Bank Asia: Basel Ii Implementation
Basel II Implementation in Bank Asia:
The Implementation works of Basel II in Bank Asia Ltd started in 2009 and by 2010 the bank successfully fulfilled all the major requirements of Bangladesh Bank. In 2011 the bank has met all reporting requirements set by the central bank.
Implementation Achievements:
As per Basel II report for the year Ended 2011, the Capital Adequacy Ratio of Bank Asia Ltd CAR reached at 14.21% which was only 8.11% in the year end 2010. Risk Weighted Assets (RWA) registered to TK 88,429.00 million which was TK 100,545.90 million in the same period of 201. The total capital stood at TK 12574.37 million against the minimum Capital requirement (MCR) of 8849.20 million i.e. TK 3725.17 million capital is surplus to meet Stress Test and ICAAP requirement. Tier I capital adequacy ratio is 10.92% against the minimum regulatory requirement of 6.00%. The Bank policy is to manage and maintain its capital with the objective of maintaining strong capital ratio and high rating.
Injection of fresh capital through issuing of right share, asset re valuation, reducing credit growth and improvement of corporate borrowers rating were the key initiatives in the year 2011 for better capital management.
Table: Historical CAR ratio of Bank Asia Ltd Capital Adequacy Ratio CAR | Requirement UnderBasel II | Dec' 2010 | June' 2011 | Sept' 2011 | Dec' 2011 | On Core Capital(tier 1) | 6% | 6.57% | 7.54% | 8.23% | 9.63% | On Actual Capital (Tier 1,2,3) | 10% | 8.11% | 10.86% | 11.85% | 14.21% |
Figure: Yearly change of CAR of Bank Asia
The Implementation works of Basel II in Bank Asia Ltd started in 2009 and by 2010 the bank successfully fulfilled all the major requirements of Bangladesh Bank. In 2011 the bank has met all reporting requirements set by the central bank.
Implementation Achievements:
As per Basel II report for the year Ended 2011, the Capital Adequacy Ratio of Bank Asia Ltd CAR reached at 14.21% which was only 8.11% in the year end 2010. Risk Weighted Assets (RWA) registered to TK 88,429.00 million which was TK 100,545.90 million in the same period of 201. The total capital stood at TK 12574.37 million against the minimum Capital requirement (MCR) of 8849.20 million i.e. TK 3725.17 million capital is surplus to meet Stress Test and ICAAP requirement. Tier I capital adequacy ratio is 10.92% against the minimum regulatory requirement of 6.00%. The Bank policy is to manage and maintain its capital with the objective of maintaining strong capital ratio and high rating.
Injection of fresh capital through issuing of right share, asset re valuation, reducing credit growth and improvement of corporate borrowers rating were the key initiatives in the year 2011 for better capital management.
Table: Historical CAR ratio of Bank Asia Ltd Capital Adequacy Ratio CAR | Requirement UnderBasel II | Dec' 2010 | June' 2011 | Sept' 2011 | Dec' 2011 | On Core Capital(tier 1) | 6% | 6.57% | 7.54% | 8.23% | 9.63% | On Actual Capital (Tier 1,2,3) | 10% | 8.11% | 10.86% | 11.85% | 14.21% |
Figure: Yearly change of CAR of Bank Asia