PILLAR III DISCLOSURE

Transcription

1 PILLAR III DISCLOSURE For the quarter ended June

2 Basel II Pillar Regulation disclosure The following information is compiled in terms of Regulation of the Banks Act (as amended), which incorporates the Basel II Pillar requirements. All disclosures presented below are consistent with those disclosed in terms of International Financial Reporting Standards (IFRS) and in compliance with the Bank s disclosure policy, unless otherwise stated. In the main, differences between IFRS and information disclosed in terms of the Banks Act (as amended) and the Regulations thereto (the Regulations) relate to the definition of capital and the calculation and measurement thereof as well as to the concept of riskweighted assets. The quarterly disclosure requires quantitative information on capital, components of capital and the capital adequacy position. In accordance with Regulation () (e) (ii) of the regulations relating to banks, the minimum requirements of the quantitative information to be disclosed to the public on a quarterly basis are: primary capital, including the primary capital adequacy ratio; total capital, including the total capital adequacy ratio; the components of capital; the total required amount of capital and reserve funds; and risk exposure or other items that is subject to rapid or material change. SCOPE AND APPLICATION Ithala SOC Limited is a wholly owned subsidiary of Ithala Development Finance Corporation Limited. Ithala Development Finance Corporation Limited is not registered as a controlling Company in terms of the Banks Act, and as such Pillar disclosure requirements apply only to Ithala SOC Limited. However, the results of Ithala SOC Limited are consolidated with the Ithala Development Finance Corporation Limited performance results. Ithala SOC Limited does not have any subsidiaries, hence accounting and regulatory reporting is on a single entity basis. Regulatory Capital requirements as at June Exposure Capital requirements Risk weighted exposure June R March R June R March R Credit risk Operational risk Other

3 Total SCOPE AND APPLICATION (Continued) Capital Adequacy as at June Minimum Actual Capital requirements June March Capital Adequacy ratio %.%.% Primary share capital and reserve March), % funds adequacy ratio (@ June).%.% Total risk weighted assets (R ) As at June the capital adequacy ratio was.% ( March :.%) The capital adequacy level was above the minimum capital adequacy ratio of %. Capital Structure Tier l capital is made up of issued ordinary shares, share premium and retained income. Tier ll capital includes the general allowance for credit impairments. June R' March R' Share Capital Share Premium Reserves ( ) ( ) Prescribed deductions against capital and reserve funds ( ) ( ) Total Tier I capital General provisions Total Tier II capital Total qualifying capital

4 ANNEXURE A COMPOSITION OF CAPITAL DISCLOSURE TEMPLATE AMOUNTS SUBJECT Basel III common disclosure template to be used during the transition of regulatory adjustments (ie from June to January ) TO PRE BASEL III TREATME NT Common Equity Tier capital: instruments and reserves R' Directly issued qualifying common share capital (and equivalent for nonjoint stock companies) plus related stock surplus Retained earnings Accumulated other comprehensive income (and other reserves) Directly issued capital subject to phase out from CET (only applicable to nonjoint stock companies) Public sector capital injections grandfathered until January Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET) Common Equity Tier capital before regulatory adjustments Common Equity Tier capital: regulatory adjustments Prudential valuation adjustments Goodwill (net of related tax liability) Other intangibles other than mortgageservicing rights (net of related tax liability) Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax liability) Cashflow hedge reserve Shortfall of provisions to expected losses Securitisation gain on sale Gains and losses due to changes in own credit risk on fair valued liabilities Definedbenefit pension fund net assets Investments in own shares (if not already netted off paidin capital on reported balance sheet) Reciprocal crossholdings in common equity ( )

5 Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than % of the issued share capital (amount above % threshold) Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions (amount above % threshold) Mortgage servicing rights (amount above % threshold) Deferred tax assets arising from temporary differences (amount above % threshold, net of related tax liability) Amount exceeding the % threshold of which: significant investments in the common stock of financials of which: mortgage servicing rights of which: deferred tax assets arising from temporary differences National specific regulatory adjustments ( ) REGULATORY ADJUSTMENTS APPLIED TO COMMON EQUITY TIER IN RESPECT OF AMOUNTS SUBJECT TO PREBASEL III TREATMENT Regulatory adjustments applied to Common Equity Tier due to insufficient Additional Tier and Tier to cover deductions Total regulatory adjustments to Common equity Tier ( ) Common Equity Tier capital (CET) Additional Tier capital : instruments Directly issued qualifying Additional Tier instruments plus related stock surplus of which: classified as equity under applicable accounting standards of which: classified as liabilities under applicable accounting standards Directly issued capital instruments subject to phase out from Additional Tier Additional Tier instruments (and CET instruments not included in line ) issued by subsidiaries and held by third parties (amount allowed in group AT) of which: instruments issued by subsidiaries subject to phase out Additional Tier capital before regulatory adjustments Additional Tier capital: regulatory adjustments Investments in own Additional Tier instruments Reciprocal crossholdings in Additional Tier instruments

6 Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation net of eligible short positions, where the bank does not own more than % of the issued common share capital of the entity (amount above % threshold) Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) National specific regulatory adjustments REGULATORY ADJUSTMENTS APPLIED TO COMMON EQUITY TIER IN RESPECT OF AMOUNTS SUBJECT TO PREBASEL III TREATMENT Regulatory adjustments applied to Additional Tier due to insufficient Tier to cover deductions Total regulatory adjustments to Additional Tier capital Additional Tier capital (AT) Tier capital (T = CET + AT)

7 Tier capital and provisions Directly issued qualifying Tier instruments plus related stock surplus Directly issued capital instruments subject to phase out from Tier Tier instruments (and CET and AT instruments not included in lines or ) issued by subsidiaries and held by third parties (amount allowed in group Tier ) of which: instruments issued by subsidiaries subject to phase out Provisions Tier capital before regulatory adjustments Tier capital : regulatory adjustments Investments in own Tier instruments Reciprocal crossholdings in Tier instruments Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation, net of eligible short positions, where the bank does not own more than % of the issued common share capital of the entity (amount above the % threshold) Significant investments in the capital banking, financial and insurance entities that are outside the scope of regulatory consolidation (net of eligible short positions) National specific regulatory adjustments REGULATORY ADJUSTMENTS APPLIED TO COMMON EQUITY TIER IN RESPECT OF AMOUNTS SUBJECT TO PREBASEL III TREATMENT Total regulatory adjustments to Tier capital Tier capital (T) Total capital (TC = T + T) RISK WEIGHTED ASSETS IN RESPECT OF AMOUNTS SUBJECT TO PREBASEL III TREATMENT Total risk weighted assets Capital ratios Common Equity Tier (as a percentage of risk weighted assets).% Tier (as a percentage of risk weighted assets).% Total capital (as a percentage of risk weighted assets).% Institution specific buffer requirement (minimum CET requirement plus capital conservation buffer plus countercyclical buffer requirements plus GSIB buffer requirement, expressed as a percentage of risk weighted assets) of which: capital conservation buffer requirement of which: bank specific countercyclical buffer requirement

8 of which: GSIB buffer requirement Common Equity Tier available to meet buffers (as a percentage of risk weighted assets) National Minima (if different from Basel ) National Common Equity Tier minimum ratio (if different from.% Basel minimum) National Tier minimum ratio.% National total capital minimum ratio.%

9 Amounts below the threshold for deductions (before risk weighting) Nonsignificant investments in the capital of other financials Significant investments in the common stock of financials Mortgage servicing rights (net of related tax liability) Deferred tax assets arising from temporary differences (net of related tax liability) Applicable caps on the on the inclusion of provisions in Tier Provisions eligible for inclusion in Tier in respect of exposures subject to standardised approach (prior to application of cap) Cap on inclusion of provisions in Tier under standardised approach Provisions eligible for inclusion in Tier in respect of exposures subject to internal ratingsbased approach (prior to application of cap) Cap for inclusion of provisions in Tier under internal ratingsbased approach Capital instruments subject to phaseout arrangements (only applicable between Jan and Jan ) Current cap on CET instruments subject to phase out arrangements Amount excluded from CET due to cap (excess over cap after redemptions and maturities) Current cap on AT instruments subject to phase out arrangements Amount excluded from AT due to cap (excess over cap after redemptions and maturities) Current cap on T instruments subject to phase out arrangements Amount excluded from T due to cap (excess over cap after redemptions and maturities)