Appendix PCD-4 Full Aggregation
Bank "x" controls a non-resident financial entity "z" (80% shareholding) which is filing its return with the respective supervisor under the Basel II capital adequacy rules. The aggregation of capital and RWAs will be carried out as follows:
Parent Bank:
Eligible regulatory capital = 3,000,00011,
Risk weighted assets = 20,000,000
CAR = 3,000,000/20,000,000
= 15%
Non-resident subsidiary:
Eligible regulatory capital = 1,000,000
Risk weighted assets = 10,000,000
CAR = 1,000,000/10,000,000
= 10%
Consolidated Capital Adequacy Ratio:
Eligible regulatory capital = 4,000,000 (3,000,000+1,000,000)
Risk weighted assets = 30,000,000 (20,000,000+10,000,000)
CAR = 4,000,000/30,000,000
= 13.33%
11 This capital amount is after all necessary deductions, including investment in "z".