CAPITA FINANCIAL SERVICES INC. (ST. LUCIA BRANCH) Notes to the Financial Statements March 31, 2024 (expressed in Eastern Caribbean dollars) 50 20 Financial Risk Management ...continued Liquidity risk management approach The Branch manages its liquidity risk by performing the following: • Day-to-day funding, managed by monitoring future cash flows to ensure that the requirements can be met; • Monitoring statement of financial position liquidity ratios against internal and regulatory requirements; • Managing the concentration and profile of debt securities; and • Monitoring and reporting using monthly cash flow measurement and projections including an analysis of the contractual maturity of the financial liabilities and the expected collection date of the financial assets. The steps taken by the Branch to respond to possible future liquidity constraints and their impact of on the Branch’s financial statements include the following: i. The Asset and Liability Management Committee meets regularly to discuss strategies and plans around managing the liquidity and the capital needs of the Branch. ii. Robust stress testing of our liquidity buffer at levels above regulatory requirements: • Assessing the monthly inflow and outflow of funds (liquidity forecasting); • Identifying and assessing the adequacy of contingency liquidity funding requirements; • Revisiting measures geared at strengthening the Branch’s capital base; and the monitoring of portfolio behavioural matrices in reference to customers servicing their loans On July 28, 2022 the Branch’s Head Office was placed under enhanced monitoring by its regulator the Central Bank of Barbados under the Financial Institutions Act. This requires the Head Office to provide certain daily reports along with additional monthly and quarterly reporting on its operations. The Head Office has received a letter of support from its ultimate parent indicating that it is committed to ensuring that Head Office has adequate resources to meet all its liabilities as they arise for a period of at least twelve months.
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