Annual report 2009-OK.qxp - Canadia Bank Plc.

Canadia Bank Plc.31. FINANCIAL RISK MANAGEMENT (continued)31.1 Credit risk (continued)c) Impairment and provisioning policies (continued)2009 2008Normal 1% 0%Special mention 3% NASubstandard 20% 10%Doubtful 50% 30%Loss 100% 100%d) Maximum exposure to credit risk before collateral held or other credit enhancements:2009 2009 2008 2008US$ Million Riel US$ Million Rielequivalentequivalent(Note 2.1) (Note 2.1)Annual Report 200962Credit risk exposures relating toon-balance sheet assets:Balances with other banks 81,939,255 341,605 28,785,020 117,472Loans and advances to customers 360,587,399 1,503,289 390,602,198 1,594,047Other assets 12,766,493 53,223 2,595,645 10,593Credit risk exposures relatingto off-balance sheet items:Unused portion of approved credit facilities 39,828,331 166,044 28,459,913 116,145Guarantees, acceptances and other financialfacilities 8,490,322 35,396 4,613,409 18,827The above table represents a worse case scenario of credit risk exposure to the Bank, since collateral held and/orother credit enhancement attached were not taken into account. For on-balance sheet assets, the exposures set outabove are based on net carrying amounts. About 72% of total maximum exposure is derived from loans andadvances to customers (2008: 86%).Management is confident in its ability to continue to control and sustain minimal exposure on credit risk resultingfrom its loans and advances to customers due to the following:• Almost all loans and advances to customers are collateralised and loan to collateral value rangefrom 60% to 70%.• 90% of loan portfolio are considered neither past due nor impaired (2008: 78%).• Allowance for loan losses had been provided for those individually impaired loans in accordancewith the NBC's requirement.