Investor Presentaiton
107
NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
46
RISK MANAGEMENT (CONTINUED)
K.
Deferral amount and outstanding balances of UAE customers
NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
46
RISK MANAGEMENT (CONTINUED)
L.
Impairment reserve under the CBUAE guidance
During 2020, the Group drew AED 6,906 million of Zero Cost Funding under the CBUAE TESS program and
repaid the full amount as at 31 December 2021.
As at 31 December 2021, the total deferrals provided to customers was AED 10,700 million out of which
AED 8,221 million has been repaid till date resulting in active deferrals amounting to AED 2,479 million. Total
outstanding exposure of the customers availing deferrals amounts to AED 47,358 million. No active deferrals
relate to TESS program.
Analysis of customers benefiting from payment deferrals
Deferral amount and outstanding balances of UAE customers
31 December 2021
Loans and receivables
The CBUAE issued its IFRS 9 guidance on 30 April 2018 via notice no. CBUAE/BSD/2018/458 addressing various
implementation challenges and practical implications for Banks adopting IFRS 9 in the UAE ("the guidance").
Pursuant to clause 6.4 of the guidance, the reconciliation between general and specific provision under
Circular 28/2010 of CBUAE and IFRS 9 is as follows:
2021
AED 000
2020
AED 000
Impairment reserve: General
General provisions under Circular 28/2010 of CBUAE
Less: Stage 1 and Stage 2 provisions under IFRS 9
General provision transferred to the impairment reserve*
5,894,162
(10,776,610)
5,903,434
(10,309,881)
AED 000
Corporate and Institutional
banking
Stage 1
Stage 2
Stage 3
Group 1
Group 2
Number
of deferral
customers
Payments
deferred
/accounts
Exposures
Expected
Credit Losses
764,360
459
6,733,711
25,768,643
74
1,690,585
7,603,974
3,014,883
31
523,497
2,842,448
1,896,116
564
8,947,793
36,215,065
5,675,359
Impairment reserve: Specific
Specific provisions under Circular 28/2010 of CBUAE
Less: Stage 3 provisions under IFRS 9
Specific provision transferred to the impairment reserve*
Total provision transferred to the impairment reserve
26,130,203
(26,408,866)
24,377,584
(24,674,930)
*In the case where provisions under IFRS 9 exceed provisions under CBUAE, no amount shall be transferred
to the impairment reserve.
M.
Market Risk
478
86
564
7,041,108
1,906,685
8,947,793
27,381,521
1,653,556
8,833,544
4,021,803
36,215,065
5,675,359
Retail banking and Wealth
Management
Stage 1
120,465
Stage 2
Stage 3
9,968
26
130,459
1,446,054
267,602
38,950
1,752,606
10,269,306
320,608
644,179
154,904
229,403
104,099
11,142,888
579,611
Group 1
120,835
Group 2
9,624
130,459
1,478,258
274,348
1,752,606
10,353,791
343,957
789,097
11,142,888
235,654
579,611
Total
131,023
10,700,399
47,357,953
6,254,970
EMIRATES NBD BANK PJSC - GROUP CONSOLIDATED FINANCIAL STATEMENTS - FOR THE YEAR ENDED 31 DECEMBER 2021
108
Market risk is the risk that the value of financial instruments in the Group's books - with the inclusion of some
other financial assets and liabilities could produce a loss because of changes in future market conditions.
The Group takes on Market Risks in the pursuit of its strategic and business objectives.
The Group predominantly pursues opportunities in the market that exposes itself to the following categories
of market risk which are actively managed and monitored:
1. Interest Rate Risk: Losses in value due to changes in the level, slope and curvature of yield curves, the
volatility of interest rates and changes in credit spreads;
2. FX Risk: Losses in value due to exposures to changes in spot prices, forward prices and volatilities of
currency rates;
3. Credit Spread Risk: Losses in the value due to change in credit spreads driven by associated credit risk of
the security issuer/underlying;
4. Commodity Price Risk: Losses in value due to exposures to changes in spot prices, forward prices and
volatilities of commodities such as petrochemicals, base and precious metals, and food stocks.
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