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AfrAsia Bank Limited and its Group Entities
Annual Report 2015
page 93
CONCENTRATION OF RISK / LARGE EXPOSURES
The Bank of Mauritius Guidelines on Credit Concentration (revised November 2013) restrict the granting of credit facilities to
non-financial institutions and other related parties, to:
a maximum exposure to any single customer of 25%;
a maximum exposure to a related group of companies to 40% of the Bank’s capital base;
in aggregate, any individual exposure of 15% above the Bank’s capital base shall not exceed 600% of its capital base.
The key focus of the Bank’s macro credit risk management approach is to avoid any undue concentrations in its credit portfolio,
whether in terms of counterparty, group, portfolio, product, country, sovereign, or currency. The Bank has always kept its large
exposures within these limits. For instance, our concentration ratio of large exposures above 15% was 139% as at 30 June 2015, well
within the regulatory limit of 600% as shown below:
CAPITAL BASE AS AT 30 JUNE 2015
MUR’000
Tier I
4,016,507
Tier II
896,799
Capital Base
4,913,306
Total Large Exposures (15% above)
6,833,167
% Large exposure v/s Capital Base (Limitation 600%)
139%
The Bank’s portfolio management supports a comprehensive assessment of concentrations within its credit risk portfolio for
provision of subsequent risk mitigating actions and diversification across various geographical boundaries, sectors, borrower groups
and products, with the main objectives of maximising shareholder value. To manage industry risk, the Bank also prepares economic
and industry reports, which are submitted to the Board Risk Committee, that highlight industry developments and risks to the Bank’s
credit portfolio. These reports are used to define strategies for both our industry portfolio and individual counterparties within the
portfolio.
COUNTRY RISK
Mauritius
34%
Other
44%
France
0%
India
14%
United States
of America
0%
United Kingdom
8%