Page 62 - Agib Bank Ltd Annual Report and IFRS Financial statements 2020

The bank is currently holding 558,000 shares in Trust Bank (G) Limited valued at D2.193 million. These shares
were given to the bank by the courts as part settlement of an overdue debt. Annual dividend received does not
form part of the bank’s annual revenue but is rather given out as charity as recommended by the Sharia Board.
We are negotiating with potential buyers to sell it off. Dividend of D0.26 million was received in 2020.

(vi) Capital management

Regulatory capital
The Central Bank of The Gambia sets and monitors capital requirements for the Bank as a whole. The parent
company and individual banking operations are directly supervised by their local regulators.

In implementing current capital requirements, The Central Bank of The Gambia requires the bank to maintain a
prescribed ratio of total capital to total risk-weighted assets. The bank is also required to maintain a credible
capital plan to ensure that capital level of the Bank is maintained in consonance with the Bank’s risk appetite.

The Bank’s regulatory capital is analysed into two tiers:

 Tier 1 capital, which includes ordinary share capital, share premium, perpetual bonds (which are
classified as innovative Tier 1 securities), retained earnings, translation reserve and other regulatory
adjustments relating to items that are included in equity but are treated differently for capital adequacy
purposes.

 Tier 2 capital, which includes qualifying subordinated liabilities, and the element of the fair value
reserve relating to unrealised gains on equity instruments classified as available-for-sale.

Various limits are applied to elements of the capital base; qualifying tier 2 capital cannot exceed tier 1 capital;
and qualifying term subordinated loan capital may not exceed 50 percent of tier 1 capital. Other deductions from
capital include the carrying amounts of investments in subsidiaries that are not included in the regulatory
consolidation, investments in the capital of banks and certain other regulatory items.

Banking operations are categorised as either trading book or banking book, and risk-weighted assets are
determined according to specified requirements that seek to reflect the varying levels of risk attached to assets
and off-balance sheet exposures.

The bank’s policy is to maintain a strong capital base to maintain investor, creditor and market confidence and to
sustain future development of the business. The impact of the level of capital on shareholders’ return is also
recognised and the Bank recognises the need to maintain a balance between the higher returns that might be
possible with greater gearing and the advantages and security afforded by a sound capital position.

The bank and its individually regulated operations have complied with all externally imposed capital requirements
throughout the period.

There have been no material changes in the bank’s management of capital during the period.

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

% ` 2020 2019
Tier 1 capital
Ordinary share capital 100 241,209 241,209
Share premium 100 2,292 2,292
Retained earnings 100 (99,059) (115,860)
Statutory reserves 100 51,942 41,228

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Annual Report and IFRS Financial Statements for the year ended 31 December 2020 61