Annual Report - Ahli United Bank

ahliunited.com

Annual Report - Ahli United Bank

32 CONCENTRATION ANALYSISThe distribution of assets, liabilities and commitments on behalf of customers by geographic region and industry sector was as follows:2009 2008Assets LiabilitiesCommitmentson behalf ofcustomers Assets LiabilitiesCommitmentson behalf ofcustomersUS$ ’000 US$ ’000 US$ ’000 US$ ’000 US$ ’000 US$ ’000Geographic region:GCC countries 16,700,194 14,703,507 1,423,469 17,121,640 16,123,086 2,175,359United Kingdom (UK) 1,404,250 797,392 5,690 2,018,530 218,290 13,534Europe (excluding UK) 1,815,378 587,931 32,488 1,476,178 1,000,459 23,888United States of America 795,051 224,055 18,619 747,462 389,743 21,235Asia (excluding GCC) 576,650 2,317,334 12,845 590,230 2,038,333 23,106Rest of the world(including Arab Republic ofEgypt) 2,282,460 2,362,333 196,082 1,628,687 1,418,039 267,41823,573,983 20,992,552 1,689,193 23,582,727 21,187,950 2,524,540Industry sector:Banks and other financialinstitutions 8,131,987 7,809,843 471,520 8,330,449 8,092,748 416,415Consumer/Personal 3,989,942 3,100,701 24,894 4,689,289 4,677,417 41,783Trading, manufacturing andservices 3,552,899 974,854 518,325 3,330,186 1,330,071 592,101Real estate/construction 4,218,164 375,195 181,345 4,244,077 630,929 1,117,357Government/public sector 1,177,712 4,557,428 - 1,102,274 3,869,785 9,082Others 2,503,279 4,174,531 493,109 1,886,452 2,587,000 347,80223,573,983 20,992,552 1,689,193 23,582,727 21,187,950 2,524,54033 MARKET RISKMarket risk is the risk of potential financial loss that may arise from adverse changes in the value of a financial instrument or portfolioof financial instruments due to movements in interest rates, foreign exchange rates, equity, commodity prices and derivatives. Thisrisk arises from asset - liability mismatches, changes that occur in the yield curve, foreign exchange rates and changes in volatilities/implied volatilities in the market value of derivatives. The Group classifies exposures to market risk into either trading or non-tradingportfolios. Given the Group’s low risk strategy, aggregate market risk levels are considered low. The Group utilises Value-at-Risk (VaR)models to assist in estimating potential losses that may arise from adverse market movements in addition to non-quantitative riskmanagement techniques. The market risk for the trading portfolio is managed and monitored on a VaR methodology which reflectsthe inter-dependency between risk variables. Non-trading portfolios are managed and monitored using stop loss limits and othersensitivity analyses.a. Market risk-tradingThe Group calculates Historical Simulation VaR using a one day holding period at a confidence level of 95%, which takes intoaccount the actual correlations observed historically between different markets and rates.Since VaR is an integral part of the Group’s market risk management, VaR limits have been established for all trading operationsand exposures are reviewed daily against the limits by management. Actual outcomes are compared to the VaR model derivedpredictions on a regular basis as a means of validating the assumptions and parameters used in the VaR calculation.AUB Annual Report 200993

More magazines by this user
Similar magazines