To view the PDF file, sign up for a MySharenet subscription.

FIRSTRAND BANK LIMITED - Pillar 3 quarterly disclosures as at 30 September 2017

Release Date: 28/11/2017 10:33
Wrap Text
Pillar 3 quarterly disclosures as at 30 September 2017

FirstRand Limited
(Incorporated in the Republic of South Africa)
(Registration number 1966/010753/06)
JSE ordinary share code: FSR
Ordinary share ISIN: ZAE000066304
JSE B preference share code: FSRP
B preference share ISIN: ZAE000060141
NSX ordinary share code: FST
(FSR or the group)

FirstRand Bank Limited
(Incorporated in the Republic of South Africa)
(Registration number 1929/001225/06)
JSE company code interest rate issuer: FRII
JSE company code debt issuer: FRD
JSE company code ETF issuer: FRLE
(FRB or the bank)

PILLAR 3 QUARTERLY DISCLOSURES AS AT 30 SEPTEMBER 2017

In accordance with Pillar 3 of the Basel Accord, Regulation 43(1)(e)
of the Regulations relating to Banks requires the group to disclose
quarterly information on its capital adequacy, leverage and
liquidity ratios. The figures below have not been reviewed or
reported on by the group’s external auditors.

CAPITAL ADEQUACY
The capital positions (excluding unappropriated profits) for the
group and bank for the quarter ended 30 September 2017 are set out
below.

R million                                        FSR            FRB
Common Equity Tier 1 capital
 Ordinary share capital and premium          8   016         16 808
 Qualifying reserves                        96   703         63 414
 Non-controlling interests                   1   136              -
 Regulatory deductions                    (4    076)        (1 096)
Total Common Equity Tier 1 capital        101    779         79 126

Total Additional Tier 1 capital                4 343          1 500

Total Tier 1 capital                         106 122         80 626

Tier 2 capital
 Tier 2 instruments                         20   134         20 133
 Other qualifying reserves                   1   338            573
 Regulatory deductions                     (4   234)           (78)
Total Tier 2 capital                        17   238         20 628

Total qualifying capital and reserves        123 360        101 254

Total minimum capital requirement per risk type:
Credit                                        55 921         46 901
Counterparty credit                            1 556          1 484
Operational                                   12 630         10 007
Market                                         2 389          2 069
Equity investment                              2 805            779
Other assets                                   3 274          2 526
Threshold items                                1 655            547
Total minimum capital requirement             80 230         64 313


Common Equity Tier 1 capital ratio             13.6%          13.2%
Tier 1 capital ratio                           14.2%          13.5%
Total capital ratio                            16.5%          16.9%

Notes:
- FRB includes foreign branches and subsidiaries.
- Excludes unappropriated profits.
- The disclosed minimum capital requirement excludes the bank-
   specific individual capital requirement and add-on for domestic
   systemically important banks, and is reported at 10.75%.
- There is currently no requirement for the countercyclical buffer
   add-on in South Africa. The current countercyclical buffer
   requirement from other jurisdictions that the group operates in
   is immaterial.
- Threshold items relates to investments in financial, banking and
   insurance entities, and deferred tax relating to temporary
   differences.

LEVERAGE
The leverage ratios for the group and bank for the quarter ended 30
September 2017 and preceding three quarters are set out below.

FSR

                                      Tier 1        Total   Leverage
R million                            capital     exposure   ratio(%)
September 2017                       106 122    1 334 733       8.0%
June 2017                             96 788    1 280 249       7.6%
March 2017                            96 559    1 277 723       7.6%
December 2016                         90 034    1 252 265       7.2%


FRB
                                      Tier 1        Total   Leverage
R million                            capital     exposure   ratio(%)
September 2017                        80 626    1 201 651       6.7%
June 2017                             74 065    1 149 027       6.4%
March 2017                            74 376    1 142 819       6.5%
December 2016                         70 097    1 123 943       6.2%


Notes:
- FRB includes foreign branches and subsidiaries.
- Actual closing balances used at each reporting period.
- Ratios exclude unappropriated profits.
- The increase in the leverage ratio from the previous quarter
  relates to the appropriation of profits in FSR and FRB, increasing
  Tier 1 capital. The total exposures increase mainly relate to on-
  balance sheet exposures relating to loans, short term securities,
  and investment and trading securities.

LIQUIDITY
The liquidity coverage ratio (LCR) is the first minimum standard for
funding and liquidity under the Basel III regime. The objective of
the LCR is to promote short-term resilience of a bank’s liquidity
risk profile by ensuring that the bank has sufficient unencumbered
high quality liquid assets (HQLA) to survive the net cash outflows
expected during a significant stress scenario for 30 calendar days.
Regulation 26(12)(a)(vi) requires banks to continuously meet their
liquidity needs by calculating the LCR from 1 January 2015 on both
a solo and consolidated basis. Regulation 43(e), read with the
relevant directives, specify quarterly disclosure of the LCR. LCR
compliance is on a phased-in basis, beginning with a 60% minimum
requirement from 1 January 2015 with 10% incremental increases each
year to 100% on 1 January 2019. The requirement effective from 1
January 2017 is 80%.

The average LCR for the group and bank for the quarter ended 30
September 2017 are set out below.
                                  FSR       FRB
HQLA(R billion)                   168       155
Net cash outflows (R billion)     183       154
Required LCR                      80%       80%
Actual LCR                        92%      101%

The group seeks to exceed the minimum LCR requirement in a
sustainable manner and to hold a sufficient buffer to allow for
volatility as determined by the group’s own internal liquidity risk
appetite.

FRB has applied for the committed liquidity facility (CLF) from the
SARB for the calendar year 2017 as provided for under guidance note
5 of 2015 and 6 of 2016. The CLF was recognised as qualifying
collateral for LCR purposes within the bank’s HQLA and subject to
prescribed haircuts as required by the SARB. The group manages the
HQLA portfolio of level 1 and level 2 assets.

Notes:
- FRB excludes foreign branches.
- The consolidated LCR for the group (FSR) includes FRB’s South
  African operations and foreign branches, as well as all registered
  banks within the group.
- The surplus HQLA holdings by subsidiaries and foreign branches in
  excess of the minimum required LCR of 80% have been excluded in
  the calculation of the consolidated group LCR.
- The LCR is calculated on a simple average of 92 days of daily
  observations over the previous quarter ended 30 September 2017
  for FirstRand Bank’s South African operations and London Branch,
  FNB Namibia and FNB Botswana. The remaining banking entities are
  based on month-end values.

This announcement is also available on the group’s website:
https://www.firstrand.co.za/


Sandton
28 November 2017

Sponsor
RAND MERCHANT BANK (a division of FirstRand Bank Limited)

Date: 28/11/2017 10:33:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Share This Story