Page 129 - 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)
18.2.1 Analysis of risk concentration (continued)

b Geographical sectors
The Bank’s maximum credit exposure, after taking account of credit loss provisions established but before
taking into account any collateral held or other credit enhancements, can be analysed by the following
geographical regions based on the country of domicile of our counterparties:

2025 2024

Eastern Caribbean (excluding Grenada) 367,151 340,026
Barbados 544 4
Grenada 1,349,478 1,268,800
Trinidad and Tobago 124,673 188,428
United States 372,959 318,689
Other Countries 339,213 256,125

2,554,018 2,372,072

18.2.2 Impairment assessment
Financial asset provisions are reviewed quarterly in accordance with established guidelines and recommended
provisions arising out of this review are submitted to the Board for approval. Non-performing debts recommended
for write-off are also reviewed quarterly and action taken in accordance with prescribed guidelines. The Bank’s
impairment assessment and measurement approach is set out below.

18.2.3 Default and recovery
The Bank considers a financial instrument defaulted and therefore Stage 3 (credit-impaired) for ECL calculations
in cases when the borrower becomes 90 days past due on its contractual payments.

As a part of a qualitative assessment of whether a customer is in default, the Bank also considers a variety of
instances that may indicate unlikeliness to pay. When such events occur, the Bank carefully considers whether the
event should result in treating the customer as defaulted and therefore assessed as Stage 3 for ECL calculations
or whether Stage 2 is appropriate.

It is the Bank’s policy to consider a financial instrument as ‘cured’ and therefore re-classified out of Stage 3 when
none of the default criteria have been present for at least six consecutive months. The decision whether to classify
an asset as Stage 2 or Stage 1 once cured depends on the updated credit grade, at the time of the cure, and
whether this indicates there has been a significant increase in credit risk compared to initial recognition.