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RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of September 13, 2017 No. 170

About establishment of normative values and techniques of calculations of prudential standard rates and other regulations and limits, obligatory to observance, size of the capital of bank and Rules of calculation and limits of open foreign exchange position

(as amended on 15-02-2021)

According to the laws of the Republic of Kazakhstan of August 31, 1995 "About banks and banking activity in the Republic of Kazakhstan" and of March 19, 2010 "About the state statistics" the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Establish:

1) Normative values and techniques of calculations of prudential standard rates and other regulations and limits, obligatory to observance, the size of the capital of bank according to appendix 1 to this resolution;

2) Rules of calculation and limits of open foreign exchange position according to appendix 2 to this resolution.

2. Recognize invalid:

1) the resolution of Board of National Bank of the Republic of Kazakhstan of May 30, 2016 No. 147 "About establishment of normative values and techniques of calculations of prudential standard rates and other regulations, obligatory to observance, and limits of the size of the capital of bank for certain date and Rules of calculation and limits of open foreign exchange position of bank" (registered in the Register of state registration of regulatory legal acts at No. 13919, published on July 26, 2016 in information system of law of Ad_let);

2) Item 2 of the resolution of Board of National Bank of the Republic of Kazakhstan of August 8, 2016 No. 188 "About modification of some regulatory legal acts of the Republic of Kazakhstan concerning banking regulation" (registered in the Register of state registration of regulatory legal acts at No. 14263, published on October 5, 2016 in Reference control bank of regulatory legal acts of the Republic of Kazakhstan).

3. To department of methodology of the financial market (Abdrakhmanov N. A.) in the procedure established by the legislation of the Republic of Kazakhstan to provide:

1) together with Legal department (Sarsenov N. V.) state registration of this resolution in the Ministry of Justice of the Republic of Kazakhstan;

2) within ten calendar days from the date of state registration of this resolution the direction it the copy in paper and electronic type in the Kazakh and Russian languages in the Republican state company on the right of economic maintaining "The republican center of legal information" for official publication and inclusion in Reference control bank of regulatory legal acts of the Republic of Kazakhstan;

3) placement of this resolution on official Internet resource of National Bank of the Republic of Kazakhstan after its official publication.

4. To management on consumer protection of financial services and external communications (Terentyev A. L.) provide within ten calendar days after state registration of this resolution the direction it to the copy on official publication in periodic printing editions.

5. To impose control of execution of this resolution on the vice-chairman of National Bank of the Republic of Kazakhstan Smolyakov O. A.

6. This resolution becomes effective since September 25, 2017 and is subject to official publication.

Chairman of National Bank

D. Akishev

It is approved

Chairman of Committee according to the statistics Ministries of national economy of the Republic of Kazakhstan

September 28, 2017

 

__________________ N. Aydapkelov

Appendix 1

to the Resolution of Board of National Bank of the Republic of Kazakhstan of September 13, 2017 No. 170

Normative values and techniques of calculations of prudential standard rates and other regulations and limits, obligatory to observance, size of the capital of bank

Chapter 1. General provisions

1. Normative values and techniques of calculations of prudential standard rates and other regulations and limits, obligatory to observance, the size of the capital of bank (further - Standard rates) are developed according to the Law of the Republic of Kazakhstan of August 31, 1995 "About banks and banking activity in the Republic of Kazakhstan" (further - the Law on banks) and establish normative values and techniques of calculations of prudential standard rates and other regulations and limits, obligatory to observance, the size of the capital of bank.

Normative values for banks and their affiliated organizations calculated on the basis of consolidated financial statements are established according to article 42 of the Law on banks.

Normative values are expressed by number with three signs after comma.

And limits of the size of the capital of bank for obligatory observance by banks enter into structure of prudential standard rates and other regulations, obligatory to observance:

minimum size of authorized and own capitals of bank;

coefficient of sufficiency of equity;

the maximum extent of risk on one borrower;

liquidity rates;

coverage ratios of liquidity and net stable funding;

capitalization of banks to obligations to nonresidents of the Republic of Kazakhstan;

coefficient on placement of part of means of bank in internal assets.

2. In Standard rates the following concepts are used:

1) book value - the amount on which the loan is recognized the balance sheet after deduction of the provisions (reserves) created on them;

2) uniform loans - group of loans with similar characteristics of credit risk;

3) individual loans - loans on which provisions (reserves) are calculated on each such loan;

4) investment loan (credit) - I will jam (credit), conforming to the following requirements:

the term of loan (credit) constitutes 5 (five) and more years;

terms of the contract of loan (credit) establish prohibition on complete early repayment. Partial repayment of loan is performed in the terms and procedure provided by the business plan of the borrower;

the loan (credit) is granted the legal entity according to its business plan providing realization of complex of the actions directed to creation, expansion and upgrade of production of goods, production and transport infrastructure;

5) unsteady types of pledge - the property and money arriving in the future (except for the rights of requirements to the state partner in the cash receipts transfered to account, intended for transfer of compensation of investment costs, under the agreement of public-private partnership signed according to the legislation of the Republic of Kazakhstan which is the key under the agreement of bank loan which conditions are provided in Item 2-1 of Standard rates, and also the money arriving in the future on off-take to the contract which is the key under the agreement of bank loan in case of compliance to the conditions provided in Item 2-2 of Standard rates), including under agreements of equity (except for the money arriving under the agreements signed with the companies with the state participation (subjects of the quasi-public sector), insurance contracts (except for the insurance contracts containing Items on unconditional and irrevocable obligation fulfillment concluded with the insurance companies having rating "BB+" of Standard&Poor rating agency "s or rating of the Moody agencies" sInvestorsService and Fitch (further - other rating agencies) is not lower, than insurance contracts which conditions are provided in Item 2-1 of Standard rates), guarantees of physical persons or legal entities (except for "BB+" of Standard&Poor rating agency "is not lower than guarantees of the legal entities having credit rating s or the rating of similar level of one of other rating agencies, guarantees of the banks of the second level having credit rating is not lower "In -" Standard&Poor rating agency "of s or other rating agencies, and also guarantees issued by national managing directors of holdings and their affiliated organizations), intangible assets, shares in the authorized capital or the securities which are not included in the official listing of organizers of the biddings of the Republic of Kazakhstan and (or) organizers of the biddings recognized by the international stock exchanges, (except for the share accepted in mortgage providing in the authorized capital and (or) securities of legal entities which have relation of debt on the loans issued on the purposes which are not connected with financing of current assets to profit to deduction of expenses on payment of the added remunerations, tax assignments and charged depreciation (EBITDA) constitutes no more 4), paper grain receipts, the mortgage providing which is outside the Republic of Kazakhstan (except for the mortgage providing which is in the countries of the Eurasian Economic Union in the presence of the conclusion of legal consultants or specialists of the affiliated organizations of bank according to the right of the said countries confirming proper registration of mortgage providing);

According to the Resolution of Board of the Agency of the Republic of Kazakhstan on regulation and development of the financial market of 30.10.2020 No. 106 of the subitem 5) of Item 2 is suspended from October 1, 2020 to June 30, 2021 inclusive, during suspension this subitem is effective in the following edition:

6) unsecured consumer loan - consumer loan, except for:

the loans provided with the pledges of the rights to real estate, the pledge of personal estate which is subject to obligatory state registration, completely covering the amount of the issued loan;

the loans provided with pledge of the rights on the issued securities which are subject to registration, completely covering the amount of the issued loan;

the loans provided with pledge of right to claim under agreements of equity in housing construction, completely covering the amount of the issued loan;

loans on which the money which is completely covering the amount of the issued loan acts as providing;

the loans issued within system of educational crediting;

the loans issued within system of housing construction savings;

7) loan - implementation of banking loan, leasing, factoring, forfaiting activities by bank, accounting of bills of exchange and receivables on earlier issued bank loans;

8) the borrower - the physical person or legal entity which signed the loan agreement (credit);

9) provisions (reserves) - the reserves created under impairment of loan;

10) the co-borrower - the physical person or legal entity which is signing the loan agreement (credit) together with the borrower and acting according to the loan agreement (credit) as the solidary actionee of obligations on return of the received money;

11) off-take the contract - the agreement between the producer (supplier) and the customer on sales of goods and (or) services with delivery in the future on in advance resolutive conditions at the cost, quantity (amount) and delivery dates.

2-1. The agreement of bank loan is signed by bank with the legal entity within the agreement of public-private partnership and corresponds to the following conditions:

the investment period of project implementation of public-private partnership does not exceed 36 (thirty six) months. The investment period is the period from the date of the conclusion of the agreement of bank loan (the agreement on provision (opening) of credit line) on start date of payment of compensation of investment costs;

step-by-step financing of the project of public-private partnership within loan amount (the loan issued within credit line) is performed in the following procedure:

the amount of step-by-step financing during one quarter of the investment period does not exceed 30 (thirty) percent of the general size of loan (the loan issued within credit line);

the amount of step-by-step financing during half of the investment period does not exceed 50 (fifty) percent of the general size of loan (the loan issued within credit line);

technical supervision of construction object is exercised by the legal entity chosen by bank on the basis of the agreement of public-private partnership.

The insurance contract signed with the insurance company having rating is not lower than "BB+" of Standard&Poor rating agency "s or other rating agencies contains exclusively following conditions allowing the insurer to refuse (not to perform) in insurance payment (insurance payment) to the beneficiary (bank):

requirements of the insurer (insured, the beneficiary) about indemnification exceed the size of insurance sum;

the damage or expenses resulted from impact of nuclear explosion, radiation or radioactive infection, military operations, civil war, any national disorders, mass riots or strikes;

the agreement of bank loan is nullified;

introduction of amendments to the agreement of bank loan, the agreement of pledge, the agreement of guarantee or the guarantee without written coordination of such changes with the insurer;

message beneficiary (bank) to the insurer of obviously false data on object of insurance, insurance risk, insured event and its consequences;

receipt of loss by the beneficiary (bank) of full recovery from the face, responsible for losses, or third party;

hindrance by the beneficiary (bank) to the insurer in investigation of circumstances of loss occurrence and in establishment of the size of the caused loss;

refusal of the beneficiary (bank) of the right to claim according to the loan agreement against the insurer, including in judicial or extrajudicial procedure.

In the insurance contract specifying of condition of implementation of insurance payment without taking into account (less) the agreement of the pledge nullified by court is allowed. In this case the insurance contract is considered as providing less the agreement of the pledge nullified by court.

In case of acceptance by bank as providing the insurance contract is accepted less the unconditional franchize.

 2-2. The money arriving in the future on off-take to the contract is excluded from unsteady types of pledge in case of observance of the following conditions:

1) customer is:

the legal entity, more than 50 (fifty) percent of voting shares (shares in the authorized capital) which directly or indirectly belong to the state or national managing holding, or;

public institution, or;

local executive body of area, city of republican value, capital;

the legal entity with rating not below "BB+" of Standard & Poor rating agency "s or other rating agencies, or;

large systemically important enterprise, or;

the legal entity whose at least 70 (seventy) percent of the income within the last 2 (two) years are created by persons specified in paragraphs the second, third, the fourth, fifth and sixth this subitem;

2) terms of the contract provide obligatory execution by the customer of the obligations to the producer (supplier) in case of proper execution by the producer (supplier) of obligations assumed under the contract;

3) the producer (supplier) - the borrower has positive credit history according to credit bureau which is expressed in lack of overdue debt more than 30 (thirty) calendar days for the last 2 (two) years.

For the purposes of Standard rates the companies corresponding to the following criteria treat the large systemically important enterprises:

the proceeds from sales of products (rendering services) constitute at least 50 (fifty) billion tenges annually for the last 2 (two) years;

tax assignments constitute at least 3 (three) billion tenges annually for the last 2 (two) years.

Chapter 2. Minimum size of authorized and own capitals of bank

3. The minimum size of authorized and own capitals for again created bank is established in the amount of 10 000 000 000 (ten billion) tenges.

4. The minimum size of equity of bank is established in the following procedure:

for housing construction savings bank in the amount of 4 000 000 000 (four billion) tenges;

for other banks in the amount of 10 000 000 000 (ten billion) tenges.

5. The bank redeems from shareholders own shares provided that such redemption will not lead to violation of any of prudential standard rates and other regulations, obligatory to observance, and limits of the size of the capital of bank set by authorized body on state regulation, control and supervision of the financial market and the financial organizations (further - authorized body).

Chapter 3. Coefficient of sufficiency of equity

6. Sufficiency of equity of bank is characterized by the following coefficients:

1) coefficient of sufficiency of fixed capital of k1:

relation of fixed capital to the amount:

assets, contingent and possible obligations weighed on degree of credit risk;

assets, conditional and possible requirements and obligations calculated taking into account market risk;

operational risk;

2) capital adequacy ratio of the first k1-2 level:

relation of the capital of the first level to the amount:

assets, contingent and possible obligations weighed on degree of credit risk;

assets, conditional and possible requirements and obligations calculated taking into account market risk;

operational risk;

3) coefficient of sufficiency of equity of k2:

equity relation to the amount:

assets, contingent and possible obligations weighed on degree of credit risk;

assets, conditional and possible requirements and obligations calculated taking into account market risk;

operational risk.

The assets, contingent and possible obligations weighed on the risk degrees taken into consideration of coefficients of k 1, k1-2 and k2 join less the reserves created according to international accounting standards (further - IFRS).

Values of capital adequacy ratios are determined as the amount of the values established according to Values of capital adequacy ratios according to appendix 2 to Standard rates.

In addition to values of coefficients of sufficiency of equity the following values of buffers of equity are established:

the requirement to the conservation buffer is fulfilled on permanent basis and constitutes:

for all banks:

since January 1, 2015 - 1 (one) percent;

since January 1, 2016 - 1 (one) percent;

since January 1, 2017 - 2 (two) percent;

since June 1, 2020 - 1 (one) percent;

since July 1, 2021 - 2 (two) percent;

for systemically significant banks:

since January 1, 2015 - 2,5 (two whole five tenth) percent;

since January 1, 2016 - 2,5 (two whole five tenth) percent;

since January 1, 2017 - 3 (three) percent;

since June 1, 2020 - 2 (two) percent;

since July 1, 2021 - 3 (three) percent;

which counter-cyclical buffer, the size and terms of introduction are established by Standard rates at least in 12 (twelve) months prior to start date of calculation of the counter-cyclical buffer. The range of the size of the counter-cyclical buffer constitutes from 0 (zero) percent to 3 (three) percent from the amount of assets, contingent and possible obligations weighed taking into account risks;

the system buffer, the requirement to which calculation extends to systemically significant banks recognized as those according to the resolution of Board of National Bank of the Republic of Kazakhstan of December 23, 2019 No. 240 "About approval of Rules of reference of the financial organizations to number systemically significant" registered in the Register of state registration of regulatory legal acts at No. 19925. The requirement to the system buffer is fulfilled since January 1, 2017 on permanent basis and constitutes 1 (one) percent from the amount of assets, contingent and possible obligations weighed taking into account risks;

the regulatory buffer is calculated as the relation of positive difference between provisions (reserves) calculated according to the Management on forming of provisions (reserves) under asset impairment of bank in the form of loans and receivables according to appendix 1 to Standard rates and the provisions (reserves) created and reflected in financial accounting of bank according to IFRS and requirements of the legislation of the Republic of Kazakhstan about financial accounting and the financial reporting (further - positive difference) to the amount:

assets, contingent and possible obligations weighed on degree of credit risk;

assets, conditional and possible requirements and obligations calculated taking into account market risk;

operational risk.

For the purposes of calculation of positive difference of provisions (reserves) calculated according to the Management on forming of provisions (reserves) under asset impairment of bank in the form of loans and receivables according to appendix 1 to Standard rates monthly decrease by the amount of provisions (reserves) on completely extinguished and (or) written off loans and receivables after the last settlement date of provisions (reserves) according to the Management on forming of provisions (reserves) under asset impairment of bank in the form of loans and receivables according to appendix 1 to Standard rates.

The positive difference is calculated on loans and receivables on which provisions (reserves) according to the Management on forming of provisions (reserves) under asset impairment of bank in the form of loans and receivables according to appendix 1 to Standard rates are expected the last date of their calculation.

When calculating positive difference the sum of provisions calculated according to the Management for forming of provisions (reserves) under asset impairment of bank in the form of loans and receivables according to appendix 1 to Standard rates joins in the amount of, not exceeding debt on loan and (or) receivables without provisions (reserves).

The positive difference corrected by results of check of authorized body is considered when calculating the regulatory buffer from the reporting date following month under report.

If the actual values of coefficients of the capital of k 1, k1-2 and k2 bank are not lower than the capital adequacy ratios established according to Values according to appendix 2 to Standard rates, but at the same time any of the provided coefficients below what the established values of capital adequacy ratios taking into account equity buffers (except for the regulatory buffer), then on use of retained net income of bank restriction according to the Minimum amount of restriction of retained net income according to appendix 3 to Standard rates, regarding the termination of dividend payout and the return share repurchase, except as specified, provided by the Law of the Republic of Kazakhstan of May 13, 2003 "About joint-stock companies" is imposed.

On the banks having positive difference, and the actual values of capital adequacy ratios (which k 1, k1-2 and k 2) any of the provided coefficients below what the established values of capital adequacy ratios taking into account equity buffers is not lower than the capital adequacy ratios established according to Values according to appendix 2 to Standard rates, but at the same time, restriction for use of retained net income according to the Minimum amount of restriction of retained net income according to appendix 3 to Standard rates, regarding the termination of dividend payout and the return share repurchase, except as specified, provided by the Law of the Republic of Kazakhstan of May 13, 2003 "About joint-stock companies" is imposed.

In case of the case provided in parts ten of this Item, bank and (or) its shareholders, bank holding and (or) its large participants develop and represent to authorized body for approval the actions plan which, without being limited to following, contains the following information about (about):

the actions for capitalization of bank to the level sufficient for covering of positive difference including including replenishment of the authorized capital, and (or) increase in net retained earnings, and (or) the redemption by shareholders of doubtful and (or) bad assets;

actions no more than 5 years for step-by-step improvement of quality of assets and return of problem debt, including the following measures:

repayment of problem debt for the account of mortgage providing and subsequent its realization or acceptance of collateral mortgage security;

realization and (or) concession of the right (requirement) for the agreement of bank loan of the affiliated organization of bank acquiring doubtful and bad assets of parent bank, to the collection agencies, banks, the organizations performing separate types of banking activities, to the organizations, specializing in improvement of quality of credit portfolios of banks of the second level, the special finance company created according to the legislation of the Republic of Kazakhstan on project financing and securitization in case of the transaction of securitization;

realization and (or) transfer of assets to the third parties;

the financial model of bank for at least 5 years by every year constituted taking into account the development strategy of bank approved by authorized body of bank;

obligations assumed by bank and (or) its shareholders, bank holding and (or) large participants during action of the actions plan;

completion dates of the actions plan on each its Item;

the list of the leading employees responsible for execution of the actions plan (with indication of the leading employees responsible for execution for each Item of the actions plan).

In case of actions plan overfulfillment in the accounting period offsetting of execution of the actions plan in the next accounting period is allowed.

In case of non-compliance with the actions plan the authorized body applies measures of supervising reaction according to the bank law of the Republic of Kazakhstan.

Values of coefficients of sufficiency of equity taking into account buffers of equity are reached at the expense of components of fixed capital which list is stipulated in Item 10 Standard rates.

The size of buffers of equity calculated according to requirements of Standard rates is not reflected in financial accounting.

Values of coefficients of sufficiency of equity and buffers of equity, except for the regulatory buffer, are reviewed by authorized body at least 1 (one) time in 3 (three) years.

7. The equity is calculated as capital sum of the first level and the capital of the second level.

8. For the purposes of Standard rates, in addition to long-term credit rating evaluations of the Standard & Poor agency "s, authorized body are also recognized long-term credit rating evaluations of other rating agencies.

For the purposes of Standard rates the following organizations treat international financial institutions:

Asian Development Bank (Asian Development Bank);

African development bank (African Development Bank);

Development bank of the European Council (Council of Europe Development Bank);

Eurasian Development Bank;

European Bank for Reconstruction and Development (European Bank for Reconstruction and Development);

European Investment Bank (European Investment Bank);

Islamic development bank (Islamic Development Bank);

Islamic corporation on private sector development (ICD);

Inter-American Development Bank (Inter-American Development Bank);

International Development Association;

International Finance Corporation (International Finance Corporation);

International Bank for Reconstruction and Development (International Bank for Reconstruction and Development);

International Monetary Fund;

International Centre for Settlement of Investment Disputes;

Multilateral agency of guarantee of investments;

Scandinavian investment bank (Nordic Investment Bank).

9. For the purposes of item 4 of article 8 of the Law on banks of investment of bank when calculating equity since July 1, 2011 represent investments in subordinated debt of the legal entity which cumulative size exceeds 10 (ten) percent of capital sum of the first level and the capital of the second level of bank.

10. The capital of the first level is calculated as the amount of fixed capital and the added capital:

1) fixed capital is calculated as the amount:

the paid common shares corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates;

supplementary paid-in capital;

retained net profit of last years;

retained net profit of the current year;

the cumulative opened reserve determined as the amount of remaining balance on the balance sheet account 3510 "Reserve capital" of the Standard chart of accounts of financial accounting in banks of the second level, the mortgage organizations and Development Bank of Kazakhstan joint-stock company approved by the resolution of Board of National Bank of the Republic of Kazakhstan of January 31, 2011 No. 3, registered in the Register of state registration of regulatory legal acts at No. 6793 (further - the Standard chart of accounts);

reserves of revaluation of fixed assets and reserves of revaluation of cost of the securities carried at fair value through other comprehensive income;

reserves of revaluation of cost of the loans carried at fair value through other comprehensive income;

minus the following regulatory adjustments:

own redeemed common shares;

intangible assets, including goodwill;

losses of last years and losses of the current year;

deferred tax asset, except for parts of the deferred tax assets recognized concerning deductible temporary differences;

reserves on other revaluation;

the sales returns connected with transactions on securitization of assets. The deferred revenue in connection with the expectation of the complete or partial income in the future received from securitization conditions belongs to such income;

the income or losses from change of fair value of the financial liability in connection with change of credit risk according to such obligation;

the regulatory adjustments which are deductible from the added capital, but in connection with its insufficient level subtracted from fixed capital;

the investments specified in Item 11 of Standard rates;

2) the added capital joins the termless agreements corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates as a result of which at the same time there is financial asset at one person and the financial liability or other financial instrument confirming the right to share of the assets of the legal entity which remained later deductions of all its obligations at other person (further - termless financial instruments) and also the paid preferred shares corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates.

The size of the added capital decreases by the amount of the following regulatory adjustments:

investments of bank into own termless financial instruments by direct or indirect method;

own redeemed preferred shares of bank;

the investments specified in Item 11 of Standard rates;

the regulatory adjustments which are deductible from the capital of the second level, but in connection with its insufficient level subtracted from the added capital.

If the amount of the added capital of bank is insufficient for implementation of deduction, then the rest is subtracted from fixed capital of bank.

11. Deduction from the capital of investments of bank into shares (shares in the authorized capital), termless financial instruments, subordinated debt (further - financial instruments) legal entities whose financial reporting are not consolidated in case of creation of the financial reporting of bank according to IFRS and also deduction of deferred tax assets, are performed in the following procedure:

if investments of bank into financial instruments of the financial organizations in which the bank has less than 10 (ten) percent of issued shares (shares in the authorized capital) in total exceed 10 (ten) percent from fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates, the amount of excess is deductible from equity;

if investments of bank into common shares of the financial organization in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital) in total exceed 10 (ten) percent from fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates and the paragraph the second this Item, the amount of excess is deductible from fixed capital;

if part of the deferred tax assets recognized concerning deductible temporary differences exceeds 10 (ten) percent from fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates and the paragraph the second this Item, the amount of excess is deductible from fixed capital;

if investments of bank into common shares of the financial organization in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital) and part of the deferred tax assets recognized concerning deductible temporary differences in total exceed 17,65 (seventeen whole sixty five 100-th) percent of difference of fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates, and the amount which is subject to deduction from fixed capital, specified in paragraphs the second, third and fourth this Item, the amount of excess is deductible from fixed capital;

the excess amount calculated according to the paragraph the fifth this Item decreases on the amounts which are deductible from fixed capital, specified in paragraphs the second, third and fourth this Item;

the deduction of the investments into financial instruments specified in the paragraph the second this Item is performed from appropriate level of equity proceeding from share of investments in the total amount of investments into financial instruments;

deferred tax assets for the purposes of calculation of deduction according to Item 10 and paragraphs the fourth, fifth and sixth this Item decrease on the amount of deferred tax liabilities, except for the deferred tax liabilities recognized concerning intangible assets including goodwill, on pro rata basis between the deferred tax assets recognized concerning deductible temporary differences and other deferred tax assets;

investments of bank into termless financial instruments of the financial organizations in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital) are deductible from the added capital;

if the amount of the added capital is insufficient for implementation of deduction, then the amount is subtracted from fixed capital of bank;

investments of bank into subordinated debt of the financial organizations, in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital), of the legal entity, are deductible from the capital of the second level;

if the capital sum of the second level is insufficient for implementation of deduction, then the amount is subtracted from the capital of the first level of bank;

the investments which are not subtracted from calculation of equity are weighed on degree of credit risk according to the Table of the assets of bank weighed on degree of credit risk of investments according to appendix 5 to Standard rates.

12. The termless financial instruments attracted till January 1, 2015, which are not corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates turn on in the added capital according to the following conditions:

since January 1, 2015 - in the amount of 100 (hundred) percent of the amount of termless financial instruments;

since January 1, 2016 - in the amount of 100 (hundred) percent of the amount of termless financial instruments;

since January 1, 2017 - in the amount of 80 (eighty) percent of the amount of termless financial instruments;

since January 1, 2018 - in the amount of 50 (fifty) percent of the amount of termless financial instruments;

since January 1, 2019 - in the amount of 20 (twenty) percent of the amount of termless financial instruments;

since January 1, 2020 the amount of termless financial instruments is excluded from calculation of the added capital.

Calculation of equity joins paid amount of termless financial instruments in the amount of the money which is actually received by bank.

13. The paid preferred shares of bank which are not corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates join in the added capital according to the following conditions:

since January 1, 2015 - in the amount of 100 (hundred) percent of the amount of the paid preferred shares;

since January 1, 2016 - in the amount of 100 (hundred) percent of the amount of the paid preferred shares;

since January 1, 2017 - in the amount of 80 (eighty) percent of the amount of the paid preferred shares;

since January 1, 2018 - in the amount of 50 (fifty) percent of the amount of the paid preferred shares;

since January 1, 2019 - in the amount of 20 (twenty) percent of the amount of the paid preferred shares;

since January 1, 2020 the amount of the paid preferred shares is excluded from calculation of the added capital.

Calculation of equity joins the amount of the paid preferred shares in the amount of the money which is actually received by bank.

14. The bank to authorized body represents copies by the approved authorized body of bank of the agreement or conditions of release of termless financial instruments. Termless financial instruments turn on in calculation of equity of bank from the written confirmation of authorized body about compliance of the agreement or conditions of release of termless financial instruments of bank to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates.

15. The capital of the second level is calculated as the amount:

subordinated debt minus the redeemed own subordinated debt of bank;

minus the investments specified in Item 11 of Standard rates.

For the bank which is subject to restructuring according to the Law on banks, the subordinated debt joins in the capital of the second level in the amount which is not exceeding 75 (seventy five) percent of capital sum of the first level minus the redeemed own subordinated debt of bank within 5 (five) years from the date of the expiration of the carrying out restructuring determined by the judgment.

The size of the subordinated debt attracted till January 1, 2015, which is not corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates joins in calculation of the capital of the second level according to the following conditions:

in national currency:

since January 1, 2015 - in the amount of 100 (hundred) percent of the amount of subordinated debt in national currency;

since January 1, 2016 - in the amount of 100 (hundred) percent of the amount of subordinated debt in national currency;

since January 1, 2017 - in the amount of 80 (eighty) percent of the amount of subordinated debt in national currency;

since January 1, 2018 - in the amount of 50 (fifty) percent of the amount of subordinated debt in national currency;

since January 1, 2019 - in the amount of 20 (twenty) percent of the amount of subordinated debt in national currency;

since January 1, 2020 the amount of subordinated debt in national currency is excluded from calculation of the capital of the second level;

in foreign currency:

since January 1, 2015 - in the amount of 80 (eighty) percent of the amount of subordinated debt in foreign currency;

since January 1, 2016 - in the amount of 60 (sixty) percent of the amount of subordinated debt in foreign currency;

since January 1, 2017 - in the amount of 40 (forty) percent of the amount of subordinated debt in foreign currency;

since January 1, 2018 - in the amount of 20 (twenty) percent of the amount of subordinated debt in foreign currency;

since January 1, 2019 the amount of subordinated debt in foreign currency is excluded from calculation of the capital of the second level.

The size of subordinated debt with repayment period as of the January 1, 2015 constituting less than 5 (five) years continues to join in calculation of the capital of the second level in the amount of, included as of December 31, 2014, and annually as of January 1 decreases by 20 (twenty) percent from the amount of subordinated debt.

16. Calculation of retained net profit (loss) of the current year or last years for the purposes of the capital of the first and second levels does not include the debit balance reflected in account 3300 "The account of adjustment of reserves (provisions)" (further - debit balance) the Standard chart of accounts as of December 31, 2012 in the following size:

in 2013 - 83,3 (eighty three whole three tenth) percent of the amount of debit balance;

in 2014 - 66,6 (sixty six whole six tenth) percent of the amount of debit balance;

in 2015 - 50 (fifty) percent of the amount of debit balance;

in 2016 - 33, ((thirty three whole three tenth) percent of the amount of debit balance;

in 2017 - 16,6 (sixteen whole six tenth) percent of the amount of debit balance.

For the purposes of Standard rates the debit balance on account 3300 "The account of adjustment of reserves (provisions)" is understood as the amount of negative difference between reserves (provisions) created as of December 31, 2012 and the reserves which developed for December 31, 2012 according to IFRS.

17. The subordinated debt of bank is the unsecured obligation of bank corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates.

18. The banks performing (performed) restructuring according to the Law on banks at discretion include in calculation of equity negative difference between fair values of the financial instruments taking into account charged depreciation issued (acquired) within restructuring in the amount which is not exceeding 15 (fifteen) percent from the amount of the paid authorized capital minus own redeemed bank shares.

19. Calculation of assets, the contingent and possible obligations weighed on degree of credit risk is carried out according to the Table of the assets of bank weighed on degree of credit risk of investments according to appendix 5 to Standard rates, Values of coefficients of weighing on degree of credit risk of investments on unsecured consumer loans when calculating coefficient of debt load, according to appendix 5-1 to Standard rates and the Table of the contingent and possible obligations of bank weighed on degree of credit risk according to appendix 6 to Standard rates. Calculation of values of coefficients of weighing for degree of credit risk of investments for unsecured consumer loans when calculating coefficient of debt load is perfromed on the unsecured consumer loans issued after January 1, 2020.

For the purposes of weighing of assets, contingent and possible obligations on risk degree assets, contingent and possible obligations decrease by the amount of the created reserves, according to IFRS.

The contingent and possible obligations weighed on degree of credit risk are determined as the work of the amount of the contingent and possible obligations expected according to the Table of the contingent and possible obligations of bank weighed on degree of credit risk according to appendix 6 to Standard rates the risk degree corresponding to category of the partner specified in the Table of the assets of bank weighed on degree of credit risk of investments according to appendix 5 to Standard rates on which the bank bears credit risks.

Swaps, futures, options, forwards join in calculation of the contingent and possible obligations weighed taking into account credit risk, by multiplication of the amount of market value of the specified financial instruments and credit risk on them on the risk degree corresponding to category of the partner specified in the Table of the assets of bank weighed on degree of credit risk of investments according to appendix 5 to Standard rates.

The credit risk on swap transactions, the future, the option and the forward is calculated as the work of nominal value of the specified financial instruments on the coefficient of credit risk specified in the Table of coefficients of credit risk for derivative financial instruments according to appendix 7 to Standard rates and determined by repayment period of the specified financial instruments.

Market value (replacement cost) of financial instruments specified in this Item represents:

according to transactions on purchase - the size of excess of the current market value of the financial instrument over the nominal contractual value of this financial instrument. If the current market value of the financial instrument is less or is equal to its nominal contractual value, the replacement cost is equal to 0 (zero);

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