Abu-Dhabi- October 18, 2004-- THE National Bank of Abu Dhabi is the first in the Middle East to implement the OpRisk Manager system as part of its structural changes to comply with the regulatory requirements specified by the Basel Committee on Banking Supervision.

The bank says the decision has given it the lead position among regional banks in satisfying the regulations, widely known as Basel II, and due for full implementation from the 2006 year-end. 

Basel II represents a major revision of the international standard on bank capital adequacy introduced in 1988 and forms the basis for a capital measurement framework with sound contemporary practices in banking, while promoting improvements in risk management and enhanced financial stability.

After studying various ways of managing the Basel II requirements in relation to Operational Risk, the bank decided that an automated system was necessary to deal with data collection and verification processes as mandated by the Bank for International Standards.

The preferred system was OpRisk Manager from HSBC Operational Risk Consultancy and supplied by Euro Banking Solutions in Dubai.

The system delivers control and risk self-assessment tools and loss events database, all Basel II compliant, along with comprehensive solutions to the management of operational risks. 

"Basel II entails better management and control of operational risk, leading to a reduction in operational losses and therefore potentially more consistent profit for the shareholders," says Sakit Al Jundi who heads the bank's Risk Management Department.

"We needed to find a system that did not require us to spend large amounts of money on outside consultants, whilst at the same time was easy enough to roll out by ourselves in a quick and efficient fashion.

"One of the main reasons for choosing OpRisk Manager is that it includes a suite of nearly three thousand expert questions for sound business practices, which means that the bank only has to choose the appropriate questions and set the system up for its own business lines and then start using it." 

The system has already been successfully rolled out to all the UAE branches network under the supervision of Dr. Lamees Al Qaisi Manger Operational Risk.

Al Jundi says that any bank adopting the Basel II Accord essentially changes its whole culture from traditional accounting to a new risk-management base.

Historically, NBAD had established a diligent and conservative image with total dedication to sound banking practices, efficient service and a protective attitude towards depositors and shareholders alike.

"The philosophy of the Bank has always been to protect its traditional values while embracing the best contemporary business practices and it is this progressive mind-set that initiated a process that has resulted in NBAD becoming the leader in adoption of the upcoming Basel II requirements from the Bank for International Settlements in advance of the proposed introduction in 2006," he explained.

NBAD was established in 1968 and has grown to encompass the largest branch network and ATM network as well as 17 overseas branches. It recently won the much-coveted Sheikh Khalifa Gold Excellence Award.

Compliance with Basel II requirements is a major objective of the bank as a whole and at all levels starting from the board of directors down to different levels of management that will result in superior standards of operational risk management, Al Jundi said.

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© Press Release 2004