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Other systemically important institutions capital buffer

The other systemically important institutions (O-SII) capital buffer is one of the instruments available in Banco de Portugal’s macroprudential toolkit aiming at addressing the macroprudential policy intermediate objective of preventing the building up of systemic risk arising from misaligned incentives and moral hazard.

According to section IV of title VII – A of the Legal Framework of Credit Institutions and Financial Companies, the designated authority may impose higher capital requirements on O-SIIs, between 0 and 2% of the total risk exposure amount, in order to compensate for the higher risk that these institutions pose to the financial system due to their size, importance for the economy of the Member State in question or the European Union, complexity or degree of interconnection with other financial sector institutions and, in the event of insolvency, the potential contagion of these institutions to the rest of the non-financial and financial sectors.

The O-SIIs capital buffer must be build up of Common Equity Tier 1 and be applied on a consolidated basis. It will be revised annually or if a significant restructuring process occurs, such as a merger or an acquisition.

In Portugal, since no global systemically important institution (G-SII) was identified, the G-SII capital buffer does not apply.

The information required to be disclosed by Banco de Portugal according to Notice No. 4/2015 is provided below:

Banking groups identified as O-SII in 2019

O-SII

Size

Importance

Complexity

Interconnectedness

Scores 1

Caixa Geral de Depósitos, S.A.

576

540

812

489

2416

Banco Comercial Português, S.A.

493

465

740

443

2141

Santander Totta, SGPS, S.A.

335

416

186

355

1292

LSF Nani Investments S.à.r.l.

287

357

307

271

1223

Banco BPI, S.A.

205

260

178

195

838

Caixa Económica Montepio Geral, Caixa Económica Bancária, S.A.

119

141

40

107

407

1 According to the guidelines of the European Banking Authority, the threshold adopted for the identification process was 350 basis points.

 

O-SII capital buffer applied to each banking group as of 1 January 2020 according to the table below:

O-SII

O-SII capital buffer

as at 1 January 2020

as at 1 January 2021

as at 1 January 2022

Caixa Geral de Depósitos, S.A.

0,750 %

1,000 %

1,000 %

Banco Comercial Português, S.A.

0,563 %

0,750 %

1,000 %

Santander Totta, SGPS, S.A.

0,375 %

0,500 %

0,500 %

LSF Nani Investments S.à.r.l.

0,375 %

0,500 %

0,500 %

Banco BPI, S.A.

0,375 %

0,500 %

0,500 %

Caixa Económica Montepio Geral, Caixa Económica Bancária, S.A.

0,188 %

0,250 %

0,250 %

Tentative date for next disclosure: 30 November 2020

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Any further information can be obtained through email: info@bportugal.pt