Page 175 - RFHL ANNUAL REPORT 2025 ONLINE_NEW
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22 Risk management (continued)
22.2 Credit risk (continued)
The debt securities within the Group’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 Group 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 Group’s credit control processes emphasise 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.
22.2.1 Analysis of risk concentration
The Group’s concentrations of risk are managed by client/counterparty, geographical region and industry sector.
The table below shows the Group’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 Banks 7,683 7,281
Due from banks 6,923 6,802
Treasury Bills 9,423 7,682
Advances 74,118 67,299
Investment securities 19,828 20,418
Investment interest receivable 212 221
Other financial assets 185 337
Total 118,372 110,040
Undrawn loan commitments 6,822 7,426
Acceptances 2,796 2,711
Guarantees and indemnities 319 357
Letters of credit 346 655
Total 10,283 11,149
Total credit risk exposure 128,655 121,189
Where financial instruments are recorded at fair value, the amounts shown represent the current credit risk
exposure but not the maximum risk exposure that could arise in the future as a result of changes in values.
