Page 180 - Capricorn IAR 2020

GLOSSARY OF TERMS ANNUAL FINANCIAL GLOSSARY OF TERMS STATEMENTS
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)
3.2.8 Credit risk-weighted amounts (continued)
Only claims on banks are risk-weighted based on external credit assessment for capital adequacy calculations. The Group utilises available external rating agencies’ ratings on both short-term and long-term exposures. No amounts are deducted from the Group’s capital. The Bank of Namibia does not have its own credit rating. The sovereign and central bank credit risk weighting has been 0% for local currency issued and controlled by the central bank. The long-term country credit ratings by an external credit rating agency for Namibia, Botswana and Zambia were as follows:
2019
Namibia long-term local currency issuer default rating BB+ Namibia long-term issuer default rating BB+ Botswana long-term local currency issuer default rating A- Botswana long-term issuer default rating A- Zambia long-term local currency issuer default rating CCC- Zambia long-term issuer default rating CCC-
3.2.9 Credit concentration risk
The Group manages credit concentration risk by imposing credit risk concentration caps on the exposure for different loans and advances classifications, such as product classes, regions and industry. The credit risk concentration caps are directly linked to the board-approved risk capacity, appetite and tolerance thresholds, and are managed as part of the risk management process. The credit concentration risk is also further assessed using stress testing and scenario analyses quantitative models.
2020
BB-
BB-
BBB+
BBB+
CC
CC
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