Question

Saudi banks apply the international standards on calculating and disclosing of market risk, so explain and give an example about the way banks calculate and disclose market risk .Give the name of the bank you have chosen.

Answer 1

Answer:

Disclosure on the Saudi Bank's Loan Portfolios of "Banque Saudi Fransi"
Introduction:
Banque Saudi Fransi seems to be a corporate banking company set up in 1977. The bank delivers regional as well as financial services to its customers. The headquarters is based in Riyadh. The office locations were based in Jeddah, Al-Riadh, and Al-Khobar. And have 120 branches in the United Arab emirates with about 3000 employees. BSF provides services such as corporate banking, investment banking, Islamic banking, wealth management, and hedge funds.

BSF's Financial Position
The net earnings of BSF since zakat is SAR 3.18 billion, the expense of the risk ratio is 0.78 percent, the capital strength is 19.2 percent, the turnover is 1.1 percent and the operating profit is 1.7 percent. There had been an average increase in performance relative to the previous year. The cost of income ratio strengthened at 33.3 percent and the cost of credit risk improved.

BSF Credit Portfolio
The market volatility system is authorized and checked regularly by the Board of Directors to provide input on the risk level.
Management of credit risk activities run through a range of divisions, including credit risk retail, corporate credit risk, fund risk, and specialized wealth management.
Risk rating and credit sensitivity shall be referred to the Board of Risk Board.
Credit derivatives assessments are submitted to the Executive committee and the board of Directors.
Credit rating reserves in the previous year have been SAR 125,725,096 loans; SAR 30,219,492 debt instruments and SAR 30,373,422 off-balance-sheet exposes.

Summarizing
Banque Saudi Fransi Bank is implementing the global standards for the declaration of loan portfolios. They also split the credit portfolio into default exposures and – anti-default risks.

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