Page 161 - Suncorp_Review

Suncorp Group Limited Annual Report 2010/11 159

34.6.2 Liquidity risk

To ensure payments are made when they fall due, the Corporate investment portfolio mandates provide suffcient cash deposits to meet day-to-day obligations.

The following table summarises the maturity profle of Corporate fnancial liabilities based on the remaining undiscounted contractual obligations.

CORPORATE

Carrying 1 year 1 to 5 Over Total cash amount or less years 5 years fows $m $m $m $m $m

2011

Trade creditors and

accrued expenses 55 55 – – 55 55 55 – – 55

2010

Trade creditors and

accrued expenses 58 58 – – 58 58 58 – – 58

34.6.3 Market risk

(a) Interest rate risk

For Corporate, interest rate risk exposure arises mainly from investment in interest-bearing securities. Interest rate risk is managed by maintaining a diversifed portfolio to protect the value of the underlying assets in the portfolio from large movements. The sensitivity of proft and loss after tax and equity reserves to movements in interest rates in relation to interest-bearing fnancial assets held at the balance date is shown in the table below. It is assumed that all residual exposures for the shareholder after tax are included in the sensitivity analysis, that the percentage point change occurs at the balance date and that there are concurrent movements in interest rates and parallel shifts in the yield curves.

CORPORATE

2011

Exposure Change in Proft (loss) Equity at 30 June interest rate after tax reserves $m % $m $m

Interest-bearing investment securities 571 +1.5 (5) – –0.6 2 –

Corporate was not exposed to interest rate risk at 30 June 2010. (b) Credit spread risk

Corporate is exposed to credit spread risk through its investments in interest-bearing securities. This risk is mitigated by incorporating a diversifed investment portfolio, establishing maximum exposure limits for counterparties and minimum limits on credit ratings. The table below presents a sensitivity analysis on how credit spread movements could affect Corporate’s proft or loss for its exposure as at the year end.

CORPORATE

2011

Exposure Change in Proft (loss) at 30 June credit spread after tax $m % $m

Credit exposure (excluding semi-government) 571 +0.6 (3) –0.3 2

Corporate was not exposed to credit spread risk at 30 June 2010.