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Customer in UAE extends its system landscape with one platform for IFRS, Risk and Regulatory Reporting

A bank that is currently shaping the project financing and banking landscapes in the UAE and the Middle East at large, has decided to benefit further from FERNBACH’s cutting-edge technologies and unparalleled customer service.

About the bank

The customer, with total assets of AED 16.48 billion as in 2015, currently reported for the H1 2016 a net profit of AED 68.7 million (up 168% from AED 25.6 million in H1 2015). Having been recognized as ‘The Fastest Growing Bank’ and ‘The Most Improved Bank’ by the Banker Middle East in 2013, the bank is focused on offering simple and easy-to-understand products and is led by a commitment to building long-term relationships with its expanding customer base.

The bank, which operates with a retail network spread across the country, has a growing presence in transactional banking and technology-driven delivery channels. The bank offers a comprehensive portfolio of standard banking products, as well as tailor-made financial solutions in Corporate, SME and Retail Banking, ranging from personal account services to finance for homes and cars to commercial loans and project financing.

Initial situation

The UAE Central Bank has instructed banks to assess the changes they will have to make to comply with the IFRS 9 rules, which are designed to improve the resilience of the banking system to shocks.

Under current standards, banks build provisions for loans when borrowers fail to repay. The new rules mean banks will have to switch to an expected credit loss model, meaning they have to start building provisions much earlier.

About the project

With the implementation of FERNBACH’s IFRS 9 platform the bank will be fully compliant with the Central Bank’s regulation by January 2018.

FERNBACH was the first choice because the bank has already used FERNBACH’s Basel 2 and ALM (Asset Liability Management) solutions since 2010 and decided in Summer 2016 to expand its business with FERNBACH by signing a series of agreements.

Under the agreements reached by both parties, FERNBACH will deploy relevant teams to exclusively plan, oversee and deliver the implementation of its IFRS 9, Liquidity, FTP (Fund Transfer Pricing) and stress testing solutions.

Specifically, the current remit guarantees an all-inclusive IFRS 9 platform which provides for expected credit losses (ECL), including: impairment stage assignment and transitioning, translation of through-the-cycle expected loss to point-in-time expected loss via the generation of projected macroeconomic parameters as well as IFRS 9 compliant disclosures that incorporate impairment movement analysis and stage transitioning audit trails.