Page 70 - Ecobank Gambia Annual Report 2020

Financial Statements & Annual Report

Notes to the Financial Statements

for the year ended 31 December 2020 (in Thousands of Gambian Dalasis)

Off-balance sheet items Not later than 1 Year Over one year Total
As at 31 December 2020

Loan commitments 88,471 - 88,471
Guarantees, acceptances and other financial facilities 1,244,617 401,000 1,645,617
Capital commitments
- - -
1,333,088 401,000 1,734,088

As at 31 December 2019 Not later than 1 Year Over one year Total

Loan commitments 77,627 - 77,627
Guarantees, acceptances and other financial facilities 1,821,349 37,252 1,858,601
Capital commitments
- - -
1,898,976 37,252 1,936,228

(d) Market risk market risks and their drivers;
Market risk is the risk of loss arising from adverse changes ¦ the use of results and estimates as the basis for the
in market conditions (interest rates, exchange rates and
equity prices) during the period. Positions that expose Group’s risk/return-oriented management; and
the Bank to market risk can be trading or non-trading ¦ monitoring risks and reporting on them.
related. Trading risk comprises positions that the Bank The Bank uses a wide range of quantitative and qualitative
holds as part of its trading or market-making activities, tools to manage and monitor market risk. Quantitative
whereas non-trading risk includes discretionary positions limits
that the Bank undertake for liquidity. for fair value and net income sensitivities, value at
Market risk management risk (VaR), stress tests, scenario analyses and ratios on
The Bank’s market risk management objective is to economic capital are used to enforce the Bank’s market
manage and control market risk exposures in order to risk appetite. The quantitative and qualitative factors
optimise return on risk while ensuring solvency. limiting market price risk are determined by the market
As with liquidity risk ALCO is responsible for ensuring the risk committees by reference to the Bank’s management
effective management of market risk throughout the of economic capital. Based on qualitative analyses and
Bank. quantitative ratios, the market risk function identifies
Specific levels of authority and responsibility in relation potential future risks, anticipates, in collaboration with
to market risk management have been assigned to the finance function, potential financial losses, and
appropriate market risk committees. defines proposals for further action, which are discussed
The core market risk management activities are: with the market units. Risk concentrations are restricted
¦ the identification of all key market risks and their directly with specific limits or are indirectly avoided using
the limit structure described above. Market risk reports
drivers; reflecting the Bank’s exposures, risk concentrations,
¦ the independent measurement and evaluation key stress test results, utilisations of limits etc. are reviewed
on a daily basis.
68 Ecobank Gambia Annual Report 2020 Appropriate actions are taken when needed, including

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