10 Capital adequacy requirements (Pillar I)

The adequacy of capital resources is monitored by the LLB Group and the individual operative units. The monitoring activity is based on the capital requirement regulations of the Principality of Liechtenstein, which in turn are based on the directives of the Basel Committee on Banking Supervision as adapted by the European Union.

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 chapter Scope of consolidation of the annual report.

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

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Capital adequacy requirements (Pillar I)

in CHF thousands

31.12.2014

31.12.2013

Tier 1 ratio (in percent)

18.3

18.8

 

 

 

Eligible capital

 

 

Share capital

154'000

154'000

Share premium

25'785

26'298

Retained earnings

1'672'539

1'649'358

Other reserves

−31'665

1'083

Non-controlling interests

102'346

104'278

Less distribution of profit

−43'233

−43'279

Non-realised gains after tax

−24'054

−17'749

Core capital (before adjustment)

1'855'718

1'873'989

Net long position in own shares

−168'584

−167'816

Other elements to be deducted from core capital

−153'724

−167'401

Eligible core capital (adjusted core capital)

1'533'410

1'538'772

Total eligible capital

1'533'410

1'538'772

 

 

 

Risk-weighted assets

 

 

Credit risks balance sheet transactions

7'328'688

6'943'825

Credit risks off-balance sheet transactions

103'813

143'338

Market risks

239'775

314'038

Operational Risks

715'850

768'338

Total risk-weighted assets

8'388'126

8'169'539

 

 

 

Required capital

 

 

Credit risk

582'739

553'158

of which price risk related to shares in the banking book

32'419

42'387

Non-counterparty related risks

11'861

13'815

Market risk

19'182

25'123

of which interest instruments

0

0

of which equities

0

0

of which forex and precious metal

13'793

9'992

of which commodities

5'389

15'131

of which settlement and delivery risks

0

0

Operational risks

57'268

61'467

Total required capital

671'050

653'563

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Segmentation of credit risks

 

Regulatory risk weighted

in CHF thousands

0 %

10 %

20 %

35 %

50 %

75 %

100 %

150 %

Total

31.12.2014

 

 

 

 

 

 

 

 

 

Central governments and banks

1'497'346

0

29'237

0

0

0

0

0

1'526'583

Public authorities

36'244

0

60'813

0

0

0

13'935

0

110'992

Administrative bodies

6'324

0

27'009

0

21'756

0

1'073

0

56'162

International organizations

28'287

0

0

0

0

0

0

0

28'287

Banks and securities firms

0

0

5'129'016

0

938'326

0

1

0

6'067'343

Companies

0

0

133'274

0

39'484

0

550'495

225

723'478

Retail

74

0

3'542

0

0

190'750

1'038'882

0

1'233'248

Secured by pledge

3'189

0

0

7'124'249

604'478

0

1'721'296

0

9'453'212

Overdue positions

0

0

0

0

0

4'951

27'189

6'065

38'205

Shares

1'078'042

0

0

0

0

0

292'159

75'381

1'445'582

Covered debentures

0

121'595

0

0

0

0

0

0

121'595

Unites in equity funds and others

0

0

0

0

0

0

43'172

0

43'172

Total

2'649'506

121'595

5'382'891

7'124'249

1'604'044

195'701

3'688'202

81'671

20'847'859

Total previous year

3'429'888

436'486

5'238'595

6'671'408

1'541'641

185'501

3'076'281

361'750

20'941'550

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Mitigation of credit risk

 

31.12.2014

31.12.2013

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

6'669

0

6'669

0

1'900

0

1'900

Off-balance sheet positions

0

50

0

50

0

0

0

0

Derivatives

0

0

0

0

0

0

0

0

Total

0

6'719

0

6'719

0

1'900

0

1'900

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