NLB d.d., Ljubljana announces new SREP reqirement
4th February 2022
Pursuant to the Rules of the Ljubljana Stock Exchange relating to Article 158 of the Market Financial Instruments Act NLB d.d., Trg republike 2, 1000 Ljubljana, announces:
On 2 February 2022, the ECB issued a new SREP decision for NLB under which it has reduced the Pillar 2 Requirement from 2.75% to 2.60% while Pillar 2 guidance remains at 1.00%. New SREP decision shall apply as of 1 March 2022. NLB is as of this date required to maintain the OCR at the level of 14.10% on a consolidated basis, consisting of:
- 10.60% TSCR (8% Pillar 1 Requirement and 2.60% Pillar 2 Requirement (of which at least 56.25% must be held in CET1 capital and at least 75% must be held in Tier 1 capital)); and
- 3.5% Combined Buffer Requirement (2.5% Capital Conservation Buffer, 1% O-SII Buffer and 0% Countercyclical Buffer).
More details on the composition of the new capital requirements can be found in the table below.
| SREP requirement |
| 2021 | 2022* |
|
|
|
|
|
| Pillar 1 (P1R) | CET1 | 4.50% | 4.50% |
|
| Tier 1 | 6.00% | 6.00% |
|
| Total capital | 8.00% | 8.00% |
| Pillar 2 (P2R) | CET1 | 1.55% | 1.46% |
|
| Tier 1 | 2.06% | 1.95% |
|
| Total capital | 2.75% | 2.60% |
| Total SREP Capital requirement (TSCR) | CET1 | 6.05% | 5.96% |
|
| Tier 1 | 8.06% | 7.95% |
|
| Total capital | 10.75% | 10.60% |
| Combined Buffer Requirement (CBR) |
| 3.50% | 3.50% |
| Capital conservation buffer | CET1 | 2.50% | 2.50% |
| Countercyclical capital buffer | CET1 | 0.00% | 0.00% |
| Global systemically important institutions (G-SII) buffer | CET1 | 0.00% | 0.00% |
| Other systemically important institutions (O-SII) buffer | CET1 | 1.00% | 1.00% |
| Systemic risk buffer (SRB) | CET1 | 0.00% | 0.00% |
| Overall capital requirement (OCR)= MDA threshold | CET1 | 9.55% | 9.46% |
|
| Tier 1 | 11.56% | 11.45% |
|
| Total capital | 14.25% | 14.10% |
| Pillar 2 Guidance (P2G) | CET1 | 1.00% | 1.00% |
| OCR+P2G | CET1 | 10.55% | 10.46% |
| * applicable from 1 March 2022 |
As at 30 September 2021, NLB Group TCR ratio stood at 17.2% and CET 1 ratio at 14.7%, which is well above the new SREP requirement. NLB d.d. intends to maintain additional Management Buffer above the regulatory requirements.
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