92 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2022 BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED Notes to the Separate Financial Statements For the year ended March 31, 2022 (Expressed in Barbados dollars) 65 23. Financial Risk Management, continued Credit risk, continued Loans and advances The Credit Union employs a range of policies and practices to mitigate credit risk relating to loans and advances. The most traditional of these is the taking of security for funds advanced. The principal collateral types for loans and advances within the Credit Union are: - Mortgages over residential properties - Charges over financial instruments such as debt securities and equities - Charges over business assets such as premises - Hypothecation of deposit balances It is the Credit Union’s policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to reduce or repay the outstanding claims. The Credit Union does not occupy repossessed properties for business use. Generally, the Credit Union updates the valuation of property held against exposures to members on inception of the loan. However, a more formal valuation is performed, when: - loan is 90 days past due and is deemed to have experienced a significant increase in credit risk; and/or - the valuation is required to provide input into determining management’s credit risk actions. The table below sets out the carrying amount and the value of identifiable collateral (mainly residential property) held against loans and advances to members measured at amortised cost. Where the same collateral is held against two or more loans, the market value of the collateral is proportionally assigned across loans based on the original amount loaned. For each loan, the value of disclosed collateral is capped at the nominal amount of the loan that it is held against. 2022 2021 Carrying Carrying Amount Collateral Amount Collateral Stage 1 $ 964,703,059 738,319,865 874,181,931 596,079,491 Stage 2 28,309,533 22,228,392 58,350,105 39,085,853 Stage 3 154,427,303 100,733,348 147,026,196 102,022,482 $ 1,147,439,895 861,281,605 1,079,558,232 737,187,826
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