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The balance sheet of Njenge bank as at 31 December 2017 is as follows: K'million Liabilities K 'million Cash inhand Balances wrth central banks (1)
The balance sheet of Njenge bank as at 31 December 2017 is as follows: K'million Liabilities K 'million Cash inhand Balances wrth central banks (1) Balances with banks abroad (2) Investments in Govt seaurities (3 Loans and overdrafts (4) Fixed assets Otherassets Tolal assels 923 Issued& paid up capital S986 REServes &arplus (5) 80526 Deposits 110568 35428 Browings from banks 101362 other liabilitie 532 K' million Memorandum tem: Inward bills held for collection (1) Balances with central banks comprise: Rating K' million Banque de France Bank of England Central bank of Madgascar Bank of Uganda AAA 3212 AAA4971 534 319 (2) Balarnces with banks abroad comprise: HSBCLondon Credit Lyonnais, Paris ABSA,Johannesburg Other banks A+ Unrated 26649 (3) Investments in Govermment Seaurities comprise: Govemment of Kenya Bills Government of India bonds Other 5683 Unrated 4514 (4) Twenty per cent of the loans and overdrafts are claims collateralized by cash deposits placed with Njenge bank. Other claims are: Rating K'million Companyx CompanyY CompanyZ Other corporates Residential loan Regulatory retail portfolio A+ Unrated 10218 300946 (5) Reserves and Surplus indude: K' million Retained Proft Statutory reserves General provision Revaluation reserves Undisdosed reservES 200 3210 12252 Additional Nutes: Risk Weights AAA to AA A+toA- BBB+ to B BB+to B Below B- Unrated )% 100% 150% 10 0% Claims on sovereigns and central banks Claims on banks 100% 150% AAA to AAA+toA BBB+ to Bl Below BB Unrateo Claims on corporates 50% 100% 15 )% 100% Claims included in the regulatory retail portfolios have a risk-weight of Claims seared by residential property have a risk weight of 35%. Other assets are risk weighted at 100%. Cash in hand and daims al lateralized by cash n the same arency have a supervisory risk weight of 0%. You are required to: Prepare a statement showing the computation of the capital adequacy ratio of Njenge bank as at 31 December 2017 using the Standardized Approach of Credit Risk of Basel I. (16 marks) Comment on yourresult. (4marks (ii Differentiate between Spervisory Review (Pillar2) and Market Discipline (Pillar3) of Basel IL (10 marks) The balance sheet of Njenge bank as at 31 December 2017 is as follows: K'million Liabilities K 'million Cash inhand Balances wrth central banks (1) Balances with banks abroad (2) Investments in Govt seaurities (3 Loans and overdrafts (4) Fixed assets Otherassets Tolal assels 923 Issued& paid up capital S986 REServes &arplus (5) 80526 Deposits 110568 35428 Browings from banks 101362 other liabilitie 532 K' million Memorandum tem: Inward bills held for collection (1) Balances with central banks comprise: Rating K' million Banque de France Bank of England Central bank of Madgascar Bank of Uganda AAA 3212 AAA4971 534 319 (2) Balarnces with banks abroad comprise: HSBCLondon Credit Lyonnais, Paris ABSA,Johannesburg Other banks A+ Unrated 26649 (3) Investments in Govermment Seaurities comprise: Govemment of Kenya Bills Government of India bonds Other 5683 Unrated 4514 (4) Twenty per cent of the loans and overdrafts are claims collateralized by cash deposits placed with Njenge bank. Other claims are: Rating K'million Companyx CompanyY CompanyZ Other corporates Residential loan Regulatory retail portfolio A+ Unrated 10218 300946 (5) Reserves and Surplus indude: K' million Retained Proft Statutory reserves General provision Revaluation reserves Undisdosed reservES 200 3210 12252 Additional Nutes: Risk Weights AAA to AA A+toA- BBB+ to B BB+to B Below B- Unrated )% 100% 150% 10 0% Claims on sovereigns and central banks Claims on banks 100% 150% AAA to AAA+toA BBB+ to Bl Below BB Unrateo Claims on corporates 50% 100% 15 )% 100% Claims included in the regulatory retail portfolios have a risk-weight of Claims seared by residential property have a risk weight of 35%. Other assets are risk weighted at 100%. Cash in hand and daims al lateralized by cash n the same arency have a supervisory risk weight of 0%. You are required to: Prepare a statement showing the computation of the capital adequacy ratio of Njenge bank as at 31 December 2017 using the Standardized Approach of Credit Risk of Basel I. (16 marks) Comment on yourresult. (4marks (ii Differentiate between Spervisory Review (Pillar2) and Market Discipline (Pillar3) of Basel IL (10 marks)
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