Risk-weighted assets (RWAs) are reduced by 8,250 million, with an impact of improvement in the bank's capital ratio of 160 basis points
The European Central Bank (ECB) has finally approved the internal credit risk calculation models of Bankia's retail mortgage portfolio (IRB), which will allow the bank to raise its fully loaded CET 1 capital ratio to 14.87 %. The Group thus consolidates its leading position in capital among the large Spanish banks.
As reported by the entity to the National Securities Market Commission (CNMV), with the approval of these models, requested in October 2018 and whose resolution was expected throughout the third quarter of the year as the market already knew and deducted, Bankia may increase its maximum quality capital by up to 160 basis points.
The activation of these models was one of the levers contemplated in Bankia's 2018-2020 Strategic Plan with the aim of continuing to strengthen the entity's capital ratio.
The authorisation will allow Bankia to deploy this methodology during the third quarter of this year to the retail mortgages portfolio originating in the Bankia perimeter, prior to the merger with BMN. The application of these models will represent a reduction in risk-weighted assets (RWAs) of around 5,970 million euros.
In parallel, the bank expects to extend the application of these same parameters to the retail mortgages portfolio originating in BMN's operations perimeter during the fourth quarter of this year, with estimated savings in RWA of 2,280 million euros.
Thus, Bankia may reduce its RWAs by a combined amount of around 8,250 million euros, which represents a positive impact on capital of 112 basis points for the Bankia perimeter and 48 basis points for the BMN perimeter.
At the close of the first semester, Bankia reached a fully loaded CET1 ratio of 13.27% and a CET1 phase in of 14.32%.
Bankia SA published this content on 15 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 September 2020 12:19:00 UTC