RESOLUTION OF BOARD OF NATIONAL BANK OF THE REPUBLIC OF KAZAKHSTAN

of April 27, 2018 No. 77

About introduction of amendments to the resolution of Board of National Bank of the Republic of Kazakhstan of September 13, 2017 No. 170 "About establishment of normative values and techniques of calculations of prudential standard rates and other regulations, obligatory to observance, and limits of the size of the capital of bank for certain date and Rules of calculation and limits of open foreign exchange position"

For the purpose of enhancement of the regulatory legal acts of the Republic of Kazakhstan regulating activities of banks of the second level, the Board of National Bank of the Republic of Kazakhstan DECIDES:

1. Bring in the resolution of Board of National Bank of the Republic of Kazakhstan of September 13, 2017 No. 170 "About establishment of normative values and techniques of calculations of prudential standard rates and other regulations, obligatory to observance, and limits of the size of the capital of bank for certain date and Rules of calculation and limits of open foreign exchange position" (it is registered in the Register of state registration of regulatory legal acts at No. 15886, it is published on October 25, 2017 in Reference control bank of regulatory legal acts of the Republic of Kazakhstan) the following changes:

in Normative values and technique of calculations of prudential standard rates and other regulations, obligatory to observance, and the limits of the size of the capital of bank for certain date approved by the specified resolution:

state Items 10 and 11 in the following edition:

"10. The capital of the first level is calculated as the amount of fixed capital and the added capital:

1) fixed capital is calculated as the amount:

the paid common shares corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates;

supplementary paid-in capital;

retained net profit of last years;

retained net profit of the current year;

the cumulative opened reserve determined as the amount of remaining balance on the balance sheet account 3510 "Reserve capital" of the Standard chart of accounts of financial accounting in banks of the second level, the mortgage organizations and Development Bank of Kazakhstan joint-stock company approved by the resolution of Board of National Bank of the Republic of Kazakhstan of January 31, 2011 No. 3, registered in the Register of state registration of regulatory legal acts at No. 6793 (further - the Standard chart of accounts);

reserves of revaluation of fixed assets and reserves of revaluation of cost of the securities carried at fair value through other comprehensive income;

reserves of revaluation of cost of the loans carried at fair value through other comprehensive income;

minus the following regulatory adjustments:

own redeemed common shares;

intangible assets, including goodwill;

losses of last years and losses of the current year;

deferred tax asset, except for parts of the deferred tax assets recognized concerning deductible temporary differences;

reserves on other revaluation;

the sales returns connected with transactions on securitization of assets. The deferred revenue in connection with the expectation of the complete or partial income in the future received from securitization conditions belongs to such income;

the income or losses from change of fair value of the financial liability in connection with change of credit risk according to such obligation;

the regulatory adjustments which are deductible from the added capital, but in connection with its insufficient level subtracted from fixed capital;

the investments specified in Item 11 of Standard rates.

For the purposes of calculation of the fixed capital specified in this subitem since September 1, 2022 the positive difference is subtracted from calculation of fixed capital in the amount of 100 (hundred) percent;

2) the added capital joins the termless agreements corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates as a result of which at the same time there is financial asset at one person and the financial liability or other financial instrument confirming the right to share of the assets of the legal entity which remained later deductions of all its obligations at other person (further - termless financial instruments) and also the paid preferred shares corresponding to the criteria established in Criteria for classification of tools within equity of bank according to appendix 4 to Standard rates.

The size of the added capital decreases by the amount of the following regulatory adjustments:

investments of bank into own termless financial instruments by direct or indirect method;

own redeemed preferred shares of bank;

the investments specified in Item 11 of Standard rates;

the regulatory adjustments which are deductible from the capital of the second level, but in connection with its insufficient level subtracted from the added capital.

If the amount of the added capital of bank is insufficient for implementation of deduction, then the rest is subtracted from fixed capital of bank.

11. Deduction from the capital of investments of bank into shares (shares in the authorized capital), termless financial instruments, subordinated debt (further - financial instruments) legal entities whose financial reporting are not consolidated in case of creation of the financial reporting of bank according to IFRS and also deduction of deferred tax assets, are performed in the following procedure:

if investments of bank into financial instruments of the financial organizations in which the bank has less than 10 (ten) percent of issued shares (shares in the authorized capital) in total exceed 10 (ten) percent from fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates, the amount of exceeding is deductible from equity;

if investments of bank into common shares of the financial organization in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital) in total exceed 10 (ten) percent from fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates and the paragraph the second this Item, the amount of exceeding is deductible from fixed capital;

if part of the deferred tax assets recognized concerning deductible temporary differences exceeds 10 (ten) percent from fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates and the paragraph the second this Item, the amount of exceeding is deductible from fixed capital;

if investments of bank into common shares of the financial organization in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital) and part of the deferred tax assets recognized concerning deductible temporary differences in total exceed 17,65 (seventeen whole sixty five 100-th) percent of difference of fixed capital of bank after application of the regulatory adjustments specified in Item 10 of Standard rates, and the amount which is subject to deduction from fixed capital, specified in paragraphs the second, third and fourth this Item, the amount of exceeding is deductible from fixed capital;

the exceeding amount calculated according to the paragraph the fifth this Item decreases on the amounts which are deductible from fixed capital, specified in paragraphs the second, third and fourth this Item;

the deduction of the investments into financial instruments specified in the paragraph the second this Item is performed from appropriate level of equity proceeding from share of investments in the total amount of investments into financial instruments;

deferred tax assets for the purposes of calculation of deduction according to Item 10 and paragraphs the fourth, fifth and sixth this Item decrease on the amount of deferred tax liabilities, except for the deferred tax liabilities recognized concerning intangible assets including goodwill, on pro rata basis between the deferred tax assets recognized concerning deductible temporary differences and other deferred tax assets;

investments of bank into termless financial instruments of the financial organizations in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital) are deductible from the added capital;

if the amount of the added capital is insufficient for implementation of deduction, then the amount is subtracted from fixed capital of bank;

investments of bank into subordinated debt of the financial organizations, in which the bank has 10 (ten) and more percent from issued shares (shares in the authorized capital), of the legal entity, are deductible from the capital of the second level;

if the capital sum of the second level is insufficient for implementation of deduction, then the amount is subtracted from the capital of the first level of bank;

the investments which are not subtracted from calculation of equity are weighed on degree of credit risk according to the Table of the assets of bank weighed on degree of credit risk of investments according to appendix 5 to Standard rates.";

2) of Item 25 to state the subitem in the following edition:

"2) on coefficient 0, (((zero whole twenty five 100-th) percent - the financial instruments with market risk connected with change of rate of remuneration with repayment period less than 6 (six) months in the form of the government securities of the Republic of Kazakhstan issued by local executive bodies of the Republic of Kazakhstan, the securities having the status state, issued by the central governments and Central Banks of foreign states, which sovereign rating from "And +" to "VVV-" of the Standard & Poor agency "s or the rating of similar level of one of other rating agencies, securities issued by international financial institutions, securities, included in the official listing of organizers of the biddings of the Republic of Kazakhstan and organizers of the biddings recognized by the international stock exchanges, specified in the List of organizers of the biddings recognized by the international stock exchanges according to appendix 8 to Standard rates; ";

state Item 52 in the following edition:

"52. The relation of the extent of risk of bank on one borrower according to its obligations to equity of bank does not exceed:

for borrowers, being the faces tied with bank the special relations of k3-1 - 0,10. The cumulative amount of risks on the borrowers connected with bank the special relations does not exceed the size of equity of bank;

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