Kuwait Finance House Bahrain selects SunGard's BancWare for Basel II

Source: SunGard

SunGard today announced that Kuwait Finance House in Bahrain has chosen SunGard's BancWare solution suite for retail and wholesale regulatory capital management, asset/liability management (ALM) and data management.

With total assets of $16.2bn, Kuwait Finance House has branches in Kuwait, Bahrain, Turkey and Malaysia. Kuwait Finance House Bahrain has selected SunGard's BancWare Capital Manager to implement integrated regulatory capital management across its retail and wholesale businesses for Basel II compliance. The project will initially follow the standardized approach, incorporating economic capital for credit risk. The subsequent adoption of BancWare's factor generation model and the development of PD spell out and LGD spell out modeling will help the bank to progress to the more advanced internal ratings-based (IRB) approach. BancWare will further help the bank to follow the basic indicator approach for operational risk, including quantitative 'Op-V@R' analysis using risk weightings.

Kuwait Finance House has also selected BancWare ALM to help manage the market risk in its balance sheet. In conjunction with BancWare Capital Manager, BancWare ALM will help the bank to obtain a unified view of its different risk categories in accordance with pillar II of the Basel II requirements.

BancWare's understanding of the risk properties of Islamic Shari'a-compliant banking products will help Kuwait Finance House to implement a Basel II framework. BancWare Data Integration will also provide data cleansing and management to further help the bank progress to the advanced approaches of Basel II compliance and overcome the challenges associated with the shortage of quality historical data in the Islamic banking world.

Waleed Abdulla Rashdan, head of risk management for Kuwait Finance House Bahrain, said, "We selected SunGard's BancWare for its ability to help us implement an integrated risk approach and meet regulatory requirements. It is especially important to us that BancWare can effectively support both conventional and Islamic banking products within the Basel II framework."

Terence Faherty, president of SunGard's BancWare business unit, said, "This project is an exammple of how global banking trends are moving towards the integrated approach to risk management. A combination of our software capabilities, our presence in the region and the availability of regional support through our Bahrain-based partner Advanced Financial Solutions, a subsidiary of Mideast Data Systems, will help Kuwait Finance House to achieve integrated risk management and Basel II compliance.

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