IAS19 Defined Benefit Pension + Mortgage Portfolio Analysis
Significant buffer to potential MDA' restrictions
Regulatory CET1 ratio vs. MDA Threshold
c.4.6%
MDA
Buffer
MDA
Buffer
c.3.7%
0.6%
1.49%
1.5%
1.5%
15.0%
Pillar 1
Pillar 2
■CCB
2.5%
2.5%
10.37%
11.26%
1.27%
1.27%
O-SII
CCYB
Jun 23
Regulatory CET1 ratio
31.0%
4.5%
4.5%
Jun 23
Regulatory CET1
ratio requirement
Future Regulatory CET1
ratio requirement²
MREL ratio vs. MREL-MDA Threshold
c.5.5%
M-MDA
Buffer
c.4.6%
M-MDA
Buffer
c.1.5%
c.5.5%
c.24.0%
20.95%
SRB Target
CBR
•
Bank of Ireland
•
•
Regulatory CET1 ratio of 15.0% at Jun 2023
-
Continued phase-in of existing transitional adjustments
expected to consume c.25bps per annum in 2023/2024
Completion of KBCI transaction and transition to IFRS17
consumed c.140bps in Q1 2023
Jun 2023 Regulatory CET1 ratio provides a buffer of c.4.6% to Jun
2023 MDA threshold and c.3.7% over future MDA threshold
Future regulatory CET1 requirement reflects phase-in of UK CCYB
(2% from Jul 2023) and ROI CCYB (1% from Nov 2023; 1.5% from
Jun 2024)
Pro forma Jun 2023 MREL ratio of 31.0%³ (12.1% on a leverage
basis) provides a buffer of c.5.5% to current MREL-MDA threshold
Future MREL RWA requirement expected to increase to c.29.5%,
reflecting phase-in of CCyB requirements into MREL requirement
MREL requirement of 7.6% on a leverage basis
•
MREL eligible senior debt issuance of c.€1bn-€2bn p.a.
anticipated; €1.5bn issued in 2023
Jun 23
MREL ratio³
Jan 22
MREL requirement
Future MREL
requirement²
1 The Maximum Distributable Amount (MDA) is determined as a percentage of attributable profits earned in the period to which the buffer breach and MDA calculation pertains, and will vary depending on the extent
of the breach of the CBR which is measured in quartiles (bottom quartile - 0%, second quartile - 20%, third quartile - 40% and top quartile - 60% of profits)
2 Future capital and MREL requirements reflect increase in ROI CCуB to 1.5% and UK CCYB at 2%. The CBI confirmed the increase in the ROI CCYB to 1.5% in June 2023 (effective June 2024). This is expected to increase
capital requirements by c.30bps
3 Includes MREL eligible senior debt issuance of €750m issued on 4 July 2023 and redemption of €600m on 10 July 2023
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