Notification by Austrian Financial Market Authority on the systemic risk buffer (SyRB) rate for twelve institutions

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Notification by Austrian Financial Market Authority on the systemic risk buffer (SyRB) rate for twelve institutions







Template for notifying the intended use of a systemic risk buffer (SRB)

Please send this template to

Emailing this template to the above-mentioned addresses constitutes an official notification, no further official letter is required. In order to facilitate the work of the notified authorities, please send the notification template in a format that allows electronically copying the information.

1.

Notifying national authority and scope of the notification

1.1 Name of the notifying authority

Austrian Financial Market Authority

1.2 Type of measure intended (also for reviews of existing measures)

Adjust, Maintain and/or Discontinue an existing SRB

2.

Description of the notified measure

2.1 Institutions covered by the intended SRB

On consolidated basis:

Institution

Erste Group Bank AG Raiffeisen Bank International AG UniCredit Bank Austria AG Raiffeisenlandesbank Oberösterreich Aktiengesellschaft

Basis consolidated consolidated consolidated consolidated

LEI

PQOH26KWDF7CG10L6792 9ZHRYM6F437SQJ6OUG95 D1HEB8VEU6D9M8ZUXG17

I6SS27Q1Q3385V753S50

RAIFFEISEN-HOLDING NIEDERÖSTERREICH-WIEN registrierte Genossenschaft mit beschränkter Haftung

consolidatedI6SS27Q1Q3385V753S50

BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft

consolidated

529900ICA8XQYGIKR372

Volksbanken Verbund

HYPO NOE Landesbank für Niederösterreich und Wien AG

consolidated consolidated

529900D4CD6DIB3CI904 5493007BWYDPQZLZ0Y27

Vorarlberger Landes- und Hypothekenbank Aktiengesellschaft

consolidatedNS54DT27LJMDYN1YFP35

HYPO TIROL BANK AG Oberösterreichische Landesbank Aktiengesellschaft

consolidated consolidated

0W5QHUNYV4W7GJO62R27 529900BI5KIGX6YLX375

Date of template version: 2016-03-01

On individual basis:

Institution

Erste Group Bank AG Raiffeisen Bank International AG UniCredit Bank Austria AG Raiffeisenlandesbank Oberösterreich Aktiengesellschaft

Basis individual basis individual basis individual basis individual basis

LEI

PQOH26KWDF7CG10L6792 9ZHRYM6F437SQJ6OUG95 D1HEB8VEU6D9M8ZUXG17

I6SS27Q1Q3385V753S50

Raiffeisenlandesbank Niederösterreich-Wien AGindividual basis

529900GPOO9ISPD1EE83

Based on the characteristics of the Austrian banking system, two main risk channels have been identified for the Austrian banking system: (1) systemic vulnerability and (2) systemic cluster risk.

The following indicators have been taken into account for the identification of the consolidated institutions in Austria:

1) Regarding the component systemic vulnerability (SyRB of 1 %; SyRB of 0,75% in the case of public ownership):

  • Deposits secured DGS > 5 % of total secured deposits in AT and

  • Total assets institution > 2 % of Total Assets Banking Sector and

  • Exposure / Position in the AT banking network > 1 %

OR

2) Regarding the component systemic cluster risk (SyRB of 0,5 %):

  • CESEE Exposure / Banks’ Total Assets > 30 % and

  • Bank-CESEE Exposure / AT-CESEE-Exposure > 2 % and

  • Vulnerability vis-à-vis CESEE (long-term structural risk of a country weighted by the ultimate risk of a bank in the respective country, cross-correlation of CDS-country-spreads) > 3 %

The following indicators have been taken into account for the identification of the institutions on an individual basis:

  • 1) Regarding the component systemic vulnerability (SyRB of 1 %):

  • 2) Regarding the component systemic cluster risk (SyRB of 0,5 %):

    • CESEE Exposure / Banks’ Total Assets > 30 % and

    • Bank-CESEE Exposure / AT-CESEE-Exposure > 2 % and

    • Vulnerability vis-à-vis CESEE (long-term structural risk of a country weighted by the ultimate risk of a bank in the respective country, cross-correlation of CDS-country-spreads) > 3 %

2.2 Buffer rate

(Article 133(11)(f) of the CRD)

List of identified institutions (consolidated)

01.01.2020 29.12.2020

Erste Group Bank AG

2,00%

2,00%

Raiffeisen Bank International AG

2,00%

2,00%

UniCredit Bank Austria AG

2,00%

2,00%

Raiffeisenlandesbank Oberösterreich Aktiengesellschaft

1,00%

1,00%

RAIFFEISEN-HOLDING NIEDERÖSTERREICH-WIEN registrierte Genossenschaft mit beschränkter Haftung

1,00%

1,00%

BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft

1,00%

1,00%

Volksbank Wien AG (gem. § 30a BWG für den Volksbanken Verbund)

1,00%

1,00%

HYPO NOE Landesbank für Niederösterreich und Wien AG

1,00%

0,50%

Hypo Vorarlberg Bank AG

1,00%

0,50%

HYPO TIROL BANK AG

1,00%

0,50%

Oberösterreichische Landesbank Aktiengesellschaft

1,00%

0,50%

List of identified institutions (unconsolidated)

01.01.2020 29.12.2020

Erste Group Bank AG

2,00%

2,00%

Raiffeisen Bank International AG

2,00%

2,00%

UniCredit Bank Austria AG

1,00%

1,00%

Raiffeisenlandesbank Oberösterreich Aktiengesellschaft

1,00%

1,00%

RAIFFEISEN-HOLDING NIEDERÖSTERREICH-WIEN registrierte Genossenschaft mit beschränkter Haftung

1,00%

1,00%

2.3 Exposures covered by the SRB

All exposures.

3.

Timing of the measure

3.1 Timing of the Decision

18.12.2020

3.2 Timing of the Publication

The expected date of publication will be in December 2020.

3.3 Disclosure

The amended Capital Buffer Regulation will be published in the Federal Law Gazette and on the FMA website (including explanatory notes).

3.4 Timing of Application

29.12.2020

3.5 Phasing in

See 2.2.

3.6 Review/deactivation of the measure

Based on a comprehensive assessment, a SyRB of up to 2% of risk-weighted assets in common equity tier 1 (CET1) should be maintained. Keeping the combined buffer constant is justified because the structural risks for the Austrian banking system have largely remained unchanged since last year‘s assessment.

Given that systemic risks may manifest themselves both on the consolidated and the unconsolidated level and that, in particular within cross-border banking groups, capital allocation in crises would not be flexible, the SyRB will be maintained also on the unconsolidated level.

For the “Hypothekenbanken” which are mortgage banks with guarantees from the federal states resulting from public ownership, the buffer is reduced due to the substantial decrease of the amount of the public guarantees for these banks. So in case one of these banks faces solvency problems and the public guarantees must be drawn, the guaranteed amount is now much lower than until 2018 and therefore the burden for the federal states as guarantors and thus the systemic risk is lower, which justified the reduction in the SyRB. Therefore, for the four Hypothekenbanken (HYPO NOE, Hypo Vorarlberg, Hypo Tirol and Oberösterreichische Landesbank) the SyRB is reduced from 1% to 0.5%.

For Denizbank and Sberbank no SyRB is applicable anymore as their share in the Austrian banking market has decreased and it is now below the threshold necessary for banks to be eligible for a SyRB.

4.

Reasons for the intended SRB

4.1 Description of the long-term non-cyclical systemic risk in your Member State

(Article 133(11)a of the CRD)

Since it was first implemented on January 1 2016, the SyRB has been effective in reducing long-term systemic structural risks and strengthening banks’ resilience to these risks by improving their capitalization. The SyRB provides for additional capital that banks can use to absorb losses in the event of a crisis. Risk-mitigating factors notwithstanding, the structural systemic risk in the Austrian banking sector continues to be elevated. Central risks for the Austrian banking system emanate above all from

  • low structural profitability;

  • the large size of the Austrian banking system with its high level of exposure to emerging markets in Europe;

  • comparably low, though substantially improved, capitalization; and

  • banks’ specific ownership structures, which would not fully ensure the adequate recapitalization of banks in the event of a crisis.

4.2 Reasons why the dimension of the long-term non-cyclical systemic risk threatens the stability of the financial system in your Member State

The systemic risk buffer is intended to mitigate the vulnerability of the banking sector against risks emanating from the financial system as a whole or a part thereof by holding additional own funds in order to increase the loss-absorbing capacity and thus the resilience of the banking sector. The SyRB will be applicable for those institutions that are most vulnerable to the identified systemic risks and described above under 2.1.This is intended to reduce the future risk of a severe disruption to the financial system as a result of systemic or macroprudential risks with potential negative effects to the real economy.

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Disclaimer

ESRB – European Systemic Risk Board published this content on 22 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 February 2021 15:32:09 UTC.

Publicnow 2021