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2018-12-04 | CD-SIBOIF-1087-3-DIC4-2018

Norm on Reform of Article 4 and Annex of the Minimum Leverage Requirement Standard

The Board of Directors of the Superintendence of Banks and Other Financial Institutions of Nicaragua issued Resolution No. CD-SIBOIF-1087-3-DIC4-2018 to amend the Minimum Leverage Requirement Standard. The reform updates Article 4 and the Annex to align the leverage ratio calculation with the new accounting framework for banks and financial institutions, which combines International Financial Reporting Standards (IFRS) with prudential regulations. These provisions become effective on January 1, 2019, while the resolution itself enters into force upon notification.

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Page 1 of 3 Resolution No. CD-SIBOIF-1087-3-DIC4-2018 Dated December 4, 2018

NORM ON REFORM OF ARTICLE 4 AND ANNEX OF THE STANDARD ON MINIMUM LEVERAGE REQUIREMENT

The Board of Directors of the Superintendence of Banks and Other Financial Institutions,

CONSIDERING

I

That on January 26, 2016, the Board of Directors of the Superintendence of Banks and Other Financial Institutions approved the Standard on Minimum Leverage Requirement, contained in Resolution No. CD-SIBOIF-926-2-ENE26-2016, published in La Gaceta, Official Gazette No. 43 on March 2, 2016.

II

That it is necessary to adapt the provisions contained in Article 4 and the Annex of the aforementioned Standard, regarding the calculation of the Minimum Leverage Ratio, in accordance with the new Accounting Framework applicable to Banks and Financial Institutions, which is based on a combination of International Financial Reporting Standards (IFRS) and prudential regulations issued by this Superintendence.

III

That in accordance with the considerations set forth above, and based on the powers conferred by Article 3, numeral 13) and Article 10, numeral 1) of Law No. 316, Law of the Superintendence of Banks and Other Financial Institutions, and its reforms; contained in Law No. 974, Law of the Nicaraguan Legal Digest of the Banking and Finance Sector, published in La Gaceta, Official Gazette No. 164, on August 27, 2018, and its reforms.

In exercise of its powers,

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-1087-3-DIC4-2018

NORM ON REFORM OF ARTICLE 4 AND ANNEX OF THE STANDARD ON MINIMUM LEVERAGE REQUIREMENT

FIRST: Article 4 of the Standard on Minimum Leverage Requirement, contained in Resolution No. CD-SIBOIF-926-2-ENE26-2016, dated January 26, 2016, published in La Gaceta, Official Gazette No. 43 on March 2, 2016, is hereby amended, to read as follows:

“Article 4. Core Capital.- For the calculation of the numerator, financial institutions must consider as core capital the components established in the regulations governing the matter on capital adequacy, plus accumulated results from previous periods that are computable, included in the secondary capital components, less capital deductions.”

Page 2 of 3

SECOND: The Annex of the Standard on Minimum Leverage Requirement, contained in Resolution No. CD-SIBOIF-926-2-ENE26-2016, is hereby amended, to read as follows:

THIRD: The provisions established in this standard shall be applicable starting from January 1, 2019.

SUPERINTENDENCE OF BANKS AND OTHER FINANCIAL INSTITUTIONS

ANNEX

MONTHLY LEVERAGE REPORT

FINANCIAL INSTITUTION: DATE: Day/ Month/ Year

Balances in thousands of córdobas

Amounts

I. TOTAL ASSETS AND CONTINGENCIES (A-B-C) A. Assets and Contingencies 110 Cash and Cash Equivalents 116 Investments at Fair Value through Profit or Loss 125 Investments at Fair Value through Other Comprehensive Income 138 Investments at Amortized Cost, Net 141 Credit Portfolio, Net 150 Accounts Receivable, Net 156 Non-Current Assets Held for Sale, Net 159 Assets received in recovery of credits 162 Participations, Net 167 Tangible Assets 178 Intangible Assets 182 Tax Assets 186 Other Assets 800 Contingent Liability Accounts, Net B. Less: Adjustments Pending to be Made C. Less: Participations in Equity Instruments

II. ADJUSTED CORE CAPITAL (A-B-C) A. Core Capital

  1. Ordinary Paid-in Capital
  2. Preferred Paid-in Capital
  3. Capitalizable Donations
  4. Share Premiums
  5. Contributions for Capital Increases
  6. Minority Interests
  7. Legal Reserve
  8. Accumulated Results 1/
  9. Other Irrevocable Reserves
  10. Less: Goodwill (Net Trade Fund)
  11. Less: Other Net Assets of Amortization B. Less: Adjustments Pending to be Made
  1. Provisions
  2. Other adjustments C. Less: Participations in Equity Instruments

III. MINIMUM LEVERAGE RATIO (II / I)

Prepared by: Authorized by:

Concepts 1/: Include computable accumulated result of previous years included in the secondary capital components.

Page 3 of 3

FOURTH: This standard shall enter into force upon its notification, without prejudice to its publication in La Gaceta, Official Gazette. (F) S. Rosales C (F) M. Díaz O. (F) Fausto Reyes B. (F) Illegible (Silvio Moisés Casco Marenco) (F) Illegible (Rafael Ángel Avellán Rivas) Secretary

RAFAEL ÁNGEL AVELLÁN RIVAS Secretary of the Board of Directors SIBOIF

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