According to this decision, Komerční banka is required to maintain a capital ratio on a consolidated basis at the minimum level of 9.6% (TSCR - Total SREP Capital Ratio) effective from 1 March 2019, which includes:
1. Minimum capital requirement according to the Article 92 (1) of the EU regulation on prudential requirements for credit institutions and investment firms, i.e. maintaining a Tier 1 core capital ratio of 4.5%, a Tier 1 capital ratio of 6% and a capital ratio of 8%, and
2. Additional requirement of 1.6% set in Pillar 2 above the aforementioned requirements. This additional requirement must be covered fully by Tier 1 capital, and, at least 75% of this requirement must be covered by Core Tier 1 capital. This requirement has been increased by 0.1 percentage point in comparison with the previous level.
Moreover, credit institutions in the Czech Republic are simultaneously subject to the combined capital requirements, which are additive to the TSCR requirement set in the aforementioned joint decision. As of 1 March 2019, KB is required to maintain a combined capital buffer comprising, in the case of Komerční banka, the capital conservation buffer at 2.5%, the countercyclical buffer set by for exposures in particular countries (in the Czech Republic currently at 1.25%, at 1.5% from 1 July 2019 and at 1.75% from 1 January 2020) and the capital systemic buffer at 3.0%.
Thus, Komerční banka’s overall capital requirements as of 1 March 2019 reach approximately 16.35% in relation to the consolidated volume of risk-weighted assets. The minimum Core Tier 1 capital level is approximately 12.45% and the minimum Tier 1 capital ratio stands at approximately 14.35%.
As of 31 December 2018, Komerční banka's consolidated capital adequacy stood at 18.5% and the Core Tier 1 ratio was at 17.9%. Tier 2 capital represented 0.6% of risk-weighted assets.