THE NATIONAL BANK OF RAS AL-KHAIMAH PILLAR 3 DISCLOSURES
For the period ended 30 June, 2022
The National Bank of Ras Al-Khaimah (P.S.C.)
1. Introduction
On 12th November 2020, the Central Bank of UAE published final Capital Adequacy Standards and Guidance along with Notice 4980/2020. This included revised Standards and Guidance with respect to Pillar 3 - Market Disclosures. The Standards prescribed the effective date of these disclosures to be 31st December 2021 and quarterly thereon. Further to this, the Central Bank of UAE provided explanatory notes and disclosure templates for Pillar 3 on 30th November 2021 as part of Notice 5508/2021 which was superseded by Notice 1887/2022 issued on 9th May 2022.
The Bank has a formal disclosure policy in place which highlights the roles and responsibilities of the management and Board of Directors with respect to internal controls and procedures for information reported under Pillar 3 disclosures.
The scope of consolidation for Pillar 3 disclosures is different compared to the scope of consolidation for financial reporting. Under the scope of regulatory consolidation, all subsidiaries of the Bank are consolidated with the exception of Ras Al Khaimah National Insurance Company PSC. All sections of the following document have been prepared under the scope of regulatory consolidation unless specifically mentioned.
2. Overview of risk management, key prudential metrics and RWA
Amounts in AED'000 | a | b | c | |||||||
30 Jun'22 | 31 Mar'22 | 31 Dec'21 | ||||||||
Available capital (amounts) | ||||||||||
1 | Common Equity Tier 1 (CET1) | 8,296,328 | 8,084,591 | 7,889,152 | ||||||
1a | Fully loaded ECL accounting model | 8,296,328 | 8,084,591 | 7,889,152 | ||||||
2 | Tier 1 | 8,296,328 | 8,084,591 | 7,889,152 | ||||||
2a | Fully loaded ECL accounting model | 8,296,328 | 8,084,591 | 7,889,152 | ||||||
Tier 1 | ||||||||||
3 | Total capital | 8,888,696 | 8,664,904 | 8,434,886 | ||||||
3a | Fully loaded ECL accounting model | 8,888,696 | 8,664,904 | 8,434,886 | ||||||
total capital | ||||||||||
Risk-weighted assets (amounts) | ||||||||||
4 | Total risk-weighted assets (RWA) | 52,785,360 | 52,543,299 | 49,523,321 | ||||||
Risk-based capital ratios as a percentage of RWA | ||||||||||
5 | Common Equity Tier 1 ratio (%) | 15.7% | 15.4% | 15.9% | ||||||
5a | Fully loaded ECL accounting model | 15.7% | 15.4% | 15.9% | ||||||
CET1 (%) | ||||||||||
6 | Tier 1 ratio (%) | 15.7% | 15.4% | 15.9% | ||||||
6a | Fully loaded ECL accounting model | 15.7% | 15.4% | 15.9% | ||||||
Tier 1 ratio (%) | ||||||||||
7 | Total capital ratio (%) | 16.8% | 16.5% | 17.0% | ||||||
7a | Fully loaded ECL accounting model | 16.8% | 16.5% | 17.0% | ||||||
total capital ratio (%) | ||||||||||
Additional CET1 buffer requirements as a percentage of RWA | ||||||||||
8 | Capital conservation buffer | 2.5% | 2.5% | 2.5% | ||||||
requirement (2.5% from 2019) (%) | ||||||||||
9 | Countercyclical buffer requirement | 0.0% | 0.0% | 0.0% | ||||||
(%) | ||||||||||
10 | Bank D-SIB additional requirements | 0.0% | 0.0% | 0.0% | ||||||
(%) | ||||||||||
11 | Total of bank CET1 specific buffer | 2.5% | 2.5% | 2.5% | ||||||
requirements (%) | ||||||||||
d | e |
30 Sep'21 | 30 Jun'21 |
8,145,217 | 7,954,695 |
8,060,377 | 7,816,080 |
8,145,217 | 7,954,695 |
8,060,377 | 7,816,080 |
8,682,434 | 8,490,887 |
8,596,534 | 8,350,540 |
48,854,950 | 47,731,422 |
16.7% | 16.7% |
16.5% | 16.4% |
16.7% | 16.7% |
16.5% | 16.4% |
17.8% | 17.8% |
17.6% | 17.5% |
2.5% | 2.5% |
0.0% | 0.0% |
0.0% | 0.0% |
2.5% | 2.5% |
The National Bank of Ras Al-Khaimah (P.S.C.) | 2
CET1 available after meeting the | ||||||||||||
12 | bank's minimum capital | 6.3% | 6.0% | 6.5% | 7.3% | 7.3% | ||||||
requirements (%) | ||||||||||||
Leverage Ratio* | ||||||||||||
13 | Total leverage ratio measure | 68,335,984 | 65,419,499 | 62,970,840 | ||||||||
14 | Leverage ratio (%) | 12.1% | 12.4% | 12.5% | ||||||||
14a | Fully loaded ECL accounting model | 12.1% | 12.4% | 12.5% | ||||||||
leverage ratio (%) | ||||||||||||
Leverage ratio (%) (excluding the | ||||||||||||
14b | impact of any | 12.1% | 12.4% | 12.5% | ||||||||
applicable 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 | Total available stable funding | |||||||||||
19 | Total required stable funding | |||||||||||
20 | NSFR ratio (%) | |||||||||||
ELAR | ||||||||||||
21 | Total HQLA | 6,751,440 | 5,949,025 | 5,476,267 | 4,750,558 | 4,404,492 | ||||||
22 | Total liabilities | 51,769,205 | 49,892,014 | 47,259,760 | 45,720,359 | 45,749,164 | ||||||
23 | Eligible Liquid Assets Ratio (ELAR) | 13.0% | 11.9% | 11.6% | 10.4% | 9.6% | ||||||
(%) | ||||||||||||
ASRR | ||||||||||||
24 | Total available stable funding | 48,167,572 | 47,129,654 | 45,274,400 | 44,291,396 | 43,697,981 | ||||||
25 | Total Advances | 39,475,792 | 40,980,578 | 37,500,815 | 37,145,903 | 36,570,176 | ||||||
26 | Advances to Stable Resources Ratio | 82.0 | 87.0 | 82.8 | 83.9 | 83.7 | ||||||
(%) | ||||||||||||
*Leverage Ratio went live starting 31st December 2021 and hence, columns for previous periods have been left blank
Capital Adequacy Ratio has improved compared to the previous quarter due to an increase in capital from additional profits earned during the quarter. The increase in Credit RWA compared to 31st March 2022 comes from Loans & Advances, Irrevocable commitments to extend credit and newly implemented Standards for Credit Valuation Adjustments (CVA). The increase in Credit RWA is offset to a great extent by a reduction in Market RWA thus, leading to an overall improvement in Capital Adequacy Ratio.
The increase in leverage ratio exposure measure is due to an increase in overall balance sheet size as well as from an increase in off balance sheet exposure. The increase in capital was not in line with increase in exposure and hence, the leverage ratio has reduced compared to 31st March 2022.
Higher increase in High Quality Liquid Assets (HQLA) compared to total liabilities has led to the overall improvement in ELAR.
Total eligible advances have reduced compared to 31st March 2022 primarily due to a reduction in interbank placements. On the other hand, total stable resources have increased due to an increase in customer deposits. This has led to the overall reduction in ASRR.
The National Bank of Ras Al-Khaimah (P.S.C.) | 3
AED'000 | a | b | c | |||||||
Minimum capital | ||||||||||
RWA | requirements | |||||||||
30 Jun 2022 | 31 Mar 2022 | 30 Jun 2022 | ||||||||
1 | Credit risk (excluding counterparty credit risk) | 46,821,626 | 46,103,315 | 4,916,271 | ||||||
2 | Of which: standardised approach (SA) | 46,821,626 | 46,103,315 | 4,916,271 | ||||||
3 | Of which: foundation internal ratings-based (F- | |||||||||
IRB) approach | ||||||||||
4 | Of which: supervisory slotting approach | |||||||||
5 | Of which: advanced internal ratings-based(A-IRB) | |||||||||
approach | ||||||||||
6 | Counterparty credit risk (CCR) | 308,615 | 321,744 | 32,405 | ||||||
7 | Of which: standardised approach for counterparty | 308,615 | 321,744 | 32,405 | ||||||
credit risk | ||||||||||
8 | Of which: Internal Model Method (IMM) | |||||||||
9 | Of which: other CCR | |||||||||
10 | Credit valuation adjustment (CVA) | 259,192 | 27,215 | |||||||
11 | Equity positions under the simple risk weight | |||||||||
approach | ||||||||||
12 | Equity investments in funds - look-through | - | - | - | ||||||
approach | ||||||||||
13 | Equity investments in funds - mandate-based | - | - | - | ||||||
approach | ||||||||||
14 | Equity investments in funds - fall-back approach | - | - | - | ||||||
15 | Settlement risk | - | - | - | ||||||
16 | Securitisation exposures in the banking book | - | - | - | ||||||
17 | Of which: securitisation internal ratings-based | |||||||||
approach (SEC-IRBA) | ||||||||||
18 | Of which: securitisation external ratings-based | - | - | - | ||||||
approach (SEC-ERBA) | ||||||||||
19 | Of which: securitisation standardised approach | - | - | - | ||||||
(SEC-SA) | ||||||||||
20 | Market risk | 1,717,478 | 2,439,790 | 180,335 | ||||||
21 | Of which: standardised approach (SA) | 1,717,478 | 2,439,790 | 180,335 | ||||||
22 | Of which: internal models approach (IMA) | |||||||||
23 | Operational risk | 3,678,449 | 3,678,449 | 386,237 | ||||||
24 | Amounts below thresholds for deduction (subject | |||||||||
to 250% risk weight) | ||||||||||
25 | Floor adjustment | |||||||||
26 | Total | 52,785,360 | 52,543,298 | 5,542,463 | ||||||
The National Bank of Ras Al-Khaimah (P.S.C.) | 4
3. Composition of capital
Amounts in AED'000 | a | b | |||
Source based on | |||||
reference | |||||
numbers/letters of | |||||
30 Jun 2022 | the balance sheet | ||||
under the | |||||
regulatory scope of | |||||
consolidation | |||||
Common Equity Tier 1 capital: instruments and reserves | |||||
1 | Directly issued qualifying common share (and equivalent for non- | 1,676,245 | Share Capital | ||
joint stock companies) capital plus related stock surplus | |||||
2 | Retained earnings | 2,779,265 | |||
3 | Accumulated other comprehensive income (and other reserves) | 3,844,933 | |||
4 | Directly issued capital subject to phase-out from CET1 (only | - | |||
applicable to non-joint stock companies) | |||||
5 | Common share capital issued by third parties (amount allowed in | - | |||
group CET1) | |||||
6 | Common Equity Tier 1 capital before regulatory deductions | 8,300,443 | |||
Common Equity Tier 1 capital regulatory adjustments | |||||
7 | Prudent valuation adjustments | - | |||
8 | Goodwill (net of related tax liability) | - | |||
9 | Other intangibles including mortgage servicing rights (net of related | - | |||
tax liability) | |||||
10 | Deferred tax assets that rely on future profitability, excluding those | - | |||
arising from temporary differences (net of related tax liability) | |||||
11 | Cash flow hedge reserve | (4,115) | |||
12 | Securitisation gain on sale | - | |||
13 | Gains and losses due to changes in own credit risk on fair valued | - | |||
liabilities | |||||
14 | Defined benefit pension fund net assets | - | |||
15 | Investments in own shares (if not already subtracted from paid-in | - | |||
capital on reported balance sheet) | |||||
16 | Reciprocal cross-holdings in CET1, AT1, Tier 2 | - | |||
Investments in the capital of banking, financial and insurance | |||||
17 | entities that are outside the scope of regulatory consolidation, | - | |||
where the bank does not own more than 10% of the issued share | |||||
capital (amount above 10% threshold) | |||||
Significant investments in the common stock of banking, financial | |||||
18 | and insurance entities that are outside the scope of regulatory | - | |||
consolidation (amount above 10% threshold) | |||||
19 | Deferred tax assets arising from temporary differences (amount | - | |||
above 10% threshold, net of related tax liability) | |||||
20 | Amount exceeding 15% threshold | - | |||
21 | Of which: significant investments in the common stock of financials | - | |||
22 | Of which: deferred tax assets arising from temporary differences | - | |||
23 | CBUAE specific regulatory adjustments | - | |||
24 | Total regulatory adjustments to Common Equity Tier 1 | (4,115) | |||
25 | Common Equity Tier 1 capital (CET1) | 8,296,328 | |||
Additional Tier 1 capital: instruments | |||||
The National Bank of Ras Al-Khaimah (P.S.C.) | 5
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Disclaimer
RAKBANK - National Bank of Ras Al-Khaimah PSC published this content on 13 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 August 2022 16:23:10 UTC.
