NSB ready to adopt Basel III in 2018

Tuesday, 7 June 2016 00:06 - - {{hitsCtrl.values.hits}}

By Charumini de Silva

Savings giant NSB is gearing up to implement Basel III, with the bank’s strategic plans already underway to reach set targets by 2018.

“The bank is already preparing to implement Basel III effective from 2018 according to our action plan. Therefore we are building up capital as well as other measures necessary,” NSB Deputy General Manager – Finance and Planning Kithsiri Wijeyaratne told the Daily FT.

Noting that the bank has a separate division for risk and compliance, he asserted that adopting Basel III requirements would not have DFT-1-NSB any impact as the management had taken proactive measures and identified areas that needed special interest.

Basel III is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector.

“The bank has the capacity to meet all objectives required when implementing Basel III by 2018. There are a few processes which need to be changed and some models need to be made to adopt and adjust our systems. We have planned already and are working on them. The bank has the capacity to meet all objectives required when implementing Basel III by 2018,” Wijeyaratne emphasised.

Wijeyaratne pointed out that bank’s capital adequacy ratios remained well above the regulatory standards for well-capitalised banks, adding that they had the highest core capital as well as liquid assets.

According to the bank’s first quarter results, Tier 1 capital adequacy ratio stood at 17.09% while total capital adequacy for the reviewed quarter was 16.08%. The liquidity ratio of the bank stood at 78.74% by the end of March 2016, which is well above the regulatory requirement of 20%.

NSB is the first and only local bank to receive ‘AAA (lk)’ credit rating from Fitch Ratings Lanka and maintain the same rating for 13 consecutive years.