Emirates Investment Bank: Condensed Consolidated Interim Financial Information - 30 June 2022

Transcription

1. Emirates Investment Bank P .J.S.C. CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION For the six month period ended 30 June 2022
2. Emirates Investment Bank P .J.S.C. Review report and condensed consolidated interim financial information for the six month period ended 30 June 2022 Contents Pages Review report on condensed consolidated interim financial information 1 Condensed consolidated interim statement of financial position 2 Condensed consolidated interim statement of profit or loss 3 Condensed consolidated interim statement of other comprehensive income 4 Condensed consolidated interim statement of cash flows 5 Condensed consolidated interim statement of changes in equity Notes to the condensed consolidated interim financial information 6-7 8 - 24
5. Emirates Investment Bank P .J.S.C. CONDENSED CONSOLIDATED INTERIM STATEMENT OF PROFIT OR LOSS For the six month period ended 30 June 2022 (Unaudited) Notes Interest income Net income from investments Three month period ended 30 June 2022 2021 AED’000 AED’000 8 9 10,276 14,921 25,197 (7,759) ─────── 8,972 19,509 ─────── 28,481 (6,938) ─────── 45,019 (15,261) ─────── 18,156 31,233 ─────── 49,389 (13,684) ─────── 17,438 5,926 954 ─────── 24,318 ─────── (15,033) 21,543 4,322 380 ─────── 26,245 ─────── (19,257) 29,758 11,598 1,448 ─────── 42,804 ─────── (29,864) 35,705 9,636 1,117 ─────── 46,458 ─────── (35,102) (6,043) ─────── (21,076) ─────── 3,242 ═══════ 358 ─────── (18,899) ─────── 7,346 ═══════ (53,331) ─────── (83,195) ─────── (40,391) ═══════ 2,995 ─────── (32,107) ─────── 14,351 ═══════ 3,242 ─────── 3,242 ═══════ 7,346 ─────── 7,346 ═══════ (40,391) ─────── (40,391) ═══════ 14,351 ─────── 14,351 ═══════ ─────── Interest expense INTEREST AND INVESTMENT INCOME, NET Fee, commission and other income Exchange gain, net OPERATING INCOME General and administrative expenses Net impairment (loss)/reversal on financial assets 6.1 OPERATING EXPENSES PROFIT/(LOSS) FOR THE PERIOD Attributable to: Equity holders of the parent Non-controlling interests PROFIT/(LOSS ) FOR THE PERIOD BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT (in AED) Six month period ended 30 June 2022 2021 AED’000 AED’000 10 19,058 25,961 ─────── 4.63 10.49 (57.70) 20.50 ═══════ ═══════ ═══════ ═══════ The accompanying notes from pages 8 to 24 form an integral part of this condensed consolidated interim financial information. 3
6. Emirates Investment Bank P .J.S.C. CONDENSED CONSOLIDATED COMPREHENSIVE INCOME INTERIM STATEMENT OF OTHER For the six month period ended 30 June 2022 (Unaudited) Three month period ended 30 June 2022 2021 AED’000 AED’000 PROFIT/(LOSS) FOR THE PERIOD Other comprehensive income/(loss) Items that will not be reclassified subsequently to profit or loss Changes in the fair value of equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss Changes in the fair value of debt instruments at fair value through other comprehensive income Six month period ended 30 June 2022 2021 AED’000 AED’000 3,242 7,346 (40,391) 14,351 687 (148) 11,452 1,136 (20,977) 4,222 (40,603) ─────── ─────── ─────── Other comprehensive (loss)/ income for the period (20,290) 4,074 (29,151) ─────── ─────── ─────── TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD (17,048) 11,420 (69,542) ═══════ ═══════ ═══════ (17,048) - 11,420 - (69,542) - ─────── ─────── ─────── Attributable to: Equity holders of the parent Non-controlling interests TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD (17,048) 11,420 (69,542) ═══════ ═══════ ═══════ 1,511 ─────── 2,647 ─────── 16,998 ═══════ 16,998 ─────── 16,998 ═══════ The accompanying notes from pages 8 to24 form an integral part of this condensed consolidated interim financial information. 4
7. Emirates Investment Bank P .J.S.C. CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS For the six month period ended 30 June 2022 (Unaudited) Notes Six month period ended 30 June 2022 2021 AED’000 AED’000 OPERATING ACTIVITIES (Loss)/Profit for the period Adjustments for: Depreciation on property and equipment Amortisation of intangible assets Depreciation on right-of-use assets Net impairment loss/(reversal) on financial assets 6.1 Operating profit before changes in operating assets and liabilities Change in UAE Central Bank statutory deposits Change in loans and advances, net Change in investments, net Change in other assets Change in due to banks Change in customers’ deposits Change in other liabilities Net cash used in operating activities (40,391) 14,351 515 63 1,755 53,331 ─────── 938 103 1,797 (2,995) ─────── 15,273 (72,282) 49,990 (243,120) 690 (284,967) 493,798 (2,305) ─────── (42,923) ─────── 14,194 (14,806) (478,849) (173,835) (8,518) 321,216 (44,936) 3,930 ─────── (381,604) ─────── (596) ─────── (596) ─────── (424) ─────── (424) ─────── (43,519) 521,940 ─────── 478,421 ═══════ (382,028) 820,983 ─────── 438,955 ═══════ 180,416 298,005 ─────── 478,421 ═══════ 205,273 233,682 ─────── 438,955 ═══════ 9,664 39,660 5,839 7,475 35,051 6,056 INVESTING ACTIVITY Purchase of property and equipment Net cash used in investing activity NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at 1 January CASH AND CASH EQUIVALENTS AT 30 June Cash and cash equivalents comprise the following amounts in the statement of financial position with original maturities of six months or less: Cash and balances with the UAE Central Bank (excluding statutory deposits) Due from banks 3 Operational cash flows from interest and dividends Interest paid Interest received (including interest from investments) Dividends received The accompanying notes from pages 8 to 24 form an integral part of this condensed consolidated interim financial information. 5
8. Emirates Investment Bank P .J.S.C. CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY For the six month period ended 30 June 2022 (Unaudited) At 1 January 2022 Loss for the period Other comprehensive loss for the period Total comprehensive loss for the period Transfer to credit impairment reserve Balance at 30 June 2022 Share Capital Legal reserve Special reserve Credit impairment reserve* Cumulative changes in fair value Retained earnings AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 70,000 35,000 44,251 13,412 10,241 - - - - - - - - - ────── ────── ────── ────── - - - - (29,151) ─────── (29,151) Total Noncontrolling interests Total AED’000 AED’000 AED’000 307,977 480,881 228 481,109 (40,391) (40,391) - (40,391) ────── (40,391) (29,151) ─────── (69,542) ─────── - (29,151) ─────── (69,542) - - - 5,637 - (5,637) - - - ────── ────── ────── ─────── ─────── ────── ─────── ─────── ─────── 70,000 35,000 44,251 19,049 (18,910) 261,949 411,339 228 411,567 ══════ ══════ ══════ ═══════ ═══════ ══════ ═══════ ═══════ ═══════ * In accordance with the requirements of CBUAE, the excess of the credit impairment provisions calculated in accordance with CBUAE requirements over the ECL allowance calculated under IFRS 9 is transferred to ‘credit impairment reserve’ as an appropriation from retained earnings. This reserve is not available for payment of dividends. The accompanying notes from pages 8 to 24 form an integral part of this condensed consolidated interim financial information. 6
9. Emirates Investment Bank P .J.S.C. CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (continued) For the six month period ended 30 June 2021 (Unaudited) At 1 January 2021 Profit for the period Other comprehensive income for the period Total comprehensive income for the period Transfer to credit impairment reserve Balance at 30 June 2021 Share Capital Legal reserve Special reserve Credit impairment reserve* Cumulative changes in fair value Retained earnings AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 70,000 35,000 44,251 4,885 14,878 285,885 - - - - - 14,351 14,351 - 14,351 ────── ───── ───── ────── 2,647 ────── ───── 2,647 ─────── ────── 2,647 ────── - - - - 2,647 14,351 16,998 - 16,998 ────── ────── ────── 6,122 ─────── ─────── (6,122) ────── ─────── ─────── ─────── 70,000 ══════ 35,000 ═════ 44,251 ═════ 11,007 ══════ 17,525 ══════ 294,114 ═════ 471,897 ═══════ 228 ══════ 472,125 ══════ The accompanying notes from pages 8 to 24 form an integral part of this condensed consolidated interim financial information. 7 Total Noncontrolling interests Total AED’000 AED’000 AED’000 454,899 228 455,127
10. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION For the six month period ended 30 June 2022 (Unaudited) 1 GENERAL INFORMATION Emirates Investment Bank P.J.S.C. (the “Bank”) was incorporated on 17 February 1976 in Dubai, United Arab Emirates by a decree of HH The Ruler of Dubai. In 1999, the Bank was registered under the UAE Commercial Companies Law No. (8) Of 1984 (as amended) as a Public Joint Stock Company. On 20 September 2021, the UAE Federal Decree Law No. 32 of 2021 ("Companies Law") was issued and came into effect on 2 January 2022 which repealed the UAE Federal Law No. 2 of 2015. The Bank has 12 months from 2 January 2022 to comply with the provisions of the UAE Federal Decree Law No 32 of 2021. The Bank is in the process of reviewing the new provisions and will apply the requirements thereof no later than one year from the date on which the amendments came into effect. The Bank is engaged in the business of investment advisory and wealth management. The address of the Bank’s registered office is P. O. Box 5503, Dubai, United Arab Emirates. The condensed consolidated interim financial information for the six month period ended 30 June 2022 comprise the financial information of the Bank and its subsidiary (together referred to as the “Group”). The Bank is a subsidiary of Al Futtaim Private Company LLC which holds 52.85% (2021: 52.85%) of the shares in the Bank. 2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation The condensed consolidated interim financial information of the Group is prepared in accordance with International Accounting Standard 34: Interim Financial Reporting, issued by the International Accounting Standards Board (‘IASB’) and comply with the applicable requirements of the laws in the U.A.E. The condensed consolidated interim financial information does not contain all information and disclosures required for full financial statements prepared in accordance with International Financial Reporting Standards and should be read in conjunction with the Group’s annual financial statements for the year ended 31 December 2021. In addition, results for the six month period ended 30 June 2022 are not necessarily indicative of the results that may be expected for the financial year ending 31 December 2022. The accounting policies applied by the Group in the preparation of the condensed consolidated interim financial information are consistent with those applied by the Group in the preparation of annual audited consolidated financial statements for the year ended 31 December 2021, unless otherwise stated. In preparing these condensed consolidated interim financial information, significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation were the same as those that were applied to the consolidated financial statements as at and for the year ended 31 December 2021. 2.2 Basis of consolidation This condensed consolidated interim financial information incorporates the financial information of the Bank and its subsidiary as at 30 June 2022. Control is achieved where the Bank has the power over the investee, exposure, or rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the investor’s returns. The condensed consolidated interim financial information comprises the financial information of the Bank and of its subsidiary. The financial information of the subsidiary is prepared for the same reporting period as that of the Bank, using consistent accounting policies. 8
11. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) 2.2 Basis of consolidation (continued) The following subsidiary in which the Bank exercises control is consolidated in this interim condensed consolidated financial information: Name of subsidiary EIB Investment Co. LLC* Country U.A.E % Holding 30 June 31 December 2022 2021 24% 24% Principal activities Investment in commercial, industrial and agricultural enterprises and their respective management. *The Bank has the ability to exercise control over EIB Investment Co. LLC (the entity) as it has rights to variable returns and has the ability to affect the returns. As the Bank has control over the entity, it has been consolidated in this condensed consolidated interim financial information. The entity has a wholly owned subsidiary named EIB Investment Management Cayman Ltd. The entity is dormant with no operations. 2.3 Significant management judgments and estimates In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. In preparing this condensed consolidated interim financial information, the significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2021, except for the judgements involved in estimation of ECL on the Russian exposures as described in note 15. 2.4 New and revised IFRS applied on the condensed consolidated interim financial information The following new and revised IFRS, which became effective for annual periods beginning on or after 1 January 2022, have been adopted in this interim financial information. The application of these revised IFRSs, except where stated, have not had any material impact on the amounts reported for the current and prior periods. • Narrow-scope amendments to IFRS 3, IAS 16, IAS 17 and some annual improvements on IFRS 9 and IFRS 16 Amendments to IFRS 3, ‘Business combinations’ update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. Amendments to IAS 16, ‘Property, plant and equipment’ prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss. Amendments to IAS 37, ‘Provisions, contingent liabilities and contingent assets’ specify which costs a company includes when assessing whether a contract will be loss-making. Annual improvements make minor amendments to IFRS 9, ‘Financial instruments’, and the Illustrative Examples accompanying IFRS 16, ‘Leases’. 9
12. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 2 BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) 2.5 New and revised IFRS in issue but not yet effective and not early adopted The Group has not yet early applied the following new standards, amendments and interpretations that have been issued but are not yet effective: New and revised IFRS Amendments to IAS 1, Presentation of financial statements’ on classification of liabilities - These narrow-scope amendments to IAS 1, ‘Presentation of financial statements’, clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (for example, the receipt of a waiver or a breach of covenant). The amendment also clarifies what IAS 1 means when it refers to the ‘settlement’ of a liability. Effective for annual periods beginning on or after Deferred until accounting periods starting not earlier than 1 January 2024 Narrow scope amendments to IAS 1, Practice statement 2 and IAS 8- The amendments 1 January 2023 aim to improve accounting policy disclosures and to help users of the financial statements to distinguish between changes in accounting estimates and changes in accounting policies. Amendment to IAS 12 – Deferred tax related to assets and liabilities arising from a single 1 January 2023 transaction- These amendments require companies to recognise deferred tax on transactions that, on initial recognition give rise to equal amounts of taxable and deduct able temporary differences. The Group is currently assessing the impact of these standards, interpretations and amendments on the future financial statements and intends to adopt these, if applicable, when they become effective. 3 DUE FROM BANKS, NET 30 June 2022 AED’000 (Unaudited) Domestic Regional International Less: allowance for impairment (note 6) 4 31 December 2021 AED’000 (Audited) 35,899 5,182 256,924 ──────── 298,005 (737) ──────── 297,268 ════════ 33,294 5,329 233,031 ─────── 271,654 (508) ─────── 271,146 ═══════ 30 June 2022 AED’000 (Unaudited) 31 December 2021 AED’000 (Audited) LOANS AND ADVANCES, NET Gross loans and advances Less: allowance for impairment (note 6) Less: interest and fees in suspense 892,361 (23,855) (3,908) ─────── 864,598 ═══════ Loans and advances, net 10 941,609 (23,970) (3,166) ─────── 914,473 ═══════
13. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 5 INVESTMENTS, NET Investments at fair value through profit or loss Debt instruments Quoted Equity instruments Quoted Unquoted Total investments measured at fair value through profit or loss Investments at fair value through other comprehensive income Debt instruments Quoted Equity instruments Quoted Unquoted Total investments measured at fair value through other comprehensive income Investments at amortised cost Debt instruments Quoted Total investments measured at amortised cost Gross investments Less: allowance for impairment (note 6) Investments, net 30 June 2022 AED’000 (Unaudited) 31 December 2021 AED’000 (Audited) 55,161 ─────── 34,386 ─────── 26,361 82,701 ─────── 109,062 ─────── 164,223 ─────── 60,121 96,750 ─────── 156,871 ─────── 191,257 ─────── 725,525 ─────── 433,737 ─────── 64,959 6,349 ─────── 71,308 52,706 6,352 ─────── 59,058 796,833 ─────── 492,795 ─────── 617,744 ─────── 617,744 ─────── 1,578,800 (56,672) ─────── 1,522,128 ═══════ 686,219 ─────── 686,219 ─────── 1,370,271 (8,895) ─────── 1,361,376 ═══════ Part of the proprietary investment portfolio of the Group having a carrying value of AED 84,557 thousand (31 December 2021: AED 438,001 thousand) is pledged as collateral with banks against credit facilities. Refer note 7.1 for the details of collateral pledged against credit facilities as at reporting date. The Group purchased equity shares during the six month period ended 30 June 2022 amounting to AED 794 thousand (30 June 2021: Nil). 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. There were no transfers between levels during the six month period ended 30 June 2022 and the year ended 31 December 2021. 11
14. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 5 INVESTMENTS, NET (continued) As at 30 June 2022, the Group held the following investments measured as follows: Total 2022 AED’000 Debt instruments: Domestic Regional International Equity instruments: Domestic Regional International Gross investments Less: allowance for impairment (note 6) Investments, net Investments carried at fair value Level 1 Level 2 Level 3 AED’000 AED’000 AED’000 Investments carried at amortised cost AED’000 159,258 200,135 1,039,037 53,866 114,243 612,577 - - 105,392 85,892 426,460 70,500 787 109,083 ─────── 1,578,800 39,395 787 26,361 ─────── 847,229 ════════ 4 82,722 ─────── 82,726 ════════ *31,101 ─────── 31,101 ════════ ─────── 617,744 ════════ (56,672) ──────── 1,522,128 ════════ The fair value of debt investments carried at amortised cost as at 30 June 2022 amounts to AED 536,693 thousand (31 December 2021: AED 680,582 thousand) and this would be classified as level 1 within the fair value heirarchy. * Key inputs used in the valuation techniques for these investments are comparable sales transaction with appropriate haircut. Discounted cash flows (DCF) include significant unobservable inputs of hair cut for comparable transactions and interest rate. In terms of relationship of unobservable inputs to fair value, any changes in comparable sale transactions and interest rate changes in DCF will directly impact the fair value. As at 31 December 2021, the Group held the following investments measured as follows: Total 2021 AED’000 Debt instruments: Domestic Regional International Equity instruments: Domestic Regional International Gross investments Less: allowance for impairment (note 6) Investments, net Investments carried at fair value Level 1 Level 2 Level 3 AED’000 AED’000 AED’000 Investments carried at amortised cost AED’000 128,086 205,594 820,662 22,168 98,215 347,740 - - 105,918 107,379 472,922 58,255 779 156,895 ─────── 1,370,271 35,784 779 60,121 ─────── 564,807 4 96,774 ─────── 96,778 *22,467 ─────── 22,467 ─────── 686,219 (8,895) ──────── 1,361,376 ════════ ════════ ════════ ════════ ════════ 12
15. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 5 INVESTMENTS, NET (continued) The following table shows a reconciliation of the opening and closing amounts of level 3 investments recorded at fair value: At the beginning of the period/year Net unrealised gain recognised in other comprehensive income At the end of the period/year 30 June 2022 AED’000 (Unaudited) 31 December 2021 AED’000 (Audited) 22,467 8,634 ───── 31,101 ═════ 20,995 1,472 ───── 22,467 ═════ The Group has assessed the sensitivity of the fair value measurement of investments under level 3 due to changes in inputs used. Such an assessment is performed on a quarterly basis by reviewing the changes in unobservable inputs which might result in higher or lower fair value measurement. 6 ALLOWANCE FOR IMPAIRMENT LOSSES ON FINANCIAL ASSETS 30 June 2022 AED’000 (Unaudited) Due from banks Movement in allowances for impairment losses Balance at 1 January Net impairment loss/(reversal) for the period/year Loans and advances Movement in allowances for impairment losses Balance at 1 January Net impairment reversal for the period/year Investments Movement in allowances for impairment losses Balance at 1 January Net impairment allowance/(reversal) for the period/year 13 31 December 2021 AED’000 (Audited) 508 229 ───── 737 ═════ 670 (162) ───── 508 ═════ 23,970 (115) ─────── 23,855 ═══════ 26,536 (2,566) ─────── 23,970 ═══════ 8,895 47,777 ─────── 56,672 ═══════ 10,802 (1,907) ─────── 8,895 ═══════
16. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 6 ALLOWANCE FOR IMPAIRMENT LOSSES ON FINANCIAL ASSETS (continued) Expected credit losses The analysis of expected credit losses by stage for loans and advances, investment in debt instruments measured at amortised cost and due from banks is as follows: Expected credit losses- Lifetime ECL (Stage 3) Expected credit losses- 12-months ECL (Stage 1) Expected credit losses- Lifetime ECL (Stage 2) Expected credit losses (Stage 1 and 2) Total expected credit losses 6.1 31 December 2021 AED’000 (Audited) 76,135 24,649 4,045 1,095 ────── 5,140 ────── 81,275 ══════ 5,072 3,652 ─────── 8,724 ─────── 33,373 ═══════ Net impairment (loss)/reversal on financial assets Three month ended 30 June ────────────────────── Impairment (loss)/reversal on investments measured at amortized cost Impairment (loss)/reversal on investments measured at FVOCI Impairment (loss)/reversal on loans and advances Impairment (loss)/reversal on due from banks 7 30 June 2022 AED’000 (Unaudited) Six month ended 30 June ───────────────── 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) 2022 AED’000 (Unaudited) 2021 AED’000 (Unaudited) (5,786) 172 (47,777) 2,753 (32) 7 (5,440) 14 135 79 115 2 (360) ───── (6,043) ═════ 100 ───── 358 ═════ (229) ───── (53,331) ═════ 226 ───── 2,995 ═════ DUE TO BANKS Term deposits Repurchase agreements 14 30 June 2022 AED’000 (Unaudited) 31 December 2021 AED’000 (Audited) 36,725 29,304 ─────── 66,029 ═══════ 146,900 204,096 ─────── 350,996 ═══════
17. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 7 7.1 DUE TO BANKS (continued) Information on collateral 30 June 2022 ──────────────────── Balance Collateral value AED’000 AED’000 (Unaudited) (Unaudited) Term deposits: Collateralized by investments Repurchase agreements: Collateralized by debt instruments 8 36,725 ═══════ 47,922 ═══════ 146,900 ═══════ 203,780 ═══════ 29,304 ═══════ 36,635 ═══════ 204,096 ═══════ 234,221 ═══════ INTEREST INCOME Three month ended 30 June ──────────────────── 2022 2021 Loans and advances Bank placements 9 31 December 2021 ─────────────────── Balance Collateral value AED’000 AED’000 (Audited) (Audited) Six month ended 30 June ───────────────── 2022 2021 AED’000 (Unaudited) AED’000 (Unaudited) AED’000 (Unaudited) AED’000 (Unaudited) 9,726 550 ─────── 10,276 ═══════ 8,933 39 ─────── 8,972 ═══════ 18,412 646 ─────── 19,058 ═══════ 18,083 73 ─────── 18,156 ═══════ NET INCOME FROM INVESTMENTS Three month ended 30 June ───────────────── 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) Interest income on investments in debt instruments Dividend income Net realised gain on disposal of investments measured at amortised cost and FVOCI Net (loss)/gain from investments measured at fair value through profit or loss Portfolio management fees paid to other financial institutions Six month ended 30 June ───────────────── 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) 11,302 4,023 10,477 5,118 22,138 5,839 20,080 6,056 380 425 345 513 (521) 3,698 (1,922) 5,014 (263) ─────── 14,921 ═══════ (209) ─────── 19,509 ═══════ (439) ─────── 25,961 ═══════ (430) ─────── 31,233 ═══════ 15
18. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 10 BASIC AND DILUTED (LOSS)/EARNINGS PER SHARE Basic loss per share of AED 57.70 (30 June 2021: Basic earnings per share of AED 20.50) is calculated by dividing the loss attributable to the equity holders of the Parent of AED 40,391 thousand for the six month period ended 30 June 2022 (30 June 2021: profit of AED 14,351 thousand) by the weighted average number of shares outstanding during the period of 700,000 of AED 100 each (30 June 2021: 700,000 shares of AED 100 each). The figure for basic and diluted earnings per share is the same as the Group has not issued any instruments which would have an impact on earnings per share. 11 SEGMENTAL ANALYSIS For operating purposes, the Group is organised into two major business segments: (a) Investments, which is principally involved in managing the Group’s own investment portfolio and provides treasury services; and (b) Banking Services, which principally manages clients’ investment portfolios, provides credit facilities, accepts deposits from corporate and individual customers. These segments are the basis on which the Group reports its primary segment information. Transactions between segments are conducted at rates determined by management taking into consideration the cost of funds and an equitable allocation of expenses and the Group operations are primarily within the UAE. Management monitors the operating results of the operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss. Investments ───────────── Six month ended 30 June 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) Revenue * Expenses (Loss)/profit for the period Banking Services ─────────────── Six month ended 30 June 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) Total ─────────────── Six month ended 30 June 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) (24,832) (15,198) ─────── 35,388 (14,544) ─────── 29,566 (29,927) ─────── 27,749 (34,242) ─────── 4,734 (45,125) ─────── 63,137 (48,786) ─────── (40,030) ═══════ 20,844 ═══════ (361) ═══════ (6,493) ═══════ (40,391) ═══════ 14,351 ═══════ * Revenue comprises of interest income, net income from investments, fee commission and other income and exchange gain/ (loss) less net impairment loss/(reversal) on financial assets. Investments Banking Services Total ──────────────── ──────────────── ─────────────── 30 June 31 December 30 June 31 December 30 June 31 December 2022 2021 2022 2021 2022 2021 AED’000 AED’000 AED’000 AED’000 AED’000 AED’000 (Unaudited) (Audited) (Unaudited) (Audited) (Unaudited) (Audited) Segment assets Segment liabilities and equity 2,114,028 ═══════ 1,925,724 ═══════ 892,947 ═══════ 944,267 ═══════ 3,006,975 2,869,991 ═══════ ═══════ 7,861 ═══════ 402,740 ═══════ 2,999,114 ═══════ 2,467,251 ═══════ 2,869,991 3,006,975 ═══════ ═══════ 16
19. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 12 COMMITMENTS AND CONTINGENT LIABILITIES Credit-related commitments and contingent liabilities Credit-related commitments include commitments to extend credit, letters of credit, guarantees and acceptances which are designed to meet the requirements of the Group’s customers. Letters of credit, guarantees and acceptances commit the Group to make payments on behalf of customers, contingent upon the failure of the customers to perform under the terms of the contract. The Group has the following credit related contingent liabilities and commitments: 30 June 2022 AED’000 (Unaudited) 16,834 68,379 ─────── 85,213 ═══════ Guarantees Unutilised committed credit facilities* 31 December 2021 AED’000 (Audited) 17,695 26,878 ─────── 44,573 ═══════ The Group has commitments of AED 19,925 thousand on account of investment in equity instruments (31 December 2021: AED 21,055 thousand). * Unutilised committed credit facilities represent a contractual commitment to permit draw downs on a facility within a defined period subject to conditions precedent and termination clauses. As commitments may expire without being drawn down and since conditions precedent to draw down have to be fulfilled, the total contract amounts do not necessarily represent exact future cash requirements. As at 31 December 2021, the Group was a defendant in two court cases, one in respect of a client’s investment in a commercial paper and the other in respect of a client’s property held on a nominee basis. During the six month period ended 30 June 2022, in both cases the Group obtained court judgements closing the litigation in favour of the Group. Accordingly, no provision has been maintained by the Group as at 30 June 2022. The Group, on a continuous basis, identifies and assesses such risks and recognizes provisions, in accordance with the accounting policy for provisions as disclosed in the annual consolidated financial statements for the year ended 31 December 2021. 13 RELATED PARTY TRANSACTIONS The Group enters into transactions in the ordinary course of business with related parties, defined as major shareholders, directors, key management personnel and their related companies. Transactions with such related parties are done on an arm's length basis, including interest rates and collateral, as those prevailing at the same time for comparable transactions with external customers and parties. Pricing policies and terms of related parties’ transactions are approved by the Group’s management. The significant balances outstanding in respect of related parties included in the condensed consolidated interim financial information are as follows: 30 June 31 December 2022 2021 AED’000 AED’000 (Unaudited) (Audited) Balances with shareholders and their related companies: Customers’ deposits 1,032,811 1,077,695 Loans and advances 422,123 422,018 Other liabilities 28,188 21,824 Other assets 1,607 1,753 Commitments and contingencies 13,024 13,885 Balances with directors, key management personnel and other related parties: Customers’ deposits 17 - 282
20. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 13 RELATED PARTY TRANSACTIONS (continued) The income and expenses in respect of related parties included in the condensed consolidated interim financial information are as follows: Three month ended 30 June ───────────────── 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) Shareholders and their group companies: Interest income Interest expense Fee, commission and other income General and administrative expenses 3,734 (5,118) 1,164 (1,725) Directors, key management personnel and other related parties: Fee, commission and other income 3,734 (5,159) 1,213 (1,539) - 8 Six month ended 30 June ──────────────── 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) 7,427 (10,221) 2,268 (3,414) - 7,303 (10,128) 1,315 (3,309) 17 Outstanding balances at the period end arise in the normal course of business. For the six month period ended 30 June 2022, the Group has not recorded any impairment on amounts owed by related parties (2021: Nil). Three month ended 30 June ───────────────────── Salaries and other benefits to key management personnel 14 2022 AED’000 (Unaudited) 2021 AED’000 (Unaudited) 2,638 ─────── 3,393 ─────── Six month ended 30 June ──────────────── 2022 2021 AED’000 AED’000 (Unaudited) (Unaudited) 5,278 ─────── 6,443 ─────── DERIVATIVE FINANCIAL INSTRUMENTS In the ordinary course of business, the Group enters into transactions that involve derivative financial instruments. A derivative financial instrument is a financial contract between two parties where payments are dependent upon movements in price in one or more underlying financial instrument, reference rate or index. The purpose of derivative financial instruments in the Group’s business is to mitigate the risks arising from default, currency and interest fluctuations and other market variables. The Group uses forward foreign exchange contracts and options to mitigate the currency risk on certain investments. There were no derivative instruments held by the Group as of 30 June 2022 (31 December 2021: Nil). Derivatives often involve at their inception only a mutual exchange of promises with little or no transfer of consideration. A relatively small movement in the value of the asset, rate or index underlying a derivative contract may have an impact on the profit or loss of the Group. The Group’s exposure under derivative contracts is closely monitored as part of the overall management of the Group’s market risk. 18
21. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 14 DERIVATIVE FINANCIAL INSTRUMENTS (continued) Derivative product type Forwards Forwards are contractual agreements to either buy or sell a specified currency, commodity or financial instrument at a specific price and date in the future. Forwards are customised contracts transacted in over-the-counter markets. Options Options are contractual agreements that convey the right, but not the obligation, to either buy or sell a specific amount of a commodity or financial instrument at a fixed price, either at a fixed future date or at any time within a specified year. Swaps Swaps are commitments to exchange one set of cash flows for another. For interest rate swaps, counterparties generally exchange fixed and floating rate interest payments in a single currency without exchanging principal. Derivative related credit risk Credit risk in respect of derivative financial instruments arises from the potential for a counterparty to default on its contractual obligations and is limited to the positive fair value of instruments that are favorable to the Group. With gross–settled derivatives, the Group is also exposed to a settlement risk, being the risk that the Group honors its obligation, but the counterparty fails to deliver the counter value. Changes in counterparty credit risk have no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationships and other financial instruments recognised at fair value. 15 RISK MANAGEMENT Credit risk Credit risk is the risk that a customer or counterparty will fail to meet a commitment, resulting in financial loss to the Group. Such risk arises from lending, trade finance, treasury and other activities undertaken by the Group. Credit risk is actively monitored in accordance with the credit policies which clearly define delegated lending authorities, policies and procedures. The management of credit risk also involves the monitoring of risk concentrations by industrial sector as well as by geographic location. Impact of current economic and geopolitical situation on credit risk The economic fallout of COVID-19 has been significant. Regulators and governments across the globe have introduced fiscal and economic stimulus measures to mitigate its impact. The Central Bank of UAE (“CBUAE”) also announced multiple economic support measures and incentives. In this regard, a Zero Cost Funding scheme was announced to support the banking and financial institutions, corporates and individuals in the UAE impacted by this crisis. Under this scheme the Targeted Economic Support Scheme (“TESS”) program was introduced in which the customers were allowed deferrals in the repayment of their loan’s instalments. To assess the impact of the TESS program and other discretional deferrals as allowed by the banks and financial institutions on their own, the CBUAE, the DFSA and FSRA issued a Joint Guidance on the treatment of IFRS 9 provisions. However, on 7 January 2022, the CBUAE formally terminated the TESS program and has allowed a transitional period of 6 months (i.e., till 30 June 2022), to bring all such customers benefiting from the deferrals in line with business-as-usual SICR criteria as applied by the banks before the application of this Joint Guidance. During this transitional period, all the banks were required to make a realistic assessment of the credit worthiness of their clients that were benefitting from deferral programs. As of 30 June 2022 and 31 December 2021, the Group does not have any customers benefitting from the deferrals. All such customers who were allowed any deferrals were brought under the normal payment terms and are being monitored under the provisions of IFRS 9 as usual. 19
22. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 15 RISK MANAGEMENT Credit risk (continued) Impact of current economic and geopolitical situation on credit risk (continued) On 24 February 2022, the military conflict between Russia and Ukraine started. As a result, a number of countries have and continue to impose new sanctions against Russian government entities, state-owned enterprises and certain specified entities and individuals linked to Russia anywhere in the world. The situation together with potential fluctuations in commodity prices, foreign exchange rates, restrictions to imports and exports, availability of local materials and services and access to local resources will directly impact entities that have significant operations or exposures in, or with Russia and Ukraine. The situation is fluid and may also have significant consequences for other entities that could be exposed to fluctuations in commodity prices and foreign exchange rates, as well as the possibility of a protracted economic downturn. As of 30 June 2022, the Group’s investment in Russian bonds (before provision for ECL) was as below: Investments at amortised cost Investments at fair value through other comprehensive income 30 June 2022 Amortised cost AED’000 (Unaudited) 31 December 2021 Amortised cost AED’000 (Audited) 30,027 5,485 ─────── 35,512 ═══════ 30,088 5,498 ─────── 35,586 ═══════ Detailed portfolio reviews are conducted on an ongoing basis and the Group is applying increased scrutiny when onboarding clients in sensitive industries and is ensuring compliance with sanctions requirements. The Group continues to monitor the current Russia–Ukraine geopolitical situation and its impact on the economy and will mitigate its exposures and risks as appropriate. Impact on measurement of ECL IFRS 9 framework requires the estimation of Expected Credit Loss (ECL) based on current and forecast economic conditions. In order to assess ECL under forecast economic conditions, the Group utilizes a range of economic scenarios of varying severity, and with appropriate weightings, to ensure that ECL estimates are representative of a range of possible economic outcomes. The Group has reviewed the potential impact of economic and geopolitical unrest outbreak on the inputs and assumptions for IFRS 9 ECL measurement in light of available information. In light of the current economic situation and ongoing sanctions, the Group has utilized stressed / punitive credit ratings and haircuts on securities, where relevant, within the ECL framework, thereby ensuring a pragmatic view and sufficient coverage from a provision standpoint. The Group is monitoring the day-to-day situation of the crisis and is actively managing down any direct exposure In respect of the loans and advances portfolio, the Group is conducting frequent reviews of the Loan to Value (“LTV”) ratios on the collateral held against loans given to customers. Accordingly, all staging and grouping decisions are subject to regular review to ensure these reflect an accurate view of the Group’s assessment of the customers’ creditworthiness, staging and grouping as of the reporting date. The Group has reassessed its portfolio of Stage 1, Stage 2 and Stage 3 customers as at 30 June 2022. For its investment portfolio, the Group has evaluated whether the investment portfolio has suffered a significant deterioration in credit quality. Based on ratings from external rating agencies and assessment of any increase in probability of default, the Group has assessed whether there has been a significant increase in credit risk for investments and whether these investments are credit impaired and assessed the impact on ECL as at 30 June 2022. 20
23. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 15 RISK MANAGEMENT (continued) Credit risk (continued) Impact on measurement of ECL (continued) Based on the assessment performed, the Group has transferred its investments in Russian bonds to stage 3. To reflect the credit impairment on these investments, the Group has recognised an ECL on these stage 3 instruments as below: Investments at amortised cost Investments at fair value through other comprehensive income 30 June 2022 AED’000 (Unaudited) 31 December 2021 AED’000 (Audited) 30,027 5,485 ─────── 35,512 ═══════ 292 2 ─────── 294 ═══════ Movement in gross carrying amount The following table explains the changes in the gross carrying amount from 1 January 2022 to 30 June 2022 and 1 January 2021 to 31 December 2021: 30 June 2022 (Unaudited) Stage 1 Stage 2 Stage 3 12-month ECL Lifetime ECL Lifetime ECL AED’000 AED’000 AED’000 Due from banks As at 1 January 2022 Repayment and other movements As at 30 June 2022 Loans and advances As at 1 January 2022 New financial assets originated Repayments and other movements As at 30 June 2022 Investments – measured at amortised cost As at 1 January 2022 Transfers Transfer from Stage 1 to Stage 3 Transfer from Stage 1 to Stage 2 Transfer from Stage 2 to Stage 1 Transfer from Stage 2 to Stage 3 Repayment and other movements As at 30 June 2022 271,654 26,351 ─────── 298,005 ═══════ ─────── ═══════ 913,734 83,178 (131,448) ─────── 865,464 ═══════ 1,720 (1,720) ─────── ═══════ 620,969 63,590 1,660 686,219 (9,316) (13,656) 3,688 (62,558) ─────── 539,127 ═══════ 13,656 (3,688) (42,375) (5,712) ─────── 25,471 ══════ 9,316 42,375 (205) ─────── 53,146 ═══════ (68,475) ─────── 617,744 ═══════ 21 ─────── ═══════ Total AED’000 26,155 742 ─────── 26,897 ═══════ 271,654 26,351 ─────── 298,005 ═══════ 941,609 83,178 (132,426) ─────── 892,361 ═══════
24. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 15 RISK MANAGEMENT (continued) Credit risk (continued) Movement in gross carrying amount (continued) Stage 1 12-month ECL AED’000 Due from banks As at 1 January 2021 New financial assets originated Repayment and other movements As at 31 December 2021 Loans and advances As at 1 January 2021 New financial assets originated Transfers Transfer from Stage 1 to Stage 2 Transfer from Stage 2 to Stage 1 Repayment and other movements As at 31 December 2021 Investments – measured at amortised cost As at 1 January 2021 New financial assets originated Transfers Transfer from Stage 1 to Stage 2 Transfer from Stage 2 to Stage 1 Repayment and other movements As at 31 December 2021 31 December 2021 (Audited) Stage 2 Stage 3 Lifetime ECL Lifetime ECL AED’000 AED’000 Total AED’000 300,528 344 (29,218) - - 300,528 344 (29,218) ─────── ────── ─────── ──────── 271,654 - - 271,654 ═══════ ══════ ═══════ ════════ 307,523 556,731 110,509 - 28,773 - 446,805 556,731 (1,744) 108,799 (57,575) 1,744 (108,799) (1,734) (2,618) (61,927) ─────── ─────── ─────── 913,734 1,720 26,155 ──────── 941,609 ═══════ ═══════ ═══════ ════════ 442,933 224,983 260,818 - 6,024 - 709,775 224,983 (54,266) 91,363 (84,044) 54,266 (91,363) (160,131) (4,364) (248,539) ─────── ─────── ─────── 620,969 63,590 1,660 686,219 ═══════ ═══════ ═══════ ═══════ ─────── Movement in loss allowance The following table explain the changes in the loss allowance from 1 January 2022 to 30 June 2022 and 1 January 2021 to 31 December 2021: 30 June 2022 (Unaudited) Stage 1 Stage 2 Stage 3 12-month ECL Lifetime ECL Lifetime ECL AED’000 AED’000 AED’000 Due from banks As at 1 January 2022 Changes in PDs/LGDs/EADs Total AED’000 508 229 - - 508 229 ────── ────── ─────── ────── ══════ ══════ ═══════ ═══════ 972 155 (261) 9 (9) 22,989 - 23,970 155 (270) ────── ────── ─────── ────── 866 - 22,989 23,855 ══════ ══════ ═══════ ═══════ As at 30 June 2022 737 Loans and advances As at 1 January 2022 New financial assets originated Changes in PDs/LGDs/EADs As at 30 June 2022 22 737
25. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 15 RISK MANAGEMENT (continued) Credit risk (continued) Movement in loss allowance (continued) 30 June 2022 (Unaudited) Stage 1 Stage 2 Stage 3 12-month ECL Lifetime ECL Lifetime ECL AED’000 AED’000 AED’000 Investments – measured at amortised cost As at 1 January 2022 Transfers Transfer from Stage 1 to Stage 3 Transfer from Stage 1 to Stage 2 Transfer from Stage 2 to Stage 1 Transfer from Stage 2 to Stage 3 Changes in PDs/LGDs/EADs As at 30 June 2022 Total AED’000 3,592 3,643 1,660 8,895 (2) (23) 7 23 (7) (3,387) 823 ────── 1,095 ══════ 2 3,387 48,097 ─────── 53,146 ═══════ 47,777 ────── 56,672 ═══════ (1,143) ────── 2,431 ══════ All guarantees issued by the Group are collateralised by cash and classified as stage 1 within the ECL model as at 30 June 2022 and 31 December 2021. Stage 1 12-month ECL AED’000 Due from banks As at 1 January 2021 Changes in PDs/LGDs/EADs As at 31 December 2021 Loans and advances As at 1 January 2021 New financial assets originated Transfers Transfer from Stage 1 to Stage 2 Transfer from Stage 2 to Stage 1 Changes in PDs/LGDs/EADs As at 31 December 2021 Investments – measured at amortised cost As at 1 January 2021 New financial assets originated Transfers Transfer from Stage 1 to Stage 2 Transfer from Stage 2 to Stage 1 Changes in PDs/LGDs/EADs As at 31 December 2021 31 December 2021 (Audited) Stage 2 Stage 3 Lifetime ECL Lifetime ECL AED’000 AED’000 Total AED’000 670 (162) ────── 508 ══════ ────── ══════ ─────── ═══════ 670 (162) ────── 508 ═══════ 608 265 580 - 25,348 - 26,536 265 (3) 571 (469) ────── 972 ══════ 3 (571) (3) ────── 9 ══════ (2,359) ─────── 22,989 ═══════ (2,831) ─────── 23,970 ═══════ 2,243 3,821 6,579 - 1,980 - 10,802 3,821 (3,418) 4,938 (3,992) ────── 3,592 ══════ 3,418 (4,938) (1,416) ────── 3,643 ══════ (320) ─────── 1,660 ═══════ (5,728) ─────── 8,895 ═══════ 23
26. Emirates Investment Bank P .J.S.C. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION (continued) For the six month period ended 30 June 2022 (Unaudited) 15 RISK MANAGEMENT (continued) Libor transition In line with the disclosures in the financial statements for the year ended 31 December 2021, the Group’s transition program has commenced and will be running until the final publication date of LIBOR on 30 June 2023. The Group has established a project to manage the transition for any of its contracts that could be affected. The following table shows the Group’s exposure at the year-end to significant IBORs subject to reform that have yet to transition to RFRs. Financial instruments exposed to USD LIBOR 30 June 2022 ──────────────────── Assets Liabilities AED’000 AED’000 (Unaudited) (Unaudited) Loans and advances Due to banks 68,531 ═══════ 66,029 ═══════ 31 December 2021 ─────────────────── Assets Liabilities AED’000 AED’000 (Audited) (Audited) 61,795 ═══════ 350,996 ═══════ All the above exposures to IBOR are yet to transition to an alternative benchmark interest rate. All the exposures will expire before transition is required. There are no loan commitments and financial guarantees as at 30 June 2022 and 31 December 2021 which are referenced to LIBOR. Hedge accounting: As at 30 June 2022 and 31 December 2021 the Group did not hold any hedged instruments which reference USD LIBOR and have not yet transitioned to an alternative interest rate. 16 FIDUCIARY ASSETS Balance of fiduciary assets 30 June 2022 AED’000 (Unaudited) 31 December 2021 AED’000 (Audited) 3,393,154 ═══════ 3,430,595 ═══════ The Group provides custody services for its customers’ assets. These assets are held by the Group in a fiduciary capacity and are, accordingly, not included in this condensed consolidated interim financial information as assets of the Group. 17 SUBSEQUENT EVENTS There have been no events subsequent to the statement of financial position date that would significantly affect the amounts reported in the condensed consolidated interim financial information as at and for the six month period ended 30 June 2022. 24