Bulgaria’s central bank said that 11 of the Balkan country’s 22 commercial banks which it regards as systemically important would have to adopt extra risk buffers.
The central bank said the Bulgarian banks, 70 percent of which are owned by European Union lenders, would require additional buffers of between 0.125 percent and 0.5 percent of total risk exposure as of January next year.
The banks are well capitalised and the new rules are not expected to prompt the raising of additional capital.
Two of the country’s largest lenders, UniCredit Bulbank and locally-owned First Investment Bank will have to adopt additional capital buffers of 0.5 percent as of January 1, the central bank said.
Another seven lenders, including DSK Bank, controlled by Hungary’s OTP as well as the units of Societe Generale and KBC will have to have additional capital buffers of 0.25 percent as of next year. Two other banks will have to add capital buffers of 0.125 percent.
The buffers for systemically important institutions are planned to gradually increase to 0.5 percent and 1.0 percent by 2020.
The central bank said it will maintain its systemic risk buffer at 3 percent for all banks. It has also introduced a capital conservation buffer of 2.5 percent for lenders since 2014 and keeps the counter-cyclical capital buffer at 0 percent.
The average Common Equity Tier 1 ratio of the banking system stood at 20.5 percent at the end of September, central bank data showed, above the total capital requirements of 10 percent.