Instructions Concerning Banks' Budgets and Future Business Plans

32- Instructions Concerning Banks Budgets and Future Business Plans

A) Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. B) Circular on amending the reporting data for Banks’ Budgets and future business plans.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 1 Thu-Al-Hijja 7, 1415 H May 7, 1995 THE GENERAL MANAGER, Instructions concerning banks’ budgets and future Business Plans* We have observed, through our study of banks’ budgets, future business plans and estimates included therein during the past years, that such data do not include certain basic information which must be available. In order for us to review such data in the desired manner, your bank is required to provide us with at least the following information, data and forms:
(1) The bank’s future business plan, which should include:
– Business strategy for the year for which the financial data is submitted, as well as the general policy which will be adopted by the bank to achieve the targets of the strategy. – Basic assumptions on which the projections of the budget items were based. (2) Explanation of the reasons of the increase or decrease in the target figures against the projected figures of the previous year, taking into account the latest actual figures available with the bank while preparing the budget. (3) Detailed schedules in the manner shown in the (enclosed diskette) including the following:
– Development of the balance sheet components, balances with the banks, loans and advances, investment portfolio and banks’ and customers’ deposits. – Development of income and expenses components. – Capital adequacy ratio.

• Circulated to all local banks.

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 2 As you know, the banks are required, pursuant to Central Bank’s instructions in this regard, to submit their budgets and future business plans in Arabic language, not later than end of October every year. It is worth mentioning that your bank is required to enter the required data into the enclosed diskette and send it to us along with your bank’s future business plan. Best regards, Hamid Ahmed Al-Rasheed Executive Director, Supervision Department

Developments of the Balance Sheet Elements Bank’s Name:…………………………… ( KD .000’s ) S.No Description 1989 1990- 1991 1992 1993 1994 5 Years Average Projected 1995 Difference from 1994 % + (-) Targeted 1996 Difference from 1995 % + (1) I : ASSETS 1 Cash 2 Balances with the Banks & Financial Institutions 3 Treasury Bills & Bonds 4 Purchased debt Bonds 5 G’tee Fund Bonds 6 Financial Investments 7 Loans, Advances & Bills Discounted 8 Bank’s Purchased Shares 9 Fixed Assets 10 Other Assets II: LIABILITIES 11 Banks & Financial Institutions’ Deposits 12 Customers’ Deposits 13 Bonds & Certificates of Deposit 14 Shareholders’ Equity 15 Other Liabilities Total Liabilities 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 3 Controls & Regulatory Instructions & Supervisory , The Law : CHAPTER TWO

Balances with the Banks
(KD .000’s)
Bank’s Name: ………………………… (Attachment 1/1) ( Actual ) 1994 ( Projected ) 1995 Difference from 1994 ( Targeted ) 1996 Difference from 1995 S.N Description KD FC Total KD FC Total KD FC Total Bal Av. Int. rate Bal Av. Int. rate Bal Bal Av. Int. rate Bal Av. Int. rate Bal KD FC Total Bal Av. Int. rate Bal Av. Int. rate Bal KD FC Total 1 Balances with CBK 2 Balances with Local Banks 3 Balances with Local Financial Institutions I : TOTAL 4 Balances with Foreign Banks 5 Balances with Foreign Financial Institutions II : TOTAL TOTAL (I + II)*

• Should totally equal with Item (2) of the Balance Sheet Table.
  ols Contr & Regulatory Instructions & Supervisory , The Law : CHAPTER TWO 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 4

Loans, Advances & Bills Discounted For Customers (KD .000’s) Bank’s Name: ………………………… (Attachment 2/1) (Actual) 1994 (Projected) 1995 Difference from 1994 (Targeted) 1996 Difference from 1995 S.N Description KD FC Tot al KD FC Tot al KD FC Tot al Bal. Av. Int. rate Bal. Av. Int. rate Bal. Bal. Av. Int. rate Bal Av. Int. rate Bal. KD FC Total Bal. Av. Int. rate Bal. Av. Int. rate Bal. KD FC Tot al Credit Facilities to Residents 1 Oil & Gas 2 Agriculture & Fishing 3 Industry 4 Construction 5 Trade & Commerce 6 Public Services 7 Personal * 8 Real –Estate & Real-Estates Transactions 9 Others 10 Total Credit Facilities to Resident Customers 11 Total Credit Facilities to Non￾President Customers 12 Total Facilities (10+11)

• Including private residence Loans.
  Should totally equal with Item (7) of the Balance Sheet Table. Controls & atory Instructions Regul & Supervisory , The Law : CHAPTER TWO 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 5

Investment Portfolio
( KD .000’s )
Bank’s Name: ………………………… Attachment No.( 3/1) (Actual) 1994 (Projected) 1995 Difference from 1994 (Targeted) 1996 Difference from 1995 S. N Description KD FC Total KD FC Total KD FC Total KD FC Total B al Av Retu rn Rate Av. Matu rity Date B al Av Retu rn Rate Av. Matu rity Date Bal. Bal Av Retu rn Rate Av. Matu rity Date B al Av Retu rn Rate Av. Matu rity Date Bal KD FC Total B al Av Retu rn Rate Av. Matu rity Date B al Av Retu rn Rate Av. Matu rity Date Bal Local Investments :
1 Treasury Bills
2
Governmen t Treasury
Bonds
3 Purchased Debt Bonds
4 Securities:
a- For
Trading
Purposes b￾Investment
Securities c￾Participatio ns in
Subsidiaries
Investments
Abroad:
5
Treasury
Bills &
Bonds
6 Securities:
a- For
Trading
Purposes b- For
Investment
Purposes c￾Participatio ns in
Subsidiaries
7- Total *

• Should totally equal with the sum of items (3. 4. 5 and 6) in the Balance Sheet Table.
  Controls & Regulatory Instructions & Supervisory , The Law : CHAPTER TWO 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 6

Deposits of Banks & Financial Institutions (KD .000’s) Bank’s Name: ………………………… Attachment No. (4/1) (Actual) 1994 (Projected) 1995 Difference from 1994 (Targeted) 1996 Difference from 1995 S.N Description KD FC Total KD FC Total KD FC Total Bal Av. Int. rate Bal Av. Int. rate Bal Bal Av. Int. rate Bal Av. Int. rate Bal KD FC Total Bal Av. Int. rate Bal Av. Int. rate Bal KD FC Total 1 Balances Accrued CBK 2 Balance Accrued Local Banks 3 Balances Accrued to Local Financial Institutions I : TOTAL 4 Balances Accrued to Foreign Banks 5 Balances Accrued to Foreign Financial Institutions II : TOTAL Total (I + II)*

• Should totally equal with Item No. (11) of the Balance Sheet Table.
  Controls & Regulatory Instructions & Supervisory , The Law : CHAPTER TWO 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 7

Customers Deposits
(KD .000’s)
Bank’s Name: ………………………… Attachment No. (5/1) (Actual) 1994 (Projected) 1995 Difference from 1994 (Targeted) 1996 Difference from 1995 S.N Description KD FC Total KD FC Total KD FC Total Bal Av. Int. rate Bal Av. Int. rate Bal Bal Av. Int. rate Bal Av. Int. rate Bal KD FC Total Bal Av. Int. rate Bal Av. Int. rate Bal KD FC Total 1 Government Deposits A- Sight B- Forward 2 Resident – Customers Deposits A- Current Accounts B- Savings Accounts C- Term Deposits 3 Non-Resident Customers Deposits A- Current Accounts B- Savings Accounts C- Time Deposits 4 Total (1+2+3) *

• Should totally equal with Item No. (12) of the Balance Sheet Table.
  Controls & Regulatory Instructions & Supervisory , The Law :
  32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS.
  CHAPTER TWO
  A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 8

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
Development Elements of the Income & Expenditure Account ( KD .000’s ) Bank’s Name: ………………………… (Attachment -2) S.N Description Actual 1994 Projected 1995 Difference from 1994-1995 Targeted 1996 Difference from 1995-1996
II. Operating Income
1 Financial Institutions
A- Interest :
1- CBK
2- Banks
3- Other Financial Institutions
B- Fees & Commissions
C- Recovered Bad Loans
D- Other Income
2 Non Financial Institutions
A- Interest
B- Fees & Commissions
C- Loans
3 Investment Securities
A- Interest on Purchased Debt Bonds B- Interest on the Treasury Bills & Bonds C- Profits from capital participation on Investment Securities D- Profits from securities trading E- Other Income 4 Income from Other Operations A- Gains on FX Trading B- Income from Real-Estate Properties C- Other Income Total Operating Income 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 9

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
Development Elements of the Income & Expenditure Account ( KD .000’s ) Bank’s Name: ………………………… (Attachment -2) S.N Description Actual 1994 Projected 1995 Difference from 1994-1995 Targeted 1996 Difference from 1995-1996
II. Operating Expenses
1 Financial Institutions
A- Interests Accrued to:
1- CBK
2- Banks
3- Other Financial Institutions
B- Fees & Commissions
C- Bad Loans
D- Other
2 Financial Instruments
3 Non Financial Sector
A- Interest on Sight Deposits &
Savings Accounts
B- Interest on time deposits
C- Fees & Commissions
D- Bad Debts
E- Other
4 Administrative Expenses
A- Staff Salaries & Bonuses
B- Other Staff Benefits
C- Other
5 Depreciation
6 Other Operating Expenses
A- Securities Trading Losses
B- FX Trading Losses
C- Other
Total Operating Expenses
Net Profit (Loss)
32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. A- Circular issued on 7/5/1995 concerning banks budgets and future Business Plans. 10

Capital Adequacy Ratio as per The Financial Position for 1996 (Attachment 3) ( KD.000’s ) First Ratio’s Numerator :
Total Capital (Basic + Subordinate) Second Ratio’s Denominator :
Risk-Weighed Assets
Risk-Weighed Contingent Liabilities Total Risk-Weighed Assets & Contingent Liabilities Third Capital Adequacy Ratio (First / Second) Controls & Regulatory Instructions & Supervisory , The Law :
A- Circular issued on 7/5/1995 concerning 32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS.
CHAPTER TWO
banks budgets and future Business Plans.
11

CHAPTER TWO: The Law, Supervisory & Regulatory Instructions & Controls
32- INSTRUCTIONS CONCERNING BANKS’ BUDGETS AND FUTURE BUSINESS PLANS. B- Circular on amending the reporting data for Banks’ Budgets and future business plans. 12 Safar 23, 1427 H March 23, 2006 THE GENERAL MANAGER, “Circular To All Conventional Banks” With reference to the Central Bank of Kuwait’s instructions issued on 7/5/1995 regarding the budgets and future business plans for the local banks. We would like to advise you that your bank is required to provide us with the data of its budget and future business plan along with the closing financial data at the end of the year, instead of the currently applied method requiring you to provide us with the mentioned documents not later than the end of October each year. This change in the reporting date is meant to have the data of your budget expressing and based on assumptions closer to reality, and prepared on the basis of the latest actual financial data. Best Regards, Ibrahim Ali Al - Qadhi Manager of Supervision Department