CENTURY COMMERCIAL BANK LIMITED Disclosure as per BASEL II (Capital Adequacy Framework)

Transcription

1 Tier 2 capital and a breakdown of its components: General Loan Loss Provision Exchange Equalization Reserves Supplementary Capital CENTURY COMMERCIAL BANK LIMITED Disclosure as per BASEL II (Capital Adequacy Framework) 1. CAPITAL STRUCTURE AND CAPITAL ADEQUACY Tier 1 capital and a breakdown of its components: Paid Up Capital Statutory General Reserves Retained Earnings Un-audited current year cumulative profit Other Free Reserve Core Capital (For Forth Quater ending on Ashwin 2070, Fiscal Year 2070/71) Detail of Subordinated Term Debts: There is no Subordinated Term Debts as of Year Ended Ashad End, Deductions from capital: There is no item to be deducted from capital. Total qualifying capital; Core Capital Supplementary Capital Total Qualifying Capital (Total Capital Fund) Capital Adequacy Ratio; Capital Adequacy Ratio Core Capital Capital Adequacy Ratio Total Capital Fund 1,080,000,000 15,107,473 56,151,301 23,929,932 66,528,737 1,241,717,443 98,600, ,372 99,487,967 1,241,717,443 99,487,967 1,341,205,410 Percentage of Total RWE 10.95% 11.82% 2. RISK EXPOSURE Risk weighted exposures for Credit Risk, Market Risk and Operational Risk: Risk weighted exposures for Credit Risk Risk weighted exposures for Operational Risk Risk weighted exposures for Market Risk Total 10,430,305, ,027,949 54,944,986 10,804,277,997 Exposures under each of 11 categories of Credit Risk: S.N. Claims Categories Amount 1 Claims on govt. and central Bank - 2 Claims on other official entities 269,925,000 3 Claims on Banks 770,756,120 4 Claims on corporate and securities firm 5,627,195,402 5 Claims on regulatory retail portfolio 260,441,077 6 Claim secured by residential properties 591,219,910 7 Claims secured by commercial real state 185,812,092 8 Past due Claims 100,307,708 9 High risk claims 950,348, Other Assets 826,895, Off Balance sheet Items 847,404,056 Total 10,430,305,063

2 Exposure calculation table; Exposure for Credit Risk A. Balance Sheet Exposures Book Value Specific Provision Eligible CEM Net Value Risk Weight Exposure a b c d=a-b-c e f=d*e Cash Balance % - Balance With Nepal Rastra Bank % - Gold % - Investment in Nepalese Government Securities % - All Claims on Government of Nepal % - Investment in Nepal Rastra Bank securities % - All claims on Nepal Rastra Bank % - Claims on Foreign Government and Central Bank (ECA 0-1) % - Claims on Foreign Government and Central Bank (ECA -2) % - Claims on Foreign Government and Central Bank (ECA -3) % - Claims on Foreign Government and Central Bank (ECA-4-6) % - Claims on Foreign Government and Central Bank (ECA -7) % - Claims On BIS, IMF, ECB, EC and MDB's recognized by the framework % - Claims on Other Multilateral Development Banks % - Claims on Public Sector Entity (ECA 0-1) % - Claims on Public Sector Entity (ECA 2) % - Claims on Public Sector Entity (ECA 3-6) % - Claims on Public Sector Entity (ECA 7) % Claims on domestic banks that meet capital adequacy requirements 1, , % Claims on domestic banks that do not meet capital adequacy requirements % Claims on foreign bank (ECA Rating 0-1) % 2.27 Claims on foreign bank (ECA Rating 2) % - Claims on foreign bank (ECA Rating 3-6) % Claims on foreign bank (ECA Rating 7) % - Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above their % respective regulatory capital requirement Claims on Domestic Corporates 5, , % 5, Claims on Foreign Corporates (ECA 0-1) % - Claims on Foreign Corporates (ECA 2) % - Claims on Foreign Corporates (ECA 3-6) % - Claims on Foreign Corporates (ECA 7) % - Regulatory Retail Portfolio (Not Overdue) % Claims fulfilling all criterion of regularity retail except granularity % Claims secured by residential properties % Claims not fully secured by residential properties % - Claims secured by residential properties (Overdue) % - Claims secured by Commercial real estate % Past due claims (except for claims secured by residential properties) % High Risk claims 2, , % Investments in equity and other capital instruments of institutions listed in stock exchange % 2.90 Investments in equity and other capital instruments of institutions not listed in the stock % - exchange Staff loan secured by residential property % Interest Receivable/claim on government securities % - Cash in transit and other cash items in the process of collection % 0.87 Other Assets (as per attachment) % TOTAL (A) 14, , , , B. Off Balance Sheet Exposures Book Value Specific Provision Eligible CEM Net Value Risk Weight Exposure Revocable Commitments % - Bills Under Collection % - Forward Exchange Contract Liabilities 2, , % LC Commitments With Original Maturity Upto 6 months domestic counterparty % LC Commitments With Original Maturity Over 6 months domestic counterparty % - Bid Bond, Performance Bond and Counter guarantee domestic counterparty % Underwriting commitments % - Lending of Bank's Securities or Posting of Securities as collateral % - Repurchase Agreements, Assets sale with recourse % - Advance Payment Guarantee % Financial Guarantee % - Acceptances and Endorsements % - Unpaid portion of Partly paid shares and Securities % - Irrevocable Credit commitments (short term) 1, , % Irrevocable Credit commitments (long term) % - Claims on foreign bank incorporated in SAARC region operating with a buffer of 1% above their - - respective regulatory capital requirement Other Contingent Liabilities % - Unpaid Guarantee Claims TOTAL (B) 4, , Total RWE for credit Risk Before Adjustment (A) +(B) 18, , , , Adjustments under Pillar II SRP 6.4a(3) - Add 10% of the loans & facilities in excess of Single Obligor Limits to RWE - SRP 6.4a(4) - Add 1% of the contract (sale) value in case of the sale of credit with recourse to RWE - Total RWE for Credit Risk after Bank's adjustments under Pillar II 18, , , ,430.31

3 Exposure for Operational Risk Fiscal Year 2067/ / /070 Net Interest Income Commission and Discount Income Other Operating Income Exchange Fluctuation Income Addition/Deduction in Interest Suspense during the period 1.31 (0.89) Gross income (a) Alfa (b) 15% 15% 15% Fixed Percentage of Gross Income [c=(a b)] Capital Requirement for operational risk (d) (average of c) Risk Weight (reciprocal of capital requirement of 10%) in times (e) Equivalent Risk Weight Exposure [f=(d e)] SRP 6.4a (8) Adjustments under Pillar II (If Gross Income for the last three years is negative) Total Credit and Investment (net of Specific Provision) of releted month - Capital Requirement for Operational Risk (5% of net credit and investment) - Risk Weight (reciprocal of capital requirement of 10%) in times Equivalent Risk Weight Exposure (g) - Equivalent Risk Weight Exposure [h=f+g] Exposure for Market Risk Currency Open Position (FCY) Exchange Rate Open Position (NPR) Relevant Open Position INR USD (0.79) (76.82) GBP EUR THB CHF AUD CAD SGD JPY HKD DKK SEK SAR QAR AED MYR KRW CNY (a) Total Open Position (43.76) (b) Fixed Percentage 5% (c) Capital Charge for Market Risk (=a b) 5.49 (d) Risk Weight (reciprocal of capital requirement of 10%) in times 10 (e) Equivalent Risk Weight Exposure (=c d) 54.94

4 Total Exposure calculation table; Risk weighted exposures for Credit Risk Risk weighted exposures for Operational Risk Risk weighted exposures for Market Risk Add : 3% of Total RWE due insufficient risk management system (as prescribed by NRB) Add : 5% of Gross Income for Operational Risk (as prescribed by NRB) Total Exposure Total Capital Fund Total Capital to Total Exposures 10,430,305, ,027,949 54,944, ,128, ,500,000 11,343,906,337 1,341,205, % Amount of Non Performing Assets (NPAs) [both Gross and Net]: Restructure Loan/Reschedule Loan Nil Substandard Loan * Gross 26,531,975 * Net 19,898,982 Doubtful Loan * Gross 6,899,000 * Net 3,449,500 Bad Loan * Gross 62,687,766 * Net 9,285,309 Non Performing Assets (NPAs) ratios Gross NPA to Gross Advances Net NPA to Net Advances 0.63% 0.33% Movement of Non Performing Assets NPA Categories Sub-Standard Doubtful Bad Write off of Loans and Interest Suspense Movements in Loan Loss Provisions and Interest Suspense: Last Quarter This Quarter Increase/ (Decrease) 14,399,000 26,531,975 12,132,975 25,519,128 6,899,000-18,620,128 4,835,500 62,687,766 57,852,266 Nil Description Loan Loss Provision Interest Suspense Last Quarter This Quarter Increase/ (Decrease) 111,915, ,954,286 17,038,305 11,850,654 26,903,811 15,053,157 quarter, for which, provision has been made as per the NRB Directives. The Loan Loss Provision to Total NPA loan is 205% Details of additional Loan Loss Provisions: Besides general loan loss provision and specific loan loss provision on Non-Performing Loan, provision of Rs. 299,714 has been made for loan against personal guarantee according to the NRB Directives 069. Segregation of Investment Portfolio into held for trading, Held to maturity and available for sale Category: Investment Portfolio Held For Trading Held To Maturity Available For Sale Net Amount (NPR) - 2,260,870,862 2,901,720

5 3. RISK MANAGEMENT STRATEGIES AND FUNCTION Bank management is responsible for understanding the nature and level of risk taken by the bank and relating the risk to the capital adequacy level. The Risk Management Committee, consisting non executive directors & Chief Executive Offcier, reviews the Credit Risk, analyzes the trend, assesses the exposure impact on capital and provides a view to the Credit Sub- Committee and Board of Directors (BOD). The bank's BOD had developed the Credit Policy Guidelines, together with Risk Management Guidelines, to strengthen of Bank's exposure in credit. All Retail and Small Medium Enterprises credits are provided under the Bank's seperate 'Product Paper' for each type of such credit. An independent Credit Risk Department analyse the the all kind of credit proposal from the view point of risk and recommend independently to the approval authority in regard to proposed funded or non-funded credit exposure. In respect of operational risk 'Standard Operation Manual' has been implemented together with Risk Management Guidelines. A seperate 'Operational Risk Department' has been introduced to analyse, review and control regarding the operational lapses timely and make them strenthen on the mean time. All the section & sub-section of operation side have been operating under the specilized manual passed by Bank's Management and BOD as the case may be. Besides, The core banking system has been tested periodically against the recovery and detection of fraud in case of casualty, and problem register is maintanin to solve the lapses in the system. The bank adopted centralized operation system all over the branches of bank. The transaction and system of Bank's branches has been reviewing from the Head Office directly. Finance & Strategic Planning checks the capital charge on operational risk regularly. With regard to market risk, In order to effectively manage the market risk the bank has set up the two tiered treasury department structure viz: a) Treasury Front Office b) Treasury Back office. Treasury front office is entrusted with the functions of market watch, research (both fundamental and technical) and analyse the market position of Bank. Front office takes decisions as regards to investments and trading as per approved Policy/Guidelines and within the perimeters of NRB regulations. Treasury back office is entrusted with the function of settlement and delivery of all the deals which are executed by front office dealers as per the approved policies/regulations. The net open position report is also discussed at the Assets Liabilities Management Committee (ALCO) each week to ensure the bank's better position. Periodical internal audit function has been conducting from the outsourced Chartered Accountants firm to timely detect all type of lapses and deviations from standard policy of banks. The Internal Audit Team directly report to Audit Committee consisting of non-executive Directors. The quaterly reports of Internal Audit for the periods are discusses in Audit Committee and instructs to Bank's Management/BOD to resolve the comments raised by Auditors strictly.