The Group calculates the leverage ratio as one of its capital adequacy measures.
The objective of excessive leverage risk management is to ensure an appropriate relationship between the amount of the Tier 1 capital and the total of balance sheet assets and off-balance sheet liabilities granted by the Group.
For the purpose of measuring the risk of excessive financial leverage, a leverage ratio is calculated by the Group as a measure of Tier 1 capital divided by the measure of total exposure and is expressed as a percentage rate. The leverage ratio as at 31 December 2020 and 31 December 2019 was above internal and external limits, as well as above the minimum levels as recommended by the PFSA.
To maintain the leverage ratio at an acceptable level, the Group set up a strategic tolerance limit and a threshold for the ratio and they are regularly monitored and verified periodically.
|Leverage ratio exposures specified in CRR
|Total capital and exposure measure
|Tier 1 capital
|Total exposure measure for leverage ratio calculation