49
BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
ANNUAL REPORT 2013
A summary of the Group’s interest rate gap position is as follows:
2012
Up to
Within
Within
Over Non-interest
3 months 3-12 months
1-5 years
5 years
bearing
Total
Assets
Cash resources
$ 51,344,213
46,430,916
-
-
5,125,829 102,900,958
Financial investments
64,891
2,208,370
12,609,000
650,000
-
15,532,261
Loans and advances
13,764,047
10,426,071 210,506,394 515,032,860
- 749,729,372
Other assets
-
-
-
-
3,901,623
3,901,623
Total assets
65,173,151
59,065,357 223,115,394 515,682,860
9,027,452 872,064,214
Liabilities
Deposits
426,241,305 116,279,199 163,403,092
29,985,445
- 735,909,041
Loans payable
1,044,467
3,194,556
19,551,423
56,310,084
-
80,100,530
Reimbursable shares
-
-
-
-
4,532,147
4,532,147
Other liabilities
-
-
-
-
9,855,048
9,855,048
Total liabilities
427,285,772 119,473,755 182,954,515
86,295,529
14,387,195 830,396,766
Interest rate gap
$(362,112,621) (60,408,398) 40,160,879 429,387,331
(5,359,743)
41,667,448
An interest rate sensitivity analysis was performed to determine the impact on profit of reasonable possible changes in the
interest rates prevailing as at March 31, 2013, with all other variables held constant.
The impact is illustrated and shown in the table below:
2013
2012
Increase / decrease of 100 bps
Impact on profit + 100 bps
$ 3,022,227
1,142,507
Impact on profit – 100 bps
(3,022,227)
(1,136,960)
25.5Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s
processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks
such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour.
While operational risk is inherent to each of the Group’s business activities, the exposure is minimised by ensuring that
the appropriate infrastructure, controls, systems and human resources are in place. Key policies and procedures, used in
managing operating risk involve a strong internal audit function, segregation of duties, delegation of authority, and financial
and managerial reporting.
Within the Group, mitigation of operating risk is assigned to senior management supported by a well-defined organisational
structure that segregates operational and administrative functions. Back-up capabilities are also maintained to ensure on-
going service delivery in adverse circumstances.
In addition periodic reviews are undertaken by the Internal Audit department. The results of the reviews are discussed with
the management of the business unit to which they relate, senior management and the Board of Directors.
26. FAIR VALUE
Fair value represents the amounts at which a financial instrument could be exchanged in an arm’s length transaction between willing
parties and is best evidenced by a quoted market price, if one exists.
Financial assets and liabilities are carried at amounts, which approximate to their fair value at the statement of financial position date.
Fair value estimates are made at a specific point in time, based on market conditions and information about the financial instrument.
These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore, cannot be
determined with precision. Changes in assumptions could significantly affect the estimates.
Notes to the Consolidated Financial Statements
For the year ended March 31, 2013, with comparative figures for 2012
(Expressed in Barbados dollars)
