PENSION IFRSPROFIT OR LOSS

CGU

PR

OF

ITO

RL

OS

SLIA

BIL

ITIE

SC

ON

SOLID

ATION

FINA

NC

IAL P

OS

ITIO

N S

HA

RE

-BA

SE

D PAY

ME

NT

EP

SJO

INT

AR

RA

NG

EMEN

TSD

ISC

LOS

UR

ES

HELD

-FOR

-SALE

PE

NS

IONCAPITAL

ASSETS

FINANCIAL RISK MANAGEMENT

FAIRVALUE

DERIVATIVESBUSINESS COMBINATIONS

PRESENTATION

UPDATEACCOUNTING POLICIESOFFSETTING

ESTIMATES

DIS

CLO

SU

RES

BANKS

NCI

PRESEN

TATIO

N

GO

OD

WILL

ESTIM

ATES

OFFS

ET

TIN

GO

CI

DEBT

FAIRVALUE

DEPOSITS

CA

SH

FLOW

SG

OIN

G C

ON

CE

RN

CONTINGENCY RELATED PARTY

PROFIT OR LOSS

STRUCTURED ENTITY

LOANS AND ADVANCES

GOING CONCERNPERFORMANCEOFFSETTING

TRADING ASSETSCOMPARATIVE VALUATION UPDATE

MATE IALITYRFAIR VALUE

ACCOUNTING POLICIES

OCI

NOTESIFRS

PENSION

FINANCIAL POSITION CASH FLOWS

IFRS 9

STATEMENT

OPERATING SEGMENTS

FINANCIAL RISK MANAGEMENT

SUBSIDIARY

OP

ER

AT

ING

SE

GM

EN

TS

BU

SIN

ES

S C

OM

BIN

AT

ION

S

PROVISIONS

TRANSACTIONS

EQUITY

PERFO

RM

AN

CE

SHARE-BASED PAYMENT

JUDGEMENT

FINA

NC

IAL PO

SITION

CARRYING AMOUNT

SIGN

IFICA

NT

PR

OP

ER

TY

AC

QU

ISITIO

NA

SSU

MPTIO

NS

CO

MPA

RATIVE

EQU

ITYNON CONTROLLING INTERESTS-

FAIR VALUE MEASUREMENTACCOUNTING POLICIES

LEASES

D E R I VAT I V E SG R O U P

INVENTORIES

ASSETS

SHARE-BASED PAYMENT PERFORMANCE

UN

CON

SO

LIDATED

STRU

CTU

RED

ENTITIES FAIR PRESENTATION

PRESENTATION

CONSOLIDATION

CASH EQUIVALENTS

DEPOSITS FROM BANKS

MATERIALITY

FINANCIAL INSTRUMENTS

FUNCTIONAL CURRENCYIMPAIRMENTL OA N S B O R R O W I N G S

ASSUMPTIONS

DISPOSALIFRS

IFRS

Guide to annual financial statements: IFRS9 Illustrative disclosures forbanks

March 2016

kpmg.com/ifrs

ContentsAbout this guide 2

Independent auditors report 4

Consolidated financial statements 6

Financial highlights 7

Consolidated statement of financial position 8

Consolidated statement of profit or loss and other comprehensive income 10

Consolidated statement of changes in equity 12

Consolidated statement of cash flows 14

Notes to the consolidated financial statements 16

Appendix I 185

Presentation of comprehensive income Two-statement approach 185

Acknowledgements 187

Keeping you informed 188

NotesBasis of preparation 161. Reporting entity 162. Basis of accounting 163. Functional and presentation currency 164. Use of judgements and estimates 16

Financial risk review and fair value 185. Financial risk review 186. Fair values of financial instruments 60

Performance for the year 727. Operating segments 728. Net interest income 769. Net fee and commission income 7710. Net trading income 7811. Net income from other financial instruments

at FVTPL 7912. Other revenue 8013. Losses arising from derecognition of

financial assets measured at amortised cost 8114. Personnel expenses 8215. Other expenses 8916. Earnings per share 90

Income taxes 9117. Income taxes 91

Assets 9618. Financial assets and financial liabilities 9619. Cash and cash equivalents 10520. Trading assets and liabilities 10621. Derivatives held for risk management and

hedge accounting 10822. Loans and advances to banks 11823. Loans and advances to customers 11924. Investment securities 12125. Property and equipment 12326. Intangible assets and goodwill 12427. Other assets 126

Liabilities and equity 12828. Deposits from banks 12829. Deposits from customers 12930. Debt securities issued 13031. Subordinated liabilities 13132. Provisions 13233. Other liabilities 13434. Capital and reserves 135

Group composition 13635. Group subsidiaries 136

Other information 13736. Involvement with unconsolidated

structured entities 13737. Transfers of financial assets 13838. Contingencies 14239. Related parties 14340. Operating leases 14441. Subsequent events 14542. Financial risk management 146

Accounting policies 15243. Basis of measurement 15244. Changes in accounting policies 15345. Significant accounting policies 15546. Standards issued but not yet adopted 184

2016 KPMG IFRG Limited, a UK company, limited by guarantee. All rights reserved.

2 | Guide to annual financial statements: IFRS9 Illustrative disclosures for banks

AU

DIT

OR

S R

EP

OR

TP

RIM

AR

Y S

TAT

EM

EN

TS

NO

TE

SA

PP

EN

DIC

ES

INT

RO

DU

CT

ION About this guide

This guide has been produced by the KPMG International Standards Group (part of KPMG IFRG Limited) and the views expressed herein are those of the KPMG International Standards Group.

It helps you to prepare financial statements in accordance with IFRS, illustrating one possible format for financial statements based on a fictitious banking group involved in a range of general banking activities. Our hypothetical corporation (the Group) has been applying IFRS for some time i.e. it is not a first-time adopter of IFRS. For more information on adopting IFRS for the first time, see Chapter 6.1 in the 12th edition 2015/16 of our publication Insights into IFRS.

Standards coveredThis guide illustrates example disclosures for the early adoption of IFRS 9 Financial Instruments and of consequential amendments to other standards, which are required to be adopted at the same time. It assumes that the Group has not adopted the hedge accounting requirements of IFRS 9 but continued to apply hedge accounting requirements of IAS39. With the exception of IFRS 9, other standards or amendments that are effective for annual periods beginning after 1January 2015 (forthcoming requirements) are not illustrated in this guide. Our IFRS: New standards Are you ready? provides a summary of newly effective and forthcoming standards (in addition to IFRS 9).

Accordingly, except for the early adoption of IFRS 9, this guide reflects IFRSs in issue at 31 December 2015 that are required to be applied by an entity with an annual period beginning on 1 January 2015 (currently effective requirements).

IFRS 9 is a new and complex standard, and the interpretation of its requirements is subject to ongoing discussions between preparers, auditors, regulators and other stakeholders. This guide does not intend to pre-empt this process and provide a view on how the requirements of the standard should be interpreted. Instead, it gives an indication of possible disclosure requirements that would apply if a bank interpreted the requirements in a particular way. It is intended to help banks implement IFRS 9, by guiding them through the decision-making process needed to prepare the requireddisclosures.

This guide is not intended to be seen as a complete and exhaustive summary of all disclosure requirements under IFRS. Instead, it focuses on disclosure requirements that are particularly relevant to banks. For examples of other disclosures, see our Guide to annual financial statements Illustrative disclosures (September 2015).

In addition, IFRS and its interpretation change over time. Accordingly, this guide should not be used as a substitute for referring to the standards and interpretations themselves.

An entity should also have regard to applicable legal and regulatory requirements. This guide does not consider the requirements of any particular jurisdiction. For example, IFRS does not require the presentation of separate financial statements for the parent entity, and this guide includes only consolidated financial statements.

Other guidanceIn preparing this guide, we had regard to the recommendations made by the Enhanced Disclosure Task Force (EDTF) in its report Enhancing the Risk Disclosures of Banks, issued on 29 October 2012, and its revision issued on 7 December 2015, Impact of Expected Credit Loss Approaches on Bank Risk Disclosures. The purpose of this report is to help banks improve their communication with their stakeholders in the area of risk disclosures, with the ultimate aim of improving investor confidence. The recommendations scope is wider than the financial statements, because they apply to all financial reports, including public disclosures required by regulators and other communications with stakeholders. In some cases, recommendations in the report may impact the manner of presentation of information that is already required to be disclosed under IFRS. In other cases, it recommends disclosure of new information.

Many regulators continue to focus on disclosures in financial statements. For example, the European Securities and Markets Authority (ESMA) has published its public statement on European common enforcement priorities for 2015. This statement identifies specific considerations relevant for the banking sector in 2015.

In addition, in preparing this guide we also had regard to the recommendations made by the Basel Committee on Banking Supervision in its Guidance on credi