The Polish Financial Supervision Authority updated capital buffers for local lenders with foreign-currency-denominated mortgage exposures and imposed individual capital add-ons based on the results of banks' stress tests.
The updated requirements are key to determine the ability of lenders to pay dividends from their 2017 profits, as well as the size of those dividends. The stress test add-on measures lenders' sensitivity to unfavorable macroeconomic conditions and is defined as the difference between their total capital ratio in the reference scenario and in the adverse economic scenario. This particular buffer requirement needs to be met by banks eyeing a 100% dividend on their 2017 profits, Rzeczpospolita noted Dec. 19.
Poland's largest lender PKO Bank Polski SA was asked by the Financial Supervision Authority, or FSA, to maintain a forex-mortgage capital buffer of 0.61 percentage point at the group level and a stress test add-on of 2.86 percentage points.
Citigroup Inc. unit Bank Handlowy w Warszawie SA was asked by the FSA to maintain a stress test add-on of 1.8 percentage points.
Millennium BCP unit Bank Millennium SA was asked by the regulator to hold an additional capital buffer of 5.41 percentage points at the group level for its forex mortgage portfolio, as well as a stress test add-on of 3.47 percentage points.
Banco Santander SA unit Bank Zachodni WBK SA was asked to maintain a forex mortgage capital buffer of 0.44 percentage point at the group level and a stress test add-on of 0.71 percentage point.
Bank Pekao SA was asked to keep an additional capital buffer of 0.01 percentage point at the group level on the foreign-currency-mortgage exposure of its mortgage unit Pekao Bank Hipoteczny SA. The regulator also asked Pekao to hold a stress test add-on of 1.27 percentage points.
Getin Noble Bank SA was asked to keep a 1.71 percentage-point capital buffer on its forex mortgage exposure at the group level, as well as a 1.24 percentage-point stress-test add-on.
The stress-test add-on for ING Groep NV unit ING Bank Slaski SA was set by the regulator at zero percentage points.
Commerzbank AG unit mBank SA was asked by the FSA to maintain an additional capital buffer of 3.53 percentage points at the group level for its forex mortgage portfolio and a stress-test add-on of zero percentage points.
BNP Paribas SA unit Bank BGZ BNP Paribas SA was asked to maintain a forex mortgage capital buffer of 0.6 percentage point at the group level and a stress test add-on of zero percentage points.
Based on the FSA's guidelines on the payment of dividends from 2017 profits and the calculated buffers, ING Bank Slaski could earmark up to 50% of its 2017 profit for dividend payments, while PKO and Bank Zachodni could pay out up to 25% of their profits as dividend, Rzeczpospolita noted in its reports from Dec. 18 and Dec. 19. It added that mBank may be able to share up to 20% of its 2017 net profit with shareholders. Meanwhile, news agency PAP reported that Pekao is close to meeting the capital requirements to earmark its entire 2017 profit for dividends.
