Page 42 - GTBANK GAMBIA ANNUAL REPORT 2021

probationary year in transferring financial asset back to a decreased sufficiently before upgrading such
lower stage following a significant reduction in credit risk: exposure to stage 2.

✓ When there is evidence of a significant ✓ When there is evidence that a financial asset in
reduction in credit risk for a financial instrument stage 3 (other than originated or purchased
in stage 2, a probationary year of 90 days will credit impaired financial asset) is no longer
be applied to confirm if the risk of default on credit impaired and also that there is a
such financial instrument has decreased significant reduction in credit risk for a financial
sufficiently before upgrading such exposure to instrument in stage 3, a probationary year of
stage 1. 180 days will be applied to confirm if the risk of
default on such financial instrument has
✓ When there is evidence that a financial asset in decreased sufficiently before upgrading such
stage 3 (other than originated or purchased exposure to stage 1.
credit impaired financial asset) is no longer
credit impaired and also that there is a The regulator noted that the essence of the waiting year
significant reduction in credit risk for a financial is to confirm that the risk of default has decreased
instrument in stage 3, a probationary year of 90 sufficiently before upgrading the financial asset to a lower
days will be applied to confirm if the risk of stage
default on such financial instrument has

Governance

The Bank’s Board of Directors and Senior Management are responsible for ensuring that the bank has appropriate credit
risk management practices, including an effective system of internal control, to determine adequate expected credit loss
(ECL) allowances in accordance with IFRS 9 as well as the Bank’s stated policies and relevant supervisory guidance.

Guaranty Trust Bank has instituted an effective governance and control framework around the IFRS 9 processes to ensure:
that data integrity and availability is upheld, expert judgement is adopted in the design of the ECL models and finally the
IFRS 9 processes are automated to give all stakeholders confidence in the resulting financial information.

The Bank’s Core Banking Application (BANKS) and the Credit Risk Management rating system are the key pillars of the
IFRS 9 model. For the purpose of estimating expected credit loss as prescribed by the standard, the Bank has designed an
ECL framework that generates data from the banking system which is processed by the Credit Risk Management and
Financial Control Unit and transformed into IFRS 9 compliant figures.

In order to maintain a strong internal control around the IFRS 9 system, the table below details the entire process regarding
the IFRS 9 process and the various responsibilities.

Annual Report 2021

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