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  • CA-10.2 CA-10.2 Definition, Calculation and Scope of the Leverage Ratio

    • Leverage Ratio Requirement and Computational Details

      • CA-10.2.1

        Bahraini Islamic bank licensees must meet a 3% leverage ratio minimum requirement at all times, calculated on a consolidated basis.

        Added: October 2018

      • CA-10.2.2

        The leverage ratio is defined as follows: The Numerator of the leverage ratio is Tier 1 capital as defined in Paragraph CA-1.1.2. The Denominator is composed of self-financed exposures and adjusted exposures funded by URIAs (see Section CA-10.3). The leverage ratio is expressed as a percentage as follows:

                                                                               Tier 1 Capital                                                                       

        {Self-financed exposures adjusted in CA-10.3

        Plus

        a [exposures funded by URIAs adjusted in CA-10.3
        Less
        PER and IRR of URIAs]}
        Added: October 2018

      • CA-10.2.3

        A proportion of assets financed by URIA must be included in the exposure calculation, whether considered on- or off-balance sheet by the Bahraini Islamic bank licensee. The proportion of such assets is calculated by multiplying the relevant assets by the alpha parameter (30%) for capital adequacy purposes. Assets financed by restricted investment accounts are not included in the denominator of the leverage ratio.

        Added: October 2018

      • CA-10.2.4

        The leverage ratio framework follows the same scope of regulatory consolidation for Tier One Capital and Total Exposures as is used in CA-B.1.2A, except where a banking, financial, insurance or commercial entity is outside the scope of regulatory consolidation, only the investment in the capital of such entities (i.e. only the carrying value of the investment, as opposed to the underlying assets and other exposures of the investee) is to be included in the total exposures measure. However, investments in the capital of such entities that are deducted from Tier One Capital must also be deducted from the exposures measure for the purpose of the leverage ratio calculation.

        Added: October 2018

      • CA-10.2.5

        Bahraini Islamic bank licensees identified as DSIBs must also meet a leverage ratio buffer requirement of 50% of HLA buffer (currently set at 1.5%), consistent with the capital measure required to meet the requirements of Module DS.

        Added: October 2018