Annual Report - Ahli United Bank

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Annual Report - Ahli United Bank

Pillar III Disclosures - Basel II (Contd.)3. CREDIT RISK MANAGEMENT (continued)Past Due and Impaired Credit FacilitiesAs per CBB guidelines, credit facilities are placed on non-accrual status and interest income suspended when either principal or interestis overdue by 90 days whereupon unpaid and accrued interest is reversed from income. Interest on non-accrual facilities is includedin income only when received. Credit facilities classified as past due are assessed for impairment in accordance with IFRS guidelines. Aspecific provision is established where there is objective evidence that a credit facility is impaired.Impaired credit facilities comprise those facilities where there is objective evidence that the Bank will not collect all amounts due,including both principal and interest. Objective evidence would include:- a breach of contract, such as default or delinquency in interest or principal payments,- the granting of a concession that, for economic or legal reasons relating to the borrower’s financial difficulties, would not otherwisebe considered,- indications that it is probable that the borrower will enter bankruptcy or other financial reorganisation,- for equity securities classified as available-for-sale, a significant or prolonged decline in fair value below cost is considered indetermining whether a security is impaired.Refer to notes 10(a) to 10(d) and note 31(c) to the audited consolidated financial statements for the year ended 31 December 2009 forthe distribution of the loans and advances portfolio by quality.Ratings 1 - 4 comprise of corporate facilities demonstrating financial condition, risk factors and capacity to repay that are good toexcellent and retail borrowers where cash collateral [or equivalent such as pledged investment funds] has been provided.Ratings 5 and 6 represents satisfactory risk and includes corporate facilities that require closer monitoring, and retail accounts whichare maintained within generally applicable product parameters.TABLE - 12 PAST DUE LOANS - AGE ANALYSISi) By Geographical areaThreemonths toone yearOneto threeyearsOverthreeyearsTotalUS$ ’000 US$ ’000 US$ ’000 US$ ’000GCC Countries 177,480 75,523 53,737 306,740United Kingdom 13,271 1,798 453 15,522Europe (excluding UK) 14,368 3,827 - 18,195United States of America - - 104 104Asia (excluding GCC countries) 159 1,424 13,138 14,721Rest of the world 1,390 20,752 6,815 28,957TOTAL 206,668 103,324 74,247 384,23953.8% 26.9% 19.3% 100.0%116 AUB Annual Report 2009

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