KBC Group: KBC discloses new ECB capital requirements - KBC's capital remains well above the minimum requirements
February 10 2022 - 12:01AM
KBC Group: KBC discloses new ECB capital requirements - KBC's
capital remains well above the minimum requirements
Press Release
Outside trading hours - Regulated information*
Brussels, 10 February 2022 (7 a.m. CET)
KBC discloses new ECB capital
requirements
KBC's capital remains well above the minimum
requirements
KBC has been informed by the European
Central Bank (ECB) of its new minimum capital requirements. The
fully loaded overall CET1 requirement for KBC Group (under the
Danish Compromise) has gone up from 10.45% (at year-end 2020) to
10.81%, due entirely to increased countercyclical buffers in some
of KBC’s core countries and a small Pillar 2 Requirement add-on for
the NPL backstop.
At the end of the fourth quarter of
2021, KBC Group’s fully loaded CET1 ratio amounted to
15.5%1, well above the new CET1
requirement.
Following the Supervisory Review and
Evaluation Process (SREP) performed for 2021, the ECB has formally
notified KBC of its decision to:
- increase the Pillar 2 Requirement (P2R) from 1.75% to
1.86%
- maintain the Pillar 2 Guidance (P2G) at 1.0% of
CET1
The 11 basis-point increase in the P2R relates
to the ECB expectation regarding minimum levels of provisioning for
non-performing loans which defaulted prior to 1 April 2018 (the
so-called ‘NPL backstop’ or ‘calendar provisioning’)2. KBC has
decided not to make a deduction from CET1 capital to cover these
loans and thus supplement the IFRS provisions already made.
Therefore, the ECB has increased the P2R by 11 basis points.
The capital requirement for KBC Group is
determined not only by the ECB, but also by the decisions
taken by the various local competent authorities in KBC’s core
markets. A number of authorities have decided to change
the countercyclical capital buffers as follows:
- increase the countercyclical capital buffer in the Czech
Republic from 0.50% to 1.00% effective from 1 July 2022, to 1.50%
effective from 1 October 2022 and to 2.00% effective from 1 January
2023
- increase the countercyclical capital buffer in Bulgaria from
0.50% to 1.00% effective from 1 October 2022
That corresponds to an additional fully loaded
CET1 requirement of
0.45% at KBC
group level (up from 0.20% at year-end 2020), including all
announced decisions on future changes.
The capital buffers for Belgian systemic banks
have not been changed. For KBC, the O-SII (other systemically
important institutions) capital buffer requirement is 1.5%, as
confirmed by the National Bank of Belgium, while
the capital conservation buffer is 2.5%. These buffers are held in
addition to the minimum CET1 requirement of 4.5% under
Pillar 1.
For KBC Group, this brings the overall
fully loaded CET1 requirement (under the Danish Compromise) to
10.81%, with an additional Pillar 2 Guidance of 1% CET1.
KBC clearly exceeds this requirement, as illustrated by its
fully loaded CET1 ratio of 15.5%1
at the end of the fourth quarter of 2021.
Note that the overall fully loaded CET1
requirement (under the Danish Compromise) would be
10% instead of 10.81% were the P2R split
according to Article 104a of Capital Requirement Directive V to be
applied. However, KBC currently does not intend to issue
instruments for that purpose.
Johan Thijs, KBC Group CEO,
stated: 'The ECB's decision confirms KBC's medium-low risk profile
and its resilience to adverse economic conditions. Our capital
position is an extremely solid one, which sends out a reassuring
signal to all stakeholders placing their trust in us.
We aim to be amongst the better capitalised
financial institutions in Europe. As a consequence, the dividend
policy of KBC Group is tailored to that purpose. Each year, the
Board of Directors will decide, at its discretion, on the total
dividend based on the assessment of risks, forward looking
profitability and strategic opportunities. With the announcement of
the full-year 2021 results, the Board of Directors proposed to
distribute a final gross dividend of 7.6 euros per share, bringing
the total gross dividend to 10.6 euros per share which will lead to
a fully loaded CET1 ratio (after the proposed capital distribution)
of 15.5%, in line with our announced capital deployment plan for
full-year 2021. As of full-year 2022, the payout ratio of at least
50% of consolidated profit will be maintained and, each year, when
announcing the full-year results, the Board of Directors will take
a decision, at its discretion, on the distribution of the capital
above 15.0% fully loaded CET1 ratio, so-called surplus capital.
We will also continue to concentrate on our
sound fundamentals of having a dynamic customer-centric, data- and
solution-driven, digital-first bank-insurance business model, a
healthy risk profile, a robust liquidity position and a comfortable
solvency position, supported by a very solid and loyal customer
deposit base in our core markets. We will remain focused on
sustainable and profitable growth, enabling us to play a beneficial
role in society and the local economy for all our stakeholders, and
to maintain our place among the best performing and most trusted
financial institutions in Europe.’
More details on the composition of the
new capital requirements can be found in the table attached to this
press release and at
www.kbc.com.
For more information, please
contact:
Kurt De Baenst, General Manager, Investor
Relations, KBC Group
Tel.: +32 2 429 35 73 – E-mail:
kurt.debaenst@kbc.be
Viviane Huybrecht, General Manager of Corporate
Communication/KBC Group Spokesperson
Tel.: + 32 2 429 85 45 – E-mail:
pressofficekbc@kbc.be
* This news item contains information that is subject to the
transparency regulations for listed companies. |
KBC Group NV Havenlaan 2 – 1080
Brussels Viviane Huybrecht
General Manager Corporate
Communication /Spokesperson Tel. +32 2 429
85 45 |
Press Office Tel. +32 2 429 65 01 Stef
Leunens Tel. +32 2 429 29 15 Ilse De
Muyer Tel. +32 2 429 32 88 Pieter
Kussé Tel. +32 2 429 85 44 Sofie
Spiessens E-mail:
pressofficekbc@kbc.be |
KBC press releases are available at
www.kbc.com or can be obtained by sending
an e-mail to pressofficekbc@kbc.be
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1 After the proposed dividend distribution 2 The impact takes
into account the agreement between KBC Ireland and CarVal Investors
regarding the disposal of non-performing loans
- 20220210-ecn-srep-2022-en
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