KENANGA ANNUAL REPORT 2017

52. OPERATIONS OF ISLAMIC BANKING (CONT’D.) (q) Capital adequacy Group and Bank 2017 RM’000 2016 RM’000 CET 1/Tier 1 capital Islamic banking funds 120,000 120,000 Retained profits 14,290 8,568 Other reserves 7,224 6,262 Less: Deferred tax assets – (205) Regulatory reserve (1,928) (1,663) Total CET 1/Tier 1 capital 139,586 132,962 Tier 2 capital Collective allowance and regulatory reserve 1,862 1,696 Total Tier 2 capital 1,862 1,696 Total capital 141,448 134,658 Group and Bank 2017 2016 CET 1 capital ratio 74.382% 83.230% Tier 1 capital ratio 74.382% 83.230% Total capital ratio 75.374% 84.292% The breakdown of risk-weighted assets (excluding any deferred tax assets) in the various categories of risk-weights are as follows: 2017 2016 Group and Bank Principal RM’000 Risk- weighted RM’000 Principal RM’000 Risk- weighted RM’000 Credit risk 809,866 148,960 508,000 135,691 Market risk – 19,125 – 8,056 Operational risk – 19,577 – 16,005 Total risk weighted assets 809,866 187,662 508,000 159,752 Annual Report 2017 31 December 2017 221 notes to the financial statements