Page 127 - RB GRENADA ANNUAL REPORT 2025_ONLINE

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Notes to the Financial Statements

For the year ended September 30, 2025. Expressed in Thousands of Eastern Caribbean dollars ($’000), except where otherwise stated.

18 Risk management (continued)
18.2 Credit risk (continued)

The Bank uses a risk rating system which groups commercial/corporate accounts into various risk categories to facilitate
the management of risk on both an individual account and portfolio basis. For retail lending, a computerised Credit
Scoring system with preset risk management criteria is in place at all branches to facilitate decision-making. Trend
indicators are also used to evaluate risk as improving, static or deteriorating. The evaluation of the risk and trend inform
the credit decision and determines the intensity of the monitoring process.

The debt securities within the Bank’s investment security portfolio are exposed to credit risk and are managed by
investment grading or country exposure with preset exposure limits as approved by the Board of Directors. The credit
quality of each individual security is assessed based on the financial strength, reputation and market position of the
issuing entity and the ability of that entity to service the debt.

The Bank avoids exposure to undue concentrations of risk by placing limits on the amount of risk accepted from a
number of borrowers engaged in similar business activities, or activities in the same geographic region or with similar
economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in
economic, political or other conditions. Such risks are controlled and monitored on a revolving basis and are subject to
an annual or more frequent review. Limits on the level of credit risk by product, industry sector, client and geography
are approved by the Board of Directors.

The Bank’s credit control processes emphasize early detection of deterioration and prompt implementation of remedial
action and where it is considered that recovery of the outstanding balance may be doubtful or unduly delayed, such
accounts are transferred from performing to non-performing status.

18.2.1 Analysis of risk concentration
The Bank’s concentrations of risk are managed by client/counterparty, geographical region and industry sector.
The table below shows the Bank’s maximum exposure to any client or counterparty before taking into account
collateral or other credit enhancements.

Gross maximum exposure
2025 2024

Statutory deposits with Central Bank 109,840 107,711
Due from banks 175,830 104,392
Due from related banks 140,256 251,716
Treasury Bills 144,004 114,929
Investment interest receivable 5,200 3,574
Advances 1,181,369 1,110,028
Investment securities, excluding equities 483,362 373,493

Total 2,239,861 2,065,843