Registered in the Ministry of Justice of the Kyrgyz Republic  

August 23, 2004. Registration Number 94-04. 

   

Approved by Resolution No.18/2 of the National Bank of the Kyrgyz Republic Board dated July 21, 2004

INSTRUCTION  

On the Determination of Capital Sufficiency (Adequacy) Standards of Commercial Banks of the Kyrgyz Republic 

(As amended by the Resolutions of the National Bank of the KR Board No.26/3 dated October 23, 2004, No.26/2 dated June 10, 2009, No.35/4 dated August 26, 2009, No.18/9 dated April 25, 2012, No.43/1 dated November 16, 2012, No.48/10 dated December 12, 2012, No.22/7 dated April 15, 2015, No.78/23 dated December 23, 2015, No.19/6 dated April 27, 2016, No.25/1 dated June 15, 2016, No.48/11 dated December 14, 2016, No.17/13 dated April 26, 2017, No.2017-П-12/25-5 dated June 15, 2017, No.2018-П-12/33-6 dated August 15, 2018, No.2018-П-12/58-10 dated December 26, 2018, No.2019-П-12/11-1 dated March 14, 2019, No.2019-П-12/19-3 dated April 10, 2019, No.2019-П-12/20-2 dated April 15, 2019, No.2019-П-12/34-3 dated June 28, 2019, No.2019-П-12/68-2 dated December 27, 2019, No.2020-П-12/73-10 dated December 23, 2020, No.2021-П-12/51-1-(RLA) dated September 15, 2021, No.2021-П-12/70-3-(RLA) dated December 15, 2021, No.2022-П-12/17-4-(RLA) dated March 23, 2022, No.2022-П-12/17-6-(RLA) dated March 23, 2022)  

1. General Provisions 

1.1. This Instruction establishes Capital Sufficiency (Adequacy) Standards of commercial banks and determines its structure. 

This Instruction applies to commercial banks, including those with an “Islamic Window”, the State Development Bank, as well as to “Financial Company of Credit Unions” OJSC in terms of determining the capital structure, the procedure for calculating the minimum amount of own (regulatory) capital and capital sufficiency (adequacy) ratios, as well as the assessment of balance sheet assets and off-balance sheet liabilities according to the degree of risk (hereinafter referred to as banks). 

(As amended by Resolution No.2017-П-12/25-5 of the National Bank of the KR Board dated June 15, 2017)  

1.2. The capital of the bank is the guarantee of profitable and sustainable growth, the guarantor of customer confidence in the bank and serves to cover the potential losses inherent in banking. 

1.3. For banking supervisors, capital is a means of protection against the consequences of excessive risk situations and financial insolvency of the bank. For this reason, banking supervisors are interested in banks to have adequate capital to cover possible losses and damages without the threat of insolvency. 

1.4. The term “Capital Sufficiency (Adequacy)” reflects the overall assessment of the bank’s reliability, the degree of its exposure to risk. The interpretation of capital as a means of protection against losses and insolvency causes a direct relationship between the amount of capital and the bank’s exposure to risk, i.e. the amount of capital should be adequate to the increasing volume of banking transactions, associated with a high degree of risk. 

2. Capital Sufficiency (Adequacy) Standards  

2.1. Minimum amount of capital:  

2.1.1. The minimum amount of the authorized capital of banks (including branches of foreign banks). 

(As amended by Resolution No.26/2 of the National Bank of the KR Board dated June 10, 2009)  

2.1.2. Shareholders’ (regulatory) capital is Tier 1 Capital.   

(As amended by the Resolutions of the National Bank of the KR Board No.2019-П-12/34-3 dated June 28, 2019, No.2021-П-12/51-1-(RLA) dated September 15, 2021)  

2.2 Capital sufficiency (adequacy) ratios based on the weighting of balance sheet assets and off-balance sheet liabilities according to the degree of risk: 

a) The sufficiency (adequacy) ratio of the total capital (K2.1) is determined by the formula: 

K2.1 = (ЧСК / (ЧРА + П * Кор))*100%, where: 

 

ЧСК (NTC) is Net Total Capital, which is defined as the sum of Tier 1 Capital and Tier 2 Capital. 

ЧРА is the sum of balance sheet assets and off-balance sheet liabilities, weighted by the degree of risk minus special loan loss provision.  

П - the established indicator (the reciprocal of the total capital adequacy ratio) for commercial banks - 8.33 (100%:12%), for systemically important banks - 7.14 (100%:14%);  

Кор is the amount of capital reserved to cover operational risks. Calculation of the capital reserved to cover operational risks using the Basic Indicative Method is carried out in accordance with the Procedure for determining the level of capital required to cover the operational risks of banks, approved by the Resolution of the National Bank of the Kyrgyz Republic Board. 

b) The Tier I Capital sufficiency (adequacy) ratio (K2.2) is determined by the formula: 

К2.2 = (КПУ / ЧРА) * 100%, 

where: 

КПУ (Tier I Capital) - the Tier I Capital, which is determined in accordance with Clause 3.6 of this Instruction. 

c) The Tier I Core Capital sufficiency (adequacy) ratio (K2.3) is determined by the formula: 

К2.3 = (БКПУ / ЧРА) * 100%,  

where:  

БКПУ – Tier I Core Capital.  

The National Bank of the Kyrgyz Republic (hereinafter referred to as the National Bank), based on the assessment of risks and the systemic importance of banks, has the right to increase the minimum amount of capital adequacy ratios.  

(As amended by the Resolutions of the National Bank of the KR Board No.2019-П-12/68-2 dated December 27, 2019, No.2021-П-12/51-1-(RLA) dated September 15, 2021)  

2.3. Leverage (К2.4) is determined by the formula:  

К2.4 = (КПУ / (СА+ЗО) *100%, где:  

СА (TA) - the total assets of the bank minus intangible assets and special loan loss provision; 

ЗО (OBSL) – the off-balance sheet liabilities subject to credit conversion factors defined by this Instruction, as well as those liabilities on which the bank has the right to unconditional withdrawal/cancellation at any time without prior notice to a customer, and to which a credit conversion factor of 10% of the total amount of such off-balance sheet liabilities can be applied. 

At the same time, the amount of loan loss provision is deducted from off-balance sheet liabilities (after applying credit conversion factors) within the amount of weighted off-balance sheet liabilities. 

(As amended by the Resolutions of the National Bank of the KR Board No.2019-П-12/68-2 dated December 27, 2019, No.2021-П-12/51-1-(RLA) dated September 15, 2021)  

2.4. In order to maintain the financial strength of the bank and the stability of its activities, it is established a requirement to support the “Additional Capital Stock of the Bank” (“Capital Buffer” index) for the payment of dividends. The “Capital Buffer” index is defined as the ratio of net total capital to the sum of balance sheet assets and off-balance sheet liabilities, weighted by the degree of risk minus special loan loss provision. The value of the “Capital Buffer” index of banks is set by the Supervisory Committee of the National Bank. 

(As amended by Resolution No.2019-П-12/68-2 of the National Bank of the Kr Board dated December 27, 2019)  

2.5. The Bank does not have the right to make a decision on the payment of dividends if the “Capital Buffer” index, calculated with account of the deduction of the amount of dividends planned for payment, is lower than the value set by the National Bank. 

After the payment of dividends, the “Capital Buffer” index must be at least the value set by the National Bank. 

If the value of the “Capital Buffer” index, calculated with account of the deduction of the amount of dividends planned for payment, is observed, the bank shall obtain permission from the National Bank for payment, except for cases when the bank increases its authorized capital at the expense of retained earnings. 

(As amended by Resolution No.2018-П-12/33-6 of the National Bank of the KR Board dated August 15, 2018)  

2.6. (Became null and void in accordance with Resolution No.2018-П-12/33-6 of the National Bank of the KR Board dated August 15, 2018) 

3. Capital Structure  

(Chapter as amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.1. The basis of the capital is the fully paid authorized capital of the bank. According to the standards of the Basel Committee on Banking Supervision, authorized capital is a “key element of capital common to banking systems in all countries; it is clearly visible in the financial statements published by banks on which the market assessment of capital adequacy is based; it is crucial for the determination of indicators of profitability and competitiveness of the bank”. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.2. The capital includes only such authorized capital (ordinary and preferred shares), which does not entail any obligations to return the funds invested by the bank’s shareholders. These funds can only be obtained by shareholders through the transfer or sale of shares to third parties. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.3. The Bank is not entitled to accept its own shares as collateral. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.4. For the purposes of banking supervision, the distinguishing feature of capital components is their ability to cover losses that may arise in the course of the bank’s activities. For this reason, when assessing capital adequacy, certain “non-capital” accounting records (for example, “General Loan Loss Provision” or “Subordinated Bonds and Other Debt Obligations”) are included in the capital. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.5. For the purposes of calculating capital sufficiency (adequacy) ratios, bank capital is divided into Tier 1 Capital and Tier 2 Capital.  

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.6. Tier 1 Capital is required to absorb losses in the course of the bank’s day-to-day operations. 

Tier 1 Capital consists of the following elements: 

- Tier 1 Core Capital; 

- Additional Tier 1 Capital. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.7. The structure of the Tier 1 Core Capital consists of the following elements: 

1) “Ordinary shares” - issued and fully paid ordinary shares of the bank that meet the conditions established by the legislation; 

2) “Preferred non-cumulative shares” - issued and fully paid preferred shares of the bank that meet the conditions established by the legislation and do not require the bank to distribute dividends. 

Where there are circumstances/conditions requiring the distribution of dividends, such preferred shares and capital contributed in excess of par value on those shares should be accounted for in Additional Tier 1 Capital or Tier 2 Capital; 

3) “Capital contributed in excess of par value” - the difference between the selling price of ordinary and preferred shares included in the Tier 1 Core Capital and their par value as a result of the issue. 

Capital contributed in excess of par value is not subject to distribution to shareholders in the form of dividends and remains in the bank. 

Upon the written consent of the National Bank, the capital contributed in excess of par value may be used to increase the authorized capital only in order to comply with the minimum authorized capital requirement; 

4) “Reserves for the future needs of the bank” - reserves created from profit after taxation for future and/or unforeseen events; 

5) “Retained earnings (losses) of previous years” - the balance of net profit (losses) after taxation of previous years after deduction of declared dividends and distribution to other capital accounts. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.8. The structure of the Additional Tier I Capital includes the following elements:  

1) “Additional capital contributed by individuals and legal entities” – monetary funds contributed by individuals and legal entities in excess of the paid-in authorized capital. The need to deposit these funds arises if the bank fails to comply with the requirements of the National Bank for the minimum amount of shareholders’(regulatory) capital (Tier 1 Capital) and/or economic standards, and/or if there is a risk of non-compliance, including at the request of the National Bank, and/ or the need to increase the authorized capital by the date determined by the National Bank. These monetary funds are credited only if the bank has an agreement with individuals and legal entities on depositing funds on account of the acquisition of bank shares by them on the condition of irrevocableness (under no circumstances), the perpetuity of the deposited funds, and also on the condition that in the event of the bank’s bankruptcy, claims according to these funds will be satisfied in the same order as the requirements of the bank’s shareholders. The amount of additional capital must be sufficient for the bank to meet the minimum values ​​for these requirements and standards. Subsequently, funds additionally contributed by individuals and legal entities must be converted into ordinary and/or preferred shares, and these persons themselves should be endowed with an indisputable right to purchase issued shares for the amount of these monetary funds provided; 

2) “Preferred shares that meet the criteria for Additional Tier 1 Capital but are not eligible for Tier 1 Core Capital”. Preferred shares in this article are indicated considering the amount paid in excess of their par value; 

3) “Other capital instruments” – the instruments that have features of both capital and debt, which includes perpetual subordinated debt. 

Subordinated debt is understood as a non-collateralized liability that must not be repaid ahead of schedule at the request of creditors and the requirements for which, in the event of the bank’s liquidation, are repaid last after all claims from creditors and depositors are satisfied, but before settlements with the bank’s shareholders. 

Additional Tier 1 Capital Instruments issued by the bank must comply with the criteria established for them. 

(As amended by Resolution No.2020-П-12/73-10 of the National Bank of the KR Board dated December 23, 2020)  

3.8-1. Additional Tier 1 Capital shall meet the following criteria for capital elements: 

1) Must be issued and paid for; 

2) Must be subordinated, that is, the claims on these instruments are subject to satisfaction as a last resort after the satisfaction of all claims from depositors, major creditors and the bank’s subordinated debt; 

3) The instrument must not be a collateral or guarantee for the obligations of the bank/bank-related parties, and also must not be subject to any requirements/conditions that may legally or economically oblige the bank to first call; 

4) Must be perpetual, i.e. have no maturity dates; 

5) May be redeemed by the issuer or repaid at his/her initiative only after a minimum period of at least five years. Wherein: 

a) The bank should not take any action when issuing the instrument, expecting that the instrument will be repurchased; 

b) Redemption/repayment is allowed only in the following cases: 

- Replacing the instrument with an instrument of the same kind or of the highest quality, if the replacement of the specified instrument is carried out on terms that are reliable for the bank’s capital; 

- The minimum requirements of the National Bank for capital are not violated; 

- Obtaining prior permission from the National Bank; 

6) Any payment of the principal (for example, by redemption or payment) shall be made with the prior consent of the National Bank, and banks should not assume or expect that the consent of the National Bank will be obtained; 

7) The right to choose in relation to the distribution of dividends/payment of interest: 

a) The bank must have the full right to cancel the distribution of dividends/payments under any circumstances;  

b) The adoption of a decision to cancel the distribution of dividends and payments should not be considered as a default or insolvency of the bank; 

c) The possibility of fulfilling other obligations as they become due for account of unpaid dividends; 

d) Cancellation of the distribution of dividends/payments should not impose restrictions on the bank. At the same time, restrictions on the payment of dividends on ordinary shares may also be established; 

8) The instrument cannot be included in liabilities to the extent that it exceeds assets, if such an excess is a sign of insolvency under the legislation; 

9) If the Bank’s Tier 1 Core Capital Ratio falls to 5.125%, the bank shall have the right to convert these instruments into ordinary shares or write off these instruments by distributing losses on them. 

In this case, the write-off should lead to the following results: 

a) Reducing the requirements for the instrument upon liquidation of the bank; 

b) A reduction in the amount payable upon redemption of the instrument; 

c) Partial or complete reduction of the amount of interest/dividend payments; 

10) Neither the bank nor a related party over which the bank exercises control or has significant influence is entitled to repurchase the instrument, including the bank is not entitled to participate directly or indirectly (including by allocating funds in the form of loans, prepayments and etc. and/or provision of other services) in the purchase of an instrument. 

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

3.9. Tier 2 Capital is required to absorb losses in the bank’s liquidation. 

The Tier 2 Capital structure consists of the following elements: 

1) “Profit of the current year” - profit after taxation received in the current year; 

2) “General reserves”: 

a) “General” Loan Loss Provision; 

b) “General” Loan Loss Provision and losses from assets other than loans. 

These reserves, eligible for inclusion in the Tier 2 Capital, will be capped at a maximum of 1.25 percent of the credit risk-weighted value of assets and off-balance sheet liabilities; 

3) “Reserves for the revaluation of securities” - unrealized profits (losses) on the results of the revaluation of securities held for sale; 

4) “Foreign currency translation reserves upon consolidation” - unrealized income (losses) arising from changes in the exchange rate during the recalculation of the statements of foreign subsidiary financial institutions of the bank; 

5) Part of capital instruments and debt instruments, which may be included in the Tier 2 Capital with the permission of the National Bank upon a written application of the Board of Directors of the bank; 

6) The difference between the selling price of shares included in the Tier 2 Capital (not included in the Tier 1 Capital) and their par value as a result of the issue. 

Instruments included in the Tier 2 Capital structure shall meet the following criteria: 

1) To be issued and paid for; 

2) Must be subordinated, that is, the claims on these instruments are subject to satisfaction as a last resort after the satisfaction of all claims from depositors, major creditors and the bank’s subordinated debt; 

3) The instrument must not be a collateral or guarantee for the obligations of the bank/bank-related parties, and also must not be subject to any requirements/conditions that may legally or economically oblige the bank to first call; 

4) Maturity: 

a) The minimum repayment period must be at least 5 (five) years, 

b) Capital instruments are depreciated on a straight-line basis for the remaining five years to maturity; 

c) Should not provide any incentives for redemption; 

5) May be redeemed by the issuer or repaid at his initiative only after a minimum period of 5 (five) years, and only after prior approval of the National Bank. Wherein: 

a) The bank should not take any action when issuing the instrument, expecting that the instrument will be repurchased;  

b) Redemption/repayment is allowed only in the following cases:  

- Replacing an instrument with an instrument of the same kind or of the highest quality, if the replacement of the specified instrument is carried out on terms that are reliable for the bank’s capital;  

- The minimum requirements of the National Bank for capital are not violated;  

- Obtaining prior permission from the National Bank;  

6) The investor/creditor does not have any rights to early redemption of future planned payments (interest income or the principal of the instrument), except in cases of bankruptcy and liquidation;  

7) Neither the bank nor a related party over which the bank exercises control or has significant influence is entitled to repurchase the instrument, including the bank is not entitled to participate directly or indirectly (including by allocating funds in the form of loans, prepayments and etc. and/or provision of other services) in the purchase of an instrument.  

(As amended by the Resolutions No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019, No.2019-П-12/68-2 dated December 27, 2019)  

3.10. Prior to calculating sufficiency (adequacy) ratios of the Net Total Capital, the Tier I Capital, the Tier I Core Capital and the Leverage ratio, the following elements are deducted from the Tier I Core Capital: 

1) Losses for the current year; 

2) Intangible assets, with the exception of assets related to technical and software products (for example, for biometric identification, smart contracts, etc.) aimed at increasing the number of customers and coverage of services that meet the following requirements: 

- The decision shall be new or significantly different from existing market offerings, or it shall offer new opportunities for using existing technologies, as evidenced by market research and comparison of key technology characteristics; 

- The decision should offer customers clear direct or indirect benefits (e.g., terms of reference showing increased security, quality of service, efficiency, product quality, lower prices, a combination of any of the above) and be supported by bank benchmarking with quantitative assessments, if necessary. 

If there are the results of technical testing, they should be available to the National Bank. Alternatively, it is possible to provide confirmation of the technical reliability of this decision from an independent third party. 

These technical and software products must be accounted for by the bank at their book value. 

3) Investments (in the form of shares or equity participation) in other non-consolidated banks and financial and credit institutions, as well as non-financial institutions. If the bank invests additional Tier 1 or Tier 2 Capital in these entities, these investments should be deducted from the corresponding capital; 

4) All deferred tax assets that depend on future returns calculated on the basis of International Financial Reporting Standards (IFRS) 12, except for deferred tax assets associated with temporary differences. Deferred tax assets can be offset against deferred tax liabilities if the conditions of IFRS 12 are met; 

5) Direct or indirect investments in own shares. The bank has the right to buy back its own shares only for their subsequent sale at a higher price, provided that the bank has concluded a preliminary Share Sale Contract for their sale after the buyback and the bank’s activities have been break-even for the previous five years until the date, on which the decision to buy back own shares is made. The bank will deduct these shares until they are sold. 

Using an identical approach, banks shall deduct the investment in their own Additional Tier 1 Capital when calculating Additional Tier 1 Capital and shall deduct the investment in their own Tier 2 Capital when calculating their Tier 2 Capital. 

Mutual cross-ownerships that artificially increase the bank’s capital position should be deducted in full. Banks shall apply an “appropriate deduction approach” to such investments in the capital of other banks, other financial institutions and insurance companies. This means that the deduction should be applied to the same component of capital for which the capital would qualify in the same way as if it had been issued by the bank itself. 

(Aa amended by the Resolutions of the National Bank of the Kyrgyz Republic Board No.2019-П-12/34-3 dated June 28, 2019, No.2021-П-12/51-1-(RLA) dated September 15, 2021)  

3.11. The values ​​of Tier 1 Capital and Net Total Capital as of the 1st day of the month following the reporting period are used to calculate the capital sufficiency (adequacy) standards and other economic standards and requirements established by the National Bank. When calculating economic ratios, the values ​​of which are determined on a daily or weekly basis during the reporting month, the total value of the Net Total capital of the bank as of the 1st day of the reporting month and additional capital is used, if it is paid by legal entities or individuals in the prescribed manner to the report date.  

(As amended by Resolution No.2019-П-12/34-3 of the National Bank of the KR Board dated June 28, 2019)  

4. Assessment of Balance Sheet Assets by Risk Degree 

4.1. The assessment of capital adequacy under this Instruction is carried out in relation to credit risk, i.e. risk relating to various types of assets and consisting in the customer’s failure to ensure full or partial recovery of the asset, as well as operational risk in terms of calculating the Total Capital Adequacy ratio in accordance with sub-paragraph “a” of Paragraph 2.2 hereof. 

(As amended by Resolution 2019-П-12/68-2 of the National Bank of the KR Board dated December 27, 2019) 

4.2. Different types of balance sheet assets have different degrees of credit risk. So, for example, cash on hand in a bank is an almost risk-free type of asset compared to the provisions of crediting or investments in fixed assets. Depending on the degree of credit risk, all balance sheet assets are divided into five categories (see below). At the same time, the main criteria of categorizing balance sheet assets are: the type of a partner, the partner’s country of origin in terms of transfer risk, asset collateral, guarantees and duration of the asset. 

4.3. Depending on the degree of credit risk, as well as on the type of individual partners/counterparties, balance sheet assets are divided into the following categories: 

1) Category 1 (degree of credit risk - 0%): 

a) Banknotes and coins of the Kyrgyz Republic, states that are members of the EAEU and the OECD and states that have a long-term sovereign credit rating of at least “A” level, assigned by the “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service”. 

Note: OECD - Organization for Economic Cooperation and Development. The list of OECD member states is available on the official website www.oecd.org; 

b) Requirements to the National Bank; 

c) Requirements to the Government of the Kyrgyz Republic (securities issued by the Government of the Kyrgyz Republic and other requirements); 

d) Requirements for the central (national) banks of states that have a long-term sovereign credit rating of at least “A” level, assigned by the “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or are members of the OECD; 

e) Requirements to the governments of states that have a long-term sovereign credit rating of at least “A” level, assigned by the “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or are members of the OECD (securities issued by governments); 

f) Assets (or part of them) with collateral denominated in the national currency of the Kyrgyz Republic and held in a separate deposit account. 

Note: In accordance with the Regulation “On Classification of Assets and Corresponding Deductions to the Loan Loss Provision”, approved by Resolution No.18/3 of the National Bank Board dated July 21, 2004; 

g) Assets (or part of them) with collateral denominated in the currency of the states that are members of the EAEU and the OECD, as well as states that have a long-term sovereign credit rating of at least “A” level assigned by the “Standard & Poor's” Rating Agency or an equivalent rating, assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” and held in a separate deposit account; 

h) Gold in the form of refined bullions issued by the National Bank; 

i) Became null and void in accordance with Resolution No.2021-П-12/51-1-(RLA) of the National Bank Board dated September 15, 2021. 

2) Category 2 (degree of credit risk - 10%): 

a) Assets (or part thereof) securitized at the current market price, which are issued by the Government of the Kyrgyz Republic; 

b) Assets (or part of them) securitized at the current market price, which are issued by the governments of states that have a long-term sovereign credit rating of at least “A” level, “Standard & Poor's” Rating Agency or an equivalent rating, assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or are members of the OECD. 

3) Category 3 (degree of credit risk - 20%): 

a) Monetary assets in settlements with banks and other financial and credit institutions of the Kyrgyz Republic; 

b) Gold and other certified precious metals in standard bars; 

c) Monetary assets in settlements with banks and other financial and credit institutions of states that have a long-term sovereign credit rating of at least “A” level, “Standard & Poor's” Rating Agency or an equivalent rating, assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or are members of the OECD; 

d) Requirements to banks and other financial and credit institutions of the Kyrgyz Republic, and all assets based on the guarantees of these institutions; 

e) Requirements to banks and other financial and credit institutions of states that have a long-term sovereign credit rating of at least “A” level, “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or are members of the OECD that are not affiliated with the reporting bank, and all assets based on the guarantees of these institutions. 

4) Category 4 (degree of credit risk - 50%): 

a) Loans to individuals for the purchase or construction of single-family housing and guaranteed by the first mortgage on such housing. This category includes only loans that are issued to the individuals intending to live in this house or apartment, i.e. this housing (or part of it) will not be used for other purposes (sale, rent, etc.). 

If these loans are overdue for more than 30 days and/or restructured, then they are indicated in category 5 with a credit risk of 100%; 

b) Gold and other certified precious metals in bullions, with the exception of refined gold bullions issued by the National Bank; 

c) Loans issued by a commercial bank under state programs, including at the expense of banks’ own funds, related to the financing of agriculture and export-oriented and import-substituting enterprises, as well as other state programs aimed at assisting the development of the Republic’s economy. 

If these loans are overdue for more than 90 days and/or restructured again, they are classified in category 5 with a credit risk of 100%. 

Note: government programs include programs partially/fully financed from the republican budget or implemented through subsidizing interest rates from the republican budget, including financing carried out in cooperation with organizations created by the state; programs within the implementation of interstate (intergovernmental) projects in accordance with international treaties and agreements;  

г) Became null and void in accordance with Resolution No.2021-П-12/51-1-(RLA) of the National Bank Board dated September 15, 2021.  

5) Category 5 (degree of credit risk - 100%): 

a) Banknotes and coins not included in Category 1; 

b) Requirements to governments and central banks of countries that have a long-term sovereign credit rating below “A” level, assigned by the “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or which are not the OECD members (securities issued by the governments of these states and other requirements); 

c) Monetary assets in settlements with banks and other financial and credit institutions of states that have a long-term sovereign credit rating of at least “A” level, “Standard & Poor's” Rating Agency or an equivalent rating, assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or which are not members of the OECD; 

d) Requirements to banks and other financial and credit institutions of states that have a long-term sovereign credit rating of at least “A” level, “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or are members of the OECD that are affiliated with the reporting bank. 

e) Requirements to banks and other financial and credit institutions of states that have a long-term sovereign credit rating of at least “A” level, “Standard & Poor's” Rating Agency or an equivalent rating assigned by one of the rating agencies “Japan Credit Rating Agency (JCR)”, “Fitch Ratings”, “Dominion Bond Rating Service (DBRS)” and “Moody's Investors Service” or which are not members of the OECD. 

f) Commercial, consumer, mortgage and other loans, except for those specified in Category 4; 

g) Fixed assets and other property of the bank; 

h) Investments and financial participation minus the deductions provided for in sub-paragraph “b” of Paragraph 3.9; 

i) All other assets not included in Categories 1, 2, 3, 4, 6 and 7. 

6) Category 6 (degree of credit risk - 150%): 

- Commercial, consumer, mortgage and other loans in foreign currency, with the exception of loans in the currency of the EAEU member states, as well as other than those specified in Category 4.  

7) Category 7 (degree of credit risk - 200%): 

- Loans to individuals and individual entrepreneurs in national currency with a nominal annual rate of 30% or more at the time of extending loans. 

(As amended by the Resolutions of the National Bank of the KR Board No.2018-П-12/33-6 dated August 15, 2018, No.2018-П-12/58-10 dated December 26, 2018, No.2019-П-12/20-2 dated April 15, 2019) 

4.4. Investments in securities are weighted minus the premium (discount) and unrealized profits (losses). 

4.5. Amounts of accrued interest receivable are weighted by degrees of risk similar to those by which the assets themselves are weighted. For example, loans to individuals for the purchase or construction of single-family housing and guaranteed by first mortgages on such housing are weighted with a credit risk of 50%. Therefore, the interest receivable on these loans will also be weighted by the degree of credit risk of 50%.  

5. Assessment of Off-Balance Sheet Liabilities by Risk Degree 

5.1. Off-balance sheet liabilities also carry the concept of credit risk, subject to certain conditions (refer to Paragraph 4.1). So, for example, the issuance of guarantees by a bank on behalf of a customer can, upon the occurrence of certain events, be transformed into ordinary extension of a loan. 

5.2. The amount of risk on off-balance sheet liabilities is determined by multiplying the par value of off-balance sheet liabilities by the corresponding percentage of the credit conversion factor. The values ​​obtained are the balance sheet equivalents of off-balance sheet liabilities and are further weighted depending on the degree of credit risk in accordance with Section 4. 

5.3. This Instruction defines the following percentages of credit conversion factors for off-balance sheet liabilities: 

Average risk (credit conversion factor - 50%): 

a) Off-balance sheet liabilities related to a specific transaction (for example, a letter of credit guaranteeing the customer compensation for losses if the contractor fails to fulfill his obligations in the construction project and other similar obligations); 

b) Short-term self-liquidating liabilities associated with trading operations (for example, a documentary letter of credit secured by the shipment of goods). 

Total risk (credit conversion factor - 100%): 

a) Loan extension obligations; 

b) Direct loan substitutes (e.g. general loan guarantees, standby letters of credit, acceptance guarantees), i.e. documents (regardless of name) representing a legal obligation of the bank to pay funds to a third party if the bank’s customer on whose behalf a guarantee or letter of credit is issued fails to pay funds advanced to a third party under a contractual agreement or similar; 

c) Agreements on sale with subsequent repurchase and sale of assets, with the right of the counterparty to return the asset in certain cases; 

d) Asset purchase obligations; 

e) All other off-balance sheet liabilities not included in the previous categories. 

(As amended by Resolution No.25/1 of the National Bank of the KR Board dated June 15, 2016)  

5.3-1. A credit conversion factor of 10% is applied to off-balance sheet liabilities, for which the bank has the right to unconditional withdrawal/cancellation at any time without prior notice to a customer. 

(As amended by Resolution No.2021-П-12/51-1-(RLA) of the National Bank of the KR Board dated September 15, 2021)  

5.4. Off-balance sheet liabilities related to foreign exchange and interest rates (for example, forward contracts, interest rate swaps, options and similar instruments) require special attention. At the same time, banks expose themselves to credit risk not for the full par value of such liabilities, but only for the potential cost of replacing the cash flow (under contracts with a positive value) in case of default by contractual partners of their obligations. The amount of credit equivalents depends on the terms of the contracts and fluctuations in interest rates and exchange rates underlying those or other financial instruments. 

At this stage, for all contracts related to exchange and interest rates, banks can use the method, which allows to calculate the potential risk for each type of contract, regardless of its current market value. To calculate the amount of the credit equivalent, it is necessary to multiply the base (par) value of each instrument by one of the conversion factors (credit conversion factor) established depending on the nature of the instrument and its duration. 

5.5. For gold transactions, the credit conversion factors are similar to those applied to foreign exchange contracts. 

5.6. This Instruction defines the following percentages of credit conversion factors for off-balance sheet liabilities related to exchange and interest rates: 

Contract duration	Interest rate contracts	Foreign exchange contracts
Less than 1 year	0.5%	2%
From 1 to 2 years	1.0%	5%
For each subsequent year	+1.0%	+3%

6. Procedure and Terms for Reporting On the Implementation of Capital Sufficiency (Adequacy) Standards 

6.1. Information on the implementation of capital sufficiency (adequacy) standards and their calculation are submitted by banks on a monthly basis as part of the Periodic Regulatory Report of Banks.  

(As amended by Resolution No.2019-П-12/68-2 of the National Bank of the KR Board dated December 27, 2019)  

 

7. Procedure for Filling Out Reporting On the Implementation of Capital Sufficiency (Adequacy) Standards  

7.1. Reporting on the implementation of capital sufficiency (adequacy) standards is compiled on the basis of the bank’s balance sheet in accordance with the Chart of Accounts for Bookkeeping in commercial banks and financial and credit institutions licensed by the National Bank. 

(As amended by Resolution No.2017-П-12/25-5 of the National Bank of the KR Board dated June 15, 2017) 

7.2. Reporting items are divided into consolidated and detailed (for example, consolidated Item 20 is divided into two detailed Items 20.1 and 20.2). Detailed items indicate the values ​​of balance sheet assets (off-balance sheet liabilities), depending on their belonging to one or another category of credit risk. The values ​​reported in the consolidated items are the sums of the values ​​in the detailed items. 

7.3. The names of most reporting items fully correspond to the names of individual accounts or groups of accounts of the Chart of Accounts for Bookkeeping in commercial banks and financial and credit institutions licensed by the National Bank. However, filling out of separate items has some peculiarities. Thus, each item of the “Securities Portfolio” part (Items 130-230) indicates the par value of the relevant type of securities, taking into account discount/premiums and fair value adjustment, regardless of their classification. For example, Item 130 “Securities Issued by the Government of the Kyrgyz Republic and/or the National Bank” indicates the amount of the par value of securities issued by the Government of the Kyrgyz Republic and/or the National Bank, taking into account discount/premiums and fair value adjustment, classified as securities measured at amortized cost; securities at fair value through profit or loss; securities measured at fair value through other comprehensive income. 

Each item of the “Credits and Leasing” part (Items 240-360) indicates the amount of the loan debt of the corresponding type of loans, minus the discount. 

(As amended by the Resolutions of the National Bank of the KR Board No.26/3 dated October 23, 2004, No.2017-П-12/25-5 dated June 15, 2017, No.2022-П-12/17-4-(RLA) dated March 23, 2022)  

8. Dividends  

8.1. Dividends are part of the bank’s net profit distributed among shareholders in accordance with the legislation. 

Dividends of the State Development Bank of the Kyrgyz Republic are distributed in the manner prescribed by the Law of the Kyrgyz Republic “On the State Development Bank of the Kyrgyz Republic”. 

(As amended by Resolution No. 43/1 of the National Bank of the KR Board dated November 16, 2012)  

8.1-1. To calculate the amount of dividends, the bank should use the smallest of the net income calculated in accordance with IFRS and prudential requirements. 

(As amended by Resolution No.2022-П-12/17-4-(RLA) of the National Bank of the KR Board dated March 23, 2022)  

8.2. The Board of the Bank (or the relevant body), on the basis of an Audit Report, shall provide the Board of Directors of the Bank and the meeting of shareholders with an analysis of at least the following factors for consideration and appropriate assessment: 

a) Capital sufficiency (adequacy) and trends in its change; 

b) Compliance with economic standards established by the National Bank; 

c) The nominal and actual levels of the bank’s income (taking into account the level of inflation) and trends in their change; 

d) Bank growth prospects; 

e) The impact of economic conditions and inflation. 

8.3. Dividends on shares are accrued and paid at the end of the fiscal year. 

Note: The fiscal year is the period from January 1 to December 31 inclusive. 

(As amended by Resolution No.17/13 of the National Bank of the KR Board dated April 26, 2017)  

8.4. The bank shall obtain permission from the National Bank to pay dividends to the bank’s shareholders. Documents for obtaining permission from the National Bank for the payment of dividends should be submitted to the National Bank no later than five working days before the general meeting of shareholders of the bank. The documents should be accompanied by the bank’s plans for the dividend payment deadline, net profit indicators calculated in accordance with IFRS and prudential requirements, and calculations for compliance with economic standards, as well as the “Capital Buffer” index, calculated with account of the planned payment of the dividend amount. 

If there is a threat to the stability of the bank, as well as to the interests of creditors and depositors, the National Bank may prohibit or impose restrictions on the payment of dividends if: 

a) This will lead to a violation of economic standards established by the National Bank; 

b) The values ​​of the bank’s capital adequacy ratios will be below the minimum limits established by the National Bank; 

c) The “Capital Buffer” index, after the payment of dividends, will be below the minimum values ​​established by the National Bank; 

d) The Loan Loss Provision have not been created or have been created insufficiently in accordance with the requirements of the National Bank; 

e) The bank has uncovered losses for previous years and/or for the reporting year; 

f) This will lead to a deterioration in the financial condition of the bank; 

g) In other cases stipulated by the laws of the Kyrgyz Republic. 

The bank is not entitled to make a decision on the payment (announcement) of dividends on shares, if at the time of the decision and payment of dividends it meets the signs of insolvency in accordance with the legislation of the Kyrgyz Republic or these signs appear in the bank as a result of the payment of dividends. 

The Bank is not entitled to make a decision on the payment (declaration) of dividends on ordinary shares, unless a decision on the payment of dividends on preferred shares has been made.  

(As amended by the Resolutions of the National Bank of the KR Board No.2018-П-12/33-6 dated August 15, 2018, No.2022-П-12/17-4-(RLA) dated March 23, 2022)  

  

Note:  

(Became null and void in accordance with Resolution No.17/13 of the National Bank of the KR Board dated April 26, 2017)  

   

Appendix to the Instruction On the Determination of Capital Sufficiency (Adequacy) Standards of Commercial Banks of the Kyrgyz Republic, Approved by Resolution No.18/2 of the National Bank Board dated July 21, 2004

(As amended by the Resolutions of the National Bank of the KR Board No.26/3 dated October 23, 2004, No.25/1 dated June 15, 2016, No.2018-П-12/33-6 dated August 15, 2018, No.2019-П-12/19-3 dated April 10, 2019, No.2019-П-12/34-3 dated June 28, 2019, No.2020-П-12/73-10 dated December 23, 2020, No.2021-П-12/51-1-(RLA) dated September 15, 2021, No.2022-П-12/17-6-(RLA) dated March 23, 2022)  

Assets  

(thou. KGS)  

No.	Items	Acc. to balance sheet	Credit risk, %	Weighted value
10	Banknotes and coins	0		0
10.1			0%
10.2			10%	0
10.3			20%	0
10.4			50%	0
10.5			100%	0
20	Monetary assets in settlements	0		0
20.1			0%
20.2			10%	0
20.3			20%	0
20.4			50%	0
20.5			100%	0
30	Correspondent account in the National Bank		0%
40	Correspondent accounts in commercial banks of the Kyrgyz Republic	0		0
40.1			0%
40.2			10%	0
40.3			20%	0
40.4			50%	0
40.5			100%	0
50	Correspondent accounts in commercial banks of the CIS countries	0		0
50.1			0%
50.2			10%	0
50.3			20%	0
50.4			50%	0
50.5			100%	0
60	Correspondent accounts in foreign banks, except for the CIS countries	0		0
60.1			0%
60.2			10%	0
60.3			20%	0
60.4			50%	0
60.5			100%	0
70	Gold and other precious metals	0		0
70.1			0%
70.2			10%	0
70.3			20%	0
70.4			50%	0
70.5			100%	0
80	Interbank deposits in commercial banks of the Kyrgyz Republic	0		0
80.1			0%
80.2			10%	0
80.3			20%	0
80.4			50%	0
80.5			100%	0
90	Interbank deposits in banks and financial institutions of the CIS countries	0		0
90.1			0%
90.2			10%	0
90.3			20%	0
90.4			50%	0
90.5			100%	0
100	Interbank deposits in foreign banks and financial institutions, except for the CIS countries	0		0
100.1			0%
100.2			10%	0
100.3			20%	0
100.4			50%	0
100.5			100%	0
110	Short-term interbank placements up to 7 days	0		0
110.1			0%
110.2			10%	0
110.3			20%	0
110.4			50%	0
110.5			100%	0
120	REPO transactions	0		0
120.1			0%
120.2			10%	0
120.3			20%	0
120.4			50%	0
120.5			100%	0

 

 

 

 

 

Security Portfolio 

 (thou. KGS)  

No.	Items	Acc. to balance sheet	Credit risk, %	Weighted value
130	Securities issued by the Government of the Kyrgyz Republic and/or the National Bank	0		0
130.1			0%
130.2			10%	0
130.3			20%	0
130.4			50%	0
130.5			100%	0
140	Securities issued by local authorities	0		0
140.1			0%
140.2			10%	0
140.3			20%	0
140.4			50%	0
140.5			100%	0
150	Securities issued by the Governments of the CIS countries	0		0
150.1			0%
150.2			10%	0
150.3			20%	0
150.4			50%	0
150.5			100%	0
160	Securities issued by foreign governments of countries other than the governments of the CIS countries	0		0
160.1			0%
160.2			10%	0
160.3			20%	0
160.4			50%	0
160.5			100%	0
170	Debt securities of the Kyrgyz companies	0		0
170.1			0%
170.2			10%	0
170.3			20%	0
170.4			50%	0
170.5			100%	0
180	Debt securities of the CIS countries’ companies	0		0
180.1			0%
180.2			10%	0
180.3			20%	0
180.4			50%	0
180.5			100%	0
190	Debt securities of foreign companies, except for the CIS countries	0	100%	0
190.1			0%
190.2			10%	0
190.3			20%	0
190.4			50%	0
190.5			100%	0
200	Capital securities of the Kyrgyz companies	0		0
200.1	Capital securities of banks and financial institutions of the Kyrgyz Republic (less than 20%)		Capital deductions
200.2	The rest of the capital securities		0%
200.3	The rest of the capital securities		10%	0
200.4	The rest of the capital securities		20%	0
200.5	The rest of the capital securities		50%	0
200.6	The rest of the capital securities		100%	0
210	Capital securities of the CIS countries’ companies	0		0
210.1	Capital securities of banks and financial institutions of the CIS countries (less than 20%)		Capital deductions
210.2	The rest of the capital securities		0%
210.3	The rest of the capital securities		10%	0
210.4	The rest of the capital securities		20%	0
210.5	The rest of the capital securities		50%	0
210.6	The rest of the capital securities		100%	0
220	Non-depreciable capital securities of companies of the Kyrgyz Republic and CIS countries	0		0
220.1	Non-depreciable capital securities of banks and financial institutions of the KR and CIS countries (less than 20%)		Capital deductions
220.2	The rest of the capital securities		0%
220.3	The rest of the capital securities		10%	0
220.4	The rest of the capital securities		20%	0
220.5	The rest of the capital securities		50%	0
220.6	The rest of the capital securities		100%	0
230	Capital securities of foreign companies, except for the CIS countries	0		0
230.1	Capital securities of foreign banks and financial institutions, except for the CIS countries (less than 20%)		Capital deductions
230.2	The rest of the capital securities		0%
230.3	The rest of the capital securities		10%	0
230.4	The rest of the capital securities		20%	0
230.5	The rest of the capital securities		50%	0
230.6	The rest of the capital securities		100%	0

Credits and Leasing  

 (thou. KGS)  

No.	Items	Acc. to balance sheet	Credit risk, %	Weighted value
240	Credits to banks of the Kyrgyz Republic	0		0
240.1			0%
240.2			10%	0
240.3			20%	0
240.4			50%	0
240.5  240.6			100%  150%	0  0
240.7			300%	0
250	Credits to banks and financial institutions of the CIS countries	0		0
250.1			0%
250.2			10%	0
250.3			20%	0
250.4			50%	0
250.5  250.6			100%  150%	0  0
250.7			300%	0
260	Credits to foreign banks and financial institutions, except for the CIS countries	0		0
260.1			0%
260.2			10%	0
260.3			20%	0
260.4			50%	0
260.5  260.6			100%  150%	0  0
260.7			300%	0
270	Credits to public sector	0		0
270.1			0%
270.2			10%	0
270.3			20%	0
270.4			50%	0
270.5			100%	0
280	Credits to non-public sector	0		0
280.1			0%
280.2			10%	0
280.3			20%	0
280.4			50%	0
280.5  280.6  280.7			100%  150%  200%	0  0  0
280.8			300%	0
290	Credits to individuals for personal purposes	0		0
290.1			0%
290.2			10%	0
290.3			20%	0
290.4			50%	0
290.5  290.6  290.7			100%  150%  200%	0  0  0
290.8			300%	0
300	Mortgage credits to public sector		100%	0
310  310.1  310.2	Mortgage credits to non-public sector		100%  150%  200%	0  0  0
310.3			300%	0
320	Mortgage credits to individuals	0		0
320.1			50%	0
320.2  320.3  320.4			100%  150%  200%	0  0  0

 

 

 

 

 

Credits and Leasing (continued)/Other assets  

 (thou. KGS)  

No.	Items	Acc. to balance sheet	Credit risk, %	Weighted value
330	Building credits to public sector	0		0
330.1			0%
330.2			10%	0
330.3			20%	0
330.4			50%	0
330.5			100%	0
340	Building credits to non-public sector	0		0
340.1			0%
340.2			10%	0
340.3			20%	0
340.4			50%	0
340.5			100%	0
340.6			150%	0
340.7			200%	0
340.8			300%	0
350	Building credits to individuals	0		0
350.1			0%
350.2			10%	0
350.3			20%	0
350.4			50%	0
350.5			100%	0
350.6			150%	0
350.7			200%	0
350.8			300%	0
360	Capital lease credits	0		0
360.1			0%
360.2			10%	0
360.3			20%	0
360.4			50%	0
360.5			100%	0
360.6			150%	0
360.7			200%	0
360.8			300%	0
361	Financing provided under Musharaka, Mudarabah contracts		400%	0
370	Fixed assets		100%	0
380	Other property of the bank		100%	0
390	Investments and financial participation in non-consolidated banks		Capital deductions
400	Investments and financial participation in non-consolidated financial institutions other than banks		Capital deductions
410	Investments and financial participation in non-consolidated non-financial institutions		100%	0
420	Accrued interest receivable	0		0
420.1			0%	0
420.2			10%	0
420.3			20%	0
420.4			50%	0
420.5			100%	0
420.6			150%	0
420.7			200%	0
420.7-1			300%	0
420.8			400%	0
430	Other assets	0		0
430.1	Intangible assets		Capital deductions
430.2	The rest of other assets		100%	0
440	Total balance sheet assets (amount Art.10-430)	0		0
450	Total by Category 1	0	0%
460	Total by Category 2	0	10%	0
470	Total by Category 3	0	20%	0
480	Total by Category 4	0	50%	0
490	Total by Category 5	0	100%	0
491	Total by Category 6	0	150%	0
492	Total by Category 7	0	200%	0
492.1	Total by Category 8	0	300%	0
493	Financing provided under Musharaka, Mudarabah contracts	0	400%	0
500	Total capital deductions	0

Off-Balance Sheet Liabilities  

 (thou. KGS)  

No.	Items	Acc. to balance sheet	Credit conversion factor, %	Credit risk, %	Weighted value
510	Liabilities for credit extension	0			0
510.1			100%	0%
510.2			100%	10%	0
510.3			100%	20%	0
510.4			100%	50%	0
510.5			100%	100%	0
520	General credit and securities guarantees, standby letters of credit and liabilities	0			0
520.1			100%	0%
520.2			100%	10%	0
520.3			100%	20%	0
520.4			100%	50%	0
520.5			100%	100%	0
530	Specific transaction-related liabilities	0			0
530.1			50%	0%
530.2			50%	10%	0
530.3			50%	20%	0
530.4			50%	50%	0
530.5			50%	100%	0
540	Trading transaction-related liabilities	0			0
540.1			50%	0%
540.2			50%	10%	0
540.3			50%	20%	0
540.4			50%	50%	0
540.5			50%	100%	0
550	Buyback and repurchase agreements	0			0
550.1			100%	0%
550.2			100%	10%	0
550.3			100%	20%	0
550.4			100%	50%	0
550.5			100%	100%	0
560	Asset purchase liabilities	0			0
560.1			100%	0%
560.2			100%	10%	0
560.3			100%	20%	0
560.4			100%	50%	0
560.5			100%	100%	0
570	Foreign exchange transactions	0			0
570.1	less than 1 year	0			0
			2%	20%	0
			2%	100%	0
570.2	From 1 to 2 years	0			0
			5%	20%	0
			5%	100%	0
570.3	For each subsequent year	0			0
				20%	0
				100%	0
580	Interest rate transactions	0			0
580.1	Less than 1 year	0			0
			0.5%	20%	0
			0.5%	100%	0
580.2	From 1 to 2 years	0			0
			1%	20%	0
			1%	100%	0
580.3	For each subsequent year	0			0
				20%	0
				100%	0
590	Other off-balance sheet liabilities	0			0
590.1			100%		0
590.2			100%		0
590.3			100%		0
595	Liabilities, which grant the bank a right to unconditional withdrawal/cancellation at any time without prior notification of a customer	0	10%	100%	0
600	Total off-balance sheet liabilities (amount Art. 510-595)	0			0
610	Total special reserves for potential and leasing losses (hereinafter referred to as the special reserves for losses)	0
610.1	Special reserves for losses by balance sheet assets	0
610.2	Special reserves for losses by off-balance sheet liabilities	0
620	Total balance sheet assets and off-balance sheet liabilities, weighted by degree of risk, minus special reserves for losses (Art.440 plus Art.600 minus 610)				0

Subordinated Debt  

(thou. KGS)  

No.	Items	Acc. to balance sheet	Share, %	Weighted value
630	Perpetual subordinated debt
640	With a remaining maturity of more than 5 years		100%	0
650	With a remaining maturity of 4 to 5 years		80%	0
660	With a remaining maturity of 3 to 4 years		60%	0
670	With a remaining maturity of 2 to 3 years		40%	0
680	With a remaining maturity of 1 to 2 years		20%	0
690	With a remaining maturity of less than 1 year		0%
700	Total	0		0

Capital and Capital Sufficiency (Adequacy) Ratios  

(thou. KGS)  

No.	Items	Amount
	Tier I Capital (Shareholders’ Capital)
	Tier I Core Capital
710	Ordinary shares
720	Preferred non-cumulative shares (eligible for inclusion in Tier 1 Core Capital)
730	Capital contributed in excess of par
740	Reserves for future needs of the bank	0
750	Retained profit (losses) of previous years	0
760	(-) Losses of the current year	0
770	(-) Intangible assets (Art.430.1)	0
780	(-) Investments (in the form of shares or capital interest) in other non-consolidated banks and financial and credit institutions, as well as non-financial institutions (Art. 200.1-230.1, Art.390, Art.400)	0
790	(-) Deferred tax assets	0
800	(-) Direct or indirect investment in the bank’s own shares	0
810	Total Tier I Core Capital (amount Art.710-800)	0
	Additional tier I Capital
820	Additional capital contributed by individuals and legal entities	0
830	Preferred shares that eligible for Additional Tier I Capital but are not eligible for Tier I Core Capital	0
840	Other capital instruments: perpetual subordinated debt (Art.630)	0
850	(-) Direct or indirect investment in the Additional Tier 1 Shareholders’ Capital	0
860	(-) Investments in Additional Tier I Capital of non-consolidated banks and in capital of financial and credit institutions, as well as non-financial institutions (where applicable)	0
870	Total Additional Tier I Capital (amount Art. 820-860)	0
880	Total Tier I Capital (amount Art.810 and Art.870)	0
	Tier II Capital
890	Profit of the current year	0
900	General reserves (eligible for inclusion): a) “General” reserves for potential losses and damages; b) “General” reserves for potential losses and damages from assets other than credits	0
910	Securities revaluation reserves	0
920	Foreign currency translation reserves on consolidation
920.1	Profit equalization reserve	0
920.2	Investment risk reserve	0
930	Portion of capital and debt instruments approved by the National Bank for inclusion in Tier 2 Capital	0
940	The difference between the selling price of shares included in Tier 2 Capital (not included in Tier 1 Capital) and their par value based on the results of the issue	0
950	(-) Direct or indirect investments in the Tier II Shareholders’ Capital	0
960	(-) Investments in Tier II Capital of non-consolidated banks and in capital of financial and credit institutions, as well as non-financial institutions (where applicable)	0
970	Total Tier II Capital (amount Art. 890-960)	0
980	Aggregate Amount of Net Total Capital (Amount Art.880 and Art.970)	0
990	Total Capital Sufficiency (Adequacy) Ratio (Art.980/Art.620)
1000	Tier I Capital Sufficiency (Adequacy) Ratio (Art.880/Art.620)
1010	Tier I Core Capital Sufficiency (Adequacy) Ratio (Art.810/Art.620)