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Interest Rate Risk For the funding of its operations, the Bank heavily relies on customer deposits, which represented 76.7 per cent of total liabilities at 30th June, 1997. Of those deposits, 72.2 per cent were demand deposits and 27.8 per cent were time deposits and saving deposits. There is a serious mismatch between the maturity structure of the Bank's assets and liabilities which, should interest rates rise, may result in decreasing interest rate margins and therefore have a material adverse effect on the Bank's results of operation. In addition, the short-term structure of the Bank's liabilities raises a concern over the stability of the deposit base. |