Poland's Bank Guarantee Fund set the minimum requirement for own funds and eligible liabilities, or MREL, for Bank Handlowy w Warszawie SA and gave the bank a Dec. 31, 2022, deadline to meet the target.
The requirement was set at 12.814% of the sum of Handlowy's total liabilities and own funds, which corresponds to 20.742% of the total risk exposure on the consolidated level. On the stand-alone level, the MREL was set at 12.899% of total liabilities and own funds, which also corresponds to 20.742% of the total risk exposure.
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, Handlowy said in a Jan. 9 filing.
MREL requirements were also recently announced for Banco Santander SA unit Santander Bank Polska SA, PKO Bank Polski SA and Bank Pekao SA.
In November 2019, PKO Bank Polski CEO Zbigniew Jagiełło said Polish banks may need to issue more than 50 billion zlotys worth of bonds in the next few years to meet their MREL targets and at least one bank operating in the Polish market will not be able to cope with the MREL-related debt issuance due to its current financial situation.
Citigroup Inc. is the ultimate parent of Bank Handlowy.
As of Jan. 9, US$1 was equivalent to 3.82 Polish zlotys.