ECB's Capital Requirements Unchanged for Crédit Agricole in 2020
The European Central Bank (ECB) has notified Crédit Agricole of its capital requirements for 2020, confirming existing Pillar 2 requirements remain stable.
Paris – The European Central Bank (ECB) has informed Crédit Agricole Group and Crédit Agricole S.A. of their applicable capital requirements following the Supervisory Review and Evaluation Process (SREP). The Pillar 2 Requirement (P2R) remains unchanged at 1.5% for both entities.
The Crédit Agricole Group must maintain a minimum Common Equity Tier 1 (CET1) ratio of 9.7% starting January 1, 2020. This includes Pillar 1 and Pillar 2 requirements, plus ongoing capital buffers, such as a 2.5% conservation buffer and a 1% buffer for systemically important institutions. Crédit Agricole S.A. must meet a minimum CET1 ratio of 8.7% from the same date, incorporating its respective Pillar 1, Pillar 2, and buffer requirements.
As of September 30, 2019, Crédit Agricole Group reported a CET1 ratio of 15.5%, which increased to 15.7% pro forma following a State Council decision regarding Emporiki. The bank states this positions it among the European banks with the highest solvency levels, well exceeding the minimum requirement.
In parallel, Crédit Agricole S.A. confirmed its intention to begin dismantling the "Switch" guarantee mechanism in the first quarter of 2020, contingent on market conditions. This operation is expected to reduce Crédit Agricole S.A.'s CET1 ratio and improve its earnings capacity, without impacting the Crédit Agricole Group's overall CET1 ratio.