Georgia's Economic Outlook 2020
STRONG NBG (BASEL III) CAPITAL ADEQUACY POSITION
NBG MEASURES AS A RESPONSE TO COVID-19
NBG's COVID-19 Supervisory Plan impact on capital adequacy ratios,
effective since March 2020:
28
CAPITAL ADEQUACY RATIOS
17.1%
16.7%
16.8%
18.1%
15.3%
Combined buffer - the conservation buffer requirement of 2.5% of risk-
weighted assets has been reduced to 0% indefinitely;
13.3%
12.7%
13.3%
13.6%
10.6%
12.7%
8.3%
11.0%
11.5%
11.1%
Pillar 2 requirements:
Currency induced credit risk buffer (CICR) requirement reduced by
2/3rds indefinitely;
The phase-in of additional credit portfolio concentration risk buffer
(HHI) and net GRAPE buffer requirements on Common Equity Tier 1
(CET1) and Tier 1 capital, planned at the end of March 2020, has been
postponed indefinitely;
The possibility of fully or partially releasing the remaining requirements
of Pillar 2 buffers (HHI, CICR, net GRAPE), if necessary, remains open.
Capital distribution during the period the banks are allowed to partially
or fully use the Pillar 2 and conservation buffers, the banks are restricted
to make capital distribution in any form;
General loan loss provisioning relating to COVID-19. The Bank's actual
capital adequacy position at 31 March 2020 considers the additional
general provision of GEL 400 million (approximately 3.3% of the Bank's
lending portfolio subject to provision under the local accounting
standards) booked under the Bank's local accounting basis, which is used
for calculation of the Bank's capital ratios, reflecting NBG's expectation of
estimated credit losses on the Bank's lending book for the whole economic
cycle, given current economic expectations.
In the view of above, the Bank was subject to following minimum capital
adequacy requirements at 31 March 2020: CET1-6.9%, Tier 1 -8.7% and
Total capital - 13.3%.
GEL millions
1Q19
2Q19
CET1 Capital Adequacy Ratio
Total Capital Adequacy Ratio
3Q19
RISK WEIGHTED ASSETS
4Q19
1Q20
Tier I Capital Adequacy Ratio
13,585
13,868
14,641
12,559
11,461
1Q19
2Q19
3Q19
4Q19
1Q20View entire presentation