Page 33 - GTBANK GAMNBIA 2021 ANNUAL REPORT

used in determining the stage allocation. In general,
assets more than 30 days past due, but not credit Financial assets are classified into one of the following
impaired, will be classed as stage 2. measurement categories:

IFRS 9 requires the use of more forward looking ✓ Amortised cost;
information including reasonable and supportable ✓ Fair Value through Other Comprehensive Income
forecasts of future economic conditions. The Bank has (FVOCI);
developed the capability to model a number of ✓ Fair Value through Profit or Loss (FVTPL) for trading
economic scenarios and capture the impact on credit related assets.
losses to ensure the overall ECL represents a The Bank classifies all of its financial assets based on the
reasonable distribution of economic outcomes.
Appropriate governance and oversight has been business model for managing the assets and the asset’s
established around the process. contractual cash flow characteristics.

An assessment of the ECL in the Bank’s balance sheet Business Model Assessment
reflects an increase in the provisions for credit losses.
However, this increase will not have a significant impact Business model assessment involves determining
on regulatory capital and invariably the Capital whether financial assets are managed in order to
generate cash flows from collection of contractual cash
adequacy due to the Bank’s strong earnings and flows, selling financial assets or both. The Bank
retention capacity over the years. assesses business model at a portfolio level reflective
of how groups of assets are managed together to
The Bank has not applied the following new or amended achieve a particular business objective. For the
standards in preparing this financial statement assessment of business model the Bank takes into
as it plans to adopt these standards at their respective consideration the following factors:
effective dates. Commentaries on these new
standards/amendments are provided below. ✓ the stated policies and objectives for the
portfolio and the operation of those policies in
practice. In particular, whether management’s
Recognition
strategy focuses on earning contractual interest
revenue, maintaining a particular interest rate
The Bank on the date of origination or purchase profile, matching the duration of the financial
recognizes loans, debt and equity securities, deposits assets to the duration of the liabilities that are
and subordinated debentures at the fair value of funding those assets or realizing cash flows
consideration paid. For non-revolving facilities, through the sale of the assets
origination date is the date the facility is disbursed, ✓ how the performance of assets in a portfolio is
origination date for revolving facilities is the date the evaluated and reported to Divisional and Group
line is availed. All other financial assets and liabilities, Heads and other key decision makers within the
including derivatives, are initially recognized on the Bank’s business lines;
trade date at which the Bank becomes a party to the ✓ the risks that affect the performance of assets
contractual provisions of the instrument. held within a business model and how those
risks are managed;
Classification and Measurement ✓ how compensation is determined for the Bank’s
business lines’ management that manages the
Initial measurement of a financial asset or liability is at assets; and
fair value plus transaction costs that are directly ✓ the frequency and volume of sales in prior years
attributable to its purchase or issuance. For instruments and expectations about future sales activity.
measured at fair value through profit or loss, transaction
costs are recognized immediately in profit or loss. Management determines the classification of the financial
Financial assets include both debt and equity instruments at initial recognition. The business model
instruments.
assessment falls under three categories:
Annual Report 2021

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