Page 71 - 2021 ANNUAL REPORT draft

The Asset & Liability Management Committee establishes the Bank’s standards and policies covering the
various components of Market Risk. These include issues on Interest Rate Risk, Liquidity Risk, Investment
Risk and Trading Risk. It ensures that the authority delegated by the Board and Management Risk
Committees with regard to Market Risk is exercised, and that Market Risk exposures are monitored and
managed. Furthermore, the Committee limits and monitors the potential impact of specific pre-defined
market movements on the comprehensive income of the Bank through stress tests and simulations. The
Credit Risk Management Bank is responsible for identifying, controlling, monitoring and reporting credit risk
related issues. The Bank also serves as the secretariat for the Management Credit Committee. Credit risk
is the most critical risk for the Bank as credit exposures, arising from lending activities account for the major
portion of the Bank’s assets and source of its revenue. Thus, the Bank ensures that credit risk related
exposures are properly monitored, managed and controlled. The Credit Risk Management Bank is
responsible for managing the credit exposures, which arise as a result of the lending and investment
activities as well as other unfunded credit exposures that have default probabilities such as contingent
liabilities.

Risk Management Methodology

The Bank recognizes that it is in the business of managing risks to derive optimal satisfaction for all
stakeholders. It has therefore, over the years detailed its approach to risk management through various
policies and procedures, which include the following:

• ERM Policy

• Credit Policy Guide

• Human Resources Policy Manual

• Standard Operating Procedures

• IT Policy
To ensure adherence to the policies and procedures, several exception reports on customers and activities
of the Bank are generated by the various audit control units for management’s decision making. These
include:

• Monthly Management Profitability Reports (MPR) for the marketing teams

• Monthly Operations Performance Reports(OPR) for the support teams

• Quarterly Business Profitability Review

• Annual Bank-wide performance appraisal systems

• Criticized Asset Committee Report
Risk Management Overview

The Bank operates a functional Risk Management Group that manages all aspects of risk including threats
and opportunities. The risk management infrastructure therefore encompasses a comprehensive and
integrated approach to identifying, managing and reporting:

(i) the 3 main inherent Bank’s risks–Credit, Market and Operational;

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Guaranty Trust Bank (Gambia) Limited Financial Statements December 2021