Ahli United Bank: Interim Condensed Consolidated Financial Statements (Reviewed) - 31 March 2019

Transcription

1. Ahli United Bank B .S.C. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 MARCH 2019
3. Ahli United Bank B .S.C. INTERIM CONSOLIDATED STATEMENT OF INCOME Three months ended 31 March 2019 (Reviewed) Three months ended Note 31 March 2018 2019 USD'000 USD'000 Interest income Interest expense 458,866 215,600 384,182 154,852 Net interest income 243,266 229,330 34,381 9,807 24,432 37,600 11,138 14,540 Fees and other income 68,620 63,278 OPERATING INCOME 311,886 292,608 13,489 13,253 298,397 279,355 47,654 8,469 23,831 45,590 5,218 25,071 79,954 75,879 218,443 203,476 9,533 11,303 208,910 192,173 16,050 17,459 192,860 174,714 2.2 2.0 Fees and commissions Trading income Investment income and others 3 Provision for credit losses 7c NET OPERATING INCOME Staff costs Depreciation Other operating expenses 2.3 OPERATING EXPENSES PROFIT BEFORE TAX Tax expense and zakat NET PROFIT FOR THE PERIOD Net profit attributable to non-controlling interests NET PROFIT ATTRIBUTABLE TO THE OWNERS OF THE BANK EARNINGS PER SHARE ATTRIBUTABLE TO THE OWNERS OF THE BANK FOR THE PERIOD Basic & diluted earnings per ordinary share (US cents) Meshal AbdulAziz Alothman Chairman 4 Mohammad J. Al-Marzooq Deputy Chairman Adel A. El-Labban Group Chief Executive Officer & Managing Director The _______________________________________________________________________________________________ attached notes 1 to 12 form part of these interim condensed consolidated financial statements 2
4. Ahli United Bank B .S.C. INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Three months ended 31 March 2019 (Reviewed) Three months ended 31 March 2018 2019 USD'000 USD'000 Net profit for the period 208,910 192,173 Other comprehensive income (OCI) Items that will not be reclassified to consolidated statement of income Net change in fair value of financial assets measured at fair value through OCI Net change in pension fund reserve 288 2,506 238 (3,688) Items that may be reclassified subsequently to consolidated statement of income Foreign currency translation adjustments Net change in fair value of financial assets measured at fair value through OCI Net change in fair value of cash flow hedges 6,856 17,476 7,362 (5,475) (12,770) 5,807 Other comprehensive income for the period 11,537 7,063 Total comprehensive income for the period 220,447 199,236 Total comprehensive income attributable to non-controlling interests 17,594 20,626 Total comprehensive income attributable to owners of the Bank 202,853 178,610 _____________________________________________________________________________________________ The attached notes 1 to 12 form part of these interim condensed consolidated financial statements 3
5. Ahli United Bank B .S.C. INTERIM CONSOLIDATED BALANCE SHEET 31 March 2019 (Reviewed) 31 March 2019 US$ ’000 (Audited) 31 December 2018 US$ ’000 1,289,443 2,413,405 2,958,591 20,117,438 8,079,520 314,814 237,417 797,145 296,944 480,036 1,390,470 1,918,727 3,061,818 19,503,961 7,568,528 318,802 265,794 764,094 237,064 478,319 36,984,753 35,507,577 4,679,703 2,173,560 23,461,260 1,708,911 192,812 3,752,792 1,832,134 23,660,035 1,097,911 192,697 32,216,246 30,535,569 Ordinary share capital Treasury shares Reserves 2,193,611 (13,190) 1,536,896 1,992,541 (13,190) 1,929,350 Equity attributable to the owners Perpetual Tier 1 Capital Securities Non-controlling interests 3,717,317 600,000 451,190 3,908,701 600,000 463,307 TOTAL EQUITY 4,768,507 4,972,008 36,984,753 35,507,577 Note ASSETS Cash and balances with central banks Treasury bills and deposits with central banks Deposits with banks Loans and advances Non-trading investments Investment in associates Investment properties Interest receivable and other assets Premises and equipment Goodwill and other intangible assets 7 8 TOTAL ASSETS LIABILITIES AND EQUITY LIABILITIES Deposits from banks Borrowings under repurchase agreements Customers’ deposits Interest payable and other liabilities Subordinated liabilities 9 TOTAL LIABILITIES EQUITY TOTAL LIABILITIES AND EQUITY Meshal AbdulAziz Alothman Chairman Mohammad J. Al-Marzooq Deputy Chairman Adel A. El-Labban Group Chief Executive Officer & Managing Director _______________________________________________________________________________________________ The attached notes 1 to 12 form part of these interim condensed consolidated financial statements 4
6. Ahli United Bank B .S.C. CONSOLIDATED STATEMENT OF CASH FLOWS Three months ended 31 March 2019 (Reviewed) Three months ended 31 March 2018 2019 US$ ’000 US$ ’000 OPERATING ACTIVITIES Profit before tax Adjustments for: Depreciation Investment income Provision for credit losses Fair Value of Employee Share Purchase Plan (ESPP) charge Share of profit from associates 218,443 203,476 8,469 (16,829) 13,489 352 (9,560) 5,218 (4,427) 13,253 261 (9,345) 214,364 208,436 76,026 (284,274) 371,611 (617,500) (22,320) 926,911 341,426 (198,775) 109,037 58,586 (445,623) (265,052) (544,544) (60,648) (181,456) (203,862) 902,248 122,260 Cash from/(used in) operations Income tax paid 916,506 (7,720) (409,655) (10,655) Net cash from/(used in) operating activities 908,786 (420,310) Purchase of non-trading investments Proceeds from sale or redemption of non-trading investments Net movement in investment properties Net increase in premises and equipment (722,454) 233,237 28,183 (10,000) (810,786) 474,869 3,322 (8,516) Net cash used in investing activities (471,034) (341,111) Capital increase due to Mandatory Share Plan (MSP) & ESPP shares 4,200 17,797 Net cash from financing activities 4,200 17,797 441,952 (743,624) 11,835 2,855 Cash and cash equivalents at 1 January 3,088,964 2,528,722 CASH AND CASH EQUIVALENTS AT 31 MARCH 3,542,751 1,787,953 878,915 659,499 2,663,836 1,128,454 3,542,751 1,787,953 Operating profit before changes in operating assets and liabilities Changes in: Mandatory reserve deposits with central banks Treasury bills and deposits with central banks Deposits with banks Loans and advances Interest receivable and other assets Deposits from banks Borrowings under repurchase agreements Customers’ deposits Interest payables and other liabilities INVESTING ACTIVITIES FINANCING ACTIVITIES INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Net foreign exchange difference Comprising: Cash and balances with central banks, excluding mandatory reserve deposits Deposits with banks, central banks & treasury bills with an original maturity of three months or less ____________________________________________________________________________________________ The attached notes 1 to 12 form part of these interim condensed consolidated financial statements 5
7. Ahli United Bank B .S.C. INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Three months ended 31 March 2019 (Reviewed) Attributable to the owners Reserves Perpetual Balance at 1 January 2019 Donations Ordinary share capital US$ ’000 Treasury shares US$ ’000 Share premium US$ ’000 Statutory reserve US$ ’000 1,992,541 (13,190) 763,660 586,481 634,672 Tier 1 Capital Securities US$ ’000 Noncontrolling interests US$ ’000 Total US$ ’000 (455,301) 1,929,350 600,000 463,307 4,972,008 - - - - - - 1,651 - - 2,549 - - Transfer from OCI reserve Ordinary share dividend - - - - (33) - - - - 1,082 Dividends of subsidiaries - - - - - - - - - - - - - - - - - 192,860 629,162 Additional shares issued Purchase of treasury shares - 399,838 Total reserves US$ ’000 199,419 Bonus shares issued - Retained Proposed earnings appropriations US$ ’000 US$ ’000 Other reserves (note 10) US$ ’000 (199,419) - (1,000) - (1,000) - - (1,000) - - (199,419) - - - - - 2,549 - - - 4,200 - - - (33) - - (397,756) - - (397,756) - - (29,716) (29,716) 352 352 - - 9,993 202,853 - - (444,956) 1,536,896 (398,838) 5 (28) Fair value amortisation of share based transactions - 352 Total comprehensive income for the period Balance at 31 March 2019 2,193,611 (13,190) 766,209 586,481 600,000 17,594 220,447 451,190 4,768,507 ________________________________________________________________________________________________________________________________________________ The attached notes 1 to 12 form part of these interim condensed consolidated financial statements 6
8. Ahli United Bank B .S.C. INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Three months ended 31 March 2019 (Reviewed) Attributable to the owners Reserves Balance at 31 December 2017 Ordinary share capital US$ ’000 Treasury shares US$ ’000 Share premium US$ ’000 Statutory reserve US$ ’000 Retained earnings US$ ’000 Proposed appropriations US$ ’000 Other reserves (note 10) US$ ’000 1,889,213 (11,661) 754,308 516,728 799,366 342,578 (474,910) Total reserves US$ ’000 Perpetual Tier 1 Capital Securities US$ ’000 1,938,070 600,000 Noncontrolling interests US$ ’000 Total US$ ’000 472,532 4,888,154 Transition adjustment on adoption of IFRS 9 - - - - (249,543) - 54,644 (194,899) (30,432) - (225,331) Restated balance at 1 January 2018 Donations Bonus shares issued Additional shares issued Transfer from OCI reserve Ordinary share dividend Dividends of subsidiary Fair value amortisation of share based transactions Total comprehensive income for the period Balance at 31 March 2018 1,889,213 - (11,661) 754,308 516,728 549,823 - - - 94,883 - - - (94,883) 8,445 - - - (4,693) 9,352 - - - - - - 818 - - - - - - - - - - 1,992,541 (11,661) 763,660 516,728 342,578 (420,266) 1,743,171 600,000 442,100 4,662,823 (1,000) - (1,000) - - - - (94,883) - - - - 9,352 (4,693) - - 17,797 (4,693) - (340,760) - - (341,578) - 261 261 - 174,714 - 3,896 178,610 - 625,779 - (416,109) 1,490,058 600,000 (23,667) - (1,000) (340,760) (23,667) 261 20,626 199,236 439,059 4,509,997 ________________________________________________________________________________________________________________________________________________ The attached notes 1 to 12 form part of these interim condensed consolidated financial statements 7
9. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 1 CORPORATE INFORMATION The parent company, Ahli United Bank B.S.C. ("AUB" or "the Bank") was incorporated in the Kingdom of Bahrain on 31 May 2000 originally as a closed company and changed on 12 July 2000 to a public shareholding company by Amiri Decree number 16/2000. The Bank and its subsidiaries (collectively known as "the Group") are engaged in retail, commercial, islamic and investment banking business, global fund management and private banking services through branches in the Kingdom of Bahrain, the State of Kuwait, the Arab Republic of Egypt, Republic of Iraq, the United Kingdom and an overseas branch in Dubai International Financial Centre (DIFC). It also operates through its associates in Libya and in the Sultanate of Oman. The Bank operates under a retail banking license issued by the Central Bank of Bahrain. The Bank also engages in life insurance business through it's subsidiary, Al Hilal Life B.S.C. (c). The Bank's registered office is located at Building 2495, Road 2832, Al Seef District 428, Kingdom of Bahrain. The interim condensed consolidated financial statements of the Group for the three-month period ended 31 March 2019 were authorised for issue in accordance with a resolution of the Directors dated 18 April 2019. 2 BASIS OF PREPARATION AND ACCOUNTING POLICIES The interim condensed consolidated financial statements of the Bank and the Group are prepared in accordance with International Accounting Standard IAS 34, Interim Financial Reporting ("IAS 34"). The accounting policies used in the preparation of the interim condensed consolidated financial statements are consistent with those used in the preparation of the annual consolidated financial statements for the year ended 31 December 2018, except for changes to the accounting for adoption of IFRS 16: Leases from 1 January 2019 as explained below. IFRS 16 Leases 2.1 IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model. Lessor accounting under IFRS 16 is substantially unchanged from IAS 17. Lessors will continue to classify leases as either operating or finance leases using similar principles as in IAS 17. Therefore, IFRS 16 did not have an impact for leases where the Group is the lessor. Prior to the adoption of IFRS 16, the Group accounted and classified each of its leases (as lessee) at the inception date as either a finance lease or an operating lease in accordance with IAS 17. 2.2 Upon adoption of IFRS 16, the Group applied a single recognition and measurement approach for all leases that it is the lessee, except for short-term leases and leases of low-value assets. The Group recognised lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. The Group adopted IFRS 16 using the modified retrospective method of adoption with the date of initial application of 1 January 2019 and accordingly, the comparative information is not restated. The Group elected to use the transition practical expedient allowing the standard to be applied only to contracts that were previously identified as leases applying IAS 17 and IFRIC 4 at the date of initial application. 2.3 The Group has recorded right-of-use assets representing the right to use the underlying assets under premises and equipment and the corresponding lease liabilities to make lease payments under other liabilities. The rightof-use assets and lease liabilities recorded as at 1 January 2019 amounted to US$ 60.6 million, with no impact on retained earnings. When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate of 2.5% at 1 January 2019. Lease costs for the period ended 31 March 2019 relating to right-of-use assets amount to US$ 2.5 million and are included under depreciation expense. _______________________________________________________________________________________________ 8
10. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 2 BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued) IFRS 16 Leases (continued) Summary of new accounting policies 2.4 The accounting policies of the Group upon adoption of IFRS 16 are as follows: a) Right of use assets The Group recognises right of use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right of use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognised right of use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right of use assets are subject to impairment. The carrying value of right-of-use assets are recognised under premises and equipment in the balance sheet. b) Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset and is recognised under other liabilities in the balance sheet. _______________________________________________________________________________________________ 9
11. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 3 INVESTMENT INCOME AND OTHERS Investment income and others include income amounting to US$ 2,604 thousand for the three months ended 31 March 2019 (31 March 2018: US$ 2,636 thousand) which is of a seasonal nature. 4 EARNINGS PER ORDINARY SHARE Three months ended 31 March Net profit for the period attributable to Bank's ordinary equity shareholders for basic and diluted earnings per share computation Weighted average ordinary shares outstanding during the period adjusted for bonus shares (in millions) Basic & diluted earnings per ordinary share (US cents) Issued and fully paid ordinary shares of US$ 0.25 each (in millions) Number of treasury shares (in millions) 5 2019 US$ ’000 2018 US$ ’000 192,860 174,714 8,746 8,745 2.2 2.0 8,774.4 7,970.2 23.8 19.1 31 March 2019 US$ ’000 (Audited) 31 December 2018 US$ ’000 2,660,930 135,876 461,806 2,600,252 126,455 576,710 3,258,612 3,303,417 CONTINGENT LIABILITIES The Group had the following credit related contingent liabilities: Guarantees Acceptances Letters of credit 6 SEGMENT INFORMATION For management reporting purposes the Group is organised into four major business segments: - Retail banking Corporate banking Treasury and investments Private banking Transactions between segments are conducted at estimated market rates on an arm's length basis. Interest is charged/credited to business segments based on a pool rate, which approximates the cost of funds. ________________________________________________________________________________________________ 10
12. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 6 SEGMENT INFORMATION (Continued) Segmental information for the period was as follows: Retail banking US$ ’000 Corporate banking US$ ’000 Treasury & investments US$ ’000 Private banking US$ ’000 Total US$ ’000 Three months ended 31 March 2019: Net interest income Fees and commissions Trading, investment income and others 49,437 8,984 778 90,945 19,274 3,608 80,348 769 29,845 22,536 5,354 8 243,266 34,381 34,239 OPERATING INCOME 59,199 113,827 110,962 27,898 311,886 Provision for credit losses 1,516 11,423 72 478 13,489 NET OPERATING INCOME 57,683 102,404 110,890 27,420 298,397 Operating expenses 28,437 19,594 23,873 8,050 79,954 PROFIT BEFORE TAX 29,246 82,810 87,017 19,370 218,443 9,533 Tax expense NET PROFIT FOR THE PERIOD 208,910 16,050 Less : Non - controlling interests NET PROFIT ATTRIBUTABLE TO THE OWNERS OF THE BANK Inter segment interest included in net interest income above 192,860 69,997 (103,770) 22,396 11,377 - Retail banking US$ ’000 Corporate banking US$ ’000 Treasury & investments US$ ’000 Private banking US$ ’000 Total US$ ’000 Net interest income Fees and commissions Trading, investment income and others 43,633 8,038 1,041 109,789 21,960 4,726 - 58,766 442 19,883 - 17,142 7,160 -28 229,330 37,600 25,678 OPERATING INCOME 52,712 136,475 79,091 24,330 292,608 Provision for credit losses 2,691 12,049 NET OPERATING INCOME 50,021 124,426 80,375 24,533 279,355 Operating expenses 25,621 18,666 22,802 8,790 75,879 PROFIT BEFORE TAX 24,400 105,760 57,573 15,743 203,476 Three months ended 31 March 2018: (1,284) (203) Tax expense 11,303 192,173 NET PROFIT FOR THE PERIOD 17,459 Less : Non-controlling interests NET PROFIT ATTRIBUTABLE TO THE OWNERS OF THE BANK Inter segment interest included in net interest income above 13,253 174,714 48,695 (69,005) 14,527 5,783 - ________________________________________________________________________________________________ 11
13. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 7 LOANS AND ADVANCES a) Carrying amount of loans and advances Stage 1 US$ ’000 Loans and advances High standard grade Standard grade Impaired Less: ECL allowances 274,542 2,380,566 - 370,969 12,437,206 8,135,236 370,969 17,917,334 2,655,108 370,969 20,943,411 (129,125) (379,135) (317,713) (825,973) 53,256 20,117,438 31 December 2018 Stage 2 Stage 3 US$ ’000 US$ ’000 Total US$ ’000 Stage 1 US$ ’000 Less: ECL allowances Total US$ ’000 12,162,664 5,754,670 - 17,788,209 Loans and advances High standard grade Standard grade Impaired 31 March 2019 Stage 2 Stage 3 US$ ’000 US$ ’000 2,275,973 12,016,100 5,146,227 - 452,471 2,324,630 - 379,779 12,468,571 7,470,857 379,779 17,162,327 2,777,101 379,779 20,319,207 (125,066) (365,332) (324,848) (815,246) 54,931 19,503,961 2019 Stage 2 Stage 3 US$ ’000 US$ ’000 Total US$ ’000 17,037,261 2,411,769 b) ECL allowance movements of loans and advances Stage 1 US$ ’000 At 1 January Add/(Less): Transfer from stage 1 Transfer from stage 2 Net remeasurement of ECL allowances for the period Amounts written off during the period Exchange rate and other adjustments 125,066 365,332 324,848 815,246 (1,856) - 762 (4,021) 1,094 4,021 - 5,943 17,634 (14,175) 9,402 (16) (16) 1,941 1,341 At 31 March 129,125 317,713 825,973 (28) (572) 379,135 _________________________________________________________________________________________________ 12
14. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 7 LOANS AND ADVANCES (continued) b) ECL allowance movements of loans and advances (continued) Stage 1 US$ ’000 2018 Stage 2 Stage 3 US$ ’000 US$ ’000 589,068 At 1 January Transition adjustment on adoption of IFRS 9 At 1 January - restated Add/(Less): Transfer from stage 1 Transfer from stage 2 Net remeasurement of ECL allowances for the period Amounts written off during the period Exchange rate and other adjustments At 31 March Total US$ ’000 260,259 145,982 378,666 324,679 849,327 (6,128) - 4,942 (6,594) 1,186 6,594 - 13,713 (1,568) 13,753 25,898 (7,411) (7,411) - - (47) 1,245 10,616 11,814 153,520 376,691 349,417 879,628 c) Provision for credit losses The net ECL measurement for provision for credit losses in the interim consolidated statement of income is determined as follows: Three months ended 31 March 2018 2019 US$ ’000 US$ ’000 Net remeasurement of ECL on loans and advances (note 7 b) Recoveries from loans and advances during the period (from fully provided loans written off in previous years) Net remeasurement of ECL for non-trading investments (note 8 b) Net remeasurement of ECL on off-balance sheet exposures and others 9,402 25,898 (5,379) 72 9,394 (3,235) (1,284) (8,126) Provision for credit losses 13,489 13,253 _________________________________________________________________________________________________ 13
15. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 8 NON-TRADING INVESTMENTS a) Carrying amount of non-trading investments Stage 1 US$ ’000 Non trading investments High standard grade Standard grade Less: ECL allowances Equity instruments and funds at fair value 157,129 - 5,414,729 2,418,166 7,675,766 157,129 - 7,832,895 (10,479) (3,032) - (13,511) - - - 260,136 - 8,079,520 31 December 2018 Stage 2 Stage 3 US$ ’000 US$ ’000 Total US$ ’000 Stage 1 US$ ’000 Less: ECL allowances Equity instruments and funds at fair value Total US$ ’000 5,414,729 2,261,037 7,665,287 Non trading investments High standard grade Standard grade 31 March 2019 Stage 2 Stage 3 US$ ’000 US$ ’000 154,097 5,022,919 2,123,813 4,909 151,944 - 5,027,828 2,275,757 7,146,732 156,853 - 7,303,585 (9,729) (3,722) - (13,451) - - - 278,394 - 7,568,528 7,137,003 153,131 Equity instruments and funds held at fair value include investments amounting to US$ 148.5 million (31 December 2018: US$ 168.7 million) which are designated as FVTPL. b) ECL allowance movements of non-trading investments Stage 1 US$ ’000 At 1 January Add/(Less): Transfer from stage 1 Net remeasurement of ECL allowances for the period (note 7 c) Exchange rate and other adjustments At 31 March 2019 Stage 2 Stage 3 US$ ’000 US$ ’000 Total US$ ’000 9,729 3,722 - 13,451 (17) 17 - - 779 (707) - 72 - (12) (12) - 10,479 3,032 - 13,511 _________________________________________________________________________________________________ 14
16. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 8 NON-TRADING INVESTMENTS (continued) b) ECL allowance movements of non-trading investments (continued) Stage 1 US$ ’000 2018 Stage 2 Stage 3 US$ ’000 US$ ’000 39,221 At 1 January Transition adjustment on adoption of IFRS 9 At 1 January - restated Add/(Less): Net remeasurement of ECL allowances for the period (note 7 c) Exchange rate and other adjustments At 31 March 9 Total US$ ’000 (23,404) 12,847 2,520 450 15,817 (417) (867) - (1,284) (213) 450 (450) (213) 12,217 2,103 - 14,320 INTEREST PAYABLE AND OTHER LIABILITIES Interest payable and other liabilities includes the year 2018 related dividend payable amounting to US$ 397,756 thousands. _________________________________________________________________________________________________ 15
17. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL 31 March 2019 (Reviewed) 10 MOVEMENT IN OTHER RESERVES Balance at 1 January 2019 Currency translation adjustments Transfers to consolidated statement of income Net fair value movements Capital reserve US$ ’000 Property revaluation reserve US$ ’000 Foreign exchange translation reserve US$ ’000 OCI reserve US$ ’000 8,480 35,225 (435,370) 3,639 (17,021) 5,277 - - (1) Cumulative changes in Cash flow hedge ESPP reserve reserve US$ ’000 US$ ’000 Pension fund reserve US$ ’000 Total other reserves US$ ’000 - (50,254) (455,301) - - - 5,276 (224) (5,251) - - (224) 2,402 - - - - - 352 2,506 11,325 (22,496) 352 (47,748) (444,956) Cumulative changes in Cash flow hedge ESPP reserve reserve US$ ’000 US$ ’000 Pension fund reserve US$ ’000 Total other reserves US$ ’000 - - - 7,653 - - - 33 - - - 8,480 35,224 (430,093) Capital reserve US$ ’000 Property revaluation reserve US$ ’000 Foreign exchange translation reserve US$ ’000 OCI reserve US$ ’000 8,480 35,568 (423,986) (12,981) (26,659) - (55,332) (474,910) - - 54,644 - - - 54,644 8,480 35,568 (423,986) 41,663 (26,659) - (55,332) (420,266) 14,422 - - - - 14,425 - - 289 - - Transfers to retained earnings Fair value movements and others Balance at 31 March 2019 Balance at 31 December 2017 Transition adjustment on adoption of IFRS 9 Balance at 1 January 2018 -restated Currency translation adjustments Transfers to consolidated statement of income Net fair value movements - - 3 - 33 2,858 289 - - - (17,341) 5,518 - - (11,823) - - - 4,693 - - - 4,693 - - - - - 261 (3,688) (3,427) 8,480 35,571 29,015 (20,852) 261 (59,020) (416,109) Transfers to retained earnings Fair value movements and others Balance at 31 March 2018 (409,564) ________________________________________________________________________________________________ 16
18. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL 31 March 2019 (Reviewed) 11 FAIR VALUE MEASUREMENT The fair value of financial assets and financial liabilities, with the exception of non-trading investments that are carried at amortised cost, approximate their carrying values. The fair value of the non-trading investments held at amortised cost is US$ 6,843.0 million as at 31 March 2019 (31 December 2018: US$ 6,182.9 million). Carrying value of these non-trading investments is US$ 6,861.3 million as at 31 March 2019 (31 December 2018: US$ 6,338.8 million). The Group's primary medium and long-term financial liabilities are the subordinated liabilities. The fair values of these financial liabilities are not materially different from their carrying values, since these liabilities are repriced at intervals of three or six months, depending on the terms and conditions of the instrument and the resultant applicable margins approximate the current spreads that would apply for borrowings with similar maturities. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:Level 1 : Quoted (unadjusted) prices in active markets for identical assets or liabilities; Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and Level 3 : Techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data. Level 1 US$ ’000 Equity instruments and funds at fair value Debt instruments (FVTOCI) Derivative assets Derivative liabilities 148,111 945,150 113 64 Level 1 US$ ’000 Equity instruments and funds at fair value Debt instruments (FVTOCI) Derivative assets Derivative liabilities 168,403 938,394 260 31 March 2019 Level 2 Level 3 US$ ’000 US$ ’000 72,977 12,952 99,985 280,316 Total US$ ’000 39,048 - 260,136 958,102 100,098 280,380 31 December 2018 Level 2 Level 3 US$ ’000 US$ ’000 Total US$ ’000 70,912 12,950 117,888 186,896 39,079 - 278,394 951,344 117,888 187,156 During the three month period ended 31 March 2019 and 31 March 2018 there have been no transfers between Levels 1, 2 and 3. __________________________________________________________________________________________________ 17
19. Ahli United Bank B .S.C. NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 31 March 2019 (Reviewed) 12 RELATED PARTY TRANSACTIONS The Group enters into transactions with major shareholders, associates, directors, senior management and companies which are controlled, jointly controlled or significantly influenced by such parties in the ordinary course of business at arm's length. All the loans and advances to related parties are performing and are subject to ECL. The income, expense and the period end balances in respect of related parties included in the interim consolidated financial statements were as follows: 2019 Senior management For the three months ended 31 March 2019 Interest income Interest expense Fees and commissions Short term employee benefits End of service benefits Directors' fees and related expenses As of 31 March 2019 Deposits with banks Loans and advances Deposits from banks Customers’ deposits Subordinated liabilities Commitments and contingent liabilities Derivative assets Non Executive Management Directors Directors US$ ’000 US$ ’000 Major shareholders US$ ’000 Associates US$ ’000 44,958 - 947 407 1,071 - 1,888 553 133 611 6,741,992 9,815 - 62,207 91,935 44,184 1,082 144,071 96,758 190,275 - Others US$ ’000 Total US$ ’000 74 7 1 3,006 438 - 9 4 720 39 - 2,918 45,929 1,205 3,726 477 611 5,477 5,151 - 921 1,221 - 62,207 150,469 91,935 6,845,122 9,815 234,459 1,082 2018 Senior management For the three months ended 31 March 2018 Interest income Interest expense Fees and commissions Short term employee benefits End of service benefits Directors' fees and related expenses As of 31 December 2018 Deposits with banks Loans and advances Deposits from banks Customers’ deposits Subordinated liabilities Commitments and contingent liabilities Derivatives liabilities Major shareholders US$ ’000 Associates US$ ’000 Non Executive Directors US$ ’000 25,517 - 1,011 8 588 - 1,895 212 16 584 52 30 2 2,846 431 - 13 8 1 855 228 - 2,971 25,775 607 3,701 659 584 7,057,754 9,700 - 120,148 25,865 137,818 96,290 800 172,261 96,846 161,172 - 7,705 5,297 - 1,024 1,111 - 120,148 206,855 137,818 7,161,008 9,700 257,462 800 Management Directors US$ ’000 Others US$ ’000 Total US$ ’000 _______________________________________________________________________________________________________ 18