Capital Adequacy

Basel III is a framework that sets international standards for banks’ capital adequacy, stress testing, and liquidity requirements. It was developed in response to the deficiencies identified in financial regulations during the financial crisis of 2007–2008. It is intended to strengthen bank’s capital requirement by increasing minimum capital requirements, holdings of high quality liquid assets, and decreasing bank leverage.

Minimum Capital Requirement

A strong base of capital is essential for a bank’s sustainability. The capital acts as a cushion or a shock absorber against unexpected losses arising from various risks during the course of the business and as a regulatory restraint on unnecessary asset expansion.

During the year 2022, Banks faced difficulties in raising fresh capital due to unfavorable market conditions, comparatively higher risk-weighted assets, higher impairment provisioning under SLFRS 9, and higher taxes. However, the Bank was capable to manage its capital requirements by using strategies such as prudent capital allocation, controlled growth in risk-weighted assets, expansion of fee-based services, timely pricing/re-pricing of its assets and liabilities, well diversified products and services portfolio and capital instruments. The Bank consistently maintains capital adequacy ratios, well in excess of minimum requirements.

At present, Capital Adequacy Ratios of the licensed banks in Sri Lanka are computed based on the Banking Act Direction No. 1 of 2016 and subsequent amendments thereto issued by the Central Bank of Sri Lanka (CBSL) stemming from Basel III accord.

Following comparison demonstrates the capital strength of the Bank and its ability to meet regulatory requirements.

		Actual end of
Components of the Capital	Minimum Regulatory Requirement from 01.01.2019 %	31.12.2020 %	31.12.2021 %	31.12.2022 %
Common Equity Tier 1 + CCB and Capital surcharge for D-SIBs	8.50	10.09	12.91	11.34
Total Tier 1	10.00	11.22	14.25	12.41
Total Capital	14.00	14.88	17.77	15.38

Below chart depicts the components of the Bank’s capital and its compliance with the firm requirements imposed by the Regulator.

The Bank was able to raise LKR 6.49 billion by issuing Basel III compliant – Tier 2, Unlisted, Rated, Unsecured, Subordinated, Redeemable debentures in 2022 in order to improve the Tier 2 capital base. Furthermore internally generated funds during the year has also enhanced Bank’s capital base, enabling the Bank to meet the regulatory capital adequacy requirements under the Basel III Accord.

Basel III Disclosure Requirements under Pillar 3 as per Banking Act Direction No. 01 of 2016

Disclosure 1: Key Regulatory Ratios – Capital and Liquidity

	31.12.2022		31.12.2021
Item	Bank	Group	Bank	Group
Regulatory Capital (LKR ’000)
Common Equity Tier 1	194,949,918	200,533,817	176,537,824	182,294,819
Tier 1 Capital	213,299,918	218,883,817	194,887,824	200,644,819
Total Capital	264,494,074	270,747,789	243,033,817	249,799,365
Regulatory Capital Ratios (%)
Common Equity Tier 1 Capital Ratio (Minimum Requirement – 8.50%)	11.34	11.34	12.91	12.83
Tier 1 Capital Ratio (Minimum Requirement – 10.00%)	12.41	12.38	14.25	14.13
Total Capital Ratio (Minimum Requirement – 14.00%)	15.38	15.32	17.77	17.59
Leverage Ratio (Minimum Requirement – 3.00%)	4.59	4.65	4.68	4.76

 

	Bank
Item	31.12.2022	31.12.2021
Regulatory Liquidity
Statutory Liquid Assets – Domestic (LKR ’000)	698,946,861	715,407,611
Statutory Liquid Assets – FCBU (USD ’000)	368,308	701,065
Statutory Liquid Assets Ratio (Minimum Requirement – 20%)
Domestic Banking Unit (%)	21.22	24.97
Off -shore Banking Unit (%)	32.79	25.34
Consolidated (%)	23.00	N/A
Liquidity Coverage Ratio (%) – Rupee (Minimum Requirement 2022 – 90%, 2021 – 100%)	169.00	169.00
Liquidity Coverage Ratio (%) – All Currency (Minimum Requirement 2022 – 90%, 2021 – 100%)	122.77	111.45
Net stable Funding Ratio (%) (Minimum Requirement 2022- 90%, 2021 – 100%)	139.00	124.31

Disclosure 2: Basel III Computation of Capital Ratios – 31.12.2022

	2022		2021
Item	Bank LKR ’000	Group |LKR ’000	Bank LKR ’000	Group LKR ’000
Common Equity Tier 1 (CET 1) Capital after Adjustments	194,949,918	200,533,817	176,537,824	182,294,819
Common Equity Tier 1 (CET 1) Capital	219,610,936	221,151,838	183,167,919	186,911,323
Equity Capital (Stated Capital)/Assigned Capital	25,730,000	25,730,000	25,000,000	25,000,000
Reserve Fund	15,131,000	15,131,000	14,491,000	14,491,000
Published Retained Earnings/(Accumulated Retained Losses)	158,616,238	159,819,481	136,739,177	138,104,222
Published Accumulated other Comprehensive Income (OCI)	19,964,631	20,104,713	3,592,322	4,129,313
General and other Disclosed Reserves	169,067	366,644	3,345,420	5,186,788
Unpublished current year's Profit/(Losses) and Gains reflected in OCI	–	–	–	–
Ordinary shares issued by consolidated banking and financial subsidiaries held by third parties	–	–		–
Total adjustments to CET 1 Capital	24,661,017	20,618,021	6,630,095	4,616,504
Goodwill (net)	–	–	–	–
Intangible Assets (net)	1,360,265	1,511,177	965,939	1,140,545
Revaluation Losses of Property, Plant and Equipment	52,913	52,913	52,913	52,913
Deferred Tax Assets (Net)	18,903,174	18,924,249	1,066,793	3,280,640
Investments in the Capital of Banking and Financial Institutions where the Bank does not own more than 10 per cent of the Issued Ordinary Share Capital of the Entity	–	–	148,640	142,406
Significant Investments in the Capital of Financial Institutions where the Bank owns more than 10 per cent of the Issued Ordinary Share Capital Of the Entity	4,214,983	–	4,395,809	–
Shortfall of Capital in Financial Subsidiaries	129,682	129,682	–	–
Additional Tier 1 (AT I) Capital after adjustment	18,350,000	18,350,000	18,350,000	18,350,000
Additional Tier 1 (AT I) Capital	18,350,000	18,350,000	18,350,000	18,350,000
Qualifying additional Tier 1 Capital Instruments	18,350,000	18,350,000	18,350,000	18,350,000
Instruments issued by Consolidated Banking and Financial Subsidiaries of the Bank and held by third parties	–	–	–	–
Total adjustments to AT 1 Capital	–	–	–	–
Investment in Own Shares	–	–	–	–
Others (specify)
Tier 2 Capital after adjustments	51,194,155	51,863,972	48,145,993	49,154,547
Tier 2 Capital	51,194,155	51,863,972	48,320,390	49,321,629
Qualifying Tier 2 Capital Instruments	21,960,592	22,028,292	22,975,611	23,375,611
Revaluation Gains	9,902,177	9,902,177	9,902,177	9,902,177
General Provisions	19,331,387	19,933,503	15,442,602	16,043,841
Instruments issued by Consolidated Banking and Financial Subsidiaries of the Bank and held by third parties	–	–	–	–
Total adjustment to Tier 2	–	–	174,397	167,082
Investment in Own Shares		–		–
Investments in the Capital of Financial Institutions and where the Bank does not own more than 10 per cent of the Issued Capital carrying Voting Rights of the Issuing Entity	–	–	174,397	167,082
Significant Investments in the Capital of Banking and Financial Institutions where the Bank own more than 10 per cent of the Issued Ordinary Share Capital of the Entity	–	–	–	–
CET I Capital	194,949,918	200,533,817	176,537,824	182,294,819
Total Tier 1 Capital	213,299,918	218,883,817	194,887,824	200,644,819
Total Capital	264,494,074	270,747,789	243,033,817	249,799,365

	2022		2021
Item	Bank LKR ’000	Group LKR ’000	Bank LKR ’000	Group LKR ’000
Total Risk Weighted Assets (RWA)	1,719,267,173	1,767,715,187	1,367,362,524	1,420,493,260
RWAs for Credit Risk	1,546,510,921	1,594,680,262	1,235,408,190	1,283,507,303
RWAs for Market Risk	19,738,892	19,717,359	16,579,803	16,582,372
RWAs for Operational Risk	153,017,360	153,317,566	115,374,531	120,403,585
CET I capital Ratio (including Capital Conservation Buffer, Countercyclical Capital Buffer and Surcharge on D-SIBs) (%)	11.34	11.34	12.91	12.83
of which: Capital Conservation Buffer (%)	2.50	2.50	2.50	2.50
of which: Countercyclical Buffer (%)	N/A	N/A	N/A	N/A
of which: Capital Surcharge on D-SIBs (%)	1.50%	1.50%	1.50%	1.50%
Total Tier 1 Capital Ratio (%)	12.41	12.38	14.25	14.13
Total Capital Ratio (including Capital Conservation Buffer, Countercyclical Capital Buffer and Surcharge on D- SIBs) (%)	15.38	15.32	17.77	17.59
of which: Capital Conservation Buffer (%)	2.50	2.50	2.50	2.50
of which: Countercyclical Buffer (%)	N/A	N/A	N/A	N/A
of which: Capital Surcharge on D-SIBs (%)	1.50	1.50	1.50	1.50

Disclosure 3: Leverage Ratio as at 31.12.2022

	2022		2021
	Bank LKR ’000	Group LKR ’000	Bank LKR ’000	Group LKR ’000
Tier 1 Capital	213,299,918	218,883,817	194,887,824	200,644,819
Total Exposures	4,646,589,230	4,703,126,805	4,163,551,295	4,211,875,382
On-balance Sheet Items (excluding Derivatives and Securities Financing Transactions, but including collateral)	4,251,645,878	4,307,950,487	3,790,236,743	3,837,071,742
Derivative Exposures	26,706,355	26,706,355	3,246,486	3,246,486
Securities financing transaction exposures	183,736,863	183,969,828	171,124,854	172,613,942
Other Off-balance Sheet Exposures	184,500,134	184,500,134	198,943,213	198,943,213
Basel III Leverage Ratio (%) (Tier 1 Capital/Total Exposure)	4.59	4.65	4.68	4.76

Disclosure 4: Net Stable Funding Ratio (NSFR) and Liquidity Coverage Ratio (LCR)

	31.12.2022 LKR ’000	31.12.2021 LKR ’000
Total available Stable Funding	2,931,092,115	2,504,060,279
Required Stable Funding – On-balance Sheet Assets	2,100,576,441	1,994,714,253
Required Stable Funding – Off-balance Sheet Assets	12,901,216	19,716,966
Total Required Stable Funding	2,113,477,657	2,014,431,219
NSFR	139%	124%

Basel III computation of liquidity coverage ratio – All currency (Bank only)

	31.12.2022		31.12.2021
Item	Total un-weighted value LKR ’000	Total weighted value LKR ’000	Total un- weighted value LKR ’000	Total weighted value LKR ’000
Total stock of High-Quality Liquid Asset (HQLA)	528,321,184	522,718,279	540,039,690	531,095,154
Total adjusted Level I Assets	495,276,344	495,276,344	492,156,944	492,156,944
Level 1 Assets	496,650,654	496,650,654	488,050,163	488,050,163
Total adjusted Level 2A Assets	29,235,313	24,850,016	48,714,935	41,407,695
Level 2A Assets	29,235,313	24,850,016	48,714,935	41,407,695
Total adjusted Level 2B Assets	2,435,217	1,217,609	3,274,592	1,637,296
Level 2B Assets	2,435,217	1,217,609	3,274,592	1,637,296
Total Cash Outflows	4,143,573,873	591,674,653	3,401,856,760	535,682,254
Deposits	2,549,717,356	254,971,736	2,101,279,219	210,127,922
Unsecured Wholesale Funding	689,360,250	283,199,642	650,380,229	289,029,451
Secured Funding Transactions	347,682,220	–	45,553,081	–
Undrawn portion of Committed (Irrevocable) Facilities and Other Contingent Funding Obligations	556,814,047	53,503,275	604,644,230	36,524,881
Additional Requirements		–		–
Total Cash Inflows	312,827,811	165,920,811	112,949,640	59,133,469
Maturing Secured Lending Transaction backed by Collateral		–	–	–
Committed Facilities	5,000,000	–	5,000,000	–
Other Inflows by counterparty which are maturing within 30 days	263,185,809	165,459,409	107,405,810	58,589,639
Operational Deposits	44,180,601	–	34,124,380	–
Other Cash Inflows	461,402	461,402	543,830	543,830
Liquidity Coverage Ratio (%) (Stock of High Quality Liquid Assets/ Total Net Cash Outflows over the next 30 calendar days)* 100		122.77		111.45

Disclosure 5: Main features of regulatory capital instruments

Description of the capital instrument
Issuer	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon
Unique identifier	LK0357D20470	LK0357D23177	LK0357D23219	LK0357D23771	LK0357D23789
Governing Laws of the Instrument	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka
Original date of issuance	25 October 2013	6 October 2015	6 October 2015	29 December 2016	29 December 2016
Par value of Instrument – LKR	100	100	100	100	100
Issued quantity (No. of debentures)	16,000,000	11,802,560	20,405,480	7,836	200
Issued quantity (LKR ’000)	1,600,000	1,180,256	2,040,548	784	20
Perpetual or dated
Original maturity date, if applicable	24 October 23	5 October 23	5 October 23	28 December 24	28 December 24
Amount recognised in Regulatory Capital (in LKR ’000 as at the reporting date)	240,000	177,038	306,082	274	7
Accounting Classification (Equity/Liability)	Liability	Liability	Liability	Liability	Liability
Coupons/Dividends
Fixed or Floating Dividend/Coupon	FIXED	FIXED	FLOATING	FIXED	FLOATING
Coupon Rate and any Related Index %	13.75	9.50	31.84	12.75	33.51
Non-cumulative or Cumulative	Non-cumulative	Non-cumulative	Non-cumulative	Non-cumulative	Non-cumulative
Convertible or Non-convertible	Non-convertible	Non-convertible	Non-convertible	Non-convertible	Non-convertible

Description of the Capital Instrument
Issuer	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon
Unique Identifier
Governing Laws of the Instrument	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka
Original date of Issuance	29 December 2017	31 July 2018	3 December 2018	27 June 2019	17 July 2019
Par value of Instrument – LKR	100	100	100	100	100
Issued Quantity (No. of Debentures)	50,000,000	67,000,000	53,000,000	30,000,000	10,488,500
Issued Quantity (LKR ’000)	5,000,000	6,700,000	5,300,000	3,000,000	1,048,850
Perpetual or dated					Dated
Original maturity date, if applicable	28 December 2025	30 July 2026	2 December 2023	26 June 2024	16 July 2024
Amount recognised in Regulatory Capital (in LKR ’000 as at the reporting date)	2,750,000	4,690,000	795,000	750,000	314,655
Accounting Classification (Equity/Liability)	Liability	Liability	Liability	Liability	Liability
Coupons/Dividends
Fixed or floating Dividend/Coupon	FIXED	FIXED	FIXED	FIXED	FIXED
Coupon Rate and any Related Index %	12.75	12.00	12.00	11.75	11.80
Non-cumulative or Cumulative	Non-cumulative	Non-cumulative	Non-cumulative	Non-cumulative	Non-cumulative
Convertible or Non-convertible	Non-convertible	Non-convertible	Non-convertible	Non-convertible	Non-viability write down

Description of the Capital Instrument
Issuer	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon	Bank of Ceylon
Unique Identifier
Governing Laws of the Instrument	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka	Laws of Sri Lanka
Original date of Issuance	18 July 2019	23 July 2019	24 July 2019	26 July 2019	26 July 2019
Par value of Instrument – LKR	100	100	100	100	100
Issued Quantity (No. of Debentures)	22,000,000	25,000,000	4,000,000	611,500	51,500,000
Issued Quantity (LKR ’000)	2,200,000	2,500,000	400,000	61,150	5,150,000
Perpetual or dated	Dated	Dated	Dated	Dated	Dated
Original maturity date, if applicable	17 July 2024	22 July 2024	23 July 2024	25 July 2027	25 July 2027
Amount recognised in Regulatory Capital (in LKR ’000 as at the reporting date)	660,000	750,000	120,000	55,035	3,862,500
Accounting Classification (Equity/Liability)	Liability	Liability	Liability	Liability	Liability
Coupons/Dividends
Fixed or Floating Dividend/Coupon	FIXED	FIXED	FIXED	FIXED	FLOATING
Coupon Rate and any Related Index %	11.80	11.80	11.50	11.75	35.01
Non-cumulative or Cumulative	Non-cumulative	Non-cumulative	Non-cumulative	Non-cumulative	Non-cumulative
Convertible or Non-convertible	Non-viability write down	Non-viability write down	Non-viability write down	Non-viability write down	Non-viability write down

Description of the Capital Instrument
Issuer	Bank of Ceylon
Unique Identifier
Governing Laws of the Instrument	Laws of Sri Lanka
Original date of Issuance	30 December 2022
Par value of Instrument – LKR	100
Issued quantity (No. of debentures)	64,900,000
Issued quantity (LKR ’000)	6,490,000
Perpetual or dated	Dated
Original maturity date, if applicable	29 December 2027
Amount recognised in Regulatory Capital (in LKR ’000 as at the reporting date)	6,490,000
Accounting Classification (Equity/Liability)	Liability
Coupons/Dividends
Fixed or Floating Dividend/Coupon	FIXED
Coupon Rate and any Related Index %	29.00
Non-cumulative or Cumulative	Non-cumulative
Convertible or Non-convertible	Non viability write down

Disclosure 7: Credit Risk under Standardised Approach – Credit Risk Exposures and Credit Risk Mitigation (CRM) Effects

Credit Risk Exposures and Credit Risk Mitigation (CRM) Effects – Bank

	Amount as at 31.12.2022
Asset class	Exposures before credit conversion factor (CCF)and CRM		Exposures post CCF and CRM		RWA and RWA Density (%)
	On balance sheet amount LKR ’000	Off balance sheet amount LKR ’000	On balance sheet amount LKR ’000	Off balance sheet amount LKR ’000	RWA LKR ’000	RWA density %
Claims on Central Government and CBSL	1,734,262,108	25,421,707	1,734,262,108	5,084,341	67,535,139	3.88
Claims on Foreign Sovereigns and their Central Bank	59,195,057	–	59,195,057	–	56,773,305	95.91
Claims on Public Sector Entities	386,105,567	84,066,438	181,049,321	11,675,442	183,185,563	95.05
Claim on Official Entities and Multilateral Development Banks	–	–	–	–	–	–
Claims on banks Exposures	100,654,303	72,775,025	100,654,303	72,775,025	110,912,541	63.95
Claims on Financial Institutions	5,456,948	18,631	5,456,948	18,631	4,622,065	84.41
Claims on Corporates	302,008,045	196,328,810	249,651,578	45,044,167	283,374,202	96.16
Retail Claims	651,828,325	237,146,007	586,061,810	–	442,810,583	75.56
Claims secured by Gold	107,352,996	–	107,352,996	–	1,006	0.00
Claims secured by Residential Property	90,135,894	–	90,135,894	–	43,356,357	48.10
Claims secured by Commercial Real Estate	40,326,980	–	40,326,980	–	40,326,980	100.00
Non-performing Assets (NPAs)	118,456,923	–	118,456,923	–	149,168,919	125.93
Higher-risk Categories	1,991,649	–	1,991,649	–	4,979,123	250.00
Cash Items and Other Assets	211,694,260	13,855,174	211,694,260	13,855,174	159,465,138	70.70
Total	3,809,469,055	629,611,792	3,486,289,827	148,452,780	1,546,510,921	42.55

Credit Risk Exposures and Credit Risk Mitigation (crm) Effects – Group

	Amount as at 31.12.2022
Asset class	Exposures before credit conversion factor (CCF)and CRM		Exposures post CCF and CRM		RWA and RWA Density (%)
	On balance sheet amount LKR ’000	Off balance sheet amount LKR ’000	On balance sheet amount LKR ’000	Off balance sheet amount LKR ’000	RWA LKR ’000	RWA density %
Claims on Central Government and CBSL	1,736,660,450	25,421,707	1,736,660,450	5,084,341	67,535,139	3.88
Claims on Foreign Sovereigns and their Central Bank	59,195,057	–	59,195,057	–	56,773,305	95.91
Claims on Public Sector Entities	398,950,181	84,066,438	181,049,321	11,675,442	183,185,563	95.05
Claim on Official Entities and Multilateral Development Banks	–	–	–	–	–	–
Claims on banks Exposures	102,020,354	72,775,025	102,020,354	72,804,626	112,322,994	64.25
Claims on Financial Institutions	5,456,948	18,631	5,456,948	18,631	4,622,065	84.41
Claims on Corporates	337,150,127	196,328,810	284,793,660	45,044,167	318,516,284	96.57
Retail Claims	651,828,325	237,146,007	586,061,810	–	442,810,583	75.56
Claims Secured by Gold	107,352,996	–	107,352,996	–	1,006	0.00
Claims Secured by Residential Property	90,135,894	–	90,135,894	–	43,356,357	48.10
Claims secured by Commercial Real Estate	40,326,980	–	40,326,980	–	40,326,980	100.00
Non-performing Assets (NPAs)	118,456,923	–	118,456,923	–	149,168,919	125.93
Higher-risk Categories	–	–	–	–	–	–
Cash Items and Other Assets	235,119,483	13,855,174	235,119,483	13,855,174	176,061,066	70.71
Total	3,882,653,718	629,611,792	3,546,629,876	148,482,381	1,594,680,262	43.16

Credit Risk under Standardised Approach: Exposures by Asset Classes and Risk Weights – Bank

Description	Amount as at 31.12.2022 (Post CCF and CRM)
Risk weight \ Asset classes	0% LKR ’000	20% LKR ’000	50% LKR ’000	60% LKR ’000	75% LKR ’000	100% LKR ’000	150% LKR ’000	>150% LKR ’000	Total Credit Exposures Amount LKR ’000
Claims on Central Government and Central Bank of Sri Lanka	1,401,668,581	332,593,528	–	–	–	–	–	–	1,734,262,108
Claims on Foreign Sovereigns and their Central Bank	–	–	4,843,503	–	–	54,351,554	–	–	59,195,057
Claims on Public Sector Entities	–	11,924,000	–	–	–	169,125,321	–	–	181,049,321
Claims on Official Entities and Multilateral Development Banks	–	–	–	–	–	–	–	–	–
Claims on Banks Exposures	–	26,136,339	10,511,498	–	–	64,006,466	–	–	100,654,303
Claims on Financial Institutions	–	626,775	1,149,139	–	–	2,935,294	444,950	–	5,156,158
Claims on Corporates	–	12,147,119	654,713	–	–	236,830,659	19,087	–	249,651,578
Retail Claims	–	–	–	5,306,960	564,513,771	16,241,078	–	–	586,061,810
Claims secured by Gold	107,351,989	–	–	–	–	1,006	–	–	107,352,996
Claims secured by Residential Property	–	–	71,968,519	–	–	18,167,375	–	–	90,135,894
Claims secured by Commercial Real Estate	–	–	–	–	–	40,326,980	–	–	40,326,980
Non-performing Assets (NPAs)	–	–	–	–	–	57,032,931	61,423,992	–	118,456,923
Higher-risk Categories	–	–	–	–	–	–	–	1,991,649	1,991,649
Cash item and Other Assets	57,929,107	10,193,986	–	–	–	143,571,167	–		211,694,260
Total	1,566,949,677	393,621,746	89,127,372	5,306,960	564,513,771	802,589,832	61,888,029	1,991,649	3,485,989,037

Credit Risk under Standardised Approach: Exposures by Asset Classes and Risk Weights – Group

Description	Amount as at 31.12.2022 (Post CCF and CRM)
Risk weight \ Asset classes	0% LKR ’000	20% LKR ’000	50% LKR ’000	60% LKR ’000	75% LKR ’000	100% LKR ’000	150% LKR ’000	>150% LKR ’000	Total Credit Exposures Amount LKR ’000
Claims on Central Government and Central Bank of Sri Lanka	1,404,066,923	332,593,528	–	–	–	–	–	–	1,736,660,450
Claims on Foreign Sovereigns and their Central Bank	–	–	4,843,503	–	–	54,351,554	–	–	59,195,057
Claims on Public Sector Entities	–	11,924,000	–	–	–	169,125,321	–	–	181,049,321
Claims on Official Entities and Multilateral Development Banks	–		–	–	–	–	–	–	–
Claims on Banks Exposures	–	26,136,339	10,511,498	–	–	65,372,517	–	–	102,020,354
Claims on Financial Institutions	–	626,775	1,149,139	–	–	2,935,294	444,950	–	5,156,158
Claims on Corporates	–	12,147,119	654,713	–	–	271,972,741	19,087	–	284,793,660
Retail Claims	–	–	–	5,306,960	564,513,771	16,241,078	–	–	586,061,810
Claims secured by Gold	107,351,989	–	–	–	–	1,006	–	–	107,352,996
Claims secured by Residential Property	–	–	71,968,519	–	–	18,167,375	–	–	90,135,894
Claims secured by Commercial Real Estate	–	–	–	–	–	40,326,980	–	–	40,326,980
Non-performing Assets (NPAs)	–	–	–	–	–	57,032,931	61,423,992	–	118,456,923
Higher-risk Categories	–	–	–	–	–	–	–	–	–
Cash item and Other Assets	64,758,402	10,193,986	–	–	–	160,167,095	–	–	235,119,483
Total	1,576,177,314	393,621,746	89,127,372	5,306,960	564,513,771	855,693,893	61,888,029	–	3,546,329,086

Disclosure 9: Market Risk under Standardised Measurement Method

	31.12.2022		31.12.2021
Item	Bank LKR ’000	Group LKR ’000	Bank LKR ’000	Group LKR ’000
(a) Capital charge for Interest Rate Risk	21,782	21,782	501,518	501,518
General Interest Rate Risk	21,782	21,782	501,518	501,518
(i) Net Long or Short Position	21,782	21,782	501,518	501,518
(ii) Horizontal Disallowance	–	–	–	–
(iii) Vertical Disallowance	–	–	–	–
(iv) Options	–	–	–	–
Specific Interest Rate Risk	–	–	–	–
(b) Capital charge for Equity	631,165	631,165	722,547	722,547
(i) General Equity Risk	296,418	296,418	340,796	340,796
(ii) Specific Equity Risk	334,747	334,747	381,751	381,751
(c) Capital charge for Foreign Exchange and Gold	2,110,498	2,107,483	1,097,107	1,097,466
Total Capital Charge for Market Risk [(a)+(b)+(c)]	2,763,445	2,760,430	2,321,172	2,321,531
Total risk weighted amount for Market Risk	19,738,892	19,717,357	16,579,800	16,582,364

Disclosure 10: Operational Risk under Basic Indicator Approach

Operational Risk under Basic Indicator Approach – Bank

Business lines	Capital charge factor	Fixed factor	Gross income as at 31.12.2022			Gross income as at 31.12.2021
			1st year LKR ’000	2nd year LKR ’000	3rd year LKR ’000	1st year LKR ’000	2nd year LKR ’000	3rd year LKR ’000
The Basic Indicator Approach	15%		94,663,889	140,313,204	193,471,515	88,071,593	94,663,889	140,313,204
Capital charges for Operational Risk (LKR ’000)					21,422,430			16,152,434
Risk weighted amount for Operational Risk (LKR ’000)					153,017,360			115,374,531

Operational Risk under basic indicator approach – Group

Business lines	Capital charge factor	Fixed factor	Gross income as at 31.12.2022			Gross income as at 31.12.2021
			1st year LKR ’000	2nd year LKR ’000	3rd year LKR ’000	1st year LKR ’000	2nd year LKR ’000	3rd year LKR ’000
The Basic Indicator Approach	15%		97,518,878	145,112,559	186,657,749	94,498,600	97,518,878	145,112,559
Capital charges for Operational Risk (LKR ’000)					21,464,459			16,856,502
Risk weighted amount for Operational Risk (LKR ’000)					153,317,566			120,403,585

 

D-SIB assessment exercise	Group LKR million
Size indicator
Section 1 – Total Exposures
Total exposures measure	4,703,127
Interconnectedness indicators
Section 2 – Intra-financial System Assets
a. Funds Deposited with or lent to Other Financial Institutions (including unused portion of committed lines extended)
(i) Funds Deposited	144,022
(ii) Lending	5,881
b. Holdings of securities issued by Other Financial Institutions
c. Net positive current exposure of Securities Financing Transactions (SFTs) with Other Financial Institutions	1,104
d. Over-the-counter (OTC) derivatives with Other Financial Institutions that have a Net Positive Mark to Market Value	157
Intra-financial system assets	151,164
Section 3 – Intra-financial System Liabilities
a. Funds deposited by or borrowed from Other Financial Institutions (including unused portion of committed lines obtained)
(i) Funds Deposited	99,911
(ii) Borrowings	379,920
b. Net Negative Current Exposure of Securities financing transactions with Other Financial Institutions
c. Over-the-counter Derivatives with Other Financial Institutions that have a Net Negative Mark to Market Value	33,602
Intra-financial System Liabilities	513,433
Section 4 – Securities Outstanding
Securities Outstanding	61,271
Substitutability/Financial Institution Infrastructure Indicators
Section 5 – Payments made in the reporting year (excluding intra-group payments)
Payments Activity	18,027,567
Section 6 – Assets Under Custody
Assets Under Custody	394,988
Section 7 – Underwritten transactions in Debt and Equity Markets
Underwriting Activity	–
Section 8 – Trading Volume
Trading volume	133,123
Complexity indicators
Section 9 – Notional amount of Over-the-counter (OTC) Derivatives
OTC Derivatives	57,183
Section 10 – Level 2 Assets
Level 2 Assets	24,850
Section 11 – Trading and available-for-sale (AFS) Securities
Trading and AFS Securities	5341
Section 12 – Cross-jurisdictional Liabilities
Foreign Liabilities (excluding Derivatives and Intra-group Liabilities)
Cross-jurisdictional liabilities	163,966
Section 13 – Cross-jurisdictional Claims
Foreign claims (excluding Derivatives and Intra-group Liabilities)
Cross-jurisdictional Claims	47,498