9 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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Segmentation of credit risks

 

Regulatory risk weighted

in CHF thousands

0 %

10 %

20 %

35 %

50 %

75 %

100 %

150 %

Total

31.12.2015

 

 

 

 

 

 

 

 

 

Central governments and central banks

2'692'664

0

33'690

0

0

0

0

0

2'726'354

Regional governments

0

0

92'005

0

3'108

0

0

0

95'113

Public sector entities

0

0

60'037

0

 

0

0

0

60'037

International organizations

77'254

0

0

0

129

0

0

0

77'383

Banks and securities firms

0

0

4'289'857

0

402'919

0

0

0

4'692'776

Corporates

0

0

89'233

0

48'055

0

1'103'318

274

1'240'880

Retail

0

0

0

0

0

235'000

409'824

0

644'825

Secured by real estate

0

0

1'849

7'298'124

1'557'895

0

627'782

0

9'485'650

In default

0

0

0

0

0

1'709

111'361

84'255

197'325

Equity

0

0

0

0

0

0

361'416

0

361'416

Covered bonds

0

95'501

0

0

0

0

0

0

95'501

Collective investments and others

61'281

0

27'505

0

0

1

208'243

0

297'030

Total

2'831'199

95'501

4'594'176

7'298'124

2'012'106

236'711

2'821'944

84'528

19'974'289

Total previous year

2'649'506

121'595

5'382'891

7'124'249

1'604'044

195'701

3'688'202

81'671

20'847'859

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Mitigation of credit risk

 

31.12.2015

31.12.2014

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

6'408

0

6'408

0

6'669

0

6'669

Off-balance sheet positions

0

50

0

50

0

50

0

50

Derivatives

0

0

0

0

0

0

0

0

Total

0

6'458

0

6'458

0

6'719

0

6'719