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to changes in the value of the transferred asset.

                             In certain transactions the Group retains the obligation to service the transferred financial asset for a
                             fee. The transferred asset is derecognised if it meets the derecognition criteria. An asset or liability is
                             recognised for the servicing contract, depending on whether the servicing fee is more than adequate
                             (asset) or is less than adequate (liability) for performing the servicing.

                             Loans that are either subject to collective impairment assessment or individually significant and whose
                             terms have been renegotiated are no longer considered to be past due but are treated as new loans. In
                             subsequent years, the asset is considered to be past due and disclosed only if renegotiated again.

                              [ii]    Financial liabilities
                             The Group derecognises a financial liability when its contractual obligations are discharged or cancelled
                             or expire.



                      (d)     Offsetting
                             Financial assets and liabilities are set off and the net amount presented in the statement of financial
                             position when, and only when, the Group has a legal enforceable right to set off the amounts and
                             intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

                             Income and expenses are presented on a net basis only when permitted under IFRSs, or for gains and
                             losses arising from a group of similar transactions such as in the Group’s trading activity. See note 5.1.4

                      (e )    Sale and repurchase agreements
                             Securities sold subject to repurchase agreements (‘repos’) remain on the statement of financial
                             position; the counterparty liability is included in amounts due to other banks, deposits from banks,
                             other deposits or deposits due to customers, as appropriate. Securities purchased under agreements
                             to resell (reverse repos’) are recorded as money market placement. The difference between sale and
                             repurchase price is treated as interest and accrued over the life of the agreements using the effective
                             interest method.

                             Securities lent to counterparties are also retained in the financial statements. Securities borrowed
                             are not recognised in the financial statements, unless these are sold to third parties, in which case the
                             purchase and sale are recorded with the gain or loss included in trading income.

                      (f)     Measurement

                              [i]    Amortised cost measurement
                             The amortised cost of a financial asset or liability is the amount at which the financial asset or liability is
                             measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation
                             using the effective interest method of any difference between the initial amount recognised and the
                             maturity amount, minus any reduction for impairment.

                              [ii]   Fair value measurement
                             Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
                             transaction between market participants at the measurement date

                             When available, the Group measures the fair value of an instrument using quoted prices in an active
                             market for that instrument. A market is regarded as active if quoted prices are readily available and
                             represent actual and regularly occurring market transactions on an arm’s length basis.

                             If a market for a financial instrument is not active, the Group establishes fair value using valuation tech-
                             niques. Valuation techniques include using recent arm’s length transactions between knowledgeable,
                             willing parties (if available), reference to the current fair value of other instruments that are substantially
                             the same, and discounted cash flow analysis. The chosen valuation technique makes maximum use
                             of market inputs, relies as little as possible on estimates specific to the Group, incorporates all factors
                             that market participants would consider in setting a price, and is consistent with accepted economic



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