My first Publication ocbc_ar17_fullreport_english | Page 189

13. SHARE CAPITAL AND OTHER EQUITY (continued)
13.5
OTHER EQUITY INSTRUMENTS
GROUP AND BANK
SGD500 million 3.80% non-cumulative non-convertible perpetual capital securities (“Capital Securities”)
2017 2016
$’000 $’000
499,143 499,143
The Capital Securities issued by the Bank on 25 August 2015 are non-cumulative non-convertible perpetual capital securities.
They qualify as Additional Tier 1 Capital under the Monetary Authority of Singapore (“MAS”) Notice on Risk Based Capital Adequacy
Requirements for Banks Incorporated in Singapore (“MAS Notice 637”) on the basis that the Bank is subject to the application of
MAS Notice 637.
The Capital Securities may, subject to MAS approval, be redeemed at the option of the Bank on or after 25 August 2020 (“First Reset
Date”). Their terms include a non-viability loss-absorbing feature. Under this feature, OCBC must write off the securities when:
(1) the MAS notifies the Bank in writing that it is of the opinion that a write-off is necessary, without which the Bank would become
non-viable; or (2) a decision by the MAS to make a public sector injection of capital, or equivalent support, without which the Bank
would have become non-viable, as determined by the MAS. The Bank will, in consultation with or as directed by MAS, determine
the amount to be written off in order for the non-viability event to cease to continue. In addition to the first call in 2020, the Capital
Securities may also be redeemed if a qualifying tax event or a change of qualification event occurs.
The Capital Securities bear a fixed distribution rate of 3.80% per annum from the issue date to the First Reset Date and will be reset
every 5 years thereafter to a fixed rate equal to the then-prevailing 5-year SGD Swap Offer Rate plus 1.51%. The non-cumulative
distributions may only be paid out of distributable reserves semi-annually in February and August, unless cancelled by the Bank at its
option. The Capital Securities constitute unsecured and subordinated obligations, ranking senior only to shareholders of the Bank.
14. CAPITAL RESERVES
GROUP
At 1 January
Share-based staff costs capitalised
Shares transferred to DSP Trust
Shares vested under DSP Scheme
Transfer (to)/from unappropriated profit (Note 12)
Transfer to share capital (Note 13.1)
At 31 December
BANK
2017 2016 2017 2016
$’000 $’000 $’000 $’000
571,850
14,807
(58,745)
48,865
(193,643)
(21,691)
361,443
526,910
15,020
(70,401)
42,736
61,676
(4,091)
571,850
105,678
14,807
–
–
–
(21,691)
98,794
94,749
15,020
–
–
–
(4,091)
105,678
Capital reserves include statutory reserves set aside by the Group’s banking and stockbroking entities in accordance with the respective
laws and regulations. Capital reserves also include the Bank’s employee share schemes’ reserves and deferred shares held by DSP Trust.
BUILDING ON OUR CORPORATE STRATEGY FOR SUSTAINABLE GROWTH
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