The ultimate end product of the ICAAP process is the ICAAP document. This section on reporting format and contents is to provide guidance to banks to describe in a logical format the main assumptions and results of the ICAAP process. Consequently, the ICAAP document should bring into one place an assessment of the capital requirements in relation to a bank's risk profile, strategies, business plans, major risks, acquisitions, governance and internal risk management systems, etc. It also must establish the capital required for economic, regulatory and accounting purposes and help identify planned sources of capital to meet its objectives. Further, all relevant assessments and information should be covered and documented in the ICAAP.

Specifically, the objectives of the ICAAP and the related entities of the bank that are included by it should be specified. The main results of the ICAAP effort may be presented in a tabular format indicating the major components of capital requirements, capital available, capital buffers and proposed funding plans. Furthermore, the adequacy of the governance and bank's internal control and risk management processes should be included.

It is also important to document the strategic position of the bank, its balance sheet strength, planned growth in the major assets based on its Business plans for the next 12 to 18 months indicating the likely consumption in capital for this growth by major category.

Further, the results of major stress tests on capital requirements and capital supply for additional risks deterioration in the economic environment, recessionary periods, or other economic/political downturns are important aspects to be covered.

A description of the bank's specific objectives is desirable. In this regard, the differing purposes that capital serves: shareholder returns, rating objectives for the bank as a whole or for certain securities being issued, avoidance of regulatory intervention, protection against uncertain events, depositor protection, working capital, capital held for strategic acquisitions, etc.

This section would be the major elements of a bank's strategic and operational plans. It would include the present financial position of the bank and expected changes to the current business profile, the environment in which it expects to operate, its projected business plans (by appropriate lines of business), projected financial position, and future planned sources of capital.

Major aspects to be considered is formulating a business plan and the bank's strategies and initiative including aspects such as the political, economic, legal, components, etc. of the environment their likely profile and impact over the planning period of the Bank. This may consider aspects such as oil prices, legislation related to the Bank, i.e. foreign investments, consumer banking, capital markets, mortgages, leasing and installment companies, etc.

The starting balance sheet and the date over which the assessment is carried out should be disclosed.

The projected balance sheet should clearly indicate the major lines of business which are going to be inspected by the Bank's strategic initiatives, environmental changes and assumption over the planning period and the impact on capital requirements by major lines of business.

Also included would be the projected financial position, the projected capital available and projected capital resource requirements based on expected plans. These might then provide a baseline against which adverse scenarios might be compared.

This section should include the following:

Disclosure of various types of Capital

Timing of the ICAAP

Generally, the ICAAP is prepared on an annual basis as at the end of each calendar year, i.e. 31 December 2008 (and is due in SAMA as at 31 January of the following year). However, should there be any variation to this timing, additional details will need to be provided. This will include the reasons for the effective date of the ICAAP. Other information to be provided will also include an analysis and consideration for any events between the effective date and the date of submission which could materially impact the ICAAP and the rationale for the time period over which ICAAP has been assessed.

Risk Covered in the ICAAP

Current Methodology

A description of how models and assessments for each of the major risks have been approached and the main assumptions made.

For instance, banks may choose to base their ICAAP on the results of Pillar 1 risks calculation with additional risks (e.g. concentration risk, interest rate risk in the banking book, etc.) assessed separately and added to Pillar 1. Alternatively, a bank may decide to base their ICAAP on internal models for all risks, including those covered under Pillar 1 (i.e. Credit, Market and Operational Risks) as additional risks.

The description would make clear which risks are covered by which modeling calculation or approach. This would include details of the models, methodology and process used to calculate risks in each of the categories identified and reason for choosing the models and method used in each case.

Future Approach and Methodology

Banks may provide a summary on the future models and methodologies being considered and developed including their strengths and weaknesses.

Internal Models: Pillar 1 and ICAAP comparisons

Should the internal models vary from any regulatory models approved for pillar 1 purposes, this section would provide a detailed comparison explaining both the methodological and parameterization differences between the internal models and the regulatory models and how those affect the capital measures for ICAAP purposes.

Details of any restrictions on the management's ability to transfer capital during stressed conditions into or out of the business(es) covered. These restrictions, for example, may include contractual, commercial, regulatory or statutory nature. A statutory restriction could be, for example, a restriction on the maximum dividend that could be declared and paid. A regulatory restriction could be the minimum regulatory capital ratio acceptable to SAMA.

This area should demonstrate the extent to which capital management is embedded within the bank's operational and strategic planning. This would include the extent and use of ICAAP results and recommendation in the strategic, operational and capital planning process. Important elements of ICAAP including growth and profitability targets, scenario analysis, and stress testing may be used in setting of business plans, management policy, dividend policy and in pricing decisions.

This could also include a statement of the actual operating philosophy and strategy on capital management and how this links to the ICAAP submitted.

A bank should detail any anticipated future refinements within the ICAAP (highlighting those aspects which are work-in-progress) and provide any other information that will help SAMA review a bank's ICAAP.