Page 72 - 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)

Carrying Trading Non-trading
amount portfolios portfolios
GMD’000 GMD’000 GMD’000
31-Dec-19
Assets subject to market risk 1,392,893 1, 392,893
Cash and cash equivalents 1,635,382
Loans and advances to banks 1,635,382
Loans and advances to customers 827,848
Investment securities 827,848 2,707,108
6,563,231
Liabilities subject to market risk 2,707,108
Deposits from banks 102,488
Deposits from customers 6,563,231 0 5,224,736
Debt secrities issued
102,488 5,327,224
5,224,736

5,327,224 0

Fair values of financial Assets and Liabilities 2 have been valued using models whose inputs are
The Bank measures fair values in accordance with IFRS observable in an active market.
13, which defines fair value as the price that would be ¦ Level 3 inputs are unobservable inputs. Assets and
received to sell an asset or paid to transfer a liability in liabilities are classified as Level 3 if their valuation
an orderly transaction between market participants at incorporates significant inputs that are not based on
the measurement date. The Bank also uses a fair value observable market data.
hierarchy that categorises into three levels the inputs to The Bank holds financial assets and liabilities for which
valuation techniques used to measure fair value, which quoted prices are not available, such as over the counter
gives highest priority to quoted prices. (OTC) derivatives. For these financial instruments the
¦ Level 1 inputs are quoted prices (unadjusted) in active Bank uses valuation techniques to estimate fair value.
The valuation techniques used include discounted cash
markets for identical assets or liabilities that the flow models, comparison with similar instruments for
entity can access at the measurement date. Assets which observable market prices exist, Black-Scholes and
and liabilities are classified as Level 1 if their value is polynomial option pricing models and other valuation
observable in an active market. models. These valuation techniques use as their basis
¦ Level 2 inputs are inputs other than quoted prices independently sourced market parameters, such as interest
included within Level 1 that are observable for the rate yield curves, equities and commodities prices, option
asset or liability, either directly or indirectly. A Level volatilities and currency rates.
2 input must be observable for substantially the full
term of the instrument. Level 2 inputs include quoted The use of observable market prices and model inputs,
prices for similar assets or liabilities in active markets, when available, reduces the need for management
quoted prices for identical or similar assets or liabilities judgement and estimation, as well as the uncertainty
in markets that are not active, inputs other than quoted related with the estimated fair value. The availability of
prices that are observable for the asset or liability, observable market prices and inputs varies depending on
such as interest rates and yield curves observable at the products and markets and is prone to changes based
commonly quoted intervals, implied volatilities; and on general conditions and specific events in the financial
credit spreads. Assets and liabilities classified as Level markets.

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