevant risk- weighting factors.
Segment reporting indicates the contribution to the revenue derived from business segments such as retail banking, corporate banking, international, treasury & investment, Government and group functions.
Shareholders' funds consist of issued and fully-paid ordinary share capital plus capital and revenue reserves.
Significant influence is the power to participate in the financial and operating policy decisions of an investee but is not controlled or jointly controlled over those policies.
The availability of cash over the long term to meet financial commitments as they fall due.
The claims of the debenture holders shall in the event of winding up, rank after all the claims of the secured and unsecured creditors and any preferential claims under any statutes, but in priority to and over claims and rights of the shareholders.
A company is a Subsidiary of another company if the Parent Company holds more than 50% of the nominal value of its equity capital or holds some shares in it and controls the composition of its Board of Directors.
The simultaneous purchase and sale of foreign exchange or securities, with the purchase executed at once and the sale back to the same party. Carried out on an agreed-upon price to be completed at a specified future date. Swaps include interest rate swaps, currency swaps and credit swaps.
A large loan by a group of banks to a large multinational firm or Government. Syndicated loans allow the participatng banks to maintain diversification by not lending too much to a single borrower.
Consists of the sum total of paid-up ordinary shares, non- cumulative, non-redeemable preference shares, share premium, statutory reserve fund, published retained profits, general and other reserves, less goodwill.
Consists of the sum total of revaluation reserves, general provisions, hybrid capital instruments and approved subordinated debentures.
The sum of Tier I and Tier II capital.
An undertaking formed to invest in securities under the terms of a trust deed.
Repayment of the principal and interest not being secured by any specific asset.
Value added is the wealth created by providing banking services, less the cost of providing such services. The value added is allocated among the employees, the providers of capital, to Government by way of taxes and retained for expansion and growth.
A local currency current account maintained with a bank by another bank (compare with nostro account).
