MILAN (Reuters) -UniCredit, Italy's second-largest bank, said on Wednesday the European Central Bank has increased its core capital requirement for 2025.
The ECB set the threshold for UniCredit's Common Equity Tier 1 (CET1) capital ratio at 10.27%, up from the 10.03% minimum level set for 2024.
The ECB sets bank-specific capital requirements annually to ensure lenders have enough cash set aside as a buffer to withstand potential risks.
UniCredit did not say why the ECB had increased its requirement.
Reuters, citing sources, reported last month that the ECB was pushing UniCredit to hold some capital against potential risks stemming from its Russia businesses.
Earlier on Wednesday, Italy's largest lender Intesa Sanpaolo said its core capital requirement for 2025 had been set at 9.89%, up from the previous 9.32%, with a "Countercyclical Capital Buffer" (CCyB) mostly accounting for the increase.
In UniCredit's case the main difference from thresholds the ECB set at the end of 2023 for the current year is the "Systemic Risk Capital Buffer" (SyRB), which UniCredit said stood at 0.2% compared with 0.03% last year.
The CCyB edged up to 0.44% from 0.37%.
The so-called Pillar 2 requirement, which the ECB uses to address risks not covered by its minimum 'Pillar 1' capital requirement, remained unchanged at 200 basis points, UniCredit said in a statement.
UniCredit's core capital stood at 16.13% of assets at the end of September. The CCyB and SyRB buffers are calculated on a quarterly basis and can vary accordingly.
The ECB sets specific requirements for banks every year after a risk assessment specific to each lender, known as SREP.
(Reporting by Valentina Za, editing by Gavin Jones, Jane Merriman and Elaine Hardcastle)
