MORNBFI Vol. 1 - Planters Development Bank

§ 4116Q.308.12.31(g) Loans to companies engaged inspeculative residential building or propertydevelopment;(h) Claims on the private sector(except those deducted from capital);(i) Equity investments (except thosededucted from capital);(j) Equipment and other real estatefor lease (for FCs);(k) Real estate for sale/lease;(l) QB premises, furniture, fixturesand equipment (net);(m) Appraisal increment - QBpremises, furniture, fixtures and equipment(net);(n) Real and other properties ownedor acquired (net);(o) Foreign currency notes and coinson hand not acceptable as internationalreserves; and(p) Foreign COCIs not denominatedin foreign currencies acceptable asinternational reserves, except those whichare deducted from capital, as follows:(i) Unsecured credit accommodations,both direct and indirect, to DOSRI;(ii) Deferred income tax;(iii) Goodwill;(iv) Sinking fund for redemption oflimited life redeemable preferred stock;(v) Equity investments in unconsolidatedsubsidiary banks and other subsidiaryfinancial allied undertakings, but excludinginsurance companies;(vi) Investments in debt capitalinstruments of unconsolidated subsidiarybanks;(vii) Equity investments in subsidiaryinsurance companies and subsidiarynon-financial allied undertakings;(viii) Reciprocal investments in equityof other banks/enterprises; and(ix) Reciprocal investments inunsecured subordinated term debtinstruments of other banks/QBs, in excessof the lower of (i) an aggregate ceiling offive percent (5%) of total Tier 1 capital ofthe QB; or (ii) ten percent (10%) of the totaloutstanding unsecured subordinated termdebt issuance of the other bank/QB;b. Off-balance sheet items. Therisk-weighted amount shall be calculatedusing a two (2)-step process.First, the credit equivalent amount ofan off-balance sheet item shall bedetermined by multiplying its notionalprincipal amount by the appropriate creditconversion factor, as follows:(1) One hundred percent (100%)credit conversion factor -This shall apply to direct creditsubstitutes, e.g. general guarantees ofindebtedness and acceptances (includingendorsements with the character ofacceptances), and shall include -(a) Outstanding guarantees issuedThis shall also apply to sale and repoagreements and asset sales with recoursewhere the credit risk remains with the QB[to the extent not included in the (BS)], aswell as to forward asset purchases, andpartly-paid shares and securities, whichrepresent commitments with certaindrawdown: Provided, That these itemsshall be weighted according to the type ofasset and not according to the type ofcounterparty with whom the transactionhas been entered into.(2) Fifty percent (50%) creditconversion factor - This shall apply to -(a) Note issuance facilities andrevolving underwriting facilities (for IHs); and(b) Other commitments, e.g., formalstandby facilities and credit lines with anoriginal maturity of more than one (1) year.This shall include -(i) Underwritten accounts unsold(for IHs).(3) Zero percent (0%) creditconversion factor -This shall apply to commitments withan original maturity of up to one (1) year.This shall also apply to those notinvolving credit risk, and shall include -Manual of Regulations for Non-Bank Financial InstitutionsQ RegulationsPart I - Page 17