Tuesday 30 July, 2013
Abu Dhabi Comm Bnk
2nd Quarter Results
RNS Number : 4731K Abu Dhabi Commercial Bank PJSC 30 July 2013
ABU DHABI COMMERCIAL BANK P.J.S.C.
Review report and condensed consolidated interim financial
information for the six month period ended June 30, 2013
ABU DHABI COMMERCIAL BANK P.J.S.C.
Review report and condensed consolidated interim financial information
for the six month period ended June 30, 2013
Pages
Report on review of interim financial information 1
Condensed consolidated interim statement of financial position 2
Condensed consolidated interim income statement (unaudited) 3
Condensed consolidated interim statement of comprehensive income (unaudited) 4
Condensed consolidated interim statement of changes in equity (unaudited) 5 - 6
Condensed consolidated interim statement of cash flows (unaudited) 7 - 8
Notes to the condensed consolidated interim financial information 9 - 45
report on review of INTERIM
financial INFORMATION
To the Board of Directors of
Abu Dhabi Commercial Bank P.J.S.C.
Abu Dhabi, U.A.E.
Introduction
We have reviewed the accompanying condensed consolidated interim statement of financial position of Abu Dhabi Commercial Bank P.J.S.C. and its subsidiaries (together referred to as "the Bank") as of June 30, 2013 and the related condensed consolidated interim statements of income, comprehensive income, changes in equity and cash flows for the six month period then ended. Management is responsible for the preparation and presentation of this interim financial information in accordance with International Accounting Standard 34, "Interim Financial Reporting ("IAS 34")". Our responsibility is to express a conclusion on this interim financial information based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial information is not prepared, in all material respects, in accordance with IAS 34.
PricewaterhouseCoopers
Jacques Fakhoury
Registration Auditor Number 379
July 30, 2013
Condensed consolidated interim statement of financial position
as at June 30, 2013
|
|
As at
|
As at
|
|
|
June 30
|
December 31
|
|
|
2013
|
2012
|
|
|
(unaudited)
|
(audited)
|
|
Notes
|
AED'000
|
AED'000
|
ASSETS
|
|
|
|
|
|
|
|
Cash and balances with Central Banks
|
3
|
10,683,195
|
9,337,874
|
Deposits and balances due from banks
|
4
|
11,076,703
|
16,517,118
|
Trading securities
|
5
|
613,503
|
641,877
|
Derivative financial instruments
|
6
|
4,042,679
|
4,993,226
|
Investment securities
|
7
|
19,246,686
|
18,712,916
|
Loans and advances, net
|
8
|
125,410,349
|
123,195,295
|
Investment properties
|
9
|
546,543
|
529,395
|
Other assets
|
10
|
2,945,741
|
5,925,962
|
Property and equipment, net
|
|
811,387
|
849,934
|
Intangible assets
|
|
76,362
|
92,126
|
|
|
|
|
Total assets
|
|
175,453,148
|
180,795,723
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Due to Central Bank
|
|
10,100
|
-
|
Due to banks
|
11
|
4,881,489
|
4,411,271
|
Derivative financial instruments
|
6
|
4,481,236
|
4,768,338
|
Deposits from customers
|
12
|
111,398,949
|
109,216,925
|
Euro commercial paper
|
13
|
4,993,184
|
4,557,108
|
Borrowings
|
14
|
21,942,219
|
26,139,647
|
Other liabilities
|
15
|
4,132,047
|
6,994,845
|
|
|
|
|
Total liabilities
|
|
151,839,224
|
156,088,134
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
Share capital
|
16
|
5,595,597
|
5,595,597
|
Share premium
|
|
3,848,286
|
3,848,286
|
Other reserves, net of treasury shares
|
17
|
4,938,145
|
6,288,591
|
Retained earnings
|
|
4,718,547
|
4,537,315
|
Capital notes
|
18
|
4,000,000
|
4,000,000
|
|
|
|
|
Equity attributable to equity holders of the Bank
|
|
23,100,575
|
24,269,789
|
Non-controlling interests
|
|
513,349
|
437,800
|
|
|
|
|
Total equity
|
|
23,613,924
|
24,707,589
|
|
|
|
|
Total liabilities and equity
|
|
175,453,148
|
180,795,723
|
|
|
|
|
This condensed consolidated interim financial information were approved by the Board of Directors and authorised for issue on July 30, 2013.
Eissa Al Suwaidi Ala'a Eraiqat Deepak Khullar
Chairman Chief Executive Officer Chief Financial Officer
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated interim income statement (unaudited)
for the six month period ended June 30, 2013
|
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
|
2013
|
2012(*)
|
|
2013
|
2012(*)
|
|
Notes
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
|
|
|
|
|
|
|
Interest income
|
19
|
1,718,485
|
1,965,222
|
|
3,376,319
|
3,803,846
|
Interest expense
|
20
|
(372,332)
|
(595,775)
|
|
(863,677)
|
(1,211,520)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest income
|
|
1,346,153
|
1,369,447
|
|
2,512,642
|
2,592,326
|
|
|
|
|
|
|
|
Income from Islamic financing
|
|
146,835
|
76,874
|
|
284,686
|
161,529
|
Islamic profit distribution
|
|
(32,344)
|
(72,288)
|
|
(77,632)
|
(149,125)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from Islamic financing
|
|
114,491
|
4,586
|
|
207,054
|
12,404
|
|
|
|
|
|
|
|
Total net interest and Islamic
financing income
|
|
1,460,644
|
1,374,033
|
|
2,719,696
|
2,604,730
|
|
|
|
|
|
|
|
Net fees and commission income
|
21
|
258,951
|
267,742
|
|
473,844
|
514,536
|
Net trading income
|
22
|
172,769
|
29,966
|
|
298,640
|
161,927
|
Other operating income
|
23
|
99,017
|
55,157
|
|
243,286
|
100,462
|
|
|
|
|
|
|
|
Operating income
|
|
1,991,381
|
1,726,898
|
|
3,735,466
|
3,381,655
|
|
|
|
|
|
|
|
Operating expenses
|
24
|
(565,492)
|
(537,190)
|
|
(1,082,884)
|
(1,042,864)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before
impairment allowances
|
|
1,425,889
|
1,189,708
|
|
2,652,582
|
2,338,791
|
|
|
|
|
|
|
|
Impairment allowances
|
25
|
(506,821)
|
(492,024)
|
|
(828,500)
|
(778,725)
|
|
|
|
|
|
|
|
Profit before taxation
|
|
919,068
|
697,684
|
|
1,824,082
|
1,560,066
|
|
|
|
|
|
|
|
Overseas income tax expense
|
|
(1,569)
|
(2,621)
|
|
(3,599)
|
(4,245)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period
|
|
917,499
|
695,063
|
|
1,820,483
|
1,555,821
|
|
|
|
|
|
|
|
Attributed to:
|
|
|
|
|
|
|
Equity holders of the Bank
|
|
868,525
|
725,308
|
|
1,698,024
|
1,522,292
|
Non-controlling interests
|
|
48,974
|
(30,245)
|
|
122,459
|
33,529
|
|
|
|
|
|
|
|
Net profit for the period
|
|
917,499
|
695,063
|
|
1,820,483
|
1,555,821
|
|
|
|
|
|
|
|
Basic earnings per share (AED)
|
26
|
0.16
|
0.13
|
|
0.29
|
0.25
|
|
|
|
|
|
|
|
Diluted earnings per share (AED)
|
26
|
0.16
|
0.13
|
|
0.29
|
0.25
|
|
|
|
|
|
|
|
(*) Amounts have been restated as explained in Note 2.1
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated interim statement of comprehensive income (unaudited)
for the six month period ended June 30, 2013
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012(*)
|
|
2013
|
2012(*)
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
Net profit for the period
|
917,499
|
695,063
|
|
1,820,483
|
1,555,821
|
|
|
|
|
|
|
Items that may be reclassified subsequently to income statement:
|
|
|
|
|
|
Exchange difference arising on translation of foreign operations
|
(19,164)
|
(18,474)
|
|
(16,807)
|
(9,419)
|
Fair value changes on cash flow hedges on financial assets
|
(2,318)
|
3,550
|
|
(9,591)
|
6,138
|
Fair value changes on available for sale investments
|
(214,235)
|
101,419
|
|
(191,341)
|
374,879
|
Fair value changes reversed on disposal/impairment of available for sale investments
|
(5,432)
|
4,323
|
|
(5,542)
|
6,754
|
|
|
|
|
|
|
Other comprehensive (loss)/income for the period
|
(241,149)
|
90,818
|
|
(223,281)
|
378,352
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
676,350
|
785,881
|
|
1,597,202
|
1,934,173
|
|
|
|
|
|
|
Attributed to:
|
|
|
|
|
|
Equity holders of the Bank
|
627,376
|
816,126
|
|
1,474,743
|
1,900,644
|
Non-controlling interests
|
48,974
|
(30,245)
|
|
122,459
|
33,529
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
676,350
|
785,881
|
|
1,597,202
|
1,934,173
|
|
|
|
|
|
|
(*) Amounts have been restated as explained in Note 2.1
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated interim statement of changes in equity (unaudited)
for the six month period ended June 30, 2013
|
|
|
Other
|
|
|
Equity
|
|
|
|
|
|
reserves,
|
|
|
attributable
|
|
|
|
|
|
net of
|
|
|
to equity
|
Non-
|
|
|
Share
|
Share
|
treasury
|
Retained
|
Capital
|
holders of
|
controlling
|
Total
|
|
capital
|
premium
|
shares
|
earnings
|
notes
|
the parent
|
interests
|
equity
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2013
|
5,595,597
|
3,848,286
|
6,288,591
|
4,537,315
|
4,000,000
|
24,269,789
|
437,800
|
24,707,589
|
Net profit for the period
|
-
|
-
|
-
|
1,698,024
|
-
|
1,698,024
|
122,459
|
1,820,483
|
Other comprehensive loss for the period
|
-
|
-
|
(223,281)
|
-
|
-
|
(223,281)
|
-
|
(223,281)
|
Other movements (Note 17)
|
-
|
-
|
(1,127,165)
|
-
|
-
|
(1,127,165)
|
-
|
(1,127,165)
|
Net decrease in non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(46,910)
|
(46,910)
|
Dividend paid to shareholders, net
|
-
|
-
|
-
|
(1,397,983)
|
-
|
(1,397,983)
|
-
|
(1,397,983)
|
Realised gain on treasury shares
|
-
|
-
|
-
|
1,191
|
-
|
1,191
|
-
|
1,191
|
Capital notes coupon paid (Note 18)
|
-
|
-
|
-
|
(120,000)
|
-
|
(120,000)
|
-
|
(120,000)
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2013
|
5,595,597
|
3,848,286
|
4,938,145
|
4,718,547
|
4,000,000
|
23,100,575
|
513,349
|
23,613,924
|
|
|
|
|
|
|
|
|
|
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated interim statement of changes in equity (unaudited)
for the six month period ended June 30, 2013 (continued)
|
|
|
Other
|
|
|
Equity
|
|
|
|
|
|
reserves,
|
|
|
attributable
|
|
|
|
|
|
net of
|
|
|
to equity
|
Non-
|
|
|
Share
|
Share
|
treasury
|
Retained
|
Capital
|
holders of
|
controlling
|
Total
|
|
capital
|
premium
|
shares
|
earnings
|
notes
|
the parent
|
interests
|
equity
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2012
|
5,595,597
|
3,848,286
|
4,919,896
|
3,708,227
|
4,000,000
|
22,072,006
|
5,517
|
22,077,523
|
Net profit for the period
|
-
|
-
|
-
|
1,522,292
|
-
|
1,522,292
|
33,529
|
1,555,821
|
Other comprehensive income for the period
|
-
|
-
|
378,352
|
-
|
-
|
378,352
|
-
|
378,352
|
Arising on consolidation of Fund subsidiaries
|
-
|
-
|
-
|
-
|
-
|
-
|
397,565
|
397,565
|
Other movements (Note 17)
|
-
|
-
|
(54,855)
|
-
|
-
|
(54,855)
|
-
|
(54,855)
|
Realised gain on treasury shares
|
-
|
-
|
-
|
40
|
-
|
40
|
-
|
40
|
Dividend paid to shareholders, net
|
-
|
-
|
-
|
(1,118,308)
|
-
|
(1,118,308)
|
-
|
(1,118,308)
|
Net decrease in non-controlling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
(18,022)
|
(18,022)
|
Capital notes coupon paid (Note 18)
|
-
|
-
|
-
|
(120,000)
|
-
|
(120,000)
|
-
|
(120,000)
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2012 (*)
|
5,595,597
|
3,848,286
|
5,243,393
|
3,992,251
|
4,000,000
|
22,679,527
|
418,589
|
23,098,116
|
|
|
|
|
|
|
|
|
|
(*) Amounts have been restated as explained in Note 2.1
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated interim statement of cash flows (unaudited)
for the six month period ended June 30, 2013
|
|
|
6 month period ended June 30
|
|
|
|
2013
|
2012(*)
|
|
|
|
AED'000
|
AED'000
|
OPERATING ACTIVITIES
|
|
|
|
|
Profit before taxation
|
|
|
1,824,082
|
1,560,066
|
Adjustments for:
|
|
|
|
|
Depreciation
|
|
|
64,935
|
65,431
|
Amortisation of intangible assets
|
|
|
15,764
|
15,764
|
Impairment allowance on loans and advances, net (Note 8)
|
|
|
966,255
|
859,654
|
|
Discount unwind (Note 8)
|
|
|
(68,282)
|
(63,874)
|
|
Impairment (recoveries)/allowance on investment securities (Note 25)
|
|
|
(26,663)
|
8,020
|
|
Impairment allowance on property and equipment, net (Note 25)
|
|
|
-
|
21,337
|
|
Net gains from disposal of available for sale securities (Note 23)
|
|
|
(34,526)
|
(5,736)
|
|
Net gains from trading securities (Note 22)
|
|
|
(152,319)
|
(33,090)
|
|
Ineffective portion of hedges - losses/(gains) (Note 6)
|
|
|
3,807
|
(26,441)
|
|
Employees' incentive plan benefit expense (Note 17)
|
|
|
19,871
|
25,844
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit before changes in operating assets and liabilities
|
|
|
2,612,924
|
2,426,975
|
Increase in due from banks
|
|
|
(6,834,591)
|
(3,276,183)
|
Decrease in net trading derivative financial instruments
|
|
|
92,314
|
90,450
|
Net proceeds from disposal of trading securities
|
|
|
180,693
|
6,143
|
(Increase)/ decrease in loans and advances
|
|
|
(3,113,027)
|
487,933
|
Increase in other assets
|
|
|
(83,892)
|
(130,354)
|
Increase/(decrease) in due to banks
|
|
|
49,173
|
(321,464)
|
Increase in deposits from customers
|
|
|
2,218,572
|
2,061,530
|
Increase/(decrease) in other liabilities
|
|
|
248,352
|
(1,170,696)
|
|
|
|
|
|
|
|
|
|
|
Cash (used in)/from operations
|
|
|
(4,629,482)
|
174,334
|
Directors' remuneration paid
|
|
|
(5,375)
|
-
|
Overseas tax paid
|
|
|
(4,611)
|
-
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in)/ from operations
|
|
|
(4,639,468)
|
174,334
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
Impairment recoveries on investment securities (Note 25)
|
|
|
26,663
|
1,923
|
Overseas tax paid, net
|
|
|
(57,457)
|
-
|
Net proceeds from disposal of available for sale investment securities
|
|
|
1,894,965
|
385,908
|
Net purchase of available for sale securities
|
|
|
(2,755,247)
|
(3,196,107)
|
Additions to investment properties
|
|
|
(17,148)
|
(74,404)
|
Purchase of property and equipment, net
|
|
|
(26,388)
|
(69,356)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(934,612)
|
(2,952,036)
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
Increase in Euro commercial paper
|
|
|
531,167
|
3,150,185
|
Proceeds from borrowings
|
|
|
7,084,076
|
556,971
|
Repayment of borrowings
|
|
|
(10,698,693)
|
(6,183,416)
|
Net proceeds from sale/ (purchase) of treasury shares by Funds subsidiaries (Note 2.1)
|
|
|
14,785
|
(1,558)
|
Dividends paid to shareholders, net
|
|
|
(1,397,983)
|
(1,118,308)
|
Shares buy back (Note 16)
|
|
|
(1,158,220)
|
-
|
Net movement in non-controlling interests
|
|
|
(49,320)
|
(18,093)
|
Purchase of employees' incentive plan shares
|
|
|
-
|
(40,000)
|
Capital notes coupon paid
|
|
|
(120,000)
|
(120,000)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(5,794,188)
|
(3,774,219)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(11,368,268)
|
(6,551,921)
|
|
|
|
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
19,180,314
|
19,261,633
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
|
|
7,812,046
|
12,709,712
|
|
|
|
|
|
Operating activities includes dividends income and interest income on available for sale investment securities.
(*) Amounts have been restated as explained in Note 2.1
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Condensed consolidated interim statement of cash flows (unaudited)
for the six month period ended June 30, 2013 (continued)
Cash and cash equivalents
Cash and cash equivalents included in the condensed consolidated interim statement of cash flows comprise the following statement of financial position amounts:
|
As at
|
As at
|
|
June 30
2013
|
December 31
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Cash and balances with Central Banks
|
10,683,195
|
9,337,874
|
Deposits and balances due from banks
|
11,076,703
|
16,517,118
|
Due to Central Bank
|
(10,100)
|
-
|
Due to banks
|
(4,881,489)
|
(4,411,271)
|
|
|
|
|
16,868,309
|
21,443,721
|
Less: Deposits and balances due from banks and cash and balances with Central Banks - original maturity more than 3 months
|
(9,413,182)
|
(2,571,339)
|
|
|
|
Add: Due to banks - original maturity more than 3 months
|
356,919
|
307,932
|
|
|
|
|
7,812,046
|
19,180,314
|
|
|
|
|
|
|
The accompanying notes form an integral part of this condensed consolidated interim financial information.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013
1 Activities and areas of operations
Abu Dhabi Commercial Bank P.J.S.C. ("ADCB" or the "Bank") is a public joint stock company with limited liability incorporated in the Emirate of Abu Dhabi, United Arab Emirates (U.A.E.). ADCB is principally engaged in the business of retail banking, commercial banking and Islamic banking and provision of other financial services through its network of fifty branches and three pay offices in the U.A.E., two branches in India, one offshore branch in Jersey and its subsidiaries.
The registered head office of ADCB is at Abu Dhabi Commercial Bank Head Office Building, Salam Street, plot C-33, Sector E-11, P. O. Box 939, Abu Dhabi, U.A.E.
ADCB is registered as a public joint stock company in accordance with the U.A.E. Federal Commercial Companies Law No. (8) of 1984 (as amended).
2 Summary of significant accounting policies
2.1 Basis of preparation
This condensed consolidated interim financial information has been prepared in accordance with IAS 34 "Interim Financial Reporting". It does not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Bank for the year ended December 31, 2012, which were prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretation Committee (IFRIC) Interpretations.
The same accounting policies, presentation and methods of computation have been followed in this condensed consolidated interim financial information as were applied in the preparation and presentation of the Bank's consolidated financial statements for the year ended December 31, 2012.
For details of related party balances and transactions, refer to Note 36 in the consolidated financial statements for the year ended December 31, 2012. The related party balances and transactions for the quarter ended June 30, 2013 are similar in nature and magnitude. Note 8 provide the details of lending exposure to Government entities.
The results for the three and six month periods ended June 30, 2013 are not necessarily indicative of the results that may be expected for the financial year ending December 31, 2013.
This condensed consolidated interim financial information is prepared and presented in United Arab Emirates Dirhams (AED) which is the Bank's functional and presentation currency and are rounded off to the nearest thousand ("000") unless otherwise indicated.
As required by the Securities and Commodities Authority of the U.A.E. ("SCA") Notification No. 2624/2008 dated October 12, 2008, accounting policies relating to investment securities and investment properties have been disclosed in the condensed consolidated interim financial information.
The preparation of the condensed consolidated interim financial information in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The main areas of judgments, estimates and assumptions applied in the condensed consolidated interim financial information, including the key sources of estimation uncertainty were the same as those applied in the Bank's consolidated financial statements for the year ended December 31, 2012.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
Change in accounting policy
As stated in note 3.1 to the consolidated financial statements for the year ended December 31, 2012, the Bank early adopted IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in Other Entities, as well as the consequential amendments to IAS 28 Investments in Associates and to IAS 31 Joint Ventures (2011), with a date of initial application of January 1, 2012. Accordingly, the comparative information for the six and three month periods ended June 30, 2012 have been restated in this condensed interim financial information - see below.
Subsidiaries
As a result of the adoption of IFRS 10, the Bank changed its accounting policy with respect to determining whether it has control over and consequently whether it consolidates its investees. IFRS 10 introduces a new control model that is applicable to all investees; among other things, it requires the consolidation of an investee if the Bank controls the investee on the basis of de facto circumstances.
In accordance with the transitional provisions of IFRS 10, the Bank re-assessed the control conclusion for its investees at 1 January 2012. As a consequence, the Bank has changed its control conclusion in respect of its investments in Al Nokhitha Fund, ADCB MSCI UAE Index Fund and Arabian Index Fund (the "Funds").
Although the Bank owns less than half of the units of these Funds, the management has determined that the Bank has de facto control over the Funds because it is exposed to significant variable returns from its involvement with the Funds and has power and rights given by the prospectus of the Funds to affect the amount of its returns. Accordingly, the Bank applied acquisition accounting to the investment at January 1, 2012, as if the investee had been consolidated from that date. Previously, two of the investments in the Funds were accounted for as associates using the equity method and one of the investments was accounted for as an available for sale investment using fair value accounting.
The following table summarises the adjustments made to the relevant line items of the Bank's condensed consolidated interim statement of financial position as at June 30, 2012 and its condensed consolidated interim statements of income and cash flows and earnings per share for the six month period ended June 30, 2012 as a result of the consolidation of the Funds.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
2.1 Basis of preparation (continued)
Change in accounting policy (continued)
Condensed consolidated interim statement of financial position (extract)
|
As at June 30, 2012 (unaudited)
|
|
As previously stated
|
Adjustments
|
As restated
|
|
AED'000
|
AED'000
|
AED'000
|
Assets
|
|
|
|
Trading securities
|
56,868
|
464,550
|
521,418
|
Investment securities
|
18,259,166
|
(36,205)
|
18,222,961
|
Other assets
|
9,212,519
|
3,314
|
9,215,833
|
Investment in associates
|
89,323
|
(89,323)
|
-
|
|
|
|
|
Overall impact on total assets
|
|
342,336
|
|
|
|
|
|
Liabilities
|
|
|
|
Deposits from customers
|
111,247,360
|
(20,438)
|
111,226,922
|
Other liabilities
|
9,812,272
|
(810)
|
9,811,462
|
|
|
|
|
Overall impact on total liabilities
|
|
(21,248)
|
|
|
|
|
|
Equity
|
|
|
|
Cumulative changes in fair value
|
(26,330)
|
3,205
|
(23,125)
|
Retained earnings
|
4,002,620
|
(10,369)
|
3,992,251
|
Treasury shares
|
-
|
(40,699)
|
(40,699)
|
Non-controlling interests
|
7,142
|
411,447
|
418,589
|
|
|
|
|
Overall impact on equity
|
|
363,584
|
|
|
|
|
|
Condensed consolidated interim income statement (extract)
|
Six month period ended June 30, 2012 (unaudited)
|
|
As previously stated (*)
|
Adjustments
for Funds consolidation
|
As restated
|
|
AED'000
|
AED'000
|
AED'000
|
Net interest and Islamic financing income
|
2,604,865
|
(135)
|
2,604,730
|
Net fees and commission income
|
518,981
|
(4,445)
|
514,536
|
Net trading income
|
144,664
|
17,263
|
161,927
|
Other operating income
|
84,583
|
15,879
|
100,462
|
|
|
|
|
Overall impact on operating income
|
|
28,562
|
|
Operating expenses
|
(1,042,492)
|
(372)
|
(1,042,864)
|
Share of profit of associates
|
7,506
|
(7,506)
|
-
|
|
|
|
|
Overall impact on net profit
|
1,535,137
|
20,684
|
1,555,821
|
|
|
|
|
Overall impact on net profit attributable to non-controlling interests
|
1,625
|
31,904
|
33,529
|
|
|
|
|
(* )Hedge ineffectiveness and gains on sale of available for sale investments reclassified from net trading income to net interest and Islamic financing income and other operating income respectively to match current period presentation.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
2.1 Basis of preparation (continued)
Change in accounting policy (continued)
Condensed consolidated interim statement of cash flows (extract)
|
Six month period ended June 30, 2012 (unaudited)
|
|
As previously stated(*)
|
Adjustments
for Funds consolidation
|
As restated
|
|
AED'000
|
AED'000
|
AED'000
|
Net cash from operations
|
171,154
|
3,180
|
174,334
|
Net cash used in investing activity
|
(2,967,696)
|
15,660
|
(2,952,036)
|
Net cash used in financing activity
|
(3,755,379)
|
(18,840)
|
(3,774,219)
|
|
|
|
|
Overall impact on cash and cash equivalents
|
|
-
|
|
|
|
|
|
(*)To match with current period presentation the following have been reclassified:
- Euro commercial paper (refer to note 18 to the consolidated financial statements for the year ended December 31, 2012) from operating activity to financing activity; and
- Net purchase of trading securities and dividend received from investment activities to operating activities.
Impact on Earnings per share (EPS)
The Funds consolidation had an immaterial impact on EPS for the six month period ended June 30 2013.
2.2 Application of new and revised International Financial Reporting Standards (IFRSs)
2.2.1 New and revised IFRSs effective for accounting periods beginning January 1, 2013
Other than the impact of early adoption of IFRS 10 set out in Note 2.1, there are no other IFRSs or IFRIC interpretations that were effective for the first time for the financial year beginning January 1, 2013 that have had a material impact on Bank's condensed consolidated interim financial information.
2.2.2 Standards and Interpretations in issue not yet effective
The Bank has not early adopted new and revised IFRSs that have been issued but are not yet effective.
New Standards and amendments to Standards:
|
Effective for annual periods beginning on or after
|
Amendments to IAS 32 Financial Instruments requires presentation to clarify certain aspects because of diversity in application of the requirements on offsetting, focused on four main areas:
· the meaning of 'currently has a legally enforceable right of set-off'
· the application of simultaneous realisation and settlement
· the offsetting of collateral amounts
· the unit of account for applying the offsetting requirements
These amendments will not have a material impact on the Bank's condensed consolidated interim financial information.
|
January 1, 2014
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
2.2 Application of new and revised International Financial Reporting Standards (IFRSs)
(continued)
2.2.2 Standards and Interpretations in issue not yet effective (continued)
New Standards and amendments to Standards:
|
Effective for annual periods beginning on or after
|
Amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and IAS 27 Separate Financial Statements relate only to investment entities, therefore will not apply to the Bank.
|
January 1, 2014
|
IFRS 9, Financial Instruments: Classification and Measurement (intended as complete replacement for IAS 39).
|
January 1, 2015
|
Key requirements of IFRS 9 are described as follows:
IFRS 9 requires all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods.
Management anticipates that these IFRSs and amendments will be adopted in the consolidated financial statements in the initial period when they become mandatorily effective. The Bank is yet to assess IFRS 9's full impact because the hedging and impairment aspects of IFRS 9 are still outstanding, and intends to adopt IFRS 9 in the initial period when it becomes mandatorily effective.
2.3 Basis of consolidation
This condensed consolidated interim financial information incorporates the financial statements of Abu Dhabi Commercial Bank P.J.S.C. and its subsidiaries (collectively referred to as "ADCB" or the "Bank").
Subsidiaries
Subsidiaries are entities controlled by the Bank. The Bank controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the condensed consolidated interim financial information from the date that control commences until the date that control ceases.
Special Purpose Entities
Special purpose entities (SPEs) are entities that are created to accomplish a narrow and well-defined objective such as the securitisation of particular assets, or the execution of a specific borrowing or lending transaction. An SPE is consolidated if, based on an evaluation of the substance of its relationship with the Bank, the Bank's power over the SPE, exposures or rights to variable returns from its involvement with the SPE and its ability to use its power over the SPE at inception and subsequently to affect the amount of its return, the Bank concludes that it controls the SPE.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
2.3 Basis of consolidation (continued)
Special Purpose Entities (continued)
The assessment of whether the Bank has control over an SPE is carried out at inception and normally no further reassessment of control is carried out in the absence of changes in the structure or terms of the SPE, or additional transactions between the Bank and the SPE except whenever there is a change in the substance of the relationship between the Bank and an SPE.
Funds under management
The Bank manages and administers assets held in unit trusts on behalf of investors. The financial statements of these entities are not included in the condensed consolidated interim financial information except when the Bank controls the entity, as referred to above, or is the principal investor.
Loss of control
Upon the loss of control, the Bank derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Bank retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or in accordance with the Bank's accounting policy for financial instruments depending on the level of influence retained.
Transactions eliminated on consolidation
Intra-group balances, and income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated in preparing the condensed consolidated interim financial information. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
Joint arrangements
Joint arrangements are arrangements of which the Bank has joint control, established by contracts requiring unanimous consent for decisions about the activities that significantly affect the arrangements' returns. They are classified and accounted for as follows:
Joint operation - when the Bank has rights to the assets, and obligations for the liabilities, relating to an arrangement, it accounts for each of its assets, liabilities and transactions, including its share of those held or incurred jointly, in relation to the joint operation.
Joint venture - when the Bank has rights only to the net assets of the arrangements, it accounts for its interest using the equity method, as for associates.
2.4 Investment securities
Investment securities are initially measured at fair value plus, in the case of investment securities not at fair value through profit or loss, incremental direct transaction costs, and subsequently accounted for depending on their classification as either held to maturity, fair value through profit or loss or available for sale.
Investment securities are classified into the following categories depending on the nature and purpose of the investment:
i) Investments at fair value through profit or loss;
ii) Available for sale and
iii) Held-to-maturity investments.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
2.4 Investment securities (continued)
Financial assets and liabilities designated at fair value through profit or loss (FVTPL)
Financial assets and liabilities are classified as at FVTPL when either held for trading or when designated as at FVTPL.
A financial asset or liability is classified as held for trading if:
§ It has been acquired principally for the purpose of selling it in the near term; or
§ On initial recognition it is part of a portfolio of identified financial instruments that the Bank manages together and has a recent actual pattern of short-term profit-taking; or
§ It is a derivative that is not designated and effective as a hedging instrument.
A financial asset or liability other than held for trading may be designated as at FVTPL upon initial recognition if:
§ Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise for measuring assets or liabilities on a different basis; or
§ It forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Bank's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
§ It forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial assets and liabilities at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in condensed consolidated interim income statement.
Held-to-maturity
Investments which have fixed or determinable payments with fixed maturities which the Bank has the positive intention and ability to hold to maturity, are classified as held to maturity investments.
Held-to-maturity investments are initially recognised at fair value plus any directly attributable transaction costs and are subsequently measured at amortised cost using the effective interest rate method, less any impairment losses, with revenue recognised on an effective yield basis.
Amortised cost is calculated by taking into account any discount or premium on acquisition using an effective interest rate method.
If there is objective evidence that an impairment on held to maturity investments carried at amortised cost has been incurred, the amount of impairment loss recognised in the condensed consolidated interim income statement is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the investments' original effective interest rate.
Investments classified as held to maturity and not close to their maturity, cannot ordinarily be sold or reclassified without impacting the Bank's ability to use this classification and cannot be designated as a hedged item with respect to interest rate or prepayment risk, reflecting the longer-term nature of these investments.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
Available for sale
Investments not classified as either "fair value through profit or loss" or "held to maturity" are classified as "available for sale". Available for sale assets are intended to be held for an indefinite period of time and may be sold in response to liquidity requirements or changes in interest rates, commodity prices or equity prices.
Available for sale investments are initially recognised at fair value plus any directly attributable transaction costs and are subsequently measured at fair value. The fair values of quoted financial assets in active markets are based on current prices. If the market for a financial asset is not active, and for unquoted securities, the Bank establishes fair value by using valuation techniques (e.g. recent arms length transactions, discounted cash flow analysis and other valuation techniques). Only in very rare cases where fair value cannot be measured reliably, investments are carried at cost and tested for impairment, if any.
Gains and losses arising from changes in fair value are recognised in the condensed consolidated interim statement of comprehensive income and recorded in cumulative changes in fair value with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in the condensed consolidated interim income statement. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in equity in the cumulative changes in fair value is included in the condensed consolidated interim income statement for the period.
If an available for sale investment is impaired, the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any previous impairment loss recognised in the condensed consolidated interim income statement is removed from equity and recognised in the condensed consolidated interim income statement. Once an impairment loss has been recognised on an available-for-sale financial asset, the subsequent accounting treatment for changes in the fair value of that asset differs depending on the nature of the available-for-sale financial asset concerned:
For an available-for-sale debt security, a subsequent decline in the fair value of the instrument is recognised in the condensed consolidated interim income statement when there is further objective evidence of impairment as a result of further decreases in the estimated future cash flows of the financial asset.
For an available-for-sale equity security, a subsequent decline in the fair value of the instrument is recognised in the condensed consolidated interim income statement, to the extent that further cumulative impairment losses have been incurred in relation to the acquisition cost of the equity security.
Where there is no further objective evidence of impairment, the decline in the fair value of the financial asset is recognised in the condensed consolidated interim statement of comprehensive income.
§ If the fair value of a debt security increases in a subsequent period, and the increase can be objectively related to an event occurring after the impairment loss was recognised in the condensed consolidated interim income statement, the impairment loss is reversed through the condensed consolidated interim income statement to the extent of the increase in fair value;
§ For an available-for-sale equity security, all subsequent increases in the fair value of the instrument are treated as a revaluation and are recognised in condensed consolidated interim statement of comprehensive income, accumulating in equity.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
2 Summary of significant accounting policies (continued)
2.5 Investment properties
Investment property is property held either to earn rental income or for capital appreciation or both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is reflected at valuation based on fair value at the statement of financial position date. The fair values are the estimated amounts for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm's length transaction. The fair value is determined on periodic basis by independent professional valuers. Fair value adjustments on investment property are included in the condensed consolidated interim income statement in the period in which these gains or losses arise.
Investment properties under development that are being constructed or developed for future use as investment property are measured initially at cost including all direct costs attributable to the design and construction of the property including related staff costs. Subsequent to initial recognition, investment properties under development are measured at fair value. Gains and losses arising from changes in the fair value of investment properties under development are included in the condensed consolidated interim income statement in the period in which they arise. Upon completion of construction or development, such properties are transferred to investment properties.
3 Cash and balances with Central Banks
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Cash on hand
|
398,310
|
552,773
|
Balances with Central Banks
|
1,243,882
|
666,128
|
Reserves maintained with Central Banks
|
6,519,370
|
5,618,973
|
Certificate of deposits with U.A.E. Central Bank
|
2,500,000
|
2,500,000
|
Reverse repo placements
|
21,633
|
-
|
|
|
|
|
|
|
|
10,683,195
|
9,337,874
|
|
|
|
The geographical concentration is as follows:
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Within the U.A.E.
|
10,628,592
|
9,278,553
|
Outside the U.A.E.
|
54,603
|
59,321
|
|
|
|
|
|
|
|
10,683,195
|
9,337,874
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
4 Deposits and balances due from banks
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Nostro balances
|
566,908
|
243,079
|
Margin deposits
|
172,555
|
480,291
|
Time deposits
|
9,487,240
|
12,757,803
|
Reverse repo placements
|
-
|
1,830,945
|
Murabaha placements
|
850,000
|
1,095,000
|
Wakala placements
|
-
|
110,000
|
|
|
|
|
|
|
|
11,076,703
|
16,517,118
|
|
|
|
The geographical concentration is as follows:
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Within the U.A.E.
|
4,175,003
|
7,496,926
|
Outside the U.A.E.
|
6,901,700
|
9,020,192
|
|
|
|
|
|
|
|
11,076,703
|
16,517,118
|
|
|
|
The Bank hedges its foreign currency reverse repo placements for foreign currency exchange rate risk using foreign exchange forward contracts and designates these instruments as cash flow hedges. The fair value of these swaps at June 30, 2013 was AED Nil (December 31, 2012 - positive fair value AED 7,252 thousand).
5 Trading securities
Quoted:
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Bonds
|
4,569
|
117,070
|
Equity instruments
|
608,934
|
524,807
|
|
|
|
|
|
|
|
613,503
|
641,877
|
|
|
|
Bonds represent investments in Government and public sector bonds. Equity instruments are equities held by the funds accounted for as subsidiaries and are mainly invested in U.A.E. and G.C.C. securities.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
5 Trading securities (continued)
The fair value of trading investments is based on quoted market prices.
The geographical concentration is as follows:
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Within the U.A.E.
|
425,804
|
454,690
|
Outside the U.A.E.
|
187,699
|
187,187
|
|
|
|
|
|
|
|
613,503
|
641,877
|
|
|
|
6 Derivative financial instruments
The fair values of derivative financial instruments held are set out below:
|
|
|
Assets
|
Liabilities
|
As at June 30, 2013 (unaudited)
|
AED'000
|
AED'000
|
|
|
|
Derivatives held for trading:
|
|
|
Foreign exchange contracts
|
340,804
|
350,783
|
Interest rate and cross currency swaps
|
3,275,865
|
3,248,935
|
Options
|
31,002
|
153,696
|
Futures
|
1,237
|
4,056
|
Commodity and energy swaps
|
8,074
|
7,898
|
Swaptions
|
68,844
|
25,660
|
|
|
|
|
|
|
|
3,725,826
|
3,791,028
|
Derivatives held as fair value hedges:
|
|
|
Interest rate and cross currency swaps
|
280,258
|
651,698
|
|
|
|
Derivatives held as cash flow hedges:
|
|
|
Interest rate swaps
|
20,928
|
2,483
|
Forward foreign exchange contracts
|
15,667
|
36,027
|
|
|
|
|
|
|
|
4,042,679
|
4,481,236
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
6 Derivative financial instruments (continued)
|
|
|
Assets
|
Liabilities
|
As at December 31, 2012 (audited)
|
AED'000
|
AED'000
|
|
|
|
Derivatives held for trading:
|
|
|
Foreign exchange contracts
|
182,709
|
178,041
|
Interest rate and cross currency swaps
|
3,990,096
|
4,000,297
|
Options
|
193,652
|
162,315
|
Futures
|
1,262
|
-
|
Commodity and energy swaps
|
191
|
147
|
Swaptions
|
8,964
|
8,964
|
|
|
|
|
|
|
|
4,376,874
|
4,349,764
|
Derivatives held as fair value hedges:
|
|
|
Interest rate and cross currency swaps
|
458,069
|
406,575
|
|
|
|
Derivatives held as cash flow hedges:
|
|
|
Interest rate swaps
|
27,752
|
-
|
Forward foreign exchange contracts
|
130,531
|
11,999
|
|
|
|
|
|
|
|
4,993,226
|
4,768,338
|
|
|
|
The net hedge ineffectiveness losses relating to the fair value and cash flow hedges amounting to AED 3,807 thousand (June 30, 2012 - gains of AED 26,441 thousand) have been recognised in the condensed consolidated interim income statement.
7 Investment securities
|
As at June 30, 2013 (unaudited)
|
|
U.A.E.
|
Other
G.C.C.
countries
|
Rest of
the world
|
Total
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
Available for sale investments
|
|
|
|
|
Quoted:
|
|
|
|
|
Bonds - Government
|
2,571,306
|
1,403,419
|
233,073
|
4,207,798
|
Bonds - Public sector
|
5,272,556
|
447,718
|
908,977
|
6,629,251
|
Bonds - Banks and financial institutions
|
1,455,146
|
605,301
|
6,017,635
|
8,078,082
|
Bonds - Corporate
|
41,078
|
-
|
1,107
|
42,185
|
Equity instruments
|
712
|
-
|
-
|
712
|
|
|
|
|
|
|
|
|
|
|
Total quoted
|
9,340,798
|
2,456,438
|
7,160,792
|
18,958,028
|
|
|
|
|
|
Unquoted:
|
|
|
|
|
Bonds - Banks and financial institutions
|
-
|
-
|
32
|
32
|
Equity instruments
|
210,615
|
-
|
692
|
211,307
|
Mutual funds
|
77,319
|
-
|
-
|
77,319
|
|
|
|
|
|
Total unquoted
|
287,934
|
-
|
724
|
288,658
|
|
|
|
|
|
|
|
|
|
|
Total available for sale investments
|
9,628,732
|
2,456,438
|
7,161,516
|
19,246,686
|
|
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
7 Investment securities (continued)
|
As at December 31, 2012 (audited)
|
|
U.A.E.
|
Other
G.C.C.
Countries
|
Rest of
the world
|
Total
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
Available for sale investments
|
|
|
|
|
Quoted:
|
|
|
|
|
Bonds - Government
|
2,604,477
|
1,236,175
|
246,697
|
4,087,349
|
Bonds - Public sector
|
5,082,037
|
453,951
|
923,606
|
6,459,594
|
Bonds - Banks and financial institutions
|
798,663
|
481,091
|
6,606,270
|
7,886,024
|
Bonds - Corporate
|
-
|
-
|
1,089
|
1,089
|
Equity instruments
|
424
|
-
|
-
|
424
|
|
|
|
|
|
|
|
|
|
|
Total quoted
|
8,485,601
|
2,171,217
|
7,777,662
|
18,434,480
|
|
|
|
|
|
Unquoted:
|
|
|
|
|
Bonds - Banks and financial institutions
|
-
|
2,057
|
-
|
2,057
|
Equity instruments
|
204,921
|
-
|
701
|
205,622
|
Mutual funds
|
70,757
|
-
|
-
|
70,757
|
|
|
|
|
|
Total unquoted
|
275,678
|
2,057
|
701
|
278,436
|
|
|
|
|
|
|
|
|
|
|
Total available for sale investments
|
8,761,279
|
2,173,274
|
7,778,363
|
18,712,916
|
|
|
|
|
|
The Bank hedges interest rate risk on certain fixed rate/ floating rate investments through interest rate swaps and designates these as fair value and cash flow hedges, respectively. The net negative fair value of these interest rate swaps at June 30, 2013 was AED 237,405 thousand (December 31, 2012 - net negative fair value AED 384,649 thousand). The hedge ineffectiveness gains and losses relating to these hedges were included in the condensed consolidated interim income statement.
The Bank entered into repurchase agreements and total return swap agreements whereby bonds were pledged and held by counterparties as collateral. The risks and rewards relating to the investments pledged remain with the Bank. The following table reflects the carrying value of these bonds and the associated financial liabilities:
|
As at June 30, 2013 (unaudited)
|
As at December 31, 2012 (audited)
|
|
Fair value of
pledged assets
|
Carrying value of associated liabilities
|
Fair
value of
pledged assets
|
Carrying value of associated liabilities
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
Repurchase financing
|
839,665
|
721,745
|
1,220,647
|
1,063,133
|
|
|
|
|
|
Further, the Bank pledged investment securities with fair value amounting to AED 1,961,512 thousand (December 31, 2012 - AED 1,651,988 thousand) as collateral against margin calls. The risks and rewards relating to the investments pledged remain with the Bank.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
8 Loans and advances, net
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Overdrafts (Retail and Corporate)
|
5,113,452
|
5,775,020
|
Corporate loans
|
99,966,469
|
101,206,881
|
Retail loans
|
12,664,372
|
12,563,043
|
Credit cards
|
2,275,291
|
2,076,531
|
Islamic financing (see below)
|
9,843,682
|
6,600,046
|
Other facilities
|
2,278,472
|
1,437,494
|
|
|
|
|
|
|
|
132,141,738
|
129,659,015
|
Less: Allowance for impairment
|
(6,731,389)
|
(6,463,720)
|
|
|
|
|
|
|
|
125,410,349
|
123,195,295
|
|
|
|
Islamic financing assets
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Murabaha
|
834,301
|
720,544
|
Ijara financing
|
5,395,107
|
2,622,091
|
Mudaraba
|
488,045
|
471,696
|
Salam
|
3,037,765
|
2,720,103
|
Others
|
88,464
|
65,612
|
|
|
|
|
9,843,682
|
6,600,046
|
Less: Allowance for impairment
|
(26,755)
|
(29,247)
|
|
|
|
|
9,816,927
|
6,570,799
|
|
|
|
The Bank hedges certain variable rate loans and advances for interest rate risk using interest rate swaps and designates these instruments as cash flow hedges. The positive fair value of these swaps at June 30, 2013 was AED 20,928 thousand (December 31, 2012 - positive fair value of AED 13,499 thousand).
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
8 Loans and advances, net (continued)
Movement of the individual and collective impairment allowance on loans and advances
|
June 30, 2013 (unaudited)
|
|
December 31, 2012 (audited)
|
|
|
Individual
impairment
|
Collective
impairment
|
Total
|
|
Individual
impairment
|
Collective
impairment
|
Total
|
|
|
AED'000
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
|
|
|
|
|
At January 1,
|
4,207,137
|
2,256,583
|
6,463,720
|
|
3,652,804
|
2,059,072
|
5,711,876
|
|
Charge for the period/year
|
701,471
|
264,784
|
966,255
|
|
1,676,510
|
197,613
|
1,874,123
|
|
Recoveries during the period/year
|
(111,092)
|
-
|
(111,092)
|
|
(183,015)
|
-
|
(183,015)
|
|
|
|
|
|
|
|
|
|
|
Net charge for the period/year
|
590,379
|
264,784
|
855,163
|
|
1,493,495
|
197,613
|
1,691,108
|
|
Discount unwind
|
(68,282)
|
-
|
(68,282)
|
|
(129,920)
|
-
|
(129,920)
|
|
Net amounts written-off, net
|
(519,022)
|
-
|
(519,022)
|
|
(809,111)
|
-
|
(809,111)
|
|
Currency translation
|
-
|
(190)
|
(190)
|
|
(131)
|
(102)
|
(233)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
|
4,210,212
|
2,521,177
|
6,731,389
|
|
4,207,137
|
2,256,583
|
6,463,720
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The economic activity sector composition of the loans and advances portfolio is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
As at June 30, 2013 (unaudited)
|
|
As at December 31, 2012 (audited)
|
|
Within the U.A.E.
|
Outside the U.A.E.
|
Total
|
|
Within the U.A.E.
|
Outside the U.A.E.
|
Total
|
|
AED'000
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
AED'000
|
Economic sector
|
|
|
|
|
|
|
|
Agriculture
|
8,727
|
-
|
8,727
|
|
10,803
|
-
|
10,803
|
Energy
|
9,712,979
|
336,828
|
10,049,807
|
|
9,863,141
|
423,428
|
10,286,569
|
Trading
|
1,194,667
|
149,351
|
1,344,018
|
|
983,414
|
39,633
|
1,023,047
|
Development & construction
|
19,615,900
|
310,329
|
19,926,229
|
|
20,005,790
|
267,207
|
20,272,997
|
Real estate investment
|
34,035,220
|
68,434
|
34,103,654
|
|
30,526,476
|
61,144
|
30,587,620
|
Transport
|
1,246,782
|
481,093
|
1,727,875
|
|
1,275,907
|
479,606
|
1,755,513
|
Personal - retail
|
19,210,581
|
13,860
|
19,224,441
|
|
17,622,127
|
10,245
|
17,632,372
|
Personal - collateralised
|
10,086,322
|
286,480
|
10,372,802
|
|
11,914,549
|
281,010
|
12,195,559
|
Government
|
2,269,649
|
-
|
2,269,649
|
|
3,149,773
|
-
|
3,149,773
|
Financial institutions (*)
|
8,118,010
|
2,180,868
|
10,298,878
|
|
8,113,300
|
1,583,274
|
9,696,574
|
Manufacturing
|
2,404,028
|
100,140
|
2,504,168
|
|
1,408,454
|
103,717
|
1,512,171
|
Services
|
18,442,070
|
1,869,420
|
20,311,490
|
|
19,834,167
|
1,701,850
|
21,536,017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126,344,935
|
5,796,803
|
132,141,738
|
|
124,707,901
|
4,951,114
|
129,659,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Allowance for impairment
|
|
(6,731,389)
|
|
|
|
(6,463,720)
|
|
|
|
|
|
|
|
|
Total
|
|
|
125,410,349
|
|
|
|
123,195,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*) includes investment companies.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
8 Loans and advances, net (continued)
The Bank entered into repurchase agreements whereby loans are pledged and held by counter parties as collateral. The risks and rewards relating to the loans pledged will remain with the Bank.
The following table reflects the carrying value of these loans and the associated financial liabilities:
|
As at June 30, 2013 (unaudited)
|
As at December 31, 2012 (audited)
|
|
Carrying value of
pledged assets
|
Carrying value of associated liabilities
|
Carrying
value of
pledged assets
|
Carrying value of associated liabilities
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
Repurchase agreements
|
4,756,807
|
2,358,230
|
4,756,807
|
2,358,230
|
|
|
|
|
|
9 Investment properties
|
Completed
and in use
|
Under development
|
Total
|
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
At January 1, 2012
|
207,811
|
189,101
|
396,912
|
Additions during the year
|
-
|
85,625
|
85,625
|
Transfer from property and equipment, net
|
182,530
|
-
|
182,530
|
Transfer to property and equipment, net
|
(106,836)
|
-
|
(106,836)
|
Decrease in fair value
|
(18,810)
|
(10,026)
|
(28,836)
|
|
|
|
|
|
|
|
|
At January 1, 2013 (audited)
|
264,695
|
264,700
|
529,395
|
Additions during the period
|
-
|
17,148
|
17,148
|
Transfer to completed property on completion of construction
|
281,848
|
(281,848)
|
-
|
|
|
|
|
|
|
|
|
At June 30, 2013 (unaudited)
|
546,543
|
-
|
546,543
|
|
|
|
|
The fair value of the Bank's investment properties is estimated by reference to current market prices for similar properties, adjusted as necessary for condition and location, or by reference to recent transactions updated to reflect current economic conditions. Valuations are carried out by registered independent appraisers having an appropriate recognised professional qualification and recent experience in the location and category of the property being valued. Discounted cash flow techniques may be used to calculate fair value in certain situations where there have been no recent transactions using current external market inputs such as market rents and interest rates. The date of the last valuation was December 31, 2012.
The valuation methodologies considered by external valuers include
a) Direct Comparable method: This method seeks to determine the value of the property from transactions of comparable properties.
b) Residual method: This method is used to assess the value of the property with a development potential where there is inadequate comparable evidence. This method is commonly used in the valuation of the site under development in the local market.
All investment properties of the Bank are located within the U.A.E.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
10 Other assets
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Interest receivable
|
903,184
|
845,442
|
Withholding tax
|
104,244
|
45,880
|
Prepayments
|
83,028
|
59,766
|
Clearing receivables
|
-
|
1,148
|
Acceptances
|
1,615,462
|
4,738,044
|
Others
|
239,823
|
235,682
|
|
|
|
|
2,945,741
|
5,925,962
|
|
|
|
Acceptances arise when the Bank is under an obligation to make payments against documents drawn under letters of credit. Acceptances specify the amount of money, the date, and the person to which the payment is due. After acceptance, the instrument becomes an unconditional liability (time draft) of the bank and is therefore recognised as a financial liability (Note 15) in the consolidated statement of financial position with a corresponding contractual right of reimbursement from the customer recognised as a financial asset. The Bank generally receives cash collateral against these acceptances.
11 Due to banks
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Vostro balances
|
231,048
|
120,504
|
Margin deposits
|
183,961
|
351,054
|
Time deposits
|
4,466,480
|
3,939,713
|
|
|
|
|
4,881,489
|
4,411,271
|
|
|
|
The Bank hedges certain time deposits for interest rate and foreign currency exchange risk using cross currency swaps and designate these as fair value hedges. The fair value of these swaps at June 30, 2013 was AED Nil (December 31, 2012 - positive fair value of AED 186 thousand).
12 Deposits from customers
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
By category
|
|
|
Current account deposits
|
35,505,979
|
29,330,632
|
Margin deposits
|
354,881
|
345,079
|
Savings deposits
|
3,369,126
|
2,826,423
|
Time deposits
|
52,816,033
|
61,420,946
|
Murabaha deposits
|
9,465,701
|
6,578,970
|
Long term government deposits
|
436,008
|
449,569
|
Other Islamic deposits (see below)
|
9,451,221
|
8,265,306
|
|
|
|
|
111,398,949
|
109,216,925
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
12 Deposits from customers (continued)
Other Islamic deposits include the following:
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Current account deposits
|
1,544,115
|
1,184,523
|
Margin deposits
|
7,706
|
7,675
|
Mudaraba savings deposits
|
2,885,003
|
2,284,227
|
Mudaraba term deposits
|
2,055,377
|
1,806,767
|
Wakala deposits
|
2,959,020
|
2,982,114
|
|
|
|
|
9,451,221
|
8,265,306
|
|
|
|
The Bank hedges certain foreign currency time deposits foreign currency exchange risk using foreign exchange forward contracts and designates these as cash flow hedges. The net negative fair value of these swaps at June 30, 2013 was AED 23,292 thousand (December 31, 2012 - net positive fair value of AED 13,257 thousand).
13 Euro commercial paper
The Bank established a USD 4 billion Euro commercial paper programme (the ECP Programme) for the issuance of Euro commercial paper under the agreement dated June 5, 2007 with Banc of America Securities Limited.
The Bank hedges ECP for foreign currency exchange risk through foreign exchange forward contracts and designates these instruments as cash flow hedges. The net positive fair value of these hedge contracts at June 30, 2013 was AED 2,932 thousand (December 31, 2012: net positive fair value of AED 98,024 thousand).
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
14 Borrowings
The details of borrowings as at June 30, 2013 (unaudited) are as follows:
|
|
|
|
Within 1 year
|
|
1-3 years
|
|
3-5 years
|
|
Over 5 years
|
|
Total
|
Instrument
|
|
Currency
|
|
AED'000
|
|
AED'000
|
|
AED'000
|
|
AED'000
|
|
AED'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured notes
|
|
Chinese Renminbi (CNH)
|
|
-
|
|
-
|
|
173,580
|
|
-
|
|
173,580
|
|
|
Malaysian Ringitt (MYR)
|
|
-
|
|
871,027
|
|
847,028
|
|
-
|
|
1,718,055
|
|
|
Swiss Franc (CHF)
|
|
-
|
|
575,706
|
|
388,677
|
|
-
|
|
964,383
|
|
|
Turkish Lira (TRY)
|
|
-
|
|
94,003
|
|
-
|
|
-
|
|
94,003
|
|
|
U.A.E. Dirham (AED)
|
|
1,253,000
|
|
-
|
|
500,000
|
|
-
|
|
1,753,000
|
|
|
US Dollar (US$)
|
|
-
|
|
3,664,603
|
|
2,736,812
|
|
624,410
|
|
7,025,825
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,253,000
|
|
5,205,339
|
|
4,646,097
|
|
624,410
|
|
11,728,846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Islamic sukuk notes
|
|
US Dollar (US$)
|
|
-
|
|
-
|
|
1,830,623
|
|
-
|
|
1,830,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated notes - floating rate
|
|
US Dollar (US$)
|
|
-
|
|
1,057,817
|
|
-
|
|
-
|
|
1,057,817
|
- fixed rate
|
|
US Dollar (US$)
|
|
-
|
|
-
|
|
-
|
|
3,813,940
|
|
3,813,940
|
|
|
Swiss Franc (CHF)
|
|
-
|
|
-
|
|
-
|
|
570,194
|
|
570,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings through repurchase agreements
|
|
US Dollar (US$)
|
|
1,743,002
|
|
179,977
|
|
-
|
|
-
|
|
1,922,979
|
|
|
U.A.E. Dirham (AED)
|
|
1,156,995
|
|
-
|
|
-
|
|
-
|
|
1,156,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,152,997
|
|
6,443,133
|
|
6,476,720
|
|
5,008,544
|
|
22,081,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on borrowings hedged
|
|
|
|
|
|
|
|
|
|
(139,175)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,942,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in borrowings is AED 16,690,603 thousand which have been hedged using interest rate and cross currency swaps. These swaps are designated as either fair value or cash flow hedges. The net positive fair value of these swaps at June 30, 2013 was AED 136,518 thousand.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
14 Borrowings (continued)
The details of borrowings as at December 31, 2012 (audited) are as follows:
|
|
|
|
Within 1 year
|
|
1-3 years
|
|
3-5 years
|
|
Over 5 years
|
|
Total
|
Instrument
|
|
Currency
|
|
AED'000
|
|
AED'000
|
|
AED'000
|
|
AED'000
|
|
AED'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured notes
|
|
Chinese Renminbi (CNH)
|
|
-
|
|
-
|
|
173,580
|
|
-
|
|
173,580
|
|
|
Malaysian Ringitt (MYR)
|
|
-
|
|
871,027
|
|
847,028
|
|
-
|
|
1,718,055
|
|
|
Swiss Franc (CHF)
|
|
-
|
|
575,705
|
|
388,677
|
|
-
|
|
964,382
|
|
|
Turkish Lira (TRY)
|
|
-
|
|
-
|
|
94,003
|
|
-
|
|
94,003
|
|
|
U.A.E. Dirham (AED)
|
|
1,253,000
|
|
-
|
|
500,000
|
|
-
|
|
1,753,000
|
|
|
US Dollar (US$)
|
|
-
|
|
3,673,000
|
|
-
|
|
587,680
|
|
4,260,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,253,000
|
|
5,119,732
|
|
2,003,288
|
|
587,680
|
|
8,963,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Syndicated loans
|
|
US Dollar (US$)
|
|
3,739,849
|
|
-
|
|
-
|
|
-
|
|
3,739,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Islamic sukuk notes
|
|
US Dollar (US$)
|
|
-
|
|
-
|
|
1,836,500
|
|
-
|
|
1,836,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subordinated floating rate notes
|
|
US Dollar (US$)
|
|
-
|
|
-
|
|
1,117,143
|
|
-
|
|
1,117,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 2 Loan
|
|
U.A.E. Dirham (AED)
|
|
-
|
|
-
|
|
6,617,456
|
|
-
|
|
6,617,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings through repurchase agreements
|
|
US Dollar (US$)
|
|
1,450,631
|
|
620,737
|
|
-
|
|
-
|
|
2,071,368
|
|
|
U.A.E. Dirham (AED)
|
|
1,349,995
|
|
-
|
|
-
|
|
-
|
|
1,349,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,793,475
|
|
5,740,469
|
|
11,574,387
|
|
587,680
|
|
25,696,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment on borrowings hedged
|
|
|
|
|
|
|
|
|
|
443,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,139,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in borrowings is AED 15,347,201 thousand which have been hedged using interest rate and cross currency swaps. These swaps are designated as either fair value or cash flow hedges. The net positive fair value of these swaps at December 31, 2012 was AED 450,212 thousand.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
14 Borrowings (continued)
Interest on unsecured notes is payable quarterly, semi annually and annually in arrears and the contractual coupon rates as at June 30, 2013 (unaudited) are as follows:
Currency
|
Within 1 year
|
1-3 years
|
3-5 years
|
Over 5 years
|
|
|
|
|
|
CNH
|
-
|
-
|
Fixed rate of 3.7% p.a. & 4.125% p. a
|
-
|
MYR
|
-
|
Fixed rate of 5.2%p.a
|
Fixed rate 4.3% & 5.35% p.a.
|
-
|
CHF
|
-
|
Fixed rate of 3.01% p.a.
|
Quarterly coupons with 110 basis point over CHF LIBOR
|
-
|
TRY
|
-
|
Fixed rate of 12.75% p.a.
|
-
|
-
|
AED
|
Fixed rate of 6% p.a.
|
-
|
Fixed rate of 6% p.a.
|
-
|
US$
|
-
|
Fixed rate of 4.75% p.a.
|
Fixed rate of 2.5% p.a.
|
Fixed rate from 4.7% to 5.1% p.a.
|
Sukuk financing notes
The Sukuk carries an expected profit rate of 4.07% per annum payable semi annually.
Subordinated notes
Subordinated floating rate notes:
Interest on the subordinated floating rate notes is payable quarterly in arrears at a coupon rate of 110 basis points over 3 months LIBOR. The subordinated floating rate notes were obtained from financial institutions outside the U.A.E. and qualified as Tier 2 subordinated loan capital for the first 5 year period till 2011 and thereafter are amortised at the rate of 20% per annum until 2016 for capital adequacy calculation (Note 29). This has been approved by the Central Bank of the U.A.E.
Subordinated fixed rate notes:
Interest on the subordinated fixed rate notes is payable half yearly in arrears and the contractual coupon rates as at June 30, 2013 (unaudited) are as follows:
Currency
|
Over 5 years
|
USD
|
Fixed rate 4.5% to 3.125%
|
CHF
|
Fixed rate 1.875% with 1 basis point over coupon
|
|
|
The subordinated fixed rate notes were obtained from financial institutions outside the U.A.E. and qualified as Tier 2 subordinated loan capital for the first 5 year period till 2018 and thereafter are amortised at the rate of 20% per annum until 2023 for capital adequacy calculation (Note 29). This has been approved by the Central Bank of the U.A.E. Subordinated notes of AED 1,666,713 thousand mature in 2023 but are callable after 5 years from the issuance date at the option of the Bank.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
14 Borrowings (continued)
Tier 2 loan
In March 2009, the Bank converted AED 6,617,456 thousand government deposits into Tier 2 qualifying loans. The Tier 2 qualifying loans were to mature seven years from the date of the issue and interest was payable on a quarterly basis at a fixed rate of 4 percent per annum commencing March 31, 2009 for the first two years, 4.5 percent per annum for the third year, 5 percent per annum for the fourth year and 5.25 percent per annum for the remaining period. The terms also provided that the Bank had a call option to repay the loans partially or fully at the end of five years from the date of issue. For regulatory purposes, the loans qualified as Tier 2 capital and were being amortised, starting 2012, at the rate of 20% per annum until maturity for capital adequacy calculation (Note 29).
The Bank repaid the entire amount of the Tier 2 loan in the first half of 2013.
Borrowings through repurchase agreements
US$: Quarterly coupons in arrears with 300 basis points plus LIBOR.
Half yearly coupons in arrears with 86 to 300 basis points plus LIBOR.
AED: Quarterly coupons in arrears with 85 basis points plus EIBOR.
The Bank has undrawn borrowing floating rate facilities of AED 1,469,200 thousand (December 31, 2012 - AED Nil), expiring within one year.
15 Other liabilities
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
|
|
|
Interest payable
|
433,726
|
752,030
|
Recognised liability for defined benefit obligations
|
227,817
|
213,631
|
Accounts payable and other creditors
|
186,944
|
247,759
|
Clearing payables
|
370
|
955
|
Deferred income
|
308,359
|
229,392
|
Acceptances (Note 10)
|
1,615,462
|
4,738,044
|
Others
|
1,359,369
|
813,034
|
|
|
|
|
|
|
|
4,132,047
|
6,994,845
|
|
|
|
16 Share capital
|
Authorised
|
|
|
|
As at
|
As at
|
|
|
June 30
|
December 31
|
|
|
2013
|
2012
|
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
AED'000
|
Ordinary shares of AED 1 each
|
5,595,597
|
5,595,597
|
5,595,597
|
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
16 Share capital (continued)
As at June 30, 2013, Abu Dhabi Investment Council held 58.083% (December 31, 2012: 58.083%) of the Bank's issued and fully paid up share capital.
Treasury shares
As at June 30, 2013, of the total issued shares of the Bank, its managed funds, now accounted for as subsidiaries, held 7,312 thousand shares (December 31, 2012 - 11,033 thousand shares).
During the period ended June 30, 2013, the Bank bought back 262,981,483 ordinary shares at a total consideration of AED 1,158,220 thousand - these shares are held as treasury shares at June 30, 2013. This buyback programme has been approved by the Securities & Commodities Authority and Central Bank of the U.A.E.
Subsequent to the reporting date, the Bank further bought back 77,620,129 ordinary shares at a total consideration of AED 377,753 thousand.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
17 Other reserves, net of treasury shares (unaudited)
Reserves movement for the six month period ended June 30, 2013:
|
|
Employees'
|
|
|
|
|
Foreign
|
|
|
|
|
|
incentive
|
|
|
|
|
currency
|
|
Cumulative
|
|
|
Treasury
|
plan
|
Statutory
|
Legal
|
General
|
Contingency
|
translation
|
Hedge
|
changes in
|
|
|
shares
|
shares, net
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
fair values
|
Total
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2013
|
(30,937)
|
(96,256)
|
1,950,650
|
1,905,863
|
2,000,000
|
150,000
|
(34,333)
|
26,756
|
416,848
|
6,288,591
|
Exchange difference arising on translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
-
|
(16,807)
|
-
|
-
|
(16,807)
|
Fair value changes on cash flow hedges on financial assets
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(9,591)
|
-
|
(9,591)
|
Fair value changes on available for sale investments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
(191,341)
|
(191,341)
|
Fair value changes reversed on disposal/impairment of available for sale investments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,542)
|
(5,542)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(16,807)
|
(9,591)
|
(196,883)
|
(223,281)
|
Shares - vested portion
|
-
|
19,871
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
19,871
|
Buy back of own shares (Note 16)
|
(1,158,220)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,158,220)
|
Net movement in treasury shares held by funds
|
11,184
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
11,184
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2013
|
(1,177,973)
|
(76,385)
|
1,950,650
|
1,905,863
|
2,000,000
|
150,000
|
(51,140)
|
17,165
|
219,965
|
4,938,145
|
|
|
|
|
|
|
|
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
17 Other reserves, net of treasury shares (unaudited) (continued)
Reserves movement for the six month period ended June 30, 2012:
|
|
Employees'
|
|
|
|
|
Foreign
|
|
|
|
|
|
incentive
|
|
|
|
|
currency
|
|
Cumulative
|
|
|
Treasury
|
plan
|
Statutory
|
Legal
|
General
|
Contingency
|
translation
|
Hedge
|
changes in
|
|
|
shares
|
shares, net
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
reserve
|
fair values
|
Total
|
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
AED'000
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2012
|
-
|
(104,595)
|
1,677,069
|
1,632,282
|
2,000,000
|
150,000
|
(27,521)
|
(2,581)
|
(404,758)
|
4,919,896
|
Exchange difference arising on translation of foreign operations
|
-
|
-
|
-
|
-
|
-
|
-
|
(9,419)
|
-
|
-
|
(9,419)
|
Fair value changes on cash flow hedges on financial assets
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6,138
|
-
|
6,138
|
Fair value changes on available for sale investments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
374,879
|
374,879
|
Fair value changes reversed on disposal/impairment of available for sale investments
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6,754
|
6,754
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss)/income for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
(9,419)
|
6,138
|
381,633
|
378,352
|
Shares purchased
|
-
|
(40,000)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(40,000)
|
Shares - vested portion
|
-
|
25,844
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
25,844
|
Treasury shares arising on consolidation of Funds
|
(40,699)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(40,699)
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2012 (*)
|
(40,699)
|
(118,751)
|
1,677,069
|
1,632,282
|
2,000,000
|
150,000
|
(36,940)
|
3,557
|
(23,125)
|
5,243,393
|
|
|
|
|
|
|
|
|
|
|
|
(*) Amounts have been restated as explained in Note 2.1
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
18 Capital notes
In February 2009, the Department of Finance, Government of Abu Dhabi subscribed to ADCB's Tier I regulatory capital notes with a principal amount of AED 4 billion (the "Notes").
The Notes are non-voting, non-cumulative perpetual securities for which there is no fixed redemption date. Redemption is only at the option of the Bank. The Notes are direct, unsecured, subordinated obligations of the Bank and rank pari passu without any preference among themselves and the rights and claims of the Note holders will be subordinated to the claims of Senior Creditors. The Notes bear interest at the rate of 6% per annum payable semi-annually until February 2014, and a floating interest rate of 6 month EIBOR plus 2.3% per annum thereafter. However the Bank may at its sole discretion elect not to make a coupon payment. The Note holders do not have a right to claim the coupon and an election by the Bank not to service the coupon is not considered an event of default. In addition, there are certain circumstances under which the Bank is prohibited from making a coupon payment on a relevant coupon payment date ("Non-Payment Event").
If the Bank makes a non-payment election or a non-payment event occurs, then the Bank will not (a) declare or pay any distribution or dividend or (b) redeem, purchase, cancel, reduce or otherwise acquire any of the share capital or any securities of the Bank ranking pari passu with or junior to the Notes except securities, the term of which stipulate a mandatory redemption or conversion into equity, in each case unless or until two consecutive coupon payments have been paid in full.
19 Interest income (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
|
|
|
|
|
|
Loans and advances to banks
|
44,744
|
58,524
|
|
95,709
|
133,834
|
Loans and advances to customers
|
1,569,202
|
1,787,730
|
|
3,047,536
|
3,435,592
|
Investment securities
|
104,539
|
118,968
|
|
233,074
|
234,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,718,485
|
1,965,222
|
|
3,376,319
|
3,803,846
|
|
|
|
|
|
|
20 Interest expense (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
|
|
|
|
|
|
Deposits from banks
|
7,221
|
3,461
|
|
12,652
|
5,969
|
Deposits from customers and euro commercial paper
|
241,948
|
432,698
|
|
542,980
|
913,329
|
Borrowings
|
123,163
|
159,616
|
|
308,045
|
292,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
372,332
|
595,775
|
|
863,677
|
1,211,520
|
|
|
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
21 Net fees and commission income (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
|
|
|
|
|
|
Fees and commission income
|
|
|
|
|
|
|
|
|
|
|
|
Retail banking fees
|
206,586
|
173,001
|
|
379,424
|
344,921
|
Corporate banking fees
|
79,105
|
117,635
|
|
151,656
|
198,831
|
Brokerage fees
|
4,357
|
851
|
|
6,404
|
2,178
|
Fees from trust and other fiduciary activities
|
30,870
|
19,341
|
|
54,511
|
32,715
|
Other fees
|
11,124
|
6,327
|
|
21,354
|
27,744
|
|
|
|
|
|
|
|
|
|
|
|
|
Total fees and commission income
|
332,042
|
317,155
|
|
613,349
|
606,389
|
Fees and commission expenses
|
(73,091)
|
(49,413)
|
|
(139,505)
|
(91,853)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net fees and commission income
|
258,951
|
267,742
|
|
473,844
|
514,536
|
|
|
|
|
|
|
22 Net trading income (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
Net gains on dealing in derivatives
|
32,504
|
27,398
|
|
37,990
|
50,444
|
Net gains from dealing in foreign currencies
|
63,982
|
39,347
|
|
108,331
|
78,393
|
Net gains/(losses) from trading securities
|
76,283
|
(36,779)
|
|
152,319
|
33,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
172,769
|
29,966
|
|
298,640
|
161,927
|
|
|
|
|
|
|
23 Other operating income (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
Gains/(losses) arising on retirement of hedges
|
5,808
|
-
|
|
103,088
|
-
|
Net gains from investment securities
|
34,526
|
5,736
|
|
34,526
|
5,736
|
Property management income
|
29,352
|
30,880
|
|
57,910
|
54,386
|
Rental income
|
6,994
|
3,650
|
|
11,489
|
8,315
|
Income from retirement of long term debt
|
-
|
-
|
|
1,973
|
6,399
|
Dividends received
|
17,783
|
8,121
|
|
29,741
|
15,888
|
Others
|
4,554
|
6,770
|
|
4,559
|
9,738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
99,017
|
55,157
|
|
243,286
|
100,462
|
|
|
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
24 Operating expenses (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
Staff expenses
|
317,711
|
308,319
|
|
618,962
|
600,428
|
Depreciation
|
32,976
|
32,644
|
|
64,935
|
65,431
|
Amortisation of intangible assets
|
7,882
|
7,882
|
|
15,764
|
15,764
|
Others
|
206,923
|
188,345
|
|
383,223
|
361,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
565,492
|
537,190
|
|
1,082,884
|
1,042,864
|
|
|
|
|
|
|
25 Impairment allowances (unaudited)
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012
|
|
2013
|
2012
|
|
AED'000
|
AED'000
|
|
AED'000
|
AED'000
|
Impairment allowance on loan advances, net
(Note 8)
|
525,396
|
461,932
|
|
855,163
|
749,368
|
Impairment (recoveries)/allowance on investment securities
|
(18,575)
|
8,755
|
|
(26,663)
|
8,020
|
Impairment allowance on property and equipment, net
|
-
|
21,337
|
|
-
|
21,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
506,821
|
492,024
|
|
828,500
|
778,725
|
|
|
|
|
|
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
26 Earnings per share (unaudited)
Basic and diluted earnings per share
The calculation of basic earnings per share is based on the net profit attributable to equity holders of the Bank and the weighted average number of equity shares outstanding. Diluted earnings per share is calculated by adjusting the weighted average number of equity shares outstanding for the dilutive effects of potential equity shares held on account of employees' incentive plan and treasury shares arising on consolidation of funds.
|
3 month period ended June 30
|
|
6 month period ended June 30
|
|
2013
|
2012(*)
|
|
2013
|
2012(*)
|
Net profit for the period attributable to the equity holders of the Bank (AED'000)
|
868,525
|
725,308
|
|
1,698,024
|
1,522,292
|
Less: Capital notes coupon paid (AED'000)
|
-
|
-
|
|
(120,000)
|
(120,000)
|
|
|
|
|
|
|
Net adjusted profit for the period attributable to the equity holders of the Bank (AED'000) (a)
|
868,525
|
725,308
|
|
1,578,024
|
1,402,292
|
|
|
|
|
|
|
Weighted average number of shares in issue throughout the period (000's)
|
5,595,597
|
5,595,597
|
|
5,595,597
|
5,595,597
|
Less: Treasury shares arising on buy back (000's)
|
(173,774)
|
-
|
|
(87,814)
|
-
|
Less: Treasury shares arising on consolidation of funds (000's)
|
(7,674)
|
(14,451)
|
|
(8,500)
|
(14,384)
|
Less: Weighted average number of shares held on account of Employees' incentive plan (000's)
|
(30,201)
|
(59,575)
|
|
(34,125)
|
(58,551)
|
|
|
|
|
|
|
Weighted average number of equity shares used for calculating basic earnings per share (000's) (b)
|
5,383,948
|
5,521,571
|
|
5,465,158
|
5,552,662
|
Add: Treasury shares arising on consolidation of funds (000's)
|
7,674
|
14,451
|
|
8,500
|
14,384
|
Add: Weighted average number of shares held on account of Employees' incentive plan (000's)
|
30,201
|
59,575
|
|
34,125
|
58,551
|
|
|
|
|
|
|
Weighted average number of equity shares used for calculating diluted earnings per share (000's) (c)
|
5,421,823
|
5,595,597
|
|
5,507,783
|
5,595,597
|
|
|
|
|
|
|
Basic earnings per share (AED) (a)/(b)
|
0.16
|
0.13
|
|
0.29
|
0.25
|
|
|
|
|
|
|
Diluted earnings per share (AED) (a)/(c)
|
0.16
|
0.13
|
|
0.29
|
0.25
|
|
|
|
|
|
|
(*) Restated as explained in Note 2.1
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
27 Commitments and contingent liabilities
The Bank had the following commitments and contingent liabilities as at:
|
As at
|
As at
|
|
June 30
|
December 31
|
|
2013
|
2012
|
|
(unaudited)
|
(audited)
|
|
AED'000
|
AED'000
|
Commitments on behalf of customers
|
|
|
Letters of credit
|
8,068,023
|
6,251,347
|
Guarantees
|
12,694,436
|
12,250,409
|
Commitments to extend credit - Revocable
|
7,751,774
|
6,744,165
|
Commitments to extend credit - Irrevocable
|
4,471,553
|
3,210,238
|
Others
|
-
|
55,095
|
|
|
|
|
|
|
|
32,985,786
|
28,511,254
|
Others
|
|
|
Commitments for future capital expenditure
|
183,305
|
131,885
|
Commitments to invest in investment securities
|
68,289
|
212,764
|
|
|
|
|
|
|
|
33,237,380
|
28,855,903
|
|
|
|
28 Operating Segments
The Bank has four reportable segments, as described below, which are the Bank's strategic divisions. The strategic divisions offer different products and services, and are managed separately based on the Bank's management and internal reporting structure. For each of the strategic divisions, the Bank's Management Executive Committee reviews internal management reports on at least a quarterly basis.
The following summary describes the operations in each of the Bank's reportable segments;
Consumer banking - comprises of retail, wealth management and Islamic financing. It includes loans, deposits and other transactions and balances with retail customers and corporate and private accounts of high net worth individuals and funds management activities.
Wholesale banking - comprises of business banking, cash management, trade finance, corporate finance, investment banking, Indian operations, Islamic financing, infrastructure and strategic client operations. It includes loans, deposits and other transactions and balances with corporate customers.
Investments and treasury - comprises of central treasury operations, management of the Bank's investment portfolio and interest rate, currency and commodity derivative portfolio and Islamic financing. Investments and treasury undertakes the Bank's funding and centralized risk management activities through borrowings, issues of debt securities, use of derivatives for risk management and investing in liquid assets such as short-term placements and corporate and government debt securities and trading and corporate finance activities.
Property management - comprises of real estate management and engineering service operations of subsidiaries - Abu Dhabi Commercial Properties L.L.C. and Abu Dhabi Commercial Engineering Services L.L.C., and rental income of ADCB.
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
28 Operating segments (continued)
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Management Executive Committee. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.
The following is an analysis of the Bank's revenue and results by operating segment for the six month period ended June 30, 2013 (unaudited):
|
Consumer banking
|
|
Wholesale
banking
|
|
Investments and treasury
|
|
Property management
|
|
Total
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
Net interest and Islamic financing
income
|
1,056,534
|
|
776,465
|
|
825,029
|
|
61,668
|
|
2,719,696
|
Non-interest income
|
449,085
|
|
204,476
|
|
283,451
|
|
78,758
|
|
1,015,770
|
Operating expenses
|
(657,062)
|
|
(287,850)
|
|
(93,383)
|
|
(44,589)
|
|
(1,082,884)
|
|
|
|
|
|
|
|
|
|
|
Operating profit before impairment
allowances
|
848,557
|
|
693,091
|
|
1,015,097
|
|
95,837
|
|
2,652,582
|
Impairment (allowances)/ recoveries
|
(801,902)
|
|
(53,261)
|
|
26,663
|
|
-
|
|
(828,500)
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax expense
|
46,655
|
|
639,830
|
|
1,041,760
|
|
95,837
|
|
1,824,082
|
Overseas income tax expense
|
-
|
|
(3,599)
|
|
-
|
|
-
|
|
(3,599)
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period
|
46,655
|
|
636,231
|
|
1,041,760
|
|
95,837
|
|
1,820,483
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
Capital expenditure
|
|
|
|
|
|
|
|
|
43,536
|
|
|
|
|
|
|
|
|
|
==========
|
|
|
|
|
|
|
|
|
|
|
As at June 30, 2013 (unaudited)
|
|
|
|
|
|
|
|
|
|
Segment assets
|
58,989,416
|
|
71,434,824
|
|
44,470,793
|
|
558,115
|
|
175,453,148
|
|
=============
|
|
=============
|
|
============
|
|
==========
|
|
=============
|
Segment liabilities
|
32,213,826
|
|
40,901,455
|
|
78,319,006
|
|
404,937
|
|
151,839,224
|
|
=============
|
|
=============
|
|
============
|
|
===========
|
|
=============
|
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
28 Operating segments (continued)
The following is an analysis of the Bank's revenue and results by operating segment for the six month period ended June 30, 2012 (unaudited):
|
Consumer banking(*)
|
|
Wholesale
banking
|
|
Investments and treasury(*)
|
|
Property management
|
|
Total
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
Net interest and Islamic financing
income
|
1,199,549
|
|
725,287
|
|
621,832
|
|
58,062
|
|
2,604,730
|
Non-interest income
|
345,415
|
|
250,434
|
|
101,715
|
|
79,361
|
|
776,925
|
Operating expenses
|
(664,352)
|
|
(265,095)
|
|
(78,587)
|
|
(34,830)
|
|
(1,042,864)
|
|
|
|
|
|
|
|
|
|
|
Operating profit before impairment
allowances
|
880,612
|
|
710,626
|
|
644,960
|
|
102,593
|
|
2,338,791
|
Impairment allowances
|
(472,746)
|
|
(276,413)
|
|
(8,229)
|
|
(21,337)
|
|
(778,725)
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax expense
|
407,866
|
|
434,213
|
|
636,731
|
|
81,256
|
|
1,560,066
|
Overseas income tax expense
|
-
|
|
(4,245)
|
|
-
|
|
-
|
|
(4,245)
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period
|
407,866
|
|
429,968
|
|
636,731
|
|
81,256
|
|
1,555,821
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
Capital expenditure
|
|
|
|
|
|
|
|
|
143,760
|
|
|
|
|
|
|
|
|
|
==========
|
As at December 31, 2012 (unaudited)
|
|
|
|
|
|
|
|
|
|
Segment assets
|
60,847,483
|
|
70,449,477
|
|
48,958,232
|
|
540,531
|
|
180,795,723
|
|
=============
|
|
=============
|
|
============
|
|
==========
|
|
=============
|
Segment liabilities
|
29,946,977
|
|
51,180,230
|
|
74,946,671
|
|
14,256
|
|
156,088,134
|
|
=============
|
|
=============
|
|
============
|
|
===========
|
|
=============
|
(*) Amounts have been restated as explained in Note 2.1
Notes to the condensed consolidated interim financial information
for the six month period ended June 30, 2013 (continued)
28 Operating segments (continued)
The following is an analysis of the Bank's revenue and results by operating segment for the three month period ended June 30, 2013 (unaudited):
|
Consumer banking
|
|
Wholesale
banking
|
|
Investments and treasury
|
|
Property management
|
|
Total
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
Net interest and Islamic financing
income
|
535,829
|
|
438,819
|
|
455,625
|
|
30,371
|
|
1,460,644
|
Non-interest income
|
232,063
|
|
107,348
|
|
151,033
|
|
40,293
|
|
530,737
|
Operating expenses
|
(350,239)
|
|
(146,241)
|
|
(43,328)
|
|
(25,684)
|
|
(565,492)
|
|
|
|
|
|
|
|
|
|
|
Operating profit before impairment
allowances
|
417,653
|
|
399,926
|
|
563,330
|
|
44,980
|
|
1,425,889
|
Impairment (allowances)/recoveries
|
(472,478)
|
|
(52,918)
|
|
18,575
|
|
-
|
|
(506,821)
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax expense
|
(54,825)
|
|
347,008
|
|
581,905
|
|
44,980
|
|
919,068
|
Overseas income tax expense
|
-
|
|
(1,569)
|
|
-
|
|
-
|
|
(1,569)
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period
|
(54,825)
|
|
345,439
|
|
581,905
|
|
44,980
|
|
917,499
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
Capital expenditure
|
|
|
|
|
|
|
|
|
9,966
|
|
|
|
|
|
|
|
|
|
==========
|
The following is an analysis of the Bank's revenue and results by operating segment for the three month period ended June 30, 2012 (unaudited):
|
Consumer banking (*)
|
|
Wholesale
banking
|
|
Investments and
treasury (*)
|
|
Property management
|
|
Total
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
|
AED' 000
|
Net interest and Islamic financing
income
|
595,494
|
|
450,394
|
|
295,037
|
|
33,108
|
|
1,374,033
|
Non-interest income
|
114,707
|
|
137,615
|
|
53,855
|
|
46,688
|
|
352,865
|
Operating expenses
|
(341,101)
|
|
(134,716)
|
|
(42,732)
|
|
(18,641)
|
|
(537,190)
|
|
|
|
|
|
|
|
|
|
|
Operating profit before impairment
allowances
|
369,100
|
|
453,293
|
|
306,160
|
|
61,155
|
|
1,189,708
|
Impairment allowances
|
(315,277)
|
|
(146,446)
|
|
(8,964)
|
|
(21,337)
|
|
(492,024)
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax expense
|
53,823
|
|
306,847
|
|
297,196
|
|
39,818
|
|
697,684
|
Overseas income tax expense
|
-
|
|
(2,621)
|
|
-
|
|
-
|
|
(2,621)
|
|
|
|
|
|
|
|
|
|
|
Net profit for the period
|
53,823
|
|
304,226
|
|
297,196
|
|
39,818
|
|
695,063
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
|
==========
|
Capital expenditure
|
|
|
|
|
|
|
|
|
89,610
|
|
|
| |