Minimum Capital Requirements for Credit Risk

Where, SAMA allow banks to assign preferential risk weights to non-HVCRE SL exposures falling into the “strong” and “good” supervisory categories as outlined in paragraph 13.4 , the corresponding expected loss (EL) risk weight is 0% for “strong” exposures, and 5% for “good” exposures. 13.11 The risk weights for HVCRE are as shown in table 23 below: Table 23 Strong Good Satisfactory Weak Default 5% 5% 35% 100% 625% 13.12 Even where, SAMA allow banks to assign preferential risk weights to HVCRE exposures falling into the “strong” and “good” supervisory categories as outlined in paragraph 13.7 , the corresponding EL risk weight will remain at 5% for both “strong” and “good” exposures. Supervisory Slotting Criteria for Specialized Lending