Page 14 - Pillar 3 Disclosure
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5. Capital Adequacy Assessment



The Society maintains a strategic planning framework, the details of which are reviewed by the Society's Board at least annually to take account 

of current and changing economic conditions. The process culminates in the production of a corporate plan with budgets covering the following 

year’s activities. The corporate plan includes references to the Society's ICAAP submission and, in particular, the Board’s risk appetite for 


different business activities/risks which is an important component within the plan. The Society ICAAP also contains the capital plan and the 

Board monitors that there are adequate capital resources to support the corporate goals contained within the plan.



In order to produce a capital plan, the Society’s ICAAP contains calculations of the capital resources requirement (effectively the minimum capital 


required) each year using the standardised approach for credit risk and the basic indicator approach for operational risk.



Under the standardised approach for credit risk, the Society applies a risk weighted asset value to each of its exposure classes and provides 8% 

of that risk weighted asset value as the minimum capital requirement for credit risk.




Under the basic indicator approach for operational risk, the Society calculates its average net income over the previous three years and provides 

15% of that average net income as the minimum capital requirement for operational risk.










































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