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 Group’s 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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