DMIT Annual Report 2017

N OTES TO THE C ONSOLIDATED F INANCIAL S TATEMENTS (Thousands of US dollars) Dar Al-Maal Al-Islami Trust 41 4. Financial instruments (continued) (b) Profit rate risk Profit rate risk is the risk that the value of the financial instrument will fluctuate due to changes in the market profit rates. Movement in the market profit rates may affect the earnings of the Group. The profit rate exposure taken by the Group arises from investing in corporate, small-medium enterprises, consumer financing, investment banking and inter-banking activities where variation in market profit rates may affect the profitability of the Group. The risk is managed by the management of individual entities. The profit rate dynamics are reviewed at regular intervals and repricing of assets and liabilities are adjusted to ensure that the spread of the subsidiary remains at an acceptable level. The financings and deposits of the Group are broadly linked to the market variable rates and thus get automatically repriced on a periodic basis based on profit rate scenarios. Profit rate risk The table below summarises the Group’s exposure to profit rate risks. It includes the Group’s financial instruments at carrying amounts, categorised by the earlier of contractual repricing or maturity dates. At 31 December 2017 Up to one month One-three months Three-twelve months One-five years Over five years Non rate sensitive Total Assets Cash and bank balances 371,152 179,376 - - - 457,929 1,008,457 Investments with Islamic institutions - - - 179 - 17 196 Trading securities 136,502 161,300 3,567 13,482 - - 314,851 Investments in financings 369,332 272,305 488,425 544,511 132,026 6,358 1,812,957 Investment securities 588,923 572,641 43,261 79,033 96 308,926 1,592,880 Other assets - 3 - - - 338,193 338,196 Total financial assets 1,465,909 1,185,625 535,253 637,205 132,122 1,111,423 5,067,537 Liabilities Due to customers, banks and other financial institutions 2,093,732 434,544 1,193,836 91,136 13,599 1,765,772 5,592,619 Other liabilities - 286 - - - 406,647 406,933 Total financial liabilities 2,093,732 434,830 1,193,836 91,136 13,599 2,172,419 5,999,552 Total repricing gap (627,823) 750,795 (658,583) 546,069 118,523 (1,060,996) (932,015)