This Annex illustrates the treatment of minority interest and other capital issued out of subsidiaries to third parties, which is set out in paragraphs 62 to 64.
Illustrative example
A banking group consists of two legal entities that are both banks. Bank P is the parent and Bank S is the subsidiary and their unconsolidated balance sheets are set out below.
|
Bank P balance sheet |
Bank S balance sheet |
||
|---|---|---|---|
|
Assets |
Assets |
||
|
Loans to customers |
100 |
Loans to customers |
150 |
|
Investment in CET1 of Bank S |
7 |
||
|
Investment in the AT1 of Bank S |
4 |
||
|
Investment in the T2 of Bank S |
2 |
||
|
Liabilities and equity |
Liabilities and equity |
||
|
Depositors |
70 |
Depositors |
127 |
|
Tier 2 |
10 |
Tier 2 |
8 |
|
Additional Tier 1 |
7 |
Additional Tier 1 |
5 |
|
Common equity |
26 |
Common equity |
10 |
The balance sheet of Bank P shows that in addition to its loans to customers, it owns 70% of the common shares of Bank S, 80% of the Additional Ti
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