Necessity to increase the capital of Resalat Bank in order to improve the capital adequacy ratio

According to the reporter of Poli Mali news site, The capital adequacy rate, which is one of the most important indicators in the banking system of any country, is in fact “the result of dividing the basic capital by the total assets weighted by the risk coefficients in percentage”.
According to the guidelines of the International Committee “Wing One”, the minimum standard capital adequacy rate of a bank should be eight percent to ensure that the bank does not go bankrupt and the ratio of the risk factor. In the “Wing 2” directive, the minimum capital adequacy rate has increased to 12%.
However, most of the country’s banks do not have the necessary capital adequacy according to the “Wing 2” guidelines.
In this regard, the central bank stated in the letter for permission to hold the meeting of Resalat Bank, which is registered in the stock exchange with the symbol “Wesalat” but has not yet been accepted: the distribution of profits is prohibited except for the minimum stipulated in the commercial law and it is necessary for the bank’s capital to Improve its capital adequacy ratio.
In the second paragraph of this license, it is emphasized that Resalat Bank must determine the duty and debt collection from Resalat Loan Funds and the assets resulting from their organization by the end of 1401.
The third condition for the holding of this bank’s assembly by the central bank is the reform and improvement of the revenue recognition cycle and the creation of an information system of collaterals and guarantees related to the granted facilities.
According to the (audited) financial statement of Resalat Bank for the financial period ending on March 29, 1400, the net profit of this bank has grown by 2,512 percent to 7,339 Rials per share.
The legal deposit of this bank with the central bank has been announced with a 65% increase compared to 2019, amounting to 5,234 billion 498 million tomans.
Resalat Bank’s balance in this period was equal to 6,865 billion tomans, which is 74% more than the financial year ending at the end of March 2019.
The granted facilities and claims of this bank from non-governmental entities reached 32 thousand 175 billion 632 million Tomans in 1400 with a 67% growth compared to 2019.
At the same time, investment in stocks and other securities by “Vesalt” increased by 98% in the mentioned financial period to 8 thousand 342 billion 875 million Tomans.
This bank announced its accumulated profit at the end of 1400, which is more than 1,231 billion tomans, which is 3,711% more than in 2019.
Therefore, we should wait for Resalat Bank to increase its capital of 194 billion tomans at least several times in order to reach the required standard regarding the necessary capital adequacy.