Commercial Bank of Dubai : Year Ended 31 December 2023

Basel III - Pillar III Disclosures

For The Year Ended 31 December 2023

COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

Contents
1.	Introduction	3
2.	Purpose and basis of preparation	3
3.	Overview of Pillar III	4
	3.1	Policy and verification	5
	3.2	Implementation of Basel III standards and guidelines	5
4.	Highlights	5
5.	Key Metrics (KM1)	6
6.	Overview of risk management and Risk Weighted Assets (OVA)	7
	6.1	Risk Governance	7
	6.2	Control Environment	7
	6.3	Risk Management	9
	6.4	Stress Testing	9
	6.5	Overview of RWAs (OV1)	10

6.6 Differences between accounting and regulatory scopes of consolidation and mapping of financial

	statement categories with regulatory risk categories (Ll1)	10
	6.7	Explanations of differences between accounting and regulatory exposure amounts (LlA)	12
7.	Composition of Capital	13
	7.1	Capital Management	13
	7.2	Composition of Regulatory Capital (CC1)	14
	7.3	Reconciliation of regulatory capital to balance sheet (CC2)	16
	7.4	Main features of regulatory capital instruments (CCA)	17
8	Leverage Ratio	18
	8.1 Summary comparison of accounting assets vs leverage ratio exposure (LR1)	18
	8.2 Leverage ratio common disclosure template (LR2)	19
9	Credit Risk	20
	9.1 General qualitative information about credit risk (CRA)	20
	9.2	Credit quality of assets (CR1)	21
	9.3	Changes in stock of defaulted loans and debt securities (CR2)	22
	9.4	Additional disclosure related to the credit quality of assets (CRB)	22
	9.5 Qualitative disclosure requirements related to credit risk mitigation techniques (CRC)	30
	9.6 Credit risk mitigation techniques -Overview (CR3)	30

9.7 Qualitative disclosures on banks' use of external credit ratings under the standardized approach for

credit risk (CRD)

31

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

	9.8	Standardized approach - Credit risk exposure and Credit Risk Mitigation (CRM) effects (CR4)	32
	9.9	Standardized approach - Exposures by asset classes and risk weights (CR5)	33
10	Counterparty credit risk (CCR)	34
	10.1	Qualitative disclosure related to Counterparty credit risk (CCRA)	34
	10.2	Analysis of Counterparty Credit Risk by approach (CCR1)	35
	10.3	Credit valuation adjustment capital charge (CCR2)	35
	10.4	Standardized approach - CCR exposures by regulatory portfolio and risk weights (CCR3)	36
	10.5	Composition of collateral for Counterparty Credit Risk exposure (CCR5)	36
	10.6	Exposures to central counterparties (CCR8)	37
11	Market Risk	38
	11.1	General qualitative disclosure requirements related to market risk (MRA)	38
	11.2	Market risk under the standardized approach (MR1)	39
12	Interest rate risk in the banking book (IRRBB)	39
	12.1	IRRBB risk management objectives and policies (IRRBBA)	39
	12.2	Sensitivity of economic value of equity and NII (IRRBB1)	40
13	Operational Risk	41
14	Liquidity Risk	42
	14.1	Liquidity risk management (LIQA)	42
	14.2	Eligible Liquid Assets Ratio (ELAR)	43
	14.3	Advances to Stables Resource Ratio (ASRR)	44
15	Remuneration Policy	44
	15.1	Remuneration policy (REMA)	44
	15.2	Remuneration awarded during the financial year (REM1)	51
	15.3	Special payments (REM2)	51
	15.4	Deferred remuneration (REM3)	51
16	Comparative Figures	52
17	Acronyms	52

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

1. Introduction

Commercial Bank of Dubai PSC ("the Bank") was incorporated in Dubai, United Arab Emirates (U.A.E.) in 1969 and is registered as a Public Joint Stock Company (PJSC) in accordance with Federal Law No. 32 of 2021. The Bank is listed on the Dubai Financial Market. The Bank's principal activity is commercial and retail banking. The registered address of the Bank is CBD Head Office, Al Ittihad Street, P.O. Box 2668, Dubai, United Arab Emirates.

2. Purpose and basis of preparation

The Central Bank of the UAE ("CBUAE") supervises the Bank and its subsidiaries (together referred as the "Group") on a consolidated basis, and therefore receives information on the capital adequacy of, and sets capital requirements for, the Group as a whole. The capital requirements are computed at Group level using the Basel III framework of the Basel Committee on Banking Supervision ("Basel Committee"), after applying the amendments advised by the CBUAE within national discretion. The Basel framework is structured around three pillars as follows:

• Pillar I prescribes the minimum capital requirements;
• Pillar II addresses the associated supervisory review process; and
• Pillar III specifies further public disclosure requirements in respect of the Group's capital and risk profile.

The disclosures have been prepared in line with the disclosure templates introduced by the CBUAE guidelines on disclosure requirements (CBUAE/BSD/N/2020/4980, CBUAE/BSD/N/2021/5508 and CBUAE/BSD/2022/5280) published in November 2020, November 2021 and December 2022 respectively.

The Pillar III report of the Group for the year ended 31 December 2023 comprises detailed information on the underlying drivers of risk-weighted assets (RWA), capital of the Bank, its wholly owned subsidiaries and the Group's interest in an associate. The report should be read in conjunction with the Group's Audited Financial Statements as at 31 December 2023. The direct subsidiaries and associate of the Group are as follows:

Name of Subsidiary	Ownership	County of	Principle activities
Interest	Incorporation
Subsidiary
CBD Financial Services LLC	100%	UAE	Providing brokerage facilities for local
shares and bonds.
CBD Employment Services One	100%	UAE	Supply of manpower services.
Person Company LLC
Attijari Properties LLC	100%	UAE	Self-owned property management services
as well as buying and selling of real estate.
Noor Almethaq Real Estate	100%	UAE	Development of real estate.
Development LLC
Special Purpose Entity
CBD (Cayman) Limited	100%	Cayman Islands	Issuance of debt securities.
CBD (Cayman II) Limited	100%	Cayman Islands	Transact and negotiate derivative
agreements.
VS 1897 (Cayman) Limited	100%	Cayman Islands	Manage investment acquired in the
settlement of debt.

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

Name of Subsidiary	Ownership	County of	Principle activities
Interest	Incorporation
CBD Digital Lab Limited
[Subsidiary of VS 1897 (Cayman)	100%	UAE	Technology research and development.
Limited]
Hortin Holding Limited [Subsidiary	100%	British Virgin	Manage real estate related investment
of VS 1897 (Cayman) Limited]	Islands	acquired in the settlement of debt.
Lodge Hill Limited		British Virgin	Manage real estate related investment
[Subsidiary of VS 1897 (Cayman)	100%
Islands	acquired in the settlement of debt.
Limited]
Westdene Investment Limited		British Virgin	Manage real estate related investment
[Subsidiary of VS 1897 (Cayman)	100%
Islands	acquired in the settlement of debt.
Limited]
Associate
National General Insurance Co.	17.8%	UAE	Life and general insurance business as well
(PJSC)	as certain reinsurance business.

3. Overview of Pillar III

Pillar III complements the minimum capital requirements and the supervisory review process. Its aim is to encourage market discipline by developing disclosure requirements which allow market participants to access specified information on the scope of application of Basel III, capital, particular risk exposures and risk assessment processes, and hence the capital adequacy of the institution. Disclosures comprises of quantitative and qualitative information and are provided at the consolidated level.

The CBUAE issued Basel III capital regulations, which came into effect from February 1st, 2017 introducing minimum capital requirements at three levels, namely Common Equity Tier 1 ("CET1"), Additional Tier 1 ("AT1") and Total Capital. Additional capital buffers (Capital Conservation Buffer and Countercyclical Capital Buffer - maximum up to 2.5% for each buffer) introduced are over and above the minimum CET1 requirement of 7%.

In November 2020, CBUAE issued revised standards and guidelines for Capital Adequacy in UAE. The new version to the Standards includes additional Guidance on the topics of Credit Risk, Market Risk and Operational Risk. Following are the changes in the revised standards which have been adopted:

• The Tier Capital Supply Standard
• Tier Capital Instruments Standard
• Pillar II Standard: Internal Capital Adequacy Assessment Procedures (ICAAP)
• Credit Risk, Market Risk and Operational Risk
• Equity Investments in Funds, Securitization, Counterparty Credit Risk and Leverage Ratio
• Credit Value Adjustment (CVA) for Pillar I and III

CBUAE requires the Pillar 2 - Supervisory Review Process to focus on each bank's Internal Capital Adequacy Assessment Process (ICAAP) in addition to Pillar 1 Capital calculations. The ICAAP should include a risk based forward looking view of, but not limited to, Credit, Market and Operational Risk Capital.

The purpose of Pillar III - Market Discipline is to complement the minimum Capital requirements (Pillar I) and the supervisory review process (Pillar II). The revised Pillar III disclosures, based on the common framework, are an effective means of informing

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

the market about the risks faced by the Bank, and provide a consistent and understandable disclosure framework that enhances transparency and improve comparability and consistency.

In compliance with the CBUAE Basel III standards and guidelines, these disclosures include qualitative and quantitative information of the Group's risk management objectives and policies, risk assessment process, capital management and capital adequacy. The Group's Pillar III disclosures are governed by the disclosure policy framework in line with CBUAE Basel III standards.

1. Policy and verification
   The Bank has operated within a framework of internal controls and procedures for accessing the appropriateness of Pillar III market disclosure for year ended 31 December 2023.
   This Pillar III disclosure have been subject to review from internal auditors, statutory auditors and appropriate senior management within the Group and attested by the Board Executive Committee.
   We confirm that the Bank's Pillar III disclosures, to the best of our knowledge, comply with the revised CBUAE Pillar III market disclosures requirements and have been prepared in compliance with the Bank's internal control framework.
2. Implementation of Basel III standards and guidelines
   The Group has adopted the standardized approach for Credit Risk, Counterparty Credit Risk, Credit Valuation Adjustment (CVA) and Market Risk, mandate-based approach (MBA) for equity investments in funds held in the banking book and the basic indicator approach for Operational Risk (Pillar I) for regulatory reporting purposes.
   The Group also assigns capital on other than Pillar I risk categories, for example 'Interest rate risk on banking book' and for 'Concentration risk', within the Pillar II framework.

4. Highlights

In line with Article 2.2. of Capital Adequacy Regulation, CBUAE requires banks to apply the following minimum requirement:

1. CET1 must be at least 7% of risk weighted assets (RWA);
2. Tier 1 Capital must be at least 8.5% of RWA;
3. Total Capital, calculated as the sum of Tier 1 Capital and Tier 2 Capital, must be at least 10.5% of RWA.
4. In addition to the minimum CET1 capital of 7% of RWA, banks must maintain a capital conservation buffer (CCB) and Countercyclical Capital Buffer (CCyB), maximum of 2.5% of RWAs on the form of CET1 capital.
5. All banks must maintain a leverage ratio of at least 3.0%.

The Group has complied with all the externally imposed capital requirements and is well capitalized with low leverage and high levels of loss-absorbing capacity. As at 31 December 2023:

• The Group's Common Equity Tier 1 (CET1) ratio of 12.54% (31 December 2022: 12.40%), Tier 1 capital Ratio of 14.81%
  (31 December 2022: 14.90%), Capital Adequacy Ratio of 15.95%1 (31 December 2022: 16.04%), are all above the regulatory requirements.
• The Group's leverage ratio of 9.97% (31 December 2022: 10.17%) is above the current regulatory requirement.
• The Group continues to manage its balance sheet proactively, with focus on sound RWA management.

1 The above capital adequacy ratios have been calculated in line with Basel and CBUAE guidelines. The ratios include proposed dividend amounts which are subject to the shareholders' approval at the Annual General Meeting.

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

5. Key Metrics (KM1)

Key prudential metrics related to regulatory capital have been included in the following table:

			Dec'23		Sep'23	Jun'23		Mar'23	Dec'22
	Available capital (amounts)								(AED '000s)
1	Common Equity Tier 1 (CET1)	12,203,222		12,705,960	12,066,821		11,478,911	10,916,957
1a	Fully loaded ECL accounting model	12,094,797		12,599,023	11,984,233		11,421,845	10,826,666
2	Tier 1	14,407,022		14,909,760	14,270,621		13,682,711	13,120,757
2a	Fully loaded ECL accounting model Tier 1	14,298,597		14,802,823	14,188,033		13,625,645	13,030,466
3	Total capital	15,517,077		16,007,085	15,346,074		14,716,322	14,128,146
3a	Fully loaded ECL accounting model total capital	15,408,652		15,900,148	15,263,486		14,659,256	14,037,855
	Risk-weighted assets (amounts)
4	Total risk-weighted assets (RWA)	97,300,973		95,280,172	93,429,931		90,119,130	88,073,313
	Risk-based capital ratios as a percentage of RWA
5	Common Equity Tier 1 ratio (%)	12.54%		13.34%	12.92%		12.74%	12.40%
5a	Fully loaded ECL accounting model CET1 (%)	12.43%		13.22%	12.83%		12.67%	12.29%
6	Tier 1 ratio (%)	14.81%		15.65%	15.27%		15.18%	14.90%
6a	Fully loaded ECL accounting model Tier 1 ratio (%)	14.70%		15.54%	15.19%		15.12%	14.80%
7	Total capital ratio (%)	15.95%		16.80%	16.43%		16.33%	16.04%
7a	Fully loaded ECL accounting model total capital ratio (%)	15.84%		16.69%	16.34%		16.27%	15.94%
	Additional CET1 buffer requirements as a percentage of RWA
8	Capital conservation buffer requirement (2.5% from 2019) (%)	2.50%		2.50%	2.50%		2.50%	2.50%
9	Countercyclical buffer requirement (%)	0.00%		0.00%	0.00%		0.00%	0.00%
10	Bank D-SIB additional requirements (%)	0.00%		0.00%	0.00%		0.00%	0.00%
11	Total of bank CET1 specific buffer requirements (%) (row 8 + row	2.50%		2.50%	2.50%		2.50%	2.50%
9+ row 10)
12	CET1 available after meeting the bank's minimum capital	5.45%		6.30%	5.92%		5.74%	5.40%
requirements (%)
	Leverage Ratio
13	Total leverage ratio measure	144,437,305		140,264,456	137,014,819		132,591,794	128,960,570
14	Leverage ratio (%) (row 2/row 13)	9.97%		10.63%	10.42%		10.32%	10.17%
14a	Fully loaded ECL accounting model leverage ratio (%) (row 2A/row	9.90%		10.55%	10.36%		10.28%	10.10%
13)
14b	Leverage ratio (%) (excluding the impact of any applicable temporary	9.97%		10.63%	10.42%		10.32%	10.17%
exemption of central bank reserves)
	Liquidity Coverage Ratio
15	Total HQLA	-		-	-		-	-
16	Total net cash outflow	-		-	-		-	-
17	LCR ratio (%)	-		-	-		-	-
	Net Stable Funding Ratio
18	Total available stable funding	-		-	-		-	-
19	Total required stable funding	-		-	-		-	-
20	NSFR ratio (%)	-		-	-		-	-
	ELAR
21	Total HQLA	22,975,374		21,448,358	19,815,907		20,973,020	18,895,824
22	Total liabilities	113,094,418		111,073,278	108,814,581		105,784,429	102,117,522
23	Eligible Liquid Assets Ratio (ELAR) (%)	20.31%		19.31%	18.21%		19.83%	18.50%
	ASRR
24	Total available stable funding	101,299,524		100,473,742	98,972,555		94,846,361	90,040,336
25	Total Advances	88,384,200		87,640,901	85,298,646		80,413,439	78,413,470
26	Advances to Stable Resources Ratio (%)	87.25%		87.23%	86.18%		84.78%	87.09%

"Fully Loaded" means bank's regulatory capital compared with a situation where the transitional arrangement had not been applied. CBUAE introduced transitional arrangements as per circular no. 04/2020 "Regulation Regarding Accounting Provisions and Capital Requirements - Transitional Arrangements".

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

6. Overview of risk management and Risk Weighted Assets (OVA)

6.1 Risk Governance

The Board of Directors (the "Board") has the overall responsibility for the operations and the financial stability of the Gro up, and ensures that the interests of shareholders, depositors, creditors, employees and other stakeholders, including the banking regulators and supervisors, are addressed. The Board is responsible for strategic direction, oversight of management and satisfying itself there are adequate controls with the ultimate objective of promoting the success and long -term value of the Group. The Board is also responsible for the overall framework of the risk governance, management, determining risk strategy, setting the Group's risk appetite and ensuring that risk exposure is monitored, controlled effectively and kept wit hin set limits. Additionally, it is responsible for establishing a clearly defined risk management structure and for approval of the risk policies and procedures as well as management of all risks related to the Group.

In order to effectively discharge this responsibility the Board is assisted by various Board Committees, namely the Board Executive Committee (BEC), Board Risk and Compliance Committee (BRCC), Board Audit Committee (BAC) and the Remuneration, Nomination and Governance Committee (REMCO).

Management actively manages risk, through a three lines of defense model where the businesses and functions in the first line are the risk owners, and the second line function of the Risk Department defines risk policies and provides assurance that risk is appropriately managed, oversight by the Executive Committee (EXCO), Assets & Liabilities Committee (ALCO), Credit Committee (CC), Project Investment Committee (PIC), Risk Management and Compliance Committee (RMCC), Operational Risk Management Committee (ORMC), Environmental, Social, and Governance Council (ESG Council), Model Oversight Committee (MOC), IFRS 9 Provisions Committee (IFRS 9 PC) and the Sharia Supervision Committee (ISSC).

6.2 Control Environment

1. Group Risk
   The Group Risk Management Department comprises of the following areas: Enterprise Risk Management, Market Risk, Operational Risk including Technology Risk and Business Continuity Management, Risk Governance and Fraud Risk Management. The core responsibilities include the following:
2. • The upkeep of the Risk Management Framework and risk appetite in accordance with the strategic plan approved by the Board and regulatory requirements;
   • Performing the Group's Internal Capital Adequacy Assessment Process (ICAAP) - including the Material Risk Identification Process - Capital Management analysis, the development of Pillar II capital assessment models and conducting Stress Testing;
   • Providing the independent assessment of, and challenge to the business areas' risk management and profiles to ensure that they are maintained in a robust manner;
   • Acting as a point of reference for risk and control matters, providing advice to management, sharing best practices and carrying out special reviews as directed by RMCC and the ALCO, and highlighting emerging risks.
   • Conducting assurance reviews on the 1st line of defense activities including risk and control self -assessments, control testing and the appropriate adoption of risk policies.
   • Providing operational resilience - protecting Group and customer information assets from cybersecurity risks and ensuring that critical functions can be maintained should a disruptive event occurs;
   • Centrally managing the Group's policies to ensure timely review and approval in accordance with regulatory and internal deadlines;
   • Formulating and managing the Group's Model Risk management approach, ensuring appropriate governance controls are in place and in line with internal and regulatory expectations;
   • Framing and introducing necessary controls to identify, assess and monitor the Group's exposure to Market Risk.

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

1. Internal Audit
   The role of the Internal Audit Department within the Group is to provide independent and objective assurance that the process for identifying, evaluating and managing significant risks faced by the Group is appropriate and effectively applied. In addition, it also provides an independent assurance on the compliance with key laws and regulations and measuring compliance with the Group's policies and procedures. Additionally, Internal Audit provides consulting services which are advisory in nature, and are generally performed at the specific request of the BAC or Management.
   It is led by the Chief Internal Audit Officer who reports to the BAC of the Board of Directors, with administrative reporting to the Chief Executive Officer of the Group.
   To perform its role effectively, Internal Audit has organizational independence from management, to enable unrestricted evaluation of management activities and personnel. The Internal Audit Charter empowers it to have full, free and effective access at all reasonable times to all records, documents and employees of the Group. Internal Audit has direct access to the Chairman of the BAC and Chief Executive Officer of the Group.
   To determine whether the Internal Audit Function is functioning effectively, the BAC shall:
2. • Assess the appropriateness of the Internal Audit Charter;
   • Assess the adequacy of resources available, both in terms of skills and funding once each year; and
   • Sponsor external assessments, at least once every five (5) years, by a qualified, independent reviewer from outside the Group.
3. Internal Control
   Board of Directors and management are responsible for developing and maintaining the existence of a sound internal control system and procedures that meet international standards and fulfill the requirements of the Group's management and external regulatory bodies. The internal control system should be capable of ensuring the achievement of the following:
4. • Accuracy and integrity of financial and operational statements issued by the Group;
   • Effectiveness and efficiency of the Group's operational activities;
   • Effectiveness of measures and procedures set to safeguard the Group's assets and properties; and
   • Compatibility with laws, legislations and regulations in force as well as policies pertinent to internal operational procedures.

Executive management constantly monitors and assesses the efficiency and effectiveness of internal control procedures and their ability to achieve stated objectives and their furtherance and enhancement. Management has reviewed the system of internal controls and found them to be effective.

The processes and responsibilities of the Internal Control functions include but not limited to:

• Ensuring that the Group's operational policies, processes and controls are adhered to;
• Ensuring that proper internal controls are in place and that they are functioning as designed in a timely and effective manner;

• Periodic review of	the Group's internal control system in order to	identify areas where internal controls may
be weak, not present	and areas where there appear to be excessive	controls resulting in operational inefficiency
so as to suggest ways to rectify the same;

1. • Enabling the management to conduct an annual review of the efficiency of the internal control system and report its findings; and
   • Monitoring of operational activities and overseeing operational controls being exercised to ensure that these are timely and effective.
2. Compliance
   Compliance risk is defined by the Basel Committee as "the risk of legal or regulatory sanctions, financial loss, or loss to reputation that a Group may suffer as a result of its failure to comply with all applicable laws, regulations, codes of condu ct

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COMMERCIAL BANK OF DUBAI

For the year ended 31 December 2023

and standards of good practice".

The process of monitoring compliance is an independent task which aims at ensuring that the Group, which includes the Bank and its regulated subsidiaries, operates in compliance with applicable laws, regulations, instructions, directives and circulars, issued by relevant authorities as well as prevailing market practices and ethical standards.

The Board of Directors oversees management of Compliance risk within the Group and takes necessary measures to set and promote a culture of compliance with the letter and spirit of applicable laws, rules, standards, ethical and professional conduct values when conducting the business of the Group.

The mission and role of the Group Compliance department is to:

1. 1. • Ensure Compliance risk is adequately identified, assessed, monitored and mitigated in conjunction with Business and other control functions;
      • Ensure senior management and the Board are fully informed of significant compliance issues and plans for resol ution;
      • Contribute to a "no surprise" compliance culture by educating and communicating compliance awareness throughout the Group;
      • Conduct independent reviews of selected processes and controls across the Group to ensure that key regulatory obligations are met and that key controls operate effectively;
      • Develop annual compliance plans which set out compliance priorities for the Group and align compliance plans with business strategies and goals; and
      • Support the business in meeting applicable regulatory requirements, including Anti-Money Laundering (AML), Combatting the Financing of Terrorism (CFT), Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS) requirements.
   2. Whistle Blowing
      A set of arrangements has been designed to enable employees and customers to confidentially report concerns about any potential violations or misconduct, enabling the investigation and follow up of such concerns in an independent and confidential manner. Such arrangements are supervised by the Board in coordination with the senior management.
   3. Fraud prevention
      The Group has a dedicated Fraud Prevention and Investigation Unit that assists in identification, detection, and verification of potential or actual fraud incidents including quantification and recoupment of any losses sustained as a result of such incident. The purpose is to manage the susceptibility of the Group's assets and processes to fraud risk with a view to reducing it and to raise the level of fraud awareness amongst employees, customers and other stakeholders.
2. Risk Management
3. 
   Risk Management is a key constituent of the Group's function. In the Risk Management Objectives and Policies and Financial Risk Management sections of the 2023 Audited Financial Statements, the Group's approach and strategy for managing risk are presented in detail. The section also provides the overarching framework towards the Group's risk management policies, practices, monitoring and governance towards the Group's main activities and significant risks.
   The Group has exposure to the following primary risks from financial instruments:

   • Credit Risk (refer to page 77 of the Audited Financial Statements 2023)
   • Liquidity Risk (refer to page 89 of the Audited Financial Statements 2023)
   • Market Risk (refer to page 94 of the Audited Financial Statements 2023)
   • Operational Risk (refer to page 99 of the Audited Financial Statements 2023)
4. Stress Testing
5. 
   The Group operates stress testing programs that supports the risk management and capital planning framework. It includes mandatory stress test scenarios required by the CBUAE. Stress testing alerts the Bank's management to adverse unexpected outcomes related to a variety of risks and provides an indication of how much capital might be needed to absorb losses should large shocks occur.

9