Page 51 - 86395_CCB - 2024 Annual Report (web)

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and challenges the Bank’s annual model assumptions based on actual
financial information and in particular the performance data. The Committee also
significant financial reporting estimates and reviewed the governance over impairment
judgements. During 2024, the following models and the need for any post model
matters have been considered: adjustments. The Committee also reviewed
The consistency and appropriateness and challenged the Bank’s effective interest
of the Bank’s significant accounting rate assumptions and model outputs
policies. There have been no material considering the Bank’s approach to early
changes in 2024. repayment charges, the growth in its fixed
Viability and going concern rate lending as well reviewing historic
assessments in uncertain macroeconomic performance against future forecasts.
circumstances. The Committee has Regular updates and assurance on
considered Management's approach to, and the development of the Bank’s hedging
the conclusions of, the assessment of the policies and processes reflecting the
Bank’s ability to remain a going concern, increased use of interest rate derivatives to
taking into account the Bank’s capital manage Interest Rate Risk.
and liquidity position. The Committee The adequacy and appropriateness
considered and, after taking the Bank’s of the Bank’s provision in respect of the
strategy and external market developments future outcome of a regulatory review.
into account, supported Management’s Assurance from Management in
conclusion that it remained appropriate to respect of the Bank’s compliance with
adopt the going concern basis in preparing its regulatory reporting requirements.
the Financial Statements. The Committee The Committee has also considered the
also considered Management's approach processes and policies required to ensure
to, and the conclusions of, the assessment it remains aligned with future market‑wide
of the Bank’s viability. After consideration, corporate governance reforms.
the Committee recommended the The internal and external audit
Board approve the approach adopted by strategies are reviewed by the Committee
Management as described on page 56. which also approves the auditors fees. The
A review of the Annual Report to ensure internal and external auditor’s provided
it is fair, balanced, and understandable. confirmation that they continued to meet
The Committee considered Management’s their independence requirements. The
approach to, and governance arrangements Committee appraises the performance of
over, the preparation of this Annual Report the Internal Audit Function outsourced
and recommended to the Board that, taken to Deloitte LLP as well as reviewing the
as a whole, it was considered to be fair, effectiveness of the external audit process.
balanced and understandable. The approach The internal audit plan was reviewed
and results of the assessment are set out in and challenged, ensuring its focus
the Directors’ report on page 55. addressed key risks and developments
Whether the Bank has made appropriate whilst ensuring that the Bank and Deloitte
accounting estimates and judgements. had the appropriate resources to deliver
The Committee has assessed the basis the proposed activity.
for, and appropriateness of, estimates and The Committee approved the
judgements proposed by Management in engagement of PwC to verify the Bank’s
the Financial Statements related to going 2024 interim earnings and provide an
concern, effective interest rate, IFRS 9, fair opinion on the country‑by‑country
value and leased, intangible and tangible reporting. Approval is required for these
assets. After challenge, the Committee non‑audit services to ensure that PwC’s
supported Management's proposals. During audit independence is maintained.
2024, the Committee reviewed regular
reports from Management assessing the
adequacy of the allowance for credit
impaired losses. The reports assessed the
adequacy of historic provisions against
subsequent recoveries, the planned
recovery strategies for individual bad debt
cases, reviewed Management’s governance
arrangements over the adequacy of
provisions as well as updates to individual