Page 109 - 86395_CCB - 2024 Annual Report (web)

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IFRS 9 Stage Definition Provisioning Basis Cure Criteria
Stage 1 All performing loans which do not 12 month
feature on the watchlist Expected Credit
Loans which have no arrears Losses
on them.
Stage 2 The customer is at least 30 days Lifetime Expected Movement back to stage 1 will only
past due. Credit Losses
The customer is on the Bank’s
watchlist, save for those accounts
which have been added because of
the death of a customer, and where
the death of that customer has not
given rise to any significant increase
in Credit Risk as payments continue
and are expected to continue to
be made.
The underlying loan collateral is
located in a particular region or
sector as defined by the
Credit Committee.
Any other significant decline in
credit quality has been identified by
the Bank.
Management specifically places the
case in stage 2.
Stage 3 The account is over 90 days past due. Lifetime Expected Movement from stage 3 back to stage
The customer has been Credit Losses
declared bankrupt.
The Company has been wound up
or a liquidator/administrator has
been appointed.
The account is part of a connected
exposure where the borrower meets
at least one of the above criteria
across any connected account.
Management considers the customer
unlikely to pay.
These criteria can be overridden by
Management if the account:
– Is not guaranteed by other
members of the group.
– Does not share the same security.
– Is a separate legal entity.
– Is not deemed to spread contagion
to other group members.
– The account is in forbearance and
that forbearance is not considered
to be ‘significant’ (see relevant
section below).
n/a
occur where the borrower meets all
of the following:
– Arrears have been fully cleared on
the account.
– The account has been ‘performing’
for a period of at least 6
consecutive months.
– The account has met all terms
of any forbearance measure
granted and a period of at least 6
consecutive months has passed
since the forbearance ending, and
the account has been ‘performing’
for this period.
– The account has been removed
from the Bank’s watchlist and is
not considered to have increased
Credit Risk for internal risk
management purposes.
– There are no other indicators
that suggest Credit Risk has
increased significantly since
initial recognition.
– There are no other connected
accounts which meet the definition
of a stage 2 asset.
2 will only occur when the borrower
meets all of the following:
– The account is no longer more
than 90 days past due.
– No connected accounts are more
than 90 days down.
– The customer has not been
more than 90 days down for a
consecutive period of 3 months.
Where forbearance was extended, all
terms of the forbearance agreement
were met, and full payments have
been made for a consecutive period
of at least 3 months.
– The Bank are actively seeking
resolution and have obtained
cooperation from the borrower to
work to resolve the arrears.
– There are no other indicators of
default which would warrant the
accounting remaining in stage 3.