Notice of Banco de Portugal on "Core Tier 1" capital ratio

In the context of the Portuguese Financial Assistance Programme negotiated with the European Commission, the European Central Bank and the International Monetary Fund, it was established that the solvency levels of the national banking system should be strengthened, in line with the objectives that have justified the approval, by the Board of Directors of Banco de Portugal, of Notice no. 1/2011 of 5 April.
 
As such, Banco de Portugal has approved a new regulation, requiring all banking groups to meet a minimum core Tier 1 capital ratio of 9 percent after the end of 2011 and 10 percent from the end of 2012 onwards.

Based on the specific risk profile of each banking group and taking into consideration the results of the solvency and deleveraging assessment framework conducted under the Programme, the regulation also envisages the possibility of Banco de Portugal being more demanding, on a case by case basis, on the minimum Core Tier 1 required to some banks.

Banks will be required to present to Banco de Portugal, by the end of June 2011, recapitalisation plans on how they intend to meet the new capital requirements.

Lisbon, 12 May 2011