Page 165 - Capricorn IAR 2020

2020 INTEGRATED ANNUAL REPORT
NOTES TO THE CONSOLIDATED AND SEPARATE ANNUAL FINANCIAL STATEMENTS (continued)
for the year ended 30 June 2020
3. FINANCIAL RISK MANAGEMENT (continued)
3.2 Credit risk (continued)
3.2.3 Loss allowance (continued)
Significant changes in the gross carrying amount of financial assets that contributed to changes in the loss allowance were as follows:
Overdrafts
• Gross overdrafts increase by N$263.6million (4.7%) from the prior period, which lead to stage 1 expected credit losses increasing and stage 2 expected credit losses to remain relatively flat year-on-year
• Non-performing overdrafts stayed relatively flat year-on-year at N$338.4 million. The non-performing overdrafts are well secured with a fair value of security of N$259.5 million
Term loans
• Term loans increased by N$1.1 billion (9.2%) from the prior period, mainly driven by growth in commercial loans
• The write-off of term loans with a gross carrying value of N$50.6 million resulted in the reduction of the expected credit loss
allowance with the same amount. This was offset by increases in the net impairments raised of N$177.4 million
Mortgages
• Mortgages grew by N$666.9 million (3.8%) over the prior period
• Expected loss allowances grew by 39.5% mainly as a result of an increase in well-collateralised non-performing mortgage loans
of N$147.2 million
Instalment finance
• Gross instalment finance loans grew by N$110.2 million (3.4%) year-on-year
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