In accordance with the request by the Autorité des Marchés Financiers to French banks, BNP Paribas announces that it has received notification of the ECB’s decision on the 2015 Supervisory Review and Evaluation Process (SREP). The capital requirement (CET1) that the bank has to meet on a consolidated basis in 2016 has been set at 10.0%, including the G-SIB buffer requirement which is equal to 0.5% in 2016.
With a phased-in CET1 ratio of 10.9% as at 30.09.15 (10.7% fully loaded CET1 ratio), BNP Paribas is well above the minimum requirement applicable for 2016. The fully loaded G-SIB buffer stands at 2% for BNP Paribas, to be reached by 2019. The ECB’s general recommendation is to follow a linear path towards the corresponding anticipated 11.5% fully loaded CET1 ratio in 2019. BNP Paribas intends to reach this level well in advance, thanks to its strong recurrent organic capital generation and active capital management as witnessed by the 40 basis points increase in its CET1 ratio in the first nine months of 2015.
Moreover, BNP Paribas is contemplating strategic alternatives with respect to its subsidiary, First Hawaiian Bank, which if successfully completed could strengthen BNPP’s CET1 ratio by up to approximately 40 basis points. This would lead BNP Paribas to reach the fully loaded CET1 anticipated level by mid-2017.
Following the SREP notification and in accordance with accounting rules, an impairment of the goodwill outstanding for BNL (Banca Nazionale del Lavoro) is triggered given the increased capital allocation requirement for this entity. This will impact the Group’s fourth quarter 2015 results by €0.9 billion. This goodwill impairment is marginally positive on BNP Paribas’ regulatory capital ratio as goodwill is already deducted. BNP Paribas confirms its 45% dividend pay-out target.
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