Allowance and Provision Calculation

The following is the allowance and provision calculations:

• Cash Flow and Forward Exposure - when Undrawn Flag is Y or N the Lifetime Allowance is computed as follows:
  • Lifetime Allowance = IF (Lifetime CECL > Carrying Amount, Carrying Amount, Lifetime CECL)
• Cash Flow and Forward Exposure - when Undrawn Flag is Y the Lifetime Provision is computed as follows:
  • Lifetime Allowance = IF (Lifetime CECL > Carrying Amount, Lifetime CECL - Carrying Amount, 0)
• Cash Flow and Forward Exposure - when Undrawn Flag is N the Lifetime Provision is computed as follows:
  • Lifetime Provision = Undrawn * CCF * Lifetime Provision Rate
• Provision Matrix Approach - when Undrawn flag Y or N the Lifetime Allowance and Provision are computed as follows:
  • Lifetime Allowance = Carrying Amount * Lifetime Provision Rate
  • Lifetime Provision = Undrawn * CCF * Lifetime Provision Rate
• Specific Provision - when Undrawn flag Y or N the Lifetime Allowance and Provision are computed as follows:
  • Lifetime Allowance = Carrying Amount * LGD * Lifetime PD
  • Lifetime Provision = Undrawn * CCF * LGD * Lifetime PD
• Current Expected Credit Loss Calculation
  • For all accounts, the Current Expected Credit Loss is calculated as follows:

  Lifetime CECL = Lifetime Allowance + Lifetime Provision

• Apportioning CECL, Allowance, and Provision values from Cohorts to Individual accounts
  • The apportioning of all following three parameters is performed:

    Lifetime values of CECL, Allowance, and Provision

• Computation of final Reporting Values
  • The Reporting CECL, Reporting Allowance, and Reporting Provision values are computed as follows:

  Reporting CECL = Lifetime CECL

  Reporting Allowance = Lifetime Allowance

  Reporting Provision = Lifetime Provision