Kuwait International Bank K S C P : NSFR Disclosure Q1,2024

Net Stable Funding Ratio

Central Bank of Kuwait had adopted at its meeting convened on 25/10/2015 the Net Stable Funding Ratio ("NSFR") for local Islamic banks. The objective of the NSFR is to promote resilience of banks' liquidity risk profiles. The NSFR will require banks to maintain a stable funding profile in relation to the composition of their assets and off-balance sheet activities. The NSFR limits overreliance on short-term wholesale funding, encourages better assessment of funding risk across all on-andoff-balance sheet items, and promotes funding stability.

The NSFR is defined as the amount of available stable funding relative to the amount of required stable funding. This ratio should be equal to at least 100% on an ongoing basis. "Available stable funding" is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year. "Required stable funding" is defined as the portion of assets and off- balance sheet (OBS) exposures expected to be funded on an ongoing basis over a one-year horizon. The amount of such stable funding required of a specific institution is a function of the liquidity characteristics and residual maturities of the various assets held by that institution as well as those of its off-balance sheet exposures.

The NSFR (as a percentage) shall be calculated as follows:

Available amount of stable funding

Required amount of stable funding

≥ 100

Governance of Liquidity Risk Management and Funding

The banks liquidity management is guided by its Assets Liability Management (ALM) Policy which is reviewed periodically and approved by the Board of Directors. The ALM Policy specifies the main goals, roles and responsibilities and related processes for managing liquidity risk. Specifically, the Policy outlines approaches for identifying, measuring and monitoring of liquidity risk parameters in line with regulatory and internal limits. ALCO and the Board Risk Management Committee (BRMC) oversees the liquidity risk management functions. ALCO reviews periodically the liquidity conditions and recommends in terms of immediate targets of liquidity mix and maturity profiles /mismatches. BRMC periodically reviews the adherence to the internal / regulatory liquidity ratios and limits established.

Liquidity risk is measured primarily using the residual maturity approach and bank manages its gaps within the limits. In addition to prudent liquidity ratios, NSFR and LCR, the bank also monitors periodically multiple deposits and funding concentration limits established to ensure better diversification of funding. The Bank's maturity profile and related maturity mismatches are also subjected to stress testing on a periodical basis. Liquidity gaps are monitored on a daily basis and again reviewed on a monthly basis by ALCO. To limit the liquidity risk, funding concentrations are constantly monitored, funding sources diversified and long-term funds sourced.

Analysis of the results for the quarter ended 31st March 2024

As per CBK instructions banks should maintain NSFR at or above 100%. Bank has complied with this ratio on all days of the quarter.

The weighted values of the financing assets, investments and other assets requiring 100% weight was the main component of the RSF representing 21% of the total RSF. ASF was mainly supported by capital (26% of ASF), retail & SME funding (32% of ASF) and other wholesale funding.

KIB Classification: CONFIDENTIAL-GENERAL BUSINESS

The following table sets forth the Net Stable Funding Ratio (NSFR) for the quarter ending on 31.03.2024.

"Values in KWD 000"

KIB Classification: CONFIDENTIAL-GENERAL BUSINESS