97 SEPARATE FINANCIAL STATEMENTS 2023 Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Separate Financial Statements March 31, 2023 (expressed in Barbados dollars) 69 23 Financial risk management …continued Credit risk …continued Incorporation of Forward-Looking Information Assessment …continued Since Barbados received a stable outlook for the period under assessment by Moody’s and the Central Bank of Barbados, the base case scenario was the most likely scenario. Out of the sensitivity analysis of nine forecasted states, a forward-looking adjustment of 4% (4%-2022) was applied as at March 31, 2023. Exposure to credit risk before collateral held or other credit enhancements 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 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 Credit Union has documented investment policies in place, which guide the management of credit risk on investments. Credit risk exposures relating to on-balance sheet assets are as follows: Maximum exposure 2023 $ 2022 $ Loans and advances to members: Consumer 678,442,712 695,911,979 Mortgages 496,505,048 446,555,966 Business 4,271,815 4,971,950 Financial investments: Debt securities-amortised cost 21,690,419 23,689,806 Cash resources 435,708,442 419,998,157 Credit risk exposures relating to off-balance sheet items as follows: Loan commitments 78,887,376 97,366,916 Total maximum exposure 1,715,505,812 1,688,494,774 The above table represents the maximum credit risk exposure of the Credit Union as of March 31, 2023 and March 31, 2022, without taking account of any collateral held or other credit enhancements attached. For onbalance sheet assets, the exposures set out above are based on net carrying amounts as reported in the statement of financial position.
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