287 How We Are Governed Financial Statements Shareholders’ Information Additional Information 50. FINANCIAL RISK MANAGEMENT (CONT’D.) (a) Credit risk (cont’d.) (i) Internal Credit Risk Ratings (cont’d.) The table below provides a mapping of the Group’s and the Bank’s internal credit risk grades to external ratings (cont’d.): Notches KIBB Obligor Rating External Rating Classification of Credit Risk Grade Description 11 12 13 BB1 BB2 BB3 BB Non- Investment Grade Weak capacity to meet its financial obligations. The entity is highly vulnerable to adverse changes in circumstances, economic conditions and/or operating environments. 14 15 16 B1 B2 B2 B Very weak capacity to meet its financial obligations. The entity has a limited ability to withstand adverse changes in circumstances, economic conditions and/or operating environments. 17 18 19 C1 C2 C3 C High likelihood of defaulting on its financial obligations. The entity is highly dependent on favourable changes in circumstances, economic conditions and/or operating environments, the lack of which would likely result in it defaulting on its financial obligations. 20 D D Default Currently in default on either all or a substantial portion of its financial obligations, whether or not formally declared. The D rating may also reflect the filing of bankruptcy and/or other actions pertaining to the entity that could jeopardize the payment of financial obligations.
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