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In compliance with the requirement
under Basel II Pillar 3 and the Bank of Thailand (‘BOT’) disclosure
requirements, United Overseas Bank (Thai) – ‘UOBT’ has developed
a set of disclosures for the position as of 30 June 2009, covering:
- Capital structure,
- Capital adequacy ratio,
- Total minimum capital requirement
- Minimum capital requirement for credit risk
by asset class, and
- Minimum capital requirement
for market risk
UOBT assesses its capital adequacy to support
current and future activities. The following table shows the breakdown
of the total regulatory capital for the Bank as at 30 June 2009,
compared with the positions as of 31 December 2008.
Capital Structure
Unit : Million Baht |
30 Jun 09 |
31 Dec 08 |
Tier 1 Capital |
Paid up share capital |
24,857 |
24,857 |
Statutory reserves |
65 |
65 |
Retained earnings (losses)
after appropriation |
1,185 |
(16) |
Total Tier 1 capital |
26,107 |
24,906 |
Tier 2
Capital |
Unrealised revaluation surplus
on land and building appraisal |
693 |
705 |
Reserve for normal performing
loans |
1,277 |
1,473 |
Revaluation surplus from equity
securities - AFS |
91 |
48 |
Total Tier 2 capital |
2,061 |
2,226 |
Total capital funds |
28,168 |
27,132 |
UOBT’s tier 1 capital funds consist of issued
and paid-up share capital, retained earnings and statutory reserve.
Tier 2 capital comprises the property revaluation reserve, the
general provision for normal performing loans and the revaluation
gain on equity securities under available-for-sale (AFS) portfolio.
There was no capital deduction item as of 30 June 2009. Under
BOT’s requirement, Tier 2 capital cannot exceed Tier 1 capital.
Capital Adequacy Ratio (CAR)
UOBT is subjected to the capital adequacy guidelines stipulated
by BOT, which are based on the framework of the Basel Committee
on Banking Supervision. As per these guidelines, the Bank is
required to maintain a minimum ratio of total capital to risk
weighted assets of 8.50%. In addition, the ratio of tier 1 capital
to risk weighted assets cannot be less than 4.25%. As of 30 June
2009, UOBT’s Capital Adequacy Ratio was 21.98%, compared to the
BOT minimum requirement of 8.50%.
Unit
: Percent |
BOT Minimum
Requirement |
30 Jun 09 |
31 Dec 08 |
Total capital
funds to risk weighted assets |
8.50 |
21.98 |
18.51 |
Tier
1 capital funds to risk weighted assets |
4.25 |
20.37 |
16.99 |
Risk Weighted
Assets And Equivalent Amount for Risk Weighted Assets
For regulatory capital requirement under Basel II, UOBT had adopted
the standardised approach (SA) for the capital computation for credit,
market and operational risk since 31 December 2008. As of 30 June
2009, the breakdown of risk weighted assets by type of risk is shown
in the below table.
Unit
: Million Baht |
30
Jun 09 |
31
Dec 08 |
Credit risk weighted assets |
111,163 |
128,847 |
Market risk weighted assets |
3,510 |
4,267 |
Operational Equivalent Amount for Risk Weighted
Assets |
13,464 |
13,503 |
Total risk weighted assets |
128,137 |
146,617 |
Under the Basel II Pillar 1 framework, the minimum
capital requirement is to be calculated and compared with the regulatory
capital described above. As per the BOT’s requirement, the minimum
capital required is 8.50% of the Bank’s total risk weighted assets.
The table below shows a breakdown of the minimum capital requirements
by risk type. As at 30 June 2009, UOBT’s total capital fund was THB
28,168 million, THB 17,276 million higher than the minimum regulatory
requirement of THB 10,892 million.
Minimum Capital Requirements By Each
Type of Risk
Unit : Million Baht |
Approach |
30 Jun 09 |
31 Dec 08 |
Minimum capital requirements for credit risk |
Standardised |
9,449 |
10,952 |
Minimum capital requirements for market risk |
Standardised |
298 |
363 |
Minimum capital requirements for operational risk |
Standardised |
1,145 |
1,148 |
Total minimum capital requirement (8.50%) |
|
10,892 |
12,463 |
UOBT's Total capital funds (21.98%) |
|
28,168 |
27,132 |
Excess of capital
funds over minimum capital requirement |
17,276 |
14,669 |
UOBT’s minimum capital requirement for credit
risk under SA is further broken down as per the table below :
Minimum Capital Requirement For Credit Risk Classified By Asset Classes
Under SA
Unit : Million Baht |
30 Jun 09 |
31 Dec 08 |
Performing claims |
1. Claims on sovereigns and central banks |
3 |
3 |
2. Claims on financial institutions, non-central
government public sector entities (PSEs) treated as claims
on financial institutions, and securities firms |
276 |
384 |
3. Claims on corporates, non-central government
public sector entities (PSEs) treated as claims on corporate |
4,251 |
5,324 |
4. Claims on retail portfolios |
1,926 |
2,077 |
5. Claims on housing loans |
1,348 |
1,486 |
6. Other assets |
1,234 |
1,318 |
Total performing claims |
9,038 |
10,592 |
Non-performing claims |
411 |
360 |
Total minimum capital requirement
for credit risk – SA |
9,449 |
10,952 |
UOBT’s minimum capital requirement for market risk under SA is further
broken down as per the table below :
Minimum Capital Requirements by Type of Market Risk
Unit : Million
Baht |
30
Jun 09 |
31
Dec 08 |
Interest rate risk |
262 |
256 |
Equity position risk |
- |
- |
Foreign exchange rate risk |
36 |
107 |
Commodity risk |
- |
- |
Total minimum capital requirements |
298 |
363 |
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