Annex A - - -/1
In accordance with Bangladesh Bank revised guidelines on risk based capital adequacy under Basel II to complement the capital adequacy requirements under Pillar III. Commercial Bank of Ceylon PLC ("the Bank") has approved policy to observe the disclosure requirements set out by the Bangladesh Bank (BB). The major highlighted regulations of the Bangladesh Bank are: a. b. c. d. e. To comply with international best practices and make the Bank's Capital more risk-absorbent; To maintain minimum capital requirement by the Bank against credit, operational and market risks; To maintain capital adequacy ratio as per requirement of the Bangladesh Bank's; To adopt the approved credit rating agencies as external credit assessment institutions (ECAI); To adopt standardised approach for both credit and market risks and basic indicator approach for operational risk; f. To submit capital adequacy returns to Bangladesh Bank on a quarterly basis.
2. Scope of Applications The risk based capital adequacy framework applies to Commercial Bank of Ceylon PLC, Bangladesh Operations, on " Solo Basis" as the Bank has no subsidiaries or significant investments rather operating in Bangladesh as a Branch of foreign bank, Commercial Bank of Ceylon PLC, incorporated in Sri Lanka. 3. Disclosures Framework The disclosures requirements as per Bangladesh Bank Basel II Guidelines are enumerated below: 3.1 Capital Structure Qualitative Disclosure The Bank's total capital as of 31 December 2010 was Taka 3,294.97 million out of which Taka 3,038.88 million was under Tier-I and remaining Taka 256.08 million was under Tier-II. The main features of our Tier-I capital of Taka 3,038.88 million is Taka 2,103.04 million kept with Bangladesh Bank as per section 13 (4) of Banking Companies Act 1991 and the remaining 935.84 million is the retained earnings at 31 December 2010. The Bank's Tier-II capital is consists of general provision of Taka 211.15 million and remaining 44.93 million is 50% of revaluation gain on treasury bills/bonds as at 31 December 2010. Quantitative Disclosure A) Amount of Tier-1 capital Fully paid-up capital/ capital deposited with BB Non-repayable share premium account Statutory reserve General reserve Retained earnings Minority interest in subsidiaries Non-cumulative irredeemable preferences shares Dividend equalisation account B) Amount deducted from Tier-1 capital • Goodwill • Shortfall • Others C) Net total of Tier-I Capital (A+B) D) Total amount of Tier 2 capital, net of deductions from Tier 2 capital E) Total eligible capital (C+D) Amounts in Taka 2,103,040,786 935,840,083 3,038,880,869 3,038,880,869 256,087,917 3,294,968,786
Commercial Bank of Ceylon PLC - Bangladesh Operations Disclosures on Risk Based Capital Requirement under Pillar III of Basel II for the year ended 31 December 2010 3.2 Capital Adequacy Qualitative Disclosure of Capital Adequacy
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The Bank has maintained regular reporting requirement of Bangladesh Bank regarding capital adequacy. The Bank is in the final stage of formulating an internal capital adequacy assessment process (ICAAP) documents in line with Bangladesh Bank BASEL-II guidelines. The Bank also ensure the capital level that are sufficient to cover all material risk of the Bank. The entire objective of the Bank's capital planning is to ensure that the Bank is adequately capitalised at all level throughout the year. The Bank maintains a capital of Taka 3,294.97 million (core capital of Taka 3,038.88 million plus supplementary capital of Taka 256.09 million) as against total risk weighted assets of Taka 20,362.54 million. The Bank's Capital Adequacy Ratio (CAR) as at 31 December 2010 is 16.18% as against the minimum requirement of 9% as of 31 December 2010 as per BRPD circular no. 10...