KENANGA ANNUAL REPORT 2019

307 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2019 52. OPERATIONS OF ISLAMIC BANKING (CONT’D.) (q) Capital adequacy Group and Bank 2019 RM’000 2018 RM’000 CET 1/Tier 1 capital Islamic banking funds 120,000 120,000 Retained profits 33,221 22,375 Reserves 11,283 8,677 Less: Intangible assets (12) - 55% of cumulative gains on financial investments at FVOCI (1,935) - Regulatory reserve (2,503) (3,335) Total CET 1/Tier 1 capital 160,054 147,717 Tier 2 capital Impairment provision 3,151 3,335 Total Tier 2 capital 3,151 3,335 Total capital 163,205 151,052 CET 1 capital ratio 45.304% 40.155% Tier 1 capital ratio 45.304% 40.155% Total capital ratio 46.196% 41.061% The breakdown of risk-weighted assets (excluding any deferred tax assets) in the various categories of risk- weights are as follows: Group and Bank 2019 2018 Principal RM’000 Risk- weighted RM’000 Principal RM’000 Risk- weighted RM’000 Credit risk 1,359,665 327,481 1,451,588 344,078 Market risk - - - 1,119 Operational risk - 25,804 - 22,673 Total risk weighted assets 1,359,665 353,285 1,451,588 367,870