Poland's Bank Guarantee Fund set the minimum requirement for own funds and eligible liabilities, or MREL, for Bank Pekao SA — with a 2022 deadline to meet it.
The requirement was set at 14.325% of the sum of Pekao's total liabilities and own funds, or TLOF, which corresponds to 21.533% of the total risk exposure on the consolidated level. On the stand-alone level, the MREL was set at 13.738% of TLOF, which corresponds to 21.535% of the total risk exposure, the bank said in a Dec. 17 filing.
The Bank Guarantee Fund also set interim MREL targets for the bank that will have to be met by the end of 2019, 2020 and 2021. The lender said it already meets the 2019 MREL on both consolidated and stand-alone basis.
Pekao will have to issue about 7 billion zlotys worth of MREL-eligible bonds over the next three years to meet the target set by the Bank Guarantee Fund, Parkiet reported Dec. 18. The bond issues will be a combination of subordinated and senior non-preferred bonds, which will be carried out both on the domestic and foreign markets, depending on market conditions and the difference in prices between these types of bonds, the newspaper noted, citing Pekao.
As of Dec. 17, US$1 was equivalent to 3.82 Polish zlotys.