2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
To create a bank, you need to form an authorized fund. This is the minimum amount of funds required to carry out the activity. According to the legislation of the Russian Federation, its volume is 5 million euros in ruble terms. According to the volume of the organization's capital, the possibility of its growth and development is determined. To do this, there is a special indicator of the sufficiency of own funds. Read on to find out what the H1 standard is and how it is calculated.
Bank capital
It includes the amount of own and additional funds. This indicator is calculated using the following formula:
UK=OK + DC, where:
UK - bank capital, OK - the amount of own funds, DK - additional capital.
Sources of formation of MC for banks in the form of JSC:
- nominal value of ordinary shares actually placed on the market;
- share premium;
- nominal value of preferred shares, provided that the founding documents stipulate that they are allowed non-payment of dividends, if this does not entail the formation of debt to the holders of securities;
- funds that are formed at the request of the Central Bank;
- profit of the current year, which is confirmed by the auditors;
- difference between UK and UK, if after reorganization the amount of the bank's own funds decreases.
The source of the formation of the IC for banks in the form of LLC is the payment of the shares of the founders.
Economic regulations
The Central Bank regularly analyzes the amount of own funds of credit institutions. It must comply with the indicators specified in Instruction No. 1 "On the procedure for regulating the activities of banks." The most important of them is H1, the capital adequacy ratio. It regulates the risks of bank insolvency, shows the minimum amount of own funds needed to cover losses. The calculation of the H1 standard is carried out according to the following formula:
H1=SK / (SUM (Ai-Cree) + p. 8807 + p. 8957 + PK + CRV + p. 8992 + 10 x OR + PP), where:
- SK - bank capital;
- Cree - risk factor of AI-th asset;
- p. - line number in reporting;
- risks:
- KRV - for contingent liabilities;
- KRS - for urgent transactions;
- OR - operational;
- РР - market;
- PC - increased coefficient.
H1 - capital adequacy ratio - for banks with equity over EUR 5 million should be 10%. If the AC is less, then the value of the coefficient should be 11% or more.
According to the methodology of the Basel Committee, the levelsufficiency is calculated separately for the capitals of the first and second levels. First, the volume of repurchased shares, the reserve fund and the profit of vulgar years are calculated. Tier 2 capital includes revaluation reserves, loss reserves and various hybrid securities.
Liquidity ratios
The H2 standard is determined by the ratio of highly liquid assets and the amount of demand liabilities:
H2=La / (Bv - 0.5 x Bv1), where:
Н2 – instant liquidity ratio;
La - highly liquid assets (cash, precious metals, foreign currency, nostro balance; balances on correspondent accounts with the Central Bank; investments in government securities);
Bv – 20% of demand account balance;
Bv1 – the minimum total balance of funds on demand accounts of individuals and legal entities.
The calculated value of H2 should be 15% or more.
Current liquidity ratio:
H3=La / (From - 0.5 x Bv1)
where:
From - demand obligations with a term of up to 30 days: balances on current accounts, "loro", deposits and deposits; loans, guarantees and guarantees and other obligations;
Bv1 – the minimum total balance of funds on demand accounts of individuals and legal entities for up to one month.
The calculated value of the coefficient should be less than 50%.
Long-term liquidity ratio is calculated for liabilities and loans maturing more than 12 months:
H4=Kr / (SC + D + 0.5 x O), where:
Kr - loans provided by the bank in rubles and foreign currency. This figure should also include 50% of bank guarantees and guarantees with the same period of validity;
D - deposits and loans received;
O - the amount of the minimum total balance on accounts with a maturity of up to 1 year.
The calculated ratio must be less than 120%.
Rehabilitated banks did not comply with the H1 liability coverage ratio
This was shown by the results of the financial analysis of credit institutions. In particular, Mosoblbank did not comply with the H1 standard in February. The value of the coefficient of the credit institution was equal to 0%, with the required 10%. The organization also lacked basic, fixed capital, long-term liquid assets. Things are no better at Finance Business Bank. The current liquidity indicator exceeded the required value by 4.32%. Norms of basic and fixed capital adequacy were also violated. The third sanitized organization - "Inres" - did not comply with the requirements of the Central Bank for 19 days, and "BTA-Kazan" - 15 days in a row. In the NB "TRUST" the value of the adequacy ratios of the basic, fixed capital, the maximum level of large and the use of own funds and funds of other legal entities amounted to 0%.
Bimbank
This credit organization took the financial group "ROST" for reorganization last autumn. But problems arose for all participants in the process. "Rost Bank" at the end of January violated the H1 standard, did not scorea sufficient number of long-term assets and exceeded the level of risk per client. The credit organization "Kedr", which is also part of this financial group, did not have enough own funds throughout January to ensure its activities. In addition, the institution has exceeded the limit of major risks, guarantees and guarantees and the level of insider risks. On January 12, 2015, Bimbank also did not have enough fixed capital to support its activities. But later the situation improved.
Consequences
The list of other organizations that violated the H1 standard includes: NPO "Petersburg Settlement Center", deprived of the license "Shipbuilding", "Tavrichesky", "Financial and Industrial" banks. Various measures of influence are not applied to credit institutions that are at the stage of financial recovery. But when the capital adequacy ratio of bank H1 was violated by Svyaznoy, questions began. According to the law, the Central Bank can revoke a license if the ratio drops to 2%. During the reporting year, this happens to banks quite often due to technical failures. But if, after correcting the problems, the value of the coefficient has not increased, then the Central Bank may request a financial rehabilitation plan or introduce its manager into the structure. For Svyaznoy, this coefficient fell to 9.19% for just one day due to the fact that the bank needed to increase deductions to reserves.
New market leader
The H1 standard for banks is legally set at 10%. FROMIn 2013, Tinkoff was the most capitalized. The value of the coefficient then reached 15.8% and remained high, despite the trends in the market. According to the results of the first quarter, this figure dropped to 15.22%. Russian Standard set a new record - 17.65%. Other credit institutions have a low indicator value: Home Credit - 13.9%, Renaissance - 12.89%, OTP - 12.34%.
Russian Standard restructured Eurobonds, extending their term until 2020, received additional capital in the amount of $350 mln and increased H1 by 4%. For this, the bank paid investors a premium of 5 percentage points. from the face value of the bond and increased the rate to 13% for one coupon. To date, the capital of "Russian Standard" is 64 billion rubles. Due to this, the organization can attract liabilities through tenders, lend to related companies in a larger volume. Losses are covered by Tier 1 capital. Its sufficiency level is low - 6.26%. But this is because it does not include subordinated bonds.
For the first quarter, the bank lost 6.5 billion rubles. At the end of 2014, the profit amounted to 1.4 billion rubles. If losses are not reduced, then the pressure of Tier 1 capital will only intensify. Competitors on the market have a higher value of this indicator: Home Credit - 8.42%, Tinkoff - 9.4%, Vostochny - 6.74%.
Sberbank does not want to stand out in the market yet
The organization received a subordinated loan from the Central Bank in the amount of 500 billion euros. This figure is currently included in equity.second level. If it is converted, then the H1 standard will increase by 1.2 percentage points from 12%. In comparison with competitors and the position of the organization in the market, the value of the coefficient is not high. But given the macroeconomics and the situation in Ukraine, the results are quite acceptable.
Conclusion
For the successful functioning of the market, the bank needs its own funds. Their volume should advise the established sufficiency standards. The Central Bank regularly checks the value of these coefficients. If the calculated indicator drops to 2%, then the license of the credit institution may be revoked.
Recommended:
Where can I find out the cadastral value of an apartment? Cadastral value of an apartment: what is it and how to find out
Not so long ago in Russia, all real estate transactions were carried out only on the basis of market and inventory value. The government decided to introduce such a concept as the cadastral value of an apartment. Market and cadastral value have now become two main concepts in the assessment
The market value of land. Cadastral and market value
The cadastral and market value of a land plot are two concepts that are important to know about in order to navigate when selling
Land: cadastral value. Land plot: assessment and change of cadastral value
A land plot is a surface that is characterized by a fixed area, boundaries, legal status, location and other features reflected in the documentation that serves as a registrar of land rights, as well as in the State Land Cadastre. Here we can talk about the lands of settlements, agricultural plots, lands for energy and industrial purposes, specially protected areas that belong to water, forest funds and others
What is the difference between the cadastral value and the inventory value? Determination of the cadastral value
Recently real estate has been valued in a new way. The cadastral value was introduced, providing for other principles for calculating the value of objects and as close as possible to the market price. At the same time, the innovation led to an increase in the tax burden. The article describes how the cadastral value differs from the inventory value and how it is calculated
Cadastral value of the apartment. Market and cadastral value of the apartment
When calculating the tax on real estate, its division or alienation, as well as some other operations, in addition to the market, you will also need the cadastral value of the apartment. What it is, how it is calculated, in what specific cases it is used and where you can get its exact value - all this is discussed in more detail below
