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Sustainability Statement (Continued)regulators, while delivering returns to shareholders andensuring adequate capital resources are available forbusiness growth, investment opportunities as well asadverse situations.KCB and each of its subsidiaries were in compliancewith all prescribed capital ratios throughout the financialyear. Since June 2009, the Bank has implemented theBasel II Standardized Approach to the measurementof credit risk and market risk and Basic IndicatorApproach for operational risk. The Group views BaselII as part of its continuing efforts to strengthen its riskmanagement culture and ensure that business growthis pursued across targeted segments and markets withthe appropriate risk management discipline, practicesand processes in place.The risk management framework proposed in BaselII seeks to ensure that the strategies formulated by abank are clearly linked to its risk appetite, so that itscapital resources are managed at an optimal level tosupport both its risk and strategic objectives. Basel II isanchored on the following three pillars:Pillar 1: Minimum Capital Requirements: is based onRisk Weighted Assets (RWAs) and seeks to maintainminimum capital levels calculated through credit,market and operational risks.Pillar 2: Supervisory Review Process: Coversregulating tools and frameworks for dealing withperipheral risks the bank faces.Pillar 3: Market Discipline: Seeks to increase thedisclosures that the bank must provide to increase thetransparency.See the analysis of the Credit, Market, Operational andother risks on Notes 4 and 5 of the Financial Statements.K C B 2 0 1 3 A n n u a l R e p o r t a n d F i n a n c i a l S t a t e m e n t s37