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2. Material accounting policies (continued)
2.6 Summary of material accounting policies (continued)
x Fair value (continued)
Level 3(continued)

For assets and liabilities that are recognised in the Consolidated financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on
the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

Where the Group’s investments are not actively traded in organised financial markets, the fair value is determined using
discounted cash flow analysis, which requires considerable judgement in interpreting market data and developing
estimates. Accordingly, estimates contained herein are not necessarily indicative of the amounts that the Group
could realise in a current market exchange. The use of different assumptions and/or estimation methodologies may
have a material effect on the estimated fair values. Management is not aware of any factors that would significantly
affect the estimated fair value amounts.

Investments classified as FVPL are actively traded in organised markets and fair value is determined by reference to
the market price at year end or on the last trade date prior to year end.

Financial instruments where carrying value is equal to fair value:- Due to their short-term maturity, the carrying value
of certain financial instruments is assumed to approximate their fair values. These include cash, due from banks and
Treasury Bills, investment securities, investment interest receivable and payable, customers’ deposit accounts, other
fund raising instruments, other assets and other liabilities.

Advances are net of specific and other provisions for impairment. The fair values of advances is based on a current
yield curve appropriate for the remaining term to maturity.

The fair values of the floating rate debt securities in issue is based on quoted market prices where available and where
not available is based on a current yield curve appropriate for the remaining term to maturity. For balances due to
banks, where the maturity period is less than one year, the fair value is assumed to equal carrying value. Where the
maturity period is in excess of one year, these are primarily floating rate instruments, the interest rates of which reset
with market rates, therefore the carrying values are assumed to equal fair values.

The fair values of fixed rate debt securities carried at amortised cost is estimated by comparing market interest rates
when they were first recognised with current market rates offered for similar financial instruments. The estimated
fair value of fixed interest-bearing deposits is based on discounted cash flows using prevailing money market interest
rates for facilities with similar credit risk and maturity.

y Segment reporting
A geographical segment is engaged in providing products, or services within a particular economic environment that
are subject to risks and returns that are different from those of segments operating in other economic environments.

A business segment is a group of assets and operations engaged in providing similar products and services that are
subject to risks and returns that are different from those of other business segments.

The Group analyses its operations by both geographic and business segments. The primary format is geographic,
reflecting its management structure. Its secondary format is that of business segments, reflecting retail and
commercial banking and other financial services.