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NEWS UPDATES Asean Affairs   4 June 2013  

PHL banks' end-2012 capital-to-risk ratio registers at a high 17.28%

Philippine banks are well-capitalized against risk, registering a capital adequacy ratio of 17.28 percent on average as individual entities as of end-2012,  Bangko Sentral ng Pilipinas reported Monday.
The ratio is an indicator actively monitored by regulators worldwide, with Bangko Sentral setting a minimum of 10 percent in terms of a bank’s capital against risk.
“When consolidated with their subsidiary banks and quasi-banks, universal and commercial banks registered a CAR of 18.35 percent at end-December last year,” according to Bangko Sentral.
“The industry’s CAR figures indicate that universal and commercial banks continue to be mindful of the importance of setting aside sufficient capital. A robust CAR position supports financial stability because it provides individual banks and the industry with an adequate buffer against risks and unexpected losses,” the central bank noted in a statement.
The industry’s Tier 1 capital remained robust at 15.22 percent of risk-weighted assets as of Dec. 32, 2012. On consolidated terms, the Tier 1 ratio registered at 15.44 percent.
Still, the ratio on solo basis as of end-2012 was a bit lower than the 17.95 percent as of end-September 2012. “This was due to risk-weighted assets (RWA) increasing at a faster pace than qualifying capital,” Bangko Sentral noted.
An increase in lending to corporations and in investments in foreign currency debt securities issued by the national government and Bangko Sentral bought about an increase in the industry RWA, according to the central bank, noting the RWA rose by 4.97 percent for individual banks and 4.93 percent on consolidated basis.
“The rise in RWA was accompanied by a slight increase in qualifying capital of 1.02 percent and 1.32 percent on solo and consolidated bases during the period. The increase was mainly driven by retained earnings as universal and commercial banks posted healthy net profits at end-2012,” Bangko Sentral noted.
The higher level of qualifying capital was tempered by the redemption by some banks of debt securities classified as Tier 2—a likely response to the new capital standards under Basel III starting on Jan. 1, 2014 which would take out certain debt securities as qualifying capital, the industry regulator said.
Through Circular 709 of Jan. 10, 2011—amending the risk-based capital adequacy framework by adopting a minimum eligibility criteria to be included in non-common equity/regulatory capital instruments in qualifying capital—Bangko Sentral laid down the groundwork the Basel III regime.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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