KENANGA ANNUAL REPORT 2018

NOTES TO THE FINANCIAL STATEMENTS 31 December 2018 223 ANNUAL REPORT 2018 47. CAPITAL MANAGEMENT AND CAPITAL ADEQUACY (CONT’D.) Capital adequacy (cont’d.) (i) Components of Tier 1 and Tier 2 capital (cont’d.): Group Bank 2018 2017 2018 2017 RM’000 RM’000 RM’000 RM’000 CET 1 capital/Tier 1 capital Paid-up share capital 246,249 246,137 246,249 246,137 Retained earnings 509,888 520,345 513,675 513,726 Other reserves 131,677 124,984 184,114 174,300 Less: Goodwill (208,754) (208,754) (252,909) (252,909) 55% of cumulative gains on financial investments at FVOCI - - (1,196) - Deferred tax assets (6,532) (10,006) (3,666) (7,798) Other intangibles (57,468) (57,660) (52,500) (52,500) Regulatory reserve (25,488) (25,277) (25,488) (25,277) Treasury shares (16,808) - (16,808) - Deduction in excess of Tier 2* (72,885) (58,927) (156,462) (130,118) Total CET 1/Tier 1 capital 499,879 530,842 435,009 465,561 Tier 2 Capital Subordinated obligations capital 25,000 5,000 25,000 5,000 Collective allowance and regulatory reserve 18,447 13,353 18,180 13,081 Less: Regulatory adjustments applied to Tier 2 capital - (14,732) - (18,081) Total Tier 2 capital 43,447 3,621 43,180 - Total Capital 543,326 534,463 478,189 465,561 * The portion of regulatory adjustments not deducted from Tier 2 (as the Group and the Bank does not have enough Tier 2 to satisfy the deduction) is deducted from the next higher level of capital; as per paragraph 31.1 of the BNM’s Capital Adequacy Framework (Capital Components).