BASEL II PILLAR III DISCLOSURES Contents Page...The CBUAE supervises Emirates Islamic Bank PJSC (the...

EMIRATES ISLAMIC BANK PJSC BASEL II – PILLAR III DISCLOSURES 31 DECEMBER 2017

BASEL II – PILLAR III DISCLOSURES Contents Page Overview 1 Information on subsidiaries and significant investments 4 Consolidated capital structure 5 Capital adequacy 6 Capital requirement for market risk as per standardized approach 10 Gross credit exposure by currency 11 Gross credit exposure by geography 12 Gross credit exposure by economic activity 14 Gross credit exposure as per standardized approach 16 Gross credit exposure as per standardized approach (Rated / Unrated) 18 Exposure subject to deduction as per standardized approach (Rated / Unrated) 20 Credit risk mitigation as per standardized approach 22 Impaired financing by economic activity 23 Impaired financing by geography 25 Reconciliation of changes in provision for impaired financing 27 Quantitative disclosures for equity position in the banking book 28 Gross credit exposure by maturity 33

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OVERVIEW (continued) Quantitative information on risk assessment (per standardized approach) includes: Risk weighted assets of the Group - credit risk, market risk and operational risk Credit risk profile of gross credit exposure by counterparty classifications, rated/

unrated Profile of gross credit exposure by economic activity, geographical region and

maturity Profile of credit risk mitigation by economic activity, geographical region and

maturity Profile of impaired financing receivables by economic activity and geographical

region Information on capital adequacy includes: Capital adequacy computation Capital profile – Tier I and Tier II Introduction The CBUAE supervises Emirates Islamic Bank PJSC (the “Bank”) and its subsidiaries (together referred to as the “Group”) on a consolidated basis, and therefore receives information on the capital adequacy of, and sets capital requirements for, the Group as a whole. The capital requirements are computed at a Group level using the Basel II framework of the Basel Committee on Banking Supervision (“Basel Committee”), after applying the amendments advised by the CBUAE, within national discretion. Basel II is structured around three ‘pillars’: minimum capital requirements (Pillar I); supervisory review process (Pillar II); and market discipline (Pillar III). Pillar III disclosures 2017 Pillar III complements the minimum capital requirements and the supervisory review process. Its aim is to encourage market discipline by developing a set of disclosure requirements which allow market participants to assess certain specified information on the scope of application of Basel II, capital, particular risk exposures and risk assessment processes, and hence the capital adequacy of the institution. Disclosures consist of both quantitative and qualitative information and are provided at the consolidated level. The Central Bank of UAE (‘CBUAE’) issued Basel III capital regulations, which came into effect from 1 February 2017 introducing minimum capital requirements at three levels,


1

OVERVIEW In November 2009, The Central Bank of the United Arab Emirates (“CBUAE”) issued guidelines for implementation of Basel II Capital Accord in the banks in UAE. As per the circular, the Standardized Approach for Credit Risk was to apply immediately with an expectation that internationally active UAE banks and larger institutions will migrate to the Foundation Internal Rating Based (FIRB) in due course. The CBUAE Basel II framework is intended to strengthen the market discipline and risk management while enhancing the safety and soundness of the banking industry in UAE. The guidelines for Pillar 1 – Calculation of Credit Risk pertain to the Standardized Approach of Basel II only. One of the major changes brought in with the new guidelines is the ability to apply, on an asset class basis, risk weightings determined from ratings provided by External Credit Assessment Institutions (“ECAI”) approved by CBUAE. CBUAE requires the Pillar 2 – Supervisory Review Process to focus on each bank’s Internal Capital Adequacy Assessment Process (ICAAP) in addition to Pillar 1 Capital calculations. The ICAAP should include a risk based forward looking view of, but not limited to, Credit, Market and Operational risk Capital. The purpose of Pillar 3 – Market Discipline is to complement the minimum capital requirements (Pillar 1) and the supervisory review process (Pillar 2). 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 of the institution. The Pillar 3 disclosures, based on a common framework, are an effective means of informing the market about the risks faced by a bank, and provide a consistent and understandable disclosure framework that enhances transparency and comparability. In compliance with the CBUAE guidelines and Basel II accord, these disclosures include information on the Group’s risk management objectives and policies, risk assessment processes and computation, capital management and capital adequacy. 1



2

OVERVIEW (continued) Quantitative information on risk assessment (per standardized approach) includes: Risk weighted assets of the Group - credit risk, market risk and operational risk Credit risk profile of gross credit exposure by counterparty classifications, rated/

unrated Profile of gross credit exposure by economic activity, geographical region and

maturity Profile of credit risk mitigation by economic activity, geographical region and

maturity Profile of impaired financing receivables by economic activity and geographical

region Information on capital adequacy includes: Capital adequacy computation Capital profile – Tier I and Tier II Introduction The CBUAE supervises Emirates Islamic Bank PJSC (the “Bank”) and its subsidiaries (together referred to as the “Group”) on a consolidated basis, and therefore receives information on the capital adequacy of, and sets capital requirements for, the Group as a whole. The capital requirements are computed at a Group level using the Basel II framework of the Basel Committee on Banking Supervision (“Basel Committee”), after applying the amendments advised by the CBUAE, within national discretion. Basel II is structured around three ‘pillars’: minimum capital requirements (Pillar I); supervisory review process (Pillar II); and market discipline (Pillar III). Pillar III disclosures 2017 Pillar III complements the minimum capital requirements and the supervisory review process. Its aim is to encourage market discipline by developing a set of disclosure requirements which allow market participants to assess certain specified information on the scope of application of Basel II, capital, particular risk exposures and risk assessment processes, and hence the capital adequacy of the institution. Disclosures consist of both quantitative and qualitative information and are provided at the consolidated level. The Central Bank of UAE (‘CBUAE’) issued Basel III capital regulations, which came into effect from 1 February 2017 introducing minimum capital requirements at three levels,


1

OVERVIEW In November 2009, The Central Bank of the United Arab Emirates (“CBUAE”) issued guidelines for implementation of Basel II Capital Accord in the banks in UAE. As per the circular, the Standardized Approach for Credit Risk was to apply immediately with an expectation that internationally active UAE banks and larger institutions will migrate to the Foundation Internal Rating Based (FIRB) in due course. The CBUAE Basel II framework is intended to strengthen the market discipline and risk management while enhancing the safety and soundness of the banking industry in UAE. The guidelines for Pillar 1 – Calculation of Credit Risk pertain to the Standardized Approach of Basel II only. One of the major changes brought in with the new guidelines is the ability to apply, on an asset class basis, risk weightings determined from ratings provided by External Credit Assessment Institutions (“ECAI”) approved by CBUAE. CBUAE requires the Pillar 2 – Supervisory Review Process to focus on each bank’s Internal Capital Adequacy Assessment Process (ICAAP) in addition to Pillar 1 Capital calculations. The ICAAP should include a risk based forward looking view of, but not limited to, Credit, Market and Operational risk Capital. The purpose of Pillar 3 – Market Discipline is to complement the minimum capital requirements (Pillar 1) and the supervisory review process (Pillar 2). 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 of the institution. The Pillar 3 disclosures, based on a common framework, are an effective means of informing the market about the risks faced by a bank, and provide a consistent and understandable disclosure framework that enhances transparency and comparability. In compliance with the CBUAE guidelines and Basel II accord, these disclosures include information on the Group’s risk management objectives and policies, risk assessment processes and computation, capital management and capital adequacy. 2



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In addition to its head office in Dubai, the Bank operates through 64 branches in the UAE. The financial statements combine the activities of the Bank’s head office, its branches and the following subsidiaries (together referred to as “the Group”).

Date of incorporation & country

Principal activity

Ownership %

2017 2016

Emirates Islamic Financial Brokerage Co. LLC

26 April 2006, UAE Financial brokerage services

100%

100%

EIB Sukuk Company Limited 6 June 2007, Cayman Islands

Special Purpose Entity

100%

100%

EI Funding Limited 15 May 2014, Cayman Islands


100%

100%

The Bank provides full commercial and banking services and offers a variety of products through Islamic financing and investing instruments in accordance with Islamic Sharia. The Bank’s registered office address is P.O. Box 6564, Dubai, United Arab Emirates. The Group consolidated financial statements for the year ended 31 December 2017 have been approved for issuance by the Board of Directors on 15 January 2018. Consolidated Capital Structure The Group’s regulatory capital is calculated as per the guidelines issued by CBUAE and it comprises: a. Tier 1 Capital which is considered as the core measure of the Group’s financial

strength and includes share capital, reserves, and retained earnings and; b. Tier 2 Capital which consists of qualified subordinated debts and allowed portions

of revaluation reserves & general provisions. The Bank’s share capital as at 31 December 2017 comprised of 5,430,422,000 issued and fully paid shares of value AED 1 each. The detailed breakdown of the capital structure of the bank is as follows:


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namely Common Equity Tier 1 (‘CET1’), Additional Tier 1 (‘AT1’) and Total Capital. The Additional capital buffers (CCB and CCyB- maximum up to 5%) introduced are over and above the minimum CET1 requirement of 7%. Future Developments The regulation and supervision of financial institutions is currently undergoing a period of ongoing change in response to the global financial crisis. Increased capital requirements and regulatory focus on Liquidity Risk have been announced by the Basel Committee in October 2010, commonly known as Basel III. These developments are being tracked by the Group and necessary dialogue conducted with the Central Bank of UAE, for timely changes to the Capital Management and Disclosure regimes. Verification The Pillar III Disclosures for the year 2017 have been appropriately verified internally and have been reviewed by the Group’s statutory auditors. Implementation of Basel II guidelines The Group is compliant with Standardized Approach for Credit, Market and Operational Risk (Pillar I) with effect from 31 October 2007. The Bank also assigns capital on other than Pillar I risk categories, for ‘Profit Rate risk on Banking Book’ and for ‘Business Risk’, within the Pillar II framework. Details on Pillar II methodologies are contained in the section – “Capital Management and Stress Testing” of this report. Group Structure Emirates Islamic Bank PJSC (formerly Middle East Bank) (the “Bank”) was incorporated by a decree of His Highness the Ruler of Dubai as a conventional Bank with a limited liability in the Emirate of Dubai on 3rd of October 1975. The Bank was reregistered as a Public Joint Stock Company in July 1995 and is regulated by the Central Bank of United Arab Emirates. At an extraordinary general meeting held on 10th of March 2004, a resolution was passed to transform the Bank’s activities to be in full compliance with the Sharia rules and principles. The entire process was completed on 9th of October 2004 (the “Transformation Date”) when the Bank obtained the UAE Central Bank and other UAE authorities’ approvals. The Bank is a subsidiary of Emirates NBD PJSC, Dubai (the “Group Holding Company”). The ultimate parent company of the Group Holding Company is Investment Corporation of Dubai, a company in which the Government of Dubai is the major shareholder. The Bank is listed in the Dubai Financial Market. 3



4

In addition to its head office in Dubai, the Bank operates through 64 branches in the UAE. The financial statements combine the activities of the Bank’s head office, its branches and the following subsidiaries (together referred to as “the Group”).

Date of incorporation & country

Principal activity

Ownership %

2017 2016

Emirates Islamic Financial Brokerage Co. LLC

26 April 2006, UAE Financial brokerage services

100%

100%

EIB Sukuk Company Limited 6 June 2007, Cayman Islands


100%

100%

EI Funding Limited 15 May 2014, Cayman Islands


100%

100%

The Bank provides full commercial and banking services and offers a variety of products through Islamic financing and investing instruments in accordance with Islamic Sharia. The Bank’s registered office address is P.O. Box 6564, Dubai, United Arab Emirates. The Group consolidated financial statements for the year ended 31 December 2017 have been approved for issuance by the Board of Directors on 15 January 2018. Consolidated Capital Structure The Group’s regulatory capital is calculated as per the guidelines issued by CBUAE and it comprises: a. Tier 1 Capital which is considered as the core measure of the Group’s financial

strength and includes share capital, reserves, and retained earnings and; b. Tier 2 Capital which consists of qualified subordinated debts and allowed portions

of revaluation reserves & general provisions. The Bank’s share capital as at 31 December 2017 comprised of 5,430,422,000 issued and fully paid shares of value AED 1 each. The detailed breakdown of the capital structure of the bank is as follows:


3

namely Common Equity Tier 1 (‘CET1’), Additional Tier 1 (‘AT1’) and Total Capital. The Additional capital buffers (CCB and CCyB- maximum up to 5%) introduced are over and above the minimum CET1 requirement of 7%. Future Developments The regulation and supervision of financial institutions is currently undergoing a period of ongoing change in response to the global financial crisis. Increased capital requirements and regulatory focus on Liquidity Risk have been announced by the Basel Committee in October 2010, commonly known as Basel III. These developments are being tracked by the Group and necessary dialogue conducted with the Central Bank of UAE, for timely changes to the Capital Management and Disclosure regimes. Verification The Pillar III Disclosures for the year 2017 have been appropriately verified internally and have been reviewed by the Group’s statutory auditors. Implementation of Basel II guidelines The Group is compliant with Standardized Approach for Credit, Market and Operational Risk (Pillar I) with effect from 31 October 2007. The Bank also assigns capital on other than Pillar I risk categories, for ‘Profit Rate risk on Banking Book’ and for ‘Business Risk’, within the Pillar II framework. Details on Pillar II methodologies are contained in the section – “Capital Management and Stress Testing” of this report. Group Structure Emirates Islamic Bank PJSC (formerly Middle East Bank) (the “Bank”) was incorporated by a decree of His Highness the Ruler of Dubai as a conventional Bank with a limited liability in the Emirate of Dubai on 3rd of October 1975. The Bank was reregistered as a Public Joint Stock Company in July 1995 and is regulated by the Central Bank of United Arab Emirates. At an extraordinary general meeting held on 10th of March 2004, a resolution was passed to transform the Bank’s activities to be in full compliance with the Sharia rules and principles. The entire process was completed on 9th of October 2004 (the “Transformation Date”) when the Bank obtained the UAE Central Bank and other UAE authorities’ approvals. The Bank is a subsidiary of Emirates NBD PJSC, Dubai (the “Group Holding Company”). The ultimate parent company of the Group Holding Company is Investment Corporation of Dubai, a company in which the Government of Dubai is the major shareholder. The Bank is listed in the Dubai Financial Market.

4



6

Capital Adequacy The Group’s Capital Adequacy ratio as at 31 December 2017 was 17.36% and Tier 1 ratio was 16.23% (in 2016, the Capital Adequacy ratio was 16.05% and Tier 1 ratio 14.86%) against the regulatory requirement of minimum of 12% and 8% respectively. The Group ensures adherence to CBUAE requirements by monitoring its Capital Adequacy against higher internal limits. Emirates Islamic is directly regulated by its local banking supervisor which sets and monitors its capital adequacy requirements. CBUAE also monitors the Capital Adequacy requirements of Emirates NBD at the Group level of which EI is a part of. CAPITAL ADEQUACY (STANDARDISED APPROACH) RISK WEIGHTED EXPOSURE 2017 2016 AED 000 AED 000

Credit risk 40,749,303 41,098,300

Market risk 21,601 14,884

Operational risk 4,301,798 3,756,966

Total 45,072,702 44,870,150

2017 2016

Capital Charge

AED 000 --------------------

Capital Charge AED 000

--------------------- Capital Requirements Credit Risk 4,889,916 4,931,796 Market Risk 2,592 1,786 Operational Risk 516,216 450,836 --------------- ----------------- Total Capital Requirements 5,408,724 5,384,418 ========= =========

CAPITAL ADEQUACY (STANDARDISED APPROACH) Capital Ratio

2017 ----------------

2016 ---------------------

Total for consolidated Group 17.36% 16.05% Tier 1 ratio for consolidated group 16.23% 14.86%

Note Risk weighted assets as at 31 December 2017 were AED 45.07 billion and as at 31 December 2016 were AED 44.87 billion.


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Particulars 2017 AED 000

2016 AED 000

---------------- ---------------- Tier 1 Capital 1. Paid up share capital/ common stock 5,430,422 5,430,422 2. Reserves - - a. Statutory reserve 410,186 339,986 b. Special reserve - - c. General reserve 1,472,651 898,963 3. Non-controlling interest in the equity of subsidiaries - - 4. Innovative capital instruments - - 5. Other capital instruments - - 6. Surplus capital from insurance companies - - Subtotal 7,313,259 6,669,371 Less: Deductions for regulatory calculation - - Less: Deductions from Tier 1 capital - - Tier 1 Capital - Subtotal (A) 7,313,259 6,669,371 Tier 2 Capital (B) 509,366 533,133 Less: Other deductions from capitals (C) - - Tier 3 Capital (D) - - Total eligible capital after deductions (A+B+C+D) 7,822,625 7,202,504

5



6

Capital Adequacy The Group’s Capital Adequacy ratio as at 31 December 2017 was 17.36% and Tier 1 ratio was 16.23% (in 2016, the Capital Adequacy ratio was 16.05% and Tier 1 ratio 14.86%) against the regulatory requirement of minimum of 12% and 8% respectively. The Group ensures adherence to CBUAE requirements by monitoring its Capital Adequacy against higher internal limits. Emirates Islamic is directly regulated by its local banking supervisor which sets and monitors its capital adequacy requirements. CBUAE also monitors the Capital Adequacy requirements of Emirates NBD at the Group level of which EI is a part of. CAPITAL ADEQUACY (STANDARDISED APPROACH) RISK WEIGHTED EXPOSURE 2017 2016 AED 000 AED 000

Credit risk 40,749,303 41,098,300

Market risk 21,601 14,884

Operational risk 4,301,798 3,756,966

Total 45,072,702 44,870,150

2017 2016

Capital Charge

AED 000 --------------------

Capital Charge AED 000

--------------------- Capital Requirements Credit Risk 4,889,916 4,931,796 Market Risk 2,592 1,786 Operational Risk 516,216 450,836 --------------- ----------------- Total Capital Requirements 5,408,724 5,384,418 ========= =========

CAPITAL ADEQUACY (STANDARDISED APPROACH) Capital Ratio

2017 ----------------

2016 ---------------------

Total for consolidated Group 17.36% 16.05% Tier 1 ratio for consolidated group 16.23% 14.86%

Note Risk weighted assets as at 31 December 2017 were AED 45.07 billion and as at 31 December 2016 were AED 44.87 billion.

6



8

Common Equity Tier 1 (CET1) Capital 2017

AED 000

Share Capital 5,430,422

Share premium account -

Eligible Reserves 727,222

Retained Earnings / (-) Loss 1,155,615

Eligible amount of minority interest -

Capital shortfall if any -

CET1 capital Before the regulatory adjustments and threshold deduction 7,313,259

Less: Regulatory deductions -

Less: Threshold deductions - Total CET1 capital after the regulatory adjustments and threshold deduction 7,313,259 Total CET1 capital after transitional arrangement for deductions (CET1) (A) 7,313,259

Additional Tier 1 (AT1) Capital

Eligible AT1 capital -

Other AT1 Capital e.g. (Share premium, minority interest) -

Total AT1 capital - Total AT1 capital after transitional arrangements (AT1) (B) -

Tier 2 (T2) Capital 509,366

Tier 2 Instruments -

Other Tier 2 capital (including General Provisions, etc.) 509,366

Total T2 Capital 509,366 Total T2 capital after transitional arrangements (T2) ( C )

509,366

Total Regulatory Capital (A+B+C) 7,822,625

Capital Ratio 2017

Minimum capital

requirement 2017

Minimum capital

requirement by 2019

a. Total capital ratio for consolidated Group 17.36% 11.75% 13% b. Tier 1 ratio only for consolidated Group 16.23% 9.75% 11% c. CET1 ratio only for consolidated Group 16.23% 8.25% 11%


7

Standardized Approach – Credit risk & credit risk mitigation Under Standardized Approach, all credit exposures are assessed according to the counterparty classifications and against the External Credit Assessment Institutions (“ECAI”) ratings as advised under national discretion (November 2009): Claims on sovereign and central banks in the GCC are risk weighted at 0%. Domestic currency claims on a non-commercial GCC Public Sector Enterprise (PSE) are treated

as claims on their sovereigns if their central bank or monetary authority treats them as such. Foreign currency claims on such a PSE are risk weighted one grade less favorable than its sovereign i.e. 20% risk weight. Claims on other foreign PSEs are risk weighted one grade less favorable than its sovereign.

Claims on commercial companies owned by a GCC sovereign or PSEs that operate as commercial organizations are treated as claims on a corporate and risk weighted in accordance with ratings from acceptable ECAIs.

ECAI ratings are also used to determine the capital requirements against exposures to banks and financial institutions. The group uses option 2 (one of alternative risk weight and ECAI ratings matrices as prescribed in the Basel II accord) for determining the capital requirements in line with the supervisory discretion adopted by the CBUAE.

Claims on corporate entities are risk weighted at prescribed risk weights applicable per the latest ECAI rating of the counterparty. Claims on unrated corporate entities are risk weighted at 100%.

Consumer banking exposure is classified into ‘Qualified Residential Mortgage’, ‘Qualified regulatory retail portfolio’ and ‘Others’; per the CBUAE Basel II guidelines and are risk weighted at 35%, 75% and 100% respectively.

All other assets are classified between ‘assets under higher risk categories’ and ‘others’; and risk weighted at prescribed risk weights.

For standardized capital adequacy calculations, the following rules are applied consistently to determine the appropriate ECAI ratings: Where more ECAI ratings of two acceptable rating agencies are available, the lower (worse) of the

two is considered. Where the ECAI ratings are split evenly between all four rating agencies, the more conservative

ratings are considered. Acceptable ECAI agencies are Moody’s, S&P, Fitch and Capital Intelligence. Basel III Capital Regulations The Central Bank of UAE (‘CBUAE’) issued Basel III capital regulations, which came into effect from 1 February 2017 (parallel reporting for Q2’17 and Q3’17 and Primary reporting from Q4’17 onwards) introducing minimum capital requirements at three levels, namely Common Equity Tier 1 (‘CET1’), Tier 1 (‘T1’) and Total Capital. The additional capital buffers (Capital Conservation Buffer (CCB) and Countercyclical Capital Buffer (CCyB) - maximum up to 2.5% for each buffer) introduced are over and above the minimum CET1 requirement of 7%. For 2017, CCB is effective in transition arrangement and is required to keep at 1.25% of the Capital base. For 2018, CCB will be required at 1.88% and from 2019; it will be required to keep at 2.5% of the Capital base. CCyB is not in effect and is not required to keep for 2017. 7



8

Common Equity Tier 1 (CET1) Capital 2017

AED 000

Share Capital 5,430,422

Share premium account -

Eligible Reserves 727,222

Retained Earnings / (-) Loss 1,155,615

Eligible amount of minority interest -

Capital shortfall if any -

CET1 capital Before the regulatory adjustments and threshold deduction 7,313,259

Less: Regulatory deductions -

Less: Threshold deductions - Total CET1 capital after the regulatory adjustments and threshold deduction 7,313,259 Total CET1 capital after transitional arrangement for deductions (CET1) (A) 7,313,259

Additional Tier 1 (AT1) Capital

Eligible AT1 capital -

Other AT1 Capital e.g. (Share premium, minority interest) -

Total AT1 capital - Total AT1 capital after transitional arrangements (AT1) (B) -

Tier 2 (T2) Capital 509,366

Tier 2 Instruments -

Other Tier 2 capital (including General Provisions, etc.) 509,366

Total T2 Capital 509,366 Total T2 capital after transitional arrangements (T2) ( C )

509,366

Total Regulatory Capital (A+B+C) 7,822,625

Capital Ratio 2017

Minimum capital

requirement 2017

Minimum capital

requirement by 2019

a. Total capital ratio for consolidated Group 17.36% 11.75% 13% b. Tier 1 ratio only for consolidated Group 16.23% 9.75% 11% c. CET1 ratio only for consolidated Group 16.23% 8.25% 11%


7

Standardized Approach – Credit risk & credit risk mitigation Under Standardized Approach, all credit exposures are assessed according to the counterparty classifications and against the External Credit Assessment Institutions (“ECAI”) ratings as advised under national discretion (November 2009): Claims on sovereign and central banks in the GCC are risk weighted at 0%. Domestic currency claims on a non-commercial GCC Public Sector Enterprise (PSE) are treated

as claims on their sovereigns if their central bank or monetary authority treats them as such. Foreign currency claims on such a PSE are risk weighted one grade less favorable than its sovereign i.e. 20% risk weight. Claims on other foreign PSEs are risk weighted one grade less favorable than its sovereign.

Claims on commercial companies owned by a GCC sovereign or PSEs that operate as commercial organizations are treated as claims on a corporate and risk weighted in accordance with ratings from acceptable ECAIs.

ECAI ratings are also used to determine the capital requirements against exposures to banks and financial institutions. The group uses option 2 (one of alternative risk weight and ECAI ratings matrices as prescribed in the Basel II accord) for determining the capital requirements in line with the supervisory discretion adopted by the CBUAE.

Claims on corporate entities are risk weighted at prescribed risk weights applicable per the latest ECAI rating of the counterparty. Claims on unrated corporate entities are risk weighted at 100%.

Consumer banking exposure is classified into ‘Qualified Residential Mortgage’, ‘Qualified regulatory retail portfolio’ and ‘Others’; per the CBUAE Basel II guidelines and are risk weighted at 35%, 75% and 100% respectively.

All other assets are classified between ‘assets under higher risk categories’ and ‘others’; and risk weighted at prescribed risk weights.

For standardized capital adequacy calculations, the following rules are applied consistently to determine the appropriate ECAI ratings: Where more ECAI ratings of two acceptable rating agencies are available, the lower (worse) of the

two is considered. Where the ECAI ratings are split evenly between all four rating agencies, the more conservative

ratings are considered. Acceptable ECAI agencies are Moody’s, S&P, Fitch and Capital Intelligence. Basel III Capital Regulations The Central Bank of UAE (‘CBUAE’) issued Basel III capital regulations, which came into effect from 1 February 2017 (parallel reporting for Q2’17 and Q3’17 and Primary reporting from Q4’17 onwards) introducing minimum capital requirements at three levels, namely Common Equity Tier 1 (‘CET1’), Tier 1 (‘T1’) and Total Capital. The additional capital buffers (Capital Conservation Buffer (CCB) and Countercyclical Capital Buffer (CCyB) - maximum up to 2.5% for each buffer) introduced are over and above the minimum CET1 requirement of 7%. For 2017, CCB is effective in transition arrangement and is required to keep at 1.25% of the Capital base. For 2018, CCB will be required at 1.88% and from 2019; it will be required to keep at 2.5% of the Capital base. CCyB is not in effect and is not required to keep for 2017. 8



10

Market Risk Market risks subject to capital charge are as follows: Profit Rate Risk Foreign Exchange Risk Equity Exposure Risk Commodity Risk Options Risk

Capital charge on profit rate risk and equity exposure risk is restricted to Bank’s ‘trading book’, while capital charge on Foreign exchange risk applies on the bank’s entire positions. The total Capital requirement for Market Risk as at 31 December 2017 is AED 2.592 million (2016: AED 1.786 million) as detailed below: CAPITAL REQUIREMENT FOR MARKET RISK AS PER STANDARDISED APPROACH

2017 AED 000

---------------

2016 AED 000

--------------- Profit rate risk 322

-

Equity position risk - - Options risk - - Foreign exchange risk 2,270 1,786 ----------------- ----------------- Total capital requirement 2,592 1,786 ========= =========

Operational Risk Basel II framework outlines three methods for calculating the risk charge for operational risk – Basic Indicator, Standardized Approach and Advanced Measurement Approach. The Group presently follows the Standardized Approach. The total capital requirement for Operational Risk as at 31 December 2017 is AED 516.22 million (2016: AED 450.84 million). This charge is computed by categorizing the Group’s activities into 8 business lines (as defined by Basel II guidelines) and multiplying the line’s three year average gross income by a pre-defined beta factor.

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9



10

Market Risk Market risks subject to capital charge are as follows: Profit Rate Risk Foreign Exchange Risk Equity Exposure Risk Commodity Risk Options Risk

Capital charge on profit rate risk and equity exposure risk is restricted to Bank’s ‘trading book’, while capital charge on Foreign exchange risk applies on the bank’s entire positions. The total Capital requirement for Market Risk as at 31 December 2017 is AED 2.592 million (2016: AED 1.786 million) as detailed below: CAPITAL REQUIREMENT FOR MARKET RISK AS PER STANDARDISED APPROACH

2017 AED 000

---------------

2016 AED 000

--------------- Profit rate risk 322

-

Equity position risk - - Options risk - - Foreign exchange risk 2,270 1,786 ----------------- ----------------- Total capital requirement 2,592 1,786 ========= =========

Operational Risk Basel II framework outlines three methods for calculating the risk charge for operational risk – Basic Indicator, Standardized Approach and Advanced Measurement Approach. The Group presently follows the Standardized Approach. The total capital requirement for Operational Risk as at 31 December 2017 is AED 516.22 million (2016: AED 450.84 million). This charge is computed by categorizing the Group’s activities into 8 business lines (as defined by Basel II guidelines) and multiplying the line’s three year average gross income by a pre-defined beta factor.

10


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EM

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1,21

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1

6,1

36

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209,

795

8

,407

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Clai

ms

secu

red

by re

siden

tial p

rope

rty

8,2

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82

- 8

,281

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8

,281

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92

Clai

ms

secu

red

by c

omm

ercia

l rea

l est

ate

3,7

82,3

91

- 3

,782

,391

3

,782

,391

-

3,7

82,3

91

3,7

82,3

91

Past

due

fina

ncin

g 5

,016

,391

-

5,0

16,3

91

1,2

24,6

04

- 1

,224

,604

1

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Hi

gher

-risk

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O

ther

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1

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-

1,5

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1,2

12,5

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Clai

ms

on s

ecur

itized

ass

ets

- -

- -

- -

- Cr

edit

deriv

ative

s (B

anks

sel

ling

posit

ion)

-

- -

- -

- -

---

------

------

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------

------

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----

------

------

------

---

------

------

------

----

------

------

------

----

------

------

------

----

------

------

------

----

Tota

l 64

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,980

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69,8

89,0

61

66,0

97,2

74

1,57

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7 64

,524

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40

,749

,303

====

====

===

====

====

====

==

====

====

==

====

====

====

==

====

====

==

====

====

====

==

====

====

==

16


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SURE

S 31

DEC

EMBE

R 2

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(RAT

ED/ U

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ED)

31 D

ECEM

BER

2017

Ra

ted

Unra

ted

Tota

l Gro

ss

Expo

sure

Ex

posu

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---

Cla

ims

on s

over

eign

s 4

81,4

82

13,

140,

399

1

3,62

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621,

881

1

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1,88

1

311

,480

Cla

ims

on n

on-c

entra

l gov

ernm

ent p

ublic

sec

tor

entit

ies

57,

398

4

33,8

67

491

,265

4

91,2

65

491

,265

11,

480

Cla

ims

on m

ulti-

late

ral d

evel

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ent b

anks

1

4,50

3

-

14,

503

1

4,50

3

14,

503

-

Cla

ims

on b

anks

2

62,7

89

10,

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478

1

1,08

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7

11,

080,

267

1

1,08

0,26

7

4,7

23,6

84

Cla

ims

on s

ecur

ities

firm

s -

-

-

-

-

-

Cla

ims

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed

entit

ies

(GRE

)

165

,572

1

4,12

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2

14,

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1

4,28

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4

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423

1

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5

Cla

ims

inclu

ded

in th

e re

gula

tory

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il por

tfolio

-

1

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11,

215,

931

1

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795

8

,407

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Cla

ims

secu

red

by re

siden

tial p

rope

rty

-

8,2

81,9

82

8,2

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82

8,2

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82

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7

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Cla

ims

secu

red

by c

omm

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al re

al e

stat

e -

3

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,391

3

,782

,391

3

,782

,391

3

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3,7

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91

Past

due

fina

ncin

g -

5

,016

,391

5

,016

,391

1

,224

,604

1

,224

,604

1,5

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64

Hig

her-r

isk c

ateg

orie

s -

5

16,3

75

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16,3

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Oth

er a

sset

s -

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1

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1

,580

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1,2

12,5

79

Cla

ims

on s

ecur

itize

d as

sets

-

-

-

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-

-

Cre

dit d

eriva

tives

(Ba

nks

sellin

g pr

otec

tion)

-

-

-

-

-

-

------

------

-----

------

------

------

----

---

------

------

------

---

------

------

------

- ---

------

------

----

------

------

------

Tota

l 98

1,74

4 68

,907

,317

69

,889

,061

66

,097

,274

64

,524

,697

40

,749

,303

====

====

===

====

====

====

==

====

====

= ==

====

====

==

====

====

====

==

====

====

==

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SURE

S 31

DEC

EMBE

R 20

17

17

GRO

SS C

REDI

T EX

POSU

RE A

S PE

R ST

ANDA

RDIS

ED A

PPRO

ACH

(con

tinue

d)

31 D

ECEM

BER

2016

On B

alan

ce S

heet

Of

f Bal

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eet

Cr

edit

Risk

M

itiga

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(CRM

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Gros

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Conv

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Fact

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sure

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sk W

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------

------

------

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------

------

------

- Cl

aim

s on

sov

erei

gns

11,8

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75

- 11

,875

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11

,875

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75

29,7

55

Clai

ms

on n

on-c

entra

l gov

ernm

ent p

ublic

se

ctor

ent

ities

439,

833

- 43

9,83

3 43

9,83

3 -

439,

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11,6

54

Clai

ms

on m

ulti-

late

ral d

evel

opm

ent b

anks

14

,514

-

14,5

14

14,5

14

- 14

,514

-

Clai

ms

on b

anks

8,

117,

131

- 8,

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131

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1 -

8,11

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1 3,

207,

663

Clai

ms

on s

ecur

ities

firm

s -

- -

- -

- -

Clai

ms

on c

orpo

rate

and

Gov

ernm

ent

rela

ted

entit

ies

(GRE

) 14

,501

,672

5,

429,

203

19,9

30,8

75

19,9

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75

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7,42

5 18

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18

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Cl

aim

s in

clude

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the

regu

lato

ry re

tail

portf

olio

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7 13

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Cl

aim

s se

cure

d by

resid

entia

l pro

perty

7,

031,

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- 7,

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7,03

1,90

6 -

7,03

1,90

6 5,

350,

107

Clai

ms

secu

red

by c

omm

ercia

l rea

l est

ate

365,

989

- 36

5,98

9 36

5,98

9 -

365,

989

365,

989

Past

due

fina

ncin

g 5,

103,

807

- 5,

103,

807

1,30

6,87

5 -

1,30

6,87

5 1,

574,

560

High

er-ri

sk c

ateg

orie

s 20

7,99

3 -

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993

207,

993

- 20

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3 31

1,98

9 O

ther

ass

ets

1,92

4,02

4 -

1,92

4,02

4 1,

924,

024

- 1,

924,

024

1,66

0,45

3 Cl

aim

s on

sec

uritiz

ed a

sset

s -

- -

- -

- -

Cred

it de

rivat

ives

(Ban

ks s

ellin

g pr

otec

tion)

-

- -

- -

- -

---

------

------

-----

------

------

------

-- ---

------

------

------

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------

------

------

- ---

------

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------

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------

------

------

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------

------

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- To

tal

63,0

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3 68

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64

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1,

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63,0

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76

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00

==

====

====

= ==

====

====

= ==

====

====

==

====

====

====

==

====

====

==

====

====

====

==

====

====

==

17


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SURE

S 31

DEC

EMBE

R 2

017

18

GRO

SS C

REDI

T EX

POSU

RE A

S PE

R ST

ANDA

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ED A

PPRO

ACH

(RAT

ED/ U

NRAT

ED)

31 D

ECEM

BER

2017

Ra

ted

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Tota

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sure

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posu

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---

------

------

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------

------

------

---

------

------

------

---

------

------

------

----

------

------

------

---

------

------

------

---

Cla

ims

on s

over

eign

s 4

81,4

82

13,

140,

399

1

3,62

1,88

1

13,

621,

881

1

3,62

1,88

1

311

,480

Cla

ims

on n

on-c

entra

l gov

ernm

ent p

ublic

sec

tor

entit

ies

57,

398

4

33,8

67

491

,265

4

91,2

65

491

,265

11,

480

Cla

ims

on m

ulti-

late

ral d

evel

opm

ent b

anks

1

4,50

3

-

14,

503

1

4,50

3

14,

503

-

Cla

ims

on b

anks

2

62,7

89

10,

817,

478

1

1,08

0,26

7

11,

080,

267

1

1,08

0,26

7

4,7

23,6

84

Cla

ims

on s

ecur

ities

firm

s -

-

-

-

-

-

Cla

ims

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed

entit

ies

(GRE

)

165

,572

1

4,12

2,29

2

14,

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864

1

4,28

7,86

4

12,

721,

423

1

2,72

1,42

5

Cla

ims

inclu

ded

in th

e re

gula

tory

reta

il por

tfolio

-

1

1,21

5,93

1

11,

215,

931

1

1,21

5,93

1

11,

209,

795

8

,407

,346

Cla

ims

secu

red

by re

siden

tial p

rope

rty

-

8,2

81,9

82

8,2

81,9

82

8,2

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82

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82

7

,281

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Cla

ims

secu

red

by c

omm

erci

al re

al e

stat

e -

3

,782

,391

3

,782

,391

3

,782

,391

3

,782

,391

3,7

82,3

91

Past

due

fina

ncin

g -

5

,016

,391

5

,016

,391

1

,224

,604

1

,224

,604

1,5

23,2

64

Hig

her-r

isk c

ateg

orie

s -

5

16,3

75

516

,375

5

16,3

75

516

,375

774

,562

Oth

er a

sset

s -

1

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1

,580

,211

1

,580

,211

1

,580

,211

1,2

12,5

79

Cla

ims

on s

ecur

itize

d as

sets

-

-

-

-

-

-

Cre

dit d

eriva

tives

(Ba

nks

sellin

g pr

otec

tion)

-

-

-

-

-

-

------

------

-----

------

------

------

----

---

------

------

------

---

------

------

------

- ---

------

------

----

------

------

------

Tota

l 98

1,74

4 68

,907

,317

69

,889

,061

66

,097

,274

64

,524

,697

40

,749

,303

====

====

===

====

====

====

==

====

====

= ==

====

====

==

====

====

====

==

====

====

==

18


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SUR

ES

31 D

ECEM

BER

201

7

20

EXPO

SURE

SUB

JECT

TO

DED

UCTI

ON

AS P

ER S

TAN

DAR

DISE

D AP

PRO

ACH

(RAT

ED/ U

NRAT

ED)

31 D

ECEM

BER

2017

Rate

d Un

rate

d To

tal G

ross

Ex

posu

re

Expo

sure

Bef

ore

CRM

Af

ter C

RM

Risk

Wei

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d As

sets

AED

000

AED

000

AED

000

AED

000

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000

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000

---

------

------

-----

------

------

------

---

------

------

------

---

------

------

------

----

------

------

------

---

------

------

------

---

Cla

ims

on s

over

eign

s -

- -

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laim

s on

non

-cen

tral g

over

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t pub

lic

sect

or e

ntiti

es

- -

- -

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Cla

ims

on m

ulti-

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anks

-

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laim

s on

ban

ks

- -

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Cla

ims

on s

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firm

s -

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Cla

ims

on c

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rate

and

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ent r

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entit

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(GR

E)

- 4

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4

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4

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3

,201

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3

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Cla

ims

incl

uded

in th

e re

gula

tory

reta

il po

rtfol

io

- 6

,136

6

,136

6

,136

-

-

Cla

ims

secu

red

by re

side

ntia

l pro

perty

-

- -

- -

-

Cla

ims

secu

red

by c

omm

erci

al re

al e

stat

e -

- -

- -

-

Past

due

fina

ncin

g

- -

- -

- -

Hig

her-r

isk

cate

gorie

s -

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- -

-

Oth

er a

sset

s -

- -

- -

-

Cla

ims

on s

ecur

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d as

sets

-

- -

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-

Cre

dit d

eriv

ativ

es (

Bank

s se

lling

prot

ectio

n)

- -

- -

- -

---

------

------

-- ---

------

------

------

- ---

------

------

------

---

------

------

------

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------

------

----

------

------

------

Tota

l -

4,77

3,82

7 4,

773,

827

4,77

3,82

7 3,

201,

251

3,20

1,25

1

==

====

====

==

====

====

==

====

====

===

====

====

====

==

====

====

==

====

====

====

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

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SEL

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AR II

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ES

31 D

ECEM

BER

201

7

19

GRO

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REDI

T EX

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APPR

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H (R

ATED

/ UNR

ATED

) (co

ntin

ued)

31

DEC

EMBE

R 20

16

Ra

ted

Unra

ted

Tota

l Gro

ss

Expo

sure

Ex

posu

re B

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e CR

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sk W

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ted

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ts

AE

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0 AE

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0

---

------

------

----

------

------

------

---

------

------

------

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------

------

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------

------

---

------

------

------

----

Cla

ims

on s

over

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s 23

4,94

2 11

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1

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11

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C

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lic s

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439,

833

439,

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439,

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11,6

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Cla

ims

on m

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late

ral d

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anks

14

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-

14,5

14

14,5

14

14,5

14

- C

laim

s on

ban

ks

361,

936

7,75

5,19

5 8,

117,

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8,11

7,13

1 8,

117,

131

3,20

7,66

3 C

laim

s on

sec

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es fi

rms

- -

- -

- -

Cla

ims

on c

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rate

and

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ent r

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ed

entit

ies

(GR

E)

125,

654

19,8

05,2

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1

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C

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ed in

the

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lato

ry re

tail

portf

olio

-

13,5

12,0

03

13,5

12,0

03

13,5

12,0

03

13,5

06,1

86

10,3

83,9

21

Cla

ims

secu

red

by re

side

ntia

l pro

perty

-

7,03

1,90

6 7,

031,

906

7,03

1,90

6 7,

031,

906

5,35

0,10

7 C

laim

s se

cure

d by

com

mer

cial

real

est

ate

- 36

5,98

9 36

5,98

9 36

5,98

9 36

5,98

9 36

5,98

9 Pa

st d

ue fi

nanc

ing

-

5,

103,

807

5,10

3,80

7 1,

306,

875

1,30

6,87

5 1,

574,

560

Hig

her-r

isk

cate

gorie

s -

207,

993

207,

993

207,

993

207,

993

311,

989

Oth

er a

sset

s 5,

185

1,91

8,83

9 1,

924,

024

1,92

4,02

4 1,

924,

024

1,66

0,45

3 C

laim

s on

sec

uriti

zed

asse

ts

-

-

-

-

-

-

C

redi

t der

ivat

ives

(Ba

nks

sellin

g pr

otec

tion)

-

-

-

-

-

-

---

------

------

---

------

------

------

- ---

------

------

----

------

------

------

- ---

------

------

----

------

------

------

-

Tota

l 80

0,50

0 67

,723

,050

68

,523

,550

64

,726

,618

63

,043

,376

41

,098

,300

====

====

===

====

====

====

==

====

====

==

====

====

====

==

====

====

==

====

====

====

19


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SUR

ES

31 D

ECEM

BER

201

7

20

EXPO

SURE

SUB

JECT

TO

DED

UCTI

ON

AS P

ER S

TAN

DAR

DISE

D AP

PRO

ACH

(RAT

ED/ U

NRAT

ED)

31 D

ECEM

BER

2017

Rate

d Un

rate

d To

tal G

ross

Ex

posu

re

Expo

sure

Bef

ore

CRM

Af

ter C

RM

Risk

Wei

ghte

d As

sets

AED

000

AED

000

AED

000

AED

000

AED

000

AED

000

---

------

------

-----

------

------

------

---

------

------

------

---

------

------

------

----

------

------

------

---

------

------

------

---

Cla

ims

on s

over

eign

s -

- -

- -

- C

laim

s on

non

-cen

tral g

over

nmen

t pub

lic

sect

or e

ntiti

es

- -

- -

- -

Cla

ims

on m

ulti-

late

ral d

evel

opm

ent b

anks

-

- -

- -

- C

laim

s on

ban

ks

- -

- -

- -

Cla

ims

on s

ecur

ities

firm

s -

- -

- -

-

Cla

ims

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed

entit

ies

(GR

E)

- 4

,767

,691

4

,767

,691

4

,767

,691

3

,201

,251

3

,201

,251

Cla

ims

incl

uded

in th

e re

gula

tory

reta

il po

rtfol

io

- 6

,136

6

,136

6

,136

-

-

Cla

ims

secu

red

by re

side

ntia

l pro

perty

-

- -

- -

-

Cla

ims

secu

red

by c

omm

erci

al re

al e

stat

e -

- -

- -

-

Past

due

fina

ncin

g

- -

- -

- -

Hig

her-r

isk

cate

gorie

s -

- -

- -

-

Oth

er a

sset

s -

- -

- -

-

Cla

ims

on s

ecur

itize

d as

sets

-

- -

- -

-

Cre

dit d

eriv

ativ

es (

Bank

s se

lling

prot

ectio

n)

- -

- -

- -

---

------

------

-- ---

------

------

------

- ---

------

------

------

---

------

------

------

- ---

------

------

----

------

------

------

Tota

l -

4,77

3,82

7 4,

773,

827

4,77

3,82

7 3,

201,

251

3,20

1,25

1

==

====

====

==

====

====

==

====

====

===

====

====

====

==

====

====

==

====

====

====

20


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SUR

ES

31 D

ECEM

BER

201

7

22

CRED

IT R

ISK

MIT

IGAT

ION

AS P

ER S

TAND

ARDI

SED

APPR

OAC

H

20

17

201

6

G

ross

cre

dit e

xpos

ure

(AED

000

)

Risk

wei

ghte

d as

sets

(A

ED 0

00)

Gro

ss c

redi

t exp

osur

e (A

ED 0

00)

Risk

wei

ghte

d as

sets

(A

ED 0

00)

---

------

------

----

------

------

------

- ---

------

------

----

------

------

------

- G

ross

exp

osur

e pr

ior t

o cr

edit

risk

miti

gatio

n 69

,889

,061

46

,113

,667

68

,523

,550

46

,578

,474

Expo

sure

cov

ered

by

on-b

alan

ce s

heet

net

ting

(3,9

44,7

57)

(3,9

44,7

57)

(3,9

62,8

40)

(3,9

62,8

40)

Ex

posu

re c

over

ed b

y el

igib

le fi

nanc

ial c

olla

tera

l (1

,419

,607

) (1

,419

,607

) (1

,517

,334

) (1

,517

,334

)

Expo

sure

s co

vere

d by

Gua

rant

ees

- -

- -

---

------

------

- ---

------

------

-- ---

------

------

- ---

------

------

-- Ne

t exp

osur

e af

ter c

redi

t ris

k m

itiga

tion

64,5

24,6

97

40,7

49,3

03

63,0

43,3

76

41,0

98,3

00

==

====

====

==

====

====

==

====

====

==

====

====

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SUR

ES

31 D

ECEM

BER

201

7

21

EXPO

SURE

SUB

JECT

TO

DED

UCTI

ON

AS P

ER S

TAND

AR D

ISED

APP

ROAC

H (R

ATED

/ UNR

ATED

) (co

ntin

ued)

31 D

ECEM

BER

2016

Rate

d Un

rate

d To

tal G

ross

Ex

posu

re

Expo

sure

Be

fore

CRM

Af

ter C

RM

Risk

Wei

ghte

d As

sets

AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0

---

------

------

----

------

------

------

---

------

------

------

---

------

------

------

-----

------

------

------

---

------

------

------

----

Cla

ims

on s

over

eign

s

-

-

-

-

-

-

C

laim

s on

non

-cen

tral g

over

nmen

t pub

lic

sect

or e

ntiti

es

-

-

-

-

-

-

Cla

ims

on m

ulti-

late

ral d

evel

opm

ent b

anks

-

-

-

-

-

-

Cla

ims

on b

anks

-

-

-

-

-

-

Cla

ims

on s

ecur

ities

firm

s

-

-

-

-

-

-

Cla

ims

on c

orpo

rate

and

Gov

ernm

ent r

elat

ed

entit

ies

(GR

E)

- 5,

172,

813

5,17

2,81

3 5,

172,

813

3,49

5,38

8 3,

495,

388

Cla

ims

incl

uded

in th

e re

gula

tory

reta

il po

rtfol

io

- 5,

817

5,81

7 5,

817

- -

Cla

ims

secu

red

by re

side

ntia

l pro

perty

-

-

-

-

-

-

Cla

ims

secu

red

by c

omm

erci

al re

al e

stat

e

-

-

-

-

-

-

Past

due

fina

ncin

g

-

-

-

-

-

-

H

ighe

r-ris

k ca

tego

ries

-

-

-

-

-

-

O

ther

ass

ets

-

-

-

-

-

-

C

laim

s on

sec

uriti

zed

asse

ts

-

-

-

-

-

-

C

redi

t der

ivat

ives

(Ba

nks

sellin

g pr

otec

tion)

-

-

-

-

-

-

---

------

------

---

------

------

------

- ---

------

------

----

------

------

------

- ---

------

------

----

------

------

------

-

Tota

l -

5,17

8,63

0 5,

178,

630

5,17

8,63

0 3,

495,

388

3,49

5,38

8

==

====

====

= ==

====

====

==

====

====

====

==

====

====

==

====

====

====

==

====

====

==

21


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II –

PILL

AR II

I DIS

CLO

SUR

ES

31 D

ECEM

BER

201

7

22

CRED

IT R

ISK

MIT

IGAT

ION

AS P

ER S

TAND

ARDI

SED

APPR

OAC

H

20

17

201

6

G

ross

cre

dit e

xpos

ure

(AED

000

)

Risk

wei

ghte

d as

sets

(A

ED 0

00)

Gro

ss c

redi

t exp

osur

e (A

ED 0

00)

Risk

wei

ghte

d as

sets

(A

ED 0

00)

---

------

------

----

------

------

------

- ---

------

------

----

------

------

------

- G

ross

exp

osur

e pr

ior t

o cr

edit

risk

miti

gatio

n 69

,889

,061

46

,113

,667

68

,523

,550

46

,578

,474

Expo

sure

cov

ered

by

on-b

alan

ce s

heet

net

ting

(3,9

44,7

57)

(3,9

44,7

57)

(3,9

62,8

40)

(3,9

62,8

40)

Ex

posu

re c

over

ed b

y el

igib

le fi

nanc

ial c

olla

tera

l (1

,419

,607

) (1

,419

,607

) (1

,517

,334

) (1

,517

,334

)

Expo

sure

s co

vere

d by

Gua

rant

ees

- -

- -

---

------

------

- ---

------

------

-- ---

------

------

- ---

------

------

-- Ne

t exp

osur

e af

ter c

redi

t ris

k m

itiga

tion

64,5

24,6

97

40,7

49,3

03

63,0

43,3

76

41,0

98,3

00

==

====

====

==

====

====

==

====

====

==

====

====

22


EMIR

ATES

ISLA

MIC

BAN

K PJ

SC

BASE

L II

PILL

AR II

I DIS

CLO

SURE

S 31

DEC

EMBE

R 20

17

24

IMPA

IRED

FIN

ANCI

NG B

Y EC

ONO

MIC

ACT

IVIT

Y (c

ontin

ued)

31

DEC

EMBE

R 20

16

Ove

rdue

(Gro

ss o

f Pro

fit in

Sus

pens

e/

Prov

isio

ns)

Prov

isio

ns

Adju

stm

ents

Pr

ofit

in

Susp

ense

Tota

l Im

paire

d As

sets

Less

than

90

days

90

day

s an

d ab

ove

Tota

l Sp

ecifi

c G

ener

al

Writ

e-of

fs

Writ

e-ba

cks

AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0

------

------

---

------

------

---

------

------

-----

------

------

-----

------

------

-- ---

------

------

-- ---

------

------

---

------

------

-- ---

------

------

-

Ag

ricul

ture

, fish

ing

& re

late

d ac

tivitie

s -

- -

- -

- -

- -

Crud

e, o

il ga

s, m

inin

g &

quar

ryin

g -

- -

- -

- -

- -

Man

ufac

turin

g -

85,0

10

85,0

10

83,3

77

- -

43

1,62

1 11

Co

nstru

ctio

n -

237,

673

237,

673

98,6

38

- -

- 4,

118

134,

917

Trad

e -

560,

424

560,

424

531,

182

- -

3,64

2 29

,121

12

1 Tr

ansp

ort,

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age

& Co

mm

unic

atio

n -

5,97

6 5,

976

5,15

3 -

- 28

9 57

7 24

6 Fi

nanc

ial I

nstit

utio

ns

- 40

3,98

6 40

3,98

6 14

6,42

3 -

- 17

6,39

0 39

,328

21

8,23

5 Re

al E

stat

e -

1,39

7,41

2 1,

397,

412

801,

555

- -

110,

416

312,

448

283,

408

Serv

ices

-

724,

339

724,

339

453,

923

- -

9,87

8 29

,279

24

1,13

8 So

vere

ign

- -

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- -

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rson

al

- 1,

390,

474

1,39

0,47

4 26

1,93

4 -

833,

629

98,2

29

713,

806

414,

733

All O

ther

s -

300,

246

300,

246

270,

843

- -

192,

186

13,6

05

14,0

67

---

------

----

------

------

-- ---

------

-----

------

------

-- ---

------

-----

------

------

-- ---

------

----

------

------

-- ---

------

-----

Tota

l -

5,10

5,54

0 5,

105,

540

2,65

3,02

8 -

833,

629

591,

073

1,14

3,90

3 1,

306,

876

==

====

==

====

====

==

====

===

====

====

= ==

====

==

====

====

= ==

====

==

====

====

= ==

====

===

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSUR

ES

31 D

ECEM

BER

2017

23

The

deta

ils o

f im

paire

d fin

anci

ng b

y Ge

ogra

phy

and

Econ

omic

Act

ivity

are

as

belo

w:

IMPA

IRED

FIN

ANCI

NG B

Y EC

ONOM

IC A

CTIV

ITY

31 D

ECEM

BER

2017

Ov

erdu

e (G

ross

of P

rofit

in S

uspe

nse/

Pr

ovis

ions

) Pr

ovis

ions

Ad

just

men

ts

Prof

it in

Su

spen

se

Tota

l Im

paire

d As

sets

Less

than

90

day

s 90

day

s an

d ab

ove

Tota

l Sp

ecifi

c Ge

nera

l W

rite-

offs

W

rite-

back

s

AED

000

AED

000

AED

000

AED

000

AED

000

AED

000

AED

000

AED

000

AED

000

---

------

------

---

------

------

---

------

------

-- ---

------

------

-- ---

------

------

---

------

------

-- ---

------

------

-- ---

------

------

-- ---

------

------

-- Ag

ricult

ure,

fishin

g &

rela

ted

activ

ities

-

3,97

5

3,

975

3,73

3

- -

-

296

(54)

Cr

ude,

oil g

as, m

ining

& q

uarry

ing

- 3

9,12

0

39,

120

3

7,55

1

- -

1,4

49

1,5

70

(1)

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ufac

turin

g -

23

2,10

9

23

2,10

9

17

0,99

7

- -

5

,096

4,78

6

56

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ectri

city a

nd W

ater

-

- -

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-

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-

-

Co

nstru

ction

-

31

0,58

4

31

0,58

4

26

9,03

0

- -

62

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9,23

4

32

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ade

-

744,

246

744,

246

606,

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-

-

42,6

97

40

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96,7

48

Tran

spor

t, St

orag

e &

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mun

icatio

n -

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-

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2,0

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(212

) Fi

nanc

ial In

stitu

tions

-

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al E

state

-

1,

846,

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368,

347

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459

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ices

-

667,

551

667

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366,

576

-

-

43,6

98

54

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246,

431

Sove

reig

n -

-

-

-

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-

-

-

Pers

onal

-

1,01

6,09

7

1,

016,

097

373,

995

-

680,

316

48

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411,

515

230,

587

All O

ther

s -

- -

-

- -

-

- -

---

------

----

------

------

-- ---

------

-----

------

------

-- ---

------

-----

------

------

-- ---

------

----

------

------

-- ---

------

-----

Tota

l -

5,01

6,39

1 5,

016,

391

2,89

4,36

9 -

680,

316

280,

513

897,

418

1,22

4,60

4

====

====

==

====

==

====

====

= ==

====

===

====

====

==

====

===

====

====

==

====

===

====

====

=

23


EMIR

ATES

ISLA

MIC

BAN

K PJ

SC

BASE

L II

PILL

AR II

I DIS

CLO

SURE

S 31

DEC

EMBE

R 20

17

24

IMPA

IRED

FIN

ANCI

NG B

Y EC

ONO

MIC

ACT

IVIT

Y (c

ontin

ued)

31

DEC

EMBE

R 20

16

Ove

rdue

(Gro

ss o

f Pro

fit in

Sus

pens

e/

Prov

isio

ns)

Prov

isio

ns

Adju

stm

ents

Pr

ofit

in

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ense

Tota

l Im

paire

d As

sets

Less

than

90

days

90

day

s an

d ab

ove

Tota

l Sp

ecifi

c G

ener

al

Writ

e-of

fs

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e-ba

cks

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24


EMIR

ATES

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EMIR

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====

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25


EMIR

ATES

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26


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISC

LOSU

RES

31 D

ECEM

BER

201

7

28

RISK

MAN

AGEM

ENT

OBJ

ECTI

VES

AND

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CIES

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ARKE

T RI

SK

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ote

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ties

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9,19

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---

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549,

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==

====

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= ==

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r pro

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(26,

809)

---

------

------

Tota

l 57

,278

==

====

====

(c) I

tem

s in

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incl

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------

------

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To

tal

57,2

78

====

====

==

EMIRATES ISLAMIC BANK PJSC BASEL II PILLAR III DISCLOSURES 31 DECEMBER 2017

27

RECONCILIATION OF CHANGES IN PROVISION FOR IMPAIRED FINANCING

2017 AED 000

------------------

2016 AED 000

------------------ Balance of provision for impaired financing as at 1 January 2,653,028 2,242,788

Add: Charge for the year

Specific Provisions 1,202,173 1,808,826

General Provisions - -

Less: Write-off of impaired financing (680,316) (833,629)

Less: Recovery of financing previously written off - -

Less: Write back / Recovery of loan loss provisions (280,513) (591,073)

Adjustments of loan loss provisions - 26,116

------------------ ------------------ Balance of provision for impaired financing as at 31 December 2,894,372 2,653,028 ========= =========

27


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISC

LOSU

RES

31 D

ECEM

BER

201

7

28

RISK

MAN

AGEM

ENT

OBJ

ECTI

VES

AND

POLI

CIES

M

ARKE

T RI

SK

Plea

se re

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ote

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SURE

S FO

R EQ

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HE B

ANKI

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OO

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R 20

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ivat

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------

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------

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ties

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,197

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35

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60,3

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160

,318

-

1

60,3

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---

------

------

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------

------

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------

------

---

------

------

- To

tal

549,

515

549,

515

33,1

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516,

375

==

====

====

= ==

====

====

= ==

====

====

==

====

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ains

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gnize

d in

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lanc

e sh

eet o

r pro

fit a

nd lo

ss a

ccou

nt

(26,

809)

---

------

------

Tota

l 57

,278

==

====

====

(c) I

tem

s in

(b) a

bove

incl

uded

in T

ier I

/ Tie

r II C

apita

l

AE

D 00

0

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Cap

ital

Amou

nt

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ount

incl

uded

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ier I

cap

ital (

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ized

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s)

84,0

87

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ount

incl

uded

in T

ier I

I cap

ital (

unre

alize

d ga

ins)

(2

6,80

9)

------

------

---

To

tal

57,2

78

====

====

==


27

RECONCILIATION OF CHANGES IN PROVISION FOR IMPAIRED FINANCING

2017 AED 000

------------------

2016 AED 000

------------------ Balance of provision for impaired financing as at 1 January 2,653,028 2,242,788

Add: Charge for the year

Specific Provisions 1,202,173 1,808,826

General Provisions - -

Less: Write-off of impaired financing (680,316) (833,629)

Less: Recovery of financing previously written off - -

Less: Write back / Recovery of loan loss provisions (280,513) (591,073)

Adjustments of loan loss provisions - 26,116

------------------ ------------------ Balance of provision for impaired financing as at 31 December 2,894,372 2,653,028 ========= =========

28


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

30

QUA

NTIT

ATIV

E DI

SCLO

SURE

S FO

R EQ

UITY

PO

SITI

ON

IN T

HE B

ANKI

NG B

OO

K (c

ontin

ued)

31

DEC

EMBE

R 20

16

(a) Q

uant

itativ

e De

tails

of E

quity

Pos

ition

AED

000

Type

FS

Cat

egor

y (A

FS/F

VPL)

Ba

sel I

I Cat

egor

y (B

anki

ng b

ook)

Cu

rren

t Yea

r Pu

blic

ly T

rade

d Pr

ivat

ely

Held

---

------

------

------

- ---

------

------

------

-----

------

------

------

------

------

------

------

----

Equi

ties

448,

091

448,

091

54,2

34

393,

857

Colle

ctive

inve

stm

ent s

chem

es

- -

- -

Any

othe

r inv

estm

ent

207,

993

207,

993

25

207,

968

---

------

------

- ---

------

------

- ---

------

------

---

------

------

- To

tal

656,

084

656,

084

54,2

59

601,

825

==

====

====

= ==

====

====

= ==

====

====

==

====

====

= (b

) Rea

lized

, Unr

ealiz

ed &

Lat

ent r

eval

uatio

n ga

ins/

(los

ses)

dur

ing

the

year

AED

000

Pa

rticu

lars

A

FS

G

ains

(Los

ses)

Re

alize

d ga

ins

(loss

es) f

rom

sal

e an

d liq

uida

tions

14

,370

Unre

alize

d ga

ins

(loss

es) r

ecog

nize

d in

the

bala

nce

shee

t but

not

thro

ugh

prof

it an

d lo

ss

acco

unt

-

Late

nt re

valu

atio

n ga

ins

(loss

es) f

or in

vest

men

t rec

orde

d at

cos

t but

not

reco

gnize

d in

ba

lanc

e sh

eet o

r pro

fit a

nd lo

ss a

ccou

nt

23,5

31

------

------

---

To

tal

37,9

01

====

====

==

(c

) Ite

ms

in (b

) abo

ve in

clud

ed in

Tie

r I/ T

ier I

I Cap

ital

AED

000

Ti

er C

apita

l Am

ount

Amou

nt in

clude

d in

Tie

r I c

apita

l (re

alize

d ga

ins)

14

,370

Amou

nt in

clude

d in

Tie

r II c

apita

l (un

real

ised

gain

s)

23,5

31

------

------

---

To

tal

37,9

01

====

====

==

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

29

QUA

NTIT

ATIV

E DI

SCLO

SURE

S FO

R EQ

UITY

PO

SITI

ON

IN T

HE B

ANKI

NG B

OO

K (C

ontin

ued)

31

DEC

EMBE

R 20

17

(d) C

apita

l req

uire

men

ts b

y Eq

uity

gro

upin

gs

AED

000

Grou

ping

Am

ount

Inve

stm

ents

in a

ssoc

iate

s an

d jo

int v

entu

res

-

Inve

stm

ent S

ecur

ities

65,9

42

He

ld fo

r Tra

ding

-

------

------

---

To

tal c

apita

l req

uire

men

t 64

,568

==

====

==

(e) E

quity

Inve

stm

ents

(Quo

ted/

Unq

uote

d) -

Incl

udin

g pr

ivat

e eq

uity

inve

stm

ents

AE

D 00

0

Parti

cula

rs

Bank

ing

Book

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Ba

sel I

I Def

initi

on)

Trad

ing

Book

(Per

Bas

el II

De

finiti

on)

---

------

------

------

------

---

------

------

------

------

------

---

Quo

ted

33,1

40

- Un

quot

ed

516,

374

-

------

------

- ---

------

----

Tota

l 54

9,51

4 -

==

====

= ==

====

=

29


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

30

QUA

NTIT

ATIV

E DI

SCLO

SURE

S FO

R EQ

UITY

PO

SITI

ON

IN T

HE B

ANKI

NG B

OO

K (c

ontin

ued)

31

DEC

EMBE

R 20

16

(a) Q

uant

itativ

e De

tails

of E

quity

Pos

ition

AED

000

Type

FS

Cat

egor

y (A

FS/F

VPL)

Ba

sel I

I Cat

egor

y (B

anki

ng b

ook)

Cu

rren

t Yea

r Pu

blic

ly T

rade

d Pr

ivat

ely

Held

---

------

------

------

- ---

------

------

------

-----

------

------

------

------

------

------

------

----

Equi

ties

448,

091

448,

091

54,2

34

393,

857

Colle

ctive

inve

stm

ent s

chem

es

- -

- -

Any

othe

r inv

estm

ent

207,

993

207,

993

25

207,

968

---

------

------

- ---

------

------

- ---

------

------

---

------

------

- To

tal

656,

084

656,

084

54,2

59

601,

825

==

====

====

= ==

====

====

= ==

====

====

==

====

====

= (b

) Rea

lized

, Unr

ealiz

ed &

Lat

ent r

eval

uatio

n ga

ins/

(los

ses)

dur

ing

the

year

AED

000

Pa

rticu

lars

A

FS

G

ains

(Los

ses)

Re

alize

d ga

ins

(loss

es) f

rom

sal

e an

d liq

uida

tions

14

,370

Unre

alize

d ga

ins

(loss

es) r

ecog

nize

d in

the

bala

nce

shee

t but

not

thro

ugh

prof

it an

d lo

ss

acco

unt

-

Late

nt re

valu

atio

n ga

ins

(loss

es) f

or in

vest

men

t rec

orde

d at

cos

t but

not

reco

gnize

d in

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lanc

e sh

eet o

r pro

fit a

nd lo

ss a

ccou

nt

23,5

31

------

------

---

To

tal

37,9

01

====

====

==

(c

) Ite

ms

in (b

) abo

ve in

clud

ed in

Tie

r I/ T

ier I

I Cap

ital

AED

000

Ti

er C

apita

l Am

ount

Amou

nt in

clude

d in

Tie

r I c

apita

l (re

alize

d ga

ins)

14

,370

Amou

nt in

clude

d in

Tie

r II c

apita

l (un

real

ised

gain

s)

23,5

31

------

------

---

To

tal

37,9

01

====

====

==

30



32

RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Foreign Exchange Risk Foreign exchange risk hedging strategies are used to ensure that positions are always within established limits. The Group has a conservative policy towards foreign exchange risk and has set limits on positions by currency. Foreign exchange risk is measured using position reports showing the net long or short position for currencies, which are monitored on a real-time basis. Foreign exchange risk is actively managed using spot and forward foreign exchange instruments. The capital requirement for foreign exchange risk as at 31 December 2017 is AED 2.27 million (as at 31 December 2016 is AED 1.79 million). Operational Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Operational risk. Liquidity Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Liquidity risk.

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

31

QUA

NTIT

ATIV

E DI

SCLO

SURE

S FO

R EQ

UITY

PO

SITI

ON

IN T

HE B

ANKI

NG B

OO

K (C

ontin

ued)

31

DEC

EMBE

R 20

16

(d) C

apita

l req

uire

men

ts b

y Eq

uity

gro

upin

gs

AED

000

Gro

upin

g Am

ount

Inve

stm

ents

in a

ssoc

iate

s an

d jo

int v

entu

res

-

Inve

stm

ent S

ecur

ities

78

,730

Held

for T

radi

ng

-

---

------

------

Tota

l cap

ital r

equi

rem

ent

78,7

30

====

====

(e

) Equ

ity In

vest

men

ts (Q

uote

d/ U

nquo

ted)

- In

clud

ing

priv

ate

equi

ty in

vest

men

ts

AED

000

Parti

cula

rs

Bank

ing

Book

(Per

Ba

sel I

I Def

initi

on)

Trad

ing

Book

(Per

Bas

el II

De

finiti

on)

---

------

------

------

------

---

------

------

------

------

------

---

Quo

ted

54,2

59

- Un

quot

ed

601,

825

-

------

------

- ---

------

----

Tota

l 65

6,08

4 -

==

====

= ==

====

=

31



32

RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Foreign Exchange Risk Foreign exchange risk hedging strategies are used to ensure that positions are always within established limits. The Group has a conservative policy towards foreign exchange risk and has set limits on positions by currency. Foreign exchange risk is measured using position reports showing the net long or short position for currencies, which are monitored on a real-time basis. Foreign exchange risk is actively managed using spot and forward foreign exchange instruments. The capital requirement for foreign exchange risk as at 31 December 2017 is AED 2.27 million (as at 31 December 2016 is AED 1.79 million). Operational Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Operational risk. Liquidity Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Liquidity risk.

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

31

QUA

NTIT

ATIV

E DI

SCLO

SURE

S FO

R EQ

UITY

PO

SITI

ON

IN T

HE B

ANKI

NG B

OO

K (C

ontin

ued)

31

DEC

EMBE

R 20

16

(d) C

apita

l req

uire

men

ts b

y Eq

uity

gro

upin

gs

AED

000

Gro

upin

g Am

ount

Inve

stm

ents

in a

ssoc

iate

s an

d jo

int v

entu

res

-

Inve

stm

ent S

ecur

ities

78

,730

Held

for T

radi

ng

-

---

------

------

Tota

l cap

ital r

equi

rem

ent

78,7

30

====

====

(e

) Equ

ity In

vest

men

ts (Q

uote

d/ U

nquo

ted)

- In

clud

ing

priv

ate

equi

ty in

vest

men

ts

AED

000

Parti

cula

rs

Bank

ing

Book

(Per

Ba

sel I

I Def

initi

on)

Trad

ing

Book

(Per

Bas

el II

De

finiti

on)

---

------

------

------

------

---

------

------

------

------

------

---

Quo

ted

54,2

59

- Un

quot

ed

601,

825

-

------

------

- ---

------

----

Tota

l 65

6,08

4 -

==

====

= ==

====

=

32

30

30


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

34

31 D

ECEM

BER

2016

Fina

ncin

g Re

ceiv

able

s Su

kuk

Othe

r as

sets

To

tal f

unde

d Co

mm

itmen

ts

OTC

deriv

ativ

es

Othe

r off-

bala

nce

shee

t ex

posu

res

Tota

l non

-fu

nded

To

tal

AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

Less

than

3 m

onth

s 5,

418,

189

91,8

12

15,1

96,9

04

20,7

06,9

05

508,

790

- 2,

632,

343

3,14

1,13

3 23

,848

,038

3

mon

ths

to 1

yea

r 3,

120,

903

191,

085

2,34

7,18

9 5,

659,

177

- -

1,71

6,76

5 1,

716,

765

7,37

5,94

2

1 ye

ar to

5 y

ears

16

,283

,896

41

7,96

4 1,

873,

901

18,5

75,7

61

- -

571,

290

571,

290

19,1

47,0

51

Ove

r 5 y

ears

12

,364

,856

12

2,26

9 1,

868,

448

14,3

55,5

73

- -

15

15

14,3

55,5

88

Add:

Gro

ssin

g up

of p

rofit

in

susp

ense

& p

rovis

ions

3,

796,

931

- -

3,79

6,93

1 -

- -

- 3,

796,

931

---

------

------

-- ---

------

-----

------

------

----

------

------

----

------

------

---

------

------

-- ---

------

------

---

------

------

- ---

------

------

- To

tal

40,9

84,7

75

823,

130

21,2

86,4

42

63,0

94,3

42

508,

790

- 4,

920,

413

5,42

9,20

3 68

,523

,550

====

====

==

====

====

==

====

===

====

====

= ==

====

==

====

====

==

====

==

====

====

= ==

====

===

EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BASE

L II

PILL

AR II

I DIS

CLO

SURE

S 31

DEC

EMBE

R 20

17

33

The

follo

win

g ta

ble

lists

the

Grou

p’s

expo

sure

s by

Res

idua

l Mat

urity

: 31

DEC

EMBE

R 20

17

Fina

ncin

g Re

ceiv

able

s

Suku

k Ot

her a

sset

s To

tal f

unde

d Co

mm

itmen

ts

OTC

deriv

ativ

es

Othe

r off-

bala

nce

shee

t ex

posu

res

Tota

l non

-fu

nded

To

tal

AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

Less

than

3 m

onth

s 9

,103

,291

1

96,4

69

21,

079,

775

3

0,37

9,53

5

742

,612

-

3

,542

,818

4

,285

,430

3

4,66

4,96

5

3 m

onth

s to

1 y

ear

6,2

61,2

53

153

,898

2

,001

,218

8

,416

,369

-

-

8

94,1

75

894

,175

9

,310

,544

1 ye

ar to

5 y

ears

9

,835

,400

6

50,6

55

-

10,

486,

055

-

-

2

84,4

76

284

,476

1

0,77

0,53

1

Ove

r 5 y

ears

9

,286

,239

2

58,0

15

1,8

06,9

77

11,

351,

231

-

-

-

-

1

1,35

1,23

1

Add:

Gro

ssin

g up

of p

rofit

in

susp

ense

& p

rovis

ions

3

,791

,790

-

-

3

,791

,790

-

-

-

-

3

,791

,790

---

------

------

-- ---

------

-----

------

------

----

------

------

----

------

------

---

------

------

-- ---

------

------

---

------

------

- ---

------

------

Tota

l 38

,277

,973

1,

259,

037

24,8

87,9

70

64,4

24,9

80

742,

612

- 4,

721,

469

5,46

4,08

1 69

,889

,061

==

====

===

====

====

==

====

==

====

====

= ==

====

==

====

====

==

====

==

====

====

= ==

====

===

O

ther

Ass

ets

inclu

de C

ash

& De

posit

s wi

th C

entra

l Ban

k, D

ue fr

om B

anks

, Inv

estm

ent s

ecur

ities

[net

of S

ukuk

], In

vest

men

t pro

perti

es, I

nves

tmen

t in

asso

ciate

and

join

t ven

ture

s, P

rope

rty &

Eq

uipm

ent &

Oth

er A

sset

s.

33


EM

IRAT

ES IS

LAM

IC B

ANK

PJSC

BA

SEL

II PI

LLAR

III D

ISCL

OSU

RES

31 D

ECEM

BER

2017

34

31 D

ECEM

BER

2016

Fina

ncin

g Re

ceiv

able

s Su

kuk

Othe

r as

sets

To

tal f

unde

d Co

mm

itmen

ts

OTC

deriv

ativ

es

Othe

r off-

bala

nce

shee

t ex

posu

res

Tota

l non

-fu

nded

To

tal

AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0 AE

D 00

0

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

------

------

-----

Less

than

3 m

onth

s 5,

418,

189

91,8

12

15,1

96,9

04

20,7

06,9

05

508,

790

- 2,

632,

343

3,14

1,13

3 23

,848

,038

3

mon

ths

to 1

yea

r 3,

120,

903

191,

085

2,34

7,18

9 5,

659,

177

- -

1,71

6,76

5 1,

716,

765

7,37

5,94

2

1 ye

ar to

5 y

ears

16

,283

,896

41

7,96

4 1,

873,

901

18,5

75,7

61

- -

571,

290

571,

290

19,1

47,0

51

Ove

r 5 y

ears

12

,364

,856

12

2,26

9 1,

868,

448

14,3

55,5

73

- -

15

15

14,3

55,5

88

Add:

Gro

ssin

g up

of p

rofit

in

susp

ense

& p

rovis

ions

3,

796,

931

- -

3,79

6,93

1 -

- -

- 3,

796,

931

---

------

------

-- ---

------

-----

------

------

----

------

------

----

------

------

---

------

------

-- ---

------

------

---

------

------

- ---

------

------

- To

tal

40,9

84,7

75

823,

130

21,2

86,4

42

63,0

94,3

42

508,

790

- 4,

920,

413

5,42

9,20

3 68

,523

,550

====

====

==

====

====

==

====

===

====

====

= ==

====

==

====

====

==

====

==

====

====

= ==

====

===

34



35

RISK MANAGEMENT OBJECTIVES AND POLICIES (continued) Reputational Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for reputation risk. Regulatory/Compliance Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Regulatory/compliance risk. Business Risk Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Business risk. Capital management policies and stress testing Please refer Note no. 33 in the annual financial statements for detailed risk management objectives and policies for Capital management policies and stress testing.

35

30

30

30

30


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