46. CAPITAL ADEQUACY The capital adequacy ratios of the Group and the Bank have been computed based on Bank Negara Malaysia (BNM)’s Capital Adequacy Framework for Islamic Banks (Capital Components) dated 14 June 2024 and Capital Adequacy Framework for Islamic Banks (Risk-Weighted Assets) dated 18 December 2023. The Group adopts the Standardised Approach for Credit Risk and Market Risk and the Basic Indicator Approach for Operational Risk. The Group and the Bank are required to meet minimum Common Equity Tier I (CET I), Tier I and Total Capital adequacy ratios of 4.5%, 6.0% and 8.0% respectively. To ensure that banks build up adequate capital buffer outside period of stress, a Capital Conservation Buffer (CCB) of 2.5% above the minimum capital adequacy was introduced by BNM. Therefore, the minimum regulatory capital adequacy ratios requirement to be observed for CET I capital ratio, Tier I capital ratio and Total Capital ratio are 7.0%, 8.5% and 10.5% respectively beginning year 2019 onwards. The capital adequacy ratios of the Group and the Bank are set out below: Group Bank 2024 2023 2024 2023 Common Equity Tier I (CET I) Capital Ratio 13.849% 14.124% 13.443% 13.530% Tier I Capital Ratio 15.325% 15.132% 14.931% 14.548% Total Capital Ratio 19.997% 19.893% 19.631% 19.347% The components of CET I, Tier I and Tier II capital: Group Bank 2024 RM’000 2023 RM’000 2024 RM’000 2023 RM’000 Paid-up share capital 3,888,725 3,888,725 3,888,725 3,888,725 Retained earnings 3,309,036 3,257,009 3,400,459 3,348,297 Other reserves 458,321 254,478 346,944 143,590 Less: Deferred tax assets (167,618) (174,728) (166,999) (173,756) Regulatory reserves (341,100) (167,000) (341,100) (167,000) Investment in subsidiaries – – (253,001) (344,049) Investment in associate (54,610) – (41,799) – Intangible assets (52,236) (50,354) (52,236) (50,354) 55% of fair value reserves (5,163) – (5,163) – Total CET I 7,035,355 7,008,130 6,775,830 6,645,453 Capital securities 750,000 500,000 750,000 500,000 Total Tier I Capital 7,785,355 7,508,130 7,525,830 7,145,453 Sukuk Murabahah 1,800,000 1,800,000 1,800,000 1,800,000 Loss provisions^ 573,069 562,500 569,367 557,168 Total Tier II Capital 2,373,069 2,362,500 2,369,367 2,357,168 Total Capital 10,158,424 9,870,630 9,895,197 9,502,621 ^ Impairment allowances on non-impaired financing and regulatory reserve, subject to maximum of 1.25% of total credit risk-weighted assets less credit absorbed by unrestricted investment accounts. Bank Islam Malaysia Berhad ◆ Integrated Annual Report 2024 422 Notes to the Financial Statements for the financial year ended 31 December 2024
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