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Press release of Banco de Portugal on the imposition of capital buffers on credit institutions identified as 'Other Systemically Important Institutions' (O-SIIs)

Banco de Portugal has decided to impose capital buffers on institutions identified as O-SIIs.

This decision was made within the scope of its annual revision of the identification of O-SIIs and the imposition of capital buffers, pursuant to Article 138-R (2) of the Legal Framework of Credit Institutions and Financial Companies and in the exercise of Banco de Portugal’s powers as national macroprudential authority. For this purpose, Banco de Portugal notified the European Central Bank, in accordance with Article 5 of Council Regulation (EU) No 1024/2013 of 15 October 2013, which did not object to the draft decision, and consulted with the National Council of Financial Supervisors, under Article 2 (3) (c) of Decree-Law No 143/2013 of 18 October 2013. 

As set out in the legal and regulatory provisions, Banco de Portugal is publishing the table below with the names of the banking groups identified as O-SIIs in 2017 and the respective capital buffers as a percentage of the total risk exposure amount. These buffers shall consist of Common Equity Tier 1 on a consolidated basis and shall be met as follows:  25% on 1 January 2018, 50% on 1 January 2019, 75% on 1 January 2020 and 100% on 1 January 2021. These buffers will be revised annually or if a significant restructuring process occurs, such as a merger or acquisition.

O-SIIs

O-SII capital buffer on 1 January 2018

O-SII capital buffer on 1 January 2019

O-SII capital buffer on 1 January 2020

O-SII capital buffer on 1 January 2021

Caixa Geral de Depósitos

0.250%

0.500%

0.750%

1.000%

Banco Comercial Português

0.188%

0.375%

0.563%

0.750%

Novo Banco

0.125%

0.250%

0.375%

0.500%

Santander Totta - SGPS

0.125%

0.250%

0.375%

0.500%

Banco BPI

0.125%

0.250%

0.375%

0.500%

Caixa Económica Montepio Geral

0.063%

0.125%

0.188%

0.250%

Banco de Portugal has kept unchanged both the methodology and the O-SII capital buffer levels,  but has decided to extend the phase-in period – the initial two-year period was converted into a four-year period – taking into consideration the challenges facing the Portuguese banking system, in a context where interest rates remain very low.

The most important challenges are:

(i) The need of banks to continue to reduce the non-performing assets on their balance sheets;  

(ii) The impact of the implementation of a new accounting standard, specifically the IFRS 9, from January 2018;

(iii) The need of banking groups to access the capital market to meet the new requirements on own funds and eligible assets within the scope of the bank resolution framework (MREL – Minimum Requirements for own funds and Eligible Liabilities);

(iv) The end of the phase-out period (in 2018) of some instruments which have hitherto been included in regulatory own funds.