The ECB increases Santander Totta’s precautionary requirements for 2024

Banco Santander Tota informed the market of the minimum prudential requirements that will come into force in 2024, and unlike other competing banks that have so far revealed the Pillar 2 requirements of the ratio (which are allocated to each bank according to asset quality), the bank has seen the bank The European Central Bank increased capital requirements depending on the quality of the asset portfolio to 1.65% (in calculating the total capital ratio).

The component of the regulatory capital ratio required depending on asset quality is the highest in Novobanco (2.85%), followed by BCP with a requirement of 2.50% and the best being Caixa and BPI with a requirement of 1.9% each. Santander Totta still compares well with its competitors because it has better capital requirements depending on the quality of the asset portfolio than its competitors.

Regarding the core capital ratio, the Pedro Castro Almeida-led bank saw the ECB increase the requirement to 0.928% in the CET1 ratio. Last year, the European Central Bank requested that the Pillar 2 ratio of CET1 be 0.844%. The increase in requirements is slight, but aggravation may mean increased credit portfolio risk. The ECB’s decision comes as a result of the Supervisory Review and Evaluation Process (SREP).

In a statement, “Banco Santander informs Totta of the decision of the European Central Bank (ECB) on the requirements Minimum precautionary capital requirements, to be Observed at 2024 On a uniform basis across the board Santander Totta SGPS based on results The process of analysis and evaluation by the supervisor.”

For its part, the Bank of Portugal announced the additional reserve required from Santander Totta SGPS, as an “Other Systemically Important Institution” (O-SII).

“The combination of these two decisions results in the following minimum own funds requirements to be taken into account, as of the above-mentioned date, in a ratio determined in accordance with Risk Weighted Assets (RWA),” the bank explains.

You Stores Of the capital required by the ECB “includes the capital maintenance reserve (2.5%) and the O-SII reserve (0.5%).” The second pillar requirement, in 2024, defined within the scope of the SREP, is 1.65% (of total capital ratio),” while it was 1.5% for this year.

The minimum CET 1 capital ratio for 2024 is 8.428%, which includes the 0.928% minimum Pillar 2 requirement for the CET 1 ratio (which is set by the ECB depending on the risk of the credit portfolio). Pillar 2 in Level 1 ratio is 1,238%.

It is clear that Santander Totta SGPS is fully compliant, taking into account capital ratios (fully loaded) Registered in 30 in hiringthat itMonth 20two3,Specific requirements, in terms of CET1 (Common stock Level 1)in Level 1 And the total percentage.