ASSET CREDIT QUALITY
All loans and advances are categorised as neither past due nor impaired; past due but not impaired; or impaired, which includes restructured loans.
- A loan is considered past due when the borrower has failed to make a payment when due under the terms of the loan contract
- The impairment allowance includes allowances against financial assets that have been individually impaired and that are subject to collective impairment, and
- Loans neither past due nor impaired consist predominantly of loans that are performing.
In carrying out credit transactions, AfrAsia Bank Limited strives not only to improve its volume growth, but also keeps in mind the quality of its loan portfolio.
|CRISIL RATING||OVERALL CRISIL RATING (MUR)||%|
As at 30 June 2014, 96% of the Bank’s asset book (excluding Credit Cards) was in the range AA+ to B, thus reflective of investment grade status of the borrowers. The remaining 4% were either sub-investment grade (facilities being on the ‘watchlist’ where there are arrears or borrowings classified as non-performing).
Total Non-Performing Assets (including credit cards NPA of MUR 4,964,253) were at MUR 469,750,579, 2.66% of total asset book.
This has increased from last FY from 0.57%. The Bank has classified as NPA, a large facility granted to one of its subsidiaries. If we exclude the latter from computation, our NPA to asset book would have been at 0.95%.
The Bank manages portfolios for individual industries by determining the credit appetite and limit for each industry on the basis of total exposure, credit quality and industry outlook. The portfolio monitoring and reporting system enables the Group to manage portfolios and to focus on specific industries and business units.
Exposure risk arises due to the over-dependency on a particular sector of the economy, geographical area, industry, currency and exposure for a single party or a group is managed through sector limits with monitoring and approval on a monthly basis to the MCC and BRC.
The Bank’s key portfolio concentrations by industry are set out below:
|SECTORS||OVERALL CRISIL RATING (MUR)||%|
|Agriculture and Fishing||675,507||482,290|
|Construction, Infrastructure and Real||2,329,744||1,683,111|
|Financial and Business Services||2,670,704||1,710,325|
|Individuals (incl. Credit Cards)||1,548,075||1,175,214|
|Information, Communication and Technology||190,606||525,124|
Outstanding balance - past 4 years
During the financial year 2014, AfrAsia Bank Limited succeeded in building a well-diversified loan book by economic sector, with exposures well-spread across major economic sectors and no single sector exceeding 30% of the Bank’s overall loan book.