GTCO

#GreatExperiences Each category of the gross loans is further analysed into Product lines as follows: OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2021

Group Company
Dec-2021 Dec-2021

Loans to Loans to Loans to Total Loans to Loans to Loans to Total
Individual non- Individual Banks Banks
In thousands of Nigerian Naira Individual non- Individual -
- -
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 151 Loans 206,003,761 1,120,191,705 15,214 1,326,210,680 -- - -
Overdrafts 15,859,599 136,236,704 80,267 152,176,570 -- - -
Others 88,289 23,647,502 23,735,791 -- - -
Stage 1 - 12 Months ECL - -- - -
Loans 221,951,649 1,280,075,911 95,481 1,502,123,041 -- - -
Overdrafts 1,999,068 244,744,045 246,743,113 -- - -
Others 1,888,882 21,570,400 - 23,459,282 -- - -
Stage 2 - Life Time ECL Not Credit Impaired - 164,527 - 164,527 -- - -
Loans 3,887,950 266,478,972 - 270,366,922 -- - -
Overdrafts 70,905,056 - 84,537,192 -- - -
Others 13,610,800 19,718,008 21,336 29,371,988 -- - -
Stage 3 - Non Performing Loans 9,653,307 10,303 673 10,303 -- -
Total Loans and Advances - 90,633,367 - 113,919,483 --
22,009
23,264,107 1,637,188,250 117,490 1,886,409,446
249,103,706

152 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report The impairment allowance on loans is further analysed as follows:

Group Company OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2021 Dec-2021

Loans to Loans to Loans to Total Loans to Loans to Loans to Total
Individual non- Individual Banks Banks
In thousands of Nigerian Naira Individual non- Individual -
- -
Stage 1: 12 Months ECL 741,327 3,755,380 - 4,496,707 - - - -
Loans 466,263 2,755,291 281 3,221,835 - - - -
Overdrafts - - -
Others - 83,024 - 83,024 - - -
1,207,590 6,593,695 281 7,801,566 - -
Stage 2: Life Time ECL Not Credit Impaired - - - -
Loans 14,645 17,327,334 - 17,341,979 - - - -
Overdrafts 216,199 853,508 - 1,069,707 - - -
Others 104 - 104 - - -
- - - -
Stage 3: Non Performing Loans 230,844 18,180,946 18,411,790 - - - -
Loans 1,522 - - - -
Overdrafts 5,541,566 35,008,540 673 40,551,628 - - - -
Others 9,023,896 7,917,498 - 16,942,067 - - -
- - -
Total allowance - 2,195 -
14,565,462 42,926,038 2,476 57,493,695
16,003,896 67,700,679 83,707,051

#GreatExperiences

#GreatExperiences Each category of the gross loans is further analysed into Product lines as follows: OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2020

Group Company
Dec-2020 Dec-2020

Loans to Loans to Loans to Total Loans to Loans to Loans to Total
Individual non- Individual Banks Banks
In thousands of Nigerian Naira Individual non- Individual -
- -
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 153 Loans 184,950,412 1,049,088,514 115,237 1,234,154,163 -- - -
Overdrafts 8,232,005 99,698,293 3,912 107,934,210 -- - -
Others 84,665 8,600,005 - 8,684,670 -- - -
Stage 1 - 12 Months ECL -- - -
Loans 193,267,082 1,157,386,812 119,149 1,350,773,043 -- - -
Overdrafts 1,077,188 262,463,801 - 263,540,989 -- - -
Others 357,244 17,711,098 - 18,068,342 -- - -
Stage 2 - Life Time ECL Not Credit Impaired - 49,283 - 49,283 -- - -
Loans 1,434,432 280,224,182 - 281,658,614 -- - -
Overdrafts 9,657,343 74,831,922 84,523,674 -- - -
Others 16,690,834 34,409 26,893,361 -- - -
Stage 3 - Non Performing Loans 10,169,653 46,603 32,874 46,603 -- -
Total Loans and Advances - 91,569,359 111,463,638 --
-
19,826,996 1,529,180,353 67,283 1,743,895,295
214,528,510 186,432

154 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report The impairment allowance on loans is further analysed as follows:

Group Company OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2020 Dec-2020

Loans to Loans to Loans to Total Loans to Loans to Loans to Total
Individual non- Individual Banks Banks
In thousands of Nigerian Naira Individual non- Individual -
- -
Stage 1: 12 Months ECL 603,008 4,199,404 59,855 4,862,267 - - - -
Loans 174,430 1,537,332 - -
Overdrafts - 1,711,762 - - -
Others - 4,786 -
777,438 5,741,522 - 4,786 - - - -
Stage 2: Life Time ECL Not Credit Impaired - -
Loans 37,564 16,073,623 59,855 6,578,815 - - - -
Overdrafts 6,819 1,800,462 -
Others - - - 16,111,187 - - -
- 1,807,281 - - - -
Stage 3: Non Performing Loans 44,383 17,874,085 ---- - -
Loans - 17,918,468 - - - -
Overdrafts 5,008,406 37,303,390 - -
Others 6,123,004 8,086,935 7,753 42,319,549 - - -
18,001
Total allowance - 19,781 14,229,720 - -
11,131,410 45,408,326
11,953,231 69,023,933 - 18,001 - -

27,534 56,567,270 - -

87,389 81,064,553 - -

#GreatExperiences

#GreatExperiences (i) Credit quality of Stage 1 Loans and advances OTHER NOTES TO THE FINANCIAL STATEMENTS

The credit quality of the portfolio of Stage 1 loans and advances can be assessed by reference to the internal rating system adopted
by the Group.

Group
Dec-2021
In thousands of Nigerian Naira

Loans and advances to customers Loans and advances to banks

Individuals Non-individuals

Rating Overdraft Loans Others Overdraft Loans Others Overdraft Loans Total
Exceptional capacity 24,526 8,873,780 - - 189,125,207
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 155 Very strong capacity 31,078,140 74,229 53,542,703 95,531,829 8,307,697 - - 619,423,553
Strong repayment capacity 1,486,568 4,883,548 - 504,466,293
Acceptable risk 13,323,801 8,855,544 - 13,706,428 587,067,316 1,582,477 15,366 189,107,988
Total 23,647,502 64,901 15,214 1,502,123,041
1,024,704 161,144,488 - 50,188,907 274,910,183 80,267 15,214
15,859,599
4,925,589 14,060 18,798,666 162,682,377

206,003,761 88,289 136,236,704 1,120,191,705

Group
Dec-2020

In thousands of Nigerian Naira

Loans and advances to customers Loans and advances to banks

Individuals Non-individuals

Rating Overdraft Loans Others Overdraft Loans Others Overdraft Loans Total
Exceptional capacity 21,593 725,090 3,912 115,237 107,047,624
Very strong capacity 28,779,938 70,669 20,558,818 56,772,367 3,093,084 - 628,426,782
Strong repayment capacity 819,368 3,647,459 - - 493,007,760
Acceptable risk 6,746,706 6,070,243 - 19,934,371 598,509,716 1,134,372 - - 122,290,877
Total 8,600,005 3,912 - 1,350,773,043
644,219 146,831,401 - 43,704,666 292,077,528 115,237
8,231,886
3,268,695 14,250 15,500,009 101,729,332

184,950,277 84,919 99,697,864 1,049,088,943

OTHER NOTES TO THE FINANCIAL STATEMENTS

(ii) Stage 2 Loans and Advances to Customers

Group Loans to Individual Loans to Non-individual Loans to Banks Total
Dec-2021
In thousands of Nigerian Naira 1,999,068 244,744,045 - 246,743,113
1,888,882 21,570,400 - 23,459,282
Gross Loans: 164,527 - 164,527
Loans - -
Overdraft 3,887,950 266,478,972 270,366,922
Others

Impairment: 14,645 17,327,334 - 17,341,979
Loans 216,199 853,508 - 1,069,707
Overdraft 104 - 104
Others - - 18,411,790
230,844 18,180,946

Net Amount: 1,984,423 227,416,711 - 229,401,134
Loans 1,672,683 20,716,892 - 22,389,575
Overdraft 164,423 - 164,423
Others - - 251,955,132
3,657,106 248,298,026

FV of collateral1: 47,855,555 6,292,769,910 - 6,340,625,465
Loans 45,217,820 86,180,061 - 131,397,881
Overdraft 272,325 - 272,325
Others - - 6,472,295,671
93,073,375 6,379,222,296

Amount of undercollateralisation: - - --
Others - - --

Net Loans 3,657,106 248,298,026 - 251,955,132
- - --
Amount of undercollateralisa-
tion on net loans

1The nature of fair value of collateral are set out in the summary of collaterals pledged against loans and advances.

156 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

Group
Dec-2020

In thousands of Nigerian Naira

Loans to Individual Loans to Non-individual Loans to Banks Total

Gross Loans: 1,077,188 262,463,801 - 263,540,989
Loans 357,244 17,711,098 - 18,068,342
Overdraft - 49,283 - 49,283
Others - 281,658,614
1,434,432 280,224,182

Impairment: 37,564 16,073,623 - 16,111,187
Loans 6,819 1,800,462 - 1,807,281
Overdraft - - --
Others - 17,918,468
44,383 17,874,085

Net Amount: 1,039,624 246,390,178 - 247,429,802
Loans 350,425 15,910,636 - 16,261,061
Overdraft - 49,283 - 49,283
Others - 263,740,146
1,390,049 262,350,097

FV of collateral1: 17,296,259 4,406,563,146 - 4,423,859,405
Loans 5,736,217 92,525,543 - 98,261,760
Overdraft - 432,267 - 432,267
Others - 4,522,553,432
23,032,476 4,499,520,956

Amount of undercollateralisation: - - --
Overdraft - - --

Net Loans 1,390,049 262,350,097 - 263,740,146
- - --
Amount of undercollateralisa-
tion on net loans

1The nature of fair value of collateral are set out in the summary of collaterals pledged against loans and advances.

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 157

OTHER NOTES TO THE FINANCIAL STATEMENTS

(iii) Stage 3 Loans and Advances to Customers

The breakdown of gross amount of Stage 3 Loans, along with the fair value of related collateral held by the Group as security, are as
follows:

Group
Dec-2021
In thousands of Nigerian Naira

Loans to Individual Loans to Non-individual Loans to Banks Total

Gross loans: 13,610,800 70,905,056 21,336 84,537,192
Loans 9,653,307 19,718,008 673 29,371,988
Overdraft - -
Others 10,303 10,303
23,264,107 90,633,367 22,009 113,919,483
Impairment:
Loans 5,541,566 35,008,540 1,522 40,551,628
Overdraft 9,023,896 7,917,498 673 16,942,067
Others - -
- -
Net Amount: 14,565,462 42,926,038 2,195 57,493,695
Loans
Overdraft 8,069,234 35,896,516 19,814 43,985,564
Others 629,411 11,800,510 - 12,429,921
- -
FV of collateral1: 10,303 10,303
Loans 8,698,645 47,707,329 19,814 56,425,788
Overdraft
Others 11,116,780 96,090,993 44,924 107,252,697
7,884,451 20,461,284 - 28,345,735
FV of collateral - - 1,963,876
Amount of undercollateralisation: 1,963,876
19,001,231 118,516,153 44,924 137,562,308
Loans
Overdraft 2,494,020 - - -
Others 1,768,856 - 673 1,026,253
-
- - - -
4,262,876 - -

Net Loans 8,698,645 47,707,329 19,814 56,425,788
- - - -
Amount of undercollateralisa-
tion on net loans

1The nature of fair value of collateral are set out in the summary of collaterals pledged against loans and advances.

158 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

Group
Dec-2020

In thousands of Nigerian Naira

Loans to Individual Loans to Non-individual Loans to Banks Total

Gross loans: 9,657,343 74,831,922 34,409 84,523,674
Loans 10,169,653 16,690,834 32,874 26,893,361
Overdraft
Others - 46,603 - 46,603
19,826,996 91,569,359 67,283 111,463,638
Impairment:
Loans 5,008,406 37,303,390 7,753 42,319,549
Overdraft 6,123,004 8,086,935 19,781 14,229,720
Others 18,001
- - 18,001
Net Amount: 11,131,410 45,408,326 27,534 56,567,270
Loans
Overdraft 4,648,937 37,528,532 26,656 42,204,125
Others 4,046,649 8,603,899 13,093 12,663,641
28,602
FV of collateral1: - - 28,602
Loans 8,695,586 46,161,033 39,749 54,896,368
Overdraft
Others 9,255,129 142,882,709 34,919 152,172,757
9,746,102 65,514,532 32,498 75,293,132
FV of collateral 1,957,599 1,957,599
Amount of undercollateralisation: - -
19,001,231 210,354,840 67,417 229,423,488
Loans
Overdraft 402,214 - - -
Others 423,551 - 376 -
- -
- - - -
825,765 -

Net Loans 8,695,586 46,161,033 39,749 54,896,368
- - - -
Amount of undercollateralisa-
tion on net loans

1 The nature of fair value of collateral are set out in the summary of collaterals pledged against loans and advances.

Upon initial recognition of loans and advances, the fair value of collateral is based on valuation techniques commonly used for the
corresponding assets. In subsequent periods, the fair value is assessed by reference to market price or indexes of similar assets.

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 159

OTHER NOTES TO THE FINANCIAL STATEMENTS

(v) Credit collateral cash collateralized facilities shall have a 20% margin to
provide cushion for interest and other charges i.e. only
The Group ensures that each credit is reviewed and 80% of the deposit or cash collateral may be availed to
granted based on the strength of the borrowers’ cash an obligor.
flow. However, the Group also ensures its credit facilities
are well secured as a second way out. The policies that The main collateral types acceptable to the Group for
guide collateral for facilities are embedded within the loans and advances include:
Group’s credit policy guide. These include the following
policy statements amongst others: • Mortgages over residential properties.

Loans to individuals and non-individuals are to be se- • Charges over business premises, fixed and floating
cured by tangible, marketable collateral that has a mar- assets as well as inventory.
ket value that is supported by a valuation report from a
registered estate valuer who is acceptable to the Group. • Charges over financial instruments such as equities,
The collateral must also be easy to check and easy to treasury bills etc.
dispose of. This collateral must be in the possession of,
or pledged to, the Group. Client’s account balances must The fair values of collaterals are based upon last annual
be within the scope of cover provided by its collateral. valuation undertaken by independent valuers on behalf
of the Group. The valuation techniques adopted for
All collateral offered must have the following attributes: properties are based upon fair values of similar proper-
ties in the neighbourhood taking into cognizance the
• There must be good legal title advantages and disadvantages of the comparatives over
the subject property and any other factor which can have
• The title must be easy to transfer effect on the valuation e.g. subsequent movements in
house prices, after making allowance for dilapidations.
• It should be easy and relatively cheap to value The fair values of non-property collaterals (such as equi-
ties, bond, treasury bills, etc.) are determined with refer-
• The value should be appreciating or at least stable ence to market quoted prices or market values of similar
instrument.
• The security must be easy to sell.
The same Fair value approach is used in determining the
All collateral must be protected by insurance. Exceptions collaterals value in the course of sale or realisation. The
include cash collateral, securities in safe keeping, indem- Group uses external agents to realize the value as soon
nity or guarantees, or where our interest is general (for as practicable, generally at auction, to settle indebted-
instance in a negative pledge). The insurance policy has ness. Any surplus funds are returned to the borrower.
to be issued by an insurer acceptable to the Group. All

Summary of collaterals pledged by customers against loans and advances

An estimate of the fair value of any collateral and other security enhancements held against loans and advances to customers
and banks is shown below:

Group Loans and advances Loans and advances
Dec-2021 to customers to Banks

In thousands of Nigerian Naira Gross Loans Collateral Gross Loans Collateral

Against Stage 1 Loans and Advances 1,502,027,560 19,850,087,258 95,481 119,081
Against Stage 2 Loans and Advances 270,366,922 6,472,295,671 - -
Against Stage 3 Loans and Advances 113,897,474 137,517,384
Total 22,009 44,924
1,886,291,956 26,459,900,313 117,490 164,005

160 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

Group Loans and advances Loans and advances
Dec-2020 to customers to Banks

In thousands of Nigerian Naira Gross Loans Collateral Gross Loans Collateral

Against Stage 1 Loans and Advances 1,350,653,894 15,289,473,997 119,149 -
Against Stage 2 Loans and Advances 281,658,614 4,522,553,432 - -
Against Stage 3 Loans and Advances 111,396,355 229,356,071 67,417
Total 67,283 67,417
1,743,708,863 20,041,383,500 186,432

The type of Collaterals and Other Security enhancement held against the various loan classifications are disclosed in the table below:

Group Loans and advances to customers Loans and advances to banks
Dec-2021 Dec-2021
In thousands of Nigerian Naira
Against Stage 1 Loans and Advances: 1,766,899,458 56,000
64,316,977 -
Property 7,142,506
Equities 63,081
Treasury bills 120,799,293 -
Cash 30,384,813 -
Guarantees 2,905,370 -
Negative pledge 56,823,057 -
ATC*, stock hypothecation and ISPO* -
Others # 17,800,815,784
Total 19,850,087,258 119,081

Against Stage 2 Loans and Advances: 79,316,781 -
Property 10,727,529 -
Equities -
Cash 141,719 -
Treasury bills 620,037 -
Guarantees 2,934,962 -
Others# 6,378,554,643 -
6,472,295,671
Total

Against Stage 3 Loans and Advances: 87,748,851 42,000
Property 41,404 -
Equities -
Treasury bills 3,307,034 -
Cash 7,875,332 -
Guarantees 3,071,730 -
ATC*, stock hypothecation and ISPO*
Others # 693,272 2,924
Total 34,779,761 44,924
Grand total 137,517,384 164,005
26,459,900,313
*ISPO: Irrevocable standing payment order
*ATC: Authority to collect
#Others include Domiciliation, Counter Indemnity, Asset Debenture, etc

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 161

OTHER NOTES TO THE FINANCIAL STATEMENTS

The type of Collaterals and Other Security enhancement held against the various loan classifications are disclosed in the table below:

Group Loans and advances Loans and advances
to customers to banks
In thousands of Nigerian Naira Dec-2020 Dec-2020
Against Stage 1 Loans and Advances:
1,746,079,857 -
Property 33,268,426 -
Equities 7,620,178 -
Treasury bills 74,350,217 -
Cash -
Guarantees 121,603,640 -
Negative pledge 892,278 -
ATC*, stock hypothecation and ISPO* -
Others# 823,172,609 -
Total 12,482,486,792
15,289,473,997

Against Stage 2 Loans and Advances: 140,895,331 -
Property 28,922,470 -
Equities 648,882 -
Cash 20,783,044 -
Guarantees - -
Negative pledge -
4,331,303,705 -
Others # 4,522,553,432
Total

Against Stage 3 Loans and Advances: 112,444,337 63,081
Property 613,139 -
Equities 5,500 -
Treasury bills -
Cash 8,677,888 -
Guarantees 7,359,528 -
ATC*, stock hypothecation and ISPO* 1,166,606
Others# 99,089,073 4,336
229,356,071 67,417
Total
67,417
Grand total 20,041,383,500

*ISPO: Irrevocable standing payment order
*ATC: Authority to collect
#Others include Domiciliation, Counter Indemnity, Asset Debenture, etc

162 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

#GreatExperiences Summary of collaterals pledged by customers against loans and advances OTHER NOTES TO THE FINANCIAL STATEMENTS

Analysis of credit collateral is further shown below: Loans and advances to banks

Group
Dec-2021

Loans and advances to customers

Term Loans Overdrafts Others Total Term Loans Overdrafts Others Total

2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 163 Against Stage 1 Loans and Advances: 1,104,011,987 138,932,639 523,954,832 1,766,899,458 - 56,000 - 56,000
Property 64,316,977 - - 64,316,977 - - - -
Equities - - - -
Cash 104,976,885 12,414,804 3,407,604 120,799,293 - - - -
Guarantees 4,276,120 2,181,666 23,927,027 30,384,813 - - - -
Negative Pledge 1,197,987 564,380 2,905,370 11,979 -
Treasury Bills 1,847,731 5,214,379 1,143,003 7,142,506 - 51,102 - 63,081
ATC*, stock hypothecation and ISPO* 1,128,535 80,396 56,823,057 - - - -
Others# 55,694,522 - 11,979 - - -
17,692,517,465 76,835,134 17,800,815,784
Total 19,028,839,674 237,271,537 31,463,185 19,850,087,258 107,102 119,081
583,976,047
-
Against Stage 2 Loans and Advances: -
-
Property 53,942,097 25,220,794 153,890 79,316,781 - -- -
-
Equities 10,727,529 - - 10,727,529 - - - -
-
Cash 32,572 109,143 4 141,719 - --

Treasury bills 217,458 402,579 - 620,037 - --

Guarantees 1,855,227 1,077,265 2,470 2,934,962 - --

Others# 6,273,850,582 104,588,100 115,961 6,378,554,643 - --

Total 6,340,625,465 131,397,881 272,325 6,472,295,671 - --

164 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Group Loans and advances to customers OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2021
Term Loans Overdrafts Others Total Term Loans Overdrafts Others Total
In thousands of Nigerian Naira
Against Stage 3 Loans and Advances: 67,212,245 20,185,652 350,954 87,748,851 42,000 - - 42,000
37,704 3,700 - 41,404 - - - -
Property - - - - -
Equities 1,885,236 1,421,798 4 3,307,034 - - - -
Treasury bills 7,832,758 42,570 7,875,332 - - - -
Cash 1,444,609 19,138 1,607,983 3,071,730 - - - -
Guarantees - - - -
ATC*, stock hypothecation and ISPO* 693,272 693,272 2,924 - - 2,924
Others# 28,101,949 6,672,877 4,935 34,779,761 44,924 107,102 - 44,924
Total 107,207,773 28,345,735 1,963,876 137,517,384 56,903 164,005
Grand Total 25,476,672,912 397,015,153 586,212,248 26,459,900,313

*ISPO: Irrevocable standing payment order
*ATC: Authority to collect
#Others include Domiciliation, Counter Indemnity, Asset Debenture, etc

#GreatExperiences

#GreatExperiences Summary of collaterals pledged by customers against loans and advances OTHER NOTES TO THE FINANCIAL STATEMENTS
Analysis of credit collateral is further shown below:

Group Loans and advances to customers Loans and advances to banks
Dec-2020
Term Loans Overdrafts Others Total Term Loans Overdrafts Others Total
In thousands of Nigerian Naira
1,059,047,141 128,587,624 558,445,092 1,746,079,857 - - - -
Against Stage 1 Loans and Ad- -
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 165 vances: 33,111,048 65,094 92,284 33,268,426 - -- -
-
Property 37,091,458 16,423,214 20,835,545 74,350,217 - -- -
Equities -
Cash 50,629,121 8,282,751 62,691,768 121,603,640 - -- -
Guarantees
Negative Pledge - 892,278 - 892,278 - - - -
Treasury Bills
ATC*, stock hypothecation and 7,620,178 - - 7,620,178 - - - -
ISPO*
Others # 822,527,066 603,660 41,883 823,172,609 - -- -
-
Total 12,292,169,162 171,835,352 18,482,278 - -- -
-
12,482,486,792 -
-
14,302,195,174 326,689,973 660,588,850 15,289,473,997 - - - -

Against Stage 2 Loans and Ad-
vances:

Property 121,268,925 19,485,170 141,236 140,895,331 - --

Equities 28,922,470 - - 28,922,470 - - -

Cash - 622,546 26,336 648,882 - --

Guarantees 20,024,985 493,364 264,695 20,783,044 - --

Negative pledge --- - - --

Others # 4,253,643,025 77,660,680 - 4,331,303,705 - --

Total 4,423,859,405 98,261,760 432,267 4,522,553,432 - --

166 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Group Loans and advances to customers OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2020
Term Loans Overdrafts Others Total Term Loans Overdrafts Others Total
In thousands of Nigerian Naira
- 63,081
Against Stage 3 Loans and Advances: - -
- -
Property 90,276,882 21,811,042 356,413 112,444,337 30,585 32,496 - -
414,570 - 613,139 - - - -
Equities 198,569 - - 5,500 - - - -
- - -
Treasury bills 5,500 1,202,015 8,677,888 - - - 4,336
1,856,135 1,600,120 7,359,528 - - - 67,417
Cash 7,475,873 - 1,166,606 - 67,417
- 4,334 2
Guarantees 3,903,273 34,919 32,498
49,976,872 34,919 32,498
ATC*, stock hypothecation and 1,166,606 75,260,634
ISPO* 500,212,367

Others# 49,111,135 1,066 99,089,073
1,957,599 229,356,071
Total 152,137,838 662,978,716 20,041,383,500

Grand total 18,878,192,417

*ISPO: Irrevocable standing payment order
*ATC: Authority to collect
#Others include Domiciliation, Counter Indemnity, Asset Debenture, etc

#GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

(b) Credit risk (continued)
Debt securities
The table below shows analysis of debt securities into the different classifications:

Group Financial assets at Investment Assets pledged Total
Dec-2021 fair value through securities as collateral

In thousands of Nigerian Naira profit or loss

Federal government bonds 53,005,868 125,898,799 6,953,359 185,858,026
Treasury bills 49,350,665 414,833,941 72,320,552 536,505,158
Special Bills 560,806,136 560,806,136
Corporate bonds - -
Euro bond - 1,953,231 - 1,953,231
Promissory Notes 2,041,118 10,178,024 - 12,219,142
- -
104,397,651 7,628,456 79,273,911 7,628,456
1,121,298,587 1,304,970,149

The Group’s investment in risk-free Government securities constitutes 99.9% of debt instruments portfolio (December 2020:
99.8%). Investment in Corporate and State Government bonds accounts for the outstanding 0.1% (December 2020: 0.2%).

Group Financial assets at Investment Assets pledged Total
Dec-2020 fair value through securities as collateral

In thousands of Nigerian Naira profit or loss

Federal government bonds 29,627,653 115,462,386 - 145,090,039
State government bonds - 1,615,161 - 1,615,161
Corporate bonds - 440,346 - 440,346
Promissory Notes - - 2,809,929
FVPL Notes 2,809,929 - - -
Treasury bills - 62,200,326
Special Bills 446,690,837 - 543,988,944
35,097,781 411,079,805 62,200,326 411,079,805
- 975,288,535 1,105,024,224

67,535,363

(g) Liquidity Risk controlling liquidity risk across its network. Seeking at all times
to balance safety, liquidity, profitability and regulatory require-
Liquidity risk is the risk that the Group, though having a solvent ments.
balance sheet, might not be able to generate sufficient cash re-
sources to meet its obligations as they fall due, or is only able A brief overview of the Group’s liquidity management processes
to do so at an excessive cost. The risk typically arises from mis- during the year includes the following:
matches in the timing of cash inflows and cash outflows.
1. Control of liquidity risk by the setting of dynamic limits
The objective of the Group’s liquidity risk management system is on metrics such as liquidity ratio, reserve ratio, asset and
to ensure that all foreseeable funding commitments can be met liability gap measures, amongst others. Internal limits are
when due, and that access to wholesale markets is controlled typically more stringent than regulatory limits across all ju-
and cost effective. To this end, the Group maintains a diversified risdictions of the Group’s operation.
funding base comprising of retail, small business, commercial
and institutional customer deposits. The Group continues to 2. The limits are monitored regularly with exceptions report-
develop and improve its liquidity risk management system with ed to the Management Risk Committee (MRC) and the
the aim of effectively identifying, measuring, monitoring and Board.

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 167

OTHER NOTES TO THE FINANCIAL STATEMENTS

3. Based on its judgement of financial market trends, the 1. Consistently grow customer deposits from diverse sources
Group actively adjusts its business strategies to manage particularly along geographical and sectorial categories.
liquidity risk. The objective is to eliminate depositor concentration or
undue reliance on individual depositors.
4. Periodic cash flow projections considering its impact on
internal and regulatory limits. 2. Generate funding at the most appropriate pricing in light
of market realities.
5. Control of non-earning assets proportion to manage its
impact on the Group’s overall financial position. 3. Maintain an appropriate funding structure that enables
the Group to operate under a variety of adverse circum-
6. Conduct regular liquidity stress tests including testing of stance, including potential firm-specific and/or market li-
contingency plans. quidity events.

7. Monitor diversification of funding sources in order to con- 4. Maintain appropriate capital to support the Group’s risk
trol concentration risk and ensure a satisfactorily funding level and strategic intent.
mix.
The Group was able to meet all its financial commitments and
8. Monitoring the level of undrawn commitments. obligations without any liquidity risk exposure during the year
under review.
9. Maintain an updated liquidity and contingency funding
plan. These plans will identify stress indicators and pre- (ii) Exposure to Liquidity Risk
scribe actions to be taken in event of firm specific or mar-
ket-based crises. One of the key measures used by the Group for managing li-
quidity risk is the ratio of liquid assets to short term liabilities. For
10. Regular conduct of the Asset and Liability Management this purpose, liquid assets include but is not limited to cash and
Committee (ALMAC) meetings. its equivalents and investment grade debt securities for which
there is an active and liquid market. Short term liabilities include
The Group’s Asset and Liability Management Committee (AL- local currency deposits from banks and customers. A similar cal-
MAC) is charged with the following responsibilities. culation is used to measure the Group’s compliance with the
liquidity limit established by the Group’s lead regulator (The Cen-
1. Establishing policies and tolerance levels, from both risk tral Bank of Nigeria).
and return perspectives, for liquidity, interest rate and bal-
ance sheet valuation management. Dec-2021 Dec-2020

2. Manage the intra-day liquidity position to ensure that pay- At end of year 38.26% 38.91%
ment and settlement obligations are met on a timely basis. Average for the year 40.76% 40.70%
Maximum for the year 44.99% 49.03%
3. Strategic financial position planning from both risk and Minimum for the year 35.65% 28.54%
return perspective. Regulatory requirement 30.00% 30.00%

4. Strategically coordinate the management of the Bank’s
financial position in consideration of changing economic
conditions.

(i) Funding approach Liquidity ratio which is a measure of liquidity risk is calculated as
The Group’s overall approach to funding is as follows: a ratio of local currency liquid assets expressed as a percentage
of its local currency customer deposits.

168 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

#GreatExperiences Financial risk management (continued) OTHER NOTES TO THE FINANCIAL STATEMENTS

The following tables show the undiscounted cash flows on the Group’s financial assets and liabilities and on the basis of their earliest possible contractual maturity.
The Gross nominal inflow / (outflow) disclosed in the table is the contractual, undiscounted cash flow on the financial assets and liabilities.

(iii) Gross nominal (undiscounted) maturities of financial assets and liabilities

Group
Dec-2021

In thousands of Nigerian Naira Note Carrying Gross nominal Less than 3 to 6 6 to 12 1 to 5 More than
amount inflow/outflow 3 months1 months months years 5 years

Financial assets 22,348,781
6,886,674
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 169 Cash and bank balances 23 933,591,069 932,878,481 904,941,761 59,903 5,587,939 - -
36,647,652 15,179,672 41,463,934
Financial assets at fair value through profit or loss 24 104,397,651 116,059,042 15,881,110 38,383,784
372,159,397 9,591,675 - -
Derivative financial assets 25 24,913,435 25,350,216 15,698,638
- 50,488,722 10,930,144 28,648,628
Investment securities: 4,329 155,955,912 50,673,014 18,557,536
160,474,524
– Fair Value through other comprehensive Income2 26 274,375,372 295,608,649 167,157,371 5,008,342 71,401,687 - -
605,325,734 8,063 - -
– Held at amortised cost 26 846,923,215 858,518,592 261,172,733 880,739,100 189,663,597
730,801 282,312,960 15,451,432 -
Assets pledged as collateral 27 79,273,911 81,837,740 10,436,053 37,553,704 1,526,218 972,973,362 278,333,695

Loans and advances to banks 28 115,014 116,666 104,274 - 613,520,828 - -
58,214 15,574,321 1,963,252
Loans and advances to customers 29 1,802,587,381 2,055,543,361 542,353,180 29,869,810 17,117,186
9,232,433 28,729,581 - -
Restricted deposits and other assets3 34 1,121,888,414 1,122,633,060 1,100,647,068 77,444,962 - -
527,880,772 - 8,204,803 7,138,513
5,188,065,462 5,488,545,807 3,018,392,188 (715,455,594) - 37,293,964 13,731,975
10,853,176 61,073,088 22,833,740
Financial liabilities 37,448,403 911,900,274 255,499,955
94,148,346 715,817,162 971,317,117
Deposits from banks 35 118,027,576 118,040,512 100,192,525 519,372,482
(196,083,112)
Deposits from customers 36 4,012,305,554 4,014,761,182 3,930,940,324

Financial liabilities at fair value through profit or loss 37 - --

Derivative financial liabilities 25 1,580,971 1,584,438 1,526,224

Other liabilities4 38 227,576,293 228,515,345 172,449,043

Other borrowed funds 40 153,897,499 154,327,213 56,620,438

4,513,387,893 4,517,228,690 4,261,728,554

Gap (asset - liabilities) (1,243,336,366)

Cumulative liquidity gap (1,243,336,366)

1 Includes balances with no specific contractual maturities
2 Equity securities have been excluded under Gross Nominal consideration.
3 Excludes Prepayments, Right of use assets and stock

4 Excludes deferred Income, impairment on contingents and provision for litigations
Management of this liquidity gap is as disclosed in Note 4(g)
Restricted deposits have been bucketed within “less than 3 months” to match the underlying deposit liabilities

170 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Gross nominal maturity of other liabilities is further analysed into: OTHER NOTES TO THE FINANCIAL STATEMENTS

In thousands of Nigerian Naira Carrying Gross nominal Less than 3 to 6 6 to 12 1 to 5 More than
amount inflow/outflow 3 months months months years 5 years

Lease Liabilities 6,318,113 8,047,081 122,208 119,746 400,952 1,041,017 6,363,158
Non-Lease Liabilities 221,258,180 220,468,264 172,326,835 29,750,064 10,452,224 7,163,786 775,355
227,576,293 228,515,345 172,449,043 29,869,810 10,853,176 8,204,803
7,138,513

#GreatExperiences

#GreatExperiences Gross nominal (undiscounted) maturities of financial assets and liabilities OTHER NOTES TO THE FINANCIAL STATEMENTS

Group
Dec-2020

In thousands of Nigerian Naira Note Carrying Gross nominal Less than 3 to 6 6 to 12 1 to 5 More than
amount inflow/out- 3 months1 months months years 5 years
flow
2,754,316
Financial assets 23 745,557,370 745,639,341 711,499,346 31,385,679 29,890,954 - -
Cash and bank balances 24 67,535,363 69,298,284 16,353,215 7,023,012 10,765,221 4,279,431 11,751,672
Financial assets at fair value through profit or loss 25 26,448,550 26,639,486 2,275,471 657,094 12,941,700
Derivative financial assets - -
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 171 Investment securities: 26 - - - - 57,588,496 -
– Fair value through profit or loss2 590,228,072 28,308,000 114,104,086 1,199,721 -
– Fair Value through other comprehensive Income2 26 691,705,703 707,273,458 31,304,159 63,308,351 53,420,080 29,949,169
– Held at amortised cost 87,371,152
Assets pledged as collateral 26 283,582,832 293,276,611 - - 9,594 - 7,077,134
Loans and advances to banks 5,059 239,838,484 16,866 -
Loans and advances to customers 27 62,200,326 63,308,351 73,773 124,078,962 891,899,652 -
Restricted deposits and other assets3 510,976,225 9,891,922 454,057 10,429,030
28 99,043 105,292 1,143,378,350 232,653,887 518,713,559 974,186,480 177,445,204
Financial liabilities 3,062,155,604 2,072,056
Deposits from banks 29 1,662,731,699 1,944,238,527 695,759 10,708,542 -
Deposits from customers 90,105,128 15,138,404 113,768,093 2,083,655 228,295,235
Financial liabilities at fair value through profit or loss 34 1,166,226,315 1,166,225,415 3,378,448,982
Derivative financial liabilities - - - -
Other liabilities4 4,706,087,201 5,016,004,765 - - - - 47,005
Other borrowed funds 2,120,560 212,082,161 3,265,695 12,970,430
35 101,509,550 101,509,429 114,619,844 17,521,197 19,747,222 41,722,806 -
Gap (asset - liabilities) 36 3,509,319,237 3,509,486,139 15,211,136 245,437,521 147,489,552 56,776,891 -
Cumulative liquidity gap 37 - - 3,600,505,650 (12,783,634) 371,224,007 917,409,589 9,238,959
25 2,758,698 2,120,560 (538,350,046) (551,133,680) (179,909,673) 737,499,916 21,475,458
38 352,176,806 352,177,089 (538,350,046) 30,761,422
40 113,894,768 115,677,819 197,533,813
935,033,729
4,079,659,059 4,080,971,036

1 Includes balances with no specific contractual maturities
2 Equity securities have been excluded under Gross Nominal consideration.
3 Excludes Prepayments, Right of use assets and stock
4 Excludes deferred income, impairment on contingents and provision for litigations
Management of this liquidity gap is as disclosed in Note 4(g)
Restricted deposits have been bucketed within “less than 3 months” to match the underlying deposit liabilities

172 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report The Gross nominal maturity of other liabilities is further analysed into:

In thousands of Nigerian Naira Carrying Gross nominal Less than 3 to 6 6 to 12 1 to 5 More than OTHER NOTES TO THE FINANCIAL STATEMENTS
amount inflow/outflow 3 months months months years 5 years

Lease Liabilities 8,087,113 9,929,682 146,867 524,611 932,047 1,144,624 7,181,533
Non-Lease Liabilities 344,089,693 342,247,407 114,472,977 211,557,550 2,333,648 11,825,806 2,057,426
352,176,806 352,177,089 114,619,844 212,082,161 3,265,695 12,970,430 9,238,959

#GreatExperiences

#GreatExperiences Gross nominal (undiscounted) maturities of financial assets and liabilities

Company OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2021

In thousands of Nigerian Naira Note Carrying Gross nominal Less than 3 to 6 6 to 12 1 to 5 More than
amount inflow/out- 3 months1 months months years 5 years
flow
-
Financial assets 34 18,183 18,183 - 18,183 - - -
Restricted deposits and other assets3 - 18,183 6,076,055 - -
18,183 18,183 -
Financial liabilities - - 6,076,055 - -
Other liabilities4 38 6,076,055 6,076,055 - - (6,076,055) - -
Other borrowed funds - - (6,057,872) - -
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 173 40 - - - 18,183 - -
Gap (asset - liabilities) - 18,183 6 to 12 (6,057,872) (6,057,872)
Cumulative liquidity gap 6,076,055 6,076,055 months

1 Includes balances with no specific contractual maturities -
2 Equity securities have been excluded under Gross Nominal consideration. 6,076,055
3 Excludes Prepayments, Right of use assets and stock 6,076,055
4 Excludes deferred income, impairment on contingents and provision for litigations

Management of this liquidity gap is as disclosed in Note 4(g)
Restricted deposits have been bucketed within “less than 3 months” to match the underlying deposit liabilities

The Gross nominal maturity of other liabilities is further analysed into:

In thousands of Nigerian Naira Carrying Gross nominal Less than 3 to 6 1 to 5 More than
amount inflow/outflow 3 months months years 5 years

Lease Liabilities -- - - - -
Non-Lease Liabilities - -
6,076,055 6,076,055 - - - -

6,076,055 6,076,055 - -

174 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Financial risk management (continued) OTHER NOTES TO THE FINANCIAL STATEMENTS

(i) Residual contractual maturities of financial assets and liabilities

Details of contractual maturities for assets and liabilities form an important source of information for the management of liquidity risk which is managed through a series of measures,
tests and reports that are largely based on contractual maturity. The following table shows the contractual maturities at period end of the Group’s financial assets and liabilities and
represents actual and in some cases assumed obligation expected for the assets or liability to be recovered or settled. These figures do not include elements of future incomes or costs.

Group
Dec-2021

In thousands of Nigerian Naira Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Financial assets amount 3 months1 months months years 5 years

Cash and bank balances 23 933,591,069 905,657,236 22,345,894 5,587,939 --

Financial assets at fair value through profit or loss 24 104,397,651 15,870,535 6,877,431 35,318,133 15,179,672 31,151,880

Derivative financial assets 25 24,913,435 15,605,968 59,340 9,248,127 --

Investment securities:

– Fair Value through other comprehensive Income2 26 274,375,372 166,354,843 37,543,483 49,769,362 9,465,116 11,242,568

– Held at amortised cost 26 846,923,215 261,083,274 371,540,850 145,194,985 50,546,570 18,557,536

Assets pledged as collateral 27 79,273,911 10,436,054 - 68,837,857 --

Loans and advances to banks 28 115,014 103,764 3,750 7,500 --

Loans and advances to customers 29 1,802,587,381 707,524,888 139,158,448 230,885,809 644,016,862 81,001,374

Restricted deposits and other assets3 34 1,121,888,414 1,099,902,423 5,008,341 1,526,218 15,451,432 -

5,188,065,462 3,182,538,985 582,537,537 546,375,930 734,659,652 141,953,358

Financial liabilities

Deposits from banks 35 118,027,576 100,179,589 730,801 17,117,186 --

Deposits from customers 36 4,012,305,554 3,928,960,983 37,387,520 28,419,927 15,573,872 1,963,252

Financial liabilities at fair value through profit or loss 37 - - - - --

Derivative financial liabilities 25 1,580,971 1,523,305 57,666 - --

Other liabilities4 38 227,576,293 171,698,715 29,642,350 11,079,039 8,188,836 6,967,353

Other borrowed funds 40 153,897,499 56,201,737 9,244,323 37,425,500 37,293,964 13,731,975

4,513,387,893 4,258,564,329 77,062,660 94,041,652 61,056,672 22,662,580

Gap (asset - liabilities) (1,076,025,344) 505,474,877 452,334,278 673,602,980 119,290,778

Cumulative liquidity gap (1,076,025,344) (570,550,467) (118,216,189) 555,386,791 674,677,569

#GreatExperiences

#GreatExperiences 1 Includes balances with no specific contractual maturities OTHER NOTES TO THE FINANCIAL STATEMENTS
2 Equity securities have been excluded under liquidity consideration.
3 Excludes prepayments, Rights of use assets and stock
4 Excludes deferred income, provision for litigations & impairment on contingents

Management of this liquidity gap is as disclosed in Note 4(g)
Restricted deposits have been bucketed within “less than 3 months” to match the underlying deposit liabilities

The residual maturity of other liabilities is further analysed into:

In thousands of Nigerian Naira Carrying Less than 3 to 6 6 to 12 1 to 5 More than
amount 3 months months months years 5 years

2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 175 Lease Liabilities 6,318,113 121,218 117,821 388,264 894,819 4,795,991
Non-Lease Liabilities 221,258,180 171,577,497 29,524,529 10,690,775 7,294,017 2,171,362
227,576,293 171,698,715 29,642,350 11,079,039 8,188,836 6,967,353

Residual contractual maturities of contingencies

The table below shows the contractual expiry by maturity of the Group’s contingent liabilities and commitments. The maximum

amount of the contingencies is allocated to the earliest period in which the contingencies could be called.

Group Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Dec-2021 amount 3 months1 months months years 5 years

In thousands of Nigerian Naira

Transaction related bonds and guarantees 43 361,977,858 79,056,259 18,252,744 34,616,437 59,030,955 171,021,463
Clean line facilities and letters of credit 43 65,055,611 48,410,009 8,700,869 5,849,349 1,896,568 198,816
Other commitments 43 5,786,093 - - - -
5,786,093
432,819,562 133,252,361 26,953,613 40,465,786 60,927,523 171,220,279

1 Includes balances with no specific contractual maturities

176 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Residual contractual maturities of financial assets and liabilities

Group OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-2020

In thousands of Nigerian Naira Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Financial assets amount 3 months1 months months years 5 years
Cash and bank balances 23
Financial assets at fair value through profit or loss 24 745,557,370 711,429,419 31,373,635 2,754,316 - -
Derivative financial assets 25 67,535,363 16,353,002 7,018,185 29,377,304 3,981,127 10,805,745
Investment securities: 26,448,550 2,274,768 656,308 10,708,606 12,808,868
– Fair value through profit or loss2 26 -
– Fair Value through other comprehensive Income2 26 - -
– Held at amortised cost 26 691,705,703 - - 57,137,671 - -
Assets pledged as collateral 27 283,582,832 589,879,300 28,101,987 105,204,807 1,199,721 15,387,024
Loans and advances to banks 28 31,304,159 62,200,326 52,625,604
Loans and advances to customers 29 62,200,326 87,371,128 7,077,134
Restricted deposits and other assets3 34 99,043 - - 7,500 - -
3,750 188,577,292 15,000 -
1,662,731,699 72,793 110,900,921 640,811,465
1,166,226,315 617,251,823 9,891,922 454,057 10,429,030 105,190,198
4,706,087,201 1,143,379,250 219,250,867 456,421,879 721,870,815 2,072,056
3,168,011,483
101,509,550 10,708,542 140,532,157
3,509,319,237 113,741,108
Financial liabilities 35 90,105,249 695,759 - -
Deposits from banks 36 - 3,378,313,182 15,134,391 - 2,083,551 47,005
Deposits from customers 37 2,758,698 -
Financial liabilities at fair value through profit or loss 25 352,176,806 - - 4,770,741 - -
Derivative financial liabilities 38 113,894,768 2,119,895 638,803 19,171,008 - -
Other liabilities4 40 4,079,659,059 114,619,560 210,577,115 148,391,399 12,970,431 9,238,959
Other borrowed funds 14,723,647 16,859,990 308,030,480 41,664,665 21,475,458
3,599,881,533 243,906,058 (148,494,761) 56,718,647 30,761,422
Gap (asset - liabilities) (431,870,050) (24,655,191) 665,152,168 109,770,735
Cumulative liquidity gap (431,870,050) (456,525,241) 516,657,407 626,428,142

#GreatExperiences 1 Includes balances with no specific contractual maturities
2 Equity securities have been excluded under liquidity consideration.
3 Excludes prepayments, Right of use assets and stock

4 Excludes deferred income and provision for litigations

Management of this liquidity gap is as disclosed in Note 4(g)
Restricted deposits have been bucketed within “less than 3 months” to match the underlying deposit liabilities

#GreatExperiences The residual maturity of other liabilities is further analysed into: OTHER NOTES TO THE FINANCIAL STATEMENTS

In thousands of Nigerian Naira Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Lease Liabilities amount 3 months1 months months years 5 years
Non-Lease Liabilities
8,087,113 145,774 516,858 904,900 995,325 5,524,256

344,089,693 114,473,786 210,060,257 3,865,841 11,975,106 3,714,703

352,176,806 114,619,560 210,577,115 4,770,741 12,970,431 9,238,959

2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 177 Residual contractual maturities of contingencies

The table below shows the contractual expiry by maturity of the Group’s contingent liabilities and commitments. The maximum
amount of the contingencies is allocated to the earliest period in which the contingencies could be called.

Group Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Dec-2020 amount 3 months1 months months years 5 years
43
In thousands of Nigerian Naira 43 365,827,380 60,252,209 34,797,663 22,955,997 36,885,164 210,936,347
43 44,121,453 36,692,594 3,791,532 2,011,264 1,626,063 -
Transaction related bonds and guarantees 8,873,968 748,891 670,527 - -
Clean line facilities and letters of credit 7,454,550
Other commitments 418,822,801 104,399,353 39,338,086 25,637,788 38,511,227 210,936,347

1 Includes balances with no specific contractual maturities

178 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Residual contractual maturities of financial assets and liabilities OTHER NOTES TO THE FINANCIAL STATEMENTS

Details of contractual maturities for assets and liabilities form an important source of information for the management of liquidity
risk which is managed through a series of measures, tests and reports that are largely based on contractual maturity. The following
table shows the contractual maturities at period end of the Group’s financial assets and liabilities and represents actual and in some
cases assumed obligation expected for the assets or liability to be recovered or settled. These figures do not include elements of
future incomes or costs.

Company Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Dec-2021 amount 3 months1 months months years 5 years

In thousands of Nigerian Naira - 18,183 -
Financial assets - 18,183 -

Restricted deposits and other assets3 34 18,183 - - 6,076,055 --
18,183 - - - --
Financial liabilities - -
Other liabilities4 38 6,076,055 - 18,183 6,076,055 - -
- 18,183 (6,076,055) - -
Other borrowed funds 40 - (6,057,872) - -
6,076,055 - -
(6,057,872) (6,057,872)
Gap (asset - liabilities)

Cumulative liquidity gap

1 Includes balances with no specific contractual maturities
2 Equity securities have been excluded under liquidity consideration.
3 Excludes prepayments
4 Excludes deferred income, provision for litigations & impairment on contingents

Management of this liquidity gap is as disclosed in Note 4(g)
Restricted deposits have been bucketed within “less than 3 months” to match the underlying deposit liabilities

The residual maturity of other liabilities is further analysed into:

In thousands of Nigerian Naira Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Lease Liabilities amount 3 months1 months months years 5 years
Non-Lease Liabilities
#GreatExperiences - - - - - -
- - - -
6,076,055 - - 6,076,055 - -

6,076,055 6,076,055

#GreatExperiences (ii) Repricing period of financial assets and liabilities OTHER NOTES TO THE FINANCIAL STATEMENTS



Repricing maturities take into account the fact that the terms of the underlying financial assets or liabilities of the Group can be
varied, which in turn affects its liquidity risk exposure. The table below indicates the earliest time the Group can vary the terms of the
underlying financial asset or liabilities and analyses the Group’s interest rate risk exposure on assets and liabilities included at carrying
amount and categorised by the earlier of contractual re–pricing or maturity dates.

Group
Dec-2021

In thousands of Nigerian Naira Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Financial assets amount 3 months1 months months years 5 years
Cash and bank balances 23
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 179 Financial assets at fair value through profit or loss 24 933,591,069 905,657,236 22,345,894 5,587,939 - -
Derivative financial assets 25 104,397,651 15,870,535 6,877,431 35,318,133 15,179,672 31,151,880
Investment securities: 15,605,968 59,340
– Fair Value through other comprehensive Income1 26 24,913,435 9,248,127 - -
– Held at amortised cost 26 166,354,843 37,543,483
Assets pledged as collateral 27 274,375,372 261,083,274 371,540,850 49,769,362 9,465,116 11,242,568
Loans and advances to banks 28 846,923,215 145,194,985 50,546,570 18,557,536
Loans and advances to customers 29 10,436,054 -
Restricted deposits and other assets2 34 79,273,911 115,014 - 68,837,857 - -
115,014 51,859,522 - - -
1,438,370,264 5,008,341 180,031,808 32,860,661
1,802,587,381 1,099,902,423 495,234,861 99,465,126 15,451,432 -
1,121,888,414 3,913,395,611 1,526,218 270,674,598 93,812,645
5,188,065,462
414,947,747

Financial liabilities

Deposits from banks 35 118,027,576 100,179,589 730,801 17,117,186 - -
3,928,960,983 37,387,520 28,419,927 15,573,872 1,963,252
Deposits from customers 36 4,012,305,554
37 - - - - - -
Financial liabilities at fair value through profit or
loss 1,523,305 57,666 - - -
171,698,715 29,642,350 11,079,039 8,188,836 6,967,353
Derivative financial liabilities 25 1,580,971 37,425,500 37,293,964 13,731,975
56,201,737 9,244,323 94,041,652 61,056,672 22,662,580
Other liabilities3 39 227,576,293 4,258,564,329 77,062,660 320,906,095 209,617,926 71,150,065
Other borrowed funds 41 153,897,499 (345,168,718) 418,172,201

4,513,387,893
674,677,569

1 Excludes equity securities.
2 Excludes prepayments

3 Excludes deferred income, provision for litigations & impairment on contingents

180 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report The repricing maturity of other liabilities is further analysed into: Carrying Less than 3 to 6 6 to 12 1 to 5 More than OTHER NOTES TO THE FINANCIAL STATEMENTS
amount 3 months months months years 5 years
In thousands of Nigerian Naira
Lease Liabilities 6,318,113 121,218 117,821 388,264 894,819 4,795,991
Non-Lease Liabilities
221,258,180 171,577,497 29,524,529 10,690,775 7,294,017 2,171,362

227,576,293 171,698,715 29,642,350 11,079,039 8,188,836 6,967,353

#GreatExperiences

#GreatExperiences Repricing period of financial assets and liabilities OTHER NOTES TO THE FINANCIAL STATEMENTS

Repricing maturities take into account the fact that the terms of the underlying financial assets or liabilities of the Group can be varied, which in turn affects its liquidity risk exposure.
The table below indicates the earliest time the Group can vary the terms of the underlying financial asset or liabilities and analyses the Group’s interest rate risk exposure on assets and
liabilities included at carrying amount and categorised by the earlier of contractual re–pricing or maturity dates.

Group
Dec-2020

In thousands of Nigerian Naira Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Financial assets amount 3 months1 months months years 5 years
Cash and bank balances 23
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 181 Financial assets at fair value through profit or loss 24 745,557,370 711,429,419 31,373,635 2,754,316 - -
Derivative financial assets 25 67,535,363 16,353,002 7,018,185 29,377,304 3,981,127 10,805,745
Investment securities: 26,448,550 2,274,768 656,308 10,708,606 12,808,868
– Fair value through profit or loss1 26 -
– Fair Value through other comprehensive Income1 26 - - - -
– Held at amortised cost 26 691,705,703 589,879,300 28,101,987 57,137,671 - -
Assets pledged as collateral 27 283,582,832 31,304,159 105,204,807 1,199,721 15,387,024
Loans and advances to banks 28 87,371,128 62,200,326 52,625,604
Loans and advances to customers 29 62,200,326 - - 7,077,134
Restricted deposits and other assets2 34 99,043 - - - -
99,043 164,189,311 72,850,458 - -
1,662,731,699 1,206,147,330 9,891,922 142,820,457
1,166,226,315 1,143,379,250 272,535,507 454,057 10,429,030 76,724,143
4,706,087,201 3,756,933,240 340,687,545 223,864,807 2,072,056

112,066,102

Financial liabilities 35 101,509,550 90,105,249 695,759 10,708,542 - -
Deposits from banks 15,134,391 113,741,108 2,083,551 47,005
Deposits from customers 36 3,509,319,237 3,378,313,182
Financial liabilities at fair value through profit or - - -
loss 37 - - -
Derivative financial liabilities - - -
Other liabilities3 25 2,758,698 2,119,895 638,803 4,770,741 12,970,431 9,238,959
Other borrowed funds 19,171,008 41,664,665 21,475,458
38 352,176,806 114,619,560 210,577,115 148,391,399 56,718,647 30,761,422
1 Excludes equity securities. 192,296,146 167,146,160 81,304,680
2 Excludes prepayments 40 113,894,768 14,723,647 16,859,990
3 Excludes deferred income and provision for litigations
4,079,659,059 3,599,881,533 243,906,058

626,428,142 157,051,707 28,629,449

182 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report The repricing maturity of other liabilities is further analysed into: OTHER NOTES TO THE FINANCIAL STATEMENTS

In thousands of Nigerian Naira Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Lease Liabilities amount 3 months1 months months years 5 years
Non-Lease Liabilities
8,087,113 145,774 516,858 904,900 995,325 5,524,256

344,089,693 114,473,786 210,060,257 3,865,841 11,975,106 3,714,703

352,176,806 114,619,560 210,577,115 4,770,741 12,970,431 9,238,959

#GreatExperiences

#GreatExperiences Repricing period of financial assets and liabilities OTHER NOTES TO THE FINANCIAL STATEMENTS

Repricing maturities take into account the fact that the terms of the underlying financial assets or liabilities of the Company can be varied, which in turn affects its liquidity risk expo-
sure. The table below indicates the earliest time the Company the earlier of contractual re–pricing or maturity dates.

Company Note Carrying Less than 3 to 6 6 to 12 1 to 5 More than
Dec-2021 34 amount 3 months1 months months years 5 years

In thousands of Nigerian Naira 18,183 - 18,183 - --
Financial assets 18,183 - 18,183 - --
Restricted deposits and other assets2
- 6,076,055
2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 183 Financial liabilities - -
-
Other liabilities3 38 6,076,055 - 18,183 6,076,055 --
Other borrowed funds 40 - - (6,076,055) --
- --
6,076,055 - 6 to 12 --
(6,057,872) months

1 Excludes equity securities. -
2 Excludes prepayments 6,076,055
6,076,055
3 Excludes deferred income, provision for litigations & impairment on contingents

The repricing maturity of other liabilities is further analysed into:

In thousands of Nigerian Naira Carrying Less than 3 to 6 1 to 5 More than
Lease Liabilities amount 3 months1 months years 5 years
Non-Lease Liabilities
- - - - -
- - - -
6,076,055 - - - -

6,076,055

OTHER NOTES TO THE FINANCIAL STATEMENTS

(h) Settlement Risk The MLRM group ensures that these limits and triggers are ad-
hered to by the Treasury & Sales Group.
The Treasury Group activities with counterparties may give rise
to settlement risk at the time of settlement of trade transactions. The Group traded in the following financial instruments in the
Settlement risk is the risk of loss due to the failure of a coun- course of the period;
terparty to honour its obligations i.e. deliver cash, securities or
other assets, as contractually agreed. 1. Treasury Bills

In order to ensure that these risks are mitigated and controlled, 2. Bonds
the Market & Liquidity Risk Management (MLRM) Group has put
in place Settlement Limits. These limits are sought periodically 3. Foreign Currencies (Spot and Forwards)
using various criteria based on the counterparty’s financial state-
ment and some other non-financial parameters. The FX Settle- 4. Money Market Instruments
ment limits are approved at the Management Credit Committee
meeting and / or Board level, depending on the limit of each (iii) Exposure to Interest Rate Risk – Banking Book
counterparty.
The principal risk to which non-trading portfolios are exposed
(i) Market Risk to, is the risk of loss from fluctuations in the future cash flows
or fair values of financial instruments because of a change in
Market risk is the risk of loss in On- or Off-balance sheet posi- market interest rates. Interest rate risk is managed principally us-
tions, as a result of adverse movement in foreign exchange rate, ing interest rate gaps. The Asset & Liability Management (ALM)
interest rate, and equity or commodity prices. Whilst the Group Group is responsible for managing and monitoring mismatches
may be faced with myriads of market risks, the Market & Liquid- between the Group’s assets and liabilities. The Asset & Liability
ity Risk Management Group ensures these risks are managed Management Committee (ALMAC) is responsible for ensuring
and controlled within the Group’s acceptable parameters, while compliance with these limits while the limits are independently
optimising returns on risk. verified by Market & Liquidity Risk Management group.

(i) Management of Market Risk The Group makes use of limit monitoring, earnings-at-risk and
gap analyses to measure and control the market risk exposures
The Market & Liquidity Risk Management Group separates its within its banking book.
market risk exposures into the trading and banking books. Due
to the various macro-economic indices and unanticipated mar- The Group also performs regular stress tests on its banking and
ket happenings, it has become more imperative for the Group to trading books. In performing this, the Group ensures there are
engage in continuous but proactive monitoring of market risks quantitative criteria in building the scenarios. The Group deter-
inherent in both trading and non-trading activities. mines the effect of changes in interest rates on interest income;
volatility in prices on trading income; and changes in funding
The trading portfolio resides with the Treasury & Sales Division sources and uses on the Group’s liquidity.
of the Group, and they maintain positions arising from market
making and proprietary trading activities. With the exception of During the period, the foreign exchange risk, interest rate risk
translation risk arising from the Group’s net investment in for- and price risk, were the key risks the Group was exposed to.
eign currency, the Market & Liquidity Risk Group monitors the However, all potential risk exposures in the course of the year
foreign exchange position in the trading and banking books. were successfully mitigated as mentioned above.

The overall authority of the Market & Liquidity Risk Management
Group is vested in the Management Risk Committee.

(ii) Exposure to Market Risks – Trading Book #GreatExperiences

The principal tools used by Market & Liquidity Risk Management
Group to measure and control market risk exposure within the
Group’s trading portfolios are the Open Position limits, Mark-to-
Market Analysis, Value-at-Risk Analysis, Sensitivity Analysis and
the Earning-at-Risk Analysis. Specific limits (regulatory and in-
house) across the trading portfolios have been clearly defined, in
line with the Group’s overall risk appetite. These set limits shall
prevent undue exposure in the event of abrupt market volatility.

184 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report

OTHER NOTES TO THE FINANCIAL STATEMENTS

Value-at-Risk (VaR) culated assuming a one-day holding period and an expected tail
loss methodology which approximates a 99% confidence level.
The Group applies VaR, a statistical risk measure, to estimate
the maximum potential loss that can incur on trading positions VaR statistics can be materially different across firms due to dif-
at a given confidence level under normal market condition. VaR ferences in portfolio composition, differences in VaR method-
is the Group’s primary market risk management measure for as- ologies, and differences in model parameters. As a result, the
sets and liabilities classified as trading positions. However, the Group believes VaR statistics can be used more effectively as
Group does not only base its risk estimates on VaR models, it indicators of trends in risk-taking within a firm, rather than as a
uses sensitivity, scenario analysis and stress testing to further basis for inferring differences in risk-taking across firms.
complement it.
The Group trades on foreign currencies, Bonds and Treasury bills
The Group uses the analytical variance-covariance method to instruments, while its subsidiaries trade mainly in bills and bonds
estimate VaR, which takes cognizance of factor sensitivities of and an insignificant amount of foreign currencies. The resultant
the trading portfolio, the volatilities and correlations of market risk exposures are interest and foreign exchange risks.
risk factor. The model is employed across the Group and applies
observable historical rates, yields and prices for the previous 12 The table below presents, risk by category, average VaR and end
months to its current positions. It assumes that historical chang- of period-end VaR as well as the high and low VaR for the pe-
es in market values are representative of the distribution of po- riod.
tential outcome in the immediate future. The Group’s VaR is cal-

Group VaR by risk type Average Dec-21 Low At reporting date
In thousands of Naira High
31,220 357 46,712
Foreign exchange risk 739,689 2,391,524 9,731 523,140
Interest rate risk 770,908 7,961,341 10,088 569,852
Total 10,352,865

Group VaR by risk type Average Dec-20 Low At reporting date
In thousands of Naira High
39,837 223 1,326
Foreign exchange risk 1,792,033 107,089 86,226 310,262
Interest rate risk 1,831,870 4,996,541 86,449 311,588
Total 5,103,630

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 185

OTHER NOTES TO THE FINANCIAL STATEMENTS

(iv) Other market risks: Sensitivity analysis of non-trad- shift. For each simulation, the same interest rate shift is used for
ing portfolios to various scenarios all currencies. The scenarios are run only for assets and liabilities
that represent the major interest-earning and bearing positions.
The management of interest rate risk against interest rate Major assumptions underlying the sensitivity are as follows:
gap limits is supplemented with monitoring the sensitivi-
ty of the Group’s financial assets and liabilities to various • 100 basis point changes in floating interest rate on as-
scenarios. Credit spread risk (not relating to changes in the sets held at amortized cost; assets accounted at fair value
obligor / issuer’s credit standing) on debt securities held by through profit or loss as well as other comprehensive in-
the Group and equity price risk is subject to regular mon- come (Dec 2021 – 100 basis points) with all other variables
itoring by Group Management Risk committee but is not held constant, resulted in the impact on profit or loss as
currently significant in relation to the overall results and set out in the table on page 186-187.
financial position of the Group.
• 100 basis point changes in floating interest rate for Bor-
Interest rate movement have both cash flow and fair val- rowed funds, Financial liabilities held for trading, Term de-
ue effect depending on whether interest rate is fixed or posits; 30 basis point changes for Savings deposits; and 15
floating. The impact resulting from adverse or favourable basis point changes for Current deposits.
movement flows from either retained earnings or OCI and
ultimately ends in equity in the following manner: In arriving at the 100-basis point used for the sensitivity analysis
of interest rate, the fluctuation in the interest rate of the Group’s
• Retained earnings arising from increase or decrease in net major assets and liabilities were considered as shown below:
interest income and the fair value changes reported in
profit or loss. • The prime lending rate on loans and advances which
ranged between 11.13% and 12.1% over the period, a
• Fair value reserves arising from increases or decreases in change of about 100 basis points is therefore probable.
fair value of financial instruments FVOCI reported directly
in other comprehensive income. • The discount rate on various maturities of treasury bills
ranged between 0.04% and 4.30% over the financial pe-
At 31 December 2021, the Group’s interest rate risk arises prin- riod as published by Central Bank of Nigeria (CBN).
cipally from risk assets and borrowings i.e. (deposit liabilities and
long-term borrowings). Borrowings issued at variable rates ex- • A 100 basis point proportional change in the cost of fund
pose the group to cash flow interest rate risk which is partially was also assumed because costs of funds seldom vary be-
offset by cash held at variable rates. Borrowings issued at fixed yond 100 basis point.
rates expose the Group to fair value interest rate risk.
The table below shows the changes that would impact the in-
The Group therefore analyses its interest rate exposure on a dy- come statement after carrying out interest rate sensitivity:
namic basis. Various scenarios are simulated taking into con-
sideration refinancing, renewal of existing positions, alternative
financing and hedging. Based on these scenarios, the Group
calculates the impact on profit and loss of a defined interest rate

The table below shows the changes that would impact the income statement after carrying out interest rate sensitivity:

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease (14,655,860) (11,598,648) (17,833,572) (15,058,668)
Asset (26,327,463) (20,835,554) (27,769,414) (23,448,493)
Liabilities
11,671,602 9,236,906 9,935,843 8,389,826

Increase 14,655,860 11,598,648 17,833,572 15,058,668
Asset 26,327,463 20,835,554 27,769,414 23,448,493
Liabilities (11,671,602) (9,236,906) (9,935,843) (8,389,826)

The aggregated figures presented above are further segregated into their various components as shown in the following tables:

186 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

Components of Statement of financial position Interest Rate sensitivity (Fair Value and Cash Flow Interest Rate Risk)
Group

In thousands of Naira Dec-21 Dec-21 Dec-20 Dec-20
Pre-tax Post-tax Pre-tax Post-tax

Decrease (2,238,179) (1,771,295) (1,531,264) (1,292,999)
Assets (1,197,574) (947,760) (13,543) (11,436)
Cash and bank balances (16,274,741)
Loans and advances to banks (1,661,161) (12,879,830) (16,443,582) (13,884,961)
Loans and advances to customers (4,265,900) (1,314,642) (1,150,488) (971,472)
Financial assets held for trading (3,376,033) (8,052,570)
Investment securities (689,907) (545,992) (577,968) (6,799,590)
Assets pledged as collateral (26,327,463) (488,036)
(20,835,554) (27,769,414)
Liabilities 62,079 (23,448,493)
Deposits from banks 10,278,539 49,129 51,082
Deposits from customers 8,134,436 8,364,341 43,134
Financial liabilities held for trading 28,651 7,062,849
Debt Securities 0 22,674 22,653
Other borrowed funds 0 6,893 19,129
1,302,333 5,820
Total 11,671,602 1,030,667 1,490,873
(14,655,860) 9,236,906 9,935,843 1,258,894
(11,598,648) (17,833,572) 8,389,826
(15,058,668)

Increase 2,238,179 1,771,295 1,531,264 1,292,999
Assets 1,197,574 947,760 13,543 11,436
Cash and bank balances 16,274,741
Loans and advances to banks 1,661,161 12,879,830 16,443,582 13,884,961
Loans and advances to customers 4,265,900 1,314,642 1,150,488 971,472
Financial assets held for trading 3,376,033 8,052,570
Investment securities 689,907 545,992 577,968 6,799,590
Assets pledged as collateral 26,327,463 488,036
20,835,554 27,769,414
Liabilities (62,079) 23,448,493
Deposits from banks (10,278,539) (49,129) (51,082)
Deposits from customers (8,134,436) (8,364,341) (43,134)
Financial liabilities held for trading (28,651) (7,062,849)
Debt securities 0 (22,674) (22,653)
Other borrowed funds 0 (6,893) (19,129)
(1,302,333) (5,820)
Total (11,671,602) (1,030,667) (1,490,873)
(9,236,906) (9,935,843) (1,258,894)
14,655,860 11,598,648 17,833,572 (8,389,826)
15,058,668

As for Cashflow interest rate risk, this risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk which is partially offset by cash held at variable rates.

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 187

OTHER NOTES TO THE FINANCIAL STATEMENTS

At 31 December 2021, if interest rates on borrowed funds at amortised cost increased or reduced by 100 basis points with all other
variables held constant, the effect on cash flow would have been as set out below:

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease 1,055,730 900,538 791,135 679,743
Increase (1,055,730) (900,538) (791,135) (679,743)

(v) Sensitivity Analysis of Fair Value Through Other Comprehensive Income Portfolio to Price

1. Financial Instrument held as Fair Value through Other Comprehensive Income

The Group recognized fair value changes for FVOCI Bonds, Bills and Equities as at 31 December 2021 and the comparative period
in 2020. The Group carried out the following in determining sensitivity of its other comprehensive income to fluctuations in market
prices of the financial assets:

Bonds to be Fair Valued through Other Comprehensive Income

• Daily bond prices were obtained and trended for the different series of Bonds in issue as at the reporting date.

• A reasonably possible change of (+1.91/-1.31) Naira was determined based on the distribution of one-year daily change in
market prices. The results were that fluctuations were in the range of (+1.91/-1.31) Naira.

• The chosen reasonable change in market prices was then applied to the Group’s holding of bonds designated as FVOCI as at
end of the year.

188 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

The result of the price sensitivity i.e. impact on other comprehensive income as at 31 December 2021, when price of bonds designated
as FVOCI increased or decreased by one Naira with all other variables held constant, would have been as set out in the tables below:

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Nigerian Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease (190,478) (150,738) (132,103) (111,548)
Increase 257,764 203,986 174,337 147,210

Treasury Bills to be Fair Valued through Other Comprehensive Income OCI

The Group carried out the following in determining sensitivity of the Group’s profit to fluctuations in market prices of treasury bills:

• Daily market discount rates were obtained and trended for the different maturities of treasury bills in issue as at the reporting
date.

• A reasonably possible change of (+1.00/-0.90) was determined based on the distribution of one-year daily change in discount
rates on treasury bills. A large proportion of changes in discount rates falls in the range of (+1.00/-0.90).

• The chosen reasonable change in market discount rates was then applied to the Group’s holding of Fair value through other
comprehensive income treasury bills at end of the year.

The result of the price sensitivity i.e. impacts on other comprehensive income as at 31 December 2021, if discount rates of treasury
bills designated as FVOCI, converted to prices, increased or reduced by (+1.00/-0.90) with all other variables held constant, would
have been as set out in the tables below:

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Nigerian Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease 1,644,775 1,301,621 1,942,071 1,639,885
Increase (1,675,552) (1,325,977) (1,715,411) (1,448,493)

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 189

OTHER NOTES TO THE FINANCIAL STATEMENTS

(vi) Sensitivity analysis of level 3 equity Instruments and its impact on OCI

The estimated fair value per share of each of the unquoted equity instruments has been determined using the relevant valuation mod-
els (where applicable/suitable). IFRS 13 outlines three approaches to fair value measurements. We have adopted the income approach
in determining the fair values of these investments. Among the significant inputs into the models are the following:

1. Risk free rate (Rf)
2. Beta (B) coefficient
3. Market return (Rm)
4. Free cash flow (FCF)
5. Cost of debt/equity etc.

The inputs were used to determine appropriate weighted cost of capital which subsequently was used to discount the free cash flow
of the company before arriving at the appropriate fair value of the share of the unquoted equity.

In determining the sensitivity of the fair value of the share of the unquoted equity to changes to the various inputs, we have assumed a
100 basis points increase or decrease to the risk-free rate, the resultant impact to pre-tax and post-tax results arising from the sensitivity
analysis are as shown in the table below:

Impact on Other Comprehensive Income

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Nigerian Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease 196,570 156,910 196,570 164,922
Increase (162,868) (130,009) (162,868) (136,646)

Impact on Income statement Dec-21 Dec-21 Dec-20 Dec-20
Pre-tax Post-tax Pre-tax Post-tax
Group
In thousands of Nigerian Naira

Decrease 663,559 529,682 355,609 298,356
Increase (494,870) (395,027) (293,640) (246,364)

(iv) Exposure to foreign currency risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with
respect to the US dollar, UK pound and Euro. Foreign exchange risk represents exposures to changes in the values of current holdings
and future cash flows denominated in other currencies. The types of instruments exposed to this risk include investments in foreign
subsidiaries, foreign currency-denominated loans and securities, future cash flows in foreign currencies arising from foreign exchange
transactions, foreign currency denominated debt amongst others. The value of these instruments fluctuates with changes in the level
or volatility of currency exchange rates or foreign interest rates. The Group deploys foreign derivative instruments whose values hedges
currency debts to foreign currency loans and advances to eliminate exchange exposures on such borrowings.

Foreign exchange profit or loss (Dollars)

The Group carried out the following in determining sensitivity of the Group’s profit to fluctuations in exchange rate of dollars:

• Daily dollar exchange rates were obtained for one year and trended
• A reasonably possible change of -2.74/5.78 (Dec 2020: -1.20/1.32) was determined based on the distribution of one-year daily

change in exchange rates. The graph below indicates that large proportion of changes in price falls in the range of -2.74/5.78
(Dec 2020: -1.20/1.32)
• The chosen reasonable change in exchange rates was then applied to the Group’s dollar position at the end of the year.

190 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

At 31 Dec 2021, if the Naira had strengthened/weakened by -2.74/5.78 Naira against the Dollar with all other variables held constant,
the pre-tax and post-tax profit for the year would have increased/(decreased) as set out in the table below mainly as a result of foreign
exchange gains or losses on the translation

In thousands of Nigerian Naira Dec-21 Dec-21 Dec-20 Dec-20
Pre-tax Post-tax Pre-tax Post-tax

Decrease 977,056) (773,210) (1,087,849) (918,580)
Increase 910,590 720,611 1,196,634 1,010,438

Foreign exchange profit or loss (Pounds)

The Group carried out the following in determining sensitivity of the Group’s profit to fluctuations in exchange rate of pounds:

• Daily pound exchange rates were obtained and trended

• A reasonably possible change of -7.72/7.00 (December 2020: -6.92/6.64) was determined based on the distribution of one-
year daily change in exchange rates. The graph below indicates that large proportion of changes in price falls in the range of
-7.72/7.00 (December 2020: -6.92/6.64)

• The chosen reasonable change in exchange rates was then applied to the Group’s position as at end of the year.

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 191

OTHER NOTES TO THE FINANCIAL STATEMENTS

At 31 Dec 2021, if the Naira had strengthened/weakened by -7.72/7.00 Naira against the Pounds with all other variables held constant
the pre-tax and post-tax profit for the year would have increased/(decreased) as set out in the table below mainly as a result of foreign
exchange gains or losses on the translation.

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Nigerian Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease (90,904) (71,939) (93,515) (78,964)
Increase 82,426 65,229 89,732 75,769

Foreign exchange profit or loss (Euros)

The Group carried out the following in determining sensitivity of the Group’s profit to fluctuations in exchange rate of Euro:

• Daily Euro exchange rates were obtained and trended

• A reasonably possible change of -8.15/8.70 (Dec 2020: -6.57/7.65) was determined based on the distribution of one-year daily
change in exchange rates. The graph below indicates that large proportion of changes in price falls in the range of -8.15/8.70
(Dec 2020: -6.57/7.65).

• The chosen reasonable change in exchange rates was then applied to the Group’s euro position as at end of the year.

192 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

At 31 Dec 2021, if the Naira had strengthened/weakened by -8.15/8.70 Naira against the Euro with all other variables held constant,
the pre-tax and post-tax profit for the year would have increased/(decreased) as set out in the table below mainly as a result of for-
eign exchange gains or losses on the translation.

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Nigerian Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease (14,691) (11,626) (42,067) (35,522)
Increase 13,763 10,891 48,983 41,361

Foreign Exchange Profit or Loss (Other Currencies)

At 31st Dec 2021, if Naira had strengthened/weakened by 5.96/-6.45 (Dec 2020: 5.20/-4.90) against the other currencies with all
other variables held constant the pre-tax and post-tax profit for the year, the impact of possible fluctuations in exchange rates on the
overall foreign exchange revaluation profit of the Group is as shown below:

Group Dec-21 Dec-21 Dec-20 Dec-20
In thousands of Nigerian Naira Pre-tax Post-tax Pre-tax Post-tax

Decrease (13,198) (10,445) (10,608) (8,957)
Increase 12,196 9,652 11,272 9,518

(ix) Sensitivity analysis of derivative valuation

The fair value of foreign exchange contracts varies largely due to changes in foreign currency exchange rates. For the purpose of as-
sessing specific risks, the Group carried out a sensitivity analysis to determine the effects that market risk exposures may have on the
fair value of the Group’s derivative financial instruments and results of operations. To perform the sensitivity analysis, daily U.S. Dollar
exchange rates were obtained from the Investors & Exporters FX Window (I & E FX Window) and trended with all other variables kept
constant. A proportional foreign exchange rate movement of ±₦0.5 (Dec 2020: ±₦0.5) depreciation of the Nigerian Naira and ±₦0.5
(Dec 2020: ±₦0.5) appreciation of the Nigerian Naira against the U.S. Dollar have been considered to be reasonably possible based on
the distribution of one-year daily change in exchange rates of the U.S. Dollar.

The following table summarizes our derivatives financial instruments as at 31 December 2021 and analyzes the sensitivity of their fair
values to an immediate change in foreign currency rates. Fair values represent the present value of forecasted future cash flows at mar-
ket foreign currency exchange rates. A favourable change indicates a weakening of the Nigerian Naira against the U.S. Dollar and an
unfavourable change indicates a strengthening of the Nigerian Naira against the U.S. Dollar. The selection of ± ₦0.5 (Dec 2020: ±₦0.5)
favourable or unfavourable change in foreign currency exchange rates should not be construed as a prediction by the Group of future
market events, but rather, to illustrate the potential impact of such an event. The modeling technique used to calculate the exposure
does not take into account correlation among foreign currency exchange rates, or correlation among various markets such as the for-
eign exchange, equity and fixed-income markets. Actual experience may differ from the results in the table below due to the correla-
tion assumptions utilized, or if events occur that were not included in the methodology, such as significant liquidity or market events.

The net impact of sensitivity for both favorable and unfavorable exchange rate of ± ₦0.5 will be ₦477,735,447 and (₦477,735,447)
respectively.

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 193

194 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Group Notional Fair Value Asset/ Favourable Unfavourable Favourable Unfavourable OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-21 Contract (Liability) changes changes changes changes
Total derivatives Amount 24,913,434 (Pre-tax) (Pre-tax) (Post-tax) (Post-tax)
(1,580,970)
In thousands of Nigerian Naira 352,282,093 Income Income Income Income
70,907,015 Statement Statement Statement Statement
Derivative Assets
Derivative Liabilities Asset 460,113 (460,113) 364,133 (364,133)
Liability 17,622 (17,622) 13,946 (13,946)

Dec-20 Notional Fair Value Asset/ Favourable Unfavourable Favourable Unfavourable
Total derivatives Contract (Liability) changes changes changes changes
Amount 34,843,563 (Pre-tax) (Pre-tax) (Post-tax) (Post-tax)
In thousands of Nigerian Naira (2,459,980)
280,977,556 Income Income Income Income
Derivative Assets 42,789,500 Statement Statement Statement Statement
Derivative Liabilities
Asset 355,101 (355,101) 305,103 (305,103)
Liability 55,084 (55,084) 47,328 (47,328)

#GreatExperiences

OTHER NOTES TO THE FINANCIAL STATEMENTS

Sensitivity analysis on ECL Model II. Inflation, given its significant impact on purchasing power
of individual borrowers and ultimately, the capacity to re-
The following are the most significant assumption affecting the pay obligations.
ECL allowance:
III. Interest rate, given its impact on the ability of individual
Corporate Portfolios borrowers to meet contractual cashflows on both local
I. Crude Oil Prices, given the significant impact on the per- and foreign currency denominated obligations.

formance of companies in the oil and gas sector. In sensitising the variables above to determine their impact
II. Exchange rate, given the significant impact on companies’ on Expected Credit Losses (ECL), the Group adjusted its For-
ward-Looking Information forecast as follows
ability to meet contractual payments denominated in for-
eign currency. • 500 basis points Increase / Decrease in GDP growth rate
III. Inflation, given its significant impact on collateral valua- over forecasted GDP growth rate
tions.
IV. GDP, given its impact on companies’ performance and col- • 500 basis points Decrease / Increase in inflation rate over
lateral valuations. Inflation rate forecast
V. Interest rate, given its impact on the ability of companies
to meet contractual cashflows on both local and foreign • 300 basis points Decrease / Increase in interest rate over
currency denominated obligations. Interest rate forecast

Retail Portfolios • Decrease / Increase in USD/NGN exchange rate by N20
I. Unemployment, given the impact it has on individual bor- over forecasted exchange rate

rowers’ ability to meet contractual payment. • Increase / Decrease in Crude Oil Price by $10pbl over fore-
casted Crude Oil Price

Set out below are the changes to the ECL as at 31 December
2021 and 31 December 2020 that would result from the pos-
sible changes in these parameters from the actual assumptions
used in the Group’s economic variables assumption.

Group Improvement Worsening
2021
In thousands of Nigerian Naira Pre-Tax Post Tax Pre-Tax Post Tax

COMMERCIAL (11,102,228) (7,771,559) 7,835,988 5,485,192
CORPORATE
PUBLIC SECTOR (3,325,502) (2,327,851) 8,330,792 5,831,554
RETAIL
SME (58,021) (40,615) 101,662 71,163

(1,617,721) (1,132,405) 2,058,851 1,441,196

(324,834) (227,384) 414,124 289,886

(16,428,306) (11,499,814) 18,741,417 13,118,992

2020 Improvement Worsening
In thousands of Nigerian Naira
Pre-Tax Post Tax Pre-Tax Post Tax
COMMERCIAL
CORPORATE (9,384,161) (6,568,913) 6,730,714 4,711,500
PUBLIC SECTOR
RETAIL (6,284,351) (4,399,046) 7,844,773 5,491,341
SME
(198,276) (138,793) 65,867 46,107

(682,033) (477,423) 658,102 460,672

(129,848) (90,894) 123,459 86,422

(16,678,669) (11,675,069) 15,422,915 10,796,041

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 195

196 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report The table below summaries the Group’s financial instruments at carrying amount, categorised by currency: OTHER NOTES TO THE FINANCIAL STATEMENTS

Group Note Total Naira USD GBP Euro Others
Dec-21 23
Financial instruments by currency 24 933,591,069 84,324,593 633,365,589 93,757,182 37,158,839 84,984,866
25 104,397,651 42,643,770 2,383 - - 61,751,498
In thousands of Nigerian Naira 24,913,435 - - -
26 24,913,435 -
Cash and bank balances 26 149,397,538 56,220,345 - -
Financial assets at fair value through profit or loss 27 274,375,372 645,385,810 37,191,183 - - 68,757,489
Derivative financial assets 28 846,923,215 - - 164,346,222
Investment securities: 29 68,430,171 - - -
– Fair Value through other comprehensive Income 34 79,273,911 114,915 99 35,042,115 7,642,921 10,843,740
– Held at amortised cost 115,014 819,327,165 - 4,199,627 -
Assets pledged as collateral 731,131,771 75,848,426 128,799,297 49,001,387
Loans and advances to banks 1,802,587,381 1,009,119,008 1,621,955,190 209,443,409
Loans and advances to customers 1,121,888,414 2,755,461,011 32,721,353
Restricted deposits and other assets1 5,188,065,462
632,848,577

Deposits from banks 35 118,027,576 658,166 90,667,389 16,429,281 9,346,480 926,260
Deposits from customers 896,946,970 86,256,170 31,318,610 464,311,870
Financial liabilities at fair value through profit or 36 4,012,305,554 2,533,471,934
loss - - - -
Derivative financial liabilities 37 - -
Other liabilities2 - - - -
Other borrowed funds 25 1,580,971 1,580,971 104,161,567 1,639,268 410,631 22,705,844

Financial Instrument Gap 38 227,576,293 98,658,983 20,202,138 - - 406,164
1,111,978,064 104,324,719 41,075,721 488,350,138
40 153,897,499 133,289,197 144,498,439
509,977,126 24,474,578 7,925,666
4,513,387,893 2,767,659,251

674,677,569 (12,198,240)

1 Excludes prepayments, Stocks, Employee defined benefit
2 Excludes Deferred Income and impact of non-monetary items in Non-Financial Instruments (NFI)

#GreatExperiences The above table does not give representation of the On-Balance sheet gap of the Group in terms of currency (foreign and local cu rencies) because non-monetary items in NFI are not
taken into consideration as it falls outside the IFRS 7 disclosure requirement. On the Asset side Property, Plant & Equipment, Intangible Assets and Prepayment are not included while

on the Liability side, Deferred income, Tax payable and Deferred tax and Positions have also been excluded.

#GreatExperiences Group OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-20
Financial instruments by currency

In thousands of Nigerian Naira

2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 197 Cash and bank balances Note Total Naira USD GBP Euro Others
Financial assets at fair value through profit or loss 23
Derivative financial assets 24 745,557,370 120,138,026 435,968,606 83,072,079 37,468,439 68,910,220
Investment securities: 25 67,535,363 36,226,876 - - - 31,308,487
– Fair value through profit or loss 26,448,550 26,448,550 - - -
– Fair Value through other comprehensive Income 26 -
– Held at amortised cost 26 - - - - -
Assets pledged as collateral 26 691,705,703 595,277,891 34,374,408 - - -
Loans and advances to banks 27 283,582,832 - - 62,053,404
Loans and advances to customers 28 77,820,332 7,541,401 - - 198,221,099
Restricted deposits and other assets1 29 62,200,326 61,955,975 - - -
34 99,043 30,038,937 4,552,689 244,351
39,749 59,294 46,302 3,147,267 -
1,662,731,699 618,083,944 848,442,209 113,157,318 45,168,395
1,166,226,315 1,083,693,881 161,613,920
4,706,087,201 2,619,685,224 52,073,051 27,265,814
1,378,458,969
549,617,295

Deposits from banks 35 101,509,550 12,733 82,638,777 9,858,411 8,871,144 128,485
Deposits from customers 740,378,651 72,498,103 27,998,194 366,267,003
Financial liabilities at fair value through profit or 36 3,509,319,237 2,302,177,286
loss - - - -
Derivative financial liabilities 37 - -
Other liabilities2 - - - -
Other borrowed funds 25 2,758,698 2,758,698 125,052,730 3,682,371 3,225,698 16,345,231

Financial Instrument Gap 38 352,176,806 203,870,776 35,870,937 - - 424,015
983,941,095 86,038,885 40,095,036 383,164,734
40 113,894,768 77,599,816 394,517,874 27,118,433 166,452,561
5,073,359
4,079,659,059 2,586,419,309

626,428,142 33,265,915

1 Excludes prepayments, Stocks, Employee defined benefit
2 Excludes Deferred Income and impact of non-monetary items in Non-Financial Instruments (NFI)

The above table does not give representation of the On-Balance sheet gap of the Group in terms of currency (foreign and local currencies) because non-monetary items in NFI are not
taken into consideration as it falls outside the IFRS 7 disclosure requirement. On the Asset side Property, Plant & Equipment, Intangible Assets and Prepayment are not included while

on the Liability side, Deferred income, Tax payable and Deferred tax and Positions have also been excluded.

198 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report Company Total Naira USD GBP Euro Others OTHER NOTES TO THE FINANCIAL STATEMENTS
Dec-21
Financial instruments by currency Note 18,183 18,183 - -- -
In thousands of Nigerian Naira 34 18,183 18,183 - -- -
- -- -
Restricted deposits and other assets1 25 - - - -- -
38 6,076,055 6,076,055 - -- -
Derivative financial liabilities 40 - -- -
Other liabilities2 - - - -- -
Other borrowed funds 6,076,055 6,076,055
(6,057,872) (6,057,872)
Financial Instrument Gap

1 Excludes prepayments, Stocks, Employee defined benefit
2 Excludes Deferred Income and impact of non-monetary items in Non-Financial Instruments (NFI)

The above table does not give representation of the On-Balance sheet gap of the Group in terms of currency (foreign and local cu rencies) because non-monetary items in NFI are not
taken into consideration as it falls outside the IFRS 7 disclosure requirement. On the Asset side Property, Plant & Equipment, Intangible Assets and Prepayment are not included while
on the Liability side, Deferred income, Tax payable and Deferred tax and Positions have also been excluded.

#GreatExperiences

OTHER NOTES TO THE
FINANCIAL

STATEMENTS

#GreatExperiences 2021 Annual Report Guaranty Trust Holding Company Plc and Subsidiary Companies 199

OTHER NOTES TO THE FINANCIAL STATEMENTS

5. Capital management and other risks

(a) Regulatory capital

Guaranty Trust Holding Company manages its capital base to achieve a prudent balance between maintaining capital ratios to support
business growth and depositor confidence and providing competitive returns to shareholders. The Company’s objectives when manag-
ing capital are (i) to comply with the capital requirements set by the regulators (Central Bank of Nigeria and the respective regulatory
authorities in the countries in which the subsidiary banking operations are domiciled) (ii) to safeguard the Group’s ability to continue as
a going concern and (iii) to maintain a sufficient capital base to achieve the current regulatory capital requirement of the Company and
its subsidiaries. The regulatory capital requirement for entities within the Group, as well as the internal target for capital management
are as follows:

The regulatory capital requirement for entities within the group are as follows:

Name of Entity Primary Regulator Regulatory Requirement

Guaranty Trust Holding Company Central Bank of Nigeria N52billion Capital *
Guaranty Trust Bank Limited Central Bank of Nigeria N50billion Capital; and 16% Capital Adequacy Ratio
Habari Pay Central Bank of Nigeria N2billion Capital

*The Capital Requirement of Guaranty Trust Holding Company represents the sum of the minimum paid up capital of all its subsidiaries.

The Central Bank of Nigeria (CBN) on 29th August 2014 issued Guidelines for Licensing and Regulation of Financial Holding Compa-
nies in Nigeria (“Guidelines”). According to the Guidelines, a financial holding company shall have a minimum paid up capital which
shall exceed the sum of the minimum paid up capital of all its subsidiaries, as may be prescribed from time to time by the sector reg-
ulators. A review of the capital level as at 31 December 2021 shows that Guaranty Trust Holding Company complies with paragraphs
7.1 and 7.3 of the regulation, which stipulates that a financial holding company should maintain a minimum paid up capital which
exceeds the aggregate of the minimum paid up capital of all its subsidiaries;

Entity Minimum Share Capital % Holding Holdco Share
N ‘million N ‘million

Guaranty Trust Bank Limited 50,000 100 50,000
Habari Pay 2,000 100 2,000
Aggregated minimum paid up Capital of Subsidiaries
Holdco Company (Share Capital and Reserves) 52,000 52,000
Surplus/(Deficit) 141,812

89,812

(b) Capital Adequacy Position in line with Basel II Accord

The International Convergence of Capital Measurement and Capital Standards: A Revised Framework, popularly known as the Basel II
Framework was introduced in 2004 as a new set of international standards and best practices that define the minimum capital require-
ments for internationally active banks. The Basel II framework stipulates a minimum level of capital that banks must maintain to ensure
that they can meet their obligations, cover unexpected losses; and can, very importantly, promote public confidence.

Basel II is a three-pronged approach relying on three Pillars -Minimum Capital Requirements (Pillar 1), Supervisory Review Process (Pillar
2) and Market Discipline (Pillar 3).

Pillar 1 Minimum Capital Requirements: It prescribes the capital allocation methodology against the core traditional credit, market and
operational risks to ensure these are adequately measured and that banks have adequate capital to mitigate these risks.

Pillar 2 Supervisory Review: It requires banks to establish a risk management framework to identify, assess and manage major risks
inherent in the institution and allocate adequate capital against those risks. It emphasizes that supervisors should be able to evaluate
the soundness of these assessments.

200 Guaranty Trust Holding Company Plc and Subsidiary Companies 2021 Annual Report #GreatExperiences