102 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Separate Financial Statements March 31, 2024 (expressed in Barbados dollars) 68 23 Financial risk management …continued Credit risk …continued Incorporation of Forward-Looking Information Assessment…continued The Credit Union assigned probabilities and related weights based on the most likely forecasted economic outlook for the period under assessment. This probability is multiplied by a multiplier factor based on management’s professional judgement to derive the adjustment required to incorporate the forward-looking estimate. 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% (2023 - 4%) was applied as at March 31, 2024. 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 2024 $ 2023 $ Loans and advances to members: Consumer 641,370,224 678,442,712 Mortgages 517,165,132 496,505,048 Business 3,664,575 4,271,815 Financial investments: Sovereign bonds 32,496,763 21,693,566 Securitized deposits (note 21) 29,400,141 – Cash resources 448,581,683 435,777,028 Credit risk exposures relating to off-balance sheet items as follows: Loan commitments 59,502,407 78,611,270 Total maximum exposure 1,732,180,925 1,715,301,439 The above table represents the maximum credit risk exposure of the Credit Union as of March 31, 2024 and March 31, 2023, 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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