Aside from recapitalization, banks’ capital adequacy ratios have benefited from new capital injections and/or re-ploughing of profits as banks are required to raise their capital base. Debt settlement and recovery (see para.
12 above) coupled with introduction of sound prudential regulations, vigilant supervision and stricter enforcement of these regulations have facilitated a sharp fall in NPLs to total loans and net NPLs to net loans ratios to 7.7% and 1.8%, respectively over CY2000-September 2006.