Page 70 - GTBANK GAMBIA ANNUAL REPORT 2021

Liquidity risk 7. Monitoring of level of undrawn commitments
8. Maintaining a contingency funding plan.

a) Liquidity Risk Governance
c) Liquidity Risk Measurement
The Board of Directors retains ultimate responsibility for There are two measures used for managing liquidity risk
the effective management of liquidity risk. Through the namely: liquidity ratio mechanism which is a statutory
Enterprise Risk Management Group (ERM), the board requirement from most Central Bank in order to protect
has delegated its responsibility for the management of third party deposits, and funding gap analysis of assets
liquidity risk to the Asset and Liability Management and liabilities.
Committee (ALMAC).

b) Liquidity Risk Management i) Liquidity ratios

A brief overview of the bank's liquidity management
processes during the year includes the following: The key measure used for managing liquidity risk is the
ratio of net liquid assets to deposits from customers. For
1. Maintenance of minimum levels of liquid and this purpose, net liquid assets are considered as including
marketable assets above the regulatory cash and cash equivalents and investment grade debt
requirement of 30%. The Bank has also set for securities for which there is an active and liquid market
less any deposits from banks, debt securities issued,
itself more stringent in-house limits above this other borrowings and commitment maturing within one
regulatory requirement to which it adheres.
2. Monitoring of its cash flow and balance sheet month.
trends. The Bank also makes forecasts of
anticipated deposits and withdrawals to The liquidity position of the Bank remained strong in the
determine their potential effect on the Bank. course of the period and materially above the minimum
3. Regular measurement & monitoring of its liquidity liquidity ratio requirement of 30% prescribed by the
position/ratios in line with regulatory Central Bank of The Gambia. Details of the Bank's ratio
requirements and in-house limits of net liquid assets to deposits and customers at the
4. Regular monitoring of non-earning assets reporting date and during the reporting period were as
follows:
5. Monitoring of deposit concentration
6. Ensure diversification of funding sources
Dec.-2021 Dec.-2020
At end of year 93% 84%

Average for the year 86% 84%

Maximum for the year 94% 86%
Minimum for the year 81% 81%

ii) Funding Approach
The bank's Asset and Liability Management Committee
The Bank's overall approach to funding is as follows: (ALMAC) is charged with the responsibility of managing
the Bank's daily liquidity position. A daily liquidity position
1. Generation of large pool of low cost deposits. is monitored and regular liquidity stress testing is
2. Maintenance of efficiently diversified sources of funds conducted under a variety of scenarios covering both
along product lines, business segments and also normal and more severe market conditions. All liquidity
regions to avoid concentration risk. policies and procedures are subject to review and
approval policies and procedures are subject to review
The bank was able to meet all its financial commitments and approval by ALMAC. The Risk Management Bank
Annual Report 2021
and obligations without any liquidity risk exposure in the sets limits which are in conformity with the regulatory
course of the year. limits. The limits are monitored regularly and exceptions

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