9 Capital adequacy requirements (Pillar I)
audited information

Capital adequacy is monitored by the LLB Group and by the individual operative units in accordance with the equity regulations of the Principality of Liechtenstein, which are based on the standards of the Basel Committee on Banking Supervision.

In accordance with Basel II, the banks may choose from various approaches to calculate the capital requirements for credit, market and operational risks. The LLB Group applies the standard approach for credit risks, the basic indicator approach for operational risks and the de minimis approach for market risks. The determination of capital requirements and tier capital is carried out on the basis of the IFRS consolidated financial statement, whereby non-realised gains are deducted from core capital.

At the LLB Group, the scope of consolidation for determining capital requirements and for the financial accounts is identical. The relevant consolidation information can be found on page 156 of the annual report.

Apart from the legal provisions, which prevent the transfer of funds or equity within the LLB Group, there are no other restrictions.

Capital adequacy requirements (Pillar I)

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in CHF thousands

31.12.2009

31.12.2008

Tier 1 ratio (in percent)

13.7

13.5

 

 

 

Eligible capital

 

 

Share capital

154'000

154'000

Capital reserve

49'744

49'768

Retained earnings

1'684'453

1'609'671

Other reserves

–22'274

–39'576

Non-controlling interests

97'122

95'542

Less distribution of profit

–98'831

–98'776

Non-realised gains after tax

–28'963

–8'165

Core capital (before adjustment)

1'835'251

1'762'464

Net long position in own shares

–199'704

–201'848

Other elements to be deducted from core capital

–286'270

–257'465

Eligible core capital (adjusted core capital)

1'349'277

1'303'151

Total eligible capital

1'349'277

1'303'151

 

 

 

Risk-weighted assets

 

 

Credit risks balance sheet transactions

8'306'360

8'272'232

Credit risks off-balance sheet transactions

150'963

145'625

Market risks

410'250

250'513

Operational risks

990'762

974'025

Total risk-weighted assets

9'858'335

9'642'395

 

 

 

Required capital

 

 

Credit risk

676'586

673'429

of which price risk related to shares in the banking book

49'658

42'236

Non-counterparty related risks

 

 

Market risk

 

 

of which interest rate instruments

0

0

of which shares

0

0

of which forex and precious metals

30'189

17'092

of which commodities

2'631

2'949

of which settlement and delivery risks

0

0

Operational risks

79'261

77'922

Total required capital

788'667

771'392

Segmentation of credit risks

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in CHF thousands

Regulatory risk weighting

 

0 %

10 %

20 %

35 %

50 %

75 %

100 %

150 %

Total

31.12.2009

 

 

 

 

 

 

 

 

 

Central governments and banks

519'603

0

0

0

0

0

0

0

519'603

Public authorities

131'428

0

56'069

0

184

0

21'687

0

209'368

Administrative bodies

172'071

0

157

0

26'348

0

22'550

0

221'126

Multinational development banks

1'081

0

0

0

0

0

0

0

1'081

Banks and securities firms

0

0

7'546'668

0

960'247

0

56'501

0

8'563'416

Companies

0

0

100'058

0

0

0

777'335

769

878'162

Retail

0

0

0

0

0

355'259

1'118'839

458

1'474'556

Secured by pledge

4'703

0

0

5'218'312

287'356

0

1'708'076

0

7'218'447

Overdue positions

0

0

0

0

0

0

7'257

180'058

187'315

Shares

0

0

0

0

0

0

5'560

81'297

86'857

Covered debentures

0

98'659

5'029

0

0

0

0

0

103'688

Units in equity funds

0

0

0

0

0

0

0

67'781

67'781

Other positions

0

0

0

0

0

0

0

0

0

Total

828'886

98'659

7'707'981

5'218'312

1'274'135

355'259

3'717'805

330'363

19'531'400

Total previous year

862'798

113'146

9'286'071

4'895'971

598'518

397'874

3'693'481

620'776

20'468'635

Mitigation of credit risk

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in CHF thousands

31.12.2009

31.12.2008

 

Covered by recog- nised financial collateral

Covered by guar- antees

Other
credit
commit-
ments

Total

Covered by recog- nised financial collateral

Covered by guar- antees

Other
credit
commit-
ments

Total

Balance sheet positions

1'058'846

4'397

0

1'063'243

0

6'161

0

6'161

Off-balance sheet positions

27'675

520

0

28'195

44'381

207

0

44'588

Derivatives

0

0

0

0

0

0

0

0

Total

1'086'521

4'917

0

1'091'438

44'381

6'368

0

50'749

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