Core capital includes paid-in capital, capital reserve, surplus reserve and undistributed profit. Tier 2 capital includes loan bad debt reserve, bad debt reserve, investment risk reserve and long-term bonds with a maturity of 5 years or more.
Paid-in capital is divided into state capital, corporate capital, individual capital and foreign capital according to different investors. Capital reserve includes increased capital in the form of stock premium, revaluation and appreciation of statutory assets and donated property. Capital can be increased according to legal procedures. Surplus reserves are extracted from after-tax profits by commercial banks according to regulations, and are the accumulation of self-development of commercial banks, including statutory surplus reserves and arbitrary surplus reserves. Undistributed profit is the undistributed part of the profits realized by commercial banks. Before undistributed, it has the same function as paid-in capital and provident fund.
Non-performing loan reserve is a reserve drawn by commercial banks according to a certain proportion of loan balance in the process of loan business, which is used to compensate possible non-performing loans at any time. The provision for bad debts is drawn at 3‰ of the balance of accounts receivable at the end of the year, which is used to write off the losses of accounts receivable of commercial banks. Investment risk reserve, according to regulations, China's commercial banks can withdraw 3‰ of the investment balance at the end of last year every year. If it reaches 1% of the investment balance at the end of last year, the difference can be withdrawn. Long-term bonds with a term of more than five years are a kind of financial bonds, which are capital bonds issued by commercial banks. The principal and interest are repaid to make up for the lack of capital of commercial banks.
In addition, according to the requirements of Basel Accord and the specific situation of commercial banks in China, China also stipulates the deduction items of net capital formed by commercial banks: investment in other banks' capital; Capital investment in non-bank financial institutions; Invested industrial and commercial enterprises; Invested non-self-use real estate; The unwritten-off part of the bad debt loss.
A commercial bank is a kind of bank, and its duty is to act as a credit intermediary for financial institutions through deposits, loans, remittances and savings. The main business scope is to absorb public deposits, issue loans and discount bills. General commercial banks do not have the right to issue money, and the traditional business of commercial banks is mainly deposits and loans.