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Financial statements
42.2 Derivatives
The table below shows the contractual undiscounted cash flows for derivatives settled on net and gross settlement basis:
The Group Less than
1 week to 1 to 3
3 to 12 More than
In millions
a
7 days 1 month
months months
1 year Total
2016 Derivatives settled on a net basis
461 3 140
265 1,403
1,350
Derivatives settled on a gross basis – inflow
59,091 104,497 171,874 232,808 184,251 752,521
– outflow 58,909 104,280 171,858 232,889 184,409 752,345
2015 Derivatives settled on a net basis
398 3
41 153
457 256
Derivatives settled on a gross basis – inflow
48,301 93,374
141,698 263,871
136,811 684,055
– outflow 48,045
93,041 141,707
263,906 136,252
682,951
a Positive indicates inflow and negative indicates outflow of funds
42.3 Contingent liabilities and commitments
The table below shows the Group’s contingent liabilities and commitments based on the remaining period as at the balance sheet date to contractual expiry date:
The Group Less than
1 to 3 3 to 5
Over In millions
1 year years
years 5 years
Total
2016 Guarantees, endorsements and other contingent liabilities
22,714 – – – 22,714
Undrawn credit commitments
a
and other facilities 206,183 11,970 13,028 4,152
235,333
Operating lease commitments 234 267 42
6 549
Capital commitments 54 12 3 – 69
Total 229,185 12,249 13,073 4,158
258,665 2015
Guarantees, endorsements and other contingent liabilities 19,901
– –
– 19,901
Undrawn credit commitments
a
and other facilities 197,676
8,985 10,389
2,732 219,782
Operating lease commitments 226
342 84
9 661
Capital commitments
33 8 7 – 48
Total 217,836 9,335
10,480 2,741
240,392
a Includes commitments that are unconditionally cancellable at any time by the Group
The Group expects that not all of the contingent liabilities and undrawn credit commitments will be drawn before expiry.
174 | DBS Annual Report 2016
43 Capital Management
The Board is responsible for setting the Group’s capital management objective, which is to maintain a strong capital position consistent with
regulatory requirements under MAS Notice 637 and the expectations of various stakeholders, e.g. customers, investors and rating agencies.
The Board articulates this objective in the form of capital targets. This objective is pursued while delivering returns to shareholders and
ensuring that adequate capital resources are available for business growth and investment opportunities as well as adverse situations,
taking into consideration our strategic plans and risk appetite.
The Group’s capital management objective is implemented via a capital management and planning process that is overseen by the Capital
Committee. The Chief Financial Officer chairs the Capital Committee. The Capital Committee receives regular updates on the Group’s current
and projected capital position. A key tool for capital planning is the annual Internal Capital Adequacy Assessment Process ICAAP through
which the Group assesses its forecast capital supply and demand relative to regulatory requirements and internal capital targets. The
ICAAP has a three-year horizon and covers various scenarios, including stress scenarios of differing scope and severity.
The Group is subject to and has compiled with the capital adequacy requirements set out in the MAS Notice 637, which effects the Basel
Committee on Banking Supervision’s capital adequacy framework in Singapore throughout the year. The Group’s capital adequacy ratios
as at 31 December 2016 have been subject to an external limited assurance review, pursuant to the MAS Notice 609 “Auditor’s Report
and Additional Information to be submitted with Annual Accounts”.
44 Segment Reporting
44.1 Business segment reporting