222 II Annexes Annex 1 Calculation of Gross Income Definition of gross income

222 ii annexes annex 1 calculation of gross income

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II. Annexes Annex 1 Calculation of Gross Income Definition of gross income GI notation 1 Account Remark Net interest income + Interest income Interest expense Net non-interest income + Net fee income + Gain/loss on financial assets and liabilities at fair value through profit or loss + Gain/loss on investment carried on equity basis Gain/loss on disposal of investment excluded + Translation gain/loss + Other net non-interest gain/loss Realized gain/loss from disposal of financial assets in available-for-sale on banking book Excluded Realized gain/loss from disposal of financial assets in held-to-maturity Excluded Notes: Gross income is defined as “net interest income” plus “net non-interest income”, Where, 1. Loss provisions other than loan loss (e.g. guarantee reserve, securities trading loss reserve, and default loss reserve), gain/loss from disposal of fixed assets and bad debt expenses may not be deducted. 2. Operating expenses and fees paid to outsourced service providers may not be deducted, but fees received by banks that provide outsourcing services shall be included. 3. Realized profits/losses from disposal of securities held in the banking book are excluded. 4. Extraordinary or irregular items as well as income derived from insurance are excluded. 1 GI notation: + means a plus item to GROSS INCOME; 「-」 means a minus item to GROSS INCOME. 223
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Annex 2 Definitions of Business Lines under the Standardized Approach Business Unit Business Activities Level 1 Level 2 Investment Finance Corporate Finance Corporate Finance Mergers and acquisitions, underwriting, privitization, securitization, research, debt (government, high yield), equity, syndication, IPO, secondary private placements Government Finance Merchant Banking Advisory Services Trading & Sales Sales Fixed income, equity, foreign exchanges, commodities, credit derivatives, funding, own position securities, lending and repos, brokerage, debt, prime brokerage Market Making Proprietary Position Treasury General Finance Retail Banking Retail Banking Retail lending, banking services, trust and estates Private Banking Private consumer lending, banking services, trust and estates, investment advice Card Services Merchant/commercial/corporate cards, private labels and retail Commercial Banking Commercial Banking Project finance, real estate, export finance, trade finance, factoring, leasing, lending, guarantees, bills of exchange Payment and Settlement External Client Services Payments and collections, funds transfer, clearing and settlement Agency Services Custody Escrow, depository receipts, custody of lent securities, subsidiary business of custodian bank Corporate Agency Issuer and paying agents Corporate Trust Others Asset Management Discretionary Fund Management Pooled, segregated, retail, charity, closed, open, private equity Non-Discretionary Fund Management Pooled, segregated, retail, charity, closed, open Retail Brokerage Retail Brokerage Execution and full service Principles for business line mapping: (A) All activities must be mapped into the eight level 1 business lines.
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