Basel III - Pillar 3 Disclosures

30 Sep 2022

National Bank of Umm Al Qaiwain

.

Page 1 of 10

Contents

1.

General Information: ............................................................................................................................

3

2.

Executive Summary:..............................................................................................................................

3

2.1.

Purpose .............................................................................................................................................

3

2.2. Overview of Basel III Requirements..................................................................................................

3

2.3.

Capital Management.........................................................................................................................

3

1.

Overview of risk management and RWA..............................................................................................

4

1.1. Template KM1: Key metrics (at consolidated group level)...............................................................

4

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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Disclaimer

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.