Risk.net Print this page
By offloading its US lending business, Spanish bank BBVA will see its core capital ratio improve by around 285 basis points, providing it with a 600bp buffer above its minimum requirement.
As of end-2020, the bank’s Common Equity Tier 1 (CET1) capital ratio was 11.73%. Had the sale of BBVA USA to US lender PNC completed, though, it would have been 14.58%, almost one-quarter higher. Its regulator-set minimum requirement is 8.59%, meaning once the sale is finalised its buffer will be around 600bp
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Credit risk of EU state-backed loans deteriorated in Q3 Print this page
State-guaranteed loans in the European Economic Area (EEA) originated in the wake of the Covid pandemic are getting creakier.
Data from the European Banking Authority (EBA) shows that of the near €300 billion ($365 billion) loans covered by public guarantee schemes (PGS) held by lenders as of end-September, 4.9% were designated ‘stage two’ under IFRS 9 accounting rules, meaning they’d deteriorated in creditworthiness since initial recognition. This is an increase from 3.1% at end-June.
Of the
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