Equity capital of the bank, its structure and functions. Own capital of the bank, characteristics of its structure What functions does the capital of the bank perform

Before approaching the analysis of the bank's activities in more detail, it is necessary to determine the procedure for its implementation in order to systematically build the stages of the study, to eliminate repetition and interruption of the logic in the analysis.

So, returning to the fact that a bank is a financial institution that attracts and places financial resources on its own behalf and at its own expense, we can say that a bank can place only what it has attracted or already has in the form of its own funds. In this way, the quality and quantity of liabilities determines the quality and quantity of assets. In this regard, it is very logical to start the analysis of the bank with its passive part.

To begin with, let's define the concepts that we will use during our lesson.

Bank liabilities- the totality of funds accounted for in the passive accounts of the bank's balance sheet and characterizing the sources of banking resources.

Passive Operations- this is the activity of the bank, aimed at the formation of its own and attracted sources of funds for their further use in order to generate income.

Equity- these are the funds of the bank, belonging to it on the basis of property rights and formed either at the expense of the funds of owners or investors, or at the expense of the bank's profit.

Regulatory capital- this is the amount of equity capital required to cover the bank's losses associated with the onset of risky events and calculated in accordance with the requirements of the regulator (the Bank of Russia).

Raised capital- these are funds raised by the bank from legal entities and individuals on a repayment basis in order to place these resources on the market.

So, the bank's liabilities are a general concept that includes all sources of resources for the bank, and the bank can receive financial resources both from its own sources, for example, profit or funds from owners, and from its customers. Therefore, the analysis of the bank's liabilities should begin with a grouping of resources into Own funds and Borrowed funds (in the literature, the term "capital" is most often used instead of the word "funds"). Grouping is necessary because the resources received by the bank from different sources perform different functions, therefore, their analysis and evaluation will be different. So, if the funds received by the bank from customers on the terms of urgency, payment and repayment are necessary for the bank for their further profitable placement, i.e. to perform the function of redistribution, then its own resources, in addition to this, also perform protective, regulatory and operational functions, which will be discussed below.

Starting the analysis of the bank's liabilities, it is necessary to indicate the features of reading the reporting forms that our readers will encounter when conducting an independent analysis and assessment. To obtain the data required for analysis, you can use such reporting forms as the “Balance Sheet (published form No. 0409806), “Report on the level of capital adequacy, the amount of reserves to cover doubtful loans and other assets (published form No. 0408908). However, the first question that the reader will ask when using these forms is what amount of the bank's own funds to use for analysis, because. he will see two of them, differing from each other in meaning.

Below is an example of excerpts from the two specified reporting forms of one of the regional banks. In both forms, essentially the same indicators are indicated, but having different quantitative values: from the balance sheet of the bank we receive own funds equal to 2,437,037 thousand rubles, and in the Capital Adequacy Report the same indicator is RUB 2,772,426 thousand (naturally, the reporting is presented for one date, which eliminates the error).

Extract from the statements "Balance sheet (published form)",

Form No. 0409806

Bank JSC "Avtovazbank" as of 01.07.2009

Extract from the report "Report on the level of capital adequacy, the amount of provisions for covering doubtful loans and other assets (published form)",

Form No. 0408908

Bank JSC "Avtovazbank" as of 01.07.2009

The reason for these differences lies in only one thing - in the method of calculating the bank's own capital. In the second case (form No. 0408908), equity is calculated in accordance with the requirements of the Bank of Russia, which regulated the accounting of such items as, for example, a subordinated loan, and a number of other items that reduce and increase equity capital as part of equity (for more details, this methodology we will consider below), while in the balance sheet of the bank (form No. 0409806) these items are not taken into account. Therefore, the equity capital indicated in the form No. 0408908 is called regulatory capital. In essence, the regulatory capital is the same equity capital of the bank, but calculated with some additional adjustments that the regulator considers correct.

Therefore, already at the beginning of the lesson, it is necessary to decide that for the analysis we will use the equity indicated in the Bank's Balance Sheet (form No. 0409806), because. it is not possible to calculate the regulatory capital independently using the methodology of the Bank of Russia due to lack of information.

So, having data on the value of total liabilities and its chapters (attracted and equity capital), we will analyze the liabilities of Bank X.

* to fill in the table, you can use the forms that are in the public domain:

- line “Total liabilities (balance sheet currency)" - form 409806 "Balance sheet of the bank" to obtain the amount of total liabilities, it is necessary to sum up the results of Chapter II (Liability) and Chapter III (Sources of own funds)

- line "Equity»- data of form 0409806, Chapter III

- line "Attracted capital" calculated as the difference between rows 1 and 3 of the above table

As can be seen from the table, during the analyzed periods, there is an increase in the volume of total liabilities, however, against the background of an increase in this indicator in absolute terms, its increase in relative terms decreases from 75.1% to 33.3%, which suggests that some problems in terms of the formation of the resource base: the bank reduces activity in the market. A large share of liabilities is occupied by attracted capital, which is determined by the nature of the bank and its role in the market. At the same time, in dynamics, the share of attracted capital is growing, and equity, respectively, is falling, which in the future may lead to problems with equity capital adequacy. This is approximately the same assessment that can be given to a bank, considering the structure of its liabilities by an enlarged grouping. For a more detailed understanding of the bank, you need to "dig" inside the liabilities, and especially in its equity.

We pay such attention to equity capital because clients are increasingly making certain requirements for this indicator of banking activity, because. rightly consider this element of bank liabilities important and characterizing the reliability of the bank.

Arguing on the topic of choosing a bank by a client, I would like to comment on the results of the site conducted by the site. So, according to the results of the survey, one of the main factors in choosing a bank is the factor “The bank has been operating in the market for a long time”, which they identify with the reliability of the bank. Understanding the essence of reliability, it should be said that one of its main characteristics is precisely its own capital, which gives the bank a "green light" to conduct operations in the market.

In the theory of banking, the bank's equity is also given an important place because of the functions it performs. So, for example, in theory there are three main functions: protective, operational and regulatory. The protective function is that the capital plays the role of a kind of protective "cushion" and allows the bank to continue operations in the event of large unforeseen losses or expenses. To finance such costs, there are various reserve funds included in equity. The operational function includes investments of own funds for the acquisition of land, buildings, equipment, as well as the creation of a financial reserve in case of unforeseen losses. The regulatory function is associated with the special interest of society in the successful functioning of banks. With the help of the bank's capital adequacy ratio (H1), state bodies assess and control the activities of banks;

Financial reserve function;

The function of maintaining public confidence;

The function of protecting the interests of depositors who do not have full insurance;

The function of a source of funds for the development of the bank.

In general, summarizing the above, we can say that the main function of capital is to maintain stability and cover losses, thereby protecting creditors and depositors. .

Since the functions of the bank's own capital are significant, its calculation, analysis and evaluation are of great importance, both on the part of the regulator - the Bank of Russia, and on the part of users of banking services.

First, we will consider the instructions of the regulator regarding the calculation of the bank's regulatory capital. In accordance with the documents of the Bank of Russia, equity is a calculated value that includes those items of own and borrowed funds that, in economic terms, can perform the functions of equity. In Russia, its value is determined in accordance with Bank of Russia Regulation No. 215-P On the Methodology for Determining Own Funds (Capital) of Credit Institutions.

The minimum amount of the authorized capital of a newly registered bank is set at 180 million rubles;

The minimum amount of own funds (capital) of the bank is set at 180 million rubles;

The minimum amount of own funds (capital) of a bank applying for a General License is set at 900 million rubles;

A newly registered bank or a bank less than two years from the date of state registration of which has passed, in order to obtain the right to attract deposits of funds from individuals, must have an authorized capital (own funds (capital)) in the amount of at least 3 billion 600 million rubles.

The authorized capital of the bank is accounted for on accounts 10207, 10208.

2. Share premium (part of the bank's additional capital) is capital, the source of which is the sale of shares at a cost exceeding the face value. Share premium is the positive difference between the face value of a bank share and its sale price, which, in essence, is the authorized capital, however, it is accounted for in a separate account (account 10602 ).

3. The reserve capital is formed by a commercial bank without fail from net profit, if the bank operates in the form of a joint-stock company. The minimum size of this fund is determined by the charter of the bank, but it cannot be less than 15% of the value of its authorized capital (account 107).

4. Bank profit. The bank's equity capital includes the profit of the previous years and part of the profit received by the bank in the reporting period.

Profit of previous years, included in the calculation of fixed capital, is defined as a positive result from a decrease in balances (part of balances) on balance accounts 10801, 70302, 70701, 70702, 70703, 70704, 70705, 70801, by the amount of balances (part of balances), on balance accounts 10901, 70402, 70706, 70707, 70708, 70709, 70710, 70712, 70711, 70802.

Particular attention should be paid to retained earnings, which increase the bank's equity capital. Retained earnings are part of net profit that is not distributed, but is retained by the bank, as a rule, for the purpose of reinvesting in its activities. This profit is a source of equity of internal origin. It is created as the balance of net profit after accrual of dividends, deductions to general reserves, reserve capital and other funds (reserves) created in accordance with decisions of the general meeting of participants (founders, participants) of the bank or in accordance with applicable law.

The profit of the current year, included in the calculation of fixed capital, is defined as a positive result from a decrease in balances (part of balances) on balance accounts 10603, 70601, 70602, 70603, 70604, 70605, 61301, 61304, by the amount of balances (part of balances), on balance accounts 10605, 70606, 70607, 70608, 70609, 70610, 70612, 70611, 50905, 61401, 61403

When calculating equity capital, bank expenses are deducted from its value . These expenses include:

Intangible assets, net of accrued depreciation, as well as investments in the creation (manufacturing) and acquisition of intangible assets;

Own shares repurchased by the bank from shareholders (or shares repurchased by the bank from owners);

Uncovered losses of previous years;

Losses of the current year;

Bank investments in shares (participatory interests);

Authorized capital (its part) and other sources of own funds (share premium, profit, reserve fund) (their part), for the formation of which investors (shareholders, participants and other persons participating in the formation of sources of own funds of a credit institution) used improper assets.

Part additional capital include funds that are of a less permanent nature and can only under certain circumstances be directed to perform the above functions.

1. Increase in the value of the property of a credit institution due to revaluation in the amount (part of additional capital) (account 10601).

2. Subordinated loan (deposit, loan, bond issue).

A subordinated loan, in accordance with Bank of Russia Ordinance No. 2241-U dated June 1, 2009, means a loan that simultaneously satisfies the following conditions:

Subordinated loan is provided for at least 30 years;

The borrowing bank has the right not to reimburse unpaid interest on the loan if it has signs of bankruptcy;

The borrowing bank has the right to cover part of its losses at the expense of a subordinated loan in the event of signs of bankruptcy;

The borrowing bank has the possibility of early repayment of the debt on the subordinated loan not earlier than 10 years from the date the subordinated loan was included in its own capital;

If the borrowing bank has not repaid the subordinated loan ahead of schedule, the interest rate on it cannot be increased by more than 100 percentage points or by no more than 50% of the original rate;

The Bank of Russia has the right to suspend the payment of principal and (or) interest under a subordinated loan agreement if the implementation of regular payments in favor of creditors will lead to signs of bankruptcy of the borrower.

The amount of a subordinated loan with additional conditions included in the sources of fixed capital cannot exceed 15% of the sum of sources of fixed capital.

Subordinated loans (deposits, loans, bonds) are included in the sources of additional capital based on the data of balance sheet accounts 31309, 31409, 31509, 31609, 41107, 41207, 41307, 41407, 41507, 41607, 41707, 41807, 42007, 42007, 42007 , 42207 42507 42807 42907 43007 43107 43207 43307 43407 43507 43607 43707 43807 43907 44007 52006

Details of the terms of the subordinated loan can be found at the link.

3. Profit of the current and previous periods, not confirmed by the audit company.

4. Part of the reserve fund formed from profits not confirmed by an audit company.

The amount of sources of additional capital is reduced by those sources (part of sources) of additional capital (authorized capital, profit, reserve fund, subordinated loan), for the formation of which investors (shareholders, participants and other persons) used improper assets.

It is in this way that the Bank of Russia regulates the mechanism for calculating the bank's own capital. However, this technique cannot be used in practice by a simple user of banking services, since some of the information is simply not available to him. For example, the forms published in the public domain do not allow obtaining such data as the amount of the reserve for possible losses on loans of II-V quality categories, which the bank did not create in comparison with the amount required by the Bank of Russia, or the profit of the current and previous periods, not confirmed by the audit company. And even more so, the user cannot obtain such information as the authorized capital and other sources of own funds, for the formation of which improper assets were used.

Therefore, we will consider a more simplified method for calculating the bank's equity capital, which can be used with only readable Form No. 101.

Equity =10207 + 10208 - 10501 - 10502 + 10601 + 10602 + 10603 - 10605 + 10701 + 10801 - 10901 - 70612 - 70611 - 70712 - 70711 + 70601 + 70602 + 70603 + 70604 + 70605 - 70606 - 70607 - 70608 - 70609 - 70610 + 70701 + 70702 + 70703 + 70704 + 70705 - 70706 - 70707 - 70708 - 70709 - 70710 + 70801 - 70802.

I would like to make a reservation right away that the amount of equity obtained using this approach will have a very approximate value and, naturally, will in no way correspond to its amount calculated according to the methodology of the Bank of Russia. This is explained by the fact that in this calculation we cannot use such items as subordinated loans, bank investments in participation shares, reserves for possible losses, etc., because. this cannot be done due to insufficient information provided in the public domain.

So, let's try to use this technique in practice and, together with the reader, determine the bank that would be preferable to choose as a service bank.

Suppose that the choice of a bank for making a deposit will be determined by the client between three banks: Bank A, Bank B, Bank C. Each of the banks has its own advantages for the client, for example, Bank A offers higher rates on a short-term deposit, Bank B has been operating on market and inspires confidence in the client, and Bank B is a small “pocket” bank created within the framework of a financial and industrial group organized by a large plant, which some clients associate with the stability of activities similar to the parent company. (It should be noted that the analyzed banks are fictitious, and any similarities between their financial performance and Russian banks are accidental).

The only similar condition for the choice is that all banks are members of the Deposit Insurance Association and thus guarantee the depositor the return of his invested funds.

To determine the positions of the banks selected for analysis in the market, we will analyze the dynamics of the volume of their liabilities and determine the main trends in the development of these banks.

* VB - bank balance currency; PC - attracted capital of the bank; SK - bank's own capital

An analysis of the volume of liabilities made it possible to identify the leader among the banks under study - this bank is Bank B, which has a balance sheet currency of 28,452,390 thousand rubles at the beginning of 2009. This bank can be called steadily growing (annual equal growth rates), which allows us to positively evaluate its activities.

The most actively developing bank can be called Bank B, whose balance sheet currency growth rate was 46.6% over the period 2008/2009. Bank A slowed down the pace of its development, and the volume of liabilities at the beginning of 2009 decreased by 9.1%.

The reason for the decrease in the amount of liabilities of Bank A was a decrease in the volume of funds raised. Thus, it can be assumed that the bank is losing its customer base and thereby narrowing the scope of the market, which can be called an unfavorable factor in its activity.

Let's calculate the value of banks' own capital using a simplified method. It is necessary to carry out an independent calculation because the information on the volume of the bank's equity capital, presented in the open press, does not allow determining from what sources the capital is formed, while it is the equity capital items that allow it to be given the most objective assessment. So, for example, if in the bank's own capital the largest share belongs to the authorized capital, and the bank has been operating on the market for a long time, then, on the one hand, this has a positive effect on the bank's condition, because. the authorized capital is the stock of the highest quality. But, on the other hand, it can be assumed that the owners of the bank withdraw profits, preventing the bank from growing organically. Particular attention should be paid to the share of profit in the bank's equity capital, and a comparative analysis between banks will allow you to choose the bank that has its largest value. Also, such articles of equity as “Income and expenses of the bank”, “Reserve Fund” and “Share premium” deserve special attention.

So, let's conduct a study of the composition and structure of equity capital of banks combined in the sample.

The analysis of the data obtained showed that Bank B has the largest amount of equity capital, which explains its long presence in the market - the bank operates steadily and efficiently, and therefore its profit increases, increasing equity capital.

Examining the dynamics of equity growth rates, we can say that Banks A and B have a declining equity growth rate, while Bank C increased capital at a relatively high rate. (Analysis of the structure of equity by items in 2008 would have made it possible to identify the reasons for such a sharp increase, but the format of the article does not allow this).

Question No. 53. Equity capital of the bank, its structure and functions. Bank capital adequacy.

The equity capital (funds) of the bank represents the funds contributed by the shareholders (founders of the bank), as well as funds generated in the course of the further activities of the bank. Compared to enterprises in other areas of activity, the equity capital of a commercial bank occupies an insignificant share in the total capital (approximately 8-10%), while this figure for industrial enterprises is 40-60%.

In commercial banks, equity capital has a different purpose than in other areas of business. The equity capital of a commercial bank serves, first of all, to insure the interests of depositors and, to a lesser extent, to provide financial support for its operational activities.

The size of equity capital is an important factor in ensuring the reliability of the functioning of the bank and should be under the control of the authorities that regulate the activities of commercial banks.

Equity capital of commercial banks is divided into main and additional. The main capital of the bank is the cash that provides its financial basis. It consists of statutory, reserve funds, economic incentive funds and other funds that are created at the expense of profit. Additional capital is cash that supplements the total equity. It is formed from unused reserves, which are intended to insure the active operations of commercial banks and retained earnings.

The capital of the bank is divided into:

1) main (tier I capital);

2) additional (tier II capital).

The bank's equity capital includes the paid and registered authorized capital and disclosed reserves, which are created or increased from retained earnings, premiums to the share price and additional shareholders' contributions to the capital, the general risk fund, which is created for an uncertain risk when conducting banking operations, except for losses for the current year and intangible assets.

The additional capital of the bank includes:

1) undisclosed reserves (such reserves are not displayed in the published balance sheet of the bank);

2) revaluation reserves;

3) hybrid (debt/equity) capital instruments;

4) subordinated debt.

At the same time, additional capital cannot exceed 50% of the fixed capital.

Own capital is, firstly, a source of financial resources for the bank. It is indispensable at the initial stages of the bank's activities, when the founders make a number of priority expenses, without which the bank simply cannot start its activities (acquisition of land and buildings, equipment of the premises, payment of wages to staff).

The bank's equity performs the following functions:

1) operational;

2) regulatory;

3) protective.

The function of ensuring operational activities is important during the creation and at the initial stages of the functioning of the bank. During such periods, the bank's own capital finances the acquisition or lease of fixed assets, computer and office equipment, organizational measures to create security systems in the bank, the introduction of banking technologies and communication systems.

In the further activities of the bank, the function of ensuring operational activities becomes secondary, in contrast to enterprises in the sphere of material production, where it remains the main one throughout the entire period of activity.

The essence of the protective function is that the capital serves to protect the funds of depositors and creditors, since losses from credit, investment, foreign exchange operations of the bank, abuses, errors are written off at the expense of reserves that are part of the capital. Therefore, if a bank has sufficient reserve capital, it can be considered reliable and solvent for a long time even if losses occur in its core business. That is, the bank's capital plays the role of a kind of buffer that absorbs losses from the realization of various banking risks.

The amount of bank capital significantly affects the level of reliability and public confidence in the bank.

The term "capital adequacy" reflects the overall assessment of the bank's reliability, the degree of its exposure to risk. The interpretation of capital as a "buffer" causes a reversible relationship between the amount of capital and the bank's exposure to risk. Hence: the higher the share of risky assets in the bank's balance sheet, the greater should be its own capital. At the same time, it should be noted that the excessive "capitalization" of the bank, the issuance of an excessive number of shares in comparison with the optimal need for own funds, is also not a blessing. It has a negative impact on the bank's performance. The mobilization of financial resources through the issuance and placement of shares is a relatively expensive and not always acceptable way of financing for a bank. As a rule, it is cheaper and more profitable to raise funds from investors than to increase your own capital.

It is difficult to determine precisely the amount of capital that a bank or the banking system as a whole should have, but it should be sufficient to perform the functions already considered to maintain the confidence of depositors and supervisors. The amount of capital required depends on the risk that the bank takes on.

For a long time, commercial banks and society have sought to develop a system of standards that could be applied when checking the capital adequacy of a bank or the banking system as a whole.

Different methods are used to assess the adequacy of bank capital. One of the oldest indicators, which is widely used today, is the ratio of capital to the amount of deposits. In this case, the specified coefficient should not be lower than 10%.

In recent years, more advanced methods for assessing bank capital and its adequacy have begun to be used. Assets in accordance with the new approaches began to be differentiated depending on the degree of risk associated with them. The greater the risk associated with a given type of assets, the greater part of the amount of these assets was used in the calculation of the capital/assets ratio.

The articles of capital also underwent differentiation: the categories of primary and secondary capital were singled out.

The main generalized indicator of capital adequacy according to the Basel Accord is the ratio of risky assets:

risky assets ratio = bank's capital/total assets, weighted by risk.

There are also other methods for assessing capital adequacy.

Book value method. According to this method, all assets and liabilities of the bank are measured in the balance sheet at the value that they had at the time of receipt or issue. The accounting model is taken as the basis, where the value of the bank's own capital is determined from the basic balance ratio and is equal to the difference between the bank's assets and its liabilities.

This method of estimating capital is most appropriate when the book value and market value of the bank's assets and liabilities do not differ much from each other. But over time, the present value may deviate significantly from the original book value, which leads to an inadequate assessment of bank capital. In a period when loans and securities are depreciating, the method of evaluating capital at book value does not provide reliable results for determining the degree of protection of depositors from risk.

Market value method. This method consists in the fact that assets and liabilities are valued at the market price, on the basis of which the capital of the bank is calculated. This method of evaluating bank capital is the most useful for investors and depositors, as well as for bank managers. The market value of capital fairly accurately reflects the real level of protection of the bank from the risk of bankruptcy. In addition, the considered method is the most dynamic, since the market value of assets and liabilities, and hence capital, can change every day. The bank's management has the opportunity to approximately estimate the change in the market value of capital, based on the current market value of the bank's shares and their number on the market.

Method of "regulative accounting procedures". The essence of the method is to calculate the amount of capital according to the rules established by the regulatory authorities. The rules vary from country to country, but often this approach is an attempt to make banks more reliable for outsiders. According to the “regulatory accounting procedures” method, the bank's capital is calculated as the sum of the following components: share capital, retained earnings, reserve funds, in particular to cover credit and currency risks, subordinated liabilities, and so on. This approach has significant drawbacks, which consist in considering debt obligations and reserves to cover losses as the capital of the bank. It is for this reason that this method is criticized by many economists.

To register a bank, it is necessary to ensure the minimum required amount of the authorized capital and maintain the established capital adequacy ratios throughout the entire period of activity.

The bank's own capital is a set of funds of various purposes, formed from funds free from obligations and ensuring economic independence and stability of the bank's functioning.

The bank's equity capital is formed in tenge at the expense of contributions from its founders or owners, authorized capital, as well as part of the profit remaining at its disposal of the bank.

Own capital performs five functions: protective, operational, regulatory, circulating and reserve.

1. protective function. Means the possibility of paying compensation to depositors in the event of the liquidation of the bank. Equity capital allows you to maintain the solvency of the bank despite the threat of losses. At the same time, however, it is assumed that most of the losses are covered not by capital, but by the current income of the bank. Capital plays the role of a kind of protective "cushion" and allows the bank to continue operations. To finance costs in the event of large unforeseen losses or expenses, there are various reserve funds included in equity. In the event of massive client defaults on loans, it is sometimes necessary to use part of the share capital to cover losses. 2. Operational function is of secondary importance compared to protection. She is involves the investment of own funds in the acquisition of land, buildings, equipment, as well as the creation of a financial reserve in case of unforeseen losses. Equity performs this function mainly at the initial stages of the bank's activities, when the founders carry out a number of priority expenses. At the subsequent stages of the bank's development, the role of equity capital is no less important, part of these funds are invested in long-term assets, in the creation of various reserves. In the future, the main source of covering the costs of expanding operations is the accumulated profit, but banks often resort to new issues of shares or long-term loans when carrying out structural measures - opening branches, mergers.3. Regulating function associated with the special interest of society in the successful functioning of banks. It means that with the help of established indicators for the bank's capital, state bodies assess and control the activities of banks. Typically, the rules relating to a bank's own capital include requirements for its minimum size, sufficiency, restrictions on assets, and conditions for purchasing assets from another bank. The economic standards set by the Central Bank are mainly based on the size of the bank's own capital. Within the framework of the considered classification of functions, the regulatory function also includes the use of capital in order to limit lending and investment operations (to the extent that the bank's loans and investments are limited by the available own capital) /5/.4. Reverse function i - equity funds can be directed to any active operations of the bank, for example, the purchase of securities, investments in real estate, leasing operations. 5. Reserve function - is manifested in the use of equity capital to cover losses arising from both active and passive operations. The Bank creates a reserve of own capital to compensate for unjustified risk. These functions of bank capital show that equity capital is the basis of the commercial activity of the bank. It ensures its independence and guarantees its financial stability, being a source of smoothing the negative consequences of various risks that the bank bears.

Bank equity structure

The main element of the bank's own funds is the statutory fund (capital). The authorized capital (fund) is an organizational and legal form of capital, the amount of which is determined by the founding agreement on the establishment of the bank and is fixed in the bank's Charter. The authorized capital is created by issuing shares (joint-stock banks) or transferring share contributions (share banks). The maximum amount of authorized capital is not limited by law. To ensure the stability of banks, a minimum amount of authorized capital is established (in the Republic of Kazakhstan for new banks 10 billion, tenge).

The authorized capital allows a commercial bank to continue operations in the event of unforeseen expenses in the event that the reserve funds available to the bank are not enough to finance the costs.

Additional capital (“additional capital”) includes:

1. Share premium - funds received from the sale of shares to their first holders at a price higher than their nominal value. These funds increase the bank's initial capital and its stable part;2. reserve fund - a fund formed from net profit, designed to absorb unforeseen losses in the bank's activities and ensure the stability of its functioning. 3. Special purpose funds and accumulation funds are intended for the production and social development of the bank. In accordance with their intended purpose, they are used to acquire new capacities during the bank's growth period, i.e. perform the operational function of their own capital.4. The profit of previous years and part of the profit received by the bank during the reporting year is included in the main capital, if the presence of these sources is confirmed by the conclusion of the audit organization based on the results for previous years, as well as for the corresponding period of the current year.

5. Subordinated debt is an unsecured obligation of a bank that is not

which is a deposit that is redeemed last in the liquidation of the bank, but before the payment on shares.

Capital Management

Tier 2 capital – + excess of current year's income over current year's expenses: + revaluation of fixed assets and securities; + subordinated debt (subordinated term debt included in Tier 2 capital must have an original maturity of at least 5 years, and in each year of the last five years, 20% of the initial amount of subordinated debt is excluded from the calculation of capital).

1. Capital adequacy ratio k1

k1=(KI-IR)/A

KI - Tier 1 capital;

IC - investments in the capital of other legal entities

A - total assets.

The value of the bank's own capital adequacy ratio k1 must be at least 0.06.

2. Capital adequacy ratio k2

k2=(K1+KP)-IK)/Ar-Ps, where

KI - Tier 1 capital;

IC - investments in the capital of other legal entities;

KII - second-tier capital;

Ap - risk-weighted assets;

Ps - special provisions(formed provisions for doubtful and unprofitable loans).

The value of the bank's own capital adequacy ratio k2 should not be< 0,12

Own capital is the basis of the activities of a commercial bank. It is formed at the time of the bank's establishment and initially consists of the amounts received from the founders as their contribution to the authorized capital of the bank.

Equity capital also includes all savings received by the bank in the course of its activities, which were not distributed among the shareholders (members) of the bank in the form of dividends or spent for other purposes. Equity capital represents the amount of money that will be distributed among the shareholders (participants) of the bank in the event of its closure.

In other words, if you sell all the assets of the bank - its securities, buildings, equipment and other valuables, and claim all the loans issued by it, and send the proceeds to pay off the bank's obligations to third parties (depositors, creditors), then the remaining amount after that and will be the actual equity capital that shareholders (participants) can claim.

Equity capital provides the bank with economic independence and stable operation. Equity capital is considered in banking practice as a reserve of resources that allows maintaining the solvency of the bank even if it loses part of its assets.

Own funds (capital) perform a number of important functions in ensuring the management and life of a commercial bank.

The protective function is manifested in the fact that the capital serves as a kind of buffer, absorbing damage from current losses until the management of the bank resolves emerging problems, ensuring the continuation of the bank's activities regardless of the presence of losses. Due to the presence of own capital, a commercial bank can carry out risky operations. Losses resulting from these operations are covered by its own capital, without affecting the attracted funds of depositors. In the event of bankruptcy, equity becomes a source of compensation to creditors and depositors.

Performing a regulatory function, capital acts as a regulator of the bank's activities, through which state bodies set the norms of economic behavior for it, warning it against excessive risks. Under the current legislation, the economic standards established by the Bank of Russia and regulating the activities of commercial banks are mainly based on the amount of the bank's own funds. The size of the bank's own funds determines the scope of its activities. The possibilities of commercial banks to expand active operations are determined by the size of their actual equity capital.

The operational function of equity capital is that equity capital is a source of investment in its own material assets and the development of the material base of the bank. In terms of the authorized capital contributed by the founders of the bank, it acts at the initial stage as start-up funds necessary for the construction or rental of premises, installation of equipment, hiring personnel and other expenses, without which the bank cannot start its activities. During the period of growth, the bank needs additional funds to create new capacities related to expanding the range of services provided and introducing advanced banking technologies, the source of which is its own capital.

For joint-stock banks, the size of equity capital is a factor that determines the price of its shares. When assessing the value of a bank, they proceed from the size of its net assets, i.e. actual equity, which allows us to speak about its pricing function. Equity capital provides a permanent source of income for shareholders (participants) - in proportion to the size of the contribution to the authorized capital, each shareholder (participant) receives a share of the bank's profit in the form of dividends.

The sources of the bank's own capital are shown in fig. one.

The authorized capital of a credit organization is formed from the amount of contributions of its participants and determines the minimum amount of property that guarantees the interests of its creditors. Each participant (shareholder) of the bank, in proportion to its contribution to the authorized capital, annually receives a part of bank profit in the form of dividends.

Contributions to the authorized capital of the bank can be made in the form of cash, tangible assets, as well as securities of a certain type.

The authorized capital of the bank can be formed only at the expense of the shareholders' (participants') own funds, the attracted funds cannot be used for its formation.

Only the banking building (premises) in which the credit institution is located, except for construction in progress, may act as a tangible asset contributed as payment for the charter capital of a credit institution.

In addition, shareholders may pay for the authorized capital of the bank with other assets belonging to them that are not cash and a bank building. The maximum size of the share of such assets in the authorized capital is established by the Board of Directors of the Bank of Russia. The maximum size (standard) of the non-monetary part of the authorized capital should not exceed 20%.

Additional capital includes: the increase in the value of the property during its revaluation, share premium, i.e. the difference between the placement price of shares at the time of issue and their nominal value, the cost of property received free of charge by the bank in ownership from organizations and individuals.

The bank's funds are formed from profit in the manner prescribed by the bank's constituent documents, taking into account the requirements of the current legislation. These include: a reserve fund, special purpose funds, accumulation funds and other funds that the bank deems necessary to create when distributing profits.

The reserve fund is intended to cover losses and losses arising as a result of the bank's activities. The minimum amount of this fund is determined by the Bank's Charter, but it cannot be less than 15% of its authorized capital. Contributions to the reserve fund are made from the profit of the reporting year remaining at the disposal of the bank after paying taxes and other obligatory payments, i.e. from net profit.

Special purpose funds are also created from the net profit of the reporting year. They are a source of material incentives and social security for bank employees. The procedure for their formation and spending is determined by the bank in the regulations on funds.

Accumulation funds represent the retained earnings of the bank, reserved as financial support for its industrial and social development and other activities to create new property. Accumulation funds, as a rule, do not decrease: there is only a change in the form of their existence - they turn from money into the form of tangible assets (buildings, equipment, materials, vehicles, etc.).

Each commercial bank independently determines the amount of own funds and their structure based on the development strategy adopted by it. If a bank, obeying the laws of competition, seeks to expand the range of its customers, including through large enterprises that are in constant need to attract bank loans, then, naturally, its own capital should increase. The nature of its active operations also affects the value of the bank's own capital. With a long-term diversion of resources into risky operations, the bank needs to have significant equity capital. The amount of own capital determines the bank's competitive position in the domestic and international markets. In practice, there are two ways to increase equity:

Profit accumulation;

Raising additional capital in the financial market.

Accumulation of profit can take place in the form of an accelerated creation of the reserve and other funds of the bank with their subsequent capitalization, or in the form of accumulation of retained earnings of previous years. This is the cheapest way to increase capital without affecting the existing bank management structure. However, the use of a significant part of the profits to increase equity means a decrease in the current dividends of the bank's shareholders and may lead to a drop in the market value of shares of open joint-stock banks.

Attracting additional capital of a bank established in the form of a limited liability company can occur both on the basis of additional contributions from its participants, and at the expense of contributions to the authorized capital of the bank of third parties, which become participants in this bank (unless this is prohibited by the Bank's Charter) . Attraction of additional capital by joint-stock banks can be carried out by placing additional shares.

1 Equity of the bank and its essence

Own funds of a commercial bank consist of the funds formed by him and the profit received by the bank as a result of its activities in the current year and over past years. The bank's funds form the basis of its own funds. Each of them has a specific purpose. The order and sources of their formation also differ.

The starting point in the organization of banking is the formation by commercial banks authorized fund (capital). Its creation in the amount determined by law is a prerequisite for registering a bank as a legal entity. Regardless of the organizational and legal form of the bank, its statutory fund is formed entirely from the contributions of participants - legal entities and individuals. The funds contributed to the statutory fund are the starting capital for the start of the economic and commercial activities of the newly created bank and throughout the entire period of the functioning of the credit institution are the economic basis of its existence.

Without fail, commercial banks must form reserve fund, which is intended to compensate for losses from the active operations of the bank, the payment of dividends on preferred shares in case of insufficiency of the profit received and for other similar purposes. The reserve fund is formed from deductions from the bank's net profit. The size of this fund is directly dependent on the size of the authorized fund of the bank. According to the legislation, the size of the reserve fund must be at least 15% of the authorized fund.

In addition to the mandatory formation of a reserve fund, commercial banks may also create other funds, the sources of which are bank profits. The number of these funds, their purpose, size, procedure for formation and use must be specified in the constituent documents of the bank or in special intra-bank regulations on funds approved by the relevant management bodies of the bank. Most often, a bank development fund, funds accumulating funds for paying dividends to shareholders and indexing the par value of shares, and a fund for bank current expenses are formed. Various trust funds can also be created, for example, for retraining and advanced training of bank personnel, etc.

A special group should be allocated to bank funds, the formation of which is associated with various external economic factors. They can be combined under the general name revaluation funds. In connection with inflation, the balance sheet value of the bank's fixed assets lags behind the market value. When periodically conducting a revaluation of their value, the bank forms a fund for the revaluation of fixed assets. When the exchange rate of foreign currencies changes against the national currency, banks experience so-called unrealized exchange differences. The bank's own funds include unrealized exchange rate differences from the revaluation of foreign currency in the authorized and other funds of the bank.

A separate group in the bank's funds is represented by funds accumulated as a result of depreciation of fixed assets.

A bank's own funds may include a number of other elements:

Reserves for risks and payments created at the expense of the bank's profit;

Issuance differences resulting from the sale of initially placed shares at a price exceeding their par value;

Retained earnings of the reporting year and previous years.

It must be borne in mind that in the course of their activities, commercial banks may partially or fully use the funds accumulated by them in special-purpose funds. In this case, there will be a decrease in the total amount of the bank's own funds.

It is necessary to distinguish between the concepts of own funds and equity capital of the bank. Own funds is a generalized concept. Including all liabilities of the bank formed in the course of its internal activities: authorized and reserve funds, other funds and reserves created from profit; issue differences; revaluation funds; retained earnings of previous years and the current year. Bank equity is a calculated value. It may include, in addition to certain items of own funds, and certain types of borrowed funds, which can theoretically be equated with own funds and which are capable of performing the functions of the bank's capital. The composition of the bank's capital includes elements of own funds that meet such principles as stability, subordination in relation to the rights of creditors and the absence of fixed income accruals. Thus, the bank's own capital should be understood as the funds and reserves created by it, which ensure the stability of the bank's operation and the ability to smooth out potential losses, as well as being used by the bank throughout the entire period of its activity. Equity includes: authorized capital, reserve capital, reserves to cover various risks, founder's profit (share difference), retained earnings of the current year and previous years. In addition, equity capital may include attracted or subordinated credit, which is characterized by sufficiently long terms of attraction (at least 5 years), the absence of the possibility for the creditor to claim the expiration dates previously provided for by the agreement.

It can be noted that the structure of banking liabilities has its own specifics in comparison with the structure of liabilities of economic entities. It consists in a relatively small share of the bank's own funds (about 10%) compared to the share of borrowed funds. This is due to a number of reasons. First, banks, by the nature of their activities, are engaged in the redistribution of temporarily free funds of clients, i.e. work mainly with "foreign" means. Secondly, the banking assets of non-financial companies, since they are mainly in cash, and not "frozen" in the form of fixed assets and inventories. This allows the bank to quickly mobilize funds to fulfill its obligations to creditors and reduces the need for equity capital.

Own funds from various commercial banks can be a much larger share of the total resources. It depends mainly on the duration of the bank's activity and the resource policy pursued by the bank. The newly created bank has all liabilities formed at its own expense and represented by funds contributed to the statutory fund. In some cases, banks are pursuing a targeted policy to “cheapen” the resource base by reducing the attraction of customer funds and increasing their own funds.

2 Equity functions

Equity is, firstly, a source of financial resources for the bank. It is indispensable at the initial stages of the bank's activities, when the founders make a number of priority expenses, without which the bank simply cannot start its activities (acquisition of land and buildings, equipment of the premises, payment of wages to staff).

The bank's equity performs the following functions:

operational;

Regulatory;

Protective.

Operations support function is important during the creation and at the initial stages of the functioning of the bank. During such periods, the bank's own capital finances the acquisition or lease of fixed assets, computer and office equipment, organizational measures to create security systems in the bank, the introduction of banking technologies and communication systems.

In the further activities of the bank, the function of ensuring operational activities becomes secondary, in contrast to enterprises in the sphere of material production, where it remains the main one throughout the entire period of activity.

Content regulatory function capital lies in the fact that through fixing the value of equity or its individual components, supervisory authorities influence banking activities and limit the level of banking risks. Thus, to determine the mandatory economic standards for regulating the activities of banks established by the National Bank of the Republic of Belarus, indicators of the bank's own capital are used in ten out of thirteen mandatory standards. That is, the value of the bank's capital significantly affects the volume and direction of banking operations. The equity capital of a commercial bank can also be used to participate in the ownership of joint-stock and general enterprises.

essence protective function lies in the fact that the capital serves to protect the funds of depositors and creditors, since losses from credit, investment, foreign exchange operations of the bank, abuses, errors are written off at the expense of reserves that are part of the capital. Therefore, if a bank has sufficient reserve capital, it can be considered reliable and solvent for a long time even if losses occur in its core business. That is, the bank's capital plays the role of a kind of buffer that absorbs losses from the realization of various banking risks.

This function includes guaranteeing deposits, protecting the interests of depositors in the event of liquidation or bankruptcy of the bank, and also ensures the functioning of the bank in the event of losses from current activities, which are usually covered by current profits. The protective function of bank capital is the main one throughout the entire period of the bank's operation.

It is easy to see that protective features are common to all of these functions. Thus, it turns out that the protective function is a common feature of the entire capital of the bank. It should be noted that the protective function of equity capital changes under the influence of several factors:

The economic and financial situation of the country and the stability of the monetary sphere;

Development of deposit and loan insurance in the country;

Bank strategies and tactics.

The higher the level of development in the country of deposit insurance, deposits and debt operations, the lower the requirements for the protective function and the lower the share of equity in the bank's liabilities can be. The stricter the bank adheres to the requirements for its liquidity, carefully insures its activities against all types of risks, the fewer requirements are placed on the protective function. At the same time, an excessive increase in liquid assets, a complete exclusion from the practice of issuing risky loans leads to a decrease in the bank's profitability. In conditions of economic, financial and legal instability, the activities of commercial banks face additional risk, which increases the requirements for the protective function of equity capital.

The multifunctional purpose of the bank's own capital makes it heterogeneous in composition. One part, intended to ensure the operational activities of a commercial bank, is the most permanent and acts in the form of funds: authorized, partially reserve, depreciation, economic incentives. The second part is designed to insure active and other operations of the bank against losses. This part is more mobile and acts in the form of funds: insurance, partially reserve, reserves to cover losses associated with non-repayment of loans. The third is intended to regulate the size of the bank's own capital, although it can be used to ensure operational activities and insurance needs. Therefore, the size of this part of equity capital is the most flexible and may depend both on changes in the strategic and tactical goals of the bank itself, and on the requirements of regulatory authorities.[

3 International Capital Standards

In 1987, representatives of the 12 leading industrialized countries (G7 countries, Sweden, Switzerland and the Benelux) announced an agreement on capital standards, often referred to as the Basel Accord, which would be applied uniformly in all banking institutions under the jurisdiction of these states.

The size of the equity of a commercial bank plays a huge role:

For the bank itself, since the volume and nature of both active and passive operations carried out directly depend on the amount of capital, which ultimately has a significant impact on the formation of performance results;

For creditors of the bank, as well as customers who are on cash management services, which is associated with ensuring the safety of their investments and guaranteeing the stability of the service;

For government agencies, including central banks, who are interested in the stability of the economy as a whole, in particular, banking systems and systems of cashless payments, since this stability can only be achieved if commercial banks have their own funds that meet the established requirements, adequate to the market situation in terms of both quantitative and qualitative parameters.

In the Republic of Belarus, the minimum amount of equity capital must be 5 million euros.

Thus, the management of banks periodically faces the problem of replenishing their own funds.

Replenishment of bank capital is carried out in two ways:

Capital increase from internal sources;

Capital increase from external sources.

The first way is to pursue a certain dividend policy, the essence of which is to increase the share of profit retention by reducing (or relatively reducing if profits remain unchanged) the payment of dividends to holders of ordinary shares.

The second method consists primarily in the additional issue of equity securities with the right to exchange for shares. This method also includes the sale of fixed assets and, first of all, real estate, followed by a lease. Such transactions are most attractive during periods when inflation and economic growth significantly outpace the increase in present value in comparison with its original value reflected in the bank's balance sheet.