NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2023 266 WE ARE KENANGA LEADERSHIP MESSAGE VALUE CREATION MODEL KENANGA INVESTMENT BANK BERHAD ANNUAL REPORT 2023 48. CAPITAL MANAGEMENT AND CAPITAL ADEQUACY (CONT’D.) Capital adequacy (cont’d.) (ii) Transitional arrangements for regulatory capital treatment of accounting provisions (cont’d.) Under the transitional arrangements, the Bank is allowed to add back the amount of loss allowance measured at an amount equal to 12-month and lifetime expected credit losses to the extent they are ascribed to non-credit-impaired exposures (“Stage 1 and Stage 2 provisions”) to CET 1 Capital. The capital adequacy ratios of the Group and of the Bank are as follows: Group Bank 2023 2022 2023 2022 With transitional arrangement CET 1 capital ratio 21.543% 20.936% 22.474% 21.626% Tier 1 capital ratio 21.543% 20.936% 22.474% 21.626% Total capital ratio 29.433% 28.913% 31.565% 30.682% Without transitional arrangement CET 1 capital ratio 21.482% 20.876% 22.427% 21.579% Tier 1 capital ratio 21.482% 20.876% 22.427% 21.579% Total capital ratio 29.372% 28.852% 31.518% 30.636%
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