Banks Capital Requirement Softened
OREANDA-NEWS. October 13, 2009. According to the NBU Resolution #541, commercial banks will be allowed to include 100% of the subordinated loans in their tier two capital calculations. Additionally, the calculation of an instant liquidity standard will be extended by the difference between banks' funds in the corresponding accounts with other banks and term funds in other banks. The resolution will come into effect on 4 January 2010 and will be valid through 1 January 2012. Note should be made that previously banks were allowed to account not more than 50% of the subordinated loans in their tier two capital.
Millennium Capital sees this news as a positive factor for the commercial banks, since it will enlarge the level of their regulative capital, if it had been funded with subordinated loans, with no additional share issue. Namely, such banks as Raiffeisen Bank Aval < BAVL UZ U/R >, Ukrsotsbank < USCB UZ U/R >, Forum < FORM UZ U/R > and Megabank < MEGA UZ U/R >, which have taken out subordinated loans, will favor from the innovation.
Millennium Capital is an integrated financial services provider. Established in 2000 by a group of professionals with solid background in securities and corporate finance, Millennium Capital is now one of tickets selling for its flights due to high arrearage to the creditors of the company.
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