UOB Annual Report 2002 - United Overseas Bank

(c)
Derivative financial instruments are instruments whose values change in response to the change in one or more “underlying”,
such as foreign exchange rate, interest rate, security price and credit price. They include forwards, swaps, futures and options.
In its normal course of business, the Group and the Bank customise derivatives to meet the specific needs of its customers. The
Group and the Bank also transact in these derivatives for proprietary trading purposes as well as to manage its assets/liabilities
and structural positions. The risks associated with the use of derivatives, as well as management’s policies for controlling these
risks are set out in Note 44.
The tables above analyse the contract or underlying principal amounts (notional amounts) and the fair values of the Group’s and
the Bank’s derivative financial instruments at the balance sheet date. A positive valuation represents a financial asset and a
negative valuation a financial liability. The notional amounts of these instruments indicate the volume of transactions outstanding
at the balance sheet date for both trading and non-trading instruments. They do not necessarily indicate the amounts of future
cash flows or the fair value of the derivatives and, therefore, do not represent total amounts at risk.
40 Commitments
The Group
The Bank
2002 2001 2002 2001
$'000 $'000 $'000 $'000
Capital commitments contracted but not provided
for on purchase of fixed assets 15,442 27,248 11,183 22,467
Undrawn credit facilities 35,947,655 34,353,956 29,912,571 15,058,810
Others 563,392 310,964 469,187 308,321
36,526,489 34,692,168 30,392,941 15,389,598
41 Cash and Cash Equivalents
The Group
2002 2001
$'000
$'000
Cash and balances with central banks 4,213,458 3,329,827
Singapore Government treasury bills and securities 8,260,989 8,711,833
Other government treasury bills and securities,
less non-cash equivalents of $723,335,000 (2001: $1,130,252,000) 609,613 687,108
13,084,060 12,728,768
UNITED OVERSEAS BANK 141