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2018 Pillar 3 Disclosures
Capital
3 |
At the 2018 year-end, the solvency ratio
3
of Cecabank was 35.83%, fully comprising Common
Equity Tier 1 capital (CET1), i.e. the CET1 solvency ratio was also 35.83%. The main factor that
has conditioned the progress of these ratios has been the decrease in weighted exposure for
credit and counterparty risk, both general and securitisation.
A key factor for management is keeping a sound capital structure in terms of quantity and
quality. As a result, and as reflected in the graph, in recent years, the Tier 1 capital base has
been progressively strengthened through the capitalisation of profit which, together with the
maintenance of low risk levels, has enabled a sustained improvement of the capital ratios
over time.
In 2018, the Board of Cecabank has maintained a minimum capital ratio of 14%. This ratio is
established in terms of Common Equity Tier 1 capital. In addition, the Risk Tolerance Framework
establishes a margin of leeway for this ratio above which the bank must operate under normal
circumstances. Both levels are amply surpassed at present.
This comfortable solvency situation allows Cecabank to cover current and future capital
requirements, and those deriving from additional risks considered when self-assessing capital,
that are not included in Basel Pillar 1 requirements.
Similarly, on 21 December 2018, the Bank of Spain informed Cecabank, S.A. of the decision
on capital taken as a result of the bank’s risk supervision assessment process. As a result of
this process, the Bank of Spain set a required CET1 solvency ratio of 10.23%, which includes
all concepts of risk, a ratio that coincides with that calculated by the bank in its internal
capital adequacy assessment for the year 2017. At the end of the financial year, the own funds
classified as CET1 covered this requirement with an excess of 250%.
3 As in 2017, the own funds at 2018 year-end do not reflect the year’s results that the Board of Directors
agreed to withhold as reserves for an amount of €42.5 million. If it had been the case, the solvency ration
and the CET1 solvency ration would stand at 37.76%.
40%
30%
20%
10%
0%
2010 2011 2012 2013 2014 2015 2016 2017 2018
1,000
750
500
250
0
Total Capital Ratio
Tier 1 Capital Ratio
Tier 1 Capital
Tier 2 Capital
Millon euros