Page 56 - GTBANK GAMBIA ANNUAL REPORT 2021

including those subject to Management Credit faced and to focus management on the attendant
Committee’s approval risks. The current risk grading framework consists
. of ten grades reflecting varying degrees of risk of
The Internal Audit and Credit Administration units default and the availability of collateral or other
respectively undertake regular audits of business units credit risk mitigation. The responsibility for
and credit quality reviews. approving the risk grades lies with the Board
Credit Committee. The risk grades are subject to
The Bank continues to focus attention on intrinsic and regular review by the Risk Management Unit.
concentration risks inherent in its business in order to
manage its portfolio risk. It sets portfolio concentration Reviewing compliance of business units with agreed
limits that are measured under the following parameters: exposure limits, including those for selected industries,
concentration limits per obligor, business lines, industry, country risk and product types. Regular reports are
sector, rating grade and geographical area. Sector limits provided to Risk Management Unit on the credit quality of
reflect the risk appetite of the Bank. local portfolios and appropriate corrective action is taken.
Providing advice, guidance and specialist skills to
The Bank drives the credit risk management processes business units to promote best practice throughout the
using appropriate technology to achieve global best Bank in the management of credit risk.
practices. There were no changes in the Bank’s risk management
policies. Each business unit is required to implement
Management of Credit Risk Bank credit policies and procedures, with credit approval
authorized by the Board Credit Committee.
The Board of Directors has delegated responsibility for the
management of credit risk to its Board Credit Committee. Credit Risk Measurement
A separate Management Credit Committee reporting to
the Board Credit Committee is responsible for oversight In line with IFRS 9, the bank adopted the expected credit
of the Bank’s credit risk, including: loss (ECL) approach. The (ECL) model should reflect the
general pattern of deterioration in the credit quality of
• Formulating credit policies in consultation with financial instruments over the life of the instruments. In
business units, covering collateral requirements, estimating the expected credit quality of the instrument,
credit assessment, risk grading and reporting, the Bank considers reasonable and supportable
documentary and legal procedures, and information available without undue cost or effort at the
compliance with regulatory and statutory reporting date, past events, current conditions and
requirements. forecasts of future economic conditions.
• Establishing the authorization structure for the Guaranty Trust Bank (Gambia) Limited undertakes
approval and renewal of credit facilities. lending activities after careful analysis of the borrowers’
Authorization limits are allocated to business unit character, capacity to repay, cash flow, credit history,
heads. Larger facilities require approval by the industry and other factors. The Bank acknowledges that
Management Credit Committee, Executive there are diverse intrinsic risks inherent in its different
Director, Managing Director and the Board Credit business segments and, as a result, applies different
Committee/Board of Directors as appropriate. parameters to adequately dimension the risks in each
• Reviewing and assessing credit risk - business segment.
Management Credit Committee assesses all The Bank’s rating grades reflect the range of parameters
credit exposures in excess of designated limits, developed to predict the default probabilities of each
prior to facilities being committed to customers by rating class in line with international best practices and in
the business unit concerned. Renewals and compliance with BASEL II requirements. The grades
reviews of facilities are subject to the same reflect granularities and are handled by Account Officers
review process. and Relationship Managers with further check by Credit
• Developing and maintaining the Bank’s risk Risk Analysis Unit in Credit Risk Management Unit.
grading in order to categorize exposures
according to the degree of risk of financial loss

Annual Report 2021

www.gtbankgambia.com Guaranty Trust Bank Gambia Limited 56