The objective of liquidity risk management is to ensure the necessary level of funds to pay present and future debts.
The liquidity risk is a risk of the lack of possibility to pay the debts on time due to the lack of liquid assets. Lack of liquidity may arise from inadequate structure of statement of financial position, mismatch of cash flows, not received payments from counterparties, sudden withdrawal of cash by clients or other market events.
The objective of liquidity risk management is to ensure the necessary level of funds to pay present and future debts (also potential) on time, taking into account the nature of performed activities and requirements which may occur due to changes in market environment, by shaping the structure of the statement of financial position and off-balance sheet liabilities.
The Group’s policy concerning liquidity is based on keeping a portfolio of liquid securities and growth of stable sources of financing (in particular stable deposits base). In liquidity risk management policy, money market instruments, including NBP open market operations, are also used.
To ensure an adequate liquidity level, the Bank and subsidiaries of the PKO Bank Polski SA Group implemented limits and thresholds for short, medium and long-term liquidity risk.
Methods of liquidity risk management in the subsidiaries of the Group are defined by internal regulations implemented by the entities which are characterised by the significant value of liquidity risk measures.
These regulations are developed after consultation with the Bank and take into account recommendations issued to the entities by the Bank.
The table below presents liquidity reserve of the Bank as at 31 December 2014 and as at 31 December 2013.
Liquidity reserve of PKO Bank Polski SA (in PLN million)
|Name of sensitivity measure||31.12.2014||31.12.2013|
|Liquidity reserve up to 1 month*||21,075||17,816|
* Liquidity reserve equals the gap between the most liquid assets and expected and potential liabilities which mature in a given period of time.
As at 31 December 2014 the level of permanent balances on deposits constituted approx. 94.7% of all deposits in the Bank (excluding interbank market), which means a decrease by approximately 1.2 pp. as compared to the end of 2013.