Page 98 - GTBank Annual Report 2020 eBook
P. 98
Credit risk reserve reconciliation
In thousands of Gambian Dalasi Dec.-2020 Dec.-2019
Provision per prudential guideline 68,936 68,999
Loan impairment per IFRS 73,037 68,132
Opening balance 50,911 50,044
CRR adjustment (4,101) 867
Closing Balance 46,810 50,911
Retained earnings bonds and indemnities. The majority of these
facilities are offset by corresponding obligations
Retained earnings are the carried forward of third parties. Contingent liabilities and
recognised income net of expenses plus current commitments comprise acceptances,
year profit attributable to shareholders. endorsements, guarantees and letters of credit.
29. Contingents
Nature of instruments
Claims and litigation
An acceptance is an undertaking by a bank to
The Bank, in its ordinary course of business, is pay a bill of exchange drawn on a customer. The
presently involved in 4 cases as a plaintiff and 3 Bank expects most acceptances to be
cases as defendant and an appeal case against presented, but reimbursement by the customer
the Attorney General due to recommendations in is normally immediate. Endorsements are
the Government White Paper from the residual liabilities of the Bank in respect of bills
Commission of Enquiry. The total amount of exchange, which have been paid and
claimed in the 4 cases instituted by the Bank is subsequently rediscounted. Guarantees and
D21, 748,084.44 whilst the amount claimed for letters of credit are given as security to support
in the 3 cases against the bank is D1,546,500 the performance of a customer to third parties.
plus a refund of all the income earned by the As the Bank will only be required to meet these
Bank from specific accounts to be assessed by obligations in the event of the customer’s
the Central Bank of The Gambia as requested in default, the cash requirements of these
Government white paper. instruments are expected to be considerably
below their nominal amounts.
Based on the advice of the solicitors, the
Directors are of the opinion that none of the Other contingent liabilities include transaction
aforementioned cases is likely to have a material related customs and performances bond and are,
adverse effect on the Bank and they are not generally, commitments to third parties which are
aware of any other pending and or threatened not directly dependent on the customer’s
claims or litigation which may be material to the creditworthiness. Documentary credits commit
financial statements. the Bank to make payments to third parties, are
on production of documents, which usually
Contingent liabilities and commitments reimbursed immediately by customers. The
following tables summarise the nominal principal
In common with other banks, the Bank conducts amount of contingent liabilities and commitments.
business involving acceptances, performance
Annual Report 2020
Guaranty Trust Bank Gambia Limited www.gtbankgambia.com 96
