91 SEPARATE FINANCIAL STATEMENTS 2024 Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Separate Financial Statements March 31, 2024 (expressed in Barbados dollars) 57 23 Financial risk management …continued Credit risk …continued Modifications The Credit Union offers various payment solutions to members who may be experiencing challenging economic times. These include extension of loan term, converting outstanding interest to a separate loan and or debt consolidation. Where modification occurs, loans meeting such criterion are classified according to type and circumstance giving rise to any such modification. The terms and conditions related to each type is tracked monthly and accessed for substantial modifications. Where required, modification gains or losses have been recognised. The ECL methodology, model inputs, significant increase in credit risk (SICR) thresholds, and definition of default remain consistent with those used as at March 31, 2023. Forward-looking information, scenarios and associated weightings, were revised to reflect current and projected future economic conditions. The Credit Union groups its loans based on their risk characteristics and in so doing is able to evaluate whether a SICR has occur based on the following characteristics: 1) The borrower is in default greater than 30 days where prior to the evaluation period they were in default 30 days or less. 2) Based on a 1,000-basis points increase in the groups 95% Confidence Interval Factor (CIF). While the Credit union 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 credit union 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 rates, GDP and inflation rates. Further details on the key inputs and assumptions used as at March 31, 2023, are provided in Note 2 (e).
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