44 CAPITAL ASSESSMENT AND ADEQUACY - BASEL III SPECIFIC

44.1 Capital Adequacy

All banks/ DFIs are required to give summary discussion of the bank's/DFI's approach to assessing the adequacy o
The discussion of capital needs should be based on the following:

Identified objectives of the capital management, interalia, support the growth in shareholder value, protect c
Commitment to sound capital and debt ratio.
Overall capital needs.
An assessment of growth prospects.
Current and potential risk exposures across all the major risk types.
Sensitivity and stress analysis of growth and risk assumptions.
The ability of the bank/ DFI to raise capital in the domestic or offshore markets.
An assessment of economic capital requirements of the bank/ DFI as determined in terms of their internal ec

Scope Of Application
The banks /DFIs are required to describe the Scope of Application of Basel-III framework on the following lines:The name of the top banking entity to which the framework has been applied.

An outline of the differences in the basis of consolidations for accounting and regulatory purposes (e.g. equity met
following disclosures are also required to be made if bank/ DFI has subsidiaries/associates, overseas operations etc.
a)
b)
c)
d)
e)
f)
g)

The list of group entities (if any), which have been fully consolidated as per International Financial Reporti
The joint ventures (if any) which have been consolidated on prorata basis as per IFRS.
The list of group entities which are included under the regulatory scope of consolidation.
Explain the reasons for difference in the accounting and regulatory method of consolidation (if any).
The list of group entities (if any), which have not been considered for consolidation both under the accou
etc.
The aggregate amount of capital deficiencies in all subsidiaries which are not included in the regulatory sco
Any restrictions, or any major impediments, on transfer of funds or regulatory capital within the entities sub

Note 44.1

Page # 1

assessing the adequacy of the capital to support current and future business operations.

areholder value, protect capital base etc.

terms of their internal economic capital model.

the following lines:-

purposes (e.g. equity method, fair value etc.), with brief description of the entities. The
, overseas operations etc.

ational Financial Reporting Standards (IFRS).

RS.
dation.
olidation (if any).
ion both under the accounting and regulatory scope of consolidation. Explain reasons

ded in the regulatory scope of consolidation.

tal within the entities subject to consolidation.

Note 44.1

Note 44.2

Rows #
1
2
3
4
5
6
7
8
9
10
11

12
13
14
15
16
17
18
19
20
21

22
23
24
25
26
27
28
29
30
31
32
33

Note 44.2

34
35
36
37
38
39

40
41
42
43
44
45
46
47

48
49
50

Note 44.2

Capital Adequacy Ratio (CAR) disclosure template:

CAPITAL ADEQUACY RETURN AS OF ________

Common Equity Tier 1 capital (CET1): Instruments and reserves

Fully Paid-up Capital/ Capital deposited with SBP
Balance in Share Premium Account
Reserve for issue of Bonus Shares
Discount on Issue of shares
General/ Statutory Reserves
Gain/(Losses) on derivatives held as Cash Flow Hedge
Unappropriated/unremitted profits/ (losses)
Minority Interests arising from CET1 capital instruments issued to third parties by consolidated bank subsidiaries (amount
allowed in CET1 capital of the consolidation group)
CET 1 before Regulatory Adjustments
Total regulatory adjustments applied to CET1 (Note 44.2.1)
Common Equity Tier 1
Additional Tier 1 (AT 1) Capital
Qualifying Additional Tier-1 capital instruments plus any related share premium
of which: Classified as equity
of which: Classified as liabilities
Additional Tier-1 capital instruments issued to third parties by consolidated subsidiaries (amount allowed in group AT 1)
of which: instrument issued by subsidiaries subject to phase out
AT1 before regulatory adjustments
Total regulatory adjustment applied to AT1 capital (Note 44.2.2)
Additional Tier 1 capital after regulatory adjustments
Additional Tier 1 capital recognized for capital adequacy
Tier 1 Capital (CET1 + admissible AT1) (11+20)
Tier 2 Capital
Qualifying Tier 2 capital instruments under Basel III plus any related share premium
Tier 2 capital instruments subject to phaseout arrangement issued under pre-Basel 3 rules
Tier 2 capital instruments issued to third parties by consolidated subsidiaries (amount allowed in group tier 2)
of which: instruments issued by subsidiaries subject to phase out
General provisions or general reserves for loan losses-up to maximum of 1.25% of Credit Risk Weighted Assets
Revaluation Reserves (net of taxes)
of which: Revaluation reserves on fixed assets
of which: Unrealized gains/losses on AFS
Foreign Exchange Translation Reserves
Undisclosed/Other Reserves (if any)
T2 before regulatory adjustments
Total regulatory adjustment applied to T2 capital (Note 44.2.3)

Note 44.2

Tier 2 capital (T2) after regulatory adjustments

Tier 2 capital recognized for capital adequacy
Portion of Additional Tier 1 capital recognized in Tier 2 capital
Total Tier 2 capital admissible for capital adequacy
TOTAL CAPITAL (T1 + admissible T2) (21+37)
Total Risk Weighted Assets (RWA) {for details refer Note 44.5}
Capital Ratios and buffers (in percentage of risk weighted assets)
CET1 to total RWA
Tier-1 capital to total RWA
Total capital to total RWA
Bank specific buffer requirement (minimum CET1 requirement plus capital conservation buffer plus any other buffer
requirement)
of which: capital conservation buffer requirement
of which: countercyclical buffer requirement
of which: D-SIB or G-SIB buffer requirement
CET1 available to meet buffers (as a percentage of risk weighted assets)
National minimum capital requirements prescribed by SBP
CET1 minimum ratio
Tier 1 minimum ratio
Total capital minimum ratio

Note 44.2

Page # 2

(Current Year)
(Prior Year)
Rupees in '000
Amount
Amount

Note 44.2

Note 44.2

Regulatory Adjustments and Additional Information

Note 44.2.1
1
2
3
4
5
6
7
8
9
10
11
12

13
14
15
16
17
18
19
20
21
22

Note 44.2.2
23
24
25
26

27
28

29
30

Note 44.2.3
31
32
33
34

35
36

* This column "Amounts subject to pre-Basel III treatment" has been added for reporting the amount of each regulator
treatment during the transitional period. The portion of the amount which has already been transitioned to the Basel III
Example: Conside
benefit pension fund net assets and in Dec 2014, a bank has PKR50 million of these assets. The transitional arrangements r
means that the bank will report PKR10 million in the first empty cell in Sr.# 5 and PKR40 mn in the second dotted cell (the
regulatory adjustment). The amount of dotted cells will be risk weighted and will be disclosed at Sr.# 37 (ii) as shown on ne

Note: Rows which are not applicable for any institution should be left blank

Note 44.2.4

37
(i)
(ii)
(iii)

(iv)

38
39
40
41
42
43
44

Regulatory Adjustments and Additional Information

Common Equity Tier 1 capital: Regulatory adjustments

Goodwill (net of related deferred tax liability)
All other intangibles (net of any associated deferred tax liability)
Shortfall in provisions against classified assets
Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax
liability)
Defined-benefit pension fund net assets
Reciprocal cross holdings in CET1 capital instruments of banking, financial and insurance entities
Cash flow hedge reserve
Investment in own shares/ CET1 instruments
Securitization gain on sale
Capital shortfall of regulated subsidiaries
Deficit on account of revaluation from bank's holdings of fixed assets/ AFS
Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory
consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)
Significant investments in the common stocks of banking, financial and insurance entities that are outside the scope of
regulatory consolidation (amount above 10% threshold)
Deferred Tax Assets arising from temporary differences (amount above 10% threshold, net of related tax liability)
Amount exceeding 15% threshold
of which: significant investments in the common stocks of financial entities
of which: deferred tax assets arising from temporary differences
National specific regulatory adjustments applied to CET1 capital
Investments in TFCs of other banks exceeding the prescribed limit
Any other deduction specified by SBP (mention details)
Adjustment to CET1 due to insufficient AT1 and Tier 2 to cover deductions
Total regulatory adjustments applied to CET1 (sum of 1 to 21)

Additional Tier-1 & Tier-1 Capital: regulatory adjustments

Investment in mutual funds exceeding the prescribed limit [SBP specific adjustment]
Investment in own AT1 capital instruments
Reciprocal cross holdings in Additional Tier 1 capital instruments of banking, financial and insurance entities
Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory
consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)
Significant investments in the capital instruments of banking, financial and insurance entities that are outside the scope of
regulatory consolidation
Portion of deduction applied 50:50 to Tier-1 and Tier-2 capital based on pre-Basel III treatment which, during transitional
period, remain subject to deduction from additional tier-1 capital

Adjustments to Additional Tier 1 due to insufficient Tier 2 to cover deductions

Total regulatory adjustment applied to AT1 capital (sum of 23 to 29)

Tier 2 Capital: regulatory adjustments

Portion of deduction applied 50:50 to Tier-1 and Tier-2 capital based on pre-Basel III treatment which, during transitional
period, remain subject to deduction from tier-2 capital
Reciprocal cross holdings in Tier 2 instruments of banking, financial and insurance entities
Investment in own Tier 2 capital instrument
Investments in the capital instruments of banking, financial and insurance entities that are outside the scope of regulatory
consolidation, where the bank does not own more than 10% of the issued share capital (amount above 10% threshold)
Significant investments in the capital instruments issued by banking, financial and insurance entities that are outside the
scope of regulatory consolidation
Total regulatory adjustment applied to T2 capital (sum of 31 to 35)

mn "Amounts subject to pre-Basel III treatment" has been added for reporting the amount of each regulatory deduction item that is
uring the transitional period. The portion of the amount which has already been transitioned to the Basel III rules would be reporte
Example: Consider that currently banks a
ion fund net assets and in Dec 2014, a bank has PKR50 million of these assets. The transitional arrangements require this bank to dedu
the bank will report PKR10 million in the first empty cell in Sr.# 5 and PKR40 mn in the second dotted cell (the total of the two cells the
adjustment). The amount of dotted cells will be risk weighted and will be disclosed at Sr.# 37 (ii) as shown on next page.

which are not applicable for any institution should be left blank

Additional Information
Risk Weighted Assets subject to pre-Basel III treatment
Risk weighted assets in respect of deduction items (which during the transitional period will be risk weighted subject to
Pre-Basel III Treatment)
of which: deferred tax assets
of which: Defined-benefit pension fund net assets
of which: Recognized portion of investment in capital of banking, financial and insurance entities where holding is
less than 10% of the issued common share capital of the entity
of which: Recognized portion of investment in capital of banking, financial and insurance entities where holding is
more than 10% of the issued common share capital of the entity
Amounts below the thresholds for deduction (before risk weighting)
Non-significant investments in the capital of other financial entities
Significant investments in the common stock of financial entities
Deferred tax assets arising from temporary differences (net of related tax liability)
Applicable caps on the inclusion of provisions in Tier 2
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach (prior to application of
cap)
Cap on inclusion of provisions in Tier 2 under standardized approach
Provisions eligible for inclusion in Tier 2 in respect of exposures subject to internal ratings-based approach (prior to
application of cap)
Cap for inclusion of provisions in Tier 2 under internal ratings-based approach

Note: Rows which are not applicable for any institution should be left blank

(Current Year)
Rupees in '000
Amount
Amounts subject
to Pre- Basel III
treatment*

Page # 3
(Prior Year)

tem that is still subject to the pre-Basel III

be reported in the main column.
tly banks apply risk weights of 100% on defined
ank to deduct 20% of the assets in 2014. This
o cells therefore equals the total Basel III

Page # 4
(Current Year)
(Prior Year)
Rupees in '000
Amount
Amount

NOTE 44.3

Capital Structure Reconciliation

Illustration of the 3 Step approach to Balance Sheet Reconciliation

All banks/ DFIs are required to follow a 3 step approach to ensure that the Basel III requirement to provide
regulatory capital elements back to the published financial statements is done in a consistent manner. Under
to show the link between their published balance sheet and the figures reported for the calculation of regulat

Step 1: Under Step 1, banks are required to use their balance sheet of the published financial statements based on t
(numbers reported in the 2nd column below) as a starting point and report the numbers for each item in the publish
regulatory scope of consolidation (3rd column below). If there are rows in the regulatory consolidation balance she
published financial statements, banks are required to add these and give a value of zero in the 2nd column. In case
identical to the scope of regulatory consolidation then banks are not required to undertake Step-1. Instead, t
and move to Step-2.

Table: 44.3.1
(in thousand PKR)
Assets
(1)
Cash and balances with treasury banks
Balanced with other banks
Lending to financial institutions
Investments
Advances
Operating fixed assets
Deferred tax assets
Other assets
Total assets
Liabilities & Equity
Bills payable
Borrowings
Deposits and other accounts
Sub-ordinated loans
Liabilities against assets subject to finance lease
Deferred tax liabilities
Other liabilities
Total liabilities
Share capital/ Head office capital account
Reserves
Unappropriated/ Unremitted profit/ (losses)
Minority Interest
Surplus on revaluation of assets
Total liabilities & equity

Note 44.3

Step 2: Under Step 2 banks are required to expand the balance sheet under the regulatory scope of consolidation (re
the capital adequacy disclosure template set out in Note 44.2. Each element must be given a reference number/le
Step-3. Given below are some examples of elements (in italic font) that may need to be expanded. However, the mo
would need to be disclosed.

Table: 44.3.2

Assets
(1)
Cash and balances with treasury banks
Balanced with other banks
Lending to financial institutions
Investments
of which: Non-significant investments in the capital instruments of banking,
financial and insurance entities exceeding 10% threshold
of which: significant investments in the capital instruments issued by banking,
financial and insurance entities exceeding regulatory threshold
of which: Mutual Funds exceeding regulatory threshold
of which: reciprocal crossholding of capital instrument (separate for CET1,
AT1, T2)
of which: others (mention details)

Advances
shortfall in provisions/ excess of total EL amount over eligible provisions
under IRB
general provisions reflected in Tier 2 capital

Fixed Assets
Deferred Tax Assets
of which: DTAs that rely on future profitability excluding those arising from
temporary differences
of which: DTAs arising from temporary differences exceeding regulatory
threshold

Other assets
of which: Goodwill
of which: Intangibles
of which: Defined-benefit pension fund net assets

Total assets
Liabilities & Equity
Bills payable
Borrowings
Deposits and other accounts
Sub-ordinated loans
of which: eligible for inclusion in AT1
of which: eligible for inclusion in Tier 2

Liabilities against assets subject to finance lease

Deferred tax liabilities

Note 44.3

of which: DTLs related to goodwill

of which: DTLs related to intangible assets
of which: DTLs related to defined pension fund net assets
of which: other deferred tax liabilities

Other liabilities
Total liabilities
Share capital
of which: amount eligible for CET1
of which: amount eligible for AT1

Reserves
of which: portion eligible for inclusion in CET1(provide breakup)
of which: portion eligible for inclusion in Tier 2

Unappropriated profit/ (losses)

Minority Interest
of which: portion eligible for inclusion in CET1
of which: portion eligible for inclusion in AT1
of which: portion eligible for inclusion in Tier 2

Surplus on revaluation of assets

of which: Revaluation reserves on Fixed Assets
of which: Unrealized Gains/Losses on AFS
In case of Deficit on revaluation (deduction from CET1)
Total liabilities & Equity

Note 44.3

Step 3: Under Step 3, a column is added to the capital adequacy disclosure template given at Note 44.2 (including s
figures of this column with the expanded balance sheet of Step-2. For example, the template includes the line "good
"(j) - (o)" to show that row 9 of the template has been calculated as the difference between component "(j)" and com
in step 2. Since the following table 44.3.3 is repetition of Note 44.2 with the addition of the last column, theref
two options; (1) Use the table 44.3.3 as proposed below, or (2) just add the last column of table 44.3.3 to Note
Basel III Disclosure Template (with added column)
Table: 44.3.3

1
2
3
4
5
6
7

8
9
10

Common Equity Tier 1 capital (CET1): Instruments and reserves

Fully Paid-up Capital/ Capital deposited with SBP
Balance in Share Premium Account
Reserve for issue of Bonus Shares
General/ Statutory Reserves
Gain/(Losses) on derivatives held as Cash Flow Hedge
Unappropriated/unremitted profits/ (losses)
Minority Interests arising from CET1 capital instruments issued to third
party by consolidated bank subsidiaries (amount allowed in CET1 capital
of the consolidation group)
CET 1 before Regulatory Adjustments
Common Equity Tier 1 capital: Regulatory adjustments
Goodwill (net of related deferred tax liability)
All other intangibles (net of any associated deferred tax liability)

11
12

Shortfall of provisions against classified assets

Deferred tax assets that rely on future profitability excluding those arising
from temporary differences (net of related tax liability)

13
14
15
16
17
18
19

Defined-benefit pension fund net assets

Reciprocal cross holdings in CET1 capital instruments
Cash flow hedge reserve
Investment in own shares/ CET1 instruments
Securitization gain on sale
Capital shortfall of regulated subsidiaries
Deficit on account of revaluation from bank's holdings of fixed assets/ AFS

20

Investments in the capital instruments of banking, financial and insurance

entities that are outside the scope of regulatory consolidation, where the
bank does not own more than 10% of the issued share capital (amount
above 10% threshold)

21

Significant investments in the capital instruments issued by banking,

financial and insurance entities that are outside the scope of regulatory
consolidation (amount above 10% threshold)

Note 44.3

22

25

Deferred Tax Assets arising from temporary differences (amount above

10% threshold, net of related tax liability)
Amount exceeding 15% threshold
of which: significant investments in the common stocks of financial
entities
of which: deferred tax assets arising from temporary differences

26

National specific regulatory adjustments applied to CET1 capital

27

of which: Investment in TFCs of other banks exceeding the prescribed

limit
of which: Any other deduction specified by SBP (mention details)

23
24

28
29
30

Regulatory adjustment applied to CET1 due to insufficient AT1 and Tier 2

to cover deductions
Total regulatory adjustments applied to CET1 (sum of 9 to 29)

31

Common Equity Tier 1

Note 44.3

32
33
34
35

36
37
38
39
40

Additional Tier 1 (AT 1) Capital

Qualifying Additional Tier-1 instruments plus any related share premium
of which: Classified as equity
of which: Classified as liabilities
Additional Tier-1 capital instruments issued by consolidated subsidiaries
and held by third parties (amount allowed in group AT 1)
of which: instrument issued by subsidiaries subject to phase out
AT1 before regulatory adjustments
Additional Tier 1 Capital: regulatory adjustments
Investment in mutual funds exceeding the prescribed limit (SBP specific
adjustment)
Investment in own AT1 capital instruments
Reciprocal cross holdings in Additional Tier 1 capital instruments

41

Investments in the capital instruments of banking, financial and insurance

entities that are outside the scope of regulatory consolidation, where the
bank does not own more than 10% of the issued share capital (amount
above 10% threshold)

42

Significant investments in the capital instruments issued by banking,

financial and insurance entities that are outside the scope of regulatory
consolidation

43

Portion of deduction applied 50:50 to core capital and supplementary

capital based on pre-Basel III treatment which, during transitional period,
remain subject to deduction from tier-1 capital

44
45

Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier

2 to cover deductions
Total of Regulatory Adjustment applied to AT1 capital (sum of 38 to 44)

46
47

Additional Tier 1 capital

Additional Tier 1 capital recognized for capital adequacy

48

Tier 1 Capital (CET1 + admissible AT1) (31+47)

49
50
51
52
53
54
55

Tier 2 Capital
Qualifying Tier 2 capital instruments under Basel III plus any related share
premium
Capital instruments subject to phase out arrangement from tier 2 (Pre-Basel
III instruments)
Tier 2 capital instruments issued to third party by consolidated subsidiaries
(amount allowed in group tier 2)
of which: instruments issued by subsidiaries subject to phase out
General Provisions or general reserves for loan losses-up to maximum of
1.25% of Credit Risk Weighted Assets
Revaluation Reserves
of which: Revaluation reserves on fixed assets
Note 44.3

56
57
58
59
60

of which: Unrealized Gains/Losses on AFS

Foreign Exchange Translation Reserves
Undisclosed/Other Reserves (if any)
T2 before regulatory adjustments
Tier 2 Capital: regulatory adjustments
Portion of deduction applied 50:50 to core capital and supplementary
capital based on pre-Basel III treatment which, during transitional period,
remain subject to deduction from tier-2 capital

61
62
63

Reciprocal cross holdings in Tier 2 instruments

Investment in own Tier 2 capital instrument
Investments in the capital instruments of banking, financial and insurance
entities that are outside the scope of regulatory consolidation, where the
bank does not own more than 10% of the issued share capital (amount
above 10% threshold)

64

Significant investments in the capital instruments issued by banking,

financial and insurance entities that are outside the scope of regulatory
consolidation

65

Amount of Regulatory Adjustment applied to T2 capital (sum of 60 to 64)

66
67
68

Tier 2 capital (T2)

Tier 2 capital recognized for capital adequacy
Excess Additional Tier 1 capital recognized in Tier 2 capital

69
70

Total Tier 2 capital admissible for capital adequacy

TOTAL CAPITAL (T1 + admissible T2) (48+69)

Note 44.3

Page # 5

ep approach to Balance Sheet Reconciliation

nsure that the Basel III requirement to provide a full reconciliation of all
tatements is done in a consistent manner. Under this process all banks/ DFIs need
he figures reported for the calculation of regulatory capital.

eet of the published financial statements based on the accounting scope of consolidation
and report the numbers for each item in the published financial statements based on
re rows in the regulatory consolidation balance sheet that are not present in the
nd give a value of zero in the 2nd column. In case the accounting consolidation is
are not required to undertake Step-1. Instead, the bank should disclose this fact

Balance sheet of the published

financial statements

Under regulatory scope of

consolidation

As at period end
(2)

As at period end
(3)

Note 44.3

Page # 6

heet under the regulatory scope of consolidation (revealed in Step 1) to identify all the elements that are used in
Each element must be given a reference number/letter in the 4th column that will be used as a cross reference in
nt) that may need to be expanded. However, the more complex the balance sheet of the bank, the more items

Balance sheet as in published

financial statements

Under regulatory scope of

consolidation

As at period end
(2)

As at period end
(3)

Reference

(4)

a
b
c
d
e

f
g

h
i
j
k
l

m
n

Note 44.3

o
p
q
r

s
t

u
v
w
x
y
z
aa
ab

Note 44.3

Page # 7

disclosure template given at Note 44.2 (including sub-notes 44.2.1 to 44.2.3) and banks will cross reference
2. For example, the template includes the line "goodwill net of related deferred tax liability". The bank will put
as the difference between component "(j)" and component "(o)" of the regulatory scope balance sheet, illustrated
44.2 with the addition of the last column, therefore to reduce duplication, the bank may adopt any of the
) just add the last column of table 44.3.3 to Note 44.2 (including sub-notes 44.2.1 to 44.2.3).

losure Template (with added column)

Component of regulatory
capital reported by bank

Source based on reference number

from step 2

(s)
(u)
(w)
(x)

(j) - (o)
(k) - (p)
(f)
{(h) - (r} * x%

where 'x' depends on transitional

arrangement for capital deduction (e.g.
0%, 20% etc.), Section 2.4.11

{(l) - (q)} * x%
(d)

(ab)

(a) - (ac) - (ae)

(b) - (ad) - (af)

Note 44.3

Portion of amount above the threshold

that is to be deducted from CET1,
whereas "ac" is the portion to be
deducted from AT1 and "ae" is the
portion to be deducted from T2

Portion of amount above the threshold

that is to be deducted from CET1,
whereas "ad" is the portion to be
deducted from AT1 and "af" is the
portion to be deducted from T2

(i)

Note 44.3

Page # 8

(t)
(m)

(y)

(ac)

(ad)

(n)
(z)

(g)
portion of (aa)
Note 44.3

portion of (aa)
(v)

(ae)

(af)

Note 44.3

Note 44.4

Main Features Template of Regulatory Capital Instruments

Set out below is the template that banks must use to ensure that the key features of all regulatory capital instruments are di
NA if the question is not applicable). Banks are required to report each regulatory capital instrument in a separate colum
regulatory capital instruments of the bank/ banking group.

Disclosure template for main featu

Main Features

1
2

Issuer
Unique identifier (eg KSE Symbol or Bloomberg identifier etc.)

Governing law(s) of the instrument

Regulatory treatment

Transitional Basel III rules

Post-transitional Basel III rules

Eligible at solo/ group/ group&solo

Instrument type

Amount recognized in regulatory capital (Currency in PKR thousands, as of reporting date)

9
10

Par value of instrument

Accounting classification

11
12

Original date of issuance

Perpetual or dated

Note 44.4

13
14

Original maturity date

Issuer call subject to prior supervisory approval

15

Optional call date, contingent call dates and redemption amount

16

Subsequent call dates, if applicable

17
18
19

Coupons / dividends
Fixed or floating dividend/ coupon
coupon rate and any related index/ benchmark
Existence of a dividend stopper

20
21

Fully discretionary, partially discretionary or mandatory

Existence of step up or other incentive to redeem

22

Noncumulative or cumulative

23

24

Convertible or non-convertible

If convertible, conversion trigger (s)

Note 44.4

25

If convertible, fully or partially

26

If convertible, conversion rate

27

If convertible, mandatory or optional conversion

28

If convertible, specify instrument type convertible into

29

If convertible, specify issuer of instrument it converts into

30

Write-down feature

31

If write-down, write-down trigger(s)

32

If write-down, full or partial

33

If write-down, permanent or temporary

34

If temporary write-down, description of write-up mechanism

35

Position in subordination hierarchy in liquidation (specify instrument type immediately

senior to instrument

36

Non-compliant transitioned features

37

If yes, specify non-compliant features

Note 44.4

apital Instruments

ulatory capital instruments are disclosed. Banks will be required to complete all of the cells for each outstanding regulatory capital instrume
al instrument in a separate column of the template, such that the completed template would provide a "main features report" that summaries

e template for main features of regulatory capital instruments

Common Shares

Instrument - 2

Inst.- 3 & so
on

Note 44.4

Note 44.4

Note 44.4

Page # 9

red to complete all of the cells for each outstanding regulatory capital instrument (please insert
he completed template would provide a "main features report" that summaries all of the

ital instruments
Explanation

Identifies issuer legal entity.

Specify the governing law(s) of the instrument

Specifies the regulatory capital treatment during Basel III transitional phase (i.e. the
component of capital that the instrument is being phased-out from).
Enter: [Common Equity Tier 1] [Additional Tier
1] [Tier 2]
Specifies regulatory capital treatment under Basel III rules not taking into account
transitional treatment.
Enter: [Common Equity Tier 1]
[Additional Tier 1] [Tier 2] [Ineligible]
Specifies the level(s) within the group at which the instrument is included in capital.
Enter: [Solo] [Group] [Solo and Group]
Enter: [Ordinary shares] [Perpetual non-cumulative preference shares] [perpetual
debt instruments] [Other Tier 2] (others: please specify)
Specifies amount recognized in regulatory capital.
Par value of instrument
Specifies accounting classification. Helps to assess loss absorbency.
Enter: [Shareholders' equity] [Liability - amortized cost]
[Liability - fair value option] [Non-controlling interest in consolidated subsidiary]

Specifies date of issuance.

Specifies whether dated or perpetual.
no Maturity] [Dated]

Enter: [Perpetual/

Note 44.4

For dated instrument, specifies original maturity date.

Specifies whether there is an issuer call option. Helps to assess permanence.
Enter: [Yes] [No]
For instrument with issuer call option, specifies first date of call if the instrument has
a call option on a specific date (day, month and year) and in addition mention if the
instrument has a tax and/or regulatory event call. Also specifies the redemption
price. Helps to assess permanence
Specifies subsequent call dates, if applicable. Helps to assess permanence.

Enter [fixed], [floating], [fixed to floating], [floating to fixed]

Specifies whether the non payment of a coupon or dividend on the instrument
prohibits the payment of dividends on common shares (i.e. whether there is a
dividend stopper)
Enter: [yes], [no]
Enter: [fully discretionary] [partially discretionary] [mandatory]
Specifies whether there is a step-up or other incentive to redeem.
Enter: [Yes] [No]
Specifies whether dividends / coupons are cumulative or noncumulative.
Enter: [Noncumulative] [Cumulative]
Specifies whether instrument is convertible or not. Helps to assess loss absorbency.
Enter: [Convertible]
[Nonconvertible]
Specifies the conditions under which the instrument will convert, including point of
non-viability. Where one or more authorities have the ability to trigger conversion,
the authorities should be listed. For each of the authorities it should be state whether
it is the terms of the contract of the instrument that provide the legal basis for the
authority to trigger conversion (a contractual approach) or whether the legal basis is
provided by statutory means (a statutory approach)

Note 44.4

Page # 10
Specifies whether the instrument will: (i) always convert fully, (ii) may convert fully
or partially; or (iii) will always convert partially
Enter: one of
the options
Specifies rate of conversion into the more loss absorbent instrument. Helps to assess
the degree of loss absorbency.
For convertible instruments, specifies whether conversion is mandatory or optional.
Helps to assess loss absorbency.
Enter: [Mandatory] [Optional]
[NA]
For convertible instruments, specifies instrument type convertible into. Helps to
assess loss absorbency.
Enter: [Common Equity Tier
1] [Additional Tier 1] [Tier 2]
If convertible, specify issuer of instrument into which it converts.
Specifies whether there is a write down feature. Helps to assess loss absorbency.
Enter: [Yes] [No]
Specifies the trigger at which write-down occurs, including point of non-viability.
Where one or more authorities have the ability to trigger write-down, the authorities
should be listed. For each of the authorities it should be state whether it is the terms
of the contract of the instrument that provide the legal basis for the authority to
trigger write-down (a contractual approach) or whether the legal basis is provided by
statutory means (a statutory approach)

For each write-down trigger separately, specifies whether the instrument will (i)
always be written-down fully, (ii) may be written down partially; or (iii) will always
be written down partially. Help assess the level of loss absorbency at write-down

For write down instrument, specifies whether write down is permanent or temporary.
Helps to assess loss absorbency.
Enter: [Permanent] [Temporary]
[NA]
For instrument that has a temporary write-down, description of write-up mechanism.
Specifies instrument to which it is most immediately subordinate. Helps to assess
loss absorbency on gone-concern basis.
Specifies whether there are non-compliant features.
Enter: [Yes] [No]
If there are non-compliant features, specify which ones. Helps to assess instrument
loss absorbency.

Note 44.4

44.5 Risk Weighted Assets

The capital requirements for the banking group as per the major risk categories should be indicated in the man

Credit Risk

On-Balance sheet
Portfolios subject to standardized approach (Simple or Comprehensive)

e.g.

Cash & cash equivalents

Sovereign
Public Sector entities
Banks
Corporate
Retail
Residential Mortgages
Past Due loans
Operating Fixed Assets
Other assets

Portfolios subject to Internal Rating Based (IRB) Approach

e.g.

Corporate, Sovereign, Corporate, Retail, Securitization etc.

Off-Balance sheet
Non-market related
e.g. Financial guarantees, acceptances, performance related commitments, trade related etc.
Market related
e.g. Foreign Exchange contracts/ derivatives etc.
Equity Exposure Risk in the Banking Book

Under simple risk weight method

e.g. Listed, Unlisted
Under Internal models approach
Market Risk
Capital Requirement for portfolios subject to Standardized Approach

Interest rate risk

Equity position risk
Foreign Exchange risk
Capital Requirement for portfolios subject to Internal Models Approach
Operational Risk
Capital Requirement for operational risks

TOTAL

Note 44.5

Capital Adequacy Ratios

CET1 to total RWA
Tier-1 capital to total RWA
Total capital to total RWA

Note 44.5

Current Year
Required

Page # 11

uld be indicated in the manner given below:Capital Requirements

Current
Prior
Year
Year

Risk Weighted Assets

Current
Prior
Year
Year

itments, trade related etc.

Note 44.5

Current Year
Actual

Prior Year
Required

Actual

Note 44.5