Annual Reports & Accounts 2011

21 Held-to-maturity investment

	2011 USD’000	2010 USD’000
Deposit with a fixed interest rate of 1.75% and a maturity date of 3 October 2012	6,879	6,875

The held-to-maturity investment represents a structured deposit with 100% capital protection, a guaranteed return of 1.75% and a variable return, which is linked to the performance of an underlying equity basket, which consists of 10 equally weighted shares. The capital protected status of the investment is valid only if the investment is held to maturity. The variable component is considered as an embedded derivative, the fair value of which at the balance sheet date was Nil.

There is no provision for impairment against the held-to-maturity investment.

At 31 December 2011, the fair value of the held-to-maturity investment is USD 6.75m (2010: USD 6.75m).

The held-to-maturity investment is denominated in UAE Dirhams.

The maximum exposure to credit risk at the reporting date is the carrying amount of the held-to-maturity investment.

The held-to-maturity investment is held by the bank as a lien against a guarantee issued by the bank in the ordinary course of business.