104 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Consolidated Financial Statements March 31, 2024 (expressed in Barbados dollars) 64 25 Financial Risk Management …continued 25.2 Credit risk …continued Modifications…continued While the Group currently has a number of loan products these are assessed for risk purposes in three categories: 1) Consumer loans 2) Business loan 3) Mortgages Additionally, the Group accessed these by categories at the product level for any significant increases in credit risk based on the 95% CIF. Key inputs and assumptions: Measuring expected credit losses is a complex calculation involving many interrelated inputs and assumptions. The key drivers of changes in expected losses under the IFRS 9 model include our internal historical default rates, unemployment rate, GDP and inflation rate. Further details on the key inputs and assumptions used as at March 31, 2024, are provided in Note 2. The following table compares our probability-weighted estimate of expected credit losses for performing loans to expected credit losses estimated in our base case scenario. Results reflect the Stage 1 and Stage 2 allowance for credit losses. Carrying value ($’000) Base Scenario ($’000) As at March 31, 2024 ECL on performing loans 2,719 2,702 As at March 31, 2023 ECL on performing loans 4,223 4,005 Further to our current policy for transfers between stages as described in Note 2, as part of our overlay, we qualitatively increased ECL in stage 2 to reflect the current challenging economic environment. This qualitative adjustment was informed by remaining time to maturity, economic projections, scenario weights and the historical behaviour of our portfolio.
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