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Article (5): Capital Conservation Buffer

C 52/2017 Effective from 23/2/2017
  1. In addition to the minimum CET1 capital of 7.0% of RWA, banks must maintain a capital conservation buffer (CCB) of 2.5% of RWAs in the form of CET1 capital
     
  2. Outside of periods of stress, banks are encouraged to hold buffers of capital above the capital adequacy requirements
     
  3. A bank that does not comply with the buffer requirement:
     
    1. Must restrict its dividends pay out to its shareholders in accordance with table 1;
       
    2. Must have a definite plan to replenish the buffer as part of its internal capital adequacy assessment process;
       
    3. Must bring the buffer to the required level within a time limit agreed with the Central Bank; and
       
    4. Will be monitored closely by the Central Bank.
Table 1
Individual Bank Minimum Capital Conservation Standards
CET 1 RatioMinimum Capital Conservation Ratios (expressed as a percentage of earnings)
7.0% - 7.625%100%
> 7.625% - 8.25%80%
> 8.25% - 8.875%60%
> 8.875% - 9.5%40%
> 9.5%0%