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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) – ‘the Bank’ has developed a set of disclosures on a solo basis for the positions as of 30 June 2010, compared with the positions as of 31 December 2009, covering:
- Capital structure,
- Capital adequacy, and
- Minimum capital requirements by risk type
UOBT assesses its capital adequacy to support current and future activities. The following table shows the breakdown of the total regulatory capital as of 30 June 2010, compared with the positions as of 31 December 2009.
The Bank has received the approval from Bank of Thailand (BOT) to adopt Foundation Internal Ratings-Based Approach (FIRB) since 30 June 2010 for credit risk capital computation. The position as of 31 December 2009 for comparison was under Standardised Approach (SA).
Capital Structure
Unit : Million Baht |
30 Jun 10 |
31 Dec 09 |
Tier 1 Capital |
Paid up share capital |
24,857 |
24,857 |
Statutory reserves |
100 |
100 |
Retained earnings
after appropriation |
3,825 |
3,205 |
Deduct :Deduction items from Tier 1 Capital – Deferred Tax Assets |
(2,426) |
(2,020) |
Total Tier 1 capital |
26,356 |
26,142 |
Tier 2
Capital |
Unrealised revaluation surplus
on land and building appraisal |
691 |
692 |
Reserve for normal performing
loans |
423 |
1,336 |
Excess provision which qualifies as Tier 2 capital – IRB Approach |
475 |
n.a. |
Revaluation surplus from equity
securities - AFS |
78 |
177 |
Total Tier 2 capital |
1,667 |
2,205 |
Total capital funds |
28,023 |
28,347 |
2. Capital Adequacy
The Bank 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% and Tier 2 capital cannot exceed Tier 1 capital.
As of 30 June 2010, the Bank’s Capital Adequacy Ratio was 20.63% and the ratio of Tier 1 capital to risk weighted assets was 19.40%.
Unit
: Percentage |
BOT Minimum
Requirements |
30 Jun 10 |
31 Dec 09 |
Total capital
funds to risk weighted assets |
8.50 |
20.63 |
21.18 |
Tier
1 capital funds to risk weighted assets |
4.25 |
19.40 |
19.53 |
Risk Weighted
Assets And Equivalent Amount for Risk Weighted Assets
Currently, the Bank has adopted the Standardised Approach (SA) for the capital computation for market and operational risks. For credit risk capital, the BOT has approved for the Bank to adopt Foundation Internal Ratings-Based Approach (FIRB) since 30 June 2010. The position as of 31 December 2009 for comparison was under Standardised Approach (SA) for credit, market and operational risks.
Unit
: Million Baht |
Approach |
30
Jun 10 |
31
Dec 09 |
Credit risk weighted assets |
FIRB |
115,162 |
116,424* |
Market risk weighted assets |
SA |
6,515 |
3,886 |
Operational equivalent amount for risk weighted
assets |
SA |
14,153 |
13,531 |
Total risk weighted assets |
|
135,830 |
133,841 |
Note: Credit risk weighted assets calculation as of 31 Dec 09 under Standardised Approach (SA).
Under the Basel II Pillar 1 framework in accordance with BOT, the minimum capital requirements comprise three risk types: credit risk, market risk and operational risk.
The table below shows the breakdown of the minimum capital requirements by risk type. As of 30 June 2010, the Bank’s total capital was THB 28,023 million, THB 16,477 million higher than the minimum capital requirements of THB 11,546 million.
Minimum Capital Requirements By Risk Type
Unit : Million Baht |
Approach |
30 Jun 10 |
31 Dec 09 |
Minimum capital requirements for credit risk |
FIRB |
9,789 |
9,896* |
Minimum capital requirements for market risk |
SA |
554 |
330 |
Minimum capital requirements for operational risk |
SA |
1,203 |
1,150 |
Total minimum capital requirements |
|
11,546 |
11,376 |
Total capital funds |
|
28,023 |
28,347 |
Excess of capital
funds over minimum capital requirements |
16,477 |
16,971 |
Note: Minimum capital requirements for credit risk as of 31 Dec 09 under Standardised Approach (SA).
Minimum Capital Requirements for Credit Risk by Asset Class under FIRB
Unit : Million Baht |
30 Jun 10 |
Minimum capital requirements for credit risk under FIRB |
|
Performing |
|
Claims on sovereigns, financial institutions, corporate |
5,197 |
Claims on other retail exposures |
397 |
Other assets |
949 |
Non-performing |
189 |
Total minimum capital requirements for credit risk under FIRB |
6,732 |
Minimum capital requirements for credit risk under SA |
|
Performing |
|
Claims on financial institutions, non-central government public sector entities (PSEs), corporate |
229
|
Claims on retail |
1,133 |
Claims on residential mortgage |
1,433 |
Equity exposures |
143 |
Non-performing |
119 |
Total minimum capital requirements for credit risk under SA |
3,057 |
Total minimum capital requirements for credit risk |
9,789 |
Minimum Capital Requirements for Credit Risk by Asset Class under SA
Unit : Million Baht |
31 Dec 09 |
Performing |
|
Claims on sovereigns and central banks |
- |
Claims on financial institutions, non-central government public sector entities (PSEs) treated as claims on financial institutions, and securities firms |
161 |
Claims on corporate, non-central government public sector entities (PSEs) treated as claims on corporate |
4,829 |
Claims on retail |
2,059 |
Claims on residential mortgage |
1,358 |
Other assets |
1,127 |
Non-performing |
362 |
Total minimum capital requirements for credit risk under SA |
9,896 |
Minimum Capital Requirements by Market Risk under SA
Unit : Million
Baht |
30
Jun 10 |
31
Dec 09 |
Interest rate risk |
515 |
325 |
Foreign exchange rate risk |
39 |
5 |
Total minimum capital requirements under SA |
554 |
330 |
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