Page 58 - GTBANK GAMBIA ANNUAL REPORT 2021

• Could be currently performing but susceptible to poor industry conditions
and operational difficulties
• Declining collateral quality

• Management and owners are good or passable

• Typically borrowers in declining markets or with small market share and
operating in cyclical industries
• Eliciting signs of deterioration as a result of well-defined weaknesses
that may impair repayment
• Typically start-ups/declining markets/deteriorating industries with high
7 (CCC) Watch-list industry risk
• Financial fundamentals below average
• Weak management

• Poor information disclosure

• Well-defined weaknesses though significant loss unlikely; orderly
liquidation of debt under threat

• Continued strength is on collateral or residual repayment capacity of
8 (CC) Substandard Risk obligor
• Partial losses of principal and interest possible if weaknesses are not
promptly rectified
• Questionable management skills

• • High probability of partial loss
Very weak credit fundamentals which make full debt repayment in
• serious doubt
Factors exist that may mitigate the potential loss but awaiting
appropriate time to determine final status
9 (C) Doubtful Risk
• Demonstrable management weaknesses, poor repayment weaknesses
and poor repayment profile
• • A definite loss of principal and interest
• Lack of capacity to repay unsecured debt
Bleak economic prospects
10 (D) Lost
• Though it is still possible to recover sometime in the future, it is
imprudent to defer write – offs

occurring, of the associated loss ratios and of default
Loans and Advances correlations between parties.
Ratings and scoring models are in use for all key credit
Models have been used to estimate the amount of credit portfolios and form the basis for measuring default risks.
exposures, as the value of a product varies with changes In measuring credit risk of loans and advances at a
in market variables, expected cash flows and time. The counterparty level, the Bank considers three components:
assessment of credit risk of a portfolio of assets entails
further estimations as to the likelihood of defaults (i) The ‘probability of default’ (PD)
Annual Report 2021

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