Search This Blog

Wednesday, November 6, 2013

The Capital Adequacy Ratios of Philippine Banks - June 30, 2013

A bank's Capital Adequacy Ratio is a measure of a bank's capital and financial strength.  It is expressed as a percentage of a bank's risk weighted credit exposures.  It is also known as the "Capital to Risk Weighted Assets Ratio (CRAR).

The general formula is as follows:

CAR = (Tier 1 Capital + Tier 2 Capital)/Risk Weighted Assets

Tier 1 Capital

Tier 1 CAR is the ratio of a bank's core or equity capital to its total risk-weighted assets.  It measures financial strength from a regulator's point of view. Tier 1 Capital measures the bank's ability to absorb losses without a bank being required to cease trading.

The formula for Tier 1 Capital is as follows:

Tier 1 Capital = (Paid-up Capital + Statutory Reserves + Disclosed Free Reserves) - (Equity Investments in Subsidiary + Intangible Assets + Current & B/F losses)

Tier 1 CAR = Tier 1 Capital/Risk Weighted Assets

Tier 2 Capital

Tier 2 Capital is supplementary capital.  It measures the ability of a bank to absorb losses in the event of a winding up and so it provides a lesser degree of protection to depositors.

The formula for Tier 2 Capital is as follows:

 Tier 2 Capital = Undisclosed Reserves + General Loss Reserves + Hybrid Debt Capital Instruments and Subordinated Debts.

Risk Weighted Assets

Risk Weighted Assets are a bank's on balance sheet assets and off-balance sheet exposures, weighted according to risk.  Different classes of assets have different risk weightings.  For instance, cash on hand or a government bond has zero risk weighting and are subtracted from the total risk assets.  A loan would have a 100% risk weighthing - it would be counted towards the total risk assets of the bank.

More information about this can be found here.

Minimum Capital Requirements

International Guidelines

Basel III is the global requlatory standard on bank capital adequacy, stress testing, and market liquidity risk agreed upon by the members of the Basel Committee on Banking Supervision.

Under Basel III, the minimum Common Equity Tier 1 Capital Ratio is 4.5%, Tier 1 Capital Ratio is 6.0%, conservation buffer is 2.5%, and the minimum Total CAR is 8.0%.


For more information on Basel III, read this.

BSP Guidelines

The BSP issued new BASEL III Implementing Guidelines that will take effect on January 1, 2014. Under the new guidelines:

"Banks must now meet specific minimum thresholds for so-called Common Equity Tier 1 (CET1) capital and Tier 1 (T1) capital in addition to the Capital Adequacy Ratio (CAR). These regulatory thresholds effectively move banks worldwide to rely more on core capital instruments like CET1 and T1 issues. This is in lieu of hybrid instruments which did not fare well in the latest global crisis as far as absorbing losses. The ability to absorb losses is central to Basel III.
The BSP maintained the minimum Capital Adequacy Ratio (CAR) at 10.0 percent. In addition to CAR, the new framework sets a CET1 ratio of at least 6.0 percent and the Tier I capital ratio is at a minimum of 7.5 percent. 
The new guidelines also introduce a capital conservation buffer of 2.5 percent which shall be made up of CET1 capital. In addition, banks which issued capital instruments from 2011 will be allowed to count these instruments as Basel III-eligible until end-2015


Under these guidelines, several Philippine Thrift Banks currently do not meet these guidelines as of June 30, 2013.  The banks that fail to meet BSP's minimum capital requirements are as follows:

Total CAR

  1. Bataan Savings and Loan Bank (Total CAR of 0.00)
  2. Equicom Savings Bank, Inc. (Total CAR of 9.83)


Tier One CAR
  1. Bataan Savings and Loan Bank (Tier One CAR of 0.00)
  2. Business & Consumers Bank (Tier One CAR of 0.00)
  3. Equicom Savings Bank, Inc. (Tier One CAR of 0.00)
  4. Maritime Savings Bank Corporation (Tier One CAR of 0.00)
  5. Optimum Development Bank (Tier One CAR of 0.00)
  6. Planters Development Bank (Tier One CAR of 5.07)
  7. Legazpi Savings Bank, Inc. (Tier One CAR of 8.09)


The Total CAR and Tier 1 CAR of Philippine Universal and Commercial Banks as of June 30, 2013 is as follows:(Banks that do not meet BSP's minimum capital requirements are highlighted in yellow):


Philippine Banking System

Total CAR

June 30, 2013










Bank
Total CAR
Bataan Savings and Loan Bank Thrift 0.00%
Equicom Savings Bank Inc. Thrift 9.83%
Silangan Savings & Loan Bank Inc. Thrift 10.10%
Planters Development Bank Thrift 10.15%
The Real Bank Inc. Thrift 10.92%
Opportunity Kauswagan Bank Inc. Thrift 11.07%
United Coconut Planters Bank U/KB 11.50%
BPI Globe Banko Inc. Thrift 12.03%
Standard Chartered Bank U/KB 13.03%
Bank of the Philippine Islands U/KB 13.35%
Citibank Savings Inc. Thrift 13.36%
Philippine Postal Savings Bank Inc. Thrift 13.61%
City Savings Bank Inc. Thrift 13.70%
Metropolitan Bank & Trust Company U/KB 13.83%
The HongKong & Shanhai Banking Corporation U/KB 14.30%
University Savings Bank Inc. Thrift 14.67%
World Partners Bank Thrift 14.85%
Farmers Savings & Loan Bank Inc. Thrift 15.41%
China Bank Savings Inc. Thrift 15.42%
BPI Family Savings Bank Inc. Thrift 15.59%
Wealth Development Bank Corporation Thrift 15.67%
Luzon Development Bank Thrift 16.03%
Legazpi Savings Bank, Inc. Thrift 16.18%
BDO Unibank, Inc. U/KB 16.21%
Rizal Commecial Banking Corporation U/KB 16.22%
Sterling Bank of Asia Thrift 16.27%
RCBC Savings Bank Inc. Thrift 16.31%
Security Bank Savings Corporation Thrift 16.54%
ANZ Banking Group Ltd. U/KB 16.76%
Security Bank Corporation U/KB 16.89%
Philippine Resources Savings Banking Thrift 17.03%
BPI Direct Savings Bank Inc. Thrift 17.09%
Philippine National Bank U/KB 17.30%
East West Banking Corporation U/KB 17.56%
Village Bank Inc. Thrift 17.77%
China Banking Corporation U/KB 17.87%
Hiyas Banking Corporation Thrift 18.17%
Philippine Savings Bank Thrift 18.76%
Philippine Veterans Bank U/KB 18.76%
Producers Savings Bank Corporation Thrift 19.30%
Penbank Inc. Thrift 20.01%
Union Bank of the Philippines U/KB 20.18%
Maybank Philippines, Inc. U/KB 20.57%
Citibank, N.A. U/KB 21.21%
Bataan Development Bank Thrift 21.23%
Comsavings Bank Thrift 21.23%
HSBC Savings Bank (Phils) Inc. Thrift 21.28%
Dumaguete City Development Bank Inc. Thrift 21.41%
Land Bank of the Philippines U/KB 21.87%
Philippine Bank of Communications U/KB 22.32%
First Consolidate Bank Inc. Thrift 23.20%
Deutsche Bank AG U/KB 23.34%
Bank of Commerce U/KB 23.66%
Development Bank of the Philippines U/KB 23.68%
Malayan Bank Savings and Mortgage Bank, Inc. Thrift 24.13%
Asia United Bank Corporation U/KB 24.25%
Mizuho Corporate Bank, Ltd. - Manila Branch U/KB 25.12%
Philippine Business Bank Inc. Thrift 25.43%
Northpoint Development Bank Inc. Thrift 25.88%
Allied Savings Bank Thrift 25.97%
UCPB Savings Bank Thrift 26.45%
Robinsons Bank Corporation U/KB 26.48%
Card SME Bank Inc. Thrift 27.24%
The Bank of Tokyo - Mitsubishi UFJ Ltd. U/KB 27.59%
Business and Consumers Bank Thrift 28.42%
Cordillera Savings Bank Inc. Thrift 28.87%
Korea Exchange Bank U/KB 29.68%
Chinatrust (Phils.) Commercial Bank Corporation U/KB 30.01%
Life Savings Bank Inc. Thrift 30.20%
Metro Cebu Public Savings Bank Thrift 31.94%
Lemery Savings & Loan Bank, Inc. Thrift 32.64%
Maritime Savings Bank Corporation Thrift 33.55%
Philippine Trust Company U/KB 36.93%
Citystate Savings Bank Inc. Thrift 37.45%
Bank of China Limited - Manila Branch U/KB 38.20%
Microfinance Maximum SB Inc. Thrift 38.38%
Pampanga Development Bank Thrift 38.51%
Tong Yang Savings Bank Inc. Thrift 39.26%
Mega International Commercial Bank Co., Ltd U/KB 39.50%
BDO Private Bank, Inc. U/KB 41.85%
Malasiqui Progressive SLB, Inc. Thrift 43.85%
JP Morgan Chase Bank, N.A. U/KB 44.86%
Pacific Ace Savings Bank Inc. Thrift 51.80%
Queen City Development Bank Inc. Thrift 52.19%
Pride Star Development Bank Inc. Thrift 52.20%
Sampaguita Savings Bank Inc. Thrift 52.98%
Internationale Nederlanden Groep Bank U/KB 53.26%
Bank of America, N.A. U/KB 54.44%
Tower Development Bank Thrift 59.44%
Bank One Savings and Trust Corp. Thrift 59.45%
Progressive Savings and Loan Bank Inc. Thrift 61.24%
Optimum Development Bank Inc. Thrift 61.88%
Dungganon Bank Thrift 61.93%
Sun Savings Bank Inc. Thrift 62.87%
Quezon Coconut Bank Inc. Thrift 65.88%
Bangkok Bank Public Co. Ltd. U/KB 84.29%
Merchants Savings & Loan Association Inc. Thrift 86.20%
Century Savings Bank Corporation Thrift 88.17%
United Overseas Bank Philippines Thrift 134.13%
Al-Amanah Islamic Investment Bank of the Philippines U/KB 153.89%
Isla Bank Inc. Thrift 320.22%
Iloilo City Development Bank Thrift 470.02%
BDO Elite Savings Bank Inc. Thrift 522.27%









Philippine Banking System
Tier 1 CAR
June 30, 2013









Bank
Tier 1 CAR
Bataan Savings and Loan Bank Thrift 0.00%
Business and Consumers Bank Thrift 0.00%
Equicom Savings Bank Inc. Thrift 0.00%
Maritime Savings Bank Corporation Thrift 0.00%
Optimum Development Bank Inc. Thrift 0.00%
Planters Development Bank Thrift 5.07%
Legazpi Savings Bank, Inc. Thrift 8.09%
The Real Bank Inc. Thrift 10.02%
Silangan Savings & Loan Bank Inc. Thrift 10.10%
BPI Globe Banko Inc. Thrift 11.26%
United Coconut Planters Bank U/KB 11.50%
Sterling Bank of Asia Thrift 12.08%
China Bank Savings Inc. Thrift 12.11%
Standard Chartered Bank U/KB 12.46%
Philippine Postal Savings Bank Inc. Thrift 12.66%
Citibank Savings Inc. Thrift 12.71%
City Savings Bank Inc. Thrift 12.85%
Bank of the Philippine Islands U/KB 13.35%
Metropolitan Bank & Trust Company U/KB 13.83%
The HongKong & Shanhai Banking Corporation U/KB 14.30%
East West Banking Corporation U/KB 14.38%
World Partners Bank Thrift 14.43%
BDO Unibank, Inc. U/KB 14.46%
Land Bank of the Philippines U/KB 14.55%
Farmers Savings & Loan Bank Inc. Thrift 14.66%
Wealth Development Bank Corporation Thrift 14.66%
BPI Family Savings Bank Inc. Thrift 14.71%
Luzon Development Bank Thrift 14.91%
Philippine Resources Savings Banking Thrift 15.30%
Philippine Savings Bank Thrift 15.46%
Security Bank Savings Corporation Thrift 15.61%
RCBC Savings Bank Inc. Thrift 15.69%
Security Bank Corporation U/KB 15.80%
Philippine National Bank U/KB 15.86%
Rizal Commecial Banking Corporation U/KB 16.22%
BPI Direct Savings Bank Inc. Thrift 16.23%
ANZ Banking Group Ltd. U/KB 16.27%
Philippine Bank of Communications U/KB 16.71%
Development Bank of the Philippines U/KB 17.07%
Village Bank Inc. Thrift 17.23%
China Banking Corporation U/KB 17.36%
Hiyas Banking Corporation Thrift 17.89%
Philippine Veterans Bank U/KB 18.58%
Union Bank of the Philippines U/KB 18.96%
Producers Savings Bank Corporation Thrift 19.03%
Penbank Inc. Thrift 19.25%
Maybank Philippines, Inc. U/KB 19.46%
Citibank, N.A. U/KB 20.49%
HSBC Savings Bank (Phils) Inc. Thrift 20.51%
Bataan Development Bank Thrift 20.86%
Dumaguete City Development Bank Inc. Thrift 21.02%
Comsavings Bank Thrift 22.14%
First Consolidate Bank Inc. Thrift 22.30%
Deutsche Bank AG U/KB 23.02%
Bank of Commerce U/KB 23.50%
Malayan Bank Savings and Mortgage Bank, Inc. Thrift 23.67%
Mizuho Corporate Bank, Ltd. - Manila Branch U/KB 24.18%
Asia United Bank Corporation U/KB 24.19%
Philippine Business Bank Inc. Thrift 24.87%
Allied Savings Bank Thrift 25.14%
UCPB Savings Bank Thrift 25.72%
Northpoint Development Bank Inc. Thrift 25.88%
Robinsons Bank Corporation U/KB 26.48%
The Bank of Tokyo - Mitsubishi UFJ Ltd. U/KB 26.62%
Korea Exchange Bank U/KB 28.28%
Cordillera Savings Bank Inc. Thrift 28.46%
Chinatrust (Phils.) Commercial Bank Corporation U/KB 29.26%
Metro Cebu Public Savings Bank Thrift 31.13%
Lemery Savings & Loan Bank, Inc. Thrift 36.02%
Philippine Trust Company U/KB 36.56%
Citystate Savings Bank Inc. Thrift 36.80%
Bank of China Limited - Manila Branch U/KB 37.39%
Mega International Commercial Bank Co., Ltd U/KB 38.55%
Tong Yang Savings Bank Inc. Thrift 39.26%
BDO Private Bank, Inc. U/KB 41.71%
Malasiqui Progressive SLB, Inc. Thrift 43.66%
JP Morgan Chase Bank, N.A. U/KB 44.76%
Opportunity Kauswagan Bank Inc. Thrift 45.35%
Sampaguita Savings Bank Inc. Thrift 49.63%
University Savings Bank Inc. Thrift 50.22%
Queen City Development Bank Inc. Thrift 51.59%
Pacific Ace Savings Bank Inc. Thrift 51.68%
Internationale Nederlanden Groep Bank U/KB 53.03%
Bank of America, N.A. U/KB 54.23%
Microfinance Maximum SB Inc. Thrift 56.31%
Quezon Coconut Bank Inc. Thrift 58.13%
Bank One Savings and Trust Corp. Thrift 58.97%
Dungganon Bank Thrift 61.23%
Progressive Savings and Loan Bank Inc. Thrift 61.24%
Sun Savings Bank Inc. Thrift 61.92%
Life Savings Bank Inc. Thrift 62.90%
Pride Star Development Bank Inc. Thrift 68.12%
Bangkok Bank Public Co. Ltd. U/KB 83.32%
Merchants Savings & Loan Association Inc. Thrift 86.37%
Century Savings Bank Corporation Thrift 86.71%
Iloilo City Development Bank Thrift 103.92%
Pampanga Development Bank Thrift 112.49%
Tower Development Bank Thrift 112.90%
United Overseas Bank Philippines Thrift 133.98%
Card SME Bank Inc. Thrift 225.36%
Isla Bank Inc. Thrift 319.85%
Al-Amanah Islamic Investment Bank of the Philippines U/KB 417.80%
BDO Elite Savings Bank Inc. Thrift 522.27%


Source: www.bsp.gov.ph


No comments:

Post a Comment