Issue - meetings
Treasury Management Activity for Period Ending 28th February 2013
Meeting: 26/03/2013 - Audit Committee (Item 4)
4 Treasury Management Activity for Period Ending 28th February 2013 PDF 289 KB
To note the contents of the treasury management activity report for period ending 28 February 2013.
Additional documents:
Minutes:
The Chief Financial Strategy Officer introduced the report and highlighted the following elements:
- the changes to the investment strategy at paragraph 6.1
- the criteria for investment set out at paragraph 9 had been approved by the Council
- investment returns set out at paragraph 10.5
- the maturity profile detailed at paragraph 10.5 and
- counterparty exposure detailed at paragraph 10.7
- investment returns since inception of the cash management arrangement with Sector at paragraph 11.
He advised the Committee that the average performance over the financial year had been slightly below target by 0.01%. The rate of return over the year also was reduced.
In response to Members’ questions the following information was provided:
The Chief Financial Strategy Officer agreed that investment inception dates would be included within the investment portfolio data reported to the Committee.
Action: O Shonola, Chief Financial Strategy Officer
The term ‘projection’ indicated the maturity period/bucket in which the investments listed in the ‘Investment Portfolio’ occurred.
50% of Council assets were linked to Bank of Scotland (BoS) and Royal Bank of Scotland (RBS) because these were the institutions which were backed by the Government.
Concerning whether investment in OCBC posed a significant risk because of the systemic risk associated with the Chinese banking system, Members were advised that the OCBC investment was short-dated..
Regarding what other investment options the Council might choose, Mr Hughes advised that Sector would consider investments according to criteria agreed in the Council's investment strategy and opportunities that occurred in the market. Hence investments would be tailored accordingly with respect to the Council's criteria.
Concerning the loss, in cash terms, resulting from the decrease of investment performance during the last year, Members were advised that the loss would be about £20-£30,000 per basis point.
Members requested comparative data of rates and returns for other local authorities and it was agreed that this would be reported as part of future treasury management reports.
Action: O Shonola, Chief Financial Strategy Officer
RESOLVED:
That the report be noted