Banca Monte dei Paschi di Siena SpA must maintain a common equity Tier 1 ratio of 10.14% from Jan. 1, 2020, following the European Central bank's annual supervisory review and evaluation process.
Additionally, the oldest bank in the world must fulfill a total capital requirement of 11% on a consolidated basis. The figure includes a Pillar 1 minimum requirement of 8% — of which 4.50% is to be in terms of CET1 — and an additional Pillar 2 requirement of 3%, to be held entirely in the form of CET1 capital.
The minimum requirement for the total capital ratio was set at 13.64% by adding a combined buffer requirement of 2.64% to the total capital requirement — 2.5% of which is the capital conservation buffer, 0.13% the other systemically important institution buffer and 0.01% the countercyclical capital buffer.
As of Sept. 30, the bank's transitional CET1 ratio stood at 14.8%, and at 12.6% on a fully loaded basis, and the transitional total capital ratio was 16.7%, and 14.6% on a fully loaded basis — comfortable above the ECB's latest minimum requirements.