Français/English - Arab Banking Corporation, ALGERIA

Risk Management
l Training and awareness-raising: in addition to the awarenessraising
messages dedicated to IT security, ONLINE training,
initiated by the group, was launched in December 2012.
3. Liquidity risk
ABC Algeria, just like the country’s other banks, has been in a
situation of surplus liquidity for many years. The decision of the
monetary authority to increase the minimum capital of banks to
ten billion dinars has accentuated this phenomenon, although
the Bank of Algeria has put in place means to reduce this surplus
liquidity, such as the liquidity reversal and the compensated
deposit facility.
The liquidity risk reflects the Bank’s capacity to satisfy the
withdrawal requests of its customers and to pay its various
obligations to its creditors in the short-term. To check this capacity,
the risk management department is responsible for monitoring the
level of the mandatory reserves held, the regulatory liquidity ratios,
and for establishing stress tests scenarios on a quarterly basis.
These scenarios are then notified to the ad hoc committee. Further,
the Bank has a liquidity management policy which mentions
the regulatory obligations to be respected the management,
monitoring and audit tools. The policy also specifies the terms of
managing a potential liquidity crisis.
CREDIT MANAGEMENT
The main missions of the Credit Department are:
l To Approve / Recommend loans after being assured:
– Of the acceptability of the risk in the return standards
– Of compliance with the credit process such as defined by
the Central Bank and the Group’s policy.
l To have risk management tools and a performing MIS
(Management Information System);
l To carry out the necessary monitoring in terms of continuous
supervision and overseeing of risks, and ensuring, where need
be, that provisions are made;
l To outline guidelines and instructions enabling the bank to
have effective management of risks and returns on loans;
l To organise and monitor the recovery of bad debts in close
collaboration with the Legal Department;
l To ensure the implementation of policies in terms of lending in
accordance with the Central Bank and the Group’s policy;
l To assure strict compliance with the lending procedures and
policies.
l Approval of loans in accordance with the limits authorised
and powers delegated, monitoring of loans, annual revisions,
classification and levels of provisions, etc.
l To assure credit training.
I. Breakdown of commitments by rating (quality of the
portfolio):
As can be seen in the table below, ABC ALGERIA has succeeded
in maintaining a quality portfolio in 2012, given that more than
99% of the portfolio is considered to be satisfactory or higher in
quality. It should be noted that this rate was 97% in 2011, and
95% in 2010.
Rating 31 DEC. 2011 31 DEC. 2012
Exposure % Exposure %
Exceptional 228 27,08 218 23,64
Excellent 15 1,80 1 0,06
Superior 17 2,04 - 0,00
Good - 0,00 36 3,92
Satisfactory 560 66,44 659 71,52
Adequate 8 0,97 5 0,58
Marginal 11 1,30 3 0,28
Special mention 3 0,38 - 0,00
Substandard - 0,00 - 0,00
Doubtful - 0,00 - 0,00
Loss - 0,00 - 0,00
Total 843 100 922 100
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