Page 58 - GTBank Annual Report 2020 eBook

cost or effort at the reporting date, past events, different parameters to adequately dimension the
current conditions and forecasts of future risks in each business segment.
economic conditions.
The Bank’s rating grades reflect the range of
Guaranty Trust Bank (Gambia) Limited parameters developed to predict the default
undertakes lending activities after careful probabilities of each rating class in line with
analysis of the borrowers’ character, capacity to international best practices and in compliance
repay, cash flow, credit history, industry and other with BASEL II requirements. The grades reflect
factors. The Bank acknowledges that there are granularities and are handled by Account Officers
diverse intrinsic risks inherent in its different and Relationship Managers with further check by
business segments and, as a result, applies Credit Risk Analysis Unit in Credit Risk
Management Unit.

Rating
Grade Description Characteristics
• Exceptional credit quality
• Obligors with overwhelming capacity to meet obligation
• Top multinationals/corporations
Exceptional
1 (AAA) • Good track record
Credit
• Strong brand name
• Strong equity and assets
• Strong cash flows
• Full cash coverage
• Very high credit quality
• Exceptionally high cash flow coverage (historical and
projected)
Superior
2 (AA) • Very strong balance sheets with high liquid assets
Credit
• Excellent asset quality
• Access to global capital markets
• Typically large national corporate in stable industries and
with significant market share
• High quality borrowers
• Good asset quality and liquidity position
• Strong debt repayment capacity and coverage
3 (A) Minimal Risk • Very good management
• Though credit fundamentals are strong, it may suffer
some temporary setback if any of them are adversely
affected
• Typically in stable industries
• Good asset quality and liquidity
• Very good debt capacity but smaller margins of debts
Above service coverage
4 (BBB)
Average • Good management in key areas
• Temporary difficulties can be overcome to meet debt
obligations
• Good management but depth may be an issue Annual Report 2020

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