Featured Product

    ECB Concludes Comprehensive Assessment of Six Bulgarian Banks

    July 26, 2019

    ECB published the results of a comprehensive assessment of six Bulgarian banks, following a request by Bulgaria to establish close cooperation between ECB and the Bulgarian National Bank. The assessed banks are UniCredit Bulbank AD, DSK Bank EAD, United Bulgarian Bank AD, First Investment Bank AD, Central Cooperative Bank AD, and Investbank AD. The cut-off date for the exercise was December 31, 2018. Four of the assessed banks did not face capital shortfalls while First Investment Bank AD and Investbank AD fell below the 8% CET1 ratio threshold in the baseline scenario of the stress test.

    A comprehensive assessment is required as part of the process of establishing close cooperation between ECB and the national competent authority of an EU member state whose currency is not euro. The exercise comprised an Asset Quality Review (AQR) and a stress test, both of which were based on the methodologies applied by ECB Banking Supervision in its regular comprehensive assessments of banks that have recently been classified as significant or could potentially become significant. The assessment identified the need to further strengthen capital positions of the banks using the same threshold ratios that had been applied in previous comprehensive assessments, including a common equity tier 1 (CET1) ratio of 8% for the AQR and the baseline scenario of the stress test, along with a CET1 ratio of 5.5% for the adverse scenario in the stress test. 

    Four of the six banks covered in the assessment—UniCredit Bulbank AD, DSK Bank EAD, United Bulgarian Bank AD, and Central Cooperative Bank AD—do not face any capital shortfalls, as they did not fall below the relevant thresholds used in AQR and the stress test. First Investment Bank AD, however, fell below the 8% CET1 ratio threshold for AQR and the stress test’s baseline scenario; the bank also fell below the 5.5% CET1 ratio threshold used in the adverse scenario of the stress test. Meanwhile, Investbank AD fell below both the 8% CET1 ratio threshold used in the stress test’s baseline scenario and the 5.5% CET1 ratio threshold used in the stress test’s adverse scenario.

    AQR is a prudential exercise, rather than an accounting exercise, and provides ECB with a point-in-time assessment of the carrying values of banks’ assets on a particular date, which for this exercise is December 31, 2018. The AQR for the Bulgarian banks was performed on the basis of the updated AQR methodology, which the ECB published in June 2018 and takes account of the impact of accounting standard IFRS 9. The AQR was complemented by a stress test exercise, which looked at how the capital positions of banks would evolve under the hypothetical baseline and adverse scenarios over the next three years (2019-21). The stress test was conducted using the methodology applied in the 2018 stress test of EBA. 


    Related Links

    Keywords: Europe, EU, Bulgaria, Banking, Asset Quality Review, Stress Testing, CET 1, SSM, Banking Supervision, ECB

    Featured Experts
    Related Articles
    News

    BIS Examines Use of Big Data and Machine Learning at Central Banks

    BIS published a paper that provides an overview on the use of big data and machine learning in the central bank community.

    March 04, 2021 WebPage Regulatory News
    News

    APRA Finalizes Reporting Standard for Operational Risk Requirements

    APRA finalized the reporting standard ARS 115.0 on capital adequacy with respect to the standardized measurement approach to operational risk for authorized deposit-taking institutions in Australia.

    March 03, 2021 WebPage Regulatory News
    News

    ECB Publishes Guide for Determining Penalties for Regulatory Breaches

    ECB published a guide that outlines the principles and methods for calculating the penalties for regulatory breaches of prudential requirements by banks.

    March 02, 2021 WebPage Regulatory News
    News

    MAS Sets Out Good Practices to Manage Operational Risks Amid COVID

    MAS and The Association of Banks in Singapore (ABS) jointly issued a paper that sets out good practices for the management of operational and other risks stemming from new work arrangements adopted by financial institutions amid the COVID-19 pandemic.

    March 02, 2021 WebPage Regulatory News
    News

    ACPR Announces New Data Collection Application for Banks and Insurers

    ACPR announced that a new data collection application, called DLPP (Datalake for Prudential), for collecting banking and insurance prudential data will go into production on April 12, 2021.

    March 02, 2021 WebPage Regulatory News
    News

    BCB Maintains CCyB at 0%, Initiates First Cycle of Regulatory Sandbox

    BCB announced that the Financial Stability Committee decided to maintain the countercyclical capital buffer (CCyB) for Brazil at 0%, at least until the end of 2021.

    March 02, 2021 WebPage Regulatory News
    News

    EIOPA Launches Study on Non-Life Underwriting Risk in Internal Models

    EIOPA has launched a European-wide comparative study on non-life underwriting risk in internal models, also kicking-off of the data collection phase.

    March 01, 2021 WebPage Regulatory News
    News

    SRB Publishes Overview of Resolution Tools Available in Banking Union

    SRB published an overview of the resolution tools available in the Banking Union and their impact on a bank’s ability to maintain continuity of access to financial market infrastructure services in resolution.

    March 01, 2021 WebPage Regulatory News
    News

    EBA Consults on Pillar 3 Disclosure Standards for ESG Risks Under CRR

    EBA is consulting on the implementing technical standards for Pillar 3 disclosures on environmental, social, and governance (ESG) risks, as set out in requirements under Article 449a of the Capital Requirements Regulation (CRR).

    March 01, 2021 WebPage Regulatory News
    News

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    ESAs Issue Advice on KPIs on Sustainability for Nonfinancial Reporting

    March 01, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6655