Risk premium fees are charged on unsecured loans issued to customers and members of staff and is meant to mitigate against risk of default arising from permanent death or disability. The net fees, minus any claims or other costs incurred, are recognised upfront as a liability and are armotised into the profit or loss over the tenure of the loan.
Article Sources
This information on ‘risk premium’ was extracted from KCB Group Plc Integrated Report and Financial Statement 2020
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