Investor Presentaiton
Group Financial Results for the nine months ended 30 September 2020
SREP requirement for 2020 at 9.7%, post ECB's capital relaxations for COVID-19
SREP requirements for 2020: CET1 ratio at 9.7%
SREP requirements for 2020 Total Capital ratio at 14.5%
1
O-SII
10.5%
0.5%
11.0%
1.0%
O-SII1
14.0%
0.5%
14.5%
1.0%
CCB2
2.5%
2.5%
CCB 2 2.5%
9.7%
2.5%
1.0%
Pillar 2R
3.0%
3.0%
2.5%
Pillar 2R
3.0%
3.0%
Tier 2
2.0%
2.0%
1.7%
AT13
Total
1.5%
1.5%
Pillar 1
of 8%
Pillar 1
4.5%
4.5%
4.5%
Pillar 1
4.5%
4.5%
2019
2020
2020
post ECB
announcement
2019
2020
•
•
1)
2)
Per EBA final guidelines on SREP and supervisory stress testing and the Single Supervisory Mechanism's (SSM) 2018 SREP methodology own funds held for the purposes of
Pillar II Guidance cannot be used to meet any other capital requirements (Pillar I, Pillar II requirement or the combined buffer requirements), and therefore cannot be used twice4
In May 2020, the Bank received formal notification from the CBC in its capacity as National Resolution Authority, of the final decision by the Single Resolution Board (SRB), for the
binding minimum requirement for own funds and eligible liabilities (MREL) for the Bank, determined as the preferred resolution point of entry. The MREL requirement was set at
28.36% of risk weighted assets as of 30 June 2019 and must be met by 31 December 2025. This MREL requirement would be equivalent to 18.54% of total liabilities and own
funds (TLOF) as at 30 June 2019. The MREL requirement is in line with the Bank's expectations, and largely in line with its funding plans5
The MREL ratio of the Bank as at 30 Sep 2020, calculated according to SRB's eligibility criteria currently in effect, and based on our internal estimate stood at 18.55% of RWAS
In November 2020, the Group received communication from the ECB informing it that no SREP decision will be issued for the 2020 SREP cycle and the 2019 SREP will remain in
force hence leaving the Group's capital requirements unchanged as well as other requirements established by the 2019 SREP decision. The communication follows relevant
announcement by the ECB earlier in the year that ECB will be taking a pragmatic approach towards the SREP for the 2020 cycle.
The Central Bank of Cyprus (CBC) set the O-SII buffer for the Group at 2%. This buffer will be phased-in gradually, having started from 1
January 2019 at 0.5% and increasing by 0.5% every year thereafter, until being fully implemented (2.0%) on 1 January 2022. In April
2020 the CBC, as part of the COVID measures, decided to delay the phasing-in by 12 months (1 January 2023). As a result, the
phasing-in of 0.5% on 1 January 2021 has been delayed for 12 months
In accordance with the legislation in Cyprus which has been set for all credit institutions the applicable rate of the CCB was fully phased
in at 2.5% in 2019
Bank of Cyprus Holdings
Additional Tier 1 Capital
3)
4)
The new provisions are effective from January 2020
5)
This decision is based on the current legislation, is expected to be updated annually and could be subject to subsequent changes by the
resolution authorities, especially considering that next year's decision will be under the BRRD II, which among others, may affect the
quantum of the MREL requirement, the final compliance period, the subordination requirements and is expected to impose a requirement
for a binding interim target for 1 January 2022
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