The NCB transaction is the first tier 1 capital issuance in the Kingdom of Saudi Arabia that will be recognised as Basel 3-compliant additional tier 1 capital, following implementation of Basel 3 capital requirements by The Saudi Arabian Monetary Agency.
The QIB transaction is the first tier 1 capital sukuk issuance in the State of Qatar that will be recognised as Basel 3-compliant additional tier 1 capital, following implementation of Basel 3 capital requirements by the Qatar Central Bank.
The Sukuk are deeply subordinated perpetual instruments and contain a "non-viability" write-off provision, as required under Basel 3.
Fitch said about $1.15 billion or P50 billion of Basel 3 issuances have been raised, with government bank Development Bank of the Philippines being the first to issue Basel 3-compliant instruments worth P10 billion last November 2013.
"Activity picked up following Basel 3 implementation in January 2014, with issuance to date limited to the local market amid more favorable pricing for the banks and healthy domestic demand from institutional investors and trust accounts," said Fitch.
"Issuance of Basel 3 Tier 2 securities is also being driven by rapid balance sheet growth in a buoyant economy, where loan growth has averaged 15 percent recently," Fitch noted.
The Basel Committee said that it had been actively monitoring the progress of members in implementing the Basel 3 regulatory reforms.
In a report, the committee said, 'The number of member jurisdictions that have published the final set of Basel 3 regulations effective from the start date of January 1 2013 is 11.
12.11.02 FC Basel 3
Liverpool 3 (Champions League 1st group stage) Rossi, Giminez and Thimothee Atouba put Gross's side 3-0 up inside 30 minutes.
Moody's Investors Service says in a new report that although Basel 3 is credit positive for banks, the standalone financial strength of banks weakened by the global financial crisis is unlikely to return to pre-crisis levels in the short term.
"Basel 3 will be positive for bank creditors overall, as it will improve the resilience of the global banking system by adding sizeable capital and liquidity buffers," says Vice President and co-author of the report Tobias Moerschen.
"While directionally positive, Basel 3 does not cure the structural challenges banks continue to face from a credit perspective, such as illiquidity and high leverage, nor does it alleviate the tension between profit-maximising equity holders and bank managers in contrast to risk-averse bondholders," notes Senior Vice President and co-author of the report Alain Laurin.