Kenanga Investment Bank Berhad Annual Report 2021 264 Our Sustainability Approach About This Report We Are Kenanga Message From Chairman and GMD 47. CAPITAL MANAGEMENT AND CAPITAL ADEQUACY (CONT’D.) Capital adequacy (cont’d.) (i) Components of Tier 1 and Tier 2 capital (cont’d.): Breakdown of risk weighted assets in the various categories of risks are as follows: 2021 2020 Notional RM’000 Risk- weighted RM’000 Notional RM’000 Risk- weighted RM’000 Group Credit risk 5,567,911 1,358,911 5,615,290 1,492,582 Market risk - 456,072 - 646,327 Operational risk - 828,589 - 704,075 Large exposure risk - 11,794 - 2,250 Total Risk Weighted Assets 5,567,911 2,655,366 5,615,290 2,845,234 Bank Credit risk 5,061,023 1,305,693 5,306,982 1,496,190 Market risk - 440,663 - 632,053 Operational risk - 617,538 - 535,355 Large exposure risk - 11,794 - 2,250 Total Risk Weighted Assets 5,061,023 2,375,688 5,306,982 2,665,848 (ii) Transitional arrangements for regulatory capital treatment of accounting provisions The Bank has elected to apply the transitional arrangements for regulatory capital treatment of accounting provisions for four financial years beginning on 1 January 2020 and apply the transitional arrangements with 31 December 2020 as the first reporting period. 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 CET1 Capital. Notes to the Financial Statements 31 December 2021
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