9 Capital adequacy requirements (Pillar I)

Capital adequacy is monitored by the LLB Group and by the individual operative units in accordance with the equity regulations of the Principality of Liechtenstein, which are based on the standards of the Basel Committee on Banking Supervision.

In accordance with Basel II, the banks may choose from various approaches to calculate the capital requirements for credit, market and operational risks. The LLB Group applies the standard approach for credit risks, the basic indicator approach for operational risks and the de minimis approach for market risks. The determination of capital requirements and tier capital is carried out on the basis of the IFRS consolidated financial statement, whereby non-realised gains are deducted from core capital.

At the LLB Group, the scope of consolidation for determining capital requirements and for the financial accounts is identical. The relevant consolidation information can be found in the chapter Scope of consolidation.

Apart from the legal provisions, which prevent the transfer of funds or equity within the LLB Group, there are no other restrictions.

Capital adequacy requirements (Pillar I)

(XLS:)

in CHF thousands

31.12.2012

31.12.2011

Tier 1 ratio (in percent)

15.6

13.9

 

 

 

Eligible capital

 

 

Share capital

154'000

154'000

Share premium

49'458

49'458

Retained earnings

1'648'077

1'594'895

Other reserves

–49'421

–51'666

Non-controlling interests

100'402

101'156

Less distribution of profit

–42'631

–8'525

Non-realised gains after tax

–22'124

–18'959

Core capital (before adjustment)

1'837'761

1'820'359

Net long position in own shares

–205'048

–206'179

Other elements to be deducted from core capital

–275'117

–294'156

Eligible core capital (adjusted core capital)

1'357'596

1'320'024

Total eligible capital

1'357'596

1'320'024

 

 

 

Risk-weighted assets

 

 

Credit risks balance sheet transactions

7'529'200

8'335'513

Credit risks off-balance sheet transactions

111'375

106'991

Market risks

311'175

216'438

Operational risks

773'450

804'694

Total risk-weighted assets

8'725'200

9'463'636

 

 

 

Required capital

 

 

Credit risk

594'148

658'906

of which price risk related to shares in the banking book

41'406

42'768

Non-counterparty related risks

17'097

16'494

Market risk

24'895

17'315

of which interest instruments

0

0

of which equities

0

0

of which forex and precious metals

19'594

12'465

of which commodities

5'301

4'850

of which settlement and delivery risks

0

0

Operational risks

61'876

64'376

Total required capital

698'016

757'091

Segmentation of credit risks

(XLS:)

 

Regulatory risk weighting

in CHF thousands

0 %

10 %

20 %

35 %

50 %

75 %

100 %

150 %

Total

31.12.2012

 

 

 

 

 

 

 

 

 

Central governments and banks

2'209'813

0

0

0

0

0

0

0

2'209'813

Public authorities

18'911

0

495

0

0

0

7'947

0

27'353

Administrative bodies

8'451

0

13

0

25'232

0

1'644

0

35'340

International organizations

0

0

907

0

0

0

0

0

907

Banks and securities firms

0

0

4'521'477

0

1'330'645

0

0

0

5'852'122

Companies

0

0

92'938

0

718

0

657'614

15'488

766'758

Retail

0

0

0

0

0

216'288

1'012'923

5'418

1'234'629

Secured by pledge

2'814

0

0

6'652'077

599'401

0

1'738'326

0

8'992'618

Overdue positions

0

0

0

0

0

10'424

35'546

13'787

59'757

Shares

0

0

0

0

0

0

1'036'533

299'661

1'336'194

Covered debentures

102'123

355'755

111'133

0

0

0

0

0

569'011

Units in equity funds

0

0

0

0

0

0

23

204

227

Total

2'342'112

355'755

4'726'963

6'652'077

1'955'996

226'712

4'490'556

334'558

21'084'729

Total previous year

1'123'419

406'161

5'168'038

6'407'932

2'139'047

228'082

3'936'890

407'687

19'817'256

Mitigation of credit risk

(XLS:)

 

31.12.2012

31.12.2011

in CHF thousands

Covered by recognised financial collateral

Covered by guarantees

Other credit commitments

Total

Covered by recognised financial collateral

Covered by guarantees

Other credit commitments

Total

Balance sheet positions

0

2'600

0

2'600

0

400

0

400

Off-balance sheet positions

0

980

0

980

0

0

0

0

Derivatives

0

0

0

0

0

0

0

0

Total

0

3'580

0

3'580

0

400

0

400

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