e hou se (bahrain) b. s.c.(c) public disclosure37c94097-98c4-4bfe-9beb-1c… · for the pu 1. kuwa...

Kuwwait F

Financ

Pu

ce Hou

ublic

30th J

use (B

Disclo

June 201

Bahra

osure

12

ain) B.

.S.C.(c)

KUWAIT

PUBLIC

1. GR

2. CA2.1 Cre2.2 Mar2.3 Ope2.4 Equ2.5 Equ2.6 Res2.7 Liqu2.8 Pro2.9 Fina

T FINANCE

DISCLOSU

ROUP STRU

PITAL ADEedit Risk………rket Risk……erational Risuity Positionsuity of Invesstricted Inveuidity Risk …

ofit Rate Riskancial Perfor

HOUSE (B

URE ...........

CTURE .....

EQUACY .....…………………

……………………sk………………s in the Bantment Accou

estment Acco…………………k…………………rmance and

Tabl

BAHRAIN) B

.................

.................

.................……………………………………

…………………king Book……unt Holders ounts (“RIA”……………………………………Position……

le of Conte

B.S.C.(C) ...

..................

..................

..................…. .............

…… .............…. .............…… ............(URIA) .......

”)…. ............….. .............…… .............….. ............

ents

.................

.................

.................

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.................

.................

.................

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..... 1

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..... 4 ..... 8 ....20 ....22 ....23 ....25 ....33 ....38 ....40 ....41

1. G The publiBahrain (Disclosureunder thisBank”) betogether rounded consolidattheir shar

Name

Kuwait F

Mr. Imad

Mr. Adel

Mr. MohaAbdulazi

Mr. Khal

Themar (c)

Total The Boarenabling performanframewor

Group Struct

c disclosures(“CBB”) requie requirements section areeing a locallyknown as (“toff to the nted financial seholding and

Finance House

d Yousif Al Ma

Ahmed Al Ba

ammed Sulaimz Ebrahim Alo

id Ali Almsala

Baytik Compa

d of Directorthe business

nce targets bk.

ture

s under this sirements outts, CBB Rule

e applicable toy incorporatethe Group”). nearest thoustatements fonationality as

e K.S.C.

ane’e

anwan

man omar

am

any B.S.C.

rs (the “Boars units to rby operating

section have lined in its PBook, Volum

o Kuwait Finaed Bank with

All amountsusand. The dorm part of ths at 30 June 2

Number of shares

1,648,995,66

488,401

488,401

488,401

488,401

120,455,527

1,771,404,80

rd”) at KFH realise the Gwithin the a

been preparPublic Disclos

me II for Islamance House (

h an Islamic s presented idisclosers mahe overall pub2012 are as f

Nom‘000

69 164,

48,8

48,8

48,8

48,8

12,0

00 177,

Bahrain seekGroup’s businagreed capita

red in accordsure Module mic Banks. R(Bahrain) B.Sretail bankinn the documade availableblic disclosurefollows:

minal Value 0)

,899,567

840

840

840

840

045,553

,140,480

ks to optimisness strategyal and risk p

dance with th(“PD”), Sect

Rules concerniS.C. (c) (“KFHng license anment are in Be in the hales. The share

(BD %

93.08

0.03

0.03

0.03

0.03

6.80

100

se the Groupy and meetparameters a

he Central Bation PD–1: Aing the discloH Bahrain” ond its subsidBahraini Dinaf yearly rev

eholders along

Nationa

8 Kuwaiti

Kuwaiti

Kuwaiti

Kuwaiti

Kuwaiti

Bahraini

’s performant agreed busand the risk

ank of Annual osures r “the iaries,

ar and viewed g with

ality

ce by siness policy

2. C The GrouGroup’s caCommitteThe primaexternallysupport it Regulator1 compriscurrency subordinareserves. order to cthe signifi

The Grouits currentrequiremeIndicator

The Bankgrowth oexpectatioand uses an Internrequiremerisk, strateconducts profitabilitscenarios,Board throidentified appropriat

apital Adeq

up manages apital is mone on Bankingary objectivesy imposed caps business an

ry capital consses share captranslation r

ated murabahCertain adju

comply with Ccant amount

p’s approach t and future ents, the GrouApproach for

k’s capital adeof the busineons for each of funds. In

nal Capital Aents for the kegic risk, procomprehensity. In additio, which is coough the Capwhich may sete corrective

uacy

the capital bitored using, Supervision s of the Groupital requiremnd to maximis

sists of Tier 1pital, share prreserve and ha payable, cstments are Capital Adequof the Group

to assessing activities. To up adopts thethe Operatio

equacy policy ess. Current business grouachieving an

Adequacy Asskey risks that fit rate risk, rve stress teson, the Banknsidered for pital Adequacyeverely affectaction to be t

base to coveamong other(“BIS rules/raup’s capital mments and thase shareholde

1 capital (coreremium, statunon-controllicollective impmade to fina

uacy (CA) Modp’s capital is in

capital adeqassess its ca

e Standardiseonal Risk.

is to maintaiand future

up, expected optimum ba

sessment Prothe Bank is e

reputation rissts for variouk’s stress testbusiness groy Strategy ant the capital ataken under s

er risks inherr measures, tatios“) and admanagement aat the Group

ers’ value.

e capital) andutory reserve,ng stakeholdpairment resancial results dule issued bn Tier 1.

uacy has beeapital adequaced Approach f

in a strong cacapital requgrowth in oflance betweeogram (ICAAexposed to ink, operationas portfolios ating framewo

owth strategiend the ICAAP adequacy of tsuch a scenar

rent in the bthe rules and dopted by theare to ensuremaintains he

d Tier 2 capit, general reseders less gooserve, current

and reservesby the CBB. F

en in line withcy requiremefor the Credit

apital base toirements areff–balance sheen risk and reAP) which quncluding credal risk, and coand assesses orks and moes. The ICAAPolicy. In cahe Bank, the rio.

business. The ratios establ

e CBB in supee that the Grealthy capita

tal (supplemeerve, retainedodwill. Tier t year’s profs, as prescribrom the regu

h its risk appents in accordand Market R

o support thee determinedeet facilities aeturn, the Bauantifies the it risk, invest

oncentration rthe impact o

odels allow foAP of the Banse a plausiblesenior manag

e adequacy olished by the

ervising the Baroup compliesl ratios in ord

entary capital)d earnings, fo2 capital incfit and revalubed by the Culatory perspe

etite in the ligance with theRisk, and the

e developmend on the basand future sonk has estabeconomic c

tment risk, liqrisk. The Banon the capitaor forward lonk is driven be stress scenagement decid

of the Basel

ank. s with der to

). Tier oreign cludes uation CBB in ective,

ght of e CBB Basic

nt and sis of ources blished capital quidity k also al and ooking by the ario is des an

For the pu1. Kuwa2. Bayan3. Baytik4. Baytik InvestmenConsolida(i.e. comm

All transfeprocess.

urpose of comit Finance Hon Group for Pk Investment k Investment

nt in subsidiation and Ded

mercial subsid

er of funds o

mputing CAR touse – Jordanroperty InvesOne S.P.C.; aTwo S.P.C.

aries has nouction Modul

diaries) are ris

or regulatory

the Bank is co;

stment W.L.L.and

t lead to ane hence not dsk weighted a

y capital with

onsolidating t

;

ny significant deducted fromas per the req

hin the Group

the following

threshold brm the availabquirement of C

p is only car

entities:

reaches specble capital. AlCA Module.

rried out afte

cified in Prudl other subsid

er proper app

dential diaries

proval

Table – 1

CAPITA

Capital

Compon

Core ca

Issued

Emplo

Share

Statuto

Genera

Retain

Unrea

Other

Total T

Deducti

Unrea

Tier 1 C

Supplem

Subord

Asset

Unrea

Genera

Tier 2 C

Total Av Available DeductioInvestmeninvestee'sExcess amAggregatTotal elig* For the pDisclosures

. Capital Struc

AL STRUCTU

Structure (P

nents of Cap

pital - Tier 1

d and fully pa

oyee stock inc

premium

ory reserve

al reserve

ned earnings

lised gains ar

reserves

Tier 1 Capital

ions from Ti

lised gross los

Capital befor

mentary cap

dinated mura

revaluation re

lised gains ar

al provisions

Capital befor

vailable Cap

Capital beforeons nt in insurans capital base mount over mte Deductiogible capitalpurposes of guimodule..

cture

RE

PD-1.3.12, 1

pital

1:

id ordinary sh

entive progra

rising from fai

ier 1:

sses arising fr

re Prudentia

pital - Tier 2

baha payable

eserve - Prope

rising from fai

re PCD

pital before

e PCD

nce entity gre

aximum permns l dance we have

1.3.13,1.3.1

hares

am funded by

r valuing equ

rom fair valui

al consolidat

2:

e

erty, plant, an

r valuing equ

PCD deduct

eater than o

mitted large ex

cross reference

4, 1.3.15) *

y the Bank

uities (45% on

ng equity sec

tion and ded

nd equipment

uities

tions (Tier 1

r equal to 2

xposure limits

ed every table w

*

nly)

curities

ductions (PC

t

& 2)

20% of

s

with the relevan

Amou

CD)

Tier I

1,212

73,673 74,885

240,655 nt Para number

unt in BD ‘00

177

(17,

71

14

482

21

(1,

316

315

102

6

7

116

432,

Tier II

17374

41,r of the CBB’s

00

7,140

379)

1,403

4,310

8,7342,169

1,033

143)

6,267

727

5,540

2,072

6,793

112

7,868

6,845

,385

I

1,2123,6734,885,960

Public

Table – 2

CAPITA

Regulat Type of

Murabah

Financin

- M

- I

- M

Total Table – 3CAPITA

Capital 1.3.30(a

Particul

Market R

Operatio Table – 4

CAPITA

Capital Particul

Consolida

2. Capital Req

AL ADEQUAC

tory Capital

f Islamic Fin

ha contracts w

ng contracts

Murabaha

Ijarah

Musharakah

. Capital RequAL ADEQUAC

Requiremena)

lars

Risk - Standar

onal Risk - Bas

. Capital Ratio

AL ADEQUAC

Adequacy Rlars

ated Ratios

quirement by T

CY

Requireme

nancing Cont

with Banks

s with custo

uirement for MCY

nts for Mark

rdised Approa

sic indicator a

os

CY

Ratios (PD-1

Type of Islam

nts (PD-1.3

tracts

omers

Market and O

ket Risk (PD

ach

approach

1.3.20)

mic Financing

.17) by Each

Operational Ris

D-1.3.18) &

Contracts.

h Type of Is

sk

Operationa

Risk WeighAssets

4

122

TotaR

Amou

slamic Finan

Capita

Amou

l Risk (PD-1

hted R

5,919

2,055

l Capital Ratio

%

24.43%

unt in BD ‘00

ncing Contra

al Requirem

57

9

1

69,

unt in BD ‘00

1.3.19) &

Capital Requiremen

1

Tier 1 CapiRatio

%

20.

00

acts

ment

407

7,302

9,957

1,657

,323

00

nt

5,740

15,257

ital

80%

2.1 C Credit riskcontract. risk by mFinancing tangible s

redit Risk

k is the risk oIt arises princ

monitoring crecontracts are

securities.

of financial locipally from leedit exposuree mostly secu

oss if a custoending, trade

es, and contiured by collate

omer or counte finance and nually assesseral in form o

terparty fails treasury actsing the credof mortgage o

to meet an ivities. The B

ditworthiness of real estate

obligation unBank controls

of counterpaproperties or

nder a credit arties. other

3T

*

3.5.10 QuantitaTable – 5. Averag

CREDIT RISK:

Credit Risk Ex

Portfolios

Balances with BaMurabaha and d Financing contraInvestments – SReceivables Total Credit commitme Grand Total

*Gross credit expAverage credit ex

ative disclosurege and Gross Cred

QUANTITATIV

posure (PD-1.3

anks due from Banks

acts with customeSukuk

ents and continge

posure is reflectedxposure has been

es dit Risk Exposure

VE DISCLOSURE

3.23(a))

ers

ent items

d net of specific pn calculated using

e

ES

T

provisions and grog quarterly conso

Self FinanTotal Gross

Credit Exposure

*

EO

979-

331,329-

48,321380,629

51,054431,683

oss of general prolidated financial s

nced Average Gross Credit

Exposure Over the Period

To

E

543-

331,771-

52,096384,410

49,308433,718

ovisions. statements and P

FinancedInvest

Total Gross Credit

Exposure

4,70054,203

300,61550,631

-410,149

-410,149

PIRI forms submit

Amount in

d by Unrestrictetment Accounts

* Average GroExposure Over

tted to CBB.

BD ‘000

ed s oss Credit the Period

4,71656,011

293,43349,689

-403,849

-403,849

9

T

Table – 6. Portfol

CREDIT RISK:

Geographic Br

Portfolios

Balances with Banks

Murabaha and due from Banks Financing contracts with customers Investments - Sukuk Receivables Total Un-funded Credit commitments ancontingent items

Grand Total

io Geographic Bre

QUANTITATIV

reakdown (PD-1

Middle East

408

-

319,206

- 43,649

363,263

nd s 51,054

414,317

eakdown.

E DISCLOSURE

1.3.23(b)

Self-

GeogrNorth

America Eu

244

-

1,788

--

2,032

-

2,032

ES

-Financed

raphic Area

urope Othe

Count

325

-

- 10

-4,672

4,997 10,

-

4,997 10,

ers tries

Total

2 979

-

0,335 331,329

-- 48,32

,337 380,629

- 51,054

,337 431,683

Finance

Middle East

9 1,959

- 54,203

9 289,348

- 42,1481 -9 387,658

4 -

3 387,658

ed by Unrestrict

GeograNorth

America Eur

1,173

-

1,661

943-

3,777 1

-

3,777 1

Amoun

ted Investment

aphic Area

rope Other

Countr

1,559

-

- 9,

- 7,-

1,559 17,1

-

1,559 17,1

nt in BD ‘000

t Accounts

rs ries

Total

9 4,700

- 54,203

606 300,615

540 50,631- -

155 410,149

- -

155 410,149

Page

0

3

5

1 - 9

-

9

10

T

C

I

P

F

BBMf

FwISR UCccG

Table – 7. Industr

CREDIT RISK: Q

Industry Sector

Portfolios

Funded

Balances wiBanks Murabaha and dufrom Banks

Financing contracwith customers Investments - Sukuk Receivables Total

Unfunded Credit commitments andcontingent items Grand Total

rial Sector Breakd

QUANTITATIVE

r Breakdown (P

Trading and

Manufacturin

ith

ue

cts 33,14

5,5738,71

d 42,05

80,77

down by Portfoli

E DISCLOSURES

PD-1.3.23(c))

Self F

Indust

ng

Banking and

Financial

Co

R

- 979

- -

45 11,070

- -72 7 12,049

54 -1 12,049

o

S

Financed

try Sector onstruction

and Real Estate Oth

-

-

220,136 66

-13,664 29

233,800 96,

9,000242,800 96,

hers

Total

- 979

- -

6,978 331,329

- -9,085 48,321,063 380,629

- 51,054,063 431,683

Financed

Trading and

Manufacturing

9 -

- -

9 30,804

- --

30,804

4 -30,804

ed by Unrestrict

IndustBanking

and Financial

Con

Rea

4,700

54,203

10,288

9,614-

78,805 2

-78,805 2

Amou

ted Investment

ry sector nstruction

and al Estate Othe

-

-

197,275 62,

41,017-

238,292 62,2

-238,292 62,2

nt in BD ‘000

t Accounts

ers

Total

- 4,700

- 54,203

,248 300,615

- 50,631 - -

248 410,149

- - 248 410,149

Table – 8

CREDIT

ConcentCounter

Counterp

Counterp Restruct Total outsrenegotiatthousand)BD 585,3due and ithese arethousand)months opaymentsreceived p The restruthe Groupmarket teof the rep

. Exposures in

T RISK: QUA

tration of risrparties

party # 1

party # 2

tured Islami

standing amoted restructu) and these a82 thousand)impaired amosecured with

). For restructor more haves on a timely partial payme

ucturing doesp as most oferms. The conpayment dates

n Excess of 15

ANTITATIVE

sk (PD-1.3.2

c Financing

ount of finanred facilities re secured w). Outstandinounted to BDh collateral atured facilitiese elapsed sinbasis or the d

ent from custo

s not have anf the exposuncession provs.

5% Limit

DISCLOSUR

23(f)) Expos

Contracts:

cing contractamounted to

with collateral ng restructureD 181,414 thomounting to s amounting tce the date deals have beomers and/or

ny significant ures are suffivided to the r

RES

sure as a Pe

Self-FinConcentrat

ts with custoBD 332,178 amounting to

ed facilities eousand (31 DBD 276,810 to BD 143,59of restructureen settled. Aobtained add

impact on piciently collatrestructured r

ercentage of

nanced tion of Risk

43%

21%

omers for whthousand (3

o BD 610,523excluding thosDecember 201thousand (3

96 (31 Decemring and the As a conditionditional collate

provision and teralised and relationships

f Capital BasFinUn

InvestmConcen

%

%

hich financing1 December

3 thousand (3se which are11: BD 240,01 December

mber 2011: BDcustomers h

n to restructueral.

present and restructuring

mainly relate

se nanced by nrestricted ment Accounntration of R

g terms have 2011: BD 31

31 December e classified as008 thousand2011: BD 29

D 99,078) eithhave made reuring, the Ban

future earning is based oes to the exte

nts Risk

-

-

been 16,617 2011: s past d) and 92,284 her six egular nk has

ngs of on the ension

Page 112

T

C

R

P

BMFI

RTCG *

Table – 9. Maturit

CREDIT RISK: Q

Residual Contra

Portfolios

Balances with BanMurabaha and duFinancing contracInvestments - Su

Receivables Total Credit commitmeGrand Total

* The Bank expec

ty Breakdown of

QUANTITATIVE

actual Maturity

nks ue from Banks cts with customerkuk

nts and contingen

cts an amount of

Credit Exposures

E DISCLOSURES

y Breakdown (P

rs

nt items *

BD 42,054 thous

s

S

D-1.3.23(g))

Up to 3 Months

48

37,14

13,4251,05

51,05

sand as cash (in a

3-12 Months

89 -- -

41 44,616- -

22 1262 44,742- -2 44,742

and out) flows to

Self-Fina

Maturity Bre1-5

Years

- -- -6 182,636- -

6 34,7732 217,409- 9,0002 226,409

occur in bucket 3

anced

reakdown 5-10 Years

--

40,656-

-40,656

-40,656

3-12 months.

Amount in BD

10-20 Years

O

--

25,279-

-25,279

-25,279

‘000

Over 20 Years

490-

1,001-

-1,491

-1,491

C

R

P

BMFI

R

T C G

CREDIT RISK: Q

Residual Contra

Portfolios

Balances with BanMurabaha and duFinancing contracInvestments - Su

Receivables

Total

Credit commitme

Grand Total

QUANTITATIVE

actual Maturity

nks ue from Banks cts with customerkuk

nts and contingen

E DISCLOSURES

y Breakdown (P

rs

nt items

S

D-1.3.23(g))

Up to 3 Months

2,3554,2027,203,77

87,529

87,529

Financed

3-12 Month

500306 41,46470

-

9 41,464

-

9 41,464

by Unrestricte

Maturity br1-5

Years

- -- -4 169,736- 46,861

- -

4 216,597

- -

4 216,597

ed Investment A

reakdown 5-10 Years

--

37,784-

-

37,784

-

37,784

Amount in

Accounts

10-20 Years

--

23,494-

-

23,494

-

23,494

n BD ‘000

Over 20 Years

2,350-

931-

-

3,281

-

3,281

Page 114

T

C

I

IS

TmBfi

C&

O

T *n P

Table – 10. Break

CREDIT RISK: Q

Impaired Loans

Industry Sector P

Trading and manufacturing Banking and financial nstitutions

Construction & real estate 2

Others

Total 3

* This amounts tnot specifically ide

Past due finances

k-up of Impaired

QUANTITATIVE

s, Past Due Loa

Total

Portfolio Good

33,145 23,83

11,070 7,96

220,136 160,52

66,978 48,17

31,329 240,49

to BD 7,868 thouentified, have a g

s are stated net o

Loans by Industr

E DISCLOSURES

ns and Allowan

Substandard

38

2,584

61

863

28

16,550

70 5,222

97

25,219

usands representgreater risk of def

of specific impairm

ry Sector

S

nces (PD-1.3.23

Past due but not

impaired

Past dindivi

impa

5,005

1,671

32,051 1

10,113

48,840 16

ing collective impfault then when o

ment.

3(h))

due or dually aired Over

3 Months

1,718 -

575 -

11,007 -

3,473 -

6,773 -

pairment against originally granted

Over 1

Year

Over 3

Years

1,718 -

575 -

11,007 -

3,473 -

16,773 -

total exposures .

Self-FinancedSpec

Balance at the

Beginning of the Period

ChaDu

thPe

-

-

-

1,672 1

1,672 1,

(self-financed an

Am

cific Impairment

arges ring he riod

Transfer from

collective provision

- -

- -

- -

1,326 -

,326 -

nd URIA financed

mount in BD ‘00

CollecImpair

Balance at the End of

the Period

-

-

-

2,998

2,998

d) which, althoug

Page

0

ctive ment

* *

*

*

-

gh

15

I

IS

TmBfiC&

O

T *n

Impaired Loans

Industry Sector P

Trading and manufacturing Banking and financial nstitutions Construction & real estate

Others

Total 3

* This amounts tnot specifically ide

s, Past Due Loa

Total

Portfolio Good

30,804 22,35

10,288 7,46

197,275 143,19

62,248 45,18

00,615 218,20

to BD 7,868 thouentified, have a g

ns and Allowan

Substandard

59 2,345

67 783

93 15,016

83

4,738

02

22,882

usands representgreater risk of def

nces (PD-1.3.23

Past due but not

impaired

Past dindivi

impa

4,541

1,517

29,080

9,176

44,314 15

ing collective impfault then when o

3(h))

Financdue or dually aired Over

3 Months

1,559 -

521 -

9,986 -

3,151 -

5,217 -

pairment against originally granted

ced by Unrestri

Over 1

Year

Over 3

Years

1,559 -

521 -

9,986 -

3,151 -

15,217 -

total exposures .

cted InvestmenSpec

Balance at the

Beginning of the Period

ChaDu

thPe

-

-

-

1,036 2

1,036 2,

(self-financed an

nt Accounts cific Impairment

arges ring he riod

Transfer from

collective provision

- -

- -

- -

2,550 -

,550 -

nd URIA financed

Amount in BD

CollecImpair

Balance at the End of

the Period

-

-

-

3,586

3,586

d) which, althoug

Page 1

‘000

ctive ment

* *

*

*

-

gh

16

Table – 1

CREDIT

Impaire

Geogra

Are

Middle EOthers countries

Total * This amalthough

1. Break-up o

T RISK: QU

ed Loans, Pa

Oaphic ea

Pa

ImI

FinCo(GT

ast

s

mounts to BDnot specifical

of Provision by

UANTITATIV

ast Due Loan

Own Capitalast Due

and mpaired Islamic nancing ontracts Greater

Than 90 Days)

I

16,890

1,570

18,460

D 7,868 thouly identified, h

y Geographic

VE DISCLO

ns And Allow

l and CurrenSpecific

Impairment

2,770

228

2,998

usands reprehave a greate

Area

OSURES

wances (PD-

nt Account CollectiveImpairme

nt

senting colleer risk of defa

-1.3.23(i))

Unrestre e

Past Due

IslamicFinancin

g Contract

s

* 20,203

* 1,878

- 22,081

ective impairmault then whe

Amou

ricted Inves

c n

t

SpecificImpairm

nt

3 3,3

8 2

1 3,5

ment against en originally g

unt in BD ‘00

stment Accoc

meCollectImpair

nt

314

272

86

exposures wranted.

00

unt tive rme

*

*

-

which,

Table – 12

CREDIT

Credit RPortfoli

Murabah

Ijarah

Total * Over aadditionaltangible a

2. Break-up o

T RISK MITI

Risk Exposuros

ha

and above th collateral in

assets, which

of Eligible Coll

GATION (CR

re Covered

he collateral, the form of

could be invo

lateral by Por

RM): DISCLO

By CRM (PD

considered f mortgage ofoked to claim

tfolio

OSURES FOR

D-1.3.25 (b)

as eligible uf residential the amount o

R STANDAR

and (c))

Total *Eligible Co

2

under the CAproperties, cowed in the e

Amou

RDISED APP

Exposure Coollateral

80,223

160,978

241,201

A Module, thorporate gua

event of defau

unt in BD ‘00

PROACH

overed by Guarantee

he Bank mainarantees and ult.

00

es

-

-

-

ntains other

Table – 13

DISCLO

General

CurrentExposu

Type of FinanContr

Murabah

Ijarah Mushara

Tota * Over aadditionaltangible a

3. Counter Pa

OSURES FOR

l Disclosures

t Credit ure by Islamic

ncing racts

PFa

ha

kah

al

and above th collateral in

assets, which

arty Credit Ris

R EXPOSURE

s (PD-1.3.26

Gross Positive air Value B

370,366

252,655

8,923

631,944

he collateral, the form of

could be invo

sk

ES RELATED

6 (b))

Netting Benefits

NCC

Ex

-

-

-

- 6

considered f mortgage ofoked to claim

TO COUNTE

Netted Current Credit

xposures C

370,366 4

252,655

8,923

631,944 4,

as eligible uf residential the amount o

ERPARTY CR

Eligib

Cash Go

Secu

4,200

29

-

,229

under the CAproperties, cowed in the e

Amou

REDIT RISK

ble Collaterals

ovt. rities

ReEst

- 76

- 160

-

- 236

A Module, thorporate gua

event of defau

unt in BD ‘00

K (CCR)

s Held *

eal tate Tot

6,023 80

0,949 160

-

6,972 241,

he Bank mainarantees and ult.

00

tal

0,223

0,978

-

,201

ntains other

2.2 M Market risrates, comits portfolfinancial aas “the ris The Boardlimits. RMcontext otrading orproprietarother pos Daily marcategoriestake appro 2.2.1 Ma For the Gmarkets oof these r Profit Raarises frofinancial i Foreign Ein foreign a daily ba The Grouand due respectiveJune 2012foreign su2011: BDcurrency purpose translation

Market Risk

sk is the riskmmodity priceios. The Grouassets and liask of losses in

d has approveMD is responsof the approvr non–tradingry position–taitions that are

rket risk repos. These repoopriate action

arket Risk Fa

Group, marketor commodityrisks.

ate Risk is tm the possibnstruments.

Exchange Rexchange rasis to ensure

p is exposed to the fact te functional cu2 is BD 34,52ubsidiary, locaD 15,298 thou

of the Groupof interim cn is

k that movemes, equity pricup is also expbilities. The G

n on and off–b

ed the overalsible for the mved market rg portfolios. Taking and ote not included

orts are prodorts are discun to mitigate t

actors

t risk may ariy markets. A s

the sensitivitybility that cha

Risk is the risktes. The Boarisk is mainta

to the currenthat the asseurrencies. Ne23 thousand (ated in Unitedusand). The ap) using the condensed co

ments in markces and crediposed to profGroup also acbalance sheet

l market risk market risk crisk appetite. Trading portfother marked–d in the tradin

duced for theussed with ththe risk.

se from movsingle transac

y of financial nges in profit

k that the valard has set limained within e

ncy risk mainlets and liabilitt assets of th(31 Decembed Kingdom, aassets and liclosing rate

onsolidated f

ket risk factoit spreads wilfit rate and pccepts the deft positions ari

appetite in tecontrol framew

The Bank solios include t–to–market png book.

e Bank’s senihe senior ma

vements in prction or finan

products to t rates will af

lue of a finanmits on positiestablished lim

ly due to the ties of its foe Group’s for

er 2011: BD 3as at 30 June abilities are tat the date

financial stat

ors, including ll reduce the potential forefinition of maising from mo

erms of markwork and set

separates mathose positionpositions. Non

ior managemnagement co

rofit rates, forncial product

changes in tffect future p

ncial instrumeions by currenmits using Va

bank's bankireign subsidireign subsidia34,426 thousa2012 is BD 1

translated inte of statementements. The

foreign exchGroup’s incomign exchangearket risk as dovements in m

ket risk strategts a limit framrket risk expns arising fron–trading po

ment coveringommittees su

reign exchangmay be subje

the profit ratprofitability or

nt will fluctuancy. PositionsR methodolog

ng book FX aries are den

aries, located and). Net ass15,680 thousto Bahraini Dnt of financiae impact of

hange rates, me or the vae risks arisingdefined by themarket prices

gy and markemework withposures into m market–ma

ortfolios includ

g the differench as ALCO

ge markets, eect to any nu

tes. Profit ratr the fair valu

ate due to chas are monitorgy.

net open posnominated inin Jordan, assets of the Grand (31 Dece

Dinar (presenal position fof foreign cur

profit lue of

g from e CBB .”

et risk in the either aking, de all

nt risk which

equity umber

te risk ues of

anges red on

sitions n their at 30 roup’s ember ntation or the rrency

Page 220

recognisestatement Equity Requity indinvestmen

Commodprices in underlyingcorrelated

d in the stat of income at

Risk is the risdices and the nt portfolio.

dity Price Riscommodity mg commodityd across secto

atement of ct the time of

k that the faivalue of ind

sk is the risk markets are y) these markors. The Grou

comprehensivdisposal of in

ir values of eividual stocks

k arises as a rdetermined bkets may be p is not expo

ve income annvestment in s

quities decreas. The equity

result of sensiby fundamen

strongly corsed to materi

nd will be rsubsidiaries.

ase as the reprice risk ex

itivity to chantal factors (irrelated withial commodity

routed to int

esult of changxposure arises

nges in comm.e. supply anin a particulay price risk.

terim consoli

ges in the levs from the Gr

modity prices. nd demand oar sector and

idated

vels of roup’s

Since of the d less

Page 2

1

Table – 14

MARKE

Level Of

ParCapital r

Maximu

Minimum

This discl

2.3 O Operationor from ebusiness afailures, ipractices,

4. Minimum

ET RISK: DI

f Market Ris

rticulars requirements

m value

m value

losure is base

Operational R

nal risk is the external eventand covers a lnternal and etransaction e

and Maximum

ISCLOSURE

sks In Terms

Price Ris

459

459

270

d on the figur

Risk

risk of loss arts, whether inlarge numberexternal fraudexecution and

m Capital Req

ES FOR BAN

s Of Capital

sk

ForeiExcha

Ris

5,28

5,87

5,28

res from the P

rising from inntentional, unof operationa

d, employmend process man

quirement for

NKS USING

Requiremen

ign ange k

EPo

R

81

75

81

PIRI for the q

nadequate or fnintentional oal risk eventsnt practices annagement, and

r Market Risk

G THE STAN

nts (PD-1.3.27

quity osition Risk

M

-

-

-

quarter ended

failed internaor natural. It s including bund workplace

d damage to p

k

NDARDISED

7 (b))Market Riskon Trading Positions in

Sukuks

30 June 2012

al processes, pis an inheren

usiness interrue safety, custphysical asset

D APPROAC

k

CommoRisk

-

-

-

2.

people and synt risk faced buption and syomer and buss.

CH

dity k

-

-

-

ystems by all

ystems siness

2

Table – 15

OPERAT

Indicato

Particul

Gross In

Amount Number financial

Material Material le

- A Bash

- A

thco

Legal caseon such m Moreover,

2.4 E Equity pricequity indinvestmen The accoudisclosed remaining

5. Indicators

TIONAL RIS

ors of Opera

lars

come (averag

of non-Shari’aof Shari’a vyear

Legal Cases

egal continge

guarantee wank is defendhould be mad

n action was he subsidiary’ompany. The

es are handlematters.

, the Bank did

quity Positio

ce risk is the dices and the nt portfolio.

unting policiesin the interim

g investments

of Operationa

SK : QUANTI

ational Risk

ge)

a-compliant iviolations tha

s:

ncies includin

was issued by ding the claimde to the cust

filed by the m’s directors ape Bank is defe

ed by the Ban

d not pay any

ons in the B

risk that the value of indiv

s, including vam condensed cs are intended

al Risk

TATIVE DIS

(PD-1.3.30

ncome at were ident

ng pending leg

the Bank to am for payment

omer.

minority shareppointed by thending the cla

k’s in-house l

y penalty to th

Banking Boo

fair values of vidual stocks.

aluation methconsolidated fd to be for lo

SCLOSURES

(b) & (c))

tified and re

gal actions ar

a customer ant under the gu

eholders in a she Bank for aaim and believ

egal team an

he CBB during

k

f equities decrThe equity p

hodologies anfinancial stateng term holdi

FOR BASIC

eported durin

re as follows:

nd subsequenuarantee and

subsidiary colleged mismaves no payme

nd external leg

g the period.

rease as a resprice risk expo

nd their relateements. Exceings.

Amou

INDICATOR

ng the

ntly called up believes that

mpany againanagement ofent will be req

gal consultan

sult of changeosure arises fr

ed key assumept for a few p

unt in BD ‘00

R APPROACH

Total

65

by the latter.t no payment

st the Bank af the quired.

ts are consult

es in the leverom the Grou

ptions, are public equities

00

H

5,096

-

-

. The t

and

ted

els of up’s

s, the

Page 223

Table – 16

EQUITY

Total anType an

Equity inManagedTotal

* Averagesubmitted ** This in Table – 17

EQUITY

Capital Equity G

Listed Unlisted ManagedTotal

6. Total and A

Y POSITION

nd Average nd Nature of

nvestments d funds

e exposure had to CBB.

ncludes public

7. Break-up o

Y POSITION

RequiremenGrouping

d Funds

Average Gros

IN BANKIN

Gross Exposf Investmen

as been calcu

cally listed equ

of Capital Req

IN BANKIN

nt - (PD-1.3

s Exposures

NG BOOK - D

sure - (PD-1nt Total G

Expos

47

47

lated using qu

uities classifie

quirement for

NG BOOK - D

3.31 (f))

DISCLOSURE

1.3.31 (b) & Gross sure

* AG

Ex

70,3028,846

9,148

uarterly conso

ed as available

Equity Group

DISCLOSURE

E REQUIREM

& (c)) Average Gross

xposure

470,3888,749

479,137

olidated finan

e for sale in t

pings

E REQUIREM

Amou

MENTS

** Publicly Traded

2,462-

2,462

ncial statemen

the financial s

Amou

MENTS

unt in BD ‘00

Privateheld

2 467- 82 476,

nts or PIRI fo

statements.

unt in BD ‘00

Capital Requireme

1701

172,

00

ely

7,8408,846,686

orms

00

ent

3080,5261,659,493

Page 224

Table – 18

EQUITI

Gains /

Particul Total rea

Total un

Unrealise

Unrealise

2.5 E The Invesbasis of Mrestrictionthe Bank Bank has the basis

The Bank URIA fundobjectives

Invest

Targe

Comp

Divers

Prepa

8. Gain and L

ES: DISCLO

Losses Etc.

lars

alised losses a

realised losse

ed gross gain

ed gains inclu

quity of Inv

stment AccouMudaraba conns as to where

can comminthe right to uof Mudaraba

has developeds are deploys of the invest

tment in Shar

eted returns;

pliance with in

sified portfolio

aration and re

Loss Reported

OSURES FOR

(PD-1.3.31

arising from s

es recognised

s included in

uded in Tier T

vestment Ac

unt Holder (“Intract in a me, how and fogle the IAH use (e.g. currcontract). Th

ed a Profit Shyed and the tments of the

ri’a compliant

nvestment pol

o; and

eporting of pe

d

R BANKING B

1 (d) and (e)

sales or liquida

in statement

Tier One Cap

Two Capital

count Holde

IAH”) authorizmanner whichor what purpofunds with itrent accounts

he IAH and th

haring Investmway the pro

e IAH funds a

t opportunitie

licy and overa

riodic manag

BOOK POSIT

))

ations in the

t of other com

pital

ers (URIA)

zes the Bankh the Bank dose the funds ts own funds s or any othee Bank partic

ment (PSIA) pofits are calcure:

s;

all business p

ement inform

TIONS

reporting per

mprehensive in

to invest theeems approp should be inv (owner’s eq

er funds whichcipate in the r

policy which dulated for the

plan;

mation.

Amou

riod

ncome

e account holpriate withoutvested. Unde

quity) and with the Bank dreturns on the

details the me URIA holde

unt in BD ‘00

Tot

(1,

(

20

lder’s funds ot laying dow

er this arrangeth other fundoes not receie invested fun

anner in whicers. The stra

00

tal

177)

812)

0,306

-

on the n any ement ds the ive on nds.

ch the ategic

Page 225

URIA holdthe financcorporatedistributioafter dedinvested funds is abalances services wholders inhas not chfacilities to The mudaperiod anshare ranBank has mudarib s The Bankand/or expublicatiocustomersare fixed tdemand. from therepresentawhich pro Displaced has been comparedaccordancwill discouassets funpotential w

Complete pay a comany sharehas forgo

ders’ funds arcing portfolio, consumer,

on of profits. Auctions of mand managedallocated propoutstanding a

with the URIAn the proportiohanged signifo the Joint Po

arib share onnd in case of ges from 50%distributed p

share since la

k has a Corpxtended prodns, website, s can be classterm URIA haDetailed infor

e website ofatives at the

oducts are ma

commercial rearned on th

d with compece with explicurage subsidnded by PSIAwithdrawal of

mudarib shampetitive ratee greater thanne part of its

re invested in. The Bank iand debt capAccording to

mandatory resd in accordaportionately band share of A holders. Adon of averageficantly from tool of assets u

n investmentsaving acco

% to 60%. Hoprofit to invest year.

porate Commucts informatdirect mailerssified broadlyaving maturityrmation aboutf the Bank, e branches ofade available t

risk (“DCR”) rhe assets finatitors’ rates. it and implicitizing its URIA

A and apportif funds by inv

are or part the to URIA holn the agreedprofit to distr

n short and mnvests these pital markets.the terms of

serve and sunce with Shabetween URIAthe funds invministrative ee URIA fundethe past yearused for the c

t accounts raunts, where owever, durinestors from it

unications Detion through s, electronic my under two cay of 1, 3, 6 ant the features

brochures f the Bank. Bto the custom

refers to the manced by the Fiduciary riskt standards aA holders, thon its share

vestment acco

ereof, based ders. There a/disclosed prribute that to

medium term funds throug

.. No priority acceptance o

ufficient operaari’a requiremA holders andvested. The Bexpenses incud assets to avrs. The Bank hcalculation of

anges from 2there is no r

ng the period,ts own share

epartment wvarious chan

mail and locaategories, 1) nd 12 monthss of various pat the bran

Branches of mers.

market pressuPSIA, when

k is the risk tpplicable to t

he Bank may to the IAH asount holders.

on the approare no instanrofit sharing rthe Bank’s cu

Murabaha angh various dis granted to

of the URIA, 1ational cash ments. Incomd shareholdeBank does nourred by the verage total ahas started aURIA finance

20% to 40% restriction of , in addition te of mudarib

hich is responnels of coml media. The Term URIA a

s whereas Savroducts offerenches, call the Bank are

ure to pay retthe return onthat arises froheir fiduciary forgo a port

s part of smo

oval of ALCO nces where thratio. There wustomers or i

nd due from Bepartments io any party f100% of the requirements

me generateders on the baot share incomBank are alloassets of the

allocating pasted assets.

depending of cash withdrto investors' s share. Ther

onsible for communication w

URIA producand 2) Savingving URIA caed by the Bancentre and e the primary

turns that excn assets is unom Bank’s fa

y responsibilitition of its moothing retur

of the Bank,he Bank, as Mwere instancenvestors

Banks, Sukukncluding Treafor the purpofunds are invs. URIA fundd through invasis of the avme from fee ocated to the Bank. The prt due and imp

on the investawal, the mushare of profre is no chan

ommunicatingwhich may incts available tg URIA. Termn be withdrawnk can be obtcustomer s

y channel th

ceeds the ratnder performiilure to perfoies. Although

mudarib sharerns and to mi

, can be waivMudarib, has es where the

ks and asury, ose of vested ds are vested verage based URIA

rocess paired

tment udarib it, the nge in

g new nclude to the URIA wn on tained ervice rough

e that ing as orm in KFHB

e from itigate

ved to taken Bank

Page 226

The rate oon pool oholders, inBank and compariso In order tthe Bank (IRR) to cand 31 Dnotice to i Table – 19

UNRES

Unrestri

Savings Term UR

Table – 20

UNRES

Unrestri

Average

Average

of return payaof assets. A nncluding ratesmarket inter

on to the retu

to ensure smcan use Pro

cater against ecember 201its customers

9. Break-up o

TRICTED I

icted Investm

URIA RIA

Tot

0. Percentage

TRICTED I

icted Investm

profit paid o

profit earned

able to URIA number of fas offered by prest rates (LIurns paid to U

ooth returns ofit Equalisati

future losses11 is Nil but ts.

of URIA

NVESTMEN

ment Accoun

tal

e of Return on

NVESTMEN

ment Accoun

n average UR

d on average U

holders is deactors are copeer banks, coBOR etc). Th

URIA holders.

and to mitigaon Reserve (s for URIA hothe Bank may

NT ACCOUN

nt (PD-1.3.33

n Average UR

NT ACCOUN

nt (PD-1.3.33

RIA assets

URIA assets

cided by ALCnsidered whiost of funds f

he bank does

ate the poten(PER). Similaolders. The ay transfer am

NTS:

(a), (e) &(g)

Amount

42,596400,318442,914

RIA Assets

NTS:

(d))

CO, keeping inile deciding rfrom various snot use a fix

ntial withdrawarly Bank canamount of PEmount into PE

A

))

FinancinURI

6

4

n view the ratrate of returnsources, liquixed market b

wal of funds bn use InvestmER and IRR aER and IRR in

Amount in B

ng to Total IA %

10% 90%

100%

Pe

te of return en payable to dity position

benchmark ra

by URIA Invement Risk Res at 30 June n future after

BD ‘000

Ratio of PrDistribut

910

ercentage

2.02.1

earned URIA

of the ate for

estors; eserve

2012 r prior

rofit ted

8%92%00%

01%14%

Page 227

Table – 2

UNREST

Unrestr

Mudarib Table – 22

UNREST

Unrestr

Shari'a-

Cash and

Murabah

Investme

Murabah

Ijarah M

Total

1. Percentage

TRICTED IN

ricted Invest

share to tota

2. Percentage

TRICTED IN

ricted Invest

-Compliant C

d balances wi

ha and due fro

ents - Sukuk

ha

untahia Bittam

e of Mudarib s

NVESTMENT

tment Accou

al URIA profits

e of Islamic F

NVESTMENT

tment Accou

Contract

ith banks

om banks

mleek

share to Tota

ACCOUNTS:

unt (PD-1.3

s

inancing Cont

ACCOUNTS:

unt (PD-1.3

l URIA Profits

:

.33 (f))

URIABe

Mush

tracts Finance

:

.33 (h))

s

A Return efore udarib hares

t

4,870

ed by URIA to

Fina

Amou

Share of Profit Paid to Bank as Mudarib

296

o Total URIA Amou

ancing

24,133

54,203

63,963

164,757

135,858

442,914

unt in BD ‘00

Percenta

6 6.

unt in BD ‘00

Financing Total URIA

5.

12.

14.

37.

30.

100.0

00

age

08%

00

to A %

45%

24%

44%

20%

67%

00%

Table – 23

UNREST

Unrestr

Counter

Claims o

Claims o

Claims o Regulato Mortgage

Past due Holding o

Others

Total Table – 24

UNREST

Unrestr

URIA

3. Percentage

TRICTED IN

ricted Invest

rparty Type

n sovereigns

n banks

n corporate

ory retail portf

e

e facilities

of real estate

4. Percentage

TRICTED IN

ricted Invest

e of Counterp

VESTMENT

tment Accou

folio

e of Profit Pai

VESTMENT

tment Accou

Shat

Tra

party Type Co

ACCOUNTS:

unt (PD-1.3

d to URIA Ho

ACCOUNTS:

unt (PD-1.3

are of Profitto IAH Befoansfer To/FReserves %

ntracts Financ

:

.33 (i))

olders to Tota

:

.33 (l) (m) &

t Paid ore From %

SPaTra

2.02%

ced by URIA

Fina

l URIA Invest

& (n))

Share of Proaid to IAH Afansfer To/FrReserves %

2

to Total URIA

Amount in

ncing

33,898

65,747

55,657

16,348

228,686

18,495

15,822

8,261

442,914

tment

ofit fter rom

%

ShPa

FundBank

.02%

A

n BD ‘000

Financing Total URIA

7.

14.

12.

3.

51.

4.

3.

1.

100.0

hare of Profaid, as a % ods Investedk as Mudarib

0.

to %

65%

84%

57%

69%

63%

18%

57%

87%

00%

it of

d, to b %

13%

Page 229

Table – 25

UNREST

Unrestr

DeclareInvestm

BHD de

USD den

Table – 26

UNREST

Unrestr

Type of

Cash and

Murabah Investme

Murabah

Ijarah customeTotal

Note: TheHowever, not invest

5. Range of D

TRICTED IN

ricted Invest

ed rate of rements accou

nominated

nominated

6. Movement

TRICTED IN

ricted Invest

Assets

d Balance wit

ha and due fro

ents – Sukuk

ha due from c

Muntahia Brs

ere are no limthe bank mo

ted in the ban

Declared Rate

VESTMENT

tment Accou

turn for unts

2

1

of URIA by T

VESTMENT

tment Accou

h banks and C

om banks

ustomers

Bittamleek d

mits imposed onitors its URnk's long term

e of Return

ACCOUNTS:

unt (PD-1.3

1-Month

.00% - 2.40%

.94% - 1.99%

Type of Assets

ACCOUNTS:

unt (PD-1.3

CBB

due from

on the amouRIA deploymem Investment

:

.33 (q))

3-Mon

% 2.35% -

% 2.26% -

s

:

.33 (r ) & (s

OpeningActual

Allocation at 01 Jan 2

24

102

62

142

113445,

nt that can bent classificatPortfolio (inc

nth 6

2.90% 2.50

2.32% 2.42

s))

g

as 012

Net MDur

P

,698

,212

,078

,607

,693,288

be invested bytions so that cluding Private

Amou

6-Month

0% - 3.15%

2% - 2.49%

Amou

Movement ring the

Period

(565)

(48,009)

1,885

22,150

22,165 (2,374)

y URIA fundsto ensure th

e Equity and

unt in BD ‘00

12-Mont

3.00% - 3.

2.58% - 2.

unt in BD ‘00

Closing ActAllocationat 30 Jun

2012

24

54

63

164

135442,

s in any one hat URIA fundReal Estate).

00

th

65%

66%

00

tual n as ne

4,133

4,203

3,963

4,757

5,858,914

asset. ds are

Page 330

Table – 27

UNREST

Unrestr

Type of

Cash item Claims o Claims o Claims o Claims o Regulato

Mortgage

Past due Claims in Other as

Total *The RWAapproved accordanc The total Informatio

7. Capital Cha

TRICTED IN

ricted Invest

Claims

ms

n sovereign

n MDBs

n banks

n corporate

ory retail portf

es

e facilities

n holdings of

ssets

A for Capital 30% alpha

ce to the CA m

Risk Weighteon Report (PI

arge on URIA

VESTMENT

tment Accou

folio

Real Estate

Adequacy Rafactor which

module.

ed Assets finaIRI). The diffe

A by Type of C

ACCOUNTS:

unt (PD-1.3

atio Purposesh is the prop

nced by Unreerence pertain

Claims

:

.33 (v))

s is presentedportion of ass

estricted Invesns to the cons

RWA forAdeqPurpo

d above priosets funded

stment Accousolidation adj

Amount

r Capital quacy oses*

-

-

-

15,647

27,446

12,261

88,840

19,859

19,241

3,880

187,174

r to the applby URIA for

unts above arjustment.

in BD ‘000

Capital Ch

1

3

11

18

ication of theRWA purpos

e as per Prud

arge

-

-

-

587

1,029

460

3,332

745

1,950

146

8,249

e CBB ses in

dential

Page 331

Table – 28

UNREST

Unrestr

June 2012

2011

2010

2009

2008 * Averagaccounts. ** This isdepending *** Durinby 86.25% Table – 29

UNREST

Unrestr

Unrestr

Amount

8. Percentage

TRICTED IN

ricted Invest

* URIA F(Avera

45

49

48

50

21

e assets fun

s the rate of g on the inves

g the period % (2011: 57%

9. Administra

TRICTED IN

ricted Invest

ricted IAH

of administra

e of Profit Ear

VESTMENT

tment Accou

Funds ge)

Profi

55,108

91,680

80,308

03,207

1,917

nded by URI

f return grossstment period

the Bank wa%)

tive Expenses

VESTMENT

tment Accou

tive expenses

rned and Prof

ACCOUNTS:

unt (PD-1.3

it Earned ** E

p

4,870

14,966

19,104

25,045

10,862

IA have bee

s of mudarib d of the Inves

ived its muda

s Allocated to

ACCOUNTS:

unt (PD-1.3

s charged to U

fit Paid to Tot

:

.33 (w))

Profit Earned as a percentage

of funds invested

2.14%

3.04%

3.97%

4.98%

5.13%

en calculated

share whichstment, and f

arib share res

o URIA

:

.33 (x))

URIA

tal URIA Fund

Profit paid

4,574

12,918

13,804

20,817

9,865

using mont

h ranges fromfrom 50% to 6

sulting in high

ds Amou

*** Profpaid as a

percentagof fundsinvested

(after smoothin

4 2.01

8 2.63

4 2.87

7 4.14

5 4.66

thly consolida

m 20% to 4060% for savin

her return pa

Amou

unt in BD ‘00

fit a ge s d

ng)

Percenreturn

shareho

1% 0

3% 0

7% 1

4% 0

6% 0

ated manage

0% for term ng URIA.

aid to URIA ho

unt in BD ‘00

Amount

3

00

ntage ns to olders

0.13%0.41%

1.10%

0.84%

0.47%

ement

URIA,

olders

00

t

3,719

Page 332

2.6 R Under RIAinvestmeninvested. purposes are investunder fidumake goo

The Bank RIA funds The Bankproper, drelevant r The Bankportfolio w a) Organ

and rrisk;

b) Obserits inv

c) Ensurunder

RIA produDepartmeinformatioto make investmen

Restricted In

A, the IAH hants, but imposFurther, the of investmen

ted and manauciary capacitod any losses

has developes are deployed

k as fund mailigent and efules and guid

k has appropwhich include

nising its inteisk managem

rving high stavestors; and ring that the rtaken and is

ucts are madent. Detailed on pack. The informed decnt risks and ex

nvestment A

as authorizedses certain reBank may b

nt. In additionaged in accordty as per the occurred due

ed the PSIA pd and the way

nager (mudafficient manndelines issued

riate procedus:

ernal affairs inment systems

andards of int

Bank has thcompetent fo

de available toproduct infordetailed risks

cision. Such dxchange rate

Accounts (“R

d the Bank toestrictions as be restricted fn, there may dance with Sinstructions o

e to normal co

policy, approvy the profits a

arib) carries oer, in accord by the CBB.

ures and con

n a responsiband procedu

tegrity and fa

he requisite leor the work un

o the customrmation abouts are discloseddisclosure incrisks.

RIA”)

o invest the fto where, howfrom comminbe other res

hari’a requireof the RIA holommercial rea

ved by the Boare calculated

out its fiduciaance with the

ntrols in place

ble manner, eures and cont

ir dealing in m

evel of knowndertaken.

mers through t various RIAd in the respe

cludes the dis

funds on the w and for wh

ngling its ownstrictions whicements. The flder and accoasons.

oard, which dd for the RIA.

ary duties ane Shari’a prin

e which com

ensuring it hatrols designed

managing the

wledge and ex

Priority BankA products is ective RIA infsclosure on p

basis of Mudhat purpose thn funds with ch IAH may funds are maordingly the B

details the ma

nd administersnciples and a

mmensurate w

as appropriatd to mitigate

e scheme to t

xperience for

king and Inveavailable in t

formation pacparticipation r

daraba contrahis funds are the RIA fundimpose. RIA naged by the

Bank is not lia

anner in whic

s the schemepplicable law

with the size

te internal coand manage

the best inter

r the tasks t

estment Placethe respectivck for the inverisks, default

act for to be

ds for funds

e Bank able to

ch the

e in a ws and

of its

ontrols e such

rest of

hat is

ement ve RIA estors risks,

Page 3

Pa

3

age 32

Table – 30

RESTRI

Restrict

Return to Table – 3

RESTRI

Restrict

RIA fund Table – 32

RESTRI

Restrict

Return o * Average

0. History of P

ICTED INVES

ted Investm

o RIA holders

1. Break-up o

ICTED INVES

ted Investm

ds

2. Percentage

ICTED INVES

ted Investm

on average* R

e RIA funds h

Profit Paid to

STMENT ACC

ment Accoun

s

of RIA by Typ

STMENT ACC

ment Accoun

e of Profit Pai

STMENT ACC

ment Accoun

RIA assets

ave been calc

RIA Holders

COUNTS:

t (PD-1.3.35

June 2012

2,094

e of Deposits

COUNTS:

t (PD-1.3.33

d to RIA Hold

COUNTS:

t (PD-1.3.33

culated using

5 (a) & (b))

2011

4 5,459

3 (a))

ders to RIA As

3 (d))

consolidated

2010

5,440

ssets

d managemen

Amou

2009 2

4,191

Amou

Pe

nt accounts.

unt in BD ‘00

2008 20

3,852 2

unt in BD ‘00

Amo

64

ercentage

7.

00

007

2,122

00

ount

4,459

87%

Table – 33

RESTRI

Restrict

Mudarib Table – 34

RESTRI

Restrict

Shari'a-

Murabah

Ijarah M

Total Table – 35

RESTRI

Restrict

Counter

Claims o

3. Mudarib sh

ICTED INVES

ted Investm

share to tota

4. Share of Is

ICTED INVES

ted Investm

-Compliant C

ha

untahia Bittam

5. Percentage

ICTED INVES

ted Investm

rparty Type

n corporate

hare as a Perc

STMENT ACC

ment Accoun

al (gross) RIA

slamic Financi

STMENT ACC

ment Accoun

Contract

mleek

e of Counterp

STMENT ACC

ment Accoun

centage of To

COUNTS:

t (PD-1.3.33

profits

ing Contracts

COUNTS:

t (PD-1.3.33

party Type Co

COUNTS:

t (PD-1.3.33

otal RIA Profit

3 (f))

in Total RIA

3 (h))

ntracts Financ

3 (i))

ts

Financing

Fin

ced by RIA to

Fin

Amou

nancing

63,545

914

64,459

o Total RIA Amou

nancing

64,459

Percenta

21.

unt in BD ‘00

FinancingTotal

Financing

98.

1.4

100.0

unt in BD ‘00

FinancingTotal

Financing

100.

age

28%

00

to

%

58%

42%

00%

00

to

%

00%

Table – 36

RESTRI

Restrict

Type of

MurabahIjarah MBittamleeTotal

Table – 37

RESTRI

Restrict

Declared

6. Share of Pr

ICTED INVES

ted Investm

f RIA T

ha Muntahia ek

7. Average De

ICTED INVES

ted Investm

d rate of retur

rofit Paid to R

STMENT ACC

ment Accoun

otal RIA

A 63,545

914 64,459

eclared Rate

STMENT ACC

ment Accoun

rn

RIA Holders a

COUNTS:

t (PD-1.3.33

RIA ReturnBefore

Mudarib shares

B 2,62

32,66

of Return of R

COUNTS:

t (PD-1.3.33

4

s a Percentag

3 (l) (m) (n)

n RIA Retafte

Mudarshare

C28 2

3260 2,

RIA

3 (q))

12-Month

4.70% - 5.70%

ge of Total RI

Amount in

) & (o))

turn r rib es

SharPaid

M

2,070

24,094

24

% 5.20

IA

n BD ‘000

re of Profit to Bank as

Mudarib

D 558

8566

4-Month

0% - 7.50%

8

8 6

Page 336

Table – 3Purposes

RESTRI

Restrict

Type of

Murabah

Ijarah M

Total Table – 39

RESTRI

Restrict

June 201

2011

2010

2009

2008

2007 * Average** Profit e

38. Treatmen

ICTED INVES

ted Investm

IAH

ha

untahia Bittam

9. Profit Earn

ICTED INVES

ted Investm

* RIA (Ave

12

e RIA funds hearned and p

nt of Assets

STMENT ACC

ment Accoun

mleek

ed and Profit

STMENT ACC

ment Accoun

Funds rage)

53,187

78,109

87,277

71,272

71,729

28,475

ave been calcrofit paid are

Financed by

COUNTS:

t (PD-1.3.33

Paid as a Per

COUNTS:

t (PD-1.3.33

Profit Earned

2,660

6,051

5,905

4,481

4,839

2,739

culated using based on ave

y RIA in the

3 (v))

rcentage of T

3 (w))

** ProfEarned a

PercentagAverage R

Funds

10

7

6

6

6

9

consolidatederage RIA fun

Calculation

Exposu

63

64,

Total RIA Fund

fit s a

ge of RIA s

Pro

.00%

.75%

.77%

.29%

.75%

.62%

d managemennds.

of RWA for

Amou

re RiAm

Cal

3,545

914

,459

ds Amou

ofit Paid

2,094

5,459

5,440

4,191

3,852

2,122

nt accounts.

Capital Ade

unt in BD ‘00

sk Weightedmount Whilelculating CA

42

42,

unt in BD ‘00

** Profit Pas a

PercentageAverage R

Funds

7.

6.

6.

5.

5.

7.4

quacy

00

d e

AR

2,002

-

,002

00

aid

e of RIA

87%

99%

23%

88%

37%

45%

Page 337

2.7 L Liquidity ras they faof cash flo Funding rexpected Table – 40

LIQUID

Liquid a

As at 30

During th

Average

Highest

Lowest

iquidity Risk

risk is the riskall due, or wilows.

risk arises whterms and wh

0. Liquidity R

DITY RISK: Q

assets to cus

June 2012

he period:

k

k that the Grol have to do s

en the neceshen required.

isk Exposure

QUANTITATI

stomer depo

oup does not so at an exce

sary liquidity

Indicators

IVE DISCLO

osits (PD-1.

have sufficieessive cost. Th

to fund illiqu

OSURE

3.37)

ent financial rehis risk arises

uid asset posit

esources to ms from misma

tions cannot

meet its obligatches in the t

be obtained a

ations timing

at the

16.9%

17.8%

19.9%

16.9%

Page 338

T

A

Table – 41. Matur

LIQUIDITY RI

Maturity Analy

Assets Cash and balancesCentral Bank of Ba

Murabaha due fro

Financing contract

Investments

Investment in asso

Investment prope

Receivables, prepaassets

Goodwill and intan

Premises and equ

Total Liabilities and UInvestment Acc

Customers’ curren

Murabaha and dueMurabaha and due

Other liabilities

Unrestricted invesSubordinated mur

Total

Net All RIA related ca

rity Analysis

SK: QUANTITAT

ysis by Differen

s with banks and ahrain

m banks

ts with customers

ociates

rties

ayments and other

ngibles

ipment

Unrestricted ounts

nt accounts

e to banks e to non-banks

stment accounts rabaha payable

sh flows are teno

TIVE DISCLOSU

nt Maturity Buck

Up to 3 Months

16,10

54,20

56,478 13,159

16,404

156,349

24,73

39,96 64,24

8,72

125,088

262,748

(106,399

or matched, henc

URE

kets. (PD-1.3.38

Upon One Year

3 Months

to 12 Months

5 5,911

3

-

8 86,080 9 3,530

- -

- -

4 126

- -

- -

9 95,647

0 5,783

3 40,279 1 36,566

6 2,522

8 112,101 - - 8 197,251

9) (101,604)

e, not included a

8)

r Subtotal up to 12 Months

1 Ye

22,016

54,203

142,558 3 16,689

- 1

-

16,530 1

-

-

251,996 73

30,513

80,242 1 100,807 1

11,248

237,189 -

459,999 45

(208,003) 27

bove. Total RIA a

Oto 5 ears

5 to 10Years

6,746 3,90

-

52,372 78,4478,049 190,82

22,691

25,000 118,18

23,102

23,637 3,99

- 46,32

31,597 441,66

13,654 13,65

22,033 30,440 16,26

19,553

68,575 68,5799,663

53,918 98,49

77,679 343,17

amounts to BD 64

Over One Year0

Over 10 Years

06 11,74

-

40 50,7027

-

83

-

92

21

69 62,44

54 13,65

- 69 16,26

-

75 68,57 -

98 98,49

71 (36,052

4,459 thousand a

Amoun

Subtotal Over 1 Year

40 22,392

-

06 481,518 - 268,876

- 122,69

- 143,183

- 123,102

- 27,629

- 46,32

46 1,235,712

54 40,962

- 122,03369 162,978

- 19,553

75 205,725 - 99,663

98 650,914

2) 584,798

as of 30 June 201

nt in BD ‘000

r

Total

2 44,4

- 54,2

8 624,06 285,5

1 122,6

3 143,1

2 139,6

9 27,6

1 46,3

2 1,487,7

2 71,4

3 202,28 263,7

3 30,8

5 442,93 99,64 1,110,9

8 376,7

12.

Page 3

408

203

076 565

691

183

632

629

321

08

475

275 785

801

914 663 13

95

39

2.8 P Profit rateexpected changes i Table – 42

PROFIT

200bp PAssets

Murabah

Financing

InvestmeLiabiliti

Murabah

Murabah

Subordin

Unrestric

rofit Rate R

e risk is the rate of fundn profit rates

2. Profit Rate

T RATE RISK

Profit Rate S

ha due from b

g contracts w

ents – Sukuk es

ha and due to

ha contracts w

nated Muraba

cted investme

Risk

potential imping due to thwill affect fut

Shock

K IN THE BA

Shocks (PD-

banks

with customers

o Banks

with non-bank

ha payable

ents accounts

pact of the mhe sources ofture profitabi

NKING BOO

-1.3.40 (b))

s

ks

mismatch betwf finance. Prolity or the fair

OK

Total Amount

5

40

1

20

23

9

44

ween the ratofit rate risk r values of fin

ChaBasi

54,203

08,533

17,102

02,275

38,384

99,663

42,914

te of return arises from t

nancial instrum

Amou

nge in is Points

200

200

200

200

200

200

200

on assets anthe possibilityments.

unt in BD ‘00

Effect on NIncome fothe Period

4

(2,

(2,

(

(4,

nd the y that

00

Net or d

542

4,085

171

023)

384)

997)

429)

2.9 F Table – 43

Financia

(PD-1.3

Quantit

Return o

Return oCost to ratio

Formula isROAE = NROAA= NCost to ne

inancial Per

3. Ratios

al Performa

3.9(b))

tative Indica

on average eq

on average asnet operatin

s as follows: Net Income/avet profit/ aveet operating in

rformance a

nce and Pos

ator J

quity

ssets ng income

verage equityrage assets ncome ratio=

nd Position

sition

June 2012

2%

0.6%

53%

y

= (Operating e

2011

2%

0.4%

52%

expenses less

2010

% 2%

% 0.5%

% 56%

s provisions) /

2009

% 1

% 0.2

% 44

/ Total operat

200

1%

2%

4%

ting income

8

15%

4%

26%

Page 441

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