MORNBFI Vol. 1 - Planters Development Bank

APP. Q-4611.12.316. The BSP reserves the right, uponauthority of the Deputy Governor,SES, toconduct on-site inspection outside of regularor special examination, for the purpose ofascertaining the accuracy of CARcalculations as well as the integrity of CARmonitoring and reporting systems.Part II. Qualifying capital1. Qualifying capital consists of Tier 1(core plus hybrid) capital and Tier 2(supplementary) capital elements, net ofrequired deductions from capital.A. Tier 1 Capital2. Tier 1 capital is the sum of core Tier1 capital and allowable amount of hybrid Tier1 capital, as set in paragraph 12.3. Core Tier 1 capital consists of:a) Paid-up common stock;b) Paid-up perpetual and noncumulativepreferred stock;c) Additional paid-in capital;d) Retained earnings;e) Undivided profits (for domesticbanks only);f) Net gains on fair value adjustmentof hedging instruments in a cash flow hedgeof available for sale equity securities;g) Cumulative foreign currencytranslation; andh) Minority interest in subsidiaryfinancial allied undertakings which are lessthan wholly-owned: Provided, That a bankshall not use minority interests in the equityaccounts of consolidated subsidiaries asavenue for introducing into its capitalstructure elements that might not otherwisequalify as Tier 1 capital or that would, ineffect, result in an excessive reliance onpreferred stock within Tier 1:Less:i. Common stock treasury shares;ii. Perpetual and non-cumulativepreferred stock treasury shares;iii. Net unrealized losses on availablefor sale equity securities purchased;iv. Gains (Losses) resulting fromdesignating financial liabilities at fair valuethrough profit or loss that are due to owncredit worthiness;v. Unbooked valuation reserves andother capital adjustments based on thelatest report of examination as approvedby the Monetary Board;vi. Total outstanding unsecuredcredit accommodations, both direct andindirect, to DOSRI and unsecured loans,other credit accommodations andguarantees granted to subsidiaries andaffiliates;vii. Deferred income tax;viii.Goodwill, including that relating tounconsolidated subsidiary banks, financialallied undertakings, excluding subsidiarysecurities dealers/brokers and insurancecompanies, (on solo basis) andunconsolidated subsidiary securitiesdealers/brokers, insurance companies andnon-financial allied undertakings (on soloand consolidated bases); andix. Gain on sale resulting from asecuritization transaction.4. Hybrid Tier 1 capital in the form ofperpetual preferred stock and perpetualUnSD may be issued subject to prior BSPapproval and to the conditions inparagraph 12.5. In the case of foreign banks, Tier 1capital is equivalent to:a) Assigned capital includingearnings not remitted to the head officewhich the bank elects to consider as partof assigned capital (in which case it canno longer be remitted to the head office);andb) “Net due to” head office,branches, subsidiaries and other officesoutside the Philippines as defined underSubsec. X105.5.d (inclusive of earningsnot remitted to head office per Subsec.Q RegulationsAppendix Q-46 - Page 2Manual of Regulations for Non-Bank Financial Institutions