REACHING - Emirates NBD€¦ · Emirates NBD Capital (KSA) LLC 100 Investment Services K.S.A. Consolidation Consolidation-Emirates NBD Capital PSC 100 Funds Management Dubai, U.A.E

EMIRATES NBDBANK PJSCBASEL II – PILLAR IIIDISCLOSURESFOR THE YEARENDED 31 DECEMBER 2019

REACHING NEW HEIGHTS

EMIRATES NBD BANK PJSC - BASEL II – PILLAR III DISCLOSURES - FOR THE YEAR ENDED 31 DECEMBER 2019

BASEL II – PILLAR III DISCLOSURES

Contents Page

Overview 1

Information on subsidiaries and significant investments 4

Consolidated capital structure as per Basel III 6

Gross credit exposure 10

Capital requirement for market risk as per standardised approach 11

Gross credit exposure by currency 12

Gross credit exposure by geography 13

Gross credit exposure by economic activity 15

Gross credit exposure by maturity 17

Impaired loans by economic activity 19

Impaired loans by geography 21

Reconciliation of changes in provision for impaired loans 23

Gross credit exposure as per standardised approach 24

Gross credit exposure as per standardised approach (Rated/Unrated) 26

Exposure subject to deduction as per standardised approach (Rated/Unrated) 28

Credit risk mitigation as per standardised approach 30

Quantitative disclosures for equity position in the banking book 31

1 2EMIRATES NBD BANK PJSC - BASEL II – PILLAR III DISCLOSURES - FOR THE YEAR ENDED 31 DECEMBER 2019

OVERVIEW (continued)

Introduction

The CBUAE supervises Emirates NBD (“ENBD” or the “bank”) and its subsidiaries (together referred to as the “Group”) on a consolidated basis, and therefore receives information on the capital adequacy of, and sets capital requirements for, the Group as a whole. The capital requirements are computed at a Group level using the Basel III framework of the Basel Committee on Banking Supervision (“Basel Committee”), after applying the amendments advised by the CBUAE, within national discretion. The Basel III framework, like Basel II, is structured around three ‘pillars’: minimum capital requirements (Pillar I); supervisory review process (Pillar II); and market discipline (Pillar III).

Pillar III disclosures 2019

Pillar III complements the minimum capital requirements and the supervisory review process. Its aim is to encourage market discipline by developing disclosure requirements which allow market participants to assess certain specified information on the scope of application of Basel III, capital, particular risk exposures and risk assessment processes, and hence the capital adequacy of the institution. Disclosures consist of both quantitative and qualitative information and are provided at the consolidated level.

The CBUAE issued Basel III capital regulations, which came into effect from 1 February 2017 introducing minimum capital requirements at three levels, namely Common Equity Tier 1 (‘CET1’), Additional Tier 1 (‘AT1’) and Total Capital. Additional capital buffers (Capital Conservation Buffer (CCB) and Countercyclical Capital Buffer (CCyB) - maximum up to 2.5% for each buffer) introduced are over and above the minimum CET1 requirement of 7%.

2019 Developments

Acquisition of DenizBank A.S

On 2 April 2019, the Group entered into a revised sale purchase agreement (Restated SPA) with Sberbank of Russia to acquire its 99.85% stake in DenizBank. In accordance with the Restated SPA, the consideration for 99.85% of shares in DenizBank was agreed at Turkish Lira (TRY) 15.48 billion. The transaction was completed on 31 July 2019 and accordingly the Group assumed control and consolidated the net assets of DenizBank as of that date.

Subsequent to 31 July 2019, as per the requirements of Turkish Capital Markets Board for a mandatory tender offer and after exercising squeeze out rights, the Group acquired the remaining 0.15% stake in DenizBank for a consideration of AED 65 million and as a result now holds 100% of equity in DenizBank. (Refer Note No. 12 of the annual financial statements)

Disposal of stake in Jointly controlled entity

On 15th April 2019, Network International Holdings Plc (a listing vehicle created as a holding entity of Network International LLC), was admitted to the premium-listing segment of the Official List maintained by Financial Conduct Authority and to the London Stock Exchange Plc.

The Group disposed its holdings in Network International Holdings Plc in two tranches. In total 39.1% shareholding was disposed, for a net consideration of AED 4,222 million compared to a book value of AED 1,076 million and as a result recorded a gain on disposal of AED 3,146 million. As of that date, the Group retained 11.9% interest in Network International Holdings Plc and no longer held significant influence and discontinued equity accounting. The retained interest was classified as investment at Fair Value through OCI. The fair value gain on measurement of the retained interest was AED 1,243 million and recognised in the income statement.

Subsequent to the above transactions, 6.2% shareholding was disposed for a net consideration of AED 749 million compared to a book value of AED 814 million. As a result, realised loss of AED 65 million was transferred to retained earnings on the investment held at Fair Value through OCI. The Group now retains 5.7% interest in Network International Holdings. (Refer Note No. 13 of annual financial statements)

OVERVIEW

In November 2009, The Central Bank of the United Arab Emirates (“CBUAE”) issued guidelines for implementation of Basel II Capital Accord in the banks in UAE. As per the circular, the Standardised Approach for Credit Risk was to apply immediately with an expectation that internationally active UAE banks and larger institutions will migrate to the Foundation Internal Rating Based (FIRB) in due course. The CBUAE Basel II framework is intended to strengthen the market discipline and risk management while enhancing the safety and soundness of the banking industry in UAE.

In February 2017, the new Basel III capital regulations issued by CBUAE came into effect for all Banks in the UAE.

The guidelines for Pillar 1 – Calculation of Credit Risk pertain to the Standardised Approach of Basel II only. One of the major changes brought in with the new guidelines is the ability to apply, on an asset class basis, risk weightings determined from ratings provided by External Credit Assessment Institutions (“ECAI”) approved by CBUAE.

CBUAE requires the Pillar 2 – Supervisory Review Process to focus on each bank’s Internal Capital Adequacy Assessment Process (ICAAP) in addition to Pillar 1 Capital calculations. The ICAAP should include a risk based forward looking view of, but not limited to, Credit, Market and Operational risk Capital.

The purpose of Pillar 3 – Market Discipline is to complement the minimum capital requirements (Pillar 1) and the supervisory review process (Pillar 2). The CBUAE supports the enhanced market discipline by developing a set of disclosure requirements which will allow market participants to assess key pieces of information on the scope of application, capital, risk exposure, risk assessment process and hence the capital adequacy of the institution. The Pillar 3 disclosures, based on a common framework, are an effective means of informing the market about the risks faced by a bank, and provide a consistent and understandable disclosure framework that enhances transparency and comparability.

In compliance with the CBUAE guidelines and Basel II accord, these disclosures include information on the Group’s risk management objectives and policies, risk assessment processes and computation, capital management and capital adequacy.

Quantitative information on risk assessment (per standardised approach) includes:

• Risk weighted assets of the Group - credit risk, market risk and operational risk

• Credit risk profile of gross credit exposure by counterparty classifications, rated/unrated

• Profile of gross credit exposure by economic activity, geographical region and maturity

• Profile of credit risk mitigation by economic activity, geographical region and maturity

• Profile of impaired loans by economic activity and geographical region

Information on capital adequacy includes:

• Capital adequacy computation

• Capital profile – CET 1, Tier I and Tier II


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n-OVERVIEW (continued)

Future Developments

In 2017, the CBUAE issued ‘Regulations regarding Capital adequacy’, supplementing the introduction of these regulations, in June 2019, CBUAE issued ‘standard regarding capital adequacy’. These standards support the implementation of the regulations. The CBUAE has also developed ‘Guidance regarding capital adequacy’ to assist banks in the application of the regulations.

Based on these standards, revised pillar 1 capital adequacy standards and revised pillar 3 disclosures requirements will be effective from June 2020.

Verification

The Pillar III Disclosures for the year 2019 have been reviewed by the Group’s statutory auditors.

Implementation of Basel II guidelines

The Group is compliant with Standardised Approach for Credit, Market and Operational Risk (Pillar I) with effect from 31st October 2007.

The Bank also assigns capital on other than Pillar I risk categories, for ‘Interest Rate risk on Banking Book’ and for ‘Business Risk’, within the Pillar II framework.

Group Structure

Emirates NBD Bank PJSC (the “Bank”) was incorporated in the United Arab Emirates on 16 July 2007 consequent to the merger between Emirates Bank International PJSC (“EBI”) and National Bank of Dubai PJSC (“NBD”), under the Commercial Companies Law (Federal Law Number 8 of 1984 as amended) as a Public Joint Stock Company. The Federal Law No. 2 of 2015, concerning Commercial Companies has come into effect from 1 July 2015, replacing the Federal Law No. 8 of 1984.

The consolidated financial statements for the year ended 31 December 2019 comprise the financial statements of the Bank and its subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and joint ventures.

The Bank is listed on the Dubai Financial Market (TICKER: “EMIRATESNBD”).

The Group’s principal business activities are corporate banking, consumer banking, treasury and Islamic banking. The Bank’s website is www.emiratesnbd.com.


CONSOLIDATED CAPITAL STRUCTURE AS PER BASEL III

The CBUAE issued Basel III capital regulations, which came into effect from 1 February 2017 introducing minimum capital requirements at three levels, namely Common Equity Tier 1 (‘CET1’), Additional Tier 1 (‘AT1’) and Total Capital.

Additional capital buffers (Capital Conservation Buffer (CCB) and Countercyclical Capital Buffer (CCyB) - maximum up to 2.5% for each buffer) introduced over and above the minimum CET1 requirement of 7%.

For 2019, CCB is required to be kept at 2.5% of the Capital base. CCyB is not in effect and is not required to be kept for 2019.

Over and above additional capital buffers, the Group as a Domestic Systematically Important Bank (D-SIB) is required to keep an additional D-SIB buffer of 1.5% of the Capital base for 2019.

Regulatory Capital

The Bank’s capital base is divided into three main categories, namely CET1, AT1 and Tier 2 (‘T2’), depending on their characteristics.

• CET1 capital is the highest quality form of capital, comprising share capital, share premium, legal, statutory and other reserves, fair value reserve, retained earnings, non-controlling interest after deductions for goodwill and intangibles and other regulatory adjustments relating to items that are included in equity but are treated differently for capital adequacy purposes under ‘CBUAE’ guidelines.

• AT1 capital comprises eligible non-common equity capital instruments.

• T2 capital comprises qualifying subordinated debt, and undisclosed reserve.

The capital overview as per Basel III framework is given below:

Available capital 2019AED 000

2018AED 000

Common equity Tier 1 capital 65,452,344 46,678,016

Tier 1 capital 74,559,700 55,607,384

Total eligible capital 79,375,840 58,802,536

Risk-weighted assets

Credit risk 385,291,210 243,860,147

Market risk 10,190,488 9,035,854

Operational risk 33,027,671 28,043,576

Total risk-weighted assets 428,509,369 280,939,577

The capital adequacy ratios as per Basel III capital regulation are given below:

Capital Ratio 2019 2018a. Total capital ratio for consolidated Group 18.52% 20.93%

b. Tier 1 ratio only for consolidated Group 17.40% 19.79%

c. CET1 ratio only for consolidated Group 15.27% 16.61%

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CONSOLIDATED CAPITAL STRUCTURE AS PER BASEL III (continued)

TIER I CAPITAL NOTES

The Group has issued a number of regulatory Tier 1 capital notes with details mentioned in the table below. The notes are perpetual, subordinated and unsecured. The Group can elect not to pay a coupon at its own discretion. Note holders will not have a right to claim the coupon and such event will not be considered an event of default. The notes carry no maturity date and have been classified as equity.

Issuance Month/Year Issued Amount Coupon Rate

March 2019 USD 1 billion (AED 3.67 billion) Fixed interest rate with a reset after six years

September 2014 USD 500 million (AED 1.83 billion) Fixed interest rate with a reset after six years

June 2009 AED 4 billion Fixed interest rate for the first five years and on a floating rate basis thereafter.

The Group has exercised its option to call back the following notes in May 2019 and as a result have been repaid in full.

Issuance Month/Year Issued Amount Coupon Rate

May 2013 USD 1 billion (AED 3.67 billion) Fixed interest rate with a reset after six years

CAPITAL ADEQUACY (STANDARDISED APPROACH)

2019Capital Charge

2018Capital Charge

Total Capital Requirements AED 000 AED 000

Credit Risk 55,867,225 32,921,120

Market Risk 1,070,001 948,765

Operational Risk 3,467,905 2,944,575

Total Capital Requirements 60,405,131 36,814,460

CONSOLIDATED CAPITAL STRUCTURE AS PER BASEL III (continued) The consolidated capital structure as per Basel III is given below:

2019AED 000

2018AED 000

Common Equity Tier 1 (CET1) Capital

Share Capital 6,316,598 5,557,775

Share premium account 17,954,164 12,270,124

Eligible Reserves 4,456,124 4,384,056

Retained Earnings/(-) Loss 43,375,416 32,412,538

Dividend Expected/Proposed - (2,223,110)

Eligible amount of minority interest 3,638 9,066

CET1 capital before the regulatory adjustments and threshold deduction 72,105,940 52,410,449

Less: Regulatory deductions (6,653,596) (5,732,433)

Total CET1 capital after the regulatory adjustments and threshold deduction 65,452,344 46,678,016

Total CET1 capital after transitional arrangement for deductions (CET1) (A) 65,452,344 46,678,016

Additional Tier 1 (AT1) Capital

Eligible AT1 capital 9,107,356 8,929,368

Other AT1 Capital e.g. (Share premium, minority interest) - -

Total AT1 capital 9,107,356 8,929,368

Total AT1 capital after transitional arrangements (AT1) (B) 9,107,356 8,929,368

Tier 2 (T2) Capital

Tier 2 Instruments e.g. subordinated loan - 146,900

Other Tier 2 capital (including General Provisions, etc.) 4,816,140 3,048,252

Total T2 Capital 4,816,140 3,195,152

Total T2 capital after transitional arrangements (T2) (C) 4,816,140 3,195,152

Total Regulatory Capital (A+B+C) 79,375,840 58,802,536


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7CAPITAL ADEQUACY (STANDARDISED APPROACH) (continued)

Standardised Approach – Credit risk & credit risk mitigation

Under Standardised Approach, all credit exposures are assessed according to the counterparty classifications and against the External Credit Assessment Institutions (“ECAI”) ratings as advised under national discretion (November 2009):

• Claims on sovereign and central banks in the GCC are risk weighted at 0% (where applicable).• Domestic currency claims on a non-commercial GCC Public Sector Enterprise (PSE) are treated as claims on

their sovereigns if their central bank or monetary authority treats them as such. Foreign currency claims on such a PSE are risk weighted one grade less favorable than its sovereign i.e. 20% risk weight. Claims on other foreign PSEs are risk weighted one grade less favorable than its sovereign.

• Claims on commercial companies owned by a GCC sovereign or PSEs that operate as commercial organisations are treated as claims on a corporate and risk weighted in accordance with ratings from acceptable ECAIs.

• ECAI ratings are also used to determine the capital requirements against exposures to banks and financial institutions. The group uses option 2 (one of alternative risk weight and ECAI ratings matrices as prescribed in the Basel II accord) for determining the capital requirements in line with the supervisory discretion adopted by the CBUAE.

• Claims on corporate entities are risk weighted at prescribed risk weights applicable per the latest ECAI rating of the counterparty. Claims on unrated corporate entities are risk weighted at 100%.

• Consumer banking exposure is classified into ‘Qualified Residential Mortgage’, ‘Qualified Regulatory Retail Portfolio’ and ‘Others’; per the CBUAE Basel II guidelines and are risk weighted at 35%, 75% and 100% respectively.

• All other assets are classified between ‘assets under higher risk categories’ and ‘others’; and risk weighted at prescribed risk weights.

For standardised capital adequacy calculations, the following rules are applied consistently to determine the appropriate ECAI ratings:

• Where more ECAI ratings of two acceptable rating agencies are available, the lower (worse) of the two is considered.

• Where the ECAI ratings are split evenly between all four rating agencies, the more conservative ratings are considered.

• Acceptable ECAI agencies are Moody’s, S&P, Fitch and Capital Intelligence.


Market Risk

Market risks subject to capital charge are as follows:

• Interest Rate Risk• Foreign Exchange Risk• Equity Exposure Risk• Commodity Risk• Options Risk

Capital charge on interest rate risk and equity exposure risk is restricted to Bank’s ‘trading book’, while capital charge on Foreign exchange risk applies on the bank’s entire positions.

The total Capital requirement for Market Risk as at 31 December 2019 is AED 1,070 million (2018: AED 949 million) as detailed below:

CAPITAL REQUIREMENT FOR MARKET RISK AS PER STANDARDISED APPROACH

2019AED 000

2018AED 000

Interest rate risk 875,773 847,009

Equity position risk - -

Options risk 64,503 74,935

Foreign exchange risk 129,725 26,821

Total capital requirement 1,070,001 948,765

Operational Risk

Basel II framework outlines three methods for calculating the risk charge for operational risk – Basic Indicator, Standardised Approach and Advanced Measurement Approach. The Group presently follows the Standardised Approach.

The total capital requirement for Operational Risk as at 31 December 2019 is AED 3,468 million (2018: AED 2,945 million). This charge is computed by categorising the Group’s activities into 8 business lines (as defined by Basel II guidelines) and multiplying the line’s three year average gross income by a pre-defined beta factor.

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nded

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Agric

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8

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919,

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e 3

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9,95

6 2

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959,

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Tran

spor

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795

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Real

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253

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Serv

ices

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610

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onal

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4

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All O

ther

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1

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79

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Gro

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est

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uspe

nse

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Tota

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Oth

er A

sset

s in

clud

e Ca

sh &

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osits

with

Cen

tral

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k, D

ue f

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ks, T

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ent

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s [n

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Secu

ritie

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nves

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ties,

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ty &

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ther

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ets.


GRO

SS C

RED

IT E

XPO

SURE

BY

MA

TURI

TY (c

onti

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The

follo

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ble

lists

the

Gro

up’s

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s by

Res

idua

l Mat

urity

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tinue

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ECEM

BER

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7 1,

943,

113

2,05

4,36

4 19

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23,8

18,5

1131

0,34

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3 m

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1,66

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1

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64

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9

75,6

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19

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462,

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10

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97,4

11

Ove

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79,5

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6,51

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963

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1,72

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uspe

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prov

ision

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Tota

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7,83

616

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138,

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342

516,

472,

740

4,15

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559,

927

36,3

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2950

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566,

571,

366

Oth

er A

sset

s in

clud

e Ca

sh &

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osits

with

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tral

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k, D

ue f

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ks, T

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ent

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f D

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Secu

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t pr

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ties,

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vest

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ther

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GRO

SS C

RED

IT E

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SURE

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MA

TURI

TY

The

follo

win

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ble

lists

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Gro

up’s

expo

sure

s by

Res

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l Mat

urity

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ECEM

BER

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s &

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lam

ic

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87,0

61

13,

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123

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35

7,19

7,78

9 9

06,3

23

1,59

5,33

3 6

,034

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8

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36

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3,80

9

3 m

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s to

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50,

751,

926

3,1

97,9

11

29,

983,

310

83,

933,

147

7,5

84,6

77

2,48

8,16

2 2

1,73

0,27

3 3

1,80

3,11

2

115,

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259

1 ye

ar to

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ears

125

,822

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1

9,11

1,65

6 6

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151,

599,

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168

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4,

500,

477

3,9

85,9

48

8,6

55,3

07

16

0,25

4,79

7

Ove

r 5 y

ears

40,

868,

957

13,

580,

332

14,

607,

971

69,

057,

260

251

,123

2,

113,

386

23,

727,

189

26,

091,

698

95,

148,

958

Add:

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of

inte

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uspe

nse

&

prov

ision

s 3

7,35

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14

49,

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174,

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771

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373

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10,

697,

358

55,

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75,

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774,

224,

510

Oth

er A

sset

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clud

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ther

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IMPA

IRED

LO

AN

S BY

ECO

NO

MIC

ACT

IVIT

Y (c

onti

nued

)

31 D

ECEM

BER

2018

Ove

rdue

(Gro

ss o

f Int

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t in

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l Im

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IRED

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AN

S BY

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NO

MIC

ACT

IVIT

Y

31 D

ECEM

BER

2019

Ove

rdue

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IRED

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AN

S BY

GEO

GRA

PHY

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tinu

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ECEM

BER

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a -

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bean

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Euro

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293,

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293,

346

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cific

pro

visi

ons

repr

esen

t Sta

ge 3

Exp

ecte

d Cr

edit

Loss

(‘EC

L’).

**G

ener

al p

rovi

sion

s re

pres

ent S

tage

1 a

nd S

tage

2 E

xpec

ted

Cred

it Lo

ss (‘

ECL’)

.

***T

his

incl

udes

Sau

di A

rabi

a, B

ahra

in, K

uwai

t, O

man

and

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IMPA

IRED

LO

AN

S BY

GEO

GRA

PHY

31 D

ECEM

BER

2019

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rdue

(Gro

ss o

f Int

eres

t in

Susp

ense

/ Pr

ovis

ions

)Pr

ovis

ions

Adju

stm

ents

Inte

rest

in

Susp

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ed

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Less

than

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and

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ific*

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4

Nor

th A

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1 16

151

- -

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a -

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- -

- -

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bean

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)

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*Spe

cific

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ons

repr

esen

t Sta

ge 3

Exp

ecte

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edit

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(‘EC

L’).

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rovi

sion

s re

pres

ent S

tage

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nd S

tage

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xpec

ted

Cred

it Lo

ss (‘

ECL’)

.

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his

incl

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Sau

di A

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ahra

in, K

uwai

t, O

man

and

Qat

ar.


RECONCILIATION OF CHANGES IN PROVISION FOR IMPAIRED LOANS

2019AED 000

2018AED 000

Balance of provision for impaired loans as at 1 January (as per IAS 39) 26,702,508 25,293,047

Reversal on transition to IFRS 9 - (7,611,048)

ECL recognised under IFRS 9 - 10,025,398

Balance at 1 January (Adjusted opening as per IFRS 9) 26,702,508 27,707,397

Add: Charge for the year

Specific Provisions (ECL Stage 3) 5,212,367 3,822,879

General Provisions (ECL Stage 1 and Stage 2) 1,419,340 (46,253)

Less: Write-off of impaired loans (2,005,953) (3,148,844)

Less: Recovery of loans previously written off - -

Less: Write back/Recovery of loan loss provisions (1,521,362) (1,631,210)

Less: Exchange and other adjustments of loan loss provisions (580,505) (1,461)

Balance of provision for impaired loans as at 31 December 29,226,395 26,702,508

The

Gro

ss C

redi

t Ex

posu

res

as p

er S

tand

ardi

sed

App

roac

h w

ith

the

effec

t of

CRM

as

deta

iled

belo

w:

GRO

SS C

RED

IT E

XPO

SURE

AS

PER

STA

ND

ARD

ISED

APP

ROA

CH

31 D

ECEM

BER

2019

On

Bala

nce

Shee

tG

ross

O

utst

andi

ngAE

D 0

00

Off

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ance

Sh

eet N

et

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sure

af

ter

Cred

it

Conv

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on

Fact

ors

(CCF

)AE

D 0

00

Tota

l Gro

ss

Expo

sure

AED

000

Expo

sure

Be

fore

CRM

AED

000

CRM

AED

000

Afte

r CR

MAE

D 0

00

Risk

W

eigh

ted

Asse

tsAE

D 0

00Cl

aim

s on

sov

erei

gns

307,

879,

445

209,

279

308,

088,

724

308,

088,

724

- 30

8,08

8,72

4 41

,060

,094

Clai

ms

on n

on-c

entr

al g

over

nmen

t pub

lic s

ecto

r ent

ities

1,13

8,17

7 17

9,17

8 1,

317,

355

1,31

7,35

5 -

1,31

7,35

5 12

2,84

9

Clai

ms

on m

ulti-

late

ral d

evel

opm

ent b

anks

113,

847

- 11

3,84

7 11

3,84

7 -

113,

847

-

Clai

ms

on b

anks

43,5

93,6

60

11,9

46,8

15

55,5

40,4

75

55,5

40,4

75

10,1

82,9

64

45,3

57,5

11

25,9

16,2

26

Clai

ms

on s

ecur

ities

firm

s-

3,92

9 3,

929

3,92

9 -

3,92

9 3,

929

Clai

ms

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed e

ntiti

es (G

RE)

162,

824,

783

55,8

51,1

82

218,

675,

965

218,

675,

965

25,7

26,3

64

192,

949,

601

190,

959,

340

Clai

ms

incl

uded

in th

e re

gula

tory

reta

il po

rtfo

lio69

,831

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201,

183

73,0

32,7

80

73,0

32,7

80

4,64

4,96

0 68

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52

,871

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Clai

ms

secu

red

by re

side

ntia

l pro

pert

y16

,699

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-

16,6

99,3

84

16,6

99,3

84

1,21

1 16

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Clai

ms

secu

red

by c

omm

erci

al re

al e

stat

e39

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4,49

3 41

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41

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41,6

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82

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82

Past

due

loan

s34

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1,

275,

233

35,4

23,9

80

6,38

0,43

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359,

386

7,77

7,13

7

Hig

her-

risk

cate

gorie

s27

3,19

1 -

273,

191

273,

191

- 27

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1 40

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7

Oth

er a

sset

s23

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44

,845

23

,436

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23

,436

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-

23,4

36,3

98

16,4

24,5

96

Clai

ms

on s

ecur

itise

d as

sets

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- -

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-

Cred

it de

rivat

ives

(Ban

ks s

ellin

g pr

otec

tion)

--

--

--

-

Tota

l69

9,13

8,37

375

,086

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774,

224,

510

745,

180,

966

40,5

76,5

4970

4,60

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5,29

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0


GRO

SS C

RED

IT E

XPO

SURE

AS

PER

STA

ND

ARD

ISED

APP

ROA

CH (R

ATE

D/U

NRA

TED

)

31 D

ECEM

BER

2019

Rate

dAE

D 0

00U

nrat

edAE

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00

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l Gro

ss

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sure

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r CR

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00

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ghte

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sets

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000

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ms

on s

over

eign

s 5

8,52

7,31

6 24

9,56

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8 30

8,08

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4 30

8,08

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4 30

8,08

8,72

4 41

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,094

Clai

ms

on n

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entr

al g

over

nmen

t pub

lic s

ecto

r ent

ities

60

6,25

5 71

1,10

0 1,

317,

355

1,31

7,35

5 1,

317,

355

122,

849

Clai

ms

on m

ulti-

late

ral d

evel

opm

ent b

anks

113,

847

- 11

3,84

7 11

3,84

7 11

3,84

7 -

Clai

ms

on b

anks

46,7

81,0

03

8,75

9,47

2 55

,540

,475

55

,540

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45

,357

,511

25

,916

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Clai

ms

on s

ecur

ities

firm

s-

3,92

9 3,

929

3,92

9 3,

929

3,92

9

Clai

ms

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed e

ntiti

es (G

RE)

4,15

8,32

5 21

4,51

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0 21

8,67

5,96

5 21

8,67

5,96

5 19

2,94

9,60

1 19

0,95

9,34

0

Clai

ms

incl

uded

in th

e re

gula

tory

reta

il po

rtfo

lio-

73,0

32,7

80

73,0

32,7

80

73,0

32,7

80

68,3

87,8

20

52,8

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54

Clai

ms

secu

red

by re

side

ntia

l pro

pert

y -

16,6

99,3

84

16,6

99,3

84

16,6

99,3

84

16,6

98,1

73

8,12

7,01

6

Clai

ms

secu

red

by c

omm

erci

al re

al e

stat

e-

41,6

18,4

82

41,6

18,4

82

41,6

18,4

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41,6

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Past

due

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s-

35,4

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35,4

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6,38

0,43

6 6,

359,

386

7,77

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7

Hig

her-

risk

cate

gorie

s-

273,

191

273,

191

273,

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273,

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787

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er a

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7,85

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23

,436

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23

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,398

23

,436

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16

,424

,596

Clai

ms

on s

ecur

itise

d as

sets

- -

- -

- -

Cred

it de

rivat

ives

(Ban

ks s

ellin

g pr

otec

tion)

- -

- -

- -

Tota

l11

0,68

4,60

466

3,53

9,90

677

4,22

4,51

074

5,18

0,96

670

4,60

4,41

738

5,29

1,21

0

GRO

SS C

RED

IT E

XPO

SURE

AS

PER

STA

ND

ARD

ISED

APP

ROA

CH (C

ON

TIN

UED

)

31 D

ECEM

BER

2018

On

Bala

nce

Shee

tG

ross

O

utst

andi

ngAE

D 0

00

Off

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ance

Sh

eet N

et

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sure

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ter

Cred

it

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Fact

ors

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00

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ss

Expo

sure

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000

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sure

Be

fore

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000

CRM

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r CR

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D 0

00

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ted

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tsAE

D 0

00Cl

aim

s on

sov

erei

gns

244,

268,

250

167,

495

244,

435,

745

244,

435,

745

-24

4,43

5,74

58,

246,

168

Clai

ms

on n

on-c

entr

al g

over

nmen

t pub

lic s

ecto

r ent

ities

783,

931

64,8

6984

8,80

084

8,80

0-

848,

800

88,2

94

Clai

ms

on m

ulti-

late

ral d

evel

opm

ent b

anks

14,6

90-

14,6

9014

,690

-14

,690

-

Clai

ms

on b

anks

41,2

26,0

5511

,782

,209

53,0

08,2

6452

,971

,035

7,46

6,64

045

,504

,395

27,6

01,5

38

Clai

ms

on s

ecur

ities

firm

s-

--

--

--

Clai

ms

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed e

ntiti

es (G

RE)

90,5

33,3

0735

,785

,767

126,

319,

074

126,

319,

074

13,5

50,5

9411

2,76

8,48

011

1,80

0,92

1

Clai

ms

incl

uded

in th

e re

gula

tory

reta

il po

rtfo

lio35

,660

,593

677,

002

36,3

37,5

9536

,337

,595

1,65

9,88

234

,677

,713

26,6

20,8

06

Clai

ms

secu

red

by re

side

ntia

l pro

pert

y15

,856

,498

-15

,856

,498

15,8

56,4

98-

15,8

56,4

9810

,999

,715

Clai

ms

secu

red

by c

omm

erci

al re

al e

stat

e43

,263

,107

1,14

1,37

044

,404

,477

44,4

04,4

77-

44,4

04,4

7744

,404

,477

Past

due

loan

s28

,088

,692

479,

914

28,5

68,6

062,

214,

095

-2,

214,

095

2,78

6,40

1

Hig

her-

risk

cate

gorie

s42

9,97

1-

429,

971

429,

971

-42

9,97

164

4,95

7

Oth

er a

sset

s16

,347

,646

-16

,347

,646

16,3

47,6

46-

16,3

47,6

4610

,666

,870

Clai

ms

on s

ecur

itise

d as

sets

--

--

--

-

Cred

it de

rivat

ives

(Ban

ks s

ellin

g pr

otec

tion)

--

--

--

-

Tota

l51

6,47

2,74

0 5

0,09

8,62

656

6,57

1,36

654

0,17

9,62

6 2

2,67

7,11

651

7,50

2,51

024

3,86

0,14

7


EXPO

SURE

SU

BJEC

T TO

DED

UCT

ION

AS

PER

STA

ND

ARD

ISED

APP

ROA

CH (R

ATE

D/U

NRA

TED

)

31 D

ECEM

BER

2019

Rate

dA

ED 0

00U

nrat

edA

ED 0

00

Tota

l Gro

ss

Expo

sure

AED

000

Expo

sure

Be

fore

CR

MA

ED 0

00A

fter

CRM

AED

000

Risk

W

eigh

ted

Ass

ets

AED

000

Clai

ms

on s

over

eign

s-

--

--

-

Clai

ms

on n

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al g

over

nmen

t pub

lic s

ecto

r ent

ities

-

--

--

-

Clai

ms

on m

ulti-

late

ral d

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opm

ent b

anks

--

--

--

Clai

ms

on b

anks

10,0

88,7

67

1,3

51,9

03

11,

440,

670

11,

440,

670

1,2

57,7

06

628

,853

Clai

ms

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed e

ntiti

es (G

RE)

411

,654

5

9,23

1,27

2 5

9,64

2,92

6 5

9,64

2,92

6 3

3,91

6,56

2 3

3,91

6,56

2

Clai

ms

incl

uded

in th

e re

gula

tory

reta

il po

rtfo

lio -

7,8

84,5

52

7,8

84,5

52

7,8

84,5

52

3,2

39,5

92

2,4

29,6

94

Clai

ms

secu

red

by re

side

ntia

l pro

pert

y -

1,2

11

1,2

11

1,2

11

- -

Clai

ms

secu

red

by c

omm

erci

al re

al e

stat

e -

--

- -

-

Past

due

loan

s -

93,

049

93,

049

46,

413

25,

363

25,

363

Hig

her-

risk

cate

gorie

s-

--

--

-

Oth

er a

sset

s-

--

--

-

Clai

ms

on s

ecur

itise

d as

sets

- -

- -

- -

Cred

it de

rivat

ives

(Ban

ks s

ellin

g pr

otec

tion)

- -

- -

- -

Tota

l10

,500

,421

6

8,56

1,98

7 7

9,06

2,40

8 7

9,01

5,77

2 3

8,43

9,22

3 3

7,00

0,47

2

GRO

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IT E

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SURE

AS

PER

STA

ND

ARD

ISED

APP

ROA

CH (R

ATE

D/U

NRA

TED

) (co

ntin

ued)

31 D

ECEM

BER

2018

Rate

dAE

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00U

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edAE

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ss

Expo

sure

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00

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sets

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Clai

ms

on s

over

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s8,

811,

937

235,

623,

808

244,

435,

745

244,

435,

745

244,

435,

745

8,24

6,16

8

Clai

ms

on n

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al g

over

nmen

t pub

lic s

ecto

r ent

ities

26

6,64

258

2,15

884

8,80

084

8,80

084

8,80

088

,294

Clai

ms

on m

ulti-

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RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

Foreign Exchange Risk

Foreign exchange risk hedging strategies are used to ensure that positions are always within established limits. The Group has a conservative policy towards foreign exchange risk and has set limits on positions by currency. Foreign exchange risk is measured using position reports showing the net long or short position for currencies, which are monitored on a real-time basis. Foreign exchange risk is actively managed using spot and forward foreign exchange instruments.

The capital requirement for foreign exchange risk as at 31 December 2019 is AED 129.73 million (as at 31 December 2018 is AED 26.82 million).

Operational Risk

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for Operational risk.

Liquidity Risk

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for Liquidity risk.

Reputational Risk

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for Reputation risk.

Regulatory/Compliance Risk

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for Regulatory/compliance risk.

Internal Audit’s role in overall risk management

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for details on Internal Audit’s role in overall risk management.

Risk management framework and processes at Emirates Islamic Bank (EI)

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for details on Risk management framework and processes at EIB.

Risk management framework and processes at DenizBank

Please refer Note no. 50 in the annual financial statements for detailed risk management objectives and policies for details on Risk management framework and processes at DenizBank.

Documents

REACHING - Emirates NBD€¦ · Emirates NBD Capital (KSA) LLC 100 Investment Services K.S.A. Consolidation Consolidation-Emirates NBD Capital PSC 100 Funds Management Dubai, U.A.E