Page 103 - 86395_CCB - 2024 Annual Report (web)

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Fair value – valuation basis
2024
£’000 Carrying value Level 1 Level 2 Level 3
Fair value of financial Financial Assets
instruments carried Debt securities 65,137 65,137 – –
at fair value
Derivatives 149 – 149 –
Fair value of financial Financial Assets
instruments not
carried at fair value Loans and advances 1,204,593 – – 1,234,573
to customers
Financial liabilities

Subordinated 4,800 – – 4,800
Debt liability
Customers’ accounts 1,272,205 – – 1,272,307

Fair value – valuation basis
2023
£’000 Carrying value Level 1 Level 2 Level 3
Fair value of financial Financial Assets
instruments carried Debt securities 47,409 47,409 – –
at fair value
Financial liabilities
Derivatives 652 – 652 –
Fair value of financial Financial Assets
instruments not
carried at fair value Loans and advances 1,083,278 – – 1,101,270
to customers
Financial liabilities

Subordinated 4,751 – – 4,751
Debt liability
Customers’ accounts 1,155,874 – – 1,149,429

• Fair value
For the purpose of calculating fair values, fair value Key considerations in the calculation of the
is assessed as the price that would be received to disclosed fair values for those financial assets
sell an asset or paid to transfer a liability in an orderly and liabilities carried at amortised cost include
transaction between market participants in the the following:
principal or, in its absence, the most advantageous – Loans and advances to customers
market to which the Bank has access at that date.
Far value of financial assets and financial liabilities In both the Bank’s Real Estate and Asset
are based on quoted market prices. If the market is Finance portfolios, each loan is individually
not active, the Bank establishes a fair value by using priced based on the circumstances and credit
appropriate valuation techniques. quality of the customer. The fair value of loans
and advances to customers is assessed as
The Bank measures fair values using the following
the value of the expected future cash flows,
fair value hierarchy, which reflects the significance
projected using the average behavioural life of
of the inputs used in making the measurements:
the Bank’s customers (actual experience may
– Level 1: quoted prices in active markets for differ from this assumption). The estimated
identical assets or liabilities; future cash flows are discounted at current
market rates for all loan types.
– Level 2: inputs other than quoted prices included
within level 1 that are observable either directly – Customers’ accounts
(e.g. prices) or indirectly (e.g. derived from prices); Customers’ accounts at variable rates are
and
at current market rates and therefore the
– Level 3: inputs for the asset or liability that are not Bank regards the fair value to be equal to the
based on observable market data. carrying value. The fair value of fixed rate