110
CAP. 155]
(Cap. 32.)
Banking
"debt securities" means any securities other than shares or stocks; "eligible bank" means-
[1987 Ed.
(a) any authorized institution which is a bank or licensed deposit-taking company (other than any deposit-taking company the licence of which is for the time being suspended under this Ordinance); and (Amended, L.N. 412/87)
(b) any bank incorporated outside Hong Kong which is not licensed under this Ordinance, except a bank which is, in the opinion of the Commissioner, not adequately supervised by an appropriate, recognized banking supervisory authority of the place in which it is incorporated;
"eligible Government" means---
(a) the Government; and
(b) any other government, except a government which is, in the opinion of the Commissioner, one that should not be accepted for the purposes of this Schedule;
"guarantee" includes indemnity;
"registered deposit-taking company" does not include any deposit-taking company the registration of which is for the time being suspended under this Ordinance.
2. The capital adequacy ratio of an authorized institution shall be calculated as the ratio, expressed as a percentage, of its capital base, as specified in paragraph 3, to its risk assets, as specified in paragraph 4.
3. The capital base of an authorized institution shall be determined by taking the sum, calculated in Hong Kong dollars, of the book value of --
(a) its paid-up capital;
(b) its general reserves, including inner reserves, share premium account and revaluation reserves;
(c) its undistributed profits as shown in the latest audited accounts, less-
(i) any dividends subsequently declared, or paid, but not provided; and
(ii) any net loss for the period since the end of the period covered by the latest audited accounts;
(d) where the Commissioner determines under section 98(2) that the accounts of the institution are to be on a consolidated basis, its minority interests; and
(e) its perpetual subordinated debt, but not exceeding the equivalent of half of the total of the amounts referred to in sub-paragraphs (a), (b), (c) and (d),
and by deducting therefrom the sum, calculated in Hong Kong dollars, of the book value of
(i) its shareholding in any company which is a subsidiary or the holding company of the institution, other than any shareholding that falls to be deducted under sub-paragraph (ii);
(ii) its loans to, shares and debentures issued by, and guarantees of liabilities of, connected companies of the institution, where in the opinion of the Commissioner the institution has made the loans, is holding the shares or debentures or, as the case may be, has given the guarantees, other than in the ordinary course of business; and for the purposes of this sub-paragraph "shares" and "debentures" shall have the meaning assigned to them by section 2 of the Companies Ordinance, and a company shall be treated as a connected company of the institution if it is a subsidiary or the holding company of the institution, or is otherwise of a description falling within section 64(1)(a), (b), (c), (d) or (e); and
(iii) the intangible assets of the institution.
4. The risk assets of an authorized institution shall be the sum of all the products achieved by-
(a) taking the book value, calculated in Hong Kong dollars, of each of the items referred to in the Table in relation to that institution; and
(b) in relation to each item, multiplying that value by the risk weight specified in the Table for the category to which that item belongs:
Provided that no item that has been deducted under paragraph 3(i), (ii) or (iii) in calculating the capital base of the institution shall be taken into account for the purposes of this paragraph.