Republic Bank Limited
36
Capital Structure
The Group’s policy is to diversify its sources of capital, to allocate
capital within the Group efficiently, and to maintain a prudent
relationship between capital resources and the risk of its underlying
business. Capital adequacy is monitored by each member of the
Group, employing techniques based on the guidelines developed
by the Basel Committee on Banking Regulations and Supervisory
Practice (the Basel Committee), as implemented by the respective
Central Banks for supervisory purposes. The risk-based capital
guidelines require a minimum ratio of core capital (Tier I) to risk-
weighted assets of 4%, with a minimum total qualifying capital (Tier
II) ratio of 8%. Core (Tier I) capital comprises mainly shareholders’
equity.
All of the companies within the Group have capital ratios which
are significantly higher than the regulatory requirement. The Group
has maintained a historical dividend payout ratio of between 40%
and 60% of net earnings. The payout ratio this year is 57.5% and
remains unchanged from 2014.
The strong capital base means the Group is well positioned to fund
its future expansion activities.
Outlook
Despite the forecast of improved conditions in the tourism-
dependent economies in the Caribbean, growth in commodity-
producing countries is expected to be challenged by low commodity
prices into the next fiscal year. The Group will continue to utilise its
sound risk management policies, solid capital base and skilled and
dedicated staff to seek growth opportunities both organically and
through expansions regionally and internationally.
This has been my last full year as Managing Director of Republic
Bank, as I proceed on retirement in February 2016. The past
ten years spent in this position and the previous 15 at various
areas throughout the organisation, have been an experience of
continuous insight and learning.
I know that the organisation will continue to thrive as Mr. Nigel
Baptiste takes over the helm upon my departure. Nigel’s 24 years of
experience with the Bank will serve him well as he takes the Group
through to its next phase of growth and development.
I would like to thank the Board of Directors for their sound
leadership and last, but certainly not least, I say thank you to all the
staff, customers and shareholders of this organisation who have
supported and guided me through my journey over the past 25
years. It has been a pleasure serving all of you!
ManagingDirector’sDiscussionandAnalysis
2
Executive
Capital Adequacy Ratio
2015
2014
Republic Bank Limited
21.72%
25.77%
Republic Finance and Merchant Bank Limited
130.21%
133.32%
Republic Bank (Cayman) Limited
26.74%
20.83%
Republic Bank (Grenada) Limited
15.60%
15.80%
Republic Bank (Guyana) Limited
22.85%
22.16%
Republic Bank (Barbados) Limited
19.78%
16.02%
Republic Bank (Suriname) N.V.
15.37%
–
HFC Bank (Ghana) Limited
14.20%
–
Atlantic Financial Limited
52.73%
67.95%
CAPITALSTRUCTURE
