BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
NON-CONSOLIDATED ANNUAL REPORT 2016
70
BARBADOS PUBLIC WORKERS' CO-OPERATIVE CREDIT UNION LIMITED
Notes to the Non-consolidated Financial Statements
For the year ended March 31, 2016
(Expressed in Barbados dollars)
55
24. Financial Risk Management,
continued
Market risk,
continued
Interest rate risk
,
continued
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, 2016, with all other variables held
constant.
The impact is illustrated and shown in the table below:
2016
2015
Increase / decrease of 100 bps
Impact on profit + 100 bps
$ (3,192,506)
4,248,224
Impact on profit – 100 bps
1,919,958
(931,400)
Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with
the Credit Union’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 Credit Union'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 Credit Union, 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
Board of Directors.
