Treasury and Investments Group

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The Treasury and Investments Group offers a diverse range of conventional and Islamic banking solutions to clients, while also undertaking the core responsibility for the Group’s funding, investments and centralised risk management activities. It manages the Bank’s borrowings, issuance of debt securities, and use of derivatives to manage risk, while investing in a range of instruments, including short-term placements, as well as corporate and sovereign debt securities.

The Treasury and Investments Group was instrumental in managing the Bank’s growth and development in 2021 in line with our five-year strategy. The business continued to support ADCB’s objectives to optimise funding and liquidity, and reduce cost of funds, and moved forward with Treasury’s aims to broaden ADCB’s investment portfolio and increase trading income.

Guided by robust asset and liability management, we continued to diversify our funding profile by markets, tenors, currencies, and products to strengthen our portfolio and better mitigate risk and volatility. The Bank grew its repo and structured funding book to AED 21.8 billion as well as conducting eight transactions under the Global Medium Term Note (GMTN) Programme in the second half of the year. The issuances, which were diversified across U.S. dollars, Pound Sterling and Chinese Yuan Renminbi, included two zero coupon callable bond sales.

Treasury’s refinancing plan for 2022 will see the Bank continue to diversify its sources of funding, by considering new products such as environmental, social and governance (ESG) bonds and structured note issuances.

Wholesale borrowings, including Euro Commercial Paper, remain well diversified over a range of currencies and maturities and accounted for 21% of total liabilities as at the end of 2021.

Investment securities increased to AED 96.5 billion as at the end of 2021, from AED 88.2 billion a year earlier, with 99% exposure to bonds — the majority of which were in the relatively low-risk government and public sector. During the year, we reduced the interest rate risk profile of the bond portfolio in response to the rising interest rate environment.

Meanwhile, the system upgrade completed in 2020 and other digital advances ensured that we were well prepared to facilitate the LIBOR transition and adapt to new regulatory changes. Enhancements to our internal treasury and risk management systems facilitated the move to the Secured Overnight Funding Rate (SOFR) that replaced U.S. Dollar LIBOR. Treasury is now fully equipped to support and offer a wide array of SOFR-linked products to remain at the forefront of market evolution.

During the year, the Bank, in its capacity as a Primary Dealer, collaborated closely with the Central Bank of the UAE to successfully launch Monetary Bills in the country.

As we continued to enhance the range of our digital capabilities, reducing time and cost for clients and the Bank, our FX platform, Go Trade, attracted a growing number of clients in 2021. Almost all new transactions consist of straight-through processing.

The Treasury and Investments Group achieved an impressive NPS score of 90 in 2021, showing great adaptability through periods of remote working and the transition back to the office.

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Treasury Net Promoter Score (NPS)