The following is the balance sheet of AlBalad Bank:

The Balance Sheet

Givens: other information of the bank at the end of the year:

• The bank provided financing modes for several clients as follows:
  • Retail financing = 50,000,000
  • Corporate financing = 17,114,980
  • SME financing = 3000,000
• The net investment of the bank placed in Government Sukuk.
• The equity structure of the bank is as follows:
  • common equity tier one capital includes capital shares + retained earnings
  • The bank raised an Additional tier 1 capital from sukuk issuance.
  • The bank does not have a second-tier capital.
• The current table highlights the current acceptable weights of asset risk exposure according to SAMA guidelines.

	Weights
Saudi Government Sukuk	0%
Corporate Financing	10%
SME Financing	20%
Consumer Financing	30%
Off balance Asset Exposure	10%

Required:

1. Calculate the capital adequacy ratio of the Saudi Islamic bank.

2. Is the Islamic Saudi Bank adequate to absorb the losses, if you know that the current SAMA capital adequacy ratio for Islamic banks is 6%.