100 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Consolidated Financial Statements March 31, 2023 (expressed in Barbados dollars) 68 25 Financial Risk Management …continued 25.2 Credit risk …continued Loans and advances …continued 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. 2023 2022 Carrying amount $ Collateral $ Carrying amount $ Collateral $ Stage 1 976,357,786 772,183,480 964,703,059 738,319,865 Stage 2 40,297,623 29,911,116 28,309,533 22,228,392 Stage 3 162,564,166 102,355,359 154,427,303 100,733,348 1,179,219,575 904,449,955 1,147,439,895 861,281,605 The collateral value expressed as a percentage of the carrying value was 76.7 percent (2022 - 75.1 percent). Financial investments The Credit Union 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 Credit Union also invested in FVOCI equity instruments which gives it an opportunity to monitor the performance of these companies over time and make economic decisions where warranted. The Credit Union has documented investment policies in place, which guide the management of credit risk on investments. Assessment of corporate investments (term deposits) The Group currently has $20,889,541 (2022 - $19,558,107) in corporate term deposits. These investments are assessed on an entity level. Currently, these investments are held in the entities which are either regulated by the Central Bank of Barbados or the Financial Services Commission as per section 34 A of the Co-operative Society Act. Corporate investments are staged based on the following evaluation criteria: 1. Time to maturity. 2. Investee ability to make payment once it becomes due (this is based on past relations with the entity together with an evaluation of whether the entity has experienced a decline in its financial ability to make payments).
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