Basel III - Pillar 3 Disclosures
30 Sep 2022
National Bank of Umm Al Qaiwain
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Contents | |||
1.2. Template OV1: Overview of RWA..................................................................................................... | 6 | ||
2. | Leverage ratio ....................................................................................................................................... | 7 | |
2.1. Template LR1: Summary comparison of accounting assets vs leverage ratio exposure .................. | 7 | ||
2.2. Template LR2: Leverage ratio common disclosure template ........................................................... | 8 | ||
3. | Liquidity Risk Management................................................................................................................... | 9 | |
3.1. Template LIQ1: Liquidity Coverage Ratio (LCR) ................................................................................ | 9 | ||
3.2. Template ELAR: Eligible Liquid Assets Ratio ..................................................................................... | 9 | ||
3.3. Template ASRR: Advances to Stables Resource Ratio .................................................................... | 10 |
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1. General Information:
National Bank of Umm Al-Qaiwain (PSC) (the "Bank") is a Public Shareholding Company (ADX listed) incorporated in the Emirate of Umm Al-Qaiwain ("UAQ") in the United Arab Emirates ("U.A.E.") by Amiri Decree Number (1) on January 5, 1982, issued by His Highness, the Ruler of Umm Al-Qaiwain, and commenced its operations with effect from August 1, 1982.
The Group comprises National Bank of Umm Al-Qaiwain (PSC), Umm Al-Qaiwain, and its subsidiary Twin Towns Marketing Management LLC (100% ownership), Dubai. The Bank is engaged in providing products and services to customers in Retail, Corporate, Small and Medium Enterprise, Treasury and Trade finance in both conventional and Islamic banking.
2. Executive Summary:
The Central Bank of the UAE has published notice number CBUAE/BSD/N/2020/4980 in November 2020 and CBUAE/BSD/N/2021/5508 on 30 November 2021 regarding Pillar 3 disclosures. These disclosures have been prepared in accordance with these guidelines along with the Board approved disclosure Policy of the Bank.
2.1. Purpose
The purpose of this report is to enable market participants to access key information relating to Bank's regulatory capital and risk exposures in order to increase transparency and confidence about Bank's exposure to risk and the overall adequacy of its regulatory capital.
2.2. Overview of Basel III Requirements
The Bank complies with the Basel 3 standards and guidelines, which have been implemented in the UAE through notice reference CBUAE/BSD/N/2020/4980 dated 12 November 2020.
For Pillar 1, Bank has adopted the Standardized Approach for Credit Risk, the Standardized Approach for Market Risk and the Basic Indicator Approach for determining the capital requirements for Operational Risk.
Pillar 2 covers additional risk areas such as systemic risk, concentration risk, strategic risk, reputational risk, liquidity risk and legal risk. The risk and capital assessment of these other areas are commonly referred as "Internal Capital Adequacy Assessment Process (ICAAP)". Under ICAAP report, the Bank assesses the above mentioned risk (where applicable) and measures that after combining the pillar 1+Pillar 2 risk the Bank can withstand the regulatory and internal capital requirements. The Bank submits ICAAP report to CBUAE on annual basis.
Pillar 3 focuses on Market Discipline and complements the minimum capital requirements (Pillar I) and the supervisory review process (Pillar II). 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 . This report is prepared in line with the same objective.
2.3. Capital Management
Bank's capital management policy is to maintain a strong capital base to support the development and growth of business. Current and future capital requirements are determined on the basis of loan growth expectations for each business unit, expected growth in off-balance sheet facilities, future sources and uses of funds and Bank's future dividend policy. The Bank also ensures compliance with externally imposed capital requirement norms, strong credit ratings and healthy capital ratios in order to support its business and to maximize shareholders' value. The U.A.E. Central Bank requires the banks in U.A.E. to maintain a ratio of total regulatory capital to the risk weighted assets at or above the agreed minimum of 10.5%. Bank continues to maintain one of the highest capital adequacy ratios in the UAE banking industry, which stands at 44.20%, which is far higher than the 10.5% i.e the minimum prescribed levels stipulated by Central Bank of the UAE. This demonstrates the financial strength of the Bank and its capacity to expand its lending and investment capability when needed.
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1. Overview of risk management and RWA
1.1. Template KM1: Key metrics (at consolidated group level)
a | b | c | d | e | ||
T | T-1 | T-2 | T-3 | T-4 | ||
In AED'000 | 30 Sep 22 | 30 Jun 22 | 31 Mar 22 | 31 Dec 21 | 30 Sept 21 | |
Available capital (amounts) | ||||||
1 | Common Equity Tier 1 (CET1) | 4,684,668 | 4,408,136 | 4,796,303 | 4,845,794 | 4,553,350 |
1a | Fully loaded ECL accounting model | 4,684,668 | 4,408,136 | 4,796,303 | 4,845,794 | 4,558,542 |
2 | Tier 1 | 4,684,668 | 4,408,136 | 4,796,303 | 4,845,794 | 4,553,350 |
2a | Fully loaded ECL accounting model Tier 1 | 4,684,668 | 4,408,136 | 4,796,303 | 4,845,794 | 4,558,542 |
3 | Total capital | 4,807,931 | 4,526,208 | 4,924,322 | 4,972,002 | 4,679,775 |
3a | Fully loaded ECL accounting model total capital | 4,807,931 | 4,526,208 | 4,924,322 | 4,972,002 | 4,684,971 |
Risk-weighted assets (amounts) | ||||||
4 | Total risk-weighted assets (RWA) | 10,877,644 | 10,462,176 | 11,267,618 | 11,132,303 | 11,312,337 |
Risk-based capital ratios as a percentage of RWA | ||||||
5 | Common Equity Tier 1 ratio (%) | 43.07% | 42.13% | 42.57% | 43.53% | 40.25% |
5a | Fully loaded ECL accounting model CET1 (%) | 43.07% | 42.13% | 42.57% | 43.53% | 40.20% |
6 | Tier 1 ratio (%) | 43.07% | 42.13% | 42.57% | 43.53% | 40.25% |
6a | Fully loaded ECL accounting model Tier 1 ratio (%) | 43.07% | 42.13% | 42.57% | 43.53% | 40.20% |
7 | Total capital ratio (%) | 44.20% | 43.26% | 43.71% | 44.66% | 41.37% |
7a | Fully loaded ECL accounting model total capital ratio (%) | 44.20% | 43.26% | 43.71% | 44.66% | 41.32% |
Additional CET1 buffer requirements as a percentage of RWA | ||||||
8 | Capital conservation buffer requirement (2.5% from 2019) (%) | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% |
9 | Countercyclical buffer requirement (%) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
10 | Bank D-SIB additional requirements (%) | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Total of bank CET1 specific buffer requirements (%) (row 8 + | ||||||
11 | row 9+ row 10) | 2.50% | 2.50% | 2.50% | 2.50% | 2.50% |
CET1 available after meeting the bank's minimum capital | ||||||
12 | requirements (%) | 33.70% | 32.76% | 33.21% | 34.16% | 30.87% |
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Leverage Ratio | |||||||||||
13 | Total leverage ratio measure | 15,526,626 | 15,532,337 | 15,806,954 | 15,691,013 | ||||||
14 | Leverage ratio (%) (row 2/row 13) | 30.17% | 28.38% | 30.34% | 30.88% | ||||||
Fully loaded ECL accounting model leverage ratio (%) (row | 30.17% | 28.38% | 30.34% | 30.88% | |||||||
14a | 2A/row 13) | ||||||||||
Leverage ratio (%) (excluding the impact of any | 30.17% | 28.38% | 30.34% | 30.88% | |||||||
14b | applicable temporary exemption of central bank reserves) | ||||||||||
Liquidity Coverage Ratio | |||||||||||
15 | Total HQLA | NA | NA | NA | NA | NA | |||||
16 | Total net cash outflow | NA | NA | NA | NA | NA | |||||
17 | LCR ratio (%) | NA | NA | NA | NA | NA | |||||
Net Stable Funding Ratio | |||||||||||
18 | Total available stable funding | NA | NA | NA | NA | NA | |||||
19 | Total required stable funding | NA | NA | NA | NA | NA | |||||
20 | NSFR ratio (%) | NA | NA | NA | NA | NA | |||||
ELAR | |||||||||||
21 | Total HQLA | 2,474,637 | 2,121,544 | 1,725,255 | 1,451,385 | 1,427,948 | |||||
22 | Total liabilities | 9,020,433 | 8,971,441 | 8,908,760 | 8,904,383 | 9,254,695 | |||||
23 | Eligible Liquid Assets Ratio (ELAR) (%) | 27.43% | 23.65% | 19.37% | 16.30% | 15.43% | |||||
ASRR | |||||||||||
24 | Total available stable funding | 12,105,636 | 11,928,170 | 12,051,672 | 11,961,891 | 11,734,655 | |||||
25 | Total Advances | 7,595,799 | 7,257,844 | 7,606,978 | 7,626,988 | 8,519,219 | |||||
26 | Advances to Stable Resources Ratio (%) | 62.75% | 60.85% | 63.12% | 63.76% | 72.60% |
Note: Leverage Ratio went live starting 31 December 2021 therefore the previous quarter data have been left blank. LCR & NSFR as NA as these applies to DSIB.
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NBQ - National Bank of Umm Al-Qaiwain PSC published this content on 14 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 November 2022 09:50:09 UTC.