Investor Presentaiton
NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
46
RISK MANAGEMENT (CONTINUED)
S.
Interest rate repricing analysis* (continued)
31 December 2021
Over 6
Less than 1
month
AED 000
Over 1 month
to 3 months
AED 000
year
AED 000
months to 1
13,832,630
8,276,237
9,937,151
156,485,278
49,068,468
43,127,897
2,385,810
20,569,253
3,625,762
---------------
TOTAL LIABILITIES AND EQUITY
172,703,718
77,913,958
56,690,810
ON BALANCE SHEET GAP
94,973,596
41,654,902
(24,127,790)
INTEREST RATE SENSITIVITY GAP - 2021
OFF BALANCE SHEET GAP
(3,071,260)
(18,336,930)
715,008
91,902,336
CUMULATIVE PROFIT RATE SENSITIVITY
CUMULATIVE PROFIT RATE SENSITIVITY
GAP - 2021
GAP - 2020
*Represents when the interest rate will be repriced for each class of assets and liabilities.
91,902,336
23,317,972
115,220,308
99,264,676
102,970,064
110,880,631
(23,412,782)
107,198,117
88,675,568
LIABILITIES AND EQUITY
Due to banks
Customer deposits
Debt issued and other borrowed funds
Sukuk payable
Negative fair value of derivatives
Customer acceptances
Other liabilities
Total equity
123
EMIRATES NBD BANK PJSC - GROUP CONSOLIDATED FINANCIAL STATEMENTS - FOR THE YEAR ENDED 31 DECEMBER 2021
124
V.
U.
T.
46
RISK MANAGEMENT (CONTINUED)
NOTES TO THE GROUP CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Reputational Risk
Reputational risk is the risk of potential loss of earnings and future revenue, loss in market value or lack
of liquidity supply due to deterioration of reputation. It also includes the threat to the brand value of a
financial institution.
Reputational risk can arise as a consequence of failures with a strong negative perception amongst clients,
shareholders, creditors or the public. The Group has measures to ensure a positive perception of the Group
and that overall risk management ensures appropriate management of reputational risk.
ICAAP and Stress-Testing:
Stress testing is an integral part of the Group's risk management process. It includes scenario analysis and is
conducted regularly. In particular, the ICAAP (a group-wide exercise spanning risk types) is performed annually.
On top of this, additional stress tests are carried out in response to microeconomic and macroeconomic
conditions or portfolio and branch/subsidiary level. Every stress test is documented and the results are
discussed at the EXCO level and approved by the GRC and the BRC.
Stress testing alerts senior management to the Group's potential vulnerability to exceptional but plausible
adverse events. As such, stress testing enables us to assess capital adequacy and identify potentially risky
portfolio segments as well as inherent systematic risks. This then allows us to develop the right contingency
plans, exit strategies and mitigating actions beforehand.
Regulatory/Compliance Risk
Regulatory/Compliance risk is the risk of reputational and/or financial losses due to the failure to comply
with applicable laws, regulations or sanctions.
The Group has an independent Compliance function, with the necessary mandate and authority to enforce and
monitor compliance on a Group wide basis. This includes compliance with the applicable laws and regulations
across the various jurisdictions where the Group operates as well as those of the USD/EU clearing centres.
Compliance policies covering key areas such as Sanctions, Anti Money Laundering (AML), Counter Terrorist
Financing (CTF), Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS) are
applicable Group wide and are supplemented where necessary to address any unique local requirements.
These policies are supported by automated screening and monitoring systems and associated investigation
teams to help comply with the Sanctions, AML, CTF, FATCA and CRS requirements. Independent Compliance
Monitoring is undertaken to provide assurance over the effectiveness of controls. Mandatory Compliance
Training is provided to all relevant staff both at onboarding and periodically thereafter to help ensure that
key requirements are complied with.
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