NLB d.d., Ljubljana discloses new ECB capital requirements

14th February 2019

NLB d.d., Ljubljana has received new decision establishing prudential requirement from ECB, which is applicable from 1st March 2019, leading to total SREP capital requirement (TSCR) of 11.25%, that includes minimum own funds of 8% (P1R) and own funds requirement of 3.25% (P2R) to be held in excess of minimum own funds requirement on consolidated level.

Following the Supervisory Review and Evaluation Process (SREP), the ECB has formally notified NLB d.d., Ljubljana of its decision to decrease:

  • the pillar 2 requirement (P2R) from 3.5% to 3.25% CET1

This decision together with applicable combined buffer requirement leads to overall capital requirement of 14.75%. More details on the composition of the new capital requirements can be found in the table below:

SREP requirement

 

2017

2018

2019

 

Pillar 1 (P1R)

 

CET1

4.50%

4.50%

4.50%

Tier1

6.00%

6.00%

6.00%

Total capital

8.00%

8.00%

8.00%

 

Pillar 2 (P2R)

CET1

3.50%

3.50%

3.25%

 

Total SREP Capital Requirement (TSCR)

 

CET1

8.00%

8.00%

7.75%

Tier 1

9.50%

9.50%

9.25%

Total capital

11.50%

11.50%

11.25%

                                                                                 Combined Buffer requirement (CBR)

Conservation buffer

CET1

1.25%

1.88%

2.50%

O-SII buffer

CET1

0%

0%

1.00%

Countercyclical buffer

CET1

0%

0%

0%

 

Overall capital requirement (OCR) = MDA threshold

 

CET1

9.25%

9.88%

11.25%

Tier 1

10.75%

11.38%

12.75%

Total capital

12.75%

13.38%

14.75%

As at 30 September 2018, NLB Groups CET 1 ratio stood at 16.9%, which is above the new SREP requirement. NLB Group intends to maintain additional Management Buffer above the regulatory requirements. Currently communicated mid-term Total Capital Target of around 17% will be regularly revised by competent bodies to reflect each time applicable capital requirements.

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