Investor Presentaiton
EMIRATES NBD
REVIEW OF
PERFORMANCE
ANNUAL REPORT 2021
Considering the
uncertainties in the economic
environment, the following actions were taken by the
Group:
Continued to utilize latest available macroeconomic
forecasts for variables such as oil prices, GDP, real
estate occupancy, unemployment rates and
exchange rates.
Applied industry specific account level adjustments
for retail exposures with regards to specific industries
whose employees were expected to be most
impacted due to COVID-19. Portfolio-level ECL
الإمارات الإسلامي
EMIRATES ISLAMIC
Future Banking
by Emirates NBD and Emirates Islamic
Urban
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adjustments were also applied to customers availing
deferrals or adjustments to monthly instalments
based upon employment status and level of salary
inflows.
Applied portfolio-level ECL adjustments to Corporate
and Institutional exposures based upon affected
geographies and sectors.
Continued to assess significant corporate exposures
individually to adequately safeguard against any
adverse movements due to COVID-19.
To ensure all models are relevant to the economic cycle
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Emirates NBD and Emirates Islamic unveil 'Future Banking' at Expo 2020 Dubai
and business intent, periodic monitoring is conducted
on set frequencies throughout the year and
communicated in relevant Group Committees to ensure
optimal governance oversight. Changes in lending
policies and/or business strategies impacting rating
systems are incorporated in the respective rating
policies.
Group Risk Model and Analytics is a major contributor in
the Group Internal Capital Adequacy Assessment
Process (ICAAP) and stress testing exercises. The Group
continued leveraging its IFRS 9 models to further
enhance the Group Internal Capital Adequacy
Assessment Process (ICAAP) and stress testing exercises.
Market Risk
Market risk is the risk of loss of income or market value
of assets due to fluctuations in factors such as interest
rates, foreign exchange rates, equities, commodity
prices, or changes in volatility or correlations of market
risk factors. The Group is exposed to market risks from
its trading, client servicing, and balance sheet
management activities. The Group's market risk
management strategy and market risk limits are
established within the Group Risk Appetite Statement
and business strategies (taking into account
macroeconomic and market conditions). Market risk
limits are subject to regular review.
The Group Asset Liability Committee (Group ALCO) and
Group Risk Committee (GRC) are the Senior Management
Committees that support the Group in managing market
risk. The Group ALCO and GRC establish the market risk
management policy and methodology framework
governing prudent market risk-taking backed by
measurement and monitoring systems and internal
controls. Group ALCO and GRC are supported by the
Market and Treasury Credit Risk unit. The latter is an
independent risk management and control unit within
Group Risk responsible for operationalising the market
risk management framework to support business
conduct while ensuring adequate risk control and
oversight.
Capital and Portfolio Analytics
The Group Capital and Portfolio Analytics team actively
tracks developments from the Basel Committee, the
Central Bank of the UAE and other regulators to
implement relevant requirements for a more resilient
banking platform.
Group Model Validation is a specialist unit that performs
the independent validation of risk models Group-wide.
The unit is responsible for the implementation of a
robust model governance framework to manage the
material portion of model risk in the Group and its
ongoing use. It also leads the technical validation of the
risk models and covers independent validation of the
models to the Board.
ICAAP and Stress Test unit is a specialised unit
responsible for leading the exercise to assess Capital
Adequacy under stress scenarios and submit reports to
the Central Bank of the UAE. This unit also conducts
stress testing or ICAAP activities for overseas branches
and the relevant authorities in these jurisdictions. For
subsidiaries, the unit provides the technical leadership
and oversight function, and ensures that submissions
meet the Group standards.
Operational Risk
Group Operational Risk works closely with the Group's
business lines and subsidiaries to raise awareness of
operational risk. Key risks are identified and discussed
at the GRC. A process is in place for the collection and
reporting of operational risk data. Conducting a risk
review, as part of the 'New Product and Process
Approval (NPPA), prior to the launch of any new or
amended product or process is embedded, as is the
Operational Risk and Control Assessment (ORCA)
workshops. These form the cornerstone of the Group's
operational risk management activity. This embeds a
risk culture across the organisation. Key Risk Indicators
(KRI) are used to monitor the level of operational risks
and issues in the Group.
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