Capital & Subordinated Debt

Capital & Subordinated Debt

Capital and Leverage Strategy

ADCB's ambition is to create the most valuable bank in the UAE. One of the keys to building maximum value for its customers and shareholders is efficient capital management. To achieve this, we focus on strengthening ADCB's balance sheet and maintaining healthy capital ratios while meeting regulatory capital and liquidity requirements.

Capital Management

The Central Bank is ADCB's principal regulator and sets and monitors its capital requirements. ADCB's objective is to have an adequate capital base to enable it to pursue its strategic initiatives and to support the growth of its business.

ADCB's senior management, by employing techniques based on the guidelines developed by the Basel Committee and the Central Bank, monitors capital adequacy and the use of regulatory capital. ADCB generates capital primarily through the retention of earnings net of dividends, while maintaining an appropriate capital buffer.

Capital adequacy and the use of regulatory capital are monitored on a regular basis per guidelines developed by the Basel Committee and the Central Bank of the United Arab Emirates ("UAE"). ADCB complies with the guidelines and reports them under Internal Capital Adequacy Assessment Process requirements report.

Capital Risk

ADCB's capital management is driven by short- and long-term strategies and organisational requirements with due consideration to the regulatory, economic and commercial environment in which we operate. ADCB's capital ratios remain strong, and the bank believes it is well-equipped to deal with evolving regulatory requirements.

Great discipline is exerted to ensure that ADCB maintains adequate capital resources to:

  • Comply with the capital requirements set by the Central Bank of the UAE
  • Safeguard ADCB's ability to increase returns for its shareholders
  • Maintain a strong capital base to support the development of its business

Capital and Leverage Planning

ADCB formulates its capital plan with due consideration given to potential future losses arising from credit, market and other risks. ADCB currently calculates its capital ratio in accordance with Basel III capital requirements. Stress testing and scenario analysis are used to ensure that its internal capital assessment considers the impact of extreme but plausible scenarios on its risk profile and capital position. This provides insight into the potential impact of significant adverse events and how to mitigate them.

ADCB uses a capital model to assess the capital demand for material risks, and support this with its internal capital adequacy assessment. Each material risk is assessed, relevant mitigants considered and appropriate levels of capital determined.

A strong governance and process framework is embedded in ADCB's capital planning and assessment methodology. The key capital management committees are the Management Executive Committee, the Assets and Liabilities Committee, the Management Risk and Credit Committee and the Board Risk and Credit Committee.

Capital Ratios

ADCB continues to maintain a strong capital ratio.

Adequacy Ratio

Capital Adequacy Ratio 19.09% in 2017

Capital Notes

In 2009, ADCB issued AED 4 bn Tier 1 capital notes, which currently bear a floating interest rate of 6 month Eibor plus 2.3% per annum, payable to the Abu Dhabi Department of Finance.

Subordinated Fixed Rate Notes

ADCB Finance (Cayman) Limited currently has one subordinated fixed rate outstanding. The coupon rate as at 31 December 2017 is as follows:

Principal Amount Coupon Rate Payable Maturity Date
USD 750,000,000 4.5000% Semi-annually 6 March 2023


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