Bank of Alexandria's management was assigned to a professional leadership with international experience late in 2002, in order to comply with the governance principles. In this respect, Basel Committee included management experience and quality, leadership and risk-based decision making among factors governing capital adequacy calculations for each bank. This was done because the effective leadership is keen on realizing the compliance with the existing laws and regulations.
Hence, Bank of Alexandria succeeded in applying the following principles:

Disclosure & Transparency

» Preparing the financial statements in accordance with the International and Egyptian Accounting Standards so as to ensure complete disclosure and transparency.

» Publishing the financial statements quarterly under the Stock Exchange Law.

» Providing an annual report to Banks and correspondents including the financial statements and the Bank's accomplishments in all fields during the reported year.

Internal Supervision

» The Bank has adopted successful policies in the field of anti-money laundering to comply with FATF Recommendations and the Egyptian Law requirements.
This was in addition to developing the anti-money laundering policies and measures to cope with national and international developments.

» The Compliance Division was established according to Basel II Requirements to ensure that systems and rules comply with domestic and international laws and regulations.
This was in addition to issuing the first and second version of the Compliance Manual to study and evaluate the non-compliance risks, besides asserting that the compliance job is not confined to anti-money laundering and terrorism finance.

» The Bank's Head of Compliance was mandated to assume the responsibility of supervising the Compliance Officers in the Bank's branches and units.

» A plan was set to train the Compliance Officers so as to protect the Bank's customers and staff from the non-compliance risks. Moreover, the Compliance officers are fully independent of the management which should cooperate with them.

» The Internal Audit Committee was established under The Central Bank, the Banking Sector and Money Law.
It is responsible for reviewing the financial statements, coordinating internal and external audit tasks ,reviewing reports prepared by the Internal Audit Department and Compliance Division.

» Administrative and financial reports are prepared based on the data made available by the Core Banking Solutions. The reports are submitted to the Board of Directors, Audit Committee and internal and external regulatory bodies.

» Internal Audit units in branches operate independently to guarantee neutrality and credibility.

» Effective supervision on branches and divisions through inspection visits and branches' internal audit units to verify executing the set instructions and evaluate performance.
This ensures detection of any deviation and reporting it to the audit committee for revision and suggesting recommendations.

» An executive committee was established to be responsible for making decisions on finance, credit lines and equity financing.

» Enriching employees' skills and training them in the field of supervision on banking transactions and pre-detecting money laundering.

Risk Management

» The Bank established an independent division for managing risks in order to apply the systems aiming at reducing the various risks that the Bank may be exposed to.

» The Scoring System was introduced to classify cardholders as well as each credit facility.

» The Bank was among the first banks to apply the Obligor Risk Rating "ORR" to the Bank's financial statements. The aim of this rating is to classify the customers' debts into categories, according to the risk profile, in order to be monitored and controlled in view of Basel II Requirements.

» The Bank established operating losses and credit customers databases.

» The Bank's Head Office network was linked to the CBE's system of pooling credit risks. Moreover, the black lists system for credit cardholders came into effect.

» The Bank adopts the most recent specialized systems in the field of market risks management via establishing a specialized department, under the Risk Management Division, using the most recent programs in this field:

TREMA
BALM

» TREMA System is considered a program for measuring value at risk (VaR) for the trading portfolio. (VaR) is the maximum expected loss in a determined period of time and it allows to manage and evaluate market risks in addition to analyzing the treasury management portfolio as follows:

The parallel yield curve shift
Duration and convexity
Cash flows

» BALM is also considered a program for Asset and Liability Management to realize a constant balance. The aim of this program is to maximize capital gains and make the necessary liquidity always available to meet the current requirements via:

Measuring liquidity risks
Measuring interest rate risks
Supporting ALCO operations