pdf - 1.26 MB - Ahli United Bank

ahliunited.com

pdf - 1.26 MB - Ahli United Bank

ESTABLISHED IN 1966, AHLI UNITED BANK (UK) PLC HAS A

LONG AND PROUD HISTORY OF UNDERSTANDING AND

MEETING THE NEEDS OF OFFSHORE INVESTORS AND

VISITORS FROM THE GULF, SERVING AS THE BRIDGE OF

CHOICE BETWEEN INDIVIDUALS AND INSTITUTIONS IN THE

REGION AND THE GLOBAL FINANCIAL MARKETS.

Ahli United Bank, UK

The Group calculates VaR using a one-day holding period at a confidence level of 95%, which takes into account the actual

correlations observed historically between different markets and rates.

VALUE AT RISK

2008

US$ Millions

2007

US$ Millions

Average 0.54 0.77

Minimum 0.23 0.25

Maximum 1.19 1.87

VaR limits are delegated by the Board to the Group Asset and Liability Committee (GALCO) and sub-delegated to the Group’s subsidiaries.

The Group recognizes that VaR is based on the assumption of normal market conditions and that certain market shocks can result

in losses greater than anticipated. Therefore, a strict limit structure and control process is adopted to effectively manage market

risks and monitor daily position limits and stop losses.

LIQUIDITY RISK

41

Liquidity risk is the risk of being unable to meet the Bank’s cash commitments without having to raise funds at unreasonable

prices or sell assets on a forced basis. It is measured by estimating the Group’s potential liquidity and funding requirements under

different stress scenarios.

The Group’s liquidity management policies and procedures are designed to ensure that funds are available under all circumstances

to meet the funding requirements of the Group not only under adverse conditions but at sufficient levels to capitalize on

opportunities for business expansion.

ANNUAL REPORT 2008

A prudent mix of liquidity control based on expected economic and Group specific events substantially ensures access to liquidity

without the need to increase cost. It also provides for the maintenance of a stock of liquid and marketable assets and an adequately

diversified deposit base in terms of maturity profile and number of counter parties.

The Group Risk Management function continuously monitors liquidity risk and actively manages the balance sheet to control

liquidity. At the subsidiary level, the respective treasury function manages this risk with monitoring by the Risk Management

department and jurisdiction of its Assets and Liabilities Committee (ALCO). At the Group level liquidity risk is managed by the

Group Assets and Liabilities Committee (GALCO), which is vested with the overall day-to-day responsibility for all matters relating

to Group liquidity.

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