to create a bank need to form a statutory fund.This is the minimum amount of funds required for the implementation of activities.According to Russian law, a volume of 5 million euros in ruble equivalent.In terms of capital is determined by the possibility of the organization of its growth and development.For this purpose there is a special measure of capital adequacy.That is a ratio N1 and how it is calculated, read on.
Capital Bank
It includes the value of its own and the additional funds.This indicator is calculated by the following formula:
IP = OK + DC where:
capital - capital of the bank,
OK - the value of own funds,
DC - additional capital.
Sources of the Criminal Code for the banks in the form of joint-stock company:
- nominal value actually put on the market of ordinary shares;
- seigniorage;
- nominal value of preferred shares, provided that the founding documents stipulate that it may be the non-payment of dividends, if it does not entail the formation of the holders of debt securities;
- funds, which are formed at the request of the Central Bank;
- profit for the current year, which is confirmed by the auditor's opinion;
- difference between the Criminal Code and the UK, if after the reorganization of the amount of the bank's equity is reduced.
source of formation of the UK banks in the form of Company shares is the payment of the founders.
Economic regulations
Central Bank regularly reviews the amount of own funds of credit institutions.He shall be as specified in the instructions number 1 "On the order of regulation of banks."The most important of them - H1, the capital adequacy ratio.It regulates the risks nesosotosyatelnosti Bank shows the minimum amount of own funds required to cover the losses.Calculation of the norm of H1 occurs on the following formula:
H1 = SC / (SUM (Au-Cree) + p. 8807 + p. 8957-PC + EOC + pp. 8992 ± 10 x PR + RR) where:
- SC - capital of the bank;
- Cree - Ai-risk ratio of the asset;
- page. - The number of rows in statements;
- risks:
- EOC - for contingent liabilities;
- cattle - for forward transactions;
- OR - operating;
- PP - market;
- PC - an increased rate.
H1 - capital adequacy - for the banks with the volume of own funds of more than 5 million euro shall be 10%.If MC is less then the gain value should be 11% or more.
by the method of the Basel Committee adequacy of capital is calculated separately for the first and second level.First, it calculates the amount of treasury shares, reserves and profits vulgar years.The Tier II capital includes revaluation reserves to cover losses and various hybrid securities.
Liquidity indicators
H2 ratio determined by the ratio of highly liquid assets and liabilities on demand:
H2 = La / (BV - 0.5 x TW1) where:
H2 - Quick ratio;
La - highly liquid assets (cash, precious metals, foreign currency, the balance of "nostro, balances on correspondent accounts in the Central Bank, investments in government securities);
BV - 20% of the balance of demand accounts;
TW1 - the minimum aggregate balance of the accounts of legal entities and pre- eminence demand.
Estimated value of the H2 should be 15% or more.
Current liquidity:
H3 = La / (From - 0.5 x TW1)
where:
On - demand liabilities with a maturity up to 30 days: balances on current accounts "Loro", deposits and deposits;Loans, Guarantees and other commitments;
TW1 - the minimum aggregate balance of the accounts of legal entities and pre- eminence on demand for up to one month.
calculated value should be less than 50%.
long-term liquidity ratio is calculated on the obligations and loans with maturities longer than 12 months:
H4 = Cr / (CK + J + 0.5 x), where:
Cr - loans that the bank granted in rubles and foreigncurrency.This figure should also be included 50% of the bank guarantees and warranties to the same period of validity;
D - deposits and loans received;
About - minimum amount of the total balance of accounts with a maturity of up to 1 year.
calculated value should be less than 120%.
rehabilitated banks failed to comply with the specification of the secured obligation H1
This is shown by the results of the financial analysis of credit institutions.In particular, "Mosoblbank" in February, did not observe the norm of H1.The coefficient of a credit institution is equal to 0% at the required 10%.The organization also lacked the basic, core capital, long-term liquid assets.Not better things in the "Business Finance Bank".Ratios higher than 4.32% in the required value.They also violated the basic capital adequacy and core capital.A third organization rehabilitated - "INRES" - did not fulfill the requirements of the Central Bank within 19 days, "BTA-Kazan" - 15 days.In the NB "TRUST" adequacy ratio of basic, core capital, large ceiling and use of its own funds and other legal entities amounted to 0%.
"Bimbank"
This credit organization has reorganization last fall financial group "growth".But problems arose for all participants in the process."The growth of the Bank" in late January breached ratio N1, has not received a sufficient number of long-term assets and exceeded the level of risk for one client.Credit institution "Cedar" which is also included in the financial group, all of January was not enough own funds for the operation.In addition, the institution has exceeded the limit of large risks, guarantees and warranties and the level of insider risks.1/12/15 Bimbanka have also lacked the basic capital for the operation.But later the situation has improved.
Consequences
The list of other organizations that have violated the norm of H1 are: NGO "St. Petersburg Settlement Center", deprived of license "Shipbuilding", "Tauride", "Financial-industrial" banks.For credit institutions that are in the process of financial recovery, the impact of the various measures do not apply.But when the bank's capital adequacy ratio H1 was violated "The Messenger", questions started.By law, the Central Bank may revoke the license if the value of the coefficient drops to 2%.During the year, this happens quite often with the banks due to technical failures.But if after correcting the problems coefficient value has not increased, the Central Bank may request a plan of financial rehabilitation or enter in your control structure.In "The Messenger" this coefficient dropped to 9.19% for one day due to the fact that the bank had to increase provisioning.
new market leader
legislated ratio N1 for banks at 10%.Since 2013 it has been the most capitalized "Tinkoff".The value of coefficient then reached 15.8% and remained high, despite the trends in the market.In the first quarter of this figure decreased to 15.22%."Russian Standard" has set a new record - 17.65%.The other credit institutions value of the index is low, "Home Credit" - 13.9%, "Renaissance" - 12.89%, "OTP" - 12.34%.
«Russian Standard" Eurobonds restructured by extending their term until 2020, has received additional capital of $ 350 million increased 4% on H1.For a bank to pay investors a premium of 5 percentage pointsof the nominal bonds and increased the rate to 13% for one coupon.Today the capital "Russian Standard" is 64 billion rubles.In this way the organization can attract liabilities through tenders, to lend to related companies at a higher level.Losses covered by Tier I capital.He is quite low - 6.26%.But it is because it does not include subordinated bonds.
During the first quarter the bank lost 6.5 billion rubles.At the end of 2014 the profit amounted to 1.4 billion rubles.If you do not reduce losses, the pressure Tier tlko increase.Rynuke competitors on this indicator above: "Home Credit" - 8.42%, "Tinkoff" - 9.4%, "East" - 6.74%.
Savings Bank does not want to stand out in the market
subordinirovanyny Organization received a loan from the Central Bank in the amount of 500 billion euros.Currently, the figure is listed as part of Tier II capital.If you convert it, the ratio N1 with a 12% rise by 1.2 percentage pointsIn comparison with competitors and the organization's position on the market value of the coefficient is not high.But given the macroeconomic situation in Ukraine and the results are quite acceptable.
Conclusion
for the successful functioning of the market the bank's own funds are required.Their volume must be established to advise adequacy.The Central Bank regularly reviews the value of these coefficients.If the calculated rate will drop to the level of 2%, a credit institution may revoke the license.
