(a) The rights of a shareholder are subordinated to those of ordinary creditors in the event of liquidation of the concerned entity.

(b) Loans and other shorter-term credit facilities have an explicit obligation on the borrower to repay the sum advanced or committed. Share capital has no such commitment (with the exception of some subordinated debt). Investments in the capital of an entity can only be realized by the sale of the concerned capital instruments to a third party, or by winding up the concerned entity.

(c) A capital investment in a third party entity (particularly where the investment is significant in size) is a pledge of capital to the concerned entity to fund its longer-term activities. The funds concerned are no longer available to be used by the investor bank to fund its activities.

(d) There may be reputational and legal risk to the investing bank, particularly if the bank has a “control relationship” with the concerned entity.

(a) The amount of the proposed major investment relative to the existing consolidated Total Capital of the bank;

(b) Existing capital adequacy ratios on a consolidated basis and forecast ratios after the major investment has gone ahead;

(c) The adequacy of information flows from the investee company to the concerned bank;

(d) Experience and fit and proper matters relating to the senior personnel associated with the proposed major investment;

(e) Risks associated with the proposed major investment;

(f) Disclosure and exchange of (supervisory) information (in the case of a foreign major investment);

(g) Adequacy of host supervision (in the case of a foreign major investment);

(h) Current investments and concentrations in exposures of the concerned bank;

(i) The compliance of the concerned bank with the CBB's rules and regulations (e.g. reporting issues), and the adequacy of internal systems and controls;

(j) The extent of holdings by any other shareholders (holding 5% or more of the capital of the concerned entity) or controllers of the concerned entity;

(k) Whether the proposed activities are in line with the Memorandum & Articles of Association of the bank;

(l) The accounting treatment of the proposed major investment;

(m) Whether the major investment relates to a closely-linked party, connected party, or controller in any way;

(n) The existence of secrecy laws or constraints over supervisory access to the premises, assets, books and records of the concerned entity in which a "major investment" is being acquired;

(o) The impact and extent of goodwill and intangibles upon the capital adequacy and balance sheet of the bank on a consolidated basis; and

(p) The bank's existing and forecast liquidity position (as a result of the major investment) and how the major investment is to be funded (e.g. by the issuance of new capital or sale of other investments).