CENTRAL BANK OF MADAGASCAR

BANKING AND FINANCIAL SUPERVISION COMMISSION

CIRCULAR NO. 001/2023-CSBF ESTABLISHING THE PROCEDURES FOR DECLARING THE REGULATORY CAPITAL OF CREDIT INSTITUTIONS

The President of the Banking and Financial Supervision Commission (CSBF),

Having regard to Law No. 2020-011 of September 1, 2020 on Banking Law,

Having regard to Law No. 2017-026 of February 8, 2018 on Microfinance,

Having regard to Decree No. 2023-011 of January 4, 2023 appointing the Governor of the Central Bank of Madagascar;

Having regard to Instruction No. 002/2022-CSBF of December 20, 2022 on the regulatory capital of credit institutions,

Establishes the procedures for declaration and the reporting templates for the regulatory capital of credit institutions as follows.

1. In accordance with the provisions of Article 13 of the aforementioned instruction, each credit institution must submit:

   • an annual declaration of its regulatory capital by June 30 at the latest following the closing of the fiscal year;
   • a special declaration of its regulatory capital, by the 15 (fifteen) days following the date of the relevant periodic closing, in any of the following cases:
     • a change in the amount of share capital;
     • the occurrence of an event resulting in an increase or decrease of 10% or more in the amount of regulatory capital;
     • the recognition of interim deficit results.

2. The declarations shall be prepared using the template defined in the annex.

3. The declarations shall be submitted to the General Secretariat of the CSBF (SG/CSBF) via the BSA "Banking Supervision Application" tele-declaration system at the SG/CSBF. The annual declaration shall be attached to the certified end-of-year accounting documents. Special declarations shall be transmitted:

   • together with the periodic financial statements closed at the end of the month following the aforementioned modification or event,
   • at each closing date at which interim deficit results are recorded.

This circular, of which the annex forms an integral part, shall enter into force upon its notification to the profession via the Professional Association and upon its publication on the website of the Central Bank of Madagascar.

Done in Antananarivo, on MAY 12, 2023 For the Banking and Financial Supervision Commission, The President

(Signature) Aivo H. ANDRIANARIVELO Governor of the Central Bank of Madagascar

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Banking and Financial Supervision Commission	REGULATORY CAPITAL	Declarant:
	TO:

REF.	DESCRIPTION	AMOUNT
	CORE TIER 1 CAPITAL (CET1)
561	Share capital, capital equivalents (meeting the criteria defined in Article 5 of Instruction No. 002/2022-CSBF)
562	Share or merger premiums actually received corresponding to the difference between the issue price of shares and their nominal value
564	Legal reserves, statutory reserves, and other unallocated reserves (excluding reserves and revaluation differences on fixed assets)
	Provisions with a reserve character
589	Retained earnings brought forward (credit balance)
591, 598 credit balance	Profit of the last closed fiscal year, audited without qualifications and pending approval and allocation by the General Meeting
563	Non-refundable and unallocated funds, in the nature of grants or donations, definitively acquired
	Consolidated reserve counterpart for goodwill
567	Differences on equity method investments in consolidated entities
	Translation differences appearing on the liability side of consolidated accounts
	Minority interests appearing in consolidated accounts as core tier 1 capital
	Subtotal A	0
569	Called-up share capital not paid up
41	Treasury shares held, other financial instruments with a core tier 1 capital character issued and held by the institution
581	Retained earnings brought forward (debit balance)
421, 437	Intangible assets including setup costs
592, 598 debit balance	Losses pending approval and allocation
594	Interim deficit result of the current fiscal year
Dividends	Dividends decided or proposed
Provisions to be made	Additional provisions for doubtful debts and risks recommended by statutory auditors and/or the CSBF
	Goodwill and deferred taxes appearing on the asset side of consolidated accounts
40	Cross-holdings in the capital of banks, insurance companies, and other financial entities in the form of financial instruments with a CET1 capital character
40	CET1 elements held as part of significant holdings in banks, insurance companies, and other financial entities
40	Total of non-significant holdings in the form of CET1 elements exceeding the 10% regulatory capital threshold
	Negative amount of other core tier 1 AT1 capital (if applicable)
	Subtotal B	0
	I- TOTAL CET1 (A - B)	0
	ADDITIONAL TIER 1 CAPITAL (AT1)
541 to 544	Financial instruments meeting the criteria defined in Article 7 of Instruction No. 002/2022-CSBF
541 to 544	Partners' accounts and other resources meeting the criteria defined in Article 7 of Instruction No. 002/2022-CSBF
	Issue premiums of instruments included in AT1
501	Equipment grants received
502	Conditional donations
521, 522	Fully mutualized guarantee funds and network guarantee funds
523	Other mutual guarantee funds and public funds allocated to guarantee categories of credit operations (up to 8% of the risks they cover)
	Latent reserve related to hire-purchase or lease-to-own operations
	Minority interests appearing in consolidated accounts as AT1
	Subtotal C	0
541 to 544	Financial instruments with an AT1 character issued by the credit institution and held by it for its own account
41	Cross-holdings in the capital of banks, insurance companies, and other financial entities in the form of AT1 capital
41	Financial instruments with an AT1 character held as part of significant holdings
41	Total of non-significant holdings in the form of AT1 elements exceeding the 10% regulatory capital threshold
	Negative amount of supplementary tier 2 capital (if applicable)
	Subtotal D	0
	II- TOTAL AT1 (C - D)	0
	TOTAL T1 (I + II)	0
	SUPPLEMENTARY TIER 2 CAPITAL (T2)
541, 542, 543, 544	Subordinated loans and other issued financial instruments meeting the criteria defined in Article 9 of Instruction No. 002/22-CSBF
541, 542, 543, 544	Partners' accounts and other resources meeting the criteria defined in Article 9 of the instruction
	Issue premiums of financial instruments admitted to T2
	Minority interests in the form of financial instruments admitted to T2
565	Reserves and revaluation differences on fixed assets validated by statutory auditors
	Subtotal E	0
541, 542, 543, 544	Financial instruments with a supplementary tier 2 capital character issued by the institution and held by it for its own account
41	Cross-holdings in the capital of banks, insurance companies, and other financial entities in the form of supplementary tier 2 capital
41	Financial instruments with a T2 character held as part of significant holdings in banks, insurance companies, and other financial entities
41	Total of non-significant holdings in the form of T2 elements exceeding the 10% regulatory capital threshold
	Subtotal F	0
	TOTAL T2 (E-F)	0
	REGULATORY CAPITAL (TOTAL T1 + TOTAL T2)	0

NB: For subsidiaries of foreign banks, submit the declarations and information transmitted to parent companies in the context of compliance with Basel II and Basel III standards on capital 1