Capital & Subordinated Debt

Capital & Subordinated Debt

Capital and Leverage Strategy

ADCB's ambition is to create the most valuable bank in the UAE. Key to building maximum value for our 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. We have a stable funding base and keep our loan to deposit ratio within our predetermined risk appetite.

Capital Management

ADCB has an active programme for managing shareholders' equity and regulatory capital, and maintain a comprehensive process for assessing ADCB's overall capital adequacy. We generate capital primarily through the retention of earnings net of dividends, while maintaining an appropriate counter cyclical capital buffer. Our objective is to maintain capital at an amount commensurate with our risk appetite, and to meet both regulatory and market expectations.

Additionally, we seek to maintain safety and soundness at all times including under any adverse conditions that might develop. In doing so, we take advantage of organic growth opportunities, maintain ready access to financial markets, continue to serve as a credit intermediary, remain a source of strength for our subsidiaries, and satisfy current and future regulatory capital requirements.

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"). To determine the appropriate level of capital, we prepare an Internal Capital Adequacy Assessment Process report on an annual basis, taking into account our growth aspirations and portfolio composition. Capital is set aside for risks such as concentration risk, interest rate risk in banking book, and the like. This report including our policy is submitted to the Central Bank of the UAE.

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. Our capital ratios remain strong, and we believe we are well-equipped to deal with evolving regulatory requirements.

We exert great discipline 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 continue as a going concern and increase returns for our shareholders
  • maintain a strong capital base to support the development of our business

Capital and Leverage Planning

ADCB formulates our capital plan with due consideration given to potential future losses arising from credit, market and other risks, we are using a regulatory formula, to the amount of capital required to support them. Stress testing and scenario analysis are used to ensure that our internal capital assessment considers the impact of extreme but plausible scenarios on our 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 our internal capital adequacy assessment. Each material risk is assessed, relevant mitigants consideredand 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 Committeeand the Board Risk and Credit Committee.

Capital Ratios

ADCB continues to maintain a strong capital ratio. 

Adequacy Ratio

Capital Adequacy Ratio 18.92% in 2016

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 three series of subordinated fixed rate outstanding. The coupon rates as at 31 December 2016 are as follows:

Principal Amount Coupon Rate Payable Maturity Date
USD 750,000,000 4.5000% Semi-annually 6 March 2023
USD 300,000,000 3.1250% Semi-annually 28 May 2023
CHF 100,000,000 1.8850% Annually 13 June 2023


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