Page 57 - GTBank Annual Report 2020 eBook

Adoption of international best practices in Management Credit Committee,
credit risk management Executive Director, Managing Director
and the Board Credit Committee/Board
of Directors as appropriate.
Development of Credit Risk ✓ Reviewing and assessing credit risk -
Management professionals.
Management Credit Committee
assesses all credit exposures in excess
Each business unit is required to implement credit of designated limits, prior to facilities
policies and procedures in line with the credit being committed to customers by the
approval authorities granted by the Board. Each business unit concerned. Renewals and
business unit is responsible for the quality and reviews of facilities are subject to the
performance of its credit portfolio and for same review process.
monitoring and controlling all credit risks in its ✓ Developing and maintaining the Bank’s
portfolio, including those subject to Management risk grading in order to categorize
Credit Committee’s approval exposures according to the degree of risk
. of financial loss faced and to focus
The Internal Audit and Credit Administration units management on the attendant risks. The
respectively undertake regular audits of business current risk grading framework consists
units and credit quality reviews. of ten grades reflecting varying degrees
of risk of default and the availability of
The Bank continues to focus attention on intrinsic collateral or other credit risk mitigation.
and concentration risks inherent in its business in The responsibility for approving the risk
order to manage its portfolio risk. It sets portfolio grades lies with the Board Credit
concentration limits that are measured under the Committee. The risk grades are subject
following parameters: concentration limits per to regular review by the Risk
obligor, business lines, industry, sector, rating Management Unit.
grade and geographical area. Sector limits reflect
the risk appetite of the Bank. Reviewing compliance of business units with
agreed exposure limits, including those for
The Bank drives the credit risk management selected industries, country risk and product
processes using appropriate technology to types. Regular reports are provided to Risk
achieve global best practices. Management Unit on the credit quality of local
portfolios and appropriate corrective action is
Management of Credit Risk taken.
Providing advice, guidance and specialist skills to
The Board of Directors has delegated business units to promote best practice
responsibility for the management of credit risk to throughout the Bank in the management of credit
its Board Credit Committee. A separate risk.
Management Credit Committee reporting to the There were no changes in the Bank’s risk
Board Credit Committee is responsible for management policies. Each business unit is
oversight of the Bank’s credit risk, including: required to implement Bank credit policies and
procedures, with credit approval authorized by
✓ Formulating credit policies in the Board Credit Committee.
consultation with business units,
covering collateral requirements, credit Credit Risk Measurement
assessment, risk grading and reporting,
documentary and legal procedures, and In line with IFRS 9, the bank adopted the
compliance with regulatory and statutory expected credit loss (ECL) approach. The (ECL)
requirements.
✓ Establishing the authorization structure model should reflect the general pattern of
deterioration in the credit quality of financial
for the approval and renewal of credit instruments over the life of the instruments. In
facilities. Authorization limits are estimating the expected credit quality of the
allocated to business unit heads. Larger instrument, the Bank considers reasonable and
facilities require approval by the
supportable information available without undue Annual Report 2020

Guaranty Trust Bank Gambia Limited www.gtbankgambia.com 55