Asset Quality Review and Stress Testing

RBSA’s AQR advisory contains the methodology for assessing the valuations of bank/financial institutions assets from a prudential perspective and provides the information necessary inputs to execute AQR. Our manuals take into account the new approach set out in IFRS 9 to impairments of bank/financial institution’s assets and classifying financial instruments. The assessment of provision levels on credit exposures follows the IFRS 9 staging model, which introduces the concept of “significant increase in credit risk since initial recognition” of a financial instrument and the related newly introduced forward-looking approach to provisioning.