107 CONSOLIDATED FINANCIAL STATEMENTS 2025 Barbados Public Workers’ Co-operative Credit Union Limited Notes to the Consolidated Financial Statements March 31, 2025 (expressed in Barbados dollars) 69 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. 2025 2024 Carrying amount $ Collateral $ Carrying amount $ Collateral $ Stage 1 971,080,829 828,016,272 962,591,043 816,853,264 Stage 2 29,048,821 24,274,579 27,027,187 21,398,724 Stage 3 153,235,694 102,890,336 172,581,702 114,012,689 1,153,365,344 955,181,187 1,162,199,932 952,264,677 The collateral value expressed as a percentage of the carrying value was 82.8 percent (2024 - 81.9 percent). Financial investments The Group 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 Group 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 Group has documented investment policies in place, which guide the management of credit risk on investments. Assessment of corporate investments (term deposits) Due to limited published market data for term deposits, the Group's internally developed model using published credit rating scores for similar investees and/or Moody's published statistics was used to determine the Probability of Default (PD) rates and Loss Given Default (LGD) applied in the Estimated Credit Losses (ECL) on term deposits. The Group currently has $26,631,759 (2024 - $20,291,821) 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.
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