Page 53 - Agib Bank Limited Annual Report 2021

maintain a credible capital plan to ensure that capital
Compliance with Bank standards is level of the Bank is maintained in consonance with
supported by a programme of periodic the Bank’s risk appetite.
reviews undertaken by Internal Audit. The
results of Internal Audit reviews are The Bank’s regulatory capital is analysed into two
discussed with the management of the tiers:
business unit to which they relate, with
summaries submitted to the Audit Tier 1 capital, which includes ordinary
Committee and senior management of the share capital, share premium, perpetual
Bank. bonds (which are classified as innovative
Tier 1 securities), retained earnings,
(v) Sharia compliance risk translation reserve and other regulatory
adjustments relating to items that are
Sharia compliance risk is the risk of loss arising from included in equity but are treated
products and services not complying with Sharia differently for capital adequacy purposes.
requirements or in accordance with Islamic
principles. The Bank’s purpose is to provide Sharia Tier 2 capital, which includes qualifying
compliant banking to customers. The Sharia subordinated liabilities, and the element of
compliant nature of each product and Service the fair value reserve relating to
offered is therefore critical to the success of the unrealised gains on equity instruments
Bank.
classified as available-for-sale.
The Sharia compliance of each product and service

offered is achieved via the Sharia Supervisory Various limits are applied to elements of the capital
Committee (SSC), which seeks to ensure that the base; qualifying tier 2 capital cannot exceed tier 1
Bank’s operations are in compliance with Islamic capital; and qualifying term subordinated loan
law. The SSC is comprised of experts in the capital may not exceed 50 percent of tier 1 capital.
interpretation of Islamic law and its application to Other deductions from capital include the carrying
modern day Islamic financial institutions. The SSC amounts of investments in subsidiaries that are not
meets on a regular basis to review all material
contracts and agreements relating to the Bank’s included in the regulatory consolidation, investments
transactions, certifying every product and service in the capital of banks and certain other regulatory
offered. items.

The bank is currently holding 558,000 shares in Banking operations are categorised as either trading

Trust Bank (G) Limited valued at D2.193 million. book or banking book, and risk-weighted assets are
These shares were given to the bank by the courts determined according to specified requirements that
as part settlement of an overdue debt. Annual seek to reflect the varying levels of risk attached to
dividend received does not form part of the bank’s
annual revenue but is rather given out as charity as assets and off-balance sheet exposures.

recommended by the Sharia Board. We are

negotiating with potential buyers to sell it off. The bank’s policy is to maintain a strong capital base
Dividend of D0.142 million was received in 2021. so as to maintain investor, creditor and market
confidence and to sustain future development of the
(vi) Capital management business. The impact of the level of capital on
shareholders’ return is also recognised and the
Regulatory capital Bank recognises the need to maintain a balance
between the higher returns that might be possible
The Central Bank of The Gambia sets and monitors with greater gearing and the advantages and
capital requirements for the Bank as a whole. The security afforded by a sound capital position.

banking operations are directly supervised by their
local regulators. The bank and its individually regulated operations
have complied with all externally imposed capital
In implementing current capital requirements, The requirements throughout the period. Annual Report and IFRS Financial Statements
Central Bank of The Gambia requires the bank to

maintain a prescribed ratio of total capital to total There have been no material changes in the bank’s
risk-weighted assets. The bank is also required to management of capital during the period.

The Bank’s regulatory capital position at 31 December was as follows:

Agib Bank Annual Report 2021 www.agib.gm 53