Summary
•Established in 1997
•Based in the Cook Islands
•Private not a Retail Bank
•Licenced for Domestic and International banking business
•Audited by KPMG
•Insured by Assicurazioni Generali S.P.A & Lloyd’s Syndicate 1274
•Member of SWIFT (CPSBCKCA)
•Total Capital to Risk Weighted Assets Ratio greater than 13% (exceeds Basel III requirements)
•Conservative product offerings
Capital Security Bank Limited (“CSB”) was established in 1997 as part of a trustee company group to further augment the international client’s estate planning, asset protection and investment options. These original ideals remain in place today and the client profile of today is similar to that of nearly 20 years ago.
The typical client of CSB is a personal family trust managed by a professional trustee. In recent times however, as international business boundaries become more transparent and the need for international banking increases, CSB now sees more individual and corporate clients becoming account holders.
Often asked why establish a Bank in a small jurisdiction in the middle of the Pacific Ocean, CSB’s response can be summarised in one word, “certainty”.
CSB maintains an office in just one jurisdiction, the Cook Islands. Whilst CSB must manage international banking requirements, its clients have the certainty of operating under just one set of laws as opposed to what many multinational banks experience. In addition, the laws in the Cook Islands are clear and concise and are supported by a professional and competent judicature and regulatory compliance.
The legislation of Cook Islands and the policies of CSB offer a balanced level of privacy to its clients. CSB is required to properly identify its clients and understand the economic purpose of transactions they undertake. CSB maintains this information in privacy but can provide that information to those properly authorised to receive same.
The nature of CSB’s business is to offer service to clients seeking Private Banking as opposed to Retail Banking. This typically means that CSB’s clients;
• are generally of a higher net worth,
• are looking to tuck “nest egg” funds away rather than “living cost” funds,
• prefer a higher level of personal service,
• are conservative in their investment goals,
• seek discretion in dealing with their personal financial information
Licenced for Domestic and International banking business
CSB first obtained its Banking Licence under the Offshore Banking Act 1981-82 in 1997. As times change and legislation is modified to meet international regulatory, anti money laundering and banking trends, this act since replaced firstly with the Banking Act 2003 and then with the current Banking Act 2011. Copies of this legislation plus banking prudential statements can be found on the Cook Islands Financial Supervisory Commission website by clicking on this link, Cook Islands Financial Services — Legislation.
CSB maintains a Licence for both Domestic (through its wholly owned subsidiary, Capital Security Bank Cook Islands Limited) and International banking business.
Copies of CSB’s licences can be found here.
The international accounting firm of KPMG are the auditors of CSB. KPMG Auckland, New Zealand are the office that is responsible for CSB’s audit. A copy of CSB's current audit opinion letter can be found here
Insured by Assicurazioni Generali S.P.A & Lloyd’s Syndicate 1274
CSB recognise that it is important to not only provide controls and manage risks it is also important for the peace of mind for our clients that certain insurances are in place.
Whilst there is no deposit guarantee scheme in place for Banks in the Cook Islands, CSB maintains professional Indemnity in the amount of USD 5,000,000.
Willis Towers Watson, a multinational risk management, insurance brokerage and advisory company, are CSB’s insurance brokers who have placed our policy 50:50 with Assicurazioni Generali S.P.A & Lloyd’s Syndicate 1274.
There are emerging technologies in global payment processing and funds transfers and CSB is keeping abreast of these developments. SWIFT however remains the industry standard and CSB is a member of this funds transfer network.
Being a member of SWIFT allows access to tremendous global resources including automated sanction screening, Know Your Client Registry (on CSB) and annual SIBOS conferences.
Total Capital to Risk Weighted Assets Ratio greater than 13% (exceeds Basel III requirements)
Under the Banking Act 2011 CSB is required to maintain a ratio of Total Capital to Risk Weighted Assets of 10%. The Capital Adequacy Ratios of the Banking Act 2011 were based on Basel II requirements. As CSB operates in an international arena and is a Private Bank with a different risk profile to retail banks, the Directors have implemented a policy to maintain this ratio at 13%, the additional 3% being a buffer.
Further the Directors and Shareholders have committed to raise this minimum to 15% (150% of the statutory minimum) by the end of 2018, thereby increasing the buffer to 5%.
Conservative product offerings
In line with its low risk philosophy CSB offers products to its clients that are conservative in nature being cash or physical precious metals. For clients seeking higher returns and more adventurous products CSB offers both a Trading Account and a Managed Investment Account where those assets are segregated by client.
Also, CSB is conservative in its own investment and cash placement strategies. CSB does not make cross currency investments and is thereby not exposed to currency risks. Further all cash deposits of clients are not invested in anything other than fixed interest bonds or deposits with highly rated OECD financial institutions.
CSB was very pleased to be recognised for its conservative and safe investment strategies by BNP Paribas Germany’s Head of Wealth Structuring in its article in the Swiss edition of FI News. The English translation and a link to the original article in German can be found here.