BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2020 80 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2020 (Expressed in Barbados dollars) 63 26. Financial Risk Management, continued 26.2 Credit risk, continued Assessment of sovereign debt securities, continued Key data sources as outlined in the expected credit loss assessment methodology were obtained from Moody’s, a global credit rating agency that provided published statistics and data on corporate and sovereign bonds and investments. Also used were the yield curves from the Central Bank of Barbados (CBB) and the Institute of Accountants of Barbados (ICAB). The expected credit loss computed were $387,859 (2019 - $697,784) as at March 31, 2020. Cash and balances with Central Bank The credit quality of financial institutions holding the Group’s cash resources is assessed according to the level of their credit worthiness and by comparison to other financial institutions. The Group places its cash resources with reputable financial institutions. Exposure to credit risk before collateral held or other credit enhancements The Group limits its exposure to credit risk by investing only in entities that have high credit ratings and Government of Barbados securities. Government securities are invested over a longer period than term deposits with other financial institutions which typically mature within one year. The Group has invested in FVOCI equity instruments as well, which gives it an opportunity to monitor the performance of these companies over time and make economic decisions where warranted. The Group has documented investment policies in place, which guide the management of credit risk on investments. Maximum exposure Credit risk exposures relating to on-balance sheet assets are as follows: 2020 2019 Loans and advances to customers: Consumer $ 753,873,695 723,519,055 Mortgages 507,451,534 470,001,201 Business 39,644,701 33,728,599 Financial investments: Amortized costs 22,024,523 22,529,971 Cash resources 308,160,914 252,492,100 Credit risk exposures relating to off-balance sheet items are as follows: Loan commitments 107,619,195 74,558,750 Total maximum exposure $ 1,738,775,562 1,576,829,676
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