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13. Application of the Standardized Approach Within a Group
No: 44047144
Date(g): 27/12/2022 | Date(h): 4/6/1444
Status: In-Force
13.1
At the consolidated level, the standardized approach calculations use fully consolidated BI figures, which net all the intragroup income and expenses. The calculations at a sub-consolidated level use BI figures for the banks consolidated at that particular sub-level. The calculations at the subsidiary level use the BI figures from the subsidiary.
13.2
Similar to bank holding companies, when BI figures for sub-consolidated or subsidiary banks where BI is more than SAR4.46 billion, these banks are required to use loss experience in the standardized approach calculations. A sub-consolidated bank or a subsidiary bank uses only the losses it has incurred in the standardized approach calculations (and does not include losses incurred by other parts of the bank holding company).
13.3
In case, a subsidiary of a bank have BI more than SAR 4.46 billion does not meet the qualitative standards for the use of the Loss Component, this subsidiary must calculate the standardized approach capital requirements by applying 100% of the BI Component. In such cases SAMA may require the bank to apply an ILM which is greater than 1.
