Page 51 - Agib Bank Limited Annual Report 2021

Residual contractual maturities of financial liabilities (In millions of D)

Less More
Carrying than 1 - 3 3 1 - 5 than
months
amount 1 month month to 1 year 5 years
s years
31-Dec-21
Non-derivative liabilities

Deposits from banks - - - - - -
Deposits from 420,188 1,507,888 - -
3,
customers 6,129 1,906,17
1
- - - - - -

31-Dec-20
Non-derivative liabilities
Deposits from banks - - - - -
2,4
Deposits from 82,733 972,714 - -
customers 9,094 1,500,92
5
- - - - - -

(iii) Market risk consequently fixed (for Murabaha) for the
duration of the contract. Risk exposure is
Market risk is the risk of loss of income arising from managed by reviewing the maturity profiles of
unfavourable market movements, including foreign transactions entered into.
exchange rates and profit rates. The objective of • Effective rates applied to new consumer
market risk management is to manage and control finance transactions are agreed on a monthly
exposures within acceptable parameters, whilst basis by ALCO and the profit (mark-up) will
optimising returns. The Company is not exposed to then be fixed for each individual transaction
any material foreign currency risk. Given the bank’s for the agreed deferred payment term.
current profile of financial instruments, the principle • Profit rates payable on Mudaraba customer
exposure is the risk of loss arising from fluctuations deposit accounts are calculated at each
in the future cash flows or fair values of these month-end in line with the profit allocation
financial instruments because of a change in model and the customer terms and
achievable rates. This is managed principally conditions. Profit rates payable on Murabaha
through monitoring gaps between effective profit deposits are agreed with the customer at the
and rental rates and reviewing approved rates and time of each transaction and the profit (mark-
bands at regular re-pricing meetings: up) and effective yield rate is consequently
fixed (for Murabaha) and maintained (for
• Profit rates for Commodity Murabaha Wakala) for the duration of the contract. Risk
receivables are agreed with the counterparty exposure is managed by reviewing the
bank at the time of each transaction and the profit maturity profiles of transactions entered into.
(mark-up) and effective yield rate is

Management of market risk

Overall authority for market risk is vested in ALCO. Risk Management Committee is responsible for the
development of detailed risk management policies (subject to review and approval by the board) and for the day-
to-day review of their implementation.
Annual Report and IFRS Financial Statements

Agib Bank Annual Report 2021 www.agib.gm 51