REPUBLIC BANK LIMITED
92
Notes to theConsolidatedFinancial Statements
For the year ended September 30, 2014. Expressed in thousands of Trinidad and Tobago dollars ($’000), except where otherwise stated
21 Risk management
(continued)
21.2 Credit risk
(continued)
21.2.1 Maximum exposure to credit risk without taking account of any collateral and other credit enhancements
(continued)
Collateral and other credit enhancements
The Group maintains credit risk exposure within acceptable parameters through the use of collateral as a risk-mitigation tool.
The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are
implemented regarding the acceptability of types of collateral and valuation parameters.
The main types of collateral obtained are cash or securities, charges over real estate properties, inventory and trade receivables
and mortgages over residential properties and chattels. The Group also obtains guarantees from parent companies for loans to
their subsidiaries.
Management monitors the market value of collateral, requests additional collateral in accordance with the underlying
agreement, andmonitors the market value of collateral obtained during its review of the adequacy of the allowance for impairment
losses.
It is the Group’s policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to repay the
outstanding claim. In general, the Group does not occupy repossessed properties for business use. As at September 30, 2014,
$318.9 million (2013: $384.4 million) in repossessed properties are still in the process of being disposed of.
21.2.2 Risk concentrations of the maximum exposure to credit risk
Concentration of risk is managed by client/counterparty, by geographical region and by industry sector as detailed in the following
schedules:
i) Geographical sectors
The Group’s maximum credit exposure, after taking account of credit loss provisions established but before taking into
account any collateral held or other credit enhancements, can be analysed by the following geographical regions based on
the country of domicile of its counterparties:
2014
2013
Trinidad and Tobago
39,940,733
37,644,064
Barbados
6,845,822
6,944,968
Eastern Caribbean
1,630,028
1,510,009
Guyana
3,419,775
3,776,449
United States
4,288,264
3,755,055
Europe
1,169,789
2,086,054
Other Countries
2,825,130
2,080,194
60,119,541
57,796,793
