SBN HOLDINGS LIMITED Annual Report 2022
ANNEXURE B RISK AND CAPITAL MANAGEMENT continued
126
SBN HOLDINGS LIMITED
Annual report 2022
Capital management
The group manages its capital levels to support business, growth, maintain depositor and creditors' confidence, create value for the
shareholders and ensure regulatory compliance.
The main regulatory requirements to be complied with are those specified in the Banking Institutions Act and related regulations, which
are aligned with Basel III.
Regulatory capital adequacy is measured through the following three risk-based ratios:
Common equity tier 1 (CET 1): ordinary share capital, share premium, retained earnings, other reserves and qualifying non-controlling
interest less impairments divided by total risk weighted assets (RWA).
Tier 1: CET 1 and other qualifying non-controlling interest plus perpetual, non-cumulative instruments with either contractual or statutory
principal loss absorption features that comply with the Basel III rules divided by total RWA.
Total capital adequacy: tier 1 plus other items such as general credit impairments and subordinated debt with either contractual or
statutory principal loss absorption features that comply with the Basel III rules divided by total RWA.
BASEL III REGULATORY CAPITAL (UNAUDITED)
GROUP
BANK
2022
N$'000
2021
N$'000
2022
N$'000
2021
N$'000
CAPITAL ADEQUACY RATIOS (UNAUDITED)
Minimum
regulatory
requirement
Group
Total capital adequacy ratio
Tier 1 capital adequacy ratio
Tier 1 leverage ratio
Bank
Total capital adequacy ratio
Tier 1 capital adequacy ratio
Tier 1 leverage ratio
Including unappropriated
profits
%
Target ratio
%
2022
%
256
Excluding unappropriated
profits
2021
%
2022
%
2021
%
10
>11.5
17.73
14.66
15.56
7.5
>9.5
15.63
11.90
13.15
14.66
11.90
>6.8
10.62
8.95
8.93
7.95
076
10
>11.5
15.63
13.33
14.22
13.33
>8.5
13.60
12.09
11.72
10.67
>6.8
9.56
8.13
8.24
7.18
BASEL III RISK-WEIGHTED ASSETS (UNAUDITED)
Tier 1
Ordinary share capital and premium
Ordinary shareholders' reserves
Less: regulatory adjustments
Intangible assets
Deferred tax asset
GROUP
BANK
2022
N$'000
2021
N$'000
2022
N$'000
643 234
643 234
3 310 682
2 975 922
594 100
3 044 173
3 953 916
3 619 156
3 638 273
(647 359)
(697 472)
(594 498)
594 100
2 738 038
3 332 138
(697 472)
Credit risk
Market risk
Operational risk
21 232 392
717 964
21 291 246
412 104
22 071 697
717 964
3 190 989
2 846 650
3 178 996
2021
N$'000
21 436 174
412 104
2 846 650
Total risk-weighted assets
25 141 345
24 550 000
25 968 657
24 694 928
(517 733)
(397 932)
(468 554)
(397 932)
(16 583)
(213 648)
(14 902)
(213 648)
(113 043)
(85 892)
(111 042)
(85 892)
3 306 557
2 921 684
3 043 775
2 634 666
Defined benefit pension fund assets and liabilities
Common equity tier 1 capital/tier 1 capital
Tier 2
Subordinated debt
Current unappropriated profits
General allowance for credit impairments
250 000
624 280
275 730
60 000
363 852
254 151
250 000
60 000
489 038
342 959
275 730
254 151
1 150 010
678 003
1 014 768
657 110
Total eligible capital (including unappropriated profits)
4 456 567
3 599 687
4 058 543
3 291 776
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