AB Bank Limited

Disclosures on Risk Based Capital (Basel-III)

As of December 31, 2018
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018
These disclosures have been made in accordance with the Bangladesh Bank BRPD Circular no. 18 dated 21
December 2014 as to guidelines on 'Risk Based Capital Adequacy for Banks' in line with Basel III.
1. Capital adequacy under Basel-III
To cope with the international best practices and to make the Bank’s capital more risk sensitive as well as more
shock resilient, ‘Guidelines on Risk Based Capital Adequacy (RBCA) for Banks’ (revised regulatory capital
framework in line with Basel III) have been introduced from 01 January 2015. The guidelines were issued by
Bangladesh Bank (BB) under section 13 and section 45 of the Bank Company Act, 1991 (amendment up to
2018).

Basel III guidelines are structured on the following aspects:

a) Minimum capital requirements to be maintained by a Bank against credit, market, and operational risks.
b) Process for assessing the overall capital adequacy aligned with risk profile of a Bank as well as capital
growth plan.
c) Framework of public disclosure on the position of a Bank’s risk profiles, capital adequacy, and risk
management system.

2. Scope of application

Basel III guidelines apply to all scheduled banks on ‘Solo’ basis as well as on ‘Consolidated’ basis where-

- Solo Basis refers to all position of the Bank and its local and overseas branches/offices; and
- Consolidated basis refers to all position of the bank (including its local and overseas branches/offices)
and its subsidiary company(ies) engaged in financial (excluding insurance) activities like Merchant banks,
Brokerage Firms, Discount Houses, etc. (if any).
AB Bank followed the scope narrated above. Bank has Tier 1 capital (going concern) and Tier 2 capital
(gone concern) structure at the moment.
3. Capital base
Regulatory capital has been categorised into following way:
1) Tier 1 capital (going concern capital)
a) Common equity Tier I
b) Additional Tier I
2) Tier 2 capital (gone concern)

1. (a) Common Equity Tier 1 Capital

For the local Banks, Common Equity Tier 1 (CET1) capital shall consist of sum of the following items:
a) Paid up capital
b) Non repayable share premium account
c) Statutory reserve
d) General reserve
e) Retained earnings
f) Dividend equalization reserve
g) No controlling interest in subsidiaries
Less: Regulatory adjustments applicable on CET1
1. (b) Additional Tier 1 Capital
For the local Banks, Additional Tier 1 (AT1) capital shall consist of the following items:
a) Instruments issued by the banks that meet the qualifying criteria for AT1
b) No controlling Interest i.e. AT1 issued by consolidated subsidiaries to third parties (for consolidated reporting
only);
Less: Regulatory adjustments applicable on AT1 Capital

2. Tier 2 Capital
Tier 2 capital, also called ‘gone-concern capital’, represents other elements which fall short of some of the
a) General provisions
b) Subordinated debt / Instruments issued by the Banks that meet the qualifying criteria for Tier 2 capital;
c) No controlling Interest i.e. Tier 2 capital issued by consolidated subsidiaries to third parties as specified
Less: Regulatory adjustments applicable on Tier 2 capital;

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AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

4. Limits (Minima and Maxima)

These instructions will be adopted in a phased manner starting from the January 2015, with full implementation
of capital ratios from the beginning of 2019. Banks will be required to maintain the following ratios on an
ongoing basis:

a) Common equity Tier 1 of at least 4.5% of the total RWA.

b) Tier 1 capital will be at least 6.0% of the total RWA.
c) Minimum CRAR of 10% of the total RWA.
d) Additional Tier 1 capital can be admitted maximum up to 1.5% of the total RWA or 33.33% of CET1,
whichever is higher
e) Tier 2 capital can be admitted maximum up to 4.0% of the total RWA or 88.89% of CET1, whichever is
higher
f) In addition to minimum CRAR, Capital Conservation Buffer (CCB) of 2.5% of the total RWA is being
introduced which will be maintained in the form of CET1.

Following is the phase-in arrangement for the implementation of minimum capital requirements

Phase-in arrangement of minimum capital requirements

Particulars 2015 2016 2017 2018 2019

Minimum Common Equity Tier-1 Capital Ratio 4.50% 4.50% 4.50% 4.50% 4.50%
Capital Conservation Buffer - 0.625% 1.25% 1.875% 2.50%
Minimum CET-1 plus Capital Conservation Buffer 4. 50% 5.13% 5.75% 6.38% 7.00%
Minimum T-1 Capital Ratio 5.50% 5.50% 6.00% 6.00% 6.00%
Minimum Total Capital Ratio 10.00% 10.00% 10.00% 10.00% 10.00%
Minimum Total Capital plus Capital Conservation Buffer 10.00% 10.625% 11.25% 11.875% 12.50%

5. Capital conservation buffer

Banks are required to maintain a capital conservation buffer of 2.5%, comprised of Common Equity Tier 1
capital, above the regulatory minimum capital requirement of 10%. Banks should not distribute capital (i.e. pay
dividends or bonuses in any form) in case capital level falls within this range. However, they will be able to
conduct business as normal when their capital levels fall into the conservation range as they experience losses.
Therefore, the constraints imposed are related to the distributions only and are not related to the operations of
banks. The distribution constraints imposed on Banks when their capital levels fall into the range increase as
the Banks’ capital levels approach the minimum requirements. The table below shows the minimum capital
conservation ratios a Bank must meet at various levels of the Common Equity Tier 1 capital ratios.

Bank’s minimum capital conservation standards

Minimum capital conservation

CET-1 ratio ratio (expressed as
percentage of earnings)
4.5% - 5.125% 100%
>5.125% - 5.75% 80%
>5.75% - 6.375% 60%
>6.375% - 7.0% 40%
>7.0% 0%

6. Regulatory adjustments / deductions

In order to arrive at the eligible regulatory capital for the purpose of calculating CRAR, Banks are required to
make the following deductions from CET1/capital:
Shortfall in provisions against NPLs and investments
Goodwill and all other intangible assets
Deferred tax assets (DTA)
Defined benefit pension fund assets
Gain on sale related to securitisation transactions
Investment in own shares
Investments in the capital of Banking, Financial and Insurance entities
(Reciprocal crossholdings in the Capital of Banking, Financial and Insurance entities)

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AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018
Transitional arrangements for capital deductions
Currently, 10% of revaluation reserves for equity instruments and 50% of revaluation reserves for fixed assets
and securities are eligible for Tier 2 capital. However, Bangladesh Bank, in the light of Basel III proposals, has
harmonised deductions from capital which will mostly be applied at the level of Tier 2. The regulatory capital
adjustment will start in a phased manner from January 2015 in the following manner:

Transitional Arrangements for Capital Deductions:

Phase-in of deductions from Tier 2 2015 2016 2017 2018 2019

RR for Fixed Assets 20% 40% 60% 80% 100%
RR for Securities 20% 40% 60% 80% 100%
RR for Equity Securities 20% 40% 60% 80% 100%
Bank complied with the conditions as embodied in this respect wherever applicable.

7. Leverage Ratio
A minimum Tier 1 leverage ratio of 3% is being prescribed both at solo and consolidated level
The banks will maintain leverage ratio on quarterly basis. The calculation at the end of each calendar quarter
will be submitted to BB showing the average of the month end leverage ratios based on the following definition
of capital and total exposure.
Tier 1 Capital (after related deductions)
Leverage Ratio =
Total Exposure (after related deductions)
Transitional arrangements
The parallel run period for leverage ratio will commence from January, 2015 and run until December 31, 2017.
During this period, the leverage ratio and its components will be tracked to assess whether the design and
calibration of the minimum Tier 1 leverage ratio of 3% is appropriate over a credit cycle and for different types of
business models, including its behavior relative to the risk based requirements.

Bank level disclosure of the leverage ratio and its components will start from 01 January 2015. However, Banks
should report their Tier 1 leverage ratio to the BB (Department of Off-Site Supervision) along with CRAR report
from the quarter ending March, 2015. Based on the results of the parallel run period, any final adjustments to
the definition and calibration of the leverage ratio will be made by BB in 2017, with a view to setting the
leverage ratio requirements as a separate capital standard from 01 January 2018.
Bank complied with the conditions as embodied in this respect wherever applicable.

8. a) Credit Risk
Credit risk is the potential that a bank borrower or counterparty fails to meet its obligation in accordance
with agreed term.
Bank followed the suggested methodology, process as contained in the guidelines.

b) Methodology
Bangladesh Bank adopted Standardised approach for calculating Risk Weighted Assets. The capital
requirement for credit risk is based on the risk assessment made by external credit assessment
institutions (ECAIs) recognized by BB for capital adequacy purposes. Banks are required to assign a risk
weight to all their on balance sheet and off balance sheet exposures. Risk weights are based on external
credit rating (solicited) which was mapped with the BB rating grade or a fixed weight that is specified by
Bangladesh Bank.
c) Credit risk mitigation
AB Bank uses a number of techniques to reduce its credit risk to which the Bank is exposed. For example,
exposures may be collateralised by first priority claims, in whole as in part with cash or securities, a loan
exposure may be guaranteed by a third party. Additionally, Bank may agree to net loans owed to them
against deposits from the same counterparty.

Bank uses comprehensive approach as adopted by the Central Bank. In this approach when taking
collateral, Bank will need to calculate adjusted exposure to a counterparty for capital adequacy purposes
in order to take account of the effects of that collateral. Using haircut, Bank is required to adjust both the
amount of the exposure to the counterparty and the value of any collateral received in support of that
counterparty to take account of possible future fluctuations in the value of either, occasioned by market
movements. This will produce volatility adjusted amounts for both exposure and collateral.

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AB Bank Limited
Disclosures on Risk Based Capital (Basel III)
Based on 31 December 2018

9. a)
a) Market
MarketRisk
Risk
Market risk is defined as the risk of losses in on and off-balance sheet positions arising from movements
in market prices. The market risk positions subject to this requirement are:
i) The risks pertaining to interest rate related instruments and equities in the trading book; and
ii) Foreign exchange risk and commodities risk throughout the Bank (both in the Banking and in the trading
book).
b) Methodology
Methodology
In Standardized Approach, the capital requirement for various market risks (interest rate risk, equity price
risk, commodity price risk, and foreign exchange risk) is determined separately. The total capital
requirement in respect of market risk is the sum of capital requirement calculated for each of these market
risk sub-categories. The methodology to calculate capital requirement under Standardized Approach for
each of these market risk categories is as follows:
a) Capital Charge for Interest Rate Risk = Capital Charge for Specific Risk + Capital Charge for General
Market Risk.
b) Capital Charge for Equity Position Risk = Capital Charge for Specific Risk + Capital Charge for General
Market Risk.
c) Capital Charge for Foreign Exchange Risk = Capital Charge for General Market Risk
d) Capital Charge for Commodity Position Risk = Capital Charge for General Market Risk
Bank followed the suggested methodology, process as contained in the Guidelines.
10. a) Operational risk
Operational risk is defined as the risk of losses resulting from inadequate or failed internal processes,
people and systems or from external events. This definition includes legal risk, but excludes strategic and
reputation risk.
b) Measurement methodology
Banks operating in Bangladesh shall compute the capital requirements for operational risk under the
Basic Indicator Approach (BIA). Under BIA, the capital charge for operational risk is a fixed percentage,
denoted by (alpha), of average positive annual gross income of the bank over the past three years.
Figures for any year in which annual gross income is negative or zero, should be excluded from both the
numerator and denominator when calculating the average.

Bank followed the suggested methodology, process as contained in the guidelines.

11. Disclosure under Pillar III
Disclosure given below as specified by RBCA guidelines dated 21 December 2014:
A) Scope of application
Qualitative disclosure
(a) The name of the top corporate AB Bank Limited
entity in the group to which this
guidelines applies.
(b) An outline of differences in the The consolidated financial statements of the Bank include the financial
basis of consolidation for statements of (a) AB Bank Limited (b) AB Investment Limited (c) AB
accounting and regulatory Securities Limited (d) Cash Link Bangladesh Limited and (e) AB
purposes, with a brief description International Finance Limited. A brief description of these are given
of the entities within the group (a) below:
that are fully consolidated; (b) that AB Bank Limited (ABBL)
are given a deduction treatment;
and (c) that are neither AB Bank Limited is one of the first generation private commercial
consolidated nor deducted (e.g. banks (PCBs), incorporated in Bangladesh on 31 December 1981 as a
where the investment is risk- public limited company under the Companies Act 1913, subsequently
weighted). replaced by the Companies Act 1994, and governed by the Bank
Company Act 1991 (amendment up to 2018) . The Bank went for
public issue of its shares on 28 December 1983 and its shares are
listed with Dhaka Stock Exchange and Chittagong Stock Exchange
respectively. AB Bank Limited has 105 Branches including 1 Islami
Banking Branch, 1 Overseas Branch in Mumbai, India. The Bank has
five (05) subsidiary companies, AB Investment Limited (ABIL), AB
Securities Limited (ABSL), CashLink Bangladesh Limited (CBL), AB
International Finance Limited (ABIFL), incorporated in Hong Kong, and
Arab Bangladesh Bank Foundation (ABBF).
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AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

(b) Continued.. AB Investment Limited

AB Investment Limited (ABIL), a Subsidiary of AB Bank Limited was
incorporated under the Companies Act, 1994 on 24 December 2009
with a view to run and manage the operations of Merchant Banking
Wing of AB Bank Limited independently. AB Investment Limited
started its operation on 10 March 2010. AB Investment Limited has
achieved an unparallel reputation as a leading Merchant Banker
through providing portfolio management services by maintaining a high
level of professional expertise and integrity in client relationship. ABIL's
Registered Office is located at WW Tower (Level 7), 68 Motijheel C.A.,
Dhaka. ABIL has two branch offices at Agrabad, Chittagong and
Chowhatta, Sylhet.
AB Securities Limited
Brokerage business of Arab Bangladesh Bank Foundation has been
transferred to the newly formed AB Securities Limited (ABSL) vide
Bangladesh Bank approval letter BRPD(R-1)717/2009-493 dated 08
November 2009. Main objective of the company is to act as a stock
broker to buy and sell Securities, Bond, Debenture, etc. on behalf of
clients. ABSL also manages its own portfolio under Stock Dealer
License. ABSL is a member of both Dhaka Stock Exchange Ltd. and
Chittagong Stock Exchange Ltd. ABSL started it’s operation
independently on 02 August 2010, before that it was operated under
the ABBF License.
Cashlink Bangladesh Limited
Cashlink Bangladesh Limited (CBL) was incorporated on 24
September 2008 in Bangladesh under the Companies Act 1994 as a
private company limited. AB Bank Limited presently holds 90% shares
in CBL. The principal activity of the company is to install and operate a
switched Automated Teller Machines (ATM) and Point of Sales (POS)
network on behalf of a number of local and foreign banks enabling
these member bank customers who are active cardholders to withdraw
cash, make utility bill payments (e.g. water, gas, electricity and
telephone bills) and to purchase commodity goods from any of the
ATM and POS terminals established under the network.

AB International Finance Limited

AB International Finance Limited (ABIFL) is a company incorporated in
Hong Kong. Its registered office and principal place of business is
situated at Room 1608, 16th Floor, Tower 1, Silvercord, 30 Canton
Road, Tsim Sha Tsui, Hong Kong

Arab Bangladesh Bank Foundation

Bank also has a Subsidiary (99.60% owned by AB Bank) for
philanthropic/ CSR activities known as Arab Bangladesh Bank
Foundation (ABBF). This has not been included in the consolidation as
ABBF operated only for philanthropic purpose and its profit is not
distributable to the shareholders. Thus, for ensuring the fair
presentation of the financial statements of the parent company (the
Bank), the Financial Statements of ABBF has not been consolidated.
(c) Any restrictions, or other major Not Applicable
impediments, on transfer of funds
or regulatory capital within the
group
(d) The aggregate amount of surplus
capital of insurance subsidiaries Aggregate amount of Capital: BDT. 20,000,000
(whether deducted or subjected to Name of subsidiary:
an alternative method) included in Arab Bangladesh Bank Foundation (ABBF)
the capital of the consolidated
group.

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AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018
B) Capital structure
Qualitative disclosure
(a) Summary information on the The terms and conditions of the main features of all capital instruments
terms and conditions of the main have been segregated in line with of the eligibility criteria set forth vide
features of all capital instruments, BRPD circular no. 18 dated 21 December 2014 and other relevant
especially in the case of capital instructions given by Bangladesh Bank from time to time. The main
instruments eligible for inclusion features of the capital instruments are as follows:
in CET 1, Additional Tier 1 or Tier
Common Equity Tier 1 capital instruments
2.
Paid-up share capital: Issued, subscribed and fully paid up share
capital of the Bank. It represents Paid up Capital, Right Shares as well
as Bonus Shares issued from time to time.
Statutory reserve: As per Section 24(1) of the Bank Company Act,
1991 (amendment up to 2018), an amount equivalent to 20% of the
profit before taxes for each year of the Bank has been transferred to
the Statutory Reserve Fund.
General reserve: Any reserve created through Profit and Loss
appropriation account for fulfilling any purpose.
Retained earnings: Amount of profit retained with the banking
company after meeting up all expenses, provisions and appropriations.

In this respect, Bank is complied.

Additional Tier 1 Capital
Bank has no any type of Additional Tier I Capital.
Tier 2 Capital
a) General provisions;
b) Subordinated debt / instruments issued by the banks that meet the
qualifying criteria for Tier 2 capital;
c) No controlling interest i.e. Tier-2 issued by consolidated subsidiaries
to third parties as specified
Less: Regulatory adjustments applicable on Tier-2 capital;

BDT in Crore
31.12.2018 31.12.2017
Solo Conso Solo Conso
(b) The amount of Regulatory > Paid up Capital 758 758 758 758
capital, with separate > Non- repayable share premium account - - - -
disclosure of: > Statutory reserve 662 662 655 655
CET 1 Capital > General reserve 122 130 122 130
> Retained earnings 591 697 601 705
> Non- Controlling Interest - 1 - 1
> Non- cumulative irredeemable preference
shares - - - -
> Dividend equalization account - - - -
2,133 2,249 2,136 2,249
Additional Tier 1 Capital - - - -
Total Tier 1 Capital 2,133 2,249 2,136 2,249
Tier 2 Capital 1,385 1,457 1,156 1,213
(c) Regulatory Adjustments/Deductions from capital 214 215 163 164
(d) Total eligible capital 3,305 3,491 3,129 3,298

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AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

C) Capital adequacy
Qualitative Disclosure

(a) A summary discussion of the Capital adequacy is the cushion required to be maintained for covering the Credit Risk,
Bank's approach to Market Risk and Operational Risk so as to protect the depositors and general creditors
assessing the adequacy of its interest against such losses. In line with BRPD circular no. 18 dated 21 December, 2014,
capital to support current and the Bank has adopted standardised approach for credit risk, standardised (rule based)
future activities. Approach for Market Risk and Basic Indicator Approach for Operational Risk for computing
capital adequacy.
BDT in Crore
31.12.2018 31.12.2017
Solo Conso Solo Conso
(b) Capital requirement for Credit Risk: 2,986 3,004 2,592 2,611

(c) Capital requirement for Market Risk: 61 70 79 86

(d) Capital requirement for Operational Risk: 249 257 226 235

(e) Total capital, CET 1 capital, Total Tier 1 capital and Tier 2 capital ratio:
> For the Bank alone 64.55% - 68.29% -
> For the consolidated group - 64.41% - 68.20%
(f) Capital Conservation Buffer 1.88% 1.88% 1.25% 1.25%
(g) Available Capital under Pillar 2 requirement 1,385 1,457 1,156 1,213

D) Credit Risk
Qualitative disclosure

(a) The general qualitative Bank classifies loans and advances (loans and bill discount in the nature of an advance)
disclosure requirement with into performing and Non Performing Loans (NPL) in accordance with the Bangladesh Bank
respect to credit risk, guidelines in this respect.
including:

> Definitions of past due and An NPA (impaired) is defined as a loan or an advance where interest and/ or installment of
impaired (for accounting principal remain overdue for more than 90 days in respect of a Continuous credit, Demand
purposes) loan or a Term Loan etc.

Classified loan is categorized under following 03 (three) categories:

> Sub-standard
> Doubtful
> Bad/Loss
Any continuous loan will be classified as:
> "Sub-standard" if it is past due/over due for 3 months or beyond but less than 6 months.
> "Doubtful if it is past due/over due for 6 months or beyond but less than 9 months.
> ‘Bad/Loss' if it is past due/over due for 9 months or beyond.
Any Demand Loan will be classified as:

> Sub-standard' if it remains past due/overdue for 3 months or beyond but not over 6
months from the date of claim by the Bank or from the date of creation of forced loan.

> Doubtful' if it remains past due/overdue for 6 months or beyond but not over 9 months
from the date of claim by the Bank or from the date of creation of forced loan.

> Bad/Loss' if it remains past due/overdue for 9 months or beyond from the date of claim
by the Bank or from the date of creation of forced loan.

In case of any installment(s) or part of installment(s) of a fixed term loan is not repaid
within the due date, the amount of unpaid installment(s) will be termed as `defaulted
installment'.

7
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

> Definitions of past due and i. In case of fixed term loans :

impaired (for accounting
purposes) > If the amount of 'defaulted installment' is equal to or more than the amount of
installment(s) due within 3 (three) months, the entire loan will be classified as ''Sub-
standard''.
> If the amount of 'defaulted installment' is equal to or more than the amount of
installment(s) due within 6 (six) months, the entire loan will be classified as ''Doubtful".

> If the amount of 'defaulted installment' is equal to or more than the amount of
installment(s) due within 9 (nine) months, the entire loan will be classified as ''Bad/Loss''.

If any fixed term loan is repayable on monthly installment basis, the amount of
installment(s) due within 06 (six) months will be equal to the sum of 06 monthly
installments. Similarly, if the loan is repayable on quarterly installment basis, the amount of
installment(s) due within 06 (six) months will be equal to the sum of 2 quarterly
installments.
Description of approaches Consumer Financing Off Balance
> Short Term Loans to All other
followed for specific and Particulars Other than SMEF Sheet
general allowances and Agri Credit HF LP BHs/MBs/SDs Credit
HF, LP Exposures
statistical methods Standard 2.50% 5% 2% 2% 0.25% 2% 1%
UC
SMA - 5% 2% 2% 0.25% 2% 1%
SS 5% 20% 20% 20% 20% 20% 20% 1%
Classified DF 5% 50% 50% 50% 50% 50% 50%
BL 100% 100% 100% 100% 100% 100% 100%
> Discussion of the Bank's The Board approves the credit policy keeping in view relevant Bangladesh Bank guidelines
credit risk management to ensure best practice in credit risk management and maintain quality of assets.
policy Authorities are properly delegated in ensuring check and balance in credit operation at
every stage i.e. screening, assessing risk, identification, management and mitigation of
credit risk as well as monitoring, supervision and recovery of loans with provision for early
warning system. There is a separate Credit Risk Management Division for ensuring proper
risk management of Loans and Credit Administration Management Division for monitoring
and recovery of irregular loans. Internal control and compliance division independently
assess quality of loans and compliance status at least once in a year. Adequate provision
is maintained against classified loans as per Bangladesh Bank guidelines. Status of loans
are regularly reported to the Board/ Board Audit Committee. Besides, credit risk
management process involves focus on monitoring of top 30 loans, Sectoral exposures
etc. among others limit.

31.12.2018 31.12.2017
In (%) BDT/Crore In (%) BDT/Crore
(b) Total gross credit risk Overdraft 8.91% 2,147 8.95% 2,056
exposures broken down by Cash credit 0.01% 2 0.01% 3
major types of credit Time loan 19.47% 4,695 23.53% 5,404
exposure Term loan 58.72% 14,156 52.66% 12,093
Forced loan 6.23% 1,503 6.23% 1,430
Bills under LC 0.10% 23 0.08% 19
Trust receipt 3.78% 912 3.74% 860
Packing credit 0.10% 25 0.12% 27
Loan against accepted bills 0.17% 42 1.53% 352
Loan-EDF 0.76% 183 1.32% 303
Consumer Loan 0.62% 150 0.69% 159
Staff loan 0.65% 157 0.68% 156
Bills purchased and discounted 0.47% 112 0.45% 102
Total 100% 24,107 100% 22,965
(0)
(1,142) 0

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AB Bank Limited
Disclosures on Risk Based Capital (Basel III)
Based on 31 December 2018
31.12.2018 31.12.2017
In (%) BDT/Crore In (%) BDT/Crore
(C) Geographical distribution of Urban branches
exposures, broken down in Dhaka 74.49% 17,740 72.56% 16,455
significant areas by major Chittagong 18.92% 4,504 20.93% 4,747
types of credit exposure Khulna 1.78% 424 1.81% 409
Sylhet 0.72% 171 0.84% 191
Barisal 0.09% 21 0.11% 24
Rajshahi 1.66% 395 1.65% 375
Rangpur 2.00% 477 1.77% 401
Mymensingh 0.34% 81 0.33% 75
100% 23,814 100% 22,678
Rural branches
Dhaka 69.89% 142 71.94% 151
Chittagong 23.81% 48 25.60% 54
Khulna 0.00% - 0.00% -
Sylhet 2.51% 5 2.46% 5
Barisal 0.00% - 0.00% -
Rajshahi 0.00% - 0.00% -
Rangpur 0.00% - 0.00% -
Mymensingh 3.80% 8 0.00% -
100% 204 100% 211
Outside Bangladesh
ABBL, Mumbai branch 0.37% 90 0.33% 77
100% 24,107 100% 22,965
(d) Industry or counterparty type Agriculture 1.80% 434 1.32% 304
distribution of exposures, Large and medium scale indus. 28.09% 6,772 28.48% 6,541
broken down by major types Working capital 23.65% 5,702 22.67% 5,206
of credit exposure. Export 1.45% 351 1.63% 375
Commercial lending 24.07% 5,804 24.40% 5,603
Small and cottage industry 0.88% 211 0.86% 197
Others 20.05% 4,834 20.64% 4,739
100% 24,107 100% 22,965
(e) Residual contractual maturity Repayable – on demand 0.46% 110 4.80% 1,103
breakdown of the whole – up to 3 months 41.84% 10,085 37.98% 8,721
portfolio, broken down by – over 3 months but below 1 year 41.58% 10,023 42.33% 9,721
major types of credit – over 1 year but below 5 years 12.80% 3,087 12.34% 2,834
exposure. – over 5 years 3.32% 801 2.55% 585
100% 24,107 100% 22,965
(f) By major industry or counterparty type:
i. Amount of impaired loans and if available, past due loans, 33.07% 7,973 7.15% 1,641
provided separately
ii. Specific and general provisions 1,064 873
iii. Charges for specific allowances and charge-offs during the 131 632
period
(g) Gross Non Performing 2018 2017
Assets (NPAs) BDT/Crore BDT/Crore
(NPAs) to outstanding Loans Non Performing Assets (NPAs) 7,973 1,641
& advances NPAs to outstanding loans and advances 33.07% 7.15%
Movement of NPAs Bangladesh Operations:

Opening balance 1,625.86 1,124.32

Additions 6,407.93 1,245.38
Reductions 61.01 743.84
Closing balance - 0.00 7,972.78 1,625.86
Movement of specific provision for NPAs
Opening balance 377.21 246.32
Provision made during the period 130.67 381.59
Write-off 507.88 - 250.70
Closing balance (0.00) 507.88 377.21
Provision held by Mumbai branch - 9.04
507.88 386.25
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AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018
E) Equities: Disclosures for Banking book positions
Qualitative Disclosure
(a) The general qualitative disclosure
requirement with respect to the equity
risk, including:
> differentiation between holdings on Investment in equity mainly for capital gain purpose but Bank has some
which capital gains are expected and investment for relationship and strategic reasons.
those taken under other objectives
including for relationship and strategic
reasons
> discussion of important policies covering Quoted shares are valued at cost. Necessary provision is maintained if market
the valuation and accounting of equity price fall below the cost price. Unquoted shares are valued at cost.
holdings in the Banking book. This
includes the accounting techniques and
valuation methodologies used, including
key assumptions and practices affecting
valuation as well as significant changes
in these practices

(b) Value disclosed in the balance sheet of Not applicable

investment, as well as the fair value of
those investments; for quoted securities,
a comparison to publicly quoted share
values where the share price is
materially different from fair value.

(c) The cumulative realized gains (losses) BDT in Crore

arising from sales and liquidations in the 8.59
reporting period (2018)

(d) > Total unrealized gains (losses) (175.08)

> Total latent revaluation gains
(losses) Nil
> Any amounts of the above included
in Tier 2 capital Nil
(e) Capital requirements broken down by Nil
appropriate equity grouping, consistent
with the bank's methodology, as well as
the aggregate amounts and the type of
equity investments subject to any
supervisory provisions regarding
regulatory capital requirements

F) Interest Rate Risk in the Banking Book (IRRBB)

Qualitative Disclosure
(a) The general qualitative disclosure Interest rate risk is the potential that the value of the On Balance Sheet and the
requirement including the nature of Off Balance Sheet position of the Bank would be negatively effected with the
IRRBB and key assumptions, including change in the interest rate. The vulnerability of an institution towards the
assumptions regarding loan advance movement of the interest rate can be gauged by using duration GAP
prepayments and behavior of non- under Stress Testing Analysis.
maturity deposits, and frequency of
IRRBB measurement. AB Bank has also been exercising the Stress Testing using the duration GAP
for measuring the Interest Rate Risk on its On Balance Sheet exposure for
estimating the impact of the net change in the market value of equity on the
Capital Adequacy Ratio (CAR) due to change in interest rates only on its On
Balance Sheet position (as the Bank holds no interest bearing Off Balance
Sheet positions and or Derivatives). Under the assumption of three different
interest rate changes i.e. 1%, 2% and 3%.

10
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

Quantitative Disclosure
(b) The increase (decline) in earnings or BDT in Crore
economic value (or relevant measure 31.12.18 31.12.17
used by management) for upward and Market value of assets 32,786 31,713
downward rate shocks according to Market value of liability 30,040 29,552
management’s method for measuring Weighted avg. duration GAP 0.74 0.92
IRRBB, broken down by currency (as
CRAR after different level of Shocks:
relevant).
Minor level 9.42% 9.96%
Moderate level 8.81% 9.12%
Major level 8.19% 8.25%

G) Market Risk
Qualitative Disclosure

(a) > Views of BOD on trading/ The Board approves all policies related to market risk, sets limits and reviews
investment activities compliance on a regular basis. The objective is to provide cost effective funding
last year to finance asset growth and trade related transaction.

> Methods used to measure Market Standardised approach has been used to measure the market risk. The total
risk capital requirement in respect of market risk is the aggregate capital
requirement calculated for each of the risk sub-categories. For each risk
category minimum capital requirement is measured in terms of two separately
calculated capital charges for 'specific risk' and 'general market risk'.

> Market risk management system The Treasury Division manage market risk covering liquidity, interest rate and
foreign exchange risks with oversight from Asset-Liability Management
Committee (ALCO) comprising senior executives of the Bank. ALCO is chaired
by the Managing Director. ALCO meets at least once in a month.

> Policies and process for mitigating There are approved limits for Market risk related instruments both on-balance
market risk sheet and off-balance sheet items. The limits are monitored and enforced on a
regular basis to protect against market risks. The exchange rate committee of
the Bank meets on a daily basis to review the prevailing market condition,
exchange rate, forex position and transactions to mitigate foreign exchange
risks.

(b) The capital requirements for: BDT in Crore

31.12.18 31.12.17
Interest rate risk 17.63 22.11
Equity position risk 36.56 42.16
Foreign exchange risk 6.97 14.70
Commodity risk - -
61.16 78.97

H) Operational Risk

Qualitative Disclosure
(a) > Views of BOD on system to reduce The policy for operational risks including internal control and compliance risk is
Operational Risk approved by the board taking into account relevant guidelines of Bangladesh
Bank. Audit Committee of the Board oversees the activities of Internal Control
and Compliance Division (ICCD) to protect against all operational risk.

> Performance gap of executives and AB has a policy to provide competitive package and best working environment
staffs to attract and retain the most talented people available in the industry. AB's
strong brand image plays an important role in employee motivation. As a result,
there is no significant performance gap.
> Potential external events No potential external events is expected to expose the Bank to significant
operational risk.

11
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018
> Policies and processes for The policy for operational risks including internal control and compliance risk is
mitigating operational risk approved by the Board taking into account relevant guidelines of Bangladesh
Bank. Policy guidelines on Risk Based Internal Audit system is in operation as
per RBA branches are rated according to their risk status and branches scoring
more on risk status are subjected to more frequent audit by Internal Control and
Compliance Division (ICCD). It is the policy of the bank to put all the branches
of the bank under any form of audit at least once in a year. ICCD directly
reports to Audit Committee of the Board. In addition there is a Vigilance Cell
established in 2009 to reinforce operational risk management of the bank.
Bank's Anti-Money laundering activities are headed by CAMELCO and their
activities are devoted to protect against all money laundering and terrorist
finance related activities. Apart from that, there is adequate check & balance at
every stage of operation, authorities are properly segregated and there is at
least dual control on every transaction to protect against operational risk.

> Approach for calculating capital Basic Indicator Approach was used for calculating capital charge for operational
charge for operational risk risk as of the reporting date.
Quantitative Disclosure BDT in Crore
31.12.18 31.12.17
(b) The capital requirements for Operational Risk 248.58 226.46
I) Liquidity Ratio
Qualitative Disclosure
(a) > Views of BOD on system to Liquidity risk is the potential for loss to the bank arising from either its inability to meet
reduce liquidity Risk its obligations of depositors as they fall due or to fund in increased assets as per
commitment.
To mitigate liquidity risk Bank asses its risk appetite and manage the risk within a
structured frame work. Professional resources are deployed to set the limits and
procedures and get them approved by the Board.
To reduce the liquidity Risk in a structured way, Bank monitors various indicators like
regulatory indicators(CRR, SLR, MTFR, MCO, ADR, LCR, NSFR) and uses internal
monitoring tools (WBG, CLP and MAT)
> Methods used to measure Liquidity measurement involves forecasting the Bank's cash inflows against its
Liquidity risk outflows to identify the potential for any net shortfalls going forward. For measuring
Bank uses some simple techniques as mentioned below:
>Bank prepares Structural Liquidity Profile (SLP) on monthly basis. SLP is used to
estimate the Bank's cash inflows and outflows and thus net deficit or surplus (GAP)
over a series of specified time periods. Bank focuses on the maturity of its assets and
liabilities in different tenors. Excessive longer tenor lending against shorter-term
borrowing is monitored as this can put the Bank’s balance sheet in a very critical and
risky position.
> Bank has a Contingency Funding Plan (CFP) in place. Contingency Funding Plan
(CFP)is a set of policies and procedures that serves as a blueprint for the Bank to
meet its funding needs in a timely manner and at a reasonable cost. Bank maintains
sufficient high quality liquid assets to meet the liquidity crisis period.
> Bank estimates the funding requirement both is normal and stress conditions arising
from on and off balance sheet exposures. Bank monitors its products which are
interest rate sensitive. Those are taken care of at the time of interest rate movement in
the market based on behavior of clients and other competitors.
> Bank monitors liability concentration level. Highly concentrated deposits means bank
is relying on too few providers or funding sources. Bank has to be ready for arranging
fund if concentrated deposits are withdrawn at a time or Bank place this fund for short
term lending.
> Bank uses variety of ratios to quantify the liquidity and interpret them taking into
account the qualitative factors.

12
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

> Liquidity risk management The Management of the Bank measures the liquidity risk and manage them under the
system Board approved guidelines and policies. Bank prepares extensive reports for
monitoring the balance sheet movement on daily basis. Bank also monitors the market
information of the country and global market. Bank has an Asset Liability Committee
(ALCO).
ALCO is a senior management level committee responsible for supervision and
management of liquidity and other risks using different monitoring tools. They monitor
the limit for indicators set by Bangladesh Bank as well as Bank’s Board.

Key elements of an effective liquidity risk management process include an efficient

MIS to measure, monitor and control existing as well as future liquidity risks and
reporting them to senior management and the Board. Bank is therefore working for
continuous improvement of MIS.
> Policies and processes for Bank has set of policies duly approved by the Board for mitigating liquidity risk. These
mitigating liquidity risk policies are supported by effective procedures to measure, achieve and maintain
liquidity. The ALCO recommends the policies for liquidity risk which is reviewed and
approved by the Board.

Operating liquidity is managed by the Bank for day to day fund requirements. And for
managing the crisis period Bank follows the CFP approved by the Board.

For regulatory purposes the Bank maintains specific amount of assets classed as
"liquid", based on its liabilities. In addition, the Bank has to maintain excess liquid
assets as per CFP.

(b) BDT/Crore
31.12.2018
Liquidity Coverage Ratio 119.15%
Net Stable Funding Ratio (NSFR) 104.59%
Stock of high quality liquid assets 5,001.52
Total net cash outflows over the next 30 calendar 4,197.83
days
Available amount of stable funding 25,774.19
Required amount of stable funding 24,642.42

J) Leverage Ratio
Qualitative Disclosure

(a) > Views of BOD on system to For reducing the leverage up to an optimum level, the Board of Directors of the Bank
reduce excessive leverage always keen to focus on the capital strength and the quality of the assets. Board is
always concern to maximise the core capital portion and keep the growth of on and off
balance sheet exposures at a favourable level.
Key initiatives of the Board:
• Emphasised to keep LD ratio at the optimal level/budgeted level
• Stressed to keep the interest rate spread at the optimal level for ensuring the
profitability of the Bank
• Market competitive Cost of Fund must be maintained
• Non-funded business i.e. import, export and bank guarantee to be expedited as per
budget
• Operational expenses must be reduced at rational level
• Decentralisation of portfolio in SME and retail business
• Special Mentioned Account (SMA) and classified loans are to be closely monitored
for ensuring asset quality, and
• Recovery cell must ensure the monitoring of risk assets frequently to maintain the
asset quality.

13
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

> Policies and processes for Primary principle of the Board is to enhance the core capital of the Bank. To keep the
managing excessive on and off- leverage at a reduced level, Board emphasised Management to build strong internal
balance sheet leverage control system specifically in the risk points by putting dual control in each phase.
Apart from this, by the instruction of the Board, Management formed different
Committees to work under specific Terms of Reference (ToR) and to report to the
Board.

All these above measures as a whole, helps the Management to keep the exposures
at sound level.
> Approach for calculating The exposure calculation for the leverage ratio is generally followed the accounting
exposure measure of exposure. In order to measure the exposure consistently with financial
accounts, the following is applied by the bank:
i. On balance sheet and non-derivative exposures are net of specific provisions and
valuation adjustments (e.g. surplus/deficit on Available for sale (AFS)/Held-for-trading
(HFT) positions).

ii. Physical or financial collateral, guarantee or credit risk mitigation purchased is not
allowed to reduce on-balance sheet exposure.
iii. Netting of loans and deposits is not allowed.
On Balance Sheet Items
Bank included items using their accounting balance sheet for the purposes of the
leverage ratio. In addition, the exposure measure is included the following treatments
for Securities Financing Transactions (e.g. repo, reverse repo etc.):
Repurchase agreements and securities financing:

Securities Financing Transactions (SFT) are a form of secured funding and therefore
an important source of balance sheet leverage that included in the leverage ratio.
Therefore Banks calculate SFT for the purposes of leverage ratio by applying:

• The accounting measure of exposure; and

• Without netting various long and short positions with the same counterparty
Off Balance Sheet Items
Bank calculates the Off-Balance Sheet (OBS) items specified in Risk based Capital
Adequacy Guidelines issued by Bangladesh Bank vide BRPD circular no. 18 dated 21
December 2014. OBS exposures calculation is given below for considering Leverage
Ratio of the Bank:

Notional Exposure
Exposures Types CCF
amount
BDT/Crore BDT/Crore
Direct credit substitutes 100% 2,228 2,228
Performance related contingencies 50% 1,100 550
Short-term self-liquidating trade letters of
20% 1,170 234
credit
Lending of securities or posting of securities
100% - -
as collateral

Other commitments with certain drawdown 100% - -

Commitments with original maturity of one

20% 1,539 308
year or less
Commitments with original maturity of over
50% - -
one year
Other commitments that can be
0% 1,405 -
unconditionally cancelled by any time
1%
Market related Off-Balance sheet exposure 146.13 1.46
Total 7,587 3,321
14
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

BDT/Crore
(b) 31.12.2018
Leverage Ratio 5.49%
On balance sheet exposure 31,744.72
Off balance sheet exposure 3,459.96
Total deduction from On and Off-Balance Sheet Exposure 213.79
Total exposure 34,990.89

K) Remuneration

Qualitative Disclosure

(a) Information relating to the bodies that oversees remuneration.

> Name of the bodies that oversees
The primary body that currently oversees remuneration practices includes: In charge
remuneration
of remuneration & payroll, Head of HR, and Managing Director of the Bank.

> Name, composition and mandate Board of Directors of the bank is the main body which approves the remuneration
of the main body overseeing proposals/changes as when needed based on the recommendation of the primary
remuneration. body
>
External consultants whose Periodically services of external consultants are sought in the process of
advice has been sought, the body remuneration update/survey in every 2/3 years to ensure competitive effectiveness of
by which they were remuneration structure. Survey focuses on gross remuneration package in each job
commissioned, and in what areas grade i.e. minimum, mid point and maximum in the given scale. Gross salary includes
of the remuneration process. different elements like Basic pay and other admissible emoluments.

> A description of the scope of the Key objective of the remuneration policy is to offer competitive remuneration package
bank’s remuneration policy (e.g. to employees in each job grade commensurate with job responsibilities irrespective of
by regions, business lines), any location/region. It is done through periodical remuneration survey with local
including the extent to which it is comparators engaging consultant. Similarly, for foreign subsidiaries, it is done in
applicable to foreign subsidiaries context of specific country remuneration market status to remain competitive in the
and branches. foreign market that ensures attracting and retention of the best performers.

> A description of the types of Divisional Heads, Departmental Heads, Senior Members of Management, Head of
employees considered as Branches/Business Units supported by MANCOM are the material risk takers in
material risk takers and as senior business.
managers, including the number
of employees in each group.
(b) Information relating to the design and structure of remuneration processes.
> An overview of the key features A scale of salary structure with a minimum – mid point and maximum package for
and objectives of remuneration each job grade is available The package includes: Basic pay, Housing, Medical,
policy. conveyance (when car is not allowed), Utilities, Maintenance, Leave fare assistance,
Personal pay (in appropriate cases) etc.
Salary progression in the form of annual merit pay linked to individual performance
within the scale etc. Service benefits like Provident Fund, Gratuity, Group term
insurance, festival bonus, car facilities and related cost as per bank's service rules are
components of total compensation.
Objective of remuneration policy is to pay competitively within industry norms in order
to attract and retain good employees,
Pay for performance link to merit measured in terms of delivery of set KPI annually
(annual merit pay)
Bank's service rules stands as a guide besides instructions and guidance from the
Board from time to time

15
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018
(b) > Whether the remuneration Remuneration structure is updated periodically usually in an interval of 2/3 years to
committee reviewed the firm’s remain competitive in the market with the approval of the Board of Directors of the
remuneration policy during the Bank. No major change made in the recent past
past year, and if so, an overview
of any changes that were made.

> A discussion of how the bank Risks and compliance employees carry out their job independently as per terms of
ensures that risk and compliance reference. In respect of remuneration, they are treated equally in line with other
employees are remunerated regular employees
independently of the businesses
they oversee.
(c) Description of the ways in which current and future risks are taken into account in the remuneration processes.
> An overview of the key risks that The business risks including credit/default risk, compliance and reputational risk,
the bank takes into account when financial and liquidity risk are considered while implementing remuneration measures
implementing remuneration for each employee/group of employees.
measures.
> An overview of the nature and Different set of measures are in practice based on nature of business lines/segments
type of the key measures used to etc. these measures are primarily focused on the business targets/goals set for each
take account of these risks, area of operation, branch vis-à-vis actual results achieved as of the reporting date.
including risks difficult to measure The most important tools and indicators used for measuring the risks are asset quality
(NPL ration), LD ratio, Net Interest Margin (NIM), provision coverage ratio, cost income
ratio, cost of fund, growth of net profit as well as non-financial indicators i.e.
compliance status with regulatory norms/instructions, service delivery etc. are brought
to all concerned of the bank from time to time.

> A discussion of the ways in which Individual employee’s performance standards are set in term of financial and non-
these measures affect financial indicators (KPI) early each year which are expected to be delivered by them
remuneration. individually. Performance evaluation at the end of year results in variation in
performance outcome (KPI fully achieved, partially achieved and not achieved) leading
to variation in performance reward (annual merit pay) thus affects in remuneration.

> A discussion of how the nature Based on differentiating performance outcome employees are rewarded annually.
and type of these measures has Differentiating reward i.e. good, better and best impact on competitive motivation at
changed over the past year and work as usual. No material change in remuneration package.
reasons for the change, as well
as the impact of changes on
remuneration.
(d) Description of the ways in which the bank seeks to link performance during a performance measurement period with
levels of remuneration.
> An overview of main performance Performance matrix in terms of broad KPI is set by the Board for the Management
metrics for bank, top-level covering business lines/different segments of businesses each year. The Management
business lines and individuals. in turn develops strategies and set performance KPI for individual employees across
functions/business to activate and achieve the set targets/KPI in delivering business
results. The most common KPIs are loan deposit ratio, cost of fund, cost income ratio,
yield on loan, quality of asset, profit target, provision coverage ration, capital to risk
weighted ratio, ROE, ROA, Liquidity position, maintenance of CRR and SLR etc.
beside non-financial KPI.
> A discussion of how amounts of Annual merit pay i.e. merit increment of employees are linked to performance outcome
individual remuneration are linked based on individual performance criteria (KPI). Merit increase is also liked to other
to bank-wide and individual elements of remuneration package, so aggregate of all employees has reasonable
performance. impact on the remuneration package and not insignificant.

> A discussion of the measures the No documented criteria as such is available to adjust remuneration of employees in
bank will in general implement to the event of weak business performance matrix. If profit target is not met in a given
adjust remuneration in the event year, generally annual merit increment is lower.
that performance metrics are
weak

16
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

(e) Description of the ways in which the bank seek to adjust remuneration to take account of longer-term performance.

> A discussion of the bank’s policy The concept of variable remuneration or for that matter deferred payment system is
on deferral and vesting of not in practice. A share of profit in the form of incentive bonus is allowed to employees
variable remuneration and, if the as approved by the board when profit target is favourably met.
fraction of variable remuneration
that is deferred differs across
employees or groups of
employees, a description of the
factors that determine the fraction
and their relative importance.

> A discussion of the bank’s policy

and criteria for adjusting deferred
remuneration before vesting and
(if permitted by national law) after Not applicable
vesting through clawback
arrangements.

(f) Description of the different forms of variable remuneration that the bank utilises and the rationale for using these
different forms.
> An overview of the forms of
variable remuneration offered
(i.e. cash, shares and share- Not applicable
linked instruments and other
forms
> A discussion of the use of the
different forms of variable
remuneration and, if the mix of
different forms of variable
remuneration differs across Not applicable
employees or groups of
employees), a description the
factors that determine the mix
and their relative importance.

Quantitative Disclosure

(g) Number of meetings held by the The main body that oversees remunerations organizes meeting as & when needed to
main body overseeing remuneration discuss issues arising in the process of administration.
during the financial year and
remuneration paid to its member.

>
Number of employees having
received a variable remuneration Not applicable (Variable remuneration practice is not available)
award during the financial year.

> Number and total amount of Bank has disbursed 02 (two) festival bonus among the employees amounting to taka
guaranteed bonuses awarded 184,021,674 during the year 2018.
during the financial year.

> Number and total amount of sign-

on awards made during the Not applicable
financial year.

17
AB Bank Limited

Disclosures on Risk Based Capital (Basel III)

Based on 31 December 2018

g) > Number and total amount of

severance payments made None during the financial year
during the financial year
> Total amount of outstanding
deferred remuneration, split into
Not applicable
cash, shares and share-linked
instruments and other forms.

> Total amount of deferred Not applicable

remuneration paid out in the
financial year.

(h) Breakdown of amount of remuneration awards for the financial year to show:
Fixed and variable. BDT 283.49 crore (Fixed including annual merit pay)
Deferred and non-deferred. Not applicable
Different forms used (cash,
shares and share linked Not applicable
instruments, other forms).
Quantitative information about
employees’ exposure to implicit and
explicit adjustments of deferred
remuneration and retained
remuneration:

> Total amount of outstanding

deferred remuneration and
retained remuneration exposed to Not applicable
ex post explicit and/or implicit
adjustments.
> Total amount of reductions during
the financial year due to ex post Not applicable
explicit adjustments.
> Total amount of reductions during
the financial year due to ex post Not applicable
implicit adjustments.

18