Decision on The BANK of Greenlands MREL requirement - Capital objective and agreement with the Danish Ministry of Industry, Business and Financial Affairs.
05 October 2021 - 2:16AM
Decision on The BANK of Greenlands MREL requirement - Capital
objective and agreement with the Danish Ministry of Industry,
Business and Financial Affairs.
To Nasdaq OMX Copenhagen04 October
2021Announcement no. 14/2021
Decision on The BANK of Greenlands MREL requirement –
Capital objective and agreement with the Danish Ministry of
Industry, Business and Financial Affairs.
The Danish FSA has decided on the Bank’s minimum requirement for
own funds and eligible liabilities (MREL). The FSA assigns a MREL
requirement of 30.4% of the Bank’s risk-weighted assets as per
year-end of 2020. The MREL requirement will be phased in during the
2022-2027 periode. The BANK of Greenland expects to cover most of
the MREL requirement by issuing Tier 3 capital and to a lesser
extent with Tier 1 and Tier 2 capital.
This decision is in line with the Bank’s expectations and the
principles for determining MREL requirements derived from the
designation of The BANK of Greenland as a systemically important
bank in 2017. The FSA updates the MREL requirement annually and the
conclusion will be published on The BANK of Greenland’s
website.
Capital objectiveUntil now, The BANK of
Greenland has had a capital objective of a capital ratio of 8-10%
points above the individual capital requirement, most recently
calculated at 10.7% at 30 June 2021. At the same date, the Bank’s
capital ratio amounted to 22.7%, which the Board of Directors has
assessed to be appropriate in view of the lack of clarification of
the MREL requirement.
Based on the decision taken concerning MREL requirement, the
Bank’s Board of Directors will, in the coming periode, reassess the
capital targets and the distribution on capital instruments. New
capital targets will be announced no later than the publication of
the annual report for 2021.
However, the Bank has already decided to issue up to DKK 100
million Senior Non-Preferred later in 2021, in order to optimise
the capital structure and cover the Bank’s MREL add-on, on a
targeted basis. When a final agreement on the issue of SNP has been
entered, a new company announcement will be published.
Agreement with the Danish Ministry of Danish Ministry of
Industry, Business and Financial AffairsIn connection with
the MREL decision, an agreement has been reached between the
Ministry of Industry, Business and Financial Affairs and The BANK
of Greenland to cover future issuance costs for the part of the
Bank’s issuances that exceed the average level to which a small
bank in the Association of Local Banks, Savings Banks and
Cooperative Banks in Denmark will be subject.
The aforementioned decision and agreements do not affect the
Bank’s previously announced expectations of a profit before tax of
DKK 125-140 million in 2021.
Kind regards,The BANK of Greenland
Martin KviesgaardBank DirectorDirect telephone: +299 34 78 02,
email: mbk@banken.gl
- 14.Meddelelse om NEP-krav 2021-10-04_ENG
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