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Dialuna, 14 Juni 2021 AWEMainta 7

2020
Abbreviated Corporate Financial Statements

NOTES TO THE ABBREVIATED CORPORATE FINANCIAL STATEMENTS
FOR THE YEAR 2020
1. General Information 2.2. Summary of Significant Accounting Policies

AIB BANK N.V. (the Bank) is a limited liability company and is incorporated on October 20, 1987 and The principal accounting policies applied in the preparation of these financial statements are set out
domiciled in Aruba. The address of its registered office is as follows: Wilhelminastraat 36, below. These policies have been consistently applied to all years presented, unless otherwise stated.
Oranjestad, Aruba.
The objectives of the Bank are among others:
- to promote the execution of projects which, in the opinion of the Bank, are important to - Basis of Measurement
the economic development of Aruba;
- to provide medium- or long-term capital and other means of financing to individuals The financial statements have been prepared under the historical cost convention except for the
who are conducting a business and to corporations among others in the form of granting following:
credits, providing loans, issue of guarantees and other forms of security, participation in • Financial Instruments at Fair Value through Profit or Loss (FVTPL) are measured at fair value;
equity and serving as intermediary in these matters; • Financial Assets at FVOCI are measured at fair value through other comprehensive income.
The shares of the Bank are held by a variety of shareholders. None of the Shareholders has power to
govern the financial and operating policies generally accompanying a shareholding of more than one - Presentation
half of the voting rights.
The assets and liabilities in the statement of financial position are presented based on liquidity.
These abbreviated corporate financial statements, are derived from the audited corporate financial
statements of the Bank which have been prepared in accordance with International Financial Reporting
Standards (IFRS). The abbreviated corporate financial statements do not contain all the disclosures - Foreign Currency Transactions
required by IFRS.
Functional and Presentation Currency
The corporate financial statements from which these abbreviated corporate financial statements were Items included in the financial statements of the Bank are measured using the currency of the
derived, have been approved for issue by the Board of Supervisory Directors on March 29, 2021. primary economic environment in which the entity operates (“the functional currency”). The financial
statements are presented in Aruban Florins, which is the Bank’s functional and presentation currency.
Overall assessment of impact of COVID-19
Since the outbreak of Coronavirus (COVID-19), Management has been periodically assessing its Transaction and Balances
impact on the future results, cash flows and financial position of the Bank. While the tourism sector Transactions occurring in United States dollars (USD) are converted at the rate of US$ 1 to Afl. 1.79.
has had a slow recovery in 2020, it is still uncertain how long it will take for the Aruban economy and Other foreign currency transactions are translated into the functional currency using the exchange
tourism sector to recuperate and reach pre-covid-19 level. Management emphasizes that as per the rate prevailing at the dates of the transactions, or valuation where items are re-measured. Foreign
date of issuance of these financial statements, it is uncertain to estimate what the eventual impact of exchange gains and losses resulting from the settlement of such transactions and from the translation
the Coronavirus will be on the Bank’s future results, cash flows and financial position. at year-end exchange rate of monetary assets and liabilities denominated in foreign currencies are
recognized in the statement of comprehensive income.
The Bank’s lending clients that in 2020 received a temporary moratorium with respect to their
contractual obligation for interest and principal repayments, have resumed their payment obligations. Changes in the fair value of monetary securities denominated in foreign currency classified as available
for sale are analyzed between translation differences resulting from changes in the amortized cost of
Notwithstanding the uncertainty, Management has assessed the Bank’s future results, cash flows and the security and other changes in the carrying amount of the security. Translation differences related
financial position by estimating the impact of the Coronavirus by: to changes in the amortized cost are recognized in profit or loss, and other changes are recognized in
- Assessing various scenarios with respect to estimating the impact of increased probabilities other comprehensive income.
of default, loss given defaults and decreases in estimated collateral values on the Bank’s
ECL allowance; Translation differences on non-monetary items, such as equities held at fair value through profit and
- Assessing various scenarios with respect to estimating the impact on the liquidity of the loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items,
Bank. such as equities classified as Financial Assets at FVOCI, are included in the fair value reserve in other
comprehensive income.
Overall, based on its assessment of the impact of the Coronavirus for the year 2020 and beyond, and
taking into account the uncertainties that exist as per the date of issuance of these financial statements,
Management concludes that it does not consider the impact to cast significant doubt upon the Bank’s - Financial Assets
ability to continue as a going concern.
Classification
The Bank classifies its financial assets in the following categories: fair value through profit or loss
2. Significant Accounting Policies (FVPL), fair value through other comprehensive income (FVOCI) or amortized cost (AC). The
classification depends on:
2.1. New or Revised Standards and Interpretations • The Banks’ assessment of the overall objective of the business model within which the
financial assets are held; and
• The contractual cash flow characteristics of the financial assets.
2.1.1. Changes in Accounting Policies and Disclosures
Business Model Assessment
Standards and amendments that are effective for the first time in 2020 (for an entity with a 31 The business model reflects how the Bank manages its financial assets in order to generate cash flows,
December 2020 year-end) and could be applicable to the Bank are: that is, whether the objective is to collect contractual cash flows, sell financial assets or both. The
• Definition of a Business (Amendments to IFRS 3) Bank assesses its business model at a portfolio level reflective of how groups of assets are managed
• Definition of Material (Amendments to IAS 1 and IAS 8) together to achieve a particular business objective. Factors considered by the Bank in determining
• Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) the business model for a group of assets include:
• Amendments to Refences to the Conceptual Framework (Various Standards) • How performance is evaluated and reported to key management personnel;
• COVID-19 Rent Related Concessions (Amendments to IFRS 16) • The risks that affect performance and how they are managed;
• How managers are compensated; and
These amendments do not have a significant impact on this financial statements and therefore the • The frequency and volume of sales in prior periods and expectations about future sales activity.
disclosures have not been made.
Contractual Cash Flow Characteristics Assessment
Where the business model is to hold financial assets to collect contractual cash flows or to collect
2.1.2. New Standards and Interpretations not yet Adopted contractual cash flows and sell, the Bank determines if they give rise to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding that is consistent with
At the date of authorization of these financial statements, several new, but not yet effective, Standards, a basic lending arrangement. In this context, ‘principal’ is the fair value of the financial asset on initial
amendments to existing Standards, and Interpretations have been published by the IASB. None of these recognition and ‘interest’ is consideration for the time value of money and credit risk associated with
Standards, Amendments or Interpretations have been adopted early by the Bank. Other Standards and the principal amount outstanding during a particular period of time and for other basic lending risks
amendments that are not yet effective and have not been adopted early by the Bank include: and costs as well as profit margin.
• IFRS 17 Insurance Contracts (effective for annual reporting periods beginning on or after
1 January 2021); If the Bank identifies any contractual cash flows, such that cash flows are no longer consistent with a
• Amendments to IFRS 17 Insurance Contracts (Amendments to IFRS 17 and IFRS 4); basic lending arrangement, the related financial asset is classified and measured at FVPL. In making this
• References to the Conceptual Framework; assessment, the Bank considers:
• Proceeds before Intended Use (Amendments to IAS 16); • Contingent events;
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37); • Leverage features;
• Annual Improvements to IFRS Standards 2018-2020 Cycle (Amendments to IFRS 1, IFRS 9, • Prepayment and term extensions; and
• IFRS 16, IAS 41); • Terms that limit the Bank’s recourse to specific financial assets and features that modify
• Classification of Liabilities as Current or Non-current (Amendments to IAS 1). consideration of the time value of money.
Management anticipates that all relevant pronouncements will be adopted for the first period Recognition and Measurement
beginning on or after the effective date of the pronouncement. New Standards, Amendments and Financial assets are initially recognized at fair value plus transaction costs for all financial assets not
Interpretations not yet adopted have not been disclosed as they are not expected to have a carried at fair value through profit or loss. Financial assets are recognized when the entity becomes
material impact on the Bank’s corporate financial statements. a party to the contractual provisions of the instrument. Regular way purchases and sales of financial
assets are recognized on trade date.