BANK OF SHARJAH Bank of Sharjah
Basel III- Pillar III Disclosures
for the period ended 30 September
2022
Bank of Sharjah P.J.S.C.
Pillar III Disclosure for the period ended 30 September 2022
Table of Content
1. | Introduction | 2 | |
2. | Purpose and basis of preparation | 2 | |
3. | Overview of Pillar III | 3 | |
3.1 | Verification | 3 | |
3.1 | Implementation of Basel III standards and guidelines | 3 | |
4. | Key Metrics for the group (KM1) | 4 | |
5. | Overview of Risk Weighted Assets (OV1) | 5 | |
6. | Leverage Ratio | 6 | |
6.1 | Summary comparison of accounting assets versus leverage ratio exposure (LR1) | 6 | |
6.2 Leverage ratio common disclosure template (LR2) | 7 | ||
7 Liquidity risk management | 8 | ||
7.1 Eligible Liquid Asset Ratio (ELAR) | 8 | ||
7.2 Advances to Stable Resources Ratio (ASRR) | 9 |
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Bank of Sharjah P.J.S.C.
Pillar III Disclosure for the period ended 30 September 2022
1. Introduction
Bank of Sharjah P.J.S.C. (the "Bank"), is a public joint stock company incorporated by an Amiri Decree issued on 22 December 1973 by His Highness the Ruler of Sharjah and was registered in February 1993 under the Commercial Companies Law Number 8 of 1984 (as amended). The Bank commenced its operations under a banking license issued by the United Arab Emirates Central Bank dated 26 January 1974. The Bank is engaged in commercial and investment banking activities.
The Bank's registered office is located at Al Khan Road, P.O. Box 1394, Sharjah, United Arab Emirates. The Bank operates through eight branches in the United Arab Emirates located in the Emirates of Sharjah, Dubai, Abu Dhabi, and City of Al Ain.
2. Purpose and Basis of preparation
The CBUAE supervises Bank of Sharjah ("BOS" or 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 III framework of the Basel Committee on Banking Supervision ("Basel Committee"), after applying the amendments advised by the CBUAE, within national discretion. The Basel III framework is structured around three 'pillars': minimum capital requirements (Pillar I); supervisory review process (Pillar II); and market discipline (Pillar III).
The disclosures have been prepared in line with the disclosures template introduced by the CBUAE guidelines on disclosure requirements published in November 2020 and November 2021 respectively.
The Pillar III report of the Group for the period ended 30 September 2022 comprises detailed information on the underlying drivers of risk-weighted assets (RWA), capital of the Bank, its wholly owned subsidiaries (together referred to as "The Group"). The report should be read in conjunction with the Group's Reviewed Financial Statements as at 30 September 2022.
The complete listing of all direct subsidiaries of Bank of Sharjah PJSC as at 30 September 2022 is as follows:
Group | Country | ||
percentage | of | ||
Name of Subsidiary | shareholding | incorporation | Principal activities |
Emirates Lebanon Bank S.A.L. | 100% | Lebanon | Financial institution |
Investment in a financial | |||
El Capital FZC | 100% | U.A.E. | institution |
Real estate development | |||
BOS Real Estate FZC | 100% | U.A.E. | activities |
BOS Capital FZC | 100% | U.A.E. | Investment |
Polyco General Trading L.L.C. | 100% | U.A.E. | General trading |
Investment & Real estate | |||
Borealis Gulf FZC | 100% | U.A.E. | development activities |
BOS Funding Limited | 100% | Cayman Islands | Financing activities |
Developing of real estate & | |||
Muwaileh Capital FZC | 90% | U.A.E. | related activities |
BOS Repos Limited | 100% | Cayman Islands | Financing activities |
BOS Derivatives Limited | 100% | Cayman Islands | Financing activities |
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Bank of Sharjah P.J.S.C.
Pillar III Disclosure for the period ended 30 September 2022
3. Overview of Pillar III
Pillar III complements the minimum capital requirements and the supervisory review process. Its aim is to encourage market discipline by developing disclosure requirements which allow market participants to assess certain specified information on the scope of application of Basel III, 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 CBUAE issued Basel III capital regulations, which came into effect from 1 February 2017 introducing minimum capital requirements at three levels, namely Common Equity Tier 1 ('CET1'), Additional Tier 1 ('AT1') and Total Capital.
The minimum capital adequacy requirements as set out by the Central Bank of UAE are as follows:
- Minimum common equity tier 1 (CET 1) ratio of 7% of risk weighted assets (RWAs).
- Minimum tier 1 ratio of 8.5% of RWAs.
- Total capital adequacy ratio of 10.5% of RWAs.
In addition to CET 1 ratio of 7% of RWAs, a capital conservation buffer (CCB) of 2.5% of RWAs shall be maintained in the form of CET 1.
The Group has complied with all the externally imposed capital requirements.
Following are the changes in the revised standards which have been adopted either prior to or during 2021:
- The Tier Capital Supply Standard
- Tier Capital Instruments Standard
- Pillar 2 Standard: Internal Capital Adequacy Assessment Process (ICAAP)
- Credit Risk, Market Risk and Operational Risk
- Equity Investment in Funds, Securitisation, Counterparty Credit Risk, Leverage Ratio
In addition, Credit Value Adjustment (CVA) for Pillar 1 and 3 will be effective from 30 September 2022.
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.
3.1 Verification
The Pillar 3 Disclosures for the period ending 30 September 2022 have been reviewed by the Group's internal auditors.
3.2 Implementation of Basel III standards and guidelines
The Group is compliant with Standardised Approach for Credit, Market and the Basic Indicator Approach for Operational Risk (Pillar 1) as applicable in 2022.
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Bank of Sharjah P.J.S.C.
Pillar III Disclosure for the period ended 30 September 2022
4. Key Metrics for the group (KM1)
Key prudential regulatory metrics have been included in the following table:
30 September | 30 June | 31 March | 31 December | ||||
2022 | 2022 | 2022 | 2021 | ||||
Available capital (amounts) | AED 000 | AED 000 | AED 000 | AED 000 | |||
1 | Common Equity Tier 1 (CET1) | 3,149,977 | 3,161,077 | 3,100,596 | 2,920,471 | ||
1a | Fully loaded ECL accounting model | 3,039,395 | 3,073,104 | 3,023,318 | 2,886,001 | ||
2 | Tier 1 | 3,149,977 | 3,161,077 | 3,100,596 | 2,920,471 | ||
2a | Fully loaded ECL accounting model Tier 1 | 3,039,395 | 3,073,104 | 3,023,318 | 2,886,001 | ||
3 | Total capital | 3,515,842 | 3,519,166 | 3,461,794 | 3,277,073 | ||
3a | Fully loaded ECL accounting model total capital | 3,405,260 | 3,431,193 | 3,384,516 | 3,242,604 | ||
Risk-weighted assets (amounts) | |||||||
4 | Total risk-weighted assets (RWA) | 30,791,161 | 30,210,358 | 30,452,401 | 30,359,658 | ||
Risk-based capital ratios as a percentage of RWA | |||||||
5 | Common Equity Tier 1 ratio (%) | 10.23% | 10.46% | 10.18% | 9.62% | ||
5a | Fully loaded ECL accounting model CET1 (%) | 9.87% | 10.17% | 9.93% | 9.51% | ||
6 | Tier 1 ratio (%) | 10.23% | 10.46% | 10.18% | 9.62% | ||
6a | Fully loaded ECL accounting model Tier 1 ratio (%) | 9.87% | 10.17% | 9.93% | 9.51% | ||
7 | Total capital ratio (%) | 11.42% | 11.65% | 11.37% | 10.79% | ||
7a | Fully loaded ECL accounting model total capital ratio (%) | 11.06% | 11.36% | 11.11% | 10.68% | ||
Additional CET1 buffer requirements as a percentage of RWA | |||||||
8 | Capital conservation buffer requirement (2.5% from 2019) (%) | - | - | - | - | ||
9 | Countercyclical buffer requirement (%) | - | - | - | - | ||
10 | Bank D-SIB additional requirements (%) | - | - | - | - | ||
11 | Total of bank CET1 specific buffer requirements (%) (row 8 + | - | - | - | - | ||
row 9+ row 10) | |||||||
12 | CET1 available after meeting the bank's minimum capital | 0.92% | 1.15% | 0.87% | 0.29% | ||
requirements (%) | |||||||
Leverage Ratio | |||||||
13 | Total leverage ratio measure | 38,758,330 | 39,268,216 | 39,198,417 | 39,659,855 | ||
14 | Leverage ratio (%) (row 2/row 13) | 8.13% | 8.05% | 7.91% | 7.36% | ||
14a | Fully loaded ECL accounting model leverage ratio (%) (row | 7.84% | 7.83% | 7.71% | 7.28% | ||
2A/row 13) | |||||||
14b | "Leverage ratio (%) (excluding the impact of any applicable | 8.13% | 8.05% | 7.91% | 7.36% | ||
temporary exemption of central bank reserves)" | |||||||
Liquidity Coverage Ratio | |||||||
15 | Total HQLA | - | - | - | - | ||
16 | Total net cash outflow | - | - | - | - | ||
17 | LCR ratio (%) | - | - | - | - | ||
Net Stable Funding Ratio | |||||||
18 | - | - | - | - | - | ||
19 | Total required stable funding | - | - | - | - | ||
20 | NSFR ratio (%) | - | - | - | - | ||
ELAR | |||||||
21 | Total HQLA | 3,258,010 | 3,958,740 | 3,559,771 | 3,998,238 | ||
22 | Total liabilities | 31,765,430 | 32,176,995 | 32,038,955 | 32,471,965 | ||
23 | Eligible Liquid Assets Ratio (ELAR) (%) | 10.26% | 12.30% | 11.11% | 12.31% | ||
ASRR | |||||||
24 | Total available stable funding | 27,442,773 | 29,575,149 | 29,168,014 | 28,316,938 | ||
25 | Total Advances | 24,276,473 | 24,562,654 | 24,822,560 | 24,990,604 | ||
26 | Advances to Stable Resources Ratio (%) | 88.46% | 83.05% | 85.10% | 88.25% | ||
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Disclaimer
Bank of Sharjah PJSC published this content on 14 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 December 2022 14:18:04 UTC.
