91
2014 ANNUAL REPORT
21 Risk management
(continued)
21.2 Credit risk
(continued)
Loan loss provisions are set aside to cover any potential loss in respect of debts that are not performing satisfactorily. A review of these
provisions is conducted quarterly in accordance with established guidelines and recommended provisions arising out of this review are
submitted to the Board for approval. Non-performing debts recommended for write-off are also reviewed annually and action taken in
accordance with prescribed guidelines.
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.
21.2.1 Maximum exposure to credit risk without taking account of any collateral and other credit enhancements
The table below shows the Group’s maximum exposure to credit risk:
Gross maximum exposure
2014
2013
Statutory deposits with Central Banks
4,834,456
4,332,600
Due from banks
8,345,146
9,237,076
Treasury Bills
5,905,053
5,723,076
Investment interest receivable
72,136
65,487
Advances
27,095,407
25,235,517
Investment securities
8,203,270
7,797,087
Total
54,455,468
52,390,843
Undrawn commitments
4,697,372
4,464,016
Acceptances
742,087
725,650
Guarantees and indemnities
106,898
105,381
Letters of credit
117,716
110,903
Total
5,664,073
5,405,950
Total credit risk exposure
60,119,541
57,796,793
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.
