Austria’s finance watchdog orders 12 banks to raise capital buffer 

Austria’s finance watchdog FMA on Tuesday said it ordered 12 Austrian banks to gradually raise their capital buffer by up to 2 percent of risk-weighted assets until the beginning of 2019 to cover systemic risks.

Erste Group Bank (ERST.VI), Raiffeisen Bank International (RBIV.VI), Raiffeisen Zentralbank Oesterreich [RZB.UL] and UniCredit Bank Austria (CRDI.MI) have to start with a raise of 0.25 percent as per Jan. 2016, which must be doubled every January until 2019.

Austrian banks have bemoaned additional requirements weighing on their results, such as a special banking levy which the government is set to change next year, which are in addition to European demands on the sector.

“The aim is to increase the ability of these lenders to resist their specific systemic risks,” FMA said in a statement.

It added the requirement for banks to boost their buffer in core equity comes on top of their SREP (Supervisory Review and Evaluation Process) ratio.

The decision was based on a recommendation from Austria’s Financial Market Stability Board, which will in future assess the need for further capital buffers on a quarterly basis, FMA said.

Also affected are Bawag PSK [CCMLPB.UL][CBS.UL], Hypo NOe [NLSBHY.UL], Hypo Tirol [HYTBK.UL], Oberoesterreichische Landesbank [OBERL.UL], Raiffeisenbank Niederoesterreich [RHNDWR.UL], Raiffeisenlandesbank Oberoesterreich (RLBOp.VI), Sberbank Europe and Vorarlberger Landes- und Hypothekenbank [VORARL.UL].

The latter have to add a maximum of 1 percent to their buffer by 2019.

Source: REUTERS – Austria’s finance watchdog orders 12 banks to raise capital buffer

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