Bank's own and borrowed funds. The bank's own funds: structure, their formation and use The bank's own funds do not include

Content.

Introduction 3

Chapter 1. Determination of the bank’s own funds (capital) 4

1.1 Concept, structure and functions of the bank’s equity capital 4

1.2 Sources of bank equity capital 5

1.3 Methods for assessing equity 7

Chapter 2. Managing your own funds 9

2.1. Internal sources of equity capital growth 9

2.2. External sources of capital gains 10

Chapter 3. Assessing the quality of management of the bank’s own funds 12

3.1.Regulatory requirements for the amount of own funds 12

3.2. Assessing the quality of equity management 18

Conclusion 26

References 27

Introduction.

With the growing number of bankruptcies and non-performing loans, there has been increased attention to the adequacy of bank capital. Regulators are requiring more bank capital to better protect depositors and ensure the viability of insurance funds. Bankers prefer lower capital ratios to boost profitability and asset growth. These conflicting goals create conflict between supervisory policies and bank performance. The Central Bank of the Russian Federation has sanctioned minimum capital standards, which are limiters for almost all banks.

Capital plays an important role in the banking risk/return dilemma. Increasing capital reduces risk by stabilizing income and increasing it, insuring against bankruptcy. But it also reduces expected returns because equity is more expensive than debt. The main issues of asset and liability management, therefore, come down to determining the optimal amount of capital.

The topic of rational management of a bank’s own capital is especially relevant today, since in our country, on the one hand, an effective deposit insurance system has not yet been created; on the other hand, an unstable economic situation, a sharp increase in competition in the banking sector, the implementation of an aggressive banking policy in the absence of an adequate information base, often the lack of professional knowledge among some bankers and other negative factors lead to bank bankruptcies and depositors losing their funds. Therefore, for our country, the presence of equity capital is the first condition for the reliability of a bank.

The purpose of the course work is a detailed examination of such a concept as equity bank and its management.

To achieve this goal course work The following tasks must be completed:

Determine the functions of equity capital;

Identify the sources of its formation;

review existing methods for assessing capital;

evaluate methods of managing equity capital;

identify quantitative characteristics of the assessment of own funds.

Chapter 1. Determination of the bank's own funds

1.1 Concept, structure and functions of own funds

The bank's own funds should be understood as various funds created by the bank to ensure its financial stability, commercial and economic activities, as well as the profit received based on the results of the current and previous years.

The structure of the bank's own funds is heterogeneous in terms of qualitative composition and changes throughout the year depending on a number of factors and, in particular, on the quality of assets, the use of its own profits, and the bank's policy to ensure the sustainability of its capital base.

The data presented (Table 1) show that the bank’s own funds consist of various funds that have their own purpose and various sources of formation.

The given structure of own funds commercial bank shows that the main share of the bank’s capital consists of: authorized capital, Extra capital and bank funds - 75.9% as of January 1, 1998 and 94.9% as of July 1, 1998. At the same time, funds formed from the bank’s net profit account for 51.0 and 70.0%, respectively, of the total amount created by banks funds, and in their composition the largest share is occupied by special purpose and accumulation funds - 45.3 and 59.6%. The funds from the last two funds are used by commercial banks primarily to satisfy the material and social needs of their employees, to provide charitable assistance and to the bank’s industrial development. Thus, the expenditure of part of these funds serves the current needs of the bank. Significantly less profit was allocated to increase the reserve fund, as evidenced by the rate of change in individual funds. In Table 3.1 Structure of the bank's own funds (%) in the conditions of increasing crisis phenomena in the economy and deteriorating solvency of clients, such distribution of profits did not contribute to increasing the bank's own funds and ensuring its stability. An important element of the structure of a bank’s own funds is reserves for possible loan losses and impairment valuable papers and other bank assets. Specific gravity of named reserves for the analyzed bank ranges from 5.9% on January 1, 1998 to 9.4% on July 1, 1998, reaching the highest value on April 1, 1998 - 18.3%. Such a sharp increase in the amount of reserves to cover operational risks was caused by a change in the order and expansion of assets for which the creation of reserves is required, which, on the one hand, led to an increase in the absolute value of equity, and on the other, to a qualitative change in their structure, this can be noted as a positive phenomenon, since a qualitative change in the structure of equity capital is one of the main factors in the growth or decrease of the bank’s equity capital.

Table 1 Own funds jar

1.2 Sources of bank equity capital

Authorized capital. It consists of the amount of participants’ contributions and determines minimum size property and interests of bank creditors. The minimum authorized capital is 5,000,000 euros.

The authorized capital is intended to secure the obligations of the bank and among its sources the following can be distinguished:

Share contributions of the founders of a commercial bank

The initial cost of fixed assets contributed as material assets into the authorized capital (their share is regulated and should not exceed 20% of the authorized capital)

Funds from profits.

Increase in the nominal value of shares in the authorized capital.

To form authorized capital The following means cannot be used:

Cash and other objects of their own political, public, religious and other public associations and organizations in the charter of which

Funds raised

Funds from the federal budget and state extra-budgetary funds

Bank reserve capital. The bank's reserve capital is formed from the bank's net profit. There are two options for its formation

According to established standards, by decision of the general meeting of shareholders

After approval annual report Part of the profit is allocated to reserve capital in the amount provided for by the charter of a commercial bank.

Reserve capital funds serve the following purposes:

Covering possible losses and expenses not included in the bank's plans

To pay interest on bank bonds or dividends on preferred shares if there is insufficient bank profit for these purposes.

The amount of reserve capital is regulated by the central bank and should not exceed 25% of the bank’s authorized capital.

Extra capital.
Additional capital is formed from the following sources:

The amount of share premium received, the difference between the market value and the issue price

Property revaluation amount

The cost of gratuitously received property of a commercial bank.

Special bank funds.

Sources:

Cost of sale of disposed commercial property

Depreciation deductions

Part of net profit that is used

Banking Development Fund

Material Incentive Fund

Bank profit (bank retained profit is calculated as the difference between book profit, taxes, dividends and expenses)

Mandatory reserves for active operations formed by the bank: they are formed through the inclusion of funds for their formation in the expenses of a commercial bank.

The bank's own capital must perform the following functions:

Protective function (main). Acts as a guarantee to depositors in the event of bank liquidation.

Operational function. Consists of allocating funds from created funds for the purchase of buildings, property, transport, equipment, etc.

Regulatory function. Associated with the interest of society in the stable functioning of the banking system.

Methods for analyzing the equity capital of a commercial bank:

Determining the amount of equity capital:

Determination of gross capital

Gross capital is equal to: bank funds (including reserve operations) plus book profit

When carrying out vertical and horizontal analysis, net capital is separated from brother capital. The most accurate amount of net capital is determined by the central bank’s methodology, regulation 31P as amended by December 21, 1999 N795U.
According to this method, own capital consists of two parts: own capital and additional capital.

Own and borrowed funds constitute the resources of a commercial bank. The bank can only place what it has attracted or already has in the form of its own funds.

Raised capital is money raised by the bank from legal and individuals on the terms of repayment in order to place these resources on the market.

Own funds include - basic, Reserve capital and retained earnings.

Sources included in fixed capital include funds that commercial Bank can, under any circumstances, be freely used to cover unexpected losses.

Authorized capital. Federal legislation establishes the following requirements for the size of the authorized capital of newly created credit organizations and the own funds (capital) of existing credit organizations: the minimum amount of the authorized capital of a newly registered bank is set in the amount of 180 million rubles, the minimum amount of the bank’s own funds (capital) is set in the amount of 180 million rubles the minimum amount of own funds (capital) of a bank applying for a General license is set in the amount of 900 million rubles, a newly registered bank (bank, from the date state registration less than two years have passed) to obtain the right to attract deposits Money individuals must have an authorized capital of at least 3 billion 600 million rubles.

Share premium (part of the bank's additional capital) is formed when shares are sold at a cost exceeding their par value.

Reserve capital is formed in mandatory from net profit if the bank operates in the form joint stock company. The minimum size of this fund is determined by the bank's charter, but it cannot be less than 15% of its authorized capital.

Additional capital includes funds that are not permanent in nature. This is an increase in the value of the bank's property due to revaluation in the amount (part of additional capital), profit of the current and previous periods not confirmed by the audit company, a reserve fund formed from profits not confirmed by the audit company, as well as a subordinated loan that meets the conditions of the instructions of the Bank of Russia No. 2241-U dated June 1, 2009

The funds attracted by banks are varied in composition. Their main types are funds raised by banks in the process of working with clients (deposits), funds accumulated by issuing their own debt obligations (certificates of deposit and savings certificates).

For banks, deposits are the main type of their passive operations and, therefore, the main resource for conducting active credit operations.

In our articles, we often touch on topics that would seem to never be useful to a simple person, far from banking specifics, in life. Thus, we examined in great detail issues related to bank liquidity, as well as the standards by which it (liquidity) is regulated: instant liquidity ratio N2, current liquidity ratio N3, long-term liquidity ratio N4.

Isn’t such a deepening into fairly narrow topics unnecessary? On the one hand, by nature professional activity You may not have to calculate bank standards. And unnecessary information can only “clog your brain.” But on the other hand, and this aspect is more important, the state of our country’s economy forces us to closely monitor the news. But, as we have noted more than once, the information coming in is so contradictory that in order to form an objective picture, you have to very carefully “pass through filters” the entire flow. And to understand what is happening, one involuntarily has to understand seemingly rather narrow topics.

We have already touched on the topic of capital adequacy in the banking system when we talked about what additional capitalization of a bank is. But in that article on the structure capital adequacy standards We didn't go into detail. Let's fill this gap.

Capital adequacy standards

The document establishing the procedure for determining capital adequacy ratios (as well as liquidity ratios) is Bank of Russia Instruction No. 139-I dated December 3, 2012 “On mandatory standards for banks.” Currently, commercial banks calculate 3 standards regulating bank capital:

Basic capital adequacy ratio N 1.1,

— fixed capital adequacy standard N 1.2,

The bank's own funds (capital) adequacy ratio N 1.0.

The formulas for determining the value of the standards are identical to each other (we have already given it in the article about additional capitalization of banks).

Adequacy standards represent the ratio of the bank’s capital (in each case its own value) to the amount credit risk by assets, contingent liabilities, derivative financial instruments, operational and market risk.

Minimum acceptable standards:

- for standard N 1.1 5% ,

Until this date 5.5%),

- for standard H1.0 10%.

As we have already mentioned, when determining the numerator of the formula, the value of the bank’s capital is used. When determining the value of the standard N1.1, the numerator contains the value basic capital, when determining the standard N1.2 – fixed capital, Н 1.0 – equity capital of a credit institution. In general, previously there was only one standard regulating bank capital - the capital adequacy standard N 1. The introduction of additional standards was due to the introduction of the Basel III standards system. Regulation of the domestic banking system in this matter does not lag behind global trends. In general, it was initially planned to introduce the Basel 3 standard in more early dates than in other countries, as well as a more “strict” meaning of the standards.

72 Banks’ own funds include:

But, ultimately, they made certain concessions.

Basic capital, fixed capital and equity capital of the bank

The methodology for calculating the base, fixed and equity capital of a credit organization is given in Regulation No. 395-P dated December 28, 2012 “Regulations on the methodology for determining the amount of equity (capital) of credit organizations (Basel III).” In accordance with this regulatory document equity credit institution is nothing more than the amount fixed capital And additional capital.

In its turn main capital(also called first-tier capital) is the amount basic capital And additional capital.

The methodology for calculating each indicator can be found in the text of the Regulations; we only note that the calculation of the basic capital includes ordinary shares and share premium, as well as the amount of retained earnings. Additional capital includes preferred shares and share premium from their placement, as well as perpetual subordinated loans. Additional capital includes subordinated loans for a period of at least five years, as well as an increase in the value of property due to revaluation (we discussed this in more detail in the article about additional capitalization).

The main purpose of liquidity standards is the ability of a commercial bank to fulfill its obligations on time.

Capital adequacy standards are designed to ensure financial stability (the ability to cover losses using equity capital). Systematic violation of capital adequacy standards, as well as reaching the value of the standards below a certain value, leads to the revocation of the license (you can read what the depositor should do in this case at this link) or to the reorganization of the bank.

Subscribing to our news is very important - it will allow you not to miss a single topic on our site. You might also be interested financial services which we are ready to offer you. For more detailed information please follow the link.

Also don’t forget to share with your friends using the social network buttons

Sources of formation of the bank's own capital

Bank's own capital:

· Established management company

· Management funds

· Insurance reserves

Share premium

Retained earnings from previous years

· Subordinated loans to legal entities

The management company is formed at the time of its creation and consists of contributions from its participants. For a joint-stock company, it is defined as the sum of the par value of its shares and acquired shares. For LLC banks, it is defined as the nominal value of all shares of its private owners. The size of the charter capital is determined in the charter itself, in its constituent agreement. The minimum size of the capital is at least 300 million rubles. The increase in the capital occurs through the accumulation of retained earnings from previous years and by raising capital on the financial market. The JSC can raise additional capital by placing additional shares or an increase in the par value of previously issued shares.

LLC banks create their own management company based on additional deposits their founders and on the basis of contributions to the management company of third parties.

The bank's funds are formed through deductions from profits in the manner established by the constituent documents.

· Reserve

· Special purpose

· Cumulative

The creation of a reserve fund is mandatory and exists regulations Bank of Russia, which regulate its spending.

The reserve fund is intended to cover losses and losses.

52. Own funds of a commercial bank.

It is created annually through deductions from profits in the amount of at least 5%. Its total value must be at least 5% of the authorized capital.

The funds from this fund are spent on:

· Coverage of losses based on the results

· Redemption of own bonds in case of insufficient funds

· Increasing the capital by capitalizing part of the funds of this fund exceeding the standard value.

The Bank of Russia exercises control over the correctness of the creation of the fund and its expenditure. For violation of the formation conditions, a fine of 0.1% of the minimum capital amount (300 billion) is charged. if the reserve fund is spent incorrectly, the bank is obliged to replenish the reserve fund in the amount of its misuse.

A special purpose fund is created from the net profit of the reporting year, in connection with the regulations developed by the bank for their formation and expenditure. The Central Bank does not interfere. These funds are a source of material incentives and their own provision for bank employees (for example, holiday homes).

Accumulation funds - retained earnings are reserved as financial source for its production and social development and other activities to create new property.

Insurance reserves – mandatory reserves to cover possible losses on loans and transactions with securities and their depreciation; as well as to cover other bank reserves.

Share premium is generated during the bank's operations to further increase its capital due to: the positive difference between the price of outstanding shares and their par value; due to the positive difference that arose when paying for shares in foreign currency between the official exchange rate of foreign currency against the ruble on the day the funds were credited to the management company and the rate determined in the decision to issue shares.

Subordinated loans – loans that have a maturity of at least 5 years, unsecured loans, payment of the principal amount of the debt occurs no earlier than the expiration of the agreement.

The interest rate on a subordinated loan should not differ significantly from market rates for similar loans at the time of their issuance. The loan agreement itself must contain:

· Impossibility clauses early repayment

· About the possibility of using % without significantly exceeding the level of the current %

· In the event of bank bankruptcy, the claims for this loan are satisfied last.

Such classic subordinated loans were issued from 1998 to 2008. The agreement is provided to the territorial institution of the BR to monitor the correctness of its condition (30 days), only then this loan is included in the bank’s capital.

In connection with the financial crisis of 2008, VneshEconom Bank received a deposit from the Ministry of Finance in the form of funds from the National Fund. Welfare for a period of 10 years at 7% in the amount of 750 billion rubles. for the purpose of providing a subordinated loan for the same term to the CB at a rate of 8%. These subordinated loans from VneshEconom Bank have different conditions, terms, %. To be admitted to a subordinated loan, VneshEconom Bank requires:

2) It is necessary that the share of Russian individuals and legal entities as final investors in the management company be at least 50% + 1 shareholder.

3) The amount of the requested loan should not exceed 15% of the amount of own funds calculated as of October 1, 2008 from 100% contributed from bank shares to replenish capital.

4) There must be data available to support significance.

5) the presence of an obligation of the borrower bank to fully channel the received subordinated loans for investment in real sector economy (priority sectors are indicated in a special government list). Loans for a period of 10 years.

In agreement with the Central Bank of the Russian Federation in the years financial crisis it is possible to attract subordinated loans from investors with additional conditions. For a period of at least 30 years with the right of early repayment after 10 years.

The source of formation of the bank's capital during a crisis is in accordance with the Federal Law. 181 of July 18, 2009, capitalization can be carried out by exchanging bonds federal loan for preferred shares of the bank with redemption after 10 years.

Commercial banks also have other sources:

· increase in the value of property due to its revaluation, which is carried out at least once by government decree or by decision of the board of directors.

· Retained earnings from previous years and the current year.

· Free and irrevocable property from legal entities and individuals. persons

⇐ Previous45678910111213Next ⇒

Related information:

Search on the site:

Bank resources circulate as a result of banks conducting passive operations, which are reflected in the liability side of the bank’s balance sheet. The bank's funds include: own, borrowed, attracted, the totality of which is used to carry out active operations. Therefore, active and passive operations are interrelated.

The structure of liabilities largely determines the bank's ability to conduct active operations. At the same time, changes in the bank's lending policy affect the nature of the resources.

Sources of equity capital are:

1) share capital;

2) reserve capital;

3) insurance reserves;

4) undistributed profits;

5) issue of long-term securities of various types.

In the structure of the bank's liabilities, the share own funds insignificant, however, the bank's own capital must be sufficient to fulfill the obligations assumed by the bank. Therefore, the Central Bank sets a capital adequacy standard.

Own capital is only the starting point for organizing banking and, depending on the form of the bank, the formation of the management company occurs differently. If the bank is organized in the form of a joint-stock company, then the charter capital is formed in the amount of the nominal value of the shares, which are distributed either in the form of an open subscription, or in the order of distribution of shares between the founders. If the bank is created as an LLC, then the entire capital is divided into shares, the size of which is determined by the constituent documents. Regardless of the bank’s organizational and legal form, its charter capital is formed entirely from its own funds. The formation of a management company at the expense of a loan is not allowed.

Further increase in the capital capital is carried out by decision of the general meeting at the expense of additional release shares, either at the expense of profits or through an increase in the share for the LLC.

In Western countries, very important importance is attached to share capital and its growth. The share capital can be increased through the reserve fund. In this case, the volume of the bank's own funds does not change. Sometimes the increased share capital is replaced by shareholders granting a subordinate loan or permission to issue a bond, with the bond eventually being converted into shares.

Subordination loan is a perpetual loan under which resources are attracted from the market loan capital. It is equal to your own funds. The loan is carried out by issuing securities, which legally occupy an intermediate position between bonds and shares. Subordinated securities are perpetual debt obligations, and at the same time evidence of participation in capital. They are repaid in the event of liquidation of the enterprise, but claims on them are carried out last.

Reserve capital The bank is formed by deductions from profits. The amount of deductions is determined by the charter. It is intended to compensate for losses and serves as a source of interest payments on bonds and stocks. When a certain amount is reached, the reserve fund is capitalized and re-accrued.

Special component own funds – insurance reserves, which are formed when performing specific operations. These include:

— reserves for possible depreciation of securities;

— reserves for possible losses on active operations;

— insurance is mandatory.

retained earnings- this is the part of the profit that remains after payment and contributions to the reserve fund. It is retained earnings that form the bank's liabilities and form funds that go towards its existence and other purposes.

A distinction is made between net equity and gross equity. Capital-gross– the sum of all bank funds and retained earnings on the balance sheet.

Bank's own funds

Net capital– part of the bank’s own funds that can be used as credit resources, i.e. given capital may be put into circulation. Each commercial bank determines the amount of its own funds independently, but the amount of its own funds depends on many factors:

1) in accordance with the law of the Central Bank, the amount of own funds is determined by preliminary size active operations;

2) the amount of own funds, necessary for the bank, depends on the specifics of his client;

3) on the nature of active operations;

4) on the degree of existence of the market for credit resources;

5) from the policies pursued by the Central Bank.

The Central Bank sets capital adequacy standards for a commercial bank. This indicator is determined by the minimum allowable size of the capital and the maximum ratio of total capital and the amount of risk-weighted assets.

⇐ Previous12345678910Next ⇒

Publication date: 2014-12-11; Read: 155 | Page copyright infringement

Studopedia.org - Studopedia.Org - 2014-2018 (0.001 s)…

Equity capital of a commercial bank

The bank's own funds should be understood as various funds created by the bank to ensure its financial stability, commercial and economic activity, as well as the profit received based on the results of the current and previous years.

The structure of the bank’s own funds is heterogeneous in terms of qualitative composition and changes throughout the year depending on a number of factors and, in particular, on the quality of assets, use own profit, the bank's policy to ensure the sustainability of its capital base.

In the context of growing crisis phenomena in the economy and deteriorating solvency of clients, such distribution of profits did not contribute to increasing the bank’s own funds and ensuring its stability.

An important element of the structure of the bank's own funds are reserves for possible losses on loans and for depreciation of securities and other assets of the bank. The share of these reserves for the analyzed bank ranges from 5.9% as of January 1, 1998 to 9.4% as of July 1, 1998, reaching its highest value on April 1, 1998 - 18.3%. Such a sharp increase in the amount of reserves to cover operational risks was caused by a change in the order and expansion of assets for which the creation of reserves is required, which, on the one hand, led to an increase in the absolute value of equity, and on the other, to a qualitative change in their structure, this can be noted as a positive phenomenon, since a qualitative change in the structure of equity capital is one of the main factors in the growth or decrease of the bank’s equity capital.

The authorized capital (capital) creates economic basis existence and is prerequisite bank formation as legal entity. Its value is regulated legislative acts central banks and, moreover, is the subject of an agreement of the European Economic Community (EEC), which in 1989 regulated its minimum value in the amount of 5 million ECU.

Reserve capital (fund) is created from net profit (after tax) in the amount of not less than 15% of the paid-in amount of the authorized capital and is intended to absorb unexpected losses in the bank’s activities and ensure the stability of its functioning. This fund is created by all banks without fail in accordance with the Federal Laws “On Joint Stock Companies” and “On Banks and Banking Activities”.

The second group of funds is formed as a result of the distribution of net profit remaining at the disposal of the bank (special purpose funds), and also reflects the process of using net profit for certain purposes (accumulation funds formed before January 1, 1998).

The third group of funds, united under the name “additional capital”, consists of:

• funds received from the sale of shares to their first holders at a price above their nominal value - “share premium”. These funds increase initial capital bank and its stable part;
• increase in the value of property formed during the revaluation of fixed assets.

  OWN AND ATTRACTED FUNDS OF THE BANK

  The presence and size of this fund are a reflection of the level of inflation in the country and, therefore, do not act qualitative characteristics his activities. In its own way economic essence and the nature of the use of funds, this fund can be considered as a reserve for depreciation of fixed assets (fixed assets);

• the value of the property received free of charge. The volume of funds in this fund shows the source of growth in the bank's material assets, and the rules of use (to cover possible losses) allow it to be classified as a reserve fund.

The fourth group of funds is created with the aim of covering risks for individual banking operations and thus ensuring the stability of banks by absorbing losses through accumulated reserves. These include: reserves for possible losses on loans, securities and other bank assets. The size of these reserves indicates, on the one hand, the qualitative structure of the bank’s assets, and on the other, the bank’s margin of safety, especially in terms of reserve funds created from “real profits” (for example, reserves for possible losses on loans of the first group).

The funds of the funds of the second, partially third and fourth groups, according to their intended purpose, are very mobile, since they are used to ensure current expenses or capital investments bank related to the development of its own technical base (for example, payment of bonuses, benefits, purchase of equipment, covering expenses incurred in excess of established limits, attributing them to operating costs, providing charitable assistance, etc.), i.e., the use of funds from these funds is associated with a decrease in the bank's property. Therefore, the funds of such funds or similar ones cannot remain in the bank and be used by it for other purposes, i.e., act as the bank’s capital.

Thus, the theory of banking distinguishes between the concepts of own funds and equity capital of the bank. The concept of “bank’s own funds” is the most general and includes all liabilities formed in the course of the bank’s activities: the bank’s authorized, reserve and other funds, all reserves created by the bank, as well as retained earnings of previous years and current year’s profit. The bank's equity capital is a value determined by calculation. It includes those items of own funds (and even borrowed funds) that, in economic terms, can perform the functions of the bank’s capital. The main elements of own funds, i.e. fundamental funds created in accordance with the law, and reserves formed at the expense of internal sources for the purpose of maintaining the bank’s activities are included in the bank’s capital if they meet the following principles:

• stability;
• subordination in relation to the rights of creditors;
• absence of fixed income accruals.

The bank's own capital should be understood as specially created funds and reserves intended to ensure its economic stability, absorb possible losses and are used by the bank throughout the entire period of its operation. The bank's capital includes authorized, reserve capital, other funds that do not have a useful life, founder's profit (issue result), retained earnings of the current year and previous years, left at the disposal of the bank and confirmed by auditors, reserves to cover various risks and performs a number of important functions in bank activities.

The functions performed by bank capital are ambiguously defined in both domestic and Western literature. There are three main functions: protective, operational and regulatory. Since a significant share of banks' assets is financed by depositors, the main function of the equity capital, which is very limited in amount, is to protect the interests of depositors. In addition, bank capital reduces the risk of bank shareholders. The protective function means the possibility of paying compensation to depositors in the event of liquidation of the bank, as well as maintaining solvency by creating a reserve for assets, allowing the bank to function despite the threat of losses. However, it is assumed that most of the losses are covered not by capital, but by the bank’s current income. Unlike most enterprises, maintaining the solvency of a commercial bank is ensured by only part of its own capital. As a rule, a bank is considered solvent as long as its share capital remains intact, i.e., as long as the value of its assets is not less than the amount of liabilities (less unsecured) issued by the bank and its share capital. Capital plays the role of a kind of protective “cushion” and allows the bank to continue operations in the event of large unexpected losses or expenses. To finance such costs, there are various reserve funds included in equity, and in the event of massive customer defaults on loans, it may be necessary to use part of the equity capital to cover losses.

The operational function of bank capital is of secondary importance compared to the protective one. It includes the allocation of own funds for the acquisition of land, buildings, equipment, as well as the creation financial reserve in case of unforeseen losses. This source financial resources indispensable at the initial stages of a bank’s activities, when the founders make a number of priority expenses. At subsequent stages of bank development, the role of equity capital is no less important; part of these funds is invested in long-term assets and in the creation of various reserves. Although the main source of covering the costs of expanding operations is accumulated profits, banks often resort to new issues of shares or long-term loans when carrying out structural events - opening branches, mergers.

The fulfillment of the regulatory function of capital is associated exclusively with the special interest of society in the successful functioning of banks. Using the bank capital indicator, government agencies assess and monitor the activities of banks. Typically, rules relating to a bank's own capital include minimum capital requirements, asset limits, and conditions for purchasing the assets of another bank. Economic standards set by the central bank are mainly based on the size of the bank's equity capital. Within the framework of the classification of functions under consideration, the regulatory function also includes the use of capital in order to limit loan and investment operations(to the extent that the bank's loans and investments are limited by its available equity capital).

The role of capital as a buffer against loan losses is clearly demonstrated when viewed in the context of cash flows. If bank customers stop fulfilling their loan obligations, the flow of funds for interest and principal payments immediately decreases. The outflow of funds does not change. The bank remains solvent as long as the amount of inflow exceeds the outflow. And here capital serves as a buffer, since it reduces forced outflows. The bank may defer dividends on shares without being able to pay. Payments of interest on bank debt, on the contrary, are mandatory. Well-capitalized banks issue new bonds or shares to replace lost cash inflows with new ones and buy time until asset problems are resolved. Thus, the greater the bank's capital, the more assets can fall into default before the bank becomes insolvent, and the lower the bank's risk.

Adequate bank capital reduces operational problems by providing easy access to financial markets. Capital gives the bank the ability to borrow from traditional sources through regular rates. Large equity capital ensures a stable reputation of the bank and confidence of depositors in it.

Capital constrains growth and reduces risk by limiting the new assets a bank can acquire through debt financing. This function is closely related to the installed government agencies capital ratio to assets. So, if banks decide to increase their loans or acquire other assets, they must support growth with additional equity financing.

This prevents speculative growth of assets, as banks must always remain within their ability to successfully manage assets.

The named functions of bank capital show that equity capital is the basis commercial activities jar. It ensures its independence and guarantees its financial stability, being a source of smoothing out the negative consequences of various risks that the bank bears.

Calculation of the bank's equity capital and its adequacy

Page 1 of 13Next ⇒

The methodology for calculating the size of a bank’s equity capital, approved by the regulator, is of great importance for the quantitative and qualitative assessment his activities. Considering that a significant part of economic standards and financial stability indicators is based on the bank’s capital indicator, the applied methodology for calculating this indicator plays a significant role in the system of banking supervision and control over the solvency and financial stability of commercial banks.

The rules and methods for calculating capital established for Russian banks are not unchanged; they are constantly being improved. In this case, the accumulated domestic experience is taken into account, but basically this improvement proceeds along the line of approaching the requirements of world standards.

Back in the 80s, international supervisory authorities over the reliability of the financial base of banks were faced with the task of determining a methodology for calculating a bank’s capital base. In July 1988, the leading countries of the world (Basel Committee) signed the “Agreement on the International Unification of Capital Calculation and Capital Standards for Banks.” It became the basic guideline for the central banks of many countries, including Russia.

In February 2003, the Bank of Russia developed and introduced the “Regulations on the methodology for determining the own funds (capital) of credit institutions.” (Regulation - 215-P of February 10, 2003), thereby taking another serious step, bringing the Russian methodology closer to the recommendations of the Basel Committee. This document, with some additions, is still valid today.

However, in parallel, within the framework of the transition to international standards Basel 3 operates on an observational basis and a new calculation methodology is Regulation 395P.

The methodology for calculating bank capital focuses on linking the quantitative and qualitative assessment of capital and allows us to identify the relationship between the most stable and volatile parts of capital.

The bank's capital is divided into 2 parts, 2 levels: main and additional.

According to the new Regulations, fixed capital is divided into 2 more levels: basic and additional.

In this case, the bank's fixed capital or Tier 1 capital is understood as a constant (unchangeable in value) part of the capital, which can be used to cover any losses. It includes: authorized capital joint stock bank, formed as a result of the release and placement ordinary shares and preferred non-cumulative shares; the bank's share premium, reserve fund formed in accordance with the requirements of legislative and regulatory documents, confirmed by auditors; profit of previous years and the current year, as well as funds formed from the profit of the current year, also if these data are confirmed by auditors.

In accordance with Bank of Russia Directive No. 2241, subordinated loans with additional conditions (terms over 30 years) began to be included in fixed capital.

Previously, before this Directive, subordinated loans for a period of over 5 years were included in Tier 2 capital, i.e. additional.

Tier 2 capital or additional capital is a less constant part of capital, i.e. capital, the value and value of which change depending, firstly, on changes in the value of the bank’s assets (reserves, revaluation of the value of fixed assets) and, secondly, on changes in market risks ( individual species debt instruments). It includes the increase in the value of property as a result of revaluation; part of the authorized capital formed by preferred shares with a fixed dividend; a reserve fund formed from the current year’s profit and from the profits of previous years until confirmed by the audit firm; retained earnings of the reporting year, not confirmed by an audit firm, and not included in fixed capital; subordinated loan (deposit, loan) on residual value for a period from 5 to 30 years.

The amount of additional capital is taken into account in calculating the total capital within the limits of the amount of fixed capital.

The calculated indicators of own funds (capital) are used to determine the values ​​of mandatory economic standards for limits on open currency positions and in other cases when the indicator of the bank's own funds is used.

Equity capital as the totality of all sources of fixed and additional capital listed on the bank’s balance sheet is gross equity capital of the bank (gross capital). However, in Russian banking practice, to calculate economic standards, limits on open currency positions, and in other cases when the bank’s own funds (capital) are used to determine the value of prudential banking standards, the indicator is used net equity capital (net capital) which represents the amount of own funds actually available to the bank and can be used as credit resources. Net equity is determined in stages.

The first stage is determining the amount of net fixed capital. And from the sum of all sources of fixed capital available to the bank, which, as already noted, constitute the first level of the bank’s gross equity capital, are excluded intangible assets minus accrued depreciation; own shares purchased by a commercial bank from shareholders; uncovered losses from previous years; current year loss; investments in shares (participation shares).

The second stage is determining the actual amount of additional capital (i.e., taking into account restrictions), which will be included in the calculation of the bank's net equity capital. The amount of sources of additional capital of the bank is compared with the resulting amount of net fixed capital. If this amount turns out to be less than or equal to the amount of net fixed capital, then all of it will be included in the calculation of additional capital. Otherwise, it must be reduced to an amount equal to the amount of net fixed capital, which was calculated at the first stage. If the resulting net fixed capital value is zero or negative, then sources of additional capital will not be included at all in calculating the bank’s equity capital.

Thus, the maximum ratio between the various parts of the bank’s equity capital is achieved: the sum of the elements of additional capital should not exceed 100% of the net fixed capital.

The third stage is calculating the amount of net equity capital. From the total amount of net fixed and additional capital obtained as a result of the two previous stages, subtract the amount of uncreated reserves for possible losses on loans of the 2-5th risk groups, for the depreciation of securities and other assets, overdue accounts receivable duration over 30 days, provided subordinated loans.

The bank's net equity capital must be positive. Its negative value indicates that a commercial bank actually has no free funds of its own, and exclusively borrowed funds are used to cover unforeseen expenses of the bank. As a result, there is a significant reduction financial stability commercial bank, which leads to serious complications and additional difficulties in the event of a crisis situation.

Capital adequacy reflects the overall assessment (mainly by regulators) of a bank's reliability.

This means that a bank will be considered reliable in terms of its capital if the parameters of the latter fit into the calculation standards developed empirically either by the banking community or by the body regulating banking activities.

World banking experience has developed a method based on the advisability of linking the amount of capital with the level of risks of active operations of banks.

In accordance with the Instruction of the Bank of Russia dated January 16, 2004 No. 110-I “On Mandatory Standards of Banks”, when calculating the regulatory capital adequacy of a bank, its assets are grouped depending on the degree of investment risk and possible loss part of their cost. Weighting of assets by risk is done by multiplying the funds in the relevant balance sheet account or part thereof by the risk factor. The assets of Russian banks are divided into five groups by risk level with weighting coefficients of 0-2, 10, 20, 50 and 100%.

Fundamentals of banking analytics. Lesson 4/1

Zero risk is assigned to funds in correspondent and deposit accounts with the Bank of Russia, mandatory reserves, transferred to the Bank of Russia, bank funds deposited for settlements by checks, funds for savings accounts when issuing shares, investing in Bank of Russia bonds, unencumbered obligations, and other means. On the contrary, most high degree risk (50-100%) the Bank of Russia has established for funds in accounts in banks - residents of the Russian Federation and in banks - non-residents of countries not included in the group developed countries, for securities for resale and other assets.

Capital adequacy ratio a commercial bank is defined as the ratio of the bank's own capital to the total volume of risk-weighted assets, and its minimum acceptable value is set depending on the size of the bank's own capital. The minimum acceptable value of the bank's own capital adequacy ratio (captain), as well as the minimum amount of capital of a newly created bank, changed with changes in the operating conditions of banks. Thus, until 1996 the standard was 4%, then it was increased to 5% and then, increasing annually, reached 8% by February 1999. Since January 1, 2000, the value of this standard was established for banks with a capital equivalent to 5 million euros and above at 10%, and for banks with a capital of less than 5 million euros - 11%. These figures correspond to the capital adequacy standard (8%) set by the banking community (Basel Committee on Banking Supervision).

12345678910Next ⇒

Bank's own funds- this is the amount by which the assets of a solvent bank exceed its liabilities or the totality of balances on passive accounts that do not have the nature of liabilities.

Depending on the source of education, own funds are divided into three groups:

1. authorized capital, which is created by the owners of the bank before its registration and can increase during the operation of the bank;

2. bank profit, both in undistributed condition and distributed to various bank funds (reserve, development fund, other funds);

3. funds for revaluation of balance sheet items, formed in connection with an increase in the value of the bank’s property as a result of its revaluation, for example, by revaluation of fixed assets, construction in progress.

Regulatory capital is determined on the basis of the bank's own funds. In terms of amount, it does not necessarily equal its own funds, since it may include sources raised for long term basis and equivalent to own (for example, subordinated loan), as well as exclude some of the used own sources.

The bank's own capital acts as the main part of the bank's own and equivalent funds. His essence express protective, resource-generating (accumulating), regulatory and operational functions.

The protective function of equity capital is due to the need to protect the interests of the bank's creditors and depositors from the risk of a possible loss of its solvency. It is implemented in the process of compensation for various losses and losses of attracted funds from clients on risky placements at the expense of funds and bank profits, which allows the bank to pay off its obligations in a timely manner. Protection of the interests of creditors at the expense of the bank’s own funds is also provided for during the liquidation of the latter. However, it should be noted that the bank pays its losses from its own funds only in the event of insolvency, when all methods of protection against risks are exhausted. Under normal operating conditions, most of the bank's losses are covered not by its own capital, but by its current income.

During normal operation of a bank, its own capital is a condition for attracting and increasing borrowed money. This implements the resource-forming (accumulating) function of equity capital. Equity capital is a factor ensuring the long-term viability of the bank, as it allows, through multiplied attraction of borrowed funds, to receive income from banking operations. Increasing the price of the bank's business (the price of the bank's assets), which, as a rule, is reflected in the increase in the market price of its shares, is its priority task.

The regulatory function is determined by the interest of society in the successful operation of banks. To implement it National Bank standards for safe operation have been introduced, ranging from the minimum size of the authorized capital and equity capital to relative indicators. Compliance with the requirements for regulatory indicators, as well as the rules and prohibitions accompanying the processes of forming the bank’s own capital, can ensure it financial security and security, protect the interests of creditors.

To support its activities, it must have a certain amount of funds and tangible assets, which constitute its resources. From the point of view of origin, these resources consist of the bank’s own capital and borrowed funds temporarily attracted by it from outside, borrowed from other persons. This implies, what are the resources of the bike represent a set of own, attracted and borrowed funds available to the bank and used by it to conduct active operations.

The bank can place its funds and conduct active operations that generate income only within the limits of its available resources. Banking resources are formed and replenished through passive operations, which play a primary and determining role in relation to active operations, logically and actually precede them and determine the volume and scale of profitable operations.

There are four forms of passive operations of commercial banks:

• primary issue of securities;
• deductions from bank profits for the formation or increase of funds;
• loans and borrowings received from other legal entities;

With the help of the first two forms of passive operations, the first large group of credit resources is created - own resources. The next two forms of passive operations create the second large group of resources - borrowed and attracted resources, i.e. obligations. Thus, the structure of banking resources can be presented as follows:

Own funds

The theory of world banking distinguishes between the concepts of equity and bank capital. The first concept is the most general; the second refers to specially created funds and reserves intended to ensure the economic stability of the bank. However, in Russian practice, the concepts of “own funds” and “capital” are identical.

Capital is the monetary expression of all real property, bank-owned. In accordance with the Federal Law “On the Central Bank Russian Federation» equity capital"is set as the amount of the authorized capital, funds of the credit organization and retained earnings».

The value of the bank's own funds is primarily in maintaining sustainability. At the initial stage of creating a bank, it is own funds that cover priority expenses (land, buildings, equipment, wage), without which the bank cannot begin its activities, the necessary reserves are created. Own resources They are also the main source of investment in long-term assets. Banks' own funds include:

• authorized capital;
• reserve fund;
• special fund;
• insurance reserves;
• Extra capital;
• profit undistributed during the year.

Authorized capital commercial bank is the monetary expression of the minimum required amount of property that the bank must possess as a legal entity and as an economic entity, i.e. this is the size of the property, only in the presence of which again bank being created can be generally registered as a legal entity and receive the first, simplest banking license and with which the bank is ultimately responsible to its creditors (i.e., if the bank has no other means left to fulfill its obligations, to pay its debts).

Grouping of operating credit institutions by size of registered authorized capital over three years last year characterized by the following data (Table 1).

Table 1. Authorized capital of credit institutions

The bank's authorized capital - the basis of its resources - consists of contributions from legal entities and individuals - participants (shareholders or shareholders) of the bank. The bank's authorized capital (both directly and as part of its own capital) performs a number of very important functions:

• at the initial stage of the bank’s work, it acts as the starting funds necessary for priority expenses;
• During a period of growth, the bank needs additional capital to create new capacities, and for this purpose banks often resort, in particular, to attracting new participants - shareholders or shareholders, i.e. to increase its authorized capital;
• capital is a regulator of the bank’s activities, including a limiter on the unreasonably rapid growth of its operations and corresponding risks. Supervisory authorities, by putting forward certain requirements for banks in terms of capital, thereby set standards of economic behavior designed to protect banks from financial instability and excessive risks;
• the presence of solid capital creates and strengthens customer confidence in the bank. However, this function cannot be perceived straightforwardly;
• capital plays the role of a shock absorber, absorbing damage from current losses, which allows the bank to continue operations even in the event of relatively large unexpected losses or emergency expenses. Although the bank must have reserve funds to finance such costs, under unfavorable circumstances (for example, massive non-payments by customers), losses may increase so much that part of the authorized capital must be used to pay off losses. It is this that serves as a kind of last buffer, absorbing current losses until the bank’s management resolves the urgent problems.

Reserve fund a commercial bank is intended to compensate for losses on active operations and, in the event of insufficient profits, serves as a source of payment of interest on bank bonds and dividends on preferred shares. A reserve fund is formed at the expense of annual contributions from profit. The minimum size of the fund from the level of the authorized capital is established Central Bank RF. At the same time, a commercial bank independently determines the level of the maximum size of the reserve fund, which is fixed in the bank’s charter. This amount can range from 25 to 100% of the authorized capital. When the established level is reached, the formed reserve fund is transferred to the authorized capital (capitalized), and its accrual begins anew.

Along with the reserve fund, a commercial bank creates other funds(for the industrial and social development of the bank itself): special purpose fund, accumulation fund, etc. These funds are similar to reserve funds, as a rule, they are formed from the bank’s profits. The procedure for the formation of funds and their use are determined by the credit organization in the regulations on funds, as well as regulatory documents Central Bank RF.

Extra capital The jar includes the following three components:

• increase in property value during revaluation. The revaluation procedure is determined by separate regulatory documents of the Central Bank of the Russian Federation published on this issue;
• share premium (only for shareholders of credit institutions), which is income received during the period of issue when shares are sold at a price exceeding the par value of the shares, as the difference between the cost (price) of the placement and their par value;
• property received free of charge from organizations and individuals.

Insurance reserves are a special component of the bank's capital. Insurance reserves are formed when specific active operations are performed. These primarily include reserves created for possible losses on loans and for the accounting of bills of exchange, reserves for possible depreciation of securities acquired by the bank, as well as a reserve for possible losses on other assets and settlements with debtors. The purpose of these reserves is to neutralize the negative consequences of the actual decline market value various assets. Reserves are formed at the expense of bank profits in a mandatory manner prescribed by the Central Bank of the Russian Federation.

retained earnings also applies to the bank’s own funds, since in the conditions market economy The operating principles of commercial banks require independent management of the profit remaining after paying taxes, dividends and contributions to reserve capital.

Total bank capital adjusted by the amount resulting from the revaluation of funds in foreign currency, securities traded on the organized securities market (OSM), precious metals, as well as the amount of accumulated coupon income received (paid).

By controlling the activities of commercial banks, the Central Bank of the Russian Federation establishes capital adequacy standards for commercial banks. This indicator is determined by the permissible size of the bank's authorized capital and the maximum ratio of its total capital and the amount of assets, taking into account the risk assessment.

Along with the absolute value of the size of bank capital (as well as authorized capital), the Central Bank of the Russian Federation introduces relative standards, in accordance with which a relationship is established between the size of equity capital and volumes various types banking operations. These ratios are also defined in Instruction of the Central Bank of the Russian Federation No. 1.

The bank's own funds serve as a source for the development of its material base; they are used to purchase buildings, necessary machinery, equipment, computer equipment, etc.

In the structure of the bank's liabilities, the share of equity capital is insignificant. However, it must be sufficient to fulfill the obligations assumed by the bank, protect the interests of depositors and other creditors, and prevent bank bankruptcy.

Bank's own capital and its structure

The bank's own capital is a combination of fully paid elements of various purposes that ensure economic independence, stability and sustainable operation of the bank. A prerequisite for inclusion of certain funds in the equity capital is their ability to fulfill the role insurance fund to cover unexpected losses that arise in the course of the bank's activities, thereby allowing the bank to continue current operations if they occur. However, not all elements of equity capital have such protective properties to the same extent. Many of them have their own unique characteristics that affect the ability of the element to recover extraordinary unforeseen expenses. This circumstance necessitated the allocation of two levels in the structure of the bank’s equity capital:

• fixed (basic) capital, representing first-tier capital
• additional capital, or second-tier capital.

IN composition of fixed capital, refer to funds that are of the most permanent nature, which a commercial bank can, under any circumstances, freely use to cover unexpected losses. These elements are reflected in the reports published by the bank, form the basis on which many assessments of the quality of the bank's work are based, and, finally, affect its profitability and degree of competitiveness.

IN composition of additional capital with certain restrictions, include funds that are less permanent in nature and can only under certain circumstances be directed to the above purposes. The cost of such funds may change over time.

The sources of the bank's fixed capital include:

• the authorized capital of the bank in the organizational and legal form of a joint stock company, formed as a result of the issue and placement of ordinary shares, as well as preferred shares that are not classified as cumulative;
• the authorized capital of the bank in the organizational and legal form of a limited liability company, formed by payment of shares by the founders;
• share premium of banks;
• bank funds (reserve and other funds) formed from the profits of previous years. remaining at the disposal of banks and confirmed by an audit organization;
• profit of the current year and previous years in the part confirmed by the auditor’s report.

Sources of additional capital are:

• increase in property value due to revaluation;
• funds formed from deductions from the profits of the current and previous year before confirmation by the audit organization;
• current year profit not confirmed by an audit organization;
• profit previous years before the audit confirmation, before July 1 of the year following the reporting year (in the absence of such confirmation, profit after this date is not included in the calculation of equity capital);
• subordinated loan;
• part of the authorized capital formed by capitalizing the increase in property value during revaluation.

Functions of bank equity

The bank's own capital is a special form of banking resources. It, unlike other sources, is of a permanent, irrevocable nature and has a clearly defined legal basis and functional certainty is a prerequisite for the formation and functioning of any commercial bank, i.e. serves as the core on which all activities of a commercial bank rest from the first day of its existence.

Despite the insignificant share in the resources of a commercial bank, its own capital performs a number of vital functions:

• protective;
• operational;
• regulating

Protective function

This is the main main function own capital of a commercial bank. It is actually its general property. Due to its permanent nature, equity capital acts as the “main means of protecting” the interests of depositors and creditors, from whose funds a significant share of the bank’s assets is financed. This is a kind of “safety belt” that allows them to receive compensation for losses in the event of bank liquidation. In banking practice, equity capital is considered as the amount within which the bank guarantees liability for its obligations.

At the same time, equity capital serves to protect the bank itself from bankruptcy. Having an irrevocable nature, it allows the bank to carry out operations despite the occurrence of large unforeseen losses, compensating for current losses until the bank management resolves the problems that have arisen. It is no coincidence that in economic literature it is compared to a “shock absorber”, called “a kind of pillow”, “money for a rainy day” and, finally, the “ultimate line of defense”.

Operational function

Throughout the entire period of operation of the bank, its own capital is the main source of formation and development of the bank’s material base, providing conditions for its organizational growth. So, in order for a new bank to start operating, it needs funds to carry out such priority expenses as purchasing or renting premises, purchasing the necessary machinery, equipment, etc. The equity capital formed at the stage of creating a commercial bank acts as starting funds for reimbursement of such costs.

During a period of growth, any operating bank is interested in both establishing long-term relationships with its clientele and in attracting new solvent clients. This forces the bank to work towards expanding the range banking services, improving their quality, increasing the number of developments, introducing advanced banking technologies, new software products, equipment upgrades, as well as carry out structural measures (in particular, create a branch network both within the region and beyond). The financial base of the bank, as well as a means of protecting it from the risk associated with organizational growth and deployment of operations, is its own capital.

Regulatory function

This function is connected, on the one hand, with the special interest of society in the normal functioning of commercial banks and maintaining the stability of the entire banking system, and on the other hand, with the norms of economic behavior that make it possible to control the activities of the bank. It, as well as the previous ones, embodies the protective property of the bank’s own capital. The latter is designed to protect a commercial bank from financial instability and excessive risks, acting as a regulator of its activities, namely, to support the uniform, orderly growth of banking assets and regulate the volume of almost all passive operations.

The listed functions of equity capital help reduce the risks of banking activities.

Characteristics of individual elements (sources) of equity capital

Initially, at the stage of creating a commercial bank, the only source of its own capital is the authorized capital. The remaining sources are generated directly in the process of the bank's activities. As they are created, the authorized capital becomes part of the bank's equity capital, but continues to remain its main element. The authorized capital, forming the core of equity capital, plays significant role in the activities of a commercial bank. It is he who determines the minimum amount of property that guarantees the interests of the bank’s depositors and creditors and serves as security for its obligations. It is this that allows a commercial bank to continue operations in the event of large unforeseen expenses and is used to cover them if the reserve funds available to the bank to finance such expenses are insufficient. Banking analysts proceed from the fact that the bank, unlike others commercial enterprises retains its solvency as long as its authorized capital remains intact.

Share premium for a credit organization in the organizational and legal form of a joint stock company, this is the positive difference between the price of shares when they were sold by the first owner and the par value of the shares. This income is included in the calculation of fixed capital after the Bank of Russia registers a report on the results of the issue.

The share premium of a credit organization in the legal form of a limited liability company is the positive difference between the value of the shares when they are paid by participants when increasing the authorized capital and the nominal value of the shares at which they are included in the authorized capital. This income is included in the calculation of fixed capital after registration in the prescribed manner of changes in the amount of authorized capital.

Credit organization funds(reserve and other funds) formed in accordance with the requirements of federal laws and regulations of the Bank of Russia in the manner established by the constituent documents of the credit institution, are included in the calculation of fixed capital based on annual data balance sheet, confirmed by an audit organization.

Funds that are a source of credits (loans) to employees of a credit organization, funds for material incentives and economic incentives, as well as other funds, as a result of the use of which the value of the credit organization’s property decreases, are not included in the calculation of own funds (capital).

Profit of previous years and current year included in fixed capital based on data confirmed by an audit organization.

A number of items act as sources of additional capital. Let us characterize some of them.

Increase in property value due to the revaluation of fixed assets, it is included in the calculation of additional capital no more than once every three years based on the data of the latest annual balance sheet confirmed by an audit organization.

A hybrid instrument such as subordinated loan. It is provided to a commercial bank for a period of at least five years and can be claimed by the creditor only upon expiration of the agreement, and in the event of liquidation of the bank - after full satisfaction of the claims of other creditors.

However, despite the fact that the subordinated loan is not subject to repayment at the initiative of its owner, it continues to remain a fixed-term debt obligation with a fixed repayment period and, as a rule, cannot be fully used to cover the bank’s losses, which was the basis for the introduction additional restrictions by its size. In particular, a subordinated loan used as an element of additional capital cannot exceed 50% of the value of the fixed capital.

Calculation of the bank's equity capital and its adequacy

Equity capital as the totality of all sources of fixed and additional capital listed on the bank’s balance sheet is gross equity capital of the bank (gross capital). However, in Russian banking practice, to calculate economic standards, limits on open currency positions, and in other cases when the bank’s own funds (capital) are used to determine the value of prudential banking standards, the indicator is used net equity capital (net capital) which represents the amount of own funds actually available to the bank and can be used as credit resources. Net equity is determined in stages.

The first stage is determining the amount of net fixed capital. And from the sum of all sources of fixed capital available to the bank, which, as already noted, constitute the first level of the bank’s gross equity capital, intangible assets minus accrued depreciation are excluded; own shares purchased by a commercial bank from shareholders; uncovered losses from previous years; current year loss; investments in shares (participation shares).

The second stage is to determine the actual amount of additional capital (i.e., taking into account restrictions), which will be included in the calculation of the bank's net equity capital. The amount of sources of additional capital of the bank is compared with the resulting amount of net fixed capital. If this amount turns out to be less than or equal to the amount of net fixed capital, then all of it will be included in the calculation of additional capital. Otherwise, it must be reduced to an amount equal to the amount of net fixed capital, which was calculated at the first stage. If the resulting net fixed capital value is zero or negative, then sources of additional capital will not be included at all in calculating the bank’s equity capital.

Thus, the maximum ratio between the various parts of the bank’s equity capital is achieved: the sum of the elements of additional capital should not exceed 100% of the net fixed capital.

The third stage is calculating the amount of net equity capital. From the total amount of net fixed and additional capital obtained as a result of the two previous stages, the amount of uncreated reserves for possible losses on loans of the 2-5th risk groups, for depreciation of securities and other assets, overdue receivables lasting more than 30 days, provided subordinated loans.

The bank's net equity capital must be positive. Its negative value indicates that a commercial bank actually has no free funds of its own, and exclusively borrowed funds are used to cover unforeseen expenses of the bank. As a result, the financial stability of a commercial bank is significantly reduced, which leads to serious complications and additional difficulties in the event of a crisis situation.

Capital adequacy reflects the overall assessment (mainly by regulators) of a bank's reliability.

This means that a bank will be considered reliable in terms of its capital if the parameters of the latter fit into the calculation standards developed empirically either by the banking community or by the body regulating banking activities.

World banking experience has developed a method based on the advisability of linking the amount of capital with the level of risks of active operations of banks.

In accordance with the Instruction of the Bank of Russia dated January 16, 2004 No. 110-I “On Mandatory Standards of Banks,” when calculating the regulatory capital adequacy of a bank, its assets are grouped depending on the degree of investment risk and the possible loss of part of their value. Weighting of assets by risk is done by multiplying the funds in the relevant balance sheet account or part thereof by the risk factor. The assets of Russian banks are divided into five groups by risk level with weighting coefficients of 0-2, 10, 20, 50 and 100%. Zero risk is assigned to funds in correspondent and deposit accounts with the Bank of Russia, mandatory reserves transferred to the Bank of Russia, bank funds deposited with checks for settlements, funds in savings accounts for the issue of shares, investments in Bank of Russia bonds, unencumbered obligations, and other funds. On the contrary, the Bank of Russia has established the highest degree of risk (50-100%) for funds in accounts in banks - residents of the Russian Federation and in banks - non-residents of countries not included in the group of developed countries, for securities for resale and other assets.

Capital adequacy ratio a commercial bank is defined as the ratio of the bank's own capital to the total volume of risk-weighted assets, and its minimum acceptable value is set depending on the size of the bank's own capital. The minimum acceptable value of the bank's own capital adequacy ratio (captain), as well as the minimum amount of capital of a newly created bank, changed with changes in the operating conditions of banks. Thus, until 1996 the standard was 4%, then it was increased to 5% and then, increasing annually, reached 8% by February 1999. From January 1, 2000, the value of this standard was established for banks with a capital equivalent to 5 million euros and above at 10%, and for banks with a capital of less than 5 million euros - 11%. These figures correspond to the capital adequacy standard (8%) set by the banking community (Basel Committee on Banking Supervision).

As throughout the world, in Russia banking sector generates its profit from borrowed funds, the share of which is about 85-90% of all resources. The share of own funds rarely exceeds 12-15% of all liabilities of the organization and consists of:

• authorized capital;
• various banking funds;
• received in this year, but retained earnings.

The profit received usually accounts for about half of the credit institution's total equity. The percentage constantly changes throughout the year depending on the market situation.

Authorized capital

When registering any legal entity, an authorized capital is required. These are those funds and non-financial liabilities, the amount of which is specified in constituent documents. They are needed to cover possible risks of creditors who will work with the newly created organization. The higher the amount, the more attractive the organization is to investors. We can say that this is the minimum balance on the balance sheet, which can cover the losses of creditors in the event of bankruptcy.

The law establishes that in order to register a bank, the authorized capital must be at least 180 million rubles. For getting general license The Central Bank will need to increase this amount to 900 million rubles. If a non-banking company is registered credit organisation, then 90 million rubles is enough. Charter capital The bank is initially formed from contributions from the founders and the property that they transfer into the ownership of the organization. At the same time, intangible assets and credit funds cannot be entered there.

Reserve fund

The second part of the bank's own funds is the reserve fund. Its presence is also mandatory, and its size cannot be less than 15% of the authorized capital. The formation of the reserve fund is carried out from the profit received during the year in the amounts approved for general meeting shareholders. The purpose of this money is to cover possible losses in the event of a decrease in profits and other unforeseen circumstances. In addition, they can be spent on increasing the authorized capital. At the same time, in reserve fund There must be at least 15% of the new amount of this capital remaining.

Other banking funds

The existence of other funds in the bank is not necessary, but is desirable for successful and safe operations. For example, an economic incentive fund allows you not to reduce profits during negative market conditions. There are funds designed to smooth out inflation and exchange rate differences currency pairs. These include funds for the revaluation of both fixed and currency funds. Their volume is constantly changing and can reach larger sizes if necessary. The increase is especially important during the period economic crises to mitigate their negative consequences.

retained earnings

In the process of commercial activity, part of the bank’s profit is paid in the form of dividends to shareholders, salaries to employees, and is spent on paying mandatory payments and taxes. The other part remains on the balance sheet for reinvestment in its activities and business development. That's what she is retained earnings, which also relates to the bank’s own funds. Its size is determined by the meeting of shareholders.

Although the bank's borrowed funds are the basis of the organization's profit, equity capital guarantees stable operations, and its size is the most important criterion for the reliability of a credit organization.