Annual report 2009-OK.qxp - Canadia Bank Plc.

Canadia Bank Plc.33. CAPITAL MANAGEMENTThe Bank's objectives when managing capital, which is a broader concept than the 'equity' on the face of balancesheet, are:• To comply with the capital requirement set by the NBC;• To safeguard the Bank's ability to continue as a going concern so that it can continue toprovide return for shareholder and benefits for other stakeholders; and• To maintain a strong capital base to support the development of business.The NBC requires all commercial banks to hold minimum capital requirement, maintain the Bank's net worth at leastequal to minimum capital, and comply with solvency, liquidity and other prudential ratios.The table below summarises the composition of regulatory capital:2009 2009 2008 2008US$ Million Riel US$ Million Rielequivalentequivalent(Note 2.1) (Note 2.1)Annual Report 200974Tier I capitalStatutory capital 40,545,000 169,032 40,545,000 165,464Retained earnings 75,056,201 312,909 54,705,135 223,251115,601,201 481,941 95,250,135 388,715Tier II capitalSubordinated debt 7,080,000 29,517 7,080,000 28,894Less:Investment in another bank (3,500,000) (14,592) (10,580,000) (43,177)Intangible assets (714,828) (2,980) (1,130,351) (4,613)Loans and advances torelated parties (205,877) (858) (180,805) (737)(4,420,705) (18,430) (11,891,156) (48,527)Total regulatory capital(net worth) 118,260,496 493,028 90,438,979 369,082Subordinated debt is treated as a financial liability for financial reporting purposes and considered as a Tier IIcapital in the calculation of the Bank's net worth in accordance with the guidelines of the NBC.