Bahrain Islamic Bank B S C : Composition of Capital and Liquidity Disclosures – 31 December 2022

Bahrain Islamic Bank B.S.C.

Composition of Capital and Liquidity Disclosures

As at 31 December 2022

Reconcilation of Published Financial Balance Sheet to Regulatory Reporting as at 31 December 2022

	Statement of Financial		Statement of Financial
	position as per
		position as per
	published financial
		Regulatory Reporting
	statements
	Q4 2022		Q4 2022
	BD'000		BD'000
Assets
Cash and balances with banks and Central Bank	70,037	70,037
Gross Placements with financial institutions	73,446	73,446
Less: Expected credit loss (stage 3)	(3,686)	(3,686)
Less: Expected credit loss (stage 1 and stage 2)	(5)	-
Net placements with financial institutions	69,755	69,760
Gross financing assets	659,232	659,232
Less: Expected credit loss (stage 3)	(24,957)	(24,957)
Less: Expected credit loss (stage 1 and stage 2)	(14,252)	-
Net financing assets	620,023	634,275
Gross investment securities	285,963	285,963
Less: Expected credit loss (stage 3)	(26,805)	(26,805)
Less: Expected credit loss (stage 1 and stage 2)	(129)	-
Net investment securities	259,029	259,158
Ijarah Muntahia Bittamleek	293,206	293,206
Less: Expected credit loss (stage 3)	(1,213)	(1,213)
Less: Expected credit loss (stage 1 and stage 2)	(2,007)	-
Net Ijarah Muntahia Bittamleek	289,986	291,993
Investment in associates	8,832	8,832
Investment in real estate	13,661	13,661
Property and equipment	14,019	14,019
Other assets	16,475	16,494
TOTAL ASSETS	1,361,817	1,378,229
Liabilities, Equity Of Investment Accountholders
And Owners' Equity
Liabilities
Placements from financial institutions	152,404	152,404
Placements from non-financial institutions and individuals	245,442	245,442
Financing from financial institutions	110,113	110,113
Customers' current accounts	231,078	231,078
Other liabilities	36,621	36,349
of which: Expected credit loss - Off balance sheet exposures (stage 3)	1,310	1,310
(stage 1 and stage 2)	272	-
of which: Other liabilities	35,039	35,039
Total Liabilities	775,658	775,386
Total Equity of Investment Accountholders	450,408	450,408
Owners' Equity
Share capital	106,406	106,406
Subordinated Mudaraba (AT1)	-	-
Treasury shares	(892)	(892)
Shares under employee share incentive scheme	(293)	(293)
Share premium	206	206
Statutory reserve	6,606	6,606
Real estate fair value reserve	1,320	1,320
Investment securities fair value reserve	1,615	1,615
Expected credit loss	-	16,684
of which: amount eligible for Tier 2 capital subject to a maximum of 1.25% of credit risk weighted assets	-	8,894
of which: amount ineligible for Tier 2 capital	-	7,790
Profit for the year	12,568	12,568
Retained earnings brought forward	(16,785)	(16,785)
of which: Retained earnings as of 1 January 2022	(13,343)	(13,343)
of which: Zakah and donations approved	(488)	(488)
of which: Profit distribution on AT1 Capital	(1,901)	(1,901)
of which: Share of reserve of investment in associate	204	204
of which: Transfer to statutory reserve	(1,257)	(1,257)
Equity Attributable to Parent's Shareholders	110,751		127,435
Subordinated Mudaraba (AT1)	25,000	25,000
Total Owners' Equity	135,751	152,435
TOTAL LIABILITIES, EQUITY OF INVESTMENT
ACCOUNTHOLDERS AND OWNERS' EQUITY	1,361,817		1,378,229

Composition of Capital Common Disclosure Template as at 31 December 2022

Common Equity Tier 1 capital: instruments and reserves

	1.	Directly issued qualifying common share capital plus related stock surplus	124,601
	2.	Retained earnings	370
	3.	Accumulated other comprehensive income (and other reserves)	1,615
	4.	Not applicable	-
	5.	Common share capital issued by subsidiaries and held by third parties (amount allowed in group CET1)	-
	6.	Common Equity Tier 1 capital before regulatory adjustments	126,586
		Common Equity Tier 1 capital: regulatory adjustments
	7.	Prudential valuation adjustments	-
	8.	Goodwill (net of related tax liability)	-
	9.	Other intangibles other than mortgage-servicing rights (net of related tax liability)	-
	10.	Deferred tax assets that rely on future profitability excluding those arising from temporary differences (net of related tax	-
	liability)
	11.	Cash-flow hedge reserve	-
	12.	Shortfall of provisions to expected losses	-
	13.	Securitisation gain on sale (as set out in paragraph 562 of Basel II framework)	-
	14.	Not applicable	-
	15.	Defined-benefit pension fund net assets	-
	16.	Investments in own shares	-
	17.	Reciprocal cross-holdings in common equity	-
		Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation,
	18.	net of eligible short positions, where the bank does not own more than 10% of the issued share capital (amount above 10%	-
		threshold)
	19.	Significant investments in the common stock of banking, financial and insurance entities that are outside the scope of	-
	regulatory consolidation, net of eligible short positions (amount above 10% threshold)
	20.	Mortgage servicing rights (amount above 10% threshold)	-
	21.	Deferred tax assets arising from temporary differences (amount above 10% threshold, net of related tax liability)	-
	22.	Amount exceeding the 15% threshold	-
	23.	of which: significant investments in the common stock of financials	-
	24.	of which: mortgage servicing rights	-
	25.	of which: deferred tax assets arising from temporary differences	-
	26.	CBB specific regulatory adjustments	-
	27.	Regulatory adjustments applied to Common Equity Tier 1 due to insufficient Additional Tier 1 and Tier 2 to cover	-
	deductions
	28.	Total regulatory adjustments to Common equity Tier 1	-
	29.	Common Equity Tier 1 capital (CET1)	126,586

Composition of Capital Common Disclosure Template as at 31 December 2022

Additional Tier 1 capital: instruments

	30.	Directly issued qualifying Additional Tier 1 instruments plus related stock surplus	25,000
	31.	of which: classified as equity under applicable accounting standards	-
	32.	of which: classified as liabilities under applicable accounting standards	-
	33.	Directly issued capital instruments subject to phase out from Additional Tier 1	-
	34.	Additional Tier 1 instruments (and CET1 instruments not included in row 5) issued by subsidiaries and held by third parties	-
	(amount allowed in group AT1)
	35.	of which: instruments issued by subsidiaries subject to phase out	-
	36.	Additional Tier 1 capital before regulatory adjustments	25,000
		Additional Tier 1 capital: regulatory adjustments
	37.	Investments in own Additional Tier 1 instruments	-
	38.	Reciprocal cross-holdings in Additional Tier 1 instruments	-
		Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation,
	39.	net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity	-
		(amount above 10% threshold)
	40.	Significant investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory	-
	consolidation (net of eligible short positions)
	41.	CBB specific regulatory adjustments	-
	42.	Regulatory adjustments applied to Additional Tier 1 due to insufficient Tier 2 to cover deductions	-
	43.	Total regulatory adjustments to Additional Tier 1 capital	-
	44.	Additional Tier 1 capital (AT1)	25,000
	45.	Tier 1 capital (T1 = CET1 + AT1)	151,586
		Tier 2 capital: instruments and provisions
	46.	Directly issued qualifying Tier 2 instruments plus related stock surplus	1,320
	47.	Directly issued capital instruments subject to phase out from Tier 2	-
	48.	Tier 2 instruments (and CET1 and AT1 instruments not included in rows 5 or 34) issued by subsidiaries and held by third	-
	parties (amount allowed in group Tier 2)
	49.	of which: instruments issued by subsidiaries subject to phase out	-
	50.	Provisions	8,894
	51.	Tier 2 capital before regulatory adjustments	10,214
		Tier 2 capital: regulatory adjustments
	52.	Investments in own Tier 2 instruments	-
	53.	Reciprocal cross-holdings in Tier 2 instruments	-
		Investments in the capital of banking, financial and insurance entities that are outside the scope of regulatory consolidation,
	54.	net of eligible short positions, where the bank does not own more than 10% of the issued common share capital of the entity	-
		(amount above the 10% threshold)
	55.	Significant investments in the capital banking, financial and insurance entities that are outside the scope of regulatory	-
	consolidation (net of eligible short positions)
	56.	National specific regulatory adjustments	-
	57.	Total regulatory adjustments to Tier 2 capital	-
	58.	Tier 2 capital (T2)	10,214
	59.	Total capital (TC = T1 + T2)	161,800
	60.	Total risk weighted assets	828,981

Composition of Capital Common Disclosure Template as at 31 December 2022

Capital ratios and buffers

	61.	Common Equity Tier 1 (as a percentage of risk weighted assets)	15.27%
	62.	Tier 1 (as a percentage of risk weighted assets)	18.29%
	63.	Total capital (as a percentage of risk weighted assets)	19.52%
	64.	Institution specific buffer requirement (minimum CET1 requirement plus capital conservation buffer plus countercyclical	9%
	buffer requirements plus D-SIB buffer requirement, expressed as a percentage of risk weighted assets)
	65.	of which: capital conservation buffer requirement	2.50%
	66.	of which: bank specific countercyclical buffer requirement	N/A
	67.	of which: D-SIB buffer requirement	N/A
	68.	Common Equity Tier 1 available to meet buffers (as a percentage of risk weighted assets)	15.27%
		National minima including CCB (where different from Basel III)
	69.	CBB Common Equity Tier 1 minimum ratio	9.00%
	70.	CBB Tier 1 minimum ratio	10.50%
	71.	CBB total capital minimum ratio	12.50%
		Amounts below the thresholds for deduction (before risk weighting)
	72.	Non-significant investments in the capital of other financials	-
	73.	Significant investments in the common stock of financials	-
	74.	Mortgage servicing rights (net of related tax liability)	-
	75.	Deferred tax assets arising from temporary differences (net of related tax liability)	-
		Applicable caps on the inclusion of provisions in Tier 2
	76.	Provisions eligible for inclusion in Tier 2 in respect of exposures subject to standardized approach (prior to application of	16,685
	cap)
	77.	Cap on inclusion of provisions in Tier 2 under standardized approach	8,894
	78.	N/A	-
	79.	N/A	-
	Capital instruments subject to phase-out arrangements (only applicable between 1 Jan 2019 and 1 Jan 2023)
	80.	Current cap on CET1 instruments subject to phase out arrangements	NA
	81.	Amount excluded from CET1 due to cap (excess over cap after redemptions and maturities)	NA
	82.	Current cap on AT1 instruments subject to phase out arrangements	NA
	83.	Amount excluded from AT1 due to cap (excess over cap after redemptions and maturities)	NA
	84.	Current cap on T2 instruments subject to phase out arrangements	NA
	85.	Amount excluded from T2 due to cap (excess over cap after redemptions and maturities)	NA