2 Part II: Prudential Regulations
Chapter 4: Capital Requirements
Minimum Capital Requirements
20. Every DTFC shall, at all times-
i. maintain records including balance sheets and periodic statements of income and expenditure to enable proper computation of the institution's capital adequacy of 20%; and ii. maintain the prescribed minimum capital requirements.
21. SAMA shall determine whether an institution is in compliance with the capital adequacy requirements in accordance with these Regulations.
Criteria for Higher Minimum Capital Ratios
22. SAMA may require higher minimum capital ratios for an individual DTFC based on, but not limited to the following criteria, if:
i. a DTFC has losses resulting in a capital deficiency; ii. a DTFC has significant exposure to risk; iii. a DTFC has a high, or particularly severe, volume of poor asset quality; iv. a DTFC is growing rapidly without adequate capitalization and risk management system among other resource needs as may be determined by SAMA; or v. there is a likelihood a DTFC may be adversely affected by the activities or conditions of its holding company (where DTFC is wholly owned by another institution).
On-Balance Sheet Items
23. Every DTFC shall assess and provide for risks in the evaluation of their respective capital adequacy measurement.
24. Every DTFC shall classify and assign risk weight to credit exposures into four categories according to their relative risk exposures, in the following manner-
i. zero weight should be assigned to the on-balance sheet items including cash, balances with SAMA, claims on the government of KSA by way of investments in government of KSA securities, loans fully secured by cash and loans duly guaranteed by government; ii. 20% weight, where deposits and balances due from commercial banks, financial institutions, DTFCs and claims (loans and advances) guaranteed by a multilateral development bank (MDB), a Regional Development Bank, or a development agencies; iii. 50% weight where loans are fully secured by a residential property located within cities and municipalities in KSA that are either occupied by the borrower or rented and; iv. 100% weight shall apply to all other claims on the public and private sector, which are not covered under the other categories and include- deposits in banks, financial institutions, mortgage finance companies and deposit-taking finance companies that are under statutory management; premises and other fixed assets, loans and advances, bills discounted and all other assets of these institutions.
Off-Balance Sheet Items
25. Every DTFC shall ensure that:
i. off-balance sheet items fully secured by cash or cash equivalent and those that are guaranteed by government of KSA shall be assigned 0% risk weight; and ii. off balance sheet items with the maturity exceeding a year are assigned a risk weight of 50%, including performance bonds and bid bonds.
Reports submitted to SAMA
26. Every DTFC shall prepare and submit to SAMA at the end of every month to be received by the 15th business day of the following month, reports on Capital to Risk Weighted Assets in the form set out in Appendix A to these Regulations.
Chapter 5: Liquidity Requirements
Liquidity Risk Management Plan
27. Every DTFC shall plan and fund its liquidity requirement over specific time periods as set by the DTFC.
28. Every DTFC is required to put in place a Board (or its delegated authority) approved liquidity risk management plan. A liquidity risk management plan shall, as a minimum, address the following:
i. management structures and information systems; ii. measuring and monitoring net funding requirements; iii. contingency funding planning; and iv. internal controls for liquidity management.
Statutory Minimum
29. Every DTFC shall maintain a minimum holding of liquid assets of twenty per cent (20%) of all its deposit liabilities, matured and short-term liabilities.
30. Every DTFC shall also maintain with SAMA at all times a statutory deposits of a sum not less than 4% of deposit liabilities. SAMA may, if it deems it to be in the public interest, vary the aforesaid percentage.
31. The deposit liabilities of a DTFC shall not exceed 15 times its total capital. If the deposits liabilities exceeds this limit, the DTFC must within one month of the date of submission of its liquidity information as per Appendix B, either increase its total capital to the prescribed limit or deposit 50% of the excess deposits with SAMA.
Returns
32. Every DTFC shall prepare and submit to SAMA at the end of every month to be received by the 15th business day of the following month, liquidity information to SAMA as set out in Appendix B to these Regulations.
33. Where the date of submission falls on a weekend or a holiday, the deadline shall be the Thursday or the day before the holiday.
Chapter 6: Asset Quality
Loan Review Function of DTFCs
34. Every DTFC's loan review function shall ensure that:
i. the loan portfolio and lending function conforms to a sound written lending policy, which has been approved and adopted by the board or its delegated authority; ii. management and the board are adequately informed regarding credit risk, among other risks and risk management control effectiveness; iii. problem accounts are identified properly and on a timely basis and internally classified in accordance with the classification criteria in these regulations; and iv. appropriate and adequate level of provisions for potential loss are made and maintained at all times.
Review and Classification of Loans
35. Every DTFC shall review, classify and appropriately make provisions for its loan portfolio at least once every three months.
36. Every DTFC shall classify loans and advances in the manner set out in Appendix C to these Regulations.
37. Where a DTFC has granted multiple loans to a single borrower, and any one of such loans is nonperforming, the DTFC shall evaluate every other loan to that borrower and place such loans on non-performing status accordingly.
Classification of Renegotiated or Restructured Loans
38. Every DTFC shall classify a renegotiated or restructured loan in the Substandard category unless-
i. all past due principal and profit is repaid in full at the time of renegotiation, in which case it may revert to 'Normal' classification. ii. All past due profit is repaid in full at the time of renegotiation in which case it may revert to 'Watch' classification.
39. A renegotiated or restructured loan classified as doubtful or loss shall continue to be classified as doubtful or loss unless -
i. all past due principal and profit is repaid in full at the time of renegotiation, in which case it may revert to 'Watch' classification or; ii. all past due profit is repaid in full at the time of renegotiation in which case it may revert to 'Substandard' classification; and iii. all past due principal and profit is repaid in full at the time of renegotiation and there has been consistent repayment of three instalments in which case it may revert to 'Normal' classification.
40. No DTFC shall restructure or renegotiate any loan or credit facility more than twice over the life of the original loan or credit facility.
41. Any loan or credit facility restructured for the second time shall be classified as substandard if all past due principal and profit is repaid in full at the time of renegotiation: Provided that if all past due profit is repaid in full at the time of renegotiation, the loan or credit facility shall be classified as doubtful.
42. Where a loan is classified as non- performing every DTFC shall suspend any profit on such loans and advances and - (a) the profit in suspense shall not be treated as income; and (b) all profit in suspense shall be taken into account in the computation of provisions for non-performing accounts; and (c) reverse any profit on non-performing loans or credit facilities accrued into income but uncollected and credit into the profit in suspense account until paid in cash by the borrower.
43. Every DTFC shall ensure that a non-performing loan or credit facility is returned to accrual basis only when all outstanding dues and unpaid obligations have been paid up to date.
44. Every DTFC shall ensure that all profit on nonperforming loan or credit facilities previously accrued into income but uncollected is reversed and credited into the profit in suspense account until paid in cash by the borrower.
45. In determining the amount of potential loss in specific loans or in the aggregate loan portfolio, every DTFC shall be guided by the following minimum provisioning percentages:
i. For loans classified "Normal", 1%; ii. For loans classified "Watch", 5%; iii. For loans classified "Substandard", 25%; iv. For loans classified "Doubtful", 75%; and v. For loans classified "Loss", 100%.
46. Where the impairment charges computed under International Financial Reporting Standards (IFRS) are lower than provisions required under these Regulations, the excess provisions shall be treated as an appropriation of retained earnings.
47. Where the impairment charges computed under IFRS are higher than provisions required under these Regulations, the IFRS impairment charges shall be considered adequate for the purposes of these Regulations.
48. The DTFC shall comply with SAMA provisioning rules, requirements specifying regulatory credit risk exposure and any changes thereof.
Write-Off of Loans
49. A DTFC shall write-off a loan or a portion of a loan from its balance sheet when-
i. the institution loses control of the contractual rights over the loan; ii. all or part of a loan is deemed uncollectible or there is no realistic prospect of recovery; iii. the borrower becomes bankrupt; or iv. efforts to collect debt are abandoned for any other reason.
50. Every DTFC shall, at least every year, review its assets and make necessary provisions as need arises, if an actual loss of an asset occurs or when the recoverable amount of the asset is less than it's carrying value.
51. Every DTFC shall submit a copy of the review report to SAMA within fifteen business days from the date of review.
Appendix A: Capital to Risk Weighted Assets Return
Name of DTFC ................................................................................................... Period ................................................................................................... CAPITAL COMPONENTS Amounts
(all amounts in SAR)
1. CORE CAPITAL (TIER 1) 1.1.1 Paid-up ordinary share capital 1.1.2 Non-repayable share premium 1.1.3 Retained earnings/Accumulated losses 1.1.4 Net after tax profits, current year to-date (50% only) 1.1.5 Capital Grants 1.1.6 Non-cumulative irredeemable preference shares 1.1.7 Other reserves 1.1.8 Sub-Total (1.1.1 to 1.1.7) LESS DEDUCTIONS 1.1.9 Investment in subsidiary institution 1.1.10 Goodwill 1.1.11 Intangible assets 1.1.12 Total Deductions (1..1.9 to 1.1.11) 1.1.13 CORE CAPITAL (1.1.8 Less 1.1.12) 1.2 SUPPLEMENTARY CAPITAL (TIER 2) 1.2.1 Revaluation reserves (25%) 1.2.2 Cumulative irredeemable preference shares 1.2.3 Convertible notes and similar capital investments 1.2.4 Perpetual subordinated debt 1.2.5 Limited life redeemable preference shares 1.2.6 Term subordinated debt 1.2.7 Statutory Loan Loss Reserve 1.2.8 Total supplementary capital (1.2.1 to 1.2.7) 1.2.9 Supplementary Capital/Core Capital (%) 1.3 TOTAL CAPITAL (1.1.13 + 1.2.8) 1.4 Total shareholder's funds 1.5 Difference (1.4 Less 1.3) 2. ON - BALANCE SHEET ASSETS Amount
(all amounts in SAR)
Weight Weighted Asset Value 2.1 Cash in domestic currency 0 2.2 Balances with SAMA 0 2.1 KSA Government Treasury Bills 0 2.2 KSA Government Treasury Bonds 0 2.3 Lending fully secured by cash 0 2.4 Advances guaranteed by the Government of KSA 0 2.7 Cash in foreign currency 0 2.8 Deposits & balances Due from local institutions 0.2 2.9 Deposits & balances Due from foreign institutions 0.2 2.10 Foreign Treasury Bills and Bonds 0.2 2.11 Claims guaranteed by Multilateral Development Banks 0.2 2.12 Loans & advances secured by residential property 0.5 2.13 Other Loans and Advances ( net of provisions) 1.0 2.14 Other Investments 1.0 2.15 Fixed Assets ( Net of Depreciation) 1.0 2.16 Other Assets 1.0 2.17 TOTAL (2.1 to 2.16) 2.18 Total Assets 3. OFF-BALANCE SHEET ASSETS Counterparty/Security Credit Risk Equivalent Weight Weighted Asset Value 3.1 Transaction secured by cash 3.2 Government of KSA 3.3 Local financial institutions 3.4 Foreign banks and foreign governments 3.5 Performance Bonds, Bid Bonds, Standby letters of credit, and other commitments with an original maturity exceeding one year 3.6 3.6 Others 3.7 3.7 TOTAL (3.1 to 3.6) 4. CAPITAL RATIO CALCULATIONS 4.1 Core Capital as per 1.1.13 above 4.2 Total Capital as per 1.3 above 4.3 Total Risk Weighted Asset Value of on- balance sheet items as per 2.18 above 4.4 Total Risk Weighted asset value of off-balance Sheet Items as per 3.7 Above 4.5 Total Risk weighted assets (4.3 + 4.4) 4.6 Total deposits 4.7 Core capital to risk assets ratio (4.1/4.5)% 4.8 Minimum core capital to risk assets requirement 4.9 Excess (Deficiency) (4.7 less 4.8) 4.10 Core capital to deposits ratio (4.1/4.6)9% 4.11 Minimum core capital to deposits requirement 4.12 Excess/(Deficiency) (5.0 less 5.1) 4.13 Total capital to risk assets ratio (4.2/4.5)% 4.14 Minimum total capital to risk assets requirement 4.15 Excess/(Deficiency) (5.3 less 5.4) Completion Instructions on Capital to Risk Weighted Assets Return
1. Capital Components
1.1 Core Capital (Tier 1)
1.1.1 Paid-up Ordinary Share Capital
This is the nominal value of the ordinary shares issued and fully paid.
1.1.2 Non-repayable Share Premium/ (discount)
This is the difference between the nominal price and purchase price of shares, which is not refundable/ recoverable.
1.1.3 Retained Earnings/ Accumulated losses
These are retained earnings or accumulated losses from the profits/losses of the prior years. They should however exclude reserves arising from revaluation of investment properties and cumulative unrealised gains and losses on financial instruments.
1.1.4 Current Year 50% Un-audited After Tax Profits
This is 50% of the current year to date un-audited after tax profits. The DTFC must have made adequate provisions for loans and advances, depreciation, amortization and other expenses. In arriving at the applicable figure, any proposed or interim dividends have to be taken into account. This should however exclude reserves arising from revaluation of investment properties and cumulative unrealised gains and losses on financial instruments. In case of a loss, full amount should be included.
1.1.5 Capital Grants
These are donations to be on lent to customers that are irredeemable or non-repayable.
1.1.6 Non-cumulative irredeemable preference shares
These are shares, which have a standing claim on the company every year, but the claim is not carried forward in event of not being paid and they are not redeemable.
1.1.7 Other reserves
These are all other reserves, which have not been included above. Such reserves should be permanent, unencumbered, uncallable and thus able to absorb losses. Further, the reserves should exclude cumulative unrealised gains and losses on available-for- saleinstruments.
1.1.8 Sub-total
Enter in this line the sub-total of all the items from 1.1.1 to 1.1.7.
1.1.9 Investments in subsidiary institutions and equity instruments of other financial institutions
To prevent multiple use of the same capital resources in different financial institutions, the DTFC should deduct any investment in subsidiaries conducting banking or FC business and equity instruments of other such institutions.
1.1.10 Goodwill
This is the difference between the value of the business as a whole and the aggregate of the fair values of its separable net assets at the time of acquisition.
1.1.11 Other intangible assets
These are assets without physical existence, e.g. patents, copyrights, formulae, trademarks, franchise etc. However, computer software should not be deducted.
1.1.12 Total deductions
This is the total of all the items from 1.1.9 to 1.1.11.
1.1.13 Core Capital
Core Capital is the deduction of line 1.1.12 from line 1.1.8.
1.2 Supplementary Capital (Tier 2)
1.2.1 Revaluation reserves
This is the revaluation reserves of fixed assets, land and buildings based on independent and professional appraisal as to the obtaining SAMA's approval.
1.2.2 Cumulative irredeemable preference shares
These are irredeemable shares with standing claim on the company and the claim is carried forward in event of it not being paid in the current year.
1.2.3 Convertible notes and similar capital investments
Convertible notes are instruments that evidence a company promise to pay a loan on maturity, which can be converted, into shares any time before maturity date. Other similar capital investments are convertible debentures, bonds, loans etc.
1.2.4 Perpetual subordinated debt
This Is a debt equity or loan capital, which is not redeemable.
1.2.5 Limited life redeemable preference shares
These are preference shares with limited life of at least five years and are redeemable.
1.2.6 Term subordinated debt
This refers to loan capital, bonds, commercial paper or debt equity with original maturity period of five years and above.
1.2.7 Statutory Loan Loss Reserve
These are provisions that have been appropriated from retained earnings (revenue reserves). This will only apply if provisions computed under quality requirements is in excess of impairment losses computed under International Financial Reporting Standards.
However, loan loss reserve qualifying as supplementary capital should not exceed 1.25% of risk weighted assets total value.
1.2.8 Total supplementary capital
This is the sub-total of the items in line 1.2.1 to 1.2.7.
1.2.9 Supplementary Capital/Core Capital (%)
This is the percentage of the supplementary capital to core capital. Total supplementary capital should not exceed core capital. Where supplementary capital exceeds core capital, then qualifying supplementary capital is limited to the amount of core capital.
1.2.10 Total Capital
Total capital is the sum of core capital and supplementary capital, i.e. Total of lines 1.1.13 and 1.2.8
1.2.11 Total Shareholders' funds
The figure reported in this line should agree with the total shareholders funds as reported in the monthly balance sheet.
1.2.12 Difference
Any difference between total capital and total shareholders' funds should be reported in this line and a reconciliation of the same be attached.
2. On-Balance Sheet Assets
2.1 Cash
Enter in this line cash at hand (domestic notes and coins).
2.2 Balances with SAMA
This includes reverse repo with SAMA, reserve requirement and any other balances held by SAMA.
2.3 KSA Government Treasury Bills
These are Treasury bills issued by KSA Government.
2.4 KSA Government Treasury bonds
These refer to the Treasury Bonds issued by KSA Government.
2.5 Lending fully secured by cash
Enter here all other debts that are fully secured by cash.
2.6 Advances guaranteed by KSA Government
This refers to all loans and advances duly guaranteed by KSA Government.
2.7 Cash in Foreign currencies
Enter in this line cash at hand (foreign notes and coins).
2.8 Deposits and balances due from Local Institutions
These are deposits and balances held with local banks, financial companies and mortgage finance companies including overnight balances.
2.9 Deposits and balances due from foreign institutions
These are balances held with correspondent banks and financial institutions abroad.
2.10 Foreign Treasury Bills and Bonds
These are bills and bonds issued by foreign governments, banks and other multilateral institutions.
2.11 Claims guaranteed by Multi-Lateral Development Banks (MDB's)
These are loans, advances and capital market instruments such as commercial paper that are guaranteed by MDBs.
2.12 Loans secured by Residential Property
These are facilities secured by residential properties situated within cities and municipalities in KSA. Such facilities should only be those classified as normal under Asset Quality Return and are performing in accordance with the original terms and conditions specified in the letter of offer. in addition, the security should be perfected in all respects and its current forced sale value should, cover in full, the outstanding debt with at least a 20% margin. The 50% weight will not be specifically applied to loans to companies engaged in speculative residential building or property development.
2.13 Other loans and advances
These refer to loans and advances that are not guaranteed by KSA government and not secured by cash. These also include commercial paper and corporate bonds and should be reported net of provisions. Provisions must be computed in accordance with Asset Quality Return. However, provisions appropriated from retained earning should not be netted off from loans and advances.
2.14 Other investments
These are investments in other companies other than financial institutions.
2.15 Fixed assets
These are assets acquired for use in the operation of the business or for investment purposes, e.g. furniture, computers, freehold and leasehold land and buildings. They should be shown net of accumulated depreciation, amortized cost, or at fair value.
2.16 Amount due from group companies
This is the claim of the reporting institution from other group companies that are not financial institutions.
2.17 Other assets
These are other assets, which have not been dealt with above.
2.18 Total on-balance sheet assets
Enter in this line total on-balance sheet asset i.e. total of line 2.1 to 2.17. Total deductions from core capital should also be deducted from the assets for the purposes of computing the risk weighted asset values. All profit bearing assets should be reported inclusive of profit earned.
2.19 Total Assets
Total asset figure should be indicated in this line.
2.20 Difference
This is the difference between total on-balance sheet assets and total assets. The difference should be explained in the form of reconciliation.
3. Off-Balance Sheet Items
DTFCs should compute credit risk equivalents for different categories of off- balance sheet transactions. The resulting amounts should be assigned 100% risk weight. Under line 3.4 of the return, foreign banks include the Multi-lateral Development Banks specified under item 2.10 of the completion notes. Under line 3.5, DTFC should include undelivered spot transactions.
3.1 Total weighted assets values
Enter in this line the total weighted assets values, i.e. 2.18 + 3.7
4. Capital Ratio Calculations
Compute as per the formulae provided in the form.
4.1 Total Deposits
This refers to margins on letters of credit, local and foreign currency deposit liabilities plus accrued profit repayable on demand, after fixed period or after notice.
4.2 General
All reported items should agree with or capable of being derived from the figures reported by the DTFC under of the same period. This is a monthly return and should be submitted by the 15th business day of the following month.
Appendix B - Lquidity Statement
Liquidity Statement Amount (all amounts in SAR) 1 Notes And Coins (a). Local Notes and Coins Total 2 Balances With Finance Companies (a). Balances with FCs Less: (b). Time Deposits with FCs (c). Matured Loans/ Advances from FCs Total 3 Balances With Domestic Commercial Bank (a). Balances with Banks Less: (b). Time Deposits with Banks (c). Overdrafts and Matured Loans/ Advances Total 4 Balances With Financial Institutions (a). Balances with Financial Institutions Less: (b). Time Deposits with Financial Institutions (c). Balance due to Financial Institutions (d). Matured Loans/ Advances from Financial Institutions Total 5 Balances With Mortgage Finance Companies (a). Balances with Mortgage Finance Companies Less: (b). Time Deposits with Mortgage Finance Companies (c). Balance due to Mortgage Finance Companies (d). Matured Loans / Advances from Mortgage Finance Companies Total 6 Treasury Bills (a). Treasury Bills (b). Treasury Bonds Total 7 Net Liquid Assets - 1-6 8 Deposit Balances (a). i) Deposits from Govt. Bodies & GREs including Accrued Profit ii) Deposits from all other Sources including Accrued Profit iii) Total Deposits (b). Less: i) Balances due to FCs ii) Balances due to Banks iii) Balances due to Financial Institutions iv) Balances due to Mortgage Finance Companies v) Total Deductions (c). Net Deposit Liabilities 9 Other Liabilities (a). Matured (b). Maturing within 91 days (c). Total other liabilities 10 Liquidity Ratio (a). Net Liquid Assets (b). Short Term Liabilities (c). Ratio {[(a)/ (b)] x 100%} Notes 1 -For overdrafts include all overdrafts and any debit balances on savings accounts Analysis of Balances Due to/from Financial Institution
Institution Amount Due To Amount Due From Net FC's - Total Banks Total Financial Institution Total Mortgage Finance Companies Total Maturity Analysis of Assets and Liabilities
Name of Institution: .........................................
Period Ending: ..................................................Assets 1 2 3 4 5 6 7 8 9 Maturing in Matured > 1 month < 1 month & > 3 months < 3 months & > 6 months < 6 months & > 1 year < 1 year & > 3 years < 3 years & > 5 years < 5 years Total Cash Reserves Balances With SAMA Balances Due From Local Institutions Balances Due From Banks Abroad KSA Government Treasury Bills KSA Government Treasury Bonds Foreign Government Treasury Bills & Bonds Other Investments Other Foreign Assets Local Currency Loans And Advances (Net) Fixed Assets (Net) Balances Due From Group Companies Other Assets Total Assets Off Balance Sheet Assets Liabilities Balances Due to SAMA Balances Due to Local Institutions Balances Due to Banks abroad Local Currency Deposits Local Currency Borrowings Foreign Currency Deposits Foreign Currency Borrowings Other Foreign Liabilities Balance Due to Group Companies Other Liabilities Capital And Reserves Total LIABILITIES Off-Balancce Sheet Liabilities Net Position On - Balance Sheet Items (A14-B12) Net Position Off - Balance Sheet Items (A15-B13) Completion Instructions
1. Notes and Coins
a. Local
Enter all notes and coins on the DTFC's premises (including mobile units) which are legal tender in KSA.
2. Balances with FCs
a. Balances with FCs
Enter the total of all balances (call and time deposits) placed with the institution, excluding uncleared effects but including accrued profit.
b. Time Deposits with FCs
Enter the amount of time deposits including accrued profit included 2(a) above whose maturities exceed 91 days.
c. Balances due to FCs
Enter the total of all balances including accrued profit (overnight borrowings, and call placements) received from FCs
This balance should agree with the total analysed in the table attached to the liquidity return.
d. Matured loans and advances from FCs
Enter the total of matured loans and advances including guarantees, bills discounted promissory notes and performance bonds received from FCs.
3. Balances with Domestic Commercial Bank
a. Balances with banks
Enter the total of all balances (overnight, call and time) held at other domestic commercial banks excluding un cleared effects.
These balances should include accrued profit and should agree with the total analysed in the schedule attached to liquidity return.
b. Time Deposits with Banks
Enter the amount of time deposits including accrued profit entered in 3(a) above whose maturities exceed 91 days.
c. Balances Due to banks
Enter the total of balances due to commercial banks including accrued profit. This balance should agree with the total analysed in the table attached to the liquidity return.
d. Matured loans and advances from domestic banks
Enter the total of all overdrafts and any other debit balances on matured loans and advances including guarantees and bonds issued by commercial banks.
4. Balances with Financial Institutions
a. Balances with Financial Institutions
Enter the total of all balances (overnight, call and time) placed with the institution, excluding uncleared effects. This should include accrued profits; and should agree with the total analysed in the table attached.
b. Time Deposits with Financial Institutions
Enter the amount of time deposits including accrued profits entered in 4(a) above whose maturities exceed 91 days.
c. Balances due to Financial institutions
Enter the total of balances received from financial institutions including accrued profits.
This balance should agree with the total analysed in the table attached and should exclude balances with institutions with maturities period exceeding 91 days.
d. Matured Loans and Advances Received from Financial Institutions
Enter the total of matured loans and advances including guarantees, bills discounted, promissory notes and performance bonds received from financial institutions.
5. Balances with Mortgage Finance Companies
a. Balances with Mortgage Finance Companies
Enter the total of all balances (overnight, call and time deposits) placed with the Institution, excluding uncleared effects but including accrued profits.
b. Time Deposits with Mortgage Finance Companies
Enter the amount of time deposits including accrued profits included in line 5(a) above whose maturities exceed 91 days.
c. Balances due to Mortgage Finance Companies
Enter the total of all balances including accrued profits (overnight borrowings, and call placements) received from mortgage finance companies.
This balance should agree with the total analysed in the table attached to the liquidity return.
d. Matured loans and advances from Mortgage Finance Companies
Enter the total of matured loans and advances including guarantees, bills discounted, promissory notes and performance bonds received from mortgage finance companies.
6. (a) KSA Government Treasury Bills
Enter the amortized cost of all KSA Government Treasury Bills investments by the reporting institution, net of encumbered Treasury Bills. Encumbered Treasury Bills are those pledged to secure any form of credit facility granted to the reporting institution.
(b) KSA Government Treasury Bonds/ Bearer Bonds
Enter the amortized cost or fair value of all treasury bonds/bearer bonds acquired by DTFC directly from the government and its issuing agents and those discounted from third parties.
7. Total Liquid Assets
Enter the sum of items 1 to 6 above
8. Total Deposit Liabilities
a. Enter total deposits (Local and Foreign Currency) from all sources, including accrued profit, but excluding un-cleared effects.
b.
Less:
i) Balances Due to banks
Enter the total of balances due to domestic and foreign commercial banks including accrued profit. This amount should agree with the sum of balances analysed in the attached table.
ii) Balances Due to FCs
Enter the total amount of balances due to FCs including accrued profit. This amount should agree with the sum of balances in the attached table.
iii) Balances Due to Financial Institutions.
Enter the total amount of balances due to domestic financial institutions including accrued profits. This amount should agree with the sum of balances in the attached table.
iv) Balances Due to Mortgage Finance Companies.
Enter the total amount of balances due to domestic mortgage finance companies including accrued profits. This amount should agree with the sum in the attached table.
v) Total Deductions
Enter the total of items b (i) to b (iv)
c. Net Deposit Liabilities
Enter the net amount of item 8 (a) less sum of 8 (b).
9. Other liabilities
a. Matured: Enter the sum of all matured liabilities (Including crystallized off- balance sheet commitments) that have cash flow implications and are due for payment.
10. Liquidity Ratio
a. Total of items (7)
b. Sum of Group 8(c) + 9(c)
c. Ratio of [(a)/ (b)] x 100%
The liquidity statement should be completed as per the instructions contained in this guideline, and should be submitted by the 15th business day of each month.
Appendix C: Asset Quality
Risk Classification of Assets
In the determination of the classification for loans and advances, performance will be the primary consideration. The performance will generally show the repayment capability of the borrower. All loans and advances should be classified by institutions according to the following criteria:- Days at Risk (Number of days past due) Classification a) Current and up to date in payments of principal and profit Normal b) 1 to 30 days in arrears or where one instalments for either principal or profit is due and unpaid Watch c) 31 to 60 days in arrears or where two instalments for either the principal or profit are due and unpaid Substandard d) 61 to 90 days in arrears or where three instalments of either principal or profit are due and unpaid Doubtful e) More than 90 days in arrears or where four or more instalments of either principal or profit are due and remain unpaid Loss Risk Classification of Assets and Provisioning
Portfolio Aging Report Classification No of loans /ACs Outstanding loan Portfolio Required Provision Required Provision Amount (SAR) Security Held Minimum provision % Portfolio at Risk Normal 1% Watch 5% Sub-standard 25% Doubtful 75% Loss 100% Other Non-performing Assets* Total Restructured/Rescheduled/ Renegotiated loans Normal 1% Watch 5% Sub-standard 25% Doubtful 75% Loss 100% Grand Total Completion Instructions
General
This return should be completed strictly in accordance with the Regulation on Asset Quality.
1. Enter in column A the number of accounts under each classification. 2. Enter in column B the amount outstanding under each classification categories of Normal Risk; Watch; Sub-standard; Doubtful and Loss. 3. Enter in column C the minimum provisions requirement in percentages in each classification category. 4. Enter in column D provisions required in each classification category. 5. Enter in column E the amount of security held in each classification category. 6. Enter the difference between column D and E in column G.